his comments straight ahead. it's thursday, june 20th. the longest day of the year in terms of sunlight. still only 24 hours. "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 and andrew ross sorkin. andrew, hold up your mug for a second. i think i saw it in the corner of my eye. >> i knew it. >> i caught it. it's our "squawk box" mug. >> it's a new one? >> this is a mug that becky had made, if you remember, at

christmas of last year, i think. >> it was at least. >> i decided to break it out this morning. >> i love it. >> for the man who has everything. >> i love it. >> a big cup of coffee. that's good. >> i'm jealous. >> it's big. yeah. >> big cup. little bit of coffee. great to see you, andrew. let's look at the u.s. equity futures after the federal holiday yesterday. there are green arrows once again. if you weren't paying attention on tuesday, we did close at a high for the s&p and nasdaq. the s&p is up 26 points. the nasdaq would open up 130 points from here. you have treasury yields which have pulled back a little bit. we have seen the bpull back thi morning. the ten-year is at 4.25. we are watching shares of nvidia. joe mentioned nvidia's market cap surpassed microsoft's making

it the most valuable company on the planet. we will talk to an analyst at the bottom of the hour about where things are headed and what you should expect from here. year to date, we are halfway through the year, year to date up 180%. the markets were closed yesterday, but we did get mortgage data. total mortgage application data up 0.9% last week. the average 30-year fixed rate fell from over 7% to 6.th9%. overseas, overnight, switzerland central bank cut the key interest rate for the second straight meeting. cut by a quarter point to 1.25% after previously cutting in march. the bank of england rate decision is coming out later this morning. we will talk more about that in five minutes time. and let's talk about x and

elon musk's comments from the november come conference where he made the comment of go, you know what, yourself. threatening to pull ads from the controversial kmcomments. take a look. >> if somebody is going to blackmail me with advertising -- blackmail me with money, go [ bleep ] yourself. go [ bleep ] yourself. >> so speaking yesterday in france at the cannes lions fes festival, musk clarified that it wasn't a comment to the wider industry, but a general point about free speech. he said advertisers were insists on censorship. musk added that it doesn't mean people can say illegal things.

free speech within the bounds of the law. he made a number of kmcomments. it was a 40-minute conversation. i had to leave right as he was beginning. i only got to watch it on the airplane. it was pretty interesting to hear a flu tnew take on it. he was interviewed by the head of wpp. he was trying to placate the audience. the other level, he was discussing that the idea that advertising -- he may not want a certain ad next to a certain content. he was cool with that. he argued how he cleaned up the platform or how theycontent. if you disagree with any content

on the platform that you won't advertise, he believes that is a problem. >> the way he explained it, i thought, was understood. you know, basically he is making a comment about censorship. if you don't like it, go f yourself. >> love it or leave it? >> he said i'm not going to base my entire life. if you run a company that's dependent on advertising, you can't say that in a vacuum, go "f" yourself to advertisers. you knew what he meant. he was talking about censorship. >> no question. i think it created a poll with the advertising community pulled back in terms of sites with approved lists and unapproved lists and places to spend money. there was a blanket view at that point we don't need to spend our money there. you are starting to see some of

the money trickle back on to x. i will still say it feels like a trickle. linda yaccarino was there and trying to make a case for advertisers to get back on the platform in numbers. one of the things he said, if you want to reach some of the most insurfluential al people i the world, go on x. >> i understand the side by side that. there are certain things you wouldn't want to be associated with. in this day and age, what one person would say, oh, my god, that's horrible i'm next to that and another person would say i love being next to that. we're in such a politically

charged environment right now. one person's horrific advertisement or comment, depending on where you stand on things, you are horrified or others going yeah. >> you could never put an airplane ad next to a story about a crash. >> child porn. there are certain objectives. it used to be, i don't know, anti-semitism. now i don't know anymore. >> depending on your brand. >> i was just going to mention one of the talks of the town out of cannes, the study from mark penn that was showing that advertising and content next to it. the idea of brand safety in the way the study suggested was almost a myth. meaning readers don't actually

associate the advertiser with the content next to it. it was actually a very contrarian view of egg. t everything. they are looking at how the reader thinks about this stuff. i thought that was very interesting. a lot of people were talking about it. >> that ruins all of the al goin tyms. do you know sutskever? >> i do. >> i tell you what i don't like is the only way you can get a pronouncer is audio. in the old days, you know, i was looking it up just now. i wanted to say it right. >> you have a microphone. >> i can't actually hear it.

put the accent and spell it out for me. is there anyone who does that anymore? shows you -- >> i don't think younger people know how -- >> to do anything? >> no, know how to use the pronun pronunciation. way to win more viewers. ah! >> that's a disaster. >> hot water everywhere. >> let me tell you what the contest was. openai co- founder sutskever is launching a new company. in a post on x, he said we will pursue safe super intelligence in a straight shot with one focus and one goal and one product. he is starting a company with daniel gross, who oversaw apple's a.i. 6:09.

okay. coming up, inflation in the uk hitting the 2% target for the first time in three years. don't count on a rate cut at the central bank meeting today. details next. later, the u.s. surgeon general joins us on his call to add a warning label for parents on social media. "squawk box" will be right back. from a career perspective, i think it's really important that you find a place that also nurtures and understands. while that might be a difference, it is celebrated as a strength. what can you really bring using the queer experience, too? whether it is is customers and media because it is a strength and it is pa owhyoar rtf o u e. >> announcer: this cnbc program is sponsored by truist

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i know what yeou're thinkin. what's on the planner? "squawk planner" today. >> that's what i saying. >> the bank of england is expected to hold rates steady despite cpi data yesterday that showed inflation had hit the 2% target. the first time in nearly three years. still, traders are betting the

boe will not cut rates ahead of the general election just over two weeks away. back here in the united states, we get housing starts and weekly jobless claims data at 8:30 a.m. eastern. why didn't we get that on monday? it's not monday. it's thursday. did you feel like -- >> i have been on the wrong day every day this week. >> i was like -- >> the day off in the middle of the week. >> i don't want to watch "60 minutes." >> it's not sunday. >> i don't have to. on the earnings front, we hear from darden and kroger and accenture before the opening bell. let's bring in keith. you started this in '95? >> freedom, the u.s. operation, was founded five years ago. we're public here at the nasdaq. >> freedom wasn't taken for a

name? freedom capital markets? >> no, it's a great name. it hasn't been taken. >> it is here? >> we're a global brand. >> freedom is best in this country. it was somewhere else before here? they're imposters. >> they're great people. >> okay. just saying. >> the mel gibson movie. freedom! "braveheart." >> nvidia, tech, has gotten ahead of itself. you think it peek peaks in the summer? >> i think we are out over our skis. we are going out on friday with the xlk. we had the great subway race. you go for the entertainment. first apple and then microsoft and then nvidia. that's changing how people are restructuring the portfolios.

you see a lot of euphoria. from the technical point of view, they are well above major moving averages. after a while, you will pause. the crescendo is not just the rebalancing today and tomorrow, but also the russell reconstitution. you will have big volume events. people are coming to the second half of the year and rebalance the portfolio. when they notice nvidia is a larger percentage than originally, they have to cut back. i think a pause given the great run we had is just a normal routine thing. we saw nvidia correct 20% and go nowhere for five months last year. now is the time if you have profits too book them. >> was the dow lacking? the s&p is doing well. tom looking good.

the nasdaq is still. there is an article out there that it does at least rhyme with the late '90s. >> it has that feel to it. >> not valuation wise. >> not at all. especially with nvidia. the earnings are tremendous. i think apple is the consistent utility that continues to shine. we haven't gotten the euphoric moment. i'm in the dan ives and tom lee camp. you get more euphoria with the market. everything with a.i. in their name coming to the market and exploding. we haven't gotten that. what we have gotten is a little too few in the queues. highest amount above the 200-moving day average since last july. the highest since 2020 after the covid rebound. it doesn't mean it will end. we are definitely due for a

pause. you want to see where it restates to. i don't think the market will fall out of bed. i think the small caps and rate sensitive stocks will finally catch up. i like the financials here. they had a nice run a couple of months ago. watch july 12th. jpmorgan chase earnings kick us off and mortgage rates just fell below 7% for the first time since march. people have a bias and thinking they are falling and now we can make the move. that is like the '90s as well. >> one of the things that tom lee has called depending upon good inflation numbers, which we got, and a rally in the ten-year, which we also got. you think it could go to 4%. it's at, you know, the technical level at 4.35, which it got through. >> we broke. >> some financials and home builders have not yet reflected where the ten-year is? >> exactly. that was a head scratcher last

week when we broke down below 4.35. the russell did not join the party when the nasdaq and s&p kept going higher. i think they eventually will. they will play catch up. it's 17% off the all-time high back in 2021. it is only up 1% this year. when it runs, it runs quickly. remember the last two months of last year? it ran 20% over that time. when people come to the party and when rates do pull back, i'm not predicting we'll get more than one cut this year, but the trend has changed. we broke that level. i think we trend back down to 4%. that will lift the russell. people will look for value as we start the second half of the year. >> as this progressed, we constantly talked about is the breadth, you know, is the breadth widening? are we seeing more stocks participating? we heard they were and the soldiers were catching up with the generals.

i still don't think they have. >> the generals keep riding further and further an head. >> nvidia keeps taking it off. you keep calling it nvidia. you listen to the conference call. the company calls itself nvidia. >> i must have heard it on this show years ago first and it stuck with me. it's always nvidia. >> we had this discussion before. >> we have. >> was it you? >> it was me. i'm not changing. stay true to myself. >> stay true to yourself. all right. potato. potato. >> i agree there. don't spell with an "e." >> you don't want to say it the way the company says it? >> i say it the way i believe it is right. next time i come back, i'm ll s it the right way. >> it's up to you.

thank you. good to see you. when we come back, a cyber incidents knocking auto dealerships off line across the u.s. we have that story next. later, a read on the mkearts with roger altman when "squawk box" returns after this. is like finding the right stone. ♪(stone skips on the lake)♪ and watching your discovery inspire further discoveries. ♪(string section building up)♪ dana-farber's momentum of discovery has changed cancer treatment everywhere. people aren't just living with cancer. they're living beyond it. ♪(orchestral music)♪ ♪(soft jingle)♪

welcome back to "squawk box." thousands of dealerships ground to a halt because a cyber incident at a major software provider for dealers and the company provides a dealer management system. it shut ddown all of the system

and conducted a third party test. it relies on the software for all of the records or print a repair order. cdk has not elaborated yet on the nature of the cyber incident. we'll keep our eye on the story. and honeywell struck a deal for k systems for $2 billion from private equity firm advent international. that transition will expand ho honeywell and comes as the military spending in the u.s. has seen a renewed focus. honeywell has seen a bolster in the aerospace industry. that stock is up 6 cents.

when we come back, crypto is looking to take a move in washington ahead of the november election. as we head to break, let's take a look at tuesday's s&p 500 winners and losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. okay, team! oh, thank you so much i couldn't have done it without you. 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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good morning. welcome back to "squawk box" live from the nasdaq market site in times square. checking the futures, once again, and looking at the nasdaq with nvidia. a.i. really betteri be somethin unbelievable to live up to not just valuation wise, because they're making the hardware, i hope it's worth it. obviously. no volatility in the market. it's really every morning we come in and this is what we see. >> same story. >> especially the nasdaq. >> rerun it.

