Ma mac, possibly some custom chips and well bring you key headline throughout this hour our own steve kovac is live on the ground at wwdc while rosenblats martin croquette and msnbc contributor are with me to discuss what the product means for apples bottom line with the event kick off as we speak lets get back to steve kovac out there in cupertino steve, people would be forgiven for thinking this whole thing is a headset unveil, but this is a developer conference which is paving the way for the new software for the next iphone and possibly macs that helped them gain a lot of market share during the pandemic. How important are those pieces during this event . Yeah. Incredibly important, jon. This is still some of the iphone companies and any updates to ios is incredibly important. What i will be looking for is around wallet and fintech, and they announced the buy now, pay later that sent shares of the firm down and they have huge ambitions for apple pay and there there was an interesting report that apple put out that 3 trillion happened in one year in u. S. Apps and how do they capture some of the activity if theyre not subject through the instore tax, and they do it through applepay so anything they can do to move the needle there is going to be super interesting, but to your point, its a Developers Conference and the reason why theyll announce a headset today because they need the developers in the audience right now to make the experiences and to make this product and get it sold so, steve, a lot of people have been saying for the past several years about everything that apple does, oh, its evolutionary, not revolutionary, and yet, here the stock is near a 3 trillion market cap at alltime highs how does the smart investor distinguish between disappointed chatter around these announcements and the reality that unlike amazon, right . Why didnt apple do the echo unlike amazon, apple is at an alltime high. Exactly a lot of that might be excitement leading up to this, but keep in mind, this will be a very longterm project this is not going to cannibalize the iphone like we saw the iphone cannibalize the ipod, for example. Its more like the watch, in my opinion, where its sort of like an accessory and they can kind of figure out the market fit from there if you remember when the watch first came out, by the way, that was the last major product about nine years ago it was mostly focused on trying to be a little iphone on your wrist and then they pared back a lot of those features and i expect to see something similar out of the headset. See how it works, no one has figured it out yet and what is apples vision for it. We know what apple thinks and what meta thinks and what is the apples pitch for mixed reality . Call me crazy, but shouldnt investors expect to hear something from ai from apples custom chips during this event theres been a lot of talk about nvidia in ai and apple has been building its own processing cores and doing its own ai work meant to feed into not just iphones, but into things like this mixed reality headset that we expect to see doesnt apple with Developers Need to make the case for the raw horsepower capability thats built into this thing, and not just for raw visualization and also for ai to be able to create environments and do it in an efficient way. And not just that apple, the privacyfocused company, they like a lot of the ai data to be processed on device so yes, especially there will be likely a mac announcement today, and expecting the n series chips that are outperforming intel and the transition that theyve successfully made off of intel and mac. That same chip is likely going to be powering a huge headset and thats a huge opportunity on the ai front that maybe we dont have a siri, chatgptpipe product, but we do have something under the hood so if they do make an ai pitch it will be something along those lines, i suspect. Steve, well come back to you during the hour to get the key analysis on the importance of what is being announced and steve kovac. Right now, lets get to Barton Crocket and casey newton casey, ill start with you on this one because this headset has been highly anticipated and yet people tend to think it its the news that apple announces and just about everything and its not a big deal and years later, perhaps it is a big deal. How do you frame what apples multiyear approach is to these technologies and how an investor should sort of prepare for that . I would prepare by measuring my expectations. You know, the first apple watch came out it wasnt great it did take a while for apple to figure out exactly what it was for. They got there in the end. Now its a 10 billion business. I think this vr ar headset could be an even bigger business and theres still a lot of fundamental technology that needs to get invented in order to work as well as apple wants it to, and for it to be affordable so if investors want to invest based on this product, i think they have to be prepared to be very patient. Martin, is this going to be a gaming console look, i think that we all hope its more than a gaming console, but i do think what your first guest said about expectations is really crucial here i mean, this is a launch where apple is basically getting people, i think, primarily to buy into the idea that this could become big and thats a great kind of setup for the stock. So youve got an argument for seeing and believing what could happen without actually having to deliver it today. So it couldnt be a better backdrop for starting down this road i do like the idea that apple is coming in with a highend device i think one of the things they need to do is separate themselves from whats already out there which is the Quest Products from meta and apple pursuing the premium end and thats right in apples wheelhouse and they make it seem like an aspirational product with something that can be the future i think you can see investors getting interested in that and its helpful for the equity and right now theres nothing meaningful for the models where we dont have anything meaningful yet and well look at whats happening today and see if