Morning Call 8/20/26

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 I'm working brand-in. This is your morning call.
 Good Thursday morning. Let's get a check on US stock futures after all three indices
 snapped three day losing streak yesterday to finish higher, although well off session highs
 yesterday. You can see pre-market here that futures are poised open lower again. S&P down 12 points,
 Dow poised open down 105 points in the NASDAQ about 19 points. So basically just fractionally
 lower here today. Breath was very strong yesterday and also the equate S&P 500 outperformed.
 So turning to treasuries and that surprise move that we saw by the Treasury Department
 to increase the size of government debt repurchases to quote at least double altering its
 tentative buyback schedule that was released just two weeks ago targeting longer-dated debt here.
 You can see we're moving a bit higher here across the curve. 10-year US 10-year
 treasury yielding 4.67 percent and the third year which has been such an area of focus
 after hitting a 19-year high earlier this week has creeped a bit higher here although off the
 highs that we saw ahead of that Treasury announcement. We're at 5.22 percent right now.
 Fed-sensitive two-year is a bit lower 4.17 percent. We've got to look at the ripple effects
 around that announcement. So you got the dollar hovering around three month lows here. If we
 could pull that chart up dollar index 98-68 is the level there this morning and let's get a
 check on precious metals because gold moved higher yesterday it's actually hovering near its highest
 level since late May now and you can see basically flat here this morning 4545 dollars in
 ounce right now. Silver's up about 1.5 percent platinum slightly lower as in the meantime though.
 Let's get a look at Bitcoin rebounding above the 70,000 mark yesterday. I was a huge move higher
 up about 8 percent in part around that Treasury action. President Trump also urging Congress to
 pass the clarity act yesterday. You see the massive spike yesterday for Bitcoin worth noting here
 that you did see the biggest wave of short liquidations on record going back to 2021 in Bitcoin.
 A lot of folks were positioned short and the move higher yesterday was exacerbated by that dynamic
 but if you see for the year though Bitcoin is still down just under 20 percent we're going to have
 more on crypto and all of this because this is very much a macro story in just a moment.
 We got to check on energy as well because President Trump saying the U.S. will launch what he calls
 quote the most crushing economic operation ever taken against any country that will be against
 Iran. He's calling economic D day essentially. This comes after a huge blow to Iran's economy
 this week when the UAE announced that it is suspending financial and economic transactions with
 Tehran. UAE is really one of those key partners other than China when it comes to Iran. So a big
 move there and you could see crude is higher this morning. WTI is up 2 percent trading around $87.65
 in barrel. Brent is also up more than 2 percent trading around $93.60 of barrel. Let's see how Europe
 and Asia are faring. J.P. Long is in Singapore. Cedric is in London and J.P. let's start this with you.
 Good morning or again we're calling it Operation Twist the Scott Besson Remix idea. It's got all the
 traders up and moving so far in Asia throughout Thursday and also giving a lot of these bond yields
 that we tracked yesterday room to actually ease. In fact the Japanese 10 year bond yield there
 could you to put a little bit more distance between itself and that 3 percent mark that last hit
 about 30 years ago. Of course these easing bond yields also helping equity and stocks across the
 region you can see in not a bad session in greater China whether you're in Hong Kong or in Shanghai.
 In Japanese markets also getting a boost of confidence when exports in July proved stronger than
 expected up by 23 percent thanks to that weaker yen. It also outsized demand for semiconductor
 materials of which Japan is an outsized exporter at a big player in across that very critical
 global supply chain. Now as well as the Nikkei 2.5 did today it did not do as well as the
 Cospi which was on Wednesdays again they'll run away later. Once again surprise surprise another
 side car triggered its soul this time thanks to a lot of these upside enthusiasm and that's what
 happens when the other membership giant Samsung actually joins SK Heinix and announces a 72 billion
 dollar share buyback program that really boosts their stock and also SK Heinix also long for the ride
 really pushing the the the the the sold benchmark up but again raising some of these questions
 about concentration risk. I do want to end by taking a look at the property stocks in
 Hong Kong today because there was a momentous occasion in today's session. We had Huikai Yang
 the founder of Evergun unfortunately it's convicted to a life imprisonment because of charges
 are related to embezzlement bribery. It also inflating sales to the tune about 71 billion dollars
 to put into context Morgan we have to remember they once had liabilities the size of 300 billion
 dollars which is bigger than the GDP of many countries out here in Asia. It also also underscores
 just all the questions and all the worries that emanated from the Chinese property sector over the
 last couple years. Will this be the end of it? Will this actually indicate a bottom only time will
 tell but definitely a momentous occasion for who was once one of Asia's richest individuals.
