Markets rally, earnings strength, and risk appetite returns 4/16/26

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1:01I'm Morgan Brennan, and this is your morning call. Good Thursday morning. What a difference 11 days makes. We're watching US Stock Futures with the Nasdaq and the S&P 500 at all time record highs as of close yesterday. First time we've seen that for the Nasdaq since October 29th. US Stock Futures right now look to keep the rally going, albeit modestly higher this morning. The S&P 500 has now rallied 10% in 11 days. The Nasdaq rallying more than 15% over the same time period. The Mag 7 really leading the charge here, up nearly 13% since the start of the month. Names including Tesla, Apple, Microsoft. Those led the latest leg higher yesterday. You call it a ketchup trade within Mag 7, closing up between 3 and 7% yesterday. It had been the other names within that mega cap tech group

2:02that had been leading the charge before Wednesday. And this morning you can see we're higher as well for some of those names right there on the screen, including Microsoft and Tesla, both up about 1% pre-market. As for the Dow industrials and for the Russell 2000, here's where we stand from all time highs for those averages as well. We are 4% from a new record high for the Dow industrials. And the Russell 2000 less than 1% about 3 quarters of 1% from here. Dow transports meantime continue to trade at a record high. And the equal weighted S&P is also playing catch up here down a couple of percent from its record high. Let's get a quick check on Treasury yields too. It's a mixed picture this morning. As you can see right there on your screen, 10 year Treasury yield 4.283% right now. And finally, let's also get a check on energy futures. And what we're seeing there with arrows higher this morning. WTI career is of 1%, but trading right around $92 a barrel. And Brent is also about 1.5% of about 96 bucks per barrel.

3:04Well, let's see if Europe is following our lead higher. And I do think it is. Do you say, Drew, it isn't London, with the early action that we are seeing there, Steve? Yeah, it's way more moderate Morgan, but he's moving to the outside. European equities moving higher after those fresh records on Wall Street and in Asia. Meanwhile here in the UK, economic growth surprised to the upside, but it's backward looking. It was GDP in February before the war in the Middle East started up 0.5% on a monthly basis. We've also had a slew of European central bankers at the IMF and World Bank meetings in DC many advocating a cautious approach to monetary policy amid uncertainty around the impact of the war. One big corporate for you, Perna Ricard, the drinks maker, third quarter sales, better than expected, but the spirits group warned of a hit to fully a sales, of course, from the war in Iran. The company also said it's involved in discussions with brown foreman over a possible merger, but did not specify any of the details back to you. All right, Steve Sedgwick, thank you. Well, turning back to the tech trade, we're watching shares of Taiwan semi overseas.

4:06The company out with its latest quarterly results reporting a 58% jump in first quarter profit to a fresh record high of $18.2 billion. The results mark eight straight quarters of double-digit growth for the NVIDIA supplier, among others. You can see shares of Taiwan semi up 1% right now. CNBC's Senior Technology Correspondent, Arjun Carpal, has more on what we're seeing, Arjun. Good morning, Morgan. Look, it was TSMC's fourth consecutive quarter of record profits with a beat on the top and bottom line driven by that continued demand for those AI-related chips. The world's biggest semiconductor manufacturer, which counts, of course, in video, an Apple amongst its top customers, the net income jumped 58% year-on-year. While its gross margins checked this for the first quarter, were just over 66%. High performance computing, the segment where it books its AI chip revenue, saw 20% quarter-on-quarter growth and accounted for nearly two-thirds of the company's revenue. TSMC management said AI demand remains extremely robust. Meanwhile, it expects capex for the year to be at the top end of that 52-56 billion-dollar range

5:12in previous years, says, as it ramps up capacity in Taiwan, of its three-nanometer advance chip-making process. The Taiwanese giants and seven-nanometer chips and below accounted for 74% of total way for revenue, underscoring how its high-end chips and most advanced semiconductors are driving the company's growth. If there was one weak spot, it is a smartphone review. It fell 11% versus the previous quarter. There's the memory shortage and consumer spending pullbacks amid the Middle East conflict. Put off people from purchasing new devices. But all in all, a very strong earnings report following on from ASML here in Europe yesterday, underscoring how AI chip demand more than it remains very robust. Yeah, AI tech trade still very much in focus. Arjun Carpal, thank you for joining me. Well, let's get to a developing story. Continue to wait for official word of a second round of peace talks between the U.S. and Iran. And also speculation, growing speculation that the ceasefire timeline can be extended as well. This as the U.S. blockade in the Strait of Hormuz wraps up its second day. Our Dan Murphy is live from the region.

