instead allow third parties to offer installment loans through its apple pay platform. it's tuesday, june 18th, 2024. it's tuesday, but i believe tomorrow's a holiday. >> it is. >> juneteenth. "squawk box" begins right now. good morning, everybody. 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 off today. say that three times fast. apple play platform. >> you can't even say it once. >> apple pay platform. >> apple pay. it is hard. i messed it up.

>> u.s. equities at this hour. you will see green arrows building on the big gains that we saw from yesterday. dow futures are up another 23 points. it is the s&p and nasdaq that closed at new highs yesterday and are indicated up once again with the s&p up 6 points. the nasdaq support 58. it is really technology driving these averages. the s&p is the 30th record high this year. we are still only just over halfway through the year. we will continue to watch the momentum building in the market. treasury yields are picking up. the ten-year yield at 4.29. the two-year yield at 4.77. it is technology stocks that boosted all of the major averages. it is a bigger part of the s&p 500 these days, too. >> i think we're basically where tom lee said we're supposed to be. he's hot. president biden is expected to announce a new immigration

program today that would provide a path to citizenship for hundreds of thousands of immigrants in the country illegally who were married to u.s. citizens. the program would benefit the immigrants living in the country at least a decade and offering them work permits and deportation protection and route or route? >> route. >> route 66. nobody sings route 66. i'll go with route to apply for a green card. a smaller version has chexisted for military families already. dave chalalhoun will testif before senate committee today. he will talk about how boeing is taking action. richard blumenthal will join us

here on cnbc at 7:30 a.m. eastern time. >> he is getting younger. incredible. he's like what's that guy? brad pitt? >> benjamin button. in other news, "wall street journal" have stated that several high profile candidates have turned down the offer to run boeing. larr larry culp declined the offer. >> he is in a good space. if you talked to larry, he worked hard to get to this place. he has the company humming. he is doing what he wants to do and the team he wants to be doing it with. he was lured back into ge. >> maybe like danny hurley. win three straight. there's reasons.

the prpre-eminent position of boeing. also a board member. david gitland reportedly declined and approached. and warner bros. david z zaslav has hired david gibbs. he was president obama's press secretary from 2009 to 2011 and later served as global chief officer at mcdonald's. the previous head of communications at warner bros. stepped down at the beginning of this year. we are watching shares of citigroup this morning after a report that says the fdic is preparing to give citigroup a failing grade for the living will plan. the board intends to vote thursday to downgrade the management systems from

efficiency to shortcoming. they are not expected to join the fdic. big banks are required to file living wills in the event of the financial crisis. citi said yesterday it was confident in its ability to wind down properly without using taxpayer funds if needed. citigroup shares are up 19 cents. apple stopped issuing loans to the apple pay later. the deal launched last year. the company will start allowing installment loans later this year in the apple paycheckout process through third parties. that includes affirm as well as credit card and debit card issuers. apple will no longer handle credit checks for people who apply to pay later in the wallet

apple. >> apple pay. >> i did it. >> no, they took it out. >> apple pay plan. i got it. >> i may have it. apple pay plan. a federal judge in texas has dismissed a lawsuit by exxon against shareholders. the promise to not submit a similar resolution in the future and rendered that case moot. the s.e.c. rules on this issue are behind the ball, but the case could not proceed. exxon had sued another shareholder in january to prevent them from submitting another proposal in the shareholder meeting. by the way, this was the third time, i believe, they had brought this and twice in the past, shareholders had resoundingly voted it down. exxon's point was they did not want to have to keep handling this. exxon argued that investors could keep refiling similar

proposals at future meetings if they did not get a ruling. critics of the lawsuit said it would have a chilling affect on the petitions. this is all going back to the changes that made it much easier to bring proxy votes as a shareholder who owns not very many shares to do it again and again if the shareholders voted it down. darren woods wanted a ruling on this and the court system to weigh in, not just the s.e.c. >> you wonder why companies want to be private. regulatr laid regulators sud adobe yesterday. adobe hid details of the ex expensive cancellation fee from consumers. hid it in fine print and

optional tecxt boxes. adobe executives made cancelling additionally challenging. they have a simple cancellation process. i need one of those things where you have someone look at all your stuff. >> cancel all my subscriptions. >> stuff that is coming out. could you cancel your credit card? >> yeah. coming up, what to buy? what stocks to buy is at record highs. a closer look at stock picks for your portfolio is next. actually, the person is unable to talk about any specific stock picks. later, senator elizabeth warren will join us to talk taxes and her concern about bank regulation. "squawk box" will be right back. with e*trade from morgan stanley, we're ready for whatever gets served up.

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selective about where to go in terms of individual names. even though all we are seeing are highs across the board. do you think it will narrow in terms of the winners? you also point out money is not going to be free anymore. it is a new paradigm. it will be selective. we had highs across the board. 30 in the s&p. >> thank you for having me on. the new highs of the index level are driven by sort of a small set of culprits. those are great companies, but we think as the regulatory back drop eases, as central banks look to cut rates with positive data, there will be a rally. to your point, you cannot inn d d discrippletively pick everything. there will be things to power creative over the next decade.

new technology and restructuring and aging throws up. >> do you think there is a pullback because of the names pull back or will you outpace the gains in the market if you are looking at selective areas? >> it is never a straight line from point "a" to point "b." as you discussed, there are parts of the tech sector that are overheated. all innovationis overhyped in the near term. i would not bet against tech or winners at this point. >> i was just struck by several banks looking for a reason to cut rates. why? we try to hard, central banks, to get away from zero and back to more normal interest rates

where money costs something and you cut down on investments that shouldn't have been made which causes bubbles and financial crises. why are they so determined to cut as quickly as they can? >> they want to make sure, i think, they are not the ghost in the machine that is distorting economic activity. >> now they decide they don't want to do that? how long have they been distorting economic activity? 10 years or 15 years? >> the mandate for the fed has always been to create a back drop, benign inflation of 2% or pick a number. the explicit mandate was the back drop for economic activity to continue. at some point the conversation will shift to behind the curve. when you get soft data points, you see the chatter pick up. i think they are mindful of not distorting prices.

>> they would rather keep the punch bowl going. they err on the side of printing too much. they do have that. you like europe better than the u.s. or you point out europe looks positive as well? >> europe is under owned. that is in its favor. the u.s. is widely owned. europe has a bunch of sectors you don't get exposed to in the u.s. semiconductor and factory automation. >> this sounds like high quality growth businesses and secure positions in the value chain. also pricing power and self funded. they don't have a lot of debt. clean balance sheets. >> they are doing something very important and they can get pricing power for it.

t they, in some ways, create their own weather. >> without talking about specific names, you touched on this briefly, i think. when you say that wealth is spreading around the globe. you are talking about wealth almost into the middle class. you are not talking about billionaires in terms of affluence. >> that is the bigger phenomenon for companies. the sheer number of people in asia and across the world coming into consumerism and the behaviors and economic activities that they will overpower. >> you talk about people getting older. i think you said unfortunately. the alternatives of getting older are really bad. >> that's true. >> because you're dead.

fortunately. not that i know or experienced these things. healthcare plays. >> healthcare is moving from infectious diseases to managing chronic conditions. essentially, the next can of worms. how do we manage someone whohas a chronic condition, but has a life expectancy. >> we have gottlieb coming on later talking about bird flu. that would solve your problem. he's here. i saw him in studio. >> i haven't seen him in a while. >> that was the prediction 20 years ago. kill half the world. never say never after 2020. would you -- you would prefer europe or spread some of your

assets there? you like the u.s., but also have diversification in europe? >> don't get me wrong. the u.s. is a better market. europe is overlooked. valuations are supported. it will be juicy opportunities that people should not overlook. >> okay. thank you. good to have you on. invesco portfolio manager. that's a big responsibility. do you sleep okay? >> probably as well as you, joe. >> not that well, then. not that well. take any melatonin? gummies? andrew told me about that. >> have you tried it? >> i take the melatonin gummies. it is like self medicatmedicati >> does that make you tired? >> no. you wake up six hours and it's gone. >> if you are not going to sleep six hours? >> i take is either way.

i'm popping them all day long now. not really. no. they're good. taste okay. thanks. when we p come back, a vict of the artificial intelligence. chegg is slashing its work force. we've got that next. "squawk box" will be right back. >> i'm lucky that i'm in a place to feel comfortable in coming out. i'm aware i have colleagues in the industry that don't know if they have that safe space or they may not at all . so when you celebrate pride month, you are letting people you know that your space is a safe space for them to be out.

