certainly the quarter we're in qt will be the most challenging quarter from a comp perspective. the stock has had quite a run this year. >> new fresh record all-time high. we've got to go. futures, i don't know, andrew, see you -- you lucky guy, in aspen. he's working hard, though. are you going to be here tomorrow? >> yes. >> i'll see you tomorrow. >> make sure you join us. "squawk on the street" right now. ♪ good tuesday morning. welcome to "squawk on the street" i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. faber has the morning off. the story flips as nvidia looks to bounce after the worst three-day drop in a year and a half. what does this mean for the next rotation? a tough three-day slight. bofa adds it to best of breed

today. the eu's new tech target accusing microsoft of breaking antitrust rules. we're watching the plane makers, airbus cutting targets and boeing reportedly in talks to buy back spirit mostly with stock. let's begin with nvidia looking to rebound after sliding into correction territory. jim, even though since the close on the 14th, s&p is up a touch. >> i don't like rallies that start in pre opening, and the reason i don't is because then anybody who is in it yesterday, who bought it -- 118 -- 117 after the close. those people are going to hit, going to hit, going to hit. that's going to make other sellers come up. you want to see it open down and then rally. this takes away the opportunity. so the people are not i think going to be able to say let's make a stand here unless micron -- they have micron because it's not going to report until tomorrow. i look at the situation and i

say wait. look. i'm an own it, don't treated it. i never want people to get a bad entry point. i don't think up three is the right entry point. >> you don't think we're there yet? >> no. we haven't had any -- we need sanjay to say it's accelerating, micron's ceo. right now we don't have any data pointsthat make me feel like, you know what, there's someone who upgraded -- it's all very lame. the defenses are lame because it's had such a big run. i say let's see if this early morning rally can hold. my sense is there will be people saying, oh, thank heavens, i thought i'd never see the price again. those are the people you're most afraid of, your fellow shareholder is your enemy now. >> that's why we turn to you, jim, for your gut in a sense. that said, yesterday, even with

its decline, you had 9 of 11 sectors green. 70% of s&p 500 components green. does that continue, that rotation? >> i spent a lot of time figuring out how much of a share donation can these companies make? apple is still accumulating money. amazon did roll over. alphabet had a really good session. there's not enough money in those stocks when they shed their gains that can go to the rest of the market and sustain it. you need to see the big seven-year auction on thursday. i care more about that. 44 billion, than i care about what these stocks are doing. there's not enough money to go around. there's just not. there's a lot of safe money at five. to get people to come in and buy something, you need fedex to say they see an acceleration. you need to see -- a lot of chatter about the auto companies, maybe they have to cut prices. you need to see some fed official say, we're looking at

the data and maybe we see softness. we have to see what the personal consumption is going to be on friday. instead we have a pop-off, bowman, you know how i feel about these people, being grilled and grilled and grilled. almost like when i interview a ceo, it's my quiet period, i can't tell you. finally, okay, whatever you say. if it gets hot, we will raise. then that gets to be the quote of the day. oh, it's going to get hot and they'll raise. we need to see fed shut up or fed say, listen, it's going to be okay. we need to see some sector of the economy that's indicating it's doing a little better before we say it's time to buy nvidia. >> we'll pay attention to fedex tonight. >> that will be important. bowman is speaking twice today. the one speech this morning was in london where he did remove her expectations for cuts into '25. take a listen. >> should the incoming data indicate that inflation is moving sustainably toward our 2%

goal, it will eventually become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming too restrictive. however, we're still not yet at the point where it's appropriate to lower policy -- the policy rate. >> at the same time you had daly yesterday say the labor market might be at an inflection point and not in a good way. >> i don't know where people get this information. i don't know the data they're looking at. it's pretty obviously we have an immigration issue. we don't have wage inflation like we thought we had. we have rent inflation. jay powell has talked about that, because we've had an influx of 10 million people in the last three years. that's not a political statement. it's an actual statement. let's stick with the facts. we do have some inflation numbers that have been too hot. we still are not at 4.2% on

unemployment. we still have areas of the economy that need to cool down. that is not a prescription for selling everything. it's not a prescription for saying we need to tighten. it's just a prescription for saying, look, the data is just okay. it's got to get a little weaker. that's the rap. everyone who is trading, go to the ham toms. stop it! >> we did see tlt ramp late yesterday. >> that was strange. >> got near 4.2 this morning, jim. we'll talk a lot more later on today about negative pricing in grocery. we'll talk to evercore they've got a note out today. cam bells, kellogg. melissa just mentioned walmart. these comps will be tough. >> these are very, very hard. i just keep coming back to what are the best performing -- what are the best performing retailers? there was a good piece we had yesterday to talk about how walmart can go higher. like a three-martini lunch.

there are three that when you're so frugal, forget about it. i'm going to go to tj. by the way, someone recommended capri. it turns out to be tjx doesn't say capri on the door. i've got to pay more for that. >> this was an all-time high yesterday, jim. >> that company is about people being smart. burlington is about people being smart. cap tri is about people saying, huh-uh. urban, because of newly, where you rent the clothes is about people saying great. this is about a frugal economy. these themes that are happening, no one seems to grasp them on the fed. why can't they just say, look, we're not as worried about food inflation -- there are two companies called costco and walmart. that's 200 million people. i don't know. maybe they have to go to dollar tree. why don't they ever mention

companies? why can't they do it? we know jay could do it. >> this is on a day when mcdonald's is launching their $5 value meal. >> about time. they crammed the franchisees that didn't realize, if you sell more at a lower price, you can make it up. >> having lost a lot of business to casual and fast casual. i know you saw the upgrade of gap today out of cowan. >> he's doing a great job. people don't think he knows what he's doing. are they out of their mind? richard dickson, i had him on the show, revitalizing one by one by one every single name plate. banana republic, doing a great job. he came on the show. the humility he showed is remarkable. i was goading him. listen, i went to my banana republic -- we're not there yet. this guy one by one is doing the

right thing. >> cowan says transformation at all four brands and back-to-school isn't that far away. >> you slr to have your stuff in your stores if you're going to do back-to-school by now. you're late. i would point out that he didn't even have as high hopes banana republic as i have when i talked to him last. subsequently he said we're getting it. this is a man who has kept expectations low for a very inexpensive stock with a really good balance sheet and a dividend that can be backed up. >> interesting, target goes to 30 from cowan on gap. let's move to the eu versus big tech. the block hitting microsoft with antitrust charges accusing bundling teams with microsoft 365. the company says it will work to find solutions to address those concerns. jim, you literally threw up your hands right now. >> when you turn on your pc, you don't suddenly get teams. this is one of the great open

secrets of the world. i put on my pc, i have a very nice hewlett packard machine. as soon as i do it, up comes teams. did i press teams? did i want teams? did i want zoom? no. i want what i want which is my home screen. no, i get teams. oh, look, there's five new updates of teams. i don't care. >> so you think the regulators, they're not off base? >> they're not aggressive enough. everybody knows it's time. we all know it. a mistake. new teams. did i ask for that? did i ask for that? when i wake up, my wife saying, hey, you know what? i've got all new underwear for you. did i ask for that? >> is the remedy simple in this case? >> i think they have to say, look, you can't make it so when you turn on a pc, that these companies that make the pcs are under orders. i don't know what happens.

