by the way. >> yeah? >> happy father's day, andrew. happy father's day to my father, to my husband, and to all you dads out there. >> that's very nice of you. thank you, thank you. maybe we get to sleep late. we'll see. >> what every dad wants. final check on the markets. we only got a couple seconds to do it. dow off, nasdaq off. s&p 500, off. but we will see where we end today. have a great weekend, everybody. happy father's day. join us on monday. "squawk on the street" begins right now. i just want to start off by saying, hot damn, i love you guys. yeah. >> elon musk celebrating yesterday at tesla's annual meeting after the shareholders did ratify his 2018 pay package. good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. futures are soft. europe's under some pressure. our focus once again on france, equities not able to enjoy more

disinflation today. ten-year hugs 4.2%, the lowest in three months. our road map begins with what's next for tesla and musk. >> yesterday was broadcom. today, it's adobe riding that a.i. rally. those shares are surging on quarterly results and guidance that was raised. and of course, we'll stick with tech, why not. apple and microsoft continue to battle it out for the title of most valuable company in the united states. let's begin with musk's pay package being approved by tesla shareholders. jim, it was not close. some 77%. he's got vanguard to thank, it looks like. >> yeah, i also think there was a belief that there would be an existential crisis without musk, that musk certainly could take his bat and ball and go home. the energized musk is very exciting for me. maybe he has something up his sleeve. he tends to have something up his sleeve. i remember that jensen huang continuing to tell me, do not call it a vehicle company. this is autonomous machine.

david, an autonomous machine has many uses. vehicle, minimal uses. >> yes, autonomy has many uses, and he believes will add to an enormous amount of market cap and shareholder value. >> yes. >> obviously, we're talking about a pay package which has now again been bestowed upon him as a result of creating enormous shareholder value over the last six years. not so much the last couple years, as we've pointed out many times. just to remind people, that pay package was, at the time, in 2018, worth some $2.6 billion on a $59 billion market cap at the time. obviously, fast forward, we're talking around $50 billion, let's call it, on the current market cap. >> 8% of the company. >> yeah. it's going to be dilutive. >> yes, it is. >> you're going back to delaware court to get this thing ratified, and you know, it's not completely clear what choancellr

mccormick is going to do here, but with the reincorporation in texas and the fact that you have put it to shareholders again, and they have once again overwhelmingly approved it, we'll see. >> right. >> but you would imagine to say, okay, fine. >> what did you think about the energized, dancing, you know, obviously very at home love of tesla, let's go beat the chinese, that's my own? >> what struck any number of people, of course, to your point, jim, was not just his discussion about autonomy. remember, he's already famously said, we're not a car company. what he does appear to be focusing on now -- and i was at the annual meeting a year ago. he makes claims that, you know, are long-term in nature, to say the least, but what he is focused on, it would appear, in terms of what may be the main driver of value at tesla over the next 10, 15 years is robots. and he basically said optimus, and we've shown you videos of it in the past, and they continue to advance in terms of what

optimus is able to do, he sees a world in which, you know, you're talking about potentially as many as a billion robots a year being made. they have 10% market share. so, just follow the math with me. 100 million robots are being made by tesla. he says we sell them for 20,000 bucks. we make $10,000 in profit. therefore, we make a trillion dollars, and i'll let him pick it up from there. >> i'm confident of the prediction that there will be more -- the ratio of humanoid robots to humans will be greater than one to one. there will be more than ten billion humanoid robots in the world, probably 20 or more, and tesla is going to be the leader in that. >> what we were hoping he would say, and we have him, of course,

is, they're going to get a 20 multiple on a trillion dollars in profit. it's going to be a 20 to $25 trillion market cap opportunity. >> well, look, this is -- this is the missing piece of the puzzle about what nvidia was saying at the gtc, which is it's robot, robot, robot, but no one's taking them up, other than this man. and he has so many of the big chips from nvidia that i have to believe that he is going to be the guy who creates the form factor that jensen dreamed up to begin with. it's very big. it is. it's very big. >> but can you really imagine a time in which, again, there are a billion robots being made a year? he talked about as many as ten billion robots eventually. >> there's an element of hyperbole there. >> they are a 10% market share and therefore, they're making $10,000 on each robot. is that really a possibility, jim? >> well, look, i'm not going to rule out anything with this guy,

but carl, this is really important. his robots, one of the things that jensen said over and over again is there's this notion that robots can look like anything. they have to look like humans. they have to act like humans, because they have to do human tasks, and anything a human can do, a robot can do if you program him correctly, and the only person who's doing this is musk. so, yeah, i mean, he'll have 100% of some market. he's the only one that seems to be doing i want in scale. >> he is throwing a lot of numbers out there, jim. 50% gross margins. make it for $10,000, sell it for $20,000, two to one humanoid-human ratios. i mean, we take all this to the bank? >> i don't know. when he told me that all of our power, five years from now, all of the power in our country would be generated by a big solar field in northwest colorado, 12 years ago, and that's when he got angry at me because i actually questioned that. i think he is a person who has dreams of possibilities. and we got to appreciate that.

people who think big. but when they talk as big as thinking big, it gets people a little too excited about the stock. >> as for the ev business, jim, he did say, tough sledding. but he did seem to ratify or endorse year on year delivery growth for the year. >> well, i had patti poppe on the other day from pacific gas and electric. she says, they still got great growth in california. california is one fifth of the country, but if you add china in, the growth would be the same. >> i'm not following you. >> the chinese cars are 10,000. so -- >> the growth of what would be insane? >> the growth of evs if we let actual chinese -- >> if we allowed the chinese to sell evs here. i guess we technically do. we have a tariff. >> it's $10,000, so we're going to charge $20,000. >> that would still sell, jim. >> that's what i'm saying. i think they could be a real threat. they need to have more than 100%

tariff. it's not going to do enough. >> which shows the cost disparity. they have been supported by the state in china. >> who's musk supported by? >> who's musk supported by? >> the free market. >> that's right. >> the chinese are -- >> harder to operate. >> i mean, the chinese, byd, what, they got a tariff under 20% in europe. you can't beat the chinese at their subsidizing. >> we've made this point. the chinese have lowered their price points. by the way, their battery technology is where they really make it up, because they're the leader in batteries. that's where all the stuff is made. right? i'm not wrong. >> no, you're right. >> and so, they're -- and they're able to incorporate the batteries, and i guess they continue to drive efficiency there, and -- >> how can he beat that? >> the quality of the automobiles is improved. >> fantastic. >> so, i don't know if they're fantastic. have you been driving one? >> my wife just drove one for seven days in italy, and she said this thing was amazing, and a $10,000 car. she said, this is so much better than tesla. she said it's just fantastic.

