thomas and the tank engine? stock jumped by as much as 50% overnight. today if you're wondering, it's wednesday, june 26th, 2024, "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc. wither ooh live at the nasdaq market site here in time scare. i'm melissa lee along with joe kernen. becky and andrew ross sorkin is off today. >> two days in a row, do you feel the effects? not getting up with me but getting up at 4:00 in this

morning? >> yeah, sure. i'll still doing my show at 5:00. >> are you here tomorrow? >> i'm here again tomorrow. i cannot get enough of the place. >> i'm going to be really easy and nice tomorrow. that's three days in a row. three days in a row. >> very compassionate. >> yeah. you can say anything to me tomorrow. >> oh, really. >> no pushback. >> i'm taking viewer requests. if you have anything to say to joe, i shall say it tomorrow. let's get a check of u.s. equities at this hour. we're looking at a higher open on the s&p as well as the nasdaq, the dow falling by 209 points. the s&p 500 up, gaining about 0.4%. the nasdaq climbing up 4.2%. the biggest impact on the nasdaq, the turnaround on nvidia. it was up by almost 7%, bounszing back after three days of decline. it's up by another 2%. quite a climb from the highs. it's lost about 13% from highs.

treasury yields a little bit higher, a little bit firmer as they say. at 4.275%. the 2-year at 2.733. check out the price of bitcoin. it was up yesterday along with nasdaq. it's down a little softer today by a thirty of a percent. >> it's due to nvidia. them when nvidia does anything, it literally can move the averages. >> it's like what apple used to be. >> right. literally can move the averages. this has been some divergence between d dow and the s&p 500. we've seen that, and that's in large part due to nvidia. amazing. fedex shares are higher. transport earnings of 5.40% a share, that's 6 cents ahead of the estimate of 5.35. the revenue is slightly higher than what analysts are expecting. capital spending for fiscal 2024 was down 16% from the prior year and below the company's own

forecast, and ceo said the company is firmly on track to achieve its $4 million cost-cutting goal. it expects another $2 billion to consolidate the air and ground surfaces. we're going to dig into this report later in the hour. >> the real head line for fedex is they're exploring options for its freight business. it's sort of the last-mile delivery service. we talked to frank holland on "fast" last night about this. it's a very valuable part of the business, valuable part of the shipping industry. when the van pulls up in front of your house. >> we stalked than yesterday. amazon in passing walmart, if it does, i see -- don't you see the trucks, those electric trucks? >> yeah. >> the guys are funny and i like the drivers. i think they're funny. they don't do a lot of getting

close to the curb. they see the house where they're going. they stop immediately. they get out, and the rest of us have to sort of -- there have been times where i'm waiting for one here and the car coming the other way is waiting for one there. that's how common it is to see these amazon trucks. fedex, the same thing. what about brown? u.p.s.? the last mile -- i mean it's really no good if you don't have the good mile. >> what good is a package if it's a mile away? >> i guess sometimes you have to go pick something up. rarely though. >> you do? >> if you're not there to sign, fedex says you can come pick it up, but it's a total pain. >> suburban problems. >> you're not familiar with that? >> no. the building signs for you. >> really. the building. the doorman building. >> don't make me feel guilty here. >> that's a famous investment

bank, one of the most famous -- we won't out them -- but we're talking about income inequality. what happens when the mob comes, you know what i mean, for your people like you -- not people like you, but this person we're talking about. shares of rivian they're soaring this morning. 30% is the gain so far. that comes after volkswagen announced plans to invest $5 billion in the startup. phil lebeau joins us now. good morning, phil. >> good morning, melissa. we often hear from these companies when they have this type of investment or venture. they say it's a win-win. in this case it may actually be a win-win for volkswagen and rivian. as we mentioned, the investment could be up to $5 billion. there will be an immediate $1 billion investment through an unsecured note.

the remainder will happen in '25 and '26. when it's all said and done, it works out to about a 10% or 15% stake in volkswagen that they're talking in rivian. in terms of what volkswagen gets out of this, for rivian, the ability has not been for them to do software, especially for an electric vehicle. that's always been a strength. this has been the problem. the manufacturing and cost involved, which is why they're still losing more than 39% per vehicle, now they easterly form a joint venture with volkswagen where they get access to rivian's software stack and its software capabilities especially when it comes to electric vehicles. they will be forming this joint venture where there will be a software future model for both companies in terms of development. in terms of evs for rivian, it's

making a mark in terms of what it's building here in central illinois, especially downstate in central illinois. they're number four in terms of ev sales relative to the other competitors who are out there. excuse me, they're number five. tesla, just over 50% market share. rivian, i'm not sure they can grow a whole lot more because their capacity is not growing dramatically this year. 57,000 vehicles is how many they're able to build. take a look at shares of vw, versus tesla. and the reason that we're showing you as well as rivian. when you look at rivian versus vw and tesla, this is all about capabilities when it comes to electric vehicles. for volkswagen, it's struggled on the software end of the business especially when it comes to electric vehicle.

rivian, if they're going to come to the second gen vags, r 2 models in 2026, is's a lot ways, guys, from here to 2026. this gives them the liquidity that they shouldn't have to do without a capital raise between now and then. >> we think about all the cash it has currently on the balance sheet, which is about 8 to $9 billion, but it's expected to burn that much through 2026. they did need that money despite the staggering stump. >> i talked with rj yesterday. the first thing he said to me, does this mean you're going to be asking me the first question of every interview, do you need to raise capital? that was the question. when are you going to raise capital? are you going to do it through a debt offering. >> issue more shares? are you going to do like you've done here with volkswagen? this is crucial for richian, to get to the models in production

of r 2, whichenishly will be built here in illinois, but then they plan on building them at a new plant in georgia. they don't get there without this infusion of capital. >> frank, by the way, shares of voeks waugen down about a percent, and shares of active are down too. as a supplier it was down yesterday, on a downgrade from piper. phil, thank you. phil lebeau. >> you bet. political primary results, republican congresswoman lauren boebert, very controversial congresswoman beat a crowded field in colorado, winning the gop nomination for a third term in congress. now, i thought she was still in the third congressional district, which includes andrews out there in aspen. we went to telluride film festival. a lot of it is republican and

it's more rural, but apparently she shad to switch to a new district on the opposite side of the state to run for the seat being vacated by retiring congressman ken buck, and this is after she nearly lost her seat in 2022, beating her democratic challenger by just 546 votes. in yesterday's primary sheks captured more than 43% f of the vote with her challengers pulling in around 14%. so it's no longer grand junction, i guess, in durango. i with end to school there while you were up in the people's republic. >> of cambridge. >> exactly. in new york, congressman jimboman was defeated soundly in a race that set a record for the most spending in a house primary. you know, the "post" never wanted to not come up with a good cover.

firing squad. firing squad. that's pretty good. he's a member of the house. he still is. he's jut not a member of congress anymore. he took a stance on israel that sparked a spending spree. he may have a career now in whatever that -- we saw at that rally. it was at, i don't know some type of -- he was up on the stage grinding and aoc too. they could take it on the road. it wasn't well received. it was cringeworthy, a lot of people thought. a lot of profanity, i think. >> is there a market for that? >> probably not. 17 points. the active challenger george latimer, he's an executive. the supporters outspent bowman by a factor of four with total

spending hitting $24 million last week. bo bowman had a pretty good slogan, which someone is going to take up, i think, for the many, not for the money. >> oh, that can be your slogan actually. >> that might be one of my slogans, too, even though we're on cnbc. money is an important factor, but it should. be the end-all/be-all. oh, 6:12. 6:12. >> herb. keep it going. >> okay. we're going to talk about yesterday's rebounding for nvidia. lauter, house speaker mike johnson is going to join us to talk about the latest house primary results and the presidential debate and a lot more. "squawk box" will be right back. in today's diverse work force, the lgbtq plus community brings in a unique blend of

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rebound in nvidia shares leading the market higher. joining us now, mary ann bar tell chief investment strategist at sanctuary wealth. i have an unsettled feeling. it's just weird, no 2% pullbacks, the market keeps going up. there's liquidity, but i felt better about the overall market in 2023 when everyone hated it than i do right now. wall street watchers have finally caught up with their own market outlook and raising their target. many of them are now at 5600. so i don't know. they were so wrong last year, it makes me uncomfortable when they get bullish. >> i'm in the same camp, joe, but i don't think it's a big

sell signal. i still think this year's going to turn out really well, and that's based on a combination of, you know, earnings still remaining very strong. profit margins still growing, and the technicals of this market remain very bullish, so, you know, i think we can get a lot of chat maybe in here a little bit. 're getting a rotation, some profit-taking in technology. you obviously saw that recently in nvidia. i still think that tech is the leadership and it's still going to drive the markets into the end of the year. >> and you like growth, so you don't think it's a value thing. in a maga super cycle for growth. you think there are true fundamentals backing up these valuations, it's not just, you know, all the stimulus, all the

liquidity. >> well, joe, it's definitely affecting risk assets, but the companies, magnificent seven, are now producing earnings. they're putting wind rallies that we saw in '99 and 2000. these are real and substantial, and we're in a major shift in the global economy as we're shifting technology to ai. in that sense it's very similar to 1995. but if you compare the nasdaq 100 to the market period of the 1920s s we may have a rally that surpasses the 2000 rally and really have a rally that's very similar to what we had in 1925 to the peak in '29. that's where i get the super cycle for your growth. i think this is going to be an unprecedented move that we see in the markets that go out to 2029, 2030. >> right now a lot of what we're seeing with ai is like the

build-out. you need chips. i don't know whether the use case for across the board is going to help every company be better, more productive, do more things. how many years before that's really a major contributor to, you know, the prosperity of these companies and how well they do? because right now it just seems like the people making pipes or whatever you want to call it, the chips, the ultra-fast chips, they're the ones benefiting. when does everyone else benefit from ai? five years? >> i think it's before that. in three years we'll have a much better sense. >> we're ahead of ourselves then if it's three years away. >> i think we're a little ahead of souers, but that doesn't mean that they're not going to build out the infrastructure. so this is going to go in cycles. so we still have to build out the infrastructure to run ai. we don't have that full st

infrastructure. and you see that with the new chip. what amazes me, i've been doing this for 40 years. i've never seen a company like nvidia before make this major transformation and then have earnings hit the bottom line so aggressively. they're definitely going to be the leader in the market. they're probably going to take about 80% of the share, but it's not going to be a straight line. but i do think this year is a good year. we may have a lot of chop next year. but i think when we go into the back end of the decade, you're going to start seeing companies move at a pace we have not seen since 2000. these are very early stagers if these moves with these companies. >> when people try to look at a historical precedent for nvidia, they come up with cisco, which went to 6$600 billion back in te

late '90s. i don't know if that -- i mean, $3 trillion, and the speed that nvidia got to $3 trillion? i don't think anything compares. i don't think that holds up to the comparison. i don't think that suddenly nvidia goes back to what cisco had, 24 years of underperformance after 1999, whenever it was. >> i think you're correct, joe. absolutely. as i said, i've never seen a company in the 40 years i've been doing this, create such groundbreaking technology that will eventually transform the global world. >> well, right now all you can do is write a college paper. i need to expand -- i need to find out more uses. drug discovery? it ought to be great at, you know, taking doctor/patient data and collating it altogether and

figuring out trends. i mean there should be a lot of things it can do. the logistics. there's no place where ai won't be great. but at this point, it's still a build-out of the infrastructure. i doemg know what you buy besides nvidia. maybe that's why. maybe all of the excitement is all concentrated in a couple of companies that are actually doing it now. >> you need hardware, right? to build this out. you look at companies like dell and old names. look at a company like hewlett-packard enterprises, an old name. you're really starting to see early stages of those stocks moving technically. so it's hardware -- well, it's the chips, it's the hardware and the software. >> okay. mary ann, thank you. we finally got your name right. i guess because everybody had those wine coolers for so long, you know, bartels & james.

