Morning Call 8/28/26

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 The world waits on wash. I'm Dominic Chiu and this is your morning call.
 So I think it's a mischaracterization to say that markets haven't reacted because we didn't move today.
 Markets are reacting in real time.
 In the period ahead we've got important decisions to make about the policy rate.
 Markets in the intervening period I think have quite a bit of decisions to make.
 All right, get used to that voice. That was Fed Chairman Kevin Worsh back in July after the central banks decision
 to keep interest rates unchanged for a fifth straight meeting.
 Good morning. I'm Dominic Chiu, in for Morgan Brennan today.
 Today we hear from Worsh once again this time from the Jackson Hole Fed Symposium out in Wyoming
 in what will be his first public comments following what's been a volatile month for rates and treasury markets.
 A head of all of that, let's check U.S. equity futures which are called at very stable right now.
 A wait and see if you will.
 The Dow is implied higher by a modest 57 points.
 The S&P down by 13 and the tech heavier Nas Act trade down by about 90.
 On the treasury side of things, a key focus ahead of those Worsh remarks.
 We can see a slight move higher in yields 4.682% for the benchmark 10 year note yield,
 the two year note yield 4.234% and the 30 year long bond 5.204%,
 so a little bit of a drop in prices for treasury bonds and then a move higher in yields.
 On the dollar index, we're watching that move as well.
 Hovering just around the 99 level for about the last week or so,
 currently at 99 spot 1.9, just about flat on the session over the last week,
 up about 4.10% of 1%.
 On the energy complex, take a look at U.S. benchmark West Texas Intermediate,
 which is down about 1.10% of 1% in trading so far today,
 $83.43, a quarter percentage point decline for ice print crude futures,
 the world gauge, $89.49 there.
 Plus, of course, the AI trade following an 8% move higher for NVIDIA shares
 and a 22% move for sales force yesterday,
 NVIDIA, by the way, adding more than $400 billion in market value alone,
 this morning, those NVIDIA shares are giving some of it back,
 down about 1% sales force, is down about two thirds of 1% after again,
 massive moves higher for both those stocks yesterday.
 Now, with Wall Street trying to wrap up a positive week,
 let's see how Europe and Asia are shaping up right now.
 Ben Boulos is in London with the latest there and Elaine Yu is in Hong Kong.
 Elaine will begin with you.
 Good morning, Dom.
 So, the mood turned cautious here in Asia after the rally fueled by NVIDIA
 and the markets are also holding their breath ahead of Chairman Warsha's speech
 and concerns are simmering about inflation and also with ongoing uncertainties in the Middle East.
 Now, in South Korea, the wants strengthened to its strongest level against the dollar
 since July last year, and the benchmark bond yields rose as well.
 The costs be close down nearly 1.8% and the index heavyweight Samsung and SK Heinz
 are down more than 3% and 4% respectively.
 Now, in Japan, the NK225 etched up,
 an analyst say that there's a bit of a weight and sea attitude there ahead of the Jackson whole speech.
 At the Bank of Japan, Deputy Governor did stress yesterday in a speech,
 the need for timely rate hikes.
 He avoided any direct signals or clear pushbacks on such a move in September,
 but he did say more attention should be paid to the upside risk to prices than in the past.
 And the yen is still in the 159 level and advantage, the chip testing equipment company,
 did gain more almost 2% after being the main drag on the index yesterday.
 Now, China is looking pretty mixed.
 The blue chip CSI 300 and the Shanghai Composite are both down fractionally
 and the Hanksang index in Hong Kong is up slightly.
 The big mover here is the Chinese bubble tea giant Misoet.
 It has more stores globally than McDonald's.
 It's known for its affordable drinks and ice cream, and it fell 7% today
 and extending yesterday's losses after a drop in its first half profits.
 And its profitability is now under pressure from rising costs and expenses.
 Back to you.
 All right, Elaine, you helping us close out the week in Hong Kong with the market action there.
 Thank you very much for that.
 Now to Europe and Ben Boulos with the action out of the continent there,
 we'll send things over to you Ben.
 Yes, the Pan-European Stock 600 currently up around about half of 1%.
 European equity markets generally getting a boost in early Friday trade
 ahead of Kevin Walsh's highly anticipated speech
 as you've been discussing in Jackson Hole today.
 Investors are still trying to make sense of Walsh's communication style
 which has created a little bit of confusion.
 Despite that, though plenty of green to be found on the regional bosses across Europe,
 it is the Paris and the Italian markets that are leading the way higher
 but also gains to be found in London and Frankfurt.