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>> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. on liechb line education company chegg will cut 23% the work force. the company has a tiny market cap of $3200 m0 million, but ita clear victim of a.i. since chatgpt was unveiled in 2022. the company's ceo gave the first indication that chatgpt was killing its business. this is the company that charges people to help with online learning. the ceo stepped aside at the

beginning of this month. this is something that chatgpt has taken overcome completely. now you can get the answers and have papers written for you by chatgpt. >> there is a stock affected by a.i. >> yeah. >> it's going to be those, too. we keep looking for winners. we've gone one. nvidia. a couple of others. there will be losers. we are watching shares of lennar. stock falling despite earnings above expectations. average sale prices dropped 5% from a year earlier because of the increase use of incentives on those sales to drive orders. rival home builder kb homes is set to report today after the closing bell. shares of la-z-boy are higher. 9 91 cents a share. the furnituremaker executed well

in the difficult housing market and improving supply chain logistics and remodelling the manufacturing operations. when we come back, the presidential campaign fundraising battle is heating up. we've got some details next. later, senator richard blumenthal will join us. he is chair of the committee that will grill the ceo of boeing today. as we head to break, let's look at yesterday's winners and losers of the s&p. >> announcer: winners and losers is sponsored by state street global advisors. ♪ ♪

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good morning. welcome back to "squawk box" here. we are live from the nasdaq market site in times square. nasdaq is strong. s&p is higher. bitcoin is laboring to stay in the mid-60s. 65,5.

down another 2%. overseas in hong kong, the financial hub will end the decades long practice of shutting the storms during major storms, including typhoons. that starts on september 23rd. shut all the time. especially now. >> i saw the thing yesterday that cyclones and hurricanes never cross the equator. that never happens. >> that's weird. >> it is weird. >> they have to start spinning the other way. too hard to stop and start again. like the toilet bowl. i don't know. the presidential fundraising race kicking into high gear. megan cassella is here with more. me megan, we talked about the fund-raiser that biden had that raised $30 million over the weekend. that is the culmination of big fundraising numbers. >> both candidates have been on a tear. both saying that is the biggest in party history. we saw that after the trump

guilty verdict. they raised $50 million in two days mostly from single dondono. nobody has to wait to see if they like one candidate or the other. they are putting money behind the candidate is more likely to win, but less likely or less afraid of. more fear of the other candidate. we see both of them take off and we get the official numbers on thursday. >> we know money matters. you can buy advertising and beef up your staff. does that matter if money comes from big or small donors? >> trump has gotten large checks from wealthy donors who want him to do well. democrats have told me that's fine. they knew he would catch up. if he would get a $10 million check in one person, that is how he will do it. that, of course, will help him

move quicker and raise money faster. >> the grassroots getting or giving he was able to fund raise right after. does that signify anything in terms of roads? it is hard to figure out where the money goes. >> that's the best gauge at this point. who has more -- that's what democrats say in particular. open secrets data had biden with 47% from small donors. that's something to watch when we get the numbers on thursday. who has more? some biden fund-raisers that i talked to this week say trump has momentum. the rhetoric is good for him since the verdict. you see the policy environment, as they describe it, as good for democrats. the roe v. wade anniversary and bump stocks and safety in the news and pride month. these are keeping democrats than ga engaged at the grassroots level.

>> my guess is there's going to be a lot of jockeying after the debate that's coming up. >> absolutely. >> coming up in a week and a half? >> next thursday. >> next thursday. next thursday night. then what? >> you see both candidates take off. that is where the money matters. it could be ad spend. that is the next pivot point. in a race like this where we know so much about both candidates, that's maybe the one type of event that can change the minds. we'll get to see both candidates next to each other for the first time. >> if somebody stumbles. >> we will see if we still have the same two candidates. >> that is something people are talking about. it is not likely that either one gets replaced. we have a few weeks left until the convention. >> i know you are nice and fair, megan, it is only one that might get replaced. >> one more likely than the other? >> the only one we would consider getting replaced.

>> that is definitely where the rhetoric is. becky is right. that becomes what people sort of start to capitalize and say it is something absolutely terrible has to happen to either candidate at this point. >> do you figure out who is more reviled? the sanctimony hollywood fat the cat? >> it is an unfortunate question at the center of the debate. that's the money that's driving this. that is interesting. can we start to tell? we know how high the unfavorables are for both candidates. can we tell they are donating to the candidate they want or the one they are less afraid of? that's the real question. >> it is easy for some people, i guess. jimmy kimmel and i'm running so fast the other way. then, people feel the same way about elon musk. >> and they were paying $25 to just watch that event that some

people who wanted to be part of it and wished they were there. that is how they raised that $30 million. >> i have only seen one part of the event a thousand times where president obama gracious ly helped his friend. >> he stepped in there. >> it's all over x. >> i don't know if i saw the raw burger with the cheese? >> you showed it to me. >> the gas grill. >> right. >> climate change. schumer screwed that up badly. >> is charcoal better? >> no. you need an electric grill like andrew has. >> tyson? >> a plug-in grill. >> to do thepancake grill? >> george foreman. >> i called him tyson. foreman. >> you have to replace me. >> mike tyson can start a grill.

>> ears of corn? that's a good one. >> megan, thank you very much. great to see you in person. >> thank you, guys. coming up, dom chu takes a look at tech valuations in this month's sectornomics. that's next. reminder, get the best of "squawk box" in our daily podcast. it is hard to fit it all in. seriously. how long is the podcast? >> as long as we want it to be. >> it's impossible. it's a three hour show. it needs to be three hours if it is the best of. listen any time. we're coming right back.

nvidia has raised eyebrows with the staggering run, but is it overvalued?

one metric is telling an interesting story. dominic chu is here with the sectornomics. sectornomics, like carbon and motel. sectornomics. that's like part sector and part economics? bidenomics? >> yes, yes. except for the overall economy. if you want to look at it that way, that's the way we can. for sectornomics this month, we talk about the valuations in one metric for the most important sector which is the technology sector. it has been driving the market. it is now 30% of the s&p 500 overall and bigger part of the nasdaq 100. if you can take a look at this particular move for nvidia. that is the talk of the town and last decade in terms of the stock market. the massive out performance over the last year over the broader tech sector at 34% has been a huge driver. leading to questions of whether or not this is an overvalued

stock. it is by many measures, but there is one that traders and investors are looking at right now that may be doesn't seem like it is so far out of the realm of reason in terms of valuation. that's the price-to-earnings growth multiple. that is one of the things where people and traders and analysts look at the earnings. according to this metric, if you look on the forward basis, s&p 500 valuation on the forward price-to-earnings ratio basis is 1.3. the s&p 500. the tech sector stands at 1.7. if you factor in the forward price-to-earnings multiple and growth rate for nvidia, it comes in below 1%. that is under valued for nvidia. to put it in perspective, guys, i picked out the other names we know. brand names to look at what their forward price-to-earnings

forward ratio. ibm is at 3%. apple is at 2.7. microsoft is at 2.0. amd is at a discount to nvidia. if you want to look at those multiples, joe and becky, many a analyses, some traders claim nvidia is a bargain at current prices. we will see if it plays out in the coming weeks and months. back over to you, joe. >> we heard it is $3 trillion, but if you look at normal valuations, it just doesn't seem out of line. >> especially with revenue. >> thank you, dominic chu. when we come back, dr. scott gottlieb will join us. as we head to break, nextera

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shares of merck are up higher 1.25%. the fda approved the vaccine to protect adults from a bacteria that can include serious illnesses. it is the pneumococcus.

in the new op-ed, dr. vivek m murthy talked about the social media dangers to children. leading to warning labels similar to those on tobacco and alcohol. joining us is dr. scott gottlieb who is a board member of illumina and pfizer. good to see you. >> thank you. >> it is something getting attention. do you think it is effective or get passed? >> i don't think it will pass. there is a high bar to compel speech and force companies to engage in speech. typically, there was a risk of the public health harm. i don't know this meets that threshold. we all know social media is harming youth, but the harm is not so direct and the scientific evidence, right now, doesn't

meet the threshold as alcohol and tobacco. >> really? >> i don't think it is diffused. they don't have the body of evidence to support this. he is dlauirawing a lot of atten to this. it is clearly a lot of a problem and literature of overuse of social media and mental health harms to children. >> raising awareness and getting this talked about. joe and i talked about how social media has been around for 20 years. literally 20 years and congress cannot agree anything to protect children in any way, shape or form. it is a bizarre set of circumstances. >> this is where he can provide leadership and come up with a set of best practices for the social sites to follow. if you look at facebook and mess messenger. they tweaked the algorithms to

make sure children are not seeing i amnappropriate content. also giving parents more parental controls over what their kids do online and ability to review messages. what the surgeon general can do is come up with a bill of rights best practices. congress may come in and legislate that. that is what we did at the fda when we wanted the social media sites to restrict advertising to kids relating to vaping and opioids and we have the social media sites taking that down and we met with them and come up with a best practices list to follow. that was the better framework. >> it reminds me when you were head of the fda and vaping thing you did do. it brought up awareness and attention and you cracked down on things. you took leadership to that. >> we got them to restrict

advertising to children. messages were targeted to kids about vaping. some deliberate with a company like juul. the sites worked with us on that. we did not have direct regulatory authority. by drawing attention to the problem and bringing them in, we conducted a series of round lik. they agreed to a set of standards. now, what the surgeon general did yesterday will draw more attention to this and kind of a splashy event. that's where he can operate, and if he comes up with a good set of standards, congress may look to legislate some of that. compelling companies to put a warning on products, we tried to do that in the fda for certain instances, corrective messages

related to drug side effects where they did not adhere to medical standards, and that's first thing is to protect the speech. >> i don't know anybody that goes to buy a pack of cigarettes, oh, i better not do this, but the general awareness is what it is. >> my kids use snap chatgpt because the mess knowledges are erased and there's a program like bark, a hardware and software device that gives you functionality to see who and what the messages say. parents need to get engaged. they can tweak the al tkpwau al

tkpwau rhythms. >> you heard joe say he's taking melatonin, so what is a safe level to use? >> the two gummies contain 6 milligrams -- >> yeah, i said 10 milligrams -- i asked how much you were taking. 10 milligrams is the limit. there's a prescription, and it's generic, and it hits a rescepter in a more robust fashion. if melatonin works for you -- >> it doesn't work for everybody? >> that's true, and -- >> no, i am asking you. there's data on this. i don't think any of the sleep

aids work for everybody, and some people have more of an overhang -- >> melatonin is short acting, so probably won't give you that. >> and it reacts with some medications, so talk to your doctor before just popping them. i am serious. >> it does -- it's kind of like self medicating, which i did in college quite a bit. i like to feel the drowsiness. >> well, like i sewed, it -- >> yeah. >> there's a prescription in melatonin, and so there's some variability, but 10 milligrams would be the upper limit -- >> you could have told me about

the frickin' vaccine, but you didn't. >> thank you. >> i think it saved our bacon, did it not, the vaccines. very helpful. and we will dig into apple's move, next. is it me... or is work not working?

