Morning Call 4/17/26

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I'm Morgan Brennan, and this is your morning call.

Good Friday morning.

We're going for 13 watching U.S. stock futures

with an Azac up 12 days in a row.

Longest win streak since 2009, 15% over that time period.

As you can see right now, on your screen, futures are in the green.

All the major averages are poised for another higher open this morning.

Now ahead of that opening bell, the S&P Nasdaq,

Nasdaq 100, Russell 2000, and the Dow transports are all at record highs.

The tech sector is on pace for its best week since last May.

And the Dow was playing catch up here too.

It's at more than 7% on the week,

less than 4% away from its own record high.

We're also getting new data from Bank of America this morning.

Showing investors pulled more than $172 billion from cash in the past week

with a majority flowing into what else, global equities.

Elsewhere, we're tracking the violent rebound in the software trade.

The State Street Spider Software ETF, that is up 11% in four days.

Oracle, it's up 29% over that time frame as well.

Huge move there, Microsoft up 13%.

Keep in mind though, we actually haven't seen any fresh record highs.

For the Mag 7, at least not yet despite the fact that they've been leading the charge here.

Take a look at Treasuries and what we're seeing in the bond market this morning.

Treasuries yields lower across the curve.

US 10 year treasury yielding 4.301% right now.

And let's also get a check on energy and what we're seeing in the commodity complex too.

Because we see some pressure there as well.

WTI crude is down about 2% right now trading around 92 bucks a barrel.

And Brent crude is down about 2% as well trading around $97.

Per barrel, our Bob Gasoline also lower Nat gas a little bit higher.

Let's see how things are shaping up around the world though.

With a number of markets in Asia on record watch too.

And Europe opening with a mixed picture to end the week.

So Lisa Kim is in Singapore.

Ben Boulos is in London.

Ben, we're going to kick this off with you.

Yeah, good morning to you Morgan.

Let me show you how the European markets, the main benchmarks,

are performing what are we two hours into the trading session.

And the continental benchmarks outperforming the London market.

All of those decisively in the green.

You can see European equity markets generally catching a breath this morning.

Rounding off a week of slight underperformance compared to their global peers.

Investors looking ahead to those potential Middle East peace talks

over the weekend.

We've also heard from a number of European central bankers

at the IMF World Bank spring meetings.

The BDF Governor Villaroid de Gullo said the European central bank

must not rush into any decision as policymakers

gather for a crucial rate meeting in less than two weeks from now.

So that's the picture on the bench rise.

The FTSE 100 is in negative territory.

Perhaps reflecting the fall in the oil price

that you were just mentioning.

Some of the oil and gas stocks on the London index

creating a bit of a down will pull on that.

But it has been edging a little bit higher towards the flat line

as the morning has worn on.

But the German French and Italian markets very much risk

on there this morning.

Let's have a look at how it breaks down sector by sector.

And this is the picture on the sectors that are gaining most

confidently technology leading the way up one

and a fifth of a percent media financial services.

Interestingly, travel and leisure.

Yes, we've got those potential talks between the US and Iran.

But right now, remember, travel is still very much disrupted.

One of the sectors really feeling the impact of the war in Iran.

But those stocks gaining ground nonetheless.

To the downside, this is where the pan European index is feeling

the biggest lag.

It's basic resources, utilities that are down.

I mentioned oil and gas.

Look at that being reflected in the stocks of the oil and gas majors

and autos as well down by a fifth of a percent.

You're seeing record gains on the S&P and the Nasdaq.

So record closes record in today highs.

The European markets lagging behind a little,

not quite posting some record highs,

but the stocks 600 looking to close the week

around about a third of a percent higher.

Morgan, have a great weekend.

All right, you too, Ben Bullos.

Thank you.

Well, let's get over to Lisa Kim with the action out of Asia as well.

Hi, Lisa.

Happy Friday, Morgan.

So Asian stocks close the last trading day of the week,

mostly in the red.

And Japanese stocks were the biggest losers

that country's benchmark index.

And K225 was off nearly 2% pulling back

from setting a fresh record high in the previous session.

Take a look at how Japanese bank stocks fair today.

They declined for the most part,

as investors reduced bets on a BOJ raid hike

at a policy meeting later this month.

Mizuo fell one and a half percent.

But over in Hong Kong,

a Chinese AI company surged in its trading debut.

Manny Court Tech is the first to go public

among the so-called six little dragons,

which is sort of this group of leading Chinese tech companies

that includes deep seek.

Asian currencies depreciated due to a slightly stronger dollar.

And the Japanese yen, Morgan,

is back to trading in the 159 handle to the dollar.

Once again, flirting with hitting the line in the send

of 160.

All right, Lisa Kim, thank you.

And I believe I'll see you on Singapore next week.

