Markets, rates and AI risks shape the September outlook 8/31/26

 Hikes and strikes. I'm Morgan Brennan and this is your morning call.
 Good Monday morning. It's great to be back with you. Let's get a check on US stock futures
 on this last trading day of August. Can you believe it? Well, we're poised to open lower here
 with the S&P poised to open down 19 points. The Dow 105 points and the Nasdaq
 basically just below the flatline down 12 points. That's after a down day for the major
 averages on Friday but an up week for the major averages last week. So let's get a look at where
 we stand closing out the month of August as well. The Dow, the S&P, the Nasdaq and the
 Russell 2000 are all up between 1.4 and 4%. The S&P and Nasdaq looking at the first positive
 months in the last three while the Dow is looking to make it five straight months of gains.
 We're going to do a deeper dive on all of that coming up later this hour. But meantime,
 let's get a look at the treasury market as well. On the back of Kevin Warsha's big Jackson
 whole speech is first as Fed Chair last Friday. Investors also waiting monthly jobs report at the end
 of this week. And you can see, for the most part, taking a little bit of a breather here across
 the yield curve with the US 10 year treasury yielding 4.71% and the Fed sensitive to your treasury
 yielding 4.3%. Let's get a check on the dollar index to give them back some gains here after
 strengthening against other major currencies on Friday. You can see right there the dollar index
 levels 99.56. And let's get a look at crypto too with Bitcoin holding below that 80,000 mark.
 It's lifting a little bit this morning back below 79,000. But my goodness,
 what a move we have seen in Bitcoin this month, particularly in the last couple of weeks here.
 So $78,441 give or take is the level for BTC this morning. You can see other cryptocurrencies
 under a bit of pressure here too. A check on Apple shares, though, today marks the last day
 of Tim Cook as CEO for that company. John Ternes is set to take the reins tomorrow. And you
 can see the shares are basically flat here. We're going to have much more on that C-suite shift
 coming up and why it matters and really is one of the big tech stories of the week.
 Turning to the energy markets following fresh strikes between the US and Iran for the first time
 in about a month. Tehran announced its launched missiles at two US bases in Jordan this after
 the US carried out strikes on Lyric Island in southern Iran yesterday. You can see oil is moving
 higher this morning. WTI is up about three and a half percent trading around $86 a barrel. Brent
 crude is around $91 a barrel also up about three and a half percent. We have not seen particularly
 for WTI. We have not seen major moves overall or the month of August despite all the volatility we
 talk about on a day-to-day basis. But let's get the very latest with our Dan Murphy who's an Abu Dhabi
 and Dan there has been quite a bit in the last call at 12 to 18 hours.
 Indeed, Morgan. Good morning to you. As you mentioned oil prices popping this morning after
 Washington's first confirmed attack on Iran in several weeks. US hot forces hitting two
 Iranian rocket launchers on Lyric Island on Sunday. Central Command saying these launchers were
 being prepared to fire rockets loaded with sea mines into the Strait of Hormuz basically posing
 an imminent threat to civilian mariners, commercial shipping and the free flow of global commerce
 into the waterway. Remember the United States had said it only recently finished clearing mines
 from Hormuz and President Trump has already sent a warning shot this morning threatening once again
 to blow up Iran's cargo island on truth social. Now Iran has responded with missile fire towards
 Jordan. We saw Jordan's military saying it intercepted eight missiles that entered its airspace.
 Iran also claiming to target US military sites here in the UAE, but the Emirati military says it
 intercepted an Iranian drone over its territorial waters, but denied reports of a missile strike
 on Al-Minhad airbase. The UAE presidential advisor Dr. Anwar Gargash also weighing in. He said
 the region cannot remain in a state of no war, no peace. He also said these attacks on the Gulf
 States and Jordan have failed and, he called for de-escalation, the restoration of normal shipping
 through Hormuz and a more credible political roadmap. Morgan? Yeah, it's interesting because we're
 having this conversation. We've seen these developments in the Middle East Sunday and into today
 here and also some of these attacks further attacks on ships as well. Meantime Friday evening,
 you had President Trump announcing this deal for Venezuelan oil. What would account for about
 a fifth of Venezuela's oil reserves, also saying that we could see the SPR, the strategic petroleum
 reserve refilled using some of this crude sour, the sour heavy crude from Venezuela to just
 taking a step back, looking at the oil markets globally right now, how should investors interpret
 all of it? Well, this is really interesting to watch as well because with regards to the war,
 we know the Trump administration has been pushing economic sanctions and maritime pressure
 to try and force Iran to reopen the waterway and make these nuclear concessions. This latest
 exchange that we've seen, this exchange of fire, raises the risk that the conflict could spiral
 once again. That's part of the reason we've seen oil prices pop up. But the fallout from Venezuela's
 new energy deal with the United States is also being watched very closely here in the Gulf.
