Earnings strength meets jobs, rates and market rotation 8/7/26

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 It's Jobs Friday, TGIF. I'm working Brennan, and this is your morning call.
 Good Friday morning. We'll say it one more time so the back of the room can hear us.
 Let's get a check on U.S. stock futures with the Dow coming off.
 It's first down day in 60. You could see it's a mixed picture right now this morning pre-market.
 S&P is poised to open, fractionally lower down three points. The Dow is at 97 points and the Nasdaq
 poised for gains to the tune of 87 points right now. Dow was looking to close out its best
 week since mid-April and all the major averages are on pace for gains for the week.
 This by the way after the major averages took a breather yesterday.
 Ahead of today's July Jobs report, if we get a look at action in the treasury market,
 you can see Fed sensitive to your treasury yielding 4.24% right now and U.S. 10-year treasury
 yielding 4.67% right now. It's basically unchanged. Also, we'll get a check on the 30-year
 5.21%. Economist looking for 83,000 net new jobs last month on employment rate holding
 steady at 4.2%. Metals continue to be on the move with gold at its highest since mid-June,
 but one and a half percent right now, 4,300 an ounce, and copper continuing to
 flirt with a new all-time high right now. It's basically flat, but we did see it meet that mark
 in general this week. You're going to have some of the mining CEOs meeting at the White House
 with President Trump later today, so Metals will continue to be on focus. Energy, too, as we continue
 to monitor the Middle East tensions, you could see higher this morning, fractionally WTIs of
 half a percent trading around $77.69 a barrel. Brent, also a half a percent just below $83,
 a barrel. Our Bob Gasoline, as well, is fractionally higher. We've got much more on all of that
 in a moment. A big, a number of big stock movers ahead of the open, too. Some of the names that
 we're tracking here are Airbnb, delivering one of its strongest growth quarters in years of
 17% from a year ago, raising full-year revenue and margin outlook, now guiding to growth
 meaningfully above its peers. And you can see those shares are spiking 9% this morning.
 And if we get a check on vaccine makers as well, the Trump administration is reportedly
 considering issuing an executive order on vaccines and autism as soon as next week.
 Last year, the president linked the use of Tylenol during pregnancy to autism,
 despite a lack of scientific evidence, at least based on what's out there publicly and published.
 And of course, this comes after an mRNA flu vaccine approved by the FDA yesterday,
 so you could see some mixed picture on the screen right now. We don't have many details
 or whether, even a sense of whether that actually moves forward, but that is what's being reported.
 The FAA is ordering not the flu vaccine, the other stuff. The FAA is ordering the inspections of
 Boeing 737 MAX jets for cracks that could affect the structural integrity of the planes.
 The directive will take effect on September 10th, will impact an estimated 471 jets
 that operate in the U.S. Boeing shares are basically flat right now.
 And let's see how Europe and Asia are closing out their week. Elaine Yu is with us from Hong Kong
 and Ben Boulos is standing by in London. Elaine, let's kick this off with you.
 Good morning, Morgan. So the sentiments in Asia are still fragile over the AI trade.
 While the U.S. jobs report due today is being closely watched for implications for the
 Federal Reserve's next moves. Now in South Korea, the cost be ended 0.6 percent lower.
 Samsung did e-cal at 0.2 percent gain, but SK high-necks fell 4.9 percent. And SK high-necks today
 said it'll spend $38 billion on expanding its chip-making facilities in South Korea.
 And of course, the current memory supercycle is being driven by tight demand,
 tight supply and over demand. So any major capacity increase will raise questions about how long
 its pricing power is going to last. Now in Japan, AI concerns are also outweighing broader gains.
 The Nikkei is down 0.12 percent and the chip-related Tokyo Electron,
 Advances and Kyoksa down about 1.5 to more than 2 percent. And SoftBang is also down 2.5 percent
 after posting a quarterly profit drop as we talked about yesterday, although that was smaller than
 expected. Now in China, better than expected, exports have lived sentiment. So the CSI 300
 and the Shanghai Compositor both up roughly 1 percent. And this export boom is still being driven
 by the global AI infrastructure demand that's driving need for these high-tech exports. And I do
 want to point out that exports to the US climbed 17 percent in July. And imports from the US
 are up 15 percent. So companies may be rushing shipments before the current trade deal expires in
 November back to you. All right, we'll continue to track that. Also worth noting that we've seen
 AI token prices globally continue to collapse here perhaps in part because of what we've seen
 with those costs coming down in China. Elaine, you have a great weekend. Thank you so much
 for staying late to join us. Let's get to the early action in Europe and our Ben Boulos as well.
 Hi Ben.
