Morning Call 8/5/26

AI Summary

Transcript

 What made you confident that you could do something that hadn't been done before?
 I have no fear of failure.
 Trailblazing women, changing the game.
 One of my favorite pieces of advice.
 Think about what your boss's boss needs.
 Leadership can look in many, many different forms.
 It really does come down to just trusting yourself.
 Life is short and you just got to think big to accomplish big things.
 Julia Bourston hosts CMBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.
 Trying for five.
 I'm Morgan Brennan, and this is your morning call.
 Good Wednesday morning.
 After Wall Street's best day since April,
 that was the case for the S&P 500.
 Let's get a check on U.S. stock futures.
 It's a mixed picture here this morning.
 S&P is basically trying for gains,
 but just above the flat line points to open up four points.
 The Dow, 93 points.
 The Nasdaq is under a bit of pressure this morning,
 taking a breather after a torrid move higher
 to start the month of August.
 Currently down, points to be down 102 points.
 S&P, Dow, and Russell 2000, all sitting at record highs.
 Asia and Europe also keeping the rally going
 with strong gains across South Korea.
 And Japan, you can see the cost be closing up
 more than 3.7% of similar move for the NK as well.
 Ahead of the open, I just mentioned the Dow S&P,
 Russell 2000, record highs.
 Nasdaq now just 2% away from its own record.
 Transport's though still in correction territory.
 We're going to get into that a little bit more later this hour
 in the state of freight.
 But in the meantime, we got big earnings movers ahead
 of the open as well.
 AMD and SpaceX blockbuster revenue numbers
 for both of those names.
 And yet, big spending plans, making investors nervous.
 And you can see that reflected in shares pre-market.
 Both of those stocks down big.
 We're going to have more on both of those reports
 and what it means for your money in just a moment.
 But speaking of earnings, two big names on tap
 before the open today as well.
 Disney and Eli Lilly, Lilly's at 15% since its last report.
 And you can see up about 3% right now pre-market
 at ahead of those results ahead of today's ADP
 private payrolls reports as well since it is a labor week.
 It's a jobs week.
 Let's get a check on where we stand in the bond market
 with most treasury yields lower this morning.
 US 10-year treasury yielding 4.6%.
 Fed sensitive to your treasury yielding 4.20%.
 And energy, let's get a check there too,
 as we continue to watch the situation in the Middle East.
 And regarding the straight of Hormuz,
 especially after those comments we got here on CNBC
 from Treasury Secretary Besson.
 Yesterday you could see up a bit here in energy prices this morning.
 WTI is up about half a percent trading around $76 a barrel.
 Brent's up 1.2% trading rate around $80 a barrel.
 Our above gasoline is a bit higher as well.
 But keep in mind with our above gasoline,
 it actually had its lowest settle since March 11th yesterday.
 SpaceX mean time posting a beat in its first earnings report
 as a public company.
 Revenue jumping 92% year over year,
 all segments topping expectations EBITDA,
 scoring 191% with the AI segment turning EBITDA positive.
 Even as CAPEX surged sixfold to $18.4 billion in Q2.
 This was mostly due to the AI build out.
 Starlink subscribers growing to 12 million in Q2
 with Elon Musk and President Gwenshot.
 Well, extremely bullish on that business,
 especially as Starlink mobile launches next year
 as a direct competitor to the traditional wireless carriers.
 Some very direct language about that.
 Starship moving closer to commercial service as well
 with launch, it's expected to launch the new
 Starlink V3 satellites to operational orbit
 on the next flight test, 14.
 And nonetheless, for investors though, it's all about AI.
 How much cash the company is burning
 as it looks to deploy two gigawatts
 that compute on Earth this year
 and exponentially ramp that next year,
 new GROC models, the cursor acquisition,
 and more neocloud deals,
 including a new compute lease worth $13.4 billion in ARR.
 And ARR is all part of the aggressive return on investment case
 that was laid out by Elon Musk on the call.
 We are expecting to reach 100 billion plus ARR in December of this year.
 And it's probably also worth mentioning
 that our internal projections for reaching
 a trillion dollars in revenue, not ARR, but revenue,
 have moved up from 2031 to 2030.
 So prior to the IPO, the financial projections we had
 were reaching a trillion dollars in revenue in 2031.
 We now expect that to be in 2030.
 And there's a nonzero chance of that being in 2029.
 So a trillion by 2030 Musk also disclosing
 an exclusive partnership with Nvidia,
 both on Earth and in space,
 with the first AI compute satellites
 expected to launch next year.
 And see if O'Brett Johnson saying,
 quote, we expect the supply,
 demand and balance in the compute market
 to continue the current economics
 of translating into a less than one year payback
 on our new capital deployments for compute.
 Nonetheless, the stock is still lower
 on these results Wall Street digesting cash flow,
 which translates to, for the first six months of the year,
 free cash flow of negative give or take 31 billion dollars.
 First lock up expiration kicks in tomorrow as well.
 And we did see a rally coming into the closed yesterday
 for space, and it's basically mirrored here
 in terms of the losses pre-market with space,
 it's down about 10% right now.
