Inflation, AI and trade tensions test the market outlook 9/8/26

 Sonnet insurance wants to know what would you do with an extra hour in your day and more money in your pocket?
 With Sonnet, you can quote and buy hominato insurance online or over the phone, your choice, on your time, whatever works best for you.
 And Canadian University and College alumni could save over $2,000 a year. That's real money, back where it belongs.
 Save time, save money, save yourself from the way insurance used to be.
 Get your quote at sonnet.ca, switch, save, simple, Sonnet.
 It's NFL kickoff time, exclusive NFL team valuations with sports business expert, Michael O'Saedius.
 The NFL is by far the most profitable league.
 NFL team valuations now on CNBC.com slash sport.
 Good Tuesday morning. Let's get a check on U.S. stock futures for this holiday shortened trading week here in the U.S.
 It was a mixed week for the markets last week.
 Saw the Dow close lower for its third week in four, but gains for the S&P and NASDAQ.
 And as you can see right there, here this morning pre-market, we are firmly lower for all of the major averages to kick off this trading week.
 S&P is poised to open lower to the tune of 40 points, Dow down 506 points and NASDAQ 110 points.
 Dow set to lose nearly 1% at the open just to put that in context here.
 Here are your biggest pre-market Dow laggards as well.
 As you can see right there on your screen, MGen, some spill over there as we see some weakness across the farm sector with some failed studies.
 Medicine studies here. Goldman Sachs is lower as well.
 Salesforce, JP Morgan and IBM all down about 1% or more.
 Treasuries in focus here. Yields are elevated.
 We've got the 10-year treasury yields back above 4.8%.
 This morning as you can see right there on your screen.
 U.S. 30-year treasury yielding 5.27% fed cents have 2-year treasury, 4.38%.
 We're also watching eye shares Canada ETF as new counter tariffs of up to 50% on 20 billion dollars worth of U.S.
 Goods takes effect here now today.
 You can see that is unchanged, but we're going to be digging into that trade war if you want to call it that.
 Trade tensions a little bit later this hour.
 And finally, take a look at energy here because that is higher following strikes.
 By the U.S. and we're on over the weekend.
 And as you can see right there, WTI is up another 3% right now trading around $94.50 a barrel.
 Brent is trading with $99.00 here, flirting with $100.00 a barrel as well.
 We are watching Hootie Rebels as well, launching a wave of attacks on Saudi Arabia this morning.
 So that is the latest headline just pushing through a few moments ago,
 wounding more than 70 people sparking fires at several oil facilities in the Kingdoms of Southern region,
 that's according to local authorities.
 This after Iran threatened to strike energy infrastructure across the Gulf, including U.S. oil and gas interests.
 If the U.S. military continues its military campaign in the region.
 And we will continue to monitor that situation.
 Meantime, as we just mentioned, WTI and Brent are both jumping this morning.
 Brent is trading around $99.00 a barrel.
 Our buck gas lean higher.
 That gas is trading about flat right now.
 Let's see how Europe and Asia are shaping up.
 Steve Sedgwick is in London with that trade. Steve.
 Hey, Morgan. Love you to see you.
 Let's start off with the end because Japan's currency is trading around a six-month high this morning.
 Trade is now seeing the chance of a bank of Japan rate hike.
 Pretty much confirmed.
 Question is, are they going to go for 50 basis points, which will be a bit of a bazooka.
 Now it comes after the country revives its growth figure for the second quarter higher on the back of improved capex data.
 GDP growth came in at 1.4% on the year that is up from the initial estimate of 1.1%.
 But still below the 1.6% analysts had penciled in.
 Here in Europe, we're moving to the downside on equities this morning.
 Oil prices moving to the upside.
 As you just mentioned, spurring more inflation fears.
 We're going to get a rate decision out of the European Central Bank on Thursday.
 Money markets pricing in a 99.7% probability.
 We get a hike.
 On the corporate front, again, you mentioned the story.
 Novartis announced that a further trial disappointment sending the stock on course for its worst day ever.
 And the politics absolutely fascinating over in Germany.
 The alternative for Germany came first in Sunday's Saxony Unhulk state, not federal, but state election.
 Claiming almost 44% of the vote, but falling short of an outright majority.
 The vote puts the AFD in position to become the first far-right party to hold power at a state level since World War II.
 The Chancellor Friedrich Mertz, CDU, came a distance second claiming just 17% of the vote.
 Huge turnout, Morgan, 75%.
 Well, I just want to stick with that with you for a moment, Steve,
 because we're very focused on midterm elections here in the US, the impact that has on the market.
 But when you see an outcome like this in Germany, what are the ripple effects across the continent?
 Everybody is paying attention because everybody's looking at the right quite frankly.
 And there I say, the extreme left as well.
 And the comfortable middle that has been ruling in Germany, but my entire life, which goes back a few decades,
 you've always had the CDU stroke CSU, which is the centre-right.
 That's Fral Merkel's party, the woman who controlled lots of European policy for over a decade.
 Then you've had the STU, the STP, the Social Democrats, to the centre-left.
 It's always been a combination of these two which have governed Germany.