All right, have a good weekend.

Turning to the war in Iran,

what's being called a fragile peace

by administration officials, investors banking on hopes

of another round of peace talks this weekend

with a ceasefire set to expire Tuesday.

But some talk that perhaps that could get extended.

Let's get to Dan Murphy in Abu Dhabi

with the latest, including Dan,

the sentiment on the ground there as well.

Hey there, Morgan.

Sentiment here is cautiously optimistic.

As you say, a ceasefire between Israel and Lebanon

is now in effect.

And President Trump is hoping this opens the door

to a broader deal with Iran.

The president has even invited Prime Minister Netanyahu

and President Ud to the White House for direct peace talks

within the next two weeks.

But it's also fair to say that this truce

is already under some pressure.

Israel has made it clear that its forces

are not leaving southern Lebanon and Hezbollah,

which of course is not part of these talks,

says it will only stand down

if Israeli attacks stop completely.

But President Trump has been striking

a more optimistic tone.

He's claiming Tehran has agreed

it will not pursue a nuclear weapon

and is prepared to hand over what he called its nuclear dust.

Of course, Tehran hasn't confirmed either of those demands.

At the same time, a second round of talks in Islamabad

is still being discussed for the coming days.

And of course, the US has already said it has put forward

its best and final offer.

And the ball is now in Iran's court, Morgan.

Yeah, Dan, I'm going to talk about Operation Epic Fury.

This is of course the military campaign

that kicked all of this off from the US.

For the treasury this week also launched,

and I think this is flying a little bit below the radar,

launched Operation Economic Fury.

And this is, goes back to what we're talking about yesterday,

with Libby Cantrell from PIMCO.

This is this roll off of sanctions

on floating Iranian oil.

It's targeting illicitate smuggling networks,

taking a look or putting notice to banks as well.

How to think about where we're moving

in terms of an economic stage of this conflict.

Morgan, this is really important.

The US is certainly ramping up

the economic pressure on Iran.

The Treasury Secretary Scott Bessent calls it

the financial equivalent of a bombing campaign.

And the hall moves squeeze is really a case in point

where the US Navy is currently blocking

Iran's shadow fleet tankers to keep its crude

off the global market.

And as you say, treasury also moved against the money trail

with sanctions that attempt to curb

Iran's smuggling networks and financial institutions

globally have also basically been put on notice here

that secondary sanctions are going to be used

against anyone still doing business with Tehran.

And that defense group piece was really important

because it also says the Pentagon has now established

a new economic defense unit this month,

which basically embeds financial warfare

directly into US military planning for the first time.

So the Trump administration and the White House

is pulling the financial lever.

Iran is hurting.

The question now is whether this is all going to work.

All right, Dan Murphy.

Thank you.

You have a good weekend.

Really fascinating about what the future of warfare

potentially entails here.

Well, now to the top stock story of the day, Netflix,

shares it down sharply,

following the company's first quarter results.

You could see down about almost 10% right now,

big move here.

Initially, it appeared that earnings of $1.23

per share beat estimates and by a wide margin,

Netflix noting that includes the impact

from the termination fee when it backed out

of the Warner Brothers deal.

But last night, LSEG admitted that it made a mistake

saying many analysts are excluding the fee

from their estimates.

So Netflix actually missed forecasts on an adjusted basis.

It did, however, beat on revenue.

Guidance for this current quarter, though,

that is still below expectations,

which Netflix chalks up to having spread out production

or licensing costs.

The company also announcing a chairman

and co-founder Reed Hastings will be stepping down,

not running for re-election for the board.

And let's bring in Jason Bazene,

media and entertainment analyst at City

for more on all of this.

Jason, a lot to dig through in this report.

What was your key takeaway?

Well, I think the most important thing is,

heading into these results,

the buy side was expecting three things.

Once Netflix was no longer pursuing large-scale M&A 1,

there was about a quarter of a billion dollars

of M&A expense that the street expected to get unwound

and raise margins to, they thought Netflix

would have more latitude to raise prices globally

since they wouldn't be under the watchful eye of the regulators.

And that meant revenue should go up the guidance.

And three, people expected a larger buyback

because they weren't accumulating cash

for this large-scale M&A.

They could return it to shareholders.

And we got none of those.

I mean, it was an X and an X all the way down.

And so the run-up in the shares that you saw going

into the print was really on those expectations.

And they were just dashed.

Yeah, so in light of that,

and I realized this street had not liked

the idea of Netflix acquiring Warner Brothers Discovery.

So when that deal went away,

how much now does the focus hone in on viewership,

especially given the fact that they don't now

release subscriber numbers,

but you want to see that that's still organically growing?

Yeah, I think viewership is vitally important.

We've been talking about this for about a year,

but the buy side is really caught up.

