Tuesday with the nasdaq 100 at alltime highs with a big focus on retail for the next 60 minutes or so. We will hear from lowes. We will hear from macys, too. From target, plans to reduce prices on 5000 items. We know consumers are feeling pressure. Lisa we havent seen it show up , the pressure, and the broadbased confident for disinflation, which is the reason twiddling our thumbs waiting for retail to come down. Annmarie barclays saying challenges for target, cutting into memorial day, expect or of your bargains to go into july 4 like everyday items. The, soda, fresh fruit, yogurt, peanut butter. Jonathan, it caught the attention of the white house. Biden immediately tweeted about it. Jonathan surprise, surprise. We need to look to the bulls on wall street. We will catch up with mike a bit later. Still bearish, jp morgan maintaining a bearish stance with high valuations, restrictive rates, and in nation. Lisa he also acknowledged a negative stance in equities, its got to be pretty awkward. At this point there is a discomfort that even some of the bulls have with valuations. That said, its getting harder and harder to see the oxygen come out of the room enough to get what, 4100 . Jonathan you know who might agree with him . Jp morgan, the ceo jamie dimon, we are not going to buy back a lot of stock at these prices. That was the standout for me. This view on the price of his own stock. Lisa you are not alone, pretty much more people in the market care about that then succession. The dip in the stock rice was given where buyback was an valuations. Jonathan we will throw that one to max from hsbc. Scores this morning, just about unchanged, going nowhere. The bond market, 10 year for tooth seven. Coming up, we will catch up with max kantner of hsbc. Stephen cook, from cfr, on the death of the iranian is it, and the former fed economist on the overload of speak. The nasdaq 100 hitting another record high as esters double down on nvidia tomorrow. Max writes, we think the rally has further legs with positioning thats not sending a warning signal and the risk of fed hikes has been taken off the table. Im pleased to say that max points us with more. Lets get bearish for you. Tell me why marco is wrong. What you say back to that . Max valuations are not a great tool for tactical views, right . Just because you by the s p or equity at a 20 times earnings doesnt in the go one turn higher. Valuations in the long term tend to work over five to 10 years. Over a shorter time, six months to 12 months, they do a poor job in predicting shortterm performance. I would use that as a bearish argument. In terms of the restrictive stance, i really disagree with that. Looking at real rates, they look restrict, but when we look at the u. S. Economy in total over the last two or three years, we have collectively learned, and that was the mistake that we did as an industry, how Interest Rate insensitive the u. S. Economy particularly has become. How now most of the debt on corporate Balance Sheets has been turned out over the last couple of years and is only expiring after 2000 30 and how most of the mortgages are on a straight. Look at that and compare it to 2007, 2 thousand 8, 40 percent were not on a floating rate, now its less than 10. Look at 1990, 40 of household that on a floating rate. Now it is 10 . Really, the restrictive stance of rates doesnt count that much. If anything, inflation, looking at the data from last week, what it shows is that we are not yet out of the woods entirely, but we get comfortable with a bit higher than target inflation, which should be helping Earnings Growth in particular, helping nominal cash flow, and it should also be helping the Income Distribution terms of the private Household Health gains we have seen over the last two years. The higher inflation has seen private Household Wealth really benefit. So, theres nothing particularly negative about that. Jonathan lets talk about the part of the equity market where its not happening and that story starting to change, retail. We just heard from lowes, we will hear from macys in a moment. Target coming out before earnings, using prices on 5000 items and talking about a pressure consumer, speaking to a loss of Pricing Power in u. S. Retail. Is that just one art of the economy or is there a broader story emerging . Max not a broader story, its one part of the economy and there are pockets of weakness among perhaps the lowest income households. You know, the ones that deal the strain the most higher rates. Absolutely 100 sent, but that doesnt mean its a broader story, it just means more differentiation the economy. For 10 years in the 2010s we have been eyeing that everything is a oneway street trade etf passive investing and you know, what happens in the economy doesnt at her anymore because there is no longer any differentiation because we have got the last buyers, the central banks, active everywhere. Thats no longer the case. We are starting to pockets of weakness on one part of the economy with pockets of continued strength. The growth of tech eminis is still showing really good signs of strength there. To me it just means there is more differentiation and a return to the old normal world, not really a return to this sign of a next crisis or recession. Absolutely not. It just means more differentiation and more opportunities for output creation. Lisa youve been bullish for a while now and are you less bullish because of the runup as people come to the same view that you are putting out there . Max i think that there will ultimately be some risks and we do see them perhaps around the q3 q4 earnings expectations in the u. S. , where the expectation start to pick up a lot for the 493 stocks and away from the magnificent seven. If we dont see any kind of particular broadening out in terms of the economy and economic strength, if economic strength is just fine but not as spectacular as we thought, those Earnings Growth expectations might be disappointed a bit, but that is only something i can play in for four to five months time, not something i can position for right now. You know, overall i think its