Nvidia, inflation and Fed policy shape the market outlook 8/26/26

 The Hard and Stroke Lottery is all about the wins.
 There's a million-dollar cash win.
 Luxury car wins.
 Dream vacation wins.
 And wins that help fight heart disease and stroke.
 Play with one to two odds of winning thousands of prizes
 at hardandstrokelottery.ca.
 Hurry, the $50,000 loyalty deadline is October 2nd.
 Lottery license RAF 156-2506 must be 18 plus.
 Please play responsibly.
 Time to get this party going!
 Uh, I thought you said you were using your reward points
 to get a new sound system.
 I didn't have as many points as I thought.
 Sounds like you need BMO and blue rewards.
 The points are at best.
 Really why?
 Because you can earn two times the points
 at any grocery, gas, or wholesale retailer.
 That's a ton of points.
 And ten times the points at select partners.
 I've stoked!
 Let's crank the tunes!
 How much is the high five?
 BMO!
 Terms and conditions apply
 to visit BMO.com slash blue rewards.
 Wall Street braces for Nvidia earnings.
 I'm Dominic Chiu, and this is your morning call.
 Good morning, I'm Dominic Chiu,
 and for Morgan Brennan this week,
 US equity futures right now are somewhat stable
 with the Dow writing a three session winning streak.
 The Dow's actually implied higher by roughly 50 points
 right now at the opening bell.
 The S&P down by about 14 and the NASDAQ down by about 51.
 Treasuries ahead of today's big July inflation report
 on PCE right now benchmark 10-year note yields
 holding just around 4.65% 4.645 to be exact.
 The two-year note yield 4.199%,
 the 30-year long bond 5.179%.
 Economists expecting year-over-year core prices
 can hold steady at 3.3%,
 headline inflation expected to tick down
 by a tenth of a percent as well,
 so those are the expectations going into that particular print.
 On the dollar index side of things,
 we have been tracking, of course,
 weakness over the course of the past,
 maybe a couple weeks or so,
 but over the last one week period up marginally
 about one tenth of one percent
 that ICE US dollar index currently at 98 spot 97.
 Bitcoin prices also in focus as well.
 We keep watching that $80,000 level.
 We are now somewhat below there.
 The current price right now down,
 it's down about one quarter of 1% to 78,731 in change.
 Gold continues to move,
 coming off another three month high,
 but those prices are lower today
 by about one quarter of 1%.
 You can see here, 4685 spot 20,
 the last trade there off about two tenths of 1%.
 And then energy, with oil coming off its war state
 in a month as traders watch for signs of a Hormuz deal,
 benchmark prices for US West Texas intermediate,
 right now just below $80 per barrel.
 79,89, now three percent.
 Same thing for ice print creatures down 3%,
 $85.93, we're watching that trade pretty closely as well.
 Well, to our stock of the day,
 and of course the week maybe the month of the season,
 if you wanna call it that,
 Nvidia's latest quarterly results are out
 after the market closed today,
 those shares are up fractionally pre-market.
 We're capping off what's been a very mixed earnings season
 for the big tech trade,
 and a stock that's sitting more than 9% away
 from its all time high.
 Let's send it now over to CABC's Senior Technology Correspondent
 Arjun Carpal with more on what to expect
 when those results cross later on this afternoon.
 Arjun.
 Yeah, good morning, Dom.
 And look, there's no doubt Nvidia faces a tough test today,
 sky high expectations,
 and of course growing nerves around this AI spending,
 financing and demand from investors as well.
 Analysts are expecting the company to nearly double revenue
 in the quarter just gone to more than $92 billion.
 But the real focus here is gonna be on the guidance
 for the October quarter where Wall Street
 is looking for revenue of just over $104 billion.
 Nvidia won't just need to meet that number.
 It will likely need to beat it convincingly.
 And key to that really is going to be a Vera Rubin
 Nvidia's next generation AI chip platform,
 which is expected to begin shipping this fall.
 Investors will be closely listening to comments
 around production capacity, demand,
 and of course how customers are transitioning
 from Blackwell to Rubin,
 all of which could offer clues on growth and visibility
 into 2027, which 2027, which is key right now for investors.
 But there are certainly some tailwinds as well,
 which will help Nvidia hyperscaler caphex
 is set to top $730 billion this year,
 while cloud giants continue to report backlogs in AI demand,
 supply constraints in memory and chip production over at TSMC,
 are also helping to export support
 Nvidia's pricing power as well.
 But there are challenges as well.
 The hyperscalers are developing more of their own chips
 in-house and Nvidia still relies on a relatively small number
 of customers in the form of those hyperscalers
 and investors remain very nervous about whether
 the huge levels of AI spending will ultimately pay off.
 At the same time, there are concerns around circular financing,
 which have resurfaced following Nvidia's announcement
 over $500 billion of financing package.
 And just one final point,
 Dom option markets are pricing in about a 5% move
 after earnings roughly in line with the last four quarters.
