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The Exchange
The Exchange 9/3/25
00:43:51
Listen to the day's top stories, the must reads & a whole lot more for today's modern investor.
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Today, stocks are mixed right now with the Dow the only index in the red. The Nasdaq is leading the gains, by the way. As you can see there, Alphabet is the big reason why it's up nearly 9%, best performing stock in the S and P as Google avoids a breakup. Apple also higher, with analysts calling it another winner in this ruling. But is it really? We're going to dig into that story. Yields are also moving lower. The 30 year briefly went back above the 5% mark earlier, but now back down to 4.89% following weaker July labor data, job openings dropping to levels rarely seen since the pandemic. The latest data point showing the labor market is softening and with that rate cut, probabilities for this month now stand at close to 95%. But we begin with Alphabet's big antitrust win and the ripple effects across the entire tech industry. The company will not be forced to sell its Chrome browser as previously suggested by the Department of Justice, but warned it will be barred from the contracts that condition exclusive payments or licensing. Now that means Google can no longer be Apple's exclusive search partner, but can negotiate annually to be the default, and that Apple can continue to collect traffic acquisition payments or TAC payments from Google's and others. Now that move is sending Apple shares higher by more than 3% as well today. BA securities but however, says that data sharing with other search engines and generative AI providers could pose longer term headwinds for Apple overall. That did not, though stop the firm from raising its price target by 10 bucks a share to $260 a share, implying a nearly 13% upside. From here for more on that call, let's bring in Wamsi Mohan, senior equity analyst over at B of A securities, along with our very own Steve Kovac. Steve, I'm going to start with you first for the state of play. These are the arguably two of the most important stocks in the entire market. They have a huge amount of influence next to a little company called Nvidia. Next to, next to Nvidia, which kind of dwarfs everybody these days. But when it comes to Apple and Alphabet specifically, this dynamic now is shaping the market narrative for sure today. What exactly does that competitive layout look like given this ruling? Yeah, and it couldn't have turned out better for Apple unless they, you know, the exclusivity thing maybe if they allowed that to continue. But look, this gives Apple a chance to continue to collect that $20 billion a year or more. It's based on how often people search from Google. That's about a fifth of total services revenue for the year. It's $100 billion. Business of 20% of that is coming straight from Google. So there's that. Then the negotiation part. I find this really interesting and we'll talk to Wamsey about this in just a second. Here is their ability to go back every year to Google as AI search becomes a bigger and bigger thing and a bigger, bigger market share of how people search for things on the Internet. They can start using that leverage now and saying every year go back to Google and say, we got something good over here from OpenAI. We got something good over here from Anthropic. And by the way, Dom, the, they're already doing that. They are talking to all three players I just named about how to power Siri next year with this big AI update that they failed to deliver this year. They failed to build their own LLM. They're going to partner with one of these big guys next year to make that happen. So this really gives Apple more leverage, saying, you want access to our billion iPhone users. Great. Show us what you got. And by the way, there's some real competition now. Google, of course. And so Wamsi, let's kick off that conversation with you on that because this has been in play for probably about two or three years now, this idea that search is going to be gradually, maybe if even rapidly replaced by using chat, GPT or other, these AI type search type products. What exactly does this now mean? Given the fact that there is now an annual renegotiation, a rejiggering of the state of play for all of these different players? The economics have to change. And what exactly does that mean for a company's future valuation? Yeah, no, thanks for having me, Dom. Look, I think that the big thing here that we got to keep sight of is that this was a pretty big risk from an Apple standpoint. Steve just mentioned, you know, $20 billion out of $100 billion business. So on total company it could have been 10 or 12% of earnings that could have gotten washed away if the ruling was adverse. And frankly the ruling is not. Which, which means that I think the buy side here was already expecting about 50% probability of it going the wrong way. And since it didn't, we actually think that an earnings cut of 10% was avoided and half of that was baked in. So we think the stock should be up about 5% just based off of the fact that, you know, there was so much negative headwind that was baked into Apple's valuation. So that's part of the reason why we raised our target price to $260. As we look into the future, the way we think about it is that the share of Google searches is clearly going down in the broader scheme of things, but the rate and pace of that will be something that will be managed. And then you also have Gemini, which could be substituted. Whether it is, you know, AI search within Google which could be augmented and potentially not cause a headwind, or it could be using Gemini models within Apple's own Apple intelligence based solution. And obviously, you know, they're talking to a bunch of companies, all