 Back to you Morgan. Well latest chapter in a story that's been playing out over a number of
 years now J.P. Hong thank you. Well let's see how Europe and Asia see how Europe is shaping up. We
 just heard about Asia Steve Sedgwick is in London with early trading Steve.
 Hey Morgan good to see you. Yeah European markets largely under pressure as well. Not that much
 to the downside. The early trade with investor sentiment just a little bit muted at the moment.
 Trade is closely watching of course everything that the president is saying Donald Trump's
 announcement of economic warfare on Iran and warnings of tremendous consequences for any country
 helping to Iran evade sanctions. That is gathering a lot of attention here. Now the high
 crew prices lifting oil and gas stocks in early trade but by and large the direction of travel
 is to the downside so far. Another area firmly in focus of course for the investors. The European
 bond markets as well bond yields around the world starting to pull back after the US Treasury of
 course stepped in to try and stem some of the sell off in those treasuries announcing as you were
 saying at least double the size of its liquidity support by back operations for those 10 to 30
 year bonds but the European arena. Well this is where we are on the GILTS the UK listed paper 5.064
 the Italian 10-year paper trading at a big discount to the pound big bonds of the GILTS which
 historically quite rare 4.08 and the benchmark boons trading at 3.26 Morgan.
 All right Steve Sedgwick thank you. Let's turn back to this rebound we've seen in crypto
 specifically Bitcoin Spring and Linn Alden founder of Linn Alden investment strategy. Linn it's great
 to have you back in the show we're going to start there but you are such a macro investing voice
 there's a lot to get to here so before we actually do get to Bitcoin I do want to get your reaction
 to what as J.P. Young just called it Operation Twist Bessent Remix. Should we bring to this
 is Operation Twist I mean I've heard such extremes is yield curve control quantitative using
 but I've also heard you know assessments from Wall Street that really this is just largely symbolic
 I think it leans more symbolic but symbols have power in the markets it shows the intention
 of where they want to go you know it's not the same as QE this is not the Fed creating new
 basemented by bonds but it is the treasury basically giving support to its longer duration
 securities off the market securities by being willing to issue more teabills and buy back some
 of their long duration debt which which does have some twist elements to it it provides liquidity
 and support to that long end and signals basically that they that they're uncomfortable with current
 yields it's an interesting action to be taken given that the yield curve is still not that steep
 but overall you know that I think that the administration is not broadly happy with how high yields are
 both in the short end and the long end and and they're taking action here which which I think
 is giving a positive signal for hard money is you know gold Bitcoin other assets yeah and of course
 the timing cannot be denied tonight either when you have US government debts are passing 40 trillion
 dollar mark earlier this week for the first time ever I realize that that doesn't necessarily change
 the dynamic versus say 39.9 trillion dollars but it it's a big number it's a round number it's an
 emotional number and we're less than two and a half months away from midterm election so what does
 this mean for some of the other asset classes including by the way the dollar which we've seen
 we can note it notably in the last 24 hours yeah so historically when a country gets this
 indebted various financial repression techniques are used but the most extreme being like hard
 yield curve control these are these are softer methods in a general they try to inflate the value of
 other assets relative to the current and relative to bonds I think that's what we're seeing here
 you know the treasures other action in recent weeks was supporting the yen I think the
 administration is fine with a weaker dollar you know it actually kind of benefits their you know
 kind of trade goals longer term even though it does put pressure on inflation potentially
 depending on how is it how weak the dollar gets but basically a lot of these actions just just
 you know basically throw the currents into the bus to protect the value of other assets
 and to prevent the yield curve getting too steep and these are pretty kind of classic actions
 when a country becomes this indebted so what does all of this mean for bitcoin and the move
 higher we saw the violent move higher we saw yesterday a mid-force liquidation in a short squeeze
 yes a bitcoin I mean the sentiment has been very low the fast money has long since moved out
 toward AI names and as we saw I mean even a fairly small move in price and in bitcoin terms
 caused that kind of record liquidations which shows just how bearish that the sentiment in
 positioning was I think that you know while we could this could be another false break I mean
 may you know we saw higher numbers and we we rolled back over to slightly lower lows than we
 saw in February so I don't think bitcoin's out of the woods yet but I do think that by by almost
 every metric bitcoin is near the low end of its valuation and sentiment range fast money's washed
 out strategy already kind of recapitized this dollar position so it kind of took that overhang
 of potential kind of further selling off the market for a while there's really not a lot of
 downside catalyst for bitcoin left and even relatively small upside gained at this point can
 attract new types of buyers once people see that the chart doesn't look bad anymore you can get
 technical traders coming back in if you get further momentum you know say months from now you
 could get more momentum traders back in so I think you know with the with a multi- your time frame
 bitcoin is is positioned here both just fundamentally from where money has gone but also from
