preparing to take on the largest alcohol distributor. it is tuesday, june 4th, 2024. "squawk box" begins right now. ♪ good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen. andrew is on assignment at the cnbc ceo council summit in washington. he will join us later in the show. in the meantime, we are looking at down arrows this morning. dow futures are indicated off 210 points. the dow was down yesterday. it was a fractional loss yesterday. this is a big move this morning. s&p futures are off 27 points. that is a decline of .50%. nasdaq indicated off almost

triple digits this morning. check out treasury yields. right now, the ten-year yield is yielding 4.4%. 4.39%. the two-year yield is 4.48%. >> it closed down 115 yesterday. >> it seemed to miss in the last week. >> it was down last week. it was the weakest for the month. it was up for the month. 40,000. we had our 40,000 hats. >> dow had issues. salesforce. >> again yesterday. >> and boeing had troubles. you are still looking at the dow that is less than 5% or riff around 5% off the all -time highs. >> another day and another new a.i. chip. intel announced the new chips at

the conference in taiwan. the day after the similar announcements from nvidia. intel unveiled pricing for its gawdy 2.0 and 3.0 processors. those are used for a.i. model training as well as deployment. $30. that's the one we put all our money on in the chips act. one of them. >> all your chips on, so to speak? >> we will see if it is a smart move. >> year to date, down almost 40%. >> i looked at it the other day when we were talking about it. market cap is down lower. you can go back 15 years, i think, and see a similar number. i don't want to say it off the top of my head. i looked at the chart. it has been dead in the water for a long, long time.

i don't know. a lot of different ceos. let's see, you can go back -- doesn't go back far enough. at least august of 2014 where it was $30. that's ten years. you can go back further than that. if you look at the meme stocks this morning, this is something we're doing on a daily basis now. the move you are seeing today shows losses, slight losses across the board. these are 1% or 2% or 3% losses after a 21% gain from gamestop yesterday. keith gill, also known as roaring kitty, posted a screen shot after yesterday's close showing the same holdings. although, cnbc could not independently verify the post was made by gill or the holdings

are authentic. gamestop shares are down 1.4% this morning. in the meantime, e*trade is considering telling keith gill he can no longer use the platform and growing concerns of manipulation. sources told gill he bought options on e*trade before he ignited a meme stock craze back in may. e*trade and morgan stanley are concerned about the ability to pump a stock for his own benefit. this sparked internal discussions at the s.e.c. about whether they could be considered manipulation. andrew left, who was burned by the position in gamestop in 2021, tells bloomberg, he is once again short gamestop. he covered that position and reshorted the stock yesterday. in a tweet, he said the keith gill post appeared more like manipulation without investment

pieces. he said someone is backing gill financially. we will tackle that question about manipulation with jacob frenkel in the next hour. >> the stock opened at $40 yesterday. it closed up $5 at 28. it is not doing much this morning. it was at $40 when it opened. it's a great gig. you know, people on twitter say warren buffett bought. it doesn't go up 80% after he announces something. he might announce that he owns something and it may boost the stock a little. you don't get to buy 100 options and quadruple the underlining stock. if that's true with keith gill, that's an $85 million profit in

a couple of hours. >> it's a situation where reddit, the reddit forums, where the meme stocks were big in 2021 and this was all taking place, on reddit, there is a lot of pushback. kate who came up with the story yesterday was showing how the moderators are pushing back. the people in the forums were the ones left holding the bag. >> there is someone on the other side of all those trades. if you are keith gill, it's great that you have followers that do that, but it eventually gets to the point -- i don't know. it's a brave new world. it's the wild, wild west of pump and dumps. >> i get the concern going after the short sellers.

what he's doing, if this is the case, is leaving yall of his followers. >> should he be penalized for blockbuster? >> no. i can understand elon musk's frustration with tesla shorted and saying we're trying to survive. >> that's is different than the meme stocks. what's the bullish scenario for gamestop? >> i don't know. maybe they figure out a way to really do -- >> based on squeezing the shorts. that's all it's based on. isn't it? >> i think so. i think there could be some underlining thing to make it exciting to go back into the stores. people buy games online or download. unless you have a great place to

gather and change things, i think mary doan is doing a good job at foot looker. >> it reminds me of rich, almost, and occupy. these are hedge fund guys with naked shorts and take it up the nose. it's a cultural movement almost. it doesn't mean there's any rationale for why these stocks are valued. why does he call himself deep value? >> you are the one who wanted "f'ing" as a middle name. >> rupert got married. starting a family. the ftc is preparing to file a lawsuit against the largest u.s. alcohol distributor. southern glasers wine and

spirits. it is related to how the company prices wine and liquor around the country. the ftc is considering bringing the case under the robinson-pactman act. it prevents suppliers from offering favorable pricing to some customers over others. large chain stores over smaller stores is the first case brought on by the ftc. previous cases argue prices drive up costs for consumers. southern glaser is the tenth largest privately held company in the united states according to "forbes." because it is private, probably not very well known. >> i never heard of it. president biden will sign an executive order today allowing him to halt some asylum claims at the u.s. and mexico border.

it would should down the border when daily crossings exceed 2,500 people. encounters are averaging 4,300 people a day which suggests a shutdown could go into effect h immediately. sources tell nbc news that it has been conveyed to lawmakers. the move is expected to face legal challenges. border security has been a weak spot for biden according to polling data. >> newsflash. >> former president trump has a 30% better dealing with the border. >> on the case. we have that going for us. coming up, apple shares turning positive for the year in yesterday's session. we will talk tech with gene

munster next. and new york state crackdown with the social media issues over the algorithm pushed to kids. "squawk box" will be right back.

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gains. it is up now on the year. joining us to talk apple and tech is gene munster from deepwater managing partners. still waters run deep, gene. is that part of it? >> indeed. >> i think of you. very calm. runs very deep. still waters. why is it up? you never really threw in the towel. you always thought apple was probably any weakness was an opportunity. >> i did, joe. ultimately, apple has, obviously been late to the game when it comes to a.i. and the move caught up 15% since the report of the last quarter as anticipation for next week. before i talk about the bigger picture next week, i want to caution the traditional buy on the rumor and zesell on the new.

don't grade on apple as they trade after the event on june 11th. apple has a unique asset which is the 2.2 billion the active devices. those are monthly devices. that is the window that 20% of the world will experience a.i. of course, they can quickly bring those to market with the partnership most likely with openai and improve siri and ultimately start to inch back toward revenue growth. that's the second piece of why the stock is improving for the last two years with revenue being east fflat. combination of what we're going to see next week along with improving revenue growth is what gets us back to a better place for apple shares. >> no new hardware, you don't think? doesn't need it? >> they showed the new m series a couple of weeks ago. introduced that in a surprise

move in an ipad that is typically on a mac. this is not the hardware event. they will save that, of course, for september when they come out with the new a-chip. we will see a shift in the chip architecture from apple not this year, but probably in 2025. think of a gpu for a smartphone. this will be used to run small language models. i think apple will increasingly rely on silicon as an advantage, but i don't expect to hear much on the developer side of the business. >> this will do it? this will vault apple into the ranks of player in a.i., you think, or do they ever catch up? >> it will vault apple or vault the world into using more a.i. products. as much as we talk about it, most people don't experience it.

very similar what apple has done in terms of shift the paradigm from the mouse to the touch interface. the a.i. interface and a.i. embedded into the operating system is a vault forward. that will improve their business. it's not going to -- we're not talking about a business going from 2% to 30% growth. this is 2% to 5% and sustained. that is a vault in terms of apple nearing a $400 billion revenue company. it is a different conversation in what is going on with google and meta, for example with nvidia. i would not call it a vault, but a huge step forward in how we use apple products. >> i haven't used siri. do you use siri, becky? >> no. >> it was so bad, i don't each

even attempt it. can you show me what you can use it for, gene? >> it will be -- this is going to probably be the shinny thing we will see next week for consumers. siri. siri has been around since 2001. they just lost the confidence of the consumer. people check the time and temperature. that's about it. of course, a deal with openai and google and allowing you to have a conversation opens up a whole different use case for siri. in part, trying to find more of what you are looking for, but also the concept of personalized a.i. keep in mind when it comes to siri, all of apple's devices with the exception of airpods have the ability to summon siri. we talk about different forms of wearing and having a.i. close to

us. siri is the best way that is going to be embodied. big opportunity. they better nail that piece related to a better conversation with siri. people will give it one more try. >> doesn't your known have the time right on the screen? >> the phone does have a time. >> i bump the phone the wrong way and i get annoyed. oh, it dhappens and there is siri. i don't want you. it's an an annoyance at this point. that's definitely not what they need i don't think. will apple be the pre-eminent tech stock again, gene? does the nasdaq need apple to be the pre-eminent tech stock?

