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Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones, member SIPC. 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. At a certain point, we're just going to send letters out. And I think you understand that saying this is the deal. You can take it or you can leave it.
President Trump's ultimatum for countries around the world ahead of his July 9th tariff deadline. That has investors on edge despite more than expected inflation. You can see here futures are lower. And we're also seeing some rising Mideast tension also an issue. Oil now at a two-month high. And RFK Jr.'s new CDC advisory panel, it's raising even more eyebrows. It is Thursday, June the 12th, 2025. And this is Worldwide Exchange on CNBC and streaming on CNBC+.
And 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 closing lower even after inflation came in lower than expected as trade once again. It dominates the market conversation. Take a look right now. You can see futures are in the red across the board. All three indices down right around a half a percent. It looks like the Dow would open up.
almost 200 points lower. We're going to take a look at the S&P 500 laggards first. Take a look at some of those names you're seeing moving the indices down right now. And you can see right here, Boeing right here at the top of the list, pulling back nearly 4% skill dynamics. Insight, Danaher and Revity running out the worst performers on the S&P in the pre-market. Then the other side of the coin, the S&P 500 leaders. You see Oracle after earnings
Those shares up over 7.5%. Cisco, not the hardware maker, but Cisco, the food service company. Those shares up over 2%. Newmont, Corning and Public Storage running out your best performers on the S&P. Also looking at currency this morning, the dollar falling yesterday. You can also see here it's lower week to date, down about just 1%. Some tensions on the greenback as we continue to see the trade deals between the U.S. and China and other countries kind of work themselves out.
We're also looking at the bond market this morning. Yields falling on the back of that softer than expected CPI. And on the trade progress, right now you can see the benchmark at 4.4. Yesterday, I believe, was about 4.47, 4.48. Also yesterday, we saw the two-year was above 4% now, pretty considerably below 4%, the long bond at 4.9. And speaking of trade, we want to stick with our top story this morning. Of course, that is President Trump.
laying the groundwork for future trade talks, saying he plans to issue country-specific ultimatums ahead of the July 9th deadline for reinstating higher tariffs on dozens of countries. The president speaking with reporters last night. We're dealing with Japan. We're dealing with South Korea. We're dealing with a lot of them. We're dealing with about 15 countries. But as you know, we have about 150 plus countries.
And you can't do that. So we're going to be sending letters out in about a week and a half, two weeks, to countries telling them what the deal is, like I did with EU.
So all this coming after the U.S. and China yesterday, they reached an agreement to ease export controls on U.S. tech in exchange for resuming imports on rare earths from China. The president confirming his support for the deal coming out of London. You see a post on True Social right here saying our deal with China is done, subject to final approval. He goes on to talk about some of the magnets in rare earths.
The markets, though, trading lower after reports that exports for licenses for those rare earths from China, they were only for six months at a time. Also, tariffs on China now stand at 55 percent. So clearly the market's trying to weigh exactly what that means. Treasury Secretary Scott Besson also floating, extending the reciprocal tariff pause for 18 important trading partners who he says are operating in good faith.
It is highly likely that those countries that are negotiating or trading blocks, as in the case of the EU, who are negotiating in good faith, we will roll the date forward to continue the good faith negotiations. If someone is not negotiating, then we will not.
And we'll have much more on this story throughout the morning. We talk to market guests about what this all means for the U.S. markets in particular. But first, we're going to turn to the Middle East and a developing story. NBC News is reporting Israel is weighing a possible military strike on Iran, putting oil markets on edge.
Right now you see WTI pulling back almost 1%, but a big spike yesterday, hitting a fresh two-month high. Again, this morning pulling back a bit. We're going to turn things over to our Dan Murphy. He joins us now from Dubai. Dan, good morning. This comes after the president indicated that nuclear talks have hit an impasse.
That's right, Frank. Good morning to you. Israel now considering a military strike on Iran within days, even without U.S. backing. That is according to NBC News sources who say Israel is growing increasingly alarmed by the pace and progress of these nuclear talks with Iran, especially any deal that allows Iran to keep enriching
uranium. Frank, this morning the U.S. pulled staff from its embassy in Baghdad and gave military families across the region the option to leave as well. President Trump weighing in earlier when asked why. Well, they are being moved out because it could be a dangerous place and we'll see what happens.
A senior Iranian official also told Reuters today that this threat from Israel was intended to influence Tehran to change its position. But the Iranians say they won't budge here, particularly on this real sticking point of enrichment.
and their armed forces are also fully ready to respond to any strike. Frank, the pressure also ramping up just moments ago after the IAEA board also said Iran was in breach of non-proliferation duties earlier today. So it is understood that the U.S. envoy Steve Witkoff will meet Iran's foreign minister in Amman on Sunday, where a counterproposal will be put forward. Until then, risk assets and oil, of course, likely to stay on edge. Frank?