why are we constantly getting these updates from teams as soon as we turn on our pc? the answer is because microsoft is really powerful or microsoft would say to me, jim, if you knew how to turn on a pc better, then you wouldn't be getting it. >> it's all in the wrist. >> maybe, jim, what you ought to do is stop pressing restart and press anti teams. that's f 74. everyone knows this. why are they just going after the bund her. >> meantime, more clarity, jim, in this apparent partnership between apple and meta which the bloomberg now says never got to a formal stage. apparently apple doesn't think meta's privacy protocols are strong enough. >> when i spoke with tim cook after the worldwide developers -- hey, when i polled the young people, they're so excited about the privacy because privacy is number one. how come nobody is talking about how we care about privacy more

than anybody. i say the people in the 50s don't care. the 20-year-olds are scared to death. they believe in privacy. when i heard that tim was in talks allegedly with mark, mark zuckerberg, what is that conversation like if the most important thing you have to say is privacy, and the most important thing he has to say is impressions. the culture in the end trumps everything. culture will trump any sort of strategic goal. i think the cultures are too different. >> back to 2.10 on apple. moelis goes to 260. >> i like that piece. i sent an email saying, it's a terrific job. i do think he is talking about that notion -- he likes simple concepts spent. i want people to read his stuff. i like his dad, the greatest chemical analyst of my life. he knew it was much more about huntsman. when you look at what ben is saying, he's making a similar point. he's saying most of your phones

are old. that's all. >> and as a result back to -- i think he called the iphone upgrade cycle, it could be unprecedented. >> he's right. especially if you have longer battery life. when you talk to cook, he would say how can people make a judgment of how great this phone is when all we could do is show a dozen of the features that are coming? i really think ben is very right. put a lot of people off good, stock going at 165 and no one upgradeed. then tony, who i now regard as the greatest ever, tony did a good call. i think it's been straight up and i think people are still trying to scramble because they're saying, well, i never like to pay 31 times earnings for apple. welcome to the new world of giant upgrade cycle plus service revenue explosion and no china to speak of, even though our relationships with china are suboptimal. >> yeah. i don't know if you saw these comments from ambassador burns

about china. in his words sort of reneging on this deal they had with us last november to get citizens to reengage. >> i thought that was dreadful. we obviously are taking -- it mentions we're taking a lot of students in which is fantastic. they can say, listen, that's because we pay. but it seemed like that, if you participate in anything that we do as a matter of cost culture, you're summoned or there's a knock on the door. i thought that was self-evidently targeted. >> we'll also talk some novo approvals in china this morning. >> now that is -- people don't realizes the obesity rate in china horrible. right now only had been diabetes. lilly had diabetes, very good. >> we'll get to transports including boeing and airbus in the spotlight for different reasons. take a look at the premarket. we'll see if this nvidia bounce can last. for now sdnaaq futures close to the morning high. stay with us.

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boeing is said to have changed its proposal to buy back spirit air systems. the jet maker is looking to offer mostly stock after coming close to a nearly $4 billion all-cash deal. it calls for shedding operations that make parts for airbus. >> very surprised because we all think of airbus as the well-oiled machine. i would say that anybody who worked on this boeing story for a long time knows they've repeatedly said it's going to be cash. repeatedly said it's going to be cash. now it's stock. that's just great. look. can anything that boeing says being taken seriously at this point?

honestly. how many days do we have to go by and say, they're a regular business, they're fine. justice department might indict them. oh, they're fine. they said it was going to be cash. now it's stock. they won a contract for the military, a couple hundred million. all i can tell you is the fact is, if there were three companies in this business, we would never be talking thabt company. it's ridiculous how many mistake boeing makes. we all say fine. it doesn't matter. >> because of the duopoly defense. >> yeah, because of the duopoly. look, i think mr. calhoun is a fine man. he gave his testimony. why isn't each member of the board being called in front of congress saying, what did you know? was there any statement, did anyone make a presentation talking about any of these issues? give me -- due process, we want process. i don't care about statements. it want process. what was the process that the

board used to be able to okay all this stuff? did the board talk about howe it's going to be all cash? let's see the process. where is the justice department's typical investigation? what are the processes this company uses. right now it looks like there are no processes. it's all seat of the pants. >> you're talking about negative news, jim. why can't the stock be pressured lower? >> because there's only two of them. it doesn't seem to be how incompetent they are. they win. i will give airbus a real shot of trying to be more incompetent than boeing with that announcement last night. >> because of the supply chain? >> yeah. we have a way in this country of examining what companies do wrong. we look at their process. we see if they had any processes. i don't feel these guys have the level of process that we would have at our company or a lot of companies. they just don't seem to have it. >> you're not willing -- you wouldn't be recommending a buy here on a flier?

>> i would be having to close my eyes and buy and say, you know what? no matter what, the travel theme is so strong i don't care. the justice department is not going after the people that run the company. what would happen is, if i come out today and say buy it and they come out and say they can't find anyone that wants to be ceo, then it goes down lower. the only thing to take the stock down to 150 would be if they said we can't find anyone who wants to be ceo which would be remarkable given the fact you make $10 million the moment you say you want to be ceo. >> did you see tsa's through point on sunday? 2.96 million. that's a record. we're still looking ahead to july fourth which we also expect to beat records. we'll get cramer's mad dash. count down to the opening bell. one more look at the premarket. we'll get to a bunch of other calls as well as we get this tuesday under way. don't go anywhere.

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let's get cramer's mad dash. >> some operators are better than others. i say that because it sounds like everything is a big etf to a lot of people. it doesn't matter if they're selling burgers or tacos. bring kerr international. this is symbol e. what people don't realize is we can talk about how mcdonald's can go below five or say kevin bring kerr has the stock up 70%. that's incredible. the reason is, bargain. they've got an $11 option for dinner that is bar none the best deal i've seen. they also, by the way, are the largest seller of margaritas in the country and they use top flight liquor. what is that general peters tequila? no, they use top flight.

i say general, not major. i think this is a man who understarndz how to leverage advertising, but understands if you give the american people a bargain, they will come. the other people who feel like this texas road house. they also have, $11. that's what people want. >> that's not far off from a fast food, a qsr order. >> this is the empire strikes back. this is full dining, which comes to almost the same as a big mac, fries and a diet coke in some parts of the country. hoffman is religious about his pursuit of value. he also has incredibly funny ads, has great social media. i remember when norm brinker was alive is the last time i liked the stock. we're talking the '80s. first i'm totally dismissive. [ cheers and applause ] >> chili's is dynamite.

