Wall Street's Space Race, Trouble Ahead for Retailers? 6/1/26

 Futures are in the green to start the month of June as stocks turn around and the world
 hit records.
 I'm Dominic Q and this is your morning call.
 Good morning.
 I'm Dominic Q and for Morgan Brennan today and US equity futures are in the first trading
 day of June.
 With the major averages kind of sitting your all time highs are in the green.
 The S&P 500 and Nasdaq are running seven day winning streaks right now futures are
 pointing towards 135 point gain for the doubt the opening bill.
 The S&P will be higher by about just about 25 points and the tech heavy Nasdaq up by
 roughly 120 or so.
 On the interest rate side of things we are watching Treasury yields still closely.
 We're still hovering in the same range as we've had before.
 You can take a look at the 10-year note yield currently.
 At least we're going to show you right now 4.47% the two-year note yield 4.037% in the
 30-year long bond relatively unchanged at 4.993%.
 And then energy prices as President Trump pushes an optimistic outlook for the US around
 peace talks that are going on going despite airstrikes by both sides.
 And right now US benchmark crude prices $90.75 up nearly 4%, about a 3.5% gain for ice
 sprint crude futures the world benchmark age $94.16 there.
 Around the world huge moves in Asia on the back of a massive chip stock rally in South Korea
 that saw the Cosby surge to a new record high and Samsung break through a $1.3 trillion
 market cap level.
 This is all as NVIDIA CEO made headlines of his own at the Computex Tech Conference
 out in Taiwan.
 Our Lisa Kim is actually in Singapore covering all of those storylines for us.
 Not exactly is the massive driver of this trade outside of what's happening with Computex.
 It's all about chips.
 You're absolutely right Dominic.
 I mean Asian chip stocks rallied on the first trading day of the month South Korea's
 Cosby climbed to a record closing high with heavyweight Samsung electronic surging 10%.
 And also there's been a lot of optimism among Asian investors since last Friday about
 meetings that NVIDIA CEO Jensen Huang is expected to have with executives during his Asia
 visit this week.
 Jensen Huang is at the Computex Conference in Taiwan.
 He gave a keynote speech earlier in the day touching on what he called NVIDIA's quote
 new major growth driver.
 Watch this.
 CPUs for agents has his own special requirement and our NVIDIA Vera is revolutionary.
 I'm so happy about its ramp.
 The order is already is going to make it the fastest and the most successful product
 launch in our company's history.
 Over in Japan, the investment giant soft bank group closed up 14% on news of its massive
 AI data sent a build out in France.
 The games now make soft bank the most valuable Japanese company surpassing the world's largest
 automaker Toyota Motor.
 Japan's benchmark index in K225 posted another record closing high Dominic.
 Lisa Kim, thank you very much for the update there from Asia.
 Thank you for that.
 Speaking of that soft bank trade and France, let's get an early check on the early action
 in Europe.
 Our Karen show is live in London with the trade there, soft bank a big part of that story
 in France.
 Karen.
 It's a huge investment, Dom 75 billion euro's worth and that tops the investment the
 soft bank has made an open AI.
 Now European equity markets themselves are a little bit muted early on in trade as
 investors continue to monitor the uncertainty around the U.S. around ceasefire deal but
 now two hours into the trade.
 Some of these markets find in their group were bounced towards the top end of the trading
 range so far today.
 So bouncing almost about 30% on the DAX but a quarter of a percent on the French stock market
 and you can see book end and buy slightly lower ranges there for the Italian stock market
 and the UK that's giving back some territory.
 And all that technology news from Asia to Europe today, tech stocks are pushing higher.
 This after soft bank pledge that might be 75 billion euro in AI infrastructure, investment
 in France.
 We're going to be speaking to Masayoshi today but it has certainly caused a pop in some of
 the big tech stocks.
 Elsewhere universal music group shares are tracking lower after rejecting billionaire
 Bill Atman's 55 billion euro takeover offer with the board arguing it materially under
 values of the company and is not in the best interest of shareholders or artists, that
 stock done 2.6% today also dragging down the media basket of stocks which is one of the
 worst performers here in Europe, Tom, back to you.
 Joe, live and London with the latest there.
 Thank you very much for that and she just mentioned it but Karen said be sure to catch that
 CMBC exclusive interview with soft bank CEO Masayoshi Saan coming up later on in squawk
 box this morning.