 the dynamics we just talked about basically that they're going to do some version of financial
 oppression between the treasure and the fed you know potentially alternating and the ultimate
 beneficiary of that is is part assets that are under owned in terms of what could trigger some of
 those upside gains at least in the nearer term for but or maybe even in the longer term for bitcoin
 I mean should we be talking about the re-emergence here then I've say a debatement trade especially when
 you see gold for example now surpassing US treasuries as the world's largest central bank reserve asset
 I think long-term yeah I think some of these trades got ahead of themselves I mean last year
 you know gold had that two year very strong wrong the culminated at over 5,000 bitcoin briefly got
 over 125,000 strategy was trading it you know three times you know it's an asset value
 and so the things were heated and I think that the correction was warranted across the number of
 these assets but I think the long-term store remains in place that you know when it when a country
 gets this indebted there's various techniques to basically gradually try to inflate away the bonds
 that that currency itself is generally what takes the hit and if you own scarce assets whether it's
 high quality equities or you know hard money's in this case as long as they are not too over-owned or
 over-bought at the time they tend to be beneficiaries and right now I think bitcoin's kind of near
 the bottom end of its cyclical range which I think you know looking back two three years from now
 what we've seen is having been a good buying opportunity so in light of all that what are you buying
 right now what would you be buying right now I think bitcoin is attracted by here I think you know
 strategy in the which basically levered bitcoin is a riskier but but still interesting long-term buy
 here I think the you know the equal weight e t sbf hundred is still interesting from multi-year
 perspective yeah I don't think it's I don't think it's particularly overvalued I'm still bullish
 on global equities a lot of American equities I think there's a lot of things out there to buy as
 long as you avoid the the frothiest areas all right Lynn Alden great to have you on and start the
 hour with you appreciate it thank you we're going to hear more about all things crypto and coin
 base the O'Brien Armstrong joins guac box a bit later this morning that's at 840 a.m. eastern
 in the meantime though you're going to hear a lot more here on morning call
 bed chairman warsch feeling the heat from president trump when it comes to rates we've got
 those details on the president's latest central bank comments plus a new partnership in tech to tackle
 growing risks from cyber threats the CEO of n t t data is standing by about his partnership
 with palo alto and later the next big test for space x that's amid the ongoing rebound we've
 seen in the stock a very busy hour still ahead when morning call return the chicken parmy burger
 make extreme pulled pork garlic and black pepper chicken McNuggets cheesy bacon Mcflavor fries
 and the street waffle Mcflurry you've scrolled them you've screen shoted them you've never been
 able to order them until now this is the McDonald's world menu heist the most wanted menu items
 taken from around the world now in Canada get them while you can for a limited time only
 ever to spend McDonald's restaurants in Canada football is back every game every weekend
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 Ford has been lucky enough to spend more than a century with you and if there's one thing we've
 witnessed it's this there's no can't in Canada ready set Ford
 welcome back to morning call companies and countries world wider grappling with a whole host
 of cyber threats with more tax now being driven by autonomous a i agents the cost of all the global
 cyber crimes has now topped ten and a half trillion dollars a year you heard that right with a tea
 last week i spoke exclusively with booze Allen a CEO Horacio Rizanski about how the cyber landscape is
 changing what's really interesting about it is the techniques that defeat an AI attacker
 will not defeat a human attacker and vice versa so we have to layer both the the the old thread
 you talk about expanding as opposed to evolving the old thread has not gone away
 fishing is still here and it happens to the best of us but but we now need to layer the
 fences against the new thread and the ones that are coming after this one well today palo
 alto networks and japan's nct data are announcing a multi-year partnership combining palo
 alto cyber security platform and threat intelligence with nct's consulting and engineering services
 to help large companies modernize their infrastructure and securely adopt AI so joining me now an
 exclusive interview is nct data's a global CEO abajit dubey abajit it's great to have you on the
 show um let's start right there what does it's what does this partnership entail
 well thank you for having me you know the frontier AI effectively has changed the cyber security
 equation on the one hand the attacks have become exponentially more sophisticated the surface area
 has increased and the speed has increased exponentially so when you have attacks that are operating
 on machine speed you cannot have defense that is human speed on the other hand I think companies
 have realized that to get economic value from AI deployments they have to deploy it in that core
 operations processes and as agents therefore become more autonomous there are legitimate concerns
 and challenges around how do you ensure governance identity access privilege what agents can and
 cannot do and that's slowing down the adoption so this whole partnership is sort of the next generation
 of our partnership with palo alto where we are massively accelerating both the AI for security where
 we help our clients move from reactive defense to proactive cyber resilience that is business
 as well as security for AI where we are effectively building the confidence layer to accelerate
 the adoption of AI yeah I want to go into that a little bit more because I mean we've been hearing
