good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen. andrew is at the aspen ideas festival. he will join us a little later in the show. if you want to take a quick look at this friday morning at the equity futures. you see green arrows. dow up 23 points. s&p futures up 18. nasdaq up 76. the dow not getting much help from the nike shares. the company cutting its full-year guidance and expects sales to slump 10% in the quarter because of china consumer trends. that is a worse forecast than the drop for the quarter that

analysts had been expecting. the stock this morning down by almost 15%. again, a dow component. we will have more on nike throughout the hour. in the meantime, the treasury markets here with the ten-year yielding 4.3%. le let's get to last night's debate. eamon javers is joining us. eamon, if i had to stay up to watch it, i don't know if i would have watched long. >> it was not a debate about policy or ideas. it was a debate about competency and capacity. joe biden's incoherent per performance raised questions as to whether he should still be the party's nominee, but for us and our audience, there were moments in the conversation about the economy in this debate, particularly early on. here are some of the moments. >> he causes inflation.

i gave him a country with no, essentially no inflation. it was perfect. all he had to do was leave it alone. he destroyed it with his green new scam and all this money thrown out the window. >> he decimated the economy. absolutely desk cimated the economy. there were no jobs. we provided thousands of millions of jobs for individuals who where in communities. we made sure they had health insurance. we have covered with the aca. i made sure there were $8,000 per person to get written off in healthcare. >> the only thing he was right about was i gave you the largest tax cut. the jobs went down and he bounced back. you can't do that. >> you have to take a look at what was left when i became president and what mr. trump left me. we had an economy in free fall.

the pandemic was badly handled and many were dying and he said it was not that serious. just inject bleach in your arm. you'll be all right. >> guys, among the many questions this morning is there will be another debate between the two men. there is another one scheduled in september on abc news, but the trump campaign may feel so confident about their candidate's performance last night that it is not worth engaging in a second debate. a lot of questions this morning. the economic topics we just played for you were important, but, of course, what everyone will be talking about, becky, is the moment early on when joe biden froze up and did not seem to complete his train of thought. that confirmed the worst suspicions about whether or not biden has the stamina or energy to continue the campaign. >> the bar was low heading into

this. i don't think the president managed to step over that low bar and questions about his ability to keep steady, i think, were huge. i would like to play it. i think we have the moment pretty early on. >> we do. >> and maybe we can play that just so people can see it for themselves. >> the covid -- excuse me with dealing with everything we have to do with, uh -- look if we finally beat medicare. >> thank you, president biden. mr. trump. >> he's right. he did beat medicaid. he beat it to death. >> i was surprised by the reaction on cnn and msnbc. democrats were in a panic and looking to replace him on the

ticket. that is the issue that swirls and come out of this. >> eamon, you said people were surprised. no one should have been surprised. when bill ackman said, someone needs to take the democratic leadership behind the wood shed. it was toostrong to call it elder abuse, but they pushed this poor man in a position where we all felt bad for him and all of us because of the human condition. it is not just the democratic leadership. you don't get to interrupt me yet. you'll get your chance. >> okay. >> mainstream media, too, across the board were willing to say don't believe what you see. we all knew this. anyone that said it, well, trump is bad for all these other reasons. if this was a surprise to anyone -- that is so unfortunate about it.

it is sad for the entire country. no one is taking any satisfaction in what we saw last night. >> joe, i push back on the democratic party establishment that pushed joe biden into this position. it is clearly joe biden pushed joe biden into this position. this is a person who does not want to step aside. >> they have been riding him since clyburne replaced bernie sanders with him. >> they thought he was the singular candidate to beat donald trump. they were right about that in 2020. this was somebody who united all of the different factions of the democratic party and put the best foot forward, they thought, in 2020. this time around after last night, i don't think democrats will feel that way. the question is what other option do they have at this point? especially if joe biden still does not want to step aside? fear of his own mortality, ego, call it what you will, this is a

