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Rotation Nation, AI in the Classroom, and Betting’s Soccer Boost 7/6/26
00:43:46
With tech proving volatile, investors are putting their money to work in other sectors. Sal Khan, CEO of Khan Academy, reveals how much computer time kids should have per week to be successful. Plus, the beautiful game drives prediction market volumes to record highs.
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Narrator/Commercial Announcer
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Michael O'Hanlon
Sometimes AT&T business Wireless Connecting changes everything.
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Kelly Evans
Thank you very much Scott. A jump in chip stocks is pushing the NASDAQ higher again today as we kick off the first full trading week of the second half of the year. While shares of Nike are weighing on the Dow, although it did briefly top 53,000 for the first time ever. I'm Kelly Evans and welcome to the Exchange. Are we or aren't we seeing a leadership rotation? Scott Kronert and Jonathan Krinski weigh in on that question question as the SOX chip index jumps almost 4% today, coming off back to back losing weeks for the first time in four months. Plus, just the sentiment is shifting around jobs with prominent voices in Silicon Valley saying that AI disruption fears are overblown. Sal Khan is here to say hold on, we still need to take those concerns seriously. That and how the betting boom on the World cup is creating new winners and losers, including one key market in China. But let's begin with this herky jerky market if I can call it that, the momentum trade coming off its worst two day decline in six years, falling 17% according to Goldman and down 24% from its peak coming into today. They say buying that dip has typically paid off and today we are seeing a bounce in areas like the chips. Let's dig into it with Scott Kronert. He's U.S. equity strategist at Citi. Scott, it's great to see you and what do you make of it?
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Scott Kroner
Hey Kelly, so you look at I think the response to the sell off that we've seen in the past couple of weeks is appropriate. That's bound to happen at some point here on the mean reversion side, I think you know our issue and we downgraded tech, we can change a go from a long standing overweight to a market weight and we are just allowing some room for digestion of the second quarter move that we saw particularly coming from the semiconductor component attack.
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Kelly Evans
Room for digestion a healthy development for you?
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Scott Kroner
I think it's probably healthy. I don't expect there to be any material change in the fundamental setups for these companies as pertains to 26 and maybe 27 earnings. But we do think that what we're doing as memory prices work higher, the stocks were higher off of the earnings expectations around that is set up for a little bit of a, of a game of chicken with the hyperscalers where who's going to blink first in terms of how you justify paying more for semiconductor componentry relative to the ROI discussion on the other side of that. So we think it plays out through the Q2 reporting period. That's where you get your digestion. Then you come back to the other side presumably with a bit more balanced view towards tech into the, into the
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Kelly Evans
end of the year by the way. Quite a move in the software space and that's an area I know you guys think maybe has some more room to go.
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Scott Kroner
Yeah. So on software we've been underweight for the past couple of quarters. We've lifted that up to a market weight and so there the spin is. We get it, we get it. Software has been ground zero for investors concerned where disruption is going to hit wholeheartedly. And we think that you've adjusted the terminal multiples appropriately for that. So what you end up getting here is that if there is some pushback on the CapEx spend out of the hyperscalers that actually transmits into a little bit more confidence that the micro, that the, the software fundamentals can remain persistent for longer and that justifies their move higher in recent days.
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Kelly Evans
I think it's interesting that of everybody on the street, you guys I believe are the highest for your earnings estimate for the s and P500 up at $350. And what, what all goes into that?
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Scott Kroner
Yeah, so we're, we're making a few assumptions. First, the Q1 positive surprise we've got we do not think will be replicated. What we think we get going into QS2 through 4 will be a more traditional beat, if you will, in the 4 to 5% range. Consensus for the S and P right now, Kelly, as of as of Thursday, this past Thursday is roughly 24-343-SO-SO we think what ends up happening here is that normal beat gets us to our 350 estimate. Again, we don't see any particular issue with the semi and tech related earnings components into the Q2 reporting period. But the other side of this is what we do think we'll begin to see is a bit more contribution from other sectors that play into the broadening trade. Exactly as we unwind some of those oil price concerns in which of those
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Kelly Evans
sectors we're showing kind of where you guys expect the biggest surprises for Q2 technology is up there, but also consumer staples, industrials, financials, health care. And then as you look out, do you expect those areas to, to kind of put earnings up at your target number and higher than people are expecting right now?
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Scott Kroner
I think the biggest edge that we're looking for here is out of consumer discretionary. So if you think back to what we were navigating with Q1 earnings, we were smack dab in the Iran higher oil price, you know, dynamic that's now moving to the sidelines. Oil prices below 60. What I think we're going to get out of the consumer discretionary cohort is a, is a corporate commentary that's certainly less concerned than it was and probably more cautiously optimistic. What that transfers into is a bit more of a, of a positive earnings revision edge but more importantly is a positive price momentum edge as well.
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Kelly Evans
So. And you are now building on. A couple of people last week were talking about the same thing saying the biggest upside surprises they were starting to expect were in the retail areas, maybe even restaurants. Consumer discretionary, broadly, I mean that would be a great broader narrative if that all started to take like I said. Does that mean the K shaped economy is over? I don't know if we can go that far yet.