 Hi Timurgan, yeah, European equities. Well, the wretching higher in early trade,
 the stock 600, the pan-European index pacing for its eight positive week in nine. Now,
 investor attention this morning on developments in the Middle East with that draft
 deraillian proposal for the trade form moves reportedly looking to block the transit of US and
 Israeli ships through the waterway. Cooperate earnings also in focus with a flurry of results
 throughout the morning to wrap up what to what it mildly has been a rather busy week. This is
 the picture across the main European forces. You can see it is the German index leading the way
 higher about two thirds of one percent. The others all in modestly positive territory. The best
 performing sector at the moment as a speak is the tech basket of stocks, which is up around about
 two percent. So shrugging off those worries that Elaine was talking about that we saw in the
 Asian trading session. Here we are tracking shares of Daimler truck which are under pressure
 in early trade. The company actually raised its full-year guidance amid an improved outlook for
 trucks in North America, but adjusted EBIT fell by nearly a fifth to 883 million euros,
 helping push earnings per share down by nearly half to just 15 cents. Morgan, have a great weekend.
 All right, you too. Thank you Ben. Ben Bula is joining us from London. Let's turn back to
 the Middle East now and a developing story as we watch the price of oil. This amid a Houthi rebel
 attack on Saudi Arabia, which officials say wounded 11 civilians, the strike coming just hours
 after the Houthis that launched a major missile and drone attack on the Yemen military,
 killing at least 30 soldiers and an attack earlier this week on two Saudi oil tankers in the
 Red Sea. This is the most serious deterioration in the Saudi Houthi confrontation since that relative
 calm that followed that 2022 truce. If you recall back to that, casualties inside Saudi Arabia,
 attacks on shipping lanes, threats to energy infrastructure also mean the risk premium
 is back heading into another weekend. So we continue to track that and for more insights in
 terms of what investors need to understand and watch around all of this as Emerita Sen,
 Director of Market Intelligence at Energy Aspects and Emerita, it's great to have you back on the show.
 I think we do need to start right there because a lot of uncertainty and questions about any
 potential deal that's coming together for transit-industrative for moves here and of course heightened
 tensions and signs of conflict in the Red Sea too. Yeah absolutely and look the challenge
 though we have in this market is that if you remember, we were trading above $90, right? And when
 these headlines started coming out of an imminent deal, apparently first by Tuesday, then Wednesday,
 then definitely by today, we went down all the way, Brent touched seven handle, but now that we
 are back above because there's signs of complications again, we haven't retraced all the losses,
 right? And this is a sign I continue to see in this market where we sell off more on any prospect of
 kind of normal, I mean normalization I say but whatever the new normal looks like in
 hormones versus the reality of actual flows being quite constrained doesn't get priced in that high,
 right? So we've got this asymmetric price response and like you also mentioned, we are seeing more
 houthi attacks on kind of Saudi infrastructure and we have to remember that Saudi Arabia has really been
 the main source of stability of alternative supplies even when hormones flows were disrupted and
 yes, UA is managed to get some diverted flows out, but if we are talking about disrupting that
 kind of 4 million barrels per day of crude flows, that is a significant tightening of balances,
 but the market is so burnt skates from all these kind of headlines that keep coming out that in
 particularly going into a weekend, traders don't want to hold long positions.
 It's so critical here, I was having a conversation with an energy trader about this last week where
 they were that's exactly what they said that folks have just been burned by this and all of
 volatility we've seen this market, you know since this war started a number of months ago and
 so many people are just not positioning or they're sitting on their hands here. That said in terms of
 I guess I'll call the fundamental picture here, I mean, inventories are so depleted and not
 just in that region either, even the SPR releases are starting to slow down, I think you note that
 in your notes, so longer term, how does this how does this play out, even if the biases to the
 downside? I'd say look, as you say this time around it looks very different, we on our latest kind
 of high frequency stocks numbers that we've got from caros, 400 million barrels have drawn since
 the war started in crude alone. SPR rates are absolutely slowing down because it's just naturally right
 when you have depleted the caverns to a point that they slow down and now we are you know around
 five to four hundred thousand barrels per day of flow rates instead of over a million barrels per day
 from the US itself. The biggest change we are starting to see is China. China single-handedly
 balances market right and in March April may they cut back on imports and now we've just had the
 July numbers, the July numbers are coming in stronger. August is looking like imports could be back
 above nine million barrels per day. We are starting to see more Chinese runs, we've seen them destalk
 a lot, so they had to come back and buy at some point to start running. These are all factors which
 means crude can't stay down forever. That said, I still think you know the US administration,
 governments around the world do want to keep prices down, so that's also why we've continued to see
 product prices do the work, right? Diesel, gasoline, those cracks have been at record high levels and
 that's where the price has been hundred and sixty hundred and eighty dollars and maybe that stays
 still because ultimately you do need demand to come off to balance this market but the crude setup
 this time is more bullish on a fundamental basis. Okay, and certainly we've been seeing that
 translate here in earnings season with the energy stocks and the refiners in particular.
