AI, space and geopolitics drive market momentum 8/4/26

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,
 like the short, and you just gotta think big to accomplish big things.
 Julia Bourston hosts CMBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.
 Gaining momentum.
 I'm Morgan Brennan, and this is your morning call.
 Good Tuesday morning.
 Let's get a check on it.
 US stock futures with the Dow sitting at an all-time high as of the close yesterday.
 You could see it's a mixed picture this morning.
 The S&P just swinging lower here pre-market in the last few moments.
 Poised open down 12 points.
 The Dow down 44 points for the Nasdaq hanging on to gains of 60 points.
 As of right now, that's after big gains for all the major averages yesterday,
 the tune of 1.3% or greater depending on which one you were tracking.
 Small caps too had a big day yesterday.
 The Russell 2000 coming off of its best day in more than two weeks.
 We've got big names out before the open as well.
 And after the close, including McDonald's, Merck, Caterpillar.
 Those are before the bell.
 SpaceX is one of the big ones after the bell.
 We're going to have much more in those names in just a moment.
 Plus, we are watching earnings reaction from the likes of Palantir,
 Snap, Whirlpool, OnSemi, and others.
 Look at that move in Palantir.
 I'm 16% right now.
 We've got more in those coming up too.
 Meantime, let's get a check on what we're seeing in the bond market right now
 with Treasury yields higher across the curve.
 10-year US-10-year Treasury sitting just above 4.7% right now.
 Fed sensitive to your Treasury.
 Yielding 4.26%.
 Let's also continue to track here the 30-year.
 We've been getting a lot of focus with investors overall in recent weeks.
 That's at 5.25%.
 Let's turn to the Middle East.
 Developing story as we watch the price of crude right now.
 That is higher after settling down some 5% yesterday.
 Still no word from Iran confirming a new round of talks.
 We're going to let it back and forth and whether that was actually happening.
 You can see WTIs trading around $82 a barrel.
 Brent, up 2.7% trading at $86 a barrel.
 In terms of those talks, whether they're direct in direct,
 the US, with the US over the straight of Hormuz,
 the country's foreign ministry, this is Iran,
 maintaining it has not requested a meeting,
 preferring instead to negotiate with teams in Oman for safe passage through Hormuz.
 We continue to track all of that right now.
 Uncertainty is really, I think, sort of the takeaway there.
 Let's see how Europe and Asia are shaping up.
 Elaine, you is with us from Hong Kong and Karen show
 is in London with early trade in Europe.
 Karen, let's kick this off with you.
 Good morning.
 While European equities are trading broadly in the ground on what is a stack day for earnings,
 with companies from every sector of the market reporting numbers,
 basic resources and tech names are taking the biggest steps forward
 in early Tuesday trade.
 Now, Aramco has reported a just and second quarter net income
 of $33.4 billion broadly flat on the quarter,
 but up a third on the year.
 The world's biggest oil producer recorded
 an average realized crude oil price of just over $108 a barrel in the period.
 The company leveraged its pipeline to the Red Sea
 bypassing the straight of Hormuz.
 HSBC's first half probably jumped more than expected to
 up by almost a quarter on the back of high rates
 and surging wealth management revenue,
 although the stock is under some pressure in the session today.
 And Lufthansa, the airline, adjusted EBIT,
 more than halved in the second quarter compared to a year ago
 with the company pointing to the high cost of jet fuel
 as well as labor strikes.
 The airline also cut its profit guidance,
 citing heightened uncertainty from fuel price volatility
 the stock down heavily.
 So a lot of impacts from the Middle East situation.
 Morgan, back to you.
 Yeah, that inverse relationship between the airlines
 and energy in full effect right now in Europe.
 Karen Cho, thank you.
 Let's get to the action in Asia and our
 alien you in Hong Kong.
 Alain. Good morning, Morgan.
 So the yen held on to most of its gain after the joint
 intervention by Tokyo and Washington.
 And again, we can do 157 that level in Asia trade.
 But it's still well about the near 40 year
 low of near 164 late last month.
 Some analysts say the yen probably won't fall much further
 because traders are worried that Japan
 and the US may step in again to support it.
 A former B.O.J. official told Reuters
 that the yen is expected to stay between
 $155 and $162 per dollar for now.
 He said if it remains stronger than $160 for another week,
 then traders may see that as it's bottom
 and start buying the NK225 etched up today
 as chip related stocks are mostly positive.
 But investors are so cautious about a positive intervention.
 In South Korea, the cost be close 1.6 percent higher.
 But regulators are limiting risky leverage ETF trading
 to help calm the markets that was shaken recently
 by fears about AI.
 The finance minister said he would work to ease the volatility
 and swiftly enforce the measures that were recently announced
 to restrict the use of these single stock leverage ETFs.