the ones that Steve mentioned here. And that means that over time Apple has this hedge versus just being exposed to Google's revenue itself. Now Wamsey, this is also an Apple story because Apple is in essence the platform for all of this. Right? You can open yourself up to many of these, I'm going to call them apps. I know that's an oversimplification of it, but these AI products, these new kind of bolt on tools are going to be on these platforms. What exactly does it mean for Apple's relationship and its future valuation given the fact that all of these players may be part of the ecosystem or not at all, given their negotiations with Apple? Yeah, it's a great question and you know, it's hard to prognosticate exactly who will be a winner over here, but the way we think about it is Apple is clearly going to be a winner. And why is that? The distribution of these is extremely, extremely important. I mean, it's been proven in search. I think it'll also prove itself in the gen context. The payments might not be coming in the same way though. The way we expect this to evolve is that Apple will strike a partnership to have these models ultimately run on Apple servers within Apple's own data centers so that they are the keepers of users information. Remember, privacy is super centric to Apple. They're going to make sure that the data stays on their servers, which means that they might take these models, train it on Apple silicon, run it on Apple servers at the end of the day and extract value for customers that way, but keep this whole thing private. So it could be a licensing agreement that they do with some of these model providers and there could be multiple of them and depending on the use case, you know, that gives them some leverage to, to negotiate across all of them. Right. And so on the one hand you've got sort of this model dynamic. The broader dynamic is obviously, you know, these can be apps put simplistically running on your iPhone at the moment and Apple will be monetizing those through its services business as usual by taking some kind of cut or revenue share in the more traditional sense of the App Store. So there are multiple ways of monetization. I think it just depends on the rate and pace of what Apple's internal development does relative to what these external providers are able to provide and the negotiating terms that they give to Apple. All right, Steve, we've got a big event coming up next week. Next week I'll be showcased that showcases Apple and lays out a possible game plan for what things look like in the future for not just AI but for everything else. So does this dynamic affect what you're going to expect at the Apple event coming up later on next week? I don't think this is going to impact the event so much. And I don't even expect to really hear much about artificial intelligence. It's all going to be about the phones, which is what Apple is the best that I do want to point out something. Notice how Wamsey did not say they need to go out there and acquire a big company. They need to go out there like we've been talking about all summer long, go out there and buy Perplexity or anthropic like that. You that conversation is over now effectively because of this decision. They don't need that because they can continue their search relationship with Google to use the other one. Or if one day someone does create some. If Perplexity does end up being better than Google, they can in a cheaper fashion, you know, partner with them as opposed to acquire them. So again, this what we're going to see next week, new phones, they're going to be a little bit better, a little bit faster. The cameras could be a little bit better than a year ago. The the big one is this thin phone, this they're calling it the iPhone Air. That's what the Internet has dubbed it. And that is going to be the most exciting model to see. It will be a really good test case to see if changing the design for the first time in five years can actually grow sales in a way I did not last year. Looking for catalysts of course for that buying going into this kind of holiday shopping season as well. All right, Wamsi Mohan, B of A securities thank you very much for joining us. Steve Kobach, thank you very much as well for the conversation. We're going to keep it right here with technology staying with Alphabet and the antitrust victory. The ruling has major implications for the generative AI space as well. Mackenzie Seagallos digs into what this means for Google and the AI startup landscape. Mac hey so going into the ruling Dom there was fear it would send shock waves through Silicon Valley and instead it is being read as good news not just for Google, but for the handful of well capitalized players dominating the AI market. An ex Google exec called the remedies a slap on the wrist and in practice it does translate to no real changes in how Alphabet already operates, which ultimately bodes well as it battles for share in the AI race. Now most importantly, Google keeps control of its reach Chrome and Android along with its ability to negotiate default status on Apple's 2 billion devices as you just discussed. Now the judge made clear that what justified allowing Google to keep those advantages of was the rise of its Gen AI rivals. He devoted 30 pages of his ruling to citing OpenAI anthropic and perplexity as proof that the market is competitive. And even the harshest requirement here, sharing search data may be delayed by years if this goes through the appeals process. Executives I've spoken with also say the ruling reopens the M and A pipeline. So expect more sub $1 billion acquisitions and and acqui hires like Google's windsurf deal. Washington, they argue, doesn't have the teeth to change Google's position. Meanwhile, the liquidity is flowing to the private AI giants Open Air, running a