 Automakers and chemicals as well as household good stocks
 are posting the most impressive gains today.
 Basic resources also up are the big mining names rising to the top of the gainers
 on the stocks.
 600 likes of Anglo-American, Antifagaster, Hochschild.
 We're seeing the gold price hold above 4600.
 So that is helping boost mining stocks there.
 To the downside and its retail tech and media where we are seeing the sharpest falls.
 Although, let's just put that in context, that fall in tech.
 Very, very slight giving up.
 Just a whisker of the gains we saw yesterday.
 Tech had been the big outperformer yesterday advancing 1.8%.
 No surprises for guessing why it was off the back of those Nvidia results.
 But let's see how markets react later.
 European markets will still be open when Kevin Walsh gives his speech
 at 3 o'clock London time today.
 We're off on Monday because of a long weekend and a public holiday here.
 So I'll hand it back to you for now.
 All right, enjoy the long weekend there Ben Boulos.
 Thank you very much for that for the market action out in Europe.
 Markets here in the US are closing in on the end of what's been a very volatile month.
 The major indices have held up pretty well,
 despite bond yields pushing the levels not seen in roughly two decades.
 As we head into September, one of the historically worst periods for stocks.
 We get one more major event to cap off the month of August
 when Fed share Kevin Walsh speaks today at the Fed's annual symposium in Jackson Hole.
 At 10 a.m. Eastern time joining me now is Dan Carter senior portfolio manager
 at Fort Washington investment advisors.
 Dan, we got kind of passed the Nvidia.
 I mean, I might kind of allude to a little bit later on,
 but the front and center issue today will be Fed chairman Kevin Walsh and his remarks.
 We know we do not expect fireworks coming out of Jackson Hole ever.
 But could we expect a little bit more market volatility given this is Walsh's first Fed symposium?
 Fed symposium in Jackson Hole.
 Sure, I think that's the right way to think about it.
 You know, what I think we shouldn't expect from Kevin Walsh is a complete 180 on his communication style.
 I think his mantra of no forward guidance will remain very much intact.
 You know, what the market is looking for and is hungry for is some sort of indication on how he's viewing the current situation in terms of inflation and growth.
 You know, he's likely to say, as he said many times, that inflation is too high.
 The committee is determined to get it back down to 2%.
 But what he says after that, I think will be more important in terms of, you know, what is his view on the latest string of softer inflation reports, softer retail sales, softer unemployment.
 So just how is he viewing the current setup in the context of the recent data?
 No, it's likely to be fireworks, but certainly the market is highly anticipating this speech.
 No, no.
 We know that the Fed, America Central Bank and the Treasury, very separate entities, very different mandates, very different kind of access to grind here.
 But they are working a lot more.
 They're being much more active these days.
 And in some ways, a scenario could play out where they could maybe be at odds with each other.
 How much do you think Chairman Worsh is going to address some of the dynamic between the fiscal and executive branch side of things versus the Central Bank's relationship?
 I think he is going to stay as far away from that as humanly possible.
 There's really no upside for him to bring in the discussion of what the Treasury Department is trying to do.
 I think what Hill is just continuing to reinforce is his Fed independence.
 We're going to do the right thing.
 We're going to look at the data, inflation is too high.
 And we, like I said, we need to hear from them, okay, inflation is too high.
 It's been too high for too long.
 But what are we going to do about it and when is really what the market wants to hear?
 And from a portfolio manager's perspective, we are not, let's say we get past Jackson Hole.
 We then have midterm elections coming up in just a couple months time.
 How likely is it that we see a more active Fed one way or the other on rates ahead of the midterm elections?
 Is that something we should be wary of?
 I think the elections themselves, you know, would they move in front of an election if necessary?
 I think that would happen.
 But the way that we're viewing it is ultimately the data is going to drive what the Fed's going to do.
 And so what is the data going to tell us over the next few months?
 Like I said, we saw a string of softer data on the growth front, employment, retail sales, et cetera.
 And we've seen a couple of inflation reports that are a bit softer than the previous trend.
 So we think those are important developments and are likely to support Fed on hold basically from here to the end of 2026.
 And we'll deal with 27 when it comes.
 But we think the data will support Fed on hold.
 And so that's what we're likely to expect.
 And the midterms obviously will be important.
 It's difficult to handicap how that's going to go and what it's going to mean.
 But in and of itself, we don't think the midterms are a big decision point for the Fed.
 All right.