>> yeah. >> s&p set another record on tuesday. >> think about the pandemic lows? 2,300. we're at 5,400. we're awfully close to it. tom lee's number wat 5,487. he will hit that when the market opens at 9:30. crypto companies are trying to put money to work in washington. we have emily wilkins with more. >> reporter: good morning, becky. crypto companies are looking to be makers or breakers this november and expand influence in d.c. in the past month, coinbase and ripple have all given major donations to fakeshake pac. that is the fourth largest

political action committee playing in 2024 according to open secrets. the group raised $160 million by the end of may and more than 1 million people have signed up to be advocates for the non-profit ste stem of crypto. coinbase chief officer said that the grassroots movement is a wake-up call for lawmakers who thought their constituents didn't care about block cchain. >> we made a fun i realization to get the politics out of crypto to level the playing field and allow the tens of millions who own crypto to be part of the process. >> fairshake is focusing on the house and senate races. they will stay out of the race and fairshake pac spent $37

million on ads and two affiliates for prime miaries wh could be key in ohio and mo montana. becky. >> emily, have you seen the skepticism die aways a result at this point? >> if you look on capitol hill, there has been a lot of bipartisan momentum around crypto bills. one passed the house. one passed the house and senate. in addition, you are seeing skeptics. i mentioned montana, jon tester is running in a tough race this december. he dismissed crypto. something he didn't need to pay attention to. now you saw him go ahead and vote for one of the pro-crypto bills. we talked to him in the hallway and he said i'm looking at the options and the bills and trying

to understand this a little bit better. he called it 21st century stuff. you are beginning to see the crypto groove and lobby and crypto campaign have an influence on how lawmakers are paying attention to it. >> it was interrupted by sam b bankman-freed and how much he was funneling to candidates. it probably took time before lawmakers felt it is okay to go back in the water and start accepting money on some of these things. >> absolutely. becky, i talked to folks in the crypto industry. they talked about the ups and downs and crip tiecripto high. they are betting on the upswing and where they don't have guys like sam bankman-freed.

those who have ties to goldman sachs that are now with the crypto industry and going to lawmakers saying you need to consider and think about the technology. if you don't do it now, other countries, including china, will get an head of it and beat us i this. that is the message they are taking to the hill and lawmakers now. >> emily, thank you. see you later. when we come back, we will talk to the authors of the new book about the racial wealth gap and you can get the best of "squawk pod" on your favorite podcast p d stapanlien anytime. we're coming back in just a moment. >> announcer: currency check is sponsored by interactive brokers. the best informed investors choose interactive brokers.

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♪ ♪ it's just a guess. eli lilly is suing six more med spau spas related to the weight loss.

some of the med spas are compounded version of the drug approved by fda. eli lilly warned untested compounds put patients at risk. it says it stands against the use of the treatment for cosmetic weight loss. last year, eli lilly took similar actions against ten spas and wellness centers and pharmacies. thanks, joe. a new book is out this week. it is titled "15 cents on the dollar." how americans made the white/black wealth gap. it takes a look at the racial wealth gap in the united states. we have abby reid and louise story. i used to work with louise. now has the new book out today and it is a fascinating one. thank you for joining us.

louise, i'll start with you. i know you spent an enormous time putting together the book and done a remarkable job with the research and government data and financial inn substittubsti institutions and your own research. what have you learned? >> the typical black family has 15 cents in wealth compared to $1 held in wealth by the typical white family. i'll say that again. the typical black family has 15 cents in wealth compared to $1 in wealth by the typical white it is not just the billionaires pulling it up. we are on a mission to make that a nationally recognized statistic. >> ebony, it seeped like when

y you look through the book, housing played a critical piece of the puzzle. you found the lack of participation in the stock market is a huge component of the problem. >> it is like a spider web. housing is a part of it, but also stock ownership. it is a driver of the wealth gap as well. >> when you think about it, you also looked at student loan credit expansion. that, obviously, to some degree and maybe it is counterintuitive, increased the disparity. can you both speak to that? that issue is right on the table right now. >> absolutely. there's a risk that despite the broader access to education, that the way it has been paid for through student loans that have disproportionately harmed the finances of black and la

tlatino americans that is continuing old patt patt patterns. we were at 15 cents on the dollar in the 1950s. it has moved around, but we're back at 15 cents on the dollar now. >> i like to add that black americans that carried student loan debt are more likely to delay other wealth building activity such as homeownership and participation in the stock market. >> what do you think there is -- there was a move after george floyd's death among corporations across the country around dei policies and really getting very active about creating pledges around goals around hiring and the like and it feels like there is now an almost anti-dei movement taking place.

view that hmeritocracy and the companies made a mistake? >> dei has become politicized. the typical black family has 15 cents of wealth for every $1 that every white family has. >> andrew, that figure, by the way, many americans are not aware with it. if it is not okay and you don't like some of the existing programs, then talk about what else. by the way, you could argue all of the existing programs have worked given this gap has remained very large for a long time and as people debate these things, they might debate new ideas. we want to make sure people know the facts. we do not take political positions in our book. we tell the stories of compelling individuals. the book will make you think and it will make you feel and we hope it will help the data become widespread.

>> do you think that the problem are government policies ultimately or do you think it is ra racism in the workplace or both? how do you weigh these things? >> it is a combination of both. we show that in the book and through historical and common day practices. >> i think there is a lack of understanding of wealth. you would not believe how much people look at wealth and the person next to mow ie is making saum same wpay. what is the big deal? people who are professionals working in the same place often have different financial flows coming in and around their life and different assets. it is not something people talk

about. it is kept private among friends and families. the government doesn't collect a report or all that much data on it. >> you focused on a bank in the book that we had on the broadcast a bunch of times. greenwood bank. its aim to recirculate money in the black community. you found something slightly different in your investigation. >> greenwood, as you know, is a fintech. isis interesting. it goes back to the days of the financial crisis. how they are able to benefit from a loophole and dodd-frank. greenwood is a fintech. they helped to promise to close the wealth gap. it is founded by andrew young. it is difficult to start something new. it is difficult to work in the

black banking space and they hit a lot of road blocks and a lot of their customers have been disappointed so far. it is early days. >> would you recommend an approach that covers everything? i'm talking about a prfriend of the show. robert johnson. it would cost $14 trillion for reparations. others were on and if we would make lending standards the same for minorities as everyone else, that would help. if you make loans for business startups and in communities having a hard time getting loans -- all of the above. how aggressive would you get? reparations? trillions of dollars of reparations? you don't get political in the book. maybe student loan forgiveness.

maybe everything. >> we did some calculations. we have an audience here. we looked at the rate of change when you compare the median families since 1989. if the gap continues converging at the rate it has been co converging since 1989, it will be closed in 291 years. >> right. do we use -- >> that's the answer. >> the government solutions. private sector solutions. the government is ineffective at trying to figure these things out. you need the private sector somehow. >> nothing can happen without both. >> right. >> 290 years. >> the book is called "15 cents on the dollar." if you want to look at the issue, take a look at it. it is a fascinating read. i want to thank ebony and louise. >> thank you. >> the solution should be a

political component. >> the sequel? >> yeah. >> we'll work on that for you. >> i want to know what you really think. coming up, boeing and nasa delaying the return of two astronauts from the international space station. details after the break. car, take me home. (♪♪) car, can you turn the music down a little? of course, james. thank you. ♪ (suspenseful music plays) ♪ um... car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here.

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boeing has delayed the return of two nasa astronauts to earth from the international space station. they were scheduled to spend eight days on the iss, but will now be there for about 20 days as officials from boeing and nasa study the potential impact of a series of helium leaks in a

propulsion system. also problems with several thrusters which are used to maneuver the spacecraft. they're currently scheduled to return on june 26th. i couldn't help but thinking about, number one, i don't have claustrophobia necessarily, but if you realize, look, i just got to -- whatever is happening, eventually i'm going to get out of here, i can talk myself into it, but if you were planning on coming home and you're in this area that goes 20 days instead of -- it would be difficult. you would have to be strong mentally for that. >> i wouldn't go in the first place. i think we're a different class of people. >> you have to be in a place -- there is nothing to breathe outside the place, bad. bad. like, down 2,000 feet in the ocean, bad. >> scary. i wouldn't want to sign up to be in this little area for 12 days, 20 days. >> what about for three hours every day. bad. >> that i'll take.

>> okay. some days that's -- all right, when we come back, nvidia's market cap passed microsoft on tuesday to become the most valuable company. we'll talk to an analyst about whether or n he in tt otthksha trend will continue. that's next. -to-use tools, like dynamic charting and risk-reward analysis, help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley (vo) a successful business owner sells his company help you find and unlock opportunities in the market. and takes on a passion project with his son - restoring his father's jazz club, and in the process, revitalizes a community landmark. from selling a business to giving back to where you come from, a raymond james financial advisor gets to know you, your family and the way you bring people together. that's life well planned.

