Trump on Iran, Major Catalysts for Cancer Drugs 6/3/26

 New pressure on the ceasefire, oil puffs,
 but futures are holding the line.
 I'm Dominic Chiu, and this is your morning call.
 Good morning, I'm Dominic Chiu, and from Morgan Brennan today,
 and Jewish equity futures right now
 are showing a little bit of weakness so far.
 The Dow's implied lower by just about 110 points,
 the S&P, just about flat to down one to two points,
 and the TechHeavier NASDAQ 100 up by about three to four points.
 Stock futures now are, again, with the indices coming off
 another fresh run of record highs.
 That's where we sit right now.
 We're watching energy as well on the back of fresh strikes
 between the US and Iran.
 We'll have more in that situation in just a moment.
 In the meantime, oil prices are moving to the upside
 by nearly 3%, 2% and 3.4% gains for US benchmark crude prices,
 currently $96.38, world benchmark Brent crude futures
 up a similar percentage amount to $98.50.
 We're watching the interest rate complex overall with treasuries
 as we await fresh labor data with the ADP private payroll
 figures later on today.
 This is after the Joltz reports yesterday
 surged to their highest level in around two years.
 The benchmark 10-year no yield ticking slightly higher
 to just about 4.48%.
 The two-year no yield just a hair below 4.08%,
 and the 30-year long bond still below five,
 but only by a little bit, 4.99% there.
 Watching a few of the stocks on the back of earnings reports,
 Palo Alto Networks get lab and ultra amongst others.
 You'll see here right now Palo Alto next to about 5%,
 get lab shares at about 6%,
 and then ultra beauty shares up about 1%.
 More on those individual moves coming up later on the sour as well.
 We're also watching shares of Marvel after skyrocketing
 over 30% in yesterday's session.
 That move coming after Nvidia's CEO, Jensen Huang,
 nailed it as the quote unquote next trillion dollar company
 during an on stage appearance with Marvel's CEO at Computex.
 That move is Marvel's biggest one-day gain in history.
 This morning those shares are extending them right now
 to the tune of 13%.
 You can see here just over the last week-to-date period,
 up 60% for those Marvel technology shares.
 Turning out to the latest on the war in Iran
 and the US and Iran exchanging heavy fire
 as diplomatic efforts between the two countries stall even further,
 the elevated attacks coming after the US struck an empty oil tanker.
 It said was attempting to breach its blockade
 in the straight of four moves.
 For its part, Iran is firing ballistic missiles
 at US bases in places like Bahrain and Kuwait.
 Let's now get out to Dan Murphy and Abu Dhabi
 with the latest on the state of play there, Dan.
 DOM Good morning, Wilson.
 Developing news in the Gulf this morning.
 After what's being called,
 one of the heaviest nights of fighting
 since the ceasefire took hold in April.
 Kuwait's international airport confirming this morning
 that it was struck by Iranian drones,
 damaging terminal one.
 This is the main hub for international flights,
 injuring a number of people,
 flights and all-air traffic in Kuwait
 now currently suspended.
 The Kuwait Ministry of Defense also saying
 this attack resulted in significant material damage
 to the building and injuries to a number of individuals
 who received the necessary medical care.
 The timing here, really brutal,
 terminal one had only reopened on Monday
 after being damaged in a separate Iranian attack
 back in February.
 And then DOM next door in Bahrain,
 air defenses also intercepting and destroying three missiles
 and a number of drones.
 Bahrain's military confirming what it called
 a systemic hostile campaign against civilian targets.
 So how did we get here?
 Well, this escalation appears to have started
 when US forces hit that empty oil tanker
 heading for Iran's cargo island.
 A vessel that Semcon says defied its blockade
 of Iranian ports.
 Of course, the bigger flashpoint as well
 coming when the US struck an Iranian military ground
 control station on Kesham Island
 that's right at the mouth of the Strait of Hormuz.
 So DOM, we're monitoring the situation here
 really closely.
 The ceasefire on shaky ground.
 All right, Dan Murphy with the latest there out in Abu Dhabi.
 Thank you very much.
 We appreciate that.
 Now, CNBC will speak exclusively
 with Israeli Prime Minister Benjamin Netanyahu
 later on today.
 That's in the 10 AM Eastern time hour.
 Let's now see how all of this is shaking around
 for markets in Europe and Asia.
 Karen Cho is in London with the latest on that front.
 Karen, good morning.
 And DOM, good morning to you.
 Well, Japan's Nikkeh closed above 68,000 for the first time.
 I met an ongoing rally in AI stocks,
 which is largely outweighed concerns over developments
 in the Middle East.
 Token electron, the chipmaker was a higher again entry
 today up double digits.
 So here in Europe, though, the equity markets
 are off to a negative start.
