Rising Returns from I-Bonds, Shift4 CEO on Customers Trends 5/8/26

 Global turmoil or U. S. Fundamentals, which will win out. Futures are higher. I'm Dominic
 Chiuin. This is your morning call.
 Good morning. I'm Dominic Chiuin for Morgan Brennan on this Friday morning. U.S.
 equity futures right now are actually modestly to the upside after Wall Street's first down
 day out of the last three. Right now the Dow has implied higher by roughly 100 points,
 the S&P higher by 30 and the tech heavier Nasdaq 100 up by about just 180 or so points.
 A look at markets for the week so far and it's been generally again positive. The Nasdaq is
 up almost 3%, the S&P 500 up 1.5% and the Dow eking out a quarter percent gain there.
 Watching yields as well ahead of today's big April jobs report, 55,000 net new jobs are expected,
 that's down from 178,000 the prior month. The unemployment rate looks to hold relatively steady
 at 4.3%. As for the yield picture ahead of that big jobs report, you can see the benchmark 10-year
 note yield going up in price, the yield dropping in value, 4.368%, the two-year note yield,
 3.891%, and the 30-year long bond just a hair above 4.95%. On the energy front, we're on pace for
 the worst week in about a month's time, U.S. benchmark crude prices right now are down just about
 1.3% to $94.44, the international benchmark gauge, Brent crude futures, right at about $100.30
 that's up 1.4% of 1%. Now that takes us to the Middle East and Wall Street trying to brush off
 fears of tensions escalating in the Persian Gulf after the U.S. and Iran exchanged weapons fire
 yesterday and the UAE said it intercepted missiles and drones coming from Iran. President Trump says
 the truth is still on, pressuring Tehran to make a deal. So let's now get out to Dan Murphy
 in Abu Dhabi with the latest sort of state of play. Dan, good morning.
 John, good morning to you. Well, markets really are attempting to determine if this is
 escalation or if it's just leverage for a deal. We saw U.S. and Iranian forces exchanging
 fire near the Strait of Hormuz in what could possibly be the most direct military confrontation
 between the two sides since the ceasefire. We saw three U.S. Navy guided missile destroyers
 coming under attack as they attempted to transit the strait to the Gulf of Oman,
 sent com saying Iran launched multiple missiles, drones and small boats at those vessels,
 but no U.S. assets were struck. And in response, U.S. forces carried out what they're calling
 self-defense strikes, basically targeting Iranian missile and drone launch sites and command
 and control locations. As you say, President Trump downplaying the exchange, calling it
 just a love tap and also insisting the ceasefire stays intact, but in the same breath,
 the President warning Iran that without a deal and I quote here,
 will knock them out a lot harder and a lot more violently in the future.
 There was also an escalation in the UAE this morning. The Ministry of Defense here intercepting
 Iranian missile and drone attacks earlier this morning, forcing authorities to send out emergency
 warnings to residents. There were no immediate reports of damage and the details of exactly what
 happened are still unclear. Meanwhile, the Wall Street Journal also reporting today that
 momentum is building on the ground. Saudi Arabia and Kuwait now lifting restrictions on U.S.
 military access to bases and airspace. That could potentially clear the way for project freedom
 in the Strait of Hormuz to restart as soon as this weekend, after it was reportedly put on pause
 due to pushback from Gulf allies here. Don, back over to you.
 All right, Dan Murphy live in Abu Dhabi with the latest there on the Iran war. Thank you very
 much for that. Now, not just the mid-east risks are in play here. President Trump is also dealing
 with a new legal defeat in his global trade war. After a U.S. trade court ruled his latest 10 percent
 global tariffs are a legal under-trade law but stopped short of granting victory to the plaintiffs.
 Now, this, as the president says, he will give the EU until July to ratify its trade deal with
 the United States or face a threat of even higher tariffs. Let's now get out to Steve Sedgwick
 in London with the latest on not just that but the market state of play as well, Steve. What do you
 see in? Look, Tom, I hate to kind of paint a picture here of negativity about the EU dragging
 its heels and the administration desperate to open up free a trade for the EU versus U.S.,
 but the fact of the matter is trade deals take a long time and the president has put this deadline
 onto the Europeans. As you say, threatening much higher tariffs if the EU doesn't unblock this deal,
 which was agreed last year and they were at one of his golf courses in Scotland when Ursula
 Fonda lay in and indeed Trump agreed on this, but the fact of the matter is, you've got 27 nations
 in Europe. It takes a long time to get them all to individually ratify. Let me give you a great
 example. This is, Trump's trying to get this done in one year in time for the anniversary of the
 United States, the 250 year anniversary. How long do our viewers think that the deal between,
 and let's say the EU and Mercassal between South America and the EU took? It's on 25 years.
