SpaceX Demand & Cynicism, A Strong Labor Market, & Screwworm 6/8/26

Summary

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Squawk Pod - SpaceX Demand & Cynicism, A Strong Labor Market, & Screwworm

Date: June 8, 2026
Hosts: Joe Kernen, Becky Quick, Andrew Ross Sorkin
Notable Guests: Steve Liesman, Leslie Picker, Steve Eisman, Dan Murphy, Brooke Rollins

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Episode Overview

This packed Monday episode dives into multiple pressing topics:

• The surprise May jobs report and its impact on the Federal Reserve’s next moves
• The coming SpaceX IPO, surging demand, skepticism, and its effects on tech stocks
• Direct Israel-Iran conflict and oil prices
• A “Screwworm” livestock pest outbreak and American agriculture headwinds

Balanced debate and deep-dive interviews provide insight into market reactions, investor behavior, policy decisions, agriculture, and real-time geopolitical risk.

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Key Topics & Discussion Points

1. Strong Labor Market Surprises & Implications for the Fed

Segment Start: [03:31]

• Surprising Jobs Numbers:

  • May US jobs added: 172,000—over twice economists’ expectations.
  • Unemployment steady at 4.3%; previous months revised upward.

• Market Reaction:

  • Despite good news, both the S&P 500 and Nasdaq suffered their worst weeks in over a year.
  • As Joe Kernen summarizes: “why good news isn’t always good news for the markets at least.” [03:31]

• Federal Reserve Dilemma:

  • Probability of a December rate hike up to 70% after the strong report ([01:27], [04:27])

  • New Fed Chair Kevin Warsh faces early pressure.

  • Debate on whether strong job growth means inflation is on the way.

    “My view of inflation is a bit different from some. I don’t think inflation comes about when the economy grows too much or hardworking Americans get increase in their wages.”
    — Kevin Warsh, via Steve Liesman [05:58]

• Neutral Rate & Productivity:

  • Higher productivity may actually raise the neutral rate (the “Goldilocks” interest rate).

    “You can have this strong productivity...and the market will still do well. But obviously the market didn’t like what it saw...”
    — Steve Liesman [06:48]

• Debt & Global Rates:

  • High debt worldwide makes rising rates riskier, especially outside the US.

    “There’s an awful lot of debt out there...when rates rise, the ability to service that debt becomes much more expensive. So it’s kind of like a vicious circle now.”
    — Steve Liesman [07:43]

2. Global Tensions: Israel-Iran Escalate, Oil Surges

Segment Start: [11:38]

• First Direct Strikes Since Ceasefire:

  • Israel and Iran exchange fire, regional tensions spike.
  • Trump attempts mediation, but largely ignored ([11:52], [13:01]).

• Energy Impact:

  • Brent crude up 5%, flirting with $100/barrel.
  • Worries over Strait of Hormuz and Bab El Mandeb closures (Red Sea)—shipping costs and inflation risk up.

  “The more long term economic consequences of this conflict could also be impacted as well. Two of the world’s most important waterways in the crosshairs of the Iranian proxies and the Iranian regime is obviously a major problem.”
  — Dan Murphy [15:51]

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3. Tech Turmoil: SpaceX IPO & The Ripple Effects

Segment Start: [20:44]
Reporter: Leslie Picker

• Market Sell-Off & IPO Timing:

  • Nasdaq dropped over 4% on Friday, worst since April last year.

• IPO Demand Dynamics:

  • SpaceX IPO could see $50B in retail and passive inflows; 30% of demand expected from retail investors, who may have to sell levered tech ETFs to fund purchases ([18:00], [20:59], [22:59]).
  • Small float (4%), options/listed derivatives coming soon—risk of volatility spillover to entire tech sector.

  “When you combine SpaceX’s tiny 4% float plus passive and retail flows and then these options levered ETFs, you can see a situation where SpaceX’s performance...has the capacity to bring the rest of the market along with it.”
  — Leslie Picker [21:59]

• Discussion of Lofty Valuations:

  • Banks like Morgan Stanley project $3.4 trillion valuation by 2040.
  • Analysts walk the line—can’t publish research before IPO, but upbeat figures nonetheless leak.

  “I haven’t really talked to [an] institutional investor who said, yeah, I’m really buying this on the fundamentals. It’s all about, you know, do you believe this very bullish future case or not?”
  — Leslie Picker [24:39]

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4. Investor Cynicism: Steve Eisman on SpaceX, AI, Asset Intensity

Segment Start: [26:58]
Guest: Steve Eisman, “Real Eisman Playbook” podcast host

• Not a Fan of SpaceX IPO:

  • Eisman finds parts of the prospectus "amusing"—eg. asteroid mining ([27:18]).

  “My favorite part...is that one of the things that SpaceX wants to do is asteroid mining. I thought that was kind of funny.”
  — Steve Eisman [27:18]

• Skeptical on the Business Model:

  • SpaceX has become “incredibly capital intensive,” especially with the pivot to AI.
  • Capex as % of revenue soared from 42% (2023) to 215% (Q1 2026).

  “It’s not even space that’s so hard...It’s the AI that is incredibly capital intensive. Grok, with all due respect to Elon Musk, is not a world class AI company.”
  — Steve Eisman [28:24]

  “Despite the incredible sums of money being spent...what’s being created...is a commodity.”
  — Steve Eisman [29:06]

• AI Economics:

  • Firms (including Google, Meta, Microsoft) are spending huge amounts, but AI models are similar—a race for “commodity” capabilities, minimal “moats.”
  • Once users are truly charged for actual compute/tokens, demand may sag.

• On Elon Musk’s Next Moves:

  • Sorkin speculates Musk may use SpaceX’s IPO currency to merge with/buy Tesla.