>> i think it will be the number one or two. if you think about magnificent seven, nvidia is having a breathtaking run that will probably last a few years. if you think about the scope of what apple can do over the next five years, we've talked about injecting a.i. into the business. there is still this other piece that they haven't tapped into. that is related to bringing the world to us in a more seamless way. that means vision pro, of course, has not been a success. they have been struggling to get adoption of that. it does tease out the ability to have some form of a wawearable. what google showed embodies what apple has to use with the next generation of devices that aree.

the one piece that is worth noting is apple and microsoft largely don't have control of the a.i. destiny. i think they will be doing these partnerships. google and meta are in a different camp. i cannot say apple is at the absolute top because of how their strategy could be in the balance of someone else's hands like openai. >> gene, we will end it there. >> thank you. >> we will see a lot of you. thanks. when we come back, big tech layoffs. we will tell you about the new rounds of job cuts at google and microsoft. and lar,te don't miss our interview with jeffrey

katzenberg. "squawk box" will be right back. at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

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i sold a pillow! >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. alphabet is laying off employees from several teams in google's cloud unit. cnbc learned 100 were cut from sales and go to market strategy and operations and engineering. the google spokesperson said it is incremental across teams to better align go to market. a microsoft spokesperson telling cnbc the company will layoff employees who work on mixed reality. the cuts will affect the department that contributes to

the lens 2.0 augmented reality headset. the layoffs total 1,000 jobs. coming up, social media crackdown. we will talk about legislation in new york state that could prevent social media companies from using algorithms to serve content to kids. as we head to break, here is a look at the s&p 500 winners and losers from yesterday. [thunder rumbles] ♪ ♪ >> announcer: winners and losers is sponsored by state street global advisors. ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street

created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ [thunder rumbles] ♪ ♪

good morning. welcome back to "squawk box" live from the nasdaq market site in times square. the futures are in the red. the dow is down 200 points. nasdaq is pulling back this morning in the pre-market session buy triple digits. just under that. 97 points. s&p also off. the state of new york plans

to prohibit social media companies to use algorithm to steer to children without parental content. this is aimed at preventing facebook and tiktok from serving automated feeds to minors. this leads children to violent and sexually explicit content. it would prohibit platforms from sending notifications during overnight hours without parental consent. the bill is expected to be voted on by the new york state legislature. governor hutcochul said this wo make social media less addictive. we have been dealing with social media for 20 years now. these rules -- 2004 is when facebook first hit the scene. these rules have been in the works for 20 years. legislation is behind all these things. just reading this story in "the wall street journal" today and

a.i. is now jumping into the picture. using fake nudes and these are fake images and almost everybody knows they are fake, they look at the teenager girls differently afterwards. we jump ahead to a.i. before we have dealt with the social media issues that have been brewing for two decades. >> i saw that story. i mean, you can't tell -- bodies aren't that different. it really makes no difference whether it is the actual or whether it is someone else's -- it's the same thing. >> the result for something -- >> this clown is back? >> that's why the windows behind us are so black. >> now he's got some crazy -- >> a skull or a hamlet thing. >> what? i'm doing it. it doesn't matter.

it is not their body. it's close enough to where -- >> you can put yourself in that an situation as a 15-year-old trying to imagine what's happening. >> i don't want to see myself. >> to have that out at such a vulnerable time. we moved on to the next technology before we dealt with the ills of the last one. i'm not saying social media is terrible. lots of great things have come out of it. it has impacted many teenagers in the country and led to anxiety. >> you wonder a lot society's ills. you don't want to say it is all social media. >> it's not. >> a large part. >> it is amplified. >> we're in the crazy world we're in. bill ackman worth8 billion.

this came after a 10% stake in pershing square for $1 billion and that value's his stake at more which is up to the$8 billi. he ranks 443 in the world rankings. a technical issue yesterday caused the class a shares of berkshire hathaway to appear to be down nearly 100% on the new york stock exchange for most of the morning trading period. trading was halted in those shares as well as barrett gold. all of those appeared to show dramatic drops in the stock prices. the nyse said the problem stemmed from the price bans published from the cta which is used by major exchanges to jointly provide real-time stock quotes. the cta said 40 stocks were

affected. the nyse said at 11:45 a.m. eastern time the issue had been resolved and trading was back to no normal. it said it would cancel erroneous trades including berkshire hathaway. when we come back, the new fortune 500 list is out this morning. the magazine's editor in chief will join us next with the biggest changes from last year. reminder for you, you can get the best osqwk bf uaox on your favorite podcast app and listen any time. we'll be right back.

welcome back, everybody. fortune announced the fortune 500 rankings for 2024. the magazine, which is out this morning, names walmart number one for the 12th year in a row. other names at top of the list include apple, amazon, cvs and

berkshire hathaway and more. joining us is alyson shontell. she is the editor in chief. if walmart is at the top as number one, how come satya nadella, is on the cover? >> a.i. the year of a.i. under nadella, who has been in the role for ten years, microsoft has grown in value by t 10x. they have a $3.1 trillion value. i would say he achieved quite a bit. >> if they have grown tenfold, where were they before? >> ballmer. >> where were they on the rankings? >> much lower. in 1995, when we opened up to service companies, they have been on the list since. they have grown significantly under him >> let's talk about other trends you have seen. what else caught your attention when you were looking at the

rankings? >> the year of efficiency. mark zuckerberg was right. travel is back. we saw fuel costs come down and we saw global business travel ramp back up. you see nvidia revenue jump 126% year over year. it broke into the fortune 50 for the first time. some significant gains there. tesla jumped ten spots. part of that was the boost in the revenue due to bringing down the price of the cars last year. >> how do you calculate the list? >> revenue. >> revenue alone? >> just revenue. >> you look at all these other factors? >> we do, but it comes down to revenue. there are lots of ways to do the list. it has always been revenue. we have never changed it. >> what about diversity measured

which have stalled in 10% of the fortune 500? >> there was zero when it started in 1972. the first was katharine graham. it picked up. the last two years is the first time 10% of companies run by women. >> high interest rates changed things. >> 22 of the companies from the financial sector which benefitted from the high interest rates. we see that significantly. >> going through the course of the year, you look at all of these different things that are moving. what other trends have you picked up over time? there is so much money indexed to the s&p 500. it is closely tracked index and closely followed. >> i can't put my finger on it enough that a.i. is here and

making moves all over the list. we haven't even seen the private sector come in in a meaningful way. super micro. for the last five years, it has seen explosive growth because of a.i. it is a server company. nvidia, again, just the huge gains they have seen over the last year, even and they continue to see. microsoft with its diversi diversification has seen ex trajectory grow. amazon is seeing a.i. grow in a positive way. yet to see apple step up. they will. you are seeing it transform the fortune 500. >> what got knocked down? if you have a.i. making such a big difference and financials moving up the list. what got knocked up? >> there were a couple of one-off companies. coinbase showed its face and never again with the boom.

open-door with real estate having a tougher year. >> yeah. that's an understatement. >> they have been knocked down. a few like that have fallen off. a few that really worked their way on like monster beverage. i do not drink it. a lot of people do. they made the list for the first time this year. workday made the list. >> alyson, thank you for coming in today. so much money is indexed to it. it is something we follow clo closely. >> thanks. coming up, news between paramount and skydance wtiaing on approval from shari redstone. the latest coming up. yeah, aw! whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up.

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paramount and skydance have agreed to terms of the merger. david faber reports that a deal could be announced in the coming days, but still needs the signoff from the paramount controlling shareholder shari redstone. redstone would receive $2 billion and skydance would buy out 50% of class b paramount shares for $4.5 billion. skydance and red bird would contribute is.5 billion in cash to reduce debt and following the deal, skydance and red bird would own two-thirds of paramount with the rest owning the remaining third. should have sold it five years ago and none of us would be struggling through the details.

>> should, could, would. stocks from india pulling back after the electoral victory by prime minister narendra modi's ruling party appearing thinner than the exit polls suggesting. the data shows modi's majority is likely to be reduced from the number of seats in parliament that they won in the last election back in 2019. it's been a huge issue. such a major part of the population in the world voting in this election. we have been tracking it closely. of course, because of the big changes that modi has had under way in india for the entire time he's been there. >> right. populous country. coming up, it's jobs week in america. we're going to get new unemployment data from small businesses from paychex. later, we will have wally adeyemo join us.

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small business job growth is stable and growing at a moderate pace, and wages, though, are growing a little more slowly, the lowest level in three years and that's according to the small business employment report. joining us is john gibson, paychecks ceo. what percentage do you use -- i don't know where the cutoff is, but how much of what we are watching is generated from what you would call small businesses?

>> yeah, joe, first of all, it's great to be with you. we track in this survey small businesses, less than 50, that represents the vast majority of businesses in the u.s. and we think it's a good indicator of what is happening in the general economy. you stated it showed positive signs. we saw job growth was the highest one-month gain we have seen since january '22. we saw the lowest wage increase in three years. when you look for small business workers, we saw the first earnings increase so far this year and that's positive mainly because they are getting more hours from their employer. when i look at the may report, really good news for the u.s. economy, which i said, is driven by small businesses and good news for the fed and good news for the small business worker as they are seeing more home each

week. >> i see positives and negatives for those that want to cut, though. this doesn't look like it's slowing very much at all, and that's good, it's good news, but we are constantly in the position of good, bad, is it good? we are just barely below, and it's the best month in a couple years and that doesn't look like -- doesn't look like the increases that the fed orchestrated are really affecting the market at this point. good news because wages aren't rising as much, and for inflation it's good news and we look at it from both sides on that fact as well. >> joe, i think the headline here is there's a lot of stability across the board. we're not seeing any signs of a recession. we are not seeing any massive changes. we continue, as you said, to kind of be stable. when i look at the underlying

trends, the job index continues to be stable. it's not growing as fast as it was last year. on wages, i may disagree a little bit. i see a lot more downward pressure on wages, and we saw anomalies at the start of the year, and as states increased minimum wages, and that spiked some of the wages. what i see now and in this earnings, 3.13% in our hourly earnings. but i watch another factor the way we report and that's the one-month analyzed, and that's down to 2.1%, and that's the lowest we have seen since november 2020. i do see wage deflation in the numbers here. >> when i said that was not good news, we want the narrow inequality and everything else, and i am fascinated that huh

ratio would say go south, young man. 19 out of the past 21 months, the south has been the fastest region for gains. the west is the only region that is down. it's below 100. that's because they went -- $25 an hour for some of the minimum wages. is it that simple, they went too far with the wage gains in california? >> well, i think you can see, as you said, the west has the highest wage inflation of any of the regions. the south has continued to really dominate. i would say up and coming is the midwest and something for you and becky, the hoosier state and the buckeye state, they are