 There's been no official response yet from the Gulf governments, but we do know that the UAE
 and Katari businesses, companies in those countries have started moving into Venezuela's energy sector
 already. They're partnering with BP on an offshore gas project, for example. I think the bigger
 issue for the region, Morgan, is OPEC reports now save Venezuela, wearing a possible exit from the
 group, no decision being made. But of course, that would have a big implication for the Gulf producers
 here. All right. We'll see how all this plays out, Dan Murphy. Thank you. Also fascinating,
 since we've got reports that this will be overseeing this deal between the U.S. and Venezuela,
 we'll see by the Pentagon's office of strategic capital, perhaps putting a fine point on this idea
 of energy as a national security topic. Well, let's now check on how overseas markets are kicking
 the week off. In Europe, markets in the UK are closed for a holiday, but if we check the rest
 of the region right now, you can see some green on the screen. I'll be a fractionally. Kat French
 is basically flat to the upside. Italy, Spain are a little bit higher this morning. Also,
 keep an eye on European natural gas prices, which seem to be moving back towards three or highs
 right now, given what we're seeing and talking about geopolitically, not just in the Middle East,
 but also what we're seeing between Russia and Ukraine as well. Let's get a look at markets in
 Asia too, or at least Kim has more from Singapore there. Lisa.
 Hey Morgan, so Asian stocks wrapped up the last trading day of the month,
 broadly lower due to renewed fears of an escalation in the Middle East. In China,
 the EV maker BYD, though, it reported second quarter earnings on Friday, and opposed that
 its first quarterly profit rise in more than a year, thanks to strong exports. According to
 a rotors estimates, BYD's overseas shipment surged around 70% in the first half of the year
 from a year ago, and staying in the greater China area, the fast fashion giant Xi'in is set to
 debut on the Hong Kong Stock Exchange tomorrow. The company is reportedly being valued at around
 26.5 billion US, which is just a quarter of its peak in 2022. The company has been expanding its
 footprint in the US, but that's been facing some setbacks as well. And finishing over in South
 Korea, SK High Necks is reportedly exploring setting up a joint venture in Japan to make memory chips.
 Back to you. All right, Lisa Kim, thank you. Well, let's turn to the Fed Chairman Kevin Worsh's
 big speech at Central Banks Jackson Hole Summit late last week, laying the groundwork for possible
 interest rate hike. At least that's how the markets interpreted it in the coming months. Worsh
 are viewing that while the economy is strong and the labor market is at full employment,
 inflation remains a concern expressing its frustrations with a Fed's fight to curb elevated
 prices. The responsibility for 65 months of sustained elevated inflation sits squarely with
 the Central Bank, and that's where it belongs. So here is my standard. We must be confident
 that underlying inflation is moving to our objective, clearly and at sufficient speed.
 Otherwise, we have worked to do.
 Well, when it comes to rate, it's 54% of users on Cal State expect the Fed to hike by 25
 basis points at next month's meeting. 4% believe the Fed will hold 47%. Excuse me,
 believe the Fed will hold steady. For more, let's bring in Jeff Klingelhofer,
 Senior Portfolio Manager at Aristotle Pacific. Jeff, it's great to have you on.
 We saw a major, I think, repricing in the Fed's, in the Fed's funds futures market. She said
 as slowly as possible, clearly as possible. Coming off of his speech, what is your
 base case given the comments we did get from Chair Warsh?
 Yeah, look, I think what the Fed is trying to set up, we have to remind ourselves what Jackson
 Hole is, we have to remind ourselves, this was not forward guidance from Warsh. So I think on day
 one, the initial inclination is to read this message is very, very hawkish. I do think the Fed
 absolutely put the burden of proof on inflation coming down. We have to continue to see that
 if we think the Fed is going to stand hold. But we'll have to remind ourselves that is exactly
 what we have seen. We have seen signs of inflation coming down. We've seen signs of the labor
 market potentially pulling back and weakening just a little bit on the margins. And so for me, I think
 we're on this perpetual hold, unless we see inflation actually move back up. The big question
 becomes what was the Jackson Hole speech then? And to me, what it was, it was really framing that
 this is a different Fed. And this Fed will have a very different reaction function because we are
 in a very different environment. Inflation is above trend, not below trend. And that means that this
 Fed does not have the markets backs. I mean, in light of that, we've had a very volatile month
 for the bond market and what we've seen with Treasury yields, for example. At the end of the day,
 is it all going to come down to bond vigilantes and how investors are interpreting in that market,
 is interpreting the Fed stance, whether it's a different time period, a different era for the Fed,
 a different reaction function or not. Well, I think the bond vigilante is absolutely there. They
 are ready to march. But the reality is that the bond side hasn't shifted. We are still looking
 to the Fed. And so you're in this delicate balance where Chairman Worshin in a previous press conference
 celebrated the bond market doing the work of the Fed. Now, if the Fed or Reserve itself doesn't
 actually move, eventually those rates will come back down, long and will probably re-steep in.