 And as always, a lot will be riding on these Nvidia numbers.
 And less volatile than it has been for the last eight quarters.
 And maybe that signals my next question, Arjun.
 The expectations landscape for investors
 has evolved and shifted over the course of the past few years.
 Given the AI narrative, it was at one point
 the poster child of AI, it maybe still is,
 but those expectations and the deliverables
 that Nvidia gives investors have changed relative
 to where investors think the stock should be.
 How exactly do those expectations play out?
 What can they say and will it be enough?
 Yeah, look, I think that Nvidia's kind of
 caught in this narrative battle right now.
 The market still sees this very much
 as the data center play.
 It is at the heart of this data center build out still.
 And so Nvidia, the key for Nvidia
 is going to be telling that data center story
 and around the Vera Rubenship,
 trying to tell investors, hey, this is going to be
 our next big explosive leg of growth.
 And that really is going to be the critical messaging.
 But also you have heard Jensen Huang
 over the last couple of quarters
 and certainly you hear it again.
 Talk about what Nvidia is in the future.
 It's not just about the data center,
 it's about Nvidia's role in things like robotics
 and things like autonomous driving
 and these new use cases that are going to emerge
 around artificial intelligence as well.
 There was a deal just in the last 24 hours
 with a complexity in Nvidia teaming up
 to do AI processing on device as well.
 This is a new area, edge computing as well.
 So there's going to be a lot of talk about
 where the future is headed from Jensen Huang
 on the earnings call today.
 But the key is whether he can convince the market,
 convince investors that actually the Nvidia story
 is about that future,
 rather than just this data center play right now.
 All right, Arjun Carpal with the check trade
 for Nvidia there, thank you very much for that.
 What's not just Nvidia though,
 investors are also tracking the retail trade
 and the wake of dismal results from dick sporting goods
 and what it calls a quote unquote challenging footwear business.
 Sheer is coming off a more than 30% drop yesterday.
 That's the worst one-day sell-off
 in corporate history for them.
 Today we hear from Bath & Body Works,
 Coals, Urban Outfitters and William Sonoma amongst others.
 But for Dix, the sell-off may be presenting
 an opportunity for investors.
 Hungry for H.U.C. dividend,
 which now sits at 4%,
 or a turnaround story for a stock
 that's sitting more than 49% away from its all-time high.
 Here's our own Jim Kramer on mad money just last night.
 Given the scale of the mis and the guidance cut,
 I don't buy anyone for getting out of touch.
 Still, I don't want to give up on dick sporting goods
 at these levels.
 In the long run, call me a believer,
 because this is the only remaining
 sporting goods retailer with genuine scale
 in this country.
 Even if it's also joined at the hip
 was struggling for longer.
 I mean, they always close it.
 It just might take a few months
 before the sporting goods footwear
 and a powerhouse-based clears that excess inventory
 and starts bouncing back.
 All right, well, speaking of turnaround efforts,
 we're going to chat with Yale School of Management's
 Jeffrey Sonnenfeld on the very issue
 and other names in the midst of their own turnaround stories
 for better or worse,
 that story's coming up later on this show.
 Well, to the action overseas and our Karen show
 in Elaine U, both standing by
 with the action from London and Hong Kong,
 Karen, we're going to begin with you.
 Good morning, Dom.
 Well, the European Stock 600 index is gaining
 just modestly this morning
 as investors buy their time waiting
 for those all important earnings out of Nvidia.
 Oil prices have slumped today
 also having a bearing on the markets here.
 I mean, renewed optimism
 that the straight-of-one booze could soon be reopened.
 You're seeing the FTSE 100 slide,
 a fraction less than a tenth of a percent.
 We've trimmed some of the downside to on the DAX,
 and in fact, you can see trying to push positive.
 One of the markets that's been under some pressure
 in recent weeks has been the French market
 down about 10 out of 11 straight sessions.
 So also one of the better performers today.
 By sectors, it's travel leisure stocks
 that are gaining all thanks to that story
 around the straight-of-one booze,
 really putting a bit under some of those stocks
 that likes a Rhino-2E performing in the budget space.
 And basic resources are ticking high this morning.
 You've heard a lot about the debatement trade.
 Gold has firmed up and that has been
 putting a bit back into the sector this week.
 Meantime oil and gas stocks,
 our weakest should expect an early European trade
 as Iran has said it has reopened talks with a man
 that dropped the resing this morning,
 really impacting that sector.
 And as you can see, the reversal there,
 along with tech,
 as investors just hit the sidelines waiting for confirmation
 around some of the earnings on and video
 and what that says about this capex cycle.
 Back to you, Tom.
 All right, Karen, show with the European trade.
 Thank you very much for that now
 to the action in Asia and Arlene Yu,
 who is in Hong Kong tracking that market action,
 has been generally positively.
 That's right, Tom.
 So Asians tech shares are rising ahead of Nvidia's earnings
 as investors here turn cautiously optimistic
 in Korea the cost be closed nearly 1% higher,
 Samsung Electronics closed higher than that.