 the reports we've been seeing the disclosures it's almost become in a weird way a bragging right
 and Silicon Valley bots escaping sandboxes are you know basically taking on a life of their own
 and you know engaging in in processes or activities that they weren't programmed to do so in terms of
 that internal threat or risk I guess I should call it for companies that are adopting AI and what
 it means for their own data and their own processes how are you navigating that how are you
 counseling those companies that are that are making these adoptions yeah I think what are fundamental
 counselors that you have to do it securely from the beginning so it has to be secure and trusted
 so every time you build an agent you deploy an agent it has to be governed the identity has to
 be governed what systems and privileges that agent has what data it can access and how do you
 manage the entire life cycle of that agent just like you would do human employees everything from
 the recruiting to the onboarding to the exit of an employee you have to do the exact same thing
 for agents in an enterprise landscape you mentioned speed you also mentioned surface area
 I mean I just go back to the the sound that we played from Booz Allen's CEO from my conversation
 exclusive conversation with him last week we talk about surface area and the expansion of that what
 does that entail well right now most cybersecurity postures and enterprises effectively are vulnerability
 detection oriented so I look at where are my vulnerabilities and I go Patrick or I fix it in the
 future and actually it's happening right now it's all about exploitation driven so what are
 attackers going to exploit and that could be anything in your environment and that massively
 accelerates the surface area and that's why you have to respond in your defense with AI just like
 the attackers are attacking with AI okay I have a jeet du Bay it's great to have you on the show
 appreciate it CEO of NTT data keep us updated as we'll just continue to evolve thank you as we had
 to break a check on shares of Moderna which are pulling back a bit today down about 10% here
 pre-market but 10% is nothing compared to the massive surge that we saw yesterday with the stock
 closing up nearly 200% that was after Moderna and Merck announced positive results from a late-stage
 trial of an experimental vaccine experimental M&R M-R-N-A vaccine to treat melanoma morning call we'll be
 right back the chicken parmy burger make extreme pulled pork garlic and black pepper chicken McNuggets
 cheesy bacon Mcflavor fries and the strew waffle Mcflurry you've scrolled them you've screen shoted
 you've never been able to order them until now this is the McDonald's world menu heist the most
 wanted menu items taken from around the world now in Canada get them while you can for a limited
 time only effort to spend McDonald's restaurants in Canada football is back every game every weekend
 drafting sportsbook has you covered every snap matters every comeback and shift the game and
 every fourth quarter moment can change everything follow the action with draft kings the number one
 sportsbook for live betting built to keep up with the speed of sports built with Canadian sports
 fans in mind draft kings brings the action together in one easy to use app follow the biggest
 matchups build your parlays and explore live betting markets as the game develops so you can focus
 on the football and enjoy the action with confidence download the draft kings app today and see what
 everyone is talking about draft kings the number one sportsbook for live betting in partnership
 with draft kings the crown is yours gambling problem called connects ontaria one eight six six five
 three one two six zero zero nineteen and over physically present in ontaria eligibility and
 restrictions apply see draft kings dot com slash sportsbook for details please play responsibly
 number one sportsbook for live betting based on available live market data
 Ford has been lucky enough to spend more than a century with you and if there's one thing we've
 witnessed it's this there's no can't in Canada ready set Ford
 welcome back for checking some of the morning's latest headlines president trump expressing his
 frustration with a federal reserve and its interest rate policy the president airing those grievances
 at the White House yesterday insisting solid economic data shouldn't stop the fed from
 adopting and adopting an easier policy stance we have interest rates that are artificial they're
 actually artificially high they raise them for no reason and you can't go out to the market when
 you have a fed that's raising entry you can't say I want to pay three points less than what the
 Fred says you're supposed to be paying so no I don't think so at all well we stick with a fed a
 group of democratic lawmakers are calling on chairman kevin wars to disclose any conversations
 he's had with president donald trump since taking over the central bank in may now this
 according to reports which say the request was made by senators chris van holland jack reed
 angela also brooks and elizabeth warren they're also seeking a written account from warsh after
 the white house and president trump gave differing accounts of recent conversations open a i mean
 times cfo giving employees an update on when the startup may make its highly anticipated public
 market debut sources telling cmbc that sarah fryer told employees during an all hands meeting
 yesterday the company quote will be a public company in 2027 but it could also debut sooner
 quote if our business continues to inflect also making some interesting comments about rival
 anthropic and the fact that they are poised to come to market in the coming weeks something
 investors will be watching for in terms of a possible prospectus well china is firing the
 latest shot in the global space race start up land space recovering the first stage of its rocket
 yesterday the chinese company joined space x and blue origin as the only private companies to land
 orbital class boosters narrowing china's gap with the u.s when it comes to reusable rockets which