don't look at me like that. >> she drove a $10,000 car and said it was better than a tesla? >> kind of, yeah. >> all right. >> well, maybe she was given to hyperbole. i don't know. >> well, speaking of that part, usually, when we talk to ceos, jim, about their own stock, they're like, oh, try not to -- >> that's your job. i don't want to touch that. >> listen to musk talking valuation of tesla. >> if the price earnings multiple is, say, i don't know, 20 or 25, something like that, that would mean a $20 trillion market cap from optimus alone. and probably 5 to 10 from autonomous vehicles. so, like, i think it's actually conceivable -- it's within the realm of possibility for tesla to achieve a valuation ten times that of the most valuable company today. >> tony saccanaghi saying you

don't hear that very much. >> some would say, why is he lowballing? >> within the possibility that it will have a $30 trillion market value. there's a lot of things within the realm of possibility, i suppose. >> better to dream big than say, listen, i think it could go up 10%. i think you have a 10% increase. >> dreaming big is -- >> what's farley saying right now at ford? we could do 7%. >> dreaming big has never stopped this guy. that's how you get a giant rocket off the ground, and you get to mars. you got to dream big. >> look, i questioned the other day, i mentioned that nvidia could have a $5 billion market cap. >> $5 trillion. >> and was sneered at by everybody. and i reminded people when apple got to $3 trillion, people laughed at that. you can continue to laugh at the valuations. this guy, if he can do -- well, optimus. what did he say the valuation of optimus is? >> 20 to $25 trillion based of, again, 100 million optimus robots being sold per year by

the company at a profit of $10,000. >> well, maybe it's the mark -- >> by the time they're doing that, a.i. will have taken over, they'll be putting it in the robot, and we won't have to worry about any of this. by the way, who knows who's going to be here talking about whatever, because the market is going to be run by machines too. don't worry about it. >> there's three. that's the three that i care about. that's what i care about. see them? >> i did. >> they're not stooges, my friend. they are the winners. >> speaking of which, take a look at the premarket here. we're going to talk more about the broader market after a short break, good desk notes out of jpmorgan today, looking at whether or not you continue to barbell cyclicals and tech. >> i don't know. remember, when the economy starts slowing down, you got to sell companies like new core. >> we'll get to how bonds are responding to this morning's data and some of the fed speak that we'll get later on this afternoon and tonight. stay with us.

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do it all on the network made for streaming, and bring on the good stuff. ♪ certainly, if you look at the effect of our policy so far, you can see it affecting the economy, right? we've seen it affect housing markets. we've seen it affect growth rates. we've seen it affect and bring supply and demand in the labor market back together, so it's definitely having an effect. whether they're sufficiently restricting, that's why we need to be data dependent and sort of assess where inflation is going. we've always said that we really need to have that confidence that inflation is moving down. >> right. >> on a path to 2%. we're not going to -- it would be inappropriate to keep rates at current levels until inflation gets to 2%.

>> that's cleveland fed president mester on "squawk" this morning. for her to say that the recent data set is welcome news is kind of a big deal. >> i thought to myself, well, wait a second, maybe this is the new, freed-up mester. she actually is not someone who has periodically done many bad things to the stock market and the bond market. there. okay? look, she served well. the new person's very good, but she did her job. i cannot say i agree with her very often at all. >> but you do now? >> well, her good-bye is very sweet. >> and meanwhile, there's the ten-year, inching above 4.2%, but it was below. it was 4.19% a bit earlier. >> even though we had these auctions this week, and the auctions went very well. a lot of things happened this week that weren't supposed to happen. i will point out, before we get too bullish, the three stocks missed the entire market. >> yesterday, at one point, we

had 80% down volume and the market was flat. >> i know. >> these giants are doing yeomans work. >> today will be adobe. adobe was extraordinarily good. this can't continue. >> this, being what? >> you can't have three stocks be the whole market. it just doesn't work. you have to be worried that -- i hate to have mester be positive and me be a downer, but you have to worry that the whole market is just five stocks. we've lost so many bull markets. we've lost drugs, banks, rails. we've lost so much -- >> lost steel. >> oh. no kidding. >> i wanted to come back to you with that. we will at some point. >> you're thinking of the nucore steel. >> nucore steel figure. but u.s. steel, deal or no deal, not great. the environment. >> asterisk. but look, i mean, huntington bank downgrade. this all -- the sell this morning, it all started, frankly, with huntington bank.

they went to europe two weeks ago with ubs, said things are good, and then they came back at a rival conference and said, sorry, we got to cut numbers. there it is. that's what everyone's worried about. >> we to have about 17% of the s&p bank sector at three-month lows, the highest since october, although, jim, b of a getting an upgrade at kbw. >> they had some good things to say. a bit of an underperformer, but i can't get excited about this bank group because we got to find out, wait a second, who else is huntington? it's a really good ohio bank. >> do you want to tell people what it was that huntington said specifically? >> net interest income, not bad, they're really growing, but it was interpreted entirely as negative that the net interest income went from, like, minus two-plus to minus one, minus four because every one of these banks is levered to that, and it's been something that's very

stable. so, you can see all the banks going down. then, you're supposed to buy, at this point, there's a pretty good equity strategy piece by wells fargo that says, don't forget, when we have the down shift, you're supposed to be buying the -- in the drug stocks. >> they had not performed particularly well this week. >> no. >> obviously, the outliers, as we said many times, merck and lilly, shares of which are up over 51%. >> you read that piece yesterday? >> i did. the journa"the journal," you me? you tell me. >> eagle scout. >> oh, an eagle scout. >> the eagle scout. i said, oh my god, the enemies must be trembling. remember those kids who were eagle scouts? >> were you one of them? >> yeah, as i drank schlitz, they promoted me. >> you were not an eagle scout. >> no, i was a schlitz drinker. remember that? it made milwaukee famous. >> rhingold.

>> joe drinking old milwaukee this morning on morning joe in light of trump's reported comments about the city yesterday. we'll get cramer's "mad dash," countdown to the opening bell, we'll dive further into adobe. got some upgdes traofhat name, zscaler, shop, in a minute. helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

i think there's been more questions around, you know, does a.i. replace these folks? and i'vealways maintained, it's actually people who use a.i. who may replace people who don't use a.i., and there's no replacement for human ingenuity. >> all right. that was narayan on "mad money." this is jim cramer, the host of "mad money." >> yes, and shantanu, a clinic last night. he's blocked both the top of the bottom guys. the bottom guys, this outfit, canva, he's introduced adobe express, and i suggest you try it. it's an unbelievable gen a.i. thing, you can get the low end and still get free gen a.i. pay up a little bit more and it's remarkable. he's going to shut off canva. well played. on the top, you had a threat from openai, sora, and he's got that blocked by this incredible

digital cloud that requires, as he just said, look, say you have a little creativity. right now, sora is, make me a picture of a rodeo. well, with adobe, you have to be a little more like, say, thoughtful. it's like, i want a picture. you describe it, and it comes up, and i just think that what -- you know, what he said that is really important is there still has to be a human creativity aspect, and this is what you have been saying over and over again. you can't dissociate humans. you can't make them so they're not important. and what he says is that if you really want great generative a.i., it's the human factor that makes this great, not the gen factor. >> it's an important point, not having to do specifically with adobe, but the jobs right now, even right now and the training being afforded younger people in organizations, are those who really know how to use a.i., to his point, effectively. you are a query engineer, which is what you're talking about, because that becomes very

important. how you phrase the query, what you ask the a.i. to do for you. >> yes, absolutely. i'll give you adobe fresco. you can say, i want an i heart new york mug. it can draw it in a second. but if you want to do something that requires some thought, well, you got to program the thought. you can't just -- and you have to fool around with all the different -- there's many different clouds. if you were to go get the suite, david, which i recommend, the $600 suite, you can literally make -- you can do nba promos. you could create nba players. >> let's come back to the stock. what does this mean? >> jopmorgan goes from hold to buy. sun underperformance is saying, listen, it's really going to come back. people were worried they were going to lose the universities where it's all used, and then the high end, they're saying,

listen, go ahead. try to be just all gen a.i. have no creativity. that's not what we're about. we're about really beautiful stuff. he's always been the gold standard. adobe is so much better than everybody else. but we forgot about it because we felt that gen a.i. would make it so why do we need this enterprise software? the answer is, if you want to be really creative, you want your stuff to look great, you have to use adobe. i thought it was a tour de force night for him. >> we'll talk more about the quarter as well as the stock price when we get an opening bell, which is about four minutes from now. don't forget, of course, you can catch us any time, itiiobanywhe listening to and following the "squawk on the street: opening bell" podcast.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. apple and microsoft, as jim said a moment ago, neck and neck for the title of the most valuable company in the united states. jim, this has been quite an experience, watching this horse race. >> right. and i know nvidia's coming in for the far turn, but both these companies are -- we saw this week that apple may have something that we must update to, and how there are companies

that want to give them the gen a.i. just to be able to have the informata, which is amazing. microsoft hasn't really said anything. we know that in another 15 days, you can get the people. it's going to be so revolutionary. >> let's get the opening bell. wrap up this eventful week. at the big board, it is the black legislative leaders network ahead of juneteenth, of course, next wednesday. at the nasdaq, it's tempest, and a.i. and precision medicine company going public on the exchange as breadth once again here, jim. pretty red. lot of chatter about france. kak gains for the year are basically gone. >> i think there's a big worry about the bond market. we don't know -- i don't think it's going to be a vast sweep by the right, but the vast sweep by the right is viewed as being, in these days, a repudiation of financial markets. remember when it used to be a reformation?