 And we're going to send great to get your insights, appreciate it, have a great weekend.
 We've got a lot more to come here, I'm warning you all. You're too food-ing.
 Terror-free funds and what's turning out to be a big bottom line boost this earning season.
 Plus SpaceX defies gravity after its first lock up tranche expires and we dig into what's next
 for the stock that's quickly becoming a retail darling, like they get husband even before I went
 public. And later, big results and big moves from names that you know. We're breaking down
 the latest free market moves ahead and we've got a very busy hour. One more in call return.
 Welcome back to The Answer is Bimo. I'm on the board is yours. I'll take Bimo for 300.
 You'll find no monthly fees on a savings amplifier account from this helpful bank.
 What is Bimo? I'll try Bimo for 500. Competitive interest rates are just another way this bank
 helps your savings go further. My gut says Bimo. Bimo is correct. Wow, this game is really easy.
 You can say that again. Terms and conditions apply. Visit bmo.com slash cash. Good night, everyone.
 Welcome back. It has been a gangbusters earning season so far with roughly 80% of S&P 500 companies.
 Q2 results now in earnings growth now sits at just about 50%. That's right, 50%. Double to 24% growth
 that was expected before the season started. Gains and AI-related investments open AI and
 philanthropic in the case of alphabet SpaceX. Those significantly propping up profits for some
 of the mega caps, but there is another factor that is quietly inflating numbers as well. Terra
 free funds, which topped $100 billion earlier this week. Now, as Biavais,
 a severe supermanium writes from March through June, 10% of S&P companies mentioned applying for
 IEPA Terra free funds, mostly in consumer industrial sectors. Well, some recognize the benefit
 and Q1, the majority did not include refunds in their guidance. Now, it's showing up.
 Last week, Apple's EPS of $2.2 per share included an 11-cent gain from Terra free funds,
 enabling a significant beat. This week, Disney's big earnings beat was largely
 propelled by 20% operating income growth from its experiences. Division think the park's
 division, but buried in the release a disclosure that it recorded $100 million in Terra free funds that
 contributed about 4 percentage points to that unit's earnings growth. So, the mouth still would
 have top estimates, but not by as much. As for elf beauty, a big earnings beat and a surge in
 gross margins involved Terra free funds, and while the company hiked guidance, it raised its EPS
 target at a far lower level than the Q2 beat would have implied. In other words, tariffs,
 rather than growth, helped fuel that new forecast. That was the reason perhaps that shares of
 the beauty company sold off so much yesterday. Well, RBC has been tracking refunds too,
 across many companies, including Stanley Black and Decker, GE Healthcare, Amazon Ford, and
 a quite a number of others. At CBC's Markets Maven, Robert Hum points out it's impossible to know
 if or how much analysts had been incorporating Terra free funds into their estimates, but what is
 clearly evident now is the modest boost to some company's earnings this season.
 I think the way all retailers are playing at this year is we've all many of us are importers
 of record. We're able to leverage those Terra free funds to offset the freight costs we're seeing,
 and that's kind of the gain that all retailers are playing this year. Well, for more,
 joining me now here. So we have not booked the majority of the refunds. It's about $80 million
 for us. There's a little bit that came in, but that we raised our guidance even despite
 counting on Terra free funds. Big part of the raising guidance is the Terra free funds that we got,
 that everybody got the IEPA Terra free funds. That's part of it.
 Well, for more, joining me now is Doug Bonaparte, financial advisor and president at Bonafide
 Wealth here on set. It's great to have you. Good to be here. So let's start right there. I mean,
 50% earnings growth this season. We've more than doubled the expectations, and obviously that is
 propping up the broader market. Your thoughts? Yeah, fastest growth since 2021, and 85% of earnings
 look in like beats. So that's carrying the market higher, and it's broad based, right? Not just
 out of your large caps, but into the midcaps international. Investors are happy right now looking
 at their portfolios. So how does that set us up for the rest of the year if Terra free funds are
 factoring into this in a sizable way? I wonder how much that's going to catch the attention of
 investors, right? It just said it was buried in there a little bit. Are we going to see that continue
 to, you know, accelerate stocks upwards? But I really think it's our earnings story here,
 but the one thing I think everyone's looking at today is the jobs numbers. Is that going to
 reframe how the Fed is looking at? You had three governors say, hey, let's go for a hike. If it comes
 in a week, do we pull back from that and, you know, kind of dispel the rumors here of a rate hike?