 China stocks are also climbing as AI and chip shares rebounded.
 The CSI-300 gained more than 1.2 percent
 and the Shenzhen composite gained 2.7 percent.
 Meanwhile, China is reportedly seeking evaluation
 of $30 to $40 billion in a Hong Kong listing
 which can launch as early as mid-August according to Reuters.
 But analysts have told CNBC that the three-year IPO delay
 by China may have caused the company the golden time
 to go public because investors and consumers
 are no longer as excited about the ultra-fast fashion retailer
 as they once did back to you.
 We talk a lot about things like terrorists
 but those diminimus tariff changes
 that happened here in the U.S.
 I'm sure having a big impact on the likes of Xi'an as well.
 All right, Elaine Yu, great to hear from you
 and get the rundown from Asia
 where there's just been so much action.
 Thank you. SpaceX on tap today as well reporting
 its first earnings as a public company that's going to happen
 after the bell, after the close here later today.
 Expected to post a loss on revenue of $6.9 billion.
 But here's what likely matters the most.
 Starlink results, CAPEX forecasts and Starship guidance.
 Starlink is the biggest and only profitable business.
 Updates on subscriber growth, new V3 satellites,
 plans for Starlink mobile, all of that will matter,
 especially as SpaceX ramps spending on its AI build out
 and looks to get Starship flying operationally
 doing those operational missions by the end of this year.
 Also, any commentary about a possible Tesla tie up,
 Elon Musk punted that on the Tesla call about two weeks ago,
 but I'm sure investors are probably going to ask nonetheless,
 still analysts are less focused on earnings,
 more focused on other factors that are already weighing on the stock.
 As Morgan Stanley puts it, quote,
 we anticipate two key results
 to neither significantly change near-term consensus expectations
 or the long-term story.
 Leaving the share price largely at the mercy
 of technical forces, lock-up expiry, investor positioning,
 cautious, and macroeconomic factors.
 So first stock lock-up expires Thursday.
 It's the first of eight tranches that could
 through January of 2027 unlock nearly four billion shares.
 You can see shares of SpaceX right now,
 pre-market though, or up 1%, that's after a pop yesterday.
 Well, turning to the other big stock story this morning,
 really it's momentum on deck.
 Palantir shares, those results,
 soaring on blowout, those shares,
 soaring on blowout results, she said,
 I need a little more coffee here.
 Palantir is up about 16 over 17%.
 Another beaten race quarter for the AI and analytics company.
 U.S. commercial business,
 this is one of those key metrics for the company,
 surging 149%, that accelerated quarter over quarter.
 U.S. government business jumping 90%,
 also an acceleration.
 Palantir reporting a June quarter rule of
 155.
 Now in software, this is called the rule of 40.
 Higher is better.
 I don't know of any other company that's reported
 a number quite like that.
 And speaking exclusively with CNBC yesterday,
 Alex Carp said the growth is going to continue
 and also weigh it in on that U.S.-China AI arms race.
 The way we win in America is we compete.
 And our open models are going to have to become
 as good as Chinese open models.
 By the way, it's also somewhat of an relevant debate
 because in reality, what I believe,
 what our customers believe is,
 the models are only valuable where they have FDs
 and application layer and some expertise
 in the installation of that and protecting tribal knowledge.
 They're not valuable as people may sometimes think.
 Yeah, and of course, Carp talking his book
 in that conversation as well as you might expect.
 For more, let's bring in Claire Plydele-Buvier,
 the co-head of a global innovation team,
 at Lion Trust asset management.
 Claire, it's great to have you back on the show.
 Let's start right there.
 Palantir, your thoughts.
 Morning, Morgan.
 Great to you on.
 Well, Palantir certainly delivered the blowout water
 that we were watching for.
 And then we're really three key takeaways for us.
 You touched on the most important number
 which was that U.S commercial work, 149 percent.
 The fact that that is accelerating
 is showcasing that enterprises are adopting
 Palantir as the full staff enterprise AI platform.
 That firstly, we're seeing this shift in Palantir capture.
 Of course, the AI staff going upwards
 to that software application there.
 So there's very few companies
 that are actually converting tokens into revenue
 as well as the data and organization there.
 So we're seeing a transfer
 value away from those model ads
 as the cost of intelligence,
 the cost of inference forms.
 You think about development site,
 that can be key three model.
 This is very good news for those companies that Palantir.
 Secondly, what was really important on the call
 was the message around open source models
 combined with Palantir's data, architecture and tools.
 And now capable of frontier model performance.
 And this is an avenue we think
 that is going to deliver significant growth
 for the company and over the coming years.
 Because if you can ground your AI in your own proprietary data,
 that is significantly preferable
 to give away your data to a third party model app.