 Now, admittedly, that does sound a long time, but you can't get these things through in a year.
 Look at any trade doing history. Look at even NAFTA, for instance. You can't do these things
 in one year, especially there I say when you're dealing with the Europeans. So, Trump's new deadline
 coming after this call with the European Commission, President Ursula Fonda lay in. It's really
 tough for the Europeans to respond. Ursula Fonda lay in has said on X or Twitter, whatever you call
 it these days, said, yeah, look, we want to do it. We're making progress, but you've got to go
 through the EU Parliament, you've got to go through the individual nations, and dare I say it,
 things on your side of the Atlantic are looking a little bit iffy on the validation
 of the terms of trade, the IEPA ruling. That got thrown out by the Supreme Court, the section 122.
 That's been thrown out now. So, it's really tricky for the Europeans to understand what's going on
 on your side of the Atlantic. For once, I have a degree of sympathy for the EU. I've got to mention
 the UK as well. Kirsta Amar facing much more pressure this morning. His Labour Party suffering
 heavy losses in the local elections across the country, right-wing reform party Nigel Farage's
 group has been so far, the big winner. Mr. Two, back to you. All right, Steve Sedgwick with what's
 happening out in the European continent. Thank you very much for that. The US markets right now are on
 track for solid gains this week, as we showed you, even as investors, track the shaky US Iran cease
 fire and oil prices resume their march higher. The S&P 500 and NAS sector on course for their six
 straight positive week. In a new note out today, RBC is raising its year-end S&P 500 target
 from $77.50 to an even $7,900. That's a nearly 8% upside from yesterday's closing price for
 the S&P. RBC citing resilient earnings growth and strength in AI-linked sectors. So joining me now
 is Lallie Ockiner, the global market strategist over at Etoro. Lallie, this is an interesting kind of
 move that we're seeing in the markets overall. The AI-linked trade has resumed that leadership over
 the course of the past month and a half after being at least set aside for a while. Is that something
 that you can see continuing? Well, thank you so much, Don, for having me. It's indeed good results
 coming from companies such as AMD. I think that's what it's telling us that AI is still the
 market's dominant earnings engine. But I would say that the trade is maturing at the moment. I
 would not chase every AI adjacent name indiscriminately. What we are saying is that semi-power
 equipment, data center infrastructure, cyber security, these are the enablers with upward earnings
 revisions. So they could be good investments. But be careful with AI's story stocks without
 margin support. I think we see that the market is becoming less forgiving, especially if the
 guidance is coming much worse than expected. So again, look for second derivative beneficiaries as
 well, such as power, grid, cooling, industrial automation. So again, be very careful about whether
 the trade has still some room to run. And again, the more second derivative enablers space rather than
 every stock out there. All right, Lully, let's move beyond that part because one of the big investment,
 I guess, concepts that won out over the course of the past 18 months is that so-called broadening
 out trade. The non-AI, non-tech, non-hyperscaler type trade in the market right now,
 is that something that can still reassert itself? And is the market in need of it in order for a
 healthy march higher to occur? Sure. I think much depends on obviously the situation in the
 Middle East. We still think that the shock is not gone. I think even a partial de-escalation
 will could hit oil further. Obviously, what that means is that macroside real incomes will
 get squeezed and the Fed not much able to ease anymore for this year at least. But again,
 the AI story is driving the markets. What we are saying is that, look, quality cyclicals over
 low quality cyclicals are a good place to be. So think about, say, industrial automation,
 select materials, industrial metals, and miners, I think are clear winners here, as we were
 seeing with Rio Tinto and BHP. And some of the international stocks are doing okay as well.
 Japan is a good story. We like the reform energy in Japan. And finally, I would say the quality
 cash flow stocks and dividend growth is, again, going to hold up well towards the end of this year.