Yeah, as we mentioned here at WTI, up more than 4%, similar story for Brent, the international benchmark. So Dan, it seemed like we were making progress when it came to those Iranian talks with the U.S. What seems to be the snag here? It seems like a complete reversal of the direction things were going just a few days ago.
That's exactly right. We've seen these negotiations play out over the last five months, and Israel and the wider Gulf region has been watching closely. Frank, the bottom line here is a strike by Israel would also mark a major break with the Trump administration. We know the president himself has said he would prefer a diplomatic solution rather than a military solution. The Iranians have also hinted today that that would be their preference as well,
Of course, urging restraint is one thing, but actually going ahead with a strike is another. It's also reported today that Israel believes time is running out as Iran rebuilds those damaged air defenses from the attack that unfolded last year. So the region absolutely on edge and really watching these talks on Sunday really closely to see exactly what could happen next.
Dan Murphy, live from Dubai. Dan, thank you very much for that. All right, turn our attention back to the markets. Those renewed geopolitical risks weighing on the markets and offsetting the good news from that softer than expected CPI read yesterday. Negative sentiment yesterday. It appears to be carrying over at least so far today. Again, looking at futures in the red across the board. The Dow looks like it would open about 200 points lower. Europe also tracking lower right now. Joining me is Janet Moy, head of market analysis at RBC Bruin Dolphin. Janet, good morning. Good to see you.
Hi, good morning, Frank. Thanks for having me. So what do you make of this geopolitical tension weighing on the markets? You know, yesterday there was a lot of optimism, at least about inflation with CPI coming in softer than expected. I'm talking about the U.S. markets right now. Do you think this will continue to weigh on the U.S. markets throughout the day?
Well, given that the U.S. market has staged a very significant rally, basically from bear market to bull market within two months, I think there are reasons to expect some pause in that rally or even some reversal. And I think so in terms of the oil prices, the rise in that obviously is not good news for inflation in the U.S.,
And I do think that the – I mean, the working assumption, I think, for many investors is that the tariffs will continue to be paused maybe for another – for the 90 days, and the baseline tariff will be at 10%. And there is going to be ongoing trade discussions. I think the most important would be the EU.
In China, we saw some of the escalation, but ultimately the tariffs are sticking. So I think the working assumption is that we're still going to have tariffs at 10%. But you just never know that there may well be some nasty surprises that could cause
downside pressure on the market. Although I think given the previous patterns of how President Trump operates, I guess the taco trade could be back on again at some point. OK, so you're seeing the possibility for the taco trade, which is short for Trump always chickens out. The president has pushed back against that quite a bit.
Right now, as we're looking at some of the geopolitical tensions in your mind, do you think this is a good time to invest in defense, aerospace? Just a few days ago, the ITA ETF had hit an all-time high. It pulled back a bit after there were some reports that the administration was going to buy less jets for the military. But with these tensions ramping up, is that a place that you think might be smart to put money?
I think defense is an area which I think a lot of governments are going to pile money on. I think especially in Europe, I think many countries in Europe are committing to more defense spending. I think that's a really secular trend.
I think it is an area that is interesting and worth thinking about for the longer term and also has a very visible path going forward. I think there are also going to be a knock-on positive effect for the industrial supply chain for countries like Germany. So I guess it's not just – I think it's an interesting sector play but also has positive implication for wider markets.
European industrial sector, for example, that would be interesting. All right, Janet Moy, great to see you as always. Thank you very much.
We have a lot more to come here on Worldwide Exchange, including a wild ride for Tesla shares and the one group of investors that are apparently in the driver's seat. But first, biotech disruption. We speak with the CEO of Elevate Bio, a member of this year's CNBC Disruptor 50 lineup. And then later, RFK Jr. making his presence felt with his new CDC advisory panel. A very busy hour still ahead. Worldwide Exchange returns.
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Welcome back to Worldwide Exchange. It has been a rough year for the biotech sector, down more than 7% over the past year, down 3% since January, but that's not stopping some investors in the private markets from getting excited about one player. That's Elevate Bio. It's number 43 on this year's CNBC Disruptor 50 list, and its CEO, Jer Brophy, joins me right now. Jer, good morning. Thanks for joining us. Good morning.
All right. So your company is all about CRISPR technology. Now, I'm going to be honest. I don't think a lot of our audience has heard of this. We've heard of mRNA technology. We've heard RNA technology. How does this fit into that landscape of biotech?