They're laser focused on it.

And I would say that Netflix's answer on this front

was a little bit unsatisfying.

They acknowledge that the viewership numbers aren't great,

but they say they have their own sort of metric

for different ways to measure engagement.

Not all viewership is viewed the same according to Netflix.

They won't divulge that metric.

They say their metric is doing fine,

but the streets laser focused on the external metric.

And I will tell you this,

this may raise almost a strategic issue,

actually not just a tactical issue

about the quality of the content.

What I'm very nervous about is when we look at

what consumers are engaging,

there's a growing trend, not just in video,

but in video games and in publishing

of ungate kept content, user generated content.

That's where all the market share is going.

And I think Netflix really may have to confront this

as the next wave,

because with these AI tools it could become more pronounced.

What is Reed Hastings retiring from the board signal?

I don't think it means a whole lot to be honest with you.

There were some conspiracy theories that somehow

this was caught up in the M&A.

I just think Reed is ready to move on

and do something else.

I wouldn't read anything into it.

Quickly, you have a buy rating on Netflix.

You keeping that?

Yeah, definitely.

I mean, look, I mean, I sound so negative.

Look, the good news is they reiterated the guidance.

The multiple is actually reasonable.

It's still a double-digit grower.

There's great optimism on the ad tier.

So there's still a lot, and they're the industry leaders.

So there's lots to like here,

but I'm just saying tactically, it was three strikes

and then long-term they got to figure out this UGC content.

Okay.

We'll end on an optimistic note.

Jason Bazzane, great to have you on.

Very good.

Cheers and Netflix down about 10% right now.

It's the only stock on the move this morning

on the back of earnings.

We're also watching Alcoa shares, though, right now.

It's not the only stock.

We're also watching Alcoa.

This after posting lower sales for the first quarter

with the war in Iran creating aluminum supply chain issues.

Really, they got dented by shipments of both alumina

and aluminum tied to that conflict.

Alcoa saying it had to reroute millions of tons

of refining capacity due to the war.

I spoke exclusively with Alcoa's CEO, Bill Oplinger, yesterday.

And I asked him if the straight-of-war moose

were to open, reopen today,

how quickly those aluminum supplies

could actually get back online and normalize.

If the conflict were resolved today,

it will take up to a year to restart some of that capacity

and potentially even longer.

As I said, we started the year in a fairly tight market

environment at the beginning of the year

based on a couple of curtailments that

had occurred around the world, not ours,

and strong aluminum demand.

What we're seeing is that we really fundamentally

believe that within the US market specifically,

many people are underestimating the tightness

that we're going to see in the May, June timeframe.

Which is an interesting commentary,

and certainly investors should take note,

because you have aluminum futures trading

at four-year highs right now.

And Oplinger is suggesting that those pricing pressures,

that could actually go higher here over the next couple of months

and that despite supply chain pressures, Alcoa, though,

is seeing an uptick in demand, especially on short-term orders.

As you do see this rebalancing, if you will,

of the global aluminum market in the wake of that conflict.

We've got a lot more to come, by the way, Alcoa.

It's almost 180% over the past 12 months.

We got more to come here on morning call, including

the disinformation front in the war with Iran.

How Tehran is tapping into AI, taking social media feeds

by storm, plus it's a company that's seen at Stocksorge

more than a 2,000% in two years with spate tied

to Earth's orbit and beyond a one-on-one

with a CEO of Rocket Lab is next.

We've got a very busy hour still ahead

when morning call returns.

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received over 19 million home visits.

Learn more at unitedhealthgroup.com slash commitment.

Men are struggling with their mental health

as 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.

MUSIC

Welcome back to Morning Call.

The war in Iran seeing a rise in AI generated

and doctored videos that are spreading across social media

with the content being used as a new weapon in this conflict.

Some of the most notable have been AI videos

created by an Iranian company that features

US and Israeli leaders as LEGO figures,

criticizing and mocking them in an effort

to frame the country's narrative around the war

while also promoting Iran's military capability.

I mean, you could just go down the rabbit hole

with some of the officially certified Iranian government's

accounts on social media sites like X.

But for more, let's bring in Nina Jankowitz.

She is the former executive director

of the disinformation government's board

under former president Biden.

She's also the co-founder and CEO of the American Sunlight

Project, a non-profit aimed at combating disinformation.

Nina, it's great to have you back on the show.

We've talked about kinetic war.

We've talked about economic war,

but this is a new front in terms of information war.

Yeah, absolutely.

What we're seeing here is Iran being successful

in information warfare for the first time.

They've dabbled before in hack-and-leak operations

and impersonating the proud boys

to try to keep Americans away from the polls.

Those efforts were found out and communicated

to the American public relatively quickly back then.