    “If I was a SpaceX shareholder, that’d be the last thing in the world I’d want him to do, but I’m sure he’s going to do it.”
    — Steve Eisman [33:19]

• On Valuations:

  “The $28.5 trillion TAM is almost as big as the entire GDP of the United States of America. What I love about the S1 is it reads like a science fiction novel.”
  — Steve Eisman [34:15]

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5. Agriculture & Screwworm Crisis

Segment Start: [37:22]
Guest: Brooke Rollins, US Agriculture Secretary

• Situation Update:

  • Second screwworm case in Texas; historical pest, not a disease threat—can be contained.
  • US investing over $1B to contain and push screwworms back into Mexico (using sterile fly technique).
  • The current administration credits rapid action in containment, despite some state officials’ criticism.

  “We have been managing Screwworm in North America since 1842. So this is obviously not new.”
  — Brooke Rollins [37:45]

• Pest Management Efforts:

  • New fly rearing/dispersal facilities in Texas and Mexico.
  • Goal: 400 million sterile flies a week; currently ramping up capacity ([43:19]).

  “We immediately upped that to 100 million flies a week...We've got to get to about 400 million a week.”
  — Brooke Rollins [43:19]

• Impact on Farmers:

  • Input prices, especially fertilizer and diesel, spiked during inflation and are seeing volatility due to Middle Eastern conflict.
  • Administration is working to “reshore” fertilizer production, expand global agricultural trade, and buffer price shocks.

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6. Memorable Quotes & Moments

• Kevin Warsh on Inflation:
  “I don’t think inflation comes about when the economy grows too much or hardworking Americans get increase in their wages.” [05:58]
• Steve Eisman on SpaceX S1:
  “It reads like a science fiction novel. It really does.” [34:15]
• Leslie Picker on SpaceX Retail Demand:
  “Retail though is expected to comprise 30% of the SpaceX IPO. And they may not be sitting on as much ample cash...” [22:59]
• Dan Murphy on Middle East Shipping Choke Points:
  “Two of the world’s most important waterways in the crosshairs of the Iranian proxies and the Iranian regime is obviously a major problem...” [15:51]
• Brooke Rollins on Screwworm Border Issues:
  “The flies do not know the border. No, that's exactly right.” [43:19]

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7. Additional Topics and Color

• NBA Finals in Manhattan:
  • Knicks vs. Spurs, President Trump expected at the game, sky-high ticket prices, cautions for crowd control.

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Timestamps for Major Segments

| Timestamp | Topic/Guest | |-----------|------------------------------------------------------| | 03:31 | Labor market, Fed debate, Steve Liesman | | 11:38 | Israel-Iran escalation, Dan Murphy | | 20:44 | SpaceX IPO impact, Leslie Picker | | 26:58 | Steve Eisman on SpaceX & AI | | 37:22 | USDA Secretary Brooke Rollins on Screwworm Crisis | | 47:49 | NBA Finals, Trump at Madison Square Garden |

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Summary Table: Speaker Highlights

| Speaker | Notable Segment | Quote/Insight | |-------------------|-----------------------|---------------------------------------------------------| | Steve Liesman | Labor Market/Fed | “Probability of Fed rate hike this year at 70%...” [01:27] | | Leslie Picker | SpaceX IPO | “Retail...30% of the SpaceX IPO...unwinding of levered ETFs.” [22:59] | | Steve Eisman | SpaceX Skepticism | “Grok...is not a world class AI company...” [28:26] | | Brooke Rollins | Screwworm Management | “The flies do not know the border...” [43:19] | | Dan Murphy | Middle East | “...major problem that...investors...are going to be following.” [15:51] |

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Tone & Style

The episode combines CNBC's signature fast-paced, data-driven financial analysis with moments of skepticism, inside jokes, and direct on-the-ground reporting. The hosts maintain a lively conversational style, sometimes with a skeptical edge—especially toward market exuberance or government spin.

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In sum:
This episode gives a panoramic view of market psychology as strong economic data collides with policy uncertainty, IPO mania meets investor skepticism, geopolitical risk shakes global markets, and American agriculture faces off against a persistent pest—all woven together with sharp analysis and candid quotes.

Transcript

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[Andrew Ross Sorkin]

AT and T Business Wireless connecting changes everything Bring in show music please.

[Joe Kernan]

This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, we're digesting Friday's sell

[Becky Quick]

off the S&P 500, breaking a nine week winning streak.

[Joe Kernan]

First, how the strong May jobs report shook market expectations for Kevin Warsh's first interest rate decision as Federal Reserve chair. The rate hike debate with CNBC's Steve Liesman.

[Steve Liesman]

The probability of Fed rate hike this year at 70% this morning for December, up from 44% before the Friday report.

[Joe Kernan]

And then the Nasdaq piece how the Space X IPO this week could have played into a rotation out of tech CNBC's Leslie Picker.

[Leslie Picker]

According to BNP Paribas, the Firm hypothesizes that retail plus passive flows into the IPO could be about $50 billion.

[Joe Kernan]

Space X clearly has pent up investor demand, but famed hedge funder Steve Eisman is one investor who's less hyped up about it.

[Steve Eisman]

Grok, with all due respect to Elon, Musk is not a world class AI company. The entire company is being bet on AI in terms of its future. Not on space and not on Starlink. Those are his words, not mine.

[Joe Kernan]

Plus, Iran and Israel have exchanged fire for the first time since the April ceasefire. And Agriculture Secretary Brooke Rollins on the

[Brooke Rollins]

Screwworm the food supply is not at risk. This is not a virus, it's not a disease. It's just a little pest.

[Joe Kernan]

It is Monday, June 8 and Squawk Pod begins right now.

[Andrew Ross Sorkin]

Stand Becky by in 3, 2, 1. Cue it please.

[Becky Quick]

Good morning everybody. Welcome to Squawk Box right here on cnbc. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. It's a Monday and we are ready to go. On Friday, the Nasdaq fell more than 4%. It was its worst day of trading since April of last year. When you were talking about the tariffs first being imposed, it was a decline for the NASDAQ of 4.7%. If you were looking over the course of the week, the NASDAQ 100 was down by more than 4 and 3% alone on Friday. We're going to talk more about that. It was something that spread throughout Asia. You saw some steep declines there as well. But on Friday, the S&P 500 breaking a nine week winning streak. It also had its worst week since last May.