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nvidia passed microsoft to become the most valuable company in the world by market capitalization on tuesday when the market was last open. joining us right now is vivek ariev, semiconductors analyst. can this run continue for nvidia? it has been an amazing turn of events, amazing huge run-up in

market capitalization. >> yeah, good morning. i think that volatility is always possible, but i think like with any stock, it is really about opportunity. it is about execution and valuation. on the opportunity side, we think that the market for generative a.i. is in the second year of what could be a three to five year deployment cycle. the demand for hardware could triple to 300 billion over the next few years. secondly, there is temptation to compare it to the dotcom boom. what is different is potentially that the dotcom boom was created by a lot of flaky business models fueled by tech. this time the spending is being done by companies with the best balance sheets on the planet and this is their mission critical infrastructure. we have capex from cloud customers growing 30%, 40% this year. oracle reported their capex will double in the next fiscal year and valuation. the stock had a strong run.

if you look at the broader s&p 500, it is trading at two times earnings growth. if you look at nvidia between 35 to 40 times, it is actually less than one times earnings growth. so by some measures it is still quite inexpensive. >> the creation of a.i. and this drive to go after it, you've compared this to kind of the same thing as the creation of fire. you want to explain what you mean? >> what i mean by that, and that's somewhat more extreme version of it, but what i really wanted to convey is that this is a new and important and exciting and fundamental tool that has been given to the technology industry because a.i. has been with us for a long time, right? if you look at google translate, the original version of -- they have a.i. for a long time. but what is different with this a.i. is that it understands context, that it can be used to create -- extract a lot of

insights from data that can be video, text format and then help to create from all that data, that's why we call it generative a.i., not just conventional a.i. i think it has the power to transform a lot of industries in ways we are just not have seen before. and secondly, this new form of a.i. is coming at a time when traditional semiconductor technology, which whas come to stand still. we needed to upgrade the structure anyway. a.i. is giving us the opportunity to upgrade the infrastructure using the new form of computing. every industry is looking at it, trying to adopt it to extract insights from a lot of data and just sitting there doing nothing right now. i think this tool, those insights can be driven and it is the start of a new industry. >> nvidia has such a huge lead over any of its competitors. the question is, can anybody catch them and if so, who?

>> i think customers will have choices if they look at this 100 billion or so market for hardware this year. nvidia has 80 plus percent of that. we think custom chips are another 10%, 15% of that and remaining 5%, you see a lot of smaller players, whether it is amd, intel, whether there is a lot of startups. but they do expect nvidia to maintain 80 plus percent market share for the reason this is the norm in technology. if you look at any part of technology, whether social, e-commerce, operating systems, you see the leader keeps 80% of the market. but you still have a long tail of competitors. we think it is going to be no different in a.i. where the leader as long as they continue to execute, which we have every confidence they will, we think they should be able to keep over 80% of this market, but in our estimation could triple over the next few years. >> vivek, thank you. >> thank you. the bank of england's latest

interest rate decision just out, leaving rates unchanged as expected. more details from the central bank are coming later this hour. it is 7:00 a.m. on the east coast and you are watching "squawk box" here on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. a lot going on this morning. among today's top stories, at&t now raising prices for customers who are on old unlimited data plans that have now been retired. starting in august, their bills are going to rise by up to $20 for plans with multiple lines. customers with a single line will see charges go up by $10 a month. at&t saying it is offering more high speed data in hot spots in exchange for the price hike. meantime, cardealers across the country disrupted by a cyberattack yesterday, major software provider cdk global saying they're shutting down most of their systems and still conducting tests on several applications. as of yesterday afternoon, the

software helped car dealers manage inventory sales, financing, insurance, just about everything, scheduling, service. so them being out of commission was a very big problem. and ferrari's first electric car reportedly comforts more than half a million dollars. plans to launch late next year. the price tag is well above the average ferrari sale price of roughly $376,000. and similarly equipped porsche ev at $107,000. joe, did you ever have multiple telephone lines in your house? >> no. >> back in the day? >> no. the land line -- >> call waiting, like, where you press the button so you can take a second call from the same line? >> yeah -- no, i don't think so. now the land line doesn't even -- our phones don't work right, andrew. >> really? >> sometimes they ring, but you try to -- so we don't really have a land line. >> why are you paying for it? >> i'm a millennial, but not on

purpose. and i can see -- i can see the -- i can see the spam call on the tv where it is coming from and i know it is spam, so i'm not too concerned. and then if i look at who did call, i can always call back if it is actually something that i needed to -- >> i can't remember the last person i wanted to talk to who called me on the land line. >> i can't remember the last person i wanted to talk to on land line or mobile. let's look at the -- emergencies you need to answer. hopefully there aren't any. the futures, nvidia, again, $3.3 trillion, up 130 points now on the nasdaq. the dow, chiming in, chipping in, and the s&p would be already, hit in terms of where it was going and when it was going to go there. let's get to dom chu with a look at this morning's premarket movers. i thought i was going to talk to

you about who won the most recent tournament, but it is not monday, it is thursday. still dealing. still figuring things out. >> this is the warmup, fourth of july, on a thursday this year, right? we got to figure out whether or not that midday holiday is going to screw things up in a couple of weeks as well. joe, becky, andrew, we're kicking things off with shares of trump media and technology group, this is the parent company of former president donald trump's truth social, social media platform. those shares are moving lower by roughly 10% right now after regulators at the securities and exchange commission actually approved a plan that allows shareholders to resell certain securities and warrants on that stock, which are eligible to be exercised for stock in exchange. expectation of more shares coming to market which would dilute the ownership of existing shareholders of the company. djt in the news now, down about 9%. on the earnings front, kb home

1.5%, close to 2%. the home builder reported quarterly results that topped estimates for both profits and revenues. orders for new homes increased by 2%, average selling prices for those homes did manage to increase on a year over year basis. a little bit of bullishness on the home side of things, up nearly 2%. a potential hurdle facing a big tech m&a deal. shares of hewlett packard enterprise are up, juniper networks up marginally. the moves come a day after regulators in the united kingdom opened up an inquiry into hpe's $14 billion deal to buy juniper network. this is the uk competition and market authority. it is looking into whether or not the tie-up would lead to antitrust issues. the move is the first step ahead of an august 14th deadline to see if it wants to conduct a full and more formal probe into

the matter. so, hpe, juniper networks and that deal, of course, joe, all driven by hpe's desire to get more into artificial intelligence. i'll send things back over to you. >> oh, boy. okay. yeah. don't do a story where we don't say those two words together. >> artificial intelligence. >> thank you, dom. >> jaws was released 49 years ago today. >> everything was released -- everything is 50 years old. do you still listen to the radio? any new music? >> the kids every once in a while find something that is poppy -- i can't name it. >> it is just amazing to me that -- maybe it is the stations. >> 49 years ago. when we come pback amazon says good-bye to plastic pillows in packages. we have the details coming up. and later, the surgeon general taking on social media platforms to combat what he is

calling an emergency mental health crisis. dr. vivek murthy joins us to talk about social media and mental health. "squawk box" is coming right back.

her uncle's unhappy. i'm sensing an underlying issue.

it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. the s&p 500 closing at a record high along with the nasdaq on tuesday. joining us now to talk markets, alesha levine, any angst, nervousness, trepidation, cautious optimism, anything that you would tell investors to be

wary of or full steam ahead. >> as i like to say, as a strategist, our job is to worry. we have to invest our client capital every day. we are constructive on markets, we are positive, we think the fundamentals are strong and in certain sectors getting better, raising the earnings for the s&p overall. so, there are some charts that are on topic and that looks not healthy, but on the other hand, the fundamentals are increasing as well. >> if you totally took a.i. out of the picture, there are still other fundamentals that are positive for equity. >> right, right. >> you add in a.i. and you get what we're witnessing. >> you have the next leg of innovation in the economy, reflected in the companies and the s&p. so, it is hard to get negative on a fundamental basis, with what's going on in the market. we're very optimistic, we're overweight u.s. large cap, we have been that way for the last two years. again, you know, it just has been the right place to be. in the end, other countries are

looking better than feared, but the growth here is so much stronger in the developed economies that you have to be invested here, we think. >> typically when there is transformative technologies and -- you heard in the past, oh, you put a dotcom on the end of a company, it is going to go here, or with biotech, it was a -- anything that would indicate that you're involved in this hot new technology and the stocks would always overshoot where they should actually be. there is none of that in a.i. right now? >> there may be. if you remember, from the late '90s, the initial winners weren't necessarily the ones coming out in the -- in the mid-2000s of who actually won the horse race there. so, innovation is always changing, and i say this, the hyperscalers are so big and the companies are so big and throws so much cash flow, there are moats around them, and moats

with alligators. it is very hard to be competitive and in the end, you know, you see for instance that if there are competitors, there are then partnerships. in a way, the large cap companies are able to take in some of the innovation of other companies, and thus not be threatened by it. >> if we were going to have a recession, would that cause you to lighten up on your equity exposure? >> yes. so, recessions are always associated with earnings downgrades and in the end, we're looking at earnings cash flow and margins. that's what we care about. so, a recession would affect that, and, yes, we would -- >> so you have to have confidence that the fed has orchestrated a soft landing, because they're trying -- inflation looks like it is coming down. on the flip side what you worry about is they might overshoot and slow the economy down too much. you don't think that's -- so they're not -- they usually

aren't able to walk that line. this time they're going to be able to do it. >> it looks like they're able to do it. >> amazing. >> it looks like they're able to do it. i think the resilience of the u.s. economy in the face of the onslaught of the fastest tightening cycle in 40 years tells you there is a lot of resilience in the household. household net worth is up 40% in four years. it is $40 trillion, $45 trillion. and so in the end, there is a lot of resilience there within the economy, in the aggregate, even though it is obvious there is parts of the economy lower and workers lower wages are struggling because they're spending on credit. and credit is expensive. so if a company or an individual or household has to borrow on the short end, that's where the payment is. >> where did the rest of that come from, the stock market or housing prices? >> housing prices overall are up about 40%. more in some markets, some markets are up 100% and ultimately, you know, the flip side of not having corporate

pensions anymore or not having sufficient pensions from the government is that individuals are responsible for investing for their retirement and as a result, households here in america are just more exposed to the stock market. so the wealth effect is just spread out much more across the economy here than it is, for instance, in europe. >> no more defined benefit -- defined contribution. >> everybody is paying attention to the stock market. so they see it. so in a bull market, like this, where fundamentals are good, people feel confident and they spend. it is not that there aren't signs of worry, because there are. we see it in some of the consumer stocks and consumer sector. the bond mark set pricing in a cut in september. it may happen. it seems that the resilience of what came before this, which was 15 years of zero rates, essentially made the greater percentage of the economy immune to the higher rate cycle.

