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>> begin this hour with stocks holding

steady following a rally in tech. John

Stofus of Oppenheimer, one of the bulls,

writing, with S&P 500 Q2 earning season

several weeks away. News flow, ecoata,

and developments in the Middle East are

likely to drive market sentiment. John

joins us now for more. John, great to

see you.

>> Great to see you as well.

>> Driving sentiment up or driving

sentiment down? Well, you know, I

driving sentiment up, I'd say right now

that we'll have to see the way the jobs

number looks at the end of the week or

well on Thursday, a little bit early

this this week. Uh, but we have to say

things are still remarkably good. And I

think the operative word remains

resilient. Resilient doesn't mean

robust. It means resilient, not

unchallenged. And every time we get the

challenges towards that resilience,

whether it's an economic data piece uh

piece, a piece of of information related

to a setback in the negotiations in the

Middle East or whatever have you, uh it

seems to be overcome by that resilience

factor that either shows earnings better

than expected uh uh debt in better

situation than it actually was thought

to be when the bears and the skeptics

start trying to drag things down. and uh

fundamentals remain very positive and

and that's that's what you got to we we

watch the the fundamentals where I I

don't go after the the technicians. I

respect them, but I'm intermediate to

longerterm investments. And you know,

we're all on the upgrade cycle in terms

of tech. Whenever the drama and the

headlines are against technology, I tell

my team that's that's many years younger

than I am. I tell them I said, "Let's

sell the uh the throw away the PC and

the laptop. Let's look for a a an abacus

and uh for a slide rule. We'll be all

set. I see what you're doing. And forget

about the GPS when you get in the car.

You need a yellow legal pad. Write it in

pencil. Get a flashlight. Get a map. You

know, we're not going back.

>> I can already see the fights ensuing in

the car as you try to figure out the

directions cuz any of us old enough to

remember that and the parents in the

front. Either way, I am wondering though

if there has been a shift in tone and

whether we've seen that with respect to

a real question about how much spending

there actually can be on semiconductors

given the expense, given the push back

that you're seeing in markets and given

the fact that debt investors are

starting to get a little pickier.

>> I think without a doubt you feel it and

you see it and it goes in this operation

where you go daytoday risk on risk off

tack on tack off back and forth. It's an

argument, but the good thing is I think

it it puts players on notice that be

careful what you're doing relating what

your expectations are on this. And for

investors, the idea is uh you have to be

aware that there will be failures. There

will be things that will not work out in

AI and other things that will. Just

think back on the internet and this is

we don't think this is like the internet

bubble. This is very different. Both

business and and the consumer have tech

deeply embedded. We're dependent on tech

in our lives. So, you know, overall we

just think it's uncertainty is very

common in life and it's so is in the

markets. There's an old adage that the

markets don't like uncertainty. They

love uncertainty. The traders have an

opportunity to go after the next vanity

plate for the for the tro next new

trophy automobile and for and for

intermediate to long-term investors look

for babies that get thrown out with the

bathwater.

>> Do you see this as a 2026 story or is

this really more of a 2027 2028 story?

Uh, I think it's genuinely 2026 story. I

think we have to see how 2027 develops

going forward because the changes today

happen so much more quickly than ever

before. As you know, I always say when I

come on the show, I've been in this

business for 43 years. So, I've been

every boom, bust, and recovery cycle

since 1983. And the markets today

because of the news flow and the the

accessibility of news flow on on

organizations like like Bloomberg uh it

it as a result of that the markets

discount both bad news and good news

very quickly and it's a remarkable

thing. It's actually a benefit to the

markets as I said keeps everybody

honest. You get shaken up every so often

and you realize trees don't grow to the

sky. It's like, you know, you don't feel

like u I'm not going to mention some of

the people from the other busts in the

past. I don't want to fight with with

people from the past. Some of whom are

in their graves now. But uh the point is

is the reality is this is a different

world today. You have to look at

structure and the structure of

everything has changed in ter by via

social media technology that's utilized

in business for pleasure, leisure, what

have you. And it's a dramatic change and

uh but you know there there's a whole

generation that believes that we never

had payoneses or we never had rotary

dials on telephones.

>> So if you're concerned though or a

little bit concerned with the AI trade,

how are you hedging against this?

>> Well, what what I'm what I'm doing is

for instance, we have a dividend

opportunity portfolio that I'm the

manager of and I can't tell you what we

own in it, but I can't give you this

idea. We barbell it. So we have tech uh

we have uh we also have telephone

companies you know we have utility

companies in it. It's all 11 sectors.

It's diversified and it it has it has an

ability so far over the uh nine years

that it's been in existence to weather

significant volatility and bounces very

well like a healthy count bounces not

like a dead count bounce.