So what most people realise is there's amazing cell and gene therapies coming through in the market at the moment and they're done and actuated in different ways. CRISPR gene editing is a way in which you can make very precise edits to a patient's DNA and what that allows you to do is identify new targets but also to correct some diseases, more importantly expand the number of treatable diseases and we're working with our partners. We've built the world's most powerful
CRISPR gene editing toolbox. We've underpinned it with AI. The numbers are staggering. It's a perfect test case for AI. We're working with our partners to rapidly identify targets and therapies. And in doing so, working with them, we think, you know, we're going to increase the speed and pace with which new treatments can come to market. All right. So you recently announced a partnership with AWS. That's the AI that she's talking about. But let's talk about these different treatments. It's for cancer, multiple sclerosis, diabetes, Huntington's disease, a rare disease there. So
Where will we possibly see this CRISPR technology be effective? What area first? Would it be cancer? Would it be, you know, one of these other areas, multiple sclerosis, diabetes? Where are we going to see the impact first more than likely? What tends to happen is cancer tends to be the first area. Dreadful diseases, pediatric diseases, rare cancers which can't be treated any other way. The FDA is very supportive.
new treatments, new technology platforms and tend to get approvals coming through pretty quickly. There are still so many cancers that can't be treated well, there are still you know dreadful stories out there. The ability to really understand the cancer at a molecular level and make that change at a molecular level is a game changer but these need you know well-developed platforms, powerful actuated tools to make these things happen.
So you mentioned the government, the FDA. There's been some changes there, very obviously. RFK Jr. is now the head of HHS. Also, I've heard some FDA officials talk about speeding up the approval of rare drugs to get them out to market faster. Is that something that's a tailwind for your business? It absolutely is.
The Secretary of Health and Human Services met the heads of FDA, NIH, CMS last week and promised support for the cell and gene therapy space. That's a huge tailwind for us. And even yesterday, the House Appropriations Committee echoed that. So we see some really positive signals in that space. Jared, I got to ask you about this tariffs. Obviously, we had some news when it comes to trade yesterday. We've had some other rare drug or rare disease drug makers come on the show and talk about the reliance on China for either rare, excuse me, for vaccines.
supplies or some of the raw materials. That's the word I was looking for, for raw materials or actually for final production. You manufacture in Massachusetts, not a big manufacturing state, but you manufacture in Massachusetts. How reliant are you on imports and specifically China? Not particularly. We're U.S. forward. So, you know, we make sure that we can make therapies in this space. We also were building out in Pittsburgh as well. I was there yesterday.
and our team does a lot of work in supporting STEM initiatives in local schools. And I heard a very interesting comment. It said, you know, the guys there said,
Pittsburgh is not a town in which manufacturing is a dirty word, and that's really important. You know, you get amazing molecular insights, amazing clinical insights. Manufacturing these drugs well, efficiently, to make sure they're safe and efficacious is key, and that's where we come in. By the way, went to grad school in Waltham, went to undergrad in Pittsburgh. Fantastic. There you go. LV Bio, number 43 on this year's Disruptors list. J.R. Berfie, thank you for joining us. Thank you very much. All right.
Moving on now, we're going to be following some breaking news. An Air India flight from India to London has been involved in an accident. According to Flight Radar, one of Boeing's 787-8 Dreamliner jets was the plane involved. Reports say at least 240 people were on board. Indian aviation regulators say the plane fell after takeoff outside the airport. Boeing shares on the back of that report falling very sharply. You can see it right here. Boeing shares down nearly 6%.
Still on deck here at Worldwide Exchange is lawmakers versus the Department of Government Efficiency and a key test for its cost-cutting efforts. Plus, we've got your big money movers, and there's just no love out there for shares of GameStop. We have all the details when Worldwide Exchange returns. Stay with us.
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Welcome back to Worldwide Exchange. Time now for your big money mover, some big stack stories this morning. Take a look. Shares of Oracle, they're up over 7.5%. Fourth quarter earnings and revenue beating forecast. The company is also raising its annual guidance, expecting revenue of at least $67 billion or growth of nearly 17%. As its bets on continued strong demand for cloud services from customers deploying AA technology appear to be paying off. Again, shares of Oracle up over 7.5%.
CoreWeave could be a big winner if Google's new partnership with OpenAI. Sources telling Reuters the company, which sells cloud services built on NVIDIA's chips, is set to offer computing capacity to Google's cloud unit. Google will then sell that OpenAI to meet growing demand for Chad GPT and other AI models. CNBC has confirmed this through sources who say the deal is still in the works.
And shares of GameStop are falling after the company says it plans to raise more debt through nearly $2 billion, through a nearly $2 billion convertible bond deal. GameStop says proceeds will go towards general corporate purposes, including investments. In April, the company completed a $1.5 billion bond deal using that money to buy Bitcoin. Shares a bit of GameStop, I should say, pulling back about 12%.
All right, turn our attention now to Washington. The Department of Government Efficiency will face its first major test in its push to cut government spending. Emily Wilkins joins us now with much more on that story. Emily, good morning.
