Worldwide Exchange 6/10/25
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Substance use disorder and addiction is so isolating. And so, as a Black woman in recovery, hope must be loud.

It grows louder when you ask for help and you're vulnerable. It is the thread that lets you know that no matter what happens, you will be okay. When we learn the power of hope, recovery is possible. Find out how at startwithhope.com. Brought to you by the National Council for Mental Well-Being, Shatterproof, and the Ad Council. I'm Frank Holland, and you're listening to CNBC's Worldwide Exchange. Our show is live weekdays at 5 a.m. Eastern. Listen in.

U.S. trying to trade talks. They enter their second day in London. Investors waiting for headlines and results. In Washington, HHS Secretary RFK Jr., he throws decades of health policy out the window, removing members of a key vaccine advisory panel.

And Tim Cook and company, they're testing the patience of the Apple faithful. Underwhelming at its latest Worldwide Developers Conference. Future is also under some pressure. It's Tuesday, June the 10th, 2025. This is Worldwide Exchange on CNBC and streaming on CNBC+.

Good morning. Thanks so much for being here with us. I am Frank Collins. Get you ready for the trade day ahead. We begin with the U.S. markets. The S&P and the Nasdaq coming off some slight gains yesterday for their fifth winning day in the last six. Investors, they're waiting for any details from those U.S.-China trade talks in London this morning. Taking a look at futures right now, you can see we're in the red across the board, but just in all fairness, fractional declines. The Dow looks like it would open about 60 points lower. S&P and Nasdaq

Again, down very fractionally. We're going to take a look at the S&P 500. Pre-market laggards first. Take a look at those names right here at the top of the list. You see MetLife pulling back about 1.1%. McDonald's, those shares of the burger chain, pulling back 1.25%. A few recent downgrades on McDonald's. Our Jim Cramer says, downgrades are ridiculous. This is a company that's always going to rebound up.

Builders, First Source, Skyworks and Aflac running out your worst performers on the S&P. Then we have the other side of the coin, the S&P 500 leaders. Now take a look at this first one right here. O'Reilly Auto, these shares up.

1,400% a bit misleading. O'Reilly Auto announcing a 15 or 14 for one stock split, I believe. Again, bit misleading, but still best performer on the S&P. Also, another rebound day for Tesla shares. Those shares up 2.25%, followed by Synchrony Financial, NRG Energy. We're going to have the CEO on the show later this week. Also, the Williams Company writing out your best performers.

on the S&P. Quick check of ETFs tracking Chinese equities as those trade talks continues. Taking a look right now, you're seeing the K-Web pulling back about a half a percent. The MCHI, it's actually closed right now. It's closed for trading right now, but finished yesterday up over 1%. Then down here, the FXI, large cap Chinese tech stocks or Chinese stocks, I should say more broadly, pulling back fractionally as well, less than a quarter of 1%. So a main talk

And these main point in these talks are rare earths. China mines about 70 percent of the world's rare earths. We also saw some action in commodities, not exactly where earths, but some commodities move silver, copper, WTI oil, all more than one percent higher yesterday. Checking them right now. You're seeing pullbacks for silver and copper, silver pulling back a third, copper pulling back three quarters, one percent down here, WTI up a quarter of one percent.

Also, we want to take a look at Apple. Of course, the Worldwide Developers Conference yesterday. Apple was lower yesterday. Right now, you're seeing in the pre-market, it's up very fractionally right now. Just a few basis points right now, again, after its Worldwide Developers Conference. There were not any big developments related to Apple intelligence or AI. However, some huge news related to software. Apple will move from iOS 7 to a new operating system called Liquid Glass. Much more on that coming up.

Just a bit later in the show. Also, again, we're going to do another check of Tesla shares. Take a look at Tesla shares rebounding yesterday after sell-off fuel by the fight between Elon Musk and President Trump. You see right here.

Shares of Tesla up two and a third percent. Week to date, big climb as we see investors, I guess, kind of shrug off this big fight between the two. Week to date, Tesla shares up about seven percent. The president also, quote unquote, wishing Elon Musk well. Also, we're going to take a look at treasuries this morning, taking at the bond market. The benchmark right now, 4.45, pulling back a few basis points from the levels that we saw yesterday. Similar story for the two-year and the long bond. Long bond at 4.91. Remember, we have CPI and PPI coming up later this week.

Okay, that is your setup now to this morning's top story. A second day of U.S.-China trade talks just getting underway in London. Both sides trying to find some common ground on key areas, including rare earth minerals and export controls. Complete coverage this morning with Sylvia Amaro live in London and our Eunice Yun with reaction from Beijing. Good morning, ladies. Sylvia, let's start with you. Very good morning, Frank.

all eyes on this second day of trade conversations between the U.S. and China. The trading teams are expected to arrive here imminently. Their conversations are expected to begin in less than 30 minutes' time.