secondary sale this week at a half trillion dollar valuation to keep its talent happy and give VCs the increased exposure that they are looking for. But smaller startups without that cash or investor appetite face a much tougher fight for Talent ahead, domestic. All right, so Mac, you mentioned all of those three big AI players. Right now we're talking OpenAI, perplexity, anthropic. How exactly did these developments for Alphabet, slash, Google and Apple change the landscape overall for those AI, the players, the privately held ones. We just heard Stephen Wamsey talk about this idea that maybe Apple doesn't need to go out and make a big acquisition in AI because now the source is now open for competition for all of these different platforms. Yeah. So you really have these two camps of AI darlings out here in Silicon Valley. On the one side you've got your model builders and OpenAI or an anthropic and open. I could, you know, in part be credited with the more lenient set of remedies that we saw here because it has put Google on its back foot since November of 2022 when it launched chatbots. Google rushed out a really botched chat bot as a response to that. Now I'm also talking to insiders within Open Air and they say that they are not focused on this antitrust ruling. They have their head down. They're continuing to raise tens of billions of dollars and they are building the tech. They're going out to enterprise to try to capture more of that market at the same time that they are advancing their models. And then that other camp of AI players is where perplexity falls. That is a wrapper. It builds on top of other LLMs and it has a very flashy valuation right now. But what a lot of people are talking about in the background is whether that holds up now that we've seen this very lenient outcome for Google. All right, Mackenzie Segalus there with the state of play on not just Alphabet, but Open Air and all the others as well. Thank you very much for that. Coming up on this show, President Trump says he'll ask the Supreme Court for an expedited ruling on his tariffs appeal. But if the decision doesn't go his way, the White House still has some other ways to enact the President's trust trade agenda. We'll tell you how that happens possibly next. Plus, lawmakers back on Capitol Hill after a six week break. But they only have about a dozen days left to avert a potential government shutdown. We're going to look at what it'll take to strike a bipartisan deal next. The exchange is back after this. This is the exchange on CNBC. For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn more@ multicare.org whenever I need to send roses that are guaranteed to make someone's day, the only place I trust is 1-800-flowers.com with 1-800-flowers, my friends and family always receive stunning, high quality bouquets that they absolutely love. Right now, when you buy a dozen multicolored roses, 1-800-flowers will double your bouquet to two dozen roses. To claim this special double roses offer, go to 1-800-flowers.com Pandora that's 1-800-flowers. Com Pandora. Ugh. I'm now switching my team to some fancy work platform that somehow knows exactly how we work, and its AI features are literally saving us hours every day. We're big fans. And just like that, teams all around the world are falling for Monday.com with intuitive design, seamless AI capabilities, and custom workflows, it's the work platform your team will instantly click with. Head to Monday.com, the first work platform you'll love to use. We're leading because of tariffs. We're leading because of talent. And this is where they'd like to be. But without the tariffs, we wouldn't have a chance because we wouldn't be able to protect those investments of the companies coming in. So if you took away tariffs, we could end up being a third world country. That's how big the ruling. So we're asking for an expedited ruling. All right. That, of course, was President Trump just yesterday in the Oval Office making his case for why the country needs tariffs. But what happens if the Supreme Court's decision does not go his way? Megan Casella is in Washington, D.C. with that story. Megan? Hey, Dom. It's a huge question right now. So the vast majority of tariffs imposed so far this term would fall away if the president loses this case. And that would mean a big drop in revenue, just over half a billion dollars expected to come in over a decade if the court ruling holds, according to the tax foundation, versus 2.3 trillion estimated now. But the White House has vowed to find other ways to impose the tariffs, in part to keep up that revenue. And they're working on a handful of options the president can pursue without Congress. So the first, and probably the most likely, is called section 338. It's part of the Smoot Hawley act passed back in 1930. Officials have talked openly about using this. And while it was not, of course, the initial justification for the president's tariffs, Trump allies at the America First Policy institution are now arguing before the court that an executive order can be upheld under a statute not originally cited. They say section 338 fits the challenged tariffs like a glove. Now, the next best option is section 232 of trade law. This allows tariffs on individual sectors for national security reasons. And nine of these investigations are currently ongoing, which could mean tariffs on a staggering amount of trade. You can see it here, things like furniture and smartphones to solar panels and windmills. And there are other options, too, Dom. Section 301 is what he used in the first term against China. Another statute allows tariffs on a temporary basis but to correct for trade deficits. And so the upshot here is that no matter what happens, the president doesn't have to turn to Congress. He will all but certainly be finding ways