Good morning, Franquia. It is do or die for Doge in the House today, where lawmakers are actually going to have to vote on whether or not they will cancel $4.9 billion in funding. This is funding Congress just approved a few months ago. Now, about $8 billion of that is for USAID and other foreign programs, about $1.1 billion for communications, including PBS, NPR, other public broadcasting. And look,
Well, $9 billion, it's basically just a drop in the bucket. The government allocates $1.7 trillion in federal spending that they approve each year. But even so, there are still concerns among some lawmakers about what the cuts are going to mean for their districts and the US spot on the global stage.
Now, whether that remains enough to sink the bill is uncertain. Remember, they can only lose three votes if everyone is present. But at least one Congress member, Dusty Johnson, he said he does plan to vote for the bill in part because of concerns about our current level of national debt. None of these cuts are particularly easy, but at some point we're $38 trillion in debt. It's really time that we tighten the belt. That is going to cause, listen, that's going to pinch some programs. No question about it.
This package of rescissions is actually supposed to be an easy one for Congress to do. They have a lot of consensus around some of these items.
And if this passes today with the House and then, of course, later the Senate, the White House does plan to send more requests for Congress to claw back previously approved funding. Plus, the hope is that this is also going to help Republican leadership reassure some of the fiscal hawks who are concerned that the cuts in the Trump megabill are too small, that they are serious about making overall cuts. Frank?
Emily Wilkins, live from D.C. Emily, thank you very much. We're going to stick with D.C. Health Secretary Robert F. Kennedy Jr. wasting little time in naming new advisors for the CDC's vaccine advisory panel after removing the existing members earlier this week. Angelica Peebles joins us now with more on this story. Angelica.
Morning, Frank. That's right. Secretary Kennedy announcing eight new members in a post on X saying, quote, they have each committed to demanding definitive safety and efficacy before making any new vaccine recommendations. He also says that the committee will review safety and efficacy data for the current vaccine schedule as well. Now, these eight new members will serve on the CDC's Advisory Committee on Immunization Practices. And this is a group that recommends how
how FDA-approved vaccines are used, so who should get them and when. Now, some of the new faces have expressed concerns about vaccines in the past. For example, Retsef Levy has a video pinned to the top of his ex-account where he says, quote,
we have to stop giving them immediately. Another member is Vicki Pebsworth, and she sits on the board of the National Vaccine Information Center. This is a group that says it's dedicated to preventing vaccine injuries and death. Now, one of the new facers, Cody Meissner, he's a highly respected and well-known doctor and vaccine policy expert. And typically, and there are other doctors on the panel, but it's not immediately clear how much expertise they have around vaccines. And typically,
members are well-versed in infectious disease, public health, and vaccine science. So a lot of people who are very familiar with vaccines. So we'll have to see exactly how some of these doctors can evaluate the data and what their views are on vaccines. And we will get our first look at this new panel in just two weeks when the ACIP is scheduled to meet and make a number of recommendations, including for COVID boosters and a newly approved RSV shot for babies from Merck. Frank?
All right. Angelica Peebles with the very latest on that CDC advisory panel. Angelica, thank you very much. We'll see you just a bit later in the show. You bet. All right. Coming up here on Worldwide Exchange, we're live at Viva Tech in Paris, where Arjun Kapoor caught up with the godfather of AI, Jensen Wong, for a very rare one-on-one. Much more Worldwide Exchange coming up right after this. We have cars driving 24-7 with drivers in the cars, and we see essentially no interventions.
So we want to be very careful with the first introduction of unsupervised self-driving, meaning that there's the car driving around with no one in it. No one behind the drivers. Well, yes, and sometimes no one in it at all. Just going to pick someone up. So the car seems to be incredibly safe.
So that was Elon Musk talking with our David Faber last month about Tesla's robo-taxi ambitions. Those awaiting to see the self-driving cars are going to have to wait just a bit longer. As Musk now says, he won't be rolling out until later this month. The delay, it is indenting Tesla's fresh enthusiasm. Shares are up nearly 10% this week.
Welcome back to Worldwide Exchange. I'm Frank Holland. Coming up this half an hour, we're going to have more on Tesla's roller coaster stock ride and the role that one group of investors is playing on that ride to the upside. But first, we begin with the U.S. markets. Trey, once again, dominating the conversation this after the U.S. and China reached an agreement to ease export controls on U.S. tech to China in exchange for resuming imports of rare earths to the U.S.,
Concerned around there is some concern around export licenses for rare earths from China. Reports are the agreement will only last six months. Tariffs on China also now stand at 55 percent. We also had the president teasing and ultimatum coming ahead of the July 9th deadline. At a certain point, we're just going to send letters out. And I think you understand that saying this is the deal. You can take it or you can leave it.