And we know that there's a lot at stake here, not just for the U.S. and China, but also for the global economy. And today's conversations follow a very long day of negotiations. On Monday, the negotiating teams were in the building to my left for more than six hours on Monday. And indeed, at the end of the negotiations, the president himself, Donald Trump, sounded very positive, really, about where we are, the direction of travel in these trade negotiations. Let's take a listen.

I think we're doing very well. They're over there now. I'm only getting good reports. It's a little early, but they'll be calling in soon. In fact, probably when I get back, I'll have my first call from them. We want to open up China. And if we don't open up China, maybe we won't do anything. But we want to open up China. It'll be a great thing for China, a great thing for the rest of the world.

So let's see what's going to happen later today, Frank. There's rumors already here on the ground that we might see a press conference. We haven't had a confirmation of that as of yet, but we know that technical work is happening to make sure that that press conference can happen if the delegations want to speak to the press. Let's see what will happen, but no doubt, very important day for both the U.S. and China here in London.

Yes, Sylvia, we know that you're going to stay on top of this entire situation. Thank you very much. Our Sylvia Amaro live from London. Let's now turn to our Eunice Yun. She's in Beijing for much more on China's reaction to the talk so far. Eunice.

Thanks so much, Frank. Well, Chinese investors are now on edge, concerned that the trade talks aren't going as well as many had hoped. The market dropped after a social media account linked to the state broadcaster CCTV posted, the U.S. should realistically assess the progress made and revoke negative measures against China. The account went on to say that China approaches talks with both sincerity as well as its own

So that's a signal that the Chinese are planning to play hardball. The negotiations, rather, I should say, are meeting, as Sylvia had said, for a second day in London. The expectation is that the export controls are really in focus rather than the tariffs.

And the Trump team has been signaling a certain willingness to ease certain controls. The White House's Kevin Hassett said in an interview that any policy adjustments wouldn't be applied to very, very high-end NVIDIA chips, but rather...

Other semiconductors which are also very important to China, other products that the Wall Street Journal said could potentially see restrictions lifted are the jet engines as well as software design or design software for technology. The tactic though I should say Frank is right out of China's negotiating playbook and that's when you see the Chinese reinterpreting an agreement

And then really being able to negotiate concessions out of their opponent without actually doing much more. And in fact, by just agreeing to pledge to do something that they'd already pledged to do.

Yeah, very interesting. We're going to continue to wait for any kind of developments. Also important to note that the Chinese premier, Ha Lefeng, is going to be there to the 13th. So there technically is more time for these negotiations to work themselves out. Our Yun Xun live in Beijing. Please keep us up to date on any new developments out of China. Thank you again.

All right, turn it back to the U.S. markets. Another check on U.S. stock futures. As we wait for some news out of London, the S&P 500 coming off a session with a really small gain. And the 10-year yield saw its narrowest daily trading range in more than six weeks. Right now, you see a bit of a mixed picture right now. We were all in the red just a bit earlier. Right now, you're seeing the S&P and the Nasdaq make some very fractional gains. Joining me now, Callie Cox, chief market strategist at Ritz-Holtz Wealth Management, which manages more than $5 billion in assets. Callie, good morning. Good to see you.

Yeah. Good morning, Frank. Great to be here. All right. So what do you make of the action that we saw yesterday going into today? S&P back above 6000. That seemed to be a very key level when it comes to sentiment. Do you think that all the gains potentially out of a deal is that already baked into this market or is there room for upside based on what comes out of these London talks?

Well, you're right, Frank. 6,000, it's a round number. It's, of course, an important psychological level. Beyond that, it doesn't really mean much, but it does remind investors that we are near all-time highs now. And it seems like people see that as a good thing. People see it as the sign that momentum is carrying us higher.

I'm a little skeptical here, I'll be honest. You know, we've seen cyclicals lead this rally. We've seen some pretty dour economic news lately. But I think in the absence of extremely bad news, and especially as trade, I guess trade tensions, you could say, loosen, I think investors want this market to move higher. All right. So, I mean-

The one thing, though, it's not clear if the tensions are loosening. We just heard Yunus saying that China released a statement through an account, basically, that they're going to kind of stay steadfast when it comes to these negotiations with a lack of clarity here. We kind of have a lack of clarity. What sectors do you see as more investable or less investable, either side of the coin? Which way you're looking at it?

