Morning Call 9/21/26

0:00At Edward Jones, we believe Rich is more than caring about the latest and greatest. It's also taking care of what gives your life meaning. That's why your dedicated financial advisor meets you where you are, with personalized financial strategies that help protect what matters, so you can preserve your progress while creating a path forward. The key to being Rich is knowing what counts. Let's find your Rich together. Edward Jones, member SIPC. When you're a caregiver to your loved one, you end up wearing lots of hats. Chef, chauffeur, accountant, nurse. And that's just the beginning. When it gets to be too much, look to AARP for support. We offer a variety of free resources and guidance that can make your daily to-do list much more. Well, doable. Get the help you need today. Visit AARP.org slash family care. That's AARP.org slash family care. Oil, back below $100. I'm Morgan Brennan, and this is your morning call.

1:00Good Monday morning. Let's get a check on US stock futures and what is sure to be a very busy week here, where the Dow coming off of its third straight negative week, its worst weekly performance since late March. It was a mixed picture for overall for the averages in terms of weekly performance last week. And you can see attempting gains here to start the new trading week. S&P poised to open up about 6-10th to 1% the Dow of about half a percent, I guess about 6-10 to 1% and the NASDAQ poised to open higher to the tune of 1%. Let's get a check on treasuries with the 10-year holding just below 5% right now. You can see US 10-year treasuries yielding 4.95%. Fed sensitive to your treasury, 4.72%. In the 30-year treasury, 5.29%. The real story last week, especially amid that Fed rate policy decision has been the yield

2:01curve flattening. It's actually its tightest level since the start of this year. We're going to take a look at the Dollar Index 2 right now because the dollar is firmer against other major currencies for the most parts. We've been particularly focused on dollar yen trading, particularly after that BOJ decision that we got last Friday as well. You can see Dollar Index level right now is 131. And if we turn to the energy markets, oil prices are under pressure with WTI back under $100 a barrel right now. And this after President Trump and Iran spent the weekend exchanging new threats with the President here saying that in an interview that Tehran should make a deal or face the potential of being wiped out. Meanwhile, Yemen's hooties are claiming responsibility for an attack on Saudi Arabia's capital this weekend. That attack, appearing to target a jet fuel storage facility at Riyadh's airport marking the first direct attack on the capital in months. Let's get to the very latest with our Dan Murphy in Abu Dhabi. Dan. Hey, they're more going good morning.

3:01Well, a new week here and a new escalation risk for the markets. Houthi missiles and drones targeting Riyadh over the weekend, really putting the focus squarely back on the regional conflict and how President Trump might respond. The Houthi saying they hit sensitive sites in the Saudi capital. Saudi authorities say they intercepted a ballistic missile after smoke was seen rising near King Khaled International Airport. President Trump telling Fox News he is in deciding mode on Iran and that very big things could happen soon. And the New York Times also reports today that he's been wavering over Saudi requests for U.S. strikes against the Houthis at one point telling the Pentagon to prepare options before pulling back again on Sunday. Now all of this also coming ahead of what is a critical week of diplomacy. President Trump meeting with Gulf and Arab leaders at the UN General Assembly this week where the next phase of the conflict is really going to be front and center. President Trump said he would probably be open to beating Iran's president, Masjid Pazeskin,

4:04on the sidelines of the summit this week. And Iranian state media today has confirmed he is likely to attend. So that really leaves the next phase of the war. And the oil market risk hanging in the balance ahead of what is really going to be a really important week on the war front Morgan. Yeah, absolutely. And we're going to be watching all of that here from the sidelines in New York City with the General Assembly meeting and everybody descending on to Manhattan. Dan, what I can't understand is if you've seen this escalation is broadening of this war why we see crude prices at least here in the U.S. back under a hundred bucks of arrow. Exactly. And we're going down today. Brent also offers most recent highs and there's probably two reasons for this Morgan. I would contend the New York Times report suggesting that the president wouldn't be going ahead with additional strikes on the Houthis on behalf of Saudi Arabia, maybe taking some of the risk premium out of the pricing headline at the moment. And then the other factor is this JP Morgan report that also suggested flows through

5:06hall moves may be a little higher than what the market believes. So at the moment, those two factors likely contributing to the downside pressure here, but again, a lot still in the balance as we come into the UNGA meeting through the course of this week and exactly what comes from that could determine exactly which direction the war goes next. All right, Dan Murphy. Thank you. It was WTI trading below $99.00. Barrow and Brent trading around $102.00. A barrel. Let's take a look at this chart as we stick with energy. It's the break wave tanker shipping ETF, which tracks the cost of transporting crude from the Middle East and West Africa. It's up more than get this 4,400 percent year date. It's the best performer year to date in terms of the entire ETF universe. It's a small ETF, we should note, but we wanted to show it to you because it's emblematic of the skyrocketing shipping costs for tankers. This disruptions from the Iran war continue. And just over the weekend, as you have seen increased reports of shortages of super tankers which are also adding to this dynamic.