 All right. A lot to kind of digest there for sure. Lolli, Akanar, Etoro, thank you very much.
 We appreciate it. Have a nice weekend. Thank you. All right. Well, a lot more coming up here
 a morning call including AI cuts coming for cloud flare with the stock sinking ahead of the
 opening bell plus legal troubles in the US and now overseas. Why authorities and pairs are
 calling for a face-to-face meeting with Elon Musk. But first, a supply-demand mismatch shares
 of core weave sinking right now. The full story in a very busy hour still ahead when morning
 call returns after this commercial break.
 Welcome back to morning call. Let's get a check on some of the stocks on the move at this
 hour in the morning. Coinbase shares are under pressure down by about 2% after posting lower
 than expected results weighed down by a drop in cryptocurrency prices. This marks the second
 straight quarterly loss due to cryptocurrency volatility. And even bigger drop for core weave
 shares down right now by about 4.5% falling on weaker second quarter revenue guidance and an
 increased spending forecast. It's also posting a larger than expected loss for the first quarter.
 Earnings though did beat and earnings though didn't and revenue did beat.
 Cloudflare shares are plunging after the company announced it's cutting over a thousand jobs
 or 20% of its workforce citing that agentic AI has fundamentally changed the company's work.
 Cloudflare's earnings did top expectations though shares are down 15%. And a firm shares are
 facing some pressure despite better than expected quarterly results and a hike to its full-year outlook.
 The company is seeing growth in a number of its users and transactions during the quarter.
 Those shares are up about 1.5%. A firm's CEO will have more on the quarter when he speaks
 exclusively to our own Jim Kramer later on on mad money tonight.
 While sticking with payments that space, also watching shares for shift 4 after closing up
 more than 9% on the back of earnings yesterday. The payments processing company beating on the
 top and bottom lines highlighting top line growth, expanding profit margins and stronger cash
 generation even as management acknowledged pockets of macro and geopolitical risk.
 For more on that quarter, we are joined in a first on CNBC interview by shift 4 CEO Taylor
 Lawber. He's also a member of the CNBC CEO Council. Taylor, thank you very much for the early
 wake up call this morning and for joining us. Thanks for having me. All right, let's talk about
 the positivity around the results. We know the quarterly results beat the metrics and we saw the
 stock gain on the heels of that. Just how much do you think your current price and valuation
 reflects the kind of growth that you are expecting? You know, it's a tough question that sparks
 some insecurities. We've grown revenue by a 35% keg or over the last seven years, all while
 improving profit margin the entire time and diversifying our business both by vertical and
 geographies. So we'll never be quite content with the way valuation ship but we're pleased that
 the market is recognizing some of the benefits of those diversification. No CEO should never be too
 comfortable with any kind of projection or metric because it's so much more out there that they
 can try to tap into. My question next is about just what you are seeing in terms of how your
 business is evolving given some of the more recently developing risks on the bigger picture macro
 front and specifically with regard to the Iran war in the Middle East right now. Has it shifted
 the dynamic of your customers at all and are they kind of behaving a little bit differently or
 are things relatively stable? So we're really seeing two different events going on right now inside
 of our merchant base. Keep in mind, we power the experience economy. So we're in a lot of restaurants,
 a lot of hotels, a lot of sports and entertainment venues, stadiums, etc but with a significant presence
 in luxury retail as well. And so in the United States we're seeing stable spending,
 actually even decent spending inside of hotels, moderate spending inside of restaurants, consumer
 seems stable. From our point of view in luxury retail which is very dependent on global travel,
 particularly travel from the Middle East we're seeing pressure there and I think that was expressed
 in the results we saw which is that they were in line with our guidance despite kind of meaningful
 pressure in the luxury retail portion of our business. With as much visibility as you can have given
 what we know right now and I say this all ahead of a big jobs report that's coming up later on
 this morning. Can you take a look at the customer base that you have and kind of segment out where
 you think there is again that relative strength and weakness you mentioned the luxury side of things.
 Are you seeing maybe signs of weakness or relative weakness or stability in the middle
 income to lower parts of the market and if so how does that kind of reconcile against that kind
 of luxury side of things if on balance your company has to cater to all these types of businesses?