Well, on that first point, Frank, I think trade tensions by default are loosening in investors' eyes because we are seeing these talks, even though the day-to-day headlines might be one step forward, two steps back, something like that. I'm not necessarily saying I agree with that, but I'm just trying to think about how investors are seeing it, especially in relation to what-

ultimately that extremely bad news and ludicrous policy that we saw at the beginning of April. But in terms of sectors, Frank, we're leaning away from those with high expectations. Tech is at the top of that list. Tech, of course, is the hot sector and it's led stocks higher, but it is one of the most exposed sectors when it comes to suppliers overseas and international revenue. I think investors are betting on this fact that

tech could be treated a little nicer when it comes to China tariffs. Of course, we've heard reports about that. But I think the Apple tariff threats a few weeks ago show us that, you know, tech isn't really as safe as we thought. I mean, we also are getting a little cautious on the economy here. So we like leaning into value here and we like leaning into quality. You know, when you say tech, a lot of times I think we

People think you're talking about the Mag 7, Mega Cap tech. But if you look at the charts, I don't know if we have this one ready, but if you look at the S&P equal weight tech sector, it's actually outperforming the tech sector. I believe also the market over the last week or so. So there's some other parts of tech working. When you're talking about tech, are you talking about chips? Because chips had a big day yesterday. Are you talking about software? Like what parts of tech are you not feeling confident about? And are there other parts of tech that you maybe see as better? Well, funny enough, and you're right, tech has a lot of different flavors. Funny enough, you know,

Stratifying tech right now is really important because the lower end of tech, you know, the more unprofitable speculative companies that have to rely on outside funding haven't done well for the past few years. They've had moments of outperformance, especially in market rebounds. I mean, I wouldn't be surprised to hear if smaller tech has outperformed over the past month or so. But they're in a really tough spot at the moment. They're going up against these bigger tech companies with big competitive advantages and, you know, larger competitive moats.

So ironically, looking into tech, I would be a little more optimistic about bigger tech companies, especially because they do fall into that quality bucket. But I think you have to be really careful here, Frank, especially if you're investing in tech as a whole or as a sector. I think you have to be very discretionary. All right. Callie Cox, we've got to leave the conversation there. Always great to see you. Thank you very much.

All right. Turn our attention now to a developing story on the protest in Los Angeles, stretching into a fourth day as President Trump activates members of the Marines to assist the thousands of National Guard troops that are already deployed in that area. California, meanwhile, taking aim at the White House in court over its actions. NBC's Chris Pallone now joins us from Washington with more on this story. Chris, good morning.

Yeah, Frank, good morning to you. And clashes between police and protesters in Los Angeles have now spilled into the morning hours overnight as we continue to monitor the situation, but far less than what we saw earlier in the evening. These are continuing days after federal agents have started to conduct raids, picking up hundreds of migrants at their workplaces throughout the region.

After another night of skirmishes between protesters and police, 700 active duty Marines are joining the effort to quell the violence that erupted over the weekend in downtown Los Angeles, sent there by President Trump. I think it would have been a very bad situation. It was heading in the wrong direction. It's now heading in the right direction.

The Marines joined thousands of National Guard troops called up against the wishes of California Governor Gavin Newsom and Los Angeles Mayor Karen Bass. There was no reason for them to be here in the first place. If anything, it was a provocation. California now asking the courts to send the military home. Trump and Hegseth ignored law enforcement's expertise and guidance and trampled over our state's, California's sovereignty.

-The city was burning. Governor Newsom did nothing. The mayor did nothing. So President Trump, God bless him, he sent the National Guard in to save property and save lives.

Mayor Bass now urging the Trump administration to stop the immigration raids taking place throughout the area, which sparked the violent protests. These raids do not need to take place. You are talking about people's places of work. You're talking about schools. On Capitol Hill, disagreement over whether the military presence is helping or hurting. Clearly the state needs help and the president's sending help. Hopefully it'll bring some peace.

These people have zero credibility, zero credibility on the other side of the aisle when it comes to issues of law and order. A war of words over how best to keep the peace.

And the last time active duty Marines were deployed on U.S. soil, 1992, when violent riots broke out in Los Angeles following the acquittal of four police officers during the Rodney King beating. Frank, back to you. NBC's Chris Pallone, live in D.C. Chris, good to see you.

A lot more to come here on Worldwide Exchange, including Elon Musk's feud with Trump and if it could mean trouble for investors in one of his most valuable companies. Plus, vaccine stock shock as RFK Jr. takes an axe to one of the government's top oversight panels. And then later, the bear case for Apple following an underwhelming product unveiling yesterday. Shares of Apple rebounding, but you can see week to date down about one and almost a quarter percent. A very busy hour still ahead from Worldwide Exchange Returns. Stay with us.

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Substance use disorder and addiction is so isolating. And so as a black woman in recovery, hope must be loud.

It grows louder when you ask for help and you're vulnerable. It is the thread that lets you know that no matter what happens, you will be okay. When we learn the power of hope, recovery is possible. Find out how at startwithhope.com. Brought to you by the National Council for Mental Wellbeing, Shatterproof, and the Ad Council.

All right, welcome back to Worldwide Exchange. Let's get a check on some of this morning's top stories. Silvana Henao is here with those. Silvana, good morning. Hey, Frank. Good Tuesday morning to you. Well, Disney will pay nearly $440 million for NBCUniversal's remaining stake in Hulu. Now, Comcast agreed to sell its 33% stake in the streaming service back in 2019. That was after Disney acquired

acquired a majority of Hulu through its takeover of Fox's entertainment assets. Now, you can hear more from Disney CEO Bob Iger when he joins Squawk on the Street for an exclusive interview at 9.15 a.m. Eastern. All right, meanwhile, Morgan Stanley is reportedly reaching out to a broader pool of investors to shore up demand for a $5 billion debt sale for Elon Musk's XTX.