>> Do you think that the rotation that

we've been seeing with the equal weight

in the Russell 2000 outperforming can

continue? Do you think it has to keep

perforing in order to reach some of your

targets?

>> Uh, no. I you know, I think I think the

I don't think it's the end for large

caps. I just think and I don't think

it's either the the the end for this run

that we've seen in small caps. I think

there's room on the stage for large mids

and smalls. We uh we believe you have to

be selective. You got to look out for

the junk. Look out for the value traps.

We like growthier value and GARP growth,

which is growth at a reasonable price.

So in technology for instance, we don't

necessar we own some of the names you

think of right away in tech, but we own

other names that most people don't think

of that support those names.

>> You've been in the business for more

than 40 years as you were saying.

>> Can you characterize this moment to give

us a sense of how different it is, I

mean, or how similar it is to previous

cycles of booms and busts just in terms

of sentiment and in terms of novelty

that a lot of people feel.

>> Great question. It's it's I think

markets are often considered to be

mostly about fear and greed and they're

not. It's fear, greed, and need, genuine

need. And today, one of the things that

structurally has changed the market so

much is that the private investor who

for many years was treated with with

disregard by the institutions today is

in many ways more important than the

institutions when it comes to the amount

of direct investments and indirect

investments that the private investor

holds. It used to be when if you worked

for a wirehouse as they used to call

them, uh they would tell you if you find

a f qualified client, offer them five

stocks for diversification, maybe a

tax-free municipal bond or a mutual

fund. Today with the products that are

available today, an experienced adi

advisor can build a portfolio for an

individual or for a family office that

will rival major major institutions or

that can rival major institutions. And

they're investing seriously. It's not

for cocktail party chatter when the the

private investor used to come in usually

once the market was up 15 or 20% they'd

rise it up they'd ride the last five or

10% then get disappointed. Today they

come in much earlier and they stay they

realize recognize that that studies that

have said that uh that it it's more

important to be in the market that time

in the market is more important than

timing the market for intermediate to

longer term investors. and they're

investing because social security will

likely not be anywhere near what it was

for the prior generations. And lastly on

this is the other the other part of this

is you no longer have defined benefit

retirement plans for most comp for most

companies. So people need to make

investment decisions that are serious.

>> Stay with us. More Bloomberg

surveillance coming up after this.

US stocks on the verge of completing

their best quarter in six years. Tech,

however, on track for its worst month

since March of 2025. Dan Ives of Wed

Bush writing, "Tech stocks have way

oversold in June. They ultimately

represent major buying opportunities as

these bearish narratives have

overshadowed the future massive growth

prospects." Dan joins us now. And of

course, when we're talking about tech,

we're talking about hyperscalers in

particular, which have been the huge

losers until yesterday, where you

actually saw a little bit of a

turnaround.

>> Why do you reject the notion that people

are pushing back against the spending

plans of some of these tech behemoths?

>> Look, the hypers scalers are 700

billion. I mean, that's what's funding

the AI revolution. I mean, when you talk

about memory chips to everything else,

but that's just the first phase because

what the hyperscalers are doing is this

is the buildout. It's Vegas strip

building in 1955.

But ultimately the monetization now is

going to come. I mean when you look at

Meta, they're not just spending to

spend. You look at Microsoft, they

essentially own the enterprise. Alphabet

5% of their customers have gone to the

AI path. Same thing with Amazon. So my

whole point is you've had this tech

rally, but Mag 7 right now penalty box

essentially. I think it significantly

outperforms second half of the year. And

I think earning season as we see in July

and there's going to be a huge

validation moment for big tech.

>> So the biggest strip maybe is a decent

analogy on the just actuality of it. Not

in the scale. I mean we're talking JP

Morgan expecting 5.5 trillion dollars of

spend on capex spend for AI heading out

to 2030. We're talking about massive

numbers that are accelerating not

decelerating and capacity constrained

companies right. I mean some of these

companies have said we can't give you

all the compute you're looking for. So,

how do you see them monetizing without

raising prices enough to really trickle

into the cost of what everybody is

spending on an everyday basis?

>> Yeah. Well, first off, for every dollar

spent on, let's say, an Nvidia chip,

there's an $8 to$10 multiplier across

the rest of tech. So, that's extremely

important in terms of what you see in

terms you talk about some of the single

stock moves just to broadening out what

we're seeing in terms of tech. And you

could argue for names like Caterpillar

and others, but when it comes to

hyperscalers, look, it's an arms race.

That's why the question is like, can

they actually cut capbacks? They can't.

In other words, like you're diving into

the deep end of the pool because if they

cut back, then they go behind others in

line that will clearly go ahead of them.

Anthropic Open AI ultimately as they go

public, they'll just have more and more

cash. And I think that's the reality

right now. And to to those the bears

would be like a it's spending to

nowhere. It's the opposite. I mean

you're essentially building out a new

economy for consumers, enterprises and

for the first time in 30 years the US is

ahead of China when it comes to tech.