 Dan Carter, Fort Washington Investment Advisors.
 Thank you very much. Have a nice weekend, sir.
 Thank you, too.
 All right.
 We have a lot more to come here on Morning Call, including the bull case for cyber stocks after a banner day for that sector yesterday.
 Plus out with the old and in with the new at gap, namely a new chief for the one of its most important brands at that portfolio.
 And then later on, a legal win for Anthropic and its ongoing fight with the Pentagon.
 We've got a very busy hour still ahead when Morning Call returns after this commercial break.
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 The realization that the AI adversary is here.
 They're moving at inference speed.
 And companies need the technologies that CrowdStrike created to help stop the breach.
 And that's which driving the momentum not only in this quarter,
 but sustainable tailwinds into the future.
 That voice was CrowdStrike CEO George Kurtz on Mad Money last night with Jim Kramer
 taking a victory lap, if you will, following a stellar earnings report
 and a 20% stock move to the upside in yesterday's session.
 It's best day by the way on record.
 And it wasn't just CrowdStrike.
 Names across the cyber defense sector coming off a banner day led by Octa
 with a nearly 30% pop.
 This morning a slightly different story as investors digest the latest earnings
 from Sentinel-1 and Rubrik as well.
 Both lower despite beating street estimates on the top and bottom lines.
 For Sentinel-1, it's outlook coming in just a bit softer than analyst expectations.
 Rubrik, for its part, just hit a 52-week high in yesterday's session.
 For more, let's turn to Tejas Desai, the head of thematic research
 over a global X ETFs and custodian of the bug that's the ticker.
 Cybersecurity ETF, which is up by the way 16% this month
 and closing in on a fresh 52-week high of its own.
 Tejas, thank you very much for the early wake-up call this morning.
 And let's talk a little bit about just how much you thought the cybersecurity story
 has maybe shifted given what we saw in results yesterday from those big players
 and what it means going forward for cybersecurity stocks.
 Don, first of all, thank you for having me.
 So fundamentally, what is changing is we're moving from this phase of AI.
 We're training large models, really focusing on developing AI
 to not deploying it more actively inside enterprises.
 And that creates a range of problems.
 And cybersecurity is really moving from being an attachment to their overall equation
 to now really being a defining component of that overall puzzle.
 And I think we're just starting to see the beginning of the problems
 as well as the opportunity really taking shape across the poor here.
 I think CrowdStrike as well as Octa really establishing the opportunity across the poor
 but we see a long cycle ahead in front of us,
 because when you think about all the extra needs that AI really needs to tackle
 from an identity perspective, data access perspective, governance,
 in a range of other applications, I think the total addressable market
 is actually quite higher in the AI age for cyber security.
 And has it grown that much, that total addressable market
 because of the tailwinds around artificial intelligence?
 We know that cyber in a world of agentic AI is going to be key
 because in a world of that many agents,
 you have that many more potential points of intrusion.
 And who exactly is best positioned to capitalize on that kind of massive tailwind?
 We know the rising tide lifts all boats,
 but some people have to be better positioned than others.
 Absolutely. Look, you have to look at the underlying paradigm shift that is played out.
 Historically over the past couple of decades,
 you saw these cyber tools helping enterprises defend against human error
 or data breaches and things like that.
 In the age of AI, you really have this problem of autonomy
 and autonomous agents inside enterprises.
 How do you really secure that?
 I think that creates an exponential frontier that needs to be secured
 and across the poor, that really maximizes number one opportunities
 for a lot of these incumbents.
 You think about CrowdStrike and the application that they offer.
 You think about Palo Alto and the applications that they offer.
 On the identity side, you have a range of companies, you know,
 Palo Alto made an interesting acquisition in the identity space,
 a bit of a couple months back.
 OctoClearly is one of the leaders in that whole dynamic as well.
 And so you have to stay broad and you have to get access
 to all the range of these point solutions that really complete
 the cyber securities stack across the poor.
 And look, if you take a step back,
 I don't think we're even seeing the problems that we could see five years or ten years down the line,
 which really, again, drives that total vegetable market for the cyber security team.
 How much are analysts, portfolio managers and investors going to scrutinize just how much more
 corporate budgets will have to swell by in the coming years
 because everybody's actively trying to deploy AI,
 but at the same time trying to protect not just their own systems,
 but their customers as well in that kind of a situation.
 Well, I think corporate cyber security budgets today are extremely low,
 especially when you take into account the AI age overall.