 And SK high next is up 0.6%.
 Now, Japanese shares also closed higher than EK225
 is up 0.6% as well.
 And China and Hong Kong shares also climbed
 tracking a broader recovery in the global markets.
 The tech heavy store 50 closed to 1.7% higher.
 Now, a story we're watching today
 is Japan's soft bank group,
 reportedly talking to investment banks
 about a potential 10 to 20 billion dollar bond offering
 to help refinance alone on its investment in open AI.
 This is according to Bloomberg.
 Back on Monday, the conglomerate said
 that it plans to issue a record 1 trillion yen
 or 6.3 billion retail bond as it raises funds
 for its investment in the chat GBC developer
 and proceeds from the sale would be partially used
 to repay a 40 billion dollar bridge loan
 according to Bloomberg.
 And this is happening as companies deepen their AI spend
 despite concerns about their returns.
 Back to you, Tom.
 All right, Elaine Yu, live in Hong Kong
 with the market action there.
 Thank you very much.
 We've got a lot more to come here
 on morning call including 10 weeks out.
 Why markets are starting to really care now
 about the 2026 midterm elections plus two out of three,
 ain't bad.
 We're digging into the turn around stories of consumer giants
 that you know, brand names that we are all aware of
 and the CEOs behind those efforts.
 And the later on, much more ahead of Nvidia's big earnings
 report and what options traders are saying right beforehand.
 Very busy hours still ahead when morning call returns
 after this commercial break.
 CNBC change makers spot letting women who innovate
 lead boldly and are transforming business.
 Do you know someone who is rewriting the future?
 Nominations for the 2027 lists are open now
 at changemakersnominations.cmbc.com.
 All right, welcome back to morning call.
 A check on shares of Target, Starbucks, and Nike.
 And three stocks with three very different performances
 so far this year.
 Target and Starbucks up 25% and 67% respectively
 in 2026.
 Nike though, down nearly 38%.
 The common trend and theme between these three consumer
 icons is question mark.
 Well, according to the Yale's Jeffrey Sonnenfeld,
 the CEOs of these companies who all face skepticism
 from analysts when initially taking those top jobs
 are now writing their turn around playbooks for this year.
 Jeff joins us now with more on that story
 and just the status update on those three particular turn
 around stories.
 Professor, thank you very much for being here
 and for the early wake up call.
 Let's go through those three names
 and maybe the synopsis in your mind
 of how those turnaround stories are playing out
 and who's doing better than others.
 Oh, I'd love it.
 That's great.
 If you can't stand good news by the way to start today,
 I'd love to get into it.
 Let's do good news.
 Come on, let's do good news first.
 Good news first, let's do it today.
 Well, it's, you know, if you take a look at these stocks,
 there are all three are iconic brands.
 We last, as they both, in fact,
 in all three of these when the CEO stepped in,
 we said these were going to be successful turnarounds.
 And I admit, as you during the break
 were serenading me with two out of three ain't bad,
 is I actually think Nike is gonna pull it out too.
 And if we get to it before lunchtime,
 I'd love to tell you about that saga.
 But basically all three of these
 have taken people who know their space,
 they know their sector,
 they hit the ground running that way.
 They're all three of them, a very employee centric,
 they're humble, and they focus on operations,
 customer experience, and that's what they have in common.
 So it's, you know, that old expression,
 new broom sweep clean, a lot of times boards
 went this messionic savior to parachute in
 from the outside.
 They don't know that that Rastafarian old adage
 actually says new broom sweep clean,
 but old brooms know the corner.
 So wisdom counts, and that's where these guys differ.
 So that's a good point, because in some way,
 these three CEOs have knowledge about the operations
 that they've been stepping into to lead.
 They have intimate knowledge of the operations themselves.
 They've been there for some time
 in some certain, certain cases.
 What exactly does that do for the turnaround efforts
 that are in play?
 Because expectations are key.
 These CEOs have to navigate these turnaround stories
 with a certain relative level of expectation.
 Which of those expectations
 between Starbucks, Target, and Nike seem to be positioned
 best for future success for these three CEOs?
 Well, if I could steal your line during our break
 is that the lowest expectations are set for Nike now.
 So I actually think that the CEO there,
 that Elliott who's come in, Elliott Hill,
 has come in with 30 years of experience,
 but people have such low regard.
 He had so many problems that he's inherited,
 but he's focused on changing out the brands of huge problems
 in China.
 So the expectations are so low
 that I think that will be pretty dramatic, but Target,
 he's, you know, the fact that he's up 75%,
 he's been on the job and he's only been there,
 not even two quarters.
 It's really remarkable.
 Store operations with a great focus,
 a tremendous sense of knowing where the bodies are buried,
 where the issues are, what he's done.
 So very effective partnerships with some designer brands
 and a real uplift and just cleaning up the stores
 has been a remarkable transformation for Target.