AI has really opened up a new front for Iran here.

They're kind of abandoning their moral code

to traffic in this sort of memified cross-content

that the Trump administration has kind of normalized

here in the United States.

Yeah, and I realize you have a new piece coming out here,

talking about this subject,

but here's the line in what you wrote that got my attention.

Unlike Russia, which used bot-powered amplification

and targeted ad buys to give the guys of grassroots debate

along with hack-and-leak document dumps

to drive discourse, explosive media,

which is the company that's working

with the Iranian government, production company,

has hacked something much more valuable,

authentic American popular opinion.

How is AI opening up this new front?

Yeah, so this is really interesting

because the best disinformation,

the best foreign influence campaigns

are always tapping into something

that is authentic in foreign discourse,

in this case, American discourse.

And this war is extremely unpopular.

Both the war and the president are pulling

at about a 60% disapproval rating,

give or take a few percentage points

depending on who you're looking at right now,

which poll you're looking at.

And so that means that when people see this stuff,

it's speaking to them.

And indeed, in previously successful foreign influence

campaigns, that is that sort of authentic discontent,

authentic grievance is the sort of thing

that's fueled real success among the public.

So what does this mean for the companies themselves,

for the platforms themselves?

Because we've had this debate, we've had this discussion,

we've seen it play out legally as well,

and with policy planning,

the boundary between free speech

and disinformation, misinformation, propaganda,

whatever you want to call it.

What are companies to do right now?

How are they handling it?

Yeah, it's been really difficult for the companies,

I would say, because unlike deep fake videos

where you might think, okay, this is potentially real,

it's clearly not real, it's Legos,

it's parody, it's satire, right?

And also, they've really struggled

to apply their own policies.

YouTube has blocked explosive media,

the company that's making these videos,

taking down its channel,

but they've been popping up and being recreated elsewhere.

Interestingly, YouTube did that based on its violence policy.

And I don't know if you can really say that Legos,

engaging in warfare is violent in any way,

but it's interesting because the Trump administration

has really bandied about this free speech rhetoric

since the very beginning,

but actually what they've done inside of the US government

over the last 14, 15 months is tear down

all of the infrastructure that was aimed

at countering foreign influence.

So now Marco Rubio has been instructing diplomats

to counter foreign propaganda

and anti-American sentiment on X,

which to me is kind of silly,

because X is not only allowing these videos

to continue to be there, but also X is not

where the populations that might be most receptive

to foreign propaganda are, it's where Americans are.

And so I think that really tells you

who the State Department cares about at this moment.

Yeah, and I just want to shift gears here.

And I realize we could probably spend

an entire hour talking about this,

but mythos from anthropic.

When we talk about cyber threats

and sort of this next era that AI is enabling,

especially as you had in videos,

and Wong saying yesterday,

mythos actually shows the need for a US-China AI dialogue.

Yeah, look, I think what we're seeing

with the rapid development,

not only with anthropic mythos,

all of these other companies that are,

I feel like it's every week that we've got a new tool

on the market, being accessible not only to government,

but to normal human beings,

it makes me really worried about the anti-regulatory stance

that the Trump administration is saying,

because we've seen the harm that these tools can do, right?

And so not only do we need dialogue between big AI players,

like the US and China,

but I think we do need to get some regulation on the books

or else we're gonna be playing catch-up,

the same way that we were with the social media phenomenon,

and look where we are now.

I wouldn't say things are too great there.

Okay, Nina Jankowitz, great to have you on.

Thanks for joining me.

Thanks for having me.

Well, straight ahead, new bets from Big Banks

on the demise of the private credit sector.

We've got those details ahead.

But first, we're watching shares of Trucker Night Swift,

reporting an earnings miss,

but guidance in line with expectations.

Management said freight conditions are improving.

This really echoed what we heard from J.B. Hunts.

Earlier this week, and Night Swift's management saying,

quote, all things considered,

we are more optimistic about the earnings opportunity

for our businesses over the next several quarters

than we were three months ago.

Remember the truckers and the freight data?

This is a read on the state of the American economy.

Morning, call me right back.

Quick question.

Do people come to you for answers at work?

Maybe you're managing projects, training new hires

or just the one everyone relies on.

That's leadership.

Through UVA, Darden's part-time MBA in Roslin,

we help professionals like you turn real world experience

into recognized leadership credentials

without stepping away from your career.

Whether you work in healthcare, education, government,

or business, this is how you take the next step.

Learn more at dartin.frg.com.

Learn more at dartin.frg.edu-btmba.

Here's a shift worth noting.

Better healthcare 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 patients

received over 19 million home visits.

Learn more at unitedhealthgroup.com slash commitment.

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.

Welcome back to morning call.