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Scott Kroner
Well, we've got some issues that we still need to work our way through the as as we know the market's pricing in the next Fed move to be sort of hawkish potential increase. The City House view is that we still got a couple of Fed rate cuts between now and year end. So I think the storyline here is that you begin to look for some edge coming off those inflation numbers as we go into the rest of the Q3 and then beyond. And with that you begin to get a little bit more confidence playing through to the consumer what that sets up for if we're right. And we also do get a bit more of a dovish leaning out of the Fed. That's a, that's a pretty good risk on profile for the broadening trade.
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Kelly Evans
KELLY Indeed. And there's the Dow turning positive again, joining the other major averages. SCOTT and by the way, Nike had been weighing on it too. Maybe that looking a little bit better this hour. Scott, thanks so much. Appreciate it for now. Thanks. Scott Kroner over at Citi. Let's get the technical take now with our next guest who warns that the trade is at the best entering a period of significant consolidation and at worst is putting in a meaningful top. Let's bring in BTIG Jonathan Krinsky. Jonathan, it's good to see you. So what do you think is happening with that trade?
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Jonathan Krinsky
Kelly? So I think, you know, the action of the last couple of weeks is certainly telling. You had the semiconductor index with seven straight days of nearly 4% move in either direction. That's typically, you know, what you see kind of after bear market bottoms, kind of, you know, in a bottoming pattern. So when you have that at a 52 week high, that's a clear indication of indecision. And again, given how stretched these names are from kind of their long term moving averages, that suggests to us that again, at best it's just a consolidation phase and we'll see if it's anything more ominous than that. But I think the good news is that that money so far is finding a home in other parts of the market and that's really the part we're focused on right now.
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Kelly Evans
I think that's a great point because who knows exactly how to pinpoint the top. And the strength of this rally has surprised the doubters a number of times. But your point is people are rotating out of it anyway and putting that money to work elsewhere in the market. And you think that's lifting areas that we've talked a lot less about in recent years.
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Jonathan Krinsky
Yeah, I mean, how many times have you heard people talk about the insurance sector of late, but that's breaking out of a, of a two year trading range to the upside, the health care sector on an equal weight basis. RSP is that equal weight ETF that's breaking out of a five year trading range. And then the REITs, which again, tech gets all the, all the love for the July performance. But the, the REIT index is up 18 straight years in the month of July. Pretty, pretty fascinating seasonal study there. And it's, you know, the REITs have not broken out yet but we think, you know, they're very poised to do so. So those are three areas we'd be looking at that look a little more timely to us than the tech trade.
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Kelly Evans
Look, rates breaking out what real estate investment trusts would make a lot of sense if Scott Kroner and others are right, that we're going to be talking about rate cuts again. And if you get some relief kind of the longer end of the curve, then maybe that's beginning to tell us something. Just quickly on the insurance piece, we had actually talked about this a week or two back more from the cautious point of view. Could retail, could insurance pricing be softening? Why do you see that one breaking out? Is there any, any kind of bigger picture takeaway from that or it's just an example of an area where money might be going where it wasn't before?
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Jonathan Krinsky
Yeah, I think that's part of it. And to your point, I think the market is probably, you know, over its skis and anticipating rate hikes. And so if you take some of those potential hikes out of the market, that could also be a tailwind for the insurance group. But you know, again, that's how markets work. Investors kind of lose interest in one area of the market and that's what's happening in healthcare for five years for, you know, REITs also have gone nowhere for five years. Insurance has done a little bit better, but it's been dead money for about 18 months. And now we're starting to see some breakouts in some of the marquee insurance names. So, you know, it's a combination of everything but, you know, definitely an area that we don't think gets enough attention right now.
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Kelly Evans
And biotech too. I know Jim was talking about that this morning, but up 50% year to date. So people say there's an area you can go and not have to have an opinion about Capex, you know, for the Mag 7 and next week or the week after time. Finally, Jonathan, as we were saying, we've had this back and forth where the momentum trades under pressure and then it, then it shows a little bit more life again. So what do you think the message is as we kick off the back half of the year? Are people going to leave that behind or can it still take us kind of in the leadership position through those 8,100 price targets Scott Kroner was talking about into year end?
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Jonathan Krinsky
Well, July is actually a very poor month for the momentum factor. It's often the case more so that the, the short side of the momentum factor rallies. So you'd have areas that have been performing poorly over the last 12 months break out and that's what causes the drawdown in momentum. Right now we're seeing a little bit of both where you know, the tech AI stocks are coming in and areas like software and some of the laggards are rallying. So we think we actually see a bit more of both of those and that can bring you into kind of the end of the middle to late part of this month when you get into EPS season. And then we'll see. I mean, if you go back to July of 2024, we saw a similar situation where momentum really had an unwind and then that led into an overall market correction as we got into August. So that's something that we'll be looking for as we get through this month.
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Kelly Evans
Yeah, you had that yen carry trade blow up and then the 50 basis point rate. All of these things that now we forget about. Jonathan, thanks very much. Really appreciate it today.