man who has not signalled he wants to step aside. maybe after digesting this coverage, he might rethink that. the question for the democratic party is who else do you have who is ready to go and can the party avoid a nasty, nasty fight between all of its factions, particularly over israel and palestine which has the potential to tear the party apart as they choose their next nominee. that kind of fight is not the way to win an election. >> the elephant in the room is they also made a deal with kamala harris. they put her in. now they're stuck with her. you can't replace her at this point. she's less popular than joe biden. eamon, three months ago, people were saying he's not going to be the nominee. three months ago. many, many, many people were

saying that. you saw the way he would call the leaders that were gone for ten years. he would say he met with them last week. there were signs from mainstream media and democratic leadership to see that this was not going to work. they're in denial. don't believe what you see. that's why i agree with ackman. democratic leadership should be taken to the wood shed. >> in part, they were in denial. there is no other option. you couldn't have gone to joe biden and say step out two months ago. maybe this morning. who makes that call? nobody has that power within the demo democratic party. i push back that there is a looming power behind the throne that could have done this. this is joe biden saying i don't want to resign. i'm not ready to retire. >> that looming power will do anything to stay in power, including propping this poor man

up. it's a tawdry thing to watch. the mainstream media, hand-in-hand, went along with this. he's sharp as a tack. when was he sharp as a tack? he knows all of the policies. we have seen him decline on tv since he got in office three and a half years ago. >> i watched the state of the union address and watched him walk in. >> he had a teleprompter there. >> he had more energy. he didn't look as frail this many months later. five months later. it raises questions over what he does in the next seven months of the existing term. >> the problem for democrats is you saw some of this spin last night. this was a bad night. other presidents have had bad opening debates in their campaign. the problem for democrats is everybody in the country knows that old age is the grim reality of old age which is a one-way

street. you don't recover from it. you just get older. >> we're all looking at that. >> the arrow points in one direction. >> ask for not whom the bell tolls. >> there are greek tragedy elements as you look how this plays out with an aging leader in the chair declining opportunities to step aside and trying to hold on to it as long as we can. we have seen this before. we have seen this with other politicians and political f figures who don't want to leave center stage. >> maybe it is a combination of the president not wanting to go and there is nobody else and they want to stay in power so badly, they enabled this to happen. we're all in this position now. >> the free for all. >> it is sad. i think "the post" stayed up

late. nothing on "the washington post." i guess they already went to print. it is sad to see. >> by 9:30, it was pretty clear wh was happening. eamon, thank you. we appreciate it. coming up in the 8:00 hour, governor doug burgum will join us. he is on trump's short list for running mate. coming up, comments from peter thiel. he had a political forum last night before the debate. "squawk box" will be right back. to transform business, accelerate growth, predict trends, you need to begin with trust. introducing watsonx governance. helping you govern any ai, as data, models, and policies change, so you can scale it responsibly.

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you coming? reach out to a friend about their mental health. seize the awkward. it's totally worth it. andrew spoke to peter thiel at the aspen ideas festival yesterday afternoon before the debate. in 2016, thiel spoke at the rnc in support of former president trump. andrew asked if he plans to support trump this time. >> you hold a gun to my head, i'll vote for trump. i'd rather have him than biden. i'll not giving money to his super pac. i'll be less involved in all of these ways. look, i don't know, i think

trump will win. i think he will win quite solidly. i don't think it's going to even be close. then, my pessimistic look ahead function is after he wins, there will be a lot of buyer's remorse because the elections are ab test. if you ask me to make an argument, biden is not making an argument. it is these two different hate factories we have targeted at each other. that is the way politics work. my view is trump will easily win that. >> i don't know. did you see joe yesterday? he said i'm voting for trump. he went into the whole situation with what happened with peter thiel. they're friends. peter thiel was doxxed back then

and isolated in silicon valley. alonzo said that factored into his decision. at this point, he said there was a sea change on the comfort level even in silicon valley. maybe they are supporting him quietly. all that hoopla. coming up, strategist -- no one can say because he is such a different candidate. if you run a public company, of course. strategist dan clifton has the reaction to the debate. the markets will read it as donald trump is now the favorite. wow. that's really out there, dan. later, key inflation data on the way. we get core pce data at 8:30 a.m. and we veha reaction from san francisco fed president mary daly. "squawk box" is coming right back.