The History Making Artemis 2 mission sending humans back

to the moon coupled with what's poised to be an historic

public offering from SpaceX, signaling escape velocity

for the space space and for investors.

Take Rocket Lab.

Stocks up 2200% in two years.

Look at that chart.

It's a vertically integrated conglomerate

watching small rockets, building spacecraft,

conducting hypersonic tests for the government.

I spoke with Founder and CEO Sir Peter Beck

as Rocket Lab unveiled a new electric propulsion

powered thruster for satellites this week

and also earlier this week, closed on its acquisition

of European company, Mineric,

which specializes in laser-based communications.

Requiring Mineric, we were able to acquire

the best terminal company, probably not the best run company,

but also in fixed that, but certainly the best technology.

But going forward, it also gives us a foothold into Europe

which outside the US is arguably

the next biggest actionable market.

Yeah, we've seen defense spending increase here in the US.

It's increasing in Europe too and space activity.

And Rocket Lab and others are poised to benefit from that.

We also discussed deal-making broadly across the sector,

given Amazon's $11.5 billion deal for Global Star.

Rocket Lab is a key contractor for the satellites

that are being built for Global Star.

I think you're seeing spectrum being valued very highly.

And if you are looking to deploy large services in space,

you need, in my opinion, at least you need three things.

You need high cadence access to space,

which you need your own rocket.

You need the ability to build satellites at scale

and you need the spectrum.

So as you think about Amazon's rolling out their services,

it was fairly logical to me that at some point,

that spectrum assets were going to be required

for them.

Now I also asked how SpaceX going public could impact

the industry and the competitive landscape.

It's a very difficult sector to understand

because there's just so many fundamentals.

And kind of to the downfall, you've

seen especially some public companies that come public.

They make great aspirations and wave their arms everywhere

about doing amazing things and then just die.

And it's very difficult for an investor to discern what is truth

and what is kind of fiction.

Unless you want to go and do some hardcore orbital dynamics

and some mass.

So I think SpaceX going public will kind of solve some

of those problems and then provided they do well also,

shine a light on the sector that hasn't been shown before.

We also discussed AI data centers in space.

It's a very interesting commentary on that as well.

Things that you will see that shift and we'll see that build out.

But everything that's on earth is not necessarily going

to just be displaced to space.

And this is certainly a whole area that rocket lab like others

in the industry are focused on right now.

We also talked about the neutron rocket

that they're developing, this new heavier lift rocket

and the launch market overall.

Still on track for that made in flight later this year.

Tire conversation with Peter Beck is online.

We'll be online later this morning on CNBC.com

and on Manifest Space.

Check it out.

Still on deck.

Nvidia hits its highest level since November 2025.

And it just wrapped its best 11-day stretch since May of last year.

According to Dow Jones, it's riding its longest win streak

since 1999.

Morning call crew is going to weigh in on that.

And big bank CEOs sound off in the state of the US economy

and consumer spending.

Ever course, Julian Emmanuel is here.

He's going to react on the other side of his break.

I'm Morgan Brennan.

Welcome to Morning Call.

We're watching US Stock Futures this morning

with the Nasdaq up 12 days in roads,

the longest winning streak for the Nasdaq since 2009.

It's at 15% over that time period.

And as you can see right there on your screen,

we've got features in the green this morning

were poised for another higher open for the major averages,

which are all on track for another week of gains.

You've got the S&P also at a record.

And we're keeping an eye on the Dow

as it starts to close the gap to catch up

with the S&P and Nasdaq some of the other averages.

For the opening belly, S&P Nasdaq Nasdaq 100,

Russell 2000 Dow transports.

They're all at record highs.

Tech sector's on pace for its best weeks since May.

And as I just mentioned, the catch up by the Dow,

it's up more than 7% on the week,

but it's less than 4% away from its own record high.

Well, checking some of the morning's latest headlines,

shares of Netflix.

Thinking after reporting mixed Q1 results

that saw EPS missing street estimates,

second quarter sales forecast also following short

of expectations.

The company also announcing chairman

and co-founder Reed Hastings is stepping down from the board.

We're watching two IPOs that we highlighted yesterday.

Okay, Aerospace and Defense Player Arxis,

if we could pull that up.

And also HVAC Specialist Madison Air.

We're also gonna get another IPO this morning.

And that's AVEX, which is pricing shares of $20 a share.

It's in the middle of the streets expected range.

That is the drone maker raising $320 million

with a $2.2 billion valuation.

And as I mentioned, shares of Madison Air,

those surge more than 18% in its Nasdaq debut

with a nearly $16 billion market cap.

And right now, up another one and a half, 2%.

Meantime, the Financial Times is reporting big banks,

including JP Morgan Chase and Barclays,

have started trading credit default swaps,

linked to flagship private credit funds

from Blackstone, Apollo Global and Aries Management.