you never said anything. you're so nice. >> bartels is an actual correct pronunciation of the name. they're correct pronunciations. my family just pronounces it bartels. >> do you want us to pronounce it correctly or like your family? >> joe, it doesn't ready matter. >> it matters. >> it double matter. >> people come on and call it nvidia, i emailed ready to end the conference call. nvidia? it's nvidia. >> everybody knows. >> no, we don't. we have a lot of o people come on and call it nvidia. when people call the state of nevada nevada, i get off. >> thanks, mary ann. >> what's coming up? >> cdk and a siper attack that

cripples dealerships. when it come come online. that's cinomg up next. and award-winning producer brian grazer. we'll be right back. car, take me home.

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now an update on the cyber attack on cdk that's crippled dealerships across north, cdk telling clients yesterday that the software outage may last until june 30th and warned them they may need to make alternative plans on how to do their end of month finances. solara is seeking a valuation, they analyze vehicle

life cycle data including insurers. a bloomberg report says it may file publicly as soon as this week. the company was taken privately by vista equity partners and other partners in a valuation of $6.5 billion. >> i promise you, i promise you we're going to talk about whirlpool very shortly, but will you bear with me? give me just a minute. i was asked to do this. i was going to do it on a break so i could record it. it's about nbc sports and nbc sports next has a series called "ask rory," mcelroy, one of the great golfers of his generation. this is where amateurs, even amateurs like me get to ask him a question, okay, and it's like golfpass website. i figure, why not talk about it so that people can look forward to it, maybe go to it since nbc

-- i met rory ten years ago at st. andrews. i get to ask him a question, and then he gets to tell me an answer that probably won't work, but rory does a shot, and, rory, here's my question, joe kernen from cnbc "squawk box," you do a shot from 30 yards out off a tight lie in a fairway, and you can concept it into the green and it bounces once and stops, and i don't even know if amateurs can do that shot. i just want to know. i want to try it. what loft do i use or wedge? i don't know how you get it so low. where do i put it in my stance, front, back, or middle, and how do i just not decel or skull it or hit it fat is it's really difficult for an amateur to do this shot, but it could probably cut ten strokes off your game. that is my question. now everyone can look forward to rory answer it on golfpass.

>> i would have asked a different question. >> what would you have asked? >> do you have a lucky charm? >> he's from northern ireland. >> you know, a rabbit's foot? >> rory's going to be back. he's go ankh to be back so big, believe me. bryson was just awesome. i mean, rory had it, but it happens to everyone. these short putts can be -- i should ask him about putting because i'm no good at that either. coming up, nvidia's rebound. some people call it nvidia. they're not allowed to stay on the show. we're going to talk tech after the break. and at 7:00 a.m. house speaker mike johnson is going to join us about the november election, tomorrow's presidential debate, and as we head to break, here's a look at s&p 500's winners and losers.

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and as we head to break, here's

good morning and welcome back to "squawk box" at nasdaq market, times square. dow's down, nasdaq's up. a lot of it has to do with in vids ya that's rebounding, a continuation of the rebounding we saw yesterday. we promised you some talk about whirlpool, and it's worth it. it's a $5 million company. it's worth it. it's a brand name. >> shares of whirlpool are up by about 10% in premarket trade. germany's bosch is considering a takeover bid. the sources say it's not certain that an offer will actually be made. as of yesterday's close, whirl poole had a market of $5 billion, 4.8. the gain right now is 11.5%. it's having an impact on the stock right here. shares of airline stock is

following. the metric is expected to fall between 4, 4.5%. the company previously predicted a drop of 1.5% to 3.5%. >> in the meantime nvidia is recovering after it sold off market value earlier this week. joining us now is tony frtony, portfolio manager. thanks for being with us. >> thanks for having me. >> how do you think about just the rush to spend and the pobltd of pull forward of demand for nvidia? >> i think it's great question. there's a reason they're deploying so much capital in a

pretty austerior environment. you're trying to look at the infrastructure before you deploy and really spend a lot of money, and so i do think we're seeing a lot of use cases with drug discovery, with profits driving, with on tichlization of logistics, as well as if you look at chatgpt. i do think we're starting to see more due to the amount of capital that's being spent, but i'm optimistic for the long term here. >> when do you start thinking about the ai halo and expanding the companies that see the best roi or increasing roi based on the spend? >> yeah, i think that -- you know, i look for in many ways like where are we seeing tangible results? you're seeing in many ways like

m meta, for example. that's one area where you see the numbers going up. it's earnings-paced. i think you see ways where there is trangable equipment. what i look for is where are there going to be long-term valuations? >> in the shorter term, are we destined to see software come under pressure as companies parse out their capex and cut back on ai and other areas? >> yeah. i think usually what happens is the second area gets a little overblown. there's a lot of cyclical pressures. but in general, i think it's had such a great run. there are times -- i think software can do well. in times when things are

tightening, it's more challenging. you do seasick click cal pressures, but your the long term, there are areas where there's questions where generative ai can change the software model to go from seat-based consumption. it will be interesting to see how they make that transition as well as looking at the entrance as they offer more generative ai first model. it's definitely an exciting space where there's a lot of space. for active management we're looking forward to that. >> tony, you're the pm of the science and technology equity stlatgy, and so i'm wondering, at this point, i'm wondering if it's a little more tilted toward technology because that's where the returns are. biotech and science has not been that great of a winner. when you make that shift because we're seeing some green chutes come up, we're seeing big moves on drug discovery, headlines, and, of course, you've got lily and novo being just juggernauts.

>> yeah, absolutely. we're definitely on tech, but we also own some health care stocks like eli lilly. like you said, that's a really great story. my focus primarily is tact. there are good opportunities at this stage of the cycle and the innovation we're seeing around ai, we're seeing it quite impressive with the companies. >> yesterday you had the headline lily is going to use ai to help find treatment for anti-microbrial bacteria or bacteria that are resis tajt to antibiotics. you have the two big stories con very subsequent. >> and weight loss. if it was too big a story, it would be ai to give you -- >> oh, for your the -- >> for weight loss, if we could

get ai and one of those weight loss drugs together, tony, it would probably be worth $6 trillion. >> yeah, i think that's a pretty interesting combination. in our portfolio, we have both. >> you're covered. >> what's the perfect dose for me? how do we get it? maybe ai can get a pill so i don't have to stick needles -- >> they're already working on the pill, joe. >> sticking needles in my forehead is bad enough. >> tony, thank you. >> i don't do that. i don't do that. i don't do that. >> you don't dye your hair either. >> i don't. you saw. >> i'm witness. >> thank you. i don't. there's no gray roots. >> it is amazing. >> it is amazing. i don't need a pair of glasses either. coming up, we'll talk about the veep stakes for former president trump. he could announce his running mate as soon as this week. that's before the convention. house speaker mike johns, he

might have some thoughts. he's going to join us live from washington. "squawk box" is coming right back. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

former president donald trump could make his pick for vice president as early as this week. let's bring in eamon javers. i thought it was going to be at the convention this is new. is it not? ? does that mean today? this week? this weekend? before the debate? after the debate? there's a lot we don't know. i got a text from one of the spokespeople from trump's campaign. he said i think he's going to announce his pick on, a nlds that's the end of the text.

they're having fun with reporters. they know we're all interested in the story. that's one thing you can control the story on entirely when you're running in the presidential campaign. it's much better to be talking about on national television than the courtroom drama we've seen over the last several weeks. they may want to drag this out. jason having fun with me last night over texts that they realize that this is a good topic for them to have people talking about about on television. >> international television, my friend, international. >> my apologiapologies. >> "wall street journal" might not be the first place trump goes for advice, given how scathing they've been about his whole candidacy for 2024. they like nikki first. they say that's who he should pick. he's still sore she stayed in the race too long, but other

presidents have looked past that. second, they go for virginia, glenn youngkin because they say his popularity, experience. they signaled college educated republicans, that trump wants to expand. then they go to the next one and think between burgum, rubio, and j.d. vance, ber gum is the best with his private sector experience. do you think ta -- most people think it's going to be burgum at this point. have you heard that? >> you know, look, there's a lot of rumors swirling around. it's really hard to say. i don't think anybody outside of donald trump and a very, very close circle on insiders know his pick. he says he has picked somebody. clearly that person doesn't know it yet because we haven't seen any leaks coming from the camps. the traditional thing you do as we know is build your coalition. you look at your last couple of

vice presidential picks. joe biden picking kamala harris. he wanted to shore up african american women. you look at donald trump's previous vice presidenti al pic mike pence, that was to shore up the ivanalists. i don't think trump has coalition building here. if he did have that in mind, maybe the we to go would be marco rubio who's abridged an establishment of republicans -- >> i can't see it. >> he has the personal history there there. >> yes. >> i think if you look at the vice presidential experience from donald trump and you look at his relationship with mike pence, mike pence was largely subservient to trump on the national stage in public, so

much so that talk shows mocked him for it in his demeanor around trump in public, but at the end, o on january 6th, mike pence had an independent decision to make, and he made it against trump's interest. i think trump doesn't like that. i think he wants somebody who not do that. >> if history's any indication, you're right. we have the speaker coming on at 7:00. we'll talk about all that. i love glenn youngkin. you know what the drawback is? and i'm not being entirely facetious or satirical here? he's too tall. he's about 6'4". i can't see someone standing next to trump that's standing at 6'4". >> not taller and not somebody with a big political base of their own. >> exactly. but, but, what good is someone that's sort of a maga guy when

the maga people, the 30% over whatever it is, they would go out in a hurricane to vote for them. >> he's got them locked up. traditionally you'd say he needs to reach out to some other constituency to bring into the tent. e i'm not sure that's on his j the 2020 election, people are telling trump right now, please, do not go into grievance politics for an hour and a half on -- can he resist? can he resist, saying i'm not going to talk about that, i want to talk about biden's policies, can he resist? he can't. >> people have predicted a disciplined donald trump before. hasn't always happened. >> if you get him going on the election, 2020, the election, thank you, eamon javers, see you later. coming up, the irs is apologizing to billionaire ken griffin. wel llouhyex 'lte y w nt.