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apple is ending its apple pay later program. >> pay later makes it easier. >> shifting instead to offer installment loans through third companies, and joining us now, dan flax, research analyst.

seems like a pain to almost have to be a bank in terms of lending standards and everything else, and is it smart of apple to outsource it to a third party? >> in this case probably it makes more sense to work with partners to drive more options for their customers. if we look at the company, the answers around apple intelligence, involving the user experience to the next level with the continued integration with hardware, software and integrated services, looking into the latter part of this year and 2025 with apple intelligence contributing to a richer user experience with better siri announcements and so a whole host of other things will drive continued growth of the installed base that sets up revenue growth, so i continue to

like the name. >> i don't know if we have talked to you since we saw apple's plans for ai, and i just wondered if that played out the way you thought it would? initially it seemed like the perception was that apple was a little late and wasn't developing things in house, and was behind the curve. suddenly when they outline the plans, the stock, you know, rocketed to new all-time highs based on that. i just wonder, what do you think investors took away from the way apple is approaching ai? maybe it's good not to be, you know, spending billions of your own money to try and develop? it reminds me of streaming, like, if you were not streaming you were an idiot, and later if you were you were an idiot. it's crazy. >> joe, their history suggests

they would rather be deliberate in getting the experience right. you saw the ipod, the iphone and ipad and all the products since. what you are seeing now is the same thing. they are know focus on trying t balance the customer experience, and the other important thing which was positive last week is that they are continuing to bring more tools to the developers. this speaks to driving and creating a vibrant ecosystem that people can build on top of. taking the devices and services and the developer community putting all that together in my view lays a strong foundation for the next wave of growth over the next 24 months. this will take time to play out, joe, but i think the company is

approaching it in a thoughtful way. >> and that's going to be the next driver for apple stock ai or is it something else? is it expanding the ecosystem? is it, i don't know, a new iphone or upgrade cycle? what is it that takes apple to the next level? >> i think it's a broadening -- or rather a continued broadening of the revenue drivers. artificial intelligence on its own, i don't think, is sufficient. the key is the install base is growing and the math around that is even with extended replacement cycles, you can generate over 200 million iphone unit sales a year. more and more customers have been mixing up to the pro and pro max which helps asps, and that continues in my view. you layer on artificial intelligence and that could be an incremental driver over the next 12 to 24 months. the key is if you look at

services, $100 billion business which is growing double digits, and mac is healthy, and wearables is just getting going, and so it's the broadening of the growth drivers, joe, and infusing ai across all of these devices and services. that drives growth, in my view, and sets the stock up well. >> did you use siri today, dan? >> i did use siri. siri continues to need a little improvement, joe, but i think she will get better. >> that's a nice way to say that. i hit something and it came up with ah, and i asked a question about something with ai, and i typed in and looked at what siri changed the words that i was typing in, and i had to fix it. >> you mumble a little. >> i wasn't -- i was typing. >> oh, you didn't ask her?

i can't type -- >> woell, she's a problem and nt a help to me. >> can you shut it off? >> well, you will see new partnerships and app providers that will build on top of it. >> is there anything you don't like, dan? there's never anything bad? >> the risks run with all the companies, and apple in this case continued to reinnovate and -- >> i draw the line with you liking siri. >> she needs work but i think she will get better, though. >> it's a low bar. thanks, dan. see you later. >> thank you. it's 7:00 a.m. on the east coast. you are watching "squawk box" right here on cnbc. i am becky quick along with joe kernen. andrew is out today. among our top stories today,

fisker filed for bankruptcy about a year after it released its first ev model. it's the second venture that has gone bust. and then a move that could help pressure amazon in contract negotiations. they won landmark victory in 2022 organizing thousands of workers in staten island, new york. it lost two other elections and attempts to bring amazon to the bargaining table when it comes to contracts. and dave calhoun under the gun today following whistleblower allegations and january's midair door plug blowout. we're seeing some buying

once again, but less so than the last time we checked. let's get to dom chu with this morning's premarket movers. >> i think bryson has turned into an outstanding golfer, which we know he is at this point, and also because he's a content creator. i have watched his reels and everything else, and so it has been an interesting move for bryson overall. but to your point, let's talk a little about our tuesday morning movers. let's choeck on occidental.

there's another purchase by berkshire, and according to regulatory filings they purchased 2.9 million shares in the last trading days bringing the total to 3.5 million shares. that's where around $15.4 million. now, shares of merck up about a quarter percent, north of 2,000 shares of volume. there's a vaccine for pneumococcal in adults. those merck shares are up 1% plus. and then capping off in the home building business. lennar, shares down 3.5%, down 4,000 shares of volume. it's forecast for current home deliveries fell below some

estimates, and the selling price of those homes are lower as well as year over year, and keep an eye on lennar, down 3.5%. i will send things back to you as i check out more reels on how to hit it far. >> in my whole life i don't think i ever hit the ball right. covering -- you know what cover so you get your hands -- you get that angle? do you know -- >> it's about lag. >> yeah, and you have to hit the ball, just compress the ball. it's much more consistent. i will have to take you out and show you. >> we will do it off-line and tell the entire audience how our golfing outing goes next time. >> yeah, and we have to play

with frank and -- >> we're trying to figure it out. >> all right. when we come back, kkr chief investment officer, henry mcvey will join us with his outlook. and senator richard blumenthal that chairs a sub committee holding the hearing will join . quk x"ill be right back.

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doc? welcome back, everybody. markets continue to make new highs with the s&p 500 logging its 30th record close this year. a few minutes ago kkr released

its outlook for the second half of the year spwaoeuplgtsed opportunity knocks. for more on this and the markets we want to bring in henry mcvey. he's chief investment officer at balance sheet at kkr. good to see you. >> thank you for having me. >> let's talk about this. you say opportunity knocks. what is different than six months ago when you put out the glass half full? >> i think there's probably going to be more election uncertainty and political uncertainty as we head into the second half of the year, so our point was don't complain about the noise if opportunity is knocking. when we look around the world right now, our businesses is actually picking up and our infrastructure business continues to be strong. what is different that we are seeing now, there's a lot of activity around the world where companies want to shed

unprofitable subsidiaries. and look in the public markets, and we focus mostly in the private, and energy is still interesting to us. i think within credit, there's a huge wave of refinanceings. when you look at what is happening on the supply side, there's not a lot of credit creation. i was recently in europe, and you see this in the u.s., about 40% of the debt issuance is refinancing. it's been a productive environment. a lot of our credit investors, particularly for the insurance companies we do business with. >> meaning a better place for it? >> yeah, an inverted yield curve, and you can pick up a high-digit yield, and in many countries around the world you can get a positive currency roll down because the dollar has been

so strong. we have left that world and we have talked for years about it, and we left the world of the zero interest rates and the new normalization is leading to cios wanting to do more broad-based acid allocations, and when rates went down, you bought venture capital and long duration debt. people are being more thoughtful and proactive around short duration credit. let me have infrastructure, cll liabilities, and weequities wit dividend builds. homebuilders are buying themselves back. there's a huge amount of capital which is the result of putting too much money in the system post covid, and the capital is finding a home in different avenues and you are seeing a break between people being

thoughtful about the capital allocation than those that are not and in our opportunity that's an interesting opportunity. >> infrastructure, that's government spending in all of this? >> what is happening is there's a mismatch between energy demand and energy supply. we are spending all our time on the back end, which is electricity has gone from zero growth in a decade, and if you think about that in the u.s., what it's doing to the grid. it's putting a huge strain on it. the demand for energy, that's equivalent of adding 24 million homes to the u.s. grid set. what that means, if you have the infrastructure around the energy and connect to where the ai demand is, there's a huge benefit. data centers, data, fiber, towers, and all of those will continue to benefit.

at the same time there's a lot of creeky infrastructure. we, generally, in 50 to 200 companies around the world, post covid they are restructuring supply chains, and the power goes out in mexico and you have a flood in california, and that's creating a much more robust cap x cycle than in the past. >> in the u.s., that's a highly regulated arena and that's one that takes a ton of time for -- >> there's a lot of activity around data and i wouldn't think about it just as putting in a transmission line up. >> you are thinking about the datacenter itself? >> yeah, you have to cool the datacenter, right? there are lots of different ways to play that. the big story globally that is going on, u.s. productivity.

if you look, money is come into the united states. we're seeing in the last four or five quarters, productivity go to about 1.5%, and if that continues that will continue to bring more money into the country and create a lower cost of capital. >> henry, your point that i think is really important and interesting is that we no longer see stocks and balances offsetting each other, where if one goes up the other goes down, and they are far more correlated and that could mean pressures to your portfolio. >> this is a huge deal. what happened in 20 years, when stocks went down, there's always an achilles hill in, and we aret seeing single asset volatility of different assets go up. we are seeing the relationship

between stocks and bonds. if you are on a board of pension or endowment or whatever, you should know your benchmark is getting more volatile because the relationship is changing. the most powerful cios are less correlated to that relationship. what you learned in the last 20 years about acid allocation and macro, you need to throw that out the window and learn more about that, and there's a piece about that that will garner attention. >> what is more correlated? >> a couple things you can start with, don't have such duration, because you will be more susceptible to bonds. you need to diversify across a broader suite of products, and some cll liabilities and infrastructure and different forms of credit. within equities, there's both

home for public and private. we were in the period where the more you own growth and the more it was in the terminal value, that worked great when the fed was suppressing rates. today i think we are in a higher resting heart rate for inflation and certainly given the deficits, you can't use the old playbook. >> higher resting heartbeat. i like that. thank you. >> thank you for having me. >> thank you for having me. could see that? that's like the gap what pixar movie is the crown-holder for the top animated domestic opening?