 And the third key takeaway was that this chasm
 that we're witnessing at the moment
 between legacy software companies
 recalling the software 1.0 companies,
 traditional seed based versus software 2.0 companies,
 these AI first companies built on and for accelerated compute
 is widening.
 And it's very, very hard as an investor
 to invest in software right now.
 And Palantir is probably among the 10% companies
 that are on the right side of this shift.
 Wow, you said so much there.
 I want to dig into.
 And I think point number two is especially important
 when you think about the partnership
 the Palantir has with Nvidia.
 And I think the takeaway there is that the lines are blurring
 between all of these different players
 within the AI tech stack,
 which in turn brings us to SpaceX
 because this is another example of where that's happening.
 And you start combing through the analysts notes,
 you start combing through some of the metrics here.
 And I realize it's going to be a noisy quarter.
 It's the first quarter for SpaceX.
 But I wonder if you think folks are fully appreciating
 what AI is going to mean for that company,
 especially as these lines do blur.
 If you're the now on the head, Morgan,
 and the the pregnancy evening is far less about our numbers
 than the direction of travel
 for SpaceX's three businesses,
 which should really be not analyzed
 as distinct businesses,
 because launch effectively knows the cost
 of putting these satellites up in space.
 You've got XAI that is turning confusion to revenues,
 CASA, which is now turning those compute revenues
 into high value software.
 And so it's this interactivity
 that is going to be the investment case going forward.
 The number that matters for us are the AI revenues,
 because over May and June, what we saw
 was an anthropic ramping with XAI,
 we've got Google coming into the next.
 And this has been the major change in the company
 since the IPO filing.
 And that's the number of we think
 that certainly on a three-year view
 is still being underestimated by the sales side.
 All right.
 And of course, we're going to get AMD
 and Arista Networks, after the bell,
 and a number of other names
 when it comes to the broader AI conversation.
 In the meantime, Claire Plydel, Bouvier,
 it's great to have you on.
 Dropping knowledge right at the start of the show,
 we love it.
 Appreciate it.
 Come back soon.
 A lot more to come here in morning call, though.
 In the meantime, including the world leader
 playing for both sides in the U.S.
 Iran War over the Shade of Pramooz,
 my next guest calls him the puppet master.
 Plus, what whirlpool just did stateside
 that's hurting more than helping the bottom line.
 And later, BP reports a surge in profit
 just one day after President Trump slammed rivals
 for raking in oil cash on the back of consumers.
 BP CEO, firing back a very busy hour still ahead.
 You don't want to miss it.
 Morning call, 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 got to think big to accomplish big things.
 Julia Borsten hosts CMBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.
 Welcome back to morning call,
 return your intention back to the Middle East
 and energy prices amid the on-again, off-again possibility
 of more U.S. Iran peace talks.
 While Washington and Tehran grapple
 for a pole position in negotiations
 and control over the straight-up Hormuz,
 one key player, according to my next guest,
 has been reaping the benefits from both sides.
 Joining me now is Jeffrey Sonnenfeld,
 senior associate dean for leadership studies
 at the Yale School of Management.
 He's also a CMBC contributor.
 And also out with a new piece
 in time titled Put in the Puppeteer,
 how Russia benefits from Trump's war in Iran.
 I mean, you are a prolific writer
 and I know your network is far and wide on this.
 So someone to certainly be speaking to
 about these geopolitical dynamics
 and then how it factors back to corporate America.
 It's great to have you back on set.
 Thanks, Juan. It's great to be with you.
 And when you say so productive,
 hope we're not sending you too many articles to read
 because you seem to stay current on everything I send you.
 You're ready for the final exam.
 You're ready for the final exam.
 Okay, so let's talk about this, this relationship.
 I don't know if we should call it triangulation or not
 between Russia, Iran and the US.
 Yeah, I think, you know, it was the late Ash Carter
 who's a friend of mine for a half century.
 I mean, that old that he was really on to Putin
 and pointing out how he is a really grand puppeteer.
 They're a good puppeteer and manipulates
 marionette strings by multiple strings at once.
 And what's happening in the Middle East
 is not separate from what's happening in central Europe.
 And Putin benefits from that.
 He benefits from having stirred things up in Iran,
 of course, on many fronts.
 The oil prices most dramatically
 just in terms of your lead
 and taking a look at energy prices
 that he's doing so much better now
 that that euros oil, at one point,
 it was around $40 a barrel
 and it cost him $46 a barrel
 just to extract it before ship it.
 But now it's up in the 70s.
 So, you know, they're up way more than 30%.
 So it's done very well on that front.
 But beyond giving him cash that he's badly needed,
 it's really helpful as a diversionary tactic
 for diplomatic attention.