That's possibly betting on more pain to come

in the sector, certainly something to watch there.

We're also watching shares of Nysource popping.

After signing a long-term energy supply deal

with Alphabet for data centers in Indiana,

the company adding it also signed a deal with Amazon

to speed up power delivery.

Those shares are up about 3.5% this morning.

While resilient quote-unquote,

that's the word we've been hearing from the CEOs

of the big US banks on their earnings calls

and on CNBC this week.

They see even with the Iran War,

driving up energy prices and inflation worries

and wild swings in the stock market.

Consumers are still on solid ground.

But at this point, the underlying economy still remains

relatively robust.

But if the resolution of the conflict drags,

that probably will be a headwind in some of these areas,

particularly inflation trends,

as we get further into the second and the third quarter.

We feel very strongly that the consumer book

at Bank America is very strong.

And at the high-fighting goes to loan

to value on our entire mortgage portfolio is below 50%.

And then our autos are high-fighting goes

and the linkancies are consistent.

So we feel very good about the book.

Despite slowing employment momentum,

US economic growth is held up.

The US consumer remains resilient in the aggregate,

but increasingly bifurcated beneath the surface.

The global macroeconomy to date,

as well as a short aftershock.

However, the impact of the Middle East conflict

is hitting Asia and Europe harder than countries,

such as the US and Brazil,

which are more insulated from energy shocks.

Clearly, the longer this goes on,

the more pronounced, the second or third-order impacts

are going to be around the world.

Well, joining me now is Julian Emanuel,

senior managing director at Evercore,

ISI, who leads the equity derivatives

and quantitative strategy team.

And Julian, it's great to have you on.

Consciously constructive?

Is that how we would categorize some of those comments?

We heard from the big bank CEOs in the US.

And if so, what does it mean?

For not only the economy, but for stocks at record highs?

Yeah, I think that's probably the best way to think about it.

Look, we've been to an extraordinary period.

We're still in an extraordinary period.

And when you think about the stock market,

maybe the most amazing thing about it is,

is that earnings estimates have risen

since the beginning of the conflict.

Very atypical.

Usually, they start rising after the conflict is over,

but it really points to the resilience

of both the economy and the consumer.

And this kind of earnings trajectory

is almost always a positive for stocks.

Yeah.

And your bullish, your S&P target is much higher

than where we are trading right now,

despite the fact that we're at record highs.

But we're also seeing this ketchup trade

in equal weight, S&P, and in Dow and just reals.

I just mentioned a 7% gain for three.

That's actually incorrect.

It's Dow transports, it's up 7%.

Dow and just reals is up 1% this week.

But it is playing catch up here.

So in terms of tech leading the charge, does that continue?

I guess how important is it to see a rotation?

Well, actually, if you think about how this year has developed,

tech was the laggard in the first quarter

by a substantial margin.

And then, of course, as we came off the bottom,

at the end of March and started rallying,

we saw two of the sectors that we really, really want to see

in our view, you're going to get higher prices.

And that's the transports telling you

that the economy is in good shape.

And the semi-conductors telling you

that the AI story remains on track

and that there's lots and lots of demand for product.

And in our mind, the recipe here is that the big tech,

which has been the laggard, is set to resume its leadership.

So in light of all of this, what drives the market from here?

Is it earnings as we get deeper into earnings season?

Or is it what happens with this Iran war

as we have a ceasefire in place

and expectations that perhaps that could extend?

Well, it's certainly both, both.

Look, the fact is, is that part of the story

of why the rally off the bottom on March the 30th

has been as strong as it's been,

is the expectation that you're going to have oil prices

moderate.

And when we look at the futures curve,

and again, this morning, part of the morning strength

is because the crude is coming off.

It's very important for the quote unquote landing zone.

However, the conflict moves to its next phase

to be reasonably below $90.

That's where we identified essentially

as a stress point in the mid-90s

that would cause the consumer to start to pull in his or her horns.

But again, the markets are telling you

that that is not the likely outcome

that we are going to have high price crude.

But in the low to mid-80s, it won't be a headwind for the economy.

OK.

Julian, stay put.

We're going to see, again, just a few minutes

when you join us with the morning call crew.

We're going to dig into all of this even more deeply.

It's really just scratch on the surface.

As I mentioned, we got a lot more to come on morning call.

We're tapping into AI to take a bite out of higher food prices.

Next week, morning call will be at CNBC's

Converge Live in Singapore as well.

For tickets and info, go to ConvergeLive.com.

I'll be there.

The show will be there.

You want to be there, too.

Morning call.

I'll be back after this.

Welcome back to Morning Call.

American Express reports before the bell next Thursday

to stock is down 11% in three months.