>> so would you -- people are buying nvidia today. they're buying it with a $3.3 trillion market cap. where do they think it is going? is it going to $4 trillion? >> i can't talk about individual stocks, but i would say that the growth rates of the stocks that have done well are commensurate with the increase in the multip are going. the growth rate is higher as well. we just put out our new forecast for the s&p for the end of the year, we're at 5700 for this year. that implies to 12% growth rate this year and next year, driven by increased earnings in communication services and information technology. so, yes. >> just, you know -- >> i agree. >> it is staggering. >> it is staggering but the earnings and the cash flow are there. if you look over time, the cash flow increase is associated with higher margins -- higher margins

and higher multiple overtime. we talk about the multiple. the multiple now is about 20.5 times. it is not unreasonable given where free cash flow is. overall in the s&p driven by the top ten. >> i know it is not unreasonable. i know this is not the dotcom bubble again. sometimes the market isn't rational. to the downside or the upside. there could be a time where people say, we don't believe it, or a time where big corporations pull in and aren't willing to spend as much because it has been a big company that are spending the money that is necessary on this. longer term, long haul, sure, maybe it is the right direction, but that doesn't mean you can't have a pretty significant pullback. >> you can have pullbacks. on the fundamentals side, it takes us the next 18 to 24 months. the big risks are the ones not priced in. what is not priced in? recession is not priced in. inflation rebounding is not priced in. and, of course, any shock is not priced in. and we all talk about the

deficit. cbo told us $2 trillion this year, again, that's the risk. it is funding it in the bond market. >> not the deficit this fiscal year, 7% of gdp. never been. >> never. >> and by just where we are right now, it is going to be 122% the debt held by the public, 122% by 2034. it is going to go up every year. it was never over 100 before that. do you believe in mmt? >> do i believe in mmt? i do not. i do not. but the two candidates running for president have no interest in reining in the debt or the deficit. >> or entitlements. >> or entitlements. >> when does that never comes home to roost? >> if productivity increases and -- >> a.i., again. >> i'm talking productivity. it doesn't have to be a.i. it is also in the healthcare sector and some of the bioteches that we're seeing as well and the pharmaceuticals driving efficiencies and driving better outcomes for patients.

>> i'll be more productive if i'm not fat. >> we are. >> really? >> all of us are. >> more productive when you're not fat. >> correct. >> that's another reason for me to -- i'm not going to inject myself. >> just don't eat the doughnuts on doughnut day. >> zero doughnuts on doughnut day. that's the guy over there, on the monitor behind you. >> right here! >> wasn't that seven doughnuts? what did you do that day? >> it wasn't that many. >> i didn't take down seven, i took down a lot. those were some good doughnuts. >> the little krispy kremes you used to do nine, didn't you? >> i want to become the dave p portnoy of doughnuts. i want to go from doughnut store to doughnut store around the nation. get me out of the studio, joe. you'll like that. >> they all make a maple bacon doughnut now, don't they? that's popular almost everywhere. there is a reason why it is. >> because it is good. >> it is really good. you got a preference for -- you

don't eat them? >> i like old-fashioned glazed. >> maybe the -- munchkins, one glazed munchkins. >> they're more calories than you think in those things. >> the munchkins. i'm not eating anything anymore. i'm not. because everything -- blood pressure, everything is because you're fat, everything, apnea, it is all because of that. alicia, thank you. >> thank you for having me. when we come back, amazon incorporating a.i. into its packaging and delivery system as it looks for ways to reduce its packaging footprint. and then the former s.e.c. chair jay clayton will be here to talk about senator warren's comments on the fed. exxon's lawsuit against activist shareholders being thrown out, and much more. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. which state is home to the most lakes in north america? the answer when "squawk box" returns.

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>> announcer: now the answer to today's aflac trivia question. which state is home to the most lakes in north america? the answer, alaska.

there are more than 3 million lakes covering over 5% of the state's total land area. all right, we both lost. we both said minnesota. >> so big. >> 10,000. >> alaska is so big. >> of course it would win. of course. olive garden parent darden restaurants reported earnings $2.65 a share. that is better than the $2.61 the street was looking for. it comes on revenue of $2.96 billion. that's basically in line with expectations. comparable store sales were flat versus expectations of a 0.3% increase. darden is also increasing its quarterly dividend by 7% and right now that stock is actually up by about 1.6%. andrew? thanks, becky. amazon changing the way it packs its boxes, saying good-bye to plastic pillows, and saying hello to a.i. diana olick joins us right now

with more on that story. good morning. >> reporter: good morning, andrew. yeah, after extensive testing with employees, consumers and third party analysts, amazon put into motion one of its most ambitious sustainability efforts yesterday, saying bye-bye to this and hello to this. it is amazon's largest plastic packaging reduction in north america so far. recycled paper is replacing the 15 billion plastic pillows used every year. >> they're difficult to recycle because you have to pop them. >> reporter: you to pop it and they can't go in a curb side recycling bin. paper may work better than plastic. >> this paper is softer. it is made with recycled content. that allows the items to cushion in there rather than bounce. >> reporter: in addition to losing plastic, amazon is using a.i. to right size its packages by eliminating empty space in boxes. >> it is an investment across

automation, investment across material science as well as machine learning and artificial intelligence. >> reporter: and we asked linder how much this transition will cost the company. he wouldn't say exactly, only that some plastic bags are less expensive, but the new technology of simplifying the process and right sizing packages allows amazon to bring the cost difference down. back to you guys. >> diana, i remember when i was in one of the facilities out in seattle, they were looking -- they were effectively creating custom boxes for almost, you know, all the different packages. is that what is going on here? using a.i.? >> reporter: yeah, exactly. they're trying to get -- you know, you've seen it before, you have the box, and you have, like, one little thing in it, and then it has this huge box with all this space around it and they have been using the paper or the plastic to do that. they're using a.i. to look into the boxes and figure out how to get as many things in as possible or if there aren't that many things to make that

packaging as small as possible because they don't want the wasted space which makes the wasted box, which makes all the trash. >> it is totally fascinating. thank you, diana. a sign of the times. appreciate it. coming up, former s.e.c. chair jay clayton on exxon's lawsuit against activist shareholders being thrown out. we'll ask about that and much more. here are the futures, strong again this morning. especially the nasdaq. "squawk box" will be right back.

welcome back, everybody. exxonmobil's lawsuit against activist shareholders has been thrown out by a judge. joining us now with a look at the implications is jay clayton, the former s.e.c. chair and a cnbc contributor. jay, this is an interesting case that we were following pretty closely because darren woods, the ceo at exxon, was trying to make a point. he wanted the judicial system to rule on whether these -- these activist investors could continue to bring shareholder proposals. what the limits are, what the changes has been, because the s.e.c. did change the rules

recently. >> right now there are virtually no limits on what proposals, according to the s.e.c., need to be included in the proxy statement. i think exxon was doing a great job to shine light on this, because let's think about it. in this case, the proponent actually admitted that they were not that interested in long-term return returns, that they were interested in an agenda separate from shareholder returns. let's say a company has a million shareholders. and you have people who are making proposals like this. it is not really the proponent versus the company. the company is there to protect the other shareholders. it has a ifiduciary duty. let's say to get educated on a proposal like this is an hour, that's $25 million in costs imposed on those other shareholders by a shareholder who really doesn't have their interest at heart. we have to have a better system

for dealing with this. >> this was the third time they brought a similar proposal. the company's point was shareholders voted it down soundly, the previous two times. we don't want to have to continue to deal with these issues that they thought were frivolous and a waste of time. >> we're going to cost shareholders 25 million bucks in their time and attention every year for somebody who doesn't care about them because the s.e.c. or the courts have not stepped up and said these are the -- there is another point here, in the last 20 years, we have increased what i would say is the robustness of corporate governance so much. we have majority independent boards, we have fully independent audit committees, we have directors who have more responsibilities than ever before to shareholders, but yet we're taking away from them the right to say this is not something that is properly put before shareholders, because it is not in the vast majority of their interest to deal with it.

>> we had calipers come in, someone who came in, a major shareholder representing one of the unions in california. and said, look, we're not going to vote our shares in favor of darren woods for continuing as director because we're unhappy he is bringing you this lawsuit. they thought that it would cast a pall, a chill over other activist shareholders being able to bring suits and they wanted that to continue. >> where is the line? okay? can you just put anything on there and we have to deal with it? of course not. i think -- she was advocating, she is entitled to her view, she was advocating it is good governance to have everything possible on the proxy. i think it is good governance for the board of directors to exercise discretion. they have complete alignment these days. other than in compensation and a few other matters with long-term shareholders, let's leave that discretion with the board of directors. >> so the judge in this case

threw this out, also wrote the s.e.c. is behind the ball on this issue. however, the court can't advise exxon of its rights without a live case or controversy to trigger jurisdiction. it said because they said forget it, we're not going to bring it anymore, there was no case to consider. >> the s.e.c. process is behind the ball. there is no viable way for a company to challenge the s.e.c. determination within the time allotted. so, you know, you don't have a right of appeal of an s.e.c. determination that it should or should not be included on the proxy. >> so what does this do? without having legal precedent being set, what does this mean? will the case itself actually do what these shareholders said? maybe cast a little bit of a pall and make people a little more reluctant to bring things, otherwise they wind up in inexpensive litigation? >> let's be realistic. if activists are in the business of raising issues and trying to get them on to the proxy statement, not for shareholder returns, but as what i would say

is a very inexpensive billboard for these issues, this is -- this isn't going to slow them down. >> wow. so, what is the next step, what happens? >> i think you should -- two things, two problems. one is the s.e.c. should have a real process, where you have a right of appeal. right now it is just an app process. and companies that are faced with repeated proposals that garner very little support to do exactly what exxon did. >> andrew? >> the thing i can't figure out is i understand why a board has a fiduciary duty and in certain cases a majority owner has a certain fiduciary duty to all the other shareholders. it is less clear to me that the shareholders themselves individually have a if ifiducia duty to themselves. while i agree there are a number of cases where shareholders bring either frivolous suits or

suits that aren't based on long-term value creation or all sorts of things, you can say that in activist cases as well, nonetheless, we don't stop them from doing those things. so where is the line? >> well, i think you make the really good point, which is the proponents have no fiduciary duty to the other shareholders. so the board of directors exercising its judgment with that if i deust fiduciary duty on this getting out of control. what you raised are some fundamental issues. when an activist comes in and says you have a division that is under performing and you should sell it, you should sell your company, those are basic corporate decisions where we say the board of directors should weigh in on them. and the board of directors should get the -- what i would say is the ratification of the shareholders. these -- what i would say is social and environmental issues that come for the proxy, they're not of that type. think about what advocates for this say.