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the irs apologized to billionaire investor ken griffin for the release of his tax returns. the apology followed griffin's withdrawal of a lawsuit against the government. his tax returns along with those of jeff bezos and elon musk were disclosed by an irs contractor to news organizations and released in news articles beginning in june of 2021. the contractor who leaked the tax returns, charles littlejohn, is serving a five-year prison term after pleading guilty to related charges. he's appealing the length of his sentence. coming up, fedex shares are sharply higher after the company reported progress in its cost cutting efforts. we'll talk to an analyst straight ahead. house speaker mike johnson is going to join us live from washington, to talk about the

debate tomorrow and new primary results that we saw from yesterday. a lot to talk about, taxes, everything. "squawk box" will be right back.

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fedex stocks soared after reported earnings and revenue that beat estimates and said it is exploring options for its freight unit. joining us, don braun, great to have you with us. >> great to be here. >> the stock is up 14.5% or so this morning, don. how much of that is news of the potential spin-off of the freight business? >> zero. >> zero, okay. >> what this is about is the fact that we had a lagubrativi

os exercise which was impossible when the numbers peaked in october of '21, which market, somewhere around there, and went on an exercise of two years where they declined by 30% in most markets, some over. and no matter how well you run this business, when you lose 30% of the overall general demand, you are going to struggle with markets, express operating profit went from a peak of over 3.3 billion annual rate to under a billion. and as we see, demand for chips continues to go up, and worldwide air freight numbers start to recover, then express's margins will do this. and the wait is over. >> you mentioned -- certainly it has been a long wait, six straight quarters, i think, of revenue declines for fedex. it has been a painful road for fedex investors.

you mentioned chips as an interesting part of the story. when we hear about the demand for a.i. chips and chips for the supply chain, et cetera, you think about fedex as part of the equation? >> absolutely. and i'm glad you said that. look, i don't know anything about which of the chip suppliers you should be buying, but i do know who moves not only the chips themselves, but moves all of the devices, the gadgets that have chips in them. and that's fedex. and if i can take, what, 12 times forward earnings for a company that moves all the chips or whatever the valuation is on nvidia, some other companies, it is what i know, but i'm going to pick that kind of valuation because as earnings come back here, they will come back in a fire fight, so -- >> right. you obviously like fedex from the fedex story, you're actually short u.p.s. personally as well as in your firm's portfolio.

so, why are you short on u.p.s.? >> they adopted a cost structure, via the latest union contract that puts them in a permanent expansion. and not only do they have to pay higher wages, but they also in that contract, they can't really adopt technology initiatives without the union's approval. and that puts them in a permanently hamstrings them against the competitor who doesn't have those issues. they spent billions upon billions on better and better technology over the years, if you look at fedex, it is actually a technology company disguised as -- it is a technology company in drag. >> don, thanks. great to speak with you. don braun, braun capital. >> i'm joe kernen along with melissa lee. becky is off today. andrew is going to join us a

little later in the show from the aspen ideas conference, festival. among today's top stories, germany's bosh is considering making a bid for u.s. appliancemaker whirlpool according to a reuters report. and shares of whirlpool are up 12.5%. tesla says it is recalling most cyber trucks in the u.s. because of issues with the vehicle's windshield wipers. and exterior trim. the retail effects more than 11,000 cyber trucks. tesla hasn't said specifically how many it has delivered to customers so far. have you ridden in one yet? >> no. >> i have. >> i've seen a few parked in the streets of new york city. >> can't believe the acceleration on that. i like that. i like the interior. they talked about the windshield wiper, a friend has one, it is the biggest thing i've ever seen because the windshield is to so big. there is one windshield wiper. it goes all the way. it is like, whoa.

when it comes out, it is shocking. but really cool. there is nothing in that car except a computer screen, pop the front, pop the back, the way you open the doors, it is pretty amazing. pretty cool. and the faa -- the faa has adopted what is known as airworthiness directive, one of those, for 13 boeing 757 200 planes. these are legally enforceable regulations to help correct something that is unsafe. in this case, the faa is responding to reports of a cracking in a structure around the panel connected with the plane's lavatories. joining us now are newsmaker of the morning, we're pleased to welcome house speaker mike johnson once again. mr. speaker, it is good to have you on. >> thanks so much, joe. great to be with you again. >> looking at some of your notes. serious mismatch is how you characterize the debate between former president trump and

president biden. and you say if you've watched president biden, he hasn't done well in some public appearances and speeches in recent months. everybody who thinks he's going to do well and worries about him being underestimated, talk about the state of the union. you don't think that that's likely to be the take after we watch? >> you know what, i expect him to be high energy. i really do. because i sat right behind him at the state of the union and clearly that was not his regular daily normal form now. i don't know if he took energy drinks or what, but he was much more on game. the difference is, and i think the differencemaker in this debate will be that, of course, he will have no teleprompter this time. so standing there for 90 minutes and speaking extemporaneously i think is not going to be a good look for him. i think the contrast between donald trump and president joe biden are going to be very stark. >> the format, people pointed out, is not -- doesn't play into former president trump's

strengths. no audience. turn the mic off between, you know, answers. things like that. when he agreed to the debate, there are some reports around now, mr. speaker, that he thought that the biden camp was kind of setting him up to say no, and then everyone would have said no, in other words, these two cnn anchors, maybe not -- that might not be ideal, according to some people, not me, far be it from me to judge, no audience, et cetera, but trump said yes, throwing them for a loop and he'll go anywhere, anyplace. do you think that's an accurate account of what happened? >> i don't think it is. i spent time with president trump last week and i can tell you what, he's excited about this debate. he's ready to get on that stage. i think the reason he accepted the terms so quickly is because he had just said a couple of days before anytime, anywhere, joe. so to his credit, look, you can

tie him up, you put one arm behind his back, it is not going to make a difference. president trump, i think is going to lay out a very clear vision for the country, very positive one, and i think that's going to be a stark contrast with the biden record. the interesting thing about both of these men is they both have been president. so, everybody can put the rhetoric aside, talking points aside, they can evaluate how their life is under joe biden and how it was under donald trump and i think everybody, every democrat, every state in the country, if they look at it objectively, i think they're going to say they were doing much, much better with president trump. that'sy t why i think he's goino win this election. >> former president trump, the other night, one of his rallies, actually posed a question who he should be to his -- to the people that he was talking to at that point obviously want the sharp-edged donald trump. "the wall street journal," as i said earlier, i'm not sure the

president -- former president trump would take any advice from "the wall street journal," they haven't been necessarily his biggest backers in this go around, but they do point out if he engages in grievance politics in 2020, if jake tapper starts out with do you accept the results of 2020, you talked to former president trump, can he say, i'm not going to dwell on that, i want to talk about how my policies are going to help americans versus president biden's? can he avoid that? are you sure? what do you think? >> i hope he does. we don't need to relitigate the past. we need to talk about what he's going to do for the future. we have to fix every single metric of public policy. i can tell you, he keeps talking about how his success will be his revenge and we love that. because i think that's exactly what the american people need. they need his success. i've been traveling nonstop, i've been all over the country, over 130 cities, campaign events

over the last six months, and over 30 states now. we have been everywhere. blue states, swing districts, red states, all across the country, doesn't matter where we are, the same sentiment is expressed. people are fed up. they're fed up with the cost of living. they cannot stay ahead. they can't keep afloat because no matter how hard they work, the inflation rate and everything else is just crushing the hard working families. you got the rising crime rates, the weakness on the world stage, all these things that make us unsettled and the open border. everybody feels that acutely and they're ready for a change. i think because of all those factors and many more, you're going to see a democratic shift in this election cycle and i think president trump is going to win this election and like i said, i think republicans will have control of both chambers of congress and we're looking forward to that, we have answers to all these great challenges facing the country. >> we're going to hear about january 6th. i don't know how that comes up, president biden or the moderators. we're going to hear about 34

felony counts, and no one's above the law, and the jury of your peers, you're going to hear all those things. but at the same time, i think the moderators have gotten so much flack about how biased they're going to be, they're going to try and throw some things at joe biden, i think, and jake tapper, to his credit, i saw him the other day saying that last debate, joe biden looked right into the camera and said, this is russian -- 51, you know, former intelligence officials call this russian disinformation. it is a lie. none of it is true and jake tapper to his credit, said, that was a lie what president biden said in that last debate. do you think we'll hear about that? >> i hope so. i've known jake for, i don't know, quarter century, we go way back. he used to cover the cases i was litigating when i was a religious liberty litigator, and we have been debating for a long time. and i think he's acutely aware of the fact that he's got all these statements on video, on record, where he's been so

critical of president trump, and if they want to salvage any of their reputations and give any appearance of being unbiased, they're going to have to, you know, give some tough questions to both sides. and so i certainly hope they will. i think the american people deserve that. i think they deserve a fair debate and even though the rules are stacked against president trump, i think he's going to be on his a-game, and i do not expect that joe biden will be. >> not just 16 former nobel laureates and some of them, paul krugman is a nobel laureate, but 16 nobel laureates said that trump's plan would rekindle inflation in a big way. you got to admit, some of the stuff he's talking about, 10% tariffs, the tax cuts are not going to expire, he's talking about going lower on the corporate tax rate, all these things are not going to be deficit friendly and people point out that, you know, in president trump's four years, the deficit probably grew

more -- there was a pandemic, obviously, so, you know, they don't mention that, that came in, a lot of spending on that -- but this does not look like a reagan republicans' , or a conservative republicans' blueprint for running the economy, what we're talking about, does it? >> well, two things i think are really important. first of all, i'm not sure the blueprint is finalized. i think he's talking about a number of ideas and sort of field testing some of it. he did that with the house republicans just two weeks ago was here, had breakfast with the house republicans and lunch with the senate republicans. it was like a pep rally. everybody is unified and in a great mood and he threw out a number of ideas just for thought. he said some of them with a smile, he wanted to, you know, gauge the interest and get everybody thinking and talking. that's part of the idea here, is that, you know, we do the round robins on all this and figure out what that final blueprint actually looks like. second thing that is really important is to remember, again,

both these men have been president. think how your life was after the first two years of the trump administration, pre-covid, right? we have the greatest economy in the history of the world. every demographic was doing better, all boats are ridesing because we instituted and engaged the principles we believed in. we did cut taxes, dramatically, but the big thing that i think spurred on the economic growth was the regulatory reform. and we were really serious about that, and i think very effective. so those models work. we already have proven it. i think as a general notion, that's what's going to guide the agenda. i think president trump is ready to get the economy roaring again. and if we do those things well, i think that will happen, i think you'll see -- we'll spur on real economic growth. >> but, mr. speaker, do you think you can enact that same playbook in a post covid world? right now we have an inflation problem, and the measures that have been floated by former president trump, even if it is with a smirk, even with a smile, they're considered inflationary.