 Let's bring in Stephanie Lank,
 high-tower chief investment strategist,
 and a CNBC contributor for more on space x's first quarter,
 and more in general with markets,
 Adder near record high, Stephanie.
 Good morning.
 Well, yeah, I mean, space x was a great quarter
 in terms of the growth, as you mentioned.
 They beat on earnings, they beat on revenue,
 all segments beat on sales.
 And I think the growth is there, Morgan.
 Conactivity grew 32%, AI at 271%,
 and space up 29%.
 Conactivity is the profitability driver
 and the gross margins there were good.
 I just don't think that this quarter
 really solved any of the bulls or the bears.
 I don't think it changed either side,
 because the cat-backs is going much higher
 and the free cash flows is negative, as you mentioned.
 But the growth is there.
 And so the reason I own this stock,
 and it's a small position,
 is for the leadership, is for the growth,
 is for the total addressable market.
 I think they could win in any of these divisions,
 and maybe they win in all of these divisions.
 And I think the stock 3, 5, 10 years from now
 is going to be much higher.
 And they're the leader, they're the number one in space,
 they have a cost advantage.
 So I kind of bought it kind of thinking,
 I buy it, set it, and forget it,
 and let's just see what happens.
 Okay, well, let's start to AMD as well,
 because that was the other big earnings report
 after the bell last night.
 Disappointing investors with its latest sales outlook
 coming in just short of the most bullish street estimates
 for the third quarter.
 Our Christina Parts and Avalists noting
 that it wasn't just the outlook.
 CapEx spike compressed free cash flow as well.
 At $808 million coming in way ahead of street estimates,
 margins also flat with no near-term expansion.
 Plus the Elon Musk comments about XAI building quote,
 exclusively on Nvidia, going forward,
 also perhaps pressuring AMD.
 The revenue did search 50% data center sales more than doubled.
 Overall, the commentary was pretty bullish,
 and yet this stock is also down 8% pre-market, Stephanie.
 Yeah, well, it's also up 146% year-to-date,
 and up 23% from the July lows,
 and it was up 7%, just very high expectations,
 very excellent growth with total revenues of 50%,
 earnings of 156%.
 Gross margins actually beat by 14% in operating margins
 also beat handedly.
 Problem is, is the CapEx.
 It's the CapEx is going to be threefold
 of what was expected,
 and they're also issuing warrants too,
 so I think that's probably disappointing to some.
 Here's the difference between AMD and the hyperscalers
 from last week, and the reason we rallies
 because the hyperscalers are starting to see an ROI,
 meaning Azure Group 43%, and AWS Group 37%,
 and Google Cloud Group 80, that's real monetization,
 and the expectations were really low,
 and that was a positive, the risk reward.
 Here, you have great growth,
 but you've had a really extended stock,
 and you are issuing warrants to fund some of this CapEx,
 so there's no problem with AMD,
 other than the fact that it's had a heck of a run,
 very winner in the long run,
 but I understand why the stock is selling off.
 All right, Stephanie, it's great to start the hour with you.
 We're gonna see you again shortly.
 You're doing double duty for us today
 with a morning call crew.
 We've really just scratched the surface for this market here,
 as we started off the month of August,
 but really on strong footing with record highs
 for the major averages,
 we're gonna see a little bit later this hour, appreciate it.
 Well, we're gonna hear more on AMD's quarter as well
 when CEO Lisa Sue joins CMBC exclusively at 9 a.m. Eastern.
 You don't wanna miss that,
 and the meantime, you don't wanna miss this either,
 because we've got a lot more to come here on morning call.
 The state of the straight,
 we're gonna speak with Senate Armed Services Committee member,
 Senator Joni Ernst, fresh off of her trip to the Middle East.
 That's next, plus we've got much more
 on SpaceX after its debut report
 and what OneFund manager calls a quote,
 bright spot for investors.
 Stay with us, we'll be right back.
 What made you confident that you could do something
 that hadn't been done before?
 I have no fear of failure.
 Trailblazing women, changing the game.
 One of my favorite pieces of advice.
 Think about what your boss's boss needs.
 Leadership can look in many, many different forms.
 It really does come down to just trusting yourself,
 like the short, and you just gotta think big
 to accomplish big things.
 Julia Borsten hosts CNBC Changemakers and Powerplayers,
 new episodes every Tuesday, wherever you get your podcasts.
 Welcome back to morning call,
 turning to the war in Iran.
 The straight up war mues is open to travel,
 according to the US military.
 In a post on X, the US central command,
 writing, in part that the southern route
 through the waterway remains free
 and open for all commercial vessels
 seeking to travel through it.
 The southern route passes through
 a monetary territorial waters
 rather than the part that is closer to Iran.
 The apparent development coming after Treasury,
 Secretary Scott Besson told CNBC yesterday
 that there may be a looming deal to open the straight.
 I think there is a chance we may have a deal today or tomorrow
 to open the straight and move towards
 a more normalized position in this conflict.