[Joe Kernan]

First up today, why good news isn't always good news for the markets at least. On Friday, the Labor Department reported that the US economy added 172,000 jobs in the month of May. That is over double what economists were expecting. Unemployment stayed steady at 4.3% and the report even revised previous months upward, signaling an even stronger labor market. Strong though it was, it means the Fed is less likely to ease monetary policy in the short term, which makes things a little tricky for Kevin Warsh, the new Federal Reserve chair who's in the role largely because of President Trump's pressure on his predecessor to raise rates. Let's get back to the show.

A strong jobs report presenting an early challenge to the Fed and new chair Kevin Morse. Senior economics reporter Steve Liesman has the details. Hey, Steve.

[Steve Liesman]

Hey, Good morning, Joe. This is really interesting. The recent surge in job growth raising the chance of Fed rate hikes as it shakes up some of the ideas we've had about the economy at the Fed and presents an early test of some of the new ideas of Fed Chair Kevin Warship. Among the challenges created by those strong job numbers, what is the break even employment rate believed to be between 0 and 50,000. What could it be now with a three month average job growth of 109,000 and no change in the unemployment rate, what's the neutral rate? Hard to believe this rate currently is restrictive with such strong job growth. And is there now concern about jobs and wages raising the inflation risk? Cleveland Fed President Beth Hammack saying on Friday if recent trends continue, it may soon be appropriate to act. And in that sense, it suggested acting being raising rates. And the probability of Fed rate hike this year at 70% this morning for December, up from 44% before the Friday report blew past Wall street expectations for job growth of 172,000 in May and big upper divisions in the two prior months. And hold on, because there's Even now a 52% chance of a second hike that would be a year from now. While everyone from the President to his top economic adviser, Kevin Hassett, arguing strong job growth is no reason to hike rates, the data also is a test for new ideas of Fed Chair Kevin Warsh. He's criticized this notion that strong job growth creates inflation. He said in recent Senate testimony. Here's what he said.

[Dan Murphy]

My view of inflation is a bit different from some. I don't think inflation comes about when the economy grows too much or hardworking Americans get increase in their wages.

[Steve Liesman]

Rather, Warsh contends inflation as a function of Fed policy being too loose and the government spending too much money. His colleagues wouldn't on the Fed. They don't disagree with that. But they add that an overheating economy, one running above potential, is also a source of inflation relative to where Fed policy is set. Joe?

[Joe Kernan]

Yep, there may be an opportunity to test all this. All this stuff, Steve, about, you know, a hot economy doesn't necessarily mean that it's inflationary. It's just, it's hard to do during a war, though, isn't it, because other things are inflationary. Is it possible that we could have a lot of productivity and let things run hot if the war were over?

[Steve Liesman]

Yeah, but you know, also, Joe, we've talked about this, that the higher productivity also raises the neutral rate. That's another aspect. You know, it really is an important question for the market, Joe, why rates are running higher. They're running higher because the economy is hot because we have strong growth, or is it because of inflation? That's. That's a separate reason. You can get to both get there both ways. But it's really important how and why you get there. And you can have this strong productivity. You can raise the neutral rate, have higher rates and the market will still do well. But obviously the market didn't like what it saw and the implications of it on Friday. I guess today it's a little more chill with it.

[Joe Kernan]

And that same question, it's a global phenomenon, too, the higher rate. But is that from oil? I don't know. Or is there even something else that we all share that's causing it around the world?

[Steve Liesman]

A lot of it, Joe. That's what we all share. We all have a blank ton of it. Can I say I'm not going to say that I don't know what the rules are on cable, so. Well, but there's an awful lot of debt out there. And then when you think about what happens when rates rise, the ability to service that debt becomes much more expensive. So it's kind of like a vicious circle now. For the US we'll always be able to service our debt, I suspect, but for other countries, maybe less so. So as rates go up, it gets harder to service. And look, supply is always an issue somewhere in the equation, usually a little bit less in the United States. But eventually we're going to have to start thinking about that in a big way.

[Becky Quick]

Is globalization kind of splintering? Does that have any impact on rates around the globe?

[Steve Liesman]

I think that's a good question, Becky. We know what's happening on the good side, right? That globalization, it's really a globalizing world where countries, the United States and others are trying to make sure they have certain supplies domestically. So that's changing. And if that changes and you work up from goods, well, that means financial flows are probably lessening on the, on the global scale. And so there would be less connectivity and more sort of. You're on your own in these aspects. But Joe's points, an important one, that the higher rates we've seen is a global phenomenon. And the extent to which the financial markets are de globalized, I think it's only modestly at this point, especially when you have a big commodity like oil and higher prices ricocheting through the world and having inflationary effects. But over time, Becky, I think if we go on this route we're going on, there is going to be more to globalization in financial markets, but I think we're a ways away from that yet.

[Becky Quick]

Let me talk about what President Trump is saying this morning. He says he doesn't. Or what he was saying over the weekend. He says that he doesn't want to dictate how the new Fed chair, Kevin wash, runs the US central bank. The president spoke in an interview on NBC's Meet the Press that was taped after Friday's jobs report. It aired yesterday.

[Donald Trump]

I think Kevin is. Kevin's fantastic and I want him to do whatever he wants. I don't want to have a big influence on him. But we had a great report. We're doing great. And it's unfair that whatever you do great, they want to raise interest rates.

[Becky Quick]

The president also addressing interest rates and the pattern of stock markets, sometimes selling off on good economic news.

[Donald Trump]

Nowadays, when you have good reports, the market goes down because they think they're going to raise interest rates. There's no reason to raise interest rates. The country becomes great. We built a country by doing great and having rates low. What they do is when they raise interest rates, they try and kill success.

[Becky Quick]

Raise interest rates, you try and kill success or at least you lower interest rates. When you're really trying to help the economy when it's doing well, usually you don't need to lower rates because the economy is already doing so well. During the interview, the President did call for lower rates, but he was pretty clear a couple of times in saying he thought Kevin was going, he wasn't going to try and influence Kevin Warsh into doing things as well.