we know that it would be bad for the deficit. so how does he answer those tough questions? this is where our country is right now. it is not pre-covid. it is post covid. and these are the problems at hand. >> it is certainly true. it is post-covid but the guiding principles are the same. i think maybe the calculations are a little different, but i think the principles are going to guide us. what that means is generally to spur economic growth, you got to allow job creators and innovators and risk takers, small businesses and the large companies as well to be able to grow and expand. you get the regulatory burden off their backs. joe biden's administration has weaponized the agencies. truly. almost every industry. i mentioned i'm traveling around the country, i'm talking to not just the fortune 500 executives, but small business owners, at all levels of the economy, and i've sat down across the table with people who are fourth generation family businesses, that are almost closing them now. and they say it with tears in their eyes. they cannot survive the

regulatory onslaught. if you get government out of the way and allow this to flourish, there may be a little bit of pain in the front end, but i think you can spur on economic growth and that's what's going to get us out of it. look, in the house, in the senate, the republicans will be serious about not just cutting taxes, but cutting spending. that's the really important thing here. spending has exploded in recent years and certainly under president biden, it is serious. >> sorry to -- we had former president trump on a couple of months ago. i asked him about social security and entitlements and medicare and everything else. and he said, well, there is a lot that can be done, and then he went on to talk about not cutting any of these things or reforming any of them, but, you know, trying to get rid of some of the waste, et cetera, et cetera. the biden camp immediately cut off the end of that statement, what he said, and put out president trump is going to cut

entitlements. and they're still saying it. nothing that you hear from either camp necessarily has to be true, you don't need a.i. to hear fake news because they both engage in it. but the fact remains, you're not -- you won't -- today, right now, you will not concede that entitlements need to be reformed. the democrats use that as their biggest cudgel to try to say trump should not be president, because he's going to cut social security. we can't cut enough spending to take care of this deficit if we don't do something -- or this overall debt, if we don't do something with entitlements. >> mandatory spending is over 72% federal budget. that's certainly true. and i'm telling you, there is not a single member of congress, republican or democrat, who doesn't at least privately acknowledge that reforms are necessary. you can do modest reforms to some of these programs that -- and spend it and change the trajectory dramatically. >> careful. they're going to use your -- if

you don't -- it is the third rail, it is even worse. it is third, fourth, fifth and sixth rail. >> i know it is. but i'm telling you, there are republicans and democrats in congress who talk about this every day about ideas. that's what we're supposed to, as lawmakers, ideas to fix them. we want to solve and shore up medicare and social security for recipients and keep those programs because they're an essential part of the country now. it takes responsible measures on both sides. there is no ideas on the table. no suggestions here, no one is talking about -- certainly president trump, republicans aren't talking about cutting those programs at all. you have to take a sober look at that. i think when he acknowledges that, president biden should do the same, everybody of good faith has to say we want to save those programs, and congress and the president and the years ahead are going to have a lot of work to do to make sure that happens. >> apparently you've got places to go, people to see, things to do, but can you -- do you have a favorite vice president pick? we were talking to eamon javers

about the latest scuttlebutt. i think i might wait until november if i were the president. when we talk about it, it is all we talk about. and he should probably delay it until the day of voting, maybe. do you have a pick, a preference? >> you know, i like all the names. all these people are my friends. and we have -- i mean, listen, it is not a political answer. it is a great bench. we have a deep bench. we're blessed with that in our party. unlike the democrats, they can't seem to muster any candidates better than biden and harris. we have a long list of folks who would do a great job and they all bring different things to the table. donald trump is the only person who makes that decision and i talked to him about all these things frequently. but we'll see. we'll see what he ultimately decides. >> nothing in this world is surprising anymore. and if it was a -- it won't be, i'm sure, but if there was a total disaster, i think they could come up with someone, the

democrats, if they had to replace it. you think that's a zero percent chance that that could happen? >> i think it is near zero. i think we're looking at the biden/harris ticket. most people on capitol hill expect that. >> mr. speaker, thanks. 7:17. thanks for all the time this morning. >> thank you. great talking to you. >> good talking to you. coming up, the price of gas and the presidential election. dan jurgen says it is a key topic in the presidential debate. he'll join us. and check out dollar yen touching 160.29. we had hit the highest -- the lowest level, the weakest level for the yen since 1986 against the dollar. that would be renewed calls, maybe speculation about the doj intervention at the currency market. we'll see if that plays out. "squawk box" will be right back.

hello. i'm ethereum. and i'm big finance. you look really tired. just calling it a day. but it's 4 p.m. yeah, and i've been working nonstop since 9:30 this morning, so. 9:30. you don't say? yep. you'd want a little shut-eye too

if you'd been moving billions around the world. well, actually, i do. you know, stablecoins, nfts, loans. people can access me 24/7. what? but look, everyone's different. you should get your rest. you'll get after it tomorrow. tomorrow's saturday. [ethereum] monday. you'll get after it again on monday.

movers. >> let's kick things off with this wednesday morning movers with a check on southwest airlines, shares are down big. probably just about 4.5% or so. over 50,000 shares of trading volume. this is america's second biggest passenger airline by market value, just updated the financial guidance for the quarter. it expects a bigger drop in the key operating and efficiency metric than previously forecast. that revenue per available seat mile is now expected to fall by 4% to 4.5% compared to a previous guide of being down 1.5% to 3.5%. they expect to set a quarterly record overall during the quarter. shares down 4.5%.

also new this morning, shares of general mills down just roughly 4.5% or so over 20,000 shares of volume. this is the food processor behind cheerios cereal, betty crocker baking mixes and blue buffalo pet products. it reported mixed quarterly results. profits per share topped estimates, revenues fell shy of the mark. like other consumer products companies, general mills saw headwinds as inflation wary consumers switched to lower cost alternatives. the company gave full year guidance for 2025 organic net sales growth fell. shares down 4.5%. we'll end with a look at a german and u.s. company tie-up. a done deal, a big investment in the electrical vehicle industry, rivian soaring by just around 40% right now on over 5 million shares of volume. late yesterday we got an announcement that rivian and volkswagen are teaming up. vw will invest up to $5 billion

in rivian with an initial $1 billion investment in up to $4 billion more by the year 2026. that money will be used to form a joint venture focused on electrical architecture and software technology. rivian shares over the last year up about 24%, but still down so far this year on a big basis. melissa, back over to you. >> dom, thanks. dom chu. still to come, why prices at the pump will be a major topic in tomorrow night's presidential debate. dan jurgen will join us. a year after record high prices for vehicles, the industry is now seeing actual deflation that has some asking how much lower prices will go. phil lebeau will join us with that story. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. wisconsin law prohibits the sale of this product in public eating places unless a customer requests it. what is it? tus.answer when "squk x" awbo awbo rern

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what is it? the answer, margarine. according to the law, violators can be fined up to $500, imprisoned for up to 3 months, or both. our next guest wrote an op-ed for the final ncial times. dan yergin is here, vice chairman at s&p global and the author of "the new map." great to see you in person. so, 345 is the most recent national average. >> just jumped up a little more. >> jumped up a little more. can't go much higher though. what can biden do about that? >> very limited things you can do. number one is, of course, the strategic petroleum reserve, which they started to use before the war began in ukraine. >> got any left? >> we're down about half. they put a little bit more back in. but that's probably the biggest tool. the second is go to some of the middle east producers, say, can

you put more oil in the market, and a few other things. but those are the kind of limits you have. and the thing that hangs over things now is not only the summer driving season, but, of course, what is happening in the middle east and whether there is going to be a war between israel and hezbollah. >> that's what i want to get to next in terms of policy. it seems like foreign policy and energy policy are just at odds with each other right now. you want to be tough on some areas in the middle east, want to be tough on russia, tough on iran. but you don't want to be too tough because that will impact the price of oil. >> don't want to disrupt supplies. that's been the challenge right from the beginning of the invasion of ukraine because on the one hand, they want to reduce russian revenue. by the way, keep the oil in the markets, so we don't have a crisis. >> can't have it both ways, though. >> it is a tough balancing act. and you get pretty unsteady. >> what do you think -- you're not an oil forecaster per se this dynamic now in terms of supply and demand in the world, are we destined for higher prices at this point?

>> i think that the risk is that, yes, we have summer driving season and that's always when prices go up. but the other thing is that what is happening in the middle east. remember, when it looked like iran and israel would go to war in april, the price was over $90 a barrel. it got down headed toward $70. now it is in the mid-80s. that's what's hanging over everything. you have the disruptions in the red sea which means half the tanker traffic that used to go that way has to go the long way around. >> the whom framing of the op-ed and the segment is that the debates are tomorrow and so this is going to be an issue that comes up because americans are feeling the pain. at the same time, prices in other areas in their lives are coming down. does that make the issue of $3.45 a gallon less? >> it is a question if it goes up to $3.75 and if it heads to $4, that's when the alarms go off. prices are up there for everything else. the inflation rate is down, but eggs still cost 20% more, milk

costs 20% more and that's what you hear in why the economy is such a big issue. >> you see rent. rent and -- i don't know if it is true, it doubled. and then if it is 7.5% mortgage, you can't blame that directly on -- unless you realize the fed had to go up 500 basis points to try to get inflation under control for whatever reason, therefore mortgage rates go up, now people can't afford a house. >> that's why you see prices and the economy are the number one issue that are out there for this campaign. >> on the debate stage, what else are you listening for in terms of energy policy? >> i think what is really interesting right now is in terms of electricity, and the recognition that this growth of data centers, the latest numbers are data centers are a little over 4% of our electricity within five years, 9%, 10% of our electricity, and the electric cars and everything else. it houses our electric system,

how is it going to catch up and meet this demand, an industry accustomed to no growth and demand, saying now oh, my gosh, it is growing. >> do you think biden will step back from this transition to green energy? because we just can't necessarily afford to do that. it is much more expensive. >> i think that -- i think this administration is very committed to it. obviously trump administration would take a different course on it. but i think this one, they're locked into t i think they are looking now and recognizing that there are real constraints about getting at additional electric power and getting things permitted, which is very hard to do in this country. >> you said getting things permitted. >> yes. >> to -- >> yeah. >> what do you think happens with what we're seeing forecast in terms of demand for electricity in our ability to supply it? are we on the path to meeting that demand? >> no i think -- i think it has been a huge wake-up call and it is going to be a race to get it done. and, you know, i could see if