 Yeah it's a great question really complicated dynamics what we saw over the last half of last year
 was a pretty acute K economy where the luxury spending luxury travel was pretty robust with
 lower end consumers pulling back quite meaningfully. We've actually seen that stabilize at least in
 recent months and when you think about the luxury retail segment of our business it's very specifically
 aligned to travel disruption. So these are consumers that are not as dependent on the overall
 economy and how they spend they'll spend kind of significantly they're traveling to places like
 Paris to buy a luxury handbag. They're pretty insulated from some of the short-term economic events
 however when travel is disrupted that's when you see a pretty strong pullback.
 And then with the last question before we let you go here for the back half of this year what are some
 of the baseline assumptions that you have for your business these are the what we are seeing right now
 not just in Iran but you know economically around the world. So we reiterated guidance for
 the full year but with a stated impact to our business through Q2 so when you think about the
 stable spending we're seeing inside of restaurants and hotels that's a strong sign. We're seeing
 a strong spending inside of sports and entertainment. In luxury retail specifically because it's
 so linked to travel we actually look at forward flight planning and it's very easy for us to
 understand with forward flight planning and paired through Q2. It's prudent for us to be cautious
 through Q2 but there's a lot of reasons to be optimistic in the back half of the year and we'll
 have to wait and see how that plays out. All right Taylor Lover shift for thank you very much we
 appreciate it. Thanks. Have a nice weekend. You too. All right straight ahead on the show investing
 like it's 2022. We're tracking the latest I bond yield surge and if the downside outweighs the
 potential risk free spot to park your cash but first a strong debut for Hawkeye 360 yesterday the
 space analytics firm jumping 30% at its first day of trading on the New York stock exchange giving
 it a valuation of more than three billion dollars and signaling solid demand by investors for
 defense tech IPOs. Those Hawkeye shares up 31% first day morning calls back after this.
 Welcome back to morning call investors looking for safe havens for their cash are seeing
 one opportunity in I bonds the Treasury Department announcing last week that the virtually risk free
 investment option will pay 4.26% annual interest through the end of October that's up from roughly
 4% payments that were offered through the end of last month demand for those I bonds previously
 surged back in 2022 hitting a record high of just over 9.6% in terms of income but that surge
 came in tandem with soaring inflation levels so could this latest uptick signal potential
 economic troubles ahead let's bring in Gilbert Garcia owner and managing partner at Garcia Hamilton
 associates Gilbert thank you very much for being here with us right now let's talk about those
 this is a retail oriented product one that is not available in massive quantities at the institutional
 type level why exactly are we so focused on that I bond market right now I think a couple of
 things I think there's an expectation by every day Americans that inflation is going to go much higher
 and why because they see gasoline prices going higher they see the war on the goal and I think it's
 the expectations that that it will go higher but in reality what's interesting is they've been
 much more attractive before if you go back to during the GFC and other places other time periods
 they've been much more attractive than they are today relative to T bills or relative to tips
 but you are spot on that it's really a retail investment for people that can buy and hold it
 really for 30 years certainly for the first five years because if you redeem it before five years
 there's a small penalty and you before fit some interest for the last quarter we're also talking
 about something that you cannot buy in size so to speak so they're your cap that's kind of certain
 levels of buying activity but I wonder I wonder what it means that there is kind of this renewed
 interest in those bonds at these kind of elevated yield levels what it signals to you perhaps
 about where the investors in this market are and what it says about the broader economy
 yeah I think what it really tells me well first of all the increment is 10,000 that's your limit
 where if you compare it to tips you are really unlimited because tips are readily marketable
 and I bonds are not but I think what it tells me is people are getting scared people are getting scared
 they're opening up the paper every day they're open at the news every day and they're seeing
 more trouble they're worried about the election so that's really what it tells me but I think the
 larger issue for us is we believe that if you focus on inflation especially right now with all
 the headwinds going on the economy the real estate prices rolling over the demographics commercial
 real estate having high vacancies and the like you're really going to in our view make a mistake
 the Fed will make a mistake because ultimately to get inflation down if it takes wrecking the economy
 and losing hundreds of thousands of jobs that's not a good trade for the Fed nor for Americans