>> we'll talk more about the degree to which that sector has stolen share from qsr later on this morning. let's get to the bell. at the big board today, consulting company booz allen hamilton celebrating 110 years [ bell ringing ]. >> kind of evenly split. >> carnival was good. >> carnival was good. i'm looking for some signs that it's working to be a little more involved. carnival had a much better-than-expected quarter. i had them on. they were surprised the stock was as low as it was. they far exceeded their promises. if it's good for carnival, somehow it's great for royal. royal is the favorite son in this group. when the smoke clears, people will still be buying rcl. doesn't matter. >> we were looking for a small loss.

managed to come in with seven cent profit, raising the yield forecast. we keep pressuring them, how much more can you raise prices? >> i guess they haven't met the resistance yet. only like -- vale did, the resort company. they reached the level where they went too far. but that is really -- of the people i think about who has gone too far in price increases, there really haven't been that many. if you look at vail resorts, that stock is down 16% because they did overreach. i'm always reluctantto talk about comcast, theme parks -- >> goldman initiates a lot of media. sell on paramount. buy comcast/disney/fox. on the disney part, they say the $60 billion investment over the next several years is an insulation from some of the content challenges that everybody faces.

>> anything that makes you feel like, wait a second, maybe i shouldn't just continue to go all in, netflix and maybe should look at the other guys. that made me feel that way. the old days, when you would speak to these guys behind the scenes, they would say, look, i don't know netflix, what's so special. netflix doesn't have theme marks. oh, darn, we have theme marks. netflix doesn't have theme parks. now we're going back full tilt. hen, hugh johnston, i have to run the company. i've got a wife out there doing stuff, my kids with me in the car. time for hugh johnston to come out and say, let me tell you who we really are. no politics, no privacy. just here is what we're doing. >> jim is right. our parent company comcast gets a similar initiation by jim. there the story is mostly about broad bapped worries being priced in and flee cash flow over the next five years really driving buybacks and dividends. >> i think the stock is not

working today despite the fact that that was a very positive piece because they say all these things they're doing will offset individual everybody. let's say we're talking about nvidia. all these things we're doing will offset the fact that people are using amd shift. you can't do a recommendation and say, look, they have these businesses in regard to that business. when there are so many companies that don't have to have anything offset, i don't of to offset -- there's nothing to offset. >> no tough choices is what you're saying. >> right. why do i have to be involved in a stock that yields 3%, that sells at ten times earnings where something good is offsetting something bad when i could be at a stock that sells at 20 times earnings and you don't have anything to offset. that's the problem. you can't have anything in a piece which says, look, these are bad, but this will offset that, when you have so many other companies where there's nothing. >> no cons, just pros.

>> no cons. i work for comcast. i own comcast stock. i just wish there were something new that would make it so you don't have to offset because there's nothing to offset. tough choices have to be made. when you continue to offer a product and it's going down in value and you have a great analyst writing a piece about goldman and the stock is down nine cents, that should say to you, wow, i don't know, maybe the offset is too much to overlook. >> speaking of tough choices, jim. a big piece in the journal about jane fraser and the turn-around at citi, and the fact it's been 80% below the highs for 15 years. >> i thought that was a really -- an unwarranted negative piece. the stock is up 19% this year. she's done a very, very good job. that piece had too many long knives for me. i think she's done a really great job. the idea that piece basically

said nothing has happened since corvette -- if you step back, it was like, to be sure but she's done this right. i thought that piece was damning with feign praise. >> a couple desks pointed out last time banks traded well afterwards. if basel iiim is more dovish, does that give management more connie dense about buybacks? >> it should. i know wells have been buying back. the one i've been watching is bank of america. they're all up 18, 19, 20. jpmorgan had a remarkable move yesterday. the group wants to go higher. in the end there are buyback machines and you can't buy back. they all depend on the last quarter. so i would advise people, that move -- now you've got to wait. you've got to wait. they're going to report, and whatever you try to pull off here is going to fail. i did not like -- by the way, i love sharly sharp.

he's doing a great job at wells. i thought it was an unfair piece about frazier. she got a bad hand. she got like a nine high and she's trying to make something happen, a straight. she's got two pair. i don't know. it made it sound like -- it's been kind of a waste land. that's just not fair. >> very difficult and very international story to turn around. >> a bad hand. >> we mentioned the glp-1s. novo will invest $400 billion in a second plant in north korea fk to try to make more glp-1s. we mentioned reuters, china approving wegovy other there. >> the big untold story is these factories are incredibly hard to build. they can take up to five years to build. >> this one won't be ready maybe

until 2029. >> nothing you can do. unstable. you have to do it with an injector. a lot of people thought it would be like covid, let's do a vaccine and get them in people's hands. jacobs has a lot of the engineering. don't buy it for that. that's not what the company is about. these are hard factories to build. you get an outfit like viking. people say, they've got something fantastic. talk to me in 2029. people say, well maybe pfizer will buy viking. no. you have to have the plants. this is one that is much more about the plant than people realizes. really hard to build. david rich, by the way, at the very beginning said our lean comes from how hard it is to build. even intel in its heyday was not able to build -- they had these foundries they were building, and they don't take as long as this, and those were big. >> it is surprising.

you're right. fair amount of pressure, jim, in home depot worst dow component. you saw pool, this lowered guidance. >> pool was terrible. i know that -- my friend herb greenberg, i heard negative things about leslie in his wall street beats, i didn't think pool would be as hurt. they had really negative things about discretionary spending with pool. it took my breath away, how bad that was. >> this price will take it back to late '22. >> remember people built pool -- there was a covid move to build pools, obviously, and these guys do that. home depot cannot get out of its own way. they become more of a rate play. they bought the srs to compete against builders firstsource. talk about a stock crushed is builders firstsource. i don't know what to say about some of these companies, they've

been hit so hard. again, it's hidden. people don't realizes builders firstsource was at 214. that was in march. now it's at 130. that's a gigantic decline. people say, who cares about builders firstsource? the answer is home depot did or they wouldn't be buying -- >> don't these kinds of charts, shouldn't they be getting the fed's attention? >> that's my point, exactly. let's deal with the fact that there are so many segments that are cooling and focus on the ones that haven't, that's rent, that's housing, that's cars. if cars come down, if the cdk hack is that bad they can't sell as much, and if we have incentives coming back, check box, check box, check box. when you go through the comps for home depot, there's nothing good. it's just there's nothing bad. >> jim mentions cars today. wells las a preview of the coming quarter for the industry.

another tough setup, jim. who is worst positioned? we are the least confident on tesla. we expect another sub-400k delivery quarter. lower pricing, financing. >> you have to go to the creative piece by jonas about energy. you can always say it'sworth x number. i still think tesla is bottoming. i do not like the action in any of these car retailers that it had problems with cdk. these are places where every single weekend is a huge amount of business. out can't do all the business by hand. >> which they literally have been doing. >> carmax is a really smart, very technologically inclined company. they have i think the least exposure to this. everybody has got some exposure because there's parts involved and going outside of your network to get stuff. this industry is being clobbered by this, clobbered. >> i would say out of all the cyberattacks we've seen in the last few years, this seems to

have the deepest roots. >> always seems the one that we start, cdk is private, we don't have the assurances we get from the sec looking at you. i don't know. this one just stinks and we're all like, eh, sure. we're in the eyes glazed over moment. george kurtz at crowdstrike, you're just counting dollars. anybody -- you either pay ransom or you pay them. it's better to pay them. >> that's a good way to get into software, jim, especially after some of these pieces yesterday about what, for example, a toik ban would cost oracle. >> i don't know. those are great speculations. >> salesforce, though, second-best dow name today. >> salesforce is fighting back. there are people who feel we've made -- we have said that the enterprise software business is