And right now, taking a look at U.S. stock futures, you can see we're in the red across the board right now. The Dow looks like it would open about 240 points lower. The S&P and the Nasdaq pulling back right around a half a percent. We're also checking the ETFs that track the equities of some of our important trading partners. Taking a look this morning, you're seeing the MCHI that tracks Chinese equities up almost a quarter of one percent. Down here, the INDA that tracks Indian equities pulling back more than three quarters of one percent. The EWW with Mexico just fractionally higher right now. There were some reports.
that the U.S. and Mexico were getting closer to some sort of a deal. We also want to look at the commodity market, specifically oil. Prices right now sitting at a two-month high. WTI jumped in more than 4% yesterday on news that the U.S. is pulling troops out of the Middle East, raising concerns of supply disruptions.
Right now, we're seeing a pullback in oil this morning. WTI and Brent Crude both pulling back more than 1%. Down here, though, natural gas popping up more than 2.5% in the pre-market. Also looking at currency, the dollar in particular. Paul Tudor Jones saying he believes the dollar is going to fall 10% over the next year. Taking a look at the dollar under some pressure this week, pulling back about 1% week to date. Right now, down about 0.5% in the pre-market. We're also checking the bond market ahead of today's PPI report. Taking a look at yields, we saw yields pull back
a bit yesterday after that cooler than expected CPI report. Right now, the benchmark at 4.39, the two-year well below 4%, the long bond at 4.88. Okay, that is your setup now. We want to turn back to some breaking news we brought you just a short time ago.
A Boeing 787 Dreamliner has crashed in India. The Air India flight was headed to London when it crashed just after takeoff. Take a look on your screen. This is some new video from near the crash site, London's Gatwick Airport. That's where that plane was headed. That airport confirming the crash just moments ago.
Reports are that at least 240 people were on board that plane. But again, this is a developing story. We're showing you some scenes from the crash. Right now, you're seeing a lot of black smoke near the scene right now coming from India. Boeing shares, they're sharply lower after this incident. We're taking a look at Boeing shares right now. They're actually hitting their lows of the morning, down about 7.75%, a major factor in the Dow futures, pulling back more than 200 points.
Right now, Boeing shares again down about 7.5%. Again, an Air India crash, a plane crash that was on its way to London. We'll continue to follow this story throughout the morning. All right, now we want to turn our attention to shares of Tesla. Solid rebound for the stock this week, up more than 9% so far. CEO Elon Musk revealing Tesla's robo-taxi launch, which was reportedly set to happen today. Well, now it's going to happen on June the 22nd. Musk saying that date could shift.
Tesla still down more than 5% since last week's very public feud with the president. But according to Vanda Research, it's been the most bought stock for the past month by retail investors. For much more, let's bring in Marco Iacchini, Senior Vice President of Research at Vanda. Marco, good morning. Good to see you.
Good morning. Glad to be back. All right. So you say retail investors, they're buying on the rumor here. Again, we thought this RoboTax thing was going to happen today at first. And then Elon Musk says it's not going to happen for another week and a half or so. Is there potential for retail investors here to sell the news if this isn't as impressive as many people believe? Or is there kind of a cult of Elon Musk here where they continue to buy this stock, in your opinion?
I think both statements are true. In the past, we have seen these type of events around the AGM in 2023, but also around the dividend splits earlier after the pandemic. We've seen this by the rumor phase, followed by a sell the news, sell the event type of phase as well. But retail investors, given their love for Musk, have always tended to come back.
How did that, again, very public feud with the president. I think feud is actually putting it lightly. Some of the things that were put out there were pretty intense. How does that impact retail investors? Because a lot of times this stock seems to trade on the sentiment of Elon Musk, whether he's distracted, whether he's focused, whether he's himself bullish about the company and its prospects.
Yeah, we actually saw on Thursday, which was probably one of the most entertaining days on X for a while, we actually saw big dig buying from retail investors in Tesla shares, as well as TSLL, which is the 2X leveraged long Tesla share ETFs. So clearly they were not
too worried about the spot if anything they saw it. Or they view that day as an opportunity to buy just for reference. Flows into DJT which you would assume could have also popped for. Obvious reasons only saw about a million of inflows on that day so clearly tells you number one that Tesla remains a core portfolio holding. For for retail investors that day saw two hundred million of inflows in Tesla shares and about seventy five. Of
75 million to TSL. So it tells you, number one, as a portfolio holding and to the law for Musk is still there, at least when it comes to financial markets. I also look at small caps. So small caps are positive in nine out of the last 10 weeks. And you're saying retail investors are playing a big part in that. So first, why are retail investors all of a sudden very interested in small caps and how are they playing a part in that rally?
Yeah. So one thing to understand is that when retail investors rotate towards smaller caps, because of the depth of the bulk of these stocks, there tends to be a much more direct impact in terms of price action. Sometimes with larger cap stocks, you don't see that. But in the aggregate for smaller cap stocks, when retail investors rotates from their portfolio holdings and moves down the risk curve, there seems to be a bit more of a direct impact.