 Now US markets are kicking off June today with the major averages at record high levels
 powered largely by the tech trade AI and in particular chip stocks with the stocks index
 now up 22% over the past month alone.
 The S&P is riding a nine week winning streak the longest for the benchmark going back to 2023.
 Historically that's led to a breather in the very short term.
 Before this current run though the S&P has been up in nine or more straight times 13 times
 going back to 1936.
 If you look at the past four cases it fell each time in the week after it hit those marks
 but was higher again a month later in the two most recent occasions back in 2023 and
 2024.
 For more on this let's bring in Dan Ives global head of technology research over wed
 bush securities also Victoria Green founding partner and CIO at G squared private wealth.
 She is also a CMBC contributor.
 Thank you both for being with us right now since we are here talking about the tech
 trade front and center Dan I'm going to start with you on this.
 We've gone back to old habits since the great financial crisis which has been mega cap
 technology powering things after taking about an 18 month breather from that overall trade.
 Does this trade have momentum?
 It's it's third in one out I mean relative to this AI super cycle and I think what you're
 seeing and you're seeing the cost be look you have less than 5% of companies in the U.S.
 that have gone down the AI path in Asia China X China it's less than 2% Europe and obviously
 Middle East you're starting into the game I mean it's my view like that's how we're
 getting to Nasdaq 30,000 and I think now what's starting to happen is the second third
 fourth derivatives Dell snowflake and others are starting to play out and this is not
 ending is still get the popcorn out and I think the bears they can see AI in the spreadsheets.
 All right Victoria is that the way that you feel is this one of those situations where
 this is very early stage and this market has a whole lot of room to run just because of
 that tech trade momentum.
 I do think I'm bullish tech I'm not quite as bullish tech as Dan is but I think it might
 take a little bit of consolidation pause here look anytime we have something move over
 two or a percent year to date we tend to err on the prudent side and say hey look this
 is great but say a micron Intel AMD up 200% year to day we might pull that back to
 target weight.
 I'm not saying sell it all I'm just saying some of these names have run so hard so fast
 we are starting to just be a little bit wary of the chip sector looking a little bit
 frothy and for me I'm just saying hey let's pull it back right so if you had a 5% allocation
 of micron possibly now that city in your portfolio almost a 10% maybe pull that back take
 your earnings off take it back to target weight 5% I agree with Dan we are still in early
 cycles here we're finally seeing the AI adoption we see no signs of capex saloing whatsoever
 and that 20% 28% S&P 500 EPS be that coming from tech and that does not look like it's
 slowing at all so I don't think you necessarily want to give up on tech I do preach a little
 bit of prudence in the near term.
 All right Victoria could I follow up that really quickly since the pandemic and maybe
 even by extension going all the way back to the great financial crisis the pullbacks that
 we've seen in the market have seemingly gotten shallower and shallower to the point
 right now where a 10% pullback is a massive pullback for this market is that a trend that
 we see continuing or are we at risk for a possible bigger drawdown the likes of which
 we've seen say during the dot com era.
 I mean we did have a solid bear in 2022 so we have seen that happen and that bear market
 did hit technology shares really really deeply remember when meta was a value stock back
 in 2022 I mean it can happen but we are very conditioned to buy the dip and I do not see
 that changing whatsoever look at that money market assets are still at all time highs
 I think it's something like 8.5 trillion parked in money market it's not like we don't
 have dry powder here so I don't see that trend stopping whatsoever we are still in a
 major up cycle secular bull market and I think by the dip is going to hold I don't think
 it's going to be weird if we see that 5 10% correction I do think you're going to see
 that floor come in the only thing that would change is if we had something breaking
 in AI which I don't see happening whatsoever as long as earnings continue to grow earnings
 revisions continuing rain positive with all of those things are major catalyst for this
 market to continue to expand and so for us it's keep common rally on here all right
 Dan within that tech universe that you cover there are a lot of ways to play it you can
 do it at the index level you can pick the individual stocks your job is to pick stocks
 so which ones go on the top of the shopping list me look on the chip side we've taught
 me it continues to be got father of agents in a video you look at AMD I mean Victoria
 talked about I think Micron in terms of look this is a memory super cycle that's going
 to continue to play out but then the hyperscalers you look at Microsoft in terms of where I view
 that oracles another name I think continues to be over sold relative and look now it's
 spreading second third fourth derivatives across AI every dollar spent on video chip there's
 an 8 to 10 dollar multiply across the rest of the tech that's why it's third inning you know
 interesting Victoria I'll end with you here you're shopping list you mentioned before that