gone. it's no longer the premium multiple. it's interesting that salesforce has a lower forward pe than apple. apple is a device company and salesforce is in the ether. i like salesforce. i remain constructive to marc benioff. i think we're in a period where a lot of people would be right to say i'm going to wait till things get better before i buy more. i'll go out to dreamforce and be part of the faithful. i they they've been able to use ai positively for customers. they don't like salesforce. they had workday and still inclined to buy service now. they being the people who really care a lot about enterprises software. >> you mean the cios, ctos? >> i think those places are all doing good business. i think the marketplace wants hardware. wall street wants hardware. >> sure. >> they want broadcom more than

salesforce. >> oil and gas, jim, a little more discussion today about summer demand finally coming around. stockpiles have been a little lawmakerish, bullish the last few days. >> i thought yesterday was related to northern israel and hezbollah. >> this notion we would see a second phase -- >> that's what i thought the spike in oim was too pronounced versus inventories, that was entirely related to people fearing something to happen, that that will be a wider fwhar the north which woulden in involve iran saying a lot more difficult things. so, therefore, you have a spurt up. i don't think it's demand. >> meanwhile, some of the red sea turmoil is starting to bite on shipping costs in the middle east again. >> costs are going up again. i know. great point. don't know -- we've glossed over it before. we care more about our trucking rates in our country. i don't know, carl. i still feel -- i said last

night on "mad," that we are right now totally in an nvidia set. every time you try to figure out, wait, should i bai yun june pacific, what do i think about lilly? you have to hit the cycle of nvidia. as long as it's top of mind like that, then we're going to struggle. have you seen the terrific things about gm? let me just check nvidia. i have not seen this occur at any other time where you just keep checking this one company because you want to be sure that that's not going to do something more. >> is there any -- we always do the top search ticker on cnbc.com. is it the most requested ticker when people meet jim? >> i don't get anything -- >> nothing else. >> i don't get it. we could be out therelooking at the grand teton and a person comes up to me, boy, thank you for your dog.

huh? your dog named nvidia. i'm jim, nice to meet you. hey, dog -- thank you. out here yesterday. hey, good dog. >> you want to see the market escape that. yeah, it has to. we can't go anywhere until we stop thinking about nvidia. we have to be able to focus on more than one thing, more than the idea that there's this company that no one has heard of that took out microsoft. that was a seminal and horrible moment. >> you mentioned fedex and micron tomorrow. nike thursday. are those early candidates? >> micron has to confirm it's not just the hot band with memory, it's throughout the food chain that it's doing well. i'm not saying it was a horrible moment for nvidia. nvidia is a great company and it deserves to sell where it should because the multiple is very low. i'm saying there was this horror moment among stock people who

know microsoft, well, there's no way this company, i have no idea what they do, is bigger than microsoft. it's just not right. i remember, by the way, when exxon was passed in value. people say exxon is the greatest company on earth, how can that be passed by merck, whatever? nvidia is too much of a focus. i've been focused on this since 2014. >> we do our part to talk about it. it's no mystery. >> it's right to focus, but we need to make it so it's not resentful. i can't have it beat all. those people are being blown out right now. but the contempt that the marketplace heaped on this company for being bigger than microsoft was almost like -- it was like rocky/apollo creed. or is this mr. t. and the forecast of people who buy it is payne? it was like a rocky moment. who is this rocky? who is that thing about the philadelphia steps, what is that all about? no, it's very possible this

company has done great things. i just felt that there's an element of, i can't believe it got that high and now finally it's going back to where it came from. i'm saying we've got to make it so this is all -- we just can look at something else, other than nvidia. >> that's a great point. we'll see p the fever breaks, especially as we move into earnings season where everybody is going to have their shot. >> exactly. 499 other companies that are really cool. >> as we go to break, let's watch bonds. we got some philly fed services this morning. we'll get conference board at the top of the hour. as jim pointed out, two-year note auction today and a busy wait for auctions. still at 4.25. we'll be right back.

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it's time jim and stop trading. >> look at the chaos in the rails. thinking what i may be say about to be wrong. an auto company and the autos move by rails, but there's a piece this morning by the pro live rick adam jonas about how ford and gm, 40% gap. i would point out there's a lot of -- my travel trust owns ford and we'll talk about it on thursday. a lot of disinformation about the f series not doing well. i -- that is not correct. the f series is continuing to take share. i understand stellantis may lose share to dodge to ford and i don't think ford is at a level that's dangerous. jonas points out maybe ford will return shareholders more. they have not indicated they wanted to do a buyback. new cfo. i think ford has plenty of

money. this stock had a move yesterday in the face of what i thought was disinformation campaign about ford losing share and disinformation meaning when you check it out, it didn't come out to be true. not unlike, by the way, the unfortunate mark zuckerberg. >> yes. >> cruise to nowhere. what was that. what was that? >> yes. >> you know. >> well, given the gm, ford year to date split, i would imagine you wouldn't be disappointed if they. >> that's what i'm hoping for. i think jonas has a good piece. it shouldn't be this far apart. gm, mary barra, we spend a lot more time -- it's interesting. if mary barra and gm were the focus and not tesla, we would probably feel a little more bullish. gm has done a remarkable job. i did think jonas saying ford is still his favorite is very positive. >> as for tesla, it does feel like every morgan stanley note on tesla from jonas is about another unit, either the ai or optimist or -- and today it's

energy. >> the robot division worth $72 per share. that's not back of the envelope. i spent all night, you can see, i tweeted at 3:30 and i was working on my -- on how there's -- a light bulb. a light bulb worth 47 -- i don't know, maybe as much as $82 per share. >> yes. that is -- that's a front of the envelope calculation. >> it's a car company doing very well. he's got a lot of other things in the hopper, in the fire, and -- >> yes. >> i think it's a buy here. i like -- ford is easier. the 5% yield down a lot versus gm. >> jim, we'll see you tonight. >> yeah. i got pets, talking about pets tonight. >> and fedex, of course. >> exactly. >> "mad money" 6:00 p.m. eastern time. dow with opening lows here down 113. our 5455 s&p. stay with us.