[Joe Kernan]

The bond market is dictating exactly where rates are headed. It has nothing. And it was. Which is, it was frustrating. It was such a good report on Friday and that was almost one of the key factors for the big sell off. Things are going to a little bit because of what. Because you're not going to just talking about.

[Becky Quick]

And technology stocks in particular are kind of keen to the.

[Joe Kernan]

And it was risk off to the potential for bitcoin held at like I think it did go one under 60

[Becky Quick]

briefly three over the week.

[Andrew Ross Sorkin]

Below 60,000 for a hot minute.

[Joe Kernan]

Yeah, it did. I think it was below 60, 59 or so 63. I don't, I don't know if you'd say it's, it's out of the woods at this point. It's. That's bouncing a little bit.

[Andrew Ross Sorkin]

We want to go to the Middle east right now because Israel and Iran exchanging fire for the first time since that ceasefire between those two countries. We wanted to get over to Dan Murphy who is right now in the region. Dan, good morning.

[Dan Murphy]

Andrew, good morning to you. And breaking just a few moments ago, President Trump wading directly into that escalation. In a post on Truth Social just moments ago, the President demanded and I quote here, that Israel and Iran must immediately stop shooting. It was a blunt one line intervention. And it comes after a weekend in which President Trump's private pressure was basically ignored. According to an Axios report, he personally told Prime Minister Netanyahu in Israel to stand down, saying a deal with Iran was within reach. But Israel struck anyway. President Trump then told the Financial Times he calls all the shots and that Netanyahu doesn't. President Trump now taking that message public. And of course overnight we saw Israel and Iran trading direct strikes the first time the two have targeted each other since the April ceasefire. Israeli warplanes hit military sites in central and western Iran, air defenses, missile launch sites and a petrochemicals facility under US Sanctions. Iran in response firing waves of missiles back and the markets are of course moving on this as well, as Becky just flagged oil pretty sharply higher this morning. Brent's up around 5% and inching closer towards 100 USD. US crude also hovering around 95 USD as well. What's interesting in the region today is that the language from both sides is also getting stronger. An Israeli military spokesperson saying Iran had made a serious mistake and that operations against Hezbollah will continue. Iran's Foreign Ministry also weighing in today saying it will keep responding for as long as needed. And an Iranian official involved in the talks also told Ms. Now that a deal with President Trump is, quote, no longer feasible at this stage. Iran's parliamentary speaker, Mohammed Galibov, the top negotiator, by the way, also saying the US Naval blockade and action in Lebanon have made American bases and assets in the region legitimate targets. One more for the energy market because over the weekends we also saw OPEC pulling plus agreeing to raise output targets by another 188,000 barrels a day from July. That will be its fourth hike since the Strait of Hormuz was shot. Although of course the strait is still choked off. Little of that is actually reaching the market, which is probably part of the reason we're seeing that risk premium staying intact for oil. So the situation here in the Middle east still looking very volatile after this latest flare up. The big question now is exactly what it means for those U.S. iran talks.

[Andrew Ross Sorkin]

Dan, in terms of the resources that Iran still has right now to continue fighting, to continue sending missiles either to Israel or elsewhere, how much capability are they still in control of?

[Dan Murphy]

Well, that's a great question, Andrew, because this most recent escalation ultimately highlights how Iran still has the capability to wage warfare around the region. Not only did we see these attempted strikes inside Israel, but at the same time as well, the Houthis in Yemen now also threatening to close down the Bab El Mandeb. This is the alternative to the Strait of Hormuz. They're saying any enemy ships attempting to pass that critical waterway will be blown up. So the threat level is rising and it appears that Iran and its proxies are still demonstrating some sort of capability on the other side of that trade. Though also fair to say that the US has done a really extensive job in degrading Iran's ability to wage that warfare. But of course, the Iranians holding on to the idea that they're going to attempt to maintain that leverage and keep up those strikes as we inch towards what could be another round of talks to find an off ramp to this

[Becky Quick]

conflict hey, Dan, I'm sorry to throw this at you without any warning, but when you talk about the Red Sea, how much of the oil flow that used to go through the Gulf has been diverted to go through the Red Sea? And how big of a problem is that to hear the Houthis saying this at this point?

[Dan Murphy]

Well, the Bab El Mandeb is a really critical waterway as well. The Strait of Hormuz responsible for about 20% of global supply. The Babel Mandeb is really critical for goods and products. So this could cause shipping rates to skyrocket. It could ultimately cause more upside inflationary pressures as well. And of course, with that critical waterway also essentially being choked off, it means that the more long term economic consequences of this conflict could also be impacted as well. So we're following this very closely. Exactly what type of capabilities the Houthis have to be able to exert their own control over ships in that area remains to be seen. But this is a warning that the market is really taking notice of. And of course, watching in closely as well. Again, exactly where this goes, I think remains to be seen at this point. But the fact that we now have two of the world's most important waterways in the crosshairs of the Iranian proxies and the Iranian regime is obviously a major problem that of course, global investors and everyone exposed to this conflict is going to be following.

[Becky Quick]

Okay, Dan, thank you very much.

[Joe Kernan]

OpenAI getting ready for the biggest update to ChatGPT since the product launched. It's already been four years, as four years ago. The Financial Times says that the changes are meant to bolster OpenAI's coding product Codex and reflect a belief within the company the task performing agents are more valuable for the future than chat bots. And the report says as OpenAI competes with Anthropic, it wants to transform ChatGPT from one of those bots into a so called super app combining both agents and coding tools. Changes are expected in the coming weeks.

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Coming up on Squawk Pod, we're ramping up to what could become the biggest IPO ever. Right on the heels of a nasdaq sell off. CNBC's Leslie Picker says it might not be such a coincidence.

[Leslie Picker]

Retail, though, is expected to comprise 30% of the SpaceX IP and they may not be sitting on as much ample cash in order to invest. And so that's why you're seeing kind of, you know, potentially the unwinding of some of these levered ETFs.

[Joe Kernan]

Then the investor famed for shorting the housing market in 2008. Steve Isman why he's not so positive about the SpaceX listing It all comes down to AI.