 If you've now got a right-wing party, the AFD, which has been knocking at the door for a long time,
 potentially looking like it's gaining traction.
 All but it's actually unhut, it's tiny.
 It's a couple of million people.
 It's in the old east of the country.
 And there's a lot of demographic issues and a lot of social issues as well.
 But if it is an outlier for broader German politics, then the comfortable middle is going to be very, very concerned.
 Plus, Morgan, don't look at it in isolation.
 Look at it and what we're seeing elsewhere.
 Because President Macron, he's been in power for two turns.
 He cannot run again.
 And who do we think at the moment is number one, certainly favourite, potentially with the posters
 to become the next president of France?
 Well, Marine Le Pen of the National Rally, another far-right party, could potentially be the winner.
 It's a long way off, by the way, in 2027.
 So if you've got a drift to the right, what does that mean about European cohesion and other huge issues
 such as this attitude to Russia as well?
 At the moment, it's a small election in a small state, but it could be a big outlier.
 All right, Steve Sedgwick.
 Breaking it down for us, appreciate it.
 It was great to see you and hear from you.
 We've got bond yields remaining elevated as we just touched on.
 Oil prices closing back in $100 a barrel.
 Like a market to bid on edge here.
 There are a few key events this week that investors will be watching closely.
 Tomorrow, US Treasury will conduct its first enhanced debt by back operation.
 That could be $4 billion worth or more.
 Thursday, the ECB holds its latest policy meeting, expected to raise rates by a quarter point for a second time this year.
 And then on Friday, we get the August CPI report that could help determine whether the Fed raises rates,
 or stays on hold when it meets next week.
 Keep in mind, we get PPI the day before as well.
 Well, joining me now is Joe Missola, head trading and derivative strategist at Charles Schwab.
 Joe, it's great to have you on.
 Let's start right there, sort of the key things that could move markets here this week and beyond.
 Yeah, investors are going to be really paying attention to the inflation data.
 And then, as you mentioned, to beginning oil and rates, they're all tied to a certain extent.
 And I think it's really having an effect on how they're approaching the market right now.
 I think they're becoming a little bit more cautious as they see yields push about 4.8 in the 10 year.
 You mentioned WTI up around 94.95 right now, 3% overnight.
 And then the hostilities that we're seeing in the Middle East, all of those together,
 it's causing a little bit of a headwind for this market.
 You know, we got real favorable jobs data on Friday, which I think we're in one of those situations right now.
 We're, you know, be careful what you ask for, right?
 Because the favorable jobs data points to an economy.
 You know, that's holding together, it's still doing fairly well.
 But at the same time, it's having a bit of an overhang on the equity markets because we're waiting for that catalyst
 to kind of push through to new highs.
 And right now, as we're seeing some of that leadership from technology
 that gave us that nice little bounce that we saw at the end of July,
 that's really starting to fade.
 And it's really been things like financials, healthcare, energy.
 You know, those have been the three sectors that have taken the lead right now.
 Yeah, I mean, Oracle results are going to be in focus to that point then,
 in light of what we have seen under the hood in the market here.
 One of the things you've been diving into is this growing gap between traders and investors
 in the sentiment there and how they're positioning themselves.
 Let's break that down.
 Yeah, I think a lot of it started, as I mentioned, going to add to the end of July
 when you saw the markets kind of rip back to the upside,
 a lot of buying within tech.
 And so some of that started to kind of fade in August,
 especially with what we saw with our stats report,
 that's our Swab Trading Activity Index.
 You know, the software trade had become invoked a little bit towards the end of July,
 but as you saw, big gains in stocks like Palantir, Microsoft Service Now,
 you mentioned Oracle and then Salesforce.
 A lot of those stocks were up 20, 25% in the month of August.
 Those were ones that we saw a lot of trimming from clients.
 I think you can call it profit-taking, if you will,
 just because of the kind of the rapid ascent that you saw in those share prices.
 But I think there's a little bit more caution as we're heading into what tends to be
 a little bit more volatile season in September, where you're seeing some of those winners trim,
 you're seeing some of the higher beta names get trimmed a little bit.
 And then there's been a rotation Morgan, which I think is interesting.
 Normally, when we talk about our stats report, we like to highlight the key equities
 that were bought and sold, and we've done that again this month.
 But when I look at the top 10 purchases in terms of net buys,
 four of them were ETS, which is something we normally don't see.
 Normally, a lot of our clients are kind of equity driven that they're looking for to be stock pickers.
 But we're seeing a lot more kind of diversification in how they're allocating those funds right now.
 That kind of points to an investor that wants to remain bullish,
 but maybe isn't as confident right now with the stock picking,
 just because of all the rotation that we've seen of late.
 All right, Joe Missola, great to get your insights to kick off the hour.
 Appreciate it.
 We got a lot more to come here on morning call, including foldable phone wars
 as Apple's China rivals beat Cupertino to market with their latest and greatest.
 We've got a live report from Beijing ahead.
 Teraf tit for tat.
 Why one company is pushing back on claims by President Trump as he threatens US sales boycott.