 So, but to be up of 75%, and at Starbucks,
 some skeptics would say, well, look at all the turnover,
 but Howard Schultz, I've known everyone,
 actually I actually knew Starbucks before Howard Schultz did.
 I discovered it in 1978, he discovered it in 1981,
 out in Seattle, but of course I didn't know what to do with it,
 which is why I only teach business.
 He went out and built a business around it,
 but one of his weaknesses was on the succession side.
 And people were wondering, would this guy get a chance?
 And he did, because he came in, this is Brian Nichols,
 of course, Michael Fidelke is referring to before,
 back at Target, a tremendous job.
 But Brian Nichols comes in, again, each one of these guys,
 30 years of experience in knowing what they're doing.
 He comes in, and he understands that the employees
 have had some issues, their dramatic change in set of pay,
 so that they, I think there's a sense of spirit, energy,
 they've cut the time, like four minutes or so,
 for each one of the servicing of the drinks.
 And the quality is there.
 There are some weird things done by his predecessor,
 with these flavored, double shot sweet drinks in the summers.
 And his predecessor, it had to be a personal friend of mine.
 But he knew how to sell Lysol detergents,
 Lysol sanitizing stuff, and women hygiene projects,
 and things with the consumer goods company,
 that was not really in this space.
 Whereas, coming in from somebody who really knew
 how to turn about your pulp leaf,
 how to turn around young brands before,
 that really paid off.
 So you see that the customer experience
 in Starbucks has gone through a tremendous transformation.
 Jorries out for some people's minds, for Nike,
 but I really think he's addressing the right things.
 We just have a few moments left here.
 Is it fair to say, is it an okay analogy to make
 that Elliott Hills situation at Nike right now
 is going to be akin to what Michael Fidelke had
 at Target when he stepped in.
 Both companies with very low expectations
 and room to grow.
 Can we expect that kind of turnaround to take shape
 at Nike as it has at Target under a Fidelke?
 Yeah, I think it's a great parallel,
 you draw in between the two,
 because even their dispositions are humble.
 And to some critics, humble to a fault,
 is people thought, well,
 the Michael Fidelke is not a back slapping
 charismatic carnival barker,
 but that really worked well for him at Target.
 And similarly, Elliott Hill, people are saying,
 oh, this is an nostalgia pick
 when you have these insiders.
 And by the way, insiders historically,
 dramatically outperform the outside messiotic hires.
 You just take a look at what Dave Ricks has done
 as an insider of course, at Eli Lilly
 or what we think of when we see at Bob Eiger did,
 of course, at Disney or Sutta and Nadala.
 These were often charged performances as insiders.
 So these guys have that in common,
 is that they know their business,
 they know the people,
 they understand how to integrate operations,
 marketing and strategic perspectives
 and they don't mind rolling up their sleeves
 and really understand in the customer experience.
 All right, Professor Jeffrey Sonnenfeld,
 Senior Associate Dean for Leadership Studies at Yale.
 Thank you very much.
 We appreciate it.
 Come back and see us again soon.
 Thank you.
 All right, straight ahead on the show here,
 the brain drain and open AI continues
 amid another top executive exit.
 But first, to check on shares of Intuit,
 a couple of sports quarter results,
 topping estimates, but it expects sales growth
 to slow in the year ahead,
 weighed down by decline in its desktop business
 until its CFO also saying they may accept short-term trade-offs
 in its business as it looks to boost turbo-tax customers
 until it shares down 12% pre-market right now,
 morning call is back after this.
 AI is here, transforming how we work, live and lead.
 And the women I talk to aren't waiting for the future,
 they're shaping it.
 I'm Julia Borsten, Senior Media and Tech correspondent
 at CNBC.
 This is CNBC Changemakers,
 where I talk with the female leaders,
 transforming business as AI reshapes the world.
 Follow and listen to CNBC Changemakers,
 Women Leading in the Age of AI,
 wherever you get your podcasts.
 Welcome back to Morning Call,
 checking some of this morning's latest headlines.
 The U.S. is reportedly considering more trade penalties
 against Canada following the latest tariff tit for tat
 according to a report.
 New measures could include more tariffs on, quote,
 other trade actions at the president's disposal.
 The Wall Street Journal is reporting
 that President Trump has submitted his 30-year nuclear deal
 with Saudi Arabia for congressional review,
 insisting the accord remains contingent on the kingdom,
 normalizing relations with Israel.
 If approved, the deal would potentially allow uranium
 enrichment to take place on Saudi territory.
 Well, meta-platforms in a group of state attorneys general
 are reportedly weighing a potential mid-trial settlement
 over a lawsuit accusing the company
 of intentionally designing Facebook and Instagram
 to be addictive to young users.
 That report, coming the same day,
 met as head of Instagram testified in a California court
 that very few teenage users were aware of
 or even used a key safety feature
 that meta eventually turned on by default
 three years after its rollout.
 Well, the brain drain continues at OpenAI ahead of its possible IPO,
 the company confirming to CNBC its head of data centers.