 there are ways to play this and that this is still an early stage game what exactly then
 do you buy yeah I'm looking at cybersecurity this week I love Palo Alto on CrowdStrike there's
 a small name named rubric they're more on the resilience and defense you know if you do get hacked
 how do you recover I think all of that software apocalypse cybersecurity did not deserve to be sold
 off I know they've rallied back hard here I think all three of those were prime for a good week I'm
 not worried about the scaler I think that was idiosyncrantic I look at this and say the growth is
 there the AI spending there what people are spending their IT budget on our cybersecurity and they're
 having to modernize and in those two names specifically in Palo Alto and CrowdStrike they're part of
 project last week they're part of mythos that's a huge plus for any enterprise looking to better
 adopt their cybersecurity and so if you're going to spend anything right now you're going to spend it
 on cyber I see that as a place that that we're looking for a big catalyst this week all right
 Victoria Green G squared private well thank you very much Dan Ives we're going to see you later on
 during the morning call crew so stick around please we've got a lot more to come here a morning
 call including well after a surprisingly strong first quarter why one sector of the market is
 bracing for trouble ahead and the names that need to be on your watch list plus what Berkshire's
 first big buy in years could mean for a stock that's appeared to lose some of its luster some
 so trading under new CEO Greg Able and then later on call it Wall Street space race investors are
 piling the space themed ETFs at a record pace but critics are still voicing some caution
 a very busy hour still ahead when morning call returns after this commercial break
 welcome back to morning call we get some further insight into the health of the retailers and the
 American consumer later on this week with the likes of bases five below victoria secret ultra beauty
 and dollar general all reporting their quarterly results it's a mixed picture on those stocks by
 the way since their last reports and while retailers have largely emerged unscathed from the first
 quarter and overhangs from the Iran war the second quarter might be a different story Gabi
 fondreuse joins us now with that story about the retailers and the consumer and just how much have
 we been able to glean about the health of the all important us consumer that drives our American
 economy so we were looking through q1 with rose colored glasses it feels like we didn't actually
 get a very good look at the us consumer at a very critical time because we had rising gas prices
 we had a lot of concern about the consumer coming into q1 with the conflict in the middle east
 but around the same time that that conflict began we also had tax refunds coming in and not just
 tax refunds higher than usual and more people getting them so that kind of helped to buoy spending and
 kind of obscure some of the results that we saw and also at the same time down we also saw an
 uptick and by now pay later it hit new highs in q1 adoption hit between 15% and 17% for people
 making up to a hundred and fifty thousand dollars a year and crucially 13% for those making
 over a hundred and fifty so it's interesting because the American consumer has been creative right
 they find ways to kind of make things work and you mentioned by now pay later but since the pandemic
 stimulus that came out you know the checks all of the kind of money that was poured into the
 economy savings got boosted they've now been drawn down if this is this the stage what exactly
 then does show up in that second and third quarter if those tax refunds which have been supportive
 yet again are no longer a factor so what we're expecting is you know potentially q1 i mean q2
 and the end of tax refunds kind of showing some underlying weakness you have delinquencies rising
 you have the consumer a little bit more exposed in q2 they don't have that extra money to feel
 discretionary spending which is what we saw at companies like target they had one of their best
 comparable sales growth and I think about five quarters but then when you heard their cfo and
 their earnings call they talked about how they're actually expecting that to moderate throughout
 the rest of the year off price was another place where you saw that tjx burlington Ross so you are
 with with the consumer having less to lean on we might see some more pull back in that space if
 you take a look at the calls that you've looked at the transcripts of the results are there
 companies in your mind that are positioned better relatively speaking in terms of performance in
 that kind of environment where the tailwinds are not necessarily there so look this is what we've
 had for retail for the past I think couple of years now is that it's like a stockpickers paradise
 because the good executors are still really performing well and that's an opportunity for the
 strongest retailers so if you look at a company like Dick sporting goods their consumers strong
 their kids are still playing baseball they're still coming out to buy those new cleats and things
 like that you know companies that the consumer is still spending that is what we're seeing
 they are just being so much more mindful about where they're spending and anybody who has a
 little bit of that exposure to the upper middle income consumer is going to be okay especially
 if they're doing right if they have that right consumer experience right product and right price
 they're still going to perform well all right Gabrielle von Rouge with the state of the American
