AI growth, retail earnings and market resilience in focus 5/19/26

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 Keeping an eye on rates and futures or in weight and sea mode, I'm Morgan Brennan, and this is your morning call.
 Good Tuesday morning. Let's get a check on US stock futures, which are essentially flat right now.
 That's after back to back losses for the S&P and the NASDAQ as of the close. Yesterday all the the Dow did eat out a slight game.
 Keep in mind though, we're still just below record highs for the S&P and the NASDAQ.
 We continue to watch the rate story with yields at their highest level in more than a year. That's for the 10 year treasure yields, which you can see right there on your screen.
 We've got some stabilization here in the bond market this morning, albeit at much higher levels than where we were just a few trading sessions ago.
 So the US 10 year treasury yielding 4.609%. You heard that right. Let's keep an eye on the two year treasury yield as well, 4.072%.
 And of course the 30 year treasury yielding 5.148% as we flirt with 30 year highs for the 30 year treasury yield.
 Well, if the 30 year yield goes higher than 5.16%. It will be the highest level since October 23, 23. Okay.
 Not true. We got more on that in a moment. There's some conflicting numbers out there watching the chip trade after sharp losses across the board yesterday as well.
 Take a look right there on your screen. There's a lot of red, but that's of course after huge gains for many of these needs.
 Seagate is down about 7% right now. Microns down 6%. Nvidia is also down about 1% and you can see more red across the board.
 We're taking a look at those stocks in the pre-market after that big move. We're also taking a look at energy after President Trump backed off once again on resuming strikes against Iran kicking the date for that to potentially happen here by a couple of days.
 You can see WTI crude down about 1% still trading at $107.50 a barrel though. So still at elevated levels and Brent crude is down 1.5% but at $110.00 for barrel.
 Let's see how Europe and Asia are shaping up Steve Cedric as in London. He's got the trade there. Hi, Steve.
 We might not have Steve Cedric. So let's stick with, all right, let's stick with the, we're just having some technical difficulties here to start the hour.
 We're going to get some more coffee going and in the meantime Steve Cedric is up and running and we are going to go to him for the global market action. Steve.
 Hey Morgan. Well, Asian equity masters market. They posted a mix session today after the US president of course said he had pulls that planned resumption of attacks on Iran.
 Here in Europe, actually, stocks are showing signs of optimism amid those hopes and an agreement to end the war in Iran could be close potentially allowing for these streets of hormones to open.
 But you can see across the board, we've got gains on the footsie up six tenths of 1% the zetra dax moving head up 1.3% and over in Paris, the cat car on up nine tenths of 1%. Let me hand it back to you.
 All right, Steve Cedric. Thank you. We're going to stick with the global rate shock G7 central bankers, including newly minted Fed share.
 Well, he's about to be the newly minted Fed share. Kevin Warsh are meeting in Paris today in the face of surging borrowing costs and growing piles of government debt together putting the squeeze on policy and equities.
 And our own Charlotte Reed is on the ground in Paris and she has more on all of this Charlotte.
 Good morning Morgan. We're really crucial meeting here by this G7 finance ministers and central bank governors.
 Look, interesting. This platform was created to deal with the 1970s all shocks were fast forward 15 one years.
 We're in a very similar situation here with this economy is dealing with the shock of the war in Iran.
 Energy shock that comes with it. And now, of course, the latest chapter of this is this bond sale of their triggered by fears of inflation, investors will get a potentially see central banks.
 High rates sooner rather than later and this back this could have, of course, on borrowing costs for key governments.
 And we know the fiscal outlook. There's some concerns there, particularly for Japan and the UK.
 So that was at the heart of the conversation between those G7 ministers.
 Yesterday, today will be the second day of this meeting with all these trading balances as well.
 So that will be the key or topics. Now, the French finance minister that sat down with with sharing these meetings
 said, look, the economies have been resilient so far. But certainly, we need to reassure the bond market and, of course, all eyes on these developments.
 Now, we see that the US Treasury is that normally benefit from this so-called exorbitant privilege.
 It might be shielded by some of these kind of moves, but not so far.
 Certainly, we've seen that they're not immune to yields on short and long term treasuries climbing lately.
 And very interesting to see the latest US Treasury data published this morning talking about foreign holdings of US Treasury sliding in March led by declines in holding from Japan and China in particular.
 So all these ministers talking about this tricky situation at the moment.
 They're trying to find some consensus and a roadmap for the all-important leaders summit that will be happening in just four weeks here in France,
 President Trump traveling for this here as well, with this backdrop here and the markets giving them some warnings as well.
 All right. Thank you.
 Well, let's do further into all of this with Ryan Dietrich.
 Chief Market Strategist, of course, in group also the CNBC contributor. And here in the building, live and studio, it's good to have you here.
 I'm excited to be here when I was getting the makeup and stuff done.
 And they said you're pulling the Dan Ives, which means I guess I'm on twice today, I'm on today.