 I think roughly speaking, you have cyber security market that is in the $250 billion range
 when you compare that against where the total IT spending is, roughly $6 trillion.
 You're still talking about roughly 4% of penetration into that overall IT market.
 And now you have the IT market, almost doubling at a major stage once you have AI fully deployed out there.
 And so we see cyber security roughly being about 10% of that range of the total market
 and that brings you close to at least a trillion dollars in total vegetable market for cyber security.
 And so it's up to these companies to really grow into that
 and we're starting to see product launches.
 We're starting to see more M&A play out.
 It is really positioning these companies to capture more of that share.
 All right, Tejas Desai at GlobalX.
 Thank you very much, Evan, as we can serve.
 Thanks for having me.
 All right. Well, straight ahead on the show,
 why shares of this chipmaker are under pressure despite a top and bottom line beat
 that your mystery chart right there will reveal it after the break.
 But first, watching shares of Alphabet reports this morning federal regulators
 are probing whether it's you two product violated customer protection laws
 and its own free speech policies in suspending user accounts.
 Alphabet shares right now up half of 1% in the pre-market morning call is back after this.
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 It's NFL Kick Off Time.
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 Welcome back to morning call of checking some of this morning's big stock movers.
 Shares of gap are soaring as the retailer reported better than expected second quarter sales
 and it's namesake brand.
 The company's also raising profit guidance for the full year and named a new CEO
 for its struggling old Navy brand.
 Michael Francis, who is currently chief customer officer at old Navy,
 those gap shares of 14 and a quarter percent.
 Workdays, second quarter earnings and revenue edging by analyst estimates,
 guidance for subscription sales were just in line with expectations,
 slowing growth has pressured the stock this year but the stock has rallied earlier this month on reports
 silver lake would buy the software maker.
 Workdays shares relatively flat in the pre-market trade.
 The beauty second quarter results beating forecast and the retailers lifting its guidance for the year on stronger demand.
 Higher income consumers and younger shoppers are still splurging on trendy more profitable makeup brands
 despite sticky inflation.
 Alt is also benefited from an uptick in demand for affordable brands such as Elf.
 Alt the beauty shares down three and a quarter percent pre-market.
 And Marvel's second quarter earnings and revenue topping estimates and the chip maker is raising its annual sales outlook on demand for its data center products.
 But those shares are sliding 8 percent on concerns for investors about the timing of when the company will recognize revenue from a major custom chip deal it signed with Google just this past week.
 Well still on deck for the show cattle herds hitting their lowest level in more than 70 years but consumers still can't get enough despite soaring prices.
 We're looking at the winners, the losers and why prices are likely not going down for beef anytime soon.
 Morning call continues next.
 I'm Dominic Chouin from Morgan bread and welcome back to morning call.
 Right now US equity futures are in a wait and see mode as investors kind of wait on today's big Jackson whole speech from Kevin Worsh and the Fed.
 Right now the Dow's implied higher by a modest 42 points the S&P lower by 13 in the Nasdaq trade down by about 90.
 Treasuries of course a key focus ahead of that big Fed speech by Chairman Kevin Worsh.
 Right now we're seeing a move lower in bond prices and a tick higher in yields.
 The benchmark 10 year note yield at 4.684 percent the two year note yield 4.234 percent and the 30 year long bond 5.205 percent.
 The dollar index still above the 99 level right now but it's been up just fractionally over the course of the past week.
 Up about one half of one percent in that span but still flatten the session so far 99 spot 21 for the ice US dollar index.
 The crypto price complex is interesting we're still eyeing that 80,000 mark for Bitcoin prices.
 We're currently just below that 79,393 off about almost one full percent.
 Ethereum prices 2,491 dollars in change that's off two thirds of 1 percent there.
 Oil prices are again lower this morning as well.
 US benchmark West Texas intermediate off about one half of 1 percent to 83 dollars and four cents.
 One third of 1 percent declines for ice print crude futures the world gauge 89 dollars and 33 cents there.
 Global markets a mixed finish to the trading day in Asia taking a look at the early trading Europe as well.
 You can see the Kacken France is up about one full percent the German decks up one half of 1 percent and the FTSE 100 in the UK up 1 quarter of 1 percent.
 We're also watching the AI trade following 8 percent move higher for NVIDIA shares than a 20 who do percent move for sales force in yesterday session on the back of earnings reports.
 NVIDIA by the way added more than 400 billion dollars in market value this morning those shares are giving some of that back NVIDIA shares are down 1 percent in the pre market three quarter of 1 percent declines for sales force shares.