 and Gilbert before let's go really quickly what are your expectations for the Fed and
 interest rates for the back half of this year we think the market is a woefully underpricing the
 number of cuts of the Fed's going to do we think that ultimately when the new Fed chairman comes in
 I think he's going to look at inflation a little bit differently he's going to look at what's
 called trim pce which really takes out the outliers on inflation and when you look at that
 mark inflation is much lower and I think he's going to look beyond the war in the in the
 Gulf and I think he's going to focus on jobs and I think he's going to recognize that the trade-off
 to get inflation lower when the glide path is already lower because of real estate is just too high
 meaning we don't want a route of wrecked jobs and wrecked the economy to get there an interesting
 point as well here I'll leave you with this Gilbert for you and our viewers and listeners
 right now predictions market platform kalshi has a 53% chance or odds or probability that there will be
 no interest rate cuts throughout the course of this year so we'll see how that dynamic plays out
 Gilbert thank you very much we appreciate that all right thank you for having me very much
 all right still on deck for the show the guest list for Trump's China CEO entourage new details
 and a multi billion dollar chip smuggling ring plus how the Iran war might redefine global
 economics Charles Dolores here to weigh in morning call continues after this
 I'm Dominic Chiuin from Morgan Brennan welcome back to morning call US equity futures
 on this Friday morning are moving to the upside here with the Dow implied higher by roughly
 150 points the S&P higher by 35 and the Nasdaq up by nearly 200 points we're watching treasuries ahead
 of today's big April jobs report those non farm payrolls expected at 8 30 a.m. eastern time
 you can see here the benchmark 10 year note yield dropping in value so bond prices rising 4.366
 currently the two year note yield 3.891 percent and the 30 year long bond 4.951 percent
 now Calche users are pricing in a 60 percent chance of 60,000 net new jobs last month
 53 percent for a more than 70,000 read and 44 percent chances of a north of 80,000 job read
 when those non farm payrolls are released now just for context the estimates right now are calling
 for a rise of 55,000 checking the energy complex as we monitor the situation out of the
 straight of form moves after the US and Iranian military exchanged fire late yesterday
 though President Trump maintains the truce is still in place as he pushes for a deal
 prices for US benchmark west Texas intermediate off of one half of 1 percent to $94.30
 ice-bren crude futures the global benchmark $99.83 off by one quarter of 1 percent
 and watching the action overseas looking at the global markets the kneecage Japan down fractionally
 about two tenths to 62,000 713 the South Korean Cosby up one tenth and the German DAX so far
 in trading down about two thirds of 1 percent two names on the move this morning Taiwan semi-conductor
 reporting a more than 17 percent pop in sales last month to more than $13 billion and Toyota
 forecasting a 20 percent drop in profits for its current financial year stemming from supply chain
 and demand destruction tied to the Middle East conflict well checking on some of the morning's
 latest headlines a US trade court has ruled President Trump's latest 10 percent temporary
 global tariffs are unjustified but is moving to only block duties for two private US importers
 and the state of Washington temporary tariffs will remain in place for all other importers while
 the White House appeals the ruling city CEO Jane Frazier and Blackstone CEO Steve Schwartzman
 will be among those scaled down to a group of a dozen or so CEOs accompanying President Trump
 when he meets with China's Xi Jinping next week other executives reportedly on the list include
 Nvidia CEO Jensen Huang Apple CEO Tim Cook and Boeing CEO Kelly Ortberg by the way we will hear
 more from Jane Frazier when she speaks to CNBC exclusively at 11.30 a.m. Eastern time today
 fresh office city's big investor day andthropic is reportedly weighing raising tens of billions of
 dollars a summer to fund a major computing capacity expansion the financial time says the round
 could lift its valuation to nearly one trillion dollars meanwhile shares of iron popping ahead of
 the opening bell after the data center operator announced a partnership with Nvidia including a
 five year right to Nvidia to buy up to 30 million shares of iron stock at a strike price of $70
 a piece sticking with Nvidia reports this morning US authorities are investigating an effort by
 Thailand based company Obon to smuggle two and a half billion dollars worth of super micro computer
 servers and advanced Nvidia chips to China with Ali Baba as one of its target customers super
 micros co-founder is already under fire for allegedly conspiring to illegally root billions of
 dollars in advance AI equipment towards China. Well turning back to President Trump facing a
 new legal setback after a US trade court ruled parts of his temporary 10 percent tariff plan
 are illegal even as the White House is pressing the EU to reach a trade deal of its own before July
 that back and forth is adding new uncertainty for global companies already dealing with rising
 geopolitical tensions supply chain issues and higher costs tied to the war in Iran.