you talk to electric power companies, they were used to growth of maybe 0.5%, now they're saying 2%, something like that. and then there is a whole supply chain that has to be there. so we're just at the beginning of realizing that we have a -- we talk about security in terms of oil, but we're going to need a lot of investment in electricity in order to meet the needs of the country that is going toward a.i. >> there is a whole other -- there is a whole other sort of dynamic in terms of the impact on other commodities. we're talking about demand for -- we have seen copper rise too on this notion that you need copper to build out the grid, in order to support -- >> copper is the metal of electrification. that gets us to this other world in which it is our dependence not only on oil, but we're not really dependent anymore for imports, but we are highly dependent on imports of minerals and that, by the way, gets you more tangled with china because china dominates the supply

chains for minerals. >> great to speak with you. thank you. >> thank you. >> dan yergin. a year after near record high prices, the auto industry is seeing deflation. and that has some asking how much lower will prices go. phil lebeau joins us with that story next. later, evercore isi sarah bianchi will join ushe o aadf tomorrow's debate. "squawk box" coming right back. they respond to emails with phone-calls... and they don't "circle back" they're already there. they wear business sneakers and pad their keyboards with something that makes their clickety- clacking... clickety-clackier. but no one loves logistics as much as they do. you need tamra, izzy and emma. they need a retirement plan. work with principal so we can help you with a retirement and benefits plan that's right for your team. let our expertise round out yours.

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welcome back to "squawk box." now the dow is down almost 100 points, but the nasdaq diverging and trading higher. bitcoin and cryptocurrencies rebounded a little bit from recent round of selling. a week or two, really. but did rebound. still above 61,000 after being down almost a percentage point today. a year after car prices hit record highs, the industry is facing deflation. so how low will car prices go? phil lebeau joins us now with more. hey, phil. >> hey, melissa. i get this question from a number of people because we have seen a number of these reports, eight straight months with new vehicle prices, transaction prices, moving lower.

and it does raise this question. is this big deflation we're seeing here because we certainly saw big inflation as prices were increasing. here is the latest from cox automotive. in may, you see the average transaction price $48,389, still -- it is high relative to where it was a few years ago. but it is down 1%, compared to may of 2023. and, again, eight straight months where we have seen a year over year decline in prices. that's rare. you don't see that very often with a new vehicle pricing. couple of things are happening here. first of all, you got new vehicle inventories climbing. why? automakers were building more vehicles. as they're building more vehicles, the dealers have more inventory, and that's forcing the dealers as they look at those inventories to say, you know what, we got to raise the incentives. and incentives are up substantially, relative to the transaction price, they're up substantially in the last year. now on average about $3200.

as you take a look at overall sales for the year, cox is estimating that we'll come in somewhere around 15.7 million vehicles sold this year. that's the expectation that would be a slight increase from last year when it was 15.5 million. quickly look at tesla, rivian, gm and ford. why are we showing you these? the ev market is the one area where you really see deflation kicking in. particularly on the used ev side. the first generation models that you may find for sale on a preowned lot, those prices have come down substantially. and this is where we're going to see the automakers, those first evs, particularly for rivian, gm and ford, they were priced pretty darn high. and they're still high, relative to an internal combustion engine vehicle. that will start to change here over the next couple of years. >> so, what part of the equation if any is the cost of financing?

obviously it remains high. you mentioned incentives offered by the automakers. is that to offset the higher borrowing cost or are they doing anything on the interest rate front? >> that's to try to convince the buyer to get into a new vehicle. yeah, melissa, that say huge issue in terms of why you see some people still little bit hesitant about buying a new vehicle. it's so expensive on the monthly payment side right now, it is well over $740. and you look at that, a lot of that is because of those higher interest rates. so, yes, the incentives are to help offset that to an extent. >> phil, thanks. phil lebeau. okay, up next, we're going to talk taxes and what investors should expect to hear in tomorrow night's debate. and then role of artificial intelligence in our nation's

schools. we're going to hear from the american federation of teachers, ra randy winegartner, we'll be right back. daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this. at truist, we believe the same is true for banking.

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presidential tax debate, the

question of whether you can cut taxes and still raise revenue, robert frank joins us now with more. >> good morning, joe. democrats say the 2017 tax cuts cost trillions in lost revenue and are partly responsible for the soaring debt. republicans say revenues hit an all time high after those tax cuts and the problem is democratic spending. tax collection data, however, shows that neither side is absolutely correct. and the year after the tax cuts, take a look at this chart, revenue from individual and corporate taxes was flat. it then fell in 2020 during the pandemic. started rising in 2021 with all that fiscal and monetary stimulus. in 2022, revenue hit that all time record with individual tax collections topping 2.7 trillion. corporate income taxes reaching 440 billion. the main reason as all of our viewers know, the stock market, the market was up 27% in 2021. all those ipos, the spacs

creating record capital gains. since then, revenue, take a look at this, is falling back down. individual tax collections are now flat, compared to 2018. that's when the tax cuts took effect. even though the gdp has grown by over 2 trillion. the best measure as you mentioned is tax revenue as a share of gdp. in 2017, it was 17%. now it is 16%. so not a big change. revenue did not collapse, in fact, as the democrats claimed, but it has declined relative to the growth of the economy. so, if you look at the 8 trillion that has been added to the debt, maybe a trillion or so of that is due to the tax cuts. it is still mostly as you pointed out a spending issue, but it doesn't mean that this is increased revenue. >> philosophically, supply siders will tell you that for innovation and entrepreneurialship, and the most ineffective way to invest

capital is the government. we know that. in a perfect world you try to keep money in the private sector as much as possible. we do have bills, we do have a safety net that we want to, you know, make opportunity the same for everyone in this country to succeed. so there is ways we try to do that. couple of things, though, corporate taxes did go up, even after a corporate tax cut, the total. >> that's right. >> and saying that it is because of a rising stock market, what causes the type of economy that delivers a rising stock market? perhaps one where money is left in the private sector, so the companies can succeed. >> what causes the market boom in 2021, you know what it was, it was $7 trillion in stimulus, it was 0% interest rates. that's what caused -- that was the biden economy. that wasn't a pro growth, low tax -- lower tax economy. >> you're talking overspending

and fiscal stimulus as -- >> i didn't say overspending. i'm saying we know where that money came from. >> where did the inflation come from? some came from the pandemic. people would argue a lot of it came from this ridiculous amount of money printed. i'll ask sarah bianchi from evercore. sarah, i just -- maybe not with what happened with all the stimulus, but take any period in history, if you get increased tax revenue from strong financial asset performance, that could result from pro growth supply side policies. people argue with me now that all reagan did, people that are 30 years old, 35, all he did was blow out the deficit, that -- they read a chapter about it. but supply side in my mind and growing the pie is the only way to increase prosperity. is that wrong?

>> well, look, i think we did see some resulting growth from the tax cuts in 2017. but i think certainly we also saw deficit implications. i think the congressional budget office and others have found that on balance, the growth that you get from tax cuts does not fully come up with the revenue we need to offset the cut. i think cbo said it is a fifth or less. so there is certainly some, but i don't think there should be any expectation that especially if we were to extend these cuts in 2025 that we should expect to have some really serious deficit impo implications. that's why you're seeing republicans, even on the hill, talking about -- >> if you cut -- okay, if we're at 16% or 17% or wherever we are, and you're spending 24, there is going to be a deficit. and over the years, we didn't

spend 24. we spent 19. and maybe we're down a little from 19, for the next 100 years, we average 17.5 in terms of revenue. we have to live at 17.5, maybe not 16. but we can't expect 24 for that part of the gdp to be used as taxes. and we can't continue to spend 24. so, who in their right mind, sarah, can argue that we're spending too much if we're at 24? in an economy that is growing? >> certainly i hope next year that both spending and revenue are -- spending cuts and revenue are on the table. we need both sides. at the same time, we have an aging population, we have a really dangerous world with a lot of defense needs. so, it is not totally unexpected that we should see slightly higher than average on the spending side. but you're right. we need to have conversations about spending, reductions as well, and a serious conversation

on the revenue side. it has to be both. >> that's all we do. i hate when people -- not you, sarah, but when people say we need to have that conversation. which means we need to talk about it, but we're really not going to do anything about it. >> we're hearing comments on the hill from republicans that just extend all of these tax cuts and incur, whether it'ses 3ds trillion, $4 trillion added to the deficit. whatever the number i think even joe would disagree it would add to the deficit extending all of these tax cuts. what are you hearing about possible pay-for the getting minor consensus even among republicans right now? >> you saw the house ways and means chair on the republican side talking about even a higher corporate rate. that is probably less likely to get attraction on the republican side, but there's a lot of republican think tanks out there talking about, one, ways to constrain the extension of the tax cuts. different tweaks you can make.

and then potentially putting higher rates on the table. whether on the individual side. again, a little bit we're seeing on the corporate, but it's -- you know, it's a hard conversation. i think it's really going to start in earnest, not until we get through the election, and to your point. i do hope that spending will be seriously on the table next year as well. i do think a balance needs both. >> okay. sarah, appreciate it. thank you. good to have you on. robert frank, thank you. we'll have this conversation. we need to have this conversation. it's a longer conversation. >> the >> this has to happen next year regardless of policy things, everybody talks on the campaign, this actually has to happen. >> 107% now debt to gdp. never been there since world war ii. no way it's not going to 130 in the next 15 -- no way. >> yeah. right. >> i don't care how much

conversations we have about it. coming up, a new report from the american federation of teachers establishes guardrails for a.i. in the classroom. randi weingarten will join us. "squawk box" will be right back. 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. (♪♪) the all new godaddy airo helps you get your business online in minutes with the power of ai... ...with a perfect name, a great logo, and a beautiful website. just start with a domain, a few clicks, and you're in business. make now the future at godaddy.com/airo hello. i'm ethereum. and i'm big finance. you look really tired. just calling it a day.