 So again, I think we're just in this wait and see period for what inflation does. But in my opinion,
 we're not past the challenges of inflation. And so we just talked about the war. We see oil prices
 continue to march on. Inflation is very ingrained. And I think that that puts the burden of proof
 eventually the data will show that. It will give the Fed cover. Yeah. I mean, in light of that,
 you just sort of took my next question out of my mouth. But it is how to understand
 renewed strikes in the Middle East right now, what we're seeing with Russia, Ukraine as well.
 And just in general, a geopolitical environment that is leading to supply shocks and shortages
 for a number of key commodities and asset classes in real time right now.
 Well, I think that's right. And I think the Fed recognizes that again, the world is just different.
 Coming out of this disinflationary shock, which is not representative of the long time periods
 of economic history, the Fed has to be different. And the inclination was to look at every individual
 shock, whether that be the COVID slowdown, the reopening trade, rents moving into housing prices,
 right? The war now and oil prices, potential AI and memory chips, these are all one off kind of
 temporary shocks. And I think this Fed is looking at it and saying, well, if it's a series of shocks,
 it's just too much demand chasing too little supply. I think worse really hopes that AI will be the
 saving grace for this economy. And I think we all hope that it will be. But I'm skeptical. And so
 if we continue to see this supply demand a mismatch, ultimately that will force the Fed's hand.
 And again, I think this Fed is willing to take that bitter pill, that medicine, which is
 we just need to bring to demand function down. And that ultimately means slowing the economy. And
 that's not something the markets want to hear. But it's something that this Fed is willing to do.
 Okay. Jeff Klingelhofer, it's great to have you on to kick off the hour. Appreciate it.
 Thank you. We got a lot more to come here. I'm warning call, including much more on
 Kevin Worsh's big Jackson whole speech and the rate strategy ramifications for the housing sector.
 The CEO of Century 21 is standing by plus we've got much more on the market's turbulent August.
 And what that may signal for one of the traditionally toughest months of the year for investors.
 And later we're turning the page at Apple as CEO Tim Cook prepares to hand the keys over to John
 Ternes, please depart. The challenge is awaiting him in leading at the tech giant. A very busy hour
 still ahead. Would you have it any other way? Morning call, be right back.
 Welcome back to morning call, Fed Chair Kevin Worsh, acknowledging in a speech on Friday the
 impact inflation. And in turn, higher mortgage rates are having on the US housing market,
 which has seen three straight years of sales at multi decade lows. But it also made clear the
 Fed's mandate is to respond to overall economic conditions versus tailing rates to boost a specific
 sector. Sound monetary policy helps households and businesses to prosper. When carried out
 effectively, it broadens and deepens the momentum of our economy and helps to secure America's
 leadership in the world. Joining me now is Mike Meadler, president and CEO of Century 21.
 Mike, it's great to have you on the show. Welcome to you.
 High mortgage rates, at least high versus what we've seen over the better part of the last two
 decades. How much is that impacting and weighing on housing right now when Chair Worsh? This is
 basically the second time or third time he said it. That this is one of the few areas of the market
 in the economy where policy is restrictive. Well, happy Monday morning to you, Maureen. Thanks
 for having me on. Look, I think that the real estate, the residential real estate industry
 specifically is probably one of the most rate-sensitive industries that we have out there. Certainly,
 any movement in the mortgage rate, especially higher, turns demands from a buyer side really
 quickly. I think what you have right now in the market, and as you mentioned earlier, this has
 been going on for a couple of straight years now. But you have more options than we've seen quite
 candidly in the last couple of years. We have inventory out there right now stacking up, and this
 is what happens when mortgage rates move a little bit higher. We've got about 1.1 million homes
 in the market right now. That's more than we've seen pre-pandemic. So going back to 2019 is when
 you have to look back to see that kind of inventory out of the market. And quite candidly,
 that is showing up in about 42% of homes taking a price cut right now. So there's a little bit more
 optionality. The question with the mortgage rate where it is is affordability for our buyers
 in the market. Yeah, and I realize housing is hyper local here, but when I hear you put a stat
 like that out there, what does that mean for pricing and pricing getting to a place potentially where
 you actually see more potential buyers coming into the market? I mean, I think you're exactly right.
