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- [00:00]
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- [00:28]
Market Analyst / Host
Cerebras, the AI chip maker made its grand public debut today. We survey the market reaction and spoiler alert, it wasn't just a big one, it was a massive one in video shares hitting record highs today as CEO Jensen Huang joins President Trump in China. We have the latest from the International Summit and telecom rivals come together in a battle against wireless dead zones. We break it all down for Thursday, May 14th. It's Brew Markets Daily and Diamondbury. More market details to come. But first, the titans of telecoms are teaming up. Today, AT&T.T Mobile and Verizon announced a rare partnership aimed at eliminating wireless dead zones across the United States. The agreement in principle creates a joint venture focused on satellite based direct to device technology, which means a focus on getting phones to connect in remote or underserved areas that traditional cell towers can't reach. A particularly good piece of news when it comes to emergencies. Well, the partnership involves pooling spectrum resources as well as developing common technical standards and expanding together connectivity in rural areas. And for a sense of just how massive is the scale that these new partners bring to the table together, just take a look at their market caps. You've got AT&T at roughly $175 billion, Verizon a bit bigger at 196 billion, and T Mobile topping them both at a whopping $203 billion of market cap. While these mammoth players do have existing satellite partners, including initiatives with AST Space Mobile and with Starlink, and those are expected to remain in place. But this joint venture provides an added avenue for growth in what's traditionally a steady eddy telecom sector. These major wireless carriers have been running out of traditional subscriber expansion opportunities in densely populated markets. So what did investors have to say on the matter? Well, they view the announcement certainly as strategically interesting, not least as defensive move as other low earth orbit providers scale on up, with Starlink poised to get a major capital boost if and when its parent company SpaceX IPOS. But as for whether this transforms the telecom giants financially is another story, at least in the near term. We saw AT&T shares fall about 1.9% to just under 25 bucks in response to the announcement, while Verizon shares slipped about 1.5%. T mobile ticking down also at just under 1.2%. Well, those declines suggest the markets are cautious about the costs, the execution risks and the uncertain monetization timeline tied to the new venture announced. But why are we watching? Well, as SpaceX gears up to go public and therefore gives the markets a reference point for valuation, public market valuation for satellite communications, we're going to keep our eyes on whether these new joint venture partners get a bump up in their stock price to just for playing in a glamorous and highly valued sandbox. Coming up in a moment, a spin through the headlines that are moving the markets today, including earnings out of Verisant Media, Yeti holdings and Honda. But first, this episode is brought to you by Charles Schwab. Timing the market, Fighting inflation, Balancing Risk no one says financial decisions are easy. In fact, they can be tricky. And often the forest in your head can lead you sideways. Financial decoder and original podcast from Charles Schwab can help.
- [04:04]
Co-Host / Financial Commentator
Join host Mark Riepe, head of Schwab center for Financial Research, as he offers modern strategies to help combat the wait, what in your head, like overconfidence, loss aversion and recency bias that may cloud your investing decisions. Listen@schwab.com financialdecoder or wherever you get your podcasts.
- [04:24]
Market Analyst / Host
Well, stocks have been trading higher today, buoyed by optimism that's coming out of the US China Summit, which we're going to cover in more detail in just a moment. But for now now let's take a quick spin through some other headlines that are moving the markets today, starting with Cerebras, the AI chip maker that we previewed yesterday. The company officially making its IPO debut today on the NASDAQ. That was this morning, reeling in five and a half billion dollars through the sale of 30 million shares. Well, on its first day of trading, shares in cerebras ticker CBRs, they went up to 350 bucks. That was compared to its out of the gate IPO pricing of $185 a share. Well, this huge pop, this listing just marks it was going to be the largest IPO of the year so far in the sector. But the fact it's gone up so far so quickly underscores just the kind of momentum that we're seeing continue in the AI semiconductor space as companies race to challenge Nvidia and Ann I saw
- [05:24]
Co-Host / Financial Commentator
the CEO of CEREBRUS making the rounds today and I didn't appreciate that. The company is literally going big with its chips, he said. We built a chip the size of a dinner plate. It's 58 times larger than any chip previously built and 15 times faster. That's the key, that it's quick. I always think of computing as trying to get smaller and smaller, so it's going to be interesting to see where this competition goes.