Now, Bloomberg reports when Morgan Stanley launched the offering early last week, that was before Musk's public feud with President Trump. It had more than three and a half billion dollars in orders. But as of yesterday, demand was only up to about five billion.

And Health Secretary Robert F. Kennedy Jr. has fired the 17 members of a panel that advises the CDC on vaccines. The committee is made up of independent experts who make recommendations determining who is eligible for shots and whether they should be covered by insurance. In an opinion piece in The Wall Street Journal, Kennedy, who is a longtime vaccine skeptic,

says a clean sweep is needed to reestablish public confidence in vaccine science. HHS says the panel will still hold a planned meeting later this month with sources telling CNBC new members will run that meeting. Now, shares of vaccine makers are lower in the pre-market, Frank, although BioNTech is just fractionally higher.

Yeah, we're going to be talking a lot more about that just a bit later in the show. Also, I want to go back to that Hulu story. I wonder if we're going to get like a free Hulu trial or something because we're owned by NBC. Mr. Roberts, I could use some Hulu.

Silvana, thank you very much. We'll see you a bit later in the show. All right. Still on deck here at Worldwide Exchange, adding AI to the shopping checkout experience, a new partnership with Palantir, the CEO of Bolt coming up next. But first, we're watching shares of Microsoft, the stock hitting another all-time high and once again becoming the most valuable U.S. stock with a market cap of $3.5 trillion. Call it a bit of a quiet rally. Shares of Microsoft, though, pulling back about a third of a percent right now. We're back right after this.

Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm

Substance use disorder and addiction is so isolating. And so as a black woman in recovery, hope must be loud.

It grows louder when you ask for help and you're vulnerable. It is the thread that lets you know that no matter what happens, you will be okay. When we learn the power of hope, recovery is possible. Find out how at startwithhope.com. Brought to you by the National Council for Mental Wellbeing, Shatterproof, and the Ad Council.

All right, welcome back to World Wide Exchange. Turning back to Apple and its developers conference, the tech giant announcing it's opening access to its AI tech to third-party developers. The move coming as Apple continues its legal fight with Epic Games and after a recent court order to open its app store to more competition regarding payments and fees. For more, let's bring in Ryan Breslow, CEO of the payments and checkout tech company Bolt. Ryan, good morning. Great to have you here.

Great to be here, Frank. All right. So obviously we're talking a lot about WWDC. Nobody was really blown away by the AI, but this new operating system, of course, is that court ruling. What does this all mean for your company? Was there anything that happened at WWDC that benefits your company or benefits the payment space?

Well, in general, we're seeing Apple open up its app store. It's loosening its restrictions. That's come after the court ruling with Epic Games where it has allowed developers to circumvent the 30% tax by going to external checkouts. That's obviously great for our business. It opens up about $100 billion in payments volume for us and external payment providers. It also loosens the app store restrictions.

And that has paved the way for major super apps to dominate major countries and continents such as Europe. OK, I want to talk to you about super apps in a minute, but I also want to get back to some other news related to your company, your partnership with Palantir that's going to allow AI and checkout. Now, I got to ask, when I go to checkout, I really just want to pay. I've already picked out everything I want. What does AI and checkout do? The world's largest Goliath commerce company, Amazon, obviously has a streamlined one click checkout system.

They have personalization. They have AI. They do all the hard work to make it very seamless for you to check out. The rest of the internet doesn't have that technology. What we're building with checkout, who's best in class at AI and personalization is we're bringing that, making it available to every other business owner so that your checkout on

every other site can have that same seamless one-click experience. So with that said, again, you have the partnership with Palantir. How is your AI platform disrupting your competition?

Today's checkouts on most, if not all, websites outside of Amazon are static. They take forever to get through. 70% of customers are dropping off at the checkout step. It's a couple trillion dollar problem in the U.S., tens of trillions globally. The checkout abandonment is a very, very big problem. And what it needs is AI, sophisticated experiences, and

and ultimately personalization. And that's what we're making available through Checkout 2.0, powered by Bolt, the pioneer of one-click checkout, and Palantir, who's world-class. So you mentioned Super Apps. So, Brian, we've got to get going. I'm looking at two companies that are kind of known for Super Apps, Tencent and Coupang. Since that ruling related to Apple and Epic Games, their shares have really taken off.

I think the question really here is these companies, they already have their super apps developed. Even you admit that super apps aren't really prevalent here in the U.S. They haven't been developed. Is this a case where foreign technology companies may have the advantage on creating a super app that maybe even Americans want to use? It's true that a lot of the rest of the world has leapfrogged America in terms of these super apps. We have...

We've now a new paved road to enable these super apps. We hope to be an America first company who's building one. We have an embedded distribution of 80 million wallet holders who are using Bolt for commerce online.