continuing to grow faster than the south so far this year. >> with becky, you have to include, like, ten states. >> yeah, and -- >> i was from cincinnati. >> i was born in indiana. i -- >> i thought you were from broken arrow? >> no, i -- >> i didn't mean to start a fight. >> where is new jersey on the state? >> not too great, becky. the northeast sluggish as well. >> well, i can give you a list of our issues back here. what is all this say about friday, do you think? the bigger picture, john, is the fed going to be able to land this softly, like we are already giving them credit for without unemployment rising? are they going to be able to do that? it never has been done before. >> well, it hasn't, but what i

see is stability. i do continue to be concerned about credit and the ability for small businesses to expand the cost and access to credit and capital is critical, but i certainly think the fed has the opportunity, and, again, these numbers, joe, what i expect to see on friday is a good stable growth in jobs. we see wage inflation going down. i get your point, joe, is that good for workers? as i pointed out, as i see the wages increase employers are increasing hours, and so in fact workers are taking home more. when we had higher wages, we had less hours, and employers were controlling the hours so i see a win/win here for the economy, the fed and business workers. >> be careful what you wish for with higher wages, because sometimes that's what happens. >> what about colorado, your

other state? >> that was college. >> and kansas, where you used to stop along the way. >> l.a. -- >> i mentioned california. >> i wasted time out there, kind of. like, two friends, the entire time. maybe that's my fault. john, good having you on this morning. it's always good to get an update. you figure small businesses are -- you didn't give me a percentage number for what we are watching, but it's above 50%, that's for sure. >> yeah, it's well above 50%, joe. small businesses really drive the u.s. economy. when you look at small businesses, close to 90% of all businesses are small businesses and when you look at the small business start since the pandemic, they are record levels and there's an entrepreneurial spirit out there and i think the small businesses will drive the u.s. economy well into the future. >> john, where are you from?

>> indiana. i'm a hoosier. >> that's right. i knew that, actually. john gibson, thank you. >> thank you. thank you for having me. it's just before 7:00 a.m. on the east coast. you are watching "squawk box" here on cnbc. i am becky quick along with joe kernen, and we will get to andrew ross sorkin in washington. this is just a day after new product announcements from nvidia and amd. a move at the border would temporarily shutdown the southern border when the crossings exceeds 2,500 people.

the ftc preparing to file a lawsuit against southern tkpwhraeu surz wine and spirits. the suit is related to how the company prices wine and liquor around the country. the fdc is considering bringing the case under a 1936 law meant to prevent suppliers giving certain pricing over others. 200 on the dow, and let's get to dom chu with this morning's premarket movers. >> let's get a check on computer chips. intel is moving higher, just over 350,000 shares of volume. some of the positivity is because of gayle zinger who took the stage saying the new line

the chips rivals nvidia's offerings, and that processor will deliver better performance and high efficiency compared to previous generations of the chips. we will stick with the simi conductor trade and get a check on nvidia. right now about a quarter of a percent after a 5% gain yesterday. new this morning, analyst at bank of america added that stock to their so-called u.s. one list of best ideas. if you are looking for more detail and analysis of some of the top analyst calls of the game head over to cncb.com/pro. gamestop is down just a percent or so.

it gained 2,100 yesterday by roaring kitty. he made another post that could show the position was held on to even after yesterday's big rally where the stock briefly gained 70% in regular trading. the stock did lose steam after there was talk about banning gill over concerns of market manipulation. amc down 23%. i will send things back over to you guys. >> i don't know. morgan stanley and e trade -- that would be quite a -- quite a move, and there would be quite a bit of backlash from that, dom. thank you. let's get to andrew. i told andrew yesterday in

washington, it just -- it just smells. that's too much money to be able to make from just posting a rev reverse uno card, $85 million overnight. >> we will talk about that, joe, in just a little bit. we have a couple segments, actually, on it. in about 20 minutes we will talk to a lawyer about that, and i think that issue may come up here in washington. i'm at the cnbc ceo summit in washington this morning. a big focus here for executives gathering is 2024 election, and we will talk about how to integrate artificial intelligence technology, and as you might imagine, regulation, as it will play into all of this with roaring kitty and so much more. we will talk to assistant attorney general for the antitrust division. we will bring that to you. later this afternoon, 26 north

founder josh harris that led the group but now owns the washington commanders, and he's a rock star here. we will bring you highlights from all that on cnbc today and tomorrow as well on "squawk," and joe, talking about politics, we will be talking to mike johnson a little bit later. a lot going on here in washington as this lobby starts to fill up with ceos. >> yeah. john boehner, the mentor. did you see those articles? that's interesting. speaking of ohio, speaking of cincinnati, john boehner. maybe you should ask him about that. thank you, andrew. when we come back, how bullish are the bulls right now? we have bank of america's savita joining us next.

and jeffrey katzenberg. a big cyber security and the venture of work, and he will join us in the next half hour. "squawk box" will be right back.

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♪ a mixed finish for stocks. kicked off trading in june, and savita subramanian from b of a securities. was it a month ago?

when did we see you last? >> i can't remember. time means nothing these days. >> it's weird. it's like einstein was right, it's like time dilation. you have been feeling pretty positive. >> i have. >> and the divergence from the dow, 1500 points from the high, does that have you concerned or do you expect the dow to catch up with the nasdaq? >> yeah, the dow is supposed to be the kcanary in the coal mine. if you look at the s&p 500, it's seven stocks. if you look at the dow, it's pretty top heavy. i almost feel like when you peel back the onion and you look at the underlying stock market, what makes me feel better is that earnings is coming in positive for a broader array of companies in the s&p. it's not just the magnificent 7

doing all the work for the index, and that makes me bullish. the idea of being in abull market is not necessarily new. we are not faced with a bunch of bears any more and people agree with us more than disagree with us, so it feels great to go into a meeting and be agreed with and doesn't feel like we are fighting that wall anymore. >> what is your multiple on the s&p based on next year? >> based on where we are now, i think the trailing pe and the forward pe are kind of reasonable. >> is it 21? what is it? >> 21, yes. that sounds very high, but, again, if you look at what is in the index, it's different from prior cycles, high margin industries -- >> ai, yeah.

>> ai is part of it, and maybe that's the area where there's more hype than reality. i do think productivity and efficiency are bullish stories, and we have been talking about that for a while and i feel like a broken record, but that's what you want to see corporations do is generate earnings f, and thas what makes me bullish, we are off the fed stimulus machine and we are in a more rational market. >> you need earnings to lead the way. what type of s&p gains are looking for year over year? >> well, the target is 5400 -- >> that doesn't give you much. how much next year? >> i think it will be a solid year but price returns are not going to be as exciting. where we are going to get more bang for our buck is dividends

and dividends are a forgotten story, because we have had buybacks be the way for returning capital, and over the next ten years the best performing area of the u.s. landscape will be large cap value companies. if you buy the large cap benchmark, you are buying one of the most hated areas of the spectrum, and when you think about large cap value, these are companies like energy companies, and they are trained to survive in a high rate environment because they have not been given any money and they can rework themselves because of ai, and now all of a sudden they have this potential to become more streamline and labor light. >> would your appreciation of

the dividend stocks changed if tax laws changed to raise the tax rates for dividends? >> that's such a good question. we have looked at tax permutations, and when we saw dividend taxes hiked -- sorry, cut in the mid-2000s, high yield stocks started to underperform. they do the opposite of what you would expect. it's not really taxes that matter for dividend yield, it's really where are you going to get your inflation protected income. you are right, taxes matter, but a lot of the stocks are held in tax managed accounts, and i thought that was one of the biggest surprises when we are studying all the different facets of the market. >> you are happy you are not obsessing about the fed, but still need to talk, probably, about the fed. are we -- we are in a 2% gdp

world and that allows the fed eventually to cut a couple times this year? is that your best case? >> i think we could be in a higher nominal gdp world. >> shouldn't cut at all then? >> there's a reasonable probability that the fed doesn't cut at all this year, and this is what our economists tell us. there's a zero probability, and i don't know what it is but it's higher than higher that the next move is a hike, and i don't think that would be terrible for stocks but it would be good for value and some of the areas that are more kind of gdp sensitive. the fed is going to cut if there's something wrong in the economy. i think you brought this point out brilliantly in the past, that the fed, basically, is only going to cut when things are starting to break and if things are not breaking why wouldn't you want to own equities. >> i don't know, and they say it's not political and has nothing to do with the election,

but they just had the -- >> well, they thought the rate would be lower than it is. >> what gave them that idea when they see no sopping up of equity -- >> they will have to see more before they cut. >> i think that's right. i think there's structural areas of inflation risks in the market today, like, look at employment. one of the reasons it has been really hard to get wages modified or moderating is that we have this very structurally tight labor market. we have an aging population and early retirees. the only way to fix that problem is ease up immigration, which is more of a political decision. i think there are areas of inflation that are hard to argue will go right back down to those

benign levels that we got used to in the last decade. >> okay. a nonconsensus view. we are sure there will be two or three this year, and i don't know, doesn't seem right. >> it doesn't. >> good to see you. >> thank you. andrew? >> thanks, becky. when we come back, in the next hour we will talk to another bullish strategy, tom lee. a strong month ahead for stocks despite yesterday being rocky. you do not want to miss it. next, what we were just talking about, game stop and meme media, and roaring kitty now has the attention of the sec. what are regulators looking for when it comes to stock manipulation? that is next.