6:08It's something we've spoken to Nordic Americans CEO about in recent months too. You can see break wave tanker shipping ETF, the BWET. It's up another 4 percent right now, pre-market. Well, let's turn to this weekend's meeting between Trump administration and China in New York. This was ahead of the big sit down that's coming between President Trump and she later this week in Washington, both Treasury Secretary Besan and his Chinese counterpart. Touting the talks is successful, hitting on key areas, including trade, investment, AI. On AI, Besan saying the two sides agreed to set up a dialogue on the technology and that the U.S. has proposed a new notification mechanism for AI incidents that could affect national security. The notification for whether they're incidents, whether there has been something that rises up to a national security level from AI because we think that just like with any cross-border

7:08activity that moving from opaque to more transparency between the number one and the number two AI powers in the world, very important. We're going to hear more on the U.S. China talks when Treasury Secretary Besan joins a squat box at 8 a.m. Eastern. We're also going to hear more about it here with the chairman of the XM bank as well, just a little bit later in this show. But let's see how Europe and Asia are shaping up. Steve Sajouk is in London with the trade there, Steve. Another busy, we talked about a busy weekend here in the U.S. It was a busy weekend in Europe as well. Yeah, absolutely. The news flow kept coming, didn't it, as well. We'll look text stocks, Morgan are leading us higher today. They've boosted shares in Asia this morning with oil prices easing as Dan was pointing out amid those reports that more supply was finding its way out of the Gulf. Japanese markets, though, were closed for a national holiday today. The European markets, they're also pushing higher today as the tech momentum picks up. But here in Europe, we're closely watching Germany after the Chancellor Friedrich Mehrt vowed

8:13to stay in power despite his conservative CDU party suffering heavy losses in state elections over the weekend. A really important corporate story here that all of you will be interested in. And that's no bonus. Unvailing its strategic ambitions for 2030 ahead of its capital markets day now. It's a Danish farmer giant, but of course, it is huge in GLP1s. It was the originator, the OG of GLP1s, and it said it's targeting more than $23 billion in pipeline sales by 2035 to increase its obesity customers by 10X. But there was a lack of any significant short term news and that weighed on the stock this morning in the shares or at their lowest levels in Saipur. Look at this share, 268 Danish Kroner, that is down 30% on the year at their peak in 2024. They were over 900 Danish Kroner back to you. All right, Steve Sajouk, thank you. For more on the big week ahead and for the markets, let's bring in Storm Urou, Lyon Trust,

9:18at Management Global Innovation Fund co-manager. Storm, it's great to have you back on the show. What's an investor to do with all of these cross currents to work through right now, whether it's on the macro side, whether it's on the micro side, whether it's geopolitics, whether it's AI, how everything's intersecting right now? Yeah, Morgan, there's definitely a lot going on in markets and it's definitely been the case this whole year. Look, we're using macro-cost currents with yields moving up, oil moving up, reducing significant individual stock price volatility to it, really add to our key positions across our funds areas where we see strong structural growth, strong fundamentals and also so importantly with higher rates, strong profitability. So that we're using macro volatility to add to positions that we have very strong conviction on. There's no doubt that macro events right now are definitely driving markets. So what are the areas where you would have strong positions on? And I ask that because when you look under the hood on the S&P 500, it's a lot of cracks here, whether it's financials, whether it's in the transportation and freight area.

10:20A lot of focus right now on dial theory for the longs out there, the long time market, the longs out there and the divergence you're seeing between industrials and transports and those two charts. So where do you see compelling opportunity? Yeah, you did right. It goes back to the playbook, you just don't want to fight the Fed. But what we're looking for is accelerating demand for the key investments we're making today. What we heard over the last couple of weeks is that we're moving to a genital AI, moving from experimentation with the need to price to deployment. What we do know is that a genital AI requires 10,000 times the amount of compute that single shot answer. What that means is that demand for compute is accelerating. Now that's really important because what we saw over the summer is a reset in a number of stock prices across this part of ecosystem. I think Sanders, I think Blue Managing, I think Invidia, really looking really attractive at this particular point. So this is the area where we're adding to. And then when we saw the announcements over the last week about alignment