 So what do you think as we go into this jobs report? Especially since we have seen this, you know,
 run back up in rates ahead of it. I mean, I think about the Google debt issuance yesterday,
 some of the data, economic data we've gotten so far this week. Yeah, so I think equity investors
 are not going to like rates going up in the near term, which is why today's job report
 seems so important, but it's a headline. We don't trade on that. Like you're talking to a financial
 advisor. People are looking at their long-term portfolios here and they're not going to make
 sudden movements because of a jobs report today. I think now is a good time to look at these
 highs and say, hey, is this, you know, more risk than I can handle moving forward? How does this
 relate to my financial plan? Probably a good time to rebalance. These are the things that I would be
 taking stock of, not necessarily what this print's going to look like. Yeah, and of course what you're
 saying right now, I think it is really critical because we're seeing such volatility in the market
 right now. And it's like, it's big moves to the upside. It's big moves to the downside. There's
 obviously a lot of leverage in the market. We've had a number of big bank CEOs who have talked about
 this this week as well and, you know, certain types of ETFs and other products and maybe
 perhaps are distorting the size of these moves. So if you are thinking about this longer term,
 when you are thinking about something like rebalancing, how are you advising your clients right now,
 where do you see the opportunities? So we use risk adjusted portfolios. We try and take a lot
 of the guesswork out of there, meaning we're looking at the right mix of asset classes to give us the
 return profile for a given level of risk, right? And we back that with financial planning. So we
 don't need to worry about headlines on the week to week or month to month. We're looking for our
 target returns to drive the goals that we need to achieve, such as their financial independence or
 sending their kids to college. And this needs to be said a lot more, thinking long-term, zooming out,
 tuning out the noise and it's perhaps the noisiest environment that we have ever experienced when it
 comes to the market. So the trick here. That's saying something. Yeah, it is. I mean, look what we have
 here in terms of social media. Look at the headlines that constantly are coming out geopolitics. You
 name it. It never stops. And that's the trick. How do we stick to our plan, stick to our portfolios,
 and do the very boring thing. Humans don't like very boring things. All right. Doug Bonaparte,
 great to have you here on set. I appreciate it. Have a good weekend. I'm just going to keep saying
 that all day. Straight ahead. I tailed to consumers when it comes to restaurant stock this
 earnings season. Take a look at the big winners and losers. That's what we're going to do on the
 other side of this break. But first, a very busy morning for big earnings movers already. Rocket
 companies. Earnings and sales coming lighter than expected despite reaching record purchase and
 re-fi market share. Some downbeat comments about the housing market in that report. Atlassian shares
 surging now. A software headwinds continue to ease. Those shares are up 29% right now. And sales
 surge 28% from a year ago. If that move holds, this would be the biggest daily gains since 2015.
 And finally, take a look at another big move in the opposite direction. Trade desk down almost
 28%. The company missed second quarter earnings and revenue expectations and forecast also missing
 estimates. Morning call. We'll be right back. Welcome back to the answer is Bimo. I'm on
 the board is yours. I'll take Bimo for 300. You'll find no monthly fees on a savings amplifier
 account from this helpful bank. What is Bimo? I'll try Bimo for 500. Competitive interest rates are
 just another way this bank helps your savings go further. My gut says Bimo. Bimo is correct. Wow,
 this game is really easy. You can say that again. Terms and conditions apply visit bimo.com slash
 cash. Good night, everyone. Bimo. We just showed some S&P winners and losers on your screen.
 Many of them tied to earnings and Akamai seeing a big pop this morning and large part due to
 cloud infrastructure demand in that partnership with Nvidia. Well, it's been a wild week for
 restaurant stocks with sharp moves on the back of earnings and differing outlooks up and down
 the price point menu. We've heard from McDonald's. We've heard from Burger King's parent company.
 We heard from others just last night. Texas Roadhouse reporting a double digit jump in revenue
 as more customers came to its restaurants. Sweet green though. Tumbling is it Warren's food safety
 scare could lead to weaker demand at salad focus chains. Let's talk about all of this,
 especially as we do await Wendy's earnings later this morning as well. Let's talk about the space
 with Greg. Frankfurt lead restaurant analyst at Guggenheim. Greg, it's great to have you on the show.
 I mean, there's a lot to talk about when it comes to the restaurant space right now. But I think
 just generally you're take away from earnings we've gotten so far, especially when you look at
 the distinction between some of these names within very specific categories, like for example,
 McDonald's versus Burger King. Yeah, I mean, the restaurant industry is always interestingly,
 it's a market share fight and so there are winners and losers, but it has felt particularly
 pronounced this earnings season, just just how much disparity there has been between the winners
 and the losers. I think to your point, McDonald's and Burger King is a great example of that.
 You have Burger King, who in the first quarter put up a 6% same for sales and the second quarter
 put up nine. They are clearly clearly doing well right now. McDonald's on the other hand,
 first quarter put up 4%, second quarter put up 1%, so so decelerating, there's clearly big movements
 in spaces like fast food and the restaurant industry in general. Okay, so and of course we're
 going to get Wendy's this morning. So I'm curious about your thoughts on that what you're watching
 there. Burger King is also owned by restaurant brands, if folks are looking for the ticker there.