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let's get back to the discussion about the debate last night and comments that could have an impact on the markets. joining us now is dan clifton from strategas. trying to bring the conversation back to the markets because we don't know the power behind the democratic party is talking about. i don't know who is ? do you know who it is? barack obama? zienst? pelosi? schumer? what are they talking about

right now? if they continue to let joe biden be the nominee, they will probably lose. they don't like losing and they don't like losing power. >> good morning. last night was an historical night. i have been doing this close to 30 years. i have never seen an event like that. within ten minutes, the panic button had been hit. now people are looking for alternatives. joe, there are no good alternatives. if you replace biden, you but a better candidate on there, but you divide the party. there is nobody who can get a presidential campaign up and running quickly even if they inn hai inherit the biden campaign. obviously, last night was the referendum on the mental an cue acuity. he doesn't have a chance to recover in one week or two weeks if he was in a normal debate

schedule. i don't know if you got a chance to watch him last night after the debate. he was much more alert and much more than you saw in the debate. i think the president has no indication that he's willing to give up the nomination at this point. he's going to continue to fight. he'll blame staff and they'll blame the fact checking and lying of donald trump and try to drag this out. what my clients are thinking this morning is they have 40 days to make a decision. democrats have to nominate joe biden before august 7th before the ohio convention. you have this uncertainty and the way the markets are reading it is they are uncertain over the trump legal issues and biden's health issues. there is more unscertainty on that today. the market right now, for the first time, is going to start bidding on the trump stocks and fading the biden stocks. i think that is a big event for

investors after six months of trading in a 50/50 range in the outcome of the election. >> might throw bitcoin in there. >> absolutely. >> everyone skips the elephant in the room. for four years, the democrats were perfectly happy to have kamala harris, vice president harris, a heartbeat away from the oval office and presidency. she is on the ticket this time. they are perfectly comfortable to having her as the heir apparent to joe biden. how could you possibly broach the possibility of kamala harris who is less popular? democrats have a little corner inside a room and they've got paint all the way around this room. i don't know who -- eamon says no one is behind this. someone has painted themselves in a corner. what do they do about kamala harris? >> absolutely. i did a call with 1,500 of my

clients yesterday. i would tell them it would be kamala harris if it is not joe biden. there is no constitutional reason why it needs to be her. politics is about addition. it is not sub extrstextrtract s. you have to move now and you have to make it vice president kamala harris. who is your v.p. nominee? i would look to shapiro in pennsylvania. you have to get that person up to speed. that person has to be vetted. this is a huge stage they are going to be on. there are no good alternatives at this point. that is really the significance for yesterday. i'm advv surprised after seven at camp david and the greatest debate prep team that this is what we got last night. it raises more concerns.

i do think it will raise more geopolitical concerns given that our foreign enemies were watching last night and seeing we're a polarized country. you can go down many directions. there will be a lot of pressure on somebody on the supreme court to step down before the election so the democrats can fill that spot while they control the senate. these are big, big decisions that will start to stem from last night. we're just at the beginning of it. s>> you know, the sad thing is, most families have seen something like this in terms of dementia. >> absolutely. >> it was pretty obvious to anybody that was willing to look, dan. that's why i don't know why everyone is expressing so much surprise. >> i think my surprise came from the idea that there was a very low bar. this was the worst possible performance you could have seen.