 Checking some of this morning's latest headlines the Wall Street journals reporting that federal authorities are preparing to file charges as part of a crackdown on betting on prediction markets.
 The journal says one set of charges are against US service member suspected of earning more than 1 million dollars from bets on military operations on polymarket.
 The other case involves a KPMG employee suspected of betting on whether a public company would beat quarterly earnings estimates.
 The journal says that charges in both cases could come this fall though final decisions have not yet been made.
 We're also following a report that NVIDIA is pausing some of its revenue sharing deals with AI cloud companies.
 Reportedly stepping back from the program last week less than two months after announcing the plan to help support the financing needs at smaller firms.
 The report adds NVIDIA could still revamp that program at a later date.
 In yet another legal twist a US judge is blocking the Pentagon's blacklisting of anthropic ruling the Pentagon's designation was illegal and baseless.
 In anthropic spokesperson tell CNBC the company welcomes the ruling its case in Washington DC is still ongoing and until it's resolved anthropic still technically remains a quote-unquote supply chain risk.
 And Bloomberg is reporting Venezuela is weighing a potential exit from OPEC saying the potential move comes as Caracas deepens its energy ties with America and that the idea has been discussed with officials in Washington DC.
 This following another report that the US is negotiating a deal to secure long-term access to parts of Venezuela's oil fuels.
 And the FDA is approving a once a day HIV pill from Gillian. The pill could help simplify care for some patients whose viruses under control but remain uncomplicated treatment regimens so keep an eye on those headlines.
 Now to the market event of the week Fed Chair Kevin Worsh is speaking at the Central Banks annual symposium in Jackson Hole Wyoming 10 a.m. Eastern time.
 Worsh is facing some pressure to clarify his views on inflation and interest rates but so far he has intentionally kept those private to avoid giving the markets any explicit forward guidance.
 Traders though in the prediction markets largely believe the Fed will keep rates on hold at its September meeting with just 31% expecting a rate hike.
 Speaking to CMBC just yesterday ahead of Worsh's speech Cleveland Fed President Beth Hammock and Kansas City Fed Chief Jeffrey Schmid suggested now may be the time to act on rates.
 I believe now is the time to act. I believe that we've been in an inflationary situation for more than five years. It's been running well above our target.
 I don't see any restriction in policy. I think we may be a little bit more accommodative certainly more accommodative than restrictive in the policy rate.
 Alright join me now is Stephen Whiting the co-CIO and chief investment strategist at the CIO group. Stephen thank you very much for joining us this morning.
 You heard the comments yesterday a lot of commentary coming from Fed officials some of whom have extreme influence over Fed policy
 and we're of course waiting on Kevin Worsh later on this morning. Do you feel as though right now the markets are appropriately positioned given what we now know from policy makers and what we expect from Kevin Worsh.
 It's so difficult when the chair of the Federal Reserve tells you you guys decide you run the risk you can tell us what you think we should do and yet will not explicitly endorse any point of view.
 So you have a chair who has said that the Federal Reserve sort of botched the last five years and certainly they made a mistake both on the fiscal side and the monetary side in the way that they handled the pandemic.
 But the tightening of policy in 2022 in 2023 again also did a lot to correct that but then they were unwilling to act at the last meeting.
 So I think there's just a lot of event apprehension and I think markets have been moving as if they're going to learn something today and they might simply not.
 Again short positions on treasury futures short positions on currencies these have all gone up there is if there's a lot of apprehension might be a lot of the anticipation of NVIDIA's news by the way.
 So let's juxtapose NVIDIA's news against what we are expecting or maybe not expecting from Kevin Worsh and the Fed.
 The markets right now seem to be taking a lot of the potential headwinds in stride.
 They are now seeing at least some of the halot lofty expectations from the AI trade and everything else come to fruition.
 Is there anything that can now derail that narrative going into this back kind of quarter of the year knowing full well that expectations have been met and exceeded and what those expectations could look like relative to what investor expectations are.
 By the way, I referenced 70% potential revenue growth at NVIDIA rather than coming to office.
 Exactly. So record high profits and you wonder why we're getting record high stock prices.
 We're actually a little bit short and we're going up further and again as you just said on NVIDIA it would seem as if the 48% EPS expectation growth for semiconductors next year will be too low if that number is right.
 So the issue is we are just living through historic boom the other side of that maybe not even 2027 there's going to be some payback for that.
 In terms of the near term it's just apprehension and risk. Now if you just think about the elections and midterm elections have been periods in which we've had somewhat softer period a little bit below.