we need to evaluate that. Speaking of met a how dangerous is this potentially for meta because theyre subsidizing their hardware with the argument that were building out an ecosystem and well build volumes of this thing. If apple comes in with a product that costs multiples more than meta that they dont have to subsidize and its even just equally popular. Not even more popular, doesnt that mean that meta bleeds cash for no great outcome down the road i think Mark Zuckerberg is that quest becomes the fitbit of Virtual Reality and the early leader that ends up being too cheap relative to the apple device out there, and i think that from the stock perspective thats not necessarily that, and i think investors need to see meta in the reality. We like the stock. We like it for the apps. Were not there for the metaverse. The risk is that they dig in their heels and they spend more chasing something that they arent going to win. Well have to see. Casey, barton says he hopes this is more than a gaming console, and i think part of the problem with things when they come out is they try to be everything and its a monitoring device that also helps to take time the metaquest, i dont know what that is and legless avatars and bad meeting room, i dont know, if they were to come out with a great gaming console that mixes in with reality and its the most awesome thing my kids have ever seen, that i can get behind what about it . I think youre right, but apple wouldnt have invested this much if they thought it could only be a gaming console gaming is a Good Business and its not a big enough business to catch apples attention what i have my eye on, what can it do with the productivity uses Something Like an Office Worker wants to pick up to do a virtual facetime call . Ill tell you, i tried it with the quest pro and its kind of only soso so i think theres a lot to be built there and if apple can get better at the productivity then they might have a hit on their hands. I dont know, though. Yeah, the iphone, it would be great if it can play games and if it can do word thats really i dont know if theres been a productivitydriven cultural phenomenon lately, but i guess well see. Along those lines, though, something that is productivity driving is apples custom chips. Those often get a lot of attention at wwdc, but perhaps we dont spend enough time talking about the kind of margin and value that those have created for apple and that should be important for investors, no . Yeah. The chips are clearly a key ingredient in why that hardware is just so good. Right . Particularly on the left side of things, apples laptops improved i would say more in the past three or four years than they did in the past ten and chips were a huge part of that story so vertical integration theyve got going on continues to drive excellence for them. All right casey newton and Barton Crocket. Meanwhile, a couple of headlines coming out of wwdc there is, as expected a 15inch macbook air. It will start at 1299 which is a lot cheaper than the rumors that ive been seeing also the 13 model, the price went down by a hundred bucks deflation in technology is back that hadnt been the case over the past year. So perhaps macro heads, keep note on that, as well. Lets turn to the chip stocks and the semiconductor etf smh on pace for the best first half of the year ever as ai hype drives a lot of gains nvidia has led the group higher up 170 . Advanced microdevices, amd gained more than 80 on semi and micron both up 40 citi out with a new note naming m micron a top pick writing with the exception of nvidia it expects a pullback as most chipmakers are not connected to generative ai and theyre facing growth and inventory challenges. Joining me is the analyst behind that call, citis chris donelly. I hear what youre saying here i also have noticed that a lot of the chips pulled way back in the months leading up to this year think about the likes of marvel, qualcomm theyre coming out with these new products and they have the growth areas and the ceos were excited about the stocks going up and then they tanked. So why at this point, even though theres been a runup in the smh is it a bad time to buy in sure. So we were just in asia last week and digging into the supply chain where products are bought and sold, et cetera, et cetera what we found is ai is doing very well, but theres a very thin slice of the market essentially nvidia and a couple of others and the rest of the Semiconductor Market from handsets to automotive to industrial and several other end markets and data center that has too much inventory is still pretty weak. So hey, we like nvidia and its doing great, but youve had numbers come down so far this year and we think numbers come down again in a month and a half and you show the chart where youve had the big spike in the semis over the last month, month and a half its small as far as a driver goes right now lets pump the brakes a little bit and continue with profits. Should semiconductor investors should be focused on ai across the board for driver and look at the continuing mov toward solid state memory as an issue. You could look at the shift in automotive platforms toward autonomous and digital you can look at the digitization of the manufacturing floor as a potential driver none of those directly airelated, but all of them continuing to happen are these stocks richly priced when you consider potential growth from those things do they need an ai storyline to deserve to go higher well, they definitely need that and ai was mentioned seemingly every other sentence in the meetings we had last week, but most of this is just way out there and youre talking a few years out in the future and right now its low Single Digits as part of the percentage of semis and the one thing we looked at that scared us is the sox index is at a 40, 40 percent premium to the s p 500 right now. Thats the highest premium its had in 15 years since the Global Financial crisis youre in an environment where in arc ggregate the things are coming down and were saying much the brakes on ai and clearly nvidia is getting a lot of the hype and