to forge ahead by himself. Dom. All right, Megan Casella with that there on the latest on the trade front. Thank you very much for that. Now staying with Washington, D.C. congress is back in session now for at least another two and a half weeks. That's how long they have to negotiate a deal to avoid another potential government shutdown. Our Emily Wilkins is on Capitol Hill with what it'll take to come to an agreement this time around. Emily? Hey, Don. Well, yeah, look, there is an increased chance of a shutdown this time. And as you said, lawmakers, they only have 14 working days in D.C. this month before the first federal government is going to run out of funding. You can see there they're not scheduled to be in D.C. that entire week before the deadline. And remember here, Republicans can't go it alone. They need Democrats to help pass a short term funding bill while they finalize spending for fiscal year 2026. But Democrats are now hinging their support on addressing what they are calling a health care crisis. Minority Leader Chuck Schumer is looking for changes to Medicaid provisions in the Trump mega bill or to renew expiring tax credits that help many Americans afford insurance under the Affordable Care Act. We have an opportunity this month, this month to start setting things right by advancing common sense legislation to protect our health care, to hold the line against Trump's abuses and to reverse the immense harmful Medicaid cuts that Trump and Republicans pushed in the summer. Further threatening bipartisan negotiations is that 5 billion in foreign aid that the White House canceled. Remember, that's funding that was approved by Congress in a bipartisan manner. Democrats are now looking for assurances that the funding levels they are negotiating for next year are not going to be ignored in the same way. But while some Republicans have spoken out against the that canceled funding, Minority Leader John Thune is saying that he will leave it up to the courts to make a final decision on what to do, meaning it is not likely to get resolved before that stopgap is needed by the end of the month. Dom, Emily, how difficult will it be this time around? We do have Republicans controlling both houses of Congress and the White House. What exactly is needed for a bill to actually get passed this time around for funding the government? The short answer, Dom, is a handful of Democrats. They need a handful of Senate Democrats to get that 60 vote threshold that they absolutely have to have here. It's not reconciliation anymore. This is back to sort of the normal way that things are done. And Democrats are saying, look, if you want our votes, we're willing to work with you, but you have to work with us. And that's where that ask for health care comes in. That's where the trying to get some sort of guarantee that the White House isn't going to cancel more funding that Congress appropriates comes in. Democrats are basically saying we're willing to help, but you have to give us something. And so that is going to be what they're really going to need to work out over the next couple of weeks as well as, of course, exactly how long the stopgap is going to go. And then when it comes to actually funding the government, you're seeing Republicans in the House and Republicans in the Senate come up with two very different numbers for exactly how much they're going to fund various agencies. All of that will need to be figured out at some point. All right, Emily Wilkins with the latest out of Washington D.C. on the tax front and spending front. Thank you very much for that. While the focus is on a potential government shutdown, my next guest says historically geopolitical risk has actually been conducive to growth, productivity and asset returns overall. So it's not a risk. It may actually be an opportunity. Joining me now is Marco Papich. He's the macro and geopolitical strategist over at BCA Research. This is a perfect conversation to have right now, Marco, because we've just now heard the update from Megan with regard to trade and tariffs, the update from Emily with regard to the government shutdown. Just how worried should the markets be this time around? It doesn't, by the way, seem like they're that worried at all. No, I know. I think that the reason that the market is not worried is that bond yields have been steadily coming down since the one big beautiful bill was passed. Now, my controversial view that very, very few of your viewers are going to agree with is that the one big beautiful bill, if you account for tariff revenue, is not that really profligate. And so the bond market calmed down. And I do think that the relationship between yields and equities is really all that you need to focus on. If yields continue to go down to four, then 375 things are going to be fine. Equity markets can go higher. The problem with tariffs, of course, is that if they're made illegal and if President Trump then struggles to find other reasons to keep them in place, the bond market has to have a different approach to pricing, one big beautiful bill, because then it is profligate and then yields should rise. And that that would be a problem for the US Economy and also for equities. It hasn't happened so far. How critical is that tariff conversation, that tariff ruling, if we want to look at it that way, to whether or not yields actually have the ability to move lower to your point to that 4% threshold for the 10 year, or even lower than that. And how important is that yield story to continuing the stock market rally? I think it's the only story, quite frankly. Bonds and equities have been positively correlated, really since 2020. Fiscal policy, inflation, these have all upended the correlations from the secular stagnation era. And so right now, for the economy to avoid a recession, we need the