 Chris Malone has recently left the company
 after joining back in March of 2025.
 Malone's exit comes just weeks after the company's revenue
 chief said she would be leaving less than a year in that role.
 OpenAI's operating chief, business and product chief,
 and four others also saw their way out in recent months.
 And Richmond-fed chief, Tom Barkin,
 says there will eventually be a, quote,
 reckoning if the US debt continues to rise
 and people stop buying it.
 Barkin, an alternate this year on the FOMC
 rate voting committee becomes a voting member
 of the FOMC in the next year.
 We'll still on deck for the show here.
 Wall Street braces for a balance of power shift
 in Washington and potentially big policy fallouts as well.
 Morning call continues next.
 I'm Dominic Chiuin from Morgan Brennan.
 Welcome back to Morning Call.
 US equity futures right now are stable
 with the Dow riding a three session winning streak
 and the Dow is actually implied higher
 by a very modest 30 to 40 points
 at this point in the pre-market trade.
 The S&P is implied lower by roughly 16 points
 and that tech heavier NASDAQ 100 trade
 implied lower by roughly 70 points.
 Treasuries ahead of today's big July PCE inflation report
 are showing at least a little slight uptick
 in the yields for the 10 year side of things
 sitting a hair below 4.65% right now.
 The two year note yield 4.20%
 and the 30 year long bond 5.179%.
 The dollar index is seeing a little bit of a gain
 so far this morning.
 Trying to reverse some of the losses
 that we've seen over the past week or two or so.
 The dollar index right now currently at 98 spot 99
 just up very marginally.
 Bitcoin prices now below the 80,000 mark.
 We did briefly top that mark this week
 currently sitting at just around 78,544 in change.
 That's off one half of 1%.
 Gold prices also coming off another three month high
 and they're lower this morning
 by about four tenths of 1%.
 Comex Gold currently sitting at $4,676 and 80 cents.
 Energy with oil coming off its worst day in a month
 as traders watch for signs of a straight of hormones deal.
 U.S. benchmark West Texas intermediate down
 just about two and three quarters percent
 to $80 almost on the big figure right now.
 Ice Brent crude futures $85.97
 off by about 3% there as well.
 Global markets a mixed session though in Asia.
 The Nikkei and Cosby, the best performers there
 checking the early trading Europe as well.
 You can see the CAC in France,
 the outperformer up one half of 1%
 and the German Dax up about one tenth of 1%.
 Now to one of the potentially big
 market moving events of the week,
 Invidius earnings after the closing bell today.
 Shares closing up more than 2% yesterday
 to snap a seven day losing streak.
 The worst such run for the stock in more than four years
 during which it dropped 7%.
 Invidius sales have shares have fallen
 in each of the past four sessions following its earnings report
 and they're roughly flat since the last report
 that we saw back in May.
 The company's position as an AI leader in that boom
 remains solid, but it's also looking for ways
 to be less reliant on the major hyperscalers
 and those clients tapping its strength
 to keep people buying its chips.
 Earlier this month, Invidius announced a partnership
 with six Wall Street heavyweights
 on a $500 billion financing push.
 CEO Jensen Huang discussing on CNBC,
 how the plan aims to treat AI infrastructure
 much like assets customers can actually borrow against.
 We used to build chips that we sell
 and these are technology components
 that people buy and use.
 But now, Invidius AI factory platform
 is really an investable asset.
 An infrastructure asset.
 All right, let's talk more about Invidius earnings now
 with Brent Cachuba, the founder of SpotGamma,
 watches the options market for a living.
 So Brent, thank you very much for being here
 with us this morning.
 The Invidius report, and I've said it before,
 is arguably the most important earnings event of the season.
 It has the most weight in the S&P,
 the most weight in the NASDAQ.
 Just how are those options markets shaping up
 ahead of that key report this afternoon?
 Thanks for having me.
 And the interesting thing is you can see
 the fingerprint of Invidius earnings
 in the S&P 500 options market.
 And so to give you an idea of that,
 the S&P 500 is pricing an extra quarter point of movement
 for tomorrow, that's Thursday,
 because obviously in the video reports are close,
 to put that in comparison for Friday
 in the huge Jackson Hole event, S&P's pricing
 in a half a point of volatility for Friday.
 So comparatively, you can see it matters.
 This is a single stock's earnings.
 Now, the expectations right now,
 we've talked about the evolution
 of people's expectations of Invidius earnings reports.
 The market's pricing in plus or minus 5%
 in terms of that move right now.
 That is less volatile than it's been
 over the course of the past eight and 12 quarters.
 What exactly does that signal to you
 about how investors are positioning
 within Invidius given the broader macro narrative
 that's happening right now?
 There's two interesting dynamics here.
 As you mentioned, if you look back over a long enough period,
 it's a fair amount of volatility, about 7%.
 If you look at the last few reports and average results,
 about 2.75% of movement.
 So at a 5% and move for Invidius,
 it's a little bit rich in terms
 of what we've seen over the last several quarters.