11:21and the extra compute that's going to require, this is just a wall of demand for compute coming through. And we just see this as a very attractive place we're putting capital to work today. We talked so much about it from the US lens. But in a week where Trump and Sheer are going to meet in Washington, are there opportunities to invest elsewhere, including in China? Yes, what we're seeing is we're seeing the building out of two different technology stacks, one in the West and one in the East. The technology stack in the East is a bit further behind. But we expect that to accelerate over the next two years, as they are able to expand capacity of Silicon, particularly in China. So we're seeing opportunities sets right across the US, Europe, and in particular starting to emerge in China as we sit today. And then the trade negotiations that happened later on this week are giving very important part about underwriting the risk there. How to interest rates and treasury yields factor into this entire conversation, especially when you could argue that equities are pretty expensive here right now.

12:27Yeah, you did right. And when we put capital work today, we need to be able to underwrite that with underlying profitability and accelerating growth. So we're not looking at the moment as banks, consumer staples, areas of the markets, which we see as being quite expensive and not having the underlying fundamentals that we require. So it really is a market where you just can't pay any price for any particular investment. The underlying valuation really matters, and that's the reason why. We're looking for companies that have accelerating demand for the end products right now, operating leverage. And that means that as that demand comes through, have strongly unexpected earnings per share growth, and also that these stock prices have come down from the 52 week lows from earlier in the year. So, Muru, great to have you on. Appreciate it. Thanks for starting the hour with me. Thanks for having me. We got a lot more to come here on morning call, including more on that Trump She Summit. And hopes of fresh deals around agriculture. We're going to talk to the CEO of Agco about what that could mean for his clients on farms across America.

13:31Plus, the chairman of the Export Import Bank of the U.S. is standing by. He's going to lay out where Washington and Beijing need to find common ground when it comes to trade. And later, anthropic tapping the brakes on its highly anticipated IPO when the company will now be making its public markets debut with a very busy hour still ahead with morning call returns. Shavey is called the heartbeat of America for a reason, with SUVs made to move with your rhythm. The versatile equinox tackles your entire day. The spacious traverse fits your crew and your whole weekend, and tracks spring style with value you can count on. All infused with tech that has your back. So your drive always hits the right cord. Adventure awaits in a new Chevy. Right now, get $500 bonus cash on select Chevy Tracks Models. Plus, get 2.9% financing on all 2026 Tracks Models.

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15:34But what if the insight surfaced itself? Or you could ship the deck without the distractions? Gemini Enterprise helps you get that done. It's AI that knows your business with agents that take stuff off your plate. Make work less work with Gemini Enterprise from Google Cloud. Welcome back to Morning Call. Let's get a check on wheat and corn prices. Jumping on the back of this weekend's talks between the US and China ahead of the meeting between President Trump and Xi later this week. Treasury Secretary Besant and his Chinese counterpart giving a positive take on the sit-down. As investors, look for signs that Beijing will buy more American agricultural goods. For more, let's bring in Eric Han-Sodia, Chairman and CEO of Agriculture, Machinery Maker, Agco. Eric, it's great to have you on the show. Welcome to you. And we're already getting reports that the Chinese are starting to buy more soy ahead of the sit-down. When you think about some of these dynamics, these trade dynamics, what does it mean for the agricultural market and for demand for your products?

16:35Yeah, the biggest, good to see you again, Morgan. First of all, thanks for having me on the show. The biggest thing that we look for is certainty and stability in farmers markets. There's been a lot of uncertainty both in their market access and their cost-base over the last couple of years. And so any kind of long-term agreement would help farmers all around the world be able to plan better. The average age of their fleet is about as high as it's been. There's thirsty for our technology. And so more stability, more certainty would be the biggest outcome we're looking for. Okay, I want to get into that thirsty for your technology piece of it a little bit more in just a moment. But it does seem like it's a perfect storm for American farmers right now. And really for farmers globally, I mean, you've got record-diesel prices, farmers on the front lines in terms of feeling the knock on impacts of that. You have fertilizer shortages. You've got trade and tariff dynamics that continue to evolve here. You've got very intense weather with super El Nino. And now you have higher interest rates too. So what does that mean for this recovery that we've been hearing about?

17:35Potential recovery we've been hearing about in the ag market. Yeah, you nailed all the top issues for farmers. And then maybe add on top of that the uncertainty of how all these things will play out. So our focus is to do what we can do. Manage for the farmers some things like labor through a use of autonomy, through input cost savings, through our technology where we can do intelligent spring and save the chemical, save about 60% of the chemical for the farmer. And then our new data platform. It's got an AI agent embedded right into it so that it makes it easier for the farmer to understand over the last several years of data collection, where are there areas that they can farm more intelligently and make changes to their operations? So we're trying to help them with things like that to make more efficiency out of the existing operations since they're under so much pressure. When we talk about precision agriculture and all the investments into that and these new technologies like AI and what that enables all the data collection on the farm, you've got a partnership with Trimble 2.