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good tuesday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with leslie picker and mike santoli. david and sara have the morning off. watching tech trying to make a stand. the nasdaq outperforming blue chips. nvidia holding on to an opening bounce. consumer confidence is out. let's get to rick santelli. >> yes. consumer confidence for the month of june in addition, we have some richmond fed indices on richmond fed, if we look at the manufacturing side of the equation, expecting a number minus 3. comes out minus 10. that's the weakest, biggest negative month over month change since march and if we look at the service side, the business conditions, at minus 11, that's the weakest since october of last year. on june consumer confidence, from the conference board, we're expecting a nice even 100 on the headline, comes in better than expected, 100.4.

and that follows sequentially 101.3, which is a downward revision of what was originally reported as 102. if we look at the present situation, 141.5. comps to last month which had a huge downward revision. all the way from 143.1 to 140.8. so big downward revision there. so 141.5 now stands as the best level going back to march of just this year. and finally if we look at what may lie ahead on expectations, 73.0. sequentially following a slightly upward revised 74.9. 73.0 is the lightest level since, well, very recently since april of this year. most of these indices don't seem to move the market much, but the revision to the present situation, is something to pay attention to with anecdotal evidence there's slowing within

the economy. if we look at interests this morning we're hovering around 473 to 474 in a 2-year, a sideways consolidation level, and as for 10-year, keep it close eye on 4.25, also seems to be recent home base for 10-year note yields. carl back to you. >> rick, we'll see you for auctions later today. rick santelli. nvidia has been one of the key drivers in this market as you know. shares trying to recoup some of their losses up about 3% today. the stock in correction territory, down about 15 from its most recent high last week. that said, shares still up 10% in june, up nearly 150% on the year and bofa does add it to their best in breed list to q3. mike, jim was talking about whether or not we need to break the fever obsession about nvidia. what's your view? >> it would help. this is maybe part of that process. it probably isn't a four-day process when this all began. it tells you a lot that you went down more than 15% from peek to

trough, like 17 or so, maybe more, and if you look at intraday prices only brought you back to prices first reached three weeks ago. went vertical, mentioned late yesterday, that last week the most actively traded option in the market was the june 140 nvidia call. nvidia peaked at 140 and some pennies and so, therefore, all of that activity if you were a buyer of those calls it's been washed away because they expired on friday. my point is, you did have this pileup of, you know, like rate speculators getting that final burst higher. now we've had this before. i've said it before. it's similar to march. the momentum sector of the market peak back then and then it cracked. the market tried to rotate away from that and broaden out. here's headlines. long awaited broadening of the market rally may have arrived. broadening out beyond tech stocks. magnificent seven losing their

oomph from march and april this year. in a bull market that's the first instinct. try to marshal the troops. that's, obviously, positive. you're basically showing demand for stock is still there. but it didn't immunize the market from eventually a broad 5, 6% pull back in april when yields broke higher hand to reprise the fed pack. markets mechanics are good. orderly rotation so far. i would be surprised if that was it for nvidia's choppy decline period at this point. tons of insider selling. everyone is noticing all the stuff people pointing out on the way up. again, does nothing to the trend. 50-day average is 100 i think in nvidia. so it just sort of shows you the extremes in terms of the gains piled up in a short period of time and you give some of those back and some of that flows into the rest of the market today. today it's the reverse. negative breadth and tech trying to bounce. >> still 20% above the 50-day average.

yeah. a lot of commentary has been written about the technical nature. you bring the options side of it. mizuho has said nvidia's selloffs of the scale usually it is on that fourth day where it sees a rebound. whether it's found a bottom remains to be seen. 63% of the time it is that kind of three days of selloff, on day four, it tends to gain interest there. questions surrounding how to value this stock and how to value the market. because it's -- gains have been unprecedented, and its growth potential is so unprecedented that there's a lot of confusion over how to truly find a price. >> how much are we going to extrapolate the massive sales gains and massively high margins of this company that they've registered recently? i don't know how to answer that question. the market is struggling with that. sorting it out. in the meantime, though, in addition to that collective fund analysis process that is what is the right value for nvidia, you get just this massive amount of

sort of self-reinforcing fevered activity on top of it. it's really very similar to tesla in 2020 and 202021 which didn't have as much of a fundamental momentum behind it necessarily, but i think you have to kind of separate those two things in a way and wait, you have two months until earnings. every time you've waited and gone chopped sideways and down into earnings for nvidia, people haven't been too disappointed. >> no. you brought up yesterday the whole dynamic with bitcoin versus nvidia. >> yeah. >> and the clear correlation there for people who are driven by momentum. >> the key part, too, there's no one single correct way for a market to behave. it could be narrowly led by the growth stocks. it can be broad. you know, market runs into trouble in both instances. market sustains itself in both instances. it's not satisfying to say, you know, sometimes things work out, sometimes they don't. but that's the reality of the market. >> right. fed governor michelle bowman speaking this morning in london saying it's not the right time

to start cutting interest rates and adding, she would be open to raising rates if inflation doesn't pull back. take a listen. >> should the incoming data indicate that inflation is moving sustainably towards our 2% goal it will eventually become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming too restrictive. however, we're still not yet at the point where it's appropriate to lower policy -- the policy rate. >> let's get the street's take on that and the outlook for the second half. joining us now is david zervos, jefferies chief market strategies and cnbc contributor. you said in the past traders are living in a rate cut la la land and think they still are and do you think that bowman's commentary will prove? >> it's a lot less of a la la land than before. when we started the year six to seven rate cuts priced in. the market is a little bit more

normal now, and i think these comments from governor bowman really are not anything new. she's been one of the more hawkish members of the committee. she's talked about the potential for a rate hike, if inflation did not come down. so i don't think this is really new news. people probably spending a little more time on her comments related to bank regulation, which there's still infighting going on at capitol hill and the fed about that. but not really hugely market moving from the rate or equity perspective of the big picture. >> yeah. absolutely. lack of consensus on what to do about capital rolls. we'll get to that in a moment. in terms of the markets, you think that market concentration and the gains therein is a positive story line from a macro standpoint and that to me is a bit contrarian of a statement. where do you see the silver lining in this concentration? we were talking about the role

nvidia plays. >> i think mike summed it up at the beginning of this segment or before i came on, saying there is really no right answer. i think taking the other side of concentration is an interesting way to go. i'm happy to do that, and i think there is a story that says concentration isn't really that bad. we want innovation, we want productivity gains, we want entrepreneurial behavior to guide the technological advances that drive growth over the long run, whether it's innovations in the 1800s and the railways or motorized vehicles or the cotton gin or any great invasion that came along. they are displacing and they are creatively destructive, and you want winners. you want big winners. the idea that every stock in the s&p 500 would be up exactly 12% today, sounds completely silly to me on a -- that that's how we would describe a good market is everybody's equal in their gains and nobody loses. sounds awfully socialist to me, and i kind of go for the more

capitalist outcome we want big winners, we want things to change, we want things to grow. there should be losers. not every company gets a participation trophy. >> and sometimes, as you know, david, those losers, eventually are those big companies that overshoot to the upside when people are excited about the innovation and the investment boom like you mentioned with railroads and others. that's all fair game. i do wonder in terms of the setup economically right now in terms of what we can grasp, you mentioned that bowman has kind of defined the hawkish edge of fed rhetoric, continues to be the case, but we've also started to hear a lot more kind of commentary sensitive to the risks of the downside for the economy and maybe the fed's not going to be enough paying enough attention to those things. is that something you're concerned about at this point? >> i'm really not. our big theme is that the fed puts structures back. if we need them they're there. we didn't need them last year.