>> But what about demand destruction? Does

that happen? Especially when we see

something like Apple come out and across

the entire suite having to raise prices.

>> Sure. Look, I mean there's going to be

negatives just like we see with memory

because there's a limited amount of

memory chip players. You can't just

>> So there is a breaking point though.

There there is a breaking point to a

point where like okay if you continue at

these prices eventually there's

cannibalization there's churn for Apple

at these levels 100 bips of churn maybe

when it comes to iPhone it'll be $150

$200 price increase but then there'll be

subsidies from carriers and others but

look now you actually you're seeing

where it's called ramagedon or what

we're seeing in terms of memory prices

that is going to have an impact, but I

view it as it's paying a small tax on

the broader ecosystem that's being built

out by big tech.

>> But if there is a little bit of a

breaking point, when does it happen?

>> Look, I think in the next 6 to9 months

is where you need to see some sort of

stabilization when it comes to prices.

You need to see scale. You need to see

ultimately what we're seeing in terms on

to on the token side where you need to

see like prices start to come down.

Capbacks will be about trillion dollars

for big tech next year. But then the

monetization starts. So essentially cap

you start to actually now see the

monetization piece which is very

important to just investors feeling like

meta. They're not just spending like

1980s rock stars for no reason.

>> There's one story that really caught my

attention over the past couple of weeks.

It's the idea of Microsoft shifting to

Chinese large language models that are

open source and that are cheaper. It's

the idea of OpenAI pushing back their uh

IPO and a question of how much OpenAI

and how quickly uh the anthropics of the

world can monetize given the cheaper

competition overseas. How much do you

see that as a pressure point that hasn't

fully been realized or even actualized

in terms of people's idea?

>> Look, my view and and I think you see

with OpenAI and Anthropic, the models

eventually will become commoditized. And

it's not just open AI anthropic you'll

have hundreds of models across the world

vertical specific the value will be in

the data how quickly that they could

penetrate enterprise Microsoft in terms

of Nadella Nadella is seen around the

corner understanding like you have to

ultimately diversify when it comes to

models and eventually as it becomes a

global sort of game but when it comes to

anthropic and open AI they understand

enterprise is golden goose that's what

they're going after now to some extent

part The reason that Microsoft that you

see the stock the way where it is

because there's a view like okay that

becomes competitive they had open AI but

now like where do they sit relative to

enterprise my view is on enterprise

Microsoft will continue to be the

ultimate winner but it just shows it's a

convergence what's happening across the

AI

>> system if that's a commoditized resource

the large language models and it really

is the data the data providers are not

open AI and anthropic well then what's

the monetization prospect for some of

these companies that potentially are

going to IPO at trillion dollars.

>> Well, for them it's all about I mean if

you look at anthropics growth it's been

unlike anything we've ever seen in terms

of ARR. Now for open AI it's now it's a

bullseye on their back. They have to

continue to monetize in the enterprise

because enterprise when you think about

all the data centers being built and all

the memory and everything it's being

built for what will be the use cases on

enterprise on the consumer software

vendors in my opinion are the ones that

it goes back to the second third

derivative just like cyber security. So,

I think part of where I think investors

and I don't think it's reflecting

they're selling the stocks is like

they're underestimating the scale and

scope of what this is all going to look

like and I think we're just still we've

talked about it's like party start at

900 p.m. goes to 4:00 a.m. to about 11

p.m.

>> Can you monetize a model that's

currently restricted?

>> No. And that's why the when it comes to

anthropic that's why they're playing

they're starting to play nice when it

comes to government. you're seeing some

sort of, you know, compromise or at

least some moving of the goalpost and

that's important because anthropic right

now. I mean, it's you're talking about

the best model in the world. You cannot

be on relative to what we see on the DoD

and the Pentagon. That's why it's an

important time for Daario and Anthropic

to get to some sort of compromise when

it comes to US government.

>> Stay with us. More Bloomberg

surveillance coming up after this.

crude heading for its biggest quarterly

drop since 2020. Morgan Stanley cutting

its price forecast for the second time

this year as Amarie was mentioning

earlier, warning of a potential glut.

Morgan Stanley, of course, cutting its

oil forecast looking now for $70 at the

end of 2027. So, it's not just a

near-term forecast, Amory. It's also

longer term what we could potentially be

seeing. I think the signal from the

White House has been really clear. We

want to make sure that oil continues to

flow. They didn't want to go into peak

driving season with high prices on the

consumer. And even with prices dropping

across the United States, the president

is still annoyed they're not not

dropping fast enough and actually going

after pero the last few days, retail

gasoline owners telling saying they're

gouging and telling consumers that you

know, you report them and complain.