you would have -- >> this is marie le pen. macron is seen as being very favorable to the financial interests in france. >> why? because he's a stable character? >> yeah, he extended the retirement age. he did any number of other things that upset, i think, the broader population, to some extent. >> the point being that there is worry that if, in fact, as you point out, the right -- far-right comes in, that it actually will be destabilizing things for the budget, which is already not looking great. >> the word frexit making the rounds today. >> well, i know, and i think that means slower growth than you'd ever expect. we know that that's what it does. if you just want to look at it from the point of view of just money, i mean, obviously, there's much more to it than that. look, i can't believe our markets are just in tune with them, but i also know that it's just a couple of stocks that got us here, and i don't dislike the market, because those stocks are great, and tech is great.

but -- and i don't need necessarily a broadening, but you got to give me a reason to buy some of these other sectors, and there aren't any. buy the rails with the freight numbers down? buy the drug companies with the i.r.a. saying we're going to negotiate with you? you can buy lilly because they have an amazing drug, but that's just one drug. >> you mentioned nucore and this warning on the quarter. basically, it's volume and pricing here, jim, that's at work. >> right. and just so people know, you really have to go back pretty far to march of the -- of 2021 to get to a number that's as bad as that. remember, march of 2021 was not exactly a great time for the country. this is the country right there, david. >> listen. i'm looking at a note from wolf out the other day, demand sentiment sours, seasonality or something more ominous, they write. they did their 11th quarterly wolf state of steel survey, and it featured the most cautious demand responses in the

three-year history. 53% of respondents expect lower year over year demand. just 8% of buyers expected demand to rise. >> that's auto. >> what is that? >> that's skyscraper -- commercial construction. oil. country tube. there's a lot of negativity in there. and then you go right over to, you know, to rh. you want to see some negativity. rh, david, that's who used to be restoration hardware. >> i'm aware of them. yeah, i've been to one. i've been to one down here. beautiful store. >> are you a member? >> yeah, we're members because we bought a couch, i think. >> you bought that cloud couch that everybody has? >> i don't know. may have made a mistake. >> this man's a visionary. guy is a visionary. i don't know if you read "the new york times" piece earlier, visionary, but that doesn't necessarily include near-term numbers. he does say, look, it's the worst housing market in 30 years. he is not mercurial. he's been consistent. without an improvement, i don't

know how you get a turn. he didn't give you much hope. >> yeah. q2 sales guide looking 3 to 4. street was at 7. they did say that rates would probably impact housing through the second half, and it may be into next year. here's what friedman said. >> we remain confident that our continued investments towards transforming our product and expanding our platform will generate significant long-term value for our shareholders. every act of creation is first an act of destruction, pablo picasso. we have worked hard to destroy the former version of ourselves and are in the process of unleashing what we believe is an exponentially more inspiring and disruptive rh brand, inclusive of the most prolific product transformation and platform expansion in the history of our industry. >> lot of transformations going on. >> i know that david loves it when they invoke picasso. >> you don't hear picasso quoted too often on a conference call.

right there, you get an "a." you get an "a." you wrote picasso -- >> no, cezanne, you get an "a," because it's a still life situation. >> you get an "a" for quoting picasso. >> let's interview rembrandt. >> changing genres, changing -- stick with modern. >> okay. what do you want? >> leger. rembrandt? >> all right, yalinsky. one of my personal favorites. the problem is that he has been a lot of -- you notice his voice was hoarse. he had just come from a major party in madrid. now, you see, when he works things like that into the quarter, how many ceos, hey, my voice is -- it's usually, like, i'm under the weather. my voice is a little scratchy. i was at a huge rager in madrid. it's an unusual call. >> who else was in madrid this week? >> edgar lives there. >> and we're going to madrid. we're taking the show to madrid.

>> i want to go to madrid badly. >> i'm going to be in the madrid airport tonight. i'll say hi for you. or tomorrow. >> are you really? >> sadly, i'm not going to spend time there. >> you got your travel clothes on, i see. >> yes, i do. >> well, jim -- >> good one. >> if rh is about the consumer, we have upgrades of hasbroa top pick pins, and we got another upgrade of shop, second in a week. >> hasbro, this is an extension of what was on the costco call where they finally said they see toys doing better. >> b of a. >> i thought that was a very good call. and hasbroa is doing a lot of great things. it's good to see them get a little recognition, but it's really one of the few stocks that's doing well today. >> not too many, although adobe is still the s&p leader, jim. jpmorgan did talk about what they call this trough of

disillusionment on fire fly. they upgrade to buy. >> firefly is a fabulous product. if you want to know how angry this market is, caterpillar gave a really big boost in the dividend, and buying back stock. it is doing really well, and the stock is just getting crushed, david. caterpillar. >> you have liked caterpillar for a long time. >> very much so. i'm not -- and i'm not moving away from it. but that is a picture of the market along with new cucor. jb hunt, you would say, when is this recession starting? >> you're talking about things that are showing an expectation of a significant -- or maybe of a slowdown. >> yeah. i mean, look at that. >> i just mentioned that steel survey. >> union pacific, one of my absolute favorite stocks, can't live to save its life. all these stocks are what i would call heavy, and i just think that when you get -- you get a floor and decor, it's just been crushed. maybe home depot comes back. >> you're not a.i. or datacenter

related, you're done for in the market? >> yeah, and that can't just be a.i., a.i., a.i. there has to be more to it. i don't like the broadening out. it says, basically, it's going to get bigger. if you were to go into retail and then listen to gary, gary friedman, im think you would sa, wow, i got to recheck everything. maybe tjx works. >> 50 basis points off the ten-year yield high. isn't that enough? that's not enough of a reason? >> got to get cuts. we have to -- this week was a week of weak data. >> that's actually david rosenberg's point today is that the market is calling the fed's bluff. >> yes, they are. >> and that even after import prices, the dots were maybe obsolete before they were published. >> look, i think that as long as -- here's a big if. >> yeah, jim. >> if nvidia stays up and a.i., if you listen to adobe call, does well, then i think we're okay. but i just think at a certain point, we're going to end up

buying procter & gamble again, going back to colgate. >> or kimberly clark. >> mike's reinvented that company. and it's almost at its all-time high, and it's got a good yield. that's what i've -- >> i'm reading something. i'm listening and reading. i can do two things at once. i hear everything you're saying. michael shoe -- >> he does not even know. if the shoe fits -- >> he's already in the madrid airport. >> he's thinking dsw. >> if the shoe fits, wear it. i heard the whole thing. >> floorsheim doesn't trade. >> deckers does. >> that could be another one i'm worried about. i'm antsy because we just -- i just need something else to buy other than nvidia. >> i'll give you broadcom, because it's up another 2%. >> my travel trust owns broadcom, nvidia, and microsoft. >> after what's been a great --