And that embedded distribution gives us a huge advantage to bring both finance super app to the U.S. All right. Ryan Breslow, CEO of Bull, valuation about $11 billion on Forge. Big announcement related to Palantir a few days ago. You've got to stay in touch. We've got to continue this conversation about AI and checkout. Have a great day. Thanks so much. Straight ahead here on Worldwide Exchange. Underwhelming the street. Apple falling following its latest Worldwide Developers Conference. And investors and traders, they are putting the stock on notice. We're back right after this.

The bar was, I think, very low this time, but I don't even think they got up over that low bar. It doesn't give you a lot of confidence that this is a company that's innovating. With all of their resources, all of their IQ and all of their manpower, what's their plan? I mean, they must be aware that they're missing things. Some of that low double-digit growth on services, which I think the company is going to continue to print at a high margin, is part of why I'm less concerned than others.

When we get the downgrades tomorrow, many will say sell. I can't blame them. But the bottom line, as long as nobody switches to Android, call me sanguine about Apple. Not more than that. Not certainly less than that. Sanguine doesn't mean buy, but it sure doesn't mean sell in tomorrow's bite of holes. I'm not buying those either.

That was Jim Cramer on Mad Money last night talking reaction to Apple's big Worldwide Developers Conference. Investors and analysts looking for big AI updates. They're a bit disappointed, instead getting a big software refresh. Welcome back to Worldwide Exchange. I'm Frank Holland. Coming up this half an hour, much, much more on the Tech Giants Developers Conference and what our next guest calls death by a thousand paper cuts facing Apple. But first, we get you ready for the trading day ahead. We begin with the U.S. markets.

The S&P and the Nasdaq coming off very slight gains for their fifth winning day in the last six. Investors waiting for any details from the U.S.-China trade talks in London this morning. We know officials are about to meet very shortly. Right now, we want to take a look at the futures. You can see a bit of a mixed picture. It was all red earlier today. Right now, the S&P and the Nasdaq just fractionally higher. The Dow looks like it would open about 45 points lower. We want to take a look at the Nasdaq 100 pre-market laggards first. Taking a look at those, you see PDD Holdings pulling back about 1.25%.

Big Chinese tech company American Electric Palantir shares pulling back more than a half a percent. AstraZeneca and Dexcom running out your worst performers on the Nasdaq 100 in the pre-market. Then, of course, the other side of the coin, the leaders taking a look at those this morning. You see Tesla shares. They're up just about 3 percent. Big rebound after the stock had a sell off following that kind of dust up between the president and Elon Musk.

Applovin, Biogen, Diamondback Energy, and Lululemon, another bounce back here, up over a half a percent. The YogoPant maker facing some distress, I should say, after its earnings. Best performers in the NASDAQ 100 in the pre-market. Quick check of ETFs that are tracking Chinese equities as these trade talks continue. Right now, we're seeing the K-Web pulling back

about a half a percent down here. The FXI pulling back about a third of a percent. Yesterday, the MCHI finished up just over 1% right there. And also, when you take a look at Apple, as we mentioned, Apple was lower yesterday during its Worldwide Developers Conference. Right now in the pre-market, you can see here it's up just very fractionally

Again, no big developments out of the conference related to Apple intelligence or AI. However, some huge news related to software. Apple is going to move from iOS 7 to a new operating system called Liquid Glass. Much, much more on that coming up in just a moment. Also, quick check of Microsoft. We talked about this earlier in the show. Hit an all-time high yesterday, regaining the title of the world's most valuable public company. Right now you can see shares are pulling back about a third of a percent.

Also, looking at some technicals right here. See the blue line's a 50-day moving average. The yellow line's the 200-day moving average.

Technically, the stock's very close to a golden cross with a 50-day. It actually crosses above the 200-day. You're kind of seeing the action right here, something a lot of technical traders are looking at. Year-to-date, Microsoft shares up nearly 12%. Also looking at Tesla shares, again, rebounding after a sell-off fuel by that fight between the president and Elon Musk. The EV maker gained 4.5% yesterday. This morning, you can see, again, it's up just about 3%. All right.

All right. That is your setup now. We want to turn our attention over to Apple again. Share is trying to recover after closing down more than 1% yesterday following its latest Worldwide Developers Conference. The street, it was decidedly underwhelmed by the new liquid glass mobile operating system, redesigned a new desktop OS and incremental tweaks to its Vision Pro, Apple TV, and Apple Music offerings. No big news related to Apple intelligence, with the exception of more chat GPT integration.

Joining me now, Clay Griffin, research analyst at Moffitt Nathanson. Clay, good morning. Thanks for joining us. Good morning, Frank. Thanks for having me. All right. So. So, Clay, walk me through this. You're at a 141 price target for Apple and a sell rating. The rest of the streets at 228. They have a buy rating. Now, we know some some price targets and things may change. But why are you so bearish? And after that, what we saw yesterday, I should say, at WWDC, are you more bearish or do things kind of turn out the way you expect it?