 So joining us now for more on this and more is Charles Delara Chairman and advisory partner at
 the partners group formally CEO at the Institute of International Finance also serving in various
 capacities at Treasury under multiple US administrations as well as the US executive director
 of the IMF. Charles we've known you for years the resume of course speaks for itself. I wonder
 from your perspective given everything that you've seen in global markets over the course
 of the last few decades call it just how important is the war in Iran on the global economic
 picture have we yet to see the full effects and if not when can we expect to see them.
 dominant good morning it's certainly good to be with you again it looks like it could be a very
 active Friday in the markets all around doesn't it look I think we are simply not at a stage
 where we're able to foresee very clearly what is going to come about with this war in Iran.
 We're told of course by both sides at least most recently by President Trump that the cease
 fire exists but you know it's a formal naval officer who served on a guided missile destroyer
 in the Mediterranean. I don't see how we can call this cease fire operational when missiles drones
 and swift boats all attack three of our destroyers dominant and so I think there remains a lot of
 issues to be resolved. I think unfortunately even if we do see and I hope we will see a temporary
 agreement which will then provide a framework for more extended and detailed negotiations even
 if we see that it seems to me as highly unlikely that we'll be able to clear out the backlog
 of over two thousand ships which are blocked now by the state of four moves and by the uncertainty
 surrounding it and therefore I think the implications for the world economy are that it continues
 to be a serious cloud over the global economic outlook dominant. And how exactly does it play out
 when can we expect to see perhaps Charles a more normalization of things that we saw prior to
 the war even starting do we think it's in the next month two months three months six months
 could take a year or more. Dominic you know there's been so much back and forth here that it's
 it's had spinning at times isn't it to follow the shifting signals coming out of both Washington
 and Toronto but I do think that both sides have growing reasons now to find some at least temporary
 framework which would move them into more extended negotiations unfortunately during that period
 of an interim agreement even if it is reached I don't think we can expect to see the
 state of four moves return to normal anytime soon that means in my view that while we may see
 some initial debt in global prices I don't think we're going to see a sustained decline here
 and if we did see a continued decline it could well be into the late fourth quarter early first
 quarter of 2027 before we see prices at the bumper it turns to normal before we see some of the
 other diesel prices which are feeding as you know dramatic shortages and I think there remains
 a lot of uncertainty about the future of navigating the state of four moves you know I think these
 20,000 sailors that are now trapped over ships floating around the strait must feel a lot like
 the sailors on the the ancient Odysseus story of being caught between skill and in Turendus they
 really need to be able to move through this strait and right now the risk are very high for both
 sailors for both their owners and the insurance firms and it's very difficult to me to see that
 we are going to have any return to normalcy in fact the easy open navigation of the
 strait of four moves that is existed for for decades and in fact for the bulk of modern history
 maybe something a reality that we don't restore any time in the near future and therefore
 the implications for the world economy remain negative I think the US empowered now by thank
 God for AI because our capital expenditures are keeping the economy moving ahead despite declining
 consumer sentiment and despite the strains on consumer pocket bulk but the US is in a better
 position here Europe and parts of Asia I think remain under a risk of recession I'm glad you
 brought that up because you know going back a decade and have some of the first it times that we've
 spoken at length were around the sovereign debt issues that the world was experiencing about
 you know 15 or so years ago and I wonder from your perspective just how much do other parts of the
 world whether they be developed market economies outside the US or more specifically the emerging
 market economies out there how will they be impacted given the ramifications of the war in Iran
 I think we are going to see growing pressures on sovereign debt in many corners of the world
 I can't help but be somewhat concerned about France and some of the other European countries that
 responding to these current pressures by simply increasing government subsidies across the
 board and while this may be the right thing to do in the very short term to mitigate the effect on
 consumers it's going to pose even further strains on already stretched fiscal positions emerging
 markets also in Latin America and South Asia I think we're going to be under pressure because
 this is going to increase the cost of energy imports in many corners of the world and even as we
 see in the United States even though we have abundant energy we are seeing the effects of this
 global energy strain on our own in our own economy now so I think I think we have to be concerned