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to help navigating programs and services, we give veterans access to support from anywhere in the world. i'm live in aspen, colorado, this morning as the aspen ideas festival. media partner. coming up, highlights from a conversation i had with ceo of microsoft, a.i., mustafa and later in the hour brian grazer talking about storytelling in this era of streaming. sam altman from openai is here. we'll bring you parts of that conversation. brian chesky, airbnb guys also touching down in aspen a little later today. charlie scharf from wells fargo, ceo, in town as well and a number of other conversations. tomorrow talking to peter thiel

right ahead of the big debates and also larry summers. a lot more coming to you over the next basically 24 to 48 hours. >> i want to be a fly on the wall. that peter thiel interview on and off camera, i think, andrew. should be -- brian staying -- i bet the airbnbs are really nice in aspen? i bet you can find one -- >> that's a great question. a great question. i will -- i will ask him where he's staying. in fact, maybe if it is an air been airbnb, cameras see if we can find it. there you go e. good thinking. >> stayed in one in telluride. it gets expensive, andrew. you know that. pricing when trying to go across town. >> yep. >> all right. looking forward to brian, the

other brian as well, brian grazer tailgates that. can i ask a question? >> 100%. >> i just -- i want to go to the movies! i don't want everything to be on netflix, like once a month. what people tell me. i wonder what brian thinks about that? he might have an answer for what we need to do. >> i'm sure he will. sure he will. >> alcohol i don't know -- >> alcohol in theaters. >> what? depends on the movie. pink floyd concert would be good. outlining guardrails in the classroom for a.i. randi wieingarten joining us next. we'll be right back. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities

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8:00 a.m. on the east coast. you're watching "squawk box" on cnbc. i'm joe kernen along with melissa lee. becky is off today, and andrew ross sorkin joins us from the aspen ideas festival in district three out there, andrew. i found out that this morning, because there was an election where boebert no longer was running in that district. she had to move, but she, i don't know. she's going to be back.

she's going to make it. aspen might not be exactly like most of the voters in district three out there. laughing here, but, randi weingarten laughing. somehow -- we'll be back in a second. and third quarter results, company snapped a streak, fedex, six straight quarters year over year revenue contractions. volkswagen planning to invest up to $5 million in ev maker rivian. a $1 billion infusion in the form of a convertible. oh -- no. it's not a convertible. a convertible note. rivian doesn't have a convertible. does it? >> no. >> a good idea. rivian ceo said the support will aim the company on its path to a positive and southwest under pressure. cut current quarter guidance from revenue for available seat

model. important metric for airlines. one of andrew's favorite things to talk about. which are airlines and -- you probably have a flight back, too, andrew. obviously, you're not walking. >> united. i think i'm -- i think this -- i think i'm on united. what i really want to do is be on delta, because i want to go to that new delta terminal at jfk. >> on social media. >> the chairs, hosting every which way. >> big vibrating chairs. big vibrating. >> massage chairs. >> i think. >> sit-down restaurant. also the food is good they say. >> yeah. >> i talked to -- been there the whole day. >> when that show's on. >> everybody's talking about it. >> he says the food's good. anyway, see you in a bit. futures, a higher op er open fo

nasdaq and s&p. losing stream. building on gains with nvidia konding reversal. 7% up yesterday. pre-market. up again. look at treasurys, too. firming in the ten year note. 4.288%. two year now at 4.735%. get to mike santoli at the nyse. mike, looks like we're going to continue higher. >> yeah. looks very steady action. the rule. hovering, not at new highs, hovers nearby, a lot of rotation below the surface. look at the s&p. now a one year. you see that peak in late july. before that fall correction. doesn't really look dramatic on this chart here based on upside. gotten it. also kept to the really, a pretty good channel that we've been in for a little while here. kind of right in the middle. slowed down a little. some action in the past week or so has resembled what we saw at the beginning of march. that was when, of course, we had, nvidia started its own correction. momentum trade really faltered

for a little while. rest of the market tried to rotate around hold the market up and eventually got that 5% pullback when treasury yields broke out to the upside. concerned about repricing a more hawkish fed maybe even the economy. overheating then stumbling. didn't come positive-of-to pass immediately, we recovered. internal dynamics. s&p to equal weighted version back to last monday. basically when nvidia has that big kind of pop and then drop. started its correction. what you see here this week is, the equal weighted s&p basically came right in to rescue the overall index. you had, nvidia market on a given day or an anti-nvidia market on a given day recently and one of each this week netting out to almost no movement in the broader index. see if that choreography continues in a seamless way. kkr buying into apartment real estate this morning.

here is the residential real estate etf against the home builder etf. actually the apartment-based residential real estate sector actually nosing ahead of home builder. more existing supply. rates are troubled for affordability on the new home side and actually you see excess supply of apartments and rental deflation. maybe abating on a forward-looking basis. interesting dynamic. watchlications for inflation reading. >> hope the market was broadening. >> yeah. >> overall markets didn't fall much when nvidia fell out of bed, but yesterday when we reversed, like the old playbook came right back. you know? weakness in the banks. weakness in all other sectors that did not show any leadership. >> as if it's a seesaw and s&p 500, not moving as much. everything going each way around it. at least for now. again, that did happen back in

the spring. a lot of people saying, finally the broadening of the rally is here. it was for a period of time and held the market together until the leaders kind of refreshed themselves and then sprinted higher again. >> all right. mike, thanks. mike santoli. the american federation of teachers out with a report laying out guidelines and safety guardrails for using artificial intelligence in the classroom. joining us with details randi weingarten president of the american federation of teachers. randi, welcome. >> glad to be here. >> was this report tough to put together? >> amazing is that, you know, about seven out of ten teachers in the united states use technology all the time. and so we have said for years, help us make sure it doesn't sup supplant. it's a supplement. so we started this journey last year. we actually started by showing our executive council chatgpt. and you had to see people's

faces just drop when we just did a, an experiment of writing, know, a press release i would write and then -- once that started. people said, okay. let's figure out how we use it positively. how we avoid the mistakes of social media that happened before, and what are the guardrails? so we put out these guardrails. teachers did this. six very basic ones. with lots of ideas about how to use things, and what not to do. and, but the second thing we did was we also did professional development and something we called 'the a.i. brain" that son oson -- is on my "share my lesson platform" for teachers to try it out. money given to grants and 11 unions to actually do some of these things. did both the pond a also the cautionary.

let me say one more thing. the most important caution. safety and privacy of kids and of their teachers. we've got to fight back cheap fakes and disinformation. >> how are teachers using a.i. right now most commonly? >> so for the people who are using it right now, as opposed to just other ad tech, it's basically helping with lesson plans. helping with assessments and helping with, like, figuring out some new and different classroom assignments. that's the most common way that teachers are using it right now. the -- the issue right now is really truly social media and deep fakes and bullying, and so how do you figure out what it is and how do you stop it? so that's why we're at, the people who really know what they're doing, and, look, i'm from the generation that didn't even start with computers. so everything i do is, i have to

think through it -- but the people who know what they're doing, they focus on safety, privacy and saying to all of us, we have to learn to be fluent in this technology. >> andrew's got a question. >> randi, out in as spohn and hope to head of microsoft's a.i. efforts. mustafa suleyman yesterday. talked a lot about education. show some in an interview in a little bit. i'm curious how you feel about using a.i. to grade a paper, which today is could, if you wanted it to. using a.i. to effectively fill out a report card. so, instead of not just having grades but sometimes teachers spend enormous time writing letters to parents. >> right. >> and to others about how a student is doing. the a.i. will do a pretty good job of filling that out for you. do you want teachers using it for those things or not? >> so it's a really good question, andrew. i would say that first drafts of

recommendations, first drafts of, there's ways to do first drafts of grading, but the human can never be substituted by a machine. and so what -- the promise for teachers, like, in term of all the paperwork that teachers do, the promise is to reduce that work, and to reduce that paperwork, but you can't have the machine be the substitute for human interaction. human interaction has to always be front and center in terms of anything we do with kids. so -- and we have been working with, as you know, the flcio and we have a partnership with microsoft and soon to be some announcements for what we're doing together in august. >> randi, great to speak with you. thank you. randi weingarten. >> thank you.

when we come back, we'll bring you highlights from my conversations with microsoft's a.i. ceo mustafa suleyman. a number of interesting insights here at the aspen ideas festival you don't want to miss. we're coming right back here on "squawk box," from aspen to times square in just a moment. power e*trade's easy to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley (♪♪) something amazing is happening here. in a world of data, people are accessing critical information quickly and securely. that's because cdw architects are building infrastructures with unified data storage from netapp. with the flexibility to run workloads

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- the first step on our new journey. you coming? reach out to a friend about their mental health. seize the awkward. it's totally worth it. welcome back to "squawk box." here at the aspen ideas festival. yesterday i spoke with head of microsoft's artificial intelligence unit. mustafa suleyman. probably the most important person now in the a.i. world at microsoft in major pareler inship with openai. and sam altman from openai will be here later today. i asked about chatbot hallucinations. talk about it all the time. whether he believes, he could ever really take us inside the black box to actually understand how a.i. works.

>> i can't, in a way that would satisfy you. >> you can't. >> and i can't tell you why you wore a blue shirt this morning. can explain very little for who you or i are. the explanation is again a little human bias. i ask you to explain why you had scrambled eggs this morning you will creatively imagine an explanation in hindsight and depending on your mood and the context that you're in and other, like, associated metadata or the explanation you're probablying to going to say it slightly differently. it's not clear it was entirely causal. there is some basis in reality for it, but this one-to-one mapping is a very hyperrational imposition on the way we think at humans. in fact, we just don't really operate like that. we operate, i think, far more by association. >> should we worry about that, though? should we worry that we -- it's one thing to not understand ourselves. another to not understand how

the computer gets -- most people think that all of this is just a big mathematical problem. right? 2 plus 2 should always equal 4. in not, what's wrong with the computer. >> that's a sort of human reasoning and culture actually works in my opinion. human reasoning works as a result of behavioral observations. when you consistently do the same thing over and over again, i gain trust. you become more reliable. when you tell me that you are unsure about something, and then i look back and it turns out that you're uncertainty was a correct assessment of that outcome, that uncertainty giving me reassurance. right? so i learn to trust you and interact with you by observation. and i think that's actually how we all operate in relation to one another, how we produce culture and society, and that's how we'll treat these models. >> so, guys, we have to start thinking about these models really very much in human dimensions.