consumer to transition from a cash driven world to one of leverage. And that requires borrowing costs to come down. The Fed can't do it on its own. And so this focus on whether the Fed is going to cut or not is kind of irrelevant. What's required is long end of the curve to be satiated with a sane fiscal policy. And that's where the conversation you had with your colleagues in government shutdown is also very important. So that's what's really required. And I think without a lowering of the long end of the yield curve, you're not going to have, you're not going to have equities do well. So I think it is crucial, but I'm also hopeful that ironically, equity revenue will, sorry, tariff revenue will stay there. And I say ironically because again, in April we were all very bearish because of tariffs, but now the US Needs that revenue, otherwise bond market will punish it the way they're punishing France, for example, today. All right, so that long story, sovereign wealth wise across the world, sovereign bond wise across the world, is still in play. My question then for you to conclude things, Marcos, given that backdrop, is the US still the best place to invest. What is the best trade right now, globally? Oh no, absolutely. It's probably the worst place to invest. Your viewers have to understand US equities can go up. In fact, countries that have lost central bank independence have done great in equities. Look at Argentina's or Turkish equities over the last 25 years. They've crushed it. However, the currency is going to suffer. From a relative perspective, if you are a US Based investor, you should be seeking external non US Equity markets because it gives you non US Dollar exposure. So no, US Markets are not the best place to invest. Absolutely not. All right. Marco Pappage with bca. Thank you very much for the help there. We'll see you again soon, sir. Coming up on the show, Industrial is quietly having a stellar year. The group outperforming tech and right now only behind communication services, which is dominated of course by meta platforms and Alphabet. But despite the move higher, our next guest is still in love with the Industrials and joins us next to make her case. Keep it right here. Oh, I'm not switching my team to some fancy work platform that somehow knows exactly how we work. And its AI features are literally saving us hours every day. We're big fans and just like that, teams all around the world are falling for Monday.com with intuitive design, seamless AI capabilities and custom workflows. It's the work platform your team will instantly click with. Head to Monday.com, the first work platform you'll love to use ahead of the NFL season kickoff. Jerry Jones live and in person with Michael Ozanian on the Cowboys rising valuation, state of the art NFL and the upcoming season closing bell over time 4 Eastern tomorrow and streaming on CNBC. All right, welcome back to the Exchange. We've got breaking news out of Washington, D.C. steve Liesman has that story. Steve Dom, thanks. We have the opening statement for Stephen Myron. He is the candidate for a Federal Reserve job that is open right now and he is going to say that he independence of monetary policy is critical for its success. He pledges or he says he intends to preserve the independence of the Fed. That is obviously a question when it comes to appointees of President Trump to the Federal Reserve Board in the sense that he has called outright for lower interest rates and of course threatened called for Jay Powell's resignation as well as firing Lisa Cook over issues of surrounding her mortgages. He does say the Myron also says the ultimate composition of the Fed's balance sheet is an open ended question. There is some talk Dominico, about whether or not the Fed should be addressing the size of its balance sheet. Many feel it doesn't really have much of an effect. Others think it's a big source of potential stimulus to the economy. So mark that as something to watch with Steve Martin. Of course, he was recently confirmed as CEA chair. So that is, he may not be such a controversial nomination or hearing process, but certainly going to get some resistance or some questions about this issue of Fed independence. Dom. Steve, if I could just follow up really quickly how you kind of alluded to it, but just how difficult of a confirmation process could this hypothetically be for Myron? Just out of curiosity, I want to know because this is a four month term, basically a three month term for Adriana Coogler's open spot. Yeah. For the Coogler job, which, you know, there was some talk about moving him over to the job that could be open from Lee's Cook, but of course that job is, I suppose, not technically open right now. So they haven't really proposed anybody yet for that job. But look, it depends on how much a deal that the Democrats want to make out of this in terms of the issue of Fed independence, in terms of some of the more controversial stances that Stephen Myron has taken about wanting a weak dollar being in favor and one of the proponents and even architects of the president's tariff policy. Obviously the Republicans who have the majority in the Senate have not made a big deal this. It was known before he became CEA chair. So we'll see. The Democrats have a lot of things on their plates, including what you heard about in the last segment about the shutdown of the government. And I'm not sure this is really going to be a place where they're going to dig in, especially not with this position, which is open, rather than the Cook position, where there could be more opposition, perhaps even bipartisan opposition, depending upon how the judge rules in the Cook case. All right, Steve Liesman here with the latest on the Fed state of play. Thank you very much for that. Now let's send it over to Bertha Coombs for