they say that we need -- climate transition is so important that we need to bring it to the board room. well, i can tell you this, in an issue as complicated as climate transition, which involves national security, the economy, foreign relations and the like, the place to decide that is not on the proxy card of a company. >> i'm not going to disagree with you. i would suggest this, there are utilities, prafor example in california and other places, where potentially if a shareholder emerged earlier and raised certain types of issues, obviously there is now a huge cost to some of the utilities, by the way warren buffett owns some utilities that are now in pain, if somebody had raised those issues, you might have thought they were climate issues originally, but they turned into economic ones later and so that's why i'm saying the line is not always clear. >> well, and, andrew, that's fair. there is a difference between raising an issue of consciousness to the board of directors, and then using a very blunt proxy process to decide

that issue. it is quite easy for the large shareholders in america, the 20 largest companies, investment companies, to call up the board of directors and say, hey, this is a big issue. it is easy for activists to raise an issue with the board of directors. the question is do you put these complex issues where the judgment of the company is really much better than a d disaggregated shareholder vote out there and take the time and expense to do it. >> even if it is a nonbinding vote? >> it may be nonbinding. if it is a nothing, then why are we doing it? >> nonbinding votes every year, every one of these proxy statements. in general, i agree with you. i wanted to see the courts make a ruling on this. >> let me give you a really stark example of the danger of putting a very complex issue out for a simple up down vote, brexit. you think anybody thinks that it was smart to put that vote in a very emotional context --

>> nigel farage. >> maybe. >> okay. jay, thank you. >> yes. >> very much. good to see you, jay clayton. >> thanks. when we come back, u.s. surgeon general vivek murthy is going to be with us, calling on congress to put a tobacco style warning label on social media platforms. he's going to discuss all of this next when we come right ba.ck

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welcome back, everybody. "the wall street journal" using data that it developed with academic researcher laura edleson is reporting that meta's instagram algorithm continues to recommend sexually explicit content to accounts of teenagers, despite meta's promise of an age-appropriate experience for young users. those tests, which involve setting up new accounts with listed ages of 13 years old showed content recommended by the platform's algorithm went from moderately racy content to adult sexual content creators. the tests were observed with a time frame of less than 20 minutes of watching reels, the meta version of scrolling through all of those videos you see. the surgeon general taking on social media platforms to combat what he is calling an emergency

mental health crisis. in a "new york times" op-ed piece, the surgeon general writes it is time to require a warning label on social media platforms stating social media is associated with significant mental health harms for adolescents. the surgeon general, dr. vivek murthy, joins us this morning. and dr. murthy, thank you for being here today. this is something -- the move you made earlier this week was one that definitely caught our attention and i'm sure a lot of other people's as well. explain why you think that this is a situation that warrants that sort of a label. >> well, we're living in a middle of a youth mental health crisis. this is the worst mental health crisis among young people i've seen in nearly 30 years of public health. and it is now becoming increasingly clear that one of the key drivers of that mental health crisis is, in fact, social media. we have to keep in mind that adolescents are not just small adults. they're a unique phase of brain

development where they're sensitive to social suggestion, social comparison, and their impulse control is not fully developed either. what we're seeing is unfortunately many young people are exposed to significant harms online, whether it is sexual content, violent content, whether it is bullying and harassment including from strangers, or exposure to features that would seek to manipulate their developing brains and excessive use and that collectively takes a toll which is why we found in the advisory i issued last year that young people are spending three hours or more on social media, facing double the risk of anxiety and depression symptoms. so this is a profound public health challenge for us. what is striking to me is if we saw this kind of data in evidence, young people themselves raising their hand and saying, these products are harming me, exposing me to dangers, and we would have raised concerns years ago, we would have taken action. the warning label i'm calling

for will help parents and young people understand the risks that we see, but it is part of a broader set of reforms that i've called for which are important to ultimately make the platforms safer for our kids. >> there is a lot of money from the social media companies that has been spent lobbying congress to try and say, no, we don't want restrictions that are placed on us, we can do this ourselves. what do you think of the efforts that the industry has taken on to try and say that we will police ourselves on this? >> well, social media has been around for nearly 20 years. and in that time, the companies have had plenty of opportunities to do it by themselves and most importantly to demonstrate with scientific evidence that the steps that they are taking are actually effective in making the platform safe for our kids. we have not seen that evidence. when i talk to independent researchers around the country, what they tell me most consistently is that they cannot get all of the data they need from social media companies to fully assess the mental health impact of the platforms on our

kids. i'll tell you this, as a parent, as a parent of two young children, i do not want to feel like any other parent doesn't want to feel that a company that is making the products my kids are using is hiding data from me about the impact on their mental health. yet that is the situation we find ourselves in today. so, you know, if companies are taking actions, that's great. what we need to see as americans is proof that these are actually effective in keeping our kids safe. right now there is plenty of evidence to say the platforms are still not safe for our children. >> doctor, long before social media, you know, adolescents before high school, during high school, we know what goes on. and just to play devil's advocate, for a second, you don't necessarily shoot the messenger. these are all -- it is almost human nature the way some of this stuff that you see and it is just one step removed from where the responsibility really should lie and that's with

parents and instilling the type of virtues and values you should have to where you wouldn't abuse what goes on with social media. social media is just the means that these -- some of these base natural inclinations are expressed. is there anything to that notion? if i was a social media company, i would be, like, what, it is my fault that the kids are brats? >> i'm so glad you bring this up, because it is a very reasonable question to ask. what is different with these platforms now compared to what childhoods have been like for many generations. the platforms have transformed childhood for kids. when i was growing up, maybe i got bullied by some kids in my class, maybe if i did something dumb in school, maybe 30 kids in my class knew about it. the world is very different now for children. you do something that perhaps you're embarrassed by and thousands of people may be seeing it because it is

recorded, it is poversted. it is at a scale that is unprecedented. the other thing is we're seeing on these platforms, they become a medium to introduce harmful content to kids that they never sought out. i have encountered so many parents and young people who themselves told me they went through a difficult breakup and found that the algorithms started feeding them content about taking their own life. in several cases, i've talked to parents whose children ultimately did take their own life after the algorithm fed them videos about not only suggesting suicide but walking them through how they would actually take their own life. this was not happening at this scale when we were growing up. so what is happening right now is the equivalent of putting kids in cars, with no safety features, putting them on roads with no speed limits, no traffic lights, no rules whatsoever, and saying, good luck. we hope it turns out okay. we can do better than that. yes, of course, there is a responsibility for parents. parents need to, of course, set

a good example for their kids and their own use of social media, they need to be involved in having conversations with their children so they understand what they're doing on social media. but i'll tell you this, we have put parents in an impossible situation to monitor a technology that they didn't grow up with, that is rapidly evolved, beyond which most of e would be reasonably able to manage and told them this is all on your shoulders. a mom i wrote about in my open ed in the "new york times," laurie, from colorado, lost her beautiful daughter to anna after harassed and social media. this mom did everything we think a parent should do. set rules for her children what kind of social media they could and couldn't use. monitored the phone every day. yet what she found there were sophisticated means of hiding apps. her daughter had multiple accounts she didn't know about, despite being inckcredibly diligent at a parent.

we have pitted children and their parents against some of the most well-resourced companies with some of the best product engineers in the world, using cutting-edge brain science making sure our kids are maximizing how much time they spend on these platform. that is not a fair fight and that's why i've called on congress to not only but a warning label in place but put in place a series of steps and guardrails that would protect kids from the kind of harmful consent we're talking about from the manipulative features that suck them into use. if we don't do that there are serious crimes -- >> surgeon general, let me ask you in terms of culpability, facebook, tiktok, some of these platforms. i'm curious how much call possicall --

culpability, google, android, apple, where does this responsibility lie for you? >> it's really a good question, andrew. look, i think i may be old-fashioned but i believe if you make products you should be responsible for them. i see it in health care all the time. make a product that causes harm, take responsibility. a doctor, you make a mistake take responsibility for that. right now we have platforms themselves regardless how they're being delivered, most of it often through phone, some cases through other platforms throughout their sort of, forms of technology, but you reflect these platforms fundamentally not safe for our kids. right now. i do think there's a responsibility platforms should bear for that. look, i do think there is a role that phone manufacturers can play as well. they could first certainly consider what standards they have for safety.

especially before they allow children to download apps on to their devices. look, in a crisis like this, where all of our kids are affected keep in mind 95% of kids are on social media. we've all got to step up and see what we can do better. not just parents and kids. >> sounds like you want congress to do something much more, but this is the only thing that you can do within your power is ask congress to put this label on it? >> i can ask congress to do much more and i've done that. not just the label. keep in mind that's one part of the broader set of safety guardrails congress needs to put in place and i called for that last year in my social media advisory. these issues are complicated, timing isn't always convenient but i ask you this -- what is more important than protecting the safety and well-being of our kids when we're living through a mental health crisis with skyrocketing levels of anxiety, depression and suicide among our kids? we should be pulling out the

stops making sure they're protected from harm especially on social media. congress can do that today. step up, take action. >> thank you for explaining your position. we appreciate it, dr. murthy. >> thanks so much. when we come back right here on "squawk box," biden versus trump. what the next president means for the nation's kax tax code. a breakdown what each candidate in tthe table. we're coming right back here on cnbc.