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Jonathan Krinsky
Thank you.
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Kelly Evans
Jonathan Krinsky with btig. Coming up, President Trump calling the leaders of Ukraine, Russia, oh, and FIFA over the weekend. One of the calls creating some major international backlash. Plus. Another first from the White House. The president joined ringing the New York Stock Exchange and NASDAQ opening bells from the Oval Office this morning to celebrate the launch of the Trump accounts. What's not a first? The president telling people to go out and buy Dell computers. Those shares up as much as 9% on the mention earlier. And remember, the president bought between 1 and $5 million worth of shares on February 10. According to that government ethics filing. The shares are up 240% since then. We're back after the short break.
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Narrator/Commercial Announcer
This is the EXC on cnbc. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update. Wherever you get your podcasts, buy the dip and save on CNBC PRO24.7 access to market moving news and interviews across three global live streams for 59.99 at cnbc.com joincnbc pro. Terms and conditions apply.
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Kelly Evans
Welcome back. We are counting down to the start of this week's high stakes NATO summit in Turkey. President Trump is expected to press his European counterparts on hitting their defense spending targets, among other issues. Megan Casella is at the White House with a look at what else is on that agenda.
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Megan Casella
Megan Kelly, that's Exactly right, the U.S. ambassador to Naito, that's Matt Whitaker, told reporters on Sunday that the president will be measuring the progress at this summit that countries have made in Naito's spending to ensure that they're on track to hit their target of 5% spending on defense. Now, President Trump is set to depart tonight for that summit in Turkey, which will run Tuesday and Wednesday. And some highlights on his schedule include bilateral sit downs with the leaders of Turkey, Syria and Ukraine, as well as a closing press conference on Wednesday morning Eastern time. And top of the list of agenda items for President Trump's meeting with Ukrainian President Zelensky is how to end the Russia, Ukraine war. President Trump spoke about that this morning. Take a listen.
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President Donald Trump
I think we're getting much closer than people realize. And President Putin wants it to end. I will tell you that very strongly. Good call. And President Zelinsky actually wants it to end now. And we're going to be going to NATO and we're going to be talking about it.
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Megan Casella
Kelly as for what else to expect, a senior U.S. official told reporters to expect billions of dollars in announcements on the sidelines of the summit, potentially around weapons systems purchased from the United States. The official also said NATO leaders will be discussing how to protect maritime traffic through the Strait of Hormuz. And there could be some talk about the US's posture review of its troops in Europe. Kelly?
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Kelly Evans
Megan, thanks very much. Appreciate it. Megan Casella, for more we turn to Michael o'. Hanlon. He's director of research for Brooking Institutions Foreign Policy Program. Michael, it's great to see you. What are your expectations for this summit?
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Michael O'Hanlon
Hi, Kelly. Well, in some ways, the less the better. You know, I think I can imagine so many issues where this could go wrong. I've heard some chatter about President Trump reopening the Greenland question. And certainly every time we talk about the Iran war, people tend to see the conflict in a different way. Europeans often think of it as Trump's war done without consultation, at great risk and penalty to them. And then he asks for their help in reopening the strait. And of course, they say, well, only after hostilities are over. So this tends to be a contentious issue as well. I hope we can have a couple of positives where we do see progress towards NATO spending more on military burden sharing and maybe see an idea or two that's new on Ukraine, although I'm afraid I have to be from Missouri and, you know, be the show me state before I agree with President Trump that we're actually any closer to a deal. I think Naito needs to find more ways to put pressure on Putin. So that would be at least a small step forward. If that could happen. I don't expect great things, but even incremental progress and no blow up would be welcome.
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Kelly Evans
One storyline curious, if you think this is correct, is that leaders are getting frustrated with President Trump. They feel their kind of flattery campaign isn't really getting them anywhere. They're looking at Canada's approach and thinking maybe that's the right one to reach out and strike more international partnerships and that there are going to be several meetings in which leaders are getting together, no cell phones allowed, kind of event session, which sounds to me like it might actually prod the president to go into responding in ways that might not go over that well either. But I guess my question is, do you think that that's really the vibe in Europe amongst these leaders is is frustration with the president that could result in, in some kind of pushback? Or instead, do you think issues, for instance, like how to best tackle Russia would be an area where they're spending more time?
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Michael O'Hanlon
Well, I think in general you're right to raise the question. I think European leaders at this point feel that just flattering President Trump is not always the best way to go. They spent a lot of last year trying to make concessions to him, agree with much of his agenda, and pick up the slack on Ukraine, where the United States basically abandoned providing any meaningful assistance. And all that got European leaders was the January 2026 demand by President Trump that the United States own Greenland and the military threats that we might just take it. So I think at that point the Wall Street Journal reported well on this today. I believe there were a lot of sessions within Europe and also conversations across the Atlantic where the European leadership basically said to President Trump, if you take Greenland, for example, this is going to be the end of Naito as we know it, and the end of a lot of transatlantic business, or at least new deals as we've known that in the past as well. I think Europeans generally feel they have to push back a little more firmly now. The chancellor of Germany made a big mistake when he spoke a couple of months ago to a school, schoolchildren and said that the Iran war was Trump's war and he had been embarrassed by the outcome, that he had been shown up by the Iranians. That's going too far. You don't want to needlessly get into fights. But I think Europeans have concluded they have to push back a little more firmly. And maybe Prime Minister Carney, the Canadian leader, maybe he is sort of showing the right model where he tries to maintain Decent conversational atmosphere with the American president, but also talks about these new links and these. I just would not surprise President Trump with any big new developments at the NATO summit. I think surprise is not a smart tactic as a rule, but pushback sometimes is.