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welcome back to "squawk box" this morning. gamestop shares are down slightly, and roaring kitty posted a screenshot of the holdings, and e-trade is considering barring gill

involving his recent gamestop option purposes. and the chair of the government investigations and securities enforcement division, and he formerly served as the sec's division of enforcement. we have been talking about this for the last few years about what constitutes stock manipulation in the context of social media and maybe some of the things that keith gill, aka, roaring kitty, has been doing. doesn't seem like a natural case. what do you think? >> darn right. does not seem like a natural case. what we are talking about here is the ability of one influencer, in this case, mr. gill, to influence the price of stock. what the sec looks at when talking about stock manipulation is somebody trying -- engaging inactivity with the purpose of

creating actual or apparent active trading with the purpose of driving the stock in one direction or the other, in other words, up or down, for the purpose of benefiting financially. in other words, the idea -- the persons engaged in trades in creating a false appearance in active trading to create a market, and merely by virtue of his presence, we have seen people with personalities that have been able to drive stocks, drive the market, captivate the market. good examples are sam bankman-fried, and there's enforcement for the sec to look at. we are hearing that the sec is looking but we are not hearing it's the enforcement division necessarily, and it could be the divisions of a commission that are involved in regulation. you are right, this is a unique phenomenon. >> what would you be looking at?

there's a separate question where do you think the rules are up-to-date or need to be up-to-date or do you think it's an -- >> let's take your second question first. i don't think you can create regulation merely because of the activity of one person. certainly invites scrutiny. clearly mr. gill has tripped every wire at the market surveillance, but to create new regulations because somebody's presence has the ability to drive the market and that would have an adverse influence and not be productive. but with the sec, the enforcement division, what they will look at is, is there coordination with others. when he's trading, do other people know what he's doing?

it's a theory the sec could further try to extend. when it comes to manipulation, what is the purpose behind all of the activity? clearly he's benefiting financially. the real issue -- >> but, jacob, if he's going on reddit or another site and telling a bunch of friends publicly on a site like reddit that he's doing these things, does that constitute manipulation? >> if he's telling people in a public forum what he's doing, i don't know it would constitute manipulation, and maybe there's no change in beneficial ownership. that's something that the sec specifically looks at when its talking about stock manipulation, in other words, a

person using multiple accounts to drive the price of the stock. this is a conundrum for the sec, because it's a unique phenomenon, and we are talking about the application of corporate fundamentals and technical trading. this is strictly momentum and social media. >> jacob, i am sure there are people watching us right now having this conversation saying, how are we even discussing this? this is happening every day on wall street. the big guys are on the phone with each other and on private message boards and messaging each other on the bloomberg terminals and talking about the trades they are making, and how sit we are having a conversation, this is the little guy trying to play with the big guy or maybe even beat the big guy? >> that could be the reason the sec doesn't do something, and not for that reason, specifically. you are right, there's a lot of

activity. there's only so much the sec's division of enforcement can do something, but when you have an influence on social media who creates this type of unique phenomenon -- let's talk about what happened a couple years ago with gamestop, and whom do they look to to be bailed out? they go to the sec and plaintiff lawyers for help, and it's not there. yes, it is a difficult phenomenon but one that you cannot regulate away. >> morgan stanley who owns e-trade thinking about do they want roaring kitty on their platform as a customer, and if you were their lawyer, and they

are thinking about their reputational issues, and that could cut both ways, because retailers, especially in e-trade world, they are fans of roaring kitty, what would you be advising them? >> look hard at your contract. look at what is the agreement with this and every other client and is the person playing by the rules. if the person is following the rules set in the contract, the customer agreement, then i think you leave them on the platform. i don't think you merely kick them off because he's created a presence for himself. on the other hand, if there's the slightest inkling of a violation, then you absolutely cut the person from the platform regardless of the risk because the down side of the reputational reisk is much to great. >> thank you for your perspective. thank you. >> thanks,ndw. when we come back, mortgage rates putting a chill on

housing. right now we will get into the challenges that are facing the real estate market. "squawk box" will be right back.

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♪ ♪

welcome back to "squawk box." futures are down but not out. a little better than they were when the show started. no triple tredigits in the dow. the housing markets facing challenge from higher mortgage rates. we look at some of the issues in real estate. diana, we are getting to the end of the spring housing market. how are things shaping up? >> it was -- i can't say anything but that it was a bust. spring housing market was really pulled forward. we saw mortgage rates started the year much lower than they had been in the fall, and there was a pull forward in demand and a lot of people came into the market, and we are seeing more supply come on the market. then in april, the rate on the 30-year fixed shot up and the market shutdown. we saw a drop in new home sales

and in existing home sales, and even though supply is actually improving. >> was it supply shutdown because i can't leave by 3.5% mortgage or did people say forget it, i can't afford to buy. >> well, some people simply have to move, if you are leaving your city or want to up size or something like that, more people were coming on to the market. the problem is you have such sensitive buyers today. home prices are so high that they are right on the margin, when you see a rate, you see it's 6.5%, and it's a big deal for most people, especially on the lower end and in the move-up market, which is where people were really stuck. i brought you my two favorite charts -- i know joe will love this. they are in the existing home report and what they do is show the share of homes for sell and what is selling.

what is interesting is 15% of home sales in april were in the $750,000 plus, so 15% of sales. go back four years. that was just 6%. that tells you what is happening in the market right now. all of the activity is on the high end of the market, and that's where the people can afford it. >> was it 750 three years ago, or was there a different number? because 750 is not what it used to be. >> yeah, i am talking four years ago. what we saw was that home prices not only jumped 45% which skewed the market higher, but it's the supply that is on the high end of the market, and it's not available to transact on the lower end of the market. >> some softness at the low end? >> there's a lot of supply. prices are supposedly coming

down. i just heard of a $68 million house that has been sitting on the market for three months now. poor guy. >> what about single family rent? that is that something we follow closely. >> yeah, this was back in the great recession when be everybody was buying up homes and putting them up for rent and then you got invitation homes, and that's the reets, and they are now building homes, and the nhb reported that new construction on single family rental homes is up 20% year over year, right now, 20%. you are seeing these companies build thousands and thousands of homes, which is great because it adds to the housing stock, which we desperately need. >> thank you. great to see you. >> thanks. when we come back, dreamworks cofounder, jeffrey

katzenberg rsiaing nearly half a billion for his venture fund. it's not focussed on media. he will talk about where he's putting his money to work right after this. "squawk box" will be right back. this is real time insights. i am here with ey america's risk consulting leader. thank you for joining us. with technology, of course, comes risk and regulation and ai is no exception. how are you talking to leaders about this right now? >> the excitement around ai is contagious, as more and more organizations build it into their business processes, and

there's a strong grasp of design and more importantly, monitoring and that's going to give consumers confidence. >> what do leaders need to consider when developing the ai strategies? >> think about what is the business purpose of the ai? how sis it being designed and developed and is the data reliable and is it's protected? and all of this to drive the creditability consumers expect. >> the risk landscape is changing drastically, so when you think of all the controls we put in to safeguard and protect the assets, those could be capitalized from an operational strategy. >> thank you for sharing your expertise. >> thank you.

♪ ♪ welcome back, everybody. hollywood mogul, jeffrey katzenberg, fund. joining us now is jeffrey katzenberg, the founding partner of wndrco, and also a founding partner at wonderco. welcome. first of all, congratulations. it's a pretty huge amount of

money to be raising. >> yeah. certainly, you know, in this environment, it's with a challenge but excited to have it behind us. we have a great group of lps, and it's actually really sort of become a very exciting time to invest again. >> how so? >> well, i think, you know, 19 -- if you look back at 2022, 2023, were challenging times in tech, for sure. but we have just seen the first five months of this year have been a real sort of uptick, and the quality and quantity of opportunities coming our way today is really significantly better, so it's exciting, an exciting time, and i have a great partner. >> let's dig deeper into what you are investing in, and we will talk about media later and let's see what you are investing in, and we have had some say valuations are frothy when you look at ai, and you are looking

at cyber security in one of those areas where maybe it's a place you are finding better deals? >> cyber security, it has been an interesting 15 or 20 years. while the world has changed in so many great ways with the internet, at the same time the idea that all of us are more vulnerable online, it's crazy, you were talking about it an hour ago, what is happening to children and the elderly, it's shocking. >> it is. >> that's something we wanted to -- >> cyber security is a huge -- particularly for enterprise, and we see all sorts of investments there but we focused and became the leading firm in consumer cyber security. how do we protect and you your family, your kids and parents, online. unfortunately, it's -- >> it's necessary. >> it's a tsunami of challenges for every one of us today. >> what are some of the companies you are focused on,

things we may not have heard about before? >> aura, it's a company we helped to get off the ground a couple years ago and it's the leader in helping families protect themselves online. it's a comprehensive solution. today we are announcing a major initiative towards helping families protect their children in terms of understanding, you know, what's the impact of social media on children's mental health, and what are -- you know, for example, if your 13-year-old is downloading calorie apps, you probably have an eating disorder coming your way -- >> those don't work, by the way. >> yeah, and -- >> if you sign up just to get a plan every month -- i'm like, oh, my god, it's happening every month. you have to cancel -- this is tmi. >> it will cost allo lot of mon

and it reminds you all the time there's something wrong with you, and that's not what you want happening to a teen. >> we talked about that, what is happening to teens. we have not solved the problem with social media, and now we have ai and fake nudes of teenagers. >> somebody will create that and say i will send it to all of your school friends if you don't send me $15,000, and you see suicides going up, and it's horrible what is happening around the world right now. >> people will look and say how come you are focussed on technology and not media, and about one-third of it was looking at media things, and that's your expertise and your field for what everybody knows you for, and what makes you think that's not the place where we will put the money? >> we saw within two or three years of that is that digital