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"incredibles 2" which pulled in $183 million. hybrid vehicles have been on a hot streak over the last year and a half over the wave of new priced electric models that could have that changing direction. phil lebeau joins us now. >> hybrids, there's greater selection and lower pricing than evs, and they have taken the wind out of the sails of evs. look at the current market share when it comes to ice vehicles, hybrid versus evs. well, that 7% and 10.5% will be changing. when will it change? bank of america out with its annual car wars report and this is a benchmark analyst report that the industry looks to every

year. and john murphy from bank of america said expect evs to outpace hybrids. here's john murphy talking about that. >> what we are seeing right now is a slightly faster growth in hybrids, but both hybrids and evs, by the time we get to calendar year 2027, reaching the mid teens penetration rate, and that's what hybrids will stall out in, and we expect evs to grow doubling that by 2030. >> tesla, gm and toyota over the last year. the reason we are showing this to you is because i hear from people on a regular basis. they said tesla is dead in the water here for a while because evs aren't selling. that's going to change at some

point. i don't know if skwrepbt motors will outpace tesla and toyota. this wave coming, joe and becky, it will have people saying i am ready to make that transition. the question is when. you have a lower priced tesla model coming early next year. chevy equinox, that's the base model and the federal tax credit brings it under 30,000. that's just the start. then you have foreign automakers also coming in with lower priced evs. hybrids are having their day in the sun, and this is a period here in the eyes of john murphy will probably run its course by 2027, 2028. >> maybe that's why i wasn't

really so sure whether this was going to be right, phil, because it's 2024, so all through next year and then the year after still have this sort of malaise. i was trying to figure out -- it's the whole reason we talk about hybrid so much is because it's been their game and the electric car's loss. you are saying a major part of the reason evs are not selling right now is because of price, and then the other reasons, you know, why they don't rent them because you don't know if you have to charge them and don't want to wait in line. i thought of all those things and i didn't think elasticity on price is a reason. >> i think that's the main reason, joe. >> i still don't want it. i don't care if it's cheaper. if i wanted it, i would have done it with a cheap tesla. a cheap equinox, i don't want

that. >> look, joe, the market will show right now evs are about $10,000 more than what you would pay for in an internal combustion vehicle, 8,000, $9,000 more. they are cheaper than evs. you eliminate that difference there, and you definitely are going to get more people -- >> you do have those issues. >> those are certainly there. >> i am not saying the market is going 100% in the evs, by '28, '29. you are having people wanting to make a commitment away from internal combustion in vehicles, and right now that's a bridge too far for ev so they are going into hybrids. everybody in the industry realizes as the wave of lower priced ev comes in, that will turn. >> how much does it cost to charge an ev versus filling up a

gas tank? >> it depends, becky, on where you are and what you are charging. those charging at home, they are getting the best deal of anybody. i can tell you this, research shows once you go electric, you don't miss going to that gas station. when your next vehicle comes up, you don't suddenly say, i am in the mood to buy a internal combustion vehicle because i miss going to the gas station. >> the conversation we just had with henry mcvey, the demand for electricity because of artificial intelligence, and we are going to run short, and another guest said electric or energy prices could rise -- i wonder if that will be a factor? >> i think we will go through periods where it's going to be a limiting factor.

there will be periods, and it's not going to be a straight linear growth for evs. >> we know that. >> but there will be other issues. >> yeah, we already know that from the last year. it's kind of a shock what's -- i mean, the poster child is hertz. what a screw up that was. >> not a good call. >> no. it's a great company, you know, but you better be ready -- you go to a different city and you better be ready if you are going to rent an electric vehicle in some city you don't know. didn't work. thanks, phil. >> you bet. when we come back, more on the markets. in the next hour, senator elizabeth warren will be our special gut.es we will talk taxes and bank capital requirements and her thoughts about red lobster and what she thinks really went

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inspectors. the department of agriculture said the inspections will remain on pause until the security situation is reviewed. local press reports say two inspectors were held against their will and attacked amid a protest over police pay. when we come back, boeing ceo, dave calhoun, set to face a senate panel today over safety and quality issues. senator richard blumenthal will join us. nasdaq up by 44, and the s&p futures up by 4, and the s&p and na nasdaq setting records again yesterday. "squawk box" will be right back.

this is realtime insights. i am hear with tom edwards, ey's managing director, ai. businesses are being asked to completely transform in response to ai. talk about the impact you are seeing its having? >> artificial intelligence asked us to analyze data in a scale we never have seen before. one of the companies we're working with, fossil, is using ai based on customer insights. >> can you talk a bit more about how companies can take advantage of these opportunities? >> ai is not only an accelerating but differentiator.

it's not enough to focus on one specific process area. you can evolve across people, process, service offerings to remain relevant against your competition. >> you mentioned the fossil example. what about other industries? >> we are focussing on value creation. what we found is every 30 second saved on customer support it equates to a million dollars saved. now we are expanding that from commercial analytics to sales and others, and that's one example of many. >> tom, thank you so much for sharing your insights. >> thank you so much for having me. boeing ceo, dave calhoun,

will face a senate sub committee to talk safety concerns and quality control issues. joining us, senator blumenthal. it's good to see you this morning. thanks for joining us. this has been like a novel over the last five or six years. just wondering, after we had the fatal crashes, the company was put on probation. they insist the things they were supposed to do, they have lived up to their obligations. if they didn't, there's some chance they could be prosecuted by the justice department. where do you come down on things? did they live up to the conditions of the probation? >> thanks for having me. the answer is very simply, no, they have failed to comply with the conditioned of the deferred

prosecution. remember, they paid about $243 million in fines and a total of 2.5 billion to the combination of customers and loved ones of people who were killed in those two crashes. the deferred prosecution depended on their complying with integrity and ethics and proper reporting. the whistleblowers that have come to us, and we have about 12 so far, told us about the use of nonconforming parts, defective or damaged parts in airplanes, and continued lying to the faa, and the kind of concealment and pressure against the whistleblowers, in fact, telling them to shut up instead of speak up. there's mounting evidence that should not only deferred

prosecution be pursued, but the company should come clean with the american people and its customers and employees, and with the american public. >> is there anyone -- do you or any other members of the senate or in washington think a felony conviction, if that were to happen, would that -- that's kind of -- is that a bridge too far to one of our great manufacturers? would that be self defeating for what we are trying to accomplish? >> great question. the goal of the hearing is really to help boeing succeed and restore trust and regain credibility as one of the great manufacturers, one of the two aerospace manufacturers of airplanes in the world, and airbus is the other. we need boeing and we need it to be putting safety and quality

ahead of profits or stock price. the idea of a felony prosecution may be a deterrent, but in the end we need to help boeing succeed. the goal is not to prosecute or penalize. it is, literally, to help boeing change its priorities so that, in fact, profit is secondary to quality and safety, which, at the end of the day, will be good for its stock price and financial well-being. >> that's the point i was going to make. to blame it on the profit incentive, it's almost a chicken and egg thing because, obviously, they are saying not to worry about the next earnings report. do you know how many bad earnings reports this company has had because it didn't focus on the ps and qs of

manufacturing a safe process? they didn't think about what is going to set us up for profitability, and all of the safety issues would have taken care of themselves. the profit incentive would be a reason to not let this stuff happen. >> well put. in fact, long-term interests here would have been much better served if the company had focused on quality and safety, and incentivizing employees and their unions to come forward as they have very courageously rather than the next earning report. here's the key. they focus on the speed of production. >> right. >> so for example, they want to produce more airplanes, but as you well know, if the airplanes have risks and the risks cause panels to blow out or worse yet,

crashes, it's not so much a matter of prosecution they should fear, it's the loss of life and it will deter people from flying on their airplanes and customers from buying them. this could impede its reputation for policy if it focussed on long-term interests, and let me be blunt, it has to do more than just musical management, musical chairs with the proposed change of leadership. >> i don't think the pay was affected very much. in reading exactly what happened, senator, they tried to pin it on this one guy, a pilot who supposedly recommended cutting corners for the new software a couple years ago that resulted in those two crashes,

and he was even acquitted. seriously, the company found one person to try and offload all of the responsibility for the shortcomings on one guy? it didn't go any higher? no management types that should be held accountable at this point? >> accountability is key. you are right. after the two crashes, they blamed it on the pilot, and by the way, the pilot had been given awards for efficiency because he saved money, which was the goal, in shortchanging safety and nobody in top management was held accountable and that's why the deferred prosecution now has to impose accountability, and they have to name names because changing

depends on telling the truth. what boeing has done is push the blame down to the factory floor. they have tried to retaliate against the whistleblowers, and we have about a dozen, who have come forward and tried to tell the truth and improve practices, and blamed them for everything going wrong rather than trying to improve the practices. that really is a recipe for disaster as well know long-term in corporate management. >> is it not enough for the chairman to be leading, and the ceo to be leaving and the head of the top managers, and you want prosecution on top of that? >> prosecution isn't the goal in and of itself. a better company is the goal. prosecution is justified by

their failure to comply with conditions that were imposed when the government said, in effect, okay, if you do the right thing, you will be off the hook for pass violations of law. now they have repeated those violations of law and deterrence and just punishment are part of the goal. in the long-term, changes in management have to do more than just change the ceo. that was the lesson of firing the last ceo and putting dave calhoun in place with his promises that things were going to be turned around. well, apparently they haven't been turned around, and part of today's hearing is going to be showing the world about what the path forward should be, more than just a single person or moving the manager in charge of operations into commercial aircraft and so forth playing

management musical chairs isn't the answer. >> senator blumenthal. thanks. we will be watching what happens today. thank you. when we come back, the first crop of microsoft's ai co-pilot pcs go on sale today, months before we expect apple's ai features to hit macs, ipads and iphones. we will talk about that race after the break. plus, goodell defending the league's ticket package, and the latest on what it could mean for future media deals is coming up. we'll be right back.