[Steve Eisman]

People are switching constantly from one to the other. There are no moats. So for all the money that's being spent, spent, what's being created, it seems to me at this point, is a commodity.

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Welcome back to Squawk Pod. Here's Joe Kernan.

SpaceX set to make its debut later this week, but some on Wall street think its impact is already rippling through the market. Leslie Picker joins us now with more. Yeah, we've, we've made no to that. Leslie, good morning.

[Leslie Picker]

Yeah, good morning, Joe. The Nasdaq had its worst performance since April of last year, exactly one week before the Space X ipo. And that may be more than a coincidence. Recently, retail investors have been chasing the upside momentum in semiconductors and hardware and AI power names. Micron alone has seen $6.5 billion in net retail flows in the last month, driving 87% upside. At the same time, US equity levered ETF assets have reached an all time high of more than $175 billion, concentrated largely in the NASDAQ 100 and semiconductors selling flows in recent winners and levered products from retail to invest in SpaceX could be very large. According to BNP Paribas, the firm hypothesizes that retail passive flows into the IPO could be about $50 billion if retail sells out of levered ETFs. That can create even more disproportionate pressure. Now this volatility could become even more exacerbated. After the IPO, you've got SpaceX options and levered ETFs that list the following week. And in the weeks after that, the company will start to be included in various indexes. So when you combine SpaceX's tiny 4% float plus passive and retail flows and then these options levered ETFs, you can see a situation where SpaceX's performance either to the up or downside, becomes more pronounced and has the capacity to bring the rest of the market along with it.

[Joe Kernan]

Guys, every time we see the, any type of sell off, Leslie, it's like, well, you need, you like Bitcoin, but if you want some Space X, you might sell some Bitcoin to get some SpaceX. And I think that's just one example of what we've been seeing. And it doesn't stop with just SpaceX. So I don't know what this means for, for the markets with, with all these hot IPOs coming.

[Leslie Picker]

Yeah, I think the question is, at least, you know, the people I speak with, the institutional investors, there's, there's ample cash available, there are a lot of different wells you can kind of tap there if they choose to invest in this IPO. Retail though, is expected to comprise 30% of the SpaceX IPO. And they may not be sitting on as much ample cash in order to invest. And so that's why you're seeing kind, you know, potentially the unwinding of some of these levered ETFs, which have a more pronounced impact on kind of the underlying assets there in order to maybe free up some cash if they were to invest in this. So you're seeing kind of an inverse relationship with the sell off and then potentially the, you know, at least retail, trying to free up some cash to invest in this.

[Joe Kernan]

Maybe they can get it from a private equity fund or something. Oh, no, that might be tough.

[Leslie Picker]

Yeah. Nope, that's locked up, Joe. Good thought.

[Joe Kernan]

Yeah. Andrew.

[Andrew Ross Sorkin]

Hey, Leslie, I'm curious what the reaction is on the street right now about both Goldman Sachs and Morgan Stanley's analysts. Of course, the bank itself is underwriting this, this big ipo, but their analysts have put out some, dare I say, sky high projections. We can hope they get there. $3.4 trillion, I think, is the market cap that Morgan Stanley put on this company, 2040. This is something that banks frankly did not do, were not allowed to some degree to do. Post that global settlement that Eliot Spitzer made back. I want to say, what was it, 2001, 2002. So, so what's happened? What's changed?

[Leslie Picker]

Yeah, I believe there was some reforming of that settlement that took place in December of this year. Kind of under the radar in terms of the communication, the analyst side and the investment banking side. It's not that there isn't still supposed to be a wall, but my understanding is that this is something where the analysts can't publish research necessarily, but the investment bankers can maybe go to the analysts and say, hey, what do you think here? And then they'll kind of work up a model and then that can be communicated. So it's not something that's used necessarily to win the business, but it's something that's maybe used as they have conversations just colloquially with investors. These are not numbers that have been published anywhere. They've just been kind of communicated. But I think to your point, Andrew, just thinking 14 years into the future for any company is very challenging for anyone to get their head around. What does my life look like in 14 years? I couldn't even tell you. There's definitely been a lot of chatter about just the projections, the fact that the valuation itself. I haven't really talked to institutional investors, investor who said, yeah, I'm really buying this on the fundamentals. It's all about, you know, do you believe this very bullish future case or not? Or do you believe in the technical setup for the actual IPO trade or not?

[Andrew Ross Sorkin]

Right. Leslie, the thing that struck me though was I agree with you. Supposedly these were internal projections that these analysts were, they were not publishing this in a sort of classic research mode. And yet in both cases, within what, 24 hours of each Other those estimates were put out into the public. And so, you know, maybe the rule, the rule of the road is that you can't publish, but if you can publish internally and then leak them and you happen to be the underwriter, what does that say?

[Leslie Picker]

Yeah, I think it's a really, really good question because I think what happened was these were communicated to investors, but if you communicate it to thousands of investors, I don't know how many were communicated to, but if you communicate it to investors, plural, it could leak easily. Absolutely.

[Andrew Ross Sorkin]

Leslie Picker, thank you. We'll be watching the big IPO all week.

[Becky Quick]

Joining us right now to talk all things markets is Steve Eisman. He is the host of the Real Eisman Playbook podcast. And Steve, thanks for being here this morning.

[Steve Eisman]

Thank you.

[Becky Quick]

Why don't we talk first about the SpaceX IPO? We're anticipating it's going to be here later this week.

[Steve Liesman]

Sure.

[Becky Quick]

Even come Friday.

[Steve Eisman]

I'm not a fan.

[Becky Quick]

Why Explain.

[Steve Eisman]

Let's see if you read the prospectus. I mean there's some amusing stuff from the prospectus. Like my favorite part of the prospectus is that one of the things that SpaceX wants to do is asteroid mining. I thought that was kind of funny. There's some asteroid mining going on in this sci fi show on Apple called For all Mankind kind. It's a central theme. But I think the probability of asteroid mining happening anytime soon is pretty low. But I think what is probably most important in the prospectus is how capital intensive Space X has become. So if you go back to fiscal year 2023 and you look, you compare revenue to Capex, capex was only 42% of revenue revenue and in the most recent first quarter it was 215% of revenue. And that's because back in fiscal year 2023, Space X was not in AI, it was just in Starlink.