>> there shouldn't be a low bar. >> it raises my questions if he can finish the rest of his term. to see how he declined from january to now from the state of the i don'tunion address. what happens between now and next january? >> becky, i was on your show after the trump conviction. i said i had been seeing a major slowdown in biden's health. i'm not a doctor. i am concerned with the market. this slowdown has been really quick since the state of the union. >> dan -- >> that is where the concern comes from. >> you said he did great at the state of the union. >> absolutely. >> i remember i said this guy's lost his mind. you said he will kick ass in the debate because he was so vital and firm during the state of the union. that's what you said. >> absolutely. i thought he was going to come out guns blazing yesterday. the surprise is his team sent him out there like this. i'm sure it was like that in the

debate prep all week and no way to get around it. if it was illness with trump and covid in the first debate. you would have heard that. i'm not surprised that people were surprised. this is the president of the united states. you think he's going to go out and put his best foot forward and he was prepared? trump pounded him off the table. >> if you say i'm meeting with general de galle in france and mix it up, it was there for everyone to see. either people were behind him and kept saying -- have we heard his press secretary kjp? is this one big cheap fake from last night? have we heard her say it is an hour and a half cheap fake? >> that is the point. you can push back on it and "the

wall street journal" video. this is for everybody's eyes to see. i go back to this is the first time many voters were starting to focus in on the election and this is the image that's going to carry with them. it was worse than nixon sweating in 1960 with the kennedy debate. this is forming opinions. what i expect to see happen is you will start to see the polling really start to move to trump. as the polling moves, states, m pennsylvania, will run to trump. it looks like trump will win and that is where the panic button comes in. joe, watch the fundraising. it will be hard to watch money for biden. if you see the money return republican, those are the reflection points where you see the party leaders worry about it. it really will come down to what

the president's wife, the first lady does and the president's sister does. he will value their advice more than anybody else. those are the two i would keep a close eye on more than president obama or speaker pelosi. >> do you think a phone call has been made yet to mrs. obama? >> i don't think that michelle obama will be the nominee for president. >> you don't think anybody is thinking about that? >> i don't. i woke up yesterday saying they doesn't like the bidens. i don't think she has an interest in politics. s>> that's -- that's always in the back of everyone's mind, dan. thank you. good to see you. >> talk to you soon. >> i think it is a tough morning for everybody. thanks. coming up, more debate reaction still to come. as we head to break, let's look at yesterday's s&p 500 winners and losers.

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welcome back to "squawk box." we are live from the nasdaq in times square. s&p futures are up 18. nasdaq indicated up 17 points. that's despite shares from nike after it reported guidance far below what the street anti antic anticipated. we will talk to an analyst who cut his price target overnight after this news. we'll talk to him about that later this morning. coming up, dpfranks frank l join us. he had a focus group about the debate last night. ll'll join us next. foow "squawk pod" on your favorite podcast app and listen anytime. we'll be right back. they need a retirement plan. work with principal so we can help you with a plan that's right for your team. let our expertise round out yours. while i am a paid actor,

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welcome back, everybody. now to the big take aways from the debate. joining us is frank luntz. frank, what did you think? >> in my entire professional career, i've done 32 debates, never has someone performed -- and i was very upset with donald trump in 2020 -- i have never seen a performance like i saw last night. my focus group all undecided from swing states. one swung to joe biden. we never had that before. we are truly in unchartered territory. what blew me away the most was joe biden voters in 2020 don't want him on the ticket in 2024. >> what -- the reaction. you had 14 swing voters from these states. >> uall undecided and voting

democrat and republican the last ten years and boy did they swing. >> let's see. you hosted that focus group. let's hear what they had to say. let's listen in. >> he does not have the leadership qualities to survive for the next four years. i don't know you he will survive the next few months. they need a candidate that can beat trump. >> back then, he was an unknown to me, really, at the time. i had seen what trump had done and now i had seen him in action or inaction, i just think that the democrats want to have a chance at putting someone in the white house, they need to put someone else up. >> i think in 2020, biden was a safe option that was a relatively not harmful to replace trump. i didn't think had the same cognitive issues we see. it was dry, but not to the same

extent. tonight, i'm not sure how he functions during an eight-hour workday or plus to be president of the united states. >> frank, you repeatedly heard people there of replacing biden on the ticket. how difficult is that? >> it is difficult unless joe biden comes forward over the few days and says i listened to the american people and saw their comments and i accept it and i did what i promised i was going to do. i would write the speech. i promised what i would do. i was going to bring normalcy back to washington. i would find ways where republicans and democrats could work together. now it's time for somebody else to take the reins. he would have to do it very quickly. he would have to, himself, want to step aside. there is no indication he wishes to do that. it was so devastating. individual after individual said