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principle of pwc's washington and national tax services. good morning to you both. kitty, start with you. given, frankly, just how much the debt and deficit are blowing up, is it unto itself simply raising taxes on the rich? do you have to cut the budget? what do you have to do? on the democratic side that is going to be the fundamental question. >> thanks so much. i want to zoom out a second. i think narrowing the conversation to just the deficit and debt is a real mistake. i'm honestly less concerned about the trajectory of debt than i am about the real needs that american families have around housing, around education. the investment needs that the country and the economy have for infrastructure, for the clean energy transition, and i think sometimes long-term projections about debt and deficit can be a

distraction to what the real needs of the economy are. all that said, if you are concerned about the debt or the deficit, the growth in the long-term debt projection has been almost entirely driven by the, first, the bush tax cuts. their permanent extension, and then the trump tax cuts piled on top. those were huge giveaways to the most profitable corporations, the wealthiest individuals in this country, and they are causing real problems in the real economy and with debt and deficit, and so i think the first step is trying to right those mistakes, and then -- >> kitty, sorry to cut you off. are you an, mm tier? >> i'm actually just looking at the pra jectry of the debt as projected. what caused it and how we can turn it around. >> no, no, no. you said you're not worried about it. i think there's a lot of smart people who are very worried about it, because while it might

not be a problem today, clearly, and i think we've seen it in every financial crisis. every financial crisis is, s sparked by debt and deficit is. it doesn't get undermined in years and months, it happens like that. it happens -- >> i'd love to respond. we've been hearing about the pending crisis of bond vigilantes at the door for years and years and years, and when we're talking about -- >> we've seen this in other countries! >> i really would love to respond to your question, because you just told me financial crises are always sparked by debt. the 2008 financial crisis was a really great example. that put millions and millions of americans out of work and out of their homes. it was not sparked by government debt growing. what it was sparked by was the housing crisis. and so -- >> it was sparked by the debt frankly of the banks. >> this is -- >> leverage in the banking

system. that is debt. >> focusing on federal debt and deficit, it's a distraction. if you've thought in 2007 that the primary problem with our economy was growing government debt and the long-term debt projections you really would have missed the mark. i think that's true now. frankly, that's what happened during the recovery from the great recession. we've seen this movie before where we pivot from trying to recover from a huge shock very, very quickly to worrying about debt and deficits. those worries are designed to convince people that it is time to cut programs like social security and medicare. that the american people rely on. i think that that is a mistake. >> okay. kitty, we have -- >> talk about tax policy -- >> set up the conversation so there's more than conversation part of it i need to apologize. i have to get our other guest into the conversation and he has a very different perspective. >> yeah. perhaps not surprisingly i have a different perspective.

two things lead to mine. one is, look, i am concerned about the deficit and debt. i don't think it's something we can continue to ignore but i'm more focused on what is driving it. i think despite what was said earlier, just look at data. congressional budget office, ruthlessly non-partisan congressional budget office released new data tuesday that says over the last 50 years revenues percentage gdp, 17.3% projected in future, 18%. revenues are doing their part. spending the last 50 years, 21% of gdp projected close to 25% of gdp. i mean, it's clear what is driving the long-term deficit and debt. i also now, this is maybe where we agree. i care about sort of human suffering and the welfare of the population, but if you look what happened after 2017, just look at the data. right? in the two years after real household median income up $6,000. better than the last ten years

combined. right? wages up. in the next, following three years. better than any three-year period in history. unemployment amongst african americans, hispanics, those without high school diplomas, all lowest in reported history. there is a path for raising the social welfare of the population. a path that is proven and not because we're not taxing enough. revenues are doing their part. we just have exploding funding and have to address that. maybe not tomorrow, but as an economist simply said it's not the wolf at the door that's the problem it's the ter mymites ine wall. that's what we need to be dealing with. >> kitty, is there ever a moment you'd say we're spending too much? >> i'm sure that there is and i think that's an absurd strongman. i'd like to go back to what was just said. it's vint to choose your windows

and say incomes grew more than over the previous ten years when talking about a lost decade of growth following the great recession largely attr attributability to too small stimulus and not enough investment in the american people. revenues for suspending, absolutely it's true revenues have been extremely low on average over the last 50 years. but that's because for the last 15, 20 years we've been dealing with the bush and trump tax cuts. if you look, you know, at the early 2000s, we had a budget that was in balance. people were concerned, in fact, that the united states was paying down its debt too aggressively. what we got was a series of tax cuts that benefited the wealthy and corporations at the expense of the american people and chronic disinvestment. on a spending question, i think it's worth looking at the cbo and their projections from right before the extension permanently of the majority of the bush tax

cuts. what you'll see is that spending projections can actually, they've fallen since then, as has revenue projections. when you say that spending is the problem, what we're actually seeing is that, if we had not had the bush tax cuts and the trump tax cuts in their wake, we would have a permanently declining debt to gdp rash sho even with aging of the population and other things putting pressure on the federal budget. >> rohit, 20 seconds to respond to that. 20 seconds to respond, quick. >> i mean, look, talk about cherry picking your data points. i'm talking about 50 years of data. right? a congressional budget office. i didn't pick the numbers. this is the official non-partisan -- >> you dus agree with the premise what she says for about the last 20 years? >> i do. actually we talk about the extension of the bush tax cuts. we are omitting from the conversations that permanent extension, that was negotiated by then vice president biden and

my former boss senate mcconnell. a bipartisan greement. not a partisan exercise. >> playing us out. thank you both for your patience. the a long conversation. a detailed one. sure we'll have it again with you soon. thank you, guys. when we can come back, evercore's roger altman joins us to talk markets, the fed and quch more. "sawk box" will be back after a quick break. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. you know what's brilliant? boring. think about it. boring is the unsung catalyst for bold.

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all right. joining us now to talk about the latest rate messaging from fed members, the economy and how all of this could play into november's election is evercore founder and senior chairmanen roger altman. roger, good morning. >> hey, becky. >> i want to ask, were you listening to the last conversation we just had? >> i was. >> maybe we can start with that and just kind of pick up, because it can be confusing. a lot of different numbers out there but the "wall street journal" has a really interesting op-ed today. opinion iece. >> i read that. >> okay. you did. so the numbers that i think are so key here is they point out that revenue is expected to total 17.2% of gdp this year.

unchanged. however, outweighs for spending hit 24.2% of gdp and average 24% over the next decade. that is a huge increase in the cbo's projections. is that a problem? >> becky, what was not mentioned in that op-ed, or the opinion piece, is that over the very long term revenues have averaged 19 to 20% of gdp. yes, recent years lower at the 17% level, but that historically, two or three hundred basis points higher. the only solution to this is going to involve both sides of the equation. spending and revenues. i wish there were, there was political will to take this on, but there isn't at the moment, and so you say to yourself, what will produce a solution and the answer, unfortunately, may be a crisis. >> hmm. >> we've seen that before.

but a real solution here requires both spending restraint and getting revenues back to the very long-term historical average. not just one side. >> i can't imagine that happening. go ahead. >> roger, the chart is right there. 19 a couple of times but since 1975, it looks like the average is nowhere near 19%. it's -- it's right in the article -- how long is the average that you're talking about when it was 19%? that only happened -- >> well, i just recall that when i was serving in the clinton administration and the -- the economic -- economic plan was being negotiated. >> yeah, but -- >> long-term historical averages looking at at that time were in the 19 to 20% range. >> take thats sense at that -- >> joe, in any event there's no solution here that doesn't

involve both sides of the equation. i think only -- i think very unrealistic to think you're going to solve at all given the size of the problem on just one side, but it is true as the "journal" editorial page says. the idea of a 7% deficit, you said a few moments ago with a different interview. 7% deficit in an economy this strong is dangerous. we have to fix that. and it's trite to say perhaps that it's unsustainable, but it is unsustainable, and if it's not pro actively fixed then i think market forces ultimately will force it to be fixed and that will be ugly, but it will be fixed. >> do you ever worry that we -- could harm innovation and the entrepreneurship and everything else? because it's 24% instead of 20%,

going into government spending. the growth you need to generate that organic, you know, revenue increase is not going to be there. it's just -- i don't know if democrats ever think about the offset for taking money out of the private sector and what ma means for long-term growth, roger. >> well, i agree with you largely on that. one of the phenomena we always see especially with fiscal policy, but you see it with other things, is that markets seem to ignore it for a very long time until they don't. and i've just seen this dynamic many times over the years i've been working, and i think that's what's going to happen here. at some point, and it may not be decades away. market's going to wake up and dislike this, and it's going to

dramatically affect treasury financing and other things. it would be good to solve this in a negotiated pro active way before that, but there doesn't seem to be a will to do that, but i'm one who thinks it will be solved. just not solved the easy way. >> roger, when you say it's not decades away. i mean, i guess you're talking about basically buyers refusing to show up to purchase treasurys, the u.s. debt. could it be less than a couple of years away? >> it's always possible, of course, becky, but right now you have the best of all worlds in the financial market environment as you've discussed this morning. all major equity indices at all-time highs. big rally in fixed income markets in recent days. vix's at 1250. inflation coming down.

headed right towards the fed's long-term target. the economy growing at about 2.7% despite the slowing we're seeing. in terms of retail sales and certain consumer products slowing and labor market softening. so it's a very, very good environment. a goldilocks environment for markets. until that changes, i just think logic suggests that markets may not focus on this, but, of course, it will change. i mine, we're seeing give or take 2. 7% growth four years after this recovery started. almost exactly four years. that's amazing. by the way, not many people seem to focus on that trying to figure out why markets are this high. it's amazing. it's the only economy in the world that's remotely, at least advanced economy, doing that. and it's quite a tribute to the u.s. economy and the private sector. but i don't think this is going to be addressed until we see a

less buoyant financial market environment, which would require a recessionary environment, or the prospect of one. >> yeah. no such thing as saving for a rainy day. roger altman, thank you. >> always a pleasure, becky, thank you. coming up, ceo of crypto exchange kraken will join us live. stay tuned. you're watching "squawk box" on cnbc.