[Becky Quick]

And it's not even space that's so hard.

[Steve Eisman]

It's the, it's the AI that is incredibly capital intensive. And Grok, with all due respect to Elon Musk, is not a world class AI company. You know, I don't think anybody speaks of Grok as, as at the leading edge.

[Becky Quick]

No, but the, the compute power that they are building has even players like Anthropic.

[Steve Eisman]

No, I understand that, but what you're talking about is an unbelievably capital intensive business.

[Becky Quick]

So not like company.

[Steve Eisman]

It's not like a software company. It's so capital. I think the most important news last week was the fact that Google is raising $80 billion. Right.

[Becky Quick]

And even though it's got a ton

[Steve Eisman]

of cash flow, but, but if you're going to spend 100, when it spent $90 billion last year, it could handle it from its own cash flow. When it's spending $180 billion, it's got to raise capital. And not just capital stock. And you know, there were rumors that Met is going to raise capital, Microsoft is going to raise capital. The whole tech sector is being transformed because it's so from an asset light, from an asset light business to an asset intense business. And the other thing I would just point out is despite the incredible sums of money that are being spent, what's being produced in terms of LLMs and agentic AI, which is great, is that really differentiatable. There's not that much difference between commodities. It's very commoditized. People are switching constantly from one to the other. There are no moats. So for all the money that's being spent, what's being created, it seems to me at this point is a commodity.

[Becky Quick]

So why do you think Berkshire Hathaway stepped in and took $10 billion of that Google?

[Steve Eisman]

I have no idea. I really don't know. I mean, look, Google, there's a lot of other reasons to own Google other than AI, but there's no question in my mind that, that the business has become capital intensive. No moats. And the other thing that's happening behind the scenes is that until now companies have been charging for tokens way below the cost of tokens. And that's actually starting to change. Microsoft GitHub is now charging actually for the tokens. And if you go on the Reddit board, you're seeing that there's a lot of pushback. So it's going to be question whether

[Becky Quick]

the business can survive, I don't know, but survive but, or thrive maybe I should say.

[Steve Eisman]

It's going to be very interesting to see how heavily people are going to be using AI once they get actually charged for the actual cost of the tokens.

[Becky Quick]

Andrew's got a question too. Andrew.

[Andrew Ross Sorkin]

Hey Steve, I don't disagree with you that right now XI is behind in terms of, relative to these other lams or even the possibility that they all become commoditized. What I don't understand though, or I don't understand about your, your take on all this is to some degree space X right now, in terms of getting things into orbit, getting to space is a monopoly. It's a monopoly power that ultimately will be able to charge at least for some period. Of time monopoly rents. I don't know what kind of multiple you put on monopoly rents, but when you think about the prospect of, and even if they don't have monopoly unto itself, the idea that they may be two, three, four, five years ahead of others, once others even get into the same competitive zone, whether it turns out to be, I think you know, your expectation is not going to be a good investment. And that, that's the part that I'm trying to understand. I found that I'll grant you never been a great bet to bet against

[Steve Eisman]

Elon Musk, I'll grant you all that. But if you look at, and that

[Andrew Ross Sorkin]

he seems to find new ways to, he finds new ways constantly to make, make money, whether it's the Google deal or the anthropic deal, he may ultimately buy. Buy Tesla, Put Tesla inside the thing. Maybe that'll, I mean, I don't know.

[Steve Eisman]

Well, let me address it. If you again, look at the S1, the TAM, the total addressable market is defined at 28%.5 trillion, 85% of that TAM is an AI. So even if everything you say about Space X and Starlink is true, the entire company is being bet on AI in terms of its future, not on space and not on Starlink. Those are his words, not mine.

[Andrew Ross Sorkin]

Do you, do you expect him to buy Tesla? I am, I'm expecting that he's going to use the stock price perhaps of Space X to buy Tesla and create sort of one giant company called X.

[Steve Eisman]

I wouldn't doubt it. I think if, if I was a shareholder of Space X, that'd be the last thing in the world I'd want him to do. But I'm sure he's going to do it. I mean if you look at, if

[Dan Murphy]

you look at Tesla, the earnings have

[Steve Eisman]

gone straight down for the last four years. Every single year that they have gone down. The EV business is just not that great a business. It's also a capital intensive business that's highly competitive. You know, China produces EVs much cheaper than, than, than, than Tesla does. I, if I, again, if I was a SpaceX shareholder, the last thing I'd want would be for him to buy.

[Becky Quick]

Yeah, there have been people who said the way to get into SpaceX index if you can't get a hold of the shares is to buy Tesla.

[Steve Eisman]

Look, I wouldn't doubt that he buys it, but like I said, that's not something I would want him to do.

[Becky Quick]

Your bigger concern is that there's a lot of good news here. But you think it's already all been baked in to expectations at this point.

[Steve Eisman]

It's more than, it's more than baked in. I mean, the, the 28.5 trillion TAM is almost as big as the entire GDP of the United States of America. I mean, what I love about the S1 is it reads like a science fiction novel. It really does.

[Becky Quick]

People who have bet against Elon Musk in the past have gotten burned if they've shorted him.

[Steve Eisman]

Is this a. I have no interest in shorting this. I'm just not playing. It's not something that I, that I think the valuation's silly and you know, people want to play, go play. But, but you know, you're talking about something that's pure momentum. But I don't see the valuation at all.

[Becky Quick]

Okay, Steve, thank you for joining us this morning. It's really great to see you.

[Steve Eisman]

Thank you.

[Joe Kernan]

Next on Squawk Pod, how the US Agriculture Secretary Brooke Rollins is directing operations to contain the Screwworm.

[Brooke Rollins]

We have been managing Screwworm in North America since 1842, so this is obviously not new.