 That's right. We're going to look into the show with you so we're excited to have you.
 All right, got to get your thoughts on where we're at.
 As we see this breather in stocks right now with yields, you know, running higher and crude higher.
 Well, I guess stocks go down. We've seen it the last couple of days. It is possible. And you'd look at yields.
 You know, one of the things we've talked a lot about a Carson group.
 Oh, you for a while saying this, is this inflationary growth environment?
 So to us, it's not overly surprising that we have stocks doing well.
 And yields going higher. And I know it's a global story.
 It's like last Friday was the first 1% drop in a long time about realize, wow, global yields are going higher.
 They've been going higher for a while. So we're not minimizing that.
 But I think in this world, a little bit higher inflation, a little bit higher growth.
 We're still bullish underweight bonds. We're still over at equities here.
 Yeah, overweight equities because higher inflation tied to higher growth tends to be good for profit margins.
 It does. And you look at profit margins and lots of guests have pointed this out.
 We're looking at record profit margins, record earnings.
 Obviously, the guidance has been strong.
 But I think one thing more going to get to me is, yes, we're hitting new highs or flirting with new highs, right?
 But you look at sentiment. I mean, people just aren't that excited.
 And I know tech maybe is a little different, but the market in general, look at some of the recent magazine covers.
 You look at sentiment polls. It's really not this over-the-top optimism.
 Listen, the Nasdaq 100 was just up 27% in 28 days.
 That's a stretch rubber band. We're due for a little bit of break consolidation,
 getting a little geeky with technicals. We're hitting new highs.
 Less stocks are above their 50-day, moving average, 20-day, moving average.
 These aren't, like, end of the world things, but this is maybe a little pause after seven new highs
 in just the month of May by itself is due, but still bullish, I think, big picture.
 Yeah. I mean, you just touched on it.
 But the S&P, arguably looking at the technicals, over-bought levels here,
 and we've been there for over a month.
 And that said, about a third of the stocks in the S&P 500 are actually over-sold still,
 and just 29.8% are over-bought, so it really kind of speaks to the narrowness of this rally as well.
 So where do you see the opportunities?
 Obviously, no tech was the big reason why techs kind of pulled everything up.
 We'd stay a little boring, but keep it diversified portfolio, but stick with the cyclicals.
 We like tech, we like industrials, we like financials.
 And listen, financials has been very, very weak.
 Wouldn't be shocked at all if that baton was passed from techs' financials.
 Again, the economy continues to do pretty well.
 Look at just that manufacturing data we've seen the last week or so, right?
 It continues to come in better than expected.
 So I think those are the areas we like, and then, according to you said this before,
 but if you drop it, hit your foot, and it hurts, you probably want to own something like that.
 So underweight bonds, we have some managed futures, we have some gold,
 hard assets, real assets.
 That other bucket of stuff, I think, is really done well this year.
 I'll continue the second half of this year.
 Yeah, gold's been weak though recently.
 What do you attribute that to?
 It has been weak.
 Obviously, well, it was up 65% last year, up 25% until the end of January.
 So I think just do for a little pause.
 I mean, there's some issues with real yields.
 The bottom line, gold does not want a hawkish Fed, right?
 That's kind of a little bit of that weakness.
 So we have, overall, unconstrained models, been about two and a half percent allocation of gold.
 It's nothing wild there, but I still think it makes sense to own a little bit of gold and a portfolio here.
 One of my favorite things that you bring to the table is all of your stats tied into history.
 Historically, we've always said sell and may go away.
 You'd probably counter that.
 We would.
 You know, you look at May, it's higher than nine of the last 10 years.
 And even the sell and may go away, period has been really strong.
 Now, one thing is a little stat here.
 We're up seven weeks in a row in the S&P 500.
 And up double digits during that Morgan only happens seven times in history.
 Small sample size, yes, but let's not ignore this.
 One year later, higher every time.
 And the last three times going back 30 years, you're up 20% a year later.
 So I'm not saying that's the case, but this blast of strength we've seen is still to us a sign that probably have a surprise summer rally.
 I'm surprised at this point, but a surprise summer rally and still straight going into the end of this year.
 Okay, so in late of all of that, what are you watching?
 We're going to talk to you a little bit more about all this a bit later today.
 But it sounds like you steer clear of bonds for now.
 What would you be watching in terms of those levels and how it interacts with stocks?
 Yeah, I mean, listen, you mentioned before we came on, you've got obviously some of the highest levels in 30 years on the 30 years.
 So I think the global picture though, continue to watch what's happened globally with bonds and with yields, continue to move higher.
 And again, it's not as easy as, well, higher yields are inflationary.
 Yes, to a degree, but we think a good deal of the higher yields also saying there's economic growth coming,
 potentially global economic growth coming.
 So that's one thing we push back on from a narrative there.
 Okay, more to come here a little bit later in the show.
 Thank you.
 Ryan Dietrich, great to have you here on set.
