Morning Call 4/28/26

 I'm Morgan Brennan, and this is your morning call.
 Good Tuesday morning, let's get a check on U.S. stock futures after a mixed day, although
 fractional moves yesterday for the major averages that still did see new record closes for
 the S&P on the NASDAQ yesterdays, you could see right now on your screen this morning,
 mixed picture, Dow poised for a higher open, the S&P and NASDAQ poised to open at lower.
 Taking a look at treasuries too is the Fed kicks off its two-day FOMC policy meeting today.
 You could see yields are higher along the curve, U.S. tenure, treasurer yielding 4.358 percent.
 Let's take a quick check on the two-year treasurer yield, which is tied to the Fed as well, 3.824 percent.
 Dollar index, we're seeing the dollar strength and against other major currencies this morning.
 It's actually coming off of its highest level in three weeks with trading yesterday and
 you could see right there, Dollar index 98.67 is the level.
 Taking a look at energy too, we have crude prices moving higher again this morning, and
 also our Bob Gas.
 Those futures are sitting at 2022 highs, but if you take a look at WTI, it's up just
 about 3 percent right now, $99 a barrel, and Brent is up about $2.511 per barrel.
 More than just big tech on the earnings calendar as well.
 This morning we're looking for results from Coke, General Motors, UPS, JetBlue, those
 all report before the open this morning.
 And we're tracking the not-so-quiet rally in chip stocks as well with the socks on pace
 for its second-best monthly gain on record going all the way back to the year 2000.
 We got much more on that, a deep dive there coming up this hour as well, especially as
 Nvidia trades at record highs.
 To our top story though, this morning, open AI reportedly falling short on revenue targets
 and user growth in recent months, sparking worries among some executives over whether it
 can support its massive spending and potentially creating a ripple effect from the AI hyperscalers
 on down.
 The Wall Street Journal says CFO Sarah Fryer has expressed concerns to others that the company
 may not be able to pay for future computing contracts if revenue doesn't grow fast enough.
 The report says open AI has missed multiple monthly revenue targets this year.
 After losing ground to an anthropic chat, GPT's growth also slowed toward the end of 2025,
 falling short of an internal target to reach 1 billion weekly active users by year ends.
 Now in a statement to Reuters, Fryer and CEO Sam Altman saying, quote, this is ridiculous.
 We were totally aligned on buying as much compute as we can and working hard on it together
 every day.
 Well, let's talk more about this, especially as we do go into a heavy lift in terms of
 tech earnings this week with Richard Claude, Portfolio Manager on the Global Tech Leaders
 team at Janice Henderson.
 Richard, it is great to have you on the show, welcome and I do want to get your reaction
 to this latest reporting regarding open AI, especially since they are seen as somewhat
 of an elephant in the room when it comes to the AI infrastructure spend.
 They are.
 I think some of these media reports are a little backward looking obviously there was a code
 read after an anthropic launch to model that was well ahead of where chat GPT was and
 they've been feeling the after effects of that.
 Now this is a dynamic market, they've launched a new version of their model, the capabilities
 look better.
 So let's see if they can get their mojo back.
 At the end of the day this is not just about one player, this is a market that's developing
 that technology and we certainly think from the anthropic side, a significant amount of
 monetization of this technology which again makes us feel a bit more comfortable about
 some of that cap expending even if some companies like an open AI obviously have taken a step
 back at the moment.
 Yeah and of course this report from the Wall Street Journal coming just hours after
 we did get this official announcement that open AI and has shaken up its partnership
 perhaps not unexpected with Microsoft capping revenue share payments as well and allowing
 both of those companies to be able to do more with more players.
 Exactly and there's obviously even tension between those parties for some while and maybe
 some personal tension as well and I'll be interesting to hear what Microsoft has to say
 about that this week.
 Are they going to go down the route of developing more of their own models and potentially
 having to spend more capex towards that or are they going to become a bit more like an
 Apple on the on the enterprise side of being a distribution channel for kind of best
 of breed and you could use a chat GVT you can use Claude from an anthropic and that for
 us will maybe be a preferred route in terms of strategy.
 So in light of all that Amazon alphabet met a Microsoft and then Apple on Thursday what
 are the key things you're going to be watching across the group?
 It's going to be a busy night we might have to use some of those agenda AI tools but I
 think a little bit to the question marks obviously around open AI I mean I think since
 the launch chat GVT there's been this eternal question in the market.
 Is this capex spending too much on this new technology?
 Are they going to be able to monetize it?
 Will it be self-sustaining or is it going to rely on circular financing for forever?
 And I think the companies get that I think the CEOs know they've got their job cut out
 in terms of this week and they're going to show us ROI.
 They're going to show us that their businesses are accelerated.
 They're going to show us head count cuts to keep margins up.
 They're going to show us good things in terms of being able to convince us that they can
 monetize this technology and this capex spending makes sense.