And that also is helped, especially in periods where, like what we've seen, for example, over the past year, we know that hedge funds, based on our institutional research, we know that hedge funds have tended to short that space. So when you have situations where retail investors are coming off really good and successful dip buying once again,
from April and now they're looking to rotate into the riskier areas of the market in this case small caps. Given on the other hand you have hedge funds who are short, they're causing what is called a short squeeze here and it's helping propel prices higher. All right. I don't know if you ever watch Mad Money here on CNBC. Jim Cramer says this year has become the year of magical thinking. He's talking about space and quantum computing and some of the other riskier trades.
When we're talking about retail investors, how are they reacting to some of these different things? We saw Voyager go public yesterday. We're also seeing nuclear stocks. He lumps that in there with that group. And those stocks tend to be a bit volatile. How are retail investors investing in these? Are they just continuing to buy or are they kind of pulling back and buying on news and selling on rumors? Similar situation to what you're talking about when it comes to Tesla. I think we were on I was on the show in January and we were talking about quantum stocks because they were the the the
moment. Those have kind of returned what we're seeing is that as retail investors are moving down the risk curve. What they're doing the focusing on a I derivatives and that could be from data centers to energy providers to quantum computing stocks so a lot of these names of actually. After seeing some interest fading in April now they're coming back pretty strong and meaning. That they're seeing a lot of retail support.
Mario Aquini, we've got to leave the conversation there. Thank you very much. It's great to see you. Thank you. All right, coming up, expanding NVIDIA's global reach with CEO Jensen Wong is telling CNBC this morning about the chip giant's plans to find opportunities overseas. We are back with a live report coming up right after this. Welcome back. Turning to Europe, France's Viva Tech Conference is underway with AI taking center stage. CNBC senior tech correspondent Arjun Kapoor live on the showroom floor, and he caught up with the one and the only Jensen Wong. Arjun, good morning.
Good morning, Frank. Look, it's been Jensen mania here in Europe, starting from the UK earlier this week, now here in Paris as well. And Jensen Huang has taken the opportunity to announce a bunch of infrastructure deals here in Europe. One of the biggest ones with Mistral AI, the open AI competitor here in France to build a big cloud platform.
with Nvidia's GPUs and the pitch here from Jensen is basically Nvidia can be the infrastructure partner to Europe as they build out all of these data centers as well. And Europe needs its own infrastructure. As you said, I had a chance to catch up with Jensen Huang just behind me and I had to ask him about China. Still the big question as well. Huawei's founder the other day just downplayed some of the progress the companies have made on AI chips. But Jensen Huang said they are still a generation behind
but are catching up. I asked him if he feels like if he's allowed back into China, whether that's still a big market for the company. Let's listen in. The important thing about China is both the business is important, but strategically it's even more important that the American technology stack is what AI developers around the world builds on. If we want the American technology stack to win around the world, then
giving up 50% of the world's AI researchers is not sensible. And so that's the most important part strategically. Where AI developers develop their technology, it will run best on that technology.
Jensen Huang taking this more from a strategic perspective saying, well, look, American AI is being built very quickly and what's needed is for American AI to be spread all over the world, hence why he's here in Europe as well and visiting many other places as well.
But there is China and they're developing quickly all the way from the chip companies to the cloud players and the AI software and model companies as well. And there's a world in which perhaps in many emerging markets, they choose to side with the Chinese tech companies. His view is that American firms should be putting their selves first and getting ahead and allowed access
to the Chinese market in order to put American technology first. So very fascinating conversation we had there. And again, it's all about that sort of geopolitical game around chips and AI that has become front and center for companies like Nvidia and for nations like France, where I'm in right now, Frank. You know what else has become front and center, at least in the last 24 hours, following some other comments from Jensen Wang as quantum computing. We're actually just talking about some of the retail investors here in the U.S. investing in the space.
Did you get a chance to talk to him and to kind of clarify his comments? Because he said quantum computing is at an inflection point and kind of gave a spike to some of those stocks. But we've also heard from some of the companies themselves that say they're quite a bit away from having an enterprise use.
I didn't get a chance to ask him in that, but I was at a Q&A with him yesterday in which he did address the quantum computers. If you remember back early this year, he made some comments in which he said useful quantum computers are still sort of 15 years away. And we saw a lot of the quantum computing stocks tank. He now feels that useful quantum computing is just within a few years. And he clarified to say what that means is quantum computing is getting to a point where it's going to be able to solve some real difficult challenges that
current computers can't. Things like discovering new drugs or even discovering new materials as well to be used in sciences and other applications in places like semiconductors as well. So that was his view and that he thinks that it's now within a few years, Frank. Arjun, great reporting as always. I got to say, I'm a little disappointed. No leather jacket. I thought you were going to have a leather jacket on. Arjun Kapoor, live from Paris. I know, I had to go with this black jacket. Next time, next time. Arjun Kapoor, live from Paris. Great to see you as always. Thank you.