- [05:44]
Market Analyst / Host
Yeah, it was always small and mighty was sort of the mantra. Now it's just like large and in charge. So things are moving along while pivoting to the world of earnings because we are still in the thick of it. Shares in Honda Ticker HMC gained over 5% today on release of its earnings. That's despite posting its first annual loss. You ready for this in 70 years? Well, the carmaker's loss came from a strategy shift and that's a pivot away from electric vehicles, taking a roughly $10 billion hit in doing so and wiping out what could otherwise have been a profitable year.
- [06:17]
Co-Host / Financial Commentator
Honda canceled plans for three electric cars that were slated to hit the United States market, along with canceling a joint venture with Sony to sell those EVs. And despite this hit, Honda said its core business of selling gasoline powered cars remains profitable and it expects to earn a net profit of more than $1.6 billion in the current fisc. Shares are down around 14% so far this year.
- [06:39]
Market Analyst / Host
Well, meanwhile, over to the media industry, so we're keeping it in the family. Shares of Versant Ticker VSNT gained over 7% after the company reported earnings today. Now remember that Versant consists of a portfolio of cable TV networks that includes CNBC and Oxygen, and these were spun out from Comcast earlier this year. Well, this was the company's first standalone report since the separation and investors reacted to, quote, not as bad as it could have been results because advertising revenue did fall down 5%. However, that was an improvement from the same period last year when advertising income declined 12%.
- [07:18]
Co-Host / Financial Commentator
And then there's the Versant back library of programming that remains valuable. We keep hearing about these libraries and the value revenue for the quarter was up 110% due in large part to licensing, keeping up with the Kardashians and other related content to Disney's Hulu and our Gen Z producer Aveni referred to the Kardashians as classic reality TV earlier today.
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Market Analyst / Host
Oh geez.
- [07:40]
Co-Host / Financial Commentator
Put it in perspective. First in is still struggling with subscriber declines and CEO Mark Lazarus said the company is quote, looking in a variety of areas for mergers and acquisitions to drive growth, including obtaining more sports rights. But and that's everyone's plan. Let's get sports. That's what people are watching. But of course those sports rights are expensive.
- [07:57]
Market Analyst / Host
Definitely going to keep watching that one. That just seems to be a sports right headline sort of every couple of months at this point in time. So watching that one carefully. Well, John, our Yeti tumblers have been been working overtime to keep our coffees and teas warm this earnings season. So has the company that makes them. Shares in Yeti holdings, that's Ticker Y E T I gained nearly 7% today after topping fourth quarter earnings estimates. The company's results were buoyed by strong demand for its drinkware and coolers as well as by international expansion. Just to put that in perspective, US sales increased 8%, but international sales even more so by a percentage point, up 9%.
- [08:34]
Co-Host / Financial Commentator
I'd love to see this one come through today. I didn't know that Yeti is a publicly traded company with a $3 billion market cap. I suppose the appetite for expensive coolers remains strong as the company boosted its full year outlook, citing strong results and improving visibility.