 On the other hand, you've also seen trade up or commentary about trade up at some of the
 sit down restaurants like Texas Roadhouse and Outback. Yeah, I think the general theme for about
 two to three years has been a weak lower income consumer. I mean, McDonald's has been warning
 us about this for roughly the last two to two and a half years and that has continued,
 I would say maybe in the first half this year it got a little bit less bad but not good for
 lower income consumers. Casual dining I think has done a pretty good job of keeping pricing down
 the last two years and that has been the big challenge. I mean, think about it this way.
 Restaurants have dealt with basically 65% wage inflation stacked over the last 10 years
 and inflation's up 35% to 40%. And that is the fundamental challenges. We are late in a labor
 cycle and restaurants have generally tried to price it and it has been a headwind on their traffic
 generally. All right. I do want to get your thoughts on food safety issues. Specifically,
 what I will call the salad sell off, whether it is young brands and what we saw with lettuce at Taco
 Bell. Now just this week Salmonella outbreak involving jalapenos at Chipotle and Codoba.
 And it doesn't matter whether certain companies are exposed to it or not. If they have salad and
 lettuce on the menu, they're feeling the pain. Case in point, the comments we got from sweet
 green or even the sell off we saw in Dutch bros yesterday when they announced that they were
 going to buy a company that has salad. I'm not sure the Dutch bros sell had to do with that,
 but you look at what happened there and that may have accelerated the challenges that salad
 and go is dealing with. I think if you were a company that had fresh produce, usually that
 something you want to go do, it's healthy for you. But I think given these dynamics, I think you're
 seeing mid to high single digits or even 15% impacts on some of these company sales when we look at
 recent trends in some of the high frequency data we've seen. And even Taco Bell, they didn't
 necessarily quantify how much the impact was, but some of the high frequency data would suggest
 it could be 30% impacts for a couple weeks. Now that usually can be transitory. These companies work
 through this, the consumer comes back to these brands, but those are big impacts to be dealing with
 if you're one of these healthier or fresh restaurant companies. Okay, we got to go but quickly here.
 One name you could buy, what would it be? Look Dutch bros has been one that we have generally
 liked. They're opening up a lot of stores, I think actually this transaction to buy in some of
 the salad and those stores might help accelerate their store growth. And so on this softness, it
 continues to be a name that we have liked. Okay, Greg Frankfurt. Thank you. It's great to have
 you on. Appreciate it. Have a good weekend. Have a good weekend. Well, we just touched on it,
 but sweet green, cutting full your outlook as okay, we're gonna, you know what, we're
 already touched on that. So still on deck. President Trump not giving up on his fight to end
 a birthright citizenship, plus we got a new multi-million dollar fine for meta. Your latest headlines
 are coming up. One morning call returns. I'm Morgan Brennan. Welcome back to Morning Call. Let's
 get a check on US stock futures with the Dow coming off of its first down day. In six, you can see it's
 a mixed picture here this morning. S&P is poised to open up basically flat right now,
 Dow down 54 points. And now it's at up 96 points this afternoon, down day for the major averages.
 You have to keep in mind though, we're hovering just below record highs for both the Dow and the
 S&P 500. The Russell 2000 as well. We're on pace for gains for the week for all the major averages.
 Head of today's July jobs report. Let's get a check on treasuries and the action in the bond market
 right now. And you can see the 10 year US 10 year treasury yielding 4.66% right now. So down
 slightly and the fed sensitive at two year treasury yielding 4.23%. Economists are looking for 83,000
 net new jobs. Last month unemployment rate holding steady at 4.2%. Well, metals are on the move.
 With gold at its highest since mid June, we've seen a rally here for precious metals this week.
 And copper, even though it's down fractionally right now, is trading right near a fresh all-time high.
 And let's look at SpaceX shares too because what a week it has been for that company after its
 first earnings report as a public company. You could see shares are up another 2.5% right now
 pre-market after jumping more than 6% into the close yesterday. SpaceX shares falling 14% on Wednesday
 after that first earnings report as investors tried to wrap their mind around capex and spending
 levels and free cash flow. And what that's going to mean versus a very, very ambitious growth
 forecast. It rose 6% yesterday, even with a release of up to 912 million shares at the end of
 the first lockup period. Some of that pop may be the announcement, though, by SpaceX and Tesla
 about the big initial investment in the Terra Fab chip factory that they're jointly developing.
 It could also be some short covering. But while speculators have doubled down on their short
 positions into space in SpaceX, that is not deterring retail investors. So Vander research says
 SpaceX is the fourth most popular stock on Robinhood and that the shares have yet to see a day of
 net selling by individuals since the IPO. So joining me now, Erin Burnett, founder and CEO of
 Mach-33 Financial, which is invested in SpaceX and Erin is probably one of the foremost experts
 in terms of analyzing the company and the space industry and how it's converging with AI. So
 Erin, it's great to have you back on the show. There's a lot to cover here. I think let's start there.