 That actually contributed to the big rally
 we saw on the markets yesterday.
 So if we're more let's bring in Senator Joni Ernst,
 she's a member of the Senate Armed Services
 and Homeland Security Committees,
 just return from the Middle East
 with a congressional delegation as well.
 Senator Ernst, it is great to have you on the show.
 Welcome to you, lots to talk about today,
 but let's start right there, the state of the straight,
 especially as you did just come back from the region.
 Yes, incredibly important
 and everyone needs to know and understand
 that Iran does not control the straight of hormones.
 This is international water.
 So it is good that central command is pushing that message out.
 We want to maintain shipping through that route.
 But overall with those negotiations going on in Oman,
 we do hope to reach a deal with the Iranians.
 Overall what I'm encouraging the President
 and the administration, though,
 is that we must complete our negotiations with Iran
 in a way that denuclearizes the country
 as well as prevents any future harm to American citizens.
 How likely do you think that that happens
 and happens quickly here?
 Well, it's always best to be optimistic in these situations.
 However, the Iranians have a very difficult track record
 and we know that they are quite deceptive.
 So while we will continue on in an optimistic attitude,
 which is incredibly important in these negotiations,
 we must always know and understand
 that they will be a bit tricky.
 So I hope for the best and we should prepare for the worst.
 And hopefully we will see greater peace
 and stability in the region.
 Yeah, I mean, the other piece of this is the weapons piece,
 the missiles and munitions piece of this from the US side.
 Not a day goes by that there's not a report
 that we are dangerously depleted
 in terms of some of our supplies of critical weapons.
 I do want to get your response to that, especially as we know
 there are various defense packages
 that are making their way through Congress right now.
 Yes, there are a number of proposed packages
 that are out there.
 We are looking at reconciliation.
 We are looking at a supplemental
 and of course we need our next fiscal year's funding
 for the Department of War.
 So we do know we need to reconstitute.
 That is normal.
 Anytime we engage in operations,
 we know that we are going to be depleting
 very valuable resources.
 But if you look at announcements coming
 from some of our largest primes,
 if you look at Lockheed Martin and the recent announcement
 that they have expanding operations
 with munitions and additional platforms,
 this is good news.
 For so long, we have been in peacetime production
 and we need them to understand that we are engaging
 in active kinetic operations.
 We must increase production.
 So we say this coming from the primes,
 those contracts have been negotiated.
 They just need to know that the United States, Congress,
 we'll be backing that with those necessary dollars.
 So again, multiple packages are being considered
 and we hope to get those over the finish line
 as soon as possible.
 Yeah, and of course when you're talking about
 multi-year contracts, 70-year contracts,
 that certainly has to come with a blessing of Congress.
 I mean, more broadly ahead of the Senate going on recess,
 are we going to get to some sort of funding deal
 continuing resolution or otherwise for fiscal 27?
 We do hope so.
 And Kudos to Senator Susan Collins of Maine.
 She has been instrumental in ensuring
 that Republicans and Democrats are coming together,
 finding those areas that we can work on,
 collaborate on and getting it over the finish line.
 So I do think that there is broad bipartisan support
 for getting a continuing resolution done.
 We saw a great vote the other evening
 in the United States Senate.
 I think we are well on our way to preventing
 a shutdown of the government prior to the November election.
 That is good news for everyone.
 We don't want to see families going without their
 SNAP benefits.
 We don't want to see federal employees laid off.
 We don't want to see issues with air traffic controllers.
 So we are well on our way to achieving that.
 This is what we should be doing.
 We need to stay and make sure our federal government is funded.
 Yeah, there's a report last night
 that you are one of the senators that is in opposition
 to Defense Secretary Hegseth's pick for Chief of Staff
 for the Army.
 I do want to get your response to that, especially since.
 And I think, at least on the investor side,
 it's been flying under the radar.
 How much leadership has changed within the Pentagon,
 even as we are in an active conflict?
 It absolutely has changed.
 And, of course, I was a huge fan of General Randy George
 an incredible leader that was modernizing our U.S. military.
 What we are hoping to see in our next Chief of Staff Army
 is someone that can pick up where General George left off,
 continue to modernize the force, take us to the future fight.
 So many discussions yet to be had on that particular topic.
 So I am hoping to see an array of candidates
 for this position.
 We need to weigh them all carefully,
 look at their experience and what they will bring
 to that position in a very pivotal time
 when we see not only ongoing actions in the Middle East,
 but we're preparing for any potential future fight with China.
 Okay.
 And I know you're very focused on fraud as well.
 Unfortunately, we're out of time right now,
 but please come back so we can discuss that too.
 Senator Ernst, it's great to have you on this show.
 Absolutely.
 Thank you so much.
 Well, straight ahead where AI Automation
 meets critical mineral mining.
 We've got an exclusive conversation with the CEO
 bringing that industry into the 21st century,
 Copper, Lithium, other minerals.
 But first, we're checking on shares of Caterpillar,
 a more than 5% cop yesterday,
 company now selling as much power equipment
 as it does tractors, excavators, and bulldozers
 cat clearing $20 billion in the quarter
 for the first time ever.