 Investors closely watching reports of missile attacks
 from the US and Iranian forces in the Gulf.
 tariffs also back on the menu as the Trump administration
 proposes fresh levees on 60 economies
 as a result of its section three or one investigation
 to force labor.
 You could see Italian stocks down a third of a percent
 coming off a record high yesterday.
 And when it comes to stocks, though,
 there is some upside-the-zara-only index reported
 a 1.38 billion euro in first quarter net profit
 in line with estimates.
 The company had a strong start to the summer season
 with an 11.5% jump in May sales.
 The sector has been in negative territories
 so far, yet to date.
 So a big pop and index shares today
 up more than 5% helping out retail names.
 But it seems as though a collaboration
 with bad bunny over Super Bowl has
 been one of the successful strategies
 as it goes after the US audience.
 Back to you, Tom.
 All right, Karen.
 Show us latest on European and Asian markets there.
 Thank you very much for that.
 Back to the markets here domestically stateside
 in the growing anticipation around the SpaceX IPO.
 Reuters reporting the company plans
 to sell over 555 million shares of stock at $135 a piece
 and raise roughly $75 billion in the offering.
 CNBC has reached out to SpaceX for a formal comment.
 Speaking to our own Leslie Picker yesterday,
 Goldman Sachs CEO David Solomon says
 markets are in greed mode ahead of SpaceX
 and other blockbuster IPOs.
 I think there's plenty of liquidity in the system
 if the world continues to remain as optimistic.
 And I do think we're in a period
 and I know when I say this, I'm pausing for a second to say it,
 but I know when I say it, it will get quoted.
 But I think it's definitely true
 when something for us to reflect on.
 We are definitely in a moment
 where there's more greed than there is fear.
 All right, Goldman Sachs, of course,
 the lead underwriter for that SpaceX IPO.
 For more, let's bring in Robert Shine,
 Chief Investment Officer over at Blanky Shine,
 Wealth Management.
 Robert, this is an interesting situation
 developing here because these types of events,
 these massive IPOs coming to market,
 and by the way, the first and what could be a series
 of big IPOs, sometimes is viewed as maybe
 a more negative sign that things are getting
 bubble-ishest, that things are maybe
 getting a little bit above their out-over-their-skis.
 Do you feel as though this market right now
 is one that can sustain the momentum
 even with all of these kind of top-ish-type signs?
 Yes, Dom, absolutely.
 I think the momentum is here.
 If you look at the IPO market specifically
 and the cadence of the IPO market,
 they look for markets that have momentum.
 They look for markets that have the liquidity,
 and this is just that momentum and liquidity market.
 So not only with the SpaceX IPO
 that's expected later this month,
 we have two more that are going to be blockbuster
 later this year.
 We firmly believe that the strength will continue.
 All right, now, the tech trade has powered much,
 if not maybe even all of this particular rally so far.
 Many other stocks have sat out.
 What exactly does that tell you about the current mix
 of influences in the market,
 and whether that's a sign we should be worried about?
 I don't know if that's the case, Dom,
 specifically, because if we look at the SAP 500,
 if we finish positive at the end of this week,
 that could be a record breaking going back to 1985
 where we had, you know, we're in the ninth week in a row
 where the S&P has been positive.
 This could be the tenth week in a row.
 And that hasn't happened since 1985.
 So that's a very positive sign for the markets going forward.
 That's a very positive sign.
 And we're also seeing, Dom, the broadening out of the markets.
 It's not just technology, and that's evident
 by what we just saw from this earning season.
 There's earnings power and momentum
 in every sector of the economy.
 Yeah, to your point, we saw small caps participating
 in that as well, we're adding your record highs
 for the Russell 2000.
 In the midst of all of that,
 given everything we've spoken about with regard to IPOs,
 some of the underlying themes
 that are developing within the markets here,
 are there any ideas that you have that are still
 in your mind, good relative value propositions
 for upside the future?
 I still like micron, everyone is talking about micron.
 But honestly, micron is the purest way
 to invest in the AI memory bottleneck.
 Essentially, they have guaranteed revenue pipeline
 installed right now.
 They have pricing power, which is key,
 but also you have to look at their PE.
 Their forward PE is only at 11.3 right now.
 It's run up recently.
 We believe it still has room to run between now and your end.
 All right, so micron on the tech side of things.
 How about out, so you mentioned broadening out,
 are there other parts of the market
 that have top picks as well, it can't just be tech?
 Absolutely, we love Eli Lilly.
 Healthcare is not just a defense sector anymore
 and specifically in that sector, Eli Lilly has basically
 the cornerstone on all of the obesity drugs
 and we believe that obesity drugs right now
 will be one of the largest pharmaceutical categories
 that we've ever seen.