 I do want to get your take away after we did get earnings midweek here and what you think of
 a trillion dollar revenue number as soon as 2029.
 Yeah, I mean, for us and thanks for having me on, it's great to be back. For us, it's
 it's fairly common to see these types of numbers come up and it's really not that big of a surprise
 with these big numbers. I think the biggest surprise is more the short-term guidance that was maybe
 a hundred billion ARR as leaving this year as a bigger surprise for us from like a numbers perspective.
 Yeah, I mean, as I mentioned, a lot of focus has been on CAPEX and what that means for
 free cash flow here, especially as Musk and Co are looking to deploy and ambitiously employ
 gigawatts here over the next couple of years. So I do also want to get your thoughts on this
 initial investment, joint investment between SpaceX and Tesla for TerraFab, which is the AI
 semiconductor manufacturing plants that they're going to start building out in grimes, Texas.
 We learned that yesterday. Here was the line in the SpaceX release that got my attention.
 The combined SpaceX and Tesla demand for chips is expected to be an excess of one terawatt
 of compute, which is significantly larger than the current global supply.
 Yeah, the TerraFab is an existential sort of thing once you start looking at the longer term
 needs for AI compute and what SpaceX is trying to build. If you believe and kind of do the forecasting
 that we do and see where this is headed as far as orbital data centers as far as even the ground
 compute and things like Optimus and all that, it's existential to have this kind of compute capability
 for in robots in robot axes and ultimately in orbit, even the scale here is just phenomenal.
 And so TerraFab has been something we've been watching closely. It can't come soon enough.
 I think it's going to be a big project. It's going to be very big for Texas. I would assume,
 yeah, it's a very exciting time and I think it's very important.
 Yeah, so in light of all of this, there are folks that have been longtime investors in Tesla
 that have been skeptical because Elon Musk will put out very aggressive forecasts. He typically
 hits them, but not within the timeframe that he says, at least on the Tesla side.
 How should investors understand what this looks like and these timelines could mean on the SpaceX side?
 Yeah, you always have to take things with a grain of salt when you're trying to figure out timelines.
 It's hard. There's internal goals that are trying to be hit and trying to be achieved.
 And then there's things that happen. And that's just the nature of the way Elon pushes his
 internal team and and folks outside to try and do more in a shorter amount of time than anyone
 thought was humanly possible. So when you take that into account, there's going to be some slippage
 and there always is. I think one of the core things we look at is we model kind of over a 10
 year or 15 year kind of timeframe and the big thing there is Starship launches. And that's one
 of the big numbers that they're trying to hit is these one hour a day Starship launch.
 We suggest that even if that takes 10 years longer than Elon thinks that the numbers are
 truly still quite staggering. So we literally bake in a 10 year delay into our numbers.
 And I think that's a very reasonable thing to do. I think it's a very conservative thing to do.
 But it's also one way of thinking about, okay, hey, stacking delays can happen. And what happens
 if that does happen? And even then you're talking tens of trillions in value for the company
 into the 2030s. Yeah, so we're having this conversation amid that first tranche of stock, insider stock
 unlocking here, the lock up expiration that we covered all day on CMBC yesterday and that I think
 investors are watching. It's been an overhang on the stock. As the flow gets larger, the argument
 can be made that it gets easier for SpaceX to merge with Tesla continues to be speculation here.
 Want to get your thoughts on it? You know, the Tesla merger conversation is always one that
 gets brought up all the time, but you know, I don't really know that we have to see what's the kind of
 the, you know, situation on the field when and if that does get brought forward from a technical
 and strategic perspective, I think it all makes sense to line these things up.
 You're talking about human, humanoid robots and SpaceX kind of build hand in hand. I mean,
 it's just a match made in heaven. Optimus on the moon and Optimus on Mars long term just
 totally makes sense. So it's not required for this thing to work. It's not required for these
 they can work closely together with these partnerships, of course, but you know, if that merger was
 submitted, I would not be against that in any way. Okay. Yeah, colonization on Mars is probably
 going to require all these technologies plus boring plus neural ink. That's a whole other
 conversation we could probably spend an hour having. Aaron Burnett, it's great to have you back
 on the show. Thank you. A lot more to come. A lot more to come here. I'm warning call including
 OpenAI reportedly looking to take on Google and Amazon for space on your kitchen counter.
 But first, another big batch of earnings movers, we're not done. Twilio popping on an update outlook
 for the current quarter and full year. See those shares are about 16.5%. Instacard also tapping
 street estimates with its most recent quarter. Company says orders increase 9% year rear total
 revenue jumped 14%. People keep ordering delivery shares are 12%. And cybersecurity giant
 cloud flare also surging on solid full year and current quarter guidance. Cyber security
 demand is not going anywhere but up shares are up for cloud flare 15%. We're right back.