6:12And Dan, one of the things that Wall Street really seems to be honing in on here is the fact that this blockade is going rather orderly in the first several days of implementation. And now you have these reports surfacing that perhaps vessels are going to be allowed to traverse the straight on the Oman side, which perhaps could be a win for both sides in this conflict. That's exactly right, Morgan. So here's where we are this morning. And for the first time in a few weeks, there is a genuine sense that this conflict might actually be heading somewhere. And that optimism is being reflected in the equity and in the oil trade. U.S. officials telling CNBC that a second round of talks is under discussion and now being planned. And today, we're also getting reports that Pakistan has set a delegation to Tehran to begin the early groundwork. Of course, we don't have a time and place confirmed yet, but momentum does seem to be building for a second chance that what could be a diplomatic off-ramp here. And Morgan, as you mentioned, the blockade is holding as well. The navy had ten ships turned back overnight, no vessels sunk or shots fired.

7:17Aran has been making some threats, saying they're going to shut down the entire gulf in the Red Sea if the blockade continues. But they're using words, not weapons. And that distinction really matters. It tells you they want to deal as much as anyone else. Morgan? All right. Dan Murphy, thank you. Their social media presence has been pretty prolific for better horse, too. Something to keep an eye on. Joining me now with more is Libby Cantrell. Pimco, managing director and head of public policy. Libby, it is great to have you on the show. Welcome, welcome. Thanks so much, Morgan. All right, a lot to get to here. But first, the latest regarding Aran, what you're watching, what you think investors need to be watching, and how all this translates to Washington. Yeah, well, again, nice to be with you. I mean, I think just talking to clients, I'm over in Europe this week. You're talking to clients, I think the real question, of course, is the fact that President Trump does seem to want a cease fire to continue this cease fire. He does want an off-ramp. I think the real question, though, for investors is does that require sort of an escalation to de-escalate approach? So could we see

8:22more conflict, more bombings in what have you, or is this going to the beginning of the end? And we will see real sort of the cease fire hold, and we'll actually see a resolution. Of course, sort of front and center to all of this, as it relates to markets, is that sort of foremost going to reopen? And then when it reopens, how long will actually take the oil industry to normalize? I think this is the real question, is that even if the straight opens tomorrow and completely allows for cargo to go through, our commodities folks expect that it's going to take weeks, if not maybe two months, for the oil industry to actually retain or normalize because of the supply shut in and what have you. So obviously a lot of questions for investors, but oil is really the read through for the market. Politically speaking, as we all know in the US, this has hampered the president in terms of both

9:24approval rating and then just folks perception of affordability, which continues to be the biggest question of biggest issue weighing on voters' minds. So clearly, the political incentives here are to wrap up this conflict. It's sort of just a question of, again, how long that takes what the approach is and then how long it does take the oil industry to normalize? Yeah, and I want to get into that Washington piece of it and specifically what this means in terms of a clock ticking on policy push now. But first, just one more question on this because you've been tracking it and I haven't heard a lot about it elsewhere and that is the fact that sanctions relief for Russia and now looking to this weekend for Iran is also going to sunset. Yeah, it was obviously, it sort of quietly happened over the weekend. There had been a waiver issued to Russia, softening sanctions on Russia oil. That was issued about a month ago. That was sort of up for renewal. I think the sort of general conventional wisdom was that it would be renewed again because of those political pressures domestically on the president in terms of the

10:29price of gas and what have you. And then that waiver was set to, it was expired, was allowed to expire. And so I think this was in some ways was sort of a head nod to Capitol Hill. Lots of folks on Capitol Hill, both Republicans and Democrats had pushed back on that sanctions relief as it relates to Russia. There was sort of a similar waiver that was set to expire this weekend. It does seem that from Secretary Besson and from other folks that that will also expire on Iranian oil. And so this again just, it's starting to think part of a new strategy, if you will, of sort of maximalist economic pressure on Iran. And also again sort of a head nod to some of the political pressures on Capitol Hill where folks really didn't sit very well that the administration was providing sanctions relief both to Russia and to Iranian oil. So how does all of this TSUP here for reconciliation 2.0, especially to time where we're going to have to replenish some of these missiles and munitions and other weapons coffers as well. And the numbers