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no. welcome back to "squawk box." i'm dominic chu. stocks watching for "morning movers" start with nvidia. we've said stock 69 day, week, year maybe eve an decade. last couple of days reached pinnacle of rarified air. speaking of the most valuable company in the air by market cap taking over microsoft and apple ended tuesday with a 3.34 trillion dollar market cap. with a 3.5% gain in the pre-market right now we could be in the range of north of 3.4, $5 trillion at opening bell. keep an eye on nvidia. meanwhile, earnings news, darden restaurants up, the shares, 2.5%. a little over 10,000 shares volume after the parent company chains like olive garden,

longhorn steak house and ruth chris, a slight miss in revenues driven in part by sales growth at established restaurant locations for both olive garden and longhorn helping offset declines in fine dining. darden's full year earnings forecast fell in line. full year expected lower end of expectations. also raised tsd dividend. cap things off with a check on winn winnebago. shares down 3.5 to 4%. 10,000 shares volume. a miss on profits and revenues. winnebago saw towable units bigger declines in motor homes and marine segments. keep an eye on those. joe, send it back to you. >> great. thank you, dom chu. coming up, we've got former undersecretary for science at the department of energy under, in the obama administration. president obama's chief science guy talking about maybe waning

how the climate crisis and all the attention is after some of those european elections at least fading to some extent. that and more when "squawk box" returns. shop... and i also have a non-profit. but no matter what business i'm in... my network and my tech need to keep up. thank you verizon business. (kevin) now our businesses get fast and reliable internet from the same network that powers our phones. (waitress) all with the security features we need. (aaron) because my businesses are my life. man, the fish tacos are blowing up! so whatever's next... we're cooking with fire. let's make it happen! (vo) switch to the partner businesses rely on.

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the nearly a decades after the paris climate agreement was adopted our next guest asking how the energy transition is proceeding. "wall street journal" op-ed piece from last week and i believe titled "the climate crisis fades out." joining us now, steve koonin senior fellow at stanford hoover institution and author of "unsettled: what climate science tells us, what it doesn't and why it matters." we point out you're in the obama administration, you were, undersecretary for treasury --

for science. would you say your views evolved since then, professor, or even then you were somewhat skeptical of some of the assertions? >> i believe that my views have been evolving as we've seen the energy transition, evolve, and as my own understanding and the world's understanding of climate science has evolved as well. after all, i was in the administration about 12 years ago. >> exactly. some of the things you point out and i guess with the backdrop of what happened in some of the european elections, there are times in the past it's been described by people that, where realities sort of collide with very ambitious goals, and maybe one of them that we're seeing now, i think we were at, what? all-time highness 2023 for emissions. and by 2030 we're going to be

double the acceptable emissions for the paris climate agreement. we're not even close. >> yeah. indeed. you know, people who are naive about the realities of demography, technology, economics and so on are trying to transform a fundamental system of society energy at a pace that is inducing electropushback, it's having economic consequences. it's costing an awful lot of money without much effect. >> you point out that there have been things in the past where, you know, i guess for years back in the '80s this was largely -- then went into the a 35-year period where it was, we need to do something and the media coverage went up ten times. in the past when you see beginning of a waning cycle, do you think we're -- on the other

end of the peak of what we're trying to do here? >> i think so. i think the fervor will certainly subside, as you mentioned. the electric is getting tired, climate fatigue. they don't like to be told what kind of car to buy or the fact they have to spend for expensive upgrades of home heating. we're seeing industry decamp from europe, because energy's getting too expensive. we're seeing low returns on green technologies for the most part. and i think people are going to eventually have a much more realistic sense of just how fast we can make this transition. >> one thing that struck me, and actually i tweeted it out. you said what could revive the flagging transition that we're seeing? that, you say, perhaps a connection between human

influence on climate and the disastrous effects of more frequent secure weather. despite claims to the contrary, the u.n. finds that such connections have not emerged for weather extremes. >> the most -- >> that is not -- that's not in the public -- >> no. well, it's there if you know where to look. so you can look at the most recent u.n. report. working group one, table 12.12. it's a couple of dozen types of weather extremes, and for almost all of them they cannot find a trend much less attribute it to human influences. of course, they'll say in the future it's going to get a lot worse, and we can take that for what it's worth, but over the past century, it's really hard to find a trend in weather extreme droughts, floods, hurricanes, severe storms and so

on. >> that's the holy grail to almost theocracy. the orthodoxy that you hear. whether -- you know, to the decimal point warming is, you know, caused by greater emissions, what the, the fallback invariably is increase in strength, severity of storms, the droughts. flooding. just about anything, you can immediately point to it as being caused by, you know, a trace kre -- co2 becoming slightly less traced? >> you can find it online. but the media, if you excuse me, politicians and ngos just love to hang on to every up and down in the weather and blame it on co2 and, therefore, we have to reduce emissions. you know -- >> it's going to be impossible basically. the almost a pipe dream at this

point? >> i would say within the sanctuary it's a pipe dream in part also because there is 6 billion people hoop need more energy on the globe. fossil fuels are the most reliable and effective convey for them to get that energy and they're going to do it no matter what "we" in the developed world tell them is dire in the future. >> all right. and it's going to be hot this week. just watch. this won't be weather. this will be climate, but if it's cold in the winter it's weather not climate, i think. >> absolutely. >> right? all right. professor koonin, thank you. time for breaking economic data. rick santelli standing by at the cme in chicago. rick, the numbers, please. >> yes. housing starts month of may. a big miss here. looking for a number around 1.37 million. 1 million 277,000. 1 million 277,000. that is the lightest going back

to june of 2020. on the permit side, well, on the permit side we were looking for a number around 1.45 million. we end up with another miss at 1 million 386,000. 1 million 386,000 is the lightest level going back. also to june of 2020. initial jobless claims. 238,000. that's from a slightly revised 243,000. call it down 5,000, shall we? and 238,000 is the lightest level of just going back to the last week in may, because the rearview mirror of 243,000, well, that was the largest number going back to august of '23. now, let's look at continuing claims. 1 million 828,000. that's a little higher than expected. it follow as slightly revised 1 million 813,000, and that is the biggest number actually

interesting. that's the biggest number. we have to go way back leer. th back here. biggest number since -- wow. really is something. november of 2021. november of 2021. all right. let's get lesser but still very important numbers on the current account balance, the deficit. mine its 237 billion. a bigger negative comp balance than we were looked for. ends up being worst since june of '22. finally, the last number. philly fed business outlook comes in at 1.3. a little bit light but still a positive number. biggest negative number was january of minus 10.6. look at the markets synthesizing all of this data, joe, andrew, we see yields moved down initially but now hovering right around 423. where they were before the number. one basis point higher than we said on tuesday before the holiday and 471 in a twol year

unchanged. we know these contracts comes back to end of march. on the close we had on tuesday. two-year comp to the first week in april. we still have some more big data points yet to come this week. especially many are looking at some of those s&p global pmis that may give us a more decisive glimpse into a realtime metric for what's going on in manufacturing and the service sector. bottom numbers, andrew. back to you. >> rick, thank you, sir. straight over to diana olick with more on the housing stargts nu starts numbers. >> andrew, a big surprise to the down side. frankly i'm not sure why estimates were high as they were given the other data we saw in may. brick out single family versus multi-family. single family down 2% year over year. haven't seen single family down year over year in a while. multifamily down 10% month to

month. down 52% year over year. multi-family's not surprising. an oversupply there and a big cutback in starts on multifamily, but back to that single family number. if you look at may, mortgage rates shot up dramatically in april, and in may came back a little bit but not a lot. still over 7% on the 30-year fix. may was the first month builders sentiment dropped since december, and kept dropping. again it dropped in june. it's now lowest level since december. so, also one of the elements of the builder sentiment survey, which is expectations of sales over the next six months, that took the biggest dive. so if you think builders are looking ahead looking at starts, starts came down month to month and year over year for single family. not surprising we're seeing a drop. builders have a lot more supply that they need to unload. and you're seeing a lot more supply coming on to the existing home market. still low. not saying not lean, but with more supply in existing home and

builders having more supply, no question that these numbers are coming down. back to you guys. >> okay. diana, thank you for that. meantime, when we come back, a lot more into this new batch of economic data. plus, why citi is boosting its year-end s&p target in a ve bryig way. all that and more. we'll be right back after this. at least, not the way it could work. your people are buried in busy work. and you might be thinking... can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. your people work better, your customers are happier, and todd... well... he's practically euphoric. practically. so, let's get to work. (♪♪)

welcome back to "squawk box." just got a big batch of economic data. going through it. jobless claims coming in higher than expected. housing starts and building permits now dropped. talk more about the economy, i welcome senior economist from the american institute for economic research and also senior director for economic policy at the center for american progress. served senior policy advisor at the white house economic council. good morning to you both, gentlemen. peter, start with you. just your initial reaction to this both from a political standpoint and if you're sitting in the federal reserve this morning. jay powell watching television thinking to yourself, what am i going to have to do about this? >> so in the jobless claims, the initial claims, i thought a little higher but i think we're seeing a collision between the price effects of the slowing

disinflation of the first few months of this year. retail sales pullback saw in monday's numbers and settling in wage hikes took place in early 2024. data showing businesses are trying to reduce labor costs. nfib polls show optimism is at levels last seen in 2012, 2013. doesn't seem surprising we're seeing some of this. the accumulative minimum wage increases in new york roughly 23%. california 20%. florida over 30%, and think is on top of the 15% to 20% increase in inflation over the last three years. unfortunate, but not very surprising. as for what the fed's going to do, several times in the past few months powell said unexpectedly this labor could continue disinflation prompt a rate cut. continuing to see rising initial claims. put that in context of the establishment and household reports we'll get later this month. we could see a cut on the basis