 So I think they got the message and they were doing that at the conferences and heading
 into results.
 I think we see more of that during the results.
 Interesting.
 Do you think we see upward revisions into capex or do you think the peak is in in terms
 of how much these companies are willing to spend and thus the focus is shifting to some
 of these other metrics that longer term have mattered more up until now?
 I think we certainly do expect that there's a desire to increase the capex because all
 of these companies are going to say they're compute constrained.
 And if they could have more data centers, they'd love to have more data centers and have
 me to make hard decisions between prioritizing different parts of their business.
 The challenge is in terms of actually being able to up this capex and this is what management
 was telling us a month or two ago was that you know to actually get powered shells is
 just a limit to how much incremental power shell you can get and also just in terms of
 being able to get actually the amount of supply of chips in game constraints in memory
 or a TSMC.
 I think that's going to lead to you know incremental capex heights but you know just a lot less
 than the quantum we've seen in the past.
 Okay Richard Klood of Janice Henderson, great to have you on.
 Well let's get to the action overseas green arrows across the board as Europe gets its
 trading day underway.
 I've got a hawkish pause from one central bank in Asia as well.
 So Chow is standing by in London, Lisa Kim has the action out of Asia, Karen, let's
 kick it off with you.
 Good morning.
 The European markets are mostly firmer today, investors are still waiting for two crucial
 central bank decisions on Thursday in Europe and the feds rate decision tomorrow.
 Plenty of movers though under the surface given it's another busy earnings day.
 Healthcare leading to clients, thanks to a negative print from Nevada shares are falling after
 a miss on revenue and profit expectations in the first quarter and mid-increasing generic
 competition in the state.
 The CEO Vasner Asim and told us he expected a bumpy start to the year but growth will pick
 up in the second half.
 And Barkley is moving lower after the lender's trading unit was not quite matching those
 revenue numbers we saw across on Wall Street in the quarter.
 It also had a $270 million impairment related to the collapse of British mortgage lender market
 financial solutions adding to some existing credit concerns in the banking sector.
 But it's not all bad news, BP is driving the oil and gas sector higher after first
 quarter profit came in well ahead of expectations with the British oil giant saying the results
 reflect exceptional oil trading contributions and mid-stronger mid-stream performance.
 Morgan.
 I do also want to ask you about this state visit which is seen as a high stakes visit
 by King Charles and Queen Camilla with President Trump here in the U.S.
 or the next couple days.
 But it started last night with President Trump welcoming them to the White House.
 What is at stake?
 Well, indeed, King Charles III and Queen Camilla kicked off their visit yesterday.
 There's been time as you mentioned with the President and First Lady the White House.
 It's been a visit that's long in the making.
 It was planned to mark the 250th anniversary of U.S. independence but also comes at a
 challenging time for U.S.-UK relations with President Trump being a vocal critic of
 the U.K.'s response to the Iran war and of course there were those security questions
 asked around the trip after the weekend shooting at the White House correspondence dinner
 although officials did decide to proceed with their plans.
 Today we will see King Charles become just the second British monarch in history to address
 a joint meeting of Congress before a state dinner alongside the President this evening
 but the two sides leaning into some shared interest.
 We saw a White House beehive the center of attention yesterday and of course the King
 is an odd B keeper and B is part of the U.K. ecosystem here Morgan.
 All right.
 Karen, thank you.
 We'll continue to monitor that visit.
 To the Asia trade now, we got red arrows to end the day after a major central bank decision
 Lisa Kim has the latest from Singapore and Lisa, it's great to see you.
 Hey Morgan, so the BOD kept rates unchanged for the third meeting in a row at three quarters
 of a percent as expected but the BOD delivered a hawkish hold as three of the nine board members
 called for a raid hike marking the biggest descent since 2016.
 But the key takeaway was a bank's updated outlook, the BOD slashed its economic growth
 forecast for this year and next while revising its inflation forecast upwards signaling
 a strong chance of a raid hike ahead.
 Investors now see the bank raising rates by June and so Japanese bank stocks were stand
 out winners on expectations of higher rates while the Japanese yen strengthened moderately
 after the policy decision but a since rebounded with yield on the benchmark 10 year JGB's climbing
 higher inching closer to a 29 year high.
 Lisa, thank you.
 Well, let's get to the Middle East now.
 The tentative peace talks between the Washington and Tehran after U.S. officials said President
 Trump and his national security team remain skeptical of Iran's latest deal offer, one that
 would see the straight from who's reopened and would table talks about its nuclear work
 while not outright rejecting it.
 The president is concerned about Iran not dealing in good faith.
 Our Dan Murphy has the reaction from the region, Dan.
 Well, Morgan, the Middle East is certainly watching as we see Washington and Tehran
 remaining at a diplomatic impasse.