 The other thing that's fascinating about Invidius
 is there's such a massive ETF
 and derivatives complex tied to the stock.
 You mentioned top holdings in the NASDAQ and the S&P,
 but do you know how many ETFs in the US listed US hold?
 Listed US ETFs hold Invidius stock?
 It's gotta be a ton.
 And if you factor in all the single stock,
 leverage ETFs and everything else,
 it's even more so, right?
 803 is the number, which to me is staggering.
 And so when you look at the impact of the stock
 to just the entire kind of US stock market ecosystem,
 it's just, that's why it's so important
 to the market while we watch it so closely.
 Another point to watch here as well as a Dow component
 in that sales force, right?
 Another one here.
 So how exactly is sales force shaping up right now?
 Sales force has a 6% implied move.
 If you look at the last several quarters,
 it holds at 4% or less the earnings move.
 And so the market is pricing a little bit more volatility.
 You obviously had SaaS apocalypse
 and a lot of the other kind of software AI narratives
 that have been popping up over the last couple of months.
 But traders are pricing in less volatility here.
 I think if you look at the way
 that options market is positioned.
 And so I'm not expecting much out of sales force earnings here.
 Stock is also around 210 is the high over the last couple
 of months, and so it's right against that resistance level.
 So I'm not expecting a lot of volatility here
 out of sales force earnings.
 And if I could kind of veer off the beaten path
 for a little bit here, we talk often
 about the options moves around these key earnings events.
 I'd also like to get your take on what's happening
 because the bond market is a huge focus for investors right now
 given Treasury Secretary Besson's comments,
 possible use maybe of the Treasury general account
 to kind of move interest rates around.
 How exactly are traders using options right now
 to position for future interest rate moves?
 And what are you seeing on your end?
 Yeah, we track the TLT, HYG, LQD, those big ETFs.
 And if you go back about two weeks,
 you saw a heavy putts queue, which tells us
 that traders were owning puts,
 they were betting on more downside in those ETFs,
 which meant higher rates, and this was back when rates
 were a long-term rates are approaching many year highs,
 decade highs, right?
 And so what we're seeing now, since Besson started kind
 of job owning, I guess I'd call it over the last couple
 of weeks, suddenly we've shifted much more neutral
 to even leaning a little bit bullish in some of these assets
 and TLT's been moving up, for example,
 quite strongly as rates have come down.
 Also tied to that as gold and Bitcoin,
 those are call skew heavy, meaning people have been piling
 to call prices here.
 Those are getting a little bit rich
 if you look at the options prices,
 but you can totally see people are kind of front running
 the idea that rates are going to kind of come down a little bit.
 You're certainly seeing that fingerprint in the bond ETFs.
 All right, so some possibly bigger T-leaves at play
 when it comes to gold, Bitcoin, and bonds
 on the options market side.
 And that's exactly right.
 And for Nvidia earnings, you may see an initial reaction,
 but then you really need that Jackson Hole event to clear
 before I think you see the trend really set up.
 All right, Frank Goodchew, but spot gamma,
 thank you very much.
 Please see us again soon.
 Thank you.
 All right.
 Well, don't miss Mad Money Tonight
 as Jim sits down for an exclusive interview
 with Salesforce CEO Mark Benioff,
 and Nvidia's Jensen Huang,
 following both company's earnings reports,
 big night, Mad Money Tonight, 6 p.m. Eastern time,
 morning calls back after this.
 All right, turning now to the latest round
 of primary contests, Senator Darleen Graham
 winning South Carolina's Republican Senate primary runoff,
 defeating Congressman Ralph Norman.
 The race was seen as a test
 of President Trump's endorsement power
 after a string of his back candidates
 stumbled in recent weeks.
 Yesterday's primary is coming with just two months to go
 until the midterm elections.
 And as CNBC's Garrett Downs highlights in a new article,
 Wall Street is increasingly turning its attention
 towards those big elections.
 Garrett actually joins us now with more on that story.
 Garrett, there are increasing expectations
 that Democrats could take partial,
 if not complete control of Congress
 from Republicans in a certain scenario.
 Why does a Democratic flip raise debt ceiling risks?
 Yeah, hey, good morning, Dom.
 So a Democratic flip raises debt ceiling risks
 because the debt ceiling becomes leverage
 when you have divided government.
 That means that Democrats might ask for something
 in return for their votes to raise the debt ceiling.
 Now, we've seen the scenario play out.
 In 2023 when Republicans flipped the house,
 they did the same thing.
 They demanded spending cuts in exchange for the debt ceiling
 and brought us right to the brink of default
 before an agreement was finally reached.
 Now, investors don't think we're going to actually get
 to a default, but they are expecting brinksmanship.
 And I had one analyst tell me to keep an eye
 on the bond market here to see how the market is weighing this.
 If you start to see a sell-off,
 that could be that they're taking it more seriously.
 OK, so if anything, I mean, we see some whipsawing.