 consumer thank you very much thanks dad all right straight ahead on the show fallout after last
 weeks blue origin launch pad disaster and what investors are now saying plus fed governor j pal's weekend
 warning over central bank independence and public trust democratic institutions take much time
 effort and patience to build but can be torn down all too quickly all right but first check in
 shares of general motors nearly a thousand union workers at a key supplier in michigan went on strike
 this morning stalling production of parts for the Chevy Silverado and GMC Sierra truck models
 the UAW says the workers are seeking a new contract from american axle
 citing pay they have not recovered from cuts made during the financial crisis back in 2008
 despite the company's high pro profits general motor shares down two thirds of one percent
 pre-market morning call is back after this
 welcome back you just saw a live shot of time square let's go a little bit further
 downtown to menace and square garden and those shares just about flatten the session so far
 this after the new york nicks learned this weekend who they'll be facing in the NBA finals
 the san antonio spurs defeating the Oklahoma city thunder in game seven of the western conference
 finals and the prediction markets thinking the spurs have the edge in that finals matchup
 sixty three percent of those on the kalshi platform are putting their money behind san antonio
 taking it all with thirty seven percent backing the new york nicks well checking that some of
 this morning's top headlines in his first public remarks since the end of his eight year term is
 fed chairman fed governor j pal sounding the alarm over a politicized fed and calling for a
 defense of democratic institutions pal speaking in boston last night like so many other institutions
 the fed has been undergoing a stress test congress wisely chose to insulate monetary policy
 decisions from political pressure all other advanced economy nations have done the same
 all right and after a record one day pop on friday del is trying again so far today unveiling
 its most affordable laptop model the xps thirteen that's in direct competition to apples entry
 level macbook neo those shares right now about three percent in the pre-market trade
 del says the new computer will be its thinnest and lightest model and about a half pound lighter than
 apples neo while also featuring a larger display in the wake of an order calling on meditative
 unwind its deal for a i start up menace china is out with new rules this morning tightening control
 on overseas deals that involve chinese investors their technology data and national security
 the new rules going into effect on july first and blue origin reportedly faces a month's long
 setback after last week's launch pad explosion in a new glenn rocket test among those impacted are
 any more new glenn launches the rollout of amazon's satellite internet service leo and future nasa
 Artemis missions as well we'll still on deck for the show what blue origins setback means for
 space x ahead of its highly publicized ipo plus the massive investor hype around its debut
 this is what long time space investor and cracking coceo argent seti told our own morgan brennan
 on the sideline of the ragan national economic forum friday about what's ahead
 we say the word space and space x but it's just the rails to be able to create new products
 in new industries and then people to build on top of it so what is the first thing they did they
 were able to launch you know something into space then satellites in space not just their own
 starlink now they're going to be building data centers in space and so the question you have to
 ask is what are they going to build on top of that and then what can you build on top of their stack
 so what i just said right now are trillions of dollars with opportunities
 i'm dominic chewing for morgan brennan today welcome back to morning call us equity futures
 on this first trading day of june are now in the positive session here with all the major
 averages at all time highs the s and p and nasdaq are writing seven day winning streaks and
 futures right now are pointing to a doubt that's higher by roughly 150 points at the opening bell
 the s and p's implied higher by roughly 20 to 21 points and the nasdaq 100 up by nearly 95
 to 96 points on the treasury side of things we are seeing a bit of movement in the 10-year
 note yield slightly up in terms of yield down in terms of price the 10-year note yield at 4.47 percent
 4.037 percent for the two-year note yield and the 30-year long bond just a shade below 5 percent
 4.99 the last trade there energy and focus as president trump pushes an optimistic outlook for
 us they run peace talks despite ongoing airstrikes by both sides and right now us benchmark west texas
 intermediate up by four percent to ninety one dollars and five cents ice print crude futures the
 world benchmark gauge ninety four dollars and thirty eight cents up about three and a half percent
 on its own tracking global markets a mixed picture in early trading in europe in asia though south
 korea's cost be closed up over three and a half percent driven a lot by that chip trade it hit a
 fresh record high a big driver for that again shares of samsung electronics and LG electronics rallying
 unexpected meetings with Nvidia CEO jensen Huang ahead of that Huang revealing that Nvidia is
 expanding its chip dominance as well now to personal computers with the help of arm taking on
 the likes of intel and events micro shares here you can see for the across the board trade Nvidia