 Thank you, Morgan, appreciate it.
 All right, we're going to turn now to California and a developing story that we are monitoring closely.
 More than 500 firefighters backed by helicopters and air tankers are battling the latest wildfire in Southern California.
 So far, this has burned more than 1300 acres across semi-valley, about 30 miles northwest of Los Angeles.
 This is also where the Ronald Reagan presidential library is located as well driven by strong winds and dry conditions.
 The fire is forcing evacuations and threatening homes across the area,
 according to Ventura County Sheriff's Office.
 So far, no injuries have been reported.
 Meanwhile, firefighters are also battling a more than 1400 acre fire on Santa Rosa Island.
 This is the second largest of the Channel Islands off of Southern California's coast.
 The blaze on the island is a popular destination for camping and hiking.
 That has forced the evacuation of 11 national park employees.
 Keep in mind, we had a very dry winter in the Western US.
 So fire season, if you even want to say that we have a season anymore,
 because we have so many of them throughout the year now, is expected to be particularly risky and particularly harsh.
 So we'll continue to monitor that.
 We've got a lot more to come here in morning call, though.
 Including what to watch when Home Depot reports in just about an hour from now.
 And if a mortgage rate sticker shock hits its bottom line.
 Plus, not giving up.
 Elon Musk defiant is ever following his legal loss against OpenAI.
 OpenAI.
 And later, we're tracking a chip deal and reports of a possible tie-up in the volatile semi-sector.
 We've got a very busy hour still ahead when morning call returns.
 You don't want to miss it.
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 Welcome back to morning call.
 Investors getting set for a rash of retail reports this week,
 with Home Depot kicking things off in just under an hour.
 That stock is off more than 20% since its last report three months ago.
 The broader group providing what could be the best gauge on consumer sentiment
 with gas prices is sitting above $4.50 a gallon.
 And for Home Depot, specifically mortgage rates sticker shock,
 may also be an outlook overhang.
 According to Mortgage News Daily, 30 are fixed rates right now,
 sitting at their highest levels since July of 2025,
 knocking on the door of 7% once again.
 So joining me now to break it all down is Gerald Storch, CEO of Storch Advisors
 and former vice chairman at Target.
 Jerry, it's great to have you on the show.
 What are you watching for Home Depot?
 Well, look, everyone's looking at all these retails.
 Just see what it says about the American consumer.
 But we already know the consumers holding up pretty well.
 We had got retail sales for April fairly recently.
 The numbers were good.
 They were up if you took up the strong increase in gasoline prices.
 And specifically for Home Depot, we saw a nice increase in building supplies
 over the last three months in the retail sales report,
 the same period that's covered by Home Depot earnings.
 So there's a good chance, I mean, it's a fool who tries to guess earnings right before they come out.
 But there's a good chance they can beat what are fairly conservative expectations.
 It's interesting to hear you say that we had Donald Broughton on last week
 who was tracking the freight flows.
 And he was saying, based on that, that housing is seeing green shoots right now,
 particularly on the home building side.
 So is that something that we should expect to potentially translate
 whether it's Home Depot or Lowe's or some of these other names that could be more tied to the housing market?
 I've heard that for a number of people, there's two major segments to their business.
 One is serving the professional business.
 And that's what you would see as increasing if in fact housing were starting to show those green shoots.
 And a lot of people think that's what we are going to see when these numbers come out.
 We'll know it in an hour.
 Then there's the DIY business, which is the other large part of the business.
 When people like me try to fix their toilet and buy way more than they need
 because they don't know what parts they actually need.
 So they get home and they have to go back and forth and back and forth and stuff like that.
 So that part of the business we're watching that very carefully too,
 to see maybe the consumer, you know, how much are they willing to spend on their own homes?
 And if that number is going up, that's a good sign for the consumer.
 But as I said, I think we know the consumer is spending pretty much as much as they were spending before,
 plus they're spending a lot more on gas.
 So for now, they're holding up pretty well.
 Yeah, in light of that, I mean, so it gets right to the heart of the question.
 I think more broadly about the state of the consumer.
 And that is, are they spending more to get less with inflationary pressures afoot?
 Well, if you take a look at what happened last month,
 I mean, we have some pretty darn good data from the commerce, you know, from the Census Bureau.
 If you take a strong look at what happened here, what you see is that sales overall grew by a very rapid rate
 year to year, almost 5%.
 But a lot of that was definitely driven by gas price increases.
 When you take that out, the increase in that number was almost identical to the pace of inflation.
 So what it looks like they're doing is they're spending more to get about the same,
 not spending more to get less.
 Okay, there's some good contacts there.
 What are you expecting from Target and what are you expecting from Walmart?
 Well, that's very interesting.
 You know, that pair have been sort of star cross lovers for a long time now.
 Many people know this, but they started this same year,
 and even came hard started that year in 1961,
 but their past have been very, very different since then.