 Today marks 60 days of war two months ago on this day, the U.S. and Israel launched strikes
 across Iran and yet what remains of the regime still really stands.
 The straight-up Hormuz remains closed and, of course, there's no deal inside.
 Meanwhile, two of the most significant voices from the UAE have spoken out in recent days
 the ad-NOXIO and the UAE industry minister Dr. Sultan Al-Jaba posting on X saying the
 straight-up Hormuz must open and be free of disruption, really doubling down on his
 earlier calls to get the water way moving again.
 When the global oil prices are soaring with Brent back to 110 today, ad-NOX is of course
 making less money because it physically cannot get enough product to the global market.
 And for regional leaders here, it's pretty clear now that what Iran lost in military
 capacity, it has partially recovered in strategic leverage.
 The closure of the straight-up Hormuz really proving to be Tehran's most powerful weapon
 so far.
 We've also heard from the UAE diplomatic advisor Dr. Anwar Gargash who has spoken out
 in recent days, calling Iran's missile and drone strikes on the Gulf states ferocious
 and long-planned.
 Of course, the UAE was hit harder than any other Gulf state by these Iranian strikes,
 and Abu Dhabi doesn't just want a nuclear deal.
 It wants to see Iran's long-range missile capabilities and its proxy networks being
 dismantled as part of any long-term deal.
 And then, of course, elsewhere around the region, Saudi Arabia also backing the negotiation
 track, and other countries like Qatar and Kuwait have also both called for a comprehensive
 and permanent settlement.
 What that looks like remains to be seen.
 Of course, President Trump meeting with his national security team to review Iran's
 latest proposal, the Wall Street Journal saying Trump is skeptical, we're expecting
 a counter-proposal in the coming days.
 Morgan?
 Dan, I just want to ask what is perhaps a very basic question, but why has the UAE
 suffered so much more in terms of attacks than anyone else in the region?
 Is it a proximity story or something else?
 It's proximity story.
 It's also the fact that this is the New York of the Middle East.
 It is the commercial capital of the region, and one of the wealthiest and most sophisticated
 countries in this part of the world.
 So as a result, there have been significant attacks being leveled towards this country.
 The other layer you could add there is the fact that the UAE is also part of the Abraham
 Accords.
 It's Trump error foreign policy during this first term that fought the Gulf States closer
 towards Israel.
 So the Iranian Sea, the UAE and Israel being closer aligned, of course, Iran is fighting
 this war against Israel.
 So the UAE has become a proxy, just two reasons, Morgan, as to why we have seen such huge
 amounts of attacks being leveled towards this country.
 Okay, Dan Murphy, thank you.
 We got a lot more to come here on warning call, including for one week only, history
 in the skies over New York, plus short seller Hunter Brook calls on investigative reporter
 Beth Nama clean, uncovering what it calls red flags in some alternative investments at
 Hamilton Lane.
 We're going to dig into that.
 And later, opening arguments in the billionaire legal battle, beginning today, we got a very
 busy hour still ahead one morning call returns.
 Welcome back to morning call history in the skies of New York City, electrical, vertical
 takeoff and landing company, Yvitaal Company, Joby conducting the city's first air taxi
 test from JFK airport.
 You can see some of the video right there on your screen.
 This is one that could eventually take riders from the airport to downtown Manhattan
 and as little as, oh, could it be 10 minutes?
 The Joby Aviation is still months away from FAA approval for its air taxi, but as we just
 mentioned, incredible pictures you can see right now, pre-market stocks up about one
 and a half, two percent, and of course, we're trying to get all these capabilities online
 ahead of the Olympics in LA later this decade as well.
 Well, the House, instead of armed services committees, are holding hearings this week
 on the Trump administration's proposed $1.5 trillion defense budget.
 That's a 44 percent increase if there were to be enacted over last year's, well, over
 last year's request, and it's the largest boost military spending since World War II.
 One company that's poised to significantly benefit from rising defense budgets is
 Carmen Holdings.
 Now, it's seeing increased demand for its missile space and hypersonic subsystems, projecting
 revenue growth of up to 50 percent this year.
 You heard that right.
 Stop right there up on your screen, up to 3 percent, it's more than doubled since going
 public.
 And February of last year, joining me now is Carmen's CEO, John Rambo.
 Great to have you here on set.
 Welcome.
 Great to be here.
 I should mention brand new CEO.
 I think you're a month into the job.
 Month into the job.
 And it's been an exciting month.
 I've had the opportunity to get out and to meet the people, see the technology that's
 made the company successful.
 I've been impressed.
 The agility, the speed, the scale.
 This is a company that's really ready to do great things as we go forward, Morgan.
 Yeah, we're going to talk about the defense piece of this in just a second, but also,
 I mean, you were a subcontractor supplier on Artemis as well, so quite the start to the
 month for you.