 The executive actions, or they're worrying
 some analysts right now with regard to everything,
 how exactly is that playing out in which sectors actually
 in the market could be more at risk
 with some of the kind of policy whipsawing
 that we could see happen?
 Yeah, Don, so I had one analyst tell me
 that a divided government could end up
 with a more volatile Donald Trump.
 That means a Donald Trump that's no longer
 willing to work with Congress if Democrats take it over
 and does everything by executive action.
 So this analyst pointed me to the tariff decision
 that President Trump made last year.
 The president's tariffs were in effect for about a year.
 And they were one of the most market-moving things he did
 in his second term now.
 And the reality is he did that without Congress.
 And analysts tell me that it's likely
 that he'll do more things like that if he loses Congress.
 And that could lose what you normally get with divided government,
 which is the filtering out of the extremes,
 which the market typically likes.
 But with Donald Trump in office, it may be a bit of a wild card.
 OK, and of course, that leads us to the bottom line question.
 With all of these scenarios in play,
 should investors and traders be moving around
 or readjusting positions, or should they
 wait until after the election cycle actually happens?
 You know, Donald, I think it's really a wait and see
 because investors, just like us, we're
 going to be waiting for election results to come in
 before we really know who's going to be in charge of Washington.
 I would say one thing analysts are pointing to is
 they're warning that a delay in election results
 could end up causing some volatility.
 Different states all have different rules
 for how they count elections.
 And in this world that we live in now with Slim Margins,
 it could take a while before we know who the final victor is.
 So that's something to keep an eye on.
 All right, Garrett Downs.
 Thank you very much for the update there.
 And of course, you can go to CMBC.com to read Garrett's full story
 on the midterm election cycle.
 We appreciate it.
 All right, as we had to break, the world
 is mourning the loss of Dolly Parton,
 who died after a brief battle with cancer,
 according to her representatives.
 Flowers and other tributes going up at her home
 outside of Nashville, Tennessee, her Hollywood walk of fame
 star and at the Empire State Building in New York City as well.
 President Trump ordering flags to be flown at half staff
 and memory of Parton, who had recently
 canceled several engagements saying
 she was dealing with some health issues.
 She was, of course, a music icon with 25 number one
 songs on the Billboard country charts
 and wrote more than 3,000 songs.
 Her net worth was estimated to be between $450 and $650 million.
 In addition to her music career, she was also a movie star
 on Turpranur, theme park owner, and philanthropic
 therapists as well, including a million dollar donation
 to help fund Moderna's research into a COVID vaccine.
 But perhaps her most notable project
 is the Imagination Library, which invested more than $500 million
 to gift more than 300 million free books
 to young children worldwide.
 Dolly Parton, icon at 80 dead.
 All right, welcome back.
 It's time now for your call sheet
 where we look at the topics driving the trading day ahead.
 The crew members assemble today are,
 Warren Pies of 3, 14 research, Keith Buchanan
 of global investments, and Jose Torres of Interactive Brokers.
 Gentlemen, thank you very much for being with us
 this morning on the call sheet.
 Let's start with our first topic, which for me
 has to be in video earnings.
 I'm a stock market guy.
 I like to talk about stocks in the market overall.
 So let's begin Warren with you on just what you think
 the expectations are for Nvidia and just how much influence
 will they have in the coming days and weeks
 for the market narrative?
 Yeah, I mean, I think that the expectations
 are that margins are going to stay strong
 and that they're going to guide for shipping more product
 and so higher revenues out aggressively into the future.
 So I expect it to be like a typical Nvidia quarter
 where it's going to be all good news fundamentally.
 And so I just think that that's kind of consensus
 at this point and understood.
 And we haven't seen for now, maybe a few quarters,
 the Nvidia earnings report hasn't been as big of a market
 mover as it had in the past, say 2024 into 2025.
 So my big takeaway is going to be, OK,
 I expect strong results.
 We monitor, compute, demand ourselves,
 and it all looks extremely healthy.
 My big question is, how's the market react to these numbers?
 And we'll get more feedback from that.
 Of course, that's going to be a big one here.
 Keith, your portfolio manager, per se.
 So let's talk about whether or not Nvidia
 is a current holding for you.
 And whether or not from a portfolio manager's perspective,
 the Nvidia story has changed enough
 where you would make any kind of adjustment
 to those portfolio positions.
 Sure, we have exposure to Nvidia
 through broad indices and also directly in our shop.
 So we're also looking at it very closely
 from a broader perspective.
 We want to make sure that the valuation
 in the Nvidia's reflects right now
 is also correlates with the growth
 of expected going forward.
 We're really impressed with how the company has grown
 into a valuation that seemed rich a year and a half ago.
 But that growth continues to try to justify,
 you know, it's 21, 22 times earnings going forward.
 We feel it is not a huge hurdle to get a crosswind video.
 So we're looking at it from a valuation of growth standpoint.
 We're really interested in that facet of earnings report.
 All right, so that's the story from that perspective.