 These shares are just below the flat line here, pre-market.
 I want to call with you right back.
 What made you confident that you could do something
 that hadn't been done before?
 I have no fear of failure.
 Trailblazing women, changing the game.
 One of my favorite pieces of advice.
 Think about what your boss's boss needs.
 Leadership can look in many, many different forms.
 It really does come down to just trusting yourself
 like the short, and you just gotta think big
 to accomplish big things.
 Julia Boersten hosts CMBC Changemakers and Power Players.
 New episodes every Tuesday, wherever you get your podcasts.
 Welcome back.
 Let's get a check on more earnings movers.
 There's so many match group shares
 thinking on revenue forecast for the current quarter.
 Just below analysts estimates revenue for its most recent quarter.
 Also amiss the company suggesting its dating sites
 still need to attract more younger users.
 Those shares are down 10%.
 Similar story for Lucid.
 Those shares, well, let's see,
 Q2 results missing expectations, the EV maker
 saying that it's starting an operational reset
 and delaying the launch of its mid-size vehicle.
 Those shares are down 7%.
 Nova Nordisk also falling in Europe.
 The drug maker raising its full-your-profit and sales outlook.
 But appearing to disappoint investors
 also focused on a narrow sales miss for its new Wigowy pill
 and a trial setback for its next generation obesity drug.
 U.S. listed shares are higher as investors here
 got to react to the news yesterday.
 So you could see down almost 4% in Europe,
 up almost 3% here in the U.S. pre-market.
 Pinterest shares meantime also falling
 on sales forecast for the current quarter
 that was in line with estimates.
 Q2 earnings and revenue though those did top estimates.
 It was the paid users piece of this
 that I think investors are honing in on.
 That was a bit of a miss.
 Those shares are down 8.5%.
 If we turn to the metals complex though,
 a check on prices this morning as you could see,
 precious metals are rallying.
 Silver is up about 2.5% right now, gold,
 which has come off quite a bit since the start of the year,
 trading around $4,200 an ounce.
 And copper is under a little bit of pressure this morning,
 but in general has seen a really big rebound.
 So here's one company that is rethinking mining.
 Mariana Minerals deploying autonomy
 to extract and refine critical minerals in the U.S.,
 two-year-old startup just raised $310 million in a series
 be around that was led by Coastal Avengers.
 This is capital to support expansion at its copper mine
 that's already operating.
 And to bring a lithium site online next year,
 I spoke exclusively with Mariana, CEO and co-founder,
 and also Tesla veteran, Turner called well.
 And I asked him, what an AI enabled mine entails.
 When you look at a mine,
 there's a flea of equipment that's operating in mine.
 And so you'll have hull trucks, you'll have dual rids,
 you'll have loaders and dozers and excavators
 and water trucks and motor graders.
 And what we've generally seen in the last 10 years
 is that hull truck autonomy has started to become a thing.
 But humans still orchestrate those autonomous assets.
 And so that means that a hull truck can navigate
 from A to B when a human tells it where is A and where is B.
 And where we're focused is actually autonomy
 both in the hardware side, generally through partnerships
 with folks that are developing the autonomy stack
 around the equipment.
 But also a lot of focus on autonomy
 in the decision making layer, in the orchestration layer.
 So instead of humans sitting in between multiple autonomy
 platforms, we use reinforcement learning
 to control those autonomous assets.
 And so when you walk into a pit and our goal
 by the end of the year is to have no humans
 in the mining operation.
 Which actually means you don't need
 as many humans in the actual mining operation,
 mining process itself, but ultimately over the long term,
 he argues that you're going to need more humans in general
 to do some of this other stuff
 as that autonomous mine continues to ramp.
 All of this as supply chain resiliency
 takes on ever greater importance
 and as the Trump administration continues
 to focus on policies, including tariffs and trade policies
 that are meant to trigger a US reindustrialization.
 That in turn has helped put up the price,
 push up the price of metals like copper.
 On the copper side, all of those copper units stay in the US.
 And we're actually, we've started to incorporate copper scrap
 recycling into our refinerated on site as well.
 And that's important because we actually
 export about a billion and a half towns
 with copper scrap overseas every year.
 And if you recycle the 100% of the copper
 that is kind of meeting the country in the form of copper scrap,
 you would have zero dependence on copper imports.
 And so we attack this in a dual feedstock strategy
 where you want refining infrastructure
 to both be able to process mind material from the ground
 as well as process end of life products from scrap.
 Because as a major importer of copper,
 we actually do have a lot of scrap.
 That is that end of life.
 And that is then leaving the country to be reprocessed
 and then coming back to the US.
 And so the metal by metal, we obviously
 want to prioritize customers that are in the US
 because that's actually just,
 if you think about supply chain regionalization
 and efficiency, it's more fuel efficient,
 it's more cost efficient, it's more time efficient,
 to build these regional supply chains
 where the end products actually are
 as the end consumers are as close to the mining operation
 and the refining operations as possible.