 It's not necessarily statistically significant but there is some caution about the absence of really knowing whether election results will be disputed whether we can know.
 But then it's pretty clear that if you take a look at election since 1950 the midterm election results have had about 90% of cases have been higher in the three months after.
 So I just think it's one of those things where there's a pretty big wall of worry.
 In some cases maybe distorting the situation and that will worry again is held back the technology sector until you see results like yesterday.
 It's also interesting your firm provides I mean maybe simplicity put outsource CIO type services you help other family offices and large high net worth advisors kind of plan their strategy out.
 Among your client base has there been any shift in sentiment with regard to what their outlook is given what we know as macro uncertainties around things like maybe trade with Canada in the US the ongoing war in Iran with the US.
 We know that there's kind of policy uncertainty at the Fed but corporate fundamentals that seem to still underpin a strategically big move higher over the coming months.
 That clients at CIO group are very much in that sense of apprehension about how good things have been.
 I mean this has just been a 15 year period of 15% returns in the S&P 500.
 We know that it's not 15% forever but there is I think a lot of need to really digest this particular boom.
 How important this AI build out is how long it will last and history tells us that we're not going to just say well we'll look through this because things will be normal thereafter.
 It's we're going to very much rally on these booming earnings in related industries. I think that they want a lot of help in risk managing that.
 All right. Stephen Whiting the CIO group thank you very much have a nice week answer.
 All right. Well a lot more to come here on morning call including taking a bite out of high beef prices.
 A look at whether new White House moves to curb costs for that burger will actually work and the stocks benefiting from the ongoing cattle supply shortage.
 And as we head out to break a check on PayPal shares and reports a consortium of advent and stripe have decided to abandon their bid for the Fintech giant.
 The duo had previously offered $50 billion for PayPal which PayPal reportedly found insufficient.
 PayPal shares in the pre market trade maybe not expectably down 12.5% morning call is back after this.
 All right. Welcome back to morning call president Trump this week taking new steps to lower beef prices as consumers feel the pinch from higher costs.
 Rising faster than overall inflation but some are raising questions about whether the move will have any real lasting impact.
 Our Pippa Stevens has more on the beef with beef Pippa. Good morning.
 So beef prices are up more than 9% in the last year with the pound of ground beef now approaching $7 and while the Trump administration has cut tariffs for the next 90 days on some beef imports.
 It probably won't have all that big of an impact given the price rise is largely thanks to a structural issue of under supply.
 The US cattle herd is at its lowest level in more than 70 years which has driven up prices.
 Now this is a cyclical industry with Texas A&M David Anderson telling me it's rare for everyone in the supply chain to profit at once.
 And this time is no exception with ranchers now in the profitable position at the expense of packers.
 Tyson Foods announcing another plant closure earlier this month as elevated cattle prices and high fixed costs slash profits.
 But while ranchers are getting higher prices right now it follows years of depressed prices.
 This inflation adjusted chart from standard consultants Alton Callow shows rancher returns over cash costs.
 2018 to 2021 were all down years with many ranchers still recovering from those losses.
 What that means is while the economics are telling ranchers to rebuild their herds the jury is out on whether they will.
 Their facing rising costs including from feed rates and drought and rebuilding their herd takes years.
 In consistent policies from changing administrations doesn't help matters.
 So while cattle futures are off their April record beef prices will probably stay elevated at least for the time being.
 All right Pippa so the scars are still there I get it if I was a rancher and saw some really bad and lean years.
 I maybe wouldn't want to be as quick to kind of move things along.
 I wonder the whether or not given the price dynamic there there is any kind of evidence of a substitution effect happening right now for other kinds of meat.
 Are we seeing pork or chicken or other types of substitute products rise and value or demand because beef prices are so high.
 We've certainly seen a trade down to other forms of protein that are cheaper and of course protein is a very hot diet fat right now and despite the rise in beef prices.
 Consumer demand is still there so we are seeing some evidence of trade down but then what we're also seeing is that the grocers in particular are taking moves to try to keep consumers still buying by things like lowering their you know the amount they're putting in the package.
 So you're paying the same price so you don't think it's going up but you're getting less of the product or we're seeing consumers trade down in the cuts of steak that they're buying going for some of those lower cost cuts.
 But what's really fascinating here is that we're not going to see whether or not the herd actually rebuilds until January at the very earliest because that's when the USDA does their survey.