 Artemis has really, I think, recaptured that excitement in the American population.
 You know, it doesn't matter whether you're focused on the military space side of things
 or commercial space.
 There is an enthusiasm and an energy within this space community.
 I had an opportunity to be at the space symposium a couple of weeks ago.
 The energy in the air was palpable.
 And Carmen has a really strong position in space.
 We're represented across virtually all of the commercial launch vehicle programs.
 Many of the space assets were building a lunar lander in our facility in Seattle.
 So this is a group of employees that are very committed to space.
 And when that Artemis launch went off, there were 2,000 employees at Carmen who were incredibly
 proud and humbled to have about a dozen complex subsystems flying on every stage of that
 mission.
 So let's turn to the military and defense side of things.
 We want to have trillion dollar budget requests.
 We've got senior Pentagon officials are going to be start testifying on the hill around
 all of this tomorrow.
 What does it mean, especially when you look at big drone budgets, when you look at these
 multi-year, you know, never been seen before missile production framework agreements.
 What does all of this mean for Carmen?
 Well, it's all about capacity, you know, and this is where Carmen is really going to
 shine.
 And we've heard a lot about the munitions budgets and the production rates, 2X, 3X, 4X,
 the current production rates of some of the key missile programs.
 Carmen has positions on all of those top effector programs.
 And so for us, we're a purpose built company that operates in this layer of the supply
 chain, where we've taken companies, in many cases, that have legacies of decades of proven
 performance, but relatively smaller companies, put them together, given them the resources
 invested in the IP rich solutions to be able to provide complex subsystems to the primes,
 invest at scale, be there for the primes, give them what they need, when they need it.
 Yeah, it's interesting, because we've seen this within the stock market.
 We've seen this divergence within the defense sector.
 And some of those more, you know, so-called legacy defense players and primes actually
 trading lower since the start of their Ron War.
 Behind you, there was a big run-up in those stocks ahead of that.
 But so-called defense tech and commercial space names, including Carmen, are actually
 continue to search here.
 How do you think it speaks to the defense demand picture and what's going to be needed
 for the future?
 I think the picture of the future is going to need all of them.
 I think there is space for the traditional businesses.
 I work for two of them, they're great companies.
 I'm now working for what's known as a defense tech startup.
 And I'm in a different community now of another group of great companies.
 Carmen is a supplier to both, whether it's the traditional, the non-traditional new
 entrance.
 We are a supplier to the primes, but represented on about 130 different programs in
 space and defense right now, supporting 80 different prime contractors.
 So given the magnitude of the spend that's going to be there, whether it's defense,
 or this, you know, significant surge in investment in commercial space, we're going to be there
 to be a part of that, support all of that.
 I think there's going to be a lot for everyone to do.
 Okay, John Rambo of Carmen, great to have you here on set.
 Thank you.
 Great to be here.
 Well, straight ahead.
 Shares of Hamilton Lane, those are touching a 52 week low yesterday, after coming under
 fire from one short seller, we've got more on that in just a moment.
 But first, we're also watching Shares of New Corps.
 The steel maker posting Q1 sales and earnings above street estimates for the first quarter.
 And those shares are popping, 3%, but a big story around steel, including companies
 that make it here in the U.S.
 And New Corps is certainly one of them, morning calls back after this.
 Welcome back to morning call.
 We're watching Shares of alternative investment management firm, Hamilton Lane, closing down
 nearly 6%.
 You can see right now, basically flat here, pre-market, hitting a fresh 52 week low, but
 the move follows a new investigative report that alleges Hamilton Lane has used aggressive
 accounting and markups, the report from Hunter Brook Media, which is a partner of short
 seller, Hunter Brook Capital, putting out the report, and Hunter Brook Capital disclosing
 a short position in Hamilton Lane in response to this.
 Joining me now is the lead author of that report, investigative reporter and Vanity Fair
 contributor, Bethany McLean, also author of Enron the smartest guys in the room, and all
 the devils are here, the hidden history of the financial crisis, and a long time friend
 of CNBC, Bethany, it's great to have you on, welcome.
 So let's start with this article, and you're reporting, and what you found about Hamilton
 Lane that is damning enough to see the sister company, Hunter Brook Capital, now placed
 a short on the stock.
 Well, I have no knowledge of what Hunter Brook Capital does, so you can read about their
 disclosures on their website and the media side and the capital side are separate.
 But I think what we found, when we dug into it, both the journal and the financial times
 did great reporting, pointing out that Hamilton Lane was benefiting from these one-day markups
 in secondary.
 So you buy a stake in a private equity that a seller is selling in their private equity assets,
 and then 80 cents on the dollar, say, and you promptly mark it up back to where the private
 equity firm originally had it valued, and you immediately report that as a gain in your
 fund's results.
 And so we looked at that, and I was interested in and thought, wow, that's really absurd
 that this is happening.