i don't like donald trump, but joe biden scares me. you can't fix scared. there's no wordsmithing. >> you can just switch those words for half the country. i don't like joe biden, but i'm afraid of donald trump. >> that's different. >> he can say he did all those things. he didn't unite this country. he didn't do what he said he would do. a lot of those people, it is not only the cognitive decline, this is a different joe biden than what they voted for. >> i want to focus on the focus group because it is so unprecedented. they said was that i never realized this. this is not editing of some video. this is not playing games. this is not a.i. this is real. i saw it, i heard it and i can't vote for it. >> so, if he were to step aside himself, what does that process

look like? >> the democrats would have to open up his delegates. the way it works now is you have a vote at the convention. that ignoring the democrats who live across the country. if i were the democratic national chairman, i would say 30 days from now we will have a nationwide primary. candidates can run. give it back to the voters because i promise you if this is a back-room deal, you will have people so angry that their choice was taken away from them. again, we are in unchartered territory. going back to the focus group last night, they saw it in the first 30 seconds. they saw it when he walked out. they saw it in his responses. if donald trump had said less and allowed joe biden to say even more -- ipt's indescribabl what we saw. >> let's watch one more from your focus group last night. >> did it move your preference?

>> it did. i feel like my decision is pretty set that i will be voting for trump. i feel he is the more capable candidate to run our country. >> i think the debate was sad and untofortunate for america. i appam pushed to trump. he is a stronger leader. it's what i have to do. >> it is frustrating. i'm disheartened for america, but leaning more toward trump even though i can't vote for him, but at least he can show up for the job. >> if i had a gun toward my head, i would lean toward trump in this situation. i really don't like him, but he can string together a sentence. >> frank, this raises questions about what not only our allies, but our enemies overseas think about what they saw. >> the tweet or comment i got

was from an official, low-level official, who says to me the winner of the debate tonight? not trump, not biden, china. that said everything to me. i'm getting texts from great britain watching this in simulcast saying what the hell is wrong with your country? they could not believe this is what's happening. joe, everybody you said about t this has been correct. >> talking about politics. you've got people who were undecided. there's 30% and you know who i'm talking about. you see the rallies. there's 30% of the country that would walk over hot coals to vote for donald trump. right or wrong, that's who these people are. the deplorables. maybe 35%. now we're talking about how many you need to get to 50 or 270.

those people are the ones that you are talking about. he has a core of 35 that don't sound anything like what we heard. >> what was special about this group is they all voted democratic and republican over the last ten years. they are all even. this is not a trump group. it came across as a trump group in the end. >> i can put mitt romney and bill krystal and it doesn't mean there are republicans. being a trump supporter doesn't mean you are a republican. >> because of what i do, i know democratic senators and democratic governors and potential presidential candidates. starting ten minutes into it, they are texting me saying what does it mean for our party? they started that way. then what does it mean for joe biden? by the time it was done, these potential candidates are saying to me how do we get out of this.

>> who was running the country for the last two years? >> i'm a pollster. i can't answer that. the focus group did not expect this. this is something you have been saying for, not just months, but a couple of years. the american people watched last night. they watched the split screen and said oh, my god! >> frank luntz, frank, thank you. >> thanks for having me. when we come back, we will talk to the ceo of oura. the company that chose to buy an ad during the debate. the debate that actually included commercial advertising. we'll talk to him about what they saw. later, he has been mentioned on the srtho list for the running mate of trump. governor doug burgum. he will join us in the 8:00 hour.