 I think you see this kind of case shaped marketplace no matter where you go. So you talk about
 a little local markets, right? And certainly the luxury market. You have, I think a lot of movement
 on the higher end. You have some markets like where I live in New Jersey and New York and the
 Northeast, where inventory is still constrained. And the mortgage rate really isn't bothering the active
 buyer, where we're really seeing the issue, I think, is obviously in the first time home buyers
 that kind of move up buyer that has had the two or three percent mortgage left over from
 refinancing during COVID. I think really what we need to see to get things stoked is not a
 magic rate is kind of more confidence as your last interviewer was speaking about for the overall
 market and then certainly affordability because housing is inflationary, not just in the cost,
 not just in the borrowing cost, but obviously closing costs, taxes, prices, all those things that's
 around the housing market. I think you're going to need a little bit more confidence for you to see
 a real surge in that kind of first time home buyer into the market. Yeah, home insurance too, which
 has been a very sticky part of services inflation as well. Speaking of building costs, how to assess
 those or understand those and the impact that could have on housing when you think about another
 tranche of candidate tariffs, for example. Yeah, I mean, so from the home building front,
 you see confidence kind of at a low here over the last year. What you're seeing a lot is obviously
 price reductions and a lot of the incentives that you're getting out of the new development space.
 The good news is I love what the government's done with this 21st century road to housing,
 really trying to stoke new development because all this gets fixed honestly on the supply side.
 You're going to see some of the largest generations in US history coming to the main home buying
 years. We know we've been undersupplied for years, if not decades right now, in the housing market.
 And so hopefully all those little steps help that home builder confidence,
 help get new starts moving and going and help build that affordable housing for that first time home buyer.
 Okay, Mike Meadler, great to have you on. Appreciate it.
 Thanks Morgan, appreciate the time.
 CEO of Century 21 real estate. Well straight ahead, we're putting pressure, we're not.
 Somebody's putting pressure on the G20. We've got those details on Treasury Secretary
 Besson's strategy to get allies to rethink trade tactics with China. But first,
 a check on shares of Aeon. The Wall Street Journal reporting that the company is
 nearing a deal to buy insurance broker USI from KKR for about $17 billion that would include debt.
 The deal could be announced as soon as today, USI specializes in risk management,
 employee benefits and retirement consulting has roughly $3 billion in annual revenue.
 This would put Aeon into mid-size business market in a more meaningful way.
 Morning call, we'll be back after this.
 We have a news alert for you on CXMT. The Chinese memory chip maker is suing the Pentagon for
 being placed on a list of companies. The US says are helping China's military CXMT
 had been designated as such under President Biden and the Trump administration has kept it on the
 list, which can trigger government contract restrictions. CXMT says it makes DRAM trips for
 civilian and commercial use only the Defense Department telling Reuters it doesn't comment
 on pending or ongoing litigation. You can see shares of CXMT finishing down 1%.
 Treasury Secretary Scott Besson plans to ask G20 members to review their terms of trade
 as the group's finance ministers prepare to gather at their meeting in North Carolina today.
 Besson telling Reuters about the plan saying that the world can't have a
 China with a $1.2 trillion trade surplus and that other countries need to press Beijing to
 strengthen domestic demand rather than relying on foreign shipments. The comments come as
 Washington and Beijing prepare for a summit between President Trump and Xi next month.
 Xi Jinping and Russia's Vladimir Putin meantime are gathered in a courgette stand today,
 attending a major summit with fellow leaders from Iran, India and other countries.
 Gathering comes amid the Iran War, which has tested the efforts by China and Russia to
 be a counterweight to Washington's influence. Yunus Yun joins us now from Beijing with more.
 Hi, Yunus.
 Hey, Morgan. Well, the Kremlin says that the two are advancing talks on the power of Siberia
 to pipeline. This is a natural gas project that is meant to boost and by some estimates,
 even double the natural gas deliveries from Russia to China. This project has long been
 stalled over pricing as well as other terms. Now, the Kremlin also says that these talks are
 going to be ongoing all week at a different forum in Vladivostok. Today, China confirmed that
 President Xi's close confidant and vice-premier Dingshoye-Sheng is also going to be dispatched
 for that forum. Now, the bilateral is on the sidelines of a larger Beijing-backed gathering
 that is called the Shenghai Cooperation Organization Summit, and it is seen as a counterweight,
 really, and very anti-West. The members include Iran. It's unclear, though, as to whether or not
 President Xi or if the organization itself is going to commit any more help or aid to Iran
 during this summit. Morgan. What's so fascinating to me, Yunus, is that for a number of years,
 we really didn't see President Xi of China doing much international travel, and that's really picked
 up when we had the trip to North Korea earlier this summer. As you mentioned, this summit this week,
 then there's a trip to Egypt, then there's the BRICS conference, as well in New Delhi, and then,
 of course, coming to Washington, although if memory serves, China has not actually confirmed his trip to
 Washington. Right, it not specifically to Washington, but the Chinese have confirmed that that
 President Xi is going to be traveling to the U.S. in the autumn. But we don't know the details,
 the way we know the details, of course, is from the White House. But as you said, it is very unusual
 to see President Xi traveling so much. He only went out, as you mentioned, to North Korea in June,
 and what we've seen is that the pattern this year has been 20 leaders coming to pay homage
 to President Xi. So a little bit of a difference now in the way that diplomacy is heading,
 and people are wondering if this is just another sign that President Xi is feeling a bit more
 comfortable and wants to gain that diplomatic clout. All right, Yunus Yun, great to have you on. Thank
 you. Well, as we had to break a check on SpaceX shares, which are down fractionally pre-market right
 now, Yunus confirming a report over the weekend that the company is taking on the task of building
 these hard-to-manufactured natural gas turbine parts. It's been a bottleneck for the power build
 out that's necessary for all that AI compute. Musk's saying SpaceX's in-house development will
 accelerate the timeline to bring turbines online by up to 18 months, calling it a quote,
 profound game changer. Also, we are tracking shares of Airbus, too, which down 1 percent.