18:35Does the case become stronger in an environment like this to invest in new products to be able to realize better cost savings moving forward? Yes, you know there's the macro trend in the micro trend. The macro trend there's 8 billion people going to 10 billion people. There's more biofuels and there's more meat in people's diet as the economies mature. Those are all demand generators for green. And yet there's no more farmers that are not allowed to use more chemical, more land, more water, all the inputs are constrained. And so the only way to make that equation work out is to do farming more precisely, precision agriculture. So there's this long term need to solve that equation through technology. And then in the short term there's even more pressure right now because of the economic pressure the farmers are under. So that's why we have a dual role technology business. One is putting technology in our new machines, which all of our competitors do too, that's kind of understood. But then we have this whole separate business that we call precision technologies multiplied.

19:38And it's a tech business that creates modules to go on to existing machines and give them new capabilities, automate a feature. And we do that not only for our brand of equipment, but for all the farmers in the market, no matter what they've bought. So we'll put new technology upgrades onto competitors machines to give that new capability. And that comes at a much lower cost point because the farmer can upgrade their product with that new feature instead of having to buy an entirely new machine. Many times there's a lot of mechanical life left, but this gives them access to the latest and greatest cutting edge technology. I want to go back to trade dynamics here and what it means in terms of manufacturing your products. Whether it's from an interest rate standpoint and what it takes to finance them and sell them to farmers. Or when we're talking about things like potential trade agreements between the US and China or others with UNGA this week, how you're thinking about that manufacturing footprint and navigating some of those cost inputs in general.

20:40Well, a couple of things. One is we're always trying to drive down costs for our farmers around the world. We serve farmers everywhere about 20% of our businesses in North America. And then we serve all the rest of the farmers all around the world. And so we're always evolving our footprint of where our supply base is and where we manufacture to try and access the lowest cost for our farmers. We've made several adjustments to optimize for the tariff environment. But it's moving fairly quickly. And so you have to be a bit measured and certain about what the future will bring. These are high capital investments. And we're still relatively low volume relative to industries like automotive or others. And so we've made many changes, but you don't wholesale change your footprint. In general, our strategy is to manufacture as much as we can on the continent where the farmers are. So that's why we've got footprint in Europe and South America and North America as much as possible serve the farmers locally. Okay. Eric, in sodium of agco. It's great to have you on. Appreciate it.

21:43Great. Great to see you, Morgan. Thank you. Well, straight ahead. Details on potential progress. We're paramounts pushed to clear regulatory hurdles for Warner Brothers. First, though, let's get a check on SpaceX shares because it will make up 2.8% of the Nasdaq 100 starting today as the indexes quarterly rebalance takes effect. That weighting is a sharp increase for the space and AI company up from just 1.3% when it was added to the index in July. At that time, most of the shares were still locked up limiting SpaceX's weighting even after Nasdaq changed its rules to let newly public, newly public large cap companies enter the index sooner. And despite a market cap that currently sits at $2 trillion. So since then, SpaceX's float has served from 639 million shares in the IPO to 1.8 billion. And counting now. Why does all of this matter? A bear waiting means more passive funds need to buy more shares to adjust their holdings, including the QQQ. This is one of the largest ETFs and more than 200 other investment products that track the Nasdaq 100.

22:44Of course, it's demand for the stock. You can see shares are up 1% pre-market. We're right back. Chevy is called the heartbeat of America for a reason with SUVs made to move with your rhythm. The versatile equinox tackles your entire day. The spacious traverse fits your crew and your whole weekend. And tracks bring style with value you can count on. All infused with tech that has your back. So your drive always hits the right cord. Let's do the heartbeat!

23:46And some of the offers take you retail delivery by 9.3026. One did work become so much work. The meeting about the meeting, the hundreds of files to find one insight. Setting aside the things you want to do for the things that pop up. Your workday's gone. But what if the insight surfaced itself or you could ship the deck without the distractions? The Gemini Enterprise helps you get that done. It's AI that knows your business with agents that take stuff off your plate. Make work less work with Gemini Enterprise from Google Cloud.