No, I think things turned out pretty much as expected. You know, my co-author Craig and I have framed this as sort of a litany of risk that Apple is facing when you think about just the tariffs, the response from China, Apple's position in China from a marketplace, these app store rulings in the Epic case and the Digital Markets Act in Europe. There's just a sort of parade of sort of

not existential threats by any means, but meaningful risks to Apple's businesses, including this incredible services business that has really supported this stock for a long time. So it's not these existential threats and being so far behind in AI, although that's clearly a risk that we care about. But

those risks against what is really a premium valuation against what we think is probably going to be good but not spectacular growth. And so it's a real dichotomy between the risks and the valuations and how those two things interplay. All right.

Clay, just one second. Right now we're seeing some officials actually going into the U.S.-China trade talks right now. I couldn't quite see who it was, but we know that it's Commerce Secretary Howard Lutnick. I believe that's actually who just walked in. One of my producers is telling me. And right now we're taking a look. Obviously, a developing situation. The camera's panning a bit. But again, Commerce Secretary Howard Lutnick just entering a building for these trade negotiations. We know Treasury Secretary Scott Besson is there. Also, the U.S. Trade Rep Jameson Greer. They're meeting with Chinese Vice Premier La...

LA Hefeng. They're going to be, excuse me, I'm mispronouncing his name, but the Chinese vice premier right now. So again, moving camera right now. So, Clay, I want to come back to you. I believe all those things that you just listed right there, those are the thousand paper cuts we were referring to, all those different issues, the court ruling, you know, threat to the services business and a few other things. Isn't this a big tailwind, the idea that the U.S. and China are having trade talks? And couldn't this potentially relieve some of the tariff pressure on Apple?

Well, it certainly could. I think that Apple still likely will try to sort of at least diversify its supply chain over time, which would be very costly and take a long time to do, irrespective of what actually happens in terms of a functional tariff rate. And I think Apple's market position in China is inevitably going to be impacted. It already has.

from the fallout from this trade dispute that these things get into a marketplace in terms of Huawei and Vivo and others benefiting from nationalism and sort of a local champion, spurring around a local champion. These things don't go away overnight. So I would expect that Apple's travails in China will continue for some time. It won't be resolved in a trade meeting at a

and a resolution of a rate. All right, so a lot of people came out bearish about Apple. One of the things they're citing is the valuation, something that you just cited. But if you're still a bull on the stock, you're saying there's two things that have to materialize. Number one, we need to see some developments when it comes to Apple intelligence, including an upgrade cycle for the iPhone fueled by it. And then you're saying Apple needs to create a subscription-based revenue stream based on agentic AI.

Now, the second one seems a bit more tricky than the upgrade cycle. Talk to me about it. What would this agentic AI subscription be for?

Well, you know, I think you can think of it in context of, you know, a really advanced, powerful Siri that's available kind of in a pro tier, if you will. You know, what we didn't hear very much yesterday was, you know, the sort of functions of Apple's private cloud computer, right? So I think that there's going to be a real differentiation between either an on-device model, which Apple is allowing developers to access now with these SDKs and opening up the

foundational model. But remember, those are the on-device 3 billion parameter model, clearly not as performant as something like a GPT-4 or something that's going to be cloud-based. And so part of the opportunity for Apple is going to be to really lean into this privacy element of it. They've constructed what we think is a clever strategy around private cloud compute that's essentially a

funnels traffic into frontier models, but really kind of lays Apple's kind of end-to-end security and privacy around it. We'll see if consumers really respond to that or if the real demand from consumers is the performance of a cloud model that's accessible from not just Apple devices, but other devices as well.

All right, Clay Griffin, I apologize for cutting you off. We've got to leave the conversation there. Your price target on Apple, 141. You've got a sell rating on the stock. We'll continue to watch the stock action. Clay Griffin from Moffitt Nathanson, thank you for joining us. Have a great day. Thank you, Craig. Take care. All right, coming up here on Worldwide Exchange, China facing a potential new crisis, how the price war is around its competitive EV market may end up doing more harm than good. And it's the big reveal of CNBC's 13th annual Disruptor 50 list.

Highlighting the most innovative private companies, that kicks off on Squawk Box at 6 a.m. Eastern. Worldwide Exchange coming back in just a moment. Welcome back to Worldwide Exchange. Here's a BYD jumping more than 3.5% in Asia. The EV maker launching its new Seal 6 vehicle for just $15,000. That's 50% less than a Tesla Model 3 in that country. The move and ongoing price wars further fueling concerns that China's EV sector is facing a crisis. Our Eunice Yun has more.

Fears are growing in China that its EV industry is in a race to the bottom. Outside of China, this country is often accused by its trading partners of flooding markets with cheap Chinese EVs. These days, similar accusations are flying within China about China, raising concerns about financial stress in the industry.