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Kelly Evans
You know, the president says that I think in his words, Russia and Ukraine both want a deal. What should the Europeans do? They've kind of looked the other way while allowing these shadow fleets from Russia to pass through their waters and continue to fund the very country that they are building up military capabilities against. And, you know, this is now continued to drag on, and there's more drone fighting and there's more bombing of Ukraine and Russia on both sides. And so what should NATO leaders do?
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Michael O'Hanlon
Well, I think both Europe and the United States need to work harder against the shadow fleet because one of the things that's changed since President Trump entered the White House again was the United States was less enthusiastic about listing ships even when we knew that they were acting illicitly. So there's got to be just greater transatlantic cooperation on that issue. As my colleagues Robin Brooks and Ben Harris have been documenting and some very careful research. I also think we need to think about, you know, getting off Russian oil and gas more systematically, more thoroughly throughout the Western world and even beyond that, maybe even thinking about applying secondary sanctions to countries that still buy Russian oil and gas. For a long time we wanted them to do so. It was actually our request they continue to do so. But maybe now we have to be willing to step up the pressure on Putin. I do not think there's any great evidence that Putin is closer to doing a deal. I hope President Trump's right, but I haven't seen proof yet.
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Kelly Evans
Yeah, finally, the. Whatever happened between the president and FIFA about the U.S. soccer issue, the player. Here's, here's, by the way, the latest Kelshi odds. And they think now the US Looks more likely to advance out of this game tonight against Belgium. Michael, is there any real fallout? Is this just going to be a distraction on the eve of this summit?
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Michael O'Hanlon
Well, I've never been asked for my expertise on soccer before on the air, especially live television. But it does look to me as if FIFA, there may be a personal bond, their relationship, but I don't know that FIFA was in danger of American retribution in any major way. So I'm thinking that that decision was made on its merits. But now I'm getting into dangerous territory, given my expertise.
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Kelly Evans
You will probably hear more about that point of view than anything else that you've said, Michael. Really Appreciate it. Great to have you today.
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Michael O'Hanlon
Thanks Kelly.
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Kelly Evans
Michael o' Hanlon from Brookings Coming up, Palantir CEO Alex Karp criticizing the token model used by AI giants Anthropic and OpenAI. But could pulling on that thread unravel the entire AI trade? We'll dig into that next. Speaking of which, we might be in the midst of a major reversal on the jobs front when it comes to AI. What does it mean for investors? We'll ask a pioneer in AI and education who's teaming up with Big Tech to reskill their workforce. Khan Academy founder Sal Khan Coming up on the Exchange
- [22:08]
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Megan Casella
gelato was too good.
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Chase Sapphire Preferred Card User
So where should we go next year?
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Kelly Evans
I've got ideas.
- [23:00]
Chase Sapphire Preferred Card User
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Kelly Evans
Palantir CEO Alex Karp bashing the AI token structure used by Anthropic and OpenAI. He says CEOs are frustrated by skyrocketing costs and warns they are turning to China for a solution. SIMA Modi has more in today's Tech Check.
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Sima Modi
Sima well it really filled in the conversation online. Kelly Alex Karp saying CEOs are privately voicing frustration on skyrocketing AI costs, which don't seem to be translating into higher productivity. He says they are particularly frustrated with the payment structure which charges users by the token for using their models. Now Karp also adding that companies are feeding the big labs with proprietary information that OpenAI and anthropic topic, he says can essentially use to replicate their businesses. Now that's really resulted in this heated debate on social media with leaders from Silicon Valley and Washington joining the conversation. Former White House adviser Sriram Krishnan posting on Next we need a clear path for how companies and countries feel about the value they bring to AI and not getting eaten by the models. Palo Alto Network CEO Nikesh Arora this morning saying token costs need to come down for enterprise adoption to rise. Altimeter Capital's Brad Gerstner pushing back on the whole return on investment debate, saying if companies really didn't find value, then why do the revenue run rates for the big labs continue to rise? And Kelly, that's why color on token usage this earnings season will show investors how quickly companies are embracing. I expect that to be a major proof point. Any sign of a slowdown in token purchases, prices will be viewed as a positive for software companies. It will sort of challenge that whole displacement narrative. And by the way, the IGV ETF continues to outperform now higher over the past six trading days.
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Kelly Evans
That's a great point, Sima, especially that they worry it was with every new business the model will evolve, but in this case opening the door to those cheaper Chinese competitors as well. Sima, thanks very much Sima Modi. Let's get over to Mackenzie Segalos for the CNBC News Update.