24:48The S&P 500 will look a little different starting today. And going into the index Bloom Energy, Genetics, Company, Illumina and Waterfiltration Company. Ever-pierr, you could see Bloom is popping on anticipation of that with trading this morning up 3.5% similar situation for ever-pierr, Illumina's under a bit of pressure. But on the way out from the S&P 500, Moulsen Courage, the trade desk and Builders First Source all will move to the S&P Small Cap 600. Well, let's get a check on some of the morning's latest headlines. President Trump says he'll appoint a new AI advisor and create a new AI force around the technology. The President unveiling the plan on Truth Social Saturday, they didn't provide further details about either initiative, although there have been some comparisons, perhaps, to the Space Force. The President's comments come as Nvidia founder, Jensen Wong, suggests that the recent focus on AI regulation for major research labs is primarily an effort to sidestep existing regulations and laws. While sticking with AI, the Wall Street Journal is reporting that a theropic is pushing back its IPO to November.

25:49Investors had expected the company to make its market debut next month. The apparent move comes as the AI industry deals with calls to slow its pace of development, including by leadership at Anthropic. Meanwhile, the Financial Times is reporting that OpenAI expects to burn through nearly $280 billion in cash between this year and 2030, this as it ramps up spending on computing power and infrastructure. We're also watching shares of Paramount Skydance and Warner Brothers jumping on reports of possible concessions by Paramount. In settlement talks with California's Attorney General over that merger, that includes a financial penalty if the company fails to make good on a promise to distribute 30 films per year in theaters, and $1.5 billion investment in production in the state. You could see shares of Paramount are up about 6% right now, and Warner Brothers is up almost 8%. You could see a settlement as soon as today, according to some reports over the weekend. And a busy weekend in the sports world too, Apollo Global reportedly set to get a 16% stake in the baseball franchise known as the Yankees,

26:55after announcing a $2.6 billion financing deal with the firm, making the Yankees the most valuable team in baseball also some reports that you could actually see the caps for private equity lifted in this deal too. So that would be meaningful. Meantime, French soccer star, Mbappe, has ended a two decade partnership with Nike to join Swiss sportswear brand on holding shares, getting a boost on the news. Financial terms of the deal have not been disclosed, but you could see on is up about 1.5%. Well, still on deck, the chairman of the Export Import Bank of the US is standing by. We're talking that big meeting between President Trump and Xi, but Washington needs to accomplish with Beijing when it comes to matters like trade and AI, and how the XM bank is working to navigate all of that and finance all of that. Also, we're going to talk a little bit about Greenland's morning call continues next. I'm Morgan Brennan, welcome back to morning call. Let's get a check on US stock futures this Monday morning. The Dow coming off its third straight negative week. It's worse weekly performance since late March, and what was a mixed picture from a weekly standpoint for the major averages.

27:59You can see this morning right now we have a rally underway with all the major averages pointed to open higher. S&P poised for gains of 48 points at the open in the Dow up 319 points, the Nasak 315 points. Let's get a check on treasuries to with a 10 year holding just below 5% right now. You can see bonds overall firmer across the curve. US 10 year treasury yielding 4.95%. Fed sensitive to your treasury 4.72%. Really what has been the story here has been the yield curve at flattening. So we continue to keep an eye on that. Checking energy to oil prices or under pressure with WTI back below $100 a barrel. And then some we're down about 1.8% right now trading right around $98 a barrel. Brent crude is also lower about 2% trading just below $102 a barrel. This after President Trump and Iran spent the weekend exchanging new threats. So we continue to keep an eye there too as we have a very big week from a geopolitical standpoint, macro standpoint. We're turning back to this weekend's talks between the Trump administration and China though. Ahead of President Trump and she's meeting later this week the two sides hitting on key areas during their New York City meeting, including trade.

29:06Including trade treasury secretary Scott Besson and US trade rep James and Greer revealing that the board of trade announced by President Trump during his visit to Beijing in May has been made operational exploring the potential for lower tariffs on quote non sensitive products. We expect that the types of goods you'll see in those lists are consumer goods, low tech items on coming in from the Chinese side on the US side. Energy products, agricultural goods, potentially medical devices and other things like that. There is a there is a world where you have a relatively small subset of American and Chinese goods that can be traded in a balanced way that are non sensitive. Well for more let's bring in Johnny Ivanovich the chairman and president of the export import bank of the United States of America. Chairman Ivanovich it's great to have you back on the show. Welcome to you. Wow we have a big week straight ahead. I think I am going to start with you though on what folks what investors should expect from these US China trade talks and where XM bank fits into all of that.