 up by about nearly two percent 12 percent gains for arm holdings advanced micro and intel down
 about four to five percent as well there Huang speaking at the computex conference in ty one just
 last night there is no question this reinvention of the computer is as big of a deal as the reinvention
 of the phone into what we now know as the smartphone and so this is the beginning of that journey this
 is the beginning of a new line and so we have a roadmap for this this is a brand new product family for us
 all right well Huang adding that anthropic open AI and SpaceX are among the first big users
 of this upcoming Vera chip unit so keep an eye on those and also watching soft bank shares
 surging about 14 percent in japan announcing it plans to invest up to eighty seven billion dollars
 in France for five gigawatts of AI data center capacity with the move soft bank has now surpassed
 Toyota as Japan's most valuable company now to one of our other top market stories and the looming
 IPO of Elon Musk's SpaceX creating a rush by investors into space related funds morning star says
 a net fourteen billion dollars has flowed into just three mutual funds and four ETFs holding SpaceX
 this as a wave of even more products gets set to launch once SpaceX actually goes public let's now
 get out to our SEMA Modi with more on that story SEMA on check out this stat Dom the tamma space
 innovators ETF just surpassed a billion dollars in assets in the span of thirty seven trading days just
 yet another sign of how retail interest in the orbit continues to grow ahead of SpaceX is highly
 anticipated IPO but not all funds are created equal with many having exposure to public and private
 companies there's the procure space ETF that encapsulates pure play names that derive basically
 majority of their revenue from the space industry the top holdings include rocket lab planet labs
 as well so it's important to look at the constituents in total space related exchange traded funds
 have seen net inflows of about three point five billion dollars since mid December so
 interesting to garnered that level of insight that's data is according to morning star with a major
 spike in just the past few weeks which according to a number of money managers we spoke to is pretty
 unprecedented and institutions running these ETFs are certainly capitalizing on the moment with six
 more similar funds expected to file soon but with any investment experts we spoke to warn that you
 have to be careful and be ready for volatility case in point blue origins new Glenn rocket exploding
 last week and instantly we saw all the space related ETFs move sharply lower on the day something
 to keep in mind as we looked for opportunity as investors look for opportunity in this space
 now a two weeks left basically till SpaceX is expected debut on the Nasdaq retail investors
 have the option to buy the stock when it goes public of course or hedge their bets by investing
 in these exchange traded funds that have SpaceX as one of their holdings you know it'll be
 interesting dumb to see what transpired so I could certainly tell us how much exposure everyday
 investors want to have to space in general or Elon Musk specifically with SpaceX all right what's
 interesting about this this rush of money going in there is obviously being catalyzed by the
 SpaceX trade but much of it is about some of the other companies involved as well just how much
 are investors focused in these funds on companies in the holdings that are not named SpaceX
 yeah that's a great point you know I think that's the question at hand is how concentrated
 of a bet investors want to have on the space economy or just disruption disruptive technologies
 in general you know we were talking about the Teima space investors ETF the ticker symbol
 nasa that certainly has been one of the more popular ones but even the arc innovation ETF by
 Kathy Wood which just invests in exploratory technologies that includes SpaceX but it also
 includes the likes of deer and Amazon so I think again how these ETFs are positioned and types
 of inflows we see in the next two weeks will tell us again just how much of a pure play bet investors
 want on space specifically or just these disruptive technologies all right see my body is there
 on the rush towards space funds thank you very much for that let's continue this conversation
 bringing Chad Anderson the founder and CEO of space capital self described as one of the world's
 largest space focused venture funds with more than a billion dollars in assets under management
 across 59 different portfolio companies Chad thank you very much for joining us here on on
 morning call and I'm going to kind of give you the same question I just asked Seema from a portfolio
 manager in essence is perspective how important is SpaceX to the space story and just how important
 are all these other companies in the entire ecosystem of space trying to drafting off of what's
 happening with this IPO well that's definitely the story here is the SpaceX is the apex player and
 they have been for a very long time the only reason that we're even speaking of space and the
 space economy as an investible category is because of SpaceX because of the access to orbit that
 they provide that enables them to do all of these other businesses that generate a lot of revenue
 so the opportunity in the space economy is massive there is a huge convergence between
 space and ground infrastructure and that's what we're seeing play out in these ETFs it's a question of
 you know what do they own and are you getting broad exposure to the space economy and what
 launch enables or you just investing in launch businesses or a very sort of niche piece of the overall