media, all the value creations there went to the platforms and not the content and we pivoted out of that four years ago and doubled down on tech as being the place of opportunity. having said that, i look at everything. we actually try and, you know, keep our eyes and ears open because i do think that there's a next big opportunity that is going to come in media, driven by ai, and driven by -- >> i think it's noteworthy, jeff, that you are totally focuseded on this right now to the -- i have no idea what to do with media. i am, like, lost. >> i think that's true of many today. >> streaming and -- >> it's a very, very challenging and certainly not a growth opportunity. there are a handful of players doing great. i think iger has done an amazing

job turning it around, and -- >> it's stock has not -- >> he will get there. >> i should buy it? >> i would bet on bob every day of the week. he will get there in the end. obviously, you look at the tech platforms, and netflix has done a tremendous, tremendous job. it's a very disruptive -- >> look at warner, and look at the value -- look at paramount and what it was worth a couple years ago, and it's scary. i think it's noteworthy that you might like cyber, but i see why you might be achewing media. >> yeah, i am optimistic that -- and it's not in front of us today, but i think in the coming years there will be phenomenal opportunities -- >> other than netflix. >> and andrew has a question. can i ask about what you think

about the deal today with skydance, and you looked at it before and thought it was a good idea, and it's going to be announced in the next coming days. >> yeah, seems like it's on its way to a conclusion, and it's in the hands of redstone and the decision that she needs to make here. i am sure it's a difficult and challenging one -- listen, you are talking to somebody that let go of its baby and sold it eight years ago and it has been in her family her whole life. probably the right thing to do, but we will see. >> andrew? >> jeffrey, i wanted to ask about a different chess piece that converges with your social media conversation you were having earlier, and also with some of your past as well, which is would you want to buy and what do you think of tiktok and whether that is something that can get hived off from

bytedance, and who would be the right buyer if not you? >> i don't have a spare couple hundred million sitting around, andrew, but i would want to take a look at it. it's an amazing, amazing platform. they continue to do an interesting job in evolving and growing it, but interestingly today, i am looking at what the next one is. when you look at how the platforms evolved and how the content itself just keeps it rating and evolving, you look at movies into television, and television into sort of all the forms into streaming and that into youtube and youtube into tiktok, and i am most interested in what is the next thing going to be, and that's where i think generative ai will be a huge factor in that and will create an opportunity, a new platform for it. >> the ai, the generative ai raised so many problems in

hollywood, though, because you have the artists and actors that say wait a second, you will just take my image and my voice, download it and then you don't need me anymore. >> yeah, and listen, there's no question -- this is shaky territory that we do have to navigate our way through, and we have seen incidents like with scarlett johansson where you can see it get away very quickly, and i try to look at the other side of it where we are going to put a set of tools in the hands of creators and artists that is going to democratize creation more than the digital revolution has, i think. >> you think. what about the other deals you see as new ones, and you mentio mentioned aura as one, but where

will the new funds go? >> well, two-thirds has been in software and i don't think that will change going forward, and finding products people can use at work which are things that they can use in their personal lives, and -- look at what is happening with chatgpt, and that didn't happen because somebody decided you should be using it, and you are using that because that's what you want to use. we will see a whole new era of those tools, and i think you are going to see a whole new generation of those. >> you were also investors in robinhood, and we have been talking about how meme stocks are back and retailers are big and huge. where do you see that headed? do you look at other investments in that arena, or do you keep your robinhood?

>> you are smarter on this than we are. we have no idea what is going on. >> did you keep robinhood? >> no, we didn't but they built a great business. >> jeffrey, again, getting back to the issues of the day, and i know you said this is in sherry's hands, and do you think it's a good deal for what this combination would mean for hollywood at large? what happens? >> david ellison is an amazing entrepreneur, and in his young 40s he built a multibillion dollar company during maybe one of the most difficult times media has ever seen, right, and so his enthusiasm and passion for the business is huge and i wouldn't underestimate that for one moment. i think he's a very, very talented entrepreneur, and he's surrounded himself with a really

good group of people and so i would be pretty optimistic with what they can do with the assets. >> if you could buy amc for a song right now, and i don't want it to go away ever, and -- >> me either. >> there's debt issues, obviously, and still down 30%. >> yeah. >> and people are going, what needs to be done there? >> it needs to be reinvented. >> how? alcohol? what is going to do it? >> the answer is there's probably a premium reinvention of that, almost like what happened to sports. if you look at sports 25, 30 years ago, and what it was like to go to an arena, the old yankee stadium, and you look at the investment they made in sports and the live experience, how amazing that is today, and they built these spectacular palaces and they have great food and great access to them, all

types of events that, you know, have turned these events into great successes again. the moving going experience needs to be reinvented in the same way. if you go to the theaters out here on the street, it's just not a great thing. >> but we need time when they almost closed down the patent office, because everything's been done. everything's been done. there's no more movies left. >> i don't buy that. i don't buy that for a minute. >> i don't, either. but i think you have an interesting that was very, very much crippled over a long period of time, the strikes that happened, that set things back. and we're just seeing now today what are still the impact of being out of work for six months. movies take 18 months, you know, 2 years to make, and it's a year ago that the business was shut down. >> so there's a boom company, in content? >> i would hope so. >> again, i don't have -- >> it's in cybersecurity now. >> i'm trying to protect you and your kids and your parents. >> which we want.

>> i'll let somebody smarter than me go make great movies. >> i don't know if that exists, but jeffrey, thank you very much for coming in. we wish you guys all the luck with these new investments. come back and tell us more when you look at that next ai thing you're getting into, too. >> we look forward to it. thanks for having us. >> thanks for having us. >> andrew? >> thank you, becky. that was a great conversation when we come back, vinod clkhos and we'll talk to wally adeyemo. "squawk box" coming right pack after this.

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white house here in washington, d.c., just a couple blocks from where i'm sitting right now at cnbc ceo council summit. when we come back, ford is going to be rolling out sales figures later this morning. will the carmaker's hybrid strategy pay off? that's next. and june didn't get off on the right foot for the markets, but tom lee remains bullish and sees the s&p reaching new heights this morning. he'll join us when "squawk box" returns after this. sure, i'm a paid actor, and this is not a real company, but there is no way to fake how upwork can help your business. search talent all over the world with over 10,000 skills you may not have in house. more than 30% of the fortune 500 use upwork because this is how we work now.

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ford is going to release its may sales figures later this morning while gm gets ready for its annual meeting. phil lebeau has more on what we can expect from the two automakers this morning. >> let's start off with ford. you can expect we'll see strong hybrid sales numbers when the company reports its results for the month of may. hybrids is really the one area where we made the pivot last year, started rolling out things like the hybrid maverick, the hybrid f-10. they've done well with that, sales up 41% year-to-date. it's about 9% of ford sales. in terms of ford versus the competition, in hybrid sales here in the u.s., this is still toyota's market, and they

dominated, selling more than half of all of the hybrids. there you see ford all the way down there at 8.4%, behind even stellantis, which has had success with plug-in hybrid vehicles for the jeep brand. ford's focus now is going to be taking the demand for hybrids, and we heard this last week from jim farley and eventually start also pushing extended range electric vehicles. they're not there yet, but that's one of the areas they focus on. you may be saying to yourself, well, what about the pure electric vehicles. they're only about 4% of the market. the lightning, the mustang mach-e, e-transit. they are at 4%, and that's not a huge growth area. look, they're losing over 100,000 per vehicle right now, at least they were in the first quarter, as you take a look at shares of ford, and also take a look at shares of general motors. as you mentioned, joe, that company is holding its annual meeting. i don't think we get any news here from mary barra. most of these annual meetings have been pretty straightforward

in terms of here's what's going on, here's where we are. they have not been making news at these, but we'll tune in and see if mary barra has something to say a little bit later on that is noteworthy. >> you see rfk jr.'s latest idea? it's brilliant. $12/gallon gas. that way we hasten the transition to evs. or we move to california, where it's already $12 a gallon, i think, under gavin, isn't it? what is it? have you been out there recently? >> i haven't been to california lately, but you know that when you go there and you rent a car, and you're like, whoa! what am i paying here?! >> right, exactly. maybe i'll rent an electric one. that just strikes so much fear -- >> i see you trembling. >> no! that's the problem. so much fear they won't be able to -- you know, i won't be able to find a station or -- i don't know. >> hertz learned a hard lesson,

a very painful lesson about when you go all-in right now on evs in the rental market. i rent hertzes, i rent other auto companies, avis, et cetera. you don't want an electric vehicle when you're out on the road, i want to return it, return it and get to the airport. a lot of times i don't have time to fill up with gas. do you think i have time to sit there and recharge? no, that's not what the consumer wants. they want convenience. >> i just realized, if you do return it without putting gas in the tank, it is $12. have you tried it? >> oh, yeah, they'll get you there. there's no doubt about that. >> same thing if you return it without a charge? >> i wonder? >> you got to pay for that, too? >> there is a charge for that, becky. you can't just bring it back with minimal charge. you've got to have some charge there. >> phil, thank you! >> you bet. it is 8:00 a.m. on the east coast and you are watching "squawk box" right here on cnbc. i'm becky quick along with joe kernan and andrew ross sorkin. among today's top stories, intel announcing a new ai chip during

the commute-x conference in taiwan, that was a day after similar announcements from nvidia and amd. intel's new offerings are designed for greater performance and power efficiency for data centers. sources telling cnbc that alphabet is laying off at least 100 employees from several teams in google's cloud unit, including in skpales and engineering. a google spokesperson confirming the cuts and calling them incremental across teams to better align its businesses. speaking job cuts, a microsoft spokesperson the company will lay off about 1,000 employees that work on mixed reality. those cuts will affect the department that contributes to the hollow lens 2, the augmented reality headset. but microsoft plans to continue selling the device. right now, let's get right back to andrew in washington. andrew, you've got a lot of big things going on there today. >> hey, thanks, becky. i'm at the cnbc ceo summit here in washington, d.c., just about to kick off the day of