a CNBC news update. Good afternoon, Bertha. Good afternoon, Dom. Florida is planning to end all state vaccines, vaccine mandates, including requirements for children who attend public schools. The state surgeon general criticized mandates today saying they, quote, drip with disdain and slavery, unquote. The move makes Florida the first state in the US to step away from a practice that has been credited for decades with controlling the spread of infectious diseases. Ukraine's prime minister said the government held the first board meeting with the US Of a joint investment fund board today. The minister said on telegram that the fund, which was created as part of a minerals deal with the US Will next figure out projects for the first round of investments. And the Metropolitan Opera in New York has reached a deal with Saudi Arabia to perform in the kingdom every winter to help resolve its financial problems. The Met and the kingdom did not share the financial terms in their announcement today. The Met has used about $120 million, more than a third of its endowment fund, to help cover operating costs since the COVID pandemic. Seems like that would be a great place to perform aid. Although of course, that said in Egypt, there's a lot of complexity there for sure. Bertha Coombs, thank you very much for the news update there. Coming up on the show, gold bugs biting back today with the precious metals surging past the 30$600 mark to a new all time high. But can the rally roll on? That's ahead. Plus a deeper dive into the so called Taylor Swift tax. The details and what it means for you regardless of whether or not you're a swiftie. The exchange is back after this. Welcome back to the Exchange. Stocks are mixed today. The Dow is tracking for its third negative day in a row while the S&P 500 and Nasdaq are moving higher. The Nasdaq is the outperformer on the day as technology leads the way after Google's big antitrust case ruling. And while our next guest expects the bulls to keep running, she does see some short term risks on the horizon. Joining me now is Katerina Simonetti, executive director at Morgan Stanley Private Wealth Management. Katerina, this is a big day in terms of the MAG7 type names, but is it going to be enough? Especially because we've been talking so much brought this broadening out trade, whether or not it's sectors or even small caps and mid caps to this overall market theme. Don, but you're absolutely right. Thank you for having me on the show. It was very exciting to watch Max 7 over the last couple of years. But as we know, the performance in these stocks are not necessarily consistent, especially when we look at them recently and when we see the market performance this year. You know, this has been an incredible story of a turnaround. We started the year expected expecting possible recession. We entered April thinking that we're going to have a tariff driven recession and look at the market now. We've had an incredible run and Morgan Stanley view that we are entering the next bull market and that there is going to be broadening of buying opportunities because of course naturally this time of the year and considering the risks that the market is still facing, there is a possibility that there will be some type of a pullback and we would be looking for buying opportunities outside of max 7, but not of course abandoning the place completely. You know Katerina, we had featured the industrial sector earlier this month in our sector Nomics kind of monthly package because it is the second best performing sector in the entire S and P so far this year. That industrials trade is one that maybe is roughly the same size as a sector as it is the weighting of just in video alone. So how important is that industrials trade to that broadening out thesis? Dom? It is surprising to investors that industrials have outperformed both financials and technology this year. And it is absolutely our top pick for the year. When you think of industrials with the overall spending, you know, with positive cash flows, with the amount of money that is being invested in buildup of the roads, of the airports and of course of data centers and electric grids that are so important for AI. And we know that sector is going to be unbelievably disruptive, you know, for the economy. You know, we think that that is the sector to focus on and to represent in the portfolios. And this also is a wonderful example how diversification makes sense, especially when market is as exciting as it is right now and we're looking for buying opportunities. And Katerina, really quickly, how important are lower interest rates specifically in the 10 year for this thesis to play out? Extremely important, Mark. Market is banking on the rate cuts, it's pricing in the rate cuts. So if the rate cuts were to happen with the speed or the timeliness that the investors are expecting, it might be disappointing. And that's why when we build portfolios, when we talk to our clients, you know, we absolutely make sure that while we are optimistic, we are cautiously optimistic, there are still risks and there absolutely could be, it could be a pullback in the market but not as drastic as what we saw in April. If we were to see one, it will be shallower and quicker and we will be buyers in this market. Alright, Katerina Simonetti of Morgan Stanley, thank you very much. We'll see you soon. All right, coming up on the show, just a few days left in the US Open tennis tournament. CNBC's own Alex Sherman is live at Billie Jean King National Tennis center in Flushing, New York, not far from here with a look at just how big of a business the sport has become. Alex. Yeah. The difference between you and me, Dom, is I'm holding one of the famed honeydew cocktails here. You can't come to the US Open without one. Already more of these $23 