 You actually see that in copper futures bifurcation,
 US futures versus futures that trade in London
 and other parts of the world as well.
 Well, Caldwell says the plan is 10 mines, 10 years,
 expanding into uranium, rare earth,
 snickle, other minerals.
 You can check the full interview on cnvc.com.
 Still on deck here, though, why telecoms
 are taking a hit on the back of SpaceX's debut earnings.
 All of those big three stocks under pressure this morning,
 we're gonna break that down on the other side of this break.
 Welcome back to Morning Call.
 I am Morgan Brennan.
 Let's get a check on US stock futures
 after a very strong starts to the month of August
 for the first two trading days.
 You can see this morning on day three,
 it's a mixed picture.
 S&P has poised to open up nine points down 93,
 the Nasdaq under a bit of pressure here pre-market,
 poised to open lower to the tune of 74, 75 points,
 the keep in mind, S&P, Dow, and Russell 2000,
 all sitting at record highs.
 S&P had its best day since early April.
 Asia and Europe also keeping the rally going
 with strong gains across South Korea and Japan.
 Both of those averages, the Cosby and the Nikkei
 finishing up more than 3.6% in trading overnight.
 And ahead of the open, the Dow, S&P 500,
 Russell 2000 at record highs.
 The Nasdaq is now just 2% away from its own record.
 Transport still are still in correction.
 Big earnings movers ahead of the open, AMD and SpaceX,
 blockbuster revenue numbers for both of those names,
 but big spending plans weighing on the stocks.
 We're gonna have much more on that in just a moment,
 speaking of earnings.
 Two other big names that are still on tap
 before the bell, Disney and Eli Lilly.
 Lilly is at 15% since its last report
 and is higher to the tune about 2.5% this morning.
 We did also just get those results in the last 24 hours
 from Nova Nordisk 2.
 So perhaps some read through from investors
 to what that means for the weight loss business at Lilly.
 Well ahead of today's ADP private payrolls report,
 let's get a check on the bond market with yields
 for the most part across the curve.
 Lower US 10-year treasury yielding 4.61%.
 And to your treasury has come down quite a bit
 in recent sessions, it's at 4.2%.
 Energy as well, we'll get a check there.
 As we continue to watch the situation
 in the middle, used and straight up for moves.
 We just heard from Senator Ernst about that too,
 just a few moments ago.
 WTI is up about half a percent trading
 around $76 a barrel.
 Brent's up 1.2% trading at $80 a barrel.
 Our bond gasoline by the way has come off
 higher this morning, but in general has come off a bit here
 in recent trading sessions.
 Turning back to SpaceX, sharply lower
 and extended trading.
 Even as it posted better than expected results
 in its first report as a public company.
 Revenue jumping 92% year over year.
 All segments topping expectations.
 EBITDA, soaring 191%.
 The AI segment turning EBITDA positive as well.
 Even as CAPEX surged to $18.4 billion in the quarter,
 overall, that was mostly due to the AI builds out.
 On the call, SpaceX guiding to $100 billion
 in annual recurring revenue by December.
 That is a huge jump from where we ended in June.
 With CEO Elon Musk forecasting revenue.
 Hitting $1 trillion by 2030.
 Pulled that forecast forward.
 Musk also disclosing an exclusive partnership
 with Nvidia as a company rapidly
 deploys compute capacity on Earth to get this year
 exponentially more next.
 But also brings compute to space.
 And faster than many expected.
 With respect to the star-mind AI satellite,
 which will be essentially an optimized barrel
 who have been NBL 72 computer.
 This is not some sort of far future distant thing
 we expect to start launching these next year.
 Well, this as Starship is now poised
 to launch new Starlink satellites, V3 satellites,
 to operational orbit on the next test flight, 14,
 meaning commercial service is coming.
 Let's talk more about SpaceX's results
 with Andrew Chan and CEO of ProCure AM,
 which runs the UFO Space ETF.
 The stock is the top holding now in the fund
 and it's the OG.
 It was the first pure play space ETF.
 Now we have a bunch of them.
 So I do want to get your thoughts on SpaceX,
 which is not just a space company, but an AI company.
 And certainly that's what investors are reacting to this morning,
 especially given the negative free cash flow numbers.
 Sure.
 So the price action wasn't what someone would probably
 want to see after an earnings call as bold as we saw yesterday.
 But as far as the spending, what could you expect?
 What did you want from a company that's
 trying to do very difficult things
 in both data and compute now, as well as space?
 Yeah.
 So in light of that, what were your takeaways for this report
 and looking to the company and the forecast moving forward?
 Well, I certainly liked what I heard, right?
 So they're pushing Starship forward.
 They're working on Starlink.
 And their next version of satellites
 is going to be possibly 10x more powerful
 than their existing lineup.
 And in mobile, Starlink mobile is something
 that we haven't really heard a ton about.
 And we probably got a little bit more clarity on that.
 Certainly other companies that are in that space
 aren't doing so well either off the back end of that information.
 But this is just one of multiple segments
 that could be enormous opportunities
 for this company to take on.