 And later, ahead of Wednesday's NFL kickoff, the other turf war brewing in the online betting space
 with a very busy hour to bring you on morning call returns.
 And Canadian University and college alumni could save over $2,000 a year.
 That's real money, back where it belongs.
 Save time, save money, save yourself from the way insurance used to be.
 Get your quote at sonnet.ca.
 Switch, save, simple, sonnet.
 Welcome back to morning call.
 Let's get a check on a number of AI-focused names in Asia.
 Mostly pulling back in today's trading session after massive rallies yesterday.
 The reason behind those gains?
 Astra.
 The newest and most powerful model from OpenAI, which has received plenty of praise since its release,
 including from Nvidia's Jensen Wong.
 Wong taking to post on X to congratulate OpenAI's team on the release over the weekend,
 noting that AGI artificial general intelligence has arrived,
 saying that Astra was trained on Nvidia chips.
 Well, for more, let's bring in XIE, partner at offline research,
 and a former engineering leader at Google and Microsoft.
 X, it's great to have you back on the show.
 Let's start right there because this seems to be the big headline of the last couple of days.
 At OpenAI's new model is ushering in the age of AGI, your thoughts.
 First and foremost, the industry is celebrating human level intelligence
 with a definition that leaves most of humanity out.
 Artificial general intelligence, as defined by OpenAI,
 is the kind that can replace human work that is considered economically valuable.
 Now, that captures one dimension of intelligence,
 but other definitions also examine how efficiently a system learns something unfamiliar,
 which is where Astra really becomes impressive,
 is that it's able to learn from these new unfamiliar environments,
 and have a massive advance while stopping short of what most consumers might consider
 to be human level intelligence.
 So, know your AI isn't going to become your chef immediately,
 just because Astra is able to use Blender,
 the 3D modeling program the same way a human would,
 or we're going to see is a lot of the high level repetitive tasks
 that require a lot of repetitive work from humans being replaced by this.
 So, it may feel like AGI to the developers,
 but may not feel like AGI to the consumers.
 Okay, so in a week, last week, where you had a flurry of model releases,
 does this one, Astra specifically stand out from the pack,
 then, and how does it tee up against what we know is coming?
 I feel like number one, Astra blew everyone out of the water,
 and it came to model releases last week.
 It jumps in coding capabilities.
 It jumps in reasoning capabilities,
 moves the industry far beyond what we've seen.
 The Arc Prize, which is one of the institutions out there
 that gives a lot of sort of feedback and guidance on where AGI is,
 and hosts a number of benchmarks, also gave Astra that praise.
 I myself have spent way too much time with it.
 Now, the reason why Astra feels so significantly different
 is because it's able to handle longer tasks
 with even smarter models that came out, as we saw with Gemini last week,
 you know, we saw Muse drop a new model as well.
 Their long horizon and their ability to do complex tasks
 over longer periods of time isn't as good as Astra.
 Astra is the first model that's able to do things for hours and hours
 and days on end in unfamiliar environments,
 which is unlocking new scientific research,
 which is unlocking the ability to offload workloads
 that we maybe have held off on to AGI before this,
 because it is able to retain accuracy across those tasks over time.
 So to be interesting to see as Astra has actually turned on
 within different enterprise environments,
 what new use cases were able to see come out of it,
 and how other models are able to respond as well.
 Were you surprised to see Jensen Wong-Wang in on this?
 I realized Nvidia has hundreds of billions of dollars worth of exposure to OpenAI,
 but they're also working with everybody else in this marketplace, too.
 I think that if I went to a shoe maker and asked them
 what I needed to cure my foot pain, they'd tell me new shoes,
 and if I went to a chip maker and told them,
 you know, what does the industry need?
 They're going to say bigger models because they benefit.
 So I do believe that there are genuine advancements inside of Astra
 that do mark us being on the path towards OpenAI's definition of AGI,
 which is again replacing valuable economic work,
 I think the more commonly held understanding
 or the concept that Dario has painted for us,
 so vividly of this data center full of geniuses,
 a country full of geniuses living in a data center,
 we're still very far off from.
 So seeing Jensen Wong way in, I think,
 is very not too surprising.
 I think beyond just the money, Astra really,
 the money he has invested in OpenAI,
 Astra actually has made very significant technical leaps
 and have demonstrated, especially in the 3D spatial modeling space
 inside of the natural sciences space,
 has demonstrated capabilities that are akin to our
 Will Smith eating spaghetti moment,
 where we're starting to see these glimpses of intelligence
 beyond what we've seen before.
 It still doesn't fully look human,
 but it's getting more and more intelligent in a way
 where in a few years we're going to have very serious conversations
 about what AGI is and how we roll it out into our society.
 I mean, speaking of serious conversations,
 obviously we've been talking about all the cybersecurity stuff
 and what bots' worms have been doing.
 Just on Friday, you had a Reuters report
 and I realized there's some question marks about this report
 and the details and the veracity, et cetera,
 but that OpenAI, according to Nightingale Collective,
 hacked a German company back in May,
 and that the bots had their own message for it.
 We're sharing tips on how to avoid being detected,
 made 15,000 edits to this particular website as well.