 as we know drives down costs to head to go to space dramatically well still on deck some wall
 streets biggest names tapping into the growing boom around defense tech i'm going to talk to the
 ceo of castellan who's here taking the big money flowing into his firm as the u.s looks to
 diversify its weapons line up hypersonics that's what's coming up after the break morning call continues
 next i'm working red and welcome back to morning call let's get a check on us stock futures
 after all three indices snapped three day losing streaks yesterday to finish in the green albeit at
 lows of the trading session you can see it's a mixed picture here this morning smp is poised to
 open fractionally lower down about five points the down ninety seven points lower by ninety seven
 points the nasak has actually turned positive here in the last little while poised to open up
 thirty six points so fractional move higher if we turn to treasuries and the surprise move by the
 treasury department to increase the size of its government debt repurchase by quote at least double
 altering its tentative buyback schedule that was released just two weeks ago if you take a look at
 treasury markets right now we're seeing yields creep higher again this morning for the most part
 across the curve us ten year treasury yielding four point six seven percent and the thirty year
 treasury after hitting a fresh nineteen year high the yield earlier this week is also creeping
 slightly higher but certainly not at those levels it's at four point two two percent right now
 fed sensitive two year four point one seven percent let's look at the ripple effects
 around that treasury announcement to other asset classes you got the dollar hovering
 right around three month highs right now a bit lower this morning ninety eight sixty is the
 level for the dollar index currently and let's get a check on precious metals which have continued
 their rally here as goal as the dollar has weakened you can see gold is basically flat right now
 four thousand five hundred forty five dollars announced silver is up about one and a half percent
 this morning platinum has just turned positive as well gold is hovering near its highest level
 since late may let's get a check on energy to as we see crude prices move higher this morning as
 well you could see wti's up to about two and a half percent trading right around eighty eight
 dollars a barrel and Brent crude is up two and a half percent trading just below ninety four
 dollars a barrel president Trump saying the u.s. will launch what he calls quote the most crushing
 economic operation ever taken against any country in regards to Iran what some are calling
 economic d day here so little light on details but something to watch especially as the u.a.
 has pulled back on its economic relations just earlier this week with Tehran let's get a check
 on crypto bitcoin that's rebounding that continues its climb higher above the seventy thousand mark
 this morning you could see it's up another five percent this morning stream just below seventy two
 thousand now in terms of the move we've seen in bitcoin has been pretty dramatic here in the last
 24 hours yesterday unleashing the biggest wave of short liquidations in records going back to
 twenty twenty one so continue to watch what's happening there president trump though also origin
 congress to pass the clarity act yesterday now we need congress to take the next step by passing
 the clarity act a fair version of the clarity act and this landmark structure legislation it is
 very very powerful structured legislation which will keep us ahead of china keep us ahead of
 everyone else will open the door to the next wave of innovations and innovators all right well let's
 get a look at some of the stocks that are in the crypto space because those are continuing to ride
 this new momentum this morning you could see a lot of big gains this morning pre market coin
 base of seven percent look at strategy right now but that's more of a move tied to bitcoin but
 that's about nine and a half percent this morning circle bullish robin hood all higher some of
 wall streets biggest names getting behind a missile making startup castellan at mean time defense
 tech we're shifting to defense tech the company announcing that it's closed a more than one billion
 dollar funding round a series c backed by the likes of carlile jp morgan and recent where it's
 the list goes on highlighting continued interest around the growing corner of the defense industry
 for more we're joined exclusively by castellan co-founder and CEO ryan hargist ryan it's great to
 have you here on set i mean it's kind of amazing we're talking about thirteen billion dollar
 valuation for castellan now that's up from two point eight billion back in December with your
 series b funding round you're in the business of hypersonic missiles so what will this money go
 toward well thanks for having me back on so the the funding for this round is extremely i mean this
 is really exciting for us so we're going to supercharge black beer production which is our first
 hypersonic weapon that we're delivering in twenty twenty seven we're going to be building thousands
 per year out in albuquerque new mexico a site we call project ranger we're going to be looking for a
 second production site in the united states and then on top of that we're developing a longer range
 weapon system as well as beginning development of defensive systems you're moving very quickly when
 it comes to missile production and specifically we're talking about i realized we've been talking
 about hypersonic technology for what two decades three decades now but when we talk about actually
 fielding it you're moving very quickly here i mean you're talking about fielding this first weapon
 as soon as next year what's enabling that and how quickly can you ramp production well it's really
 a back to the basics so we're following a model of what the country used to do in the Apollo era
 we build a lot of development hardware we produce a ton of hardware in development which helps us