 Walmart's a behemoth now, they're way outperforming Target.
 It is even close, and I expect to see the same thing this quarter.
 The question for Target is, are we going to start to see a turnaround under their new CEO?
 There's a lot of whispers out there that's maybe one of the best quarters they had in a while on the top line.
 But even that growth, people say, oh, maybe the same store sales have grown 2%.
 That's still lower than that rate of inflation we've been talking about,
 which means that at least at Target, people are not spending even up to the rate of inflation.
 Now, if they do worse than that number, it's going to be a huge disappointment.
 So I hope that they do better because this is supposed to be the start of something
 that people are going to watch that very intently, that 2% level for same store sales increase.
 That's what we will expect.
 Also, people watch the margin line.
 Their margin got frankly trashed over the last few years as they bought too much
 and had to do a lot of markdowns.
 We want to see if that restores some health so that even with that 2% growth less than the rate of inflation,
 can they show a nice earnings increase?
 That's what we're going to watch for in Target.
 We're hoping it's the start of a turnaround here.
 Walmart, I expect them to keep on shugging.
 They have been doing fantastic.
 They've been the best performer in retail for a very long time,
 certainly among large players them in Costco.
 And so they're going to post some good numbers.
 I expect their same store sales could double targets, could be 4% compared to that 2%.
 That's the pace they've been on.
 If they do that, they're going to be just fine.
 Despite the large increase in their stock price,
 that we've seen reflecting that great performance.
 Yeah, and of course there's so much more than just a retailer to your point under the hood,
 like all these different revenue streams tied to the tech piece of their business
 and what they've invested too.
 Finally, I just have to ask, is there a magic level that gets watched historically
 in terms of gas prices and how that affects what we see in the retailers?
 No, I think if you really take a look at the current prices,
 they're certainly up substantially versus where they were a year ago,
 20 plus percent higher consumer expenditures on gas.
 But they're able to absorb that for a while.
 If you look by historical context, given the rate of inflation and everything else,
 it really hasn't been that high.
 So I think this can handle this for a while.
 It's almost like a new normal for a little while here.
 I think we've got a few months here where this isn't going to cause too much trouble.
 If it continues into the holidays, then I get worried.
 So I think at this level, we're okay for a few months.
 So we've got this level not higher, a few months, not longer.
 That's what we have to watch for.
 Okay, Jerry Storch, we covered a lot there.
 I appreciate it.
 Thank you.
 My pleasure.
 We'll start ahead.
 I'm Donnie, Diamond, Solomon.
 What the self-proclaimed democratic socialist mayor of New York has to say to Wall Street's leaders.
 But first, we're watching shares of chip maker analog devices reportedly in advanced talks to acquire a company called Empower Semi
 for about $1.5 billion in cash with a deal coming as soon as today.
 Empower makes power management chips for AI processors and data centers.
 And you can see analog is down fractionally right now.
 If you're market morning call, you're right back.
 This message comes from Viking committed to exploring the world in comfort,
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 destination focused dining and cultural enrichment on board and on shore.
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 Discover more at Viking.com.
 Welcome back to morning call.
 We're going to check on some of the morning's latest headlines.
 Roughly a quarter million commuters across New York, breathing aside of relief this morning,
 after negotiators reached a deal to end the Long Island Railroad strike after three days,
 service is set to resume at noon today.
 That's eastern time.
 No details of the new contract have been released.
 The union still needs to ratify the agreement.
 Well, if we stick with the big apple, New York City mayor, Zoran Mamdani,
 says he met with JP Morgan CEO Jamie Diamond in the bank's New York headquarters yesterday,
 discussing government waste, environmental reforms, and public private partnerships.
 The meeting follows one between the mayor and Goldman Sachs CEO David Solomon at Gracie Mansion,
 with the two speaking about housing and investing in small business.
 Well, Elon Musk says he plans to appeal a judge's decision that ruled against him
 in his case against open AI and its CEO Sam Altman.
 And opposed on X, Musk says the jury never actually ruled on the merits of the case
 just on the timeline technicality, adding there is no question on Altman or Greg Brockman's motives
 when it comes to enriching themselves at the expense of humanity.
 Well, Google and Blackstone say they are forming a new AI cloud business venture
 that will see Blackstone invest an initial $5 billion to help bring 500 megawatts
 of data center capacity online by next year with a total investment possibly reaching
 as much as $25 billion according to reports.
 And the CDC says that one American in the Democratic Republic of Congo has tested positive
 for that new strain of Ebola that is spreading across Central Africa.
 The agency adding no cases tied to the outbreak have so far been confirmed domestically
 and that overall risk to the US public remains low.
 Well, still on deck, pivots and cuts, how companies from tech to banking are dealing
 with the AI workforce revolution and what workers are saying in response.
 But first, shares of service now, keep an eye on those coming off the best day in a more than a year,
 closing up more than 8%, potentially hinting at a software trade revival.