The company drawing the most fire is China's market leader, BYD. BYD slashes prices by as much as 34%. This mini hatchback, the Seagull, now costs only $7,700.

The intense price war has sparked high-profile auto executives to sound the alarm, with the head of Great Wall Motor calling the industry unhealthy. In a local media interview in late May, Chairman Wei Jianjun drew parallels to China's moribund property sector and its now-defunct poster child, developer Evergrande.

An Evergrande-like crisis already exists in the automotive industry, he says. It just hasn't erupted yet. BYD has dismissed Wei's comment as alarmist. Sellers at this used car market see another sign of strain. The authorities are looking into a phenomenon known as zero-mileage used cars. This is when cars are registered and plated and then marked as sold, but they haven't ever been driven.

Used car salesman Ma Hui is worried where all the competition leads. All of us were losing money last year, he says. There are too many companies making too many new energy cars.

And the sellers told us that that zero mileage use car tactic is meant to help car companies and dealerships to artificially inflate their sales numbers. It's one of the reasons why the official Communist Party paper, The People's Daily, said that these price wars, Frank, are leading to nowhere.

Our Eunice Yun live in Beijing. Eunice, thank you very much. We really appreciate the reporting as always. Our Eunice Yun again, live in Beijing. And then coming up on Friday, we're going to have much more in China's EV sector. Our Phil LeBeau is going to be in Paris looking at how European automakers are struggling to deal with the explosion in Chinese EVs in Europe.

All right, coming up here on Worldwide Exchange, the one word that every investor has to hear today. And we've got the stock pick that every investor needs to know. Plus, more on the fallout over health secretary Robert F. Kennedy Jr. purging a key panel of experts on vaccines. We're going to look at what this latest move could mean for key companies in that space. Much more Worldwide Exchange coming up in just a moment.

Welcome back to Worldwide Exchange. Turning to health care, HHS Secretary Robert F. Kennedy Jr. says he has fired 17 members of a panel that advises the CDC on vaccines. The committee is made up of independent experts who make recommendations determining who's eligible for shots and whether they should be covered by insurance. In an opinion piece in the Wall Street Journal,

Kennedy, a longtime vaccine skeptic, says a clean sweep is needed to reestablish public confidence in vaccine science. HHS says the panel will still hold a planned meeting later this month with sources telling CNBC that new members will run that meeting.

Shares of vaccine makers in the pre-market taking a look, kind of a mixed reaction right now. BioNTech, those shares up about a third of 1%. Eli Lilly basically flat, but Moderna and Amgen pulling back just about a third of 1%. Joining me now is Emily Field, equity research analyst at Barclays, covering European pharmaceuticals. Emily, good morning. Good to see you.

Thanks for having me. All right. So, I mean, if you don't mind, I know you mostly cover the stocks here, but I do want to get to this op ed from RFK Jr. So part of that op ed is he says that this panel, it just has approved every vaccine. It's never denied any vaccine. Is there truth in that? And is there skepticism when it comes to vaccines, either in the public health space or in your mind in the public?

But that's a very good question. And I would say at least, you know, in recent history, we have seen the panel take actions that have limited the use of some vaccines. And one example is the adult RSV vaccines, which were launched by GSK and Pfizer a couple of years ago. Last June, in a meeting of this very panel, the president,

Committee did a very full analysis of the risk benefit in terms of preventing infection versus the risk of side effects and actually scaled back the recommendation to a very high risk population. So I don't think that investors have thought of this panel as, you know, just rubber stamping everything that comes across their desk. OK, so.

Is there any sense in your mind, because I mean, it's kind of a complicated situation. It's political, it's subjective. And we're also talking about science. And generally, when we're talking about science, it's whether it's true or not true. But in this case, there is some subjectivity to it. Do you think that the public has some questions about the I guess the validity of this panel when it comes to approving vaccines? We do know that during the pandemic, there was a lot of skepticism about that vaccine. But that seemed to kind of go away. You don't really hear much about it anymore.

Yeah, I feel like in a lot of the commentary that we get from doctors and things that we've read is that it does seem like the COVID vaccine is just a very, very unique situation and almost somewhat like a one-off. Now, as it comes to influenza, and obviously there's a documented measles outbreak going on in Texas, but influenza rates, vaccination rates have fallen slightly over the last couple

of years in the U.S., which people have attributed to vaccine fatigue. But, you know, I think in terms of, you know, vaccine research and development process at our large pharmaceutical companies, that has continued unabated, you know, COVID or not.

All right, let's bring this full circle to the investor angle, Emily. What stocks are the most impacted by this idea that it's going to be a new panel of essentially handpicked people from RFK and this administration? It seems like it's not going to be the same sense. It's going to be independent experts going forward. Yeah, so it's a super interesting question because, you know,

Obviously, RFP Jr. has a big focus on vaccines, and we have seen this same panel's meeting was postponed earlier in the year, back in February. It was eventually held, and the meeting kind of went as normal. So I think, but the one to watch here is actually, it's from Merck, U.S. Merck. It's a vaccine called clisrobimab. It's actually technically a monoclonal antibody, but it prevents infants and newborns from contracting RSD disease.