the business and for the rest of the semis, its a pretty tough environment thats what i wonder, is the difference between the valuation of the names that are at the top very different historically from the valuation of the names at the bottom so is the whole sox sort of priced in a way thats concerning or is it that certain names have run up so far that its made the whole index look relatively expensive yeah. Its almost like i covered the meme stocks or Something Like that nvidia had such a huge blowout of a quarter and folks started buying everything they can get their hands on and then you had a lot of companies they could get their hands on and its one or two percent of the revenues the Semiconductor Space is extremely volatile and its never not been volatile. So you can have periods of time like the last six weeks where you get these sudden spikes and you have to be nimble, in my opinion, given the environment and even for the second half it looks sketchy right now. Chris danel, why, thank you for that view on Semiconductors Still getting some headlines out of apple wwdc. Apple announcing mac pro with apple silicon. Thats the last model in the lineup to ditch intel chips for apples own homegrown design so the transition off of intel from apple is now complete it was basically complete before because the mac pro is very low volume, but this is a very significant moment for apples ecosystem where they can now say to developers, they have completed that transition remarkably smoothly with share gains as we mentioned in the show with the mac. Coming up, should the fed hike, pause or pivot that is the question everyones asking after fridays strong jobs report. Well look at what the market is pricing in and how investors should position it plus, we are watching all of the updates as i mentioned, just now coming out of apples worldwide developer conference and well bring you the latest headlines with the stock up 50 from the recent low the exchange is back right after this ts hexcng ocn hit ehaen bc is it possible to protect my business from Cyber Threats . It is, with comcast business. Helping every connected device stay protected. Yours. Your employees. Even. Susan . Hers, too. Safe. Secure. And powered by the next generation 10g network. With comcast business, advanced security isnt just possible. Its happening. Get started with fast speeds and advanced security for 49. 99 a month for 12 months. Plus ask how to get up to a 750 prepaid card with qualifying internet. Welcome back to the exchange, stocks mostly in the green after posting in march Kristina Partsinevelos has a look at the numbers. Yeah. We have a mixed bag and the s p 500 is getting close to bull market territory and much of the gains have to do with the seven tech names, ai mafia or the magnificent seven as jim cramer likes to say including nvidia, apple, microsoft, google, amazon and tesla and that is on pace for its best first half of the year since 1991, the year the World Wide Web came to life with its first web page the nasdaq is up about 26 year to date and the nasdaq 100 hitting a fresh 52week high and apple helping with a lot of these moves given its weight and the launch of its new products and lets talk about sectors and financials led lower today by some big names, j. P. Morgan down 1. 5 and fidelity, and fifth third over 1 . The wall street journal reporting they may raise capital by 20 and thats putting pressure on the sector and i want to make a pivot and i want to talk about the cryptosphere because the sec is suing Crypto Exchange binance over alleged violations it is a notice issued against them by the sec and theyre selling off quite dramatically and marathon, nine riot, 7 , jon. The thing that caught my eye in the sec lawsuit and binance is the commingling of Customer Fund which is reminds me of ftx, but it seems like it would be different from any issues with Coinbase Coinbase public and seems to be operating in a way thats more visible and are people trading these things together, perhaps and not because theyre all necessarily doing the same things yes the answer is 100 yes and also because the sec is going after the names and it does get lumped in and in particular with binance there are 13 charges against the company and the four main points and one is the commingling of customer assets and the other is possibly selling unregistered securities and these are Digital Asset asks this brings up the whole question, what is the security the crypto world is saying the sec wont define it and another major point, too is theyre operating a platform that wasnt cleared by the sec and binance saying we dont operate the Clearing House in the United States we have binance. U. S. And thats not the Clearing House theres a lot of vagueness about whats going on internally with the company, but both coinbase and binance arguing the sec is not playing ball and not working with them and not communicating and jon, one last point and binance did say it is not a u. S. Exchange and theyre limited in reach and they just had this in a blog post about an hour ago. Some cryptocurrencies themselves traded down quite a bit down more than 5. 5 and ethereum, as well. Well keep our eyes on those, two. Kristina, thanks. Thank you were more than a week away from the next fed meeting and the market expecting a pause in the rate hikes and thanks to last weeks strong jobs report thins are shaping up differently for julys position and the remainder of the year. Steve liesman joins me now with that story hi, jon the big upside surprise in the jobs report didnt have markets price in a june height which is what some might have expected and theres a 70 probability that the fed pauses and what it did change was the markets implication for rate cuts this year they have been priced out before the jobs report, fed funds futures had seen at least one rate cut by december putting the yearend funds rate at 485 and after the number suggesting the fed would remain around current levels until the new year. The result, the gap between where the fed expects to be and where the market thinks the fed is going to be is near nothi