 opportunity here you know a lot of these ETFs they don't even own SpaceX for example right and if
 they do it's usually a very small amount and so I think it's really important that people understand
 what it is that they're buying this is not for the faint of heart this is cutting edge technology
 there's a lot of opportunity here but there's also a lot of risk we've seen a lot of bad investments
 be made here from you know well intentioned folks that are excited about a category that don't quite
 understand the technology or the market dynamics so it's important to have some specialist
 expertise here speaking of not understanding I mean and this is nothing this is not a knock on any
 investors in particular or the managers around the money in this ecosystem it's more about what
 kind of clarity we have about just how big of a deal this could be we've seen some estimates we
 spoke to Maurice Pot over at TEMMA funds the CEO there and he had mentioned something on our ETF
 edge show just this past week about the total addressable market being anywhere from two trillion
 dollars to 28 trillion dollars now you could drive a tank through that spread right now what exactly
 then does an investor need to know about what that total addressable market looks like and how
 exactly do you fundamentally allocate to companies based upon that kind of theoretical TAM I think
 it really depends on how you define what the space economy is right so the 28 trillion
 dollar number is what SpaceX put out in their prospectus and that's really the AI play and the AI
 infrastructure play one way to think about this is GPS and a lot of our investment thesis is based on
 the GPS playbook which 24 satellites have generated trillions of dollars in economic value we are now
 at an inflection point where we have 18,000 satellites in orbit and we have two million satellites that
 are going to be launched between now and 2040 so that's the scale of what we're talking about here
 space technologies are already the invisible backbone of the world's largest industries today
 and again there's this massive convergence happening between space infrastructure ground infrastructure
 and moving a lot of this capability off planet and in orbit you know it's interesting because the
 word startup has evolved over time the startups that we're talking about right now are going to be
 valued in the trillions of dollars what exactly then does investing in these companies
 look like knowing that startups for a venture investor are now coming out at valuations close
 to a trillion if not more yeah and I think this is something that everyone is grappling with right
 this is a brave new world where companies that are waiting a long time to go public and then when
 they do you know where do they fit into the ecosystem right and how do different exchanges and
 things like that think about companies that are raising this much capital at these high
 evaluations right so these are important conversations for us I mean there's just a lot of opportunity
 in the private markets I think for all of the enthusiasm that we've seen in the public markets
 SpaceX is really the leader here they're the ones that are driving a lot of attention here showing
 people just how big how large and strategically important the space economy has become a lot of
 the opportunity is still in the private market so the best is yet to come all right Chad Anderson
 thank you very much for the conversation please come back and see this again soon thank you all right
 well a lot more to come here a morning call including the first major deal for Berkshire Hathaway
 in the Greg Abel CEO era the nearly seven billion dollar bethic and glomerate is making and what
 investors are saying about all of it and as we head to break a check on shares of RevMed
 trial data presented at the annual Asco conference this weekend shows the company's experimental
 pancreatic cancer drug doubled survivor rates and improved symptoms enough that some patients could
 resume activities they had to previously abandon you can hear more from RevMed CEO later on today
 on CNBC at just around 11.30 a.m. Eastern time remember RevMed was a company we spoke about right here
 on morning call this past week ahead of Asco morning call is back after this
 welcome back we're watching shares of Berkshire Hathaway and Taylor Morrison Holmes
 Berkshire's agreeing to buy the home building giant for $6.8 billion in cash or $72.50
 per share it's a 24% premium to Taylor Morrison stock price as of Friday's closing bill
 the deal also marks the first major transaction under newly minted CEO Greg Abel since he took
 over as Berkshire CEO from Warren Buffett at the start of this year for more on the story let's
 bring an Adam Patty CEO of Vista shares whose target 15 Berkshire select income ETF mirrors the
 20 largest holdings in Berkshire Hathaway Adam thank you very much for the conversation here
 let's kick it off with just what it means to have this kind of a transaction happen right now
 in home building along the Berkshire Hathaway lines and is this kind of the big first step that
 Greg Abel's taking in terms of reshaping the portfolio at Berkshire yeah well thanks for having me
 this is a classic Buffett play right him he's he's you know home builders have been out of favor
 they're trading it to press multiples single digit you know PE ratios and you know so they got
 a really solid asset on the cheap you know number one number two it's a consolidation play for
 Berkshire so this is you know they're not new to home building they've they've been in since 2003