But this morning, we're looking at the card's younger Americans

search for most online and why they're searching.

We have the numbers thanks to data from Generation Labs,

Verb AI, which tracks the buying and searching habits

of people between 18 and 34 years old.

The top brands searched are Chase.

That's at the top.

That's followed by Discover, Capital One, and American Express.

The reason why they're most often searching

is to find out how to cancel the second top reason

for the credit card search.

And OK, it's how to cancel.

And then the second top reason is how to get cash back.

Well, let's turn to the debate around affordability

as consumers face heightened inflation pressures,

including on food prices.

Now, a number of grocers are turning to AI for a solution.

And Brandon Gomez is making his morning call debut.

joins us right here.

Thanks for having me, Morgan.

Yes, of course.

As inflation pressures, consumers and competition

heats up traditional price strategies.

Well, they're just not working.

Like broader discounts are price hikes.

They're losing effectiveness.

Shoppers are visiting more stores and chasing deals

with discounters like Dollar General,

and warehouse clubs like Costco gaining share.

Now, traditional grocers are getting more precise.

Instead of marking down entire categories,

retailers are using AI to dynamically price perishable items,

especially those nearing their best by date.

Now, the goal, turn potential waste into revenue.

Platforms like Flash Food are helping

chains, including Kroger, connect shoppers

with discounted food through an app.

You can see here, driving, both savings and store traffic.

Now, you go into the app, you fill your car,

and then you pick up your bag in store.

The Flash Food says its partners have cut food waste

known as shrink by roughly 27%.

Shoppers using the app make four additional trips per month,

and spend about $28 more per visit on full price items

beyond discounted purchases.

A Kroger CEO said last quarter, we see AI as a meaningful opportunity

to improve the customer experience and drive productivity.

And for grocers, the promise is simple.

Use data to offer the right discount at the right time

without eroding margins.

In an industry where billions of dollars in food

is effectively wasted each year,

that precision could be a game changer here, Morgan,

for these companies that are really trying

to just compete against Walmart, Costco,

Dollar General, all these discounters.

Yeah, it's super fascinating.

It seems like it's a win-win for all involved.

I mean, we're talking about food waste on the one hand,

on the other, just this week, a flurry of global leaders,

both publicly and reportedly raising red flags

about the possibility of food crisis tied to the straight-of-form moose.

I mean, the headline I saw was half of the world's calories

could be at risk here with what we're seeing with this war in Iran.

So how to just think about what that means potentially

for food inflation and how grocers and restaurants

and others are going to navigate all this.

It starts with the being of the pipeline, right, for farmers.

And we've already heard from a lot of them saying

they're going to be planting a lot of different crops.

Calorie dense food, maybe that's where some of those stats

are coming from, rice, peanuts.

There could be a shortage in those areas

as they plant another, other crops like soybeans.

So really, we'll just have to see how this plays out long-term.

But you're right to point out the fact

that it starts in the straight-of-form moose

and eventually it lands on America's kitchen tables.

All right, Brandon, go and masquerade to have you on.

Thank you.

Well, straight ahead, the morning call crew

teeing up the day ahead.

And the sector that is up nearly 15% this week

that one member says he is not sold on.

We're back in a moment.

Welcome back to morning call.

It's time for your call sheet where we look at the topics

driving the trading day ahead.

The crew members today on set with us.

We've got Freedom Capital Markets,

Chief Market Strategist, Jay Woods.

We also have Cleo Capital Managing Director Sarah Kunst

and still with us, Everquery, ISI,

Senior Managing Director, Julian, Emmanuel.

Ooh, I love this panel so much to get to here.

We got to start with record highs

and a record rally in record time, Jay.

What do you think?

Who thought we'd be talking about record highs

just two weeks ago?

This rally caught a lot of traders off guard,

the speed of which had happened

has been unbelievable given the headlines.

And now what you look for is where the leadership is

and what we're getting is the leadership

is actually the ones we need.

Financials, you know, still not making new highs

although city is looking great,

but we're getting through earning season.

We're focusing on the things that matter

and where the technicals we're kind of leading this market

and as a technician, I like that.

It just flipped the script on us.

So now we look to go where the strength is

and there's still some strength

in some of these mag seven names

that are coming back to life.

And I think the financials set the table

for what could be a really good earning season.

Yeah, Julian, I see you nodding your head there

about mag seven, you agree?

Absolutely, look and think about it.

It really makes a lot of sense.

They were sort of cast aside

at the beginning of the year you had your typical rotation

and the broadening in the market.

But now you're returning to the stocks

that if you look at your last segment

are the ones that are gonna help you affordability crisis

by implementing AI.