 of refine the manufacturing system which is actually a really hard problem especially if you
 don't go build early on and we're doing that we're doing the testing so that we can deliver this
 at a quantity that folks couldn't imagine possible we had the undersecretary of acquisitions
 and sustainment for the pentagon mic defi on the show yesterday he actually named drops
 castellan when he was talking about you know this need to get more missiles and munitions
 productions online open the aperture in terms of who the defense department is working with and
 what those types of deals look like moving forward to your thoughts yes i think the administration
 in the department are trying to clear the hurdles for new entrance such as ourselves by dropping some
 of the the more bureaucratic processes they're also clearing the way for testing which is super
 important to the model i just spoke about and they're making sure that funding flows to the new
 entrance which is really important to get these large wall street names behind us well and that's
 exactly where i was going to go with you the fact that we are seeing you know a growing cadre of
 blue chip wall street names it's not just in the venture world either in the case in point
 togg comes from jp morgan now being involved in this and funding around in a very meaningful way
 how does it speak to investor appetite growing investor appetite for this sector in a company like
 castellan well i think it's really exciting time for america we're talking about re industrialization
 we're of course working on defense defense of manufacturing but really it's a strength of our
 business so we have over five hundred million dollars in contracts in the past eighteen months
 with morque on the way we're integrating to two major weapons platforms f-18 with the navy
 high-mars for the army and because of that we ran a competitive process we are able to select some
 of the best investors in the united states we've got the world's largest bank jp morgan we have
 injuries and horror wits who shows that we have you know venture style returns that we can provide
 and then we have carlile who's been a you know top-backer of aerospace startups for for decades
 you're also a space ex-alarm and so are your co-founders here so in terms of what investors need
 to understand about uh... the street cred that brings when it comes to building hardware
 well it's really to that that point i made about getting back to the basics of the appalo era
 of looking at your supply chain making sure to take into account that your design for what you
 are building is is sourcible and to make sure that you have dual sources of supply about vertical
 integration so that you can build the systems and iterate on them within a reasonable time frame
 and then to do all that in a process that produces really complex systems at an affordable price
 in a in a time frame of relevance and so we're bringing that to the missile market which is what's
 so exciting yeah okay you're gonna you're gonna part of my divergence here but given the fact
 that you do have those face x routes we are seeing another lock up expiration for stock today and
 you and i haven't spoken since that company's gone public want to get your thoughts on all of it
 i'm really excited i have i mean over half of our company's former space x so um
 i i fear whenever it goes down because we probably lose productivity with people looking at the stock
 ticker but do you think people are selling now do you think i'm selling i know some folks are selling
 i mean they've held on for a very long time to take an tremendous risk and you know it's meaningful
 money for for folks and this allows them do you know to go buy a house by car and i'm really excited
 for them as well as like my friends still at space x for me personally it was exciting to be able to
 actually take the gains that i made at space x both with knowledge but but also with the stock to
 fund Castellan at the start all right Brian hargess of Castellan it's great to have you here on set
 thank you well a lot more to come here on morning call including we're bracing for Walmart we
 get those results before set to cross before the open so just in a short while what the options
 market is signaling about the potential stock reaction we've got that and much more one more
 in call returns all right let's get a check on shares of space x we just touched on it in our
 last conversation we could see shares are down about 1.3 percent right now trading around a
 hundred and thirty seven dollars eighty cents a share of pre-market this of course as today we
 get more insider shares becoming available to sell in the second of a series of lock up
 explorations over the coming months about three hundred and nineteen million additional shares
 on lock today that marks seventy days of space x as a public company was a smaller tranche than
 the nearly nine hundred twelve million shares that became available on august six today's
 expiration still represents about seven percent restricted stock and more locks are coming upwards
 of seven hundred million shares on lock in september more than six hundred fifty million october by
 year and you're talking about about four point nine billion shares of space x that will be available
 to trade or roughly seventy percent of the stock that is not held by Elon Musk now this on the
 heels of a Bloomberg report yesterday that space x attempted to acquire AI coding startup cognition
 the report that cognition's CEO quickly denied space x closed its sixty billion dollar acquisition
 of cursors another AI coding startup last week space x is not responded to requests for comment but
 space x stock is up about twenty eight percent since hitting its lows right before earnings
 at the beginning of the month when it fell below one of five meanwhile investors preparing for
 Walmart results those are out before the open the stock is down more than ten percent since its
 lattice latest results and our next guest says options markets are pointing to a big move in the