>> i could take a vacation with those. >> adding -- >> own it, don't trade it, david. nvidia. >> i know, apple and nvidia. own it, don't trade it. >> he doesn't care. when he wants rh and nucor, own it don't trade it. >> you want to talk about gamestop and keith gill? we should mention it. >> he's now the man. he has so much money. he's become the man. he was sticking it to the man. now he is the man. >> got options on 120,000 call options. they were going to expire on june 21st. he seems to have sold about 80,000 of them, but potentially exercised some and went from five million shares of ownership to about nine million shares. >> that's a huge position. >> that is a big position in gamestop. you can figure out the math there. >> they've got to break all those leases and move into another business. he is now the third largest shareholder after -- never mind. ryan cohen. >> but he's the second largest individual shareholder. >> you've got to hope that ryan's got a game plan, david. >> ten-plus billion dollar

market value. they've raised $3 billion in new equity. they already had a billion in cash. >> they can break every single lease, write a check to simon properties, write a check to everybody, get out of that stupid business, reinvent themselves, something that's worth more than 30, and i think they'll do that. >> okay. >> it makes too much sense. >> okay. >> there's your man, david. hey, einstein. >> it's a week ago since we got that great performance. >> what's picasso say about that? >> picasso has a lot to say, or as i refer to him, pablo. >> did he take spots and dots, that art appreciation? >> i did not. i should have. >> that was a gut. it was an "a." >> pablo. >> we're just thinking everything spain. everything -- picasso -- >> it's a great country, man. >> are you going to drop in on -- >> i don't believe i will. >> most important banker in europe? >> you've talked about that. >> i think she's amazing. i think that bank's incredible.

her father fired her at jpmorgan. >> really? >> yeah. >> interesting. >> i would have fired the father and kept the kid. kid should stay in the picture. >> jim, today, with the dollar index testing 106 and with hershey, one of the best performers, those are typically signals of a nervous market. >> yeah, exactly, although cocoa has peaked. and i think that shock should -- >> it's followed by campbell's and general mills. >> look, we're at the wrong juncture. this is when you first -- when you're in that period when you're about to get the first rate cut and not now, people tend to start -- i've been doing this series on drug stocks all week. they look for drugs and foods. campbell's had an okay quarter. hershey had an okay quarter. the food group is not filled with okay quarters. general mills was not bad. smucker put up a number, and people liked it for about a day. hormel, which is the protein company -- did you see what dave

ricks said about salty snacks? he wants a challenge. he made me one more eagle scout. >> i'm not going there. >> david, what about the nba? you know, have you been following the nba? >> nba? >> yeah. >> how'd you get to that? >> okay, well, how about -- i don't know. >> i'm looking at warner bros. discovery shares were down yesterday. >> yeah. what's the story there? >> they're up a bit today. the nba is going -- i think the boston celtics are going to win the championship. i'm going out on a limb on that one. >> 3-0, it's never been -- >> we can assume that. and then the question will be, what happens in terms of the nba contract that we've talked a lot about. >> that's where i'm going it have our parent company, comcast, nbc universal, expected to obviously -- will be officially announced. disney, clearly, and then that other package that's going to amazon for streaming, jim, i don't know. i think it's possible that warner bros. discovery will try to match that economically. >> with what? >> with money. >> with the money that shari redstone doesn't have?

>> they can come up with 1.8 or whatever the number is. >> they'll lever up again? >> i don't know that they're going to get it. and then the question is, would there be litigation in some way between warner bros. discovery and the nba? we'll see. >> david, your group that you have been covering, this paramount, warner. >> yeah, yeah. >> i mean, apres moi le deluge. >> stock prices have been disastrous. >> can you modify that a little to make it less -- >> sorry. >> somewhat disastrous? >> not good. you want to own netflix. it's up 36% this year. that's what you wanted to own. >> there is a story today about amazon starting to make inroads on advertising. and that's what we need. amazon, netflix, i mean, what -- what happened to three, six, and ten? >> there's also some pieces that the political cycle's not giving media companies the revenue boost that they got in '18.

or '20. i'm sorry. >> this is the last go-round where the, i think, where the traditional broadcasters are going to really have these deals. when the nfl renews many years from now, and nba, obviously, they're signing the nba deals, but can you imagine any -- they're not going to be able to stop them. it's going to be all amazon, apple, netflix, which is moving slowly but surely into live sports. >> one of the reasons why these keep adding stock market value is that the number of industries that they can just take over. it's -- especially if you have a different president who's not really interested in antitrust, that's not trying to break them up. look, you could run for president on the theory that these companies are too valuable. too big. >> too big, too powerful. >> too large. >> you could. >> it's hard when the consumer likes the service. >> they love them. >> it's not a political winner. >> no. i just think that these companies can keep rolling, because there's no one can touch

them. >> and we've talked about this many times, and we'll continue to. they now are in a position to drive the a.i. world because they have the balance sheets to be able to do it. >> they can buy the chips. >> this is not, at least at this point, a place where you can play as a smaller player, because you need enormous allocations of capital to build these. >> we had this conversation with -- we did it the other day with retail and inventory management. it's permeating every sector, jim. >> i've never seen it. i shouldn't say that. there were times when standard oil was the dominant company. >> but you weren't around then. >> unfortunately not. >> barely, but you weren't. >> you look at adobe and say, they can compete. that's what you would think. broadcom, you know what? yeah, they can compete. that's what you have to have. you have to have companies that can compete, and they have to have some technological edge or such shrewd financial edge, which is hock tan's. financially, he's -- >> broadcom had an $800 billion market value. it's not exactly a small company. it's the largest in the world. >> i just think that you're

running into this situation where you have companies that are just nation states, and they do whatever the heck they want. and buy whatever they want. if they wanted to buy the nba, they could do it. >> oh, yeah. >> make it a division. >> they want to buy their own power companies for their datacenters, they can do that too. >> they have to buy a natural gas company. >> you sound like lina khan. >> that deal is going to happen in the next few weeks. >> khan, kanter and cramer. >> you're starting -- >> jonathan kanter's an incredibly nice guy, just for the record. he is. >> he can't figure out what he wants. >> he's incredibly nice. i agreed with him on ticketmaster. what's that about? >> it's about fees on fees on fees. >> i agree with him on that. those fees are too high. >> i agree. you have people going to france to watch taylor swift and paying the same for the flight is everything else. >> two reports on taylor's effect on cpi in sweden in the uk. >> that was amazing. >> i'm trying to get to that restaurant in jersey she went to. >> lost me on that one. >> the black something or other.

got to get to that place. >> got it. as we go to break, watch bonds. we're watching 4.2% on the ten-year. it will be busy today. umich in a few minutes and later on today, goolsbee, lisa cook as well. stay with us.