 you know there's no immediate threat to the US fiscal position in global markets but I think one
 would have to have one's head in the sand not to be concerned about the steady rise of our debt
 these extraordinary expenses of the defense budget which while they may be necessary in the
 current environment will need to be offset at some point by some difficult choices and I don't
 see the leadership in Washington on either side of the aisle this prepared to make that decision
 right now all right tough choices head for sure Charles Delora thank you very much we appreciate
 it please come back and see us again soon sir pleasure to be with you Dominic take care all right
 thank you for that a lot more to come here a morning call including Sam Altman said to take the
 stand a look ahead to what open AI CEO may say when he goes before the court in his company's
 legal brawl with Elon Musk and as we head out to break check on shares of Akamai technology
 surging on a boost in full-year guidance cute one results coming in mixed the cloud computing
 company also announcing a leading frontier model provider has committed nearly two billion
 dollars for his cloud infrastructure services Akamai shares up 27% pre-market warning calls back after
 this welcome back to morning call news alert here prosecutors and friends summoning Elon Musk to face
 preliminary criminal charges in a massive investigation into a social media platform x over
 allegations of disinformation and the spread of sexually explicit images of children on the platform
 sticking with the Elon Musk story his trial against open AI over the future of that company
 resumes on Monday CEO Sam Altman as well as Microsoft CEO Sachin Adela are expected to testify in the
 coming week this is after open a ice Greg Brockman the co-founder took the stand
 rebutting much of Elon Musk's statements in court cmbc zone actually kapoo is heading back
 to oakland california to cover the trial but joins us now ahead of what's likely to be a very
 very busy week so i guess maybe the big question for me is what has surprised you as a reporter
 covering the event so far i think what surprised me most so far is actually how well behaved all
 the executives have been inside the courtroom last week musk for instance really didn't interact
 with altman or Brockman as far as i saw even when he was on the stand he really wasn't making eye
 contact and when he was off the stand his back was to them so really a departure from all of the
 jabs and insults we've seen flying on social media in recent weeks all right so i mean
 Sachin Adela Sam Altman are going to testify what exactly could we expect to hear i mean these are
 the two of the probably i could argue most high profile CEOs in the entire marketplace right now
 yes absolutely i think it's safe to say we can expect three things from them first i think
 nadella will likely try to make it clear that microsoft did not found open a i or establish its
 for profits subsidiary both of those things happened before it made its investment in open a i in
 2019 second i think altman will really use this as his opportunity to make his case until his
 side of the story musk has been trying to paint him as a bad actor in somebody who stole a charity
 as he said multiple times so i think altman will really take the floor and share his recollection
 of events and the early years at open a i and third i think both men will likely be asked about the
 chaotic but brief few days where altman was ousted from his role as CEO of open a i and exactly just
 to follow up on that point there if we are looking at the dynamic right now is there a sense that
 people are getting that have been inside the courtroom and out about whether or not this is
 tilting one way or the other i know it's very early to tell it's very hard to speculate i will
 say the jury has been engaged but it's a lot of nitty-gritty discussions about open a i's corporate
 structure so at times they look tired and even a little bored but i think next week's going to be
 fireworks for sure all right actually kapoo covering the the sam altman and elan musk trial thank you very
 much and safe travels to you thank you all right well straight ahead on the show the morning call
 crews team up the trading day ahead and why one crew member says cash may be the move in the
 current market environment sticking with cash we're back in a moment
 and welcome back it's time now for your call sheet where we look at the topic striving the
 trading day ahead the crew members today are matt mailey chief market strategist at miller
 tayback also chris hodge chief u.s economist over at ntxis america's and dug bonapart president of
 bona fide wealth and a member of the cmbc financial advisory council gentleman thank you all for
 being here with us right now let's start with the earning story and what we've seen from the
 hyperscalers dug on the start with you first have you liked what you've seen with the earning story
 so far vis-a-vis those hyperscalers in a i yeah you got to like it right things look pretty rose
 you right now we have legs in the a i space semiconductors going bonkers obviously a lot of people
 saying hey when does the music stop but it has not stopped look at that growth okay matt
 from your perspective how exactly do we kind of look at the a i story given the earning strength
 that we've seen against the capital expenditure story and the divergence we've seen in some of those
 stocks well don't see me don't i think we got to look at a little bit of some of these stocks of