 So the total addressable market is fantastic for that.
 And Eli Lilly's most recent earnings report is up 56%
 and they're on track for $85 billion this year.
 So we love Eli Lilly.
 All right, micron and Eli Lilly,
 two top picks from Robert Shionne.
 Thank you very much.
 We appreciate that, sir.
 A lot more to come here on morning call,
 including more on Palo Alto networks under pressure
 ahead of the opening bell.
 Despite beating the streets expectations for its earnings report,
 the company CEO gives his view on the quarter to CNBC.
 Plus, digging into the biotech trade
 on the back of a major conference this past weekend.
 We talked to one top analyst about the stocks.
 She says investors need to watch.
 And later on, dollar stores tapping into concerns
 that consumers here, including high-end spenders,
 are looking to actually trade down the spectrum.
 A very busy hour still ahead when morning call returns
 after this commercial break.
 Welcome back to morning call.
 Let's get a check on some of the big earnings
 movers of the day so far shares of ultra beauty are rising
 to the tune of just about 1% as first quarter earnings,
 revenue and same store sales beat forecast.
 The retailer raises its profit guidance for the full year
 as well.
 Alto is seeing stronger demand for higher price products
 and is drawing younger customers from the tick-tock push
 led by the company's CEO.
 We're also watching right now shares of GitLab,
 which are down by about 6% the maker of software development
 tools reported better than expected first quarter results
 and raised its revenue guidance for the year.
 GitLab also announced it's cutting 14% of its workforce,
 or 350 full-time jobs as part of a pivot
 to make AI a bigger part of its business.
 The company will also exit more than 20 countries
 reducing its geographic footprint by nearly 40%.
 And also watching shares of Palo Alto networks
 which are currently down by about nearly 6%.
 The latest quarterly results topping estimates as well there.
 It's also raising its profit and revenue outlook
 for the year as enterprise customers
 spend more on the cloud, identity, and AI-driven cyber security
 products.
 Here's what Palo Alto CEO had to say about the quarter
 to our own Jim Kramer last night on Mad Money.
 You saw from us, we seemed to be making good progress
 in the first quarter having cyber-archist Palo Alto.
 We have amazing plans for them going forward,
 but it's gonna be crawl walk around.
 Get them amazing, build more capability,
 get out and make sure every customer has that capability.
 That was Nikesh Arora from Palo Alto Networks
 to our own Jim Kramer last night.
 Checking on shares of dollar general,
 falling more than 3% yesterday on the back of earnings as well.
 A big takeaway from those results.
 The companies winning over value seeking shoppers
 across all income brackets and dollar general,
 not the only one seeing that trend playing out right now.
 Our own Brandon Gomez is here with more on that story
 and just why many consumers,
 whether they are lower income, middle income,
 or higher income are all starting to re-gauge their spending.
 Yeah, and it's the dollar stores,
 but we heard this from discount retailers
 this quarter overall, more recently those dollar stores.
 Dollar Tree told us that they saw growth in the quarter last week.
 Dollar General yesterday beating on profits,
 raising its full year earnings outlook,
 shoppers are looking for value, don.
 But what dollar general did yesterday
 was put a finer point on where the K-shape economy
 is taking off, saying it saw an accelerating trade in
 or trade down effect with higher income shoppers
 increasingly turning to discounts.
 And that line in the sand is drawn at households
 earning more than $100,000 a year.
 Well, I reached out to Michael Gunther at Consumer Edge
 who collects credit and debit card data.
 Take a look here, don.
 What you can see is that all income brackets
 as you point out are, in fact,
 growing share at these dollar stores.
 But if you focus on those green and gray bars towards the end,
 that's the 100K plus and the 150K plus income households
 that are growing the most for these dollar stores
 and for these discount retailers.
 Again, showing that they're growing share across the board,
 but that specific cohort we're seeing the largest growth.
 And what about the core consumer?
 Well, Dollar General saying there's a lot of distress right now
 with persistent inflation and sustained higher gas prices
 above $4.
 These companies expect that to persist throughout 2026
 and clearly more consumers across the board
 are feeling that pressure as they turn to these discount retailers.
 It's been a story that's played out numerous times
 over economic cycles.
 This idea that when you start to sense or feel stress,
 you start to change some of your habits.
 Just how worried should we be?
 How significant are these signs of even the higher end
 consumer trading down?
 Or is this just something that maybe is transitory?
 I hate to use that word, that T word,
 but it is something where maybe people do feel
 a little bit better later on down the line
 if say gasoline prices come down.
 And that's where I sort of turned to what
 the earnings commentary was yesterday, right?
 Executives on the Dollar General call saying
 they expect this to persist further into the year.