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we know about the ai apps and software after weeks of announcement from the biggest companies in the game, but starting today microsoft is kicking off the artificial intelligence hardware race launching a dozen models of ai computers months before apple switches on all the ai features you heard about last week. by the way, part of the pc push saying the latest devices outperform the mac, and they call it co-pilot plus pcs, which is a clever way of saying they are designed to use the device rather than the suburb net. this is coming from different brands, microsoft, of course, and samsung, hp, dell and novo and others you are familiar with. microsoft said it expected 50

million co-pilot pcs will ship this year, and 242 million pcs were shipped in 2023, so the ai pcs will be a tiny fraction of new computers. what can you even do on a co-pilot pc? they run a version ai feature called recall, because of privacy concerns. recall takes screen shots every few seconds from your pc to create a searchable database of your history. what could possibly go wrong there? so they yanked that feature for now. these pcs, though, still going to launch ahead of apple, but missing that key ai feature. by the way, still not clear if ai pcs, or phones, is enough to spur upgrades. same story with apple and what it announced last week. >> you need to go faster with all of this stuff, i think. >> what do you mean? >> i don't know, i want it now! >> you're buying one? >> no, but i drove by the microsoft store on the way here.

>> so you're not buying one? >> no. i don't need a computer right now. >> you don't need ai? >> an apple phone -- >> that's what's interesting about the apple thing, they're going way old school, and they're doing that planned on opulscence, they're doing that. the real questions is, are these futures good enough to make people say, hmm, i didn't need a pc this year, but now i do. >> my instant bias is i don't want to bebeta terrster. >> by the way, this is beta, and that recall feature is a test feature. so you will be beta tester. it's not going to be perfect.

this is microsoft and apple are saying it's not going to be perfect. it will be a while before it all shakes up. >> and one thing when i say, wow, ai is great. >> right now, the answer is not today. >> should i ask you ai -- >> it will tell you right now, i'm sure. don't ask siri, who knows what it will tell you. >> i feel bad, i've been saying such bad things about siri, lately. >> it's well deserved. >> i know. they're trying. >> they're trying. the $3 trillion company is just trying really hard. >> is the benefits of ai -- i mean, when am i going to say, i absolutely need it, but is it going to be benefiting me without me really realizing it underneath the surface? >> i think, yes, but also what i think is, we're talking about this race right now between who can launch first. eventually, it's not going to matter. remember in the late '90s, it's like, we have internet now on pcs, now it's just table stakes. i can see that happening sooner

than later. it's going to be like having wi-fi on your phone or something. we're almost there. >> that's not a profitable -- >> no, not at all. >> thank you very much. when we come back, did the nfl sunday ticket plan violate anti-trust laws. we're going to talk about that, next. let's check on the futures ahead of the retail sales data that we're expecting today, that number, the reaction, and the state of the consumer is coming up in just about 35 minutes' time. if you look right now, dow futures up by 2. s&p futures up by 4. the nasdaq up by 43. "squawk box" will be right back. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call

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the nfl faces a major lawsuit that could cost the league more than $21 billion if things don't go their way. the case involves its sunday ticket plan, and whether the nfl violated anti-trust laws by offering that package to consumers. for more on this, we want to bring in patrick rish. he's the founder and ceo of sports analytics and consulting firm, sports impact. and patrick, walk us through this. yesterday, roger goodell testified, but, what is this all about? what happened to kick this off?

>> well, ultimately, it comes down to the way these things have been packaged in the past. and the plaintiffs in this case, a class action lawsuit, are claiming that the nfl by packaging these games on sunday nfl ticket is doing so and violating anti-trust rules. on the flip side, the nfl believes that they have antitrust exemptions when it comes to broadcast. the plaintiffs are arguing that that's just with respect to over the air television and not paid tv. i think it's a fascinating case, becky, as obviously a consumer of the nfl myself, i know you and joe enjoy it as well. i understand that the plaintiffs and consumers that don't want to purchase and watch all the games, they want to be able to a la carte pick the dpgames that they want to watch. one of the reasons why this has become such a popular product is look at the proliferation over the years of fantasy football and now gaming. where this will end up will become a fascinating outcome. >> what's the collective mentality that goes into this?

the exemption they have for pr broadcast, it does seem if you're getting something you wouldn't normally be getting, we can charge you whatever you want. >> it goes back to all the other spots in baseball, basketball, hockey, you have the ability to pick and choose the games you want to watch. but again, at the same time, the nfl comes back and says, look, we offer games for free on broadcast tv in every market, and we have all of these different packages that people can consume. if you want to be a slinger and watch the nfl red zone, you can do that, which is the highlighting of uall of your games, and the sunday package, you can watch all of the games in all of the markets, but you have to pay that premium price. one of the compromises we may see out of this is just like for individual sports teams that have season tickets and mini plans, there may be a compromise and you see some kind of mini package, where it's an offchute of the sunday nfl ticket plan. >> meaning you could pick three

to five teams or three to five games you want to watch and not pay the full price for it? >> absolutely. i think that that's a reasonable compromise, because, again, there are going to be some people out there, they want to pay the premium price, because they want to have access to all the games, because of fantasy, because of betting, or just because of the love of the sport. but there may be others, understandably, that just want to pick or choose three to five teams. >> if that's the compromise, we're already to the point where roger goodell had to testify. that's the first time he's had to do that since he was made commissioner back in 2006. this seems like it's pretty serious. there's a lot of money, potentially, on the line. we mentioned in the heading on this, $21 billion has been thrown out there as a potential situation. doyou see a compromise situation that backs out of that once it's a class action lawsuit and so many lawyers are involved? >> that's a great question. and again, if you compare it to the lawsuit with the rams and the nfl ended up settling in that case, but it didn't go to trial. the fact that both sides took it

to trial, they both really have strong arguments. and jerry jones, owner of the cowboys, also testified yesterday, and i think it's fascinating that he made an argument where he was against individual teams being able to have their own broadcast deals, as they do, as i said, in baseball and basketball and hockey. and for him to say that, he would be one of the chief beneficiaries of that. i think that's a pretty strong argument that the jury and the judge will take into consideration. >> meaning that even the strongest players want to make sure that they are keeping the nfl together on this? >> absolutely. >> okay. patrick, thank you. patrick rish. >> and it is almost exactly 8:00 a.m. on the east coast. and you're watching "squawk box" on cnbc. i'm joe kernan along with becky quick. andrew is off today. among the day's big stories, the may retail sales report, that's out at 8:30 a.m. economists expect growth of 0.2%. 2% would be bad. never get a rate cut. but 0.2% from april.

we'll have the instant reaction in the numbers. meanwhile, a "wall street journal" report says that the fdic, becky, is preparing to give citigroup -- did you get her reaction shot -- >> i tried. >> you were -- i mean, i saw you, you were just -- your jaw dropped when i was reading your story about the fdic preparing to of give citigroup -- can you believe that, a failing grade for its living will plan. the report says that the fdic board intends to vote thursday to downgrade its rating from citi's data management systems, to deficiency from shortcoming. that is a shock. big banks are required to file living wills to outline plans to wind down in the event of a debilitating financial crisis. and adobe shares are lower this morning. u.s. regulators suing the maker of photo shop and acrobat, accusing the company of making it difficult to cancel subscriptions. the doj said adobe hid details of an expensive cancellation from consumers in fine print.

ad adobe's general counsel said, we are transparent with the terms and conditions of our subscription agreement and have a simple cancellation process. somebody's not being total truthful here. >> difference of opinion. i suppose. let's check out the futures. they are still in the green, not by a lot, but you've got the dow indicated up by about five points. same story for the s&p 500. the nasdaq looks like it would open up by about 45 points. treasury market is showing slightly higher yields, but well below the highs we've seen in recent weeks. the ten-year is at 429, the two-year at 4.77. let's get over to dom chu with a look at this morning's pre-market movers. >> we'll start things off with a check on dow component, merck, which is higher by nearly 1.5% right now, just around 5,000 shares of pre-market trading volume. the pharmaceutical giant is getting some help on the regulatory front, after the food and drug administration approved the company's vaccine against pneumococcal disease in adults.

the injection is meant to prevent against 21 different strains of the bacteria that can cause the disease and lead to more serious illnesses like pneumonia. merck shares up 1.5%. >> next, shares of kroger higher by about 1.5%. the grocery store chain behind companies like harris teeter is getting an upupdate to outperform from market perform. the target price goes up by $2 to 60 bucks a share. they think the recent pullback that you've seen here in kroger shares represents a good buying opportunity, regardless of the outcome of kroger's pending purchase of competitor al albertson's, so keep an eye on those shares of kroger. for more on that and other top analyst calls of the day, head over to cnbc.com/pro, subscribers there can get more details and analysis of the big calls of the day. we'll end with a check on shares of gamestop, that are down about 3.5%, around 700,000 shares of

volume, following up on a 12% drop yesterday, after the video game retailer and original meme stock did not offer much in terms of detail about its future strategy during its highly anticipated and delayed annual shareholder meeting. that meeting, by the way, only lasted about half an hour, and no shareholder questions were made their way into the agenda. gamestop following. remember, during the regular session, we hit an intraday high of nearly $65 per share. currently trading at $28.78. back over to you, joe. >> thanks, dom. let's get to some macro analysis now of what's happening globally, primarily fixed income. joining us now is pria nixa with jpmorgan asset management. you think, at this point, good to see you, we can declare victory, kind of on an inflation and start worrying about growth

and whether we're staying at the tightening party too long. >> i think -- number one, thanks for having me on. i think the market's focus has shifted, including the fed's focus has shifted from just inflation. you talk about, can we declare victory? no, the data is notoriously volatile. the fed, i think, has a little bit of ptsd from what happened in the fourth quarter last year and the first quarter of this year, the fact that inflation came in higher. we've had two months in a row of sequential decline in inflation. inflation expectations are well an cord. wages are actually heading lower. and much of the high inflation print is all coming from shelter. shelter is important, but some of the high-frequency measures are coming down. i think we can a little bit more comfortable around inflation. and you look at the growth side, that's where there has been a change. and i think the market is waking up to it. this idea tlhere is declining growth. are we declining a little bit below trend or much more? that only time will tell.