programming. it starts at 9:00 a.m. a big focus here for executives, the 2024 election and how to integrate artificial intelligence technology. we're going to see what this crowd really thinks of the election and which way they're going to go. we'll talk about it on the broadcast, of course. and later this morning, i'll be speaking with ftc chair lina khan and assistant attorney general for the antitrust division, together, jonathan kanter in a rare conversation about regulation in america today and where it's all headed. i imagine the ceos in this room will have a lot of questions for them. and then, the man who's become the man of the hour of washington, d.c., josh harris, who now leads the commanders, he owns the commanders, spending more than $6 billion with a team of other investors and also 26 north former apollo man. we'll discuss sports valuations, the broader economy, and so much more. we have the speaker of the house here, mike johnson. and a all-star lineup of ceos,

as well. we'll bring you highlights from all of that here today on cnbc, from this location, and then again tomorrow on "squawk box." in the meantime, i'm going to send it over to dom, who's looking at the markets, which seem to be headed in the wrong direction, my friend. >> they are, but they're still hovering near those record highs. we'll see how things shake out today, andrew. we've got some news this morning with regard to one big mover, and that's on earnings. it's from bath and body works. i'll show you that right now, it's down roughly 7.5%, which is off the pre-market lows. about 60,000 shares of trading volume. this is the personal home and products retailer. it reported reports that were positive, but full-year guidance that fell shy of some analyst expectations. those expectations were understandably high going into that print for a stock that had already hit a high for the year. you can see just in yesterday's session, and was up roughly 90% from the lows we saw back in october. so bath and body works down

7.5%, mostly the outlook there. meanwhile on the analyst fronts, keep an eye on flutter entertainment today. they've been moving between gains and losses, just around 12 to 13,000 shares of volume. analysts at oppenheimer have initiated coverage of the parent company of online betting company fan duel with an outperform rating, buy, and a $240 price target. that's about 27% higher than last night's close. they expect fan duel to maintain market share in the u.s. and the ability to absorb possible higher online gaming taxes, hypothetically, in the future. so those flutter shares, we'll keep an eye on those. and we'll end with a check on the oil and gas complex. oil prices have been under nearly and medium-term pressure. wti crude is working right now on a sixth straight day of losses, following through on a big drop yesterday after a weekend medium global oil cartel opec and its partner companies yielded a surprise announcement of a plan to increase oil production, slated to begin later on this fall. oil stocks under pressure across

the pre-market trade. majors like exxonmobil down a%, apa, and oil services company baker hughes down 1.5%. by the way, for more on that and other top stories of the day, head over to cnbc.com/pro, including a look at where oil prices may be headed into 2025. subscribers get full detail and analysis there, joe. i'll send things back over to you. >> okay, very good. thanks, d morks. our next guest says that june -- i'm going to introduce you and i'm going to let him tell you. because, we're not going to bury the lead on this. let's get to tom lee, of fund strat. an amazing guy we try to visit with as much as we can. he's on a roll, head of research at fund strat global advisers, a cnbc contributor. and once again, you're doing exactly what i tell you not to do, tom. and that is giving a price target and a time frame.

never do both. never do -- do one or the other, but you're doing it again! so 5,500 on the s&p with by the end of june. it's hard not talk about that immediately. based on, tom, lower inflation. >> that's right. i think there's a fundamental case, joe, which is, inflation is coming in softer than expected and i think the job market is cooling, but not weakening dramatically. and i think that's a good situation for equities. and i think that the sell-off in april actually hasn't really been fully recovered. and that's why we expected a rebound in ay, but i think that carries over into june. and there's still $6 trillion of cash on the sidelines and margin debt is still way below where it was in october of 2021, so we know investors really aren't that long yet. so i think that comes together this month, with a pretty surprisingly robust move higher. >> it is a little bit longer

than that crazy call you made, that was based on a weak, tom. and it worked out for you. you were right. so now, at least, you're doing it in terms of a month. in the past, when you have made these calls, it's been about inflation, hasn't it? and that's where it is again. what are you seeing in terms of components that make you confident that those were outliers that we saw a couple months ago, where it looked like it was of inflation was coming back? >> yeah, the april inflation data, both cpi and pce, kind of revealed that the two things that the fed has been waiting to cool are starting to cool. one is shelter inflation. you know, it's decelerating, even though it's still higher than the fed would like. and then i think there's some evidence that auto insurance, which has been, you know, rising over 22% is beginning to sort of

normalize. and i think some time before the second half, auto insurance is no longer going to be contributing to inflation. that's the dynamic we think that's at play in this upcoming may pcre report. that comes out may 12th. >> the other lead i didn't want to bury, and this is another like crazy call, tom, 150,000 on bitcoin by the end of the year. it's already june. >> yes. we're still constructive on bitcoin. there's the tail winds that are associated with having that just took place. we also know, because of the bitcoin etf, and there have been tremendous inflows, but institutional sort of adoption and infrastructure being built around bitcoin is only beginning. and that makes, you know, crypto, and especially bitcoin a bona fide asset class. and i think that sort of widening ownership is going to be propelling bitcoin to 150,000.

and again, surprise -- maybe surprising or not surprising, bitcoin still follows math, you know, more than 87% of the move in bitcoin still follows just the number of wallets and the activity per wallet and both are moving higher. >> tom, i would think that a lot of your calls are based on the fed cutting. bitcoin is not going to 150 if the fed doesn't cut. so you must think that the fed is going to be able to cut. is that because of inflation? because the economy slows? fundamentally, what do you think has to happen for all of these bullish things in both stocks and crypto to happen with the fed? >> yeah, i think it is important for the fed to not have hikes on the table. so i think that's the most important for investors, is the fed is no longer in rate hiking cycle. but if the fed makes even just one cut this year, i think it's really supportive of equities, because it really shows the fed

is trying to nurture the business cycle, and it's a good environment for stocks. i don't think one cut or three cuts makes that much difference for stocks, but, again, you're exactly right. it all depends on inflation, really, the edge coming off enough for the fed to say, we're comfortable cutting this year. >> but not necessarily, we could have goldilocks. we could have inflation come down and the economy continue to do okay? >> yeah, that's right. i think that the company's earnings have actually really spoken to how in a 5%, pretty restrictive rate environment, earnings have been really robust. i know consumers, there are some trouble signs out there, but consumer leverage is still quite low. and of course, if the fed does begin to cut, there's a lot of levers that will boost both consumer wealth and company demand. there are positive kettles associated with the fed cut,

eventually. >> tom lee, not much more that needs to be said. we'll be able to -- that's just way too specific. but we'll have you on and we'll check july -- maybe we'll have you on july 1st. we'll see what's going on. we won't be mad if you're not exactly right, because you're willing to go out on a limb all the time with us. so i appreciate it. >> thank you. >> will you be mad? >> no. >> okay. >> sticks his neck out on a regular basis. >> i tell him not to. >> when we come back, paramount and sky dance agreeing to terms of a merger. we'll talk about what it means for the changing media landscape. that's next. plus, deputy treasury secretary wally adeyemo will join us to talk geopolitics including why he's calling for more sanctions on russia. "squawk box" will be right back.

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welcome back, everybody. paramount and sky dance have agreed to the terms of a merger with a deal to be announced in the coming days. that's according to cnbc's david

faber, who says that sherry redstone still has to sign off on this deal. joining us right now is rich greenfield with light shed partners. rich, why don't you think what we think we know and what we don't know yet about this deal. >> well, i think saying that this transaction is going to be announced imminently is a bit cart before house. i think there's been sort of some form of ruptures occurred between the two sides, and i think it is not clear that this transaction is going to move forward as planned. i think skydance very much wants this transaction to occur. the paramount special committee has certainly endorsed the current transaction. the key piece has alwaysd think some eason, i don't know what happened over the last week, but something's happened that has led to friction between the two sides. and i think the redstone national amusements group is

actively looking for alternatives. it doesn't mean this won't happen, but i do think that it probably is, if it does happen, it may be happening on a slower time frame, because i think they are actively pursuing alternatives, despite how much sky dance wants this. and remember, skydance had sweetened this bid, it's moved from 0% to cash and shareholders to 20% of the transaction in cash, now we're up to 40% in cash. they've moved the bar pretty dramatically for public shareholders. the problem is, you're still getting 60% of your shares, meaningfully diluted by the inclusion of the merger. >> yeah, i mean, sherry redstone national amusements may be looking for other suitors, but they've been doing that for a while. are there viable options out there, you think? >> it's not clear . i mean, there's been a lot of press reports and a lot of stories we'veheard talking from people about interest in buying out her stake directly.

becky, some people would say, oh, it sounds crazy to -- who would want to buy the national amusement stake and not buy the whole thing the way skydance -- remember, they're buying the national amusement stake and merging in the rest of paramount. who would want to buy just the redstone stake? and i think step back and go, there's a lot of people who buy sports teams or buy parts of sports teams. so if you think of it as a trophy asset for $2.5 or $3 billion, are there people that might want to do that if the skydance deal is not happening? it's possible. you know, i still think there's probably a good chance that skydance happens, but i don't think it's certain. and i think you're seeing the fact that this thing didn't happen yesterday/today, shows everybody something changed. there is definitely friction on all sides right now. >> when you ask me who would wand to just buy the national amusement piece, i would think everybody.

because then you get a far lower price to take over effective control of the company. i think the question becomes, can you do that without paying anything to the other shareholders, are there questions of fairness that come up, is the board going to be able to sign off on those issues? i would love to buy it and only pay for the national amusements piece, because you're paying a small portion for the majority voting control. >> and remember, that was the original idea of sky ddance, an they realized you can't tax wise merge in your studio with paramount for several years. so they sort of shifted to this alternative transaction of sort of doing it all at once, needing special committee approval. but i do think that she -- i think that national amusements is eager to figure out, is there somebody who might buy just that stake? and maybe not even all of it. maybe just a portion of it. you know, i think when you think about, who's going to be president?