 For artillery is you are one of this great networks
 if not the top.
 It really defense expert.
 You know that we're actually running quite low
 on artillery shells and other weaponry.
 And it's because the law has been diverted,
 of course, from central Europe
 and Ukraine to the Middle East.
 And as we know that, for fact,
 from the actual manufacturers are telling us
 that in addition to the military,
 but it also is helpful just in terms of
 adraining other resources.
 So Putin has found this to be magnificent
 but he also is manufacturing all kinds of fighter jets
 for Iran and Iran's getting them for free.
 We also know that the EU, the Israeli, Ukraine
 and US intelligence are telling us
 that he's actually helping Iran target
 to shoot down our soldiers and hit our military bases.
 They even launched the spice satellite
 with high intensity, identity, a vision
 to help spot our people better.
 That was a Russian launch helping Iran.
 So we've really got a confront.
 Putin's role as a grand puppeteer
 between these different positions.
 Yeah, and to your point,
 I mean, you saw the kinetic worlds,
 if you will, converge last week
 when Ukraine started striking Iranian flag ships
 and carrying out more activities in the Caspian Sea as well,
 along military routes that are being used by Russia
 and Ukraine here, all this begs the question.
 We've got a sanctions package,
 perhaps making its way through Congress right now.
 Does that cross the finish line
 and how effective can that actually be
 knowing there's been a mixed history in terms of sanctions?
 It's such a good question.
 We actually worked pretty closely
 in the development of sanctions package
 with the last administration,
 but I actually worked pretty closely with Trump 1.0.
 I'm kind of ambidextrous that way,
 but worked with the Biden team on sanctions
 against Russia after the invasion.
 But actually, on Iran,
 we worked pretty closely with Adam Boller
 who helped develop that with Jared Kushner
 in Trump 1.0.
 It was most effective on the Iran side.
 And I know you're talking about Russia right now,
 but on the Iran side is most effective.
 When the spiket was cut off in Trump 1.0,
 that was great.
 The oil revenues disappeared.
 They're soaring now up to $50 billion a year,
 just the oil revenues and then the tolling
 has gotten much worse when the straits.
 But now when you flip it back to Russia
 where your question really was,
 it's the 88 to 12 vote in the Senate
 on the Lindsey Graham Act is very encouraging.
 But here's a little twist.
 We have another hour and a half to talk about this, right?
 There's a little twist on this is the EU
 with all the St. Thamonius hand-ringing
 about the U.S. needs to support Ukraine
 where which we could ensured is this new sanctions bill
 if it passes the House and the president signs it.
 Although with this kind of vote,
 he doesn't have to sign it.
 Is France is not gonna do well by this
 because there are a hundred percent sanctions
 that will be assigned to third parties
 that are benefiting.
 France has been investing in LNG in Russia.
 They're putting, there's zero,
 nobody's putting foreign direct investment into Russia
 since the invasion, except China, tiny bit.
 But France has like $26 billion of investment in LNG
 that was zero before, you know.
 So France is really a concern in Germany
 with the metals that are sanctioned
 for the U.S. to buy, Germany is buying.
 So there's a lot of concern about the EU
 and how we clear that up.
 That'll be a problem.
 Yeah, perhaps speaks to some of the tensions we've seen
 between the U.S. and Europe
 where that alliance is concerned
 and some of these trade values.
 The LNG Gram Acto is very encouraging.
 And I think, as you mentioned, Ukraine
 getting a going after ships in the Caspian Sea
 is a real concern.
 So we're seeing that these two fields of battle
 are coming together and need a common approach
 and recognizing Putin.
 It's very much as Churchill had warned us
 in a major speech in 1940
 is that Hitler's great strength was leveraging the resources
 of lands that they invaded.
 And that's something that Putin is really good at
 is if he doesn't have the cards, he steals them.
 Yeah, all right, Jeff Sonnenfeld,
 it's great to have you here on set.
 We do, we need another hour and a half.
 I feel like we're just crashing the surface here.
 Come back soon.
 Thanks.
 All right, straight ahead.
 The U.S. government making a big bet
 on one homegrown defense tech company.
 Drones, we're going to talk drones,
 continue this conversation, if you will.
 We're just people with one CEO on the factory front lines.
 But first, a quick check on shares of Microsoft.
 The stock is now up some 25% over the past three sessions.
 Huge move.
 Marking the best three-day run since October of 2000.
 Under a little bit of pressure this morning,
 but you get the gist.
 Looking at that chart, stay with us.
 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 got to think big
 to accomplish big things.
 Julia Bourston hosts CMBC Changemakers and Powerplayers.
 New episodes every Tuesday, wherever you get your podcasts.
 Welcome back.