 Welcome back. We're checking some of the morning's latest headlines. The governor of Virginia says
 she will intervene in next era's acquisition of dominion energy over fears of higher energy
 prices, higher power prices. The merger would create the largest regulated utility in the world.
 Dominion is also responsible for the largest data center market in the world in northern
 Virginia. And President Trump just signed two executive orders aimed at cracking down on
 birthright citizenship, including denying citizenship to children of foreign enemies, terrorists
 and lobbyists, also defining birth tourism as fraud. Well, this after the White House late yesterday
 imposed a series of price floors and a 15% tariff on a key raw material that's used in chips and
 solar panels that is primarily produced in China. And the judge in Mexico is ordering meta platforms
 to pay in New Mexico to pay $567 million after a jury ruled that the company willfully violated
 the state's unfair practices act, saying the company, quote, contributing to the current mental
 health crisis among New Mexico's youth. Meta noted in its second quarter filing that the New
 Mexico attorney general has indicated that they intend to seek up to $62.85 billion in penalties
 in the case. Well, opening eyes highly awaited first consumer device will be the size of hockey
 puck likely cost more than $300 Bloomberg reporting the product which is expected to launch next year
 is essentially a smart speaker without a display with the aim of being easy to carry around in
 your hand. It will have features such as speaker grills, microphones and lights to show when it's
 listening straight ahead. The morning call crew team up the trading day ahead why one member says
 it looks like the surprise at summer rally is back. Welcome back it's time for your call sheet
 where we look at the topics driving the trading day ahead crew members today Ray Wong principal
 analyst founder and chairman of conservation research CBC contributor and Carson Group Chief
 Marcus strategist Ryan D. Trek and with me right here on set is Gina Martin Adams Chief
 Marcus strategist at HB wealth which was by the way just named to CBC's elite advisors list
 this year so to check out that full list by the way please visit cmbc.com slash elite advisors
 all right it's great to have you all here Gina I'm going to kick this off with you are elite
 advisor okay let's start with jobs what are you watching this morning I think the most important
 thing to watch is the unemployment rate we know the job growth is relatively slow about half the
 pace of the pre pandemic average but the unemployment rate has been extremely low as labor force growth
 has been very slow so the Fed in particular is going to be watching that unemployment rate as well
 as wage growth if we see the unemployment rate remaining low wage growth accelerating the Fed is
 probably still under the gun to potentially tighten later this year yeah I actually thought
 it was very interesting Ryan to hear Brian Moynihan CEO of Bank of America on our air doubling down
 on his teams three rate hikes before the end of this year forecast as well so I do want to get your
 thoughts on the labor market situation here especially as we have seen a run up in rates and
 calcium 30% of folks on calcium you're saying that we could see a number that comes in above 80,000
 today well first off good morning thanks for me bad and we're in that camp I mean we've been
 earlier this year as come on with you say and listen the labor market under their services
 better than people think and our last three months we've averaged a hundred and ten thousand jobs
 yes all of last year we had 120 the entire year so it's only things are perfect
 but the labor market is improving I mean the jolt nut data we saw it it's the same as always been
 low higher but low fire in initial claims or low so I think we'll probably have a pretty solid
 number I know we talk all day on this we'll make it quick maybe one place carcer groups different
 we do not see a hike the rest of this year yes inflation is broadening out it's still around
 three three and a percent but we think the Fed's going to run it hot that's a theme we've had for a
 while and I think the market's pretty comfortable with that honestly all right some like it hot
 right want to get your thoughts on all of this well I'm looking for us to see if there's
 job growth in that eighty thousand it's beyond health care and at travel and leisure I think it's
 going to be important I think what we're also looking for is to see if manufacturing jobs are
 picking up given all the manufacturing investment that's in play and of course I agree I think that
 we're not going to see it hot until the end of next year and even then I think Besson's going to
 try to run the run the table and see how long you can keep this going with low interest rates
 all right yeah and by the way welcome to the call group good to have you on this morning
 let's talk earnings Gina 50 percent growth in EPS we just talked about it earlier on the show
 I mean there's a little bit of distortion there some mega caps that hold companies that are done
 well in the private markets and are gone public in the case alphabet with SpaceX but also
 tariff refunds are part of the picture here too in general though you strip those away it's still
 really solid report how does it set us up looking across the different sectors you know the
 unfortunate thing is it sets us up with perfect earnings which means going forward how are we
 going to compare to the earnings growth rates that's the only problem it's a very high class problem
 is we have extraordinary earnings growth at the moment we're going to continue to have very strong
 earnings growth in a third and fourth quarter but the comparisons are going to be incredibly hard
 going into 2027 and that's something the market is going to have to absorb this is in particular
 very important for the tech space this is one of the reasons why tech has struggled uh in the month
 of July in particular great earnings very strong spending but probably peak growth rates and those
 growth rates are going to slow now at the same time the rest of the S&P 500 is actually showing some