 And then we did an analysis and quantified the magnitude of the gains, which is that it
 was roughly 30% in Hamilton Lane's largest fund.
 So if this had been, I don't know, 5 to 10%, a nice little pop on top of, but I'd
 think of as more real results.
 That's one thing, but 30% of the gains, that's a pretty stunning figure.
 And is that why you looked at Hamilton Lane specifically?
 How does that compare to the rest of the industry?
 So the magnitude of the one-day markups at Hamilton Lane are big.
 They also recently changed the way they collect management fees in order to be able to collect
 management fees on these one-day markups so they can collect management fees on the
 unrealized gains.
 And so that had a huge impact on their earnings that we did not think was well understood
 by the market.
 So other firms do also take fees on unrealized gains, and other firms mark up their secondaries.
 But the combination of the change in the way Hamilton Lane can collect its fees plus
 the magnitude of the markups is pretty unique.
 Yeah.
 And I guess to put a finer point on that, and you just touched on it, but NAV, we're talking
 about the use of standard accounting practices.
 You can raise eyebrows about it, but it's certainly legal, right?
 And it is used, it's widespread.
 Many do it.
 And then, of course, to the point about compensation practices and some of the methodologies
 there also used by others as well.
 I mean, some of this has been out there about Hamilton Lane specifically for a couple of years.
 So what is it about this moment in time that makes this so significant?
 Well, I think there are two, three things.
 One is that the quantifying the magnitude of the markups on the funds profits.
 That's the thing that is new amid all the craziness in private credit.
 People are focused on all the risks in private credit.
 So that's what made this timely, because wait, if private credit is at risk, what about
 the equity in these deals?
 If that's a sort of basic finance thing, right?
 If the credit is at risk, then the equity should be toast.
 And there's the portfolio math in there that can change that.
 But if people are selling their secondary stakes, it's hard to believe there's some gigantic
 winner in there that is going to make it all okay.
 And that really is the third thing is that the magnitude of secondary transactions is
 different than it was in the past.
 So now it's a really competitive market.
 Evercore advises, the investment bank evercore advises on a ton of these deals, really competitive
 market, which makes it a little bit harder to believe that if you're buying this at $75
 to $0.80 on the dollar, you got a bargain.
 It's actually worth 100 cents on the dollar.
 Maybe when the secondary business was new, that was more true.
 But people are actually even going to the SEC and saying, wait, we need to rethink the
 accounting on these.
 Now that this is as competitive and big a business as it is.
 So what was once accepted practice is becoming more controversial.
 Yeah.
 And I realized that Hamilton Lane weighed in within your reporting as well.
 We've also reached out to Hamilton Lane.
 Obviously it's still very early here this morning.
 So we're waiting to hear back.
 But you in general have been digging pretty deeply into whether it's the private equity
 or private credit side.
 We'll say private markets in general.
 There's been this big and brewing debate about just how risky or concerning that piece of
 the market is right now, and whether there is systemic risk, despite the fact that it's
 a very small corner of the broader markets, your thoughts.
 Yeah.
 So it's really hard to know because especially in private credit, it's all private,
 so it's murky.
 You can't actually do your own research to see what these stakes are, what these stakes
 are worth, whether they be in private credit or in private equity.
 I guess I have my suspicions because usually when things are in the dark, usually when
 somebody's telling you it's worth something, it's usually not worth more than they're
 telling you.
 That has happened in the history of finance like never, right?
 It's usually worth less than they're telling you.
 So I think investors are pulling money from these funds.
 People have a right to be suspicious.
 And one of the things that is so concerning to me is the way that the fund managers are
 getting paid on unrealized gains, the incentives they have to collect, particularly retail investors
 assets, because that's how they get paid.
 These are all publicly traded firms now, they get, they get valued based on the fee stream
 they're collecting.
 And so they have, they become asset gathers more necessarily than asset managers, and that's
 another big change in the private equity, private credit industry that is new and that
 it changes the incentive structure.
 If they were getting paid based on doing only a great job, that's, that's one thing.
 But when they're getting, when their stocks are getting valued and people are able to cash
 out stock options based on fees, a fee stream, that's, that's a little bit different.
 Bethany McLean, great to have you on.
 Thank you.
 Well, still on deck, we're tracking the chip rally, partying like it's 2000 all over
 again.
 The stats you have to see to believe, some of the context that goes into that number, we've
 got Morning Call on the other side of this break.
 I'm Morgan Brennan.
 Welcome back to Morning Call.
 Let's get a check on U.S. stock futures, which are mixed.
 After closing mixed yesterday with both the S&P and the NASDAQ closing at new record
 highs, albeit fractionally yesterday, you can see this morning on your screen, Dow futures
 are pointed for a higher open here, the S&P and NASDAQ are poised to open lower.