and i don't expect there's going to be enough new information before the election to really drive them to do anything significant. maybe, maybe, maybe if inflation really were to come down super fast we get some negative headline or core prints on the monthly numbers or a big, big dip in the nfp and a rise to say 4.2, 4.3 quickly on the unemployment rate. you could argue for something in september. i think it's easier to stand pat, watch the data, say we need more information and make decisions once you know whether it's trump versus biden in early november and they will have two meetings this year to go on after they get that information and the market will probably give them a lot of feedback to think about where financial conditions go after the election. >> and much has been made, david, about kind of how higher for longer has created this k-shaped recovery and kind of bifurcated consumers in terms of who is spending and the struggles that those on the lower end are facing. as this persists without any

kind of rate cut, do you expect that to continue and if so, what does that mean for some of the composite data we're seeing about the economy? is it showing a true picture of potential deterioration at the lower end? >> the lower end has been remarkably robust in many ways in terms of wage gains, a lot of that really was because of the immigration patterns around covid. i think the consumer by and large is miserable for one reason and one reason only, the inflation -- the cumulative inflation over the last three and change years since early 2021, is 20%. and that's three times the normal rate that we've seen in any period in most recent history over the last 20 years. so people are upset about inflation, and they're upset that the level of prices has not come down. that will take time for them to get a little bit less upset about that and the economy. but right now in terms of the job prospects, in terms of real wage growth, in terms of balance

sheets for consumers, i'm not really worried about the consumer. i think the consumer delevered significantly after the gfc. i'm much more worried about pockets of leverage on the corporate side, places like private equity, commercial real estate, unprofitable tech. those are places that worry me more than the consumer. the consumer might whine a little bit and is rightly upset about inflation, but i don't think that's the source of major economic stumbling and that's why we've had eight great quarters of growth up until recently all above -- well above 2%, even while inflation was coming down dramatically. >> yeah. it feels like every day there's a new headline about dividend recaps or nav loans or something to that effect. so definitely something to keep an eye on, david. thank you. >> always a pleasure. >> a bit more than 40 minutes into the trading session. movers we're watching, solar edge shares are plunging. the company announced it may not

receive more than 11 million it's owed from a client who filed for bankruptcy. any money the company does collect may only come after a significant delay. shares down some 70% on the year. boeing reportedly offering to buy spirit aerosystems in a deal funded mostly by stock at about $35 a share. the offer a premium of 6% over spirit's closing stock price yesterday. we're keeping a close eye on carnival. the cruise operator swinging to a profit and raising its annual profit forecast geb. the company's earnings call is under way this hour. we'll bring you any headlines that cross carnival up almost 6%. a programming note, carnival's ceo will join us next hour on "money movers." as we go to break, take a look at the road map for the roftd hour. fast food fight. mcdonald's kicking off that price war with its campaign today. the winners and losers and what it means for investors. >> while the s&p is up double

digits this year, a third of the index is in the red since january. we'll take a look at the potential comeback stocks for the second half. and delta unveiling its exclusive high-end lounge at jfk airport. we'll go inside it and take you for a live tour in a big show ahead. scarlett "squawk on the street" is back after this don't go away.

welcome back. check out shares of walmart today under pressure right now down more than 2%. cfo john rainey speaking about

the retailer's outlook at a bofa investor conference in london saying, quote, not every quarter is going to be as good as the last quarter and the certainly the quarter we're in the second quarter we said is our most challenging quarter from the comp perspective for the year so it won't be like the first quarter. walmart shares outperforming in the first half, the best stock in the dow up almost 30% trading around 52-week highs, just off those today, down about 2.2%. the fast food price wars in full swing with the launch from mcdonald's this morning. to kate rogers with some details. good morning. >> reporter: good morning. ed golden arches releasing its $5 value meal between a mcchicken or mcdouble, chicken nuggets fries and a drink. burger king launched a similar value meal before mcdonald's this summer and plans to keep it on the menu longer according to

a memo that cnbc reviewed. wendy's and starbucks have stepped up with value menus of late. consumers feeling crunched for cash will have options. mcdonald's u.s. president joe earlinger telling the tropical storm that the competition is good for business. take a listen here. >> i never think of satisfying customers is facing a pressure. i think this is great thing for our business. it's a great thing for our customers. we'll stick to it. as long as our customers need value we're going to provide it to them. >> reporter: mcdonald's is offering free fries on friday in its app with any $1 purchase and franchisees nationwide are offering other locally discounted items this summer in addition to that value meal. back to you. >> thanks. appreciate that. we'll keep that conversation going with our next guest who says mcdonald's is in need of this, quote, value war. evercore analyst david palmer joins us with a 330 target on shares of m cd. great piece looking at the share

loss at least in the industry sandwich category as a result of competition from casual dining, fast casual and others. yae >> yeah. mcdonald's has a value perception problem. you heard in the interview joe did this morning their prices went up 40% during the covid era and wages went up 20% for the average consumer. the price of mcdonald's in people's reality and in people's minds went -- has got -- their value has gotten worse. we see in independent data their value for the money scores ranks among the bottom of the major chains as well. >> so talk about -- you have numbers on how much share they might win back with a national value push. >> yeah. it's going to be very -- it's tough to predict this. there's no perfect analog period. there's no -- this is not a dollar double cheeseburger

anchored dollar menu. this is not a dollar any sized soft drink anchored item type menu. this is a bundle. it's a $5 bundle. they're not unique in having this. they're kind of joining the $5 bundle party, but it is mcdonald's and they have a billion dollar national advertising spend budget per year. these guys have a very big time brand. their reimaged restaurant. for them to cause this, quote, war could actually be helpful for them, and it might help the entire fast food industry. >> well, david, how would you define success in this new pricing structure and how long it's going to last? what do you need to see in terms of traffic and comp gains to say, that this mode actually works for mcdonald's? >> well what the company is talking about is doing this for four weeks nationally advertised and that's -- that was what they could get over the hump with the

franchisees. you know $20 labor out in california, you see something similar in the major cities on the coasts. clearly those markets can't support something that might be 10, 12 points higher food cost margin than what is typical. but they may keep it in many markets in the middle of the country and the south, in addition they're looking at other value constructs that would be more of a permanent solution. there's a lot of gates to go through here. this is a scenario that if this is successful enough and the food margin hit is less than expected, that the company and the suppliers and the franchisees would come together and rally around this four for $5 menu as a permanent solution. that doesn't look like it's the default choice. later on they will be introducing more premium options. they need to get their traffic in order for the people numb options to stick the way they want to. buy one get one for a dollar or for 5, they need to find a value

solution here in the near term. >> david, slightly different note, off good look at negative pricing in consumer packaged goods. kellogg, campbell and what that's going to do to overall comps. i see walmart is down 2% plus today. target is rolling out price cuts on another 3,000 items. can you talk about what that might mean for earnings season? >> that's an interesting cross-reference because it's mcdonald's ceo used to say, they competed with your refrigerator at home and they're right. you know, the fast food industry does compete with food at home because over 80%, in fact it's 85% of our meals are prepared at home. and right now food inflation has rolled over. a lot of companies are promoting more hoping to see some volume improvements. unfortunately, a lot of those companies are spending up on promotions and the volume isn't turning and that's what we highlighted today in the note. there's some names that look

pretty good on earnings today and their sales are coming in okay. but there's many more that it looks like the promotions going up and the volume is just grinding slightly to an improvement and it's -- it looks like we're not on a good path for 2025 top lines. >> pretty interesting. far cry from the time not that long ago where it looked like pricinged into limit. we'll see what the coming weeks bring. thanks for covering so many bases. david palmer at evercore isi. >> still ahead financials underperforming on the month, quarter, year and on the move this morning after a report that fed's bank capital overhaul may not be as bad for the industry as some were expectingp what investors need to know after the break. back in 2.