there is clear slowing. that's why the fed is saying, we need a little bit more confidence to cut. but we're either cutting 200 basis points, 250 basis points, if we stay in a soft landing or we're cutting a lot more. so i think that distribution of outcomes just, you know, the last time i was here three months ago, we were talking about are, do they hike, stay on hold, do they cut. now we're talking about, at some point, this year, they're likely to cut. the question is, can they cut fast enough. if inflation remains sticky, monetary policy works with a flag. do they not cut fast enough that they can actually prevent growth from continuing to slow down? recessions are always non-linear. it is a concern, i think, for the market, which is why that retail sales number is going to be so important. >> we'll be watching that. now, you think that there is some risk that it's more than a soft landing then? >> i do. typically, all the lowdowns we've seen, think slowdown and

sometimes the slowdown, it's very non-linear decline in growth or rise in the unemployment rate. we haved a 0.6% of an increase in the unemployment rate. now, if it continues, i think i'll get a lot more nervous. right now, we think we're solidly in a soft landing. but soft landings in my mind are always about pricing in those risk scenarios. the risk, a few months ago, was that inflation would stay high. i think that's coming down. the risk now is, can the fed be quick enough, do they cut fast enough? we've had only one soft landing in history. 95. as much as our base case remains soft landing, we still think risk assets make sense. i think you're supposed to do a lot of credit work, make sure you're buying balance sheets that you like or business models that make sense, because dispersion in every sector is increasing. we're seeing it in the equity market, in fixed income, that's a sign that monetary policy is tight, growth is slowing. you know, the future is hard, but i would say, at this point, we're in a soft landing, but the risk to a slowdown are starting

to increase and we're watching the fed. can they be quick enough to start to cut rates, start to reduce some of that restrictiveness. >> and some of the cracks that you see emerging, lower-income households. so for lower-income household, they get hit with inflation, and when things start working in terms of inflation, they get hit by slower growth. they get it coming and going, skm and small businesses. >> exactly. i think they're linked, and technically, hiring tends to be small business driven. some of those small business hiding intentions have been declining pretty fast. so what's holding all of this up? what's holding even the lower income consumers is the job market. so as much as we're going to watch retail sales and all parts of fed, look at control group, i think it's the jobs market, and we're getting mixed signals there. the unemployment rate is moving up, but the establishment survey, which i think overstates a little bit of the strength, is still showing very strong job growth. if the job market can hold in

here, we get 150,000 or so payrolls, i think the soft landing persists. but the risks are that things slow down faster, and i think that's what the market, the fed, everyone is sort of hyper focused uon. >> we don't have time, but you need to watch the french elections too. it could impact what happens in your view. >> absolutely. we should. i think what we're also seeing is an unwind of the carry tree. in a soft landing, you buy carry. you think volatility is low, volatility picked up with the em elections and picked up with the upcoming french elections. we have the u.s. election coming up. >> what?! >> so we need to make sure you have liquid satisassets, safe a, so you don't have to throw out the trades, and not forced to unwind. that's the spillover from the french elections. >> is that this year? >> what year is this? >> 2024! you're absolutely right. november of this year. pria, thank you. >> thanks. when we come back, boeing ceo dave calhoun is going to be testifying on capitol hill

today. that stock is down more than 30% year-to-date. is this a buying opportunity? we'll talk to an analyst about that, next. and at 8:40 a.m. eastern time, senator elizabeth warren will join us. she wants some answers from the fed about conversations with jpmorgan's ceo jamie dimon. "squawk box" is coming right pack. ♪♪ ♪♪ citi's industry leading global payments solutions help their clients move money around the world seamlessly in over 180 countries... and help a partner like the world food programme as they provide more than food to people in need. together, citi and the world food programme empower families across the globe. ♪♪

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there is mounting evidence that not only should deferred prosecution be pursued, but the company should come clean with the american people, with its customers, with its employees, and with the american public. >> that was senator richard blumenthal ahead of today's hearing, where boeing ceo david calhoun scheduled to testify. joining us right now with more on the company's stock

performance is kivon rearview mirror. what do you think? what's riding on this and how closely are you watching as a stock analyst? >> well, i'm not sure what they're going to accomplish today. they'll probably go over all the problems that boeing has had. i think they're on the path trto recovery, but basically, they'll have to staexecute and prove th can get their production rate up. that they can deliver planes on time and that are safe. >> and what do you do in the meantime item i mean, that is not a short-term precipitation for a turnaround. how much faith do you put in this? how early do you buy in? do you have see results before you would say, okay, i think this is a good place? >> that's a great question. i think ultimately, they can get close to their target cash flow number of $10, of $10 billion,

perhaps probably not before 2026. so if you believe that, you could buy some today. there are several short-term overhangs that i think, you know, could give the stock a setback. i would say foremost there would be a labor contract that expires in september. the union wants a big wage hike. but they want more than that. they want assurance they're going to get boeing's future business. they're asking for a defined benefit plan. i think that's tough. they're asking for a seat on the board. i think that's tough. i think the company wants to reach an agreement. i think they could come up with a wage package that would satisfy the union, but the problem with labor and negotiations is they're emotional. and you think they're there, and something goes wrong, and you aren't there or you're sort of at loggerheads and something comes through and you getback into it. that's one. china is another one.

they have not been taking 737s for about a month. and the alleged reason is they feel that the battery on the new cockpit voice recorder needs to be sort of fully tested. i mean, i think that's a political stunt, because the faa and yasa both have fully approved it. so i think that's a political issue, you know, that's an issue. so there are a number of things they have to do. i think they're going to have to demonstrate getting the production rate up smoothly. >> having said that, that's a long list of worries and long-term fixes that you would like to see, and yet you still have a buy rating on the stock. so is that just a reflection of how much the stock has come down? >> well, it's basically, if the stock were back at 230, i probably would not have a buy, but it's not. so i think it's at a level where, you know, they really execute the way we think they

can execute, the stock will do better. like i said, i think the labor is probably the major overhang that i see. i feel pretty good that they will be able to execute. they've taken the time of slowing down the rate to catch up on traveled work, to re-look all of their policies, to discuss with the faa setting up metrics that they should stay within. so i think they're on the path to getting this solved. >> it's still half the valuation that it was. the stock is down more than 50% over the last five years. still a huge hit. i mean, there's only a couple of places you can go for this. air airbus or boeing, stills a huge hit and a huge reputation issue. do you see it getting back to those levels of 2019? >> i think i can get to 250.

getting back there is basically a long stretch, because a lot has happened in between. you mentioned reputation, i think, warren buffett said that it takes years to build your reputation. it only takes a day to harm it. and certainly, with the alaska air incident and the two max crashes in 2018 and '19, they've taken a reputation hit. so they are going to have to rebuild that in terms of selling planes. there also are two potential new competitors, the chinese, they're starting out their production capacity is 50. they want to take it up to 150. the brazilians are considering whether they should enter this market. so i think boeing's going to have to execute. i feel confident that they can. that they're doing the right thing. and one thing, i think that people don't fully kind of give credit to is covid, what happened in covid was, it became

very difficult to get experienced labor to build the plane. so i think the shortcomings that you had with the alaska air incident were in part because you didn't have a trained workforce that had been experienced. >> cai, thank you. cai von rumohr. >> coming up next, lawmakers want tech companies to be held accountable for deep fake revenge porn. a new bill that would criminalize publishing or threatening to publish such ima images. that story when "squawk box" returns. 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'm not really exactly sure what we're talking about. emily wilkins joins us now. it sounds horrible. i don't want it to happen anyone i know, emily. but, tell us about it. >> yeah, this is certainly something no one wants to have happen to them, but there has opinion a boom in basically ai-generated images. they take the faces of real people, and then they put them on deep fake nude images. it's your face, but it's a photo you never took, absolutely at all. and now a new bipartisan bill is seeking to push back not only on those who create and post those images, but also on social media sites and websites where they might appear. cnbc got an exclusive look at the bill that would require social media companies to remove images within 48 hours of the victim requesting them to be taken down. the bill would also criminalizing threapublishing o threatening to publish images. new apps have made it easier

than ever to create fake pornographic images. in 2023, deep fake pornography videos have increased 464%. in texas, students have used ai generation apps to bully and harass classmates with these deep fake app. and other states have criminalized deep fake porn. but the bill's senator ted cruz said in a statement, a the federal standard is needed to create a level playing field and put responsibility on the websites to have in place procedures to empower all victims. interestingly enough, cruz's bill isn't the only one to address these deep fakes. senators dick durbin and lindsey graham brought a different bipartisan bill to the senate floor last week. the bills do differ in scope, a little bit in angle, but there is an agreement that these deep fakes do need to be addressed before they become even more common, and we'll be keeping a very close eye on what congress decides to do. joe? >> emily, appreciate that.

thank you. >> it's a crazy situation, even if they get these federal guidelines on this, or federal rules on this, for it to be up 48 hours, the damage is already done. there have been stories where kids in school, something gets sent around, and instantaneously, people look at them differently, even when they know it's not them. >> i wonder if over time, it's like, ah, that's stupid. >> you would think people would say that now, but they don't. they inherently -- it's a -- >> and like, we've talked about it before, the difference between one nude body and another -- it doesn't really matter, it could be you, maybe it's not you. >> we've seen bad fakes before, but if they can make it really good. >> well, how do you know? it's probably not that much different, you know what i mean? yeah, what i said, i don't want it to happen to me. i don't want anyone would want it to happen. nobody needs to see that.