 And you can see right there on your screen pre-market up another almost 4%.
 For its part, the broader software sector is seeing green shoots as well,
 shares of the eye shares expanded at tech software sector ETF are more than 1% over the past week,
 nearly 7% in the past month.
 This is the IGV that we talk about so much.
 More in call, we'll be right back.
 I'm Morgan Brennan. Welcome back to morning call.
 Let's get a check on US stock futures after back to back losses for the S&P and Nasdaq yesterday.
 The Dow did eke out a game.
 You could see right there on your screen.
 We're firmly in the red for futures this morning.
 All the major averages poised for a lower open.
 Again, let's get a check on treasuries as well as we've seen pretty aggressive selling in the bond market
 over the past call at week or so.
 You could see right there on your screen maybe some stabilization here with the US 10-year treasury
 yielding 4.613%.
 The Fed sensitive 2-year treasury yielding 4.076%.
 And we're also keeping an eye on the 30-year, which is currently yielding 5.15%.
 We're flirting with multi-decade highs here on the cusp of it for the 30-year.
 We're watching energy after President Trump backed off once again on resuming strikes against Iran.
 And we're also watching the chip trade after sharp losses across the board yesterday.
 But that's after just a torrid run-up that we've seen overall in semis, which have led, you know,
 the Nasdaq NS&P2 record highs in recent weeks.
 You could see taking a breather here.
 Let in part by comments that we got from C Gates last night.
 C Gates shares are down at seven percent.
 Microns also down about 5 percent as well.
 Oh, okay.
 So these are the pre-market numbers.
 We're down.
 We're down.
 Not down seven percent though.
 Down about 1.5 percent per C gate.
 Let's take a look at some of those stocks in the pre-market.
 There they are.
 Intel CEO speaking with our Jim Kramer on Mad Money last night about demand companies
 like his R-seeing around all things AI and where that demand is actually heading next.
 Next frontier going to be the physical AI.
 And then meant that you're going to mean a lot of agents, a lot of digital worker.
 And this is changing the whole application.
 And that's what I think is very exciting for me.
 Sometimes life, you want to have some breaks.
 The big break is the CPU becomes sexy again.
 All right.
 I must watch conversation there with Liputan who doesn't do very much media.
 We're checking crypto as well.
 Bloomberg reporting that the SEC is preparing a framework for trading tokenized or digital versions of stocks as soon as this week.
 And by the way, the Bitcoin rally has continued quietly here.
 Although we're trading around 76,751 this morning, but we were flirting with 80,000 on the overnight.
 Checking global markets and make session in Asia with the Nikkei and Cosby closing lower.
 The Cosby down about 3%, a little more than 3%.
 But a positive start to early trading in Europe.
 As you can see right there on your screen as well with the DAX leading the charge up more than 1%.
 For more on the markets overall though.
 Let's bring up Simon Beschloss, founder and CEO of Rock Creek Group.
 And I've signed as great to have you back on the show.
 Welcome to you.
 I've got to start.
 There's so much to talk about, but I got to start with this run up that we are seeing in rates here.
 And not just here in the US, but globally.
 Absolutely.
 Absolutely.
 I think with the new Fed share, Kevin Wash, it's going to be so interesting Morgan with the kind of bond sell off that we have had this morning.
 It seems to be easing with the G7 finance ministers who just sort of were wrapping up their meeting in Paris.
 But it will be sort of interesting to watch the rest of the day, whether there is a real easing or not.
 As you said, the levels we're seeing in the US are in terms of the 30 year bonds.
 Are the highest since we've seen them in 1999.
 But also the levels in Japan and elsewhere are reaching levels that we've not seen in several decades.
 When you see long dated bonds like 30 years moving aggressively higher, how much does this reflect anticipation or even the reality of fiscal policy and politics in the markets here?
 It is very interesting because it is really that balance between short term inflationary fears that are fueling what people are feeling and sort of the psychology of the markets versus the fiscal deficits
 that continue to grow.
 And I think there's that that concern plus the amount of capital that is being put to work for AI.
 So those three factors short term and long term are things that we have not always seen at the same time where people are getting scared short term, but they are also scared because of the fiscal deficits we're seeing in Germany, for example, continuing to expand their fiscal deficit.
 Other places there is a question mark in Japan. There is a big debate going on on fiscal deficits.
 So it's a question that the bond market is really starting to disconnect from the equity markets as we're saying.
 Yeah, I mean, and to your point, we also have this war in the Middle East that continues with the straight up from the US basically closed here and energy prices at multi year highs.
 When you see the Japanese officials intervening to buoy the yen or you see India raising tariffs on silver and gold to help support the rupee in the midst of burgeoning trade deficits and what we are seeing with energy prices, how does it speak to the impacts across global markets?
 We're a little bit buffered here in the US so we don't maybe pay attention as much as we should, but huge effects globally.
 And as you said, we are extremely buffered because we are the largest energy producer right now.