of weakening employment later this summer. absent what happens in disinflation. >> brandon, what's your initial take on all of this? >> i disagree. i don't think there's that much to see here. this data is hard to read. the most basic test, do we have more ui claims this year compared to last, initial claims. 238,000 this week. had 261,000 last year. actually went down. i think that tells us what we need to know. saw jobless claims rise over the same period last year. really just residuals seasonality. increases go away in july, and that's what i expect to see. >> so maybe nothing to see on the jobless claims side. i understand that. what about the housing starts piece? >> i'm not a housing expert. not really my thing. i can talk about the labor market, though. employment rate in may higher than it was in may of the

previous year. just according to the last jobs report, our best measure, really just seeing a strong stable economy pushing forward. >> yeah. when it comes to -- >> yeah? >> when it comes to housing what i see is, i see inflation, high mortgage rates, rising unemployment, declining optimism. you know, more and more polls show americans don't think they could find another job if they left their current one. the supply side, demand. supply side, a bit of pall over the industry. commercial real estate. nobody's going to shift from a 2%, 3% mortgage got just after the pandemic into a 7% mortgage take on anothers $3,000 in monthly expenses. not surprising we see housing starts and applications for -- >> that part i agree with you 100% on. the jobs piece, i don't disagree

there's anxiety out there, but there's, a part of me wants to agree with brendan. if you just look on a historical basis where we are in the jobs market. you would think there should be euphoria? >> so i will concede this. this is a very noisy number. very noisy number at this time of year for a few reasons. right? teachers getting off. more gig jobs taken. more summer employment. you know, what i see is that companies are not reabsorbing layoffs and as quickly as for in time and also where a lot of workers think they can't get a job. these numbers especially at this time of year, weekly initial claims and weekly numbers have to be put in context of the numbers we get in a few weeks. two weieks, something like that. household surveys. these numbers are noisy and have to put them in context what we'll see soon. >> leave it there, guys.

thank you both for joining us and making sense of some numbers for us. joe? and gilead announcing its twice yearly shot to prevent hiv. lana, hit me with that cold. 100% effective in a phase-three trial. ones three needed to complete successfully to seek full fda approval for hiv infection. data expected later this year or early next. lanacapivire approved to treat some cases of hiv under brand nay sunlanka, but the new study focuseses on its potential as a preventative measure. coming up, the ceos of crypto exchange. ceo. just one. talking about the fight with the

s.e.c. industry regulation. also crypto support in washington. stay tuned you're tcngwahi "squawk box" on cnbc. ♪ ♪ ♪ ♪ ♪ ♪

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crypto including a battle with the s.e.c. joining us, dave ripley ceo of kraken and according to coin market cap, it's the sixth largest exchange globally. good to see you. >> good to be here. >> some day and ipo, one more round of finances before that? >> yeah. not surprised to hear that question. the crypto market is obviously doing incredibly well. contrast that to just last year about around this time. you know, bitcoin -- netting of sentiment, low price. now at all-time highs and been here for a while. so as you might imagine, kraken is seeing great success throughout this year as well. >> s.e.c. in your face from time

to time. are you settling with one issue another pending. is that today? >> yeah. actually our oral arguments for the motion to dismiss is today. the motion to dismiss is basically our argument this shouldn't even go to trial. if we look at what's happening here and contrast -- >> what are they saying? review. what is the s.e.c. contending? >> they're contending that some of the digital assets, cryptocurrencies actually qualify at securities and, therefore, they're traded on -- >> not registered? >> well, yeah. which, of course, not actually a path to register. look at, you know, we sell mar market across the world, canada, uk and u.s. prime markets. pretty much gone to a place they put in a reasonable set of regulations. contrast to here in the u.s.

basically rogue regulators pursuing a path of regulation by enforcement. meanwhile, we have congress actually trying to pass bills to put something in place that's meaningful and appropriate for this. >> who do you think should be -- regulating the industry? if it's not the s.e.c.? what would you like congress to do? >> right now there's a bill that actually just passed the house with solid bipartisan support. 279 votes, i believe. the fit 21 bill that actually puts forth a structure, built the ftc and s.e.c. were to regulate, depending on the digital assets. for the most part many of the digital assets would actually come under the purview of this eftc. >> would you say that you're seeing more, a more receptive congress at this point? maybe not the executive branch, i guess? >> well, it's kind of all of the

above. i mean, when we came into this year the executive branch, as you noted, via fcc, primarily, strongly negative to cryptocurrency. many supporters throughout the u.s. government. i government. i mean, i visit d.c. periodically and met with many people in congress, the senate, and there are a number of supporters there, and i think over the past several, i don't know, maybe two months or so, we've seen kind of strong support and now bipartisan support as well. i mean, the bill i just mentioned is one great example. we didn't expect it to be that successful, 279 votes. it was really successful. i think it was 71 from the democrat side as well. so, now, we've kind of seen a little bit of softening up on the executive branch. biden administration said that they're willing to discuss and work with the industry, work

with congress to put forth a new bill, and so we're just seeing a lot of positive movement. >> when you hear -- where do you think it came from in the biden administration? i mean, senator elizabeth warren, we know how she feels about it. gary gensler. they bring up the only use case for it is for, i don't know, money laundering or ransomware. is that the main reason that you hear from the biden administration? is that what you think it stems from? >> i don't think so. i don't think so. but it's baffling what the reason could be. >> king dollar. >> it doesn't help a government to not be able to use -- >> sure, sure, but you know, i mean, the reality is that there's -- right now, if we talk about stablecoins, the u.s. dollar stablecoin with huge adoption there, over $100 billion of adoption, that's something that actually kind of promotes the usage of the

dollar, not just here in the u.s. but globally, and many stablecoins also coming into the regulatory fold, regulatory compliant, as is kraken, following the regulations that are in place for money laundering and so forth. i don't think that's the answer, but it is baffling, because you ask the question, what could it be? and it's a mystery. >> do you think former president trump is sincere about his recent comments about crypto? does he understand crypto, bitcoin? do you take him at his word that it would be a friendlier touch? >> well, yeah, everyone goes on a journey with bitcoin and cryptocurrency. i did myself, and his comments on bitcoin and cryptocurrency are recent, so i would hope that he's kind of on that learning journey, learning more about it. when individuals actually take the time to learn about bitcoin cryptocurrency, it's almost always a positive outcome. >> so, 2024 will be the year of more accommodating regulation

and an ipo for your company? >> so, 2025 was your question? >> no, 2024. >> this year? okay, we got to go quicker. >> no, 2025 then is more -- you can change it. >> the regulation, i think we're absolutely on our way with the passage of this bill in the house and potentially we get there this year with the passage -- >> but for you, 2025? >> as far as kraken, fund raise, ipo, all these things are out there. yeah. it's -- timing is not something that we're, you know, defined specifically at this point in time. >> okay. thanks. >> thank you. >> dave ripley, believe it or not. you got it. you've heard that before, i'm sure. andrew? okay. thanks so much, joe. coming up, citi's scott chronert is going to tell us why he just boosted his year-end s&p 500 target in a very big way. we'll talk about it. quk"etnsft t. "saw rur aerhis. g) at morgan stanley, old school hard work

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welcome back to "squawk box." our final guest today just raised his year-end s&p 500 target to 5,600 up from 5,100. in his view, it's all about the megacaps. i want to bring in scott chronert, head of u.s. equity strategy at citi research.

make the case, my friend. >> well, thanks, andrew. i think the sentiment here is, when you think about it, fairly straightforward. when you look at the year to date index return, the way we break it down is that when we ran the math at 14% or so for the s&p, five percentage points of that came from nvidia, four percentage points came from the rest of the mag seven. that left the remaining 493 within the s&p contributing about 5%. essentially what's been happening here is that the fundamental beat and raise dynamic for nvidia and the rest of the mag seven has stood out this year and has lifted expectations for that cohort of companies that in turn has influenced where broader s&p earnings are going. to a certain degree, what we're really doing here is trueing up our starting point for the year, 5,100, which, you know, assumed a contribution from the mag seven, but not to the extent that we're getting right now. so, where we go from here?

we're still looking for a very strong earnings follow-through for that component of the market going into the end of the year. we are looking for a contribution from the rest of the mag seven. that becomes more of a story as we head into 2025, though. >> scott, what's your -- your fed prognostication in all of this? what does it require to get to the 5,600 number? by the way, obviously, the 5,100 has already been blown through so unless you thought the whole thing was going to reverse, this is not wild. >> well, that's the point of this. this is fairly fundamentally premised. what you really have to get comfortable with is that the multiple for the s&p is going to hold in this 22-22.5 range, which is roughly where we are currently, but it's predicated on the fundamental backdrop for the mag seven. in terms of the interest rate environment, heck, we've argued for some time now that the mega cap growth part of the market has actually benefitted from higher fed funds rates as a function of the interest they

earn on their cash. now, in terms of the fed outlook from here, the citi economics view is first cut in september, three cuts for this year. i know consensus is closer to one. i'm less concerned. i want to know that the pivot is coming, and in terms of aless restrictive fed, we do think we're seeing some fraying around the edges, more broadly in the economy, and i think the fed is going to be in place to ease later on. that becomes more of an influence on the '25 fundamental outlook than it does fundamentals for the back half of '24, though. >> okay. scott, we are going to leave the conversation there. we will see where things go. by the way, do you think -- we got to go, but do you think it ticks down before it ticks up? >> yeah, we think that there's -- the growing risks are pretty clear here. we think there's room in the second half of the year for 5 to 10% pullback, and we want to be prepared to buy into that eventuality. >> okay. scott, thank you. have a great day. appreciate it very, very much. joe, before we head out,

let's take a quick final check on the markets. right now, on the back of some of that news, by the way, on both housing and jobless claims. you're looking at the dow off about 18, 19 points this morning, nasdaq up about 80, s&p 500, up about 15. >> it's up a lot more -- the nasdaq was up a lot more earlier, i guess, andrew. now the dow is down. it's reversed. it won't last. >> all right. we will see where things end today. we'll see you in the morning. join us tomorrow. "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with melissa lee, mike santoli here at post nine of the new york stock exchange. cramer and faber have the morning off. stocks do look to resume their climb after wednesday's holiday. central banks continue to ease this morning. it's the swiss, qqq's closing in on a 20% total return for the year so far. our road map begins with the number