Wall Street Brunch: U.S.-China Summit In Spotlight

President Trump and President Xi's White House summit will focus on trade, tariffs, Taiwan, and AI, with rare-earth exports and Boeing (BA) orders in play. Failure to extend the rare-earth export ban truce could escalate geopolitical tensions, while a comprehensive deal would need to address multiple global conflicts and tech competition. AI policy is in the spotlight as Trump proposes an 'AI Force' and Google (GOOG) faces scrutiny after its Gemini model accessed external systems during cybersecurity testing. Costco's (COST) upcoming earnings draw attention; despite strong growth, its PEG valuation remains expensive, leading to a cautious Hold stance from SA's head of quant.

Trump and Xi meet with trade, tariffs and AI on deck.

Trump pitches an AI Force while Google reveals Gemini breach.

Costco earnings put valuation in focus.

This week, President Donald Trump will host Chinese President Xi Jinping at the White House, with trade, tariffs, Taiwan and AI expected to feature prominently in the talks. Bilateral meetings are due ahead of the big meeting Thursday, including Treasury Secretary Scott Bessent meeting with Chinese Vice Premier He Lifeng today in New York. Investors will also be watching for possible announcements on Chinese purchases of U.S. goods, including Boeing ( BA ) aircraft, and flows of rare-earth magnets from China. SA analyst Damir Tokic says the failure to make a deal to extend the rare-earth export ban truce “ could trigger a major geopolitical escalation .” But with oil sales to China and U.S. tech exports also on the table, a deal “would have to settle the war in Russia, the war in Iran, the AI race,” not to mention the original trade war, he said.

AI dominated the news this weekend, with President Donald Trump posting that he intends to create an AI Force with an AI Czar to protect an industry that he says will one day make up 25% of U.S. GDP. He says the AI Force will “not in any way hinder or stifle” growth and will use the current criminal and civil justice systems to handle any “bad” aspects. While he stressed again that fears of an AI takeover are a “hoax,” Trump also canvassed for an AI rebrand to Superior, Extreme or Supreme Intelligence. Meanwhile, Google ( GOOG ) confirmed that its Gemini model gained unauthorized access to three companies in May during a review of its cybersecurity capabilities, the first known incident of the company’s AI system autonomously engaging in such an act. Gemini accessed outside systems by guessing login information or using credentials found publicly, assuming the systems were part of the test. But in all three cases, the model stopped short of doing anything further after entry.

On the earnings front the calendar is still very sparse. Costco’s ( COST ) report Thursday will likely garner the most attention. Seeking Alpha Head of Quant Steve Cress says he always leans toward a positive Hold for Costco . Looking at price-earnings/growth, “even the PEG is freaking expensive. It's got a D (Quant grade) for PEG, it's at a 76% premium. So it really is a rich and expensive stock. But, there is a growth element to it,” Cress said on Wall Street Breakfast Friday. “I'm just not sure the valuation framework is worth it.” And you can hear more from him every morning around market open with Rena Sherbill on TikTok, X and YouTube @cresstopstocks.

Looking to the rest of the earnings calendar : AutoZone ( AZO ) and KB Home ( KBH ) report Tuesday. Cracker Barrel ( CBRL ), General Mills ( GIS ) and Paychex ( PAYX ) weigh in on Wednesday. BlackBerry ( BB ) joins Costco on Thursday. Among other corporate happenings this week, investors will be looking for more statements from media companies, especially CNN owner Warner Bros. Discovery ( WBD ) and MS NOW owner Versant ( VSNT ), after CNN, MS NOW and Politico journalists were prevented...