>> i think we're all in the same boat when it comes to that. >> so you agree with me -- thank you. >> are you imagining -- it's in my head already. it's in my head already -- >> it's bad. it's very bad. it's very bad. you can't unsee it, already. and you didn't even see anything. next, the may retail sales report will be released. we'll have the numbers and the instant reaction. then senator elizabeth warren will join us with a wide-ranging interview. "squawk box" will rhtac beig bk.

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we are just seconds away from the may retail sales report. right now, you're looking at the futures. they've been up all morning, but pretty modestly. dow futures are up by about 25 points. nasdaq futures up just over 50. the s&p futures up by about 7. we mentioned that both the s&p 500 and nasdaq set new records. that's new 30 records in this year so far. we're only in june in this year so far for the s&p 500. if you're looking at what's happening with the treasury yields, the ten-year is at 4.78,

the ten-year at 4.28. rick santelli is standing by at the cme in chicago. those yields have come down after the weaker jobs numbers last week, too. >> absolutely. but i will point out, we are six basis points higher on the week on both 2s and 10s. we have popped just a bit, what else is popping on the wires is our retail sales numbers for the month of may. still, obviously, a saur number and expecting up .3% for our headline. this is the advance. we will get an updated version. we're only up 0.1%, and in the rearview mirror, we still have unchanged. and that's the second lowest reading of the year. we started down 1.1%. if we strip out autos, the numbers doesn't improve, it actually desserts to down 0.1%.

we continue to be pressed a bit. revisions trickling in. last month, all the numbers are getting revised lower we'll go to those in a second. the number does improve. it's up 0.1%. and finally, the control number, which is inputted into higher up food chain data points like gdp, up 0.4%. up 0.4% is actually the best number since march when it was up 0.1%. all of these numbers have slipped a bit. now let's go to these revisions. on headline, unchanged becomes down 0.2%. if you strip down autos, last month was up 0.2. that loses 0.3 down to 0.1. ex-us a autos and gas becomes 0.3% and so not only are the numbers less than expected

across the board, the revisions are lower as well. is the economy slowing. is this anecdotal? it's hard to tell, but the market has an opinion. anecdotal or not, it once again brings up the question of the fed and the easing scycle, interest rates are moved a bit lower. 471. we've moved down to 471 in the 2s. and don't forget at 1:00 eastern, 13 billion reopened 20-year bonds will hit the auction block. becky, back to you. >> rick, thank you. let's get over to steve liesman. he joins us right now with more on what he's taking out of this data. steve, what are you thinking? >> i think it's a potentially very important report, becky, there has been concern about the consumer slowing and rick was absolutely right to focus on those revisions, because it changes what we thought happened in the past. the zero going to the control

group, i'm not sure what happened to gdp in that part of it, but the revisions will bring down this sense that we had a pretty robust quarter underway. the thailand fed gdp has not been updated since june 7th. we'll have industrial production and inventories, as well. on the other side of 10:00, we should check back in. we were looking at a 3.1% gdp number. i'm thinking that number is going to be coming down as a result of this date and this warning. and once again front and center will be this notion of just how robust is the consumer here. people have been waiting for this slowdown. we seem to have two months in a row here of a weaker consumer. so it is worth paying attention to this, becky. and now maybe the anecdotes that we've heard from the retailers, those on the weaker side, maybe that's telling us the story. some had complained earlier, it

did not show up in the data, now maybe it's showing up in the data >> steve, thank you. >> let's bring in bill simon, former walmart u.s. ceo. and might be former, but you've got contacts and connections all over the place. was this surprising to you? the revisions in the current numbers? >> not really. it sort of matches what i'm hearing. it's a tough slog out there. the consumer has battled through pandemics and supply chain shortages and they're to the point where just the accumulation of news and the price burden is starting to wear on them. i think it will be really interesting to see the detail of the report and understand what's happening with food, particularly. food has been a huge burden on the consumer, and if food inflation is easing, that could

explain some of the revisions and some of the misses this morning. >> i guess the fed at this point, if you were to advice them, would you say you are seeing the lag effect that we've been waiting for for so along with the higher rates, and does this make you feel confident where we are right now, that it is restrictive, where interest rates are to the economy? >> yeah, i think the consumer is clearly burdened. after a bunch of years of free money through the pandemic, they're reaching a point where their access to cash is limited. savings are completed, credit cards are maxed, and there's an opportunity to inject more cash into the system. >> in terms of who we're talking about, luxury is holding up as it usually does, better than

most? >> there are three things going on. the high-end consumer has the ability to trade down, and you see that. walmart reported some of that in their earnings. costco is doing pretty well, as they get a trade down from the super premium into the more discounters. the lower end of the economy, look, they struggle all the time. so the struggle is not new to them. and i think where the difference is, where the real pain is being felt is in the middle of the economy. so they don't have as much ability to trade down, many or most of them are already shopping discounters, trying to find the best value. and that is sort of their cash becomes restricted and their ability to maneuver gets limited. and i really think that's where the pain is, in the middle of the economy. >> middle and lower. but we just had, you know, that's the same people affected by inflation now, affected by the slowdown. they get it coming and going. it's not good. >> right, exactly! exactly. >> all right, bill, appreciate your quick analysis, there,

thanks. good to have you on. >> take care. >> new this morning, ralph lauren unveiling its uniforms for team usa's opening and closing ceremonies. andrew recently sat down with ralph lauren's chief branding and innovation officer at the company's headquarters in midtown manhattan and asked him about how much the partnership has become part of ralph lauren's business versus marketing for the brand. >> at ralph lauren, we've always been inspired by the amemameric dream. and the dream of a better life is part of our purpose. the sense that you could celebrate the world that we live in, all parts of america, and then this opportunity to dress team usa really fulfills our dreams and part of our mission. so it's really been -- it's a perfect partnership, it's a perfect collaboration. >> when you're thinking about designing something like this for the smoceremonies, how muche you thinking about how much they'll stand up relative to the other teams, in competing

against other countries and other designers? >> well, for us, we do what we love. what ralph lauren has always been about is what would make my feel good? and with the olympics, we actually work with the athletes. they come up to our offices, we meet with the olympic committee, they tell us what makes them feel comfortable. it's amazing, they'll walk in front of the entire world, in front of -- more people will watch this than any single event in history. and they want to feel confident. >> this is clearly inspired by race car driving. >> yes. my dad loves race cars, love the feeling of speed, love the sport sensibility, and thought of a modern team jacket came right out of that. and it felt fashion forward. it's trending in the world right now, sort of automotive racing, you can see it with formula one. >> how do you break out among all of the various brands? this summer in particular, you have the nikes who are always going to be there, you, and others. this year, as you know, i

imagine one of your big competitors in life, lvmh is one of the major sponsors, given that this is in france. do you think about that? what it takes to sort of evaluate above what are dozens of brands, all competing for attention? >> well, we want to tell a story about our country, but we also want to make sure that it is affordable and yet, we have to keep the quality and the craftsmanship at the highest level. and we polo, we're able to do that. the idea of polo started with my dad in 1967. he had never been to a polo match, but he loved the spirit of sportsmanship and the elegance and the sporty lifestyle on and off the field. and he called it polo. he could have called it payable, and he joked about it, that's what he was thinking, i'm going to call it baseball. so sports and ralph lauren are synonymous since the very inception of the company. as companies have started to enter into the sporting lifestyle and that fray, our leadership is secure. we're doing things that we

really think tell a story that's authentic to our company. because that's who we are and how we started. >> ralph lauren is, of course, an official outfitter of team usa. the summer games are just 38 days away. you can tune in to ongoing coverage of the olympics right here on cnbc and we'll be there, as well, for "squawk box". >> 38 days. >> 38 days. >> preparing -- parmentally preparing. >> i hooked up our hotel yesterday. >> really? >> it was pretty nice. >> i'm not expecting much. coming up, senator elizabeth warren will join us. she's blasting the fed oundannding some conversations ar bk conversations with jpmorgan ceo jamie dimon. "squawk box" coming right back.

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welcome back, everybody. in a letter out this morning, senator elizabeth warren is questioning the fed about

closed-door conversations about jamie dimon, advocating for slacker bank capital requirements in half. in the letter, senator warren writes, it now appears that you are directly doing the bank industry's bidding, rewarding them more their extensive personal lobbying of you. senator elizabeth warren joins us this morning and she has more on her stance on this. senator, welcome. what do you think the problem is here? >> look, the problem is that just last year, we saw the second, third, and fourth largest bank failures in the history of the united states. there is an effort underway that has been underway for years now, to increase the capital standards, not across the board for all the banks, but for that tiny sliver at the top. probably somewhere in the range of 5 or 6 banks. now, those banks don't want to have to increase their capital standards, because it means they have to hold a little money back, so that they're a little safer, a little more secure. and so that american taxpayers won't be called on to bail them

out again. back when the fed chair, jerome powell, was talking to us last year about the bank failures, he admitted that we needed stronger capital reserve requirements, and he has made the point repeatedly, when he's come in front of congress, when i've questioned him, that we have a vice chair for supervision, that's michael barr, and that jerome powell, as chair, would support the vice chair, as the vice chair developed rules for stronger capital standards. the vice chair is doing that, and it appears that the chair jerome powell is trying to undercut him. in other words, doing the bidding of that handful of giant banks, who would like to be able to gamble all of their money. and if things go wrong, have the taxpayers pick up the slack.