 Tentagana is looking to continue to push
 to expand domestic manufacturing of critical war technologies,
 announcing that it is giving Alabama-based PDW
 a conditional loan commitment up to $820 million
 to help it grow its next generation of drone robotics
 and autonomous technology.
 So for more, I'm joined by Matt Higgins, co-founder
 and executive chairman of PDW and more.
 But let's start right there.
 Office of Strategic Capital.
 This has been the branch within the Pentagon
 that's mistricking all of these interesting, unusual,
 in some cases, unprecedented deals
 under this administration to basically get us the US
 on a wartime footing.
 So let's talk about what this means for PDW
 and what this means for drone warfare,
 drone manufacturing in the US.
 Yeah, well, thanks for having me.
 It's good to see you this way this early.
 So I think what the government's trying to do,
 the DOW and Office of Strategic Capital,
 is step in where the private markets are inefficient,
 where there's some urgent need to stand up
 a part of the ecosystem on manufacturing
 and on-choring and step in.
 So one example is magnets.
 What they did with Matt Higgins was amazing.
 We don't make magnets here.
 And yet magnets go into every drone and robotics.
 So what they're doing with PDW is saying,
 we need to stand up a drone component ecosystem
 in the United States in order to begin to match our adversaries.
 It does not exist.
 It was undermined and decimated by a decade-long campaign
 that China ran here to flood the market
 with cheap products.
 We've never seen that before.
 Yeah, no, exactly never happened.
 So they are stepping in to make sure
 that we make the motors and the cameras
 and the batteries here on US soil.
 If we don't do that,
 we're gonna be in trouble when we need it.
 Yeah, I mean, we're talking more and more about drone warfare.
 So where does PDW stand within the broader ecosystem here?
 And how to think about the competitive landscape
 and what I would argue has been a commoditization
 to your point in part because of China
 of drone technology.
 Well, I've been out in a long time.
 I'm a lifelong New Yorker.
 I used to oversee the redevelopment
 of the World Trade Center post-9-11.
 So I'm always thinking about where are we vulnerable?
 And I started working on drones with the drone racing league.
 I have a background in sports
 and I wrote the first check into DRL in 2015
 and realized we have just opened Pandora's Box.
 These drones are gonna be used for nefarious purposes
 and they need to be a US advantage.
 So I watched methodically as China undermined the US industry.
 So circa 2015, we had a nascent industry
 that was starting to sprout up
 and now we don't make components in the US.
 Where do we fit?
 We make drones that extend the capability of the warfighter,
 20 pound drone that could fit in your backpack
 and that could enable you to deliver blood
 on the battlefield or are calling an airstrike.
 That's what we do.
 But what we're really passionate about
 is becoming a version of like a Taiwan semi-conductor
 where we can help build the components
 that the US needs on US soil.
 But there's no private market for that.
 So the OSC and the DOW is stepping in.
 And we're one of more, there'll be others
 to help say, okay, here is a loan.
 We have to pay it back at favorable terms
 that'll give you the breathing room
 to build that infrastructure
 so we can start matching what Russia and Ukraine
 and North Korea is starting to do on the drone front.
 Yeah, we talk about reindustrialization
 and ground zero really is defense industrial base
 and areas of national security.
 Okay, I'm gonna take a hard left here.
 Where are we going?
 You just mentioned your roots, RSE ventures.
 I mean, you've been a long time investor in things
 like entertainment sports, other areas.
 So just more broadly, your assessment of those industries
 and the investing landscape overall right now.
 Yeah, I, so what am I, what am I long on?
 I'm not gonna talk about the obvious AI.
 Live entertainment.
 I mean, this generation is willing to spend almost spend
 almost anything to go to concerts, live sports.
 I have a sports media rights business.
 We're partners with UEFA.
 And we just handled the auction for the Champions League
 which went really well.
 So I am very, very long and anything experiential
 and masterfully obvious.
 Long also any franchise value.
 I'm doing a lot with nason sports franchises
 and sports leagues that I'm looking at.
 So anything live, I'm interested in.
 All right, that's great to have you here on set.
 Thanks for having me.
 Matt Higgins, appreciate it.
 Thank you.
 Still on deck, Snapchat's big ad bump.
 See those shares are also bumping, higher by eight percent
 and doing little to make a dent
 in what's been a very rough year for the stock overall though.
 Morning call, we'll continue next.
 I'm Morgan Brennan.
 Welcome back to Morning Call.
 Let's get a check on US stock futures.
 The Dow is sitting at an all time high as of the close yesterday
 and you can see basically at the flat line right now,
 the S&P 500 less than 10 points from its all time closing high.
 So take a look at the screen right now, pre-market.
 S&P is poised open down at 12 points
 Dow basically open flat up or lower by about one point.
 And the NASZECA is poised for gains of 51 points right now.