 Yeah, I want to go back to Starlink and dig
 a little deeper there because obviously
 it's the profit engine of SpaceX.
 12 million subscribers at the end of Q2.
 They're very, very bullish on the call.
 And to your point with these new V3 satellites
 that are going to launch, many more of them
 are headed to orbit and much better capability.
 Musk talked about the fact that they're basically
 he expects in the coming years that they're
 going to supply most of the world with internet.
 And then the comments from Gwen Shotwell about Starlink mobile
 taking market share from the big three here in the US
 Verizon AT&T mobile if we can bring those stock charts back up.
 I mean, those names are under pressure on this.
 I also have to think on the flip side
 that this could potentially be a bull case
 for a company like AST Space Mobile, which
 is working with all of those wireless providers
 to help do direct to sell service.
 And we saw successful launch just a little bit ago
 by a Falcon launch with SpaceX and the Bluebird satellites
 for AST Space Mobile.
 Exactly.
 So it has been a collaborative industry.
 Certainly shots fired across the telecom world.
 But this is something where I'm a happy customer of Starlink
 myself when we had the storms up in Northeast New Jersey
 just over July 4th.
 My internet was out for multiple days,
 but my Starlink was working perfectly.
 So being able to use some of the existing infrastructure
 build on to the types of ways that people are connecting
 to Starlink to be able to possibly expand it to Starlink Mobile
 is a pretty exciting opportunity for this company.
 Yeah, I don't know if we have them queued up
 because I hadn't asked for them before this panel.
 But I'm very curious what you think the read through
 more broadly is to the space industry.
 Because the space stocks have traded in sympathy
 with SpaceX since the IPO.
 We got a lock up expiration tomorrow.
 And there had been some chatter that you had been
 seeing some shorting in some of these other space stocks
 ahead of that expiration too.
 Yeah, so this kind of gives me vibes
 of the post-spac, de-spac boom bus cycle for space companies.
 And a lot of the space companies moved in the same direction
 and baby thrown out with the bath water kind of philosophy.
 And then we saw companies start to really get their grounds
 and build off of there.
 Like a company like Rocket Lab was one of these companies
 that had gotten thrown out with the rest of the de-spac names.
 And certainly you give these companies enough time
 and people can start to look at the different milestones
 that they hit, their goals, see these earnings periods
 and see what the company's actually thinking.
 And all of a sudden, they start to re-value
 these companies differently.
 So certainly these names have moved
 across the space industry, not necessarily in lockstep
 with SpaceX.
 But we've also seen a lot of really positive things
 during that time period too, like due government contracts.
 M&A talks with Rocket Lab and Eredium and others.
 So I mean, there have been really positive things
 that have been happening during this broader sell-off
 in the space industry.
 So I think people need to look at the individual companies
 and also think about where they're going.
 This isn't the same industry as some of your other slower,
 you know, more established industries.
 We're in a new frontier and we're taking on new opportunities.
 Yeah, literally, no pun intended there.
 Andrew, it's great to have you on.
 And Sharers of Rocket Lab are higher this morning,
 speaking of government contracts in part
 because they got another one last night.
 Andrew Shannon, from Pequeer, great to have you.
 We got a lot more to come here on morning call,
 including a post-check on the transports.
 State of freight.
 And freight costs continuing to climb higher.
 The CEO of Schneider National is here to break it all down.
 And as we add to your break, let's get a check
 on Sharers of Booking Holdings.
 Those are higher after Q2 profit, beat estimates on
 resilient US domestic travel.
 It did trim its annual gross bookings forecast
 as it navigates to fall out of that conflict in the Middle
 East, but you could see Sharers are popping six and a half
 percent.
 We'll be right back.
 Welcome back, freight costs in the US are rising sharply.
 It's trucking capacity is tightening.
 US banks' freight payment index shows shippers are paying
 28% more than a year ago for a transportation
 despite a nearly 3% decline in shipping volume.
 That's being driven by tighter capacity,
 rising fuel costs, it's pushing rates higher,
 even as consumer and overall market demand is relatively soft.
 Joining me now is Jim Filter, President and CEO
 of Schneider National.
 This is one of the largest US trucking
 and logistics companies in the country.
 Right here on set, it's great to have you.
 I got to start right there because we've been hearing about
 a tightening truck market and a freight rebound this year.
 What are you seeing?
 Yeah, absolutely.
 And you're right that we're not really seeing that much
 change in demand.
 There's some pockets of strength.
 There's some build out of data centers.
 We're seeing strength there.
 A little bit of growth in the deep retail.
 But overall demand has been relatively flat.
 What's changed dramatically is the amount of capacity.
 Capacity surged after the pandemic.
 But what we found out later was a lot of the capacity
 that entered during that time,
 weren't following the same regulations
 as all the large reputable firms.
 And so over the last both seven months,
 administrations taken a lot of actions
 to reduce that capacity.
 And that's what's really changed this industry.
 Yeah, a bit of a crackdown.
 And certainly you've heard about that
 from the railroads too, who are very happy
 that there's some conversion from truck to train right now.