- [08:49]
Market Analyst / Host
Finally, rounding out earnings, at least for today. We've got to hit tech and shares in Cisco Ticker CSEO were the ones we were watching. That stock jumping over 13% after beating expectations. Well, Cisco had anticipated $5 billion in AI infrastructure and hyperscaler orders over the course of this year, but it managed to bring in that much in the first quarter alone. The company now expects to be in receipt of $9 billion in orders for 2026. On a different note, cost cutting. Cisco did announce it was also going to slash around 4,000 jobs, but for this one it's been on a roll. Shares up 50% so far this year. Well, let's take a quick break and when we come back, we whiz through what on earth is going on in China? This episode is brought to you by Charles Schwab. Overconfidence, loss aversion, recency, bias. Could attribution bias be messing with your retirement plan? Financial Decoder an original podcast from Charles Schwab explains how these pesky biases can affect the decisions you make about your financial life. Host Mark Reape, head of the Schwab center for Financial Research, and his guests offer practical strategies on what you can do to help beat back these decision making biases. Download the latest episode and follow@schwab.com financialdecoda orever you listen
- [10:07]
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- [10:33]
Market Analyst / Host
Well, updates have been trickling in throughout the day. We've been glued to X, we've been glued to our emails to see which news headlines have been coming in. And of course, that's because President Trump and more than a dozen really heavy hitting American business leaders are currently participating in a state visit to China to discuss market access tariffs, chip export policy and the general status of trade between these two nations, the biggest economies in the world. Well, upon arrival, the US Delegation's message was that they, quote, highly value the Chinese market and hope to do more business in the country. In turn, Chinese President Xi Jinping responded by welcoming more, quote, mutually beneficial cooperation and assured the delegation that American companies, quote, will have broader prospects in China. Well, the group for the United States includes leaders from tech, finance, aerospace, semiconductors, payments, manufacturing and industrial. So these are major, major CEOs from some of the biggest sectors of the US economy. This includes David Solomon, CEO of Goldman Sachs, Jane Fraser of Citigroup, Larry Culp of GE, plus the CEOs of Visa, MasterCard, Micron, Tesla, Apple, Nvidia, Boeing and others. It really is a who's who. This is an unbelievable list of companies being represented. And it's important because the summit between the two countries is intended to address broader geopolitical concerns. But this corporate diplomacy mission has already yielded some concrete results, which is why investors eyes are on this. This includes AI approvals and aircraft sales. So let's take a look at the market reaction. John. Kicking off by focusing on four executives that took part directly in today's summit with Trump and Xi Jinping talking about their goals. Let's take a look at what we've learned from these talks. Kicking off with Elon Musk.
- [12:21]
Co-Host / Financial Commentator
That's right, Elon Musk. Force the CEO of Tesla. He was on Air Force One with the president, made that trip with the president. And what does Elon want? Well, lots of things. He has his hand in lots of different companies. But let's just focus on Tesla because China is a critical market for Tesla and Musk is seeking clearance from Chinese regulators to expand adoption of Tesla's full self driving assistance system. And of course, Tesla has A long history in China. In 2018, it became the first foreign car company allowed to set up automaking in China without a local partner. So far, Tesla is up 1% today and it's up 9% this week. Shares in Tesla and there is some optimism about Musk's appearance there. Musk coming out of that meeting with the presidents of China and the United States, saying the meeting was, quote, awesome, wonderful, and that, quote, many good things had been achieved.
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Market Analyst / Host
Well, it's interesting to see what the tangible outcome is going to be here. Just to put this in context, EV competition coming from Chinese players has been very intense. The likes of byd, the sort of cost structure, benefit that these businesses have had given the benefit of scale that they're getting from the sheer size of the domestic demand market in China. So this one's been critically important. We're still waiting to see what exactly it was about the meeting that meant that Musk called it awesome, wonderful and many good things, and specifically what this translates into for the Tesla model and for Tesla shareholders. But good vibes, in a sense is sort of what we're getting out of this. So we need to sort of wait and see. Again, you made the point at the beginning, John, that Musk has his fingers in many pies. Don't see any reference here to Space X or to Starlink. So also we'll have to see if there's anything else more broadly coming out of that. Let's move on now to talk about Jensen Huang, CEO, of course, of Nvidia. He was a late addition to this delegation. I remember reading about this. The narrative that's been in the press is that he was picked up right, in Alaska. Right. So he, Huang, makes his way to Alaska, then boards Air Force One there. And that announcement apparently came about after the President had watched the media reaction to Huang not being in the original lineup. So anyway, Jensen Huang gets to go to the summit. Nvidia stock up 3%. You may remember that there's been a lot of complexity around Nvidia's relationship as such a premier US player. But with China being a market that's been contentious, modified AI chips in China, or rather Nvidia sale of those to the Chinese market, have been subject to U.S. export restrictions. And so there has been a lot of wait and see in order for the market to get its mind around how that might get resolved, if at all. Now, Reuters reported that the United states has cleared 10 Chinese firms to buy Nvidia, second most powerful AI chip. Not the best stuff, but the second most powerful, that's the H200. And those Chinese firms that apparently have been teed up to get a hold of Those includes Alibaba, ByteDance, which of course is the parent company of TikTok and also jd.com which is another power player in the Chinese e commerce market.