 And so that's when we'll see our ranchers confident these prices will stay because the other dynamic here at play don that could actually bring prices down is if ranchers see these high prices for cattle futures right now.
 Do they decide to then effectively flood the market and send their calves to market given they can get high prices now rather than waiting a few years and wondering will the consumer demand still be there and will price is still be elevated.
 So that is one one thing that could change the price dynamic going forward but the bottom line here is that this market is one of under supply.
 All right, Pippa Stevens with the latest on the beef price boom here. We'll see what happens. Thank you very much for that straight ahead on the show.
 The morning call crew assembles team up the training day ahead and the final big test for markets and what's been a very rocky month of training.
 Kevin Warsh, we're back in a moment.
 All right, welcome back to morning call. Here's what to watch today. We get economic data including the latest look at consumer sentiment.
 And of course, the feds Jackson whole summer continues that includes chairman Kevin Warsh delivering his keynote remarks at 10 a.m. Eastern time.
 And then it's a first on CNBC conversation with Chicago Fed president Austin Goolsbee 12 30 p.m. Eastern time as well. So a jam packed day of fed speak.
 Now it's time for your call sheet when we look at the topics driving the training day ahead the crew members assemble today are Ryan Dietrich of the Carson group.
 He's also a CNBC contributor Matt powers of the powers advisory group and below little of direction. Now the topics today we're going to start off with Kevin Warsh because we need to.
 It's the highlight of the day so far and what's going to be potentially the big kind of catalyst macro wise for the market narrative.
 Well, I'll start with you on this one is the market right now in your mind. One that's waiting on Warsh. Is it supposed to wait on Warsh? What exactly can he say or not say that would actually have a massive impact on markets?
 Yeah, fair question. I think first absolutely the market's waiting on Warsh. That's not a question right now. The second point that I'll point out is volume is actually really low right now.
 So trading volume you hadn't seen that pick up obviously no real volatility in the VIX. What's going to happen in my opinion is that we're going to look past this and the market's going to be focused clearly on jobs next week as well as some more additional economic data.
 Because Warsh is in this waiting scene period and I don't think you're going to see things change for the investor if I'm sitting at home and I'm trying to make an assessment of what's going on.
 I'm saying okay, where's the volatility? Where are the pockets and right now you see this debatement trade actually open back up.
 So you see this actually movement and gold as well as obviously big coin. So that's what I'm watching right now.
 Ryan, maybe not a surprise that August has a lower volume dynamic to it. In fact, I took a week or so off on vacation this month as well
 and that means I wasn't trading. Not that I do it actively as a TV journalist, but that's fine. But you watch these things.
 Is the volume dynamic coupled with the price action? One where this kind of Warsh setup is one that could lead to volatility?
 First off, good morning, Dom. Thanks for having me back. I mean, there's only the chance it could. I kind of agree with the comments that were just there.
 I mean, low volume is Warsh really going to rock the boat. I guess we'll know more in a couple hours.
 You know, August, specifically though, we're looking at one of the best August we've had in a while, Dom. I mean, that's, you know, 3%, maybe even a little bit more right now.
 You peel back the onion, so to speak. You know, we have almost 70% of the stocks in S.P. 500 above their 200 day moving average.
 I mean, there really is a lot of participation. One more quick comment. The last two times Warsh spoke at a Fed meeting.
 The S.P. 500 fell well over 1%. Most of us probably remember the last couple of times he spoke and Margaret didn't like it.
 Let's just be aware of that. But then we came soaring back quickly both times. So, you know, I don't think it's going to be too big of a deal to be honest today though.
 All right. So Matt, how concerned are you and your client base with anything that Warsh may or may not do today?
 Yeah, good morning. Hey, thanks for having me. You know, I don't think today's necessarily about Warsh telling us what the Fed's going to do in September.
 I'd actually be, you know, surprised if he makes any kind of direct guidance, you know, as far as clients go.
 You know, I think it's finally about getting a better understanding of, you know, what he thinks, how he thinks, especially with the broader economy.
 So I'd really watched the bond market here, you know, the long end and, you know, it's kind of a narrow lane he's in.
 So if he's too vague and doesn't give much confidence, you know, on the path towards his 2% inflation March, I think long term yields are going to move higher.
 Two hawkish, you know, particularly after you could say three dissenters, you know, it's it could lead to a short term rate hike, but that's the balancing act.
 You know, it's he's got to show you serious about inflation without unnecessarily sending yields higher.
 And the other risk here shortly or quickly, you could say very little, you know, if he comes up to Jackson Hole, we don't have a better understanding.