 But even we're not that buffered because as gas prices get to be close to $5 or go over $5 this summer, it may not be as good as everybody thinks here.
 But in the rest of the world right now, we know jet fuel is double the price it was, but it's the availability of fuel that's becoming a huge, huge issue in places like India,
 in all over Asia where the lower income countries are closing school for one day or several days a week where they don't have LPG to cook.
 So the level of supply constraint versus pricing also is disconnected.
 Prices are going up even though in places like India, as you said, they are not increasing gasoline prices, for example.
 They're trying to keep the governments trying to keep the prices not to go up and reducing tax on fuel while trying to deal with the availability of energy.
 So there's the availability issue versus the price issue to the consumer and those two are slightly disconnected where countries can afford to disconnect them.
 Yeah, and of course over the long term here, maybe not so long term right now as well.
 I mean, you need more energy for this AI infrastructure build out too.
 So just want to get your thoughts on where we are in that process as we look to in video earnings and we do talk about, you know, surging prices for things like memory chips.
 So interesting right now what we saw with Cerberus last week and that IPO.
 And also a few other companies that are starting to develop new kinds of chips or alternatives to NVIDIA.
 And that will be sort of a very interesting thing to watch.
 Obviously the scale of NVIDIA and its market share is a huge, but as others start to chip away and produce different kinds of chips, potentially better.
 Yes, it will be something to watch and see whether that affects NVIDIA but also others.
 And you were just talking to you were just showing a little bit of the clip on the Intel CEO.
 I think watching what they're doing will be super interesting too.
 How about the IPO market overall?
 I mean, we're waiting the SpaceX IPO as soon as mid June here and you mentioned Cerberus, which obviously had a huge start out of the gate.
 Last week, we've got all these changes to indexing as well to bring some of these big mega cap names into the indexes more quickly.
 How do you see all this shaping up?
 It will be so interesting because in the next month or two, we're going to have several huge IPOs as you said.
 SpaceX, there is an anthropic, there will be other ones open AI is thinking of the timing, whether they'll come earlier or a little bit later.
 And then there will be others like Cerberus that came last week.
 So the scale is going to be huge.
 Obviously, they will be selling five, they'll be floating only five, maybe eight, maybe less than 10 percent in each case.
 But the scale of these over the next year or two affecting the market and the indices will be super interesting.
 But also, what will be the impact?
 What will people sell in order to buy these new stocks in the market?
 That's something else to watch, whether they'll sell their max seven or parts of the max seven or they will sell the broader market because not everyone is sitting on cash.
 Yeah, I just finally, I just have to ask, and we've got a calcium chart here showing it, but it does seem prediction markets expect we're going to see anthropic go public before open AI.
 I mean, are we entering a new era overall in terms of these just big, giant companies that are valued into the trillions of dollars in the process.
 Are the trillions of dollars in the private markets coming online here?
 Yeah, I mean, for companies to come online at the valuation of a trillion or above or close to that is something that is quite exceptional in our lifetime.
 So people have not really studied the impact.
 Nobody is going to be able to really forecast the exact impact of these except that they will to some extent displace other things and because liquidity is where it is.
 You know, Karen Warsh had talked about taking out liquidity from the markets when he before he was nominated, we had the money that is coming out of the Middle East compared to the kind of wealth that we saw in the sovereign funds when they would write huge tickets.
 Will they be also writing the very big tickets over the next few months, over the next few years, depending on how the whole situation with oil industry goes and replacements to their oil industry.
 So these companies could hugely displace existing stocks.
 Such a good point. I've signed a batch loss. It's so great to have you on. Thank you for joining me.
 We'll be with you. Thank you more.
 We got a lot more to come here on morning call, including rewriting the American Dream, how AI is creating a new economy as a fresh wave of college students enter an uncertain labor market.
 Plus, as we had to break, we're watching shares of Samsung Electronics, the company and the union representing workers narrowing some differences in talks to avoid a labor strike that's according to local media, the two sides are racing to reach a deal before Thursday.
 When nearly 48,000 Samsung workers are set to walk off the job for more than two weeks, you could see Samsung down two percent this morning. We'll be back.
 Welcome back. We are watching what's been a stealth rally in the soft ag space soybeans up 3% on the week coming off its biggest one day gains since January of last year.
 And it's a similar story for wheat. That's up more than 5% this week corn off its best day since July 2023. And all of this is following China's promise to buy more US foreign products following last week's Trump she summit.
 You've also seen a catch up in the ag trade versus all the other commodities and you've seen some reports suggesting that maybe crop output yield is going to be lower this year in certain parts of the world, including by the way here in the US for some of these cash crops.
 The meta is reportedly reassigning 7,000 workers related to artificial intelligence, this according to Bloomberg, setting internal memo.
 The move part of the tech giants at broad corporate restructuring that includes planned job cuts as soon as this week. And this as standard chartered announces its own plans to cut more than 7,000 jobs over the next four years as it boosts adoption of AI.