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Co-Host / Financial Commentator
And then announcement just came out a couple of hours ago.
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Market Analyst / Host
Right, Exactly. This is hot off the press. Other details of the arrangements not yet being released. Now yesterday, just to take a look at the reaction to this, shares and Nvidia hit an all time high. They're up another 4% today. Just one person's view, I suspect that's a little bit riding on the coattails of the Cerebras IPO and just how powerful that was in signaling demand for AI chips. But I gotta tell you, the company this is, Nvidia, crossed the five and a half trillion dollar market cap threshold, hitting a record 1.7 trillion. Did you see the headlines today folks, speculating will it be the first 6 trillion dollar company? Who knows? We don't know. But we do know that it did hit a record $5.7 trillion today. Huang said, quote Xi and President Trump were incredible. I want to know what incredible means. What is, what is going on? Words and what's going, how does it mean?
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Co-Host / Financial Commentator
And how are they translated?
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Market Analyst / Host
Yes, exactly. How are they translated? Well, that was Jensen Huang. So both he and Moscow to a rip roaring start by the, by the sound of things.
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Co-Host / Financial Commentator
Yes. And Kelly Ortberg, the CEO of Boeing.
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Market Analyst / Host
This is a good one. Yeah.
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Co-Host / Financial Commentator
Yes. Going into the summit, it was reported that China was considering buying 500 of Boeing's jets. And Ortberg had expressed confidence that a deal could be that would include some aircraft orders. Well, more news out of today. A few hours ago, Treasury Secretary Scott Besant said that he expects, quote, large Boeing orders from China. And then right after that, Trump said that that number is about 200. So shares in Boeing were up about the start of the day, but they fell around 4% throughout the day today. Perhaps because investors thought the 200 number was a bit light. They were looking at maybe 500 lanes going in. Yeah, but also this is interesting. Boeing already has 6,800 unfilled jet orders on its backlog. It would take a decade at current production rates to make all the planes that have already been ordered from Boeing. And so its current focus is less on sales but more on ramping up manufacturing rates. But also just to put it in context, what an important client China is of Boeing and has been historically years ago, China bought 20% of Boeing's planes. But in the last decade, China has not bought a single Boeing plane. And so Boeing is trying to get that client customer back.
- [17:41]
Market Analyst / Host
And just, you know, is it an accident that last 10 years that since the last Trump administration. Right. So is this the moment where under the president being back in the seat, we see a reversal in that which perhaps would signal a shift in sort of relations between the two nations when it comes to this important aerospace and defense business. Kelly Ortberg, CEO of Boeing, lots going on. I don't know if Kelly Ortberg came out and said that this was incredible, awesome and with many good things, but I guess we're going to have to see if there's more.
- [18:07]
Co-Host / Financial Commentator
From the reporting, it seemed like maybe Kelly wasn't in that meeting. Exactly. Those two directly.
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Market Analyst / Host
There we go. Maybe there's another shot. Well, let's talk about Tim Cook. He's going to be the outgoing CEO of Apple. He'll be leaving the post in September, but he is at the summit. This is complete speculation. I do wonder if Tim Cook is angling for an ambassadorship.
- [18:27]
Co-Host / Financial Commentator
Oh, interesting.