11:30are pretty eye-popping that are being thrown around. Yeah, and I think just broadly speaking, because of these concerns that it will take the oil market some weeks, if not months, to normalize. I think our view from a macroeconomic perspective is you look in history, inflation shocks, supply side shocks have translated then into to grow shocks. And so if the economy does slow because of this, then sort of the next logical question is, what is the policy makers response to that? And could we actually see some countercyclical stimulus, particularly given that we're in an election year, folks are concerned about sort of the election dynamics going into November, particularly Republicans? I think that the upshot is, we don't exactly know how Congress will respond. There is this reconciliation bill. All of our clients eyes glaze over when we use a term reconciliation, but just as a reminder, that allows bills to pass with only 50 votes, not 60 in the Senate me. It could just be a partisan Republican bill. And that is kind of gaining traction

12:35that will fund DHS, which of course is continues to be shut down. People have sort of forgotten about that. But I think the big question is, do we see additional money for Iran? How big is that? Is it $100 billion? The $200 billion? The White House has suggested, obviously, that will weigh on the deficit. And then lastly, can we see some of that countercyclical stimulus? Should the economy actually slow? Could we see new tax cuts or what have you? I think it seems like what's coalescing is a skinnier bill, a bill that has less of a deficit impact. That might be good for the Treasury market. But again, if we do actually see slower growth, maybe not so good in terms of what the economic environment might look like right before the midterms. Yeah. You take that. You take tax refunds or tariff refunds, I should say, being implemented here and obviously questions about trade policy moving forward in general. And then you have a worse nomination that's now scheduled for confirmation hearing that's now scheduled for next week with the possibility that that entire confirmation process is a little bit delayed here. What does it all mean for the bond market? Yeah, I mean, we've been saying very consistently

13:41to our clients really since the election of 2024 that regardless of who won, then the deficit would be the biggest loser under a Kamala Harris regime and under Donald Trump regime. You know, that has proven to be right. We're looking at deficits tracking at sort of six to seven percent of GDP on an annual basis, really, for the foreseeable future. And of course, as you add back those tariff refunds, the fact that the Supreme Court did overturn this IEPA case, meaning that the Treasury has to pay back, you know, at least about $160 billion of refunds over the next two years or so, plus the fact that you're going to have maybe more defense spending, plus the fact that maybe you do see, you know, some more countercicle because stimulus, this just, you know, is just adding up to the fact that we heard just the US is running very high deficits. And again, this is not a Republican problem necessarily. It's a bipartisan problem because even if Democrats were in charge, we don't think they would likely fix it either. So I do think there, you know, you know, our view is that there's no real reckoning in the bond market. But it does probably mean that we have steeper yield curves sort of for foreseeable future. Got it. I know this is a global

14:45issue as well, not just a domestic one either. Although we look through it through that lens, it's just, all right, Libby Cantrell, it's great to have you on. Thanks so much for kicking out. Thanks so much for seeing me. Great to see you. Thank you. A lot more to come here on Morning Call, including a bull call on one Contrarian trade courtesy of Valley Gifford. And under the name, under the radar names that are looking to make a big splash in the public equity markets, we're going to look under the hood on those. And later, a kickoff to big tech earnings, when Netflix reports after the post, what you need to watch with the streaming giant of very busy hours still ahead Morning Call of your effect. Here's a shift worth noting. Better health care is care that meets patients where they are. United Health Group is bringing it directly to living rooms. This is a win for patients managing chronic conditions. And here's the interesting thing. By closing those care gaps, administering in-home exams and identifying risks earlier, more diseases can be prevented and patient outcomes can improve. In 2025 alone, United Health Group

15:46patients received over 19 million home visits. Learn more at unitedhealthgroup.com slash commitment. She loves it hot. He loves it cold. However you sleep, the pod by eight sleep adapts to you. Personalized temperatures keep you in deep sleep longer. So you wake up refreshed. Learn more at eightsleep.com. Men are struggling with their mental health that some of the highest rates we've ever seen, but most aren't getting the support they need and that needs to change. I'm Dr. Guy Winch, your host for season three of the visibility gap presented by Signal Healthcare. This season, we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts. Taking a look at that chart on your screen right there, we've seen this record rally really across