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Mackenzie Segalos
Mackenzie Cuba's national electric grid has collapsed, leaving around 10 million people without power. That's according to the country's grid operator. Cuba has experienced hours to days long power outages in recent months linked partially to the US imposed oil blockade that has cut off the island's fuel supply. The grid operator told Reuters it was investigating the cause of the outage. Hamas says it's dissolved its government in Gaza and is preparing to transfer power to a UN backed committee as part of a US brokered cease fire deal. The militant group did not say if it would take the step to disarm or hand over security to an international force. The Board of Peace led by President Trump stressed the new leadership committee must control all weapons in Gaza and George Clooney will receive the lifetime achievement award at the 83rd Venice Film Festival this year. Festival organizers noted Clooney's work as an actor, director and producer across multiple genres. Kelly, sending it back to you.
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Kelly Evans
All right, Congrats to him, Mackenzie. Thanks. Coming up, there's been a lot of pushback lately against AI being a job destroyer, but our next guest is still very concerned. He is teaming up with some of the tech giants to do something about it in education. Sal Khan joins us next. Welcome back. Zynga founder Mark Pincus promoting his new memoir and pushing back on the narrative driven by many AI companies themselves that the technology will create massive job losses. Pink is posting over the weekend. The job loss narrative isn't supported by any facts. Neither was the Internet job loss for E commerce or anything else. And the rest of the tech world seems to be getting the message. The Wall Street Journal observes Big Tech has suddenly flipped on the AI jobs wipeout scenario. Let's dive deeper here with Sal Khan. He's founder and CEO of the Khan Academy, a global nonprofit providing free education to more than 200 million people worldwide. Sal, it's great to have you back. And so you're kind of on the side of caution that you think we do have to worry about the disruption that's coming from AI to the workforce.
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Sal Khan
You know, none of us have a perfect crystal ball and I hope what you just reported is, is true. But I think there is a a reasonable probability that we do see pretty significant disruption in certain areas. You know, we already see the waymos driving around. We all are already see call centers shifting to AI based call centers. It's hard to imagine that you're not going to at least see some disruption in certain industries. The jury is still out on things like software engineering. People are getting more productive, the models are getting better. I just saw that Fable is now available again. So who knows where that's going to go. But hope isn't a plan we should be thinking about. If we start to see even 5, 10% unemployment in some of these sectors, what are we going to do about it? And that's where you know, we're thinking very deeply. We have a partnership with TED Content Institute where we're thinking about how do we create a low cost, high scale, aspirational way to skill and reskill people. But I think everyone needs to be at least having a plan. And worst case, maybe there isn't the job dislocation, but at least we have better ways of skilling people.
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Kelly Evans
I've heard CEOs say this and it seems almost self evidently true that those who use AI in the workplace place will be super productive and probably have better job security and job prospects broadly than those who don't. So what does that look like? You know, sort of job to job. And what component of it do you think? Where do you guys think you can come in and help people with those skills?
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Sal Khan
Yeah, it's interesting because, you know, this, this content institute that we're creating and we're hoping to launch the first programs in, let's say, within the next six to 12 months. Even though it is degrees in applied AI, we actually think the most durable skills in this world are actually not just Vibe coding or creating some agents or, you know, creating a hard AI. It's actually going to be communication, collaboration, creativity, resilience. And so what we're doing is a lot of work where the students will come and have authentic experiences with each other, with other human beings, and have different ways of evaluating their creativity, their collaboration, while they're also using the tools of the future. Now, now just teaching the tools of the future, we think that's not really an evergreen solution because last year everyone was talking about Vibe coding, now everyone's talking about managing agents. Next year it will be something else. So it's really the skills of learning
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Kelly Evans
how to learn, which by the way, is the entire purpose of education. And what I'm doing. I'm not going to get back on the soapbox, but one of the reasons why I don't love a lot of the Chromebook and EdTech in the classroom stuff is it just, I'm not sure it's the best way to learn how to learn. I think it's a lot of gamification, a lot of distraction. I know you share some of these concerns as well and that you guys have actually revamped your own kind of Khan Academy tools. I'd love to hear more about that.
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Sal Khan
Yeah. I think the key with technology is it shouldn't ever be technology for technology sake. It should be what problems are you trying to solve? Solve. And if the simplest way to solve the problem is with pencil and paper, solve it with pencil and paper. But what we've always tried to address is, you know that classroom that you're observing, That's a classroom using Khan Academy. The kids are engaged, they're talking to each other. And the idea is if you're, if you're a teacher like that, with a classroom of 30 students, it's very hard to reach every student where they are. Some students are ready to race ahead, some students need remediation. And we're seeing time and time again if you give proper use of tools, not in front of a computer all of the time, we usually, we recommend 20 minutes a day for maybe three days a week. If we're talking about middle school, high
- [31:13]
Kelly Evans
school classes, 20 minutes a day, three days a week, I think is a lot less than what's going on in elementary school.