easy to say eventually it will spread or eventually ultimately there will be a recession, thats totally fine, but its like saying eventually the sun will be shining in london. We know it is happening, but who knows, it might take another six months, two days, then its over. Not attaching a timing is a tickling out of you and saying that eventually the consumer might yield the string too much, that will eventually put us into recession . Thats fine, but we cant run money like that. Not really when we say eventually things might be bad. Actually, right now things are still very, very solid. If we look at things like job openings and job postings, labor market ticking along, Household Wealth creation is really good. Overall things are totally fine. Lisa for someone who lives in a place where the sun never shines, you are credibly optimistic. Talking about the tail, lowes, the target price cut, we have seen Retail Stocks to killer with interest climbing dramatically in the last couple of weeks. Theres a sense that sumer discretionary catering to the middle end, the lower end, it wont do well as Everything Else does just fine. Do you adhere to that you . Do you think that area is under pressure disproportionately because of the pockets of week this out there . Max i would turn that around and say that because there is so much pessimism already with Short Interest at high levels and people not really expecting so much weakness out of the sector, it might be worth it to say lets look at the consumer stock, Consumer Discretionary stocks, and in fact maybe things are not as bad for the consumer as everybody is saying. Its similar to what people have been saying about europe and the eurozone a couple of weeks, months ago, where you had these relentless downgrades to European Growth expectations for the last couple of weeks people to realize that it is not particularly great in europe, but it is not as catastrophic as we thought and i think that perhaps the Consumer Sector in the u. S. Is in a similar place where things are not particularly great, but increasingly people are really expecting almost a calamity to happen and unless that really unfolds, which i dont see any particular signs of that we happening, then you know, that might be a good buying opportunity. Jonathan max, wrapping it up, overweight japan, underweight sovereigns. The reason your overrate all the rest and underweight sovereigns, are they the same reason . Max pretty much. Within developed market sovereigns, a month ago we had a bullish duration because the valuations are starting to look a lot enticing and a lot appealing. But of course, if you are a bit more bullish on duration and think that the Interest Rate bond volatility continues to go down, it will probably free up a bit of risk premium in equities, allowing equity multiples in tech, in the growth part of the equity market, to expand. From a relative perspective, as good as perhaps sovereigns will do, its actually the nasdaq, the tech, the growth art of the equity market, high yield, that you really want to own their. Jonathan max, great catching up with you, buddy. I guess with something to say back jp morgan, who was overly bearish on the equity market, usurers are stable and unchanged after closing yesterday just short of alltime highs. Updating stories elsewhere this morning, your bloomberg reef, starting with the story, trump losing the gap on raising with, out raising ayden and the Democratic Party by 25 million in april with a total of 76, boost coming on the heels of several highprofile fund raisers, including a palm beach event hosted by john paulson and overall the Biden Campaign holds a wide cash lead over trump. Stepping down at the fbi see, martin gruenberg, following a scathing report detailing allegations of harassment and discrimination during his tenure. It came from a months long probe into a journal article about female Bank Examiners facing a sexualized boys club environment. The white house said that they would move quickly to nominate a successor. Jamie dimon says that succession plans are well underway at jpmorgan chase, telling shareholders that senior individuals at the bank are being paired his eventual departure. The 68yearold think that the timeline five years anymore, making reference to a longstanding tradition of saying that his retirement is five years away, no matter who asked. Now we have a different answer from the man himself. Lisa at a time when they rearrange some of the management im elevated it to the top ranks. When he said hes not ready to wear the jersey and put it on every day and get on the field, hes not gonna. Annmarie exactly, he still says he has the energy though he saying it not five years anymore, timetable looks less, but says he still has the energy to do it. Kind of. Jonathan i hope i have the energy in my late 60s that i have now. I struggle to believe that i will, but i hope i will. On the program, robot reviving the pc rivalry. Late 80s, early 90s, when we fell in love with you see, thats what got us going, the ability to use computers to create and i think the ai is going to take it to the next level. Jonathan that conversation, just around the corner. Live in new york city this, good morning. Suspenseful music] trains. [whoosh] trains that use the power of dell ai and intel. Clearing the way, [rumble] [whoosh] so you arrive exactly where you belong. At Morgan Stanley, old school hard work meets bold new thinking. To help you see untapped possibilities and relentlessly work with you to make them real. Jonathan live from new york city, welcome to the program area equity futures are just about unchanged in the bond market yields lower on the basis points. Under surveillance this morning, reviving the the mac rivalry. The pc has always been about, you know im a creating things, right . That is sort of what you do on a pc. Ai is an assistant. It helps you as an enduser, doing during the late 80s and early 90s when we fell in love with you see, thats what got us going, the ability to use computers to create and i think this ai is just going to take it to the next level. Jonathan