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somewhere. right now we don't have -- you posted an excellent piece on twitter of commodities for goldman. they're not free malbut they're all in the wrong direction and great for the fed to make its change but they have to do it so sooner rather than later. >> you want a cut? >> this data shocked me this week. wow. it's happened ahead of when i thought. >> that's a bit of a turn, jim. >> it is. >> i don't think you think july is live. >> it's not. but the data was weak this week, surprisingly weak. one of the reasons i think the bond auctions went so well. i can't find a lot of stocks i like. so that's why i do the drug piece all week, because they i will like as they come down, those are very -- they don't have any glp-1 companies like the food companies, that david ricks piece was brilliant, but did it ever say, look out. >> your drug treasure hunt has

been good all week long nchgts thank you. really great stocks. one more left it's terrific. disney is not flying after nelson peltz didn't get the seats today. >> it's not. >> is that a cheap shot? >> completely. out of nowhere for no reason. >> keep an eye on parks. have great time. >> you too. >> thank you. >> i'm going camping like i was an eagle scout. david ricks and i. >> be careful. >> see you soon. dow down 227 on this friday. don't go anywhere. if your business needs a new application then developers will have to write code. a lot of code. if an application needs to be modernized then you'll need time, resources... and caffeine. if this sounds daunting then use watsonx code assistant ai designed to multiply developer productivity so you can generate code quickly. let's create a more modern foundation for business, with watsonx code assistant.

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good friday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber, live as always from post nine of the new york stock exchange. stocks not too hot this morning. s&p is down 0.3%. nasdaq comp actually unchanged.

still, it's up this week. the nasdaq up more than 3% this week. the s&p up 1.4. dow lagging all week long, down 200 or so points right now, and down about 1% for the week. bit of a divergence as tech out in performs, communication services thanks to alphabet and the media names as well. technology having another good day. nvidia adding anotherpercent, having another good week, but again, the rest of the market in terms of sectors are down. take a look at treasury yields. the story this week lower treasury yields and that is continuing today. maybe a bit of a flight to safety. gold higher, the dollar higher. but in general the theme of the week has been lower inflation numbers in the u.s. caused a lot of bond buying. 10-year yield 4.2%. i mean we started the week with sharply higher yields. it's been a rally in the bond market. 30 minutes into trading. three movers we're watching starting with adobe. rallying on the ai boom posting

better than expected second quarter results. and then also raising its full-year revenue forecast. on the other end, check out shares of rh, plunging after posting a much wider than expected loss. we're going to take a closer look at the quarter in a moment. nucore falling. more on that stock and the state of industrials on the show. >> let's get umich out a couple moments ago. rick santelli has got it. good morning, rick. >> good morning, carl. university of michigan, june preliminary reads. in a couple weeks they may change. they include important inflation metrics based on the survey. our june preliminary read for the headline number, 65.6. a big miss. that's the weakest level since november of 2023 and follows 69.1, which was solid. now if we look at current conditions, also a big miss. expecting a number over 72. our last number was a whisker

under 70. 62.5. weakest going all the way back to december of '22. if you look at expectations what may lie ahead, looking for a number in the camp of 72. 67.6. that is the weakest going back to, well, december of last year. now, the important inflation metrics. one-year inflation, 3.3%. which is exactly what it was last month. we were expecting it to ease back to 3.2. the back-to-back 3.3s are the hottest since november of last year when we were at 4.5%. finally the 5 to 10-year metric expected to be 3%. rearview mirror 3%. pops up as well. the 3.1. 3.1 the hottest since november of last year. granted these inflation numbers aren't super hot, but they're not cooling. you could ask questions whether surveys are too qualitative or not but many like to follow these. a couple sidebars, at current

levels at 4.20, we're down 23 basis points on pace for the lowest yield close since the 28th of march. look at the two-year at 4.67, it's down 22 basis points on the week on pace for its lowest yield close since the 4th of april. and remember, since the jobs report, one week ago, the 10-year has built momentum by trading under previous day's low yields every session including today. sara, back to you. >> low yield week. you would have the specifics. thank you. rick santelli. the other bond yields i want to point out today, our story of the week, not improving sentiment, is what's happening in france. we've seen the carnage in the french stock market lost about $200 billion in market value, the size of greece's economy this week. the chart that everybody is watching right now. having a little deja vu watching the european bond spreads. the french-german spread. the differential between what's

considered riskier now versus safer. it's not sovereign debt level crisis levels as matt of miller points out, but it is a risk and increasing political risk there, especially when deficits are so in focus in europe and france has work to do on that front and now the politicians have started fear mongering and i think the quote today that is worth highlighting that investors are watching is from the french finance minister. this is macron's finance minister. he warned against the four left parties that got together and sort of formed an alliance. he said "their program is complete madness that will guarantee downgrade, mass unemployment and exit from the european union." they haven't put out their program or plan or platform, but now the fear mongering has begun and i'm getting notes that already say ffexit, like they might have a vote like the uk to

leave. that's preliminary and nobody is talking about that yet. it's a concern. the brunltsz a concern -- budgets are a concern. the euro is weak on a week where shouldn't be. weaker u.s. inflation data so the dollar should be weaker. that's a risk. for stocks at record highs, an economy like france, which is one of the biggest in europe, you worry about the political stability there. >> do we run the risk of a euro contagion and/or something along the lines of what we saw, i don't know, it's 13 years ago, something like that? . >> we're not at those levels. second of all, there's not really a concern like we had then, when they needed bailouts and their economies were collapsing. nothing like that. but definitely increasing scrutiny around the sovereign debt profiles of places like france which need some tough political medicine to get deficits in order. back down to the 3% european target. now with all the political back and forth it's unclear whether that's going to happen. and what is going to happen? this idea of a coha billtation

government, if le pen wins the far right and he's president, she's prime minister. we don't know. that's what market is reflecting at this point. other big international news of the night came from the bank of japan which didn't do anything on rates. it wasn't expected to. but it just puptsds punted on higher interests and tapering its bond buying program. according to the bank of japan, "depending on the economic and price data that become available at the time there's a possibility we could decide to raise interest rates and adjust the degree of monetary support in july." super dovish and now what's happening in the currency market, all sorts of crazy things because this is when the market then tests the resolve of the bank of japan, dollar shoots up, japanese yen weakens, we go back to the high levels on the dollar/yen, 157 where we are and they might have to spend so much money to intervene they should have tapered to begin with.

there's all sorts of interesting global market news right now that we're paying attention to. >> yeah. for obvious reasons. of course, currency being a key. good time to travel to japan. >> great time to travel to japan. >> or europe. >> the dollar strong overall. let's had a strong run on the back of higher interests and had a strong run this week and -- >> this week it's kind of -- yeah, rates are down as you point out. >> political risk. those are the two stories. >> right. >> the european political risk. we'll get a lot more inflation data next week out of europe. that's very much in focus. we'll get retail sales in the u.s. here on tuesday, but we're also going to get european inflation and we're going to get uk inflation and it's all important because, david, now we're in this global race of divergence of central banks cutting interests. will the uk cut in august? that's kind of the economic consensus. guess what? they are dealing with taylor swift inflation in europe right now and that's a real thing.