 Usually you would have seen the stock be rewarded
 by this type of action by the consumer
 because that means that they're turning
 to these discount retailers,
 but even these retailers are feeling the pressure
 of higher fuel prices.
 They said they've been mitigating transportation costs,
 distribution costs, and so long-term,
 I think that there is concern that there is right now
 at least no end in sight to this cycle.
 And so once we have a clear understanding
 of when that is going to be,
 then maybe the market will begin to reward.
 That's going to be an increased focus.
 I'm sure on those channel checks by analysts
 on foot traffic and things like that
 in places like TJX, Marshalls, stores like that.
 Brandon Gomez, thank you very much
 for the update there on the consumer.
 All right, straight ahead on the show,
 the Trump administration is taking a new action
 around trade and tariffs, the allies and adversaries
 facing fresh action by the White House.
 But first, checking shares of GameStop,
 the retailer reporting higher first quarter profits
 and revenue, jumping 14% on stronger sales of collectibles.
 The board's also signing off on a $2 billion stock buyback
 program, shares of GameStop up about eight
 and a three quarter percent here.
 GameStop results coming after CEO Ryan Cohen
 announced a more than $50 billion takeover bid for eBay,
 which was rejected by that company.
 But even with today's spike, shares are often nearly
 25% in the past 12 months.
 Morning call is back after this.
 All right, welcome back to Morning Call.
 Checking out some of this morning's latest headlines,
 the Trump administration is proposing new tariffs
 of at least 10% on 60 trading partners.
 US trade representative Jamison Greer,
 signing a failure by the countries, including China,
 India, Japan, and South Korea,
 to ban goods made with alleged forced labor.
 Seven states are suing the Trump administration
 and total energies for canceling a major offshore wind
 project.
 The lawsuit led by New York challenges the decision
 and the interior department's reimbursement
 of $795 million to the French energy giant.
 And a pivot by total to spend nearly $1 billion
 on a Texas LNG plant and on US oil and gas drilling
 these projects.
 CBS has now fired long time 60 minutes correspondents Scott
 Pelley, according to a letter seen by CNBC.
 The move coming a day after Pelley reportedly
 accused CBS editor-in-chief Barry Weiss of quote unquote
 murdering the show in a staff meeting.
 Also apparently accusing its new executive producer
 of having quote unquote slender qualifications for his job.
 In a lengthy statement of paying by several media outlets,
 Pelley accused management at CBS News,
 which is owned by Paramount Skydance,
 of incompetence and unprofessionalism.
 And Kevin Worsh apparently giving early insight
 into his leadership plans at the Fed,
 pledging to follow the best of the central bank's
 traditions as he begins his four-year term
 as chairman of that central bank.
 This according to Reuters,
 which reviewed the note from Worsh to the Fed's
 more than 20,000 employees,
 Worsh apparently adding the Fed's highest priority
 will be to get policy right,
 but adds the central bank won't rely
 on past practices when we find better alternatives.
 Well, the biggest event of the year covering the development
 of drugs to treat cancer is now over,
 but there was plenty of promising trial data
 that came out of the annual meeting
 of the American Society of Clinical Oncology,
 or ASCO as it's known,
 including one presentation in particular
 that prompted a standing ovation.
 Emily Field was in that room
 when that happened this past weekend.
 She's the US head of biopharma research over at Barclays.
 Emily, we had high expectations
 and for revolution medicines,
 especially going into ASCO this past week.
 How much were they exceeded by, in your opinion?
 Yeah, so I think that,
 we had some high level details
 when they had you to press release a little while ago,
 but going into it,
 you really see the full presentation
 and just seeing all of the data,
 whether it's on efficacy or safety.
 And then what was most important,
 I think, was just seeing the reaction
 of all the clinicians in the room,
 seeing that there's always a discussant
 who reviews the data
 and it was just so overwhelmingly positive.
 And you know, Emily, we're showing some video right now
 from that ASCO conference
 and that kind of,
 that presentation by revolution medicines
 and some of the ovation that we are seeing right now.
 When it comes to cancer treatments,
 this is an audience filled with not just analysts
 but doctors as well,
 people who kind of watch the industry overall and practice it.
 How important was this year's conference vis-a-vis
 some of the other ones that you've seen in the past,
 not just because of revolution medicines,
 but because of all the stuff that happened portfolio-wise.
 Yeah, so I think that what I was seeing
 in terms of what clinicians seem so excited about
 was that the pan-rast target
 that revolution medicines is going after
 was long considered undruggable.
 And so that was the, I think,
 what people were so excited about.
 Not only what this would mean for patients with pancreatic cancer
 who have just really had nothing besides chemo for so long,
 but what this could mean for just opening up
 this undruggable target
 and where could we go next?
 What could this mean for other types of tumors?