16:58the globe here at the NK, actually closing at a record high cost B is less than 2% from a new record high, which is wild when you look at chart of Korea's index since the start of the year, Shanghai Composite down about 3% still from record high in Hang Sun is the underperformer if you will. Well, sticking with the action in Asia, China out with its latest read on economic growth, hitting targets despite mid east disruption. Eunice Yoon joins us now in CMC newsline with more. Hi, Eunice. Hey, Morgan. Well, China's Q1 GDP beat estimates in a group faster than the end of last year to top Beijing's range for the year of 4.5 to 5%. So a lot of good news on that front for the policymakers here. The rebound got a boost from high tech exports, manufacturing of these against tech products through 12.5% from a year ago. That includes EVs, lithium batteries, robots, as well as tip components. So China's reliance on exports and infrastructure was reflected in the March data as well, factory output beat while retail sales slugged on weaker consumer spending,

18:00fixed asset investment recovered. But real estate investment was down by 11.2% and all of that just showing how weak property sector is and how Chinese are still staying away from purchases. Now with China's growth lopsided towards exports, China's statistics bureau flight concerns about the outlook, especially with the Iran war still under her rise and in terms of the impact on trade. The statistics bureau called the external environment more complex and volatile. All right, Yunus Yun, thank you. Well, China and emerging market stocks have been rallying this week along with the broader global markets. Speculation over renewed peace talks between the US and around lifting sentiment, the MSCI Emerging Markets Index, or EEM, that is now less than 1% away from erasing its losses since the Iran war began as well. Joining me now is William Sutcliffe, head of emerging markets equity team at Bayley Gifford with $273 billion under management. And well, it is great to have you on the show. Welcome. I think that's where we've got to start,

19:04more broadly. Is EEM a buy right now? Yeah, I mean, it's a really interesting question. I think for as long as I can remember, and I've been part of the emerging markets team here for more than 25 years, but for as long as I can remember, there's been this narrative around emerging markets that it's a little bit risky. It's an asset class you might want to dip your toe in when you're feeling good about the world and good about global growth, but when risk aversion's rising in environments like the current one, you would usually not want to be an emerging market because you want to retreat to the safety of dollar assets. So it's interesting to me how much that narrative has flipped. There is a lot more resilience and a lot more growth in emerging markets than I think there has been historically. So I do think investors need to flip that mindset from, is it risky to invest in emerging markets to what are the risks of multi-investing in emerging markets?

20:06It's interesting to hear you saying that, knowing that we've had a dollar. And yes, it's weakened again in recent days, but it's strengthened in the midst of at least initially in the midst of this war with Iran. We've seen energy prices spike as well. What is it about this conflict, or maybe even just more generally the reordering of the global order that is making emerging markets attractive in a situation like this or in market conditions like this? Yeah, I mean, for me as a long-term investor and we typically invest on five-year-plus time horizons, but for me the interesting question is less about where energy prices are in in six months time or 12 months time. Where I have zero insight, but by the way, there's plenty of large parts of emerging markets that will do very well in that environment. And I'm thinking of the oily economies like Brazil, for example, but the stock market is already up about 30 percent so far this year. But the more interesting question for me is what are likely to be the lasting

21:07impacts of this war and to what extent does it accelerate that global trend towards greater self-sufficiency and greater resilience and supply chains and in energy security and the good news for me is that emerging markets does very well to these trends because of course what this boils down to really is we need a lot of stuff, right? We're going to need critical minerals like copper or lithium to build that renewable infrastructure and we're going to need lots of steel and lots of cement to build those new supply chains and we're going to need lots of semi-conductors to power those AI models and where are the biggest, the best, the lowest cost producers of all this stuff? Well they tend to be in emerging markets so that's why I say I think investors do need to flip that mindset from from the end that somewhere scary and tactical someone was strategic and increasingly necessary. So in light of that your thoughts on China right now? Yeah I mean I mean China I think is a great example of a country that's being well ahead of the

22:10curve in that in that move to self-sufficiency and then back in 2015 Beijing launched a deliberate industrial policy aimed at upgrading China's manufacturing capabilities and reducing the dependence on foreign imports which was called made in China 2025 and they're now reaping the rewards of that strategy trade surplus I think was was running at about 20 billion dollars a month back in 2015 is now within a hundred billion dollars a month and alongside that there have been very significant investments in electrification to give you a sense of that China added more renewable capacity last year than the rest of the world combined and there are plenty of Chinese companies that are now utterly dominant in many areas of green tech so if you think that one of the long-term consequences of the war is that it re-ignites that pushed towards electrification as countries seek to reduce their dependence on foreign or then I think it puts these companies in a really interesting place and I'd be looking at companies like CATL in batteries utterly