 I mean, if they were a publicly traded company
 and something like that had happened,
 the SEC and regulators would be all over it,
 but in general, just the fact that we are seeing these types
 of sophisticated cyber security breaches,
 are the companies doing enough to put the guardrails in place
 as we do talk about AGI?
 Companies are struggling to balance with the need
 between being first in market, appeasing shareholders,
 and also this new role they're playing
 of sort of the US's first line of defense
 as it comes to national security,
 as it relates to cyber security,
 and also needing to build things that don't harm people.
 And sometimes those mechanisms are not compatible.
 And so these issues that we're seeing now
 in production environments have been very loudly announced
 inside of these AI models.
 Companies reports as they release these models.
 In fact, when I was on, I believe it was last October and November,
 we were talking about how Claude, when it had released,
 one of its models and was doing testing,
 was talking about how on its own,
 it was hacking into other environments,
 breaking out of containment environments.
 So these behaviors are not new
 in terms of the companies being aware of them.
 They're just new in production environments
 because from them announcing it in those papers
 to the time that they turned it on in the real world,
 there wasn't much different done in terms of safety
 or in terms of regulation or in terms of assignment,
 intentionally of responsibility of what happens
 when those systems go rogue.
 So now we're at a moment in time
 where we have to make that decision together.
 Who is responsible if I make an AI agent swarm
 and it goes and hacks your company?
 Who goes to jail?
 That's a felony if I do it as an individual.
 What happens when it's a group of rogue swarms?
 Agent swarms doing it.
 We haven't made those decisions collectively yet.
 This is the moment where we're going to start
 to see those discussions unfold more seriously,
 especially as we're ahead of the CBCF week coming up here in DC.
 And so to be interesting to see what those guardrails
 actually end up looking like inside of the models
 as we end up deciding who's at fault
 when they make decisions that humans don't agree with.
 Okay, XIE, always great to have you on, appreciate it.
 Funding news from the space and defense world, meantime,
 Stoke Space announcing that it has raised about a billion dollars
 in an initial series E round that's led by Kola,
 that's led by 0.72 ventures and spark capital.
 Stoke is developing fully and rapidly reusable rockets.
 This is the feet only one other.
 Launch provider is close to realizing
 and that is SpaceX with Starship.
 Stoke has not yet launched a rocket to orbit,
 but CEO and co-founder Andy Lapis says
 its medium lift to Nova Pathfinder is preparing
 for a first flight early next year
 that the company is also working on a larger 15 ton class
 Nova rocket as well.
 What we've seen is that
 for companies that are not SpaceX,
 the launch supply picture has really not changed much
 in the last few years.
 But the ambition has increased, right?
 So, you know, for third party launch supply,
 that's relatively stagnant.
 But the ambition and the demand signal has gone very, very high.
 And that's true, commercially, that's true on the government side.
 And so, it's really, really important that there is
 a few other launch providers who can step up
 and fill that demand in order to create
 the healthy competitive economy with multiple players
 and multiple verticals in space.
 And we're pretty committed to delivering on that promise.
 Lapis, so whether space has entered a new chapter
 as an investable sector?
 The last big domino to fall
 before this industry really explodes
 is the ability to get two space and back
 with aircraft like regularity
 and we're right there.
 We are so close.
 Let's see the full interview with Stoke Space's CEO.
 Just head over to cmbc.com.
 And looks like we have some stuff in the printer that I'm not supposed to read.
 But anyway, speaking of launch dynamics
 and what we're seeing in terms of the demand versus capacity situation
 that we've been covering so closely on this show,
 we did have more news over the weekend
 from the space sector.
 German startup E-Star Airspace's uncrewed spectrum rocket
 became the first commercial rocket to reach orbit
 from continental Europe, marking a breakthrough for a region
 where several countries are seeking a foothold
 in the fast growing market for satellite launches.
 The company's chief commercial officer
 telling our colleagues in Europe that the company
 is now focused on scaling production,
 saying space industry was, quote, desperate
 for additional launch capacity,
 also warning that Europe's launch infrastructure
 would need to expand to support the industry's growth.
 Now, the scale of E-SARS operations is currently dwarfed
 by those of U.S. competitors, including SpaceX.
 Straight ahead, though, Chinese rivals ramp up the pressure
 on Apple, CEO, John Ternis, and his first iPhone unveil
 as chief executive.
 First, though, let's get a check on Bitcoin after hackers took $320 million
 worth of BTC from Liquid Network.
 This is a blockchain used by several crypto exchanges.
 The firm says about 4,000 of the 4,200 Bitcoin
 held in its wallet were taken by so-called White Hat hackers.
 In a post on X, Liquid Network says
 wallets will be impacted, it's halted new transactions,
 and a sorry for any inconvenience.
 Morning call is back after this.
 Sana insurance wants to know
 what would you do with an extra hour in your day
 and more money in your pocket?
 With Sana, you can quote and buy
 hominato insurance online or over the phone,
 your choice on your time, whatever works best for you.
 And Canadian University and college alumni
 could save over $2,000 a year.
 That's real money, back where it belongs.