 This is of course, is after a toured rally to start the week
 and to start the month yesterday
 with all the major averages gaining at least 1.3 percent.
 Big names out before the open and after the close today
 include McDonald's, Merck, Caterpillar, SpaceX.
 Some other names too like AMD is going to be one to watch
 after the bell.
 We're also watching Energy as we await word on whether a new
 round of talks between the US and Iran are in fact happening.
 You can see crude oil is climbing this morning.
 WTI is about 1.8 percent trading just below $82 barrel.
 Brent is up 2.3 percent trading just below $86 a barrel.
 Let's get a check on treasuries too and what we're seeing
 in the bond market here as yields climb across the curve.
 US 10 year treasury yielding 4.7 percent right now.
 Fed sensitive to your treasury yielding 4.26 percent
 and the 30 year treasury 4.25 percent.
 Also we're continuing to watch the Japanese yen
 that dollar yen trade this after touching a three month
 high of $155.20 yesterday per dollar per the dollar.
 That's after that US Japanese intervention.
 And you can see a bit softer in the yen this morning
 but still trading around $157.84 per dollar per dollar.
 Excuse me treasury secretary Scott Bessent will have more
 on this when he joins a squat box at 7.30 a.m. Eastern.
 You don't want to miss that also treasury refunding big
 week for all of that and for the bond market treasuries
 overall as well.
 Watching a number of stocks moving on earnings this morning
 including pounds here soaring on blow out results
 and other beaten raise quarter for the AI and analytics
 company shares are up 16 percent pre market similar story
 for shares of snap after reporting better than expected sales
 and earnings.
 See you Evan Spiegel telling investors the company quote
 so I'm proving momentum in our advertising business
 Spiegel will speak exclusively with CNBC just after 8 a.m. Eastern
 today and we got some big moves also for shares of on semi
 those are up seven percent.
 That's thanks to a Q2 top and bottom line and margins beat
 company says it expects sales to AI data centers to more than
 double this year.
 And chlorox reporting a tiny beat as slightly high slightly
 higher sales offset weak gross margins.
 But the EPS guide at the midpoint that fell short management
 warning that quote we expect the operating environment to
 remain challenging with continued cost volatility and a value
 seeking consumer to shares are basically flat here pre market
 we're also watching shares a whirlpool company posting a
 second quarter loss that was worse than feared revenue
 also coming in below estimates as did the revised full year
 earnings guidance shares are fractionally higher right now
 pre market they've been raising prices particularly in
 North America nonetheless the guidance coming lower let's also
 turn to rock a dime this is a storied space technology
 company that specializes in the design and manufacture of
 propulsion electronics power systems think rocket engines
 the firm is the firm is famous for building the engines that
 power major US space programs including the Saturn 5 space
 shuttle most recently Artemis 2 missions it's also
 beginning a new era today it's being spun off from L3
 Harris and restoring that standalone rocket line name it's
 coming under the jurisdiction of private equity firm A.E.
 industrial least from a majority ownership standpoint and
 joining me now is the new CEO of rocket dying Kristen Houston
 it is great to have you on the show welcome to you it's a old
 name new company we stretch from Apollo to Artemis here
 let's start with the fact that rock a dime is seen quite a few
 space cycles how would you categorize this one well thanks
 Morgan for having me on this morning and we are just so
 excited to be launching rock a dime you covered it well of
 our storied history for over six decades now it is a great
 time to be part of the space industry I mean we are seeing
 unprecedented growth in so many areas whether it's nuclear
 propulsion or national security space system or operations
 and we are well position now as an independent company
 providing propulsion space electronics and power systems to
 to meet our customers ambitious missions so what is being an
 independent company enable that being a part of a bigger
 broader aerospace and defense contractor didn't yeah we are
 now able to focus and be you know putting all of our energy
 and all of our effort on our propulsion electronics and
 power system solutions again our customers have some very
 ambitious missions more than we've really ever seen
 and we now will have that focus and be able to be fully
 fully engaged on on space how are you thinking about reusability
 yeah we you know we we are all 10 upper stage engine for example
 already had already has a relight has a relight capability
 I mean we know that with this with spacecraft and satellites
 that are going to be needing on orbit refueling
 even just having longer duration missions that some
 our technology enables and supports you know again whether
 it's across all the things we do we really have opportunity
 support all of our customers in in where they're going
 yeah and if I just take a step back it's obviously a big day for space
 we've news with your company but also we get SpaceX earnings after the bell
 what do investors need to understand about this industry
 the technological capabilities but also sort of this this commercial
 element that we're entering in a more meaningful way
 yeah you know the opportunity is bigger than just any one company
 there is so much that's happening again the siss lunar operations whether
 we're trying to build out the moon base from an exploration point of view
 or from a national security perspective maintaining the high ground and that
 siss lunar orbit to again trying to do deep space exploration
 to Mars using nuclear propulsion to all other kinds of
 nuclear secure i'm sorry national security national security
 space concerns you know we know it's getting more congested and more
 contested in space and that's requiring a lot of a lot of maneuverability
 and a new technology yeah um what does it mean from a demand standpoint whether
 it is on the defense side or the civil side or even on the commercial
 side especially as we do see more of that technology unlocking
 more markets including in space when you think about
 you know in space infrastructure and to your point a lunar economy that's
 building out
 yeah so there's a lot of ambition on the on the lunar economy right for
 example and there's whether it's what NASA is doing and then also we're seeing
 a lot of new entrants as well and we're supporting
 you know really across across that range um so it's it's launching to get
 there on supporting customers like ULA
 to um you know the new new landers that are being that are being worked on
 to eventually have power systems like and we we're supporting
 nuclear surface power because everything's going to need power when we get
 to the moon there's rovers you know it is we're going to unlock a whole new
 economy with the with the lunar with the lunar surface
 all right of course we're going to be hearing more about this i would imagine from
 the SpaceX call after the bell tonight which kicks off at 4.30 p.m.