- [31:18]
Sal Khan
Exactly. Like, it shouldn't just be there all the time, but we are seeing when you get that level of, for lack of a word, dosage, the kids are accelerating 20, 30, 40% because they're getting a lot more practice on the things that they need to get practice on and when they're using the tool. Obviously you could use AI to cheat. That's a huge problem. We've seen people use other AI tools to cheat on Khan Academy, but the AI tools that we put out, it's Socratic, it's an ethical tutor, it's looping in the parents and the teachers. So the tools themselves are neutral. You just, we just have to think about how do we use it in moderation and how do we use it to solve real problems and then where
- [31:51]
Kelly Evans
do you think sal we're going to be? It's kind of an impossible question, but when we talk about how you want these tools to help people, shifting back to the workforce now to kind of be able to continue to learn how to learn what, what does that mean in practice, especially once you get into the workforce, your skills are highly specific to the job that you're doing or to one that might be coming up and learning how to learn feels like something much broader than that.
- [32:14]
President Donald Trump
Yeah.
- [32:14]
Sal Khan
You know, I even see it with employees at Khan Academy. The ones that were always curious had a lot of knowledge, critical thinking. When you give them an AI tool, their curiosity will take them and their ability to validate information too, because we know these models can hallucinate, etc. They are producing more and higher quality things while maybe folks who are already struggling. Yes, the AI can help them write a little bit cleaner, a little bit better, but you can see that they don't have the critical thinking necessarily to push back as much or to make sure that they're getting the best possible output. So that's why it is important one, to have some exposure to these tools, but even more important to really build these, these evergreen skills of critical thinking, communication, etc. Etc. You know, to your earlier question, we don't know what the job market is going to be like in four or five, much less 10, 20 years. But we're pretty confident that the skills that are going to really matter are going to be the human skills like communication, collaboration, resilience, et cetera, et cetera. And so those are the things that schools should really focus on. And you still need to have the traditional, you know, strong critical thinking, math, reading, writing skills. If you really care about students being able to do it independently, you need to be proctoring them, making sure if you're using tools, making sure that those are tools that are not cheating tools. A lot of these AI tools that are even trying to build themselves as classroom learning tools, you can ask it a question, it'll tell you the answer. You can do that cognitive offloading. So it's really, really important for a people not to put everything in one bucket, but really try out the tools themselves.
- [33:50]
Kelly Evans
I love what you said about curiosity and kind of that characteristic, whether you're a student or an employee being. So I watch how my husband, you say, I'm like, I never would have thought of half of this stuff. So same tool, different brain, different outcomes. Sal, thanks very much for joining us again today. Appreciate it.
- [34:06]
Sal Khan
Thanks for having me.
- [34:07]
Kelly Evans
Khan Academy. Sal Khan. Coming up, the World cup leading to record volumes for sports books and the rise of prediction markets as well, which is creating some potential losers in the, let's call it the international gambling space. We'll tell you where next.
- [34:26]
Narrator/Commercial Announcer
As our country celebrates its 250th anniversary, CNBC spotlights the leaders driving business and the nation forward.
- [34:36]
Mark Dankberg
If I had to choose one word that describes American business history, it would be reinvention. It meshes with entrepreneurship. It's a big part of America. I'm Mark Dankberg and I'm chairman and CEO at ViaSat. What the company's evolved to do is largely satellite communications. When you're a space company like we are, you know, space is hard. Our business now, compared to 40 years ago, we're doing things that didn't even exist 40 years ago. When we started the company, we didn't have any money, we had no outside. So we started in a spare bedroom in my house. That was what we had to work with. I grew up in the 60s during the Apollo program, and space was just the epitome of adventure, new frontier technology. When you look back and think of sending people to the moon without even really having a computer on board, that's insane. It's incredible, right? How inspiring is that? But the growing up part of it, watching the launches, must have at least subconsciously influenced me, because look at where I ended up. One of the main events in the space Race was John F. Kennedy's speech at Rice University's football stadium. It was hugely inspirational.
- [35:49]
Scott Kroner
We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard.
- [35:58]
Mark Dankberg
I think, I think one of the things that's really been good about America is the spirit of reinvention. It's like there's always a better way to do things. And so that creates lots of opportunity and it moves the country forward.
- [36:15]
Kelly Evans
Welcome back. The U.S. men's National Team faces off against Belgium in a little more than six hours time. The probability of an American win now at 54% on Kelshi that saw a big pickup after FIFA reverse for Lauren Balogan's red card. Contessa Brewer is here on set with more on that, including some. Can we call it breaking. What's the latest? Okay, so first situation.
- [36:36]
Contessa Brewer
So first of all, we know that Belgium has asked FIFA and appealed that decision. And FIFA said, no, we're not going to take that back. And also there was a lot of crowing, I think, from the Oval Office today. President Trump said, I didn't. Well, you know what? I'm not even going to tell you what I said. I've got it here. Here's President Trump talking about why he called FIFA's president to protest the red card ban of Baligan in tonight's game.