 So in light of that, because I look at truck tonnage,
 the late Donald Broughton always pointed this out
 to me in his charts.
 The truck tonnage tends to be an early indicator
 to the tune of a couple quarters ahead
 of economic activity and growth here in the US.
 So what are you seeing in terms of the US economy?
 Yeah, overall it's stable.
 But what we're not seeing is a lot of build up in inventories.
 It appears that interest rates are weighing on housing
 and autos to the most important sectors of our industry.
 And so overall though, it's been stable.
 Okay, the other piece of this is the labor piece.
 We've talked about it for years, truck driver shortages.
 Voltsman covering autonomous driving,
 coming into the mix as well.
 So how are you approaching that at Schneider?
 Yeah, yeah, first of all, with drivers,
 we're always looking to add driver capacity
 into our industry and the first place
 that we're able to help our drivers
 is make them more productive.
 And so really proud of what we've been able
 to do in the first quarter that we've seen
 double digit increase in productivity
 that's putting more money into their pockets.
 And it's really just a matter of having more freight available
 for them to take advantage of.
 And then the second piece is,
 we are increasing driver wages in specific markets,
 tapping into other recruiting opportunities
 to be able to grow our driver capacity.
 But long term, you mentioned autonomous vehicles.
 There's a place that we see an opportunity here,
 but still expect that we're gonna have drivers
 that are making first and last mile deliveries
 but perhaps the autonomous vehicle helps us
 with the line haul portion of it.
 Okay, so there's the labor piece of it.
 We know diesel prices are elevated right now too.
 Those are prices that push out to end users,
 consumers, shippers along the way too.
 What does all of this mean for pricing
 and the cost of transportation
 as we look to the second half of the year here
 and the holiday season and the like?
 Yeah, well we're expecting that prices
 are gonna continue to grow from here.
 So, you know, there's industry data
 that shows the cost of transportation
 had grown about 25% from 2019 to 2025.
 We did not see improvement in our pricing during that time frame.
 And so what's gone right now is trying
 to recollect that inflationary cost
 that we've already seen and then to be able
 to invest to grow driver capacity
 where we need to make additional investments.
 And so right now what's happened
 is really just catching us up to where we needed
 to be over the last several years.
 But we expect that we're gonna see some
 additional increases in freight transportation
 to be able to fund growth and capacity.
 Okay, Jim filter of Snyder National.
 It's great to have you here on set.
 Appreciate it.
 Great to be here.
 Thank you so much.
 Well straight ahead, the morning call
 crew team up the trading day ahead.
 Fresh questions around the momentum trade
 with SpaceX and AMD, deep in the red this morning.
 We're back in a moment.
 All right, here's what to watch today.
 We're gonna get data including GDP figures.
 The Fed's Lisa Cook speaks this afternoon
 and another busy day of earnings.
 We got results from likes of Sandisk Disney,
 Lily, Kraft Heinz and Uber just to name a few.
 There's many more.
 It's time for your call sheet, though crew members today.
 Miller, Tavak, Chief Market Strategist, Matt Maley,
 and Blanky, Shine, Wealth Management,
 Chief Investment Officer, Robert Shine
 and back with us our own Stephanie link.
 I guess I should say our own, but Stephanie link.
 Okay, we're just, we're just gonna go to the wall
 with markets and Robert, I'm gonna start this with you
 and that is what we're seeing with SpaceX,
 what we're seeing with AMD.
 I'm gonna kick it off with SpaceX though
 because actually overall, I thought the print was very strong.
 The commentary was very strong, but obviously spending
 is very aggressive here.
 It seems like it's a show me story.
 What I think investors need to understand
 is that SpaceX is not Tesla.
 They tend to hit and execute pretty aggressively
 and pretty much on target.
 All things considered knowing that space is hard.
 Well, I was just as surprised as you were
 to see they lost less, right?
 And the reason why SpaceX is down
 is simply because they're spending more.
 And it's all about the scalability story,
 but it's really the global communication infrastructure
 that story that we heard last night about the SpaceX mobile.
 I mean, the total addressable market for that
 is absolutely unbelievable.
 So that's where the scale is gonna come through
 moving forward, but the growth of revenue
 is something not to shake your head at.
 Yeah, and Matt, I want to get your thoughts on this too.
 You got a stock lockup, expiration,
 the first tranche kicks in tomorrow.
 The selling in SpaceX is accelerating here,
 but in general, when you think about
 how spring loaded this market has been
 in both directions, your thoughts.
 Yeah, Morgan, this move in SpaceX and in Advanced Micro
 is a little bit concerning.
 Obviously we've seen an unbelievable bounce,
 but you'll worry a little bit about
 that this whole thing was spending
 that remember how Google that reported
 really good numbers, but the spending was up
 and so the stock got hit.
 And we're gonna get back to that,
 because we bring in Advanced Micro
 and you saw what happened in the chip stocks
 since the earnings this season began,
 it was Broadcom, Micron, the Samsung,
 Taiwan, semiconductor, Intel, Texas Instruments.
 They all reported very good numbers, good guidance
 and yet the stocks went down.