 eastern um but in the meantime Kristen Houston of rocket dynas great to have
 you on appreciate it thank you we're moving space forward all right a lot
 more coming here on morning call including shares of bp on the move on the
 back of earnings the company CEO is telling cvc about president trump's latest
 criticisms of the oil industry quote making
 too much money morning call we'll be right back
 let's get a check on shares of amazon after becoming the fifth company ever to
 hit three trillion dollars in market cap yesterday you could see shares are
 down to one point eight percent here pre-market but we are still just above
 that three trillion dollar level even here right now uh for amazon with its
 market cap so we'll continue to track that we're also tracking some of the
 morning's latest headlines uh we are watching shares of british oil giant bp
 out with earnings just hours ago reporting a sharp rise in second quarter
 profit that more than doubled mostly thanks to higher fuel prices and
 midi's tensions the report coming after president trump slam
 rivals exon and chevron for quote making too much money off of high oil
 prices bp CEO mego niel joining our colleagues at squawk box europe earlier
 this morning and weighing in on the president's comments and the sensitive
 political environment i understand the pressure that the ordinary household
 feels when they pull into the service station to fill up and see
 and see the prices um the reality is we produce a global commodity and the
 product we sell hangs off the prices for the product we sell hangs off that
 global commodity price what bp is doing is making sure that we are focused on
 the things we can do to try to help address the situation
 all right well to capital home the trump administration hosting executives from
 opening i google and throught back another a i giants at the white house that's
 happening today officials confirming to cmbc the group plans to discuss a new
 voluntary framework for reviewing the industry's most advanced a i models
 before they are released the framework would allow companies to give the
 government early access to certain frontier models for up to 30 days
 but would stop short of creating a mandatory licensing or pre clearance
 system that is key to that double deal news
 Williams buying momentum midstream for from a private equity firm for up to five
 and a half billion dollars that's helping fuel its natural gas expansion
 along the u.s. golf coast a good time to do that you can see shares of Williams are
 up one percent pre-market and across the pond prologists has agreed to buy uk
 rival surgo for more than eighteen billion dollars to expand its european
 warehouse footprint that deal is a nearly 40 percent premium to surgo's
 closing price back in june when news of deal talks first emerged even going back
 and forth for months now well to the latest on the nationwide parasitic
 outbreak bloomberg reporting young brands talk about his parent company and health
 authorities in michigan were in direct contact about an outbreak in early
 july this was weeks before young or the health department officially notified
 consumers and straight ahead the morning call crew is here to end up the trading day ahead
 and the key test one member says space x faces that does not involve today's
 big earnings report time for your call sheet where we look at the topic
 driving the trading day ahead crew members today jade woods of freedom capital
 markets peter book bar of one point bfg wealth partners both cmbc contributors
 and chris hodge and it takes this cib america's great to have you all here we
 got a lot on deck to talk about jay i want to kick this off with you you got
 the down at a record high s and p is flirting with it too what a difference
 a couple days make uh... yeah it's just like we were panic that this war was
 going to escalate and we were going to finally break down and no we were
 captured key levels were looking at new highs and it looks like we're going to
 probably get them by the end of the day uh... so this market is been
 taking the slings and arrows thrown at it and continues to move on earnings has
 been the story and earnings continue to drive us higher oh we're going to get
 more into earnings don't you worry first peter though we got a ten-year treasure
 yield to four point seven percent uh... how do you see
 this market overall right now especially as you do have a lot of these things
 swirling above and beyond earnings including dollar yen which i know
 something you you follow closely
 well the interesting thing with the rise in the ten-year yield
 is that it's all real rates interestingly inflation expectations
 if you look at the two-year the five-year the ten-year the break evens are lower
 than where they were prior to the war beginning so this is not an inflation driven move
 i think it's a lot of its debts and deficits i think it's the huge amount of
 corporate supply that's coming particularly from the hyperscalers and four seventy
 is above the may high and five percent i think is in sight with respect to the
 yen that has a huge significance the move because the japanese are the largest
 foreign holder of u.s. treasuries at one point two trillion so that is why scout
 doesn't wants the end to strengthen because they do not want uh... the u.s.