- [37:06]
President Donald Trump
I asked for a review because I didn't think it was a foul. And, you know, again, I'm good at this stuff. I didn't think it was a foul. I thought it was two great athletes that crashed into each other and got entangled. That was not a. That was not a guy punching somebody in the face or anything that, you know, would be different. And I think it's. I think it's a terrible. If they wouldn't allow, you know, a top player, maybe the best, maybe among the best players on the team to play, I think it would have had a big stain.
- [37:37]
Contessa Brewer
No one asked me, but I agree with President Trump in this case. I did not call FIFA's president to say so.
- [37:43]
Kelly Evans
However, it reminds me of we all watching at home going, listen, I know, I know what I'm watching, watching. But you don't always get to call the.
- [37:49]
Contessa Brewer
Do you shout back at the television, too?
- [37:51]
Kelly Evans
All the time.
- [37:52]
Contessa Brewer
But listen, here's the thing. FIFA's decision just infuriated Belgium's coach, who called it an April Fool's joke. You had these European soccer officials outraged. But maybe this chart explains it. Kelly showed it, but look how the probability Shifted of the USA winning tonight in the game with that FIFA reversal, Belgium had been leading. Well, fanduel says the wagers are now just pouring in for Baligan to score in tonight's matchup. Four times more money than the next most popular bet scoring bet on USA's Christian Pulisic. And the money, I mean, there is just so much money here. Caesars is setting new soccer records for the number of wages, for the amount of wagers, the unique customers that are coming in. Kalshee, with whom CNBC has a commercial relationship, is setting new records to wagering on who will win the World cup final, has now surpassed Kelly. A billion bucks. That is the biggest market ever for Kalsi. That's bigger than the super bowl this year. How Piper Sandler says it saw more than $5 billion in trading volume. This pack. No, no, that I wrote that wrong. It's not that Piper Sandler saw it. It's that Couch. She saw more than $5 billion in trading volume. That's up 45% month over month. Polymarkets up 24% month over month. There's a lot of excitement here.
- [39:10]
Kelly Evans
You have a great little stat that you mentioned as well, which is that there has been a drop in Macao casino revenues. In the meantime. While all this is going on, I was just wondering, is this a temporary World cup phenomenon or could it be the case that innovation in prediction markets actually undermines even sort of something like Macao and its kind of long term prospects?
- [39:32]
Contessa Brewer
So I was really surprised that to find all of the analysts blaming World cup action for a 12% drop in gross gaming revenue in Macao in June, that's pretty dramatic. But this would be a blip, right? It means that you've got avid soccer fans taking their discretionary gambling dollars and putting them toward World cup rather than going to play baccarat at the casinos. Will prediction markets cannibalize wagering? So far we're not seeing that it's coming from states where sports betting isn't quite legal. But. But as you've got FanDuel acting as a market maker now doing business B2B supplying parlays and combos to other prediction markets, that actually gives another revenue stream that they didn't already have. At the same time where if there is some incremental cannibalization, it sort of evens out.
- [40:25]
Kelly Evans
And I always love the US versus China frenemy story. And I just thought this was such an interesting component to it. And we'll see $1 billion already.
- [40:32]
Contessa Brewer
Nice game number I mean, not only with the action itself, but we're going to wait. I'm going to get new numbers on what, what records it broke tonight because the appetite for USA in this country is there in the rest of the world. They still think France is going to
- [40:46]
Kelly Evans
take it all, do they?
- [40:47]
Oliver Renick
Yeah.
- [40:48]
Kelly Evans
Contessa, for now, thanks. Appreciate it. Contessa Brewer. Coming up, Space X is set to Join the NASDAQ 100 after the market close. It's not just soccer that's the big event this afternoon, really. And that could spell some rough trading ahead, especially for retail investors. We'll tell you why next. Welcome back. TD securities. Peter Haynes told us last month the S and P decision to not fast track Space X into its index might be the largest active bet against current market trends in history. So while shares won't be on that index for at least another 11 months or so, Space X does start trading on the NASDAQ 100 tomorrow. Oliver Renick has more on what that means for retail investors and index holders alike. Hi, Oliver.
- [41:33]
Oliver Renick
Hey, Kelly. Nasdaq's inclusion of SpaceX will, in theory, make the index more volatile overnight, given SpaceX's wild swings. But its low free float means the impact will likely be minimal. How shares get released around its lockup timeline, how passive investors handle its inclusion and overall demand for its options will determine if SpaceX stays as wild as it came out of the gate. The stock trades with an implied volatility of 92, almost 3.5 times that of QQQ, which itself is currently the most volatile in comparison to the S&P 500 in almost 20 years. Arguably, that means over the long term, SpaceX volatility should come down as index investors buy and hold. But if they're afraid of SpaceX, they might hedge using SpaceX puts, or perhaps better, by selling SpaceX calls, which can neutralize its impact on your fund if you so want that. But if you listen to the options crowd right now, you probably only want to sell SpaceX calls if you're buying them, too. It's still a top five stock for options trading. More than twice as many calls traded as puts today. And four times more calls were bought than puts bought, with the biggest money targeting the 180 strikes expiring on Friday.