30:11Sure Morgan good morning. It's great to be here with you. You know what Secretary Besson and Besson Greer sought to do yesterday was really pave the path to ensure that the president has a productive series of talks later on this week. And you know as Secretary Besson mentioned the overarching objective is to help maintain the stability that we've enjoyed over the past year. In addition to setting up an AI dialogue framework which will be really important so those talks will well and we anticipate that the president will be successful later on this week. Yeah and of course we're anticipating other deal making to happen to on the sidelines of the General Assembly meetings as well including with allies around energy infrastructure and the like. So how to understand that as you are thinking about a reshaping of the global order and this idea of supply chain resilience. You know this is going to be an incredibly busy week for us. We've just come off a busy week as well where we were in Minnesota on Thursday opening up the first new iron or mine in America in nearly 50 years on the iron range.

31:13And what we've demonstrated is that we can do what nobody thought was possible again thanks to President Trump's leadership vision and more importantly his unwavering commitment to reindustrializing America. And it ties back into what we're talking about a moment ago. How do we make America more competitive and more resilient and domestic supply chain security is a huge issue. And when we talk to the people in Minnesota by the way the iron range Morgan has been mining iron ore for nearly 150 years actually the steel that was used to win World War II to build America came from this exact iron ore range. Now they've been waiting for federal partners and people to help them unlock all that potential and that's what we're very proud to do. Yeah I mean you've been on the forefront of this reestablishment of supply chains domestically critical minerals rare earths other types of metals including iron ore here project vault. How is all of that process going? Yeah look we're expecting to hopefully make some news this week with project vault and advancing that. But as you know Morgan all of this is foundational to the reindustrialization of America and to advance manufacturing again.

32:19And this is all having to do how do we deliver the American dream 2.0 for another 250 plus years. And in order for us to manufacture again in America we have to be able to iterate to innovate. So we have to be able to make things here and we believe that supply chain resiliency paired with you know an infusion of of AI and advanced tools and advanced manufacturing is going to help make America competitive again. As we go into this Trump she summit what does that mean in terms of US reliance on China for some of these metals and minerals and materials. You the president's been very clear that we need to find ways for us to be competitive and resilient. And so whether it's opportunities like project vault where we brought together the public and private sectors to help create shock absorbers and the event of shortages and some of these critical raw materials or it's unleashing America's energy dominance where we can help bring American energy molecules and technologies to every corner of the globe all that value of crews here.

33:20It's no surprise Morgan that the states in America that are the largest energy exporters also enjoy the lowest cost of power and utilities and all these things come back to how do we stay competitive and how do we stay resilient. How does Greenland fit into all of this we got this news of a deal over the weekend it's expected to be inked and made final this week at the UN. We don't have the details at least not publicly yet. It certainly makes sense from national security standpoint and you can't have you know you can't have a new golden dome missile defense without that arguably. But what does it mean from the supply chain side to impossible investment into things like critical minerals in Greenland. You know we at the export import bank of the United States you know we have something called the supply chain resilience initiative which allows us to deploy capital in projects all around the world so long as the critical raw materials those those minerals Morgan come back to the United States and help a crew supply chain security here and so these things are super foundational you know not simply for advanced manufacturing but to ensure that the American war fighter has what he or she needs when you when they need it most.

34:28And so all of this is plays into how can we ensure that American manufacturing American companies American technology is armed with the right approach. So in light of all this you just touched on it before but AI what do you see is the greatest risk to American AI deployment across the world right now. You know we're very grateful for the president's leadership on this point he put together something called the global AI export plan which he called for an executive order we at XM with a first federal agency to actually change our policies to modernize them look we've learned the lessons of the past whether it's telecom or other large recent innovations where the rest of the world wants to partner with us Morgan they're constantly coming to us saying how do we how do you help us implement and we can help us. So we can help us implement and American let AI solution and so one thing that will determine the success of it is can American companies and American technology play a leading role and bringing AI to every corner of the globe.

35:29So in light of that and given the fact that you are the financing arm to implement this AI tech stack to allies and globally is security now part of the conversation and what that looks like internal regulation things like that. Look trusted technology trusted vendors this is something that we're laser focused on and thanks a great leadership of Michael Kratzios at the White House and our fantastic interagency partners across the commerce department treasury department state department you'll see a lot of movement and some announcements on that this week. Okay. John Yvonnevich the chairman and president of the export import bank of the U.S. it's great to have you on the show appreciate it. Great to be a Morgan thank you. Alright we got a lot more to come here on morning call including investors not loving it when it comes to McDonald's stock performance. Lacking the market in a big way. Branda Gomez lays out how the company plans to address those worries. Morning call we'll be right back. Welcome back to morning call McDonald's heads into this week's investor day with a problem shareholders might not be able to look past.