microsoft introducing a new category of ai focused pcs, stepping up competition with apple and google, saying the machines will be 50 faster than the topoftheline macbook air next to a special chip dedicated to ai processing. Mandy joins us mandeep joins us now. Are we going to fall in love with pcs all over again . Mandeep every device maker is trying to refresh and pcs, we spend as much time not as much as we do on smart phones, but a productivity perspective is use case for ai and you can see the argument by the refresh cycle would be pulled or were to free had the functionality and the chips to facilitate it. I just doubt that there will be as much to offer as the ceos were talking about even that we are at an early stage where the infrastructure is not built out. How can it translate into the devices that we use day to day . Jonathan can you detail the functionality . What with the User Experience look like . Mandeep i got back to what you can do on the smart own. On the smartphone there are so many things you want to interact with without having go across apps. Its the same on desktops. You dont want to have to go between programs to, you know, copy paste things. What if there was a smoother way to pass information from one app to another where ai can facilitate. And this goes back to the point that everyone makes about work lows. Work lows proving as a part of generative ai. Copilots, assistants, vendors dont work so well with each other. At least that is what you have seen over the years. These Companies Want to do all of their walled gardens, they dont want to share data. Thats the promise of ai. If it had the perfect information it could automate a lot of workflows, i just get happening that weekly. Lisa workflow efficiency is not very sexy. It is for reducing costs for a few people but for the average person looking to buy a smart phone, they dont want to make their work low more efficient when they call their kids, so when does that create a super cycle in terms of replacing phones . Mandeep in prior cycles we saw that the killer app always comes later. A lot of promise in terms of what smart phones do. The apps based on locationbased awareness, even much nadir in 2009, 2010, it was a good three or four years before they figured it out and i think that will be the same. Right now we are in the structure buildout phase where everyone sees the promise of generative ai because you can be multimodal, you can pass video, audio, all the other kinds of stuff, the system and interpret it. How do you filter out the note noise and drive productivity . That is where it will take a while to figure that out annmarie when it comes to laptops, the issue everyone has is everyone uses iphones, you want to be in the same system. Isnt that the leg up that apple has . Mandeep it does and it comes down to distribution. Google on the serverside, apple in terms of the devices, its hard to move away from their ecosystem because ai, in the end im a will be commoditized to the extent that everyone has the same infrastructure and some form of large model with ai features that will be similar. I doubt that it will be so highly depreciated the ai on apple or google will work far superior than others, but its the singularity of how you deal with ai and how it is incorporated on your devices. Annmarie talking about chips, yesterday we heard from the nvidia ceo speaking to ed ludlow saying that Technology Depends heavily on taiwan and will continue to do so for the next foreseeable time and overnight we had a scoop about asml and tsmc saying that they can disable all of their manufacturing remotely if china were to invade taiwan. How important are these geopolitical conversations to these Technology Companies right now . Mandeep i mean when i look at nvidia right now, the biggest risk going into the quarter is the fact china revenue again completely go away. Its the same risk for apple. They seem to be maneuvering it well that and these companies are dependent on china for revenue, and to an extent, on the supply chains. Apple still has 90 of the assembly being done in that region. Nvidia doesnt have that kind of fixture on the Assembly Side but it still relies on some parts of that region, so the geopolitical conflicts are creating the tensions into these companies seem to be maneuvering it well. At least so far. Jonathan this is about a kill switch, they can kill production but productions dont come from somewhere. Where is that supply going to come from . Mandeep we know that they are looking into other parts of southeast asia, even india. Look, that is where you have to be pragmatic. Not every region will have the capacity to take advanced manufacturing or assembly and this will take years. Think about how long it has taken to open advanced manufacturing factories despite the subsidies. It will be three years before we see that online. That is what youre talking about hims of timeline, these things take a while before they play out. Lisa the why behind it being complicated is not just the technology to build the chips, its also the idea of the x the state and the entire infrastructure taiwan is built around that what are we doing here to support our factories . Mandeep training is a big aspect of how you are going to bring that online. Yes, you need the personnel. Immigration is going to be a hot button issue stringing talent to work there. But again, these things will take or years, five years before you see Real Progress and you are talking about more cutting edge stuff. Two nanometers, three nanometers, you cant just jump overnight. That is what we figured out with intel. Five nodes in three years . They couldnt execute. Theres a reason for that. It takes a lot of gradual progress to get to the point where you show that hey we can do this. Jonathan drumroll, big story, nvidia. Updates north of one k in the last three hours. How high is the bar this time around . Jonathan i feel like they are price for percent price for perfection every quarter but where is the good news going to come from . Right now every hyperscalers, every raised the forecast for next year. I look at wh