 Save time, save money, save yourself
 from the way insurance used to be.
 Get your quote at sonnet.ca.
 Switch, save, simple, sonnet.
 It's NFL kickoff time.
 Exclusive NFL team valuations
 with sports business expert, Michael Ozenius.
 NFL is by far the most profitable league.
 NFL team valuations.
 Now on cnbc.com slash sport.
 Well, the back for watching Apple Share
 is ahead of the highly anticipated hardware event
 that kicks off tomorrow, largely expected to unveil.
 It's iPhone 18 as well as the long rumored first foldable phone.
 But a pair of Chinese competitors are looking to get a jump
 on Cupertino Unis Yoon.
 It joins us from Beijing with more high units.
 Hey, Morgan.
 Well, both Huawei and Xiaomi held two separate events
 to launch their own new foldable phones, Huawei,
 which competes with Apple on the high end,
 unveiled the Mate XT2.
 This is a new tri-fold phone that when completely unfolded
 is about the size of a tablet.
 The company has been very excited about the fact
 that they're using their new in-house Kirin 9050 pro chip.
 The company says that this squeezes out more computing power
 because of later circuits.
 And the price is steep.
 It ranges from about $3,000 per phone to $3,700.
 It's going to be available from September 12th.
 As for Xiaomi's new phone, it's called the 18-fold.
 It's about a passport-sized phone once you fold it.
 And then it uses also an in-house chip,
 which the founder claims outperforms the chip that's used
 in the iPhone 17.
 The price range is less than Huawei,
 but still pretty steep, $1,500 to $2,100 per phone,
 and it's going to be available from September 10th,
 which is only one day after iPhone's new product launch.
 Huawei leads in the China market,
 with a market share of 22.6 percent
 in the second quarter, according to IDC,
 Xiaomi has been hanging on with 12.4 percent,
 but Apple has been making ground, gaining ground
 because of the iPhone 17 series.
 There's also been a lot of anticipation about this particular phone,
 the idea that there potentially could be a foldable iPhone
 is exciting to a lot of people.
 In fact, the term foldable iPhone is trending right now
 on Chinese social media
 and the joke online, Morgan,
 is that maybe Huawei and Xiaomi are going to make it easier
 for people to buy the new iPhone that's foldable
 because the foldable iPhone is supposed to be only $2,000.
 Oh, that's exactly where I was going to go with you, Eunice.
 And that is, what does that marketplace actually look like
 for these very high priced phones in China?
 Are these more, like, bragging right trophy-type pieces
 or is this actually a meaningful market potentially?
 I think it's a meaningful market.
 I mean, a lot of people do like to brag about
 being the first one to get some of these phones,
 but there is a sizable market of people who actually can afford them.
 But, of course, when you want to try to target a broader market,
 the affordability issue does come into play.
 In fact, the founder had been asked about the price,
 and he said, well, the founder of Xiaomi had been asked about the price,
 and he said, oh, I'd love to actually bring the prices down,
 but the memory chips, the DDR, are so expensive.
 So it's because of all these supply chain issues
 that the cost of these phones have been pushed up.
 Yeah, we've heard that before.
 Eunice Yoon, great to see you.
 Still on deck, a new tariff hit rocking sectors
 from steel and aluminum to clothing, dairy, motorcycles.
 You speak with a former White House trade advisor
 about what's at stake next.
 And as we head to break, let's get a check on shares of Jeffries,
 the FT reporting, a fund run by one of the bank's units,
 has nearly $500 million of exposure
 to iron or trader radiant worlds, and another entity found.
 And Reuters had previously reported that Jeffries had
 about $300 million of exposure to the firm
 through its point Bonita Fund,
 which drew attention last year following the explosion
 of auto parts maker first brands.
 You can see shares of Jeffries are actually
 fractionally higher this morning,
 but the scrutiny of private credit continues.
 More in call, be right back.
 I'm Morgan Brennan.
 Welcome back to you more in call.
 Let's get a check on US stock futures,
 which are firmly in the red this morning.
 That's after a mixed week for the markets
 that saw the Dow close lower for its third week in four.
 We did see gains for the S&P and NASDAQ last week.
 Of course, this is a holiday short and trading week
 here in the US.
 But as you could see, we're starting off with some weakness here.
 S&P has poised open down about 2728 points.
 The Dow down 448 points.
 The NASDAQ down 39 points
 were appearing some of the losses here pre-market
 over the past 30 minutes or so.
 Big drag on the Dow this morning has been Amgen.
 That's accounting for roughly 120 negative Dow points here
 at the open.
 This after overseas rival Novartis late Friday said
 that late stage trials of two experimental drugs failed
 to meet their targets.
 And US-based Ionis caught up in the selling as well
 as a Kenovard's partner in one of those trials.
 You could see a lot of big moves on the screen.
 Amgen's down 5% pre-market Novartis and Ionis
 are both down about 12%.
 Right now, if we check on some of the morning's latest headlines,
 though, oil spiking after hoody rebels launched a wave of attacks
 on Saudi Arabia this morning,
 wounding more than 70 people, sparking fires at several oil
 facilities in the Kingdom Southern region.