 The growing trend is coming as a fresh wave of college students enter the workforce. Literally now they find a very different labor landscape compared to four years ago. Our Gabrielle Von Rouge looks at how AI is writing the American dream.
 You feel like a superhero out there but I'm proud to tell people what I do.
 Mason Cook is a 24-year-old AT&T premises technician helping connect fiber into homes and businesses.
 Heisen's job doesn't require a four-year degree.
 How different would your life look like right now if you had taken on student debt?
 I would be two years out of college working a job making less than I am now, not even owning a house at this point.
 In my opinion I would be behind versus where I'm at now.
 But for many young people who followed the traditional college to office path that first wrong of the career ladder is getting harder to reach.
 What I find is an immediate 9% drop in hires after the chat GPT was released. I empathize with early career workers especially new graduates.
 It is true that it is tough out there and the data really do back up.
 So far the biggest impact we've seen AI make on the economy has been hiring for early career workers with college degrees.
 Meanwhile blue collar workers like Kyson remain in high demand and will play a critical role in building AI infrastructure.
 I've been hearing this from some of the folks who have gone on the front lines of this AI implementation,
 particularly Alex Carpe Palantir for example.
 And anybody who's involved in industrial and physical AI and the role that's going to play in upscaling workers on factory floors for example more quickly.
 I'm just curious what the data is actually showing are we seeing this translate through the data even with all the job cuts we've had in recent weeks that have been announced.
 So when you look at the top line jobs numbers you're not the economy looks good the jobs market looks good.
 But it's when you dig in and look a little bit deeper is when you're starting to see that impact on the entry early career worker.
 We have two really strong studies that have come out Stanford's digital economy lab.
 What they looked at is ADP private payroll data a little bit less noisy than the government data.
 And what they did is they found a 16% slower growth in hiring between 24 and 2025 in AI exposed roles.
 Whereas you actually saw greater hiring in those who were less exposed.
 And what's most important here Morgan is that they actually adjusted for all of the other noise happening in the economy.
 Interest rates high cost of capital remote work COVID all of these things and they still found that the trend persisted.
 And the Census Bureau actually was able to replicate that study with the quarterly workforce indicators found a 9% drop 150,000 fewer jobs.
 So it's these early career workers that are really starting to take the run.
 All right, we have to see what this does to disrupt higher education as well.
 There's so much to dig into here.
 Cappy Fon Rouge, it's great to have you here on set and to be reporting this out.
 I look forward to more of your reporting on all of this.
 Thank you so much.
 Thank you.
 We'll straight ahead.
 We got the morning call crew team up the trading day ahead and the one two punch of great risks and a key test for the consumer.
 That's on tab and more stay with us.
 Here's what's watch day.
 We're getting pending home sales data.
 We're going to hear from the Fed's Christopher Waller and Paulson.
 Or arguments begin today and anthropics appeal, challenging the Pentagon's designation of the AI company as a supply chain risk and Google case off its annual developer's conference.
 We're also going to get earnings from Home Depot, toll brothers and Kava.
 And we're watching China, Russia, President Vladimir Putin.
 Arriving in Beijing today for a two day summit with Chinese President Xi Jinping.
 That's coming off the back of President Trump's two day visits last week.
 We're going to get you set up for this time for your call sheet,
 where we look at the topics that are driving the trading day ahead.
 So the crew members today, Ryan D. Trick, the Carson Group.
 Stephanie Link of Hyde Tower, both are CMBC contributors and Warren Pies of 314 research.
 Great to have you all here.
 I think I just laid it out.
 We got a lot on tab.
 Ryan, I'm going to start with you.
 Impact of war on the markets as we see the strike deadline kicked off a couple days.
 Well, I don't think anyone's too surprised.
 We're kind of kicking the can a little bit here more.
 And you know, this is kind of ways of been going.
 Clearly, we've talked earlier segment about yields going higher.
 We still have energy prices.
 Right before I came on, you showed all his various commodity prices going higher.
 I think it's more just that inflationary growth world that we're in.
 And it's probably where we're going to be for a while still.
 Yeah, and we've got elevated energy prices, Warren.
 And then this big run up in yields and a little bit more stabilization this morning,
 but overall just dramatic moves.
 Yeah, so I think that they're kind of related.
 And so I do think that we started this war and everyone thought that we were going to be able to look through it
 and it was going to be kind of a short lived outage in the oil market.
 And what we've started to look at is this relationship between yields and not just yields,
 but the so for market, which is kind of looking out at what the Fed's going to do.
 And the price of crude oil.
 And what we've seen is that as this last little bout of higher crude prices,
 we've seen the cuts come out of the so for market.
 And that's been a dramatic move.
 So we're transitioning, I think, and it's related to this outage from a cut cycle to a true hole,
 which is going to be a lot for the market to digest.
 Yeah, to keep points, Stephanie, you want to get your thoughts on it.