 We're seeing the same thing here.
 So this concerns over spending,
 the concerns of what the sell the news from the chip stocks.
 If that resurges or reinserts itself,
 we could see a reversal back lower,
 but right now the biases with the bulls
 and we'll see if this continues.
 Okay, Stephanie, wanna get your thoughts in this?
 So take a little bit of a breather here
 for what we saw the last two days in the markets.
 I mean, the Dow, S&P, Russell 2000, all at record highs.
 And it's not just about tech,
 it's about some of these other companies
 like Caterpillar yesterday, for example,
 that are benefiting from AI tech build out.
 Yeah, we've talked about the AI food chain for years
 and it's coming to fruition.
 We are seeing a lot of the industrial companies
 benefiting from all of this capex spending.
 If you look at companies like Quantum Services,
 GE, Vernova, Vertiv, Eaton,
 all of them had astronomical order growth
 and backlog growth.
 And that means that there's a lot of visibility
 for those names as well, but just stepping back,
 earnings in general are very strong.
 We're running up 58% earnings growth
 with 15% revenue growth
 and 250 basis points of gross margin expansion
 so far in this quarter.
 And that's about double what people were expecting.
 Myself included, and it is broad base.
 Yes, it's tech and calm surfaces,
 but it is also energy, materials, industrials,
 and healthcare.
 And so that's really exciting.
 I think the other thing that's really surprising, Morgan,
 is that the Atlanta Fed tracker that came out this week,
 we're at 5.9% GDP growth
 and that speaks to, again, this whole AI revolution.
 Wanna get your thoughts on that, Robert?
 By the way, you two are friends.
 You two go back out here, your colleagues.
 Very much so.
 I love when that happens on the call crew.
 So if you wanna get your thoughts on that,
 especially the, okay, we're gonna get ISM services
 read today and we also get a more consumer facing stocks
 reporting as well.
 I mean, there was Mickey D's yesterday.
 I mean, today you're gonna get things like DoorDash
 and you're gonna get Uber and a number of others
 as well on the consumer side.
 Your assessment of that piece of the market.
 We also have the jobs report on Friday.
 That's not about that, but that's not fast forward.
 That being said, it's all about the AI spend
 as we said earlier.
 And the question is, as long as if you look at companies
 like Microsoft,
 if you spend and you preserve your free cash flow
 to an extent, you're gonna do just fine
 in this market moving forward.
 AI is the story, the spend is there.
 It's also gonna produce tremendous profitability
 moving forward for all these companies.
 They can't afford not to.
 Yeah.
 Okay, so let's jump forward.
 Labor data, what are you looking for, Matt?
 How much does it matter to this market
 when you still have yields, treasure yields
 that are elevated?
 We've come off a little bit here.
 We have energy prices that are elevated.
 And then of course, we are focused
 on the other piece of the Fed mandate, which is inflation.
 Right, Morgan, it's interesting to see what happened last week
 with the reaction to Chairman Worsh's press conference.
 Everybody was saying, because the market reacted poorly
 or the bond market,
 therefore he needs to change what he's doing
 and he's to adjust my feeling.
 He said, we have to adjust to what the way he wants
 to change the way the Fed is going.
 So with the interest rates remaining high
 and some concerns that he is going to be more hawkish
 than people have been thinking in the past
 or that the Fed overall is gonna be more hawkish.
 The employment point is gonna be even more important
 than it usually is.
 So there's no question that interest rates have remained higher.
 The highest levels are close to the highest levels
 in 18 months and since 2007 in the 30 year note.
 So it's gonna be very important
 because if we see a real start to push up again,
 it is gonna create headwinds for the stock market
 at some point.
 Yeah, Stephanie, it seems to me it's earnings,
 it's economic data and then it's geopolitics,
 probably in that order in terms
 of what investors are focused on.
 Is that the right way to think about this
 moving forward?
 Is there anything that changes that?
 No, I mean, I look, I think that we all know
 that stocks follow profits on the way up and on the way down
 and over the last three years we've seen massive revisions
 higher and we're seeing again higher this year.
 And so that's it very encouraging
 and it does speak to the strong economy,
 it does speak to the broadening out.
 It's not just AI Morgan, it's also the consumer.
 The consumer continues to consume and on the labor market,
 I have no doubt it's gonna be a strong number.
 I don't pay that much attention
 to the non-farm payroll numbers.
 I've paid more attention to the weekly jobless claims
 and they're the lowest level since 1969.
 So we have a good labor market, people are spending
 and it's not just K-shaped.
 So I think there's a lot to be excited about.
 I think the market inches higher
 throughout the end of the year.
 Okay, and we'll see what it does in the meantime today
 with the S&P and the Dow both poised for gains
 but the Nasdaq under pressure premarket.
 Thank you to our morning call crew.
 What made you confident that you could do something
 that hadn't been done before?
 I have no fear of failure.
 Trailblazing women changing the game.
 One of my favorite pieces of advice.
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 Julia Boursten hosts CMBC Changemakers and Powerplayers.
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