 with Clayton so they know the business Clayton has been busy buying up both on up both on
 companies for years and what what Taylor does for them is it brings them into the higher end of
 the market in a national way so that's really exciting in the third piece which I think is extremely
 exciting is that this is a vertical integration play for Berkshire right so most people don't know
 they you know they own the paint the insulation the flooring the brick the brokerage and the mortgages
 so you know it'll be interesting to see once they consolidate this platform you know how much more
 demand is being driven for these other ancillary businesses that they already own in their portfolio
 this Taylor Morrison acquisition is maybe the the way to get into a bigger conversation about
 just what we expect in terms of investment style you mentioned classic Berkshire Buffett type
 play how much can we expect Greg able to be quote unquote classic Berkshire Buffett in the coming
 years I mean look he's been there for what 20 25 years he's completely steeped in the Buffett
 philosophy I think he made it very clear in his last earnings call that you know he is sticking
 with what has worked over it over a Berkshire for many many years of course as a new CEO he'll have
 his own thoughts he'll want to stamp you know put the stamp on the company for his own thoughts
 and strategies but it's very clear that Berkshire is sticking with what made them so successful over
 many years and really quickly it's been a laggard Berkshire has in the AI era what does Berkshire
 need to do to get that stock going up again look we've been in a momentum driven market for many
 many years you know you buy the S&P 500 and you were a genius in terms of your investment returns
 Berkshire does not typically perform well in those types of markets but when the market switches
 to more of a value or quality tilted market which is what we've seen more this year it's acts as
 a coiled spring and we've seen that with our Omaha OMA ETF performance has been very strong year
 to date and we anticipate Berkshire to do very well going forward. All right Adam Paddy Mr.
 Shares thank you very much see us again soon sir. Thank you. All right and we're going to hear
 more on the Berkshire deal from Taylor Morrison when that company CEO joins Squawk on the street
 in a first on CNBC conversation at 10 a.m. Eastern time today. Straight ahead on this show the morning
 call crews assembly team up the trading day ahead and why one member says the history books suggest
 this June may be a bumpy one for investors and don't miss our own David favors exclusive sit
 downs with open AI CEO Sam Altman oracle CEO Clay McGurk and then related digital chairman Jeff
 Blau from the massive Stargate data center in Sailing Michigan three conversations that you will not
 want to miss. Morning call is back after this.
 All right welcome back here to watch in the week ahead we get the monthly jobs report on Friday
 with ADP and Joltz figures ahead of that report. I also watch for fresh manufacturing data factory
 orders productivity and the Fed's beige book and speaking of the Fed we're going to hear from nearly
 a half dozen central bank officials throughout the course of the week and on the earnings front
 results from Broadcom Palo Alto Networks Macy's Lululemon dollar general amongst others so keep an eye
 on that. It's time now for your call sheet where we look at the topics driving the trading day ahead
 the crew members today are Dan ives of wed bush back with us from the A block of our show let's
 bring in Ryan Dietrich of the Carson group and Stephanie link of high tower they're both CNBC
 contributors. Now let's start with our first topic market new month new record highs for the markets
 overall Ryan I'm going to start with you on this one here you've been bullish for a while and to be
 fair you have been correct about it but at some point these markets come to an end will it be
 anytime soon. Good morning Dom thanks for having me back we don't think it's anytime soon there's a
 few ways to put this you know June's got something for everybody you know June in a midterm year
 is the worst month on average but nine of the last ten years it's been higher so we know we've had
 a lot of momentum in this market are we stretched of course we're stretched up nine weeks or
 I'm in up 10 in a row since 1985 but one thing I think it's really fascinating listeners you know
 this bull market last week just topped the previous bull market or the longest bull markets in
 1962 64 all right so now it's the eighth longest bull market ever you look at those other seven
 bull markets Dom that made it this far the average length was seven years I'm not saying this is
 going to go seven years but we are saying when bull markets get this old like this one continues
 to do they usually don't end anytime soon. All right from Stephanie from a portfolio manager standpoint
 this is one where there have been massive gains in certain key parts of the market
 which has led Victoria Green early in our show to say that's time to rebalance take some of the
 profits there reallocate them elsewhere from your perspective has the catalyst that new market highs
 led you to rethink allocations take profits some places and deploy them to others or you're riding
 with what has worked over the course of the past eight couple of years. I'm kind of riding with
 what has worked over the last couple of years but I am kind of broadening out into other sectors
 as well so I don't want to give up on technology Dom because we really are seeing a phenomenal
 situation with this whole AI food chain boom but I think you can play the AI food chain via the