 treasury market to be a source of funds for the japanese in intervening
 yeah i do want to get your thoughts on that chris because we're here from the
 treasury secretary on squawk box uh... coming up in just
 a little bit um... but also the fact that quite frankly the underlying data here in
 the u.s. been pretty strong look no further than i.s.m. manufacturing
 yesterday and of course we're going to start getting all this labor data this week
 yeah um... the activity data that we've gotten over the past week or so has been
 fairly solid there's also some tailwinds from q2 um...
 refunds from taxes that aren't necessarily going to be um... a tailwind
 going forward but i think if you look at you know domestically driven uh...
 economic activity everything looks pretty solid right now
 okay i said i was coming back to earnings coming back to earnings i this show has
 been jam packed with a lot regarding geopolitics national security
 ai i will say aerospace and defense in particular today but it's for good reason
 because all of these areas are converging right now
 and we're bookended by two of the biggest dual-use technology companies in the
 world balance your earnings last night space x after the bell today
 well balance here wow uh... they beat they've guided they've done everything
 right again this is three quarters in row price action let's see if it can
 sustain it can it be microsoft gap and keep going watch this one forty seven one
 fifty level let's see how it closes today if it can hold that then this stock
 is where you want to be uh... space x what are we talking about we're talking
 about the lock-up but what people are realizing you know there's a big short
 interest here too i think this may be baked in we have two days but what i want
 to hear path of profitability i want to see how tesla reacts to space x earnings
 and how musk is put on the spot about being cio of both of these companies but uh...
 space x is going to be fascinating to watch and i think this may give us that
 entry point people on the sidelines have been waiting for
 to dip the toe in the water i think i may just do that myself yeah you have
 a map you just have something really important i think we're space you have massive
 amounts of apply coming online it starts Thursday it's going to go through next year
 yeah what's your point very small float uh... which has been part of what's
 pressuring the stock with all the short interest and you gotta wonder whether
 perhaps a bottom is in here at least near term yeah and that's what we're
 going to find out uh... if if this can hold the recent lows
 then i think this is a good floor and we can build from there
 on a spike if it gets back to that one thirty one thirty five level then
 it's time to probably take some chips off the table okay evaluate the trade
 because it's still a long story to go and uh... this is just going to be one small step
 in a very big journey for uh... space uh... yeah and of course we're getting so many other names to
 peter i mean there's others like a md and airsta when you talk about you know momentum trade and
 a i after the bell but this morning caterpillar this has been a high flyer uh... that's taken a
 breather recently uh... and also speaks to what we've seen in in the industrial sector
 right because we know that a i everyone feeding into that build out ecosystem uh... is the
 strongest part of the economy and caterpillar transforming its business to tap into that uh... the
 other earnings that's going to be really important is McDonald's because the lower the middle
 income summer has not been a key economic contributor and in fact it's been a drag
 and the quick service short short side of the restaurant business in particular so what they have
 to say i think is going to be an important tell and also McDonald's Walmart and others have talked about
 how those making over a hundred thousand dollars are visiting their stores more often i want to hear
 me what McDonald says about that as well yeah i mean happy meals is a big big goodie for the toddlers
 in my house um yeah okay so Chris i want to throw up a chart on the screen i don't know if you could
 see this or not but there is a very striking inverse relationship between shares of McDonald's
 and the price of our bob gasoline futures and as our bob moves higher McDonald shares move lower
 it speaks to exactly what Peter was just touching on and that is the consumer sensibility to things
 like higher gas prices your thoughts yeah uh... higher gas prices are attacks on the consumer
 and this comes at a time that even though the jobs data has been fairly stable people don't
 really feel great uh... about their position in the jobs market wages have been slowing in their
 their confidence in their ability to find a new higher paying job has continuously gone down so
 even though even though the labor market data has been stable i think there's an underlying weakness
 that's going to weigh on discretionary consumer spending okay uh... we're also going to get some
 healthcare names this morning where you get spotify and in the meantime futures are basically
 floating around the flatline at least for the down the s and p thank you to our call crew
 what made you confident that you could do something that hadn't been done before
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