drinks have been sold this year than the entire tournament last year. We'll tell you how millions of dollars flowing into tennis is changing the sport when we return. Change the US Open now in the quarterfinals section. And while this year's showing has not been a Grand Slam for American tennis players, tennis popularity is still growing overall stateside. Joining me now to break it all down, with those numbers included, from the Billie Jean King Tennis center in Queens, New York, is CNBC's Alex Sherman. This is a plum assignment, even though it's local, but there's a lot of folks out there who would be very, very, very happy to be where you are right now. Alex. Yeah. Beautiful weather. It has been all week for the tournament. You mentioned that this has not been a great tournament for the Americans. That's not really new, at least on the men's side. It's well over 20 years now since Andy Roddick last won the tournament. As an American, we went through a whole era where the Big Three dominated. Roger Federer, Rafael Nadal and Novak Djokovic. Djokovic, still playing, he won just yesterday, is back in the semifinals. But now we see a new era on men's tennis where you've got Carlos Alcaraz and Jannik Sinner seemingly winning every tournament. There's a theory out there that the reason we have seen segued from these three dominant players to these two new dominant players is that if you are a great player young and you start winning tournaments, that you are winning so much money now in prize money, plus the endorsements tacked on that you're able to reinvest in your skill and in your career in a different way than all of the players below you. And that is what has maintained these few players a little bit ahead of everybody else. I asked Maria Sharapova about this theory. She was a dominant player as early as 17 years old. Take a listen to what she had to say. It's a pretty intense payroll and I think the better and the bigger you are, the more flexibility you have to help shape your team. But you know, in the beginning it's usually one or two people and you know, if you have the fortune to do well, quite literally, you get a chance to hire probably six to eight full time staff. So you're seeing tennis become big business, both from the training standpoint and also sort of the ancillary social media behind it. The US Open is a great example of an event that has become something bigger than just tennis. You saw I had the honey juice cocktail earlier. You look around here, it's just sponsor after sponsor. People clearly want to be here. It has become a social media event and that transcends for both the men's tour and the women's tour. Those cups, I think I've got plenty of those cups in my drawers somewhere. Those honey deuce cups, the Grey Goose logoed ones, they're great for the pool or for anything else outside. All right. Enjoy the time at the US Open. We'll, we'll talk to you soon, Alex. Coming up here on the show, the Vaneck Vectors Gold Miners ETF took for a third straight day of gains and climbing to levels not seen since 2011. Whether the precious metal trade has more room to run that story coming up next. The Exchanges back after this. All right. Welcome back to the Exchange. Gold is surging to another record high today, climbing above the 30$500 mark as trade turmoil starts to l demand for the precious metal. That's pushed the Vaneck Vectors Gold Miners ETF up nearly 4% so far this week. So is it too late to chase this rally or is there more room to run? Let's ask Tim Seymour, chief investment officer of Seymour Asset Management. He's also a CNBC contributor, a guy I would see normally on Fast Money as well. So, Tim, thank you very much for being here. Let's talk about the gold trade and whether it still has legs. I think it does. The outperformance of the miners to the metal is something that really only started in earnest in 2025. It's now a 40% outperformance year to date after underperforming by 40% in what has been this has been a 20 year rally in gold. I don't think that some of the current politics, dynamics, even concerns around inflation stagflation are the reason that gold is doing what it's doing. And I think some of the same trends of the last 15 to 20 years are alive and well. Central banks are buying. They're the largest element of the demand in gold. I think that diversification exists. I think for miners, part of the outperformance here is the operational leverage in their business. Remember, these are the underperformance of the miners before this year. A lot of that and significant part of the underperformance of the last five happened during a period of inflation. Inflation for, for global Miners of everything. But for gold miners, maybe even more so, cost inflation that is turned around so that operational leverage is in the business. If you look at Agnico Eagle, which is one of the larger positions in Evo, my international etf, but there's a number of other gold miners where you've got free cash flow, yields that are 7 to 10% and growing. They're paying down debt. These are attractive multiples. And the story for gold continues. So I think you, I think, I think the market is largely underweight. The miners trade, if you can believe that, I think gold is an equal weight to an overweight, but I think miners are underweight. All right, so that's the gold trade overall. Let's also talk about a stock that we haven't mentioned as much today on a relative basis. That's Nvidia. There's a key technical level that some traders are watching right now, Tim, and it's one that has a lot of people maybe a little bit worried there. Take us through the Nvidia trade and why some of those trades are maybe coming into question given the moving averages out there for Nvidia. All right, well, it looks like we lost Tim Seymour there. But as you can see, the