 There's also a macro effect
 because a lot of the conversations around data centers,
 hyperscalers, the spending on chips,
 the build out and everything,
 has added a level of macroeconomic influence.
 Whether or not it could be inflationary, Jose,
 is it inflationary to see companies like Nvidia
 doing the kind of business that they're doing
 and companies like OpenAI and others
 buying as much as they are buying.
 At the margins, Dom, not much.
 Really, from an inflation perspective,
 we're seeing that oil is down in the 70s today.
 That's going to be great news.
 I think treasuries are going to be set up
 for a rally third day in a row.
 I think the PC data in this morning
 does have room to miss to the downside.
 As far as Nvidia, huge macro story
 because, of course, all the construction
 and the AI infrastructure development
 is lifting GDP numbers.
 But it's also leading to a rising stock market,
 which is boosting the wealth effect
 and the bolstering consumption across the economy.
 We've had terrific growth.
 The growth is expected to continue.
 However, we could use lower interest rates.
 I think as we move into the future months,
 as things with US and Iran
 and reach a new level of normal now
 with more financial sanctions,
 more of a cold war rather than a hostile hot one
 with less violence or no violence that is,
 that can keep oil around the 70s, maybe even the 60s
 and bring the core CPI.
 August, I'm expecting it to come in at 2.4%.
 That could be 2.1%, 2% by Iran.
 And that's really conducive
 for a bullish environment in stocks.
 All right, Warren, with that in mind,
 I mean, he brought up the PC data.
 That's our second topic, of course,
 that we're talking about right now.
 Is the market set up, especially for the tech sector
 and some of the broader stories
 that we're seeing around AI?
 Is that kind of inflation story,
 one that we have to watch
 because it could be a real potential headwind
 if we start seeing interest rates move steadily higher
 above where we see them right now?
 Yeah, no, my view is that we took down our equity risk
 from overweight back in mid-April
 all the way into mid-August.
 And the reason we did that is because I look out
 and think this market's been so disjointed
 and so uncorrelated.
 If there is an event that spikes correlations,
 it could be problematic.
 Not that we would say we're bearish,
 but we see the macro events building out there.
 I mean, we have Jackson Hole this week.
 We have the PCE this week.
 I know what Jose is saying,
 but our nowcast points to core PCE being
 coming in around 0.28 month over month.
 And I think if we were to get a number like that,
 which is really difficult to predict
 out to the 100th decimal place,
 but if we were to get a number like that,
 I think you'd see a violent repricing
 in the odds of a Fed hike in September.
 And so yeah, I think we're on a knife's edge.
 In my opinion, the September meeting should be priced
 as if it's a coin flip or 50-50 proposition.
 So yeah, these are, we tech and everything
 is gonna be paying close attention to these macro events.
 All right, so that brings us to our third topic,
 that macro event at the end of the week
 and that's Kevin Worsh's first speech
 as a Fed chair at the Jackson Hole Symposium.
 Jose, what are your expectations
 for just what we could hear or not hear from Chairman Worsh?
 Well, you know Dom, he started off June,
 really Hawkes, July was more of a dovish meeting.
 I think he's leading in the dovish direction.
 If he's too hawkish on the balance,
 gee, if he talks too much about rate hikes,
 that could derail the economic expansion.
 And we'll almost certainly drive even more volatility
 in the fixed income markets,
 which of course, equities don't like.
 I think apps with excluding energy,
 inflation is a really positive story.
 I heard what Warren said about the PCE.
 You know, those numbers have been quite elevated,
 but I think the key differential
 and the significant factor for the US economy
 is the fact that home prices are essentially flat,
 rencer down in many areas of the nation
 and that's really driving this big spread
 between the PCE and the CPI.
 And I think that's gonna be something that in the months ahead,
 the data task force at the Fed,
 that Fed Chair Worsh has set up is gonna be looking into
 in terms of which of the price pressure gauges are more appropriate.
 All right, and Keith, the last word to you,
 from your perspective, do the markets need to see clearance
 from Nvidia and Worsh before seeing a catalyst
 to move higher or lower marketly?
 Sure, we look at the catalyst at the end of the week
 being the chairman of speech
 as much more important than Nvidia's earnings frankly.
 We look at the 30 year as the most valuable price
 in all of risk assets.
 Sure.
 That continues to move higher is risk on the rest of the market.
 We feel like that speech has to ruin Toa line
 in order to keep that 30 year rate contained.
 All right.
 Thank you very much gentlemen, Warren Pies, Jose Torres
 and of course, Keith, you can and we appreciate it.
 AI is here, transforming how we work, live and lead.
 And the women I talked to aren't waiting for the future,
 they're shaping it.
 I'm Julia Borsten, senior media and tech correspondent at CNBC.
 This is CNBC Changemakers, where I talk
 with the female leaders transforming business
 as AI reshapes the world.
 Follow and listen to CNBC Changemakers,
 women leading in the age of AI,
 wherever you get your podcasts.