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headlines suggesting the fed is considering a watered down rules. people familiar with the matter said the decisions would inten new wait banks with sizable businesses and as for the size banks would need to guard against financial stress. early math on the changes suggests the increase would be as small as 5% versus the 16% average hike in the initial proposal according to that bloomberg report. shortly after the rules were proposed last summer they were met with some very fierce opposition from the financial industry. fed chairman jay powell as well as the lead architectof the rules vice chairman michael bar have each suggested that they are planning for broad changes without detailing specifics. the other regulators, the fdic and occ, declined to comment to cnbc and the fed told cnbc, quote, it hasn't made any decisions on timing, process or substance. the fed isn't targeting a specific range and is focused on

the substance of possible revisions. and, of course, the timing of the news coincides with the results of the bank's annual stress tests due after the close tomorrow. the kbw bank index gained 1. % yesterday, off about half a percent today. the stress test could be seen as another catalyst depending on how the banks fair. the big question about the capital rules what will happen? they have about 4 months before the election. you know, if there is some sort of change in appetite surrounding these rules, if there is some sort of change in who is in the white house what does that ultimately mean for these as they currently stand proposed overarching capital rules? >> yeah. directionally positive for bank investor sentiment if they're talking about reduced burdens. banks have almost completely been delinked from the strength of the domestic economy in a way. you know, they have no leverage to it.

good times are for building capital in this post-financial crisis era, and bad times for eating through it with potential losses down the road. almost too late to change that stress. stress tests more buybacks and dividends would probably be the next thing to look toward. >> some analysts have pointed out the fact that if, you know, we see the stress tests and on friday expecting a slew of announcements from the banks of what they plan to do with it in terms of dividends and buybacks, capital return, but if you're a bank in the middle of this fight, do you get super aggressive on capital return if you're trying to say to your regulators, don't make us kind of increase? we don't have that much extra. it's probably not the best time from an aesthetic standpoint to bereturning a whole lot of capital if you're trying to make the point that, you know, the capital they're demanding is already too onerous. something to keep an eye out for this week. >> on a day the "journal" takes a look at citi's attempt at a turnaround.

see how that works out. still to come the fed's rough road to 2%. we'll lay out three scenarios to see how long it would take to get the fed back to its target. that's coming up next.

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hello, everybody. i'm contessa brewer with your cnbc news update. wikileaks founder julian assange on his way to a courtroom in the northern mariana islands. a u.s. controlled territory north of guam. when he lands he's expected to plead guilty to a conspiracy charge as part of a plea deal with the justice department. this will end a more than decades long legal battle over assange's publication of classified documents. he has spent the last five years in a british jail israel's supreme court ruled trawl orthodox jewish men must be drafted into the military. most israelis are by law expected to serve. the ultra orthodox have been ext exempt to allow full-time study

in religious universities. benjamin netanyahu's government relies on ultra orthodox parties. the surgeon general declared gun violence a public health crisis. vivek murty called on the country to give it the same attention as toe bay backco use and car crashes and marks first time the surgeon general announced a pronouncement on firearm death which statistics show hit a three decade high in 2021. >> thanks. contessa brewer. investors gearing up for a gee inflation read as you know. pce the fed's favorite inflation gauge, our economics reporter steve liesman joins us with three scenarios to see how long it will take to get back to target. >> yeah, carl, thanks. an analysis of possible inflation path over the next year shows the economy has to be lousy or absolutely perfect to hit that target. with even a slight rise of monthly inflation from the

prepandemic level the fed may never hit the target creating a series of hard choices percent krpg. history, average monthly core pce ran 0i po 1 to.014. saw monthly inflation double to 3.4% on average, kroer pce. contrast in the period of the great financial crisis 0.9%. we modelled that recession like core pce and found it would drop inflation to around the 2% level year over year at the end of 2024. go back to the prepandemic level of 0.15 your middle scenario until the spring of 2025, the fed could start cutting several months before that. if we do 0.2%, just a few hun dreads of a point higher the fed never gets there. there are those who say we are not going back to that prepandemic level because of de globalization, tariff wars and government spending and high

labor costs. fed choices in that world include keeping rates high, hiking as bowman talked about this morning, possibly causing a recession to get there. only modest cuts but remaining above neutral over time and then maybe eating crow and accepting a higher inflation target or going to a range. the fed keeps saying hey, it's going to get that 2% inflation and possibly do so without a recession. but it may, guys, choose -- need to choose one or the other unless the u.s. economy finds that prepandemic inflation mojo. back to you guys. >> all right. steve, thanks very much. appreciate the setup. turning to the global picture for stocks and rates. our next guest says political turmoil in europe is creating more opportunities abroad. david hair rock harrow associates cy equities and portfolio manager joins us now. great to talk with you. as i guess a company by company stock picker when you see the macro moves like the decline in the french market, maybe the bond spreads blowing out in

response to political turmoil, i guess it's got to surface some opportunities. how are you viewing it? >> you know, i've been doing this since 1986, believe it or not, and we just go through these waves of political events that rock stock markets, whether it be elections or whatever you have. this political upheaval moves share prices quite aggressively. but the fact is, what it doesn't really move in most cases, is the underlying company's ability to generate cash flow for its owners. harris, this is what we're looking at. we're looking at company's abilities to create wealth and cash flow streams for owners of the business. so we have to do is see how these actual political events geopolitical events, impact those cash flow streams. and not surprisingly, they have a very, very small, if any, impact on these cash flow streams, thus the fundamental

value of the business has barely changed but thin a short term t prices have been hit hard in the case of the week before last, you know, many stocks were down 5 or 10% in europe based on what happened in the european elections and the calling for the french elections. us, of course, if price moves in a vastly different direction than value, that spells opportunity. >> yeah. it's interesting it all came as the ecb was easing rates and talk of the european economy more broadly on firmer footing. where in particular does it seem as if you found some chances to get better value? >> you look at some of the multinational companies, even though they're based in france, and, of course, i'm not denying france is facing political turmoil, now, does the company like kerring, which sells luxury goods under gucci, st. laurent,

all over the world, france is probably a very, very small part of it. advertising company like publicly sis got hit. a very strong blue chip bank b and ppari got hit. their earnings should have very low impact. blue chip europe in general, if you shy away from the novo nordisks of the world, offer some really good values especially in the health care space. switzerland has two good pharmaceutical companies. the united kingdom is the home of smith & nephew, a sports medicine company. and these companies all have kind of been lingering because, you know, they're not selling glp-1s [ inaudible ] or of this natur nature. >> do you see more opportunity in asia and china. you mentioned alibaba and tencent as potential

opportunities there? >> if we break out asia between emerging asia, which includes korea and southeast asia and japan and china, versus opportunity sfrets a valuation perspective, you can find the greatest selectively value in china. the blue chips like tencent and alibaba, some of their best companies, but they're also some of the lowest value. on the other hand, as we all know, we've been talking about the japanese markets have this huge run, and we have prices that have gotten ahead of the fundamental quality levels as defined by return on capital, return on equity. you know, japanese companies historically as they do today, sell at lower -- they have higher valuations than the rest of the world outside the u.s., but their quality metrics such as return on equity are well below the rest of the world. a value to us is the price you

pay for what you get. if you pay a higher price and get lower quality it makes it harder, not impossible, but harder to find value. >> yeah. it's interesting, it qualifies as a contrarian take given there's a lot of momentum chasers in the japan market. we'll see how it goes. david, great to check in with you. thanks so much. >> thank you for having me. by the way, quick programming note as we go to break. we are a week away from one of the biggest central bank gatherings of the year. the ecb forum in portugal. our sara eisen will be there. we'll bring you her conversation with ecb president lagarde, fed chair powell and the head of brazil's bank. that's coming next tuesday morning here on "squawk on the street." >> that's going to be great. after the break underperforming stocks in the s&p that the street says could rally in the second half. carnival cruise earnings call under way this half hour. the latest headlines as the stock gets a pop on those results. stay with us.