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welcome back, all right, welcome back, everybody. last night's presidential debate format featured two commercial breaks with paid advertisements. that was a first. oura ring purchased an ad in that time. joining us now is tom hale, the ceo of oura. oura is the ring that measures your sleep, your health, a lot of different metrics, and, tom, it is great to see you this morning. what happened? what led you to the point where first you found out about the ads and what led you to buy a spot there? >> it came together really quickly. our mission is to help people across the country, you know, men, women, republicans,

democrats, live healthier lives. this is a product for a broad market. we looked at that opportunity and we're always looking for big moments where large groups of people come together, sporting events, to reach that audience and this was just a great opportunity. >> so, what did you see? the purchase price, the number of ads, have you gotten any of that information back yet? >> you know, we -- it came together so quickly, we just sort of saw the opportunity and jumped right in. it was a very efficient buy for us in terms of the reach. and we also thought that it was a very broad base of customers and opportunities for us to reach people. so, it has been successful for us. our website traffic last night speaked meaningfully. >> what did you see? i know you measure anonymously, you measure heart rate, you measure sleep, you can put all those things together. what did you see during the debate last night with oura ring wearers? >> it is really interesting. we see this in a lot of live

events. but at the start of the debate, we saw a noticeable increase of heart rate, beats per minute, which is an indicator of, you know, excitetion, physiological stress. we saw that increase over the course of the debate. normally we would expect to see people's heart rates dropping in the same time frame, comparing it to a week ago same time frame and heart rates were rising. some measurable and meaningful effect correlated with this -- the debate. >> tom, we talked before about it, you mentioned you advertised during sporting events and you can actually see heart rates spike during a playoff game when there is a shot that is missed or made. tell us a little bit about that, how you can actually -- >> it was amazing. we did this actually for the world cup between france and argentina. you can see in the penalty kicks in the last i think five or so minutes, like, each one of these shots that was either missed or made had a huge spike in heart rate. on one side, argentina goes up.

on the other one, france would go up. that makes sense. it is a stimuli, it is affecting your physiology, it is affecting everybody who is experiencing this moment and their bodies react in a predictable way. >> i thought of your user being a guy, somewhere between the ages of 30 and 45 who is really tech savvy. what is your demographic? >> well, it is very broad. it is ceos, housewives, it is people who are chronically ill, people trying to run a marathon. and i think what is interesting is that demographicfor us has really shifted. it shifted towards women. so for today, maybe 60, 62% of our base are women. and so that shift is on the back of us having kind of a product that appeals to women and helps them understand their bodies and makes them empowered in their health journey. that shift is interesting. the audience that showed up for last night's debate is the same. >> wow. okay. tom, i'm sorry we have to go.

i have so much more i would like to talk to you about on this. i saw the ads last night. we'll have you back again soon. tom hale, the oura ceo. great to see you, tom. >> thank you, becky. take care. lk> coming up, we're going to ta to guggenheim's nike analyst, he's cutt ting his pri target after last night's report. he'll tell you why next. ay, tea! oh, thank you so much >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. ernet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

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staggering. nike shares. i'm trying to find when they

traded at 80 last. i think it might be, like, five years, five or six years. following premarket, as you can see there, almost 15%, down to 80, after the company warned that 2025 fiscal sales down midsingle digits. analysts, bob dermal is here. people were looking for up 1%, right? >> that's right. >> so that's a huge miss. you're guggenheim securities director equity market and securities. that's staggering. i think it might be somewhere back in 2019, last time we were at these levels, five years ago. >> yeah, no, i think couple of things, even in the near term, there is a big step down. double digit declines expected in the next fiscal quarter. and, you know, you look at the pressures, there is two pieces of this, the lifestyle piece and the performance piece. lifestyle piece is their key franchise, air force ones, the

dunk shoes and those are under a lot of pressure. the other piece is within digital. so, you know, stores versus digital, online and direct, down double digit, in north america, aligns with some of the key lifestyle franchises, so both of those businesses, you know, are under a lot of pressure. china, you know, is rarely promotional. china was up 7. there was some shifts that went on. highly promotional, competitive, you know, some macro concerns over there as well. so you put sort of the digital piece with the china piece, north america and china, we lowered our revenue expectations, earnings expectations and took down our price target. >> down to -- >> 115, from 130. >> could be at 80. >> yeah, i think the interesting thing is your point on the multiyear low is we had taken some numbers down i think two months ago. just not enough. and so from the business