 Financial times reporting the Aerospace Giant is gauging interest from potential buyers,
 where it's US space business. Such a move with streamlined the defense and space portfolio
 and allow Airbus to focus on a new European satellite venture to better compete with SpaceX
 and Chinese rivals. Morning call, we'll be right back.
 I'm Morgan Brennan. Welcome back to Morning Call. Let's get a check on US stock futures on
 this last trading day of August. You can see firmly in the red this morning with the S&P
 points to open down 19 points, the Dow 109 points, and the Nasdaq 15 points that's after a down day
 last Friday and up week for the major averages last week. And so far, all the major averages
 hanging on to games for the month of August. So let's get a look at Treasuries on the back of
 Kevin Worsh's big Jackson whole speech as well. Investors also awaiting the monthly jobs report
 at the end of the week. You can see taking a little bit of a breather mostly across the curve.
 With the US 10-year treasure yielding 4.7 percent and the Fed sensitive to your treasure yielding
 4.32 percent. We saw a big run up in the front end of the curve on Friday last week. We're also
 watching energy after fresh strikes between the US and Iran for the first time in about a month
 Sunday into Mondays, Iran announcing launch missiles at two US bases in Jordan. And this after
 the US carried out strikes on Lerick Island in southern Iran yesterday, basically sent
 Com saying that they were stopping the possibility of more mines in the Strait of Hormuz from
 being deployed. So you could see oil right now is moving higher up about 3 percent plus for WTI,
 which is trading around $86 a barrel. And Brent's also up 3.3 percent trading around $91 a barrel.
 Let's take a look at gold too. It's about 9 percent for the month of August. Looking at its best
 month since February, even as we take a little bit of a breather here this morning adding to some
 of the losses we saw Friday as well. Silver also a bit lower this morning, but has also had a very
 strong month. Markets are set to close out what's been a turbulent month for investors overall
 grabbing with a number of headlines around a Treasury intervention in video earnings. Kevin
 Worsh's Jackson whole speech is just to name a few also some more trade war tariffs up with Canada
 still a solid month for stocks with the indices up between 1.4 and 4 percent. The S&P and Nasak
 are looking at their first positive months in the last three while the Dow is looking to make its
 fifth straight month of gains. So for more on what this could mean, all mean moving into September
 and beyond. Let's bring in Frank Capillary founder and president of Cap These is also a CMBC pro contributor.
 It's great to have you here. You come loaded with charts, which we love. September historically
 tends to be a very weak month, but before again to that, what did August set us up with?
 August set us up with a good month as we know, but one of the main reasons for that is that
 S&P 500 breath continues to be strong. So we see that with the S&P 500 obviously breaking out
 right here, but I think the most important part was what happened here at the end of May
 beginning of June. That's when the S&P 500 failed, right? Because at that time, technology started
 to fall apart, setting doctors as well, considering that there's so much weight in the S&P, we needed
 the rest of the structures to come up. So if we look at the events of client line underneath here,
 they're actually moving higher as well. So I write that down there. It's pretty clear to see,
 is that we need the breath, we need the sectors to continue to work in unison for this to continue
 the work, especially if technology does not come back. Okay, XLF, XLC to your point about technology
 communication services, some of these parts of the market and how important they are.
 Exactly. So we're looking at the XLF next and we can see here, this is a really long-term chart
 going back to 2012, monthly log scale. So what we can see here is a breakout, you know, all
 time highs. That's important because we can see what happened last few times that occurred
 where those breakouts not only led to immediate upside-down follow-through that happened for
 months, even years, right? So this is just marginal right now, but very important because the
 financials, again, big part of this breath discussion, second biggest sector than the S&P 500,
 obviously very important to market any economy overall. Okay, in terms of the setup then for
 September, which we know historically tends to be a very week month, the weakest month of the year,
 particularly in midterm elections. I think it's probably worth noting that when you look at some
 of the data, it's like the middle of August to the middle of September tends to be a down draft.