 I mean, just how much we've seen a shift in market sentiment towards the possibility of hikes now before the year is out.
 And of course, when we talk about the move in bonds, it is a global phenomenon.
 But then it also to bring it back home has not gone effects on the consumer too as we look to retail earnings.
 Right, I mean, we're watching oil obviously and the war and the news.
 And also interest rates, those are two things that are top of mind for just about everybody.
 And I think in terms of like the Trump tweets or on truth social, I think you kind of have to almost look through it.
 Because the fundamentals to this economy are actually quite good.
 The Atlanta Fed tracker is at 4%.
 I was looking at some of the credit card data for the consumer.
 And JB Morgan just came out with some credit card data for last month.
 And it's running up about spending is running up about 6.5%.
 So I think the consumer continues to consume and that's a good thing.
 If oil stays at these levels, it will obviously put pressure on the consumer.
 But for now, the consumer is able to kind of just plow through it, if you will.
 Terms of retail earnings, I mean, I think housing is going to be, I mean, at best in line,
 maybe lows does a little better because they're doing it yourself and the weather is helping them.
 But I think Home Depot is much more cyclical.
 So I think there's a lot of levers that they can pull to actually just come in line.
 But I don't think it's anything to be excited about, not at like 18, 19 times forward estimates.
 Target is a different story because it's a turnaround story.
 So I think you got to pick and choose within retail.
 I happen to own target.
 How do you see it when we talk about retail, Ryan?
 Well, I want to build on those concepts there.
 So obviously retail stocks in general have been weak.
 We saw the recent GDP number at the last five quarters.
 GDP has been about 2%.
 45% of that has been from AI, AI spending.
 So the consumer is a tad weak.
 But one of the areas that we think the second half of this year, Morgan, they can do a lot better,
 is a labor market, right?
 Unemployment rate is still still still near all-time lows or 40-year lows.
 You have initial jobless claims of 200,000.
 The ADP number continues to suggest there's better small business hiring.
 So I think the second half of this year, one thing no one's talking about
 is a labor market comeback, which clearly will help the consumer, potentially consumer spending.
 And we don't have to realize so much on AI to keep the economy moving.
 Yeah.
 You want to get your thoughts, especially about this idea of an underlying economy
 that's actually very resilient holding in there.
 And which is, I would argue, looking at some of the data we've gotten recently,
 being buoyed by the industrial side of the economy with AI infrastructure build at,
 oh, by the way, defense spending showing up in some of those numbers too.
 Yeah.
 Yeah, absolutely.
 I mean, the story, I think, there have been two forces you've had,
 the AI, the CAPEX AI, build out in the strengthening economy and earning story on one hand,
 and then obviously the straightover moves closer on the other hand,
 and they've battled out, and obviously I think the bullish factors have won.
 And I do think it's about the resilient economy,
 and I think it's about the multiplier effect you get from all of this CAPEX spending.
 We looked out and said, okay, sales growth in the next 24 months,
 you know, that we've seen this ramp up in analyst estimates.
 What is that equate to for nominal GDP terms?
 And it points to like a 6% nominal GDP world,
 which is robust growth.
 I mean, that's in the post 1990s era, that's quite robust.
 And so I think that the tech stocks and a lot of the AI
 build out stocks remain kind of on the defensive side,
 for all the reasons that Stephanie laid out.
 I mean, a lot of the stuff that's interest rate-sensitive
 is going to struggle as long as the straight is closed.
 And so that leads people, if they want to participate in the earnings boom,
 they want to participate in the booming economy,
 they want to get into this tech space.
 So that's where I think the focus has been in deservedly so.
 Speaking of 1990s, Stephanie, we've heard more and more folks come out
 and make comparisons to 1999 and the late 1990s
 with what we're seeing with AI.
 Are they warranted?
 Oh, absolutely not.
 I think that you're in the first or second inning with regards to AI.
 And exactly what you were just talking about in terms of the industrial economy.
 It's the AI food chain, Morgan.
 It is AI.
 It's you need data centers, more data centers.
 You've got to stick the stuff inside the data centers.
 And then you need the grid to get upgraded.
 And you know, we don't have enough power.
 So all of those industries are benefiting substantially.
 And they're benefiting because of all the capex,
 almost $800 billion in capex from most of the Meg 7s this year alone.
 That's up 75%.
 That is not going to change.
 Those numbers are only going to go higher.
 Maybe at a percentage basis they slow down,
 but they're still going to go higher in terms of capex.
 And as long as that happens,
 a lot of parts of the economy are going to benefit.
 Okay.
 And of course, we will keep an eye on this Google IO event too.
 Speaking of AI infrastructure and Nvidia tomorrow.
 And of course, the memory stocks which have taken a breather here
 in the last 24 hours or so.
 US stock futures are lower this morning.
 Thank you to our morning call crew, Rockstar crew.
 Great to have you.
 We're going to throw it over to Squawk Box now.