 This is according to local authorities.
 This after Iran threatened to strike energy infrastructure across
 the Gulf, including US oil and gas interests.
 If the US military continues its campaign in the region,
 there was a lot of back and forth over the weekend,
 including ships.
 US envoys Steve Whitkopf and Jared Kushner meantime,
 spending the weekend overseas conducting their first official visit
 to Kiev Sunday after meeting with President Russian President Vladimir Putin
 in Moscow a day earlier.
 Kushner and Whitkopf describing the talks in Ukraine as,
 quote, encouraging.
 And NTSB officials giving an update on the deadly Amazon cargo plane crash
 at Miami International Airport over the weekend.
 Revealing the fatalities all came from the vehicles that were hit
 by the plane and not on the Boeing 767 cargo jet itself.
 Now, the NTSB says that it has recovered the flight data recorder
 and cockpit voice recorder.
 Both are going to regulators where they will be evaluated
 and downloaded.
 And shares of Amazon last I checked and Boeing were under pressure
 this morning in the midst of all of this.
 Back on Wall Street, though,
 S&P Dow Jones says,
 Bloom Energy, Illumina and Ever Pure will join the S&P 500
 as part of its quarterly rebalance before the start of trading on September 21st.
 You can see shares of all of those companies are jumping on that news
 and they will replace Molson Corps trade desk and builders first source.
 And investors are gearing up for Anthropics IPO and an expected S1 drop
 anytime now here this month.
 The company is S1, though, is reportedly not going to be released
 until late September.
 That's according to Reuters with IPO marketing likely set for the middle of October
 and listing just days before the midterm elections.
 Now, this following an FT report that the company is close to naming Morgan Stanley
 to take first position for the listing.
 And if that weren't enough,
 it's also reportedly secured nearly 520 billion dollars in compute deals
 amid surging clawed demand.
 Well, Canada is raising the stakes and its trade war with the U.S.
 boosting tariffs on 20 billion dollars worth of U.S. exports to Canada
 by as much as 50 percent hitting products from steel, aluminum,
 and plywood to clothing, cosmetics, motorcycles, and cheese
 that move coming in response to U.S. tariffs of a similar dollar amount
 of goods announced late last month when trade talks between Ottawa and Washington fell apart.
 More U.S. tariffs are set to take effect in the New Year
 and no new talks have been scheduled, at least not yet, according to reports.
 One company that's caught in the middle of all this, though,
 is Montreal-based, aerospace-based giant Bombardier.
 The president threatening to boycott the company's jets from sales
 to the U.S., saying on social media, quote,
 if they want our markets, they must build here and stop treating America like a piggy bank.
 Now, in a statement to see and we see Bombardier says its workers are based all over the U.S.
 with direct employment in more than 20 states and sites in 10 states,
 including California, Texas, and Arizona,
 also adding that aircraft are built with American-made components like engines, avionics,
 all provided by nearly 2,800 U.S.-based suppliers across 47 states.
 Joining me now is Kellyanne Shaw, former White House Trade Advisor
 during the first Trump administration and currently a partner at Akin and Senior Advisor
 at the Center for Strategic and International Studies.
 Kelly, it's great to have you on, Kellyanne.
 Do we risk a wider trade war here between the U.S. and Canada?
 Yeah, good morning.
 And I would classify this more as a trade row rather than a full-blown trade war.
 And what I mean by that is even with the U.S. retaliatory tariffs from a few weeks ago
 when Canada's tariffs had just went into effect this morning,
 we're still talking about less than 5% of U.S. Canada trade being impacted by any of this,
 which means most of the trade going back and forth continues to flow duty-free.
 This isn't the same thing we saw with China where we had tariffs up to 100 and plus percent.
 This is a very small percentage of trade. They're still an off-ramp here,
 but I do think tensions are pretty hot at the moment.
 You know, when I see things like dairy on this list,
 I mean, this was already a sticking point in terms of the U.S. being able to, you know,
 send more of its dairy products, its cheese products into Canada.
 So I do wonder how much of this really has an economic bite to it versus being about the political optics
 in a place like Canada, where it has made a lot of sense for politicians,
 Mark Carney included, to really fuel the fire here.
 Yeah, exactly. There's a lot of symbolism.
 There's a lot of political messaging attached to the specific sectors and products
 that Canada targeted in its latest round of tariffs.
 But to your point, none of this really makes any sense from the U.S. negotiating perspective.
 And I understand that Canadians have a very different view of what happened,
 both sides seem to be living in two alternative realities about the facts on the ground.
 But the deal was effectively Canada, remove your retaliation on dairy and autos,
 and comply with your U.S. MCA dairy commitments that you made six years ago in exchange for 232
 the sexual terror relief. And that's the deal that was on the table.
 That will likely be the deal several months from now if the parties do get back together.
 So from the U.S. perspective, this is mostly about politics,
 it's about political messaging, and to your point, the economic impact of this is relatively muted.
 What is the read through to other parts of the world?
 Especially economies that maybe aren't, you know, the U.S. and China will say,
 as we do see the U.N. General Assembly kickoff here,
 and there has been this framing that Canada is in a tent pole position
 to potentially create a blueprint for other countries in similar positions to move forward when it comes to trade.