Yeah. Call of President Trump with Joe

from Senoko. Rebecca Babin of CIBC

private wealth writing the market may be

overestimating the pace of production

recovery while underestimating a future

inventory rebuilding demand. Rebecca

joins us now. Rebecca, you're one of the

few who are holding on to this view that

maybe oil prices are going to go up. How

much push back have you gotten recently?

>> So, I get a fair amount of push back,

but I would say this. You keep

referencing the Morgan Stanley price

cuts this morning. Guess what? their

targets are still above the strip of

where the strip is currently trading

right now. So $70 at the end of 27 is

still above where the market has crude

right now which is closer to you know

high60s. So I think what's happening is

some of the analysts that may maybe have

overshot of where they thought crude

would go are coming back to where the

market is now. So in terms of the

comment of what I'm making is

essentially we are effectively pricing

in all of this supply coming back to the

market in a very even and measured way

and that demand which has been impacted

due to this conflict does not come back.

Right? So that's what's being priced

right now and to me that's just a little

bit overly optimistic on how quickly the

supply is going to come back. We've

already seen fits and starts here and we

did have a lot of Iranian crude sitting

off the coast of China before the

sanctions were waved. So that was

immediate pressure on prompt, right? And

we've also had this SPR release has

which has helped buffer this um

conflict. So we we've had a lot of

prompt supply and we're anticipating

that this just carries forward in a very

measured way and that the demand drop

that came out of China as they cut

refinery runs um and transitioned away

from some of their more fossil fuel

intensive prochemical activities isn't

going to rebound. And to me that's just

a little bit pessimistic. If you look at

the headlines today, China has already

said they're going to roll back some of

their product export bans immediately.

that is going to pull forward a little

bit more crude demand. Um, and I think

that we're overestimating the downside

just as we had overestimated the upside

at the height of the conflict.

>> So, where do you see prices ending the

end of this year, Rebecca?

>> So, I think we can look at the end of

the year and I can kind of see Brent TI

can see 75 TI 80 Brent. Um and I just

think that we again we don't necessarily

see this even distribution of flows

resumed through to 85 what I think is

priced is 85% of flows resumed by the

end of July is what's priced I think

that might get pushed out um and we

don't necessarily see we are seeing this

immediate reaction as ships have

transited and Iranian sanctions have

been waved but if that gets pulled back

I don't think we see the the

acceleration of inventory builds that

the market's anticipating. So I'm not

drastically above the strip. I'm kind of

looking 7580. Um Brent TI,

>> what do you make of the conventional

wisdom that then next year we're going

to potentially have another glut?

>> So that is a really interesting

question. I think 2027 is shaping up to

be um really challenging from a

forecasting perspective. Um right now

estimates have a surplus of about 4

million barrels a day for 2027. Some um

analysts are higher, some are lower, but

that's kind of the midpoint of the range

there. That is going to be very

indicative of how aggressively countries

and um decide to stockpile after this

event, right? If all of those four

million barrels surplus is just kind of

we don't need to rebuild inventories and

it's just considered to be excess

surplus in the market, we could see

pressure in 2027 and we could see the

strip trend kind of closer to that $70

level in TI maybe 65. I tend to think

having read the headlines again this

morning that India says they're going to

increase their strategic petroleum

reserves. Um, China has some re

rebuilding of stock piles to do. India

also wants to diversify away from Middle

Eastern crude. I tend to think that's a

scenario where anticipating this massive

surplus, but what it's going to be is a

rebuild in the market might not reflect

quite as loose as that number kind of

would headline number would say. So I'm

not thinking that we see this dramatic

60s50s crude scenario um next year which

I know some analysts are pointing to. I

tend to think we hover around this kind

of 7075 level.

>> What has the effect OFAC waiverss done

for this market? The fact of the matter

is Iranian crude could f flow freely at

market price. This has been a huge

factor, not just the OFAC, but the fact

that you can transact in dollars. Um, I

think has opened up a lot of Iranian

crude to the market. Um, now what I

haven't seen is a tremendous amount of

buying outside of China of Iranian

crude. But what that does essentially is

make Iranian crude available to places

like India um which has has

significantly reduced their imports due

to the sanctions and makes it a more

competitive barrel right in the market

that can press other things lower.

Typically Iranian crude traded at a huge

discount because of those sanctions.

It's now a free floating market barrel

and that kind of just can press things

lower. Now that's this all assumes we

we're talking about a 60-day waiver

here. So, we don't know how that shakes

out and if it'll get re-imposed, but for

now, it's certainly the reason we're

seeing the weakness in the prompt

market, which I don't necessarily

disagree with. I just when I look at the

riskreward here, I think we've priced in

a lot of a really optimistic scenario.

And should that not play out, I think

the we have more upside than we do

downside um at current prices.

This is the Bloomberg Surveillance

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