- [18:27]
Market Analyst / Host
China at some point. It'd be such an interesting spot for him to be in if he were able to do that. So anyway, he's leaving that top seat at Apple in September. He is at the summit. He is going to remain on the Apple board. Of course, Apple really focused on stabilizing its manufacturing footprint in China and to look at easing tensions around tariffs and just a huge amount of supply chain risk that all of this adversarial narrative between China and us has thrown into Apple's supply chain footprint. Just to give that some context, of the roughly 60 million iPhones that Apple sells in the United States each year, 80% ish of them are made in China. So this is a massive deal. Well, President Trump's tariffs have put pressure on Apple to reshore manufacturing to the United States, which is much, much, much easier said than done. And instead, we've seen Apple shift some production of those US Bound phones to India. Still, they're relying heavily on Chinese manufacturing for componentry and for assembly. Now, we did see Apple shares hit a record high of 300 yesterday, flat today. But after the meeting, Tim Cook emerged and he let actions speak louder than words. He showed the peace sign with his hands and he gave a thumbs up. So that is the Tim Cook way of saying incredible, wonderful, awesome, wonderful and many good things. Well, the summit continues tomorrow, so we're going to keep on watching this and we're going to have our eye on whether any updates come out of these conversations with respect to rare earth mineral exports to the United States. Just as a recap, China is the biggest processor of rare earths and minerals in the world. So this isn't just about getting access to the raw stuff. It's actually about the processing capacity which makes China so important in the value chain. There's also chatter about the creation of a potential board of trade with which to manage disputes and avoid trade wars. I sort of thought that was a World Trade Organization's role, but here it is. The Board of Trade is something that's going to be talked about. And I think this is the most critically important thing, how China might use its influence to help reopen the Strait of Hormuz. China is very impactful when it comes to its relationship with Iran. And so that last piece, John, is really, if I'm going to watch for anything coming out of this near term, it's about the impact on the Strait of Hormuz and getting that fully reopened. Lots going on. So much going on. We run into the bell. There it is, 4pm on the east coast. The markets wrapping up for the day. And we don't have a ticker tape, but we are going to throw it over to our human ticker, our producer,
- [21:00]
Co-Host / Financial Commentator
John, and the markets were all up across the board today, possibly on optimism out of China, The S&P 500 and the Dow both up about 8. 10 of a percent. The NASDAQ finishing up about 9. 10 of a percent for the day.
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Market Analyst / Host
Busy day.
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Co-Host / Financial Commentator
Record highs.
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Market Analyst / Host
Record, record, record highs. Well, do come back tomorrow because we have a special guest. We have the Airbnb cfo, Ellie Mertz, joining us now. If you think about what we've been talking about on the show in, you'd sort of think that the implications for travel could be all over the place. On the one hand, we keep talking about strong demand for premium travelers coming out of the airlines. On the other hand, we're talking about inflation and the increasing cost of travel. On the one hand, we're talking about the fact that geopolitical turmoil is creating concerns amongst travelers, maybe not as willing to go internationally or for international folks to come here when it comes to vacations. On the other hand, you did see Airbnb report in its shareholder letter for its Q1 earnings that it's seeing just a reallocation of where people are choosing to spend their time, but they're still hitting the road. So to unpack it all, we can have Ellie Mertz. She's going to be here on the show tomorrow, so do come back. That's it. Meanwhile, for today's Blue Markets Daily.
- [22:08]
Co-Host / Financial Commentator
Blue Markets Daily is hosted by Anne Barry and produced by John Coteau, Taka Bella, Teef Avenue LaRoy and Emily Millard. Protecting the Directors Uchenawa Ogu Audio Engineering by Brittany Dotako and the president of Morning Brew Inc. Is Devin Emery.
- [22:19]
Market Analyst / Host
Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. See you back in tomorrow, same time, same place.
- [22:27]
Katherine Ann Edwards
If you can't afford child care or can't afford to take a sick day, that's not just your bad luck, it's actually bad for our economy. I'm Katherine Ann Edwards, an economist, and I'm editor Robin Rousey. On our podcast Optimist Economy, I break down how our lives intersect with the economy, whether it's wages, Social Security, the national debt. And I ask the questions that you're actually thinking like, like, is AI going to take my job? Americans deserve a better economy than the one we have, so let's talk about how to get there. Every Tuesday on Optimist Economy. Wherever you listen to podcasts.