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in down about 5% today. stock has been volatile as activists try to whip up enthusiasm around rumors of penn'penn penn's sale and downgraded, saying the current evaluation is appropriate, since they initiated in may and have a top pick in caesars in the space. the s&p is up double digits so far this year but there are a slew of underperformers in the index. dom chu joins us with a closer look on potential comeback candidates heading into the second half. we already talked about the catch uptrade with mcdonald's. this is a different kind of trade.

>> a turnaround trade and not ket ch ketchup. tomato products aside, the team took a look at s&p 500 stocks that have been beaten up medium to long term but shown recent signs of life and have at least some bullish feelings from the analyst community. the screen goes like this, s&p 500 stocks, negative year to date performance so far, but positive one month price performance so near term upside, and an implied 10% upside to the analyst consensus target price. now amongst the names that passed this particular screen at cnbc pro check out some of the names that are in the consumer side of things. number one, starbucks makes that list. you can see here on a year-to-date basis it's been down about 17%, but we've seen a couple signs of life here maybe in the last month or so. starbucks potentially could see a bounceback. we'll see what happens here. another one on the technology side of things. we're talking shares of software and in this case adobe.

these shares are down about 12% so far this year to date, but again, seen over the last month or so positive one month price appreciation and analysts are still generally bullish on that. adobe another candidate. in an interesting one in travel and tourism, seeing action today so far, check out what's going on with carnival corporation, up 4.75% on a year-to-date basis still down about 7%, but again near term upside and analysts still are more bullish so mike, check out some of those names. by the way, more on this particular screen and how subscribers can use the cnbc pro screening tool, just head over to cnbc.com/pro. learn all about how the screeners work at that particular site. i'll send things back to you. >> thanks very much. pick up right there with carnival cruise shares rallying on the back of the latest earnings and outlook. the company holding its conference call at this hour. seema moody has been monitoring it and joins us with the latest headlines. good morning, seema. >> reporter: and mike, carnival

put the rumors of soft pricing to bed sharing with less inventory remaining for the remainder sale of this year, it's able to demand higher prices on higher bookings and forecasting net yield guidance of 10.5% for this year in line with royal caribbean and higher than norwegian cruise line's forecast. executives on the call mentioned europe's booking curve at a 15-year high. analysts point to carnival's diversified offerings as a strength and the cfo of the company taking a jab at hotels saying service levels are deteriorating while guest satisfaction on its cruises remain high. the company in the process of what it calls a strategic realignment of its portfolio which involves consolidating a few pno cruises in australia into carnival cruise line. analysts call it a proof point that management is willing to evolve and reposition ships to maximize shareholder return. now with a very strong outlook, ceo josh winestein was asked about whether carnival is ready

to reinstate a dividend. winestein said right now he's focused on strengthening the balance sheet, paying down debt and getting back to investment grade and talks are premature. interesting to see how the conversation around the stock has evolved. guys. >> pretty remarkable headlines crossing now, the booking curve in with a look at what's ahead. hey, phil. >> carl, it's not every day you get a new lounge that opens up, but this is not any old lounge, not another sky club. it's the delta 1 club. why is it so important for delta and its future and most lucrative passengers? we'lrae gls d pln right after this.

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delta upping the ante in the

airport lounge wars. let's get to phil lebeau with more on that story. >> carl, if you fly much, you know lounges anywhere in the world are packed these days. so many people have access to them. but the airlines are really saying, wait a second, how do we take care of our most lucrative customers? at delta at jfk, that means opening the delta one lounge. it's for the most lucrative customers. you're not buying a guest pass to come in here. you're also not getting in here unless you're spending a lot of money, say, with a first-class ticket to europe. capacity is limited to 500 people in this room. you're not wedged in here. access to limited. is-t is the largest delta lounge in the world. it's the only delta one lounge in the world. it is much larger than any delta sky club. so, what you're looking at here, things like where i'm standing right now, a sitdown, full-service restaurant. it's not a buffet you just walk

up to. and this comes at a time when more and more people are flying. look at the number of screened passengers by the tsa. we will see 3 million people screened by the tsa probably within the next week. that is the expectation that fourth of july holiday will be the first time we see that here in the united states. and it's only expected to grow from there. so, as you take a look at shares of delta versus their competitors, keep in mind, for delta, this is all part of saying, we are the top dog when it comes to the u.s. airlines. we are the most profitable airline. we intend to stay in that position easily outperforming their major rivals, united and southwest. we'll be talking with ed bastian on "power lunch." not just about the delta lounge and why it's so important, but this summer, which is a busy, busy summer, and delta will be needing this space. it opens officially tomorrow and when it opens, you'll see plenty of their premium passengers in here for sure.

>> we mentioned the lounge wars. who is the war against? who is upgrading in a similar fashion? >> everybody is upgrading their lounges. it's a matter of how quickly can it be done. if you go into certain markets and flying into a particular airline's hub city, obviously you'll get the nicest lounges in that space. but the problem is, there are so many lounges that people have access to that it's super crowded. if everyone's special, then nobody's special. that's what ed bastian likes to say. and that's true. that's not to denigrate other lounges. even delta will tell you their sky clubs are very crowded. this is their way of saying we want to take care of the -- not the most important, but their most lucrative customers. >> phil, fascinating story. i think everybody who travels can see the calculus behind, especially what givens with wait times and service.

a lot more from phil throughout the course of the day. that's our phil lebeau at the upcoming delta lounge at jfk. meantime, market in a bit of a range here. dow down about 175. s&p, 5460, or just south of that as we see yields pretty steady at 4.25. with a two-year note auction a couple of minutes away. "money movers" starts right after this. (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com >> university of maryland global campus is a school for real life, one that values the successes you've already achieved. earn up to 90 undergraduate credits for relevant experience and get the support you need from your first day

to graduation day and beyond. what will your next success be?

good tuesday morning. welcome to "money movers." i'm carl quintanilla with leslie picker. today carnival's chief josh weinstein. gold to 3k. b of a's metal research joins us on his bull call on commodities. neuberger berman holly newman kroft on the favorable trends to watch for as this market tries to get new highs. >> the s&p up about 0.2%. the dow down about 167, 177 points at this hour. we'll start with nvidia rebounding this morning after falling do