>> i know. carl and i were talking it earlier. there are two research reports, one on uk cpi and one on sweden. >> i highlighted them. >> i wouldn't have expected anything less? bigger risk according to cou when on the uk the impact of taylor swift august london tour dates. she's there next week by the way. there will be a concert on one of the index days when they measure cpi and a surge in the hotel prices that could be material temporarily adding 30 basis points to services inflation, 15 basis points on the headline. "inflation data for that month might keep the bank of england on told in september." >> taylor swift might actually prevent policy makers from lowering rates. >> more powerful than the powerful people on the planet, central bankers. and we've started to see this. sweden, so sweden, she was there in may and the swedish inflation number was very hot and it was hot in the services sector and that's because of things like hotel prices.

it's temporary, but it also makes central bankers' jobs harder to do when they're trying to walk this fine line between cutting rates to boost their economies and not letting inflation flare up. she's not back in the u.s. until the fall. >> we got relief in inventory prices. >> a lot of that is the story of gas prices. >> but also -- >> input into inflation. >> ex-auto, consumer goods. >> ad it to the ppi and cpi this week and you got three confirmations of the disinflation story and now the question is, is one more month of good data going to be enough for the fed? that's going to be the debate. because the market does not believe the fed dots. market says two cuts. fed says one cut. we'll see who wins that battle. it's usually the market. but for the last quote, i love gary friedman, everyone's favorite macro strategist, ceo of rust hardware, with an opinion on rates and he's in a

category home furnishing, hit harder than many on the back of higher interests and mortgage rates. listen what he says the fed should do. >> i think there's a lot of pressure on the fed. i think the fed is going to -- is going to be massively data dependent which means the fed will be behind the curve. right. and so they were behind the curve on seeing inflation. i think they'll be behind the curve as it relates to assessing, is inflation under control? i think they'll be behind the curve as it relates to, you know, it's time to cut interests. >> now, i said that he feels it harder than most because of the housing market and exposure there, but there is this question now, are they going to be behind the curve? if they are too patient as the economic data deteriorates.

real retail sales on tuesday important. >> s&p and nasdaq under pressure as well. coming off a fourth day of record closes and tech is on pace for the best week since november. stock a bit more about where the markets go from here. yardeni research president, ed yardeni. you've been watching all of this closely. is the market not going to take a moment to celebrate slowing growth? >> well the slowing growth issue is still not a done deal. we certainly had restaurant payroll employment and the payroll employment suggests wages, salaries and personal income in may were up sharply and that should be visible in retail sales. i was taken aback by the numbers you just covered. people have been pessimistic for a while and the economy has been good. the labor market strong. and as i said, the stock market

is at an all-time record high. >> that said, three weeks of three weeks of increasing initial claims, watching jolts, chatter about the philly fed, look at benchmarks and whether 13 states overstating the labor market, are you worried there might be a turn of the page here. >> don't you get the feeling people are looking for trouble. i've never seen so much slicing and dicing of the data looking for bad news when the good news is right there at the top. no. i mean initial claims up three weeks in a row. so what. they were up in a similar fashion last summer and the data seasonally adjusted but there could be funky things going on around summer vacations and memorial day holidays. i think we're going to see these claims come back down to something like 220,000 to 100,000. labor market looks fine. i mean, the national federation of independent businesses came

out with their survey for may, and it indicated that job openings actually rose and hiring froze. i guess take your pick, you know. pick your poison. but, you know, some people are drinking the coolaid. i prefer coke. >> have you at least removed one of the concerns you wrote about in recent months, the threat of a melt up? >> sure looks like a melt up to me. looks like an early phase of a melt up. look, carl, you're a young man, but i remember the agricultural revolution, and that's when the economy was all about agriculture in the 1800s and it was a great productivity in that sector. we went into the 1900s and had the industrial revolution. now we're in the digital revolution and the digital economy is less interest rate sensitive. it creates a lot more cash. capital spending is extremely strong. i think that's the way we have to look at it. that's what stock market is

saying. you know, i think the stock market started to discount artificial intelligence on november 30th, 2022, when openai introduced chatgpt. apple just came up with some software that will make their phones compatible with all that and the stocks are absolutely hot. so the digital economy is going up in the stock market and the industrial economy not so much. >> ed, what about political risk? that appears to be front and center today. you're up, we felt it all week. not necessarily in the u.s. stock market. maybe it's not an issue for us here. there's going to be ap election here, too, so i wonder what kind of wrench the political instability and uncertainty will throw in the markets? >> right. >> and then the analysis of what election outcomes will mean for economies? >> yeah. i think that's probably the biggest risk right now is the politics in general. geopolitical risk is certainly front and center in my mind, and now you've also got domestic political risk in europe and in the united states.

both candidates for the white house are threatening to impose massive tariffs on china, for example, and when i talk to people about the roaring 2020 scenario for this decade they remind me the 1920s ended badly and ended badly because of smooth holly tariff because of protectionism. i think you're right. this is not a worry-free bull market, but then they never are. there's always something to worry about. the good news is our domestic politics is starting to look just downright stable compared to things kind of coming unglued in europe and maybe that's one of the reasons why the bond yield is doing well and money continues to come into our markets. >> i hesitate to go here, ed, journal does have a piece about trump's tariff and tax policy even though they say it's loosely defined and contra contradictory on who you talk to

in the campaign. >> yeah. i think at this point the market is going wait to see how this thing plays out, so i think to your question about a melt up, we could continue to see technology stocks melting up, industrials doing very well, financials doing very well. those are the areas recommending an overweight. i forget to mention the overweight -- my recommendation of overweight energy a clunker so far, but to me that's a shock absorber to things becoming unglued in the geopolitical realm. all in all i think the market looks okay this year. ask me again or once the election is over. >> we will. and well before that, ed. thanks. have a good weekend. >> thank you. >> ed yardeni. >> as we head to break our road map for the rest of the hour. apple and microsoft going back and forth here in the battle to be the most valuable company. apple up almost 25% in the past three months. closer look at how much higher the tech giant can go from here. >> elon musk gets shareholder approval for the mega pay

package, but there still could be legal hurdles ahead. we'll discuss that with a former delaware supreme court justice. >> the great tax debate. former president trump proposing new plans during his trip to d.c. yesterday on how to handle the 2017 tax cuts that do expire next year. big show still ahead on "squawk on the street." stay with us. trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights. trade brilliantly with schwab. wall street forecasts over $100 billion in sales for weight loss drugs known as glp-1. even with unliked and inconvenient injections,

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i just want to start off by saying, i love you guys! yeah. >> that was elon musk thanking shareholders for greenlighting that, well, $56 billion pay package, maybe worth a bit less than that right now. the company is going to reincorporate in texas. that's where it's head quartered. our next guest says musk and tesla face legal hurdles around that compensation package. former justice of the delaware supreme court carolyn burger joins us now. good to have you back. help us try make sense of this. it needs to be ratified by the delaware chancellory court. explain to our viewers what comes next for this.

>> okay. what's happened so far makes it sound as if it's all done. the stockholders approved it and there was a new proxy statement, so we're good. but that's -- that's only part of the story because that new vote doesn't do anything until a court, in this case the court of chancery, says that okay, that cures the problems that i found with the original vote and the original proxy statement and even with the original process of setting the compensation package. the trial court was pretty negative about just about everything, and there's a judgment out there that says the tesla directors breached their fiduciary duty and that the stock options and the stock purchases all have to be

rescinded. that's where things stand. what will happen now is that i strongly suspect tesla and the other defendants will go into the court of chancery and almost perhaps even next week, move to reopen the decision. reopen the judgment on the basis that there has been a significant new development, namely, a new stock holder vote which they will say is based upon absolutely full information and cannot be challenged because it doesn't suffer the same infermties as the first one. of course, on the other side, i understand there's already talk about how this stockholder vote was also imperfect. >> right. >> or flawed. >> so are -- >> and so -- >> yeah. so what is -- what are your expectations in terms of the court, the chancery court, and the chances it would reverse itself in terms of the decision

that brought us here in the first place? >> okay. my own view is that the court is not going to reverse itself, and the basis for that is that the judge was pretty adamant about how the pay package was just plain unreasonable, and there were a lot of superlatives, a lot of cracks, if you will, about elon musk and why does he have to get human compensation when all these other billionaires like bezos and warren buffet, they don't take those kinds of pay packages. why does musk need one? >> yeah. >> those kinds of comments strongly suggest the judge doesn't want to change her mind, and i suspect what will happen is that there will be new set of briefing and the subject will be, did this new vote override

or change the decision that was entered? i believe that the court is going to say that it did have an impact, but most likely, what the court will do is say, all right, now the burden is on the plaintiff instead of on the defendant to prove that this was an entirely fair compensation package. and at that point i believe that the court is going to say even if the plaintiff has the burden, the evidence supports finding unfairness. >> okay. >> ultimately the decision will stand. then they'll appeal. >> they'll appeal. what about the reincorporation in texas? does that give them an opportunity to just say, enough with you, delaware, and go down a different road somehow? >> not at this point. because the parties have all assured the delaware court that

any further litigation about this compensation package will stay in delaware. it started there and it's going to stay there, even if it goes on for long enough that the company is reincorporated as new-laws, certificate of incorporation. one of the things that was of concern the new certificate of incorporation will say that texas is the only place that anyone can bring an action involving tesla. so that would apparently conflict with continuing in delaware. but the attorneys sent a letter to the court and said, we're not going to do that. we understand that this started in delaware. it's going to stay in delaware. i don't think there's going to be any issue about switching the incorporation to texas. >> carolyn -- >> they're switching the incorporation to texas, but switching the case to texas? >> right.