- [42:43]
Kelly Evans
Kelly, good reminder, $4 billion is what Millennium's pods made on this trade, apparently. Oliver, for now, thanks. Oliver Renick in Chicago. Could this be the catalyst that gets Space X rallying again after falling 11% in the past two weeks? Let's ask just Jeff Kilberg almost called you Jess. He's KKM founder, financials founder and etf. I've just, I'm thinking World Cup. Jeff no, I am thinking about Space X and what a big deal do you think this is going to be?
- [43:11]
Jeff Kilberg
Kelly I think it is a big deal and it's a really dynamic situation due to the fact there's only 3% float out there. If you fast forward one month Kelly August six that's the actual first earnings report post IPO where actually some insiders will be able to sell by 20% more. So I think tomorrow is going to be fascinating. But I sold puts two weeks ago. I sold the 150 puts expiring July 17th. I collected $11. They're trading about 575 right now. So I'm actually going the other way that Oliver is that a buying calls or selling calls on the position I was able to obtain the ipo. I'm trying to get more access. I'm selling puts and for selling for $11 Kelly I will own it in the event SpaceX goes lower down to 139. I happily own it at 139 but there's a ton of volatility. We've seen $11 range today and I think that's all anticipation of people trying to either get out in front of that mandatory passive index insensitive buying tomorrow or this potential low float if it
- [44:07]
Kelly Evans
goes down to 139. I mean we'll see But I want to talk to Trump accounts Jeff while you're here. The President rang the New York Stock Exchange and the NASDAQ opening bell jointly from the Oval Office this morning. Can see it they're kind of modeled after the Liberty Bell in celebration of launching the Trump accounts one time thousand dollars seed deposit for eligible eligible children. They're investing it I believe in low fee index funds hoping these give a boost to some brokerages. I know a lot of analysts are Jeff looking for a balance there. A lot of companies have a match where they might put in another thousand dollars. What market impact do you think this is going to have?
- [44:42]
Jeff Kilberg
I think it's a massive impact and remove the fact that they're building for the future. And I don't get political Kelly, you know that but I get so excited that all these kids are getting opportunities I didn't have and so many of us didn't have. And I already signed up my daughter. My other two boys were ineligible. You probably need a cackle of computers to sign up all your kiddos but it's an opportunity for them to touch, smell and feel stocks. And it seems like every day, every hour, we're hearing about more and more people wanting to donate. It's a really interesting platform, Kelly. The Trump accounts, it's, no, it's about philanthropic events that happen, but now it's very targeted where you can give to kids. So I get excited about it. I think it's going to educate folks and future generations on the market. So I'm all in on these accounts and I really think it's opportunity because when you think about what I do for a living, Kelly, I'm an active manager. I manage two ETFs. I'm always trying to time the market, but this, these Trump accounts, they are time in the market. And that's where it gets exciting.
- [45:37]
Kelly Evans
What would you say? Anyone watching now who's, who's like, all right, what do I do? Do I leave? I, I, my opinion is leave it in the S and P index fund. Don't overthink it. But what other advice would you give people for who are putting.
- [45:50]
Jeff Kilberg
I have two ETFs, so ticker ESN ticker gear would be my advice, but no, I think you're absolutely right. Get exposure, but be diversified. The QQQS spy as well as the Russell 2000 is moving. So I think you want diversification, but I think it's going to educate and you're going to see more and more people get involved in their future. So it's super exciting. Kelly.
- [46:07]
Kelly Evans
Yeah. Oh, Son Kwan over at, well, Fargo thought it might even support the market. He thought about 20 billion of inflows.
- [46:13]
Jeff Kilberg
Yeah. And I think there's me more because if you just look today when the president of Space X, she just is going to donate, she just announced a couple of hours ago she's going to donate 20% of her space X stock to these accounts. President Trump just floated a rumor, this is not confirmed, but they're talking about trying to make some Trump accounts for adults. So there's a lot of momentum. And I think what we saw in Q2 earnings and Q3 earnings expectations, the stock market is really strong. And I get so excited about you're seeing actually earnings estimates go up. That's a really rare occasion. They typically drop estimates, but they're 350.
- [46:46]
Kelly Evans
That's what Scott. Remarkable.
- [46:47]
Jeff Kilberg
We can do this. We go.
- [46:48]
Kelly Evans
All right, Jeff. Thanks, Jeff. Kilberg.
- [46:50]
Jeff Kilberg
Go usa.
- [46:51]
Kelly Evans
That's it for us. Thanks for watching the exchange and I'll join Brian Sullivan. He's back for power lunch. After this quick break
- [47:00]
Scott Kroner
with my Sapphire Preferred card.
- [47:02]
Kelly Evans
We took a trip to a desert
- [47:04]
Scott Kroner
Oasis, earning five times the points on Chase Travel, two times the points on all other Trav plus $100 hotel credit.
- [47:09]
Chase Sapphire Preferred Card User
Chase Sapphire Preferred a car that's preferred for a reason.
- [47:12]
Scott Kroner
Cards issued by JPMorgan Chase bank and a member FDIC subject to credit approval terms apply.