 Well, treasuries are also in focus, as the Fed kicks off its two-day policy meeting
 today.
 As you can see right there, a lot of green on the screen as yields are higher across
 the curve.
 The U.S. tenure treasury yielding 4.358% right now.
 Let's take a look at the two-year treasury, which is most closely tied to the Fed.
 It's also higher as well.
 Similar story in terms of up arrows in the energy complex right now.
 You've got our Bob Gas sitting at 2022 highs and futures there, but also WTI crude right
 now taking a leg higher this morning, up about $3.99.51 per barrel and Brent crude is up
 about two and a half, $3.111 per barrel.
 A busy day ahead on earnings in the March up to Mag 7 results.
 We've got Coca-Cola, General Motors, UPS, JetBlue.
 Those are all reporting before the bell this morning.
 And let's get a check on some of the morning's latest headlines as well.
 Possible new cracks in the AI trade, the Wall Street Journal reporting, OpenAI has failed
 to meet its own internal goals on new subscribers and sales, casting questions around its aggressive
 spending plans.
 The report adding CFO Sarah Fryer is also expressing concerns.
 If it does not boost sales fast enough that it might not be able to open AI, it might
 not be able to afford its future computing needs.
 The company, though, pushing back in statements on that reporting.
 If we stick with headaches for OpenAI, though, after seating a nine-person jury yesterday,
 opening arguments scheduled to begin today in that high stakes legal battle between Elon
 Musk and Sam Altman over OpenAI's turn into a profit for profit business.
 Now this despite early promises to Musk by Altman and Greg Brockman that the company would
 remain a nonprofit focused on helping society.
 Musk is seeking upwards of $150 billion in damages and from OpenAI and Microsoft, which
 is one of its largest investors.
 Met at mean time is reportedly preparing to unwind its acquisition of AI startup Manus
 after China blocked the deal on national security grounds, according to the report Manus
 investors, which includes benchmark, have already received some returns.
 Well, the Bank of Japan keeping interest rates unchanged and its latest policy decision,
 three of the nine members on the board, however, proposing a hike as early as June over
 the Middle East inflation concerns that we're seeing rip through the market, particularly
 in parts of Asia with some of these energy supply bottlenecks.
 And Google reportedly signing a deal with the Pentagon, granting it access to its AI models
 for classified work.
 It's according to the information.
 The agreement allows the Defense Department to use Google's AI for, quote, any lawful
 government purpose.
 Well, we turn now to the latest in the shooting at the White House correspondent's dinner.
 Cole Thomas Allen is due back in court Thursday to see if he's eligible for release ahead of
 his trial after formerly being charged yesterday with attempting to assassinate President Trump
 at the event.
 Allen is also facing several other charges.
 He did not enter a plea.
 Mean time, excuse me, mean time.
 Late night host Jimmy Kimmel is pushing back on calls by the President and others for
 Disney's ABC to fire him over a joke he made about Trump and the first lady days before
 the shooting.
 Kimmel was briefly suspended last fall after backlash from the President and others over
 his comments around the shooting death of Charlie Kirk.
 This latest pressure campaign by the President comes just six weeks after Josh Demaro took
 over as Disney's CEO.
 Well, if we get back to the markets in Japan Central Bank kicking off a busy week of global
 central bank rate decisions, the Fed begins its two day policy meeting today with a decision
 out tomorrow largely expected to hold rates steady.
 We will also get decisions from Canada Central Bank, European Central Bank, at the Bank
 of England.
 This week as well, Brazil, a number of others.
 For more, let's bring in Lynn Alden, founder and principal at Lynn Alden Investment Strategy.
 Lynn, it's great to have you back on the show.
 Before I start getting into central banks and the like, I do want to get your thoughts
 on S&P and Nasdaq at record highs.
 Right, I think this is an ongoing symptom of fiscal dominance which is that they
 keep kind of the major stock indices keep levitating to the upside compared to many investor
 expectations.
 Partially because you have these very structural and fiscal deficits that are going on
 on the background, they're profitable out of asset prices.
 So we see a lot of the detriment in the economy, a lot of the slow parts of the economy,
 that's affected kind of the lower half of the income spectrum.
 While the top half the income spectrum generally continues to be OK, that's a big part of consumer
 spending.
 So it's not really surprising that the overall wealth effect and the stock market is still
 doing strong, even if I'm surprised like many others at the sheer speed with which
 you've recovered.
 I know, you were just, you were on the show, I think, what, a month and a half ago and
 you were seeing in the near term cash is the only assured production.
 We've seen such a shift to risk on here in the last couple of weeks.
 Yeah, surprising.
 I think the, I mean, obviously the semiconductors have led a big part of that.
 There are many stocks still below their highs, and so I still think there's bargains.
 You know, in kind of my research area, we put one trend of capital to work.