 For lay people out there, I mean, right now,
 for those people who have been affected by cancer,
 one of the primary medications used either in concert
 with others or by itself is Ketruda,
 which is from Merck.
 It's become one of those medicines
 that has become almost kind of ubiquitous
 to certain types of cancer treatments.
 Is the revolution medicines product?
 Something that could have that kind of trajectory
 in treating many different kinds of cancers
 in the coming years?
 Yeah, that's a good question.
 We don't know just yet,
 just because at this point,
 you need to have certain types of driver mutations
 to be able to receive this drug.
 And that's sort of why Ketruda has done so well
 is that it just works across so many different tumor types
 and for so many people.
 So we'll have to wait and see,
 but I think that in terms of this particular target,
 the doctors just seem so excited
 about what, where we could go from here.
 And then outside of the revolution medicines,
 standing ovation, what else stood out to you
 about other companies and other products
 that kind of really rang the bell, so to speak?
 Yeah, so I think the other big theme of the conference
 was what is going to come next in lung cancer?
 Ketruda is lung cancer's biggest indication
 and there's sort of been two competing forces
 trying to be what could be the next Ketruda?
 Antivati drug conjugates, which are being developed
 by Merck, the innovator of Ketruda, AstraZeneca.
 And then you have these bi-specific antibodies.
 Summit therapeutics is one that's developing
 one in partnership with a Chinese company.
 And so going into the conference
 has sort of felt like it was this battle royale,
 I call that, yeah, exactly.
 And I think we don't really have definitive answers
 as of yet, both sides presented data
 at the conference this weekend.
 I would say the ADC data was received a little bit better,
 but we'll be learning more
 at the medical conference throughout the year.
 All right, Emily Field at Barclays,
 thank you very much.
 And obviously, a great conference,
 so we'll see, please come back and see us again
 with those updates.
 Thank you.
 All right, we'll still on deck for the show.
 The trumpet agenda is facing a bumpy road ahead
 as Congress gets back to work.
 What the potential DC drama could mean for markets
 and, of course, your money, warning calls back after this.
 Welcome back. I'm Dominic Chouin from Morgan Brennan.
 Welcome back to morning call.
 US Act with Futures right now are slightly lower
 after coming off some record highs.
 The Dow's implied lower by 170 points.
 The S&P off by about two points.
 And the Nasdaq down by about, or up by about 50 points right now.
 On the energy side of things, we are seeing a move higher
 in oil prices.
 US benchmark West Texas Intermediate currently up
 just about almost two and three quarters to three percent now.
 96 dollars and 44 cents per barrel.
 I spread crude futures.
 The World Benchmark gauge $98.65.
 That's a similar percentage gain over there.
 Turning out of Washington, DC, Congress gets back to work.
 And for President Trump plans to advance his agenda
 may face some new resistance.
 But it's not just Democrats looking to put up a fight this time around.
 Our Emily Wilkins is here with the GOP pushback that the president could be facing right now.
 Emily.
 Morning, Dom.
 Yeah, look, Senate Republicans, they are showing more willingness to buck the Trump administration
 in part because several key Republicans lost their primaries after Trump went ahead
 and endorsed their opponent.
 So likely today, they will likely grapple with the Justice Department's proposed $1.8 billion
 dollar fund for alleged victims of government weaponization.
 After numerous senators raised concerns with the plan, acting Attorney General Todd Blanche
 told lawmakers yesterday that the DOJ was dropping the fund.
 Yet, several senators, they've indicated that his word alone might not be enough.
 Senator Bill Cassidy, who lost his primary after Trump endorsed a challenger, told me yesterday
 at CNBC CEO Council that there needs to be strong protections in place to ensure the
 fund cannot go forward as is.
 I am not confident that the weaponization fund will not go forward because what if they
 end up getting the judge lift this day, does that mean they can go forward with it?
 And to be clear, it is a slush fund.
 The four positions out of five are appointed by the president and there's very little oversight
 to whom to whom to whom to whom he comes from a major sticking point in the larger effort
 to pass a $70 billion in funding for ICE and Customs and Border Patrol, which the Senate
 again could start voting on as soon as today.
 In addition, more Republicans are also showing a new willingness to check Trump's power in
 Iran through invoking the War Powers Act.
 Just a few weeks ago, Cassidy joined several other Senate Republicans to advance the measure.
 And then this afternoon, we will be keeping a close eye on a similar vote in the House
 to see if there is a similar sentiment among Republicans there.
 Tom?
 All right, Emily Wilkins, please stay with us for just a moment here and bring in Henrietta
 Trays into the discussion as well.
 She's the co-founder and director of Economic Policy, Advaita Partners.
 Henrietta, you just heard Emily's report here on what kind of the state of play is right
 now in Congress, vis-a-vis the White House, and policy.