i know you've got lina khan coming up at 11:30. she obviously detests all forms of consolidation, but under a different administration, there might be a lot of different buyers for these assets. so there's a school of thought if you wait until next year, instead of having effectually as you're talking about, pecky, one buyers, maybe you would have a lot more alternatives if you waited. i don't think this is entirely clear that this plays out the way a lot of the press has reported it. >> five months to the election, you're saying, if you hold off, off shot of maybe, a more welcoming environment, although. i don't know that that would necessarily be the case, either. the last trump administration was not always fond of many of the media deals and mergers that were taking place. >> that is a nice way of saying it, becky. i would agree with that. on the flip side, collansolidat, you know, right now, this administration has been hostile towards private equity buyers of tv stations. i don't know if that would be

the case. i think there might be a more pro-consolidation stance at the fcc. it so may not allow -- who knows whether warner brothers could buy paramount under that structure, you're right, but could you split off pieces, would it be easier to consolidate assets. i think a lot could change under an administration. look, we know that national amusements wants to raise cash. they know they want to exit this business. the question is, over what time frame and to who. there is no doubt in my mind, over the next couple of years, they are not going the majority owner of these assets. i think the question is just, is the skydance deal is the right deal, and did something change, meaning, is it significantly less cash to sherry or something happened that has changed their mind. maybe not permanently, but they're certainly exploring other alternatives to see, like you just said, becky, could they pull a rabbit out of a hat and find somebody who just wants to buy the national stake at a big premium. >> rabbit out of a hat might be the nice way of saying that,

rich. let's very quickly, we had jeffrey katzenberg on a little bit ago. and look, he's out of media entirely, because he can't figure out where this is headed, what a problem this is. i just wonder, do you see any partner that makes sense from a content and distribution strategy that, hey, this is a fix, this is something that looks better. >> the media space is undergoing pretty seismic change. and when you look at the internet, it's traditionally winner take most. pick your category. but traditionally, it's winner take most. and i think that's sort of the challenge you're seeing, is everyone is trying to figure out, can they really be a streaming juggernaut? you know, there's too many players. we need some players to either go away, abandon -- i don't think -- and you know, consolidation, unfortunately, becky, at least under the current world, i don't think is possible. so yes, consolidation would certainly help, and that's traditionally what would happen.

that is not possible. so a lot of these companies will have to make hard decisions, how long do they persevere, and do they actually make a hard right turn and make different decisions with their businesses? you know, like, paramount plus is a crazy idea right now to continue to be burning $1.5 billion a year on a streaming business that isn't working. these companies need to make big decisions, obviously, until the m&a process plays out. we don't know when they're going to make those decisions, but i think changing strategies and admitting that this is not what you're good at and focusing on what these companies are good at, which is making content and stopping trying to be netflix would be a big step in the right direction. >> hey, rich, thank you! >> thank you. >> coming up in just a moment, a social media crackdown. new york state preparing a bill that would limit the platform's use of algorithms to serve content to kids. we'll bring you more on that story in just a moment.

as we head to a break, take a look at today's biggest pre-market winners and losers in the s&p 500. "squawk box" returns from washington, d.c. from the nasdaq market site this morning after.

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welcome back to "squawk box," everybody. the futures this morning under a little bit of pressure. we're off the lows of the morning, i should say, but you should see the dow futures right now, down by 125 points. s&p futures down by about 17. the nasdaq down by 57. it does come after a down day for the dow, at least, yesterday. s&p 500 and the nasdaq, up. >> the state of new york plans to prohibit social media companies from using algorithms to steer content to children without parental content. the legislation is aimed at

preventing companies like facebook and tiktok from serving automated feeds to minors. critics have said that the feeds lead children to violent as well as sexually explicit content and it would also prohibit platforms from sending minors notifications during overnight hours without parental consent. the bill is still being completed, but is expected to be voted on this week by new york's legislature. and governor kathy hochul says that the measure would make social media less addictive. california's legislature is considering a similar measure. it wouldn't the same without all of that stuff, would it, andrea? it seems like it wouldn't even work. it seems impossible to do that. pulling the rug out. >> i think you're right. i think you're right. we will see. we will see. we've got a lot more coming up on "squawk" in just a moment. i'm in washington, d.c. at cnbc's ceo council summit. when we come back, using ai for physical therapy. we're going to talk to the ceo

of sword health, one of its major backers, venture capital titan. vinod khosla will join us on how its technology is personalizing patient care. we'll bring you that story and that interview eight after this. you're watching "squawk box" on cnbc.

welcome back to "squawk box" this morning, live from washington, d.c. sword health, which provides physical therapy powered by artificial intelligence raising a new round of funding led by khosla ventures. joining us right now first-time sword health founder and ceo, virgilio bento, and vinod khosla, founder of khosla ventures, a legend who's invested in sword health from the beginning, and a legend in silicon valley. we're glad to have both of you here. vinod, i'll start with you. go back in time and tell us how you founded this company and what makes you excited about it. the idea of physical that you were and ai, it sounds like it doesn't go together, because you think to yourself, physical

therapy you need somebody physically with you, and, a i sounds like a computer, but you're doing something different here. >> yeah, well, we got an email from virgilio in 2015, a portuguese ph.d based in portugal with a very large vision to change health care, one of the largest things in health care is muscoskeletal. so that's how we met. through a cold email. it's now become one of the fastest growing companies in health care i've seen going from 2 million run rate, about late 2020, 3 1/2 years ago, to about 200 million now, run rate. so i'm very excited about what virgilio has done. he's a little underrated for the attention, because he's based in portugal, but i do think that

he's one of the most exciting companies in health and using ai to deliver digital health very accessibly and rapidly and well. >> so, virgilio, for those uninitiated, explain what sword does. >> so basically, what we've been doing is using ai alongside human clinicians to allow patients to recover at home. either we started with physical pain, then we expanded to public health, then other areas of care. basically, we allow patients to recover independent at home, our ai technology. we call it phoenix. patients can recover at 7:00 a.m., in their pajamas after breakfast, and we make sure that everything that they are doing, we always have humans in the loop, providing the human touch, but also in an evaluated way, so they are highly skilled. >> so, in terms of how this

works, one of the things that people have talked about when it comes to health care and ai, for a very long time, is liability, frankly. because they've always thought, you know, is ai going to hallucinate, is it going to instruct somebody to do the wrong thing? how do you address those concerns? >> so, basically, that's why we believe that in our ai model, it's not just the ai, it's the ai and the human, right? and the human is there to act and the do the checks and balances of what the ai system is doing. so independently at home, the patient, during the session with our ai sees them. the ai provides feedback, in line with what was defined by the clinician, changes the program in line with what was defined by the clinician. and so every single thing that the ai does in health care, either it's pre-approved or post-approved by the human clinician always. and so that's why we make sure that everything that is being executed is always in line with

what with the human clinician defines. >> reporter: vinod, you were an early investor in openai and all sorts of forms of ai. we have been having a big debate on the broadcast now for maybe several months, about who the winners in ai are going to be. it's clearly the chipmakers in terms of processing power, but increasingly, the question is, within the software world, and maybe this is one of those examples of a potential winner, how do you see both large language models, smaller models, productized diversions of ai, like this in your portfolio. >> i'll give you more than one large language model and lots and lots of small models. but hundreds, if not thousands of applications like sword health. so what we've done is a classic example of an area you don't think of, but economics is hugely impacted. and you couldn't deliver this kind of therapy with really

robust margins without ai. and that's what sword health has done. and a stunning example in the area that people don't expect. >> vinod, while i have you here, just because we're talking ai with and i'm so curious what you think is going on in the valley, when you think, though, about the big winners in this -- in the model world, how do you see it today? how do you sort of stack rank the quality of what chatgpt looks like today versus what you think google and gemini are doing, versus, you know, anthropic, what you may see out of aws, eventually. i mean, how you sort of look at all of these different players? >> no question open ai has established a good lead. they're ahead of the pack for sure, havery quickly, and they' executing extremely well. i'm also pretty certain that google will do well, with anthropic. there will be more than one

model in the west, and regional models in other parts of the world. >> what do you think about apple? >> it's all about execution and talent and a couple of companies have all of those. many of those hypervaluations decline and go away in my view. but the winners will be very large winners, more money will be lost. most money, most companies will lose money, but more money will be made than lost by a lot. >> vinod, let me ask you, since you are an investor, early investor in openai, there have been a whole series of articles about sam altman, and just recently, t"the wall street journal" had a piece yesterday about his investments in so many other businesses, where he gets most of his wealth. he doesn't have equity in openai itself, which is unique. there's been lots of criticism about these outside investments. the truth is, i don't understand it personally. i actually think he's doing

remarkable things and probably should have been paid at openai itself. but i'm curious as an investor what you think. >> the press likes to take knox at sam, to be honest. if he brings -- takes a lot of risk with a lot of money on fusion, and bringsit to the planet, i'm all for it, even though we are in a comparative affect in fusion. so i think he's doing a lot of good things for the world in bringing things like fusion to us or at least attempting it. and he's been in the ecosystem, i know hardly anyone in the ecosystem who doesn't make lots of investment. in fact, it's a shame he's had to be a little more restrictive on himself. because he is a really good investor. >> and then, separately, the other thing i wanted to ask you about, given that we have an opportunity to talk to you and it's so rare, is to talk about politics in silicon valley. you've been a supporter of president biden, i'm in

washington, d.c. this morning, at the cnbc ceo council summit. what is your sense of the shifting winds in the valley around politics? i think for a very long time, the valley was seen as sort of a liberal bastion, but you know, if you listen to elon musk or listen to all-in podcast and that gang and others, it seems to be shifting potentially towards former president trump. is that just a small pocket or do you think that that's a real shift in terms of the way the valley is thinking politically? >> the first thing i would say is, all-in podcast, and some of the supporters there are not based in the valley. i would say that a bunch of maga extremists in every part of society, and i hope we can prevent them from destroying democracy, which is probably the most important issue we face.