 We didn't really kind of lean in as hard as we could have, but we did put some trend
 to work in capital in to define things that had sold off significantly and hadn't yet
 recovered.
 So what are some of those areas that you think are very compelling right now?
 Well, for example, there was a sell-off in Visa, and that was ongoing even before this
 particular crisis.
 There were big sell-offs in, for example, Indian financials because obviously India is
 quite pressured by ongoing energy and fertilizer prices and potential shortages at these levels.
 And so areas that I think are structurally sound, but that are temporarily impaired.
 We put some capital to work.
 But overall, I think that the market has kind of got back to risk on a little bit quickly,
 but I think structurally, it makes sense that there are ongoing pressures that keep
 things kind of more levitated than the bears would think.
 And what's so fascinating to me is this hasn't just been a US phenomenon, it's been really
 a global one here in terms of this risk on rally.
 I mean, even places like South Korea right now, I think 30%, you've seen gains in the
 cost fee over the past month, mind you, it got hit harder than the US and some of the
 net energy export markets here.
 But in general, how do you factor in now, central banks, and what's expected to be hawkish
 holds from so many of them here this weekend and beyond?
 Yeah, so I think for the most part, when it comes to the more hawkish side of it, I think
 they're going to look through energy pricing.
 Many of them have already signaled that they would.
 The problem is that this crisis mostly takes off their most dovish wing.
 It's very optically challenging for them to cut interest rates when you have an inflation
 that's both above target and rising.
 The challenge of course is that most central bank tools are not geared toward one very large
 fiscal deficits and two energy shortages, that's not really what their tools address.
 They can slow down part to the economy to try to take some of the pressure off of those
 things.
 But for the most part, central bank policy is around controlling how much bank lending
 is happening.
 Throughout the whole crisis, throughout the post-COVID stimulus inflation, the energy inflation
 we had in 2022, and then this current energy inflation, excessive bank lending is not really
 the cause of the inflation numbers we're seeing.
 So central banks are in the passenger seat here compared to fiscal policies and compared
 to critical factors that either get energy flowing again or fail to do so.
 It's such a key point you make.
 I was in Singapore last weekend and one of the things that kept rising in conversation
 was that this so-called demise of the dollar is the global reserve currency completely
 overblown.
 We're nowhere near that.
 But that what is taking root and continue to accelerate in terms of a trend is this
 idea of de-dollarization.
 Wanted to get your thoughts on that, especially as we do think about things like gold or even
 Bitcoin.
 I think these things are overdone in the short term but have some truth in the longer term.
 I think we're seeing a more multipolder world emerging, not just in terms of money but
 in terms of geopolitical power, military power.
 I think that's a pretty natural state of affairs for that to happen.
 And because of central bank shifting, they've been buying on average less treasuries over
 the really going back a decade now.
 There's not been a lot of foreign official central bank accumulation of treasuries.
 The foreign private sector has bonds and treasuries but even then at a lower rate compared
 to how much they're issued.
 We have not a ton of central bank increases in treasuries.
 They have around the margins been increasing their tonnage of gold.
 And then as there's been capital flows into gold, the price appreciation combined with
 their slightly higher tonnage has resulted in gold taking the largest share of foreign
 reserves.
 Before the Russian invasion of Ukraine, we saw increasing Euro-dynamited pricing of natural
 gas between Europe and Russia.
 Of course, that was all impaired after the invasion.
 But then on the flip side, we've seen more, you know, non-US pricing of energy between
 say Russia and China.
 And I just do, I think structure, we're entering more multipolder world.
 But then a lot of this is like if you divide top down versus bottom up is different.
 So in a top down sense, some countries are trying around the margins to diversify, you
 know, the types of money they expose or two.
 But from a bottom up perspective around the world, people still want dollars.
 If you're on the streets of Cairo, if you're in Argentina, the country you name it,
 they're still a very strong network effect around the dollar and stable coins.
 And I think that that part's going to persist for quite a long time.
 These are very slow moving challenges to a very large network effect.
 Yeah.
 We're out of time, but I just have to ask Bitcoin, bottoms in.
 I think the bottom's in.
 I don't really necessarily expect a massive surge up anytime soon.
 But I think that we've seen the lows for the cycle most likely.
 Okay.
 That's always great to have you on.
 Come back soon.
 Thank you.
 All right.
 We'll be back after this break.
 Morning, call a return.
 Come back to morning call.
 Let's turn now to the chip sector.
 We're watching shares of Sanders and Micron of 65 and 50% respectively this month.
 Well, those two stocks are part of a bigger breakout by the semiconductor sector this month.
 As BTIG is Jonathan Kinsky notes, if the month ended yesterday, it would be the socks
 is second best monthly gain on record only behind the gains that we saw in February
 of 2000.
 Now, it's up about a little over 36% so far this month.