 What exactly does the administration need to get done now?
 Not just with the war in Iran, but for broader agenda items as well.
 But just how much of a clock is on all of this?
 Great questions, Tom.
 And of course, Emily is exactly correct.
 Around town, we're kind of calling them the YOLO Senators.
 These are members who are incumbent Republicans, who the president aggressively primaried and got
 ousted from their seats.
 So that's John Cornyn in Texas, Bill Cassidy, who you just showed in Louisiana.
 And there are a host of others that I've got my eye on.
 And the reality is that right now, Congress probably for the next two weeks is only going
 to be working on the bare minimum, but it's weird because it's a reconciliation bill.
 So you should expect something extreme, maybe a tax policy, something that will help consumers
 worried about inflation.
 But none of that is in this bill.
 It is $70 billion to fund ICE and the DHS.
 Senators like Bill Cassidy are trying to strip out the billion dollars for the ballroom
 or the $1.776 billion for January 6th insurrectionists.
 And there's nothing in here for a gas tax holiday or any of the components that members
 really want the president to focus on, now that we're fully in the summer and the election
 is right around the corner.
 So there's not a domestic agenda around stimulus coming in this bill.
 Henry, what should be, I guess, the question?
 What should be the key focus for the administration in its relationship with Congress?
 What should it be trying to push through right now?
 And what exactly is the priority with regard to how this particular administration, this
 Congress approaches the midterm cycle coming up this fall?
 When I speak with Senate Republicans and their senior staff, what they tell me is that voters
 want to focus on the economy, jobs, prices, inflation.
 Those are the top four concerns of American constituents.
 We famously don't care about international affairs and foreign policy time after time.
 That's what our voting turns up.
 But in this case, we're paying $4.33 a gallon for gas, which is effectively attacked
 in about $480 per household.
 And that's not something that the Republican members in both the House and the Senate
 want to go back and campaign on.
 So they're going to try to rate in the president's authority to perpetuate this war with the
 war power's resolution that I believe has the votes not just to pass the Senate, but also
 to pass the House.
 Indeed, that's why Speaker Johnson sent everybody home early about a week ago.
 So we're in this place where the members want the president to move away from tariffs,
 which we're also just announced as you discussed earlier in your show.
 I'm really focused on domestic policy and that's not what we're getting.
 Emily, from a logistical standpoint, agenda-wise and everything else, let's put clocks and
 calendars to this.
 What exactly could the next few months, the summer months, which are typically ones that
 maybe aren't as active on some of these fronts?
 But because it's a midterm election cycle could be a little bit more both on the formal
 and informal fronts.
 What is on the calendar in your mind that we need to pay attention to?
 Interesting things to keep an eye on.
 One actually fits into that affordability bucket.
 Remember, the House and Senate have both been working on this housing affordability
 legislation.
 The House recently went in, stripped away a controversial provision that actually
 gives major investors more ability to build rental homes, senators and house members
 argue that this is actually going to help supply, could potentially bring down prices.
 We know that that builds bounce back and forth between the two chambers and it does seem
 like now leadership is actually trying to work out some language that could be agreeable
 to both chambers and pass them with big bipartisan support.
 But look, that's one of the things that it doesn't necessarily have to get done.
 One of the things that definitely needs to get done is a reauthorization of Pfizer, that
 is a key national security law there.
 That is now of course being complicated by Trump's decision to name Bill Pulti as acting
 director of national intelligence.
 And one of the other things I spoke with Cassidy about yesterday was that and Cassidy said,
 look, I don't really know what this guy's qualifications are.
 It's not clear to me that he necessarily has that kind of background.
 And while senators don't need to play a role right now since he's only acting, he's
 not actually up for the permanent confirmation.
 At the same point, they're a little concerned about passing this national security law.
 If there's going to be someone heading these agencies that doesn't have the background
 that they're used to seeing from someone with that amount of power.
 All right, a lot of complexity here developing for sure.
 Henrietta Trays and Emily Wilkins, thank you both for the conversation.
 We appreciate that.
 And a lot more to come here on Morning Call as well, including new rules around one investment
 vehicle hitting shares of exchange operators and raising some fresh fears about potential
 risks to the broader markets.
 That story, when Morning Call comes back after this.
 All right, welcome back.
 We're watching shares of exchange operators this morning.
 Sometimes like of course, CME Group, CBO, Intercontinental Exchange, the parent company
 of ICE and NASDAQ.
 All right, now you can see relatively stable, a little bit more mixed here and upside here
 for CBO.
 But this is all after falling between nearly two and eight and a half percent and yesterday
 on the commodity futures trading commissions approval of perpetual futures for Bitcoin.
 Perps, as they're known, right?