23:17dominant with a 40% global share of ED batteries and moving into energy storage and moving into maritime transport and I'd be looking at companies like BYD the auto company who overtook Tesla last year as the world's largest producer of EDs and just by the way these are not the cheap low-quality products that you might have historically associated with China these are desirable products I think it's quite telling that Jim Farley that the CEO of Ford he drives a Chinese EV he had a giant ESU7 shipped over to Michigan and in his words it's it's fantastic we have to leave the conversation there we'll suck Cliff it's great to have you on for Billy Gifford but please come back so we can talk more about the AI build out and what that means in terms of global ramifications as well because there's so much more here for us to dig into appreciate the time well we have some sad news to report mark mobius the emerging markets guru and long-time

24:17CNBC guest and a friend of this show has died according to a statement on his LinkedIn page mobius launched one of the first funds dedicated to the sector when he joined Franklin Templeton in 1987 by the time he retired from the firm in 2018 the group managed more than 40 billion dollars in 70 countries and he remained active in emerging markets with his own company mobius investments mark mobius was 89 may he rest in peace Instagram Tina counts automatic protections for teens Instagram Tina counts have built-in content settings and limits for who can contact teens plus teens under 16 can't change these default safety settings without parental approval so parents can help teens connect safely Instagram Tina counts automatic protections for who can contact teens and the content they can see learn more at instagram.com slash Tina counts she loves it hot he loves it cool the pod by eight

25:20sleep is a smart mattress cover that fits on your bed and keeps each side at the perfect temperature all night long by staying comfortably warm or cool the pod helps you sleep deeper and wake up feeling more rusted every morning you get daily health insights and a sleep fitness score however you sleep the pilot by eight sleep adapts to you try it at eight sleep dot com men are struggling with their mental health that some of the highest rates we've ever seen but most aren't getting the support they need and that needs to change i'm dr guy winch your host for season three of the visibility gap presented by signal health care this season we're focusing on men's mental health bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult join us for the new season wherever you stream your podcasts welcome back to morning call the IPO market is seeing a

26:23resurgence maybe not resurgence but it's chugging along let's say it that way fueled by prospects of high profile mega deals later this year you've got SpaceX offering set for June at evaluation that could top two trillion dollars potentially or at least one trillion and potential IPOs of open AI and anthropic the Renaissance capital IPO ETF is up 5% year to date helped by its nearly 15% jump this month there were 127 IPO filings in the first quarter that's the third highest quarter in three years and there's a flurry of activity already just this week specifically today Madison air this is the maker of building ventilation systems pricing its IPO at the top end of its range last night raising more than two billion dollars that makes it the biggest offering so far this year arcs is will also begin trading today this is an aerospace and defense parts maker pricing its IPO 28 dollars a share giving it evaluation of about 11 billion dollars that was an upsized offering it's the first exit for industrial focused pe firm arcline nuclear reactor startup x energy filing for an IPO they amended that filing yesterday they've started the road show amazon backed

27:28company is uh... seeking to raise up to eight hundred million dollars you got hawk i three sixty also filing for its IPO at the end of last week the space analytics firm swinging to a profit last year with revenue jumping nearly seventy five percent and you have some names on the consumer side too like suja on the juice and smoothie side so we're going to continue to keep an eye on all of this but still on deck right now calling on Detroit's reports that pentagon the pentagon may lean on the big three for more than just cars this takes us back to world war two again it is on theme for this administration morning calls back after this as america celebrates its two hundred fifty at the anniversary cnbc spotlights the companies that rose with the nation and continue to shape its future i'm crazy zilgen owner and president of the avid zilgen company a manufacturer of musical instruments

28:30the company was originally started in sixteen twenty three in isdomble by avid zilgen the first avid z was an alchemist and what he created was a unique alloy that produced beautiful clear sounding symbols then in nineteen twenty nine my grandfather avid z the third relocated the company here in america we've been proudly made in america ever since america is the largest market for musical instruments and the birth of jazz in america provided an opportunity being in america gave us access to these artists they could come into the factory and we could make new sounds together my grandfather is unstoppable his resilience and a deep passion led us through the depression and world war two where we had the war production board putting metal on allocation when ringo star the beetles performed on the ed sell of them show in the nineteen sixties

29:34overnight everyone wanted to be a drummer that created a back order of ninety thousand symbols it made zilgen the symbol of choice for rock and roll drummers being a multi generational company we're focused on stewardship and the legacy of the brand what makes a family business overall so successful is the long-term perspective that is unique to private companies i think it's exciting to see that next generation of zilgen family members learning the business and carrying on the core family values that have been passed down for generations we're excited to see where the music takes us