>> all right, sfwhenate warren, let's run through some of those points. that's a lot to dig through. first of all, you mentioned the big bank failures that we've had. that is true, we have had the biggest bank failures, but it has not been the taxpayers that have bailed them out. it has all been born by the fdic. it raised special assessments on all of those biggest banks you talked about. those are the ones that have been doing the bailing out when it comes to this. second of all, these big banks have pushed back and their side of things have been that if we do not -- if we are not allowed to use that capital, it is capital that will not going out to do things like make loans for houses, make loans for small businesses, make sure that the american public has access to that money. and that we will become less competitive, relative to other big countries. >> so, you know, let me unpack what you've just said. the idea that we say, it's fine for the fdic to have to pick up, i don't know, $12 billion, $15 billion in losses because of those bank failures.

we shouldn't worry about it. and notice, by the way, that jpmorgan chase that bought one of those big banks managed to book a more than $2 billion gain from doing its own government-supported rescue of one of those failing banks. look, the whole idea is to make the banking system more stable. and i don't know about you, but i still remember in 2008, when the american taxpayer had to sign up to be on the line for $700 billion in bailout money for those giant financial institutions. >> but it wasn't the giant financial institutions that have gone bankrupt -- >> that the fed opened its window and let money go out over and over and over -- >> but i don't think we should compare to what's happening right now to what happened during the great recession -- during the great -- >> that's what everybody says. let's not worry about the bad times during the good times. >> no, that's not -- >> the banks are highly profitable right now. they have booked enormous

profits. and if they had to put aside just a little bit, then they would be safer. that's the idea behind it. and do keep in mind that these giant banks are no longer the banks that are doing home mortgage lending. that's done by our community banks, our regional banks, it's done outside the banking system n now. >> but take a look at who it is doing the home mortgage lending -- >> let's take a look at who was doing the financial collapses, too. >> the banks are making the argument that somehow they won't be able to do a kind of lending that they're only doing a tiny portion of right now. the way i see this is we have a vice chair for supervision. jerome powell has testified to this multiple times. he is the expert on bank capital requirements. he is trying devise those capital requirements and he is

getting hit by lobbying by a hand ofl giant banks. and now it appears, and i've written a letter to ask about this, that jerome powell is also joining the lobbying. jerome powell said in open testimony, in front of the united states senate banking committee, that he would support the vice chair for supervision. he did that back when the vice chair was randy quarles skprmp in the corner of the big banks. now that it's someone that's taking a little tougher look at those banks, suddenly it appears that the chair of the federal reserve is changing his tune. look, either he really believes in supporting the vice chair or he doesn't. but it is not the job of chairman powell to get out and lobby on behalf of a handful of banks so that they can be even more profitable by pushing more risk into the rest of the system. >> senator, my biggest problem, i think, with what you're saying is questioning jay powell's

credibility or his commitment on what he's doing with these things. >> all i can do is compare what he said in testimony, in front of the committee i'm on, in answers to questions to me in public. and how he has now turned around and has now turned around and appears to be changing his tune. i've written a letter that says i want to clarify -- >> -- >> i would like for him to clarify his position on this. >> he's not there suggesting -- >> his job is to watch out -- >> -- i'm sorry. i'll let you talk first and then you can listen to mement we shouldn't talk over each other. >> go ahead. you're the one who interrupted. >> okay. senator, let me just ask, are you suggesting that jay powell is a person who has been totally swayed by the banks on this. am i wrong to make that

assumption? >> i'm suggesting that jay powell testified in front of the banking committee multiple times that he would be guided by the vice chair of supervision on decisions around capital requirements. he did that for years when randy quarles was the vice chair for supervision. i didn't like the direction randy quarles went because i thought he was too much in the pocket of the banks. but so be it. that's what jay powell said was his approach. he thought it was the right thing to do. plus, he said, that's the structure of the fed. we have exactly one place in the fed where there's one person who is specifically charged by statute with developing the expertise and developing the rules on things like capital standards, and that's the vice chair for supervision. and then jay powell turns around and seems to be undercutting

exactly what the vice chair for supervision is doing, and i want to understand why. i want to understand if it's related to the fact that jay powell has had multiple meetings with jamie dimon and with other big bankers. it's not the job of jay powell to carry water for the biggest banks in this country. it is the job of the chairman of the fed to watch out for the security and safety of the whole system, and that is specifically on the question of capital reserve requirements, the job of the vice chair. i have written a letter to jay powell asking him would he please clarify what on earth he's doing here. >> why don't we talk about some other issues that have come up and you've weighed in on recently. you've got a huge focus on what's going to be happening with taxes. we have heard from both president biden and former president trump recently about what their plans would be for taxes.

obviously, it's a very different outlook on either side. you've been rallying democratic senators to say they need to hold a firm line here. >> that's exactly right. look, we've reached a point in america where the american people have said this just isn't fair anymore, that someone like jeff bezos pays taxes at a lower rate than a boston public school teacher. so what the american people want to see is that we raise taxes on billionaires, billionaire corporations, and that we fund the irs so they can actually make the tax cheats pay what they owe. that's what joe biden is running for. it's popular and the rest of the democrats really need to have his back. i think that's what we're going to do. that's why joe biden is going to win. >> former president trump, when he addressed the business roundtable just -- was that this week or last week? they all seem to run together at

this point. i think it was late last week. suggested he would be taking the tax rate down to 20%. obviously, that's at lagger heads with what the democrats would like to have happen here. it's going to depend on who wins, not only the white house, but who wins the senate in these elections coming up. where do you think things stand? >> i want to say, because i do think this is one of the places that is the clearest contrast. basically what donald trump has done -- you're right. he went in front of the business roundtable. he's gone to his wealthy donors and he has put the american tax system on the auction block. he said, if you will give donald trump millions and millions of dollars in order to wage his campaign, that in return for that, he's described it as he will give first class tax cuts to the richest americans and to the biggest corporations. that's not something the american people support. when i say the american people,

i'm not just talking here about democrats. look, what we've got right now is that 80% of american people -- that's democrats, republicans and independents -- want to see us raise taxes on the richest corporations and the richest americans, and that includes about two-thirds of republicans who want to see that. part of the reason we need to do that is fairness. and part of the reason we need to do that is this is how we pay for the programs we need in america. we really want to see more investment in infrastructure. joe biden and the democrats have gotten through one of the biggest bipartisan infrastructure packages ever, but we need to do more for our transportation system. we need to do more for our water and sewage systems. not very sexy, but very important. in addition to that, we need to be making investments in things like child care, and to do that

we need the revenues. so it's really important that we talk about making sure that the system is a little fairer and the burden not all be carried by working class americans, by middle class americans, but those at the very, very top, also have to pay their fair share in taxes. >> normal w-2 earners in the 1% o or top 10%, you know, senator, it's a very progressive system. in terms of outlays, we're spending 23.1% of gdp on all these services you're talking about. would you commit to any new revenue earned being earmarked for debt reduction since we're at unsustainable levels right now on our total debt. 106%. by 2030 it's going to be crowding out almost anything we're trying to do. let's say you do get your tax increases on all these fat cats.

would you commit to putting that towards deficit reduction instead of spending, spending, spending, tax and spend. does it seem like it's working well for us right now to keep taxing and spending more? we're not getting anywhere. >> i understand that that's how it usually gets framed and how you want to frame it. but do keep in mind why we have such a severe deficit problem, and it's because we've done tax cuts that have just reduced our revenue sharply. for example, the congressional budget office was saying that it appeared that where we were in the early odds was that the amount of revenue coming in and the amount of expenditures going out looked about in balance until the bush tax cuts became permanent. once those bush tax cuts became permanent, what happens is the deficit goes right through the roof. what did donald trump's tax cuts

also do? they pushed the deficit up even higher. so part of what we've got to do is we've got to get our revenue back in balance with our expenditures, but we also at the same time have to think about the things that we do need to spend money on in this country. look what the investments in infrastructure are already doing for our country. i don't know about you, but back in massachusetts, for example, we've got two bridges that go out to cape cod. those bridges were built by the army corporation of engineers. they had a 50-year life span. that sounds reasonable. the problem is they were built 90 years ago. they were built to carry a modest amount of traffic. now they carry literally hundreds of millions of trips across those bridges, and it is the only way to access by car or by bicycle or by foot, to be able to access cape cod.

this is a piece of infrastructure we desperately need in this country. if we replaced it 40 years ago, i would have cost us a whole lot less. now we're looking at a $2 billion ticket for each of those two bridges. we've got to put the money in for our infrastructure. otherwise the country simply doesn't run. how is it that other nations have upgraded transit? how is it that other nations have upgraded their water systems? and here in the united states we have a transit system that's the butt of jokes. we need to make those investments. yes, we need to brang to bring the national debt. we also need to do investments. we need to do both of those things. we can't do it if we're letting people like jeff bezos say, you know what? he can take trips into outer space. he can buy the biggest yacht in the world, but somehow he doesn't have any w-2 income and,

therefore, he doesn't really have to pay at a higher tax rate than a boston public school teacher. it's not right. >> i'm sorry to cut you off but we're out of time in the program. we have to hand it over to the next show. >> you bet. >> thank you for joining us. >> i'm still thinking about the deep fakes. make sure you join us tomorrow. "squawk on the street" is next. ♪ >> good tuesday morning, welcome to "squawk on the street." i'm carl quintailla. faber and cramer have the day off. ten-year drops to 4.24. markets, of course, are closed tomorrow for the juneteenth holiday. the s&p and nasdaq aiming to set some fresh all-time highs. >>