And that is a theme that we think has a lot of durability

particularly when you've got some marquee IPOs ahead of you

and the fact that the public's re-engaging in the market

we saw that a couple days ago

when a sneaker maker put AI in its name

and went up 500% the public definitely has an affinity

for technology stocks and technology earnings

are gonna drive the narrative.

Yes, your point, meme trades back.

Risk gone here, full force.

Sarah, I wanna get your thoughts on all of this

especially because before we dig more deeply

into the tech trade specifically,

a lot of attention being paid to the fact that

even as we have an S&P and a NASDAQ at record highs

breath has been poor.

Yeah, absolutely.

I think that we're seeing sort of a return to the fact

that people don't exactly know what to do

with their money right now.

And I think that they are looking for places

to get it off the sidelines to say

we don't know how long there's going to be

sort of this unease in the Middle East.

We want to put our cash somewhere.

And I think for a lot of global capital right now

sort of conversely, America feels almost like the safest place

we still do have oil and we have a lot of tech names

that are doing incredibly well.

So I think you're gonna continue to see people

sort of dive into that sort of narrow width of names

that they feel are pretty safe right now.

Yeah, Nvidia J and I know you watch the technicals as well

but Nvidia historic win streak that ended yesterday.

We ended down for actually for Nvidia.

But it had been positive earlier in the morning

recorded 11 consecutive days of gains.

It's the longest winning streak on record going back to 1999.

That's according to Dow Jones market data.

But perhaps most importantly,

it broke through that long held resistance of 195 a share.

No real news, nothing really fundamentally changed.

It broke down, it faked a lot of people out

and then when it got back into that channel, it took off.

I think we're gonna see that rally continue

into their earnings and then that's when we'll see,

okay, can it continue that climb higher?

But this is exactly what we needed.

When the biggest stock in the world is finally starting to move

that is gonna lift all boats.

And now the one sector that I'm really following

with software is software back.

I think that's the tell because we're seeing the winners

and the losers starting to shake out

and I'm watching Oracle very closely.

That stock of all of them, Microsoft Oracle,

those have come back a little bit.

I think they're gonna rally into earnings

and then we get this pivot away from them.

So but get back to your Nvidia win streak.

It was one of those things like, yeah,

I didn't even know that's that until you just dropped

that knowledge on me.

So thank you for that.

Oh, you're welcome.

You took the question out of my mouth, Julian.

I mean, Oracle's up 29% since the start of this week.

I still buy it right now.

Yeah, software, is it back, Julian?

It's become value, okay.

And if you look at these companies,

look, there may be a five and a 10 year existential issue

with a lot of these because of AI.

Well, when you look at their cash flows

on a one and a three year basis,

they're incredibly strong.

And you look at technology as a whole,

it's trading at a PE discount, usually a premium,

but a shrunken premium to the S&P

that goes back before the pandemic

and think about all the technology developments

we've had since that time,

technology stocks have become value.

Yeah, Sarah, I wanna throw up this chart.

I think it's so good.

Rick Santelli pointed it out yesterday.

So a hat tip to him.

But take a look at what the 10 year treasury yield

versus WTI crude has done since the start of this year.

They basically tracked each other

amid this war in Iran.

Now we have the ceasefire in place

between the US and Iran.

It's currently set to expire on Tuesday.

Expectation, we get more talks

perhaps this weekend as well.

How much does this potentially drive the market

from here versus earnings?

I think that it certainly has a piece of it.

I think a lot of what you're seeing

with people going into the tech trade

is because they've been really leery

about where oil's gonna go.

Certainly it feels like it's gonna go up at how high.

And then on the treasuries,

I think there's a big question of,

hey, what are these treasury auctions going to look like

going forward?

How many people want to buy deeper

into the US market right now?

And so you look at all that red and you say,

hey, that's not the direction we wanna see.

And so I do think that there is sort of

the safest trade in the world

is supposed to be US treasuries.

And right now that doesn't feel like

the best place to put your money.

Okay, we got sub 30 seconds left, Jay.

I'm gonna give you last words here,

especially as we watched for

worse confirmation hearing next week.

This morning you got Netflix, Alcoa

you get more regional bank earnings as well.

And then of course, as I mentioned,

Iran talks potentially over the weekend.

Yeah, that's a lot to digest,

but I think where the focus is actually gonna be on earnings.

These headlines out of Iran,

they have gotten this jittery.

I think we've finally gotten past that

and we're focusing on what really matters.

Those software stocks I think that rally does continue,

but I don't think it's going to be an all clear.

There is a true story there

that there are gonna be winners and losers here.

So that IGB rally, I would fade it

if it gets back to 90.

So that's the one that I'm not back all in on,

but the big mega caps, I'm back.

All right, well thank you to our morning call crew.

Have a wonderful weekend.

We're watching the markets with futures higher right now.

Squawk box starts now.

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