 stock once earnings cross and you could see shares of pop in about one percent here pre-market
 ahead of that Brent Kachuba is the founder of spot gamma which analyzes options flows it's here
 on set it's great to have you on the show welcome welcome let's start with Walmart yeah nice
 shot when my last name by the way you got it so yes yeah so with Walmart it's interesting it's a
 four point five percent implied move for earnings today which is pretty typical of the stock target
 last night they reported good earnings are up four point two percent last time I check so a good
 pulse there and now Walmart has missed four out of the last five earnings they've had negative
 reaction is what is typical and I think what is different this time about earnings is that
 the stock has a bullish lean in the options market we call this a call skew and so investors are
 looking for a pop here at least the option traders are looking for a pop in the stock here and
 that's a bit different because in May as you mentioned before there was a bearish lean in the options
 market and the stock actually dropped seven percent after that may earnings report so a different
 tone here this morning and options markets definitely looking a little more bullish I would say
 into this earnings report okay cool we'll have to see what we got the print here in just a short
 while in the meantime we just you know we just talked about SpaceX and do you want to get your thoughts
 on what we're seeing there yeah there's the 300 million share lockup as you alluded to today and I
 think the key thing here is to to reiterate that these are shares that are becoming available to
 trade they're not new shares so it's not dilutive and there's a lot of talk about the 9 million shares
 from earlier this month and actually the stock as you mentioned before it made its all-time
 low on August 5th that bigger lockup was August 6th and so the stocks just traded up since then
 and a lot of people were nervous that that new supply would keep the price down but it's not it's
 actually the stock isn't done pretty well now the key thing to watch from the options market is
 that 150 level it's a key resistance line because when we see that stock move up that level
 option shares have been selling calls at or above that strike that 150 area and so that we see
 as a key kind of resistance or ceiling level at this point interesting every time the stocks try
 to breach it it's bounce back lower again to your point okay I do want to talk about what else
 we're seeing the market more broadly here let's start with vix exploration vixeration because
 there's been some chatter that this has brought but potentially this dynamic has potentially tamped
 down some of the volatility and some of the demand we've seen yeah and if you were to just look at a
 chart of the vix over time you can actually mark the lows in the vix at expiration which was yesterday
 so yesterday 40% of vix contracts expired and the argument there is that the contracts
 reduce volatility because traders are selling vix or selling volatility into these
 expirations and that helps to support stock and kind of keep the volatility quiet and that
 expiration positions on wine which allows volatility to expand it's kind of like breathing in and
 out a little bit and so what's kind of key about this is that the vixeration happens yesterday
 tomorrow's options expiration and so you're allowing the market to potentially move a bit more now
 with some really big events next week we have pce core pc next week we have Nvidia earnings next
 weeks and of course jacks and whole and so the timing of volatility sort of start to expand with
 positions rolling off yesterday in a bunch of these events next week I think is really critical
 for our investors to take note of okay a lot here going into the final week of trading for all
 guests next week no summer's low down here that's right right to have you on thank you so much
 well straight ahead we've got the morning call crew tuning up the trading day ahead
 welcome back alibaba results are out and shares are lower about 4% right now the
 China-based e-commerce giant saw revenue come in above analyst estimates but the bottom line
 was slightly short of forecast bava did say that growth in cloud revenue accelerated 45%
 in a i related product revenue grew at a triple digit pace for the 12th consecutive quarter
 kind of a similar dynamic arguably to what we saw with bydo when they reported earlier this week
 as well that acceleration in cloud and an a i well time for your call sheet where we look at
 the topics driving the trading day ahead crew members today jay woods of freedom capital markets
 hard to sing of fun strat and septany link of high tower jay and Stephanie are both cmbc
 contributors all right i mean i keep waiting for summer slowdown we're not getting it so of course
 i'm going to start right there with and jay i'm going to put this to you the treasury announcement
 we got yesterday some folks referring to it as operation twist we can you know debate how symbolic
 it is versus actually you know fundamentally meaningful to the market regardless big moves
 in asset classes what does it mean for the bomb market what does it mean for rates what does it mean
 for everything else yeah well it's tempered the long end so that is something that the the you know
 the trump administration been watching closely but well i would look at it from the equity point
 of view from the commodity point of view where do you go where's the new strength and uh you know
 we always looked at big coin like where's it correlated to you know gold was going up and
 coin was going out well we finally found a correlation at least for the time being but big coin
 technically just broke out it looks like it's on a run to seventy seven eighty thousand and then
 gold uh when you look at gold and now copper free port macaron individually uh on the verge
 of a major breakout this is where the strength is and then uh you know the homebuilders for our
 short-term play we've got a nice little floor under there so i like tolling on our in the home