Nvidia trade right now, now falling below that 50 day moving average for the first time since April. So Tim, are you back with us? Sorry. I'm with you, Dom. All right, so the Nvidia trade, I just showed a graphic with the 50 day moving average for Nvidia and the fact that we've now fallen below it for the first time, going all the way back to kind of like April, May in that timeframe. How worrisome is that trade for Nvidia? I think if you look at semis as a group, they've, they've pulled back a bit overall. But I guess the underperformance of semis relative to the S and P, whereas we've seen the NASDAQ make a fresh all time relative high, is something you could be concerned about. Markets have gotten a little ahead of themselves where the last, you know, the first couple of days of September, maybe a little more volatility. The fundamentals around Nvidia, what really matters. And if you're looking at earnings growth of 50% and into 26 data center going 15%. We know about the hyperscaler Capex story, which I haven't heard any, you know, there's been nothing close to a pushback on 4 to 500 billion annually in hyperscaler Capex. China's a little uncertain? No, I'm not worried about Nvidia. I thought those numbers were fine, especially given the momentum into the stock. I'm not surprised. We've, we've pulled back a little bit. All right, Tim Seymour covering Gold and Nvidia, thank you very much. We'll see you soon, sir. Thank you, Don. All right. Coming up on the show, from coast to coast, local governments are finding new sources of revenue. We're going to dive into those tax stories. Taylor's version coming up next. Welcome back to the exchange. Regular viewers know we talk about funding local governments quite frequently, usually through the lens of municipal bonds, but but some are finding a new way to raise revenues which is taxing the vacation homes of the wealthy. Robert Frank joins us now with more on what's being called the Taylor Swift tax. You got to take us through this story, Robert. Well, Dom, great to see you. You know, from Rhode island and Montana to Cape Cod and even Los Angeles, a growing number of local governments are taxing the real estate of the wealthy. In Rhode Island, a new property tax on non primary residences valued at at least a million dollars was just approved by the governor. It adds an extra $5 for every $1,000 in assessed value. It is known, as you just mentioned, as the Taylor Swift tax. And that's because she bought an oceanfront estate in Watch hill back in 2013. Her property is currently assessed at $28 million with property tax of about $201,000 a year. Now the new tax would add an additional $136,000, bringing her total tax tax bill $337,000 a year. Montana has also passed a new tax on second homes and investment properties that will take effect next year. It's going to raise Property taxes more than 68 for 68% for vacation homes, but it's going to lower taxes for full time residents. And in Cape Cod, the town of Falmouth considering a special transfer tax on homes sold for over $2 million. Similar taxes have had mixed success when they've been implemented. L A s new mansion tax on sales over $5 million was expected to raise up to $1 billion a year. A couple of years later, it has raised less than half that. So haven't really performed on the promises for revenue. But certainly as states look to offset the budget cuts in D.C. and as we have this split housing market, certainly the real estate of the wealthy, a big source of potential revenue right now. And how much, Robert, just really quickly, how much of this is going to really play out throughout much of America, there's some hotspots I understand, but this isn't something that can happen everywhere. No, it's going to be most effective where the wealthy congregate. I wouldn't be surprised if we see something like this in New York, probably unlikely. In Florida there's discussion Vermont. So I would say the places where the rich like to vacation is going to be where the money is. Of course, it's where the rich like to vacation. Alright, Robert Frank, thank you very much for that update there and be sure to subscribe, by the way to his Inside wealth newsletter as well. Robert, we'll see you again soon. All right, before we go, we want to mention that Salesforce Chairman and CEO Marc Benioff will be joining our own Jim Cramer tonight on Mad Money after the company's earnings report. That's going to be at 6pm Eastern time. A must watch interview. Jim and Mark, always a great conversation there. Meanwhile, let's check on the markets right now overall I mentioned before they were mixed at the top of the hour. If you take a look at the Dow right now, we're still down about a half a percent or 290 points. The s and P may be just about flat on the session right now. The NASDAQ composite up about 2/3 of 1% to $21,421. Meanwhile, the small cap index is down 1/2 of 1% and that all important 10 year yield is 4.2. So that does it for us right now. Thank you for watching the Exchange. I will see you later on this afternoon as I fill in for Melissa Lee on Fast Money. But in the meantime, let's toss it right now over to Brian Sullivan and the Power Lunch Crew. It starts right now. You've been listening to the Exchange. Make sure you're subscribed to get each episode every day, same time, same place. Sometimes an identity threat is a ring of professional hackers and sometimes it's an overworked accountant who forgot to encrypt their connection while sending bank details. I need a coffee. And you need Lifelock because your info is in endless places. It only takes one mistake to expose you to identity theft. LifeLock monitors hundreds of millions of data points a second. If your identity is stolen, we'll fix it, guaranteed. Or your money back. 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