[Joe Kernan]

Plus other headwinds for US Farmers. And it's not just the Knicks showing up at MSG tonight for Game three. President Trump and Mayor Mamdani will be at the Garden too, if you want

[Andrew Ross Sorkin]

to go to the game tonight. Beyond the ticket prices, you got to show up two hours ahead of time to allow for TSA style security.

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[Joe Kernan]

You're listening to Squawk Pod.

[Andrew Ross Sorkin]

You're watching Squawk Box on cnbc. I'm Andrew Ross Sorkin in London this morning. Joe Kernan and Becky Quick are of course in New York. And we've got a lot of news this morning.

[Becky Quick]

The Agriculture Department has confirmed a second screw worm case in Texas which was found in a calf about five miles from the first case. The USDA says that the US Food supply remains safe and it is monitoring the situation. Joining us right now is Agriculture Secretary Brooke Rollins. And, Secretary Rollins, thank you very much for being with us today.

[Brooke Rollins]

Good morning. Thank you for having me.

[Becky Quick]

Can we just get your the best of your knowledge where this situation stands right now? Finding a second case five miles away is certainly raising concerns of a possibility for an outbreak. What do you know at this point?

[Brooke Rollins]

Well, let me level set for a minute. We have been managing screwworm in North America since 1842. So this is obviously not new. In the 1950s and 1960s, it was a massive issue for our livestock producers across the Southwest and really all through america in the 1960s, a new technique to battle it called the sterile insect technique, using sterile flies to mate with the bad fl. The screwworm is actually a fly that lays her larva in open wounds and livestock. And so we were able to defeat it in the late 1960s, early 1970s, eradicated it, pushed it all the way back past the Darien Gap into South America where it was contained for decades, I guess almost 50, 60 years. I do think it's important to note that under the last administration with a massive movement under the open borders policy, the cartels, et cetera, border security, that's when it began to make its way back up toward America, hitting Mexico in early 2023, moving its way up through Mexico in 2024. And when we walked in the door last year, I was sworn in on February 13th of 2025. They laid this all out for me. And I said, well, where are the sterile flies, right? I mean, this is we've beaten it before, we've got to beat it again. And obviously not much had been done to push back. So we moved, really closed all the ports. We started to build the infrastructure to battle it. And all of that has been coming online now over the last few months. By closing the ports, all the models showed it would hit last summer, we'd actually have that infestation last summer, but were able to push it off until this summer. So now we have moved into containment. The two cases in South Texas, the food supply is not at risk. This is not a virus. It's not a disease. It's just a little pest. A larva that lands in a calf's wound, for example, can be treated. So the calf that were, the two calves that were found last week, last Wednesday, have been treated. They're expected to fully recover. But in partnership with the Texas Animal Health Commission, the Texas governor, et cetera, we have boots on the ground. I'm headed there again for the fifth or sixth time today, and we'll be able to beat this back. But we're going to do everything we can, investing over a billion dollars to push this pest back into Mexico, then to eradicate, as we did about 50 years ago.

[Becky Quick]

Secretary Rollins, there has been some pushback from some officials in Texas, including Sid Miller, who's the agriculture commissioner there, saying that the administration's not moving fast enough. What exactly do they want to see done? How quickly does this take place? And just the idea of eradicated flies, maybe it's the only way to do this. How long does that take, though, to really set in? I guess it's the gestational period of several waves of flies that you have to go through.

[Dan Murphy]

Right.

[Brooke Rollins]

Well, you know, it's very unfortunate what the Texas Ag Commissioner has been saying. I've known him for a long time. He lost his primary as the incumbent a few months ago and has had lots of crazy ideas for a long time. I think his latest thing is he's saying, well, don't even report it if you get it, which from the Texas Ag Commissioner is absolutely just so disturbing and disruptive and so harmful to what we're trying to achieve. So I certainly hope he changes his tune very, very quickly. He knows that we have been moving at Trump speed. The big fly facility we're building for the first time in America, we permitted within a couple of months, which would normally take years to even permit, and then broke ground. We opened a new dispersal facility earlier this year. Again, in preparation for this. We're already dropping about 10 million sterile flies a week right now on the affected area. We have the first ever ground release. You normally release flies from the air. We're also releasing flies from the ground. Again, we've had a year to prepare because we were able to keep it out against every model last year, and we've got a lot of things moving to protect. But the other thing I think that's interesting is we also have A lot of treatment opportunities from the fda. They went on an emergency fast track approval process last year preparing for today. And that's why again versus the 50s and 60s there were no sterile fly innovation until later. That's how they eradicated it. There wasn't treatment. We're in a much better spot today than we were back then when it took years to make sure we were able to do it. But we'll be at the point where we're going to start being able to push back hopefully within a couple of months. Until then it is keep your eyes on your on your livestock Report report report. We have all the veterinarians on the ground, mobile testing units ready to go to again contain as we're working with all of our great ranchers and livestock prod producers in Texas and of course working with Arizona, New Mexico and California also border states also with significant livestock. But the screw room is hundreds of miles away from those states. So we're really focused on Texas right now.

[Becky Quick]

The cases that have been reported have been have taken place just miles from the border with Mexico. Is this a situation that in order to fight it effectively, those irradiated flies have to be dropped also in Mexico to try and push it back from the border. I mean flies don't recognize a border.

[Brooke Rollins]

That's the flies do not know the border. No, that's exactly right. And that's what we've been doing. We upped. The only sterile fly producing facility in the entire continent across North America has been in Panama, which is where that gap, that biological gap was that that was broken under the last administration because so many people were trying to get to America through South America, Central America and into Mexico. So the only facility was our COPEG facility in Panama that produced on average about 30 million flies a week. We immediately upped that to 100 million flies a week and then have been flying those flies over the last year, which is again how we were able to keep it out of America for almost a year when it was supposed to be here. Was using those flies to ensure that. And we move that, we call it the polygon. We move it around almost every day to figure out where the biggest threats are. So that has been successful. But we need a lot more than 100 million flies a week to begin to eradicate as they did in the late 60s and early 70s. While we brought on we've got a new facility in Metapa, Mexico that we began to outfit last fall. So that comes online in the next few weeks. That's going to add another 50 to 100 million a week. We've got to get to about 400 million a week. We've got some new technology coming out, but the big facility that again we broke ground in Texas, that at its full capacity, which will be next year, will be around 300 to 400 million flies a week. But again, we're hopeful, we'll begin to start pushing back. But we've got the containment strategy. We've got people on the ground. Texas Animal Health Commission is the lead on this. We are helping, obviously coming alongside them to help from the usda. It's an all hands on deck. This is not a blue versus red, Republican versus Democrat, those who lost their primaries versus those who won their primaries. We've got to get everybody moving in the same direction. And that's what we're working so hard to do.