30:35i'm working bread and and this is morning call we're watching you a stock future this morning with the nasak and s and p five hundred at all time highs record highs their first sense in the case of nasak october twenty nine uh... u.s stock futures right now we're looking to keep that rally going all be it modestly this morning with green arrows on the screen and all the major averages poised for a higher open as of right now the s and p five hundred is now rallied ten almost eleven percent in eleven days with the nasak rally more than fifteen percent over the same time period mega cap tech has really been leading the charge but also software i g v it's up something like ten percent since the start of this week well let's get a check on treasuries right now which is a mixed picture across the curve u.s tenure treasurer yielding four point two eight percent so up slightly if we take a look at energy as well we see those futures prices moving higher to this morning wti crude of one percent ninety two dollars per barrel and Brent is up a little over one percent ninety six dollars per barrel still way off where we were to start this week also getting a check on metals which have seen

31:37a rally here uh... and although largely flat for a gold and silver as of right now platinum's doing a little bit better um... we are back at highs that we haven't seen or i guess it's the highest level in a month copper is also one to keep an eye on as we continue to trade above six bucks here watching shares of ty one semi the company out with its latest quarterly results reporting a fifty eight percent jump in first quarter profits to a fresh record high of eighteen point two billion dollars this results the results i should say mark eight straight quarters of double digit growth for the in video supplier although shares are up only freshly about half a percent take a look at some other names in the chip space because in general semis have been on fire in recent trading sessions and you could see it's a bit of a mixed picture here this morning pre-market but in video is up another call at half a percent right now just below two hundred bucks a share we're going to turn to jbe hunt shares are higher in the back of earnings that beat analyst estimates notching its first sales gain since twenty twenty two why are we highlighting

32:39this because free data is such a strong early indicator on the state of the u.s economy specifically the goods part of the economy so on the call management said the overall truckload market is improving with a man showing really signs of improvement possible signal of strength for the broader u.s. economy as i just mentioned uh... you can see those shares are about two percent right now meanwhile the feds beige book revealing that while manufacturing activity row slightly to moderately in most districts a number of manufacturers say they've had to increase prices to cover rising impact costs and previously absorbed tariff related costs now some adding that they've also implemented surcharges on oil related inputs so today we get a fresh read on the space you get the filly fed manufacturing index and also industrial production data and for more on the state of manufacturing here in america let's bring in j timman's president ceo of the national association of manufacturers j it's great to have you on the show i think we got to start right there you obviously have a real time sense of what we're seeing in terms of manufacturing

33:41activity in the industrial side of the economy here in the u.s. what is taking root so you know you see the data and you're starting to see that manufacturing activity is is ticking up over this uh... first part of the year but what i can tell you morgan is that what i hear from manufacturers all over the country is there is this incredible optimism about the future and that is because of the certainty that was achieved last year uh... during the tax reform debate hr one was passed that strengthened uh... and renewed the 2017 tax reforms regulatory modernization is occurring right now as we speak and of course energy abundance is a as a big focus for this administration and that is important to us now having said that there are a few headwinds you mentioned you mentioned one which is rising input costs uh... until we get some certainty on the trade front and the tariff front manufacturers are a little bit hesitant to invest although they want to do so we also want to see permitting reform so that we can continue that drive for energy abundance

34:43and then i would say the the other big factor is we have fewer workers than we need four hundred thousand jobs are open in the sector today um... and i want to talk a little bit more about that last piece that last point you just made um here in just a moment but first we you know trade uncertainty how is the conflict in Iran and rising energy prices factoring into all of this too and i guess not even just right now but longer term what does it do to shape this reindustrialization narrative yeah so look at it uncertainty is always bad it's always bad for investment it's always bad for for planning purposes for manufacturers but our hope is obviously i'm sure it's the hope of all americans is that this conflict does resolve itself successfully in the near future and until that time uh... you'll see manufacturers trying to figure out what you know what the road ahead is and that is particularly true when it comes to energy and energy costs we use one third of the nation's energy so any any change in energy prices even just a little bit impacts our