All right, coming up here on Worldwide Exchange, the one word that every investor has to hear today and the stock pick that every investor needs to know. Plus, tariff tumble. RH set to report after the bell. Feeling the pain of President Trump's trade war, the key numbers to watch and those results. They're coming up next.
Welcome back to Worldwide Exchange. RH reports earnings after the close today. You can see shares are down just about a half a percent right now. Shares of the high-end furniture retailer are down more than 50 percent this year and 27 percent since President Trump announced his Liberation Day tariffs on April the 2nd. That's the same day the company reported its last earnings, which disappointed the street. RH relies heavily on Asia, especially China and Vietnam, to make its merchandise. Let's bring in Brian Nagel, senior analyst at Oppenheimer. Brian, good morning. Good to see you.
Good morning, Frank. What are your expectations for RH? As we just mentioned, they source very heavily from Asia, specifically from China. And we saw those tariffs ramp up. Yeah, good point. Look, this is going to be an interesting report. OK, and the numbers are always important, like with every company. But I think what's going to be more important here is commentary from RH and the company's management team about how they are dealing with tariffs. You know, this conversation is
Across all the companies I follow, you know, this is a big conversation right now. It's particularly notable in this home furnishings category because, like you said in your opening, you know, so much product is sourced from overseas. But I think we're really going to be waiting for, you know, commentary from the management team as to the, you know, the ways in which they plan to deal with tariffs.
So you say RH is actually a read in some other big retailers as well, whether it's Williams, Sonoma and Wayfair. All of them seem very closely tied to the housing and people buying new houses and wanting to buy things for the new house. So some of these declines when it comes to RH and maybe some other retailers, obviously it's tariff related. But is it also the housing market and this kind of the slowdown, the housing market also weighing on RH and some of these other ones?
Yeah, look, I think that's actually the bigger factor, okay, the housing market. We talk about that a lot, you know. So I do cover names such as Williams-Sonoma, Wayfair. So if you look at the home furnishing space, RH, Williams-Sonoma, Wayfair, they're kind of along the continuum, if you will, of home furnishings. And importantly, I spend a lot of time covering Home Depot and Lowe's as well. The big
The big factor behind all of these companies is what I consider to be a stagnant U.S. housing market. Houses just aren't moving. And that movement in houses, people going from one home to another, buying their first home, is a big catalyst for spending within the home furnishing space. And right now, we just don't have that.
Yeah, I would think so, especially for an R.H. Like you when you buy a new house, you want to buy something special for it as opposed to fixing up your house where oftentimes you keep the same furniture. At least most people I know. I want to just go a bit deeper. A lot of people are talking about earnings season coming up for Q2 and that we're going to see the impact of tariffs.
In this case, are we going to see the impact of just a higher cost of goods sold because of shipping? I would imagine during the pause in our age, Williams-Sonoma wafer, they're going to try to rush in a lot of goods during this pause, not knowing when it would end. Are we going to see a margin impact to that effort to stock up on inventory? Are we going to also see a tariff impact? Is it going to be a double whammy or is one going to impact the results more than the other?
Now, look, that's a great question. And I think it's really important to try to articulate this. So we just concluded our Oppenheimer Consumer Growth and E-commerce Conference. And as I was talking to companies over the past few days, this was a big topic. And the key here is a lot of companies and our H is in this bucket. A lot of companies brought inventory in early. So right now they're basically working through that inventory that is not yet been tariffed.
Okay, so at the same time, so I'm talking to companies I follow, you know, there's very much a trend. Okay, they're watching tariffs. You know, maybe we're getting some stability in what these tariff rates are actually going to be. Obviously still very fluid with some stability. So they're starting to think about how to adjust prices. So really, you know, to answer your question, Frank, the impact of these tariffs is,
It will likely not happen until later this year. It's a second half 25 and obviously 26 dynamic because of this lead lag, lead lag relationship. So, again, talking specifically about our age, you know, you may see some tonight's report. You may see some tariff impact, but really more of that's going to be on the come.
Brian Nagel, we got to leave the conversation there. Great to see you. Thank you very much. Thank you. Nice seeing you. All right. Coming up here on Worldwide Exchange, we're following some breaking news on Boeing that has shares under some heavy selling pressure. You can see Boeing shares down more than 7 percent. We're back right after this break with that story and much more.
As we close in on the 6 a.m. hour, check on a few big stories that we're following this morning. That includes some breaking news. Air India says a passenger plane with 244 people on board has crashed in the northwestern part of that country about five minutes after takeoff. The flight was bound for London's Gatwick Airport. And according to FlightAware, the plane was a Boeing 787 Dreamliner. Shares of Boeing, they are sharply lower on that news. Much more on that story throughout the day.
Moving on, President Trump says he plans to send letters to U.S. trading partners in the next week or so, setting unilateral tariff rates. That's ahead of a July 9th deadline to reimpose higher tariffs on dozens of countries. Also looking at an earnings mover this morning. Oracle higher after the company reports better than expected earnings and raises its revenue guidance for the year. You can see shares of Oracle up just about 7.5%. We're also getting Chime pricing its IPO at $27 a share, slightly above the expected range.