That was actually just approved by the FDA just yesterday, one day ahead of schedule. But to get in doctors' offices and be covered by insurance, et cetera, it does need this ACIP recommendation. It is on the schedule for this June meeting. So that will be the one to watch as this is a new vaccine that would be going up for its first recommendation that would be competing against a vaccine from Sanofi, which is called Bay Fortis. So I think that's certainly the near-term one to watch.

All right, Emily, Phil, thank you so much for your time and for your insight. We'll continue to watch this one. Taking a look at Merck shares, by the way, they're up just over a half a percent. All right, coming up here at Worldwide Exchange, providing some portfolio protection. The defensive name up just about 20% year to date. The stock that our next guest calls their top stock pick. Try to get that one out. But we're going to get into it right after the break. Stay with us.

Welcome back to Worldwide Exchange. Checking futures as investors continue to watch for the latest out of those U.S.-China trade talks. Bit of a mixed picture right now. The S&P and the Nasdaq both fractionally higher. The Dow looks like it would open just about 35 points lower. For much more, let's bring in Kevin Maughan, president and CIO at Hennigan & Walsh Asset Management. Kevin, good morning. Thanks for joining us. Good morning, Frank.

All right, so trade talks going on right now. Surprised that another day we're seeing the future is just a bit muted. Not a lot of action in the futures, even though these trade talks are actively happening. It's critical. The most critical outcome that I see coming out of this week is some formal agreement as it relates to rare earth minerals. Those rare earth minerals are desperately needed by auto manufacturers and defense contractors. And China right now either produces or processes 90 percent of the world's rare earth minerals.

All right. So speaking of defense, that's your word of the day. Yes. Are you saying investors should play defense? I mean, we were talking about this earlier. The S&P is back above 6,000, kind of a key sentiment level. Huge run up from those April lows, more than 20 percent run up from there. So is now the time just to kind of batten down the hatches and play some defense as an investor? Yeah. In this case, I'm talking about defense, not defense.

defense. And from the standpoint of follow the money, national defense. Last year, we saw nearly a 10 percent increase in defense spending across the globe to two point seven trillion dollars, the largest annual increase since the Cold War. Europe increased by 17 percent. Germany increased by 28 percent. We understand the Trump administration has proposed an over one trillion dollar defense spending budget this year. So if you're looking to

follow the money become more offensive by investing in defense. All right. That takes us to your pick, which is RTX. Now, why RTX out of all the different defense companies? Sure. So RTX operates out of three segments, Collins Aerospace, Pratt & Whitney, and of course Raytheon. Raytheon is the most attractive from an investment standpoint. They produce and distribute air,

And missile defense systems. Think the iron dome. Stocks up over 21% year to date, has a trailing 12-month dividend yield of nearly 2%, and the forward P is just around a little under 23, roughly in line with the market. I think a lot of that defense spending is going to go to big defense contractors such as RTX. Your pick is RTX. Looking at the charts right here, since the tariffs were put into place, RTX shares up just about 6%. I want to go back to the other. I don't even know how to, the inflection. Defense when we're talking about trading. Let's go back to that.

one. I was mentioning to you during the break, I was talking to somebody who works a lot of pension funds. He says pensions are putting a lot of money in bonds right now because stocks are less attractive. Stocks are kind of at the 90 to 95 percentile of every metric, whether it's valuation, et cetera, and that bonds are more attractive. So for investors, is it time to be more defensive and maybe put money into bonds? And if so, corporate, treasury, short end, long end? Sure. I think it depends upon what your objectives are and what your risk tolerance is.

If your objective is income and you're more conservative in general, bonds are always an appropriate solution. Think about municipal bonds for investors in high tax brackets right now. The tax equivalent yields of many investment grade municipal bonds are very, very attractive and worth consideration. And we also see the outlook for yields perhaps factoring into the need to add bonds to your portfolio from a diversification standpoint. So, yes, I think stay investment grade quality. Look to munis if you're a high tax free bracket.

Other side of the coin, very quickly. Is there opportunity risk of the idea that the trade deal happens, equities take off again? If you're in bonds, then you don't have the opportunity to take advantage of that rally. Are you looking at that risk as well? Yeah, yeah.

I think there's more of a risk to the downside than there is to an upside. But if we get an informal agreement as it relates to the rare earth minerals and we ease up on some of our chip restrictions with exports, I think that's a tailwind for the markets, at least over the short term. Kevin, your pick for today, RTS. Thanks for joining us. All right, here's what to watch today. In just a moment, we get the latest look at the sentiment of small businesses and several earnings out today, including Jam Smucker, Dave & Buster's, GitLab, and GameStop. One more quick look at futures. We mentioned all morning long, bit of a mixed picture. That's going to do it for us here on Worldwide Exchange.

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