 We're actually basically flat for the S&P over that time frame, but what are you watching going
 into September? Well, getting back to the S&P 500 for a second, we're now 18 straight days without
 1% moving in the direction, which is the longest such streak of 2026. So it just tells us that
 volatility has been low from that perspective, and we see it here again, and also probably not going
 to last to be that quiet, meaning that this is going to, this is going to all that occur right here,
 and so that looks like potential consolidation above a breakout. As we know, there's a lot of
 catalysts coming, especially with the feds meeting, and so if nothing else, expect this really quiet
 trading range and relatively soon. Okay, how much does that hinge on 10-year treasure yields?
 Very much so, and that is probably the most important thing we're watching going into September.
 As we can tell here, this is going back to 2023, and this area we have highlighted here
 is between 475 and say 480, and that's just resistance, right? It's every time we've got it up there,
 it's failed, we can see that recently, right? It's been right there once more, and the important
 thing is we put the S&P 500 in top of this, what's happened? The S&P is moving higher over that
 time frame, so markets, equity markets, love what? A flat bottom market, and so with percolating,
 coming back up to where the fed is going to potentially raise rates at some point,
 if this range finally gets broken to the upside, that can have a negative effect on the S&P 500.
 Otherwise, resistance continuing to fail there, that could be a tell on for the market.
 In September, I'm going forward. Okay, very quickly. What are you watching in terms of agriculture,
 especially as we've seen wheat prices, for example, shoot higher?
 Very important, and the DBA agriculture ETF has all that in there, and you can tell,
 it's the same time frame as the 10-year yield, and so it also had a range, but differences
 broke out already. So this is what's happened in August, a huge move, wheat, soybeans, corn,
 all those together. And so, you know, very important part, of course, the inflation discussion.
 And the last time you saw something like this happened for the fed move, which is 2021,
 and obviously they had the flip catch up. Okay, Frank Capillary, great to get the round out,
 I do. Good to have you here. Thank you. Nice to meet you. All right, to read more of Frank's work,
 you can go to cnbc.com, backslashpro. Check that out. We got a lot more coming here on morning
 calls, well, including the end of an era in Cupertino, as Apple prepares to bid farewell to Tim Cook
 as its CEO, a look back at his legacy, and the challenge is ahead for a successor,
 morning call, you're right back. Well, let's get a check on some of the morning's latest headlines,
 OpenAI announcing that it's ending developer access to its models on cursor,
 that move coming after the AI coding startup was bought by Elon Musk's SpaceX. Earlier this month,
 OpenAI, saying it's an announcement that quote, it was not that SpaceX would use its technology
 within its terms. It was worried that SpaceX would not use its technology within terms of service,
 based on OpenAI's experience with Elon Musk's company's violating contracts.
 Cursor and OpenAI did not immediately respond to CNBC's requests for comments, but certainly
 speaking to that rivalry, we have seen between Sam Altman and Elon Musk. Several music publishers
 meantime, including Sony and Warner, are suing Anthropic and its co-founders, Stario Moda and
 Benjamin Mann. The group claims the company carried out quote, breeze and campaign of intellectual
 property theft by using thousands of copyrighted works to train its AI model Claude,
 in a statement Anthropic disputed those claims. And NASA kicking off a new mission to explore
 some of the biggest mysteries in the heavens. Launching the Roman Space Telescope aboard a
 SpaceX Falcon Heavy rocket yesterday morning, the repurposed spy satellite will be used to
 investigate cosmic mysteries such as dark energy and dark matter. Meanwhile, NASA announcing
 that it and SpaceX are delaying the launch of a mission to the International Space Station
 to fix a leak in the Dragon Space Crafts propulsion system. That was a human space flight that we will
 watch for a new date for. Turning to Apple and the end of an era at Cupertino. Today's
 mark today marks Tim Cook's last day as CEO of the tech giant. After 15 years in the role,
 senior vice president of hardware engineering, John Ternis officially steps into the role starting
 tomorrow and he'll have some big shoes to fill under Cook as CEO. Apple shares are up over
 2200 percent since 2011. And in that time, Apple's market cap has gone from around $350
 billion to more than $4 trillion. Briefly surpassing 5 trillion mark just last month.
 For more, let's bring in Daniel Newman, CEO at Futurum. Dan, it's great to have you back on the show.