36:30The stock has been lagging the market and in a big way shares are down 27% since their March high and are near their lowest level since 2024. Branda Gomez is here on set joins us now with more. I know it's the market. Well we'll find out on Wednesday but Wall Street is waiting for evidence McDonald's can fix its biggest market the United States. McDonald's U.S. same store sales grew just eight tenths of a percent last quarter trailing competition like Burger King and Shake Shack. And the company has acknowledged its value messaging and execution have been uneven. Now the brand that has long defined affordable fast food now has to restore the perception without asking franchisees to absorb unsuspectable food. Now that is the balance CEO Chris Kaczynski and new U.S. president Sky Anderson need to explain on Wednesday the layout McDonald's next. The company's new strategy built around building better food marketing restaurant technology remodels and improved service. And unless I've spoken to are looking for a near term bridge of promotions and personalized digital offers to secure the value narrative.

37:31Now a longer term plan for innovation and food is important with particular focus in chicken and beverage offerings easier operations remodels the list goes on. There's also a growth test here McDonald's has pushed its 50,000 restaurant goal to 2028 and investors want to know what next will cost and whether those investments can still deliver the free cash flow and returns the stock is built on. And specifically when the turnaround in the U.S. starts showing up in results Morgan. So again a lot on the plate for Wednesday. Yeah I mean in light of all this we're talking about a little bit earlier in the show there's cracks under the hood when you look at the stock market and a lot of it is tied to economically sensitive parts of the market whether it's now transports whether it's the turn the roll over we've seen in financials but also the weakness we've seen in consumer stocks. How much of this is McDonald's specific story and how much of this is just pain across the restaurant space for a number of reasons in general this year. So that's a great question and when you talk about to what's happening in retail spending in addition to what's happening in restaurants and the food there is sort of a split right you're seeing that case shape economy take hold now the question is how much of is McDonald's specific there's a lot of it that has to do with execution even the CEO has said the most recent $3 value meal promotion didn't resonate with consumers because a third of the franchise owners weren't executing at the same level across the board.

38:48So again we're going to hear some of those turnover some of those quicker triggers that could be pulled to turn around the stock but there are some of these longer term factors that play the your mentioning all right Brandon go maska to have you are on set appreciate it. Well straight ahead the morning call crew to you up the trading day ahead including the two things one member says are the key for interest rates time now for your call shape where we look at the topics driving the trading day ahead crew members today Peter share of Academy security Stephen Whiting of CIO group and Henry at a phase of data partners great to have you all here it's not just the day it's the week ahead it's a big one Peter I'm going to kick it off with you because it seems like we really have two big categories and they actually intersect and that's geopolitics and AI what are you watching really watching what's going to go on with Trump and G this week right do we come to send any sort of agreement on where we stand on AI will we slow China down I am continued to be very worried about China flooding our market with cheap Chinese compute that's an issue I think we probably wind up getting good vibes from this I'm not sure whether it's real though or not how about you Stephen what do you think. Well this is the week of geopolitics of course but we have to look two weeks out at what's going to happen with earning season and it's pretty clear that they estimates have been cut nicely ahead

39:58of these actual earnings results it's most obvious in financials and energy and I think we're going to see big beats yet again. And we had a what are you watching right now especially as we do also as we look across the world right now we do count down to a midterm election and we know that this administration is looking to get. As many deals done as quickly as possible ahead of that. Yeah I'm not expecting a ton from the US China meeting the focus should be on the board of trade which US your greer and treasury secretary best and have really been touting as their you shining star from this meeting but I want to be clear that when we see headlines the tariffs are going to be reduced it's going to be across roughly 30 billion dollars worth of trade which equates to 7% of trade between the United States and China so these are going to sound like big wins but I think it's the calm before the storm as we get into the post election period as you point out Morgan where we're really going to be in an era of a lame duck presidency which is when you see the president do even more on foreign policy more on tariffs more on war in the US.

41:00In fact and that's going to be the hallmark of everything that comes after November 4th. I do want to get your thoughts Henrietta because I know you've written about this quite a bit including this morning on this idea of a diesel export ban. I was at the G 20 energy conference last week you know spoke to all the folks there on the ground from the administration including secretary burglum into your secretary burglum on camera who said it's very unlikely that we see that. Why do you continue to believe it could actually be enacted. Desperate times call for desperate measures were at $4.48 an average gasoline right now going into an election and I'll put it into numbers for you when you have one party control in Washington historically the majority of the U.S. is 21 seats in the house when gas prices are rising they lose 32 we are rapidly approaching $5.00 average gasoline and Congress has absconded they have left DC that leaves us with only one option just the White House and so then you're necessarily dealing with more extreme things the president doesn't have the authority to bring down the gas tax for example but what he can do is impose an export ban and you're