>> so how do you explain what's happ happening? and i'm thinking, it's true, elon musk is now in texas, peter thiel is i think, left california. but what do you see happening? in terms of just the thinking. you must have had conversations with a lot of folks in this space. >> you know, there's clearly concerns with the extreme left and the extreme right. i have those to concerns. many like myselves are independents. and they want to be in the middle and let alone -- so i do see the frustration on the right and i see the frustration on the left, but i think most people i know of are more focused on the morals and values of a guy like trump. like, would you want your kids to grow up with those values that trump has? and demonstrates? >> one of the things i'm hearing at this ceo conference, just

even last night, is a worry among ceos about regulation. we'll talk to lina khan a little bit later today. how do you balance -- and i imagine you may even agree with a lot of the criticism about regulations here. i don't know if you do or not, but how do you balance that versus some of the other views i think you have, either on social issues or these moral issues that you have around the former president? >> you know, most people in silicon valley are social liberals and economic conservatives. that's sort of the grade here. mostly. people like lina khan are extremists in enforcing regulation and enforcing more, i would say, control and wanting to enforce more control. so i think most people would be in the middle here in the valley, i think, as a culture,

as a place, and with social values very different than fiscal values. >> fair enough. i could talk to you forever. i would talk to you, virgilio, forever. there is a lot more to talk about and i hope we have the opportunity to do it. virgilio, i want to congratulate you on the new funding round. vinod, it's great to see you and look forward to seeing you again very, very soon. thanks. >> thank you d. >> thank you. >> thank you. becky, back to you. >> andrew, thank you. when we come back, we'll talk to deputy treasury secretary. but let's get a quick check on the price of bitcoin. bew lo70,000, sitting just above 69,000. "squawk box" will be right back. (vo) a law partner rediscovers her grandmother's artistry and establishes a charitable trust to keep the craft alive for generations to come.

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president biden will sign an executive order today allowing him to halt some asylum claims at the u.s./mexico border. the move would traemporarily sh down the border when daily migrant crossings exceed 2,500, and the border reopening when the number falls below 1,500. encounters at the u.s./mexico border are currently averaging about 4,300 per day, which suggests that a shutdown could go into effect immediately. sources tell nbc news that those thresholds have been conveyed to lawmakers, but could still change before the order is signed. and of course, the move is expected to face a wide array of legal challenges. border security, here's a fnews flash, has been a weak spot for biden according to polling data. cnbc national poll in march found that former president trump has a 30-point edge with

registered voters on the question of which candidate would handle immigration and border security better. andrew? >> thanks, joe. meantime, just back from his trip to ukraine, deputy treasury secretary wally adeyemo writing, it's time to step up our efforts to stop russia's war footing and that would require manufacturers to scrutinize their supply chains. secretary adeyemo joins us this morning. great to see you this morning. >> you too. >> tell us what you really learned on this trip. >> arriving in kyiv reminded me of two things. one, how brave and determined the ukrainian people are, but secondly, how much of a strategic failure this is for russia. what you remember in february of 2022, russia thought they would have ukraine within days and kyiv within weeks. but standing there in kyiv, you recognize that isn't true and the ukrainian people are

committed to fighting. and what i was there to do is commit to them that the u.s. is there to stand beside them. >> what do you think will happen next? >> the most important thing we need from the u.s. business community are two things. one is, we need manufacturers, be it microelectronics and machine tools to step up their compliance efforts, but also to make surethat freight forwarders and their distributors do the same. what we know is that the kremlin has asked their intelligence services to find ways around our sanctions. and the second one is for financial institutions, who are the big correspondent -- with big correspondent banking relationships to look at small and medium-sized banks in the countries of concern for us, because we know that the kremlin is not using big banks anymore. >> do you believe, fundamentally, that u.s. manufacturers, and u.s. banks are either looking the other way or are complicit in some kind of effort to help the russians? >> no, i think the opposite is true. every time i talk to a major ceo, they ask me, what more can

they do? the challenge is that the the russians are very good at trying toe vad our sanctions, and we need to do more. i would say that u.s. ceos, the ones i've talked to, have been patriotic and often come to me and ask what else can i do? and i want to deliver that message not just to the ones that are we need you to do is pay more attention to supply chains and the banks you're working with. >> okay. let's talk about the role of china as a chess piece in the situation in ukraine which is what kind of pressure they can bring to bear or not including russia, but what kind of pressuredo you think should be brought to bare? >> china has the ability to put a great deal of pressure on china. without china, russia's industrialized complex would grind to a halt. today machine tools origin parts getting to russia's military complex are coming from china. what we told the chinese is you can have a robust economic

relationship with russians, but for these select goods, we need to stop selling to them. if the chinese said they would stop doing that, russia wouldn't be able to build weapons they want for the war they're fighting in ukraine. >> both president biden and -- former president trump has talked about big tariffs on china. president biden hs also talked about tariffs on china. there was a recent piece where he's interviewed in "time" magazine. there's a question mark about how much inflation, what are the inflationary effects of tariffs on china? president biden says his tariffs are not inflationary but suggests that former president trump's, if they were to go into effect, would be inflationary. you're in the middle of this. what do you think? >> i think you have to look at the differences in approaches. we've taken a targeted approach to using tariffs, but we're not doing it just in the united states. we're working with allies and partners to do it so we're

actually putting real press sure on china from all sides. china is not only going to face tariffs from the united states but a collection of countries that want them on a level playing field. the second thing, we're not doing it in a broadway to increase taxes for the american people. an approach to put a 10% tariff across the board would be a $1,500 fax on each american. that's not what the president has done. our goal is to make sure we create a level playing field for american firms and workers, and the best way to do that is working with our allies and partners. >> a political question. some polls suggest that a majority of americans think we're in a recession right now, think we're in a recession right now which i would argue to you is misinformation of sorts. but then the question arises, why they think that we're in a recession. i'm curious why you think that

they may think that, and also to the extent that's a messaging problem for the administration, why you think you landed in that spot? >> as you know, andrew, i don't do the politics. i do the economics. what i know from most americans is we've been through a very tough period, not just here in the united states but around the world with the pandemic. while we're coming through that and our economy is doing better than any major economy in the world that is developed, there are still challenges that americans face. the thing that gives me confidence that we're making our way through it is 16 million americans have decided to start small businesses. you don't start a small business if you don't have confidence in your ability to sell the goods and services you have. we have record low unemployment. americans are still working to get past the pandemic that was hard, make sure they have access to the goods and services they need to make sure they can build the opportunity they want. my view is the challenge that the american people are facing is one that has to do with high

costs. we're doing, making sure to bring down the costs of the goods they need. my goal is we have to keep doing what they're doing. >> i'm not going to ask you to comment on the fed and maybe go to the pricing issue on inflation broadly. there was a sense that things were getting under control. now it appears from what we hear from neel kashkari and others that maybe there's a right hike in the offing which would suggest they don't think inflation is under control. do you think it's under control? >> as you mentioned, i'm not going to comment on the fed. i would say, look where we started. we expect it to continue to come down. for most americans they're not paying attention to pce or cpi, what they're paying attention to is what does it cost for me to get gas in my car, for food, housing. on gas, it was at $5.00 a barrel in 2022 until we took actions to bring them down. now it's about $3.50.

on food, while the numbers there have gotten better, i think the most indicative thing is what you see with walmart and target, trying to cut costs on products in their stores. we have to build more housing and that's what the president is advocating us to do. we're focused on doing everything we can to bring down costs. we expect that inflation also will come down over time. >> we've got to run. what was the reaction side of the treasury to the conviction of the former president? >> i was in germany talking to german businesses about the two things i mentioned to you, getting them to focus on doing everything we can to help the ukrainian people. >> is there a policy inside treasury about hiring convicted felons? >> i know you're going to try to get me to talk about that. i'm not going to talk about that. i appreciate you trying. >> wally, thank you. great to see you.

a lot more coming up on "squawk box" after this. we're coming right back. (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

welcome back to "squawk box." i'm dominic chu with a check before we head out of the show with top headlines.

check out what's happening with intel. the dow component semiconductor companies up 1.5% after announcing a new line of artificial intelligence chips at the conference in taiwan. it comes a day after nvidia and advanced micro made an announcement at the same conference. watch what's happening anything india based including this etf down 7% premarket, this after election results are projected to show that prime minister narendra modi is going to win but not by as much of a landslide as previously thought. one more thing to keep an eye on is the meme stocks. we'll get you a check after a 21% jump in gamestop yesterday. gamestop pulling back about 3.5% today. amc entertainment, sun power, blackberry, reddit also showing more stability. joe, with that i'll send things back over to you.

>> dom, thanks. a quick final check on the markets. the dow down less than 100. the nasdaq was down triple digits at the beginning at about 6:00 a.m. in the premarket. now we've got -- we've seen across the board the averages pairing their losses. friday a big jobs number. tomorrow is only winds. make sure you join us. "squawk on the street" is next. ♪ just here for your looks. good tuesday morning. welcome to "squawk on the street." i'm david faber with jim cramer live from post nine at the new york stock exchange. carl is on assignment at the cnbc council summit, summit council, council summit in d.c. i'm not sure we have our boards right now so we're not going to be able to look at futures