 building side yeah i mean you could also argue that this actually lifted low shares yesterday despite
 you know print yesterday morning it was not necessarily the best here it was certainly a little
 disappointing to compare it against home depot why get your thoughts on all this hardika i think at
 the end of the day it doesn't really change anything right i don't see how best and could continue
 this buyback going at a greater scale for starters four billion is not a large amount
 and then secondly i just think that if he wants to continue buying back longer-dated bonds he's
 going to have to issue more short-dated and that's just going to make this whole growing deficit
 problem worse we hit forty trillion for the u.s. debt yesterday that's a big round juicy number
 and i think that if we have more shorter-dated bonds issued i think that's going to hurt the
 prices and yields are going to go up and again that's just going to keep increasing their deficit
 so it fails to solve the underlying problem which is that the deficit keeps growing investors are
 losing hopes that they'll ever get paid back yeah Stephanie want to get your thoughts on this and
 yes forty trillion dollars it's a big alarming juicy to use the word hardika just use number
 how do you take that how do you take corporate debt issuance how do you take you know what we
 see with the straight up our moves and geopolitics and energy how you put it all together
 and also the role that central banks can or cannot play in all of this when you talk about things like
 supply shocks i mean you put it all together what does it mean how do you navigate it as an investor
 well well the treasury is absolutely watching yields between what they did with japan and then
 what they did yesterday and i think they're prepared to do more that being said maybe it stabilizes
 the ten year and the thirty year it temporarily but it doesn't change the tidal wave of hyper-scalers
 and their issuance of debt and doesn't change the deficits it doesn't change the elevated inflation
 and and i would also add i think the bond market also at least the long end was rising yield
 were rising because the economic growth is better than expected and so i think there's a lot of
 things that are in play in the bond market at this moment in time what i care about mostly is what
 what is the economy growing at and right now we're growing something around four four and a half
 percent according to the Atlanta Fed tracker and we we know there's an ai boom that's continuing
 to help the economic growth the consumer is consuming as we got data points from target and
 estate lottery yesterday housing is obviously struggling they will continue to struggle but i think
 all adding it all up i think earnings growth is going to continue to grow in the double digits and
 that's positive for at least what does it mean for walmart jay what does it mean for walmart we're
 going to find out a little while i i think that target report was unbelievable and i think that's
 more testament to what the new ceo michael fiddle key is done there stock up over 60 percent
 now watch one sixty one sixty five major resistance over a long term base but that turn around
 has been nothing shorter spectacular walmart is going to give us a real good look into the consumer
 tj max a little disappointing uh but walmart uh is struggling right now but near term going into
 this uh number it's been starting to come back so let's see if you can get back above key levels
 one eighteen is the level i'm watching if you can recapture that then maybe we make a run back
 to the old time highs but it will give us more of an idea of what that consumer is doing and
 how uh the economy's been affecting them and so far we haven't seen any real negative effects
 yeah right now we're trading pre-market here up about half a percent i think one fourteen eighty
 is the level to your point um in walmart ahead of this print um the the other piece when we talk
 about grocery we talk about consumer we walmart the other piece of walmart is how much it's been
 spending to deploy AI i think it's sort of a good early test case of you know productivity gains
 and you know how the technology is going to grow tentacles and reach into different parts of
 different businesses um so in light of that how what should we be looking for when it comes to that
 and i by the way i think a similar case for deer which is also reporting this morning i agree
 and i think companies like walmart deer caterpillar they are really bit they have really been the
 beneficiaries of this AI boom and if you take a step back this is what AI was supposed to do all
 along AI was supposed to benefit companies outside of the tech industry as well and i think with walmart
 they have just really benefited from this k-shaped economy where we have this uh lessening middle class
 and then we have an um lower income class that is looking to spend more and more or even higher income
 consumers who are flocking to walmart for its deals whereas in targets case for example i'm just
 not sure who their consumer base is so their stock coming back up is potentially reflecting
 this middle class that's coming back to spending on discretionary goods uh the deer's case i think
 that you know uh it's just a it's a great manufacturing boom at the end of the day and it's
 reflective of this data center boom that we're seeing across the country play out yeah okay deer
 walmart also space x with another lockup expiration today we got 30 seconds it's definitely
 i like space x i would be buying it on weakness i think there's many ways that they can win
 it's either ai it's connectivity it's space the last quarter was phenomenal so it's uh i think for
 the long term the long term i think you want to be buying it all right look at that uh we're on time
 thank you to our call crew appreciate it i want to protect you check it futures right now uh i
 believe it's a mixed picture here although yeah it's mixed picture smp endow pointed
 poised to open lower than azx slightly higher thank you to our morning call crew
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