 industrials via the power companies the energy companies the commodity companies
 fairly new position for me has been alkoa they're going to benefit just like copper is benefiting
 from this whole electrification so I think you can own still own tech I definitely want to be there
 but I do think that there are other places as well to play that tech theme. All right Dan we're talking
 record high levels in the cost being South Korea record high levels in the knee K225 in Japan record
 high levels here all driven by that tech momentum this is your bailiwick this is your wheelhouse you
 cover many of these tech companies this tech momentum there have to be standouts there that continue
 and others that may teal off peel off what exactly are the ones that you think are the most
 positioned and what parts of that thematic trade are going to have the most legs going forward. Look the
 chip super cycle is going to continue and look and I've seen it firsthand in Asia I mean demand
 supplies 12 to 1 for Nvidia chips and with that means bullish for AMD bullish for obviously all the
 memory players and everything that we're seeing play out but I continue to think if you look what's
 happening on the hyperscalers that's where I think you want to continue to be focused Amazon
 Google in particular as well as Microsoft and look the SaaS apocalypse as we've talked about many
 times it was it was a ghost trade that was way over done you can't paint them all the same brush
 you know Stephanie Ryan talked about all time and I think now you're starting to see second
 third fourth derivatives what's that we talked about it's going to be happening across what
 infrastructure energy chips software it's it look we're talking about 4 trillion that's going to
 spend this AI revolution. Steph you mentioned the derivative trades right you mentioned Alcoa is
 one of those you also mentioned not you're not giving up on tech so let's talk about the primary
 first order in that technology trade Dan laid out a few of it on the shopping list what exactly
 stands out to you on that tech specific trade. So on a pullback because some of these stocks are
 up a lot but I have a lot of conviction in Marvel they they're optical businesses growing north of
 50% their custom A6 they and Broadcom have an 80% market share that's growing 20% that's going to
 get to 100% growth by 2029 I think there's $10 of earnings power in Marvel snowflake blew it away
 and they're clearly a winner and that stock really has lagged up until last last week IBM is a winner
 and we haven't even talked about quantum computing yet that's going to be a bananza for them
 and I like Dell it's had a nice run but I think there's much more to go I mean the numbers and
 the revisions that we're seeing are just staggering. All right Ryan one of the big trades over the
 course of the past year plus at this point has been to sell slash short software companies
 and buy those chip stocks it's been a massive pairs trade on hedge funds and everything else going
 forward does it still have legs or are we going to see this mean reversion where people say hey
 maybe that the SaaS apocalypse is overdone we're seeing a bid to all those names this morning
 and that semiconductor trade does cool off of it. I think it's possible you know I mean just last
 month and my software had one of its greatest months ever you know I mean I think just the theme
 that we've had is this technology in general that Patan does get passed around so you have maybe
 a little bit of both one thing we've done Carson Group right we manage a lot of money we have some
 low vol over here and some high momentum over here we have called like a pair trade now we did
 trim some momentum recently a little bit just kind of went into some S&P 500 ETFs again you know
 ring the cash register a little bit there but one more I think listeners might like here June is
 the only month in the history of the stock market out of all 12 that the S&P 500 is never peaked so
 maybe we have a little bit of a peak after a nine week rally and we pull back say 5 to 8 percent
 but never have we had the ultimate peak DOM in June and we know this year is going to be the first
 one. Alright now let's go to our last topic we got a lot of eco data coming up and specifically the
 granddaddy of them all the jobs report coming out right on Friday Dan how much do we need lower rates
 for this tech momentum to continue look at me obviously you need it over the long term but right
 now I think the market is able to kind of see through what we're seeing in terms of inflation oil
 obviously spiking but over the long term you're going to need to see worse ultimately at one point
 cut rates but right now it's resilient because investors are able to see through you want to own
 the tech trade you can't get caught up in some of the macro and the geopolitical that's not so
 many of the bears amiss you know these transformational tech moves and Stephanie your perspective what's
 the most important thing you're watching on the eco calendar this week well I mean the economy is
 running hot right now DOM so I just want to continue to see the momentum I think we get the unit
 labor cost numbers that's going to be important but we're at 3.8 percent Atlanta Fed tracker and
 last week the most important number was the Chicago PMI sure the best in four years and that speaks
 right to ensuring an AI boom all right Ryan Dietrich Stephanie linked and I've thanks for
 the conversation for our morning call crew futures right now we're applying about 150 point
 gain for the Dow Jones industrial average keep it right here swap box starts right now