The fintech will trade on the Nasdaq. Chime's CEO is going to be on squawk on the street at 9 a.m. Eastern time. Microsoft reportedly working on a version of Copilot for the Pentagon. Business Insider says the company is working to ensure it meets security and compliance standards. And protests against immigration raids and troop deployments in Los Angeles, they're now spreading to other U.S. cities. Similar protests are breaking out in New York, Seattle, Chicago, Austin, Las Vegas and D.C.
Turn our attention now back to the markets and checking U.S. stock futures. You can see in the red across the board this morning, the Dow being weighed down by that Boeing news. The Dow looks like it would open about 250 points lower. With that, let's bring in Matt Powers, managing partner at Powers Advisory Group. Matt, good morning. Good to see you. Morning, Frank. Good to see you. Matt, what's your word of the day?
So what are the days unimpressed? You know, yesterday we had objectively good news. CPI numbers are in line. This kind of tails off yesterday. It was announced Trump, the Trump China deal was reaching. It's being kind of treated like background noise, you know, not necessarily bearish, just really the markets were kind of unimpressed, almost like it was already priced in. They were waiting for it. Yeah, it did seem like it was already priced in. Not a lot of movement after that. What did you make of the downturn after we found out that the licenses would only be for six months? We also heard from the president.
Later in the day, who said that he might impose some unilateral deals. It kind of seemed like you threw that in the mix, along with Scott Besson saying they might extend some of the deadlines for reciprocal tariffs. So it just really seemed like a lot of different news. What did you make of all of it together?
I mean, you basically said it right there. It's a fluid situation. You know, the agreement was made with China. It's kind of a framework for a deal yet to be approved. But we've seen how quickly these things can change. And I think we've kind of been desensitized to these negotiations. You know, that 90 day pause does end in July.
possibly extended, but we're yet to see where we're going to go from there. I mean, we can't make any judgment right now. It really is policy changes daily. What do you make of the softer than expected CPI? Does it change your view on any sectors in particular? I was talking to another strategist. They said they like consumer discretionary if we get a softer than expected CPI and inflation remains on that same trajectory to go down.
Yeah, I mean, I think for markets really to push forward from here, it's that big three. It's just the continued, that theme hasn't really changed. It's the calmer inflation, rates need to come down and some level of policy clarity. You know, we think you need to look at longer term investment areas to work through this. But at the same time, probably the most important thing is look at entry points into beaten up companies, regardless of what sector they're in. So, you know, there's some contrarian plays out there you can look at, but
And, you know, we're kind of looking again at specific companies, still a stock pickers market. It's anytime we see a run up like this, like we just did in May, you know, we turn around right back into being a stock picker. All right. So you're looking at some beat now names. I think that really takes us to your pick. Your pick for us today is Pepsi. I'm looking at the charts and about 13 percent year to date. So what upside are you seeing in this company?
Yeah, so on surface, it might sound kind of boring to have Pepsi as your pick, but we're not looking for a quick pop of price. We don't want to be looking back here a year from now wishing we would have taken notice. I've said it many times, we're a dividend growth firm and we have to pay attention here. So
Pepsi, here we are, they're a dividend king. They've got 53 straight years of growth. They're trading at five-year lows. And they've got a record high yield of 4.3% right now. So it's really hard to ignore. And then you hit the valuation. So their PE is the lowest it's been since 2012, trading at 16 times.
It's well below Coke, set 24 times. We know Pepsi is more of a snack company, Coke more on the beverage side. But here, the stock is down 35% from its all-time highs, which is really abnormal for a defensive staple like this. And they've got some headwinds here they're facing, and they're manageable. We think investors possibly were lured away by treasury yields going higher, and Pepsi is just that traditional dividend growth company with a higher yield.
And you know, you got the GOP one situation that, you know, that weight loss drugs will crush some of the demand for, for snacks. You know, that could be very manageable health conscious eating with, with Maha and RFK's plans. You know, there's certainly a,
It's going to affect Pepsi. 60% of the revenue comes from snacks, but they're known for acquiring brands. They've got over 200 brands. They just recently acquired Poppy, C8 Foods, Sabra, et cetera. So, you know, it's kind of a strategic play into that category. Matt Powers, your pick for us today is Pepsi. Great to see you as always. Thank you very much.
Thanks, Frank. We'll see you. Here's what to watch today. We get the latest look at inflation with PPI before the bell. We also get initial jobless claims. And then after the close, it's earnings from Adobe and, as we mentioned earlier, from RH. One more look at futures. As we mentioned, lower across the board right now. Looks like the Dow would open up about 250 points lower. A major factor in that is Boeing. Boeing shares lower after a plane crash in India. That does it for us.
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