35:45bottom line tremendously so uh... seeing uh... seeing this set a lot is is definitely a goal for manufacturers in the united states so let's go back to labor piece of this i've been beating the drum on this because we talk about uh softness in labor market tied to white collar workers and and this idea of ai disruption taking root in corporate offices across the u.s. but what are we seeing on the manufacturing side and the physical side and on factory floors because i keep hearing from ceo's that there aren't enough of these skilled workers to do the jobs yeah i you've you've heard right so i as i said four hundred thousand open jobs today in manufacturing that number grows to about two million open jobs by the year twenty thirty three and by the way that's before we factor in all the benefits from tax reform and regulatory modernization that number is going to grow and it does take into account the changing technologies that are available to manufacturing so if you think about how ai will be used in particular on the shop floor it means that we will be able to be more

36:45productive we can produce more goods we can produce uh... a lot more for the united states having said that we need to upskill and we need to train the manufacturing workforce for those for that for that new type of job that will emerge because of technology and ai right now our manufacturing institute has uh... been working with uh... with manufacturing workers to train them on on ai skill sets and that is the number one goal i think for manufacturers right now who are trying to upskill their workforce about fifty percent today use ai that number will grow to about eighty percent by the year twenty thirty okay jay timmons great to have you on the show thank you for joining me thanks for having me here all right of course you got those usmca talks coming into focus for the summer as well so there's going to be more to continue to talk about when it comes to the state of manufacturing in the meantime though we have a lot more to come here on morning call including elan musk we're probably taking new steps to reshape the chip space and shutdown speculation for one

37:48p.j.a. rival amid big questions about its funding future be sure to my catch my exclusive conversation with the CEO of alkoa after that reports earnings after the bell today too speaking of manufacturing and the industrial economy and what energy prices are doing as well as aluminum shortages in the Persian Gulf what all does doing through the global commodities markets that's a four p.m. Eastern today morning call will be right back welcome back to morning call reading a check on some of this morning's latest headlines elan musk's tariff ab team is reportedly asking suppliers including samsung applied materials tokyo electron and lamb research for price quotes and delivery times for chip making equipment the tariff ab project which already has intel CEO lip botan's support is aimed at reshaping the chip making sector currently dominated by tsmc by the way intel been a huge mover over the last couple of weeks

38:50all right well senior pentagon officials are reportedly holding talks with forward general motors g.e. aerospace and machinery maker ashkosh about producing weapons and other supplies for the us military got no immediate comment from the companies but the pentagon says the dode is committed to expanding the defense industrial base by leveraging all available commercial solutions is very much in line with the policy we've been getting from this administration and this idea of an arsenal of freedom that harkens back to the model that was in place in world war two meantime live nations says a jury's verdict that it illegally monopolized the live events industry and overcharged fans is quote not the last word on this matter adding that it will appeal that ruling the complaint was initially brought by the justice department and dozens of state attorneys general back in 2024 we use regulators are reportedly investigating a series of what they call suspicious and well timed trades in the oil futures market ahead of recent policy moves by president trump and his war in iran and that is one to certainly track here

39:53and the FT is reporting Saudi Arabia's sovereign wealth fund is on the verge of cutting support for live golf with an announcement expected as soon as today with the iran war and other factors reportedly quote adding more pressure to reposition some priorities no comment from live or the Saudi government those sources are telling CNBC the season will continue as planned that would have huge ripple effects across the golf industry and sports more broadly well straight ahead the morning call crew is going to join us tan up the day ahead find out about the key catalyst one member of our crew says markets must see to sustain this rally and next week morning call will be at CNBC's converge live conference in singapore for tickets and info go to converge alive dot com i will be there will be broadcasting from there you don't want to miss it morning calls right back welcome back to morning call it's time for a call sheet where we look at the topics driving the trading day ahead the crew members today chris for own chief market strategist as strategic

40:55as research partners Steve garasso CEO of garasso global CNBC contributor and Keith Buchanan senior portfolio manager at global investments well that's a get to um chris i'm going to kick this off with you it's great to have you here in studio smp at record highs nasdaq at a record highs and all the other major averages and by the way not just here in the u.s globally at or near record highs closing in on them even as we have oil prices higher and we have some uncertainty in the state of form is sometimes the less you know in this business right me eleven days from the march 30th low to new highs right now and then i think almost more importantly when you look at the leadership fabric of this a lot of what was working preer and seems to be reasserting itself here you see with the power stocks the transports have acted great throughout all this i mean again you wouldn't have expected that with higher oil but the trucks the rails and frankly i know the bank earnings here have been a little squeamish but i mean you have city group at new highs here you have Goldman Sachs and Morgan Stanley right there at new high so it's hard to make a recession call when you have transports power banks