standpoint, there was some expectation for, you know, some turn around work. this is a bigger leg down than we anticipated. i think they're doing the right things, they're focused on innovation. we have sporting veenlt ing eve up, the euro championships, the olympics, multiple innovative products within running, caitlin clark within women's basketball, they're hosting a meeting in the fall, late november, to really reset things. and i think if this isn't a kitchen sink type of a quarter, it is close to one. >> all right. i guess that's the positive. nike always had competition. i know hoka and there is some upstarts. what put -- put your finger on the real core of where -- management did something product mix, something is not right here. some miscalculation was made. >> it is a combination two of things to one thing. they stayed too long with these lifestyle franchises, with the air force ones, with the dunks,

without a pipeline of innovation. so now they have accelerated the lifestyle declines, inventory is down 11% and the pipeline, you can't turn it on overnight, so they accelerated forward some things they had over the next few years into the coming quarters, they're talking about a three-year pipeline of new innovative product. they can get sort of supply and demand right and lifestyle and really get some traction, some performance and innovation, i think that can lead us higher. >> sneaksneakers, all about sne and they're the largest apparel maker in the world right now. is the other apparel make any difference. can they do anything there? >> i think apparel is more difficult, challenging than the footwear. these guys, i think, the other point i make is 80 to 115, this is an amazing global brand. competition as you said has always been there. so i think if they can get some of the product right, you know, moving in the right direction, you'll start to see better

results, cleaner inventories, margins and top line, we can see the recovery. but this is definitely a -- >> this is just coincidence. 123 and now at 80? it is always a coincidence for all these -- disney, target, all of them. all right, thank you. > i want to buy a vowel. it is just after 7:00 a.m. on the east coast. you are watching "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin, who is reporting live from the aspen ideas festival. the story everyone is talking about this morning, last night's first presidential debate. democratic party fund-raisers are sounding the alarm after president biden's performance. some long time backers are raising the prospect of replacing him on the ticket. andrew, good to see you this morning. what is the reaction in aspen? >> i think the reaction here was the reaction that is happening all over the country, which was

that president biden's performance was so disappointing that there are now real questions about whether he's going to have to be replaced. and we're going to show you some tape in just a little bit of some conversations we had right before the debate. but i will tell you after the debate, i think this -- the reaction was shock, surprise, and real questions about who is going to ultimately be the democratic nominee. there are questions -- >> andrew, were you really -- you told us -- you sort of foreshadowed that, which -- i was already sort of laughing about -- the aspen ideas festival, you go to a watch party. the group -- i don't know who is there or anything, but can you -- you were there? can you describe to me -- >> i actually ultimately wasn't -- >> oh, you weren't there. >> i ultimately was texting and emailing with some of the folks who were, but i think generally and literally i can also tell you separately just even coming

downstairs at the hotel where i was staying last night, right after the debate, the reaction was, as you might imagine, it was -- i think as i said, a sense -- for those who were supporting president biden, shock and disappointment and questions as to, you know, whether he will be the candidate, if he's not the candidate, who is the candidate, what are the mechanics and steps that would be needed to replace him, whether he ultimately takes himself out, whether somebody else takes him out, and what is supposed to -- what is supposed to happen at this point in the ball game. i don't think there was anybody under any illusion who was watching that last night. >> it was a collection -- a collection of people that you might think probably the majority probably were very -- believe it or not, everybody was sort of -- it was heart wrenching, i think, very difficult. very difficult. >> i know so many people who said they couldn't watch,

literally, they stopped in the middle. i can't watch. this is upsetting and sad and disappointing to watch president biden in what seemed to be a position and in shape that was not at least at that last night up to the task. i think that was clear to anybody who was watching the program. so, you know, there were people then, by the way, joe, maybe to the point that you're questioning the different political allegiance, some people saying, well, is this good or bad for the democratic party relative to president trump? there is some people saying, look, this might be the best thing to happen to democrats. i don't know. we'll have to see how this all plays out. >> it is a chess game. which we talked about again and again, because i don't know whether kamala harris would have a better chance or not