 They're a type of future style contract with no expiration date, unlike futures.
 And they're becoming way more popular among retail traders, not just here, but mostly abroad.
 Investors are worried that the CFTC could give the green light to other asset classes to
 trade next, which could increase competition, of course, for those traditional exchange
 operators that we just showed you, who have long dominated on Wall Street.
 For more on this story, let's bring in Catherine Kirkpatrick-Boss.
 She's the general counsel at Starkware.
 This is a blockchain company that focuses on zero knowledge-proof technology built on
 the Ethereum platform.
 She's also a board member of Architect Financial Technologies, a global regulated perpetual futures
 exchange.
 Catherine, thank you very much for joining us this morning.
 I would like to start the conversation off with just a clarification or definition, if
 you will.
 For those people who are professionals who watch this show, futures or futures, but perpetual
 futures are different because they don't have an expiration date.
 And there is a funding mechanism, so to speak, that keeps this market kind of in line.
 Can you take us through the basic mechanics, please?
 Exactly.
 And, you know, I think it's really important to note that perps are very elegant for retail
 speculation because of the nature of the asset, and you're correct.
 The key aspect of this contract is that it has no expiry, and it uses this funding rate
 mechanism to maintain price convergence with the underlying spot price of the asset.
 Because the real question is there's no expiration, this is a huge advantage for traders.
 It creates some natural efficiencies, but that elegant funding rate mechanism locks
 it to the spot price.
 Now, it's mostly geared towards things like cryptocurrency, Bitcoin and Ethereum in particular.
 But the reason why these exchange operators are moving the way that they are is because
 it is now flowing through, and people can imagine a world where you could trade oil futures
 maybe, or gold futures, or corn futures on a perpetual basis without expiration, and that
 would threaten these exchange operators.
 Just how important is perp to this whole story?
 That's correct, and we're actually already seeing those kinds of futures offshore.
 Architect has non-cryptopurps offshore, and although the CFTC specifically limited this
 approval to Bitcoin, basically because of the nature of Bitcoin, the very deep spot volumes
 and the 24-7 nature of Bitcoin, which is unique to crypto, they kind of open the door by
 saying that they would address perps more broadly in the future, and those characteristics
 of Bitcoin also could apply to other assets.
 So although this may not apply to wheat, you could see how this could apply to, for
 example, AI compute power, and that could present some really unique upside potential
 hedging alongside speculation, and there's a natural fear that this kind of asset growth
 could cannibalize the traditional mechanisms for hedging.
 We understand that the markets are handicapping this in real time, especially when it comes
 to the stock price of these exchange operators.
 From your mind, as somebody has to look at policy from a board perspective and an execution
 perspective at a company as well, this administration, the Trump administration, and the regulators
 tied to it have, at least in many people's minds, expressed an openness to maybe looking
 at some of these types of products and letting them run.
 But how important is the Washington backdrop for this kind of story of perps in perpetual
 futures going forward?
 Well, it's huge.
 This is obviously a very pro-innovation administration, and you're seeing that with
 Chair Sealeague.
 He's specifically promised to look at perps.
 He's following through on his promise with this kind of guidance.
 And look, the CFTC is what they call a principle-based regulator versus the SEC is a rules-based
 regulator.
 That allows some flexibility.
 The commodities exchange act doesn't actually define a future.
 And a lot of this is based on precedent.
 So you have a futures style product or a product with futures characteristics like obligation,
 margin requirements, etc.
 That's an opening to OK this kind of product.
 So this is partially the administration, partially opening in the commodities exchange
 act.
 All right.
 Catherine Kirkpatrick-Boss, it's a bigger conversation.
 Please come back and see us again soon.
 That's Catherine Kirkpatrick-Boss over at Starkware, the General Counsel there, kind of future,
 kind of swap.
 Straight ahead on the show.
 The morning call crew assembles, teeing up a trading day ahead, and the signals, one
 member says, maybe flashing some caution ahead for the broader markets.
 The morning call crew coming together after this.
 All right.
 It's time now for your call sheet where we look at the topic, striving the trading day ahead.
 The crew member is assembled today, our Steve Grasso, CEO of Grasso Global, he's also a
 CMBC contributor.
 We've also got Paul Hickey of Bespoke Investment Group, and Bill Lee of Global Economic Advisors
 Gentlemen.
 Thank you very much for assembling this early morning.
 Let's start with our first topic, which is the new Iran strikes between both sides that's
 happening right now.
 I will turn to Bill for you for this one first.
 This has been a macro story for a long time, and headlines drive the market.
 How exactly should headlines around these particular strikes drive today's trading?
 Clearly, the markets are seeing the price spike as a spike, because there's no sign
 that inflation expectations, especially the longer term expectations are becoming on
 anchor, and so a really clear implication of that is that the Fed should not be tightening
 policy.