41:57kind of all leading the charge yeah we've had banks he was very constructive on the u.s economy specifically in the midst of all the steve grouse it does feel like a formal rally what sustains it oh yes and so well that that pretty much sustains it right there so when you have people chasing the market everyone was waiting for this pullback that never happened to the extent they thought it would happen you know the market has become so numb Morgan to all of these events look at the events we've had in the last decade we and and just put put a bow on it with covid everyone was looking for sort of a covid event where you had everything being thrown out it happened in in real real time fast speed and now everyone is chasing everything including risk assets have jumped the most recently um and to that to that point i mean we did and it's such still really small we're talking about microcap at the all birds move yesterday um

42:57getting a lot of attention here and and this idea key that like meme stocks are back in the mix as well sure we see that as a sign of the market just wants to go higher and investors want to get back and bond we we look at that as a read through into our next expectation that really haven't buzzed that much and continue to move higher and implied growth that's really really attractive for capital here and valuations have bounced right back from where uh back to where they were before this crisis in Iran and we look at that as a sign that the market simply want to go up because they're confirming earnings growth that if it materializes it's substantial at this area um all right so let's dig a little deeper just earnings Chris we we just talked about some of the bank earnings we've gotten so far obviously like one of the best macro takes you can get um you know as you come into earnings season here on the state of things uh we're gonna get alkoa after the bell before that we get more regional banks we get PepsiCo this morning a number of others to what are you watching especially as expectations were have actually elevated going into results it's pretty remarkable if you think about the last four five six weeks

44:00even through the whole conflict there was really no hit to earnings expectations i think the question now is the bar too high um the bank results have been decent i think alkoa uh will be particularly important just given the rally that we've seen in the metals as a sector we've been very bullish on more the base metals than the precious but the alkoas the free ports the rios valets um i think the strength from those stocks hi again it's kind of a reminder of what was working before Iran continues to work uh today you've seen it globally uh here as well all see dollar making new highs it's very much a industrial metal type uh fx pair um and then i think when you look globally i mean nique new highs already here i mean this was the market that was supposed to be hit the worst because of what was going on given the energy dependent and you just haven't seen it in europe you haven't seen in japan i think the earnings certainly reflect that as well yeah Steve want to get your thoughts on all of this yeah yeah so if you look at netflix and it's interesting and chris could uh you know you could look at the same charts that i look at it when they announced their uh original intention for

45:05m and a with water brothers you we're back to those levels so you if you look at a chart it's pretty clear that we're back to the levels where we're out when they announced it so i'm not sure how much fuel is left in the tank there um people want to see them grow organically and obviously the deal coming off was uh definitely a tail when you can see that in the chart um also look at apple apps i you know why look at this market through prism if you look at biotech all these small biotech companies are probably going to be gobbled up because it's going to be a string of pearls approach morgan where all the large pharma has to make up for the patent cliff that's coming in the next year or so hmm so i would look for small cap biotech to run yeah we're talking about patent clips with an open nordisk CEO just earlier this week on the show uh Keith your thoughts especially as netflix does kick off and then maybe this isn't even like a fair assessment anymore to steves point but this sort of scene is kicking off big big tech earnings

46:08sure we look at last week as really said and send the tone um if there's anything we were afraid of with some of the big bank earnings was an implication of a growth scare that that could have been implied in some of the expectations for some of those companies and as we see as that said in the tone for ace potato economic growth and we feel like that is the biggest threat um to this market um really coming off the ball here uh we didn't see that last week we don't really feel like netflix can imply anything uh to the aggregate um we do look at it as a read through to the consumer to an extent um but we're really focused on the last four days of earnings as as he said in the tone for we expect going forward and netflix could confirm or or refute that uh we would don't really think it changes the needle as far as our expectations all right we've got 20 seconds left Chris last words thank you for watching listen i think a couple things here are important how does the market perceive the economy going forward we watch discretionary versus staples to get an idea i mean staples are making new relative lows right now so whatever defensive hope there was that the staples would kind of come to the rescue here and provide

47:09some safe haven certainly has not happened yeah of course we keep an eye on the bond market as well which has not rallied to the same degree that equities have to but we're just going to check on stock futures right now those are higher uh as that rally is poised to continue here in trading today say thank you to our panel great to have the call crew on and squawk buck starts right now the peloton cross training series makes every workout personal peloton iq helped you move smarter with personalized guidance based on your performance ready to lift heavier weight suggestions help you choose the right dumbbells while form feedback perfect your posture and rep tracking keeps count get accurate real-time support from your built-in personal coach workout confidently on the cross training series