 You know, it could actually send it could be some some more volatility for the markets here.
 All right, speaking of volatility and Ryan alluded to it, we was a pretty choppy august, and we're heading into a month in September that and Ryan, I'll go to you for this one first, has historically been one of the worst months for S&P 500 performance on an average basis.
 So because you crunch all these numbers all the time, Ryan, a choppy august into what is a seasonally weaker part of the market in September, what are the expectations?
 These are the mid term election cycle as well.
 Well, let's get ready to hear this a lot. September is the worst month on average, the worst since 1950, the worst the last 10 years, worst the last 20 years, and I believe the 10th worst in a mid term year.
 Now, here's what's interesting, Tom. I just look at this before we came on. I looked at the 10 worst September ever.
 The S&P 500 was negative nine of them coming into it, what I'm getting at, usually the bad September is historically when you have a weak market coming into it.
 That's not the case right now. Now, one more, when the when August is higher, which is in August is also pretty weak. I know not this year.
 When August is higher and you're up like double digits coming into the usually weak September.
 Once again, historically, September is up like 1% on average, stronger. So there's a lot of numbers I just said. I think the reality we had the early midterm year volatility this year.
 We know we usually have midterm volatility had earlier. And I think the surprise rally again is still here. And I think we probably have a higher September, which might not be the consensus. That's what we're seeing out there now.
 All right, so a good S&P 500 leading into September may change the narrative a little bit. Matt, are there any key parts of the market sector industry wise, thematically that you are eyeing because of the way the market set up right now with what could be a more volatile midterm election cycle coming up?
 Yeah, some more positivity here and actually like it. I think the starting point for the market right now. It's that earnings are rock solid. You're looking at the strongest earnings growth we've had since the third quarter, since key three of 2021, roughly 51% strip out Amazon and alphabet you're at 32% but still still strong.
 So it's broadening out 10 of 11 sectors grew earnings and almost all a double digit. So you know, I think you give AI a lot of credit for that. Obviously, you know, we're starting to see the impact move beyond just the traditional name.
 So I think as long as the earnings continue to look like this, you know, that's where everything's at. I think it's pretty pretty pretty difficult to get overly negative on the market right now.
 And speaking of AI yesterday, we got big results. Some would call them bumper results from Nvidia and Salesforce as well. That kind of massive move in some of these AI related names.
 Let's talk a little bit below all about Salesforce. It is a big part of it's a Dow component, big part of the tech scene and everything else. Do you think that those Salesforce results have kind of somewhat changed the narrative?
 We our own Jim Kramer says that both those results in video and sales for us have kind of retilted things a little bit more bullish from an ETF and markets perspective or we see in that kind of play out in trades.
 And no, absolutely the first thing I'll point out is I think we're in a bit of a nominal bull market in that sense, right? You're not seeing real growth on the other side.
 So inflation is eating away at actually how investors would actually benefit on the back end of that. So here's what I mean by that.
 If you think about what happened yesterday, you're seeing a broadening out of the AI trade and it's really about how enterprises are going to be able to manifest real returns, real value and extract from historically SaaS-based platforms.
 Here's the other component I'll point out. You're seeing a need to diversify your concentration risk on the equity side.
 You're seeing actually more flows into equally way to cues versus just holding these concentrated seven to ten names. And that's a big point right now going to the back half of the year where you actually don't have a lot of noise or market I would say announcements.
 All right. Matt has the SaaS watch stomped out the SaaS apocalypse.
 SaaS-pocalypse is something that's a word, right? You know, I think it's like this. You look at the IGV and you look under the hood and there's so many different names. I think you and I discussed this before on power lunch.
 So many different names inside there that you have everything from anything software wise. So not necessarily, you know, I think what happened there yesterday was great, was wonderful.
 But I think that is it proof that enterprise software slowdown has officially bottomed out? I don't know. I think Salesforce could be showing their kind of pulling away from some of the other software names at this point.
 And Ryan really quickly just a few seconds left. Salesforce's outlook. Does it set up well?
 No, we think so. I mean, I think it is lifebloodable market, Dom is rotation. We're seeing that one more quick when I heard the word sentiment.
 You look at sentiment. People still aren't that excited. I mean, they really aren't that AAI sentiment poll. We saw a huge spike in bears, more bears and bullshare.
 Sure.
 Six weeks of row. Nobody's optimistic. I think that's bullish. All right. Ryan Dietrich, Matt Powers, below little. Thank you guys very much. Have a great weekend.
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