42:05seeing support pop up in Iowa Tennessee leader Thune in the Dakota so Republican party is asking begging for some sort of executive action to bring prices down and you can either end the war and reopen the election which doesn't seem likely or you can start to do outside the box thinking like impose an export ban. Okay I know there's a lot of talk about invoking the defense production act here too to do more with refining capacity in the near term here in the U.S. so that's another thing to watch. In light of all of this how important our energy prices to the broader markets right now Peter. No I think we have to keep watching diesel that does have the potential to flow through I do like the fact though the president's really kind of push past this idea that this has to be done by the midterms. I think that takes away some pressure around might have felt so I think that allows us to put more pressure on. Threaten them again more militarily have things to come to play so I think we're pushing them hard and I think it's actually good if he says hey I don't care about this I'm going to let this go past the midterms because that takes away a pressure point I think a ran thought they had I'm optimistic we're going to keep pushing this we'll get through this and I think it's a nation you know we hate to say it but we almost have to suck this up deal with these higher prices if we are ultimately going to get a real win there and I think

43:13that possibility is growing the economic sanctions are working the block eight is working we're getting some oil through we are doing a lot I think doing an export ban be one of the worst things we do it would kind of take away trust from dealing with US companies I would avoid that deal with this and continue to push Iran and get these economic sanctions and hopefully G says something that says okay we're not fully behind supporting Iran's economy that could be enough to tip the scales do you think we're going to see any sort of meaningful dialogue or deal making with this between the US and the Saudis or some of the other Gulf leaders that are going to be in New York this week or even a potential meeting between the US and Iran. I think there is that possibility I think this is kind of grinding on everyone I don't think we will necessarily get this big huge win but I think we're close enough to a point where a ran probably has to capitulate on enough we can go back to some sort of MOU maybe a better MOU than before and everyone's kind of writing off Trump in the election it's still two months away right there is plenty of time if we can fix oil address this and I think a lot of pressure is not going on the hoodies did raise the stakes to us I'm optimistic we can push this and get better outcomes.

44:15Yeah we have even mentioned Greenland will come back to the second but see but I want to I want to get your thoughts on this whole conversation especially as we look not just to the energy markets but also to the bond markets and all the activity we've seen there as a great. Well look I think the one of the most troubling things that we heard out of chair warship statements was that geopolitics was a kind of guide to raising interest rates just take a look today what could happen in geopolitics as you just heard or running officials are in New York it's possible these things can change interest rates that risen 100 basis points out for every tenor out to 30 years so if you really think about it this will outlast the energy shock and so we would have been in a place for many years where it was possible to look through energy shocks now the correlation that we've seen between bond yields and oil is troubling but you can see it can cut both ways we can also have some relief. So Steven how do you how do you layer what we're seeing with the AI trade and what I would argue was a net negative weekend in terms of news reports whether it's open AI or anthropic or even a data center in New Mexico tied to Oracle.

45:18Well this is the big issue we are living through a boom we've seen a massive rise 65% growth in IT investment heading into its third year and unfortunately it just will not stay there these companies don't exist just to spend this money so eventually there's going to be a drop and we're going to be in a period in which interest rates will be too high for that economy the one that has the payback for the investment boom but that's not now but it's really what investors will ultimately have to watch it could be as soon as 2027 that we're going to start to see that. Henry I want to get your thoughts what we're seeing with AI because it's been so busy and then in the background you have the whole debate around so called pacing the frontier what a deal if we get some sort of deal or guidelines between the US and China could look like what that could mean and just had to think about this from a geopolitical standpoint in terms of competition overall. You know my background is DC and what I would report to clients and investors is that DC is nowhere on this they don't know how to tax AI they don't

46:21know how to regulate AI they don't know what to do on data centers and they're taking the lead from the states and the states have a hodgepodge of answers right now and they're really taking their keys from the American public which is hey not yet too much they're taking our electricity they're taking our water the noise pollution is too high just pump the brakes and that's what the federal government is seeing so there's going to be efforts in the Senate to at least hold a hearing on that this week but I think this is a 2028 presidential agenda story and therefore you won't see legislation until 2029. We got 15 seconds. Meta connect is that going to matter in light of all this this week? You know I think it's a secondary thing I really do think it comes down to where we're headed on compute it's such a big part of the GDP that growth I do agree with Besson that there are national security reasons we need to build the data centers out we're starting to see these companies take steps towards public relations to get that going I think that's urgent for the country it's something important to do I think we get that and I love energy stocks they are going to do well because we need so much energy. All right thank you to our call crew great to have all of you here

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