 Yeah, I think that's what the Canadians are trying to do.
 They're trying to show that they're tough in standing up to the United States
 and having other countries follow.
 But if you look at all of the other major trading partners of the United States,
 every single one has struck some sort of deal with the administration.
 They've tried to work it out. They've taken a different approach.
 And those relationships are relatively stable.
 But again, we're talking about less than 5% of trade between the United States and Canada here.
 This is not a full-blown trade war. This is not impacting our entire respective economies.
 I don't know that it's really going to be a path forward for other countries to follow here.
 I think this is really just specific between the United States and Canada.
 Okay, Kellyanne Shaw, great to have you on and get the contacts. Appreciate it.
 Thanks so much.
 A lot more to come here on Morning Call, including the kickoff to a new NFL season.
 We got big money flowing into bedding and Kitesa Brewer is here to break down this sizable shift that is happening in real time.
 Morning Call will be right back.
 Welcome back. We're just over 24 hours from the kickoff of the new NFL season
 with a Super Bowl rematch of the Patriots versus the Seahawks.
 The new season also means a big bump for bedding, but a major shift is already underway in that arena.
 Contessa Brewer joins us now with more. Contessa.
 Hi there, Morgan.
 Look, this is typically the biggest season for bedding, for acquiring customers, for increasing engagement.
 And depending on how the teams do, making money.
 But this season, there is a stark trend emerging.
 Prediction platforms are soaring and sportsbooks are stagnating.
 Consider Kalshi, for instance, the prediction powerhouse with whom CNBC has a commercial relationship.
 Tells me it is seeing 15 times more trading volume on the NFL leading up to kickoff than the same time last year.
 US Sportsbooks mean time are expected to see $29.5 billion in wages this NFL season.
 About the same as last year, according to the American Gaming Association, growth has slowed in terms of new states.
 Legalizing sportsbedding, only Missouri has been added to the list over the past year.
 And investors are showing their skepticism.
 Draft King's stock is down 50 percent from this time last year.
 Fandall parent flutter is down 67 percent.
 The sportsbooks have all said, look, we're launching these new products.
 They're going to try to win new customers or keep the ones they already have this NFL season, Morgan.
 So about a decade ago, I was sent to a big press conference with Roderick Adele and I asked him,
 what the NFL stance could potentially evolve to be regarding sportsbedding at the time he was like,
 we're not for it, we're completely against it, it's never going to happen.
 Flash forward to today, not only have they embraced sportsbedding, but now we're talking about prediction markets.
 So where does the NFL fall in all this? How do they feel about this?
 Not only embrace it, they have official bedding partners.
 So, Fandall and Draft King's have resigned with the NFL as official gambling partners and they've added fanatics.
 In the meantime, NFL has sent letters warning the prediction platforms that they're offering markets that are ripe for manipulation.
 Anything they say where, for instance, a kicker, if you make a bet on whether a kicker is going to make a field goal, that is ripe for manipulation.
 Whether a ref makes a call a certain way or not and they want those markets, those event contracts to come off so that they're not manipulated and that they can protect the integrity of the game.
 I asked Kauschy about it and they said, yeah, we're not commenting on that.
 All right, Katz has a brewer. Great to see you. Thank you.
 Well, straight ahead, the morning call crew team up the trading day ahead and the data of one member says will be critical to the feds upcoming rate decision. We're back in a moment.
 It's time for your call sheet crew members today, Ryan Dietrich, Jimmy Pathakukis and Amy with Silverman.
 Great to have you here. There's actually a lot to focus on here this week.
 Jimmy, I'm going to kick this off with you because it would seem inflation is really going to be the key focus for investors, whether it's PPI on Thursday or CPI on Friday.
 We got diesel at a record gasoline, a gallon of regular gasoline at a record high for this time of year. How to think about it?
 Yeah, I was at I think inflation is top of mind and the problem has been top of mind in front of mine for five years.
 You know, chairman war said we have work to do. They do have work to do.
 It seems like a lot of what we're hearing this week already with oil prices say that work may be just increased.
 I don't think that these inflation reports ultimately will allow the fed to not act.
 It may confirm that action is needed, but I think I think I think the chairman's a little bit locked in.
 I think base in that speech based based on the fact that this is a long this now a long term problem.
 I think inflation will drive fed rate hikes and my gosh people also worried now it seemed to be finally worried about debt and deficit.
 So I think all the arrows are pointing in one direction here.
 Yeah, I mean, we've got more headlines Ryan out of the Middle East right now, which is sending crude prices higher.
 Trevgy yields are higher futures are lower here.
 But yet you look under the hood in terms of some of the economic data we've gotten recently here in the US,
 including the jobs report that was much stronger than expected on Friday.
 And how is it also contributing to this discussion?
 Yeah, first off morning, Morgan, good morning, sorry.
 First off, this is interesting.
 The Tuesday after labor day.
 So today is down nine years in a row for the S&P 500 for the Dow for the Nasdaq.
 So listen, some little weakness today is not too abnormal.