 rally and uh and we might want to think about looking at some other names you know we've seen look
 at what's going with advanced micro devices up 85 percent in just five or six weeks so we see how
 intel is has doubled uh and intel maltrading in basically a hundred times earnings advanced micro
 great company like it long term but it's uh you know it's you know it's gone from 30 times earnings
 to 57 times earnings and they're all over bought so look now i think it's some of the ones that
 have been lagging even in in video which you know hasn't been doing all that well you know it's
 finally starting to look like it's going to break out apples breaking to a new all time high and some
 of the quantum computing stocks are breaking out as well even though earnings are very important
 it's also momentum driven market so i'm looking at the stocks that are breaking out rather than
 ones that are getting over bought all right Chris i guess from an economist perspective we're talking
 earmarking pledging whatever you want to call it trillions of dollars at that point for the next
 k five to ten years economically speaking what exactly do you look for when you see some of these
 numbers coming from the likes of a meta platforms or an amazon or a microsoft or an oracle
 about just what kinds of money we are spending and what the economic flow-throughs will be
 yeah i think especially given the broader context with iran and the straight of four moves
 you're looking at an inflationary impulse for uh software in in particular and this puts the
 Fed in a very difficult position where you have a lot of these exogenous stocks push pushing up
 inflation and now you have these domestic dynamics also pushing up inflation all right so speaking
 of inflation let's talk about that move that we've seen in prices especially with energy vis-a-vis
 the iran war and let's talk about the earning story in the broader context of that Chris
 i'll start with you on this one how exactly are we think how do you think things will play out
 economically with regard to just how long the effects of this price shock will be for the consumer
 yeah well i think the fed standard playbook is to look through an energy shock and to think that
 some sort of any sort of energy shock is going to be a boost to headline inflation but ultimately
 have a disinflationary impulse for core because you're going to see dampening consumer demand
 you know it's a consumer sector that's a lot weaker than it was in 2022 and we last had an
 had an energy shock and that's the that's the that's the outlook that we see as well
 and Doug from your perspective from a financial advisor's view are your clients concerned or do
 they view this as transitory yeah so they've seen this phase before i don't get a lot of conversation
 they're hey you know gas prices are affecting my portfolio or affecting my life whether that's a
 privileged position or not it's just part of an overall hey things are more expensive right now
 they're hoping it's short-term we get to resolution we get back to a summer here where gas is not
 a problem but from a portfolio perspective they're kind of baked in exposure to energy here so they're
 not chasing you know that trade percent all right and Matt should people be chasing that trade or
 what exactly is the best portfolio positioning given everything we know about AI energy markets
 are on and whatever we have clarity into well then i mean you know it's it's it's funny because
 we've had this unbelievable rally over the last couple of years i mean we had a bare market in 2022
 which it's hard to remember that but a little over three years the market is double and you know
 the market is getting expensive you know p ratios we can say whether that's justified or not but
 price to book and price to sales they're a record all-time most expensive levels and you know
 again we've had this great run i just think that for the individual investor in particular
 why not raise a little bit of cash here i mean well how you know the the big price targets the high-end
 price targets in another six seven percent away you're already up a hundred percent in the last
 three or four years and you know if you raise ten percent cash it's not like you know we're not
 going to a hundred percent cash here you're going to miss the next six or seven percent you're going to
 miss six or seven percent on ten percent of your portfolio and if things do get worse in the in the
 geopolitical frame in the market does come in you'll have a little dry powder to you so
 i just think people should be a little bit careful up here all right and our final topic here is
 the jobs report coming out later on Chris let's get your take does it even matter what happens with
 this jobs report yeah it certainly does matter um because we've seen recent data show that
 demand for labor has stabilized a little bit but we're still in a very tenuous equilibrium
 and there's economic cross-currence from uncertainty with policy plus the stimulus from
 the AI and tech investment you know it's we we think that we're going to get solid jobs
 number but comparatively speaking unspectacular all right and Doug your final thoughts on the jobs
 report most important thing to me are is the income faucet still running for our clients that's
 where things really break down so we pay close attention to that and we're hoping for a good report
 all right Doug Chris Matt thank you guys very much for joining us and have a nice weekend guys
 all right thanks in the morning call crew futures right now are bid let's send it over to squawk box