 There's no sign of excess demand-driven kind of inflation that the Fed could be effective
 in encountering, but it's a supply side shock, and the supply price shock is going to
 be clearly being priced in the five-year break even as a temporary phenomenon.
 Now, Steve, I'll turn to you for this one, because the market action we're seeing pre-market
 today has basically mirrored what we've seen arguably over the past two weeks, which
 is this kind of stable, slightly up, slightly down market that somehow manages to keep
 eking out record highs at the close every single day, a classic melt-up scenario.
 How much longer do we continue that kind of slow, gradual melt-up, and what potential
 catalyst either sends us way higher or way lower?
 Well, if you think about it down, the reason why the market keeps running the way it is,
 or it does, is because earnings growth has been off the charts, and that caught everyone
 off guard.
 And what people were doing was trying to hedge their bets against the rising market,
 meaning they were taking out protection because they didn't think the rally was going to
 last.
 Having said that, if the market continues to have earnings growth exponentially above
 what the market was prepared for, people will chase.
 But I agree, when you look at a demand poll versus a cost push, there's nothing that the
 Fed right now can do with rates to solve inflation.
 So if that's the case, then even though we're not looking at a rate cut right now, what
 could a rate high possibly do other than hurt the lower income bracket?
 So I think the market is trying to digest all of that at once.
 All right, so speaking of that, today we have an issue with regard to the number of earnings
 reports coming out, but it's also driving a story, Paul Hickey, about just how strong
 and sustained this rally could be.
 I hope it keeps going higher in perpetuity, because my 401K is doing better just like everybody
 else's is.
 But why are there caution signs out there in your mind?
 And how much of the underlying kind of thematics in the trade for the S&P say are signaling maybe
 that this is just narrowly focused on those big tech stocks?
 Well, so far this rally, Brett has been weaker off these March lows.
 You've seen the cumulative AD line for the S&P 500.
 It hasn't made a new high since mid April.
 So you tend that's a negative divergence what they call, but these types of divergences
 can go on for a long time before they become overly concerning.
 The AD line peaked in April 1998 back in the 90s.
 The market didn't peak for another two years after that.
 So these types of divergences can go on for a while.
 But I think as if you're looking to put new money to work here, rather than maybe focusing
 on the cap weighted S&P 500, where 50% of the market is in tech and communication services,
 you can go to the equal weighted index, which has just recently also moved out to new highs
 and isn't as extended.
 The S&P 500 technology sector is close to 20% above its 50-day moving average.
 Historically, it hasn't been to that level since 2002.
 And forward returns when the tech sector has been that extended for over a month above
 its 50-day moving average have been mixed and volatile to say the least.
 You saw it back a lot during the late 90s and they've run up to the .com boom.
 So I think you want to just take a more broader approach.
 So if we do see a consolidation in the rally and some of these big tech stocks take a breather,
 you'll see other stocks tend to see inflows.
 Okay, so we've hit the Ruan War, we've hit some of the market breadth underlying issues
 here.
 I want to take us through now to the earnings and the eco data that we have coming up
 this week.
 More tech and retail names coming out, CrowdStrike, we've got other retailers coming out
 as well.
 Bill, I'll go to you for this one.
 The earnings growth story has been powering this market.
 Multiple expansion hasn't really been that big of a story so far.
 What needs to happen in order for this to continue?
 The earnings story for corporate America.
 I think the message we got from Jensen Wong is giving us a signal that a lot of the AI
 transmission and usage of AI is going toward the local level, local computing as it were.
 That I think the small of companies are going to start to gain the benefits from a lot of
 the AI technologies that are being put in place.
 And I think that's going to support earnings going forward because the productivity boom
 for the last several years has really been the source of this massive earnings growth
 that we've seen.
 And I think it's certainly going to continue and broaden into other companies as the adoption
 of AI becomes much more easy at the local level and not having to depend on hyperscalers.
 All right, let's get a couple of final thoughts here.
 Steve Grasso, job status coming out throughout the course of this week.
 How important is that for the eco story?
 I think I lost you there, Dom.
 If you could hear me, jobs actually right now, I don't think are the real linchpin of whether
 or not the market is going to rally or fall.
 I think it's what I said before.
 It's the real supply issue that we have that's creating the inflation rate.
 So I don't think the mandates are going to come into question here.
 Sure.
 How long the Fed can sort of push back that question of rate height versus rate cuts
 and obviously rate cuts are not on the young table right now.
 Gotcha.
 All right.
 Steve Grasso, Paul Hickey, Bill Lee, thank you very much for being part of the morning
 call crew today.
 If futures right now are holding stable, keep it right here.
 Squawk box starts right now.