not necessarily in mathematical or thinking about them as a computer. i also asked him about the issue of intellectual property. a big one here at the aspen ideas festival, so many author and other creators especially given reports of openai and others that trained off transcripts from youtube videos. here's what he said about the economics of all of that around content. >> the economics of information be about to radically change because we're going to reduce cost of production of knowledge to zero marginal cost. this is just a very difficult thing for people to intuit. but in 15, 20 years time we will be producing new scientific cultural knowledge at almost zero marginal cost. it will be widely open source and available to everybody, and i think that is going to be, you know, a true inflection point in history of our species, because what are we, collectively, as an organism of humans, other than a

knowledge, an intellectual production engine. we produce knowledge. our science makes us better. what we really want in the world, in my opinion, new engines that can turbo charge discovery and invention. >> we're going to have to get on the couch, because if you really start to the think about it, joe, and melissa, i mean, who are we? we are content creators in many ways, and the margin's costs of content is going to zero, well, there's lots of industries, of course, that are going to shape trip as result. european union charged microsoft by bundling teams and microsoft delaying launch of a.i. features in europe given regulatory environment. so i asked mustafa as the concentration of power in artificial intelligence among the big tech companies. >> makes me very anxious. the reality is everywhere you look we've seen rapid concentrations. whether in news media, and the

power of the "new york times," the "financial times," economists, great news organizations or whether in cities. concentration of power around a few big metropolitan elite cities or in technology companies, and the practical fact is over time power compounds. power has a sendancy to attract more power, because it can generate the intellectual and financial resources to be successful and all compete in the open market. one hand feels like an incredible situation between microsoft, meta, google and so on. it clearly is also true we're able to make investments unprecedented in corporate history. >> can you speak to what i imagine is a friendly or -- could turn into a frenemy situation with openai, which is you have a partnership now and you're developing your own tech as well. your own a.i. they helped you get to the lead. read you something.

semifore. you know this? >> of course. >> with the tour de france coming up here's a bike analogy i think everyone understands. microsoft amend openai are a two-person breakaway far ahead from the peloton. by working together now they might be able to keep the lead. if either goes solo, they may fall both behind. both companies have to think about their finish line strategy when they will have to ditch the other. you're on the bike. >> again, i don't buy the metaphor there is a finish line. this is another false frame. it's actually very much also true in the context of our race with china! we're going head-to-head, it's zero sum. there will be a finish line and when we cross it we will have a.i., we have to stop framing everything as an adversarial race. it is true we have ferocious

competition they're an independent company we don't own or control them and don't even have board members. they do entirely their own thing but we have a deep partnership, very good friends with sam, huge trust and faith how that's run and that's how it's going to roll for many years to come. >> went deep with mustafa on so many issues. watch it online. watch in its entirety, one of the first interviews now given in his new role at microsoft. of course, prior to that was a co-founder of deepmind at google back in 2010. an o.g., if you will, in the a.i. space then started inflection along with reid hoffman, then, of course, got spun effectively inside now of microsoft and as i mentioned earlier sam altman is going to be here in aspen later today and we'll bring you parts offing that conversation. a.i., talk of the town, seeming to be just about everywhere you

go. >> andrew, during that one part of the conversation i briefly thought about us, content is worth zero. but what he described, if you were listening closely, was really the singularity, where mankind, where machines now have, what, a billion times the collective knowledge of mankind. >> yep. >> for the last million years, whatever it is. however we've been -- when machines get to that point, i don't know if we need to do anything for new knowledge and new content. and i'm hoping it's a positive, because i want to be some kind of cyborg, i don't know. maybe download my neurons, to something that can last. we may just miss. may be like 100 years from now. >> give you one. you'll appreciate this. we had a piece of the conversation actually about the election, and elections, and the role of a.i. in politics. >> you just can't help yourself.

can you? >> no, no, no. but, no. this was interesting. mu stmustafa completely separat from elections. 2024, set up that way and hopes it will in 2028. then he said, you know, come 2030, come 2032 or even farther out we will all have our own agents, our own bots that are ours. just like some people want their pets to have sort of humanhood, if you will, that he thinks that bots, your agent, may actually get involved in politics on your behalf, and so even efforts that are made to separate politics and elections from a.i., it will be very difficult, because it's democracy, if you will, people will want the agents involved in that conversation. so -- it gets very -- talk about single larty, interesting

quickly the farther out you go. >> will any of us be happy? did you ask him that? i'm happy now but you're describe as horrible future to me. aren't you? >> let's just be hopeful. going with hope. crossing my fingers. >> hope for the best, prepare for the worst, though. thanks. we'll be back to you. brian's going to be much more positive. coming up, go deeper into the conversation we've been having this week about housing and affordability in america. a chief economist joins us. next, exclusive results from the latest cnbc cfo council survey including what corporate financial decision-makers see in store for the second half of this year. this year. we're back in 30 seconds. i'm a rock star. great job putting finance and hr on one platform with workday. thank you!

guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one. welcome back to "squawk box." what sectors believe they'll see biggest growth second half of 2024. you see here. technology, top answer. continuing to show leadership tied for second consumer staples and energy. speaking of the consumer, we also asked these corporate financial decision-makers what's the big efforts external risk to their business. see it here. 54% telling us their biggest concern, biggest external risk is consumer spending followed by over regulation and then fed policy. that consumer demand, highest

read since q1 of 2023. so this q2, cfo survey taken between june 3rd and june 30th. a lot of things happened during that time. a fed meeting, rates unchanged but cutout look lower. cpi report better than expected, and saw s&p 500, it topped 5500 first time ever. in this environment, the cfo detailed plans to focus on acquisitions along with research and development. 21% said m & a and r & d priorities for capex spending. building new factories or. if as their priority. and capex spending expected to stay about the same. a quarter expecting increase. 17%, forecasting a decline in the capex spending. melissa, back to you. >> what are the cfos saying about the fed and possible cuts second half of the year? >> optimism about a cut this year. show you the chart. about 38% believe a cut in

september. very optimistic a cut before the election. a large number of them you can see. 17% believe it will come in november still after the election. another 17% believe it could come in december, but look down here. 29% believe that the first fed rate cut comes next year possibly later. >> all right. frank, thanks. frank holland. the latest case show home price index last three months record high. 47% higher than in peril 2020. joining us now with more on housing affordability and chief economist at realtor.com doesn't make sense to me. is it about supply, i guess? so expensive to buy a house, how is anyone buying a house? at 7.5% mortgages? it must be supply. right? >> it's been about supply and also the amount of equity in housing right now. homeowners are sitting on a record amount of equity.

those without a mortgage, aren't affected by today's borrowing costs can make moves. so they are able to navigate these higher prices without as much of a ramification. so supply and also a bit of a shift in the mix of who is actually buying homes right now. we are seeing a shift towards more expensive homes as opposed to less expensive homes among buyers in the market. >> treasury's criticized for not extending low rates. but most people did, didn't they? or are people that are in some arms, are they still -- is it piper still going to have to be paid? are they coming due or have most already shifted? >> season arms reset but a portion of outstanding debt. i don't think it's going to be a big ramification or that we'll see a huge impact on consumer spending even people's ability to pay their mortgage. there will be some ramification. >> is this a mean immemedian-ty

thing? the high end driving the price of houses to records? or is it just -- i think a mean or median -- is it skewed by all the rich people within the coaston regions buying this $50 million houses? >> look at inventory. we see actually more low are-priced homes on the market. the homes in the 200 to $350,000 category, biggest area we've seen growth. in part a regional mix. while on a basis, not seeing lower prices. it is good for buyers in that entry-level price point to see more options. more to choose from. >> yesterday the market digested news from a company saying people aren't renovating as much anymore because of high interest rates and not renovating their pools, not putting in new pools et cetera. we saw a sell-off across the

board when it came to home retailers and home builders. does this tell you about the psyche of the potential heim buyer? people looking for relief towards end of the year but we're not getting it. >> the way 2024 played out is different than many expected. people expected more interest rate relief and got a good break early in the year raising expectations. haven't seen that carried through. i think it's going to be a little higher for longer. eventually we'll get relief but missed the heart of home buying season ant not going to see as much activity as originally expected. >> what comes after millennials? who are they? generation something? >> z or something? >> will they ever be able to buy houses if they don't have equity you were talking about? can anyone go into a market right now with a 7.5% mortgage and buy a house? what's it cost? >> seeing first-timers get into the market making up about 30% of recent home sales but it is

expensive. costs essentially doubled. home prices up 50% roughly, but the mortgage rates are up driving the cost up. >> think about what you just said. doubled in the last five years? >> yes. >> part of inflation. isn't it? isn't that why people feel they don't have any money? it's not just eggs. i mean, it's houses. >> inflation depends on the perspective. home owners on a mortgage haven't seen costs go up, property taxes go up, a small portion. home buyers taking inflation on the chin. >> do you have a, like, do you advertise not to say realtor, do you tell people -- is it a pet peeve? >> three syllables? >> like nuclear. >> no "." between the l and the t. >> do you say realtor?

>> no. >> you say it correctly. >> i worked at the -- >> you'll never -- >> realtor instead of "realtor." >> they talk about the pronunciation. >> a nuclear bomb goes off in my head when somebody says "realtor." and award winning producer brian grazer. a good chance he had something to do with your favorite movie. and much more on the markets. nasdaq actually turned negative. ay tuned. you're watching "squawk box" on cnbc. you look really tired. just calling it a day. but it's 4 p.m. yeah, and i've been working nonstop since 9:30 this morning, so. 9:30. you don't say? yep. you'd want a little shut-eye too if you'd been moving billions around the world. well, actually, i do. you know, stablecoins, nfts, loans.

people can access me 24/7. what? but look, everyone's different. you should get your rest. you'll get after it tomorrow. tomorrow's saturday. [ethereum] monday. you'll get after it again on monday.

160.31 the current level weathered to lowest since 1986. 160.38. joining us now, advisory group cio and cnbc contributor. peter, great to have you with us. >> good morning. >> they meet next month, end of july. they've got to be hawkish. what do you think happens? >> i think they're laying

groundwork for not only a rate increase, maybe 10, 15 basis points. not as much as 25, and also trimming back on their qe. still doing qe but less of it. an extraordinary amount of pressure now on the bank of japan from not only the japanese citizenry, from that dealing with higher inflation and now decrease in the purchasing power of the yen, but also the ministry finance that doesn't want to the have to deal with fx intervention, because they know that usually fails. the question, though, is that even after those moves, is that going to be enough to stem this yen weakness? because there's still a mile wide between u.s. policy rates and what will be in japan. >> one month is a long time to watch this currency slide, peter. do you think they try and step in? traders are, it's been sort of a whisper the past month or so that the boj would eventually have to step in. do you think that this slide is

orderly enough that the boj would not? >> well, they've done it twice already over the past couple months, and the impact was maybe a couple of days. seeing now obviously retail at 160 proving those two times failed. the only way get to sustainable slowdown, at least in the depreciation of the yen or at least, maybe even get a rally is actual action by the boj. so i'm not sure if they're going to intervene before that boj meeting and sort of front run it, but maybe in order to give any yen rally triggered by that meeting some momentum, maybe they intervene after that meeting, but in the meantime, having to wait for further weakness. >> interesting. the flip side literally to this whole yen weakness is strength in the u.s. dollar, peter, and the strength of the u.s. dollar's seen, you know, across, crosses. again, every major currency in the world. so how do you think that manifests during earnings season, which is literally right

around the corner? are we going to hear more commentaries? more of a, quote/unquote "theme" during this season? >> for some. many multi-nationals try to hedge but it's impossible to full doi that. the last couple of quarters we did see coca-cola, microsoft, some of the big names that do business everywhere that a few hundred basis points of growth was clipped by the rally in the dollar. you could see a repeat of that, but i think overall the dollar strength isn't enough to really move the needle earnings-wise. even take the euro. trading 105, 115 range for years now and remains in that range. i think the dollar overall is in a trading range outside of the outliers like the yen. >> all right. peter, got to let you go. thanks for your thoughts. peter boockvar. coming up in a moment, legendary hollywood producer.