 And the move hasn't been driven in large part by fundamentals, only four members of the
 socks index, ASML, time on semi intel, which had a big week last week.
 And Texas instruments have reported earnings so far and we haven't heard from their top
 customers yet.
 Either that, of course, will change in the coming days.
 You can't talk semis without talking in video.
 That was up 4% Monday.
 Hit a new high.
 You'd see right now down a little bit here, a pre market, but as Adam Kobasey of the Kobasey
 letter points out, Nvidia now represents nearly 5% of the SMSCI all-country world index.
 It's near the highest level on record.
 Now, for context here, what we're saying Nvidia's weight is now larger than Japan's A.K.A.,
 the world's third largest stock market.
 It's contribution to that index is also greater than that of France and Germany combined
 and surpasses those of the UK, Canada and China.
 Bottom line here, big question for investors, is this sustainable and given the parabolic
 move we have seen in semis, is it something akin to what we saw in silver earlier this
 year, or is it against sustainable?
 We'll have to see.
 Straight ahead.
 The morning call crew teeing up the trading day ahead and the next big test, one member
 says a week's the market.
 You want to hear what they have to say, we're back in a moment.
 It's time for a call shoot where we look at the topics driving the trading day ahead.
 The crew members today, Stephanie Gilder-Robin Hood, Martin Norton of Empower and Mark Short
 of Advancing American Freedom, also former legislative affairs director in the first
 Trump White House and here on set.
 It's great to have you all here.
 Let's see how much we can get through.
 We're very tight on time.
 My apologies for that.
 Stephanie, I'll kick it off with you.
 Open AI.
 We had this Wall Street Journal report overnight, but in general, a lot of news around this
 and how it radiates out to the broader tech trade.
 I'm not sure it was that surprising, just given the fact that the company has sort of been,
 I think, testing where the direction of the company is going to be and whether they'll
 focus on enterprise or consumer.
 They're getting rid of Sora.
 So I'm not that surprised, but I do think they're still finding their way.
 And they are definitely spending a lot to grow in the future.
 And it's just one way, I think, companies like this approach relative to an anthropic,
 for example, that's probably been a bit more conservative.
 But I think it looks like they're not going to back down in terms of spending.
 And I don't think that means that much then for the broader semiconductor rise and other
 hard-ass that rise.
 Yeah, Marge, how does that TSMF for earnings here this week with five of the MAG-7 reporting?
 Well, the real test for those companies is whether, not just their CAPEX plans continue
 but also whether we see the monetization.
 That's been the fly in the ointment for these companies, the idea that we're not necessarily
 seeing demand that fits the spending that they're doing.
 And so I think investors are going to have a close eye on what they say and what the
 numbers look like on that front.
 Yeah.
 AI regulation.
 You think that's going to be on the table later this year?
 Is there a clock ticking, not just for policymakers and for Washington, but also for investors here?
 I think it's a growing risk that's getting a lot much to little attention.
 The reality is that Bernie Sanders has been calling for breaking up of open AI.
 He's calling for it to be regulated.
 There's more and more concern about data centers and needing regulation.
 And as you head to the midterms, the appearance of the Democrats are ascendant and likely
 to take control of House and potentially the Senate, I think it's a much bigger risk
 that needs to be evaluated, maybe not this year Morgan, but after November.
 Yeah.
 So focus on central bank's decisions this week, to Mark, including FOMC tomorrow.
 But perhaps the bigger news will be what happens with Senate banking committee moving forward.
 Kevin Worsh's nomination and what that means for any kind of commentary or pal announcing
 that he's going to step aside or retire with the end of his chair commitment.
 It's hard to see drum pal retiring until the IG investigations completed because I know
 that the DOJ putting this aside is clear the path for till us to support pal.
 But the IG can still recommend further investigation at DOJ.
 And so if you're drum pal, why would you trust that and not continue to re-hold on to
 your seat until that IG investigation is completed?
 That's a really key point.
 I don't know what's getting talked about enough.
 Stephanie, your thoughts on what we're getting from the Fed this week and or all of the other.
 I think it's five out of the G10 central bank countries making decisions this week.
 I think we're in a period where at least in the short term inflation is going to remain
 elevated and I just don't see them making any changes because you while you have started
 to see some layoffs from companies coming through, it hasn't really hit the big numbers yet.
 And so I think they're just going to be on hold and I think a lot of other central banks
 are going to be on hold because you know, as Lynn Alden said earlier in your program,
 this is not the best environment for a central bank to be able to control what happens
 on the inflation side since it is supply driven.
 Yeah, we got 10 seconds left, Marta, earnings this morning, any final thoughts?
 Listen, it's been a strong earning season, so we're just looking to see whether we continue
 that trend or whether there's something that unravels it, but it doesn't seem likely
 at this point.
 Okay.
 Thank you to our call crew.
 Great to have you here.
 Squawk box starts now.