 But getting to it, you know, building what Jimmy just said.
 I mean, we think the fed's going to run it hot.
 We've been sent out for a while.
 Yes, the labor market in our opinion looks like it's coming back a little bit.
 We have some good services data.
 We've got copper near all time highs.
 We know what yields are doing.
 Yet you look at fed fund futures right now.
 About a 60% chance of a hike to us at saying, you know,
 that they're probably a little bit behind the curve.
 But I think they'd want to run it hot.
 And that's something we can see in all year.
 And I think that probably means this bull market's going to continue here more.
 Yeah, Amy, I want to get your thoughts on all of this.
 What you're seeing in the data and the positioning that you track in the market,
 especially when it comes to something like volatility in the VIX.
 You know, look, we think about positioning, especially coming into September.
 You typically get VIX up around 9% on average.
 This is looking over the past 20 years.
 You've had a lot of good news with earnings.
 But we're sort of an idiosyncratic vacuum right now.
 It's going to be all macro for a little while.
 Something we recommend to investors with volatility this low with options so cheap.
 It's simply to look at some short-term put spreads right around the FOMC meeting.
 Because we, you know, we have important catalysts coming up.
 And I think we also have a lot of macro news on top of it that's going to lift our correlations
 and probably pick up our volatility.
 Of course, we got an ECV decision.
 Expectations are going to raise rates, Jimmy, this week.
 Yen continues to be in focus here as it strengthens against the dollar expectations at your COBOJ.
 That's going to be pretty aggressive in terms of tightening here, too.
 And yet, we're seeing ahead of midterm elections, the rhetoric ramp up again about the possibility of a rate cut
 when it comes to President Trump or the vice president or others here as we are in this political and election cycle.
 Yeah, you know, I'm not sure what the president's expectations are of Kevin Warsh.
 I expect that he will continue to jawbone.
 He will, listen, if we see rate hikes and people are, I think, will be sensitive to this issue.
 There's certainly sensitive to mortgage rates and we've been talking about gas prices.
 The president will continue to say, I want lower rates.
 Do I think with this chairman, especially after that Jackson Hole meeting, is going to be receptive to those please?
 No.
 I realize in the midterm, we have a history of federal reserve chairman and the federal reserve doing things before elections
 that presidents have not liked.
 And this will maybe another historical example of that about to happen.
 I mean, the other thing that we've been talking quite a bit about is debt tied to the AI infrastructure build out,
 which brings us Ryan to Oracle, which is going to have earnings after the bell.
 There is a two.
 How critical is that report going to be to the entire tech trade?
 Well, it's going to be important.
 Oracle is down about 19% year-to-date.
 We know they've been lagging.
 We know the issues that are there and you look at credit default swaps.
 And we've seen credit default swaps.
 Kind of trickle higher, really, across the board and a lot of these AI names.
 One more thing on this.
 So software the last five weeks is up over 25%.
 Go back on history, Morgan.
 That happened to lows in 2009, lows in 2020.
 So that software trade we talked last week about the baton being passed around.
 Yeah, that could we could see some continuation of software trade, which is overall,
 I think still a positive for a diversified portfolio.
 Yeah, and along those lines, we're going to get Adobe results this week too.
 So Amy, we'd love to get your thoughts on all of this.
 Especially as OpenAI says that it's brought us into this AGI era.
 Yeah, I don't know if we should be a terrified or not about that.
 But look specifically, as it relates to software, you know, one thing that's happened in this market is
 you've had a lot of zicking and zacking.
 So, you know, you have had semis go up all softwares go down as Ryan said that baton is being passed on.
 So that's creating what we call this paddling duck market, meaning there's these violent rotations underneath.
 But you don't tend to see them on the surface.
 We see that right now in IGV.
 So the ETF for software when you look down at the constituents, you actually see a good deal of positive momentum.
 You can see a good deal of call buying.
 And if we see that baton being passed, that's going to be another violent rotation momentum
 that you're not necessarily going to see bleed into VIX, but it does not mean there's not a volatile deal under the surface there.
 Okay. We've got about 30 seconds left, Jimmy.
 I have to get your thoughts on all the AGI stuff because we know this is a big part of the midterm election narrative as well.
 Yeah, I want, it seems to me that the level of concern in Washington so far has not been reflected in markets, in the prices of semiconductor makers.
 And I wonder as we sort of come back from the summer break with the election, if that runner is going to get ramped up.
 And at some point, investors begin to take seriously that people in Washington are growing more concerned and we may actually get action.
 So far, they haven't been paying attention.
 Okay, we'll continue to talk about all of it.
 Thank you to our call crew.
 Great to have you here to kick off the holiday short and trading week.
 Sonnet insurance wants to know what would you do with an extra hour in your day and more money in your pocket?
 With Sonnet, you can quote and buy hominato insurance online or over the phone, your choice on your time, whatever works best for you.
 And Canadian University and College alumni could save over $2,000 a year.
 That's real money, back where it belongs.
 Save time, save money, save yourself from the way insurance used to be.
 Get your quote at sonnet.ca, switch, save, simple, Sonnet.