right here. brian grazer's going to join me in aspen at the aspen ideas festival talking all things media, hollywood, streaming, and whether he sees consolidation ahead. the changing economics of show business and much more. don't go anywhere. "squawk box" comg inright back from aspen, colorado, after this. at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today. [thunder rumbles] ♪ ♪ ♪ ♪

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whatever. >> okay. >> easy peasy. >> okay. >> welcome back to "squawk box." i'm at the aspen ideas festival. nbc universal news group is the media partner with aspen and joining me right now oscar

golden globe emmy and grammy award-winning producer brian grazer. found ef, executive chairman of imagine entertainment. easy peasy. here today, it's early tore you. >> early, i know. >> thank you for being here. a kwubl qucouple questions from about the movie business. i was going to start there. >> whatever you want. >> consolidation, a changing nature of all of is th. >> yes. >> what do you think about the fact that it feels like, despite "barbie" and "oppenheimer" last summer maybe people aren't really going back to the movies? >> i have a -- some evidence that supports that. >> yeah. >> um -- imagine as played in the zone where there is that chance, high probability chance, that it will be successful in a movie theater. >> okay. >> and so it's -- it's great for us. >> right. >> because we've built over 30

years, over 100 different products. brands. you know? whether backdraft, now going to do today with glen powell or whether it's 24. a movie we're going to do in a very interesting way with disney/fox. >> wow. >> so these formats of the late '90s and the 2000s have become very important, because the, the streamers or the people who are, or studios, are very right now, even more risk adverse. what they like to do, as you just pointed out by doing "barbie." what is it? 100-year-old product or something? >> yeah. >> they like brands already established that people have high level of awareness to, where you actually, add a new twist or really interesting casting, which is, of course, what we're doing with ours. we're doing something with sydney sweeney i'm very excited about. doing something with scarlett

johansson, also very excited about. i mention's glen powell with "backdraft." >> a former -- but generation grew up in a different era. a little less fractured you could create these. "backdraft" was a huge picture. if you had to do that, as an original today. >> yeah. >> could it be a huge picture? >> i think so. >> you think so? >> yeah. because actually a.i. and digital effects have so far advanced themselves, you can have tiny cameras almost imperceptible captures physics of a fire in a way never done before. i'm sure you saw "dune 2." >> yes. >> blew my mind. absolutely so state-of-the-art and amazing. those are the benefits of a.i. and advancement of digital effects. so i think you can do that.

>> what do you think -- >> that's the goal. >> that's the goal. what do you think is going to happen just to the streaming world right now? feels like everybody's trying to make sense of it. a lot talk about consolidation, an election coming up. a lot of folks waiting to figure whether regulators will allow, should allow. do you think in the next year or two there will be demonstrable consolidation among the streamers? >> i do, y. >> you do? >> i do. i don't want it to be true. it's not optimal. they will still choose high-quality entertainment. it will always -- we're now in a time where we're not going backwards and doing just shelf space content any onger. i don't think any streamer or any studio wants to do that any longer. they don't see that, that the super aggregator work. i think they see specific movies and television shows that are events or appointment.

>> so interesting you say that. netflix has become a super aggregator? >> they're in another category. >> you think everybody else chasing the fever game trying to be netflix, you think that's a fever dream? maybe? >> yeah. >> i'm saying it for you. >> yeah. thank you. saying it for me. >> what do you think -- all talking about the future of paramount, talking about the future of warner brothers. this company. which is owned by comcast, and peacock. do you see, when you think about the -- chess pieces. >> cnbc, amazing. >> love you. lionsgate. how do you see that all coming together -- or not? if you were moving the chess pieces? >> well, i think the high-quality single, independent that creates partnerships would, their i pichip and emerging sta.

being an arms dealers to all of those streamers is a good business. >> right. >> i think the smaller financing entities. the smaller, or the companies that are the ones you just mentioned. >> right. >> they will have, probably have to be consolidated into bigger companies. >> right. you mentioned a.i. >> yeah. >> you seem very excited about a.i. >> i am! >> a lot of people in hollywood you know who are super scared of a.i. >> right. >> what do you tell them? >> i tell them that a.i. -- learn a.i. and win, learn with the part -- learn and become a partner with a.i. and win with it. because a.i. is never going to replace human experience, really. it's an executor, not a creator. >> how many people -- >> if you follow that. right? >> totally. the question is, what has people nervous. there's the scarlett johansson of it all means somehow an

actor's voice or likeness will be used, but there's the other issue, which is it take as team. behind the cameras right here we have a whole crew here and when you put together a film it requires an enormous crew. >> yes. >> in the future, this lighting setup took a while to figure out. >> right. >> in the future a.i. will basically tell the director of photography, put the light here, here, here and here and be able to do it very quickly. all of the design elements, i imagine, is going to, dgood new take couldn't cost, your business, labor perspective it's going to take out jobs? >> somewhat. >> okay. >> not by 50%. >> okay. >> but by 10 or 20%. you don't even know how that will work. in other words, because let's say the lighting you just talked about. you can pre-visualize on your, with your a.i. and your computer, you can pre-vis your

entire movie or the scene you created. but people are variables. variables change the lighting. someone actually has to do that. you can't really eliminate human beings. >> right. let me ask you. back actually, sort of to the beginning. actually, sort of to beginning, and joe, i don't know if you want to jump in here, because i know joe was talking about the movie theater business. >> i want to ask -- >> can you hear him? >> the fracturing, though, of the business, of the idea that making a -- oh. joe, i can't hear you. that's what i apologize. >> that's all right. >> you jump in. >> yeah, i want to go back, brian, to -- how are you? good to see you. thanks for -- >> great seeing you, joe. thank you. >> thanks for joining us. you describe something that was troubling to me, and that was that some of the projects that are going to get greenlit are kind of the standard projects that they know they can make money on, which would mean some

of your greatest achievements would be really hard to get money to make, i would think. we have had some really -- some of the legends of hollywood say, i don't like what's coming out, another guardians of the galaxy, another "avengers". how do unknown people that want to tell a story that people have no idea whether it's going to be a big hit, but it might be, how does that work? it's just you're describing a paradox. >> well, okay. i mean, this gets very granular, but how will people -- artists thrive in this world? i think a human being's -- an artist's greatest value is to

tap into their inner self, which can't be replaced. we are our own format, and so i think if you have an original, authentic voice, it will always be of very high value, and you do have to integrate that in with the ability to storytell and the ability to partner with a.i. -- i think that's essential. by the way, a.i. will help the beginners as much as it will help the seasoned veterans. >> question, though, what i think goes to joe's question. and it goes to the sort of "barbie" of it all. can you break through in an environment where everything seems so fractured? >> it's hard. >> that's the -- that, i think, is the fundamental question. and by the way, the economics have changed. >> i think that's why the streamers are chasing brands, already existing, premarketed brands like the ones we were just talking about. like "24: the movie" using my

own product, will be much easier than just starting from scratch and creating a really good action film with a title that we don't know. but "24" is a brand that has loyalty, has interest, and has awareness, and so that's why they chase brands. that's why the 20 to 30-year-old ip is of high value. >> how hard is it to create a movie star in kevin costner is a movie star. he lives out here. he made his name over many, many years, and just recently with "yellowstone." we'll see what happens with this horizon film or series of films. but do you think -- how hard is it to create the next kevin costner today? >> well, we think it's hard. >> right. >> but there are people, some of them i'm working with, sydney sweeney, glen powell.

i'm doing a new movie with a girl from the bear that's any, ayo edibiri, and she's hugely talented and on the cover of magazines. have you heard of her? >> i will admit i have not. and i apologize. >> every kid has heard of her. >> showing my own ignorance there. >> every kid has heard of her. she's hugely popular. she was a stand-up comic when she was, like, 20, 21 years old. she's only 27 now, 28, and she's massive. zendaya. >> true. absolutely. >> she's huge. >> yes. >> our friend, sam levinson, gave birth to a lot of new stars, and "euphoria." so, you'd be surprised how many young talent -- how much young talent is out there that are stars in their world, and their world is crossing over into our

world. bringing up "dune ii" again. austin butler was in it. it was fantastic. >> the next generation. brian grazer, thank you so much for waking up early. >> did we do it? >> we did it. we're not over yet, though, because i got to say good-bye to everybody. brian grazer, of course, thank you. also, a programming note. we got a lot more coming up from aspen. tomorrow on the broadcast, senator joe manchin and his daughter, heather manchin, is going to be joining us. we'll bring you parts of the sam altman conversation. all that and more, squaw"squawk coming back from aspen and times square after this. atalyst for bold. what straps bold to a rocket and hurtles it into space? boring does. boring makes vacations happen, early retirements possible, and startups start up. because it's smart, dependable, and steady.

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let's get to dominic chu. >> here's the headliners coming out. the big earnings story so far has got to be fedex, shares up about 14%. the package delivery and transportation logistics giant company reported earnings and revenues that both came in ahead of analyst estimates, so take a look at fedex shares up by about 14%. also, now, watch what's

happening here with shares of apple. they are up here 0.66% on rosenblatt's analyst, upgrading to that buy. we are getting some help here because they think that artificial intelligence is going to be a driver because of some of the privacy concerns that apple addresses. that's going to be huge as well. check out shares of fun game stocks, six flags and cedar fair. six flags up by 2.75%. cedar fair up by 1%. their merger, combining both those amusement park properties, gets a win from regulators. knott's berry farm meets those six flags. >> thank you, dom. we've lost our gains in the premarket. >> yeah, we have. i was going to ask dom what

his -- no, if he had a question for rory. >> you can ask him tomorrow. >> i'm going to ask him tomorrow. we -- >> we can ask him tomorrow. >> we can ask him tomorrow because that will be three straight days. get some sleep tonight. and andrew, you got -- man, you're working. you got a lot of people out there. that's a good -- it's a festival. i called it a conference. it's a festival. >> it is. it is. we got a lot more we'll bring you tomorrow, absolutely. >> excellent. "squawk on the street" coming up right now. good wednesday 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. futures are under some pressure as yields bounce on some hot inflation reads around the globe. canada, yesterday. australia, today. that said, several upgrades today for names like apple, depot, shopify, and more. our road map begins with nvidia today,