i don't think that's going to happen. >> right. >> i just worry about -- i'm just wondering what your thoughts are on the national mood? there's increasing skepticism around our legal system right now and politization around our courts. >> yes. >> and many people who think they are rigged and political and elon musk is a lightening rod and now he's had two shareholder votes where he has shareholders approving this pay package. why are the courts going after him specifically and not allowing it to go through? do you worry about that perception? >> i worry in a general sense, certainly, about the federal courts, but the delaware courts have more than 100 years of history of being faithful to the law, and even if the judge doesn't particularly like elon musk, and doesn't like the way he spends his money or acquires

his money, that is not going to impact the result. i think the decision in delaware is going to be a pure legal decision, as it has been up until now. >> carolyn, always appreciate your helping us work through these issues. thank you. >> you're welcome. >> still to come, nucore moving lower on its latest profit warning. new details d anthe fallout on industrials when we come right back.

welcome back to "squawk on the street." getting a check on crypto today. bitcoin trading around 67k on pace for its worst week since april and bernstein out with a bull call on one name in the space, micro strategy, initiates the stock at a buy with a $2890 target or 80% higher from here as they say the company is, quote, synonymous with brand bitcoin and attracts investors looking for an active leveraged bitcoin strategy. as some of their long-term bitcoin targets are aggressive,

200 k, up from 150 prior, and half a million from 2029. >> it's not a micro strategist analyst, it's a bitcoin call. >> i don't know the analyst. >> a play on bitcoin. >> a play on bitcoin. >> as it is. micro strategy benefitting from the big rise in the underlying. let's talk about nucore, a steel maker, and the stock moving lower following a new profit forecast. seema moody has the story for us. >> david, nucore slashing its second quarter guidance about 26% below analyst consensus. its steel business is expected to see a sequentialdecline due to lower selling prices, weak volume. pricing power has been a concern in the market and it's one of the reasons the stock has under performed days after nucore announced its acquisition of a manufacturer of high performance commercial doors for buildings for about $565 million. and it also follows the release of wolfe's steel survey you mentioned last hour that showed

the most cautious demand in three years when asked about inventory plans into the third quarter, just 12% of buyers planning to restock down from the prior survey's 21%. analysts citing weaker economy, excess capacity from china, plus that ism report last week that confirmed the u.s. manufacturing sector contracted in may for the second consecutive month. you'll see this coincide with the steep drop in steel prices this year. other names in the steel space, u.s. steel, are down not just today but sharply this year. in the industrial space, msc, a mid cap distributor that sells to larger construction players, released a warning citing weakness in the manufacturing, fastenal and caterpillar are down today. >> thank you for pointing it out. seema moody. down market, down most sectors are down except for technology and communication services. after the break, stock splits making a comeback.

broadcom and williams-sonoma, joining the likes of chipotle, walmart and a bunch of others. a look at what's driving all this when we come right back. [crowd chanting] they ignored your potential, and mocked your ambition. but it's not the critic who counts. with every swing and block, your game plan never changed. ♪♪ some still call it luck. let them. because you know what it's always been. inevitable. ♪♪ ♪♪ i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars.

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♪ welcome back. i'm pippa stevens with your cnbc news update. the supreme court tossed out a federal ban this morning on bump stocks. the devices that can enable semiautomatic weapons to fire rapidly like machine guns writing for the majority in the 6-3 opinion, justice thomas wrote the atf exceeded its authority by classifying bump stocks as machine guns enacted under then president trump after a gunman used a device at the deadly 2017 mass shooting in las vegas that killed 58 people.

pope francis became first leader of the catholic church to ever address the g7 at the group's summit today in italy. he approached the world leaders for stronger guardrails on emerging technology. president biden is expected to meet with the pope privately today. and nassau announced a new target departure date for starliner for the international space station. the agency pushed it back from today until next saturday after the crew capsule developed a handful of leaks. two nasa astronauts arrived after boeing was plagued with months of mission delays. back to you. >> thank you. pippa stevens. it certainly was a busy week for the fed holding interest rates steady lowering its rate forecast for the rest of the year. steve liesman spoke with cleveland fed president loretta mester today first on cnbc. she's a voter but on her way out. >> yeah. she had thoughts about the next few months and i'll get to it

that are kind of interesting. cleveland fed president, first fed official to speak after this week's meeting welcomed progress on inflation and suggested the economy be back on track to the declines in inflation we saw last year. >> we've been working hard to get inflation down. we've been restrictive on our monetary policy. we've seen really good progress over the last couple years on inflation. we're not there yet. but you have to look at the whole, you know, group of data and be happy that we're starting to see inflation move back down again after stalling a bit in the first part of the year. >> the comments coming after in port prices surprised to the downside. the first positive inflation out of three this week. as inflation falls or inflation adjusted funds rate rises. the fed becomes more restrictive without moving rates. mester said the fed would be moving before it achieves the 2% target. >> we've always said we need to have that confidence.

>> right. >> inflation is moving down on a path to 2%. we're not going to -- it would be inappropriate to keep rates at current levels until inflation gets to 2%. >> the markets think july is too soon but they've become confident in the september cut now at 71% after the inflation data this week it's up 20 points higher than after last friday's jobs report. we're now monitoring this last line there you can see december, the probability of a second cut now at 76%. she retires, as sara said, mester does, after a ten-year tenure as cleveland fed president and 39 years at the fed overall. she said the good inflation data was a good way go out on, but needed to see a few more months, her exact language, of improvement before cutting and we'll be listening for her successor who takes over in july feels the same way. sara. >> i'm going to miss her pragmatism. i feel like she always explained things in a really practical way and had a good handle on it.