[Becky Quick]

Secretary, how are farmers faring these days? The state of the American farmer, given higher fertilizer prices, higher prices at the pump, particularly with diesel.

[Brooke Rollins]

Well, the farm economy, there's no doubt, is facing headwinds. What it was almost a 40% increase in input prices under the last administration, not not surprisingly, the highest inflation we've seen, I think on record, obviously spills into the farm economy with labor, with fuel, with seeds, with fertilizer. Before the Iranian conflict, all those numbers were coming down significantly. Fuel was down almost 25%. Fertilizer in some cases was down 100%. What this Iranian conflict has meant is a temporary increase in prices, but they're real. And I was with the president on Friday in Wisconsin. We did a farmer event the president talked about, you know, he's doing everything he can. He loves our farmers and ranchers. He's so great about it. But at the same time, what we have to realize is no new trade deals under the Biden administration. We now have 19 new trade deals and frameworks. We've opened the market up. I mean, these are what the farmers want. They don't want to farm for a government check. They want to farm, to sell their goods, the righteous, the righteous, farming and feeding the world and fueling the world. And that's what's happened over the last year. We're having surging exports in dairy tree nuts, ethanol, corn, wheat, et cetera, and not just to China, to the rest of the world. And we're only just beginning. So the cost of inputs have come down other than this, fertilizer and diesel fuel, under the last, what, 90 days with the conflict. But as soon as that ends, they'll begin to trend down significantly again. And in the meantime, we're working to open up the markets for fertilizer. We're reshoring fertilizer. We announced the groundbreaking just a few weeks ago of what will be the largest ammonia plant in the world in Louisiana. We're going to very quickly be announcing one of the largest potash fertilizer plants in the world in America. Over decades, so much of our fertilizer, like so much of our manufacturing had offshored and moved to other countries. And because this light has been shown on, it's a national security issue. If our farmers have to rely on other countries for fertilizer, we're now bringing all of that back to America. So it's in the long term, this is a huge success story. In the short term, we're opening up these lines. We're waiving the Jones Act. We're doing everything we can to get more fertilizer to America today and get the prices down.

[Becky Quick]

Secretary Rollins, thank you for joining us.

[Brooke Rollins]

Thank you for having me. Great to be on.

[Andrew Ross Sorkin]

And the NBA Finals returning to Manhattan tonight for the first time since before the new millennium. New York leading San Antonio two games to none and the best of seven series tip off set for 8:30pm Eastern time, though we'll see whether it starts on time because President Trump expected to attend the game at the invitation of Knicks owner James Dolan. Mr. Trump would become the first sitting president to attend an NBA Finals game. New York's police department saying a watch party scheduled to take place outside Manhattan Square, Madison Square Garden has now been canceled. Attendees, by the way, if you want to go to the game tonight, beyond the ticket prices, you got to show up two hours ahead of time to allow for TSA style security screening. So you pay a lot for the ticket and then you'll, you'll wait online for about two hours and we'll see whether the game goes off at the right time. I don't know what you guys think

[Becky Quick]

it's like Trump and Mayor Mamdani going

[Joe Kernan]

to be there and it's like 10 the tickets, 10 grand for the nosebleeds above.

[Becky Quick]

10 grand, $100,000 plus for seats down up front.

[Joe Kernan]

100,000.

[Becky Quick]

Yeah. Six figures is what is what you could get to for some of these seats. It was something Hart spoke about I think over the weekend. Just saying he wished these prices weren't quite so high that some of the fans could get in who have been longtime fans who have been waiting for this because the Knicks haven't won a championship since 1973. There's a restaurant here in New York that is offering prices that are 1973 prices like 78 cents for chicken wings and stuff and beer. Different things that are going through it now. It has been all season long the spurs have not dropped three in a row, but they haven't won a game in Madison Square Garden in five and a half years.

[Joe Kernan]

Really?

[Becky Quick]

Yeah. So you know this crowd is going to be a fired up home crowd. The last game where they won by

[Joe Kernan]

one point and it's 830. San Antonio, it's not 8:30, but it's also good. Is it 7:30?

[Andrew Ross Sorkin]

The whole idea of all of those, all those New Yorkers who are outside typically who used to stay outside of Masters, we're Garden to watch. That's over. It'll be interesting to see whether if there is a win, whether people take over the streets, whether they can take over the streets again, whether tip off really happens at 8:30. You might recall when the president came to watch tennis at the US Open in the last fall, that is that delayed things. There's a lot of back and forth about whether he should be going to the game at all. I don't know if you saw what Stephen A. Smith and some others said, just about what it does to the, the machinations around the Garden and everything else. But we will see and we will watch and go Knicks.

[Becky Quick]

So the last time the Knicks lost a game, do you know how long it's been? They've won 13 in a row.

[Joe Kernan]

Yeah.

[Becky Quick]

The last time they lost a game was April 23rd.

[Joe Kernan]

Playoff games, right? I think 13 playoff games.

[Becky Quick]

They won 13. Yeah. It's been unbelievable

[Joe Kernan]

that that's Squawk Pod for today. Thank you for listening. Let's go. Nix Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin, weekday mornings on cnbc starting at 6am Eastern. To get the smartest takes and analysis from that TV show right into your ears, Follow Squawkpod wherever you get your podcasts. We'll meet you right back here tomorrow.

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[Andrew Ross Sorkin]

Thanks, guys.

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