 accelerating earnings growth so outside of the technology sector you finally have full participation
 in the earnings growth recovery emerging so it really is about a two speed kind of cadence
 inside the index itself which is creating a lot of rotation underneath the surface but generally
 improving breadth improving performance especially outside a tech and outside of those gross
 names we're seeing a real value trade starting to emerge this year yeah okay I see both of you
 both of the gentlemen here on this on this crew are nodding their heads Ryan I'm going to go to you
 first just also because tech sector forward PE ratio near its lowest level the year below the 10
 year average too now well that's right I was going to point that out I mean yes earnings
 are up a lot but again market's actually cheaper now than it was at the start of the year you know I
 think it's important and I agree with Gina you know 100% on this broadening out theme you'll talk
 technicals for a second we're hitting new highs and advanced the climb lines across the board
 this week market breadth leads price we would say that for a couple months market had a huge rally for
 six you know up 16% in April and May virtually goes sideways the S&P 500 for eight weeks as the
 baton was passed around and now we're back I think to your regularly scheduled bull market but to
 get to the specific question it's broadening out I mean we're broadening out it's not just about
 tech anymore not just about communication services I mean bank started this off with some incredible
 news and it is just continued through today so I agree the high bars there but there's other areas
 that are still cheap and growing and it's not just about tech anymore yeah into your point I mean
 we're bucking some of the seasonality trends here to start the month of August okay Ray I have to
 have you weigh in on all this especially as we see some of the high flyers this morning on the
 earning side actually software names yeah we're definitely going to see that rotation out of hardware
 what we're seeing on the chip side it's because software P ratios are really low we're sitting at 23
 24 which is really low we're also at but we've seen the bottom in terms of the 12 month lows
 now that's been going on with software at least double digit growth and software we're seeing
 amazing it's rule of 50 rule of 60 you look at service now you look at what's going on sales force you
 look at workday Adobe these are companies that have been battered on the stock side and now we're seeing
 some growth and their numbers are good the forecasts are good but more importantly these are
 companies that aren't necessary investing in heavy catbacks on chips and I think the market's coming
 around yeah by the way pound here rule 40 was 155 rule of 155 to your point okay quickly I want
 to get your thoughts Ray on SpaceX when free cash flow isn't focused for some of these big mega
 caps right now spending numbers and we have a lockup here that is expiring the first tranche of
 a lockup that's expiring some traders telling me that maybe perhaps we're not going to see some of
 these potential block trades hit the market until later today or maybe early next week
 I've said this for a while I think SpaceX is kind of like the way Facebook operated in their
 IPO you can see dips below the IPO price along the way as different tranches are there it's a good
 buy at 105 to 110 it's probably what we're going to see people come through but I think the
 important thing is you're betting on SpaceX for the long term it's not a short term growth story
 this is a company that's really going to be talking about the future of our industries everything
 from space exploration to telecommunications to AI to even how we look at manufacturing okay
 I do want to get your thoughts June as we go into a weekend we've got tensions that have
 ratcheted up or I guess we'll say more questions here than answers again where Middle East conflict
 is concerned yeah it does look like it's going to continue to contribute volatility into the equity
 market but it's below the surface volatility in the form of energy and materials stocks with 10
 which tend to break out with commodity price rises on the conflict news and then sell off as
 soon as we get some sort of peace sort of emerging or some sort of sign of peace emerging so it
 really is a contributor of volatility as opposed to an overall driver of performance trends in the
 equity market right now I'm watching commodity prices at large though we did have a sneaky little
 rise and gold over the course of the last couple of weeks that's feeding through into improving
 performance for materials stocks so I do think you want to keep a close eye on what's going on in
 the commodity complex beyond simply the war in Iran and think about commodity set large yeah
 I'm going to start the week with dollar yen and focus Ryan and we've seen the dollar soft
 in this week after you know U.S. intervention in in Japan's you know currency here
 June has just mentioned what we've seen in precious metals and gold specifically copper though
 also all time high yes doctor copper right he is a PhD in the economy global economy you see
 those new highs and I wanted to talk about the dollar and they were probably near the end so
 make this quick you know dollars lower last week it had that surprise move lower after the Fed
 if the world is falling apart like they were telling us on Fed day you know two Wednesdays ago the
 dollar we're going higher in our opinion so a lower trending dollar finer resistance out of 100
 is a positive development really for risk assets and one more quick one we like commodities we've
 been overweight commodities all year a higher inflationary growth environment we didn't see a recession
 but higher inflation it makes sense to diversify kind of that 40 percent buck at 60 40 40 percent bonds
 have some hard assets have some managed futures have some commodities in that so we've done
 obviously done better than bonds in general okay with that thank you to our call crew
 have a great weekend wonderful to have you all here we touched on a lot