steve, i guess the risk now that people are worried about is that they stay too long and that the fed's own forecast and their bias doesn't necessarily match up with the disinflation data? >> yeah. i'm actually watching, sara, you remember we had this trade, it was the fed makes a mistake trade and you could see that in the long end if you look at the 10-year, for example, the 10-year remained down or would -- the yield would go lower because when the fed talked hawkish because it was more -- the market was more convinced that there would be a recession that would make a mistake. i think that could start to creep back in. the market is much more -- what's the right way to say it, extrapolating from the recent data than the fed is. then again, the fed extrapolated a lot from the data than the market did. i'm guessing you're reading the same people, a lot of victory laps going on right now among those who said that the january, february data was the

aberration. those guys are doing victory laps right now saying look, we had it right and what's happening now is more in tune with what's happening in the economy when it comes to inflation. >> the fed can pivot in terms of their language and what they're hinting, so they, too, cannot claim victory and have to be wary of doing that. >> right. >> so soon. all right. thanks, steve. >> thanks. >> broadcom and williams-sonoma announcing stock splits joining a growing list of companies that have done the same this year. bob pisani taking a look at what's behind the moves. good morning, bob. rjtsz good morning. good to see you. it started with walmart they announced a three for one stock split in january and from there it's picked up steam. yesterday williams-sonoma announced a two for one split and wednesday broadcom announced a ten for one split that join nvidia, chipotle, lam research. stock splits are less common today than they were 20 or 30

years ago during the tech and internet bubble of the '90s stock splits were common but after the dotcom bubble stock splits declined and after the great financial crisis in 2008-2009, stock split practically ceased to exist and really didn't recover even after the market started recovering in 2010. the likely reason they didn't recover is that the institutional base for stock ownership has come to dominate the market. institutions are the big buyer and they invest by dollar value, not by the shares that they are trying to buy in. but recently there are some signs of a subtle shift going on. some of this may be because the price of some stocks have reached absurd levels. ten companies in the s&p 500 with stock prices over a thousand. but i think more importantly, some companies appear to be a lot more interested in appealing to retail investors than they used to be. so nvidia and walmart and wil williams-sonoma all said they wanted to make stock ownership more accessible to employees and

investors in general. so here's an interesting question. the splitting of stock affect the price. well in theory no. the value of the company remains the same. it's not that simple. there are often very subtle changes in trading that may be beneficial. for example, trading volumes almost invariably go up. liquidity improves and split usually increase the shareholder base. that was the object a number of companies mentioned. all of this may have subtle but beneficial changes. so are there any other candidates throughout? here's the key. if companies with a retail focus are suddenly more sensitive to their prices, there are some very obvious candidates. there's a number of holdouts in what i call the over 1,000 club for the s&p. they're fairly small number and they're getting smaller but they include booking holdings, auto zone and decker outdoors. now there's other high priced stocks with a retail focus that include costco, and super micro computer. they joined the s&p 500. here's the key, guys. if corporate america comes to believe there is a trend here and they can attract attention

splitting their stocks there's a number of retail facing companies that may be out there. o'reilly's 900, servicenow 715, that could be a candidate. lower priced companies, ulta beauty is 400. spotify is 305. if they come to believe that suddenly there is a trend and they can benefit by attracting more retail investors you may see a lot more stock split than we've seen in 20 years or so. we'll keep an eye on that. >> good stuff. goldman wrote about it. bob pisani. apple and microsoft battling it out for the crown as the most valuable company. we'll discuss how much higher those stocks might go in a minute. as a fiduciary, i promise to be the financial steward that you and your family need. i promise to put your long-term financial well-being above any short term transaction. everyone has a big picture. my job is to help you invest in yours. [announcer] charles schwab is proud to support the independent financial advisors

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welcome back to "squawk on the street." apple and microsoft battling for the most valuable company. apple retaking the title from microsoft for the first time since january, but microsoft is back on top right now. if you're following day by day.

apple shares up 9% this week. 25% in the past three months. is there more room to run? martin yang a senior analyst of emerging technologies at oppenheimer, buy rating on apple. but a price target of only 200. it's blown past your price target and time to readjust? >> yeah. we can talk about our future plans for adjustments but our current model has not reflected a re-acceleration in iphone install base and shipments, so, you know, if you viewed this as -- in that scenario, there's room for upward adjustment. >> so do you rethink all of that this week? >> definitely. >> not necessarily the models but what you expect in terms of the upgrade cycle and the revenues? >> after seeing what apple presented at the wdc, definitely i think iphone features will reaccelerate the replacement cycle coming this fall. >> why?

what is it that has led to such a sharp rethink here from wall street, do you think, on that? >> i think there has never been a comprehensive implementation of various ai models on the system level, not from microsoft, not from google or android or samsung, that will make the overall system appeal to consumers in not just one way, but all at, you know -- in various ways that will make the operating system and phone much more usable to consumers. this is the most thoughtful approach i've seen and i think consumers will want to try that and see how that's different from other devices. >> how do you think about apple's own sort of self-reliance when it comes to building ai and apple intelligence, versus dependence on a platform like chatgpt? >> i think apple has benefitted

from a very integrated in-house hardware-software integration, and that is an extension of that approach by utilizing its own large language models and own intelligence. >> the last four days since the meeting, a lot of -- a lot has been made of the fact that a large number of the phones already out there are not going to be able to run these a.i. models, so to speak. i'm curious as you work through your numbers, what are your expectations in terms of the upgrade cycle? >> yeah, my current expectation is they are going to allow the a.i. models to run on pro and pro max models for this year. and then next year i'm expecting all iphones to have the capability to run the latest large language models. so this year you'll get an accelerated replacement cycle, but also a favorable mix towards

pro and pro max. >> martin, thank you for joining us. we'll look for any rating changes. martin yang. i'm sure you're not the only one after a week like this. 9% move for apple. appreciate it. >> my pleasure. coming up after the break, a closer look at some competing tax plans, including the ideas that former president trump proposed yesterday in his trip down to d.c. when we're back in a couple of minutes. a queer woman i not only had to break through the glass ceiling. after coming out i had to break through the gay glass ceiling. that probably explains why there's only a handful of queer women in c-suite levels. you bring unique opinions to the table that c'te plat an breiced by anyone else.

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>> a lot yesterday. there were a lot from both sides yesterday. the big question for both parties, broadly, is this election is going to determine what happens to those 2017 tax cuts when they expire at the end of next year. former president trump wants to extend them and now even add some tax breaks. yesterday he floated that plan to eliminate the income tax with tariffs. he wants to lower the corporate rate from 21% to 20% and maybe even exempt tip wages from income taxes. extending those tax cuts without those additional ones would cost $4.6 trillion over the next ten years, according to cbo. republicans say an extension would largely pay for itself with growth. they say cutting taxes will lead to more revenue so you don't need any offsets. the broadest study of those tax cuts shows they did increase corporate investment, they did increase ages, but they did reduce federal revenue by over $1.5 trillion. biden's plan, on the other hand,

calls for extending those tax cuts for those making less than $400,000 a year, but he is calling for over $5 trillion in tax hikes, mainly on companies and the wealthy, that he says would bring down the debt. now you've got two more clear proposals on how they would each deal with this, what we could call the tax cliff, at the end of next year. >> what about congress and the role they would play? >> and whatever that makeup looks like at that point. even when the democrats were in charge, they couldn't raise taxes. could biden get any of this through even if you have a full democratic congress. trump might have trouble on his party saying, there's not going to be any pay for us. there are some traditional conservatives that don't want a larger deficit. they don't like the debt. they don't want to see it grow because of what you're doing with taxes. that's going to be the challenge. >> was there some proposal made to have a large consumption tax and get rid of income tax overall? i thought i read -- >> tariffs over income tax.

>> yeah, tariffs over income tax. >> exactly. carl, to your point, the president said this yesterday about tariffs -- >> former president trump. >> former president trump talked about replacing the income tax with tariffs. i talked to many republican advisers on his tax plan and they're like, yeah, no, we're not -- they didn't dismiss it. they just said, we're not discussing it. mathematically, there's no way that works. >> robert, thank you. >> thank you. >> to be continued, of course. the market down about 0.3%, the s&p. our live market coverage will ntueig aerhis.

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. good friday morning. welcome to "money movers." i'm carl quintanilla with sara eisen live at post 9 of the new york stock exchange. go big or go home. morgan stanley makes the case for large cap stocks. we'll speak with one investor who voted against the musk package. coastal homes disappearing into the ocean. a look at the lit cal rising risks in real estate. for now,