 The era that's closing and the new one that's beginning. I think first,
 let's start with Tim Cook's legacy, especially since for years. It felt like investors were
 dunking on this idea that he had not had a lot of new product launches or innovations, even if
 that wasn't actually true. Yeah, good morning. Thanks for having me. We're going to
 Tim accomplished a lot in his time. It's very hard to look at 2200 plus percent
 becoming the world's most valuable company by market cap even recently during the say,
 I boom, especially when investors got a little more defend. Apple was often named that they
 felt safe to turn back to. Having said that, the performance, if you want to be critical in some
 ways, you could say, well, he kind of fell mid-table among his peers. Google, Amazon, Tesla,
 Nvidia, outperforming by a long shot. And probably the biggest criticism comes down to the
 buyback, $877 billion buyback program, which I did some calculations this morning, Morgan.
 And he spent more on buybacks than the entire Mag 7 combined. Wow. So the performance was good.
 It was very good, but it was really kind of equal among peers in the end. Tesla, of course,
 blew it away on more of these massive trends that they were able to pick up in tailwinds and
 belief of their investors. But having said that, I think Turner says some big shoes to fill.
 You know, it's interesting, because you do see a lot of C-suite shake-ups across technology,
 but when it comes to the six largest U.S. tech companies, it's very rare. Actually, the last
 time we saw a CEO change over at one of those top six companies was Andy Jassy at Amazon in 2021
 and before that I was under Pichai at Alphabet in 2015. But in terms of Apple specifically,
 what do you see as the biggest challenges or biggest things that Turner is going to have to
 face head on right out of the gate? Is it a theory overhaul? Is it something else?
 Yeah. I think it is answering the big question about AI. Now, I'll give them a lot of credit.
 Even I was not sure early on how they were going to kind of quote unquote miss AI.
 Syria hasn't been as successful. I think many people had hoped. But having said that, the partnerships
 with Google, the fact that they are still the experienced layer that so many of us, whether it's how
 we use Clawed, how we use ChatGPT, we're experiencing it on an Apple device, especially on the phone
 and the mobile side. But having said that, that's sort of, you know, semantic interface. They have
 the chance to really own that layer and they just haven't gotten it right. So I think that that's
 the first thing. And having Turnerist, you know, you had Cook who was much more of an operations
 expert. He totally nailed supply chain, built the best cost economics, unit economics in the
 pretty much in the world. Turnerist is more of a hardware. He's more than engineering side, you
 know, go back to this Steve Jobs era. And they need that. They need to reinvent themselves because
 I think getting Siri right is the first step. But I think longer term, the question is, is the
 is the handset going to be the device of the future? We've seen the the headsets kind of flop.
 Cars didn't work out. Apple's smart home never really became a thing. They got services and
 cooked it a good job of services. But the device of the future, we know OpenAI is trying to develop
 stuff. We know Meta is trying to develop stuff. I think Apple needs to own this. And I think that's
 Turnis' big job. Okay. Daniel Newman, great to have you on. Appreciate it. Yeah, thanks for having me.
 We'll see how all of this plays out straight ahead though the morning call crew.
 Tying up the trading day ahead as Margaret's head into the month that ends that tends to be
 the most challenging. We'll be right back. Time for your call sheet where we look at the topics
 driving the trading day ahead. Crew members today, Mike O'Rourke, Jay Woods and Peter Shear.
 All on set. All in the house. It's great to have you here. And we actually have a lot to get
 through. We were just talking about the commercial break. It's not really been a sleepy summer.
 So Peter, I'm going to kick this one off with you as we wrap up August. What have you been watching
 most closely? No, I'm still watching Chinese compute where they're headed and compute.
 What that's going to do to us and where we stand on rare earths and critical minerals.
 Because I think that's really set up for this next meeting with G. And I'm not sure that we're
 winning that right now. So I think we've got to be aggressive. We've got to see policy in that
 direction. I think that's going to drive the economy and markets for the next quarter. Yeah,
 I mean, in focus today we've got G20 finance ministers summit down in North Carolina here.
 Maybe it's been a little bit quieter on the stock side. At least from a market standpoint,
 as we look to close out August with gains here for the major averages, but not so much on the bond
 market. No, the bond market is the tell right now. We're not seeing it rattle the equity market. But
 and we enter September. And as you're going to hear ad nauseam September the worst month of the
 year historically. But what I'm focused on is now that we're through earning season. And we have
 a few big ones this week. Do we get that follow through to the upside? We're starting to see
 some momentum slow. And so what I'm looking forward to is will the bond market affect the equity
 market. And I think Nvidia was an interesting tell. It didn't make new highs last week. In fact,
 the price action on Friday has been concerned. Broadcom that will take the spotlight this week
 right at the 200 day moving average. I'm going back to my technicals. I love it. Bring it. We'll
 it have that earnings and that momentum. Can they guide like Nvidia does and then we'll price
 action follow. So the semis they came back to life. But I don't think you all clear for them to
 take us to that next leg higher. At least over the coming weeks is there. Okay. Micro work. What say
 you, especially given the fact that at least so far we seem to be bucking some of that seasonal trend.
 We're also in a midterm election year. How much is going to hinge on tech playing a catch-up here
 and and and re-igniting this? Well, I think Jay brings up a great point about Nvidia. Obviously had
 a big rally post earnings on Thursday lost half of that gain on Friday. And I think that I had
 to do with the interest rate hike fears, right? Nvidia's reposition itself that it wants to finance
 this AI build out to the tune of hundreds of billions of dollars. And that's better risk that you
 are going to take yourself from being this tech high growth company to something levered to the economy
 interest rates and financial markets. And I think that's the fear we sort around a lot of the
 tape on Friday that the AI build out is debt-driven. It's debt-financed. So if we do wind up with
 interest rate heights, which I'm not even sure I'm really there in that camp that we're going to get
 them, it's going to put pressure on the AI trade. It's going to deflate multiples. And that's
 what I'd be watching for. Yeah. I mean, it also puts pressure on on treasury prices too. I mean,
 look at what we've seen in yields at the long end of the curve, Peter. I know you've been writing
 about this as well. Now layer in what we got from Fed Chair Warsh on Friday. You know, I think
 everyone's going to go back to where we were before that. He talks tough, but I don't think he's
 going to hike. So I don't think we have to worry about hikes. I do think the long end of the yield
 curve is going to be under pressure. And it's not so much anything that we're doing domestically. It
 is the amount of supply that we're getting from the compute, right? We haven't seen bond announcements
 yet today would not shock me if we get a big compute bond issue. And today August was a record
 August. We did more $100 billion more in corporate credit than we typically do in August. That's
 putting pressure globally. Sovereign countries across the border issuing debt to fund infrastructure
 to fund defense spending. So I think this is much more of global supply. And treasury just aren't
 that exciting. I'd rather own some of the compute bonds than treasuries. And I think the rest of the
 world doesn't care as much about treasuries either. So I think Besson's going to have to step up if he
 really wants to control the long end of the yield curve. Yeah. I mean, we know something else that's
 been funneling into the treasury market overall has been what we're seeing with oil prices and commodity
 prices too. So how to factor in what we've seen with renewed strikes, Jay, in the middle east
 as well as these ongoing, you know, ratcheting up of strikes between Russia and Ukraine, which
 sent wheat prices soaring last week. I don't know if that's been talked about. Yeah, no. I think
 Frank hid it on some of the agricultural stocks earlier in the show, how they're breaking out.
 And you know, we're seeing gold looking like it wants to take another leg higher. But to me,
 Russia, Ukraine, Iran, I woke up this morning expecting to see the future is a little lower.
 And once again, we're kind of shrugging it off. So as long as we don't get a super spike back
 above 90 in oil, I think the market can absorb this. We've kind of just put it to the side like,
 oh, this is normal rhetoric. So I'm not so concerned. But I think the energy space, I look at Exxon
 Mobil, look at Chavran, I look at the XOP. These are places where you want to put money to work. I think
 the trends continue to be higher. And when you hear headlines like this and the conflict rages on,
 it's a good place to put money to work. Yeah, I mean, we've been sort of framing it since the
 beginning of this hour, hikes and strikes, Mike. And there have been some winners this month and
 all of this. I mean, just look at the renewed rally we've seen in precious metals, gold, silver,
 for example, Bitcoin as well as had an interesting month. Well, I mean, that's Secretary Besen. He
 rejuvenated the basement trade, which is not something that Treasury Secretary is supposed to do,
 but obviously announcing those increased treasury repurchases, people think that the government
 wants to debase our currency. That's not the case. It's not true. I don't think it's going to hold up.
 I do think Chair Worsh helped to pop that a little on Friday. And hopefully we see more of that.
 So that would be interesting because I think those are truly speculative moves in the commodities
 in Bitcoin. And if we see some fiscal responsibility eventually emerge here as far as a policy approach.
 And again, if Worsh can keep people, the market's believing that he is truly hawkish on inflation,
 then I think you'll see that big come out of those groups. Yeah, we got about 30 seconds left.
 Peter, what's a you final thoughts? I agree. I love energy globally. I think the build out and
 demand for energy is real. Countries need it. I think it's happening here. You're going to start
 seeing it across the globe. Australia is announcing it. Canada I think is going to have to do something to
 compete with the US. That's my favorite area right now globally. Okay, 20 seconds. Let's see what we can do.
 Jay, let's watch some software names this week. We got Palo Alto Networks on the heels of CrowdStrike.
 And that continued software momentum and snowflake. Snowflake was the first of the software names
 to actually gap higher and start this trend back. The equal weight software index, the XSW,
 breaking out to new highs. So software may continue to go higher.
 Okay, we're going to have to leave the conversation there. Mike, I owe you another question.
 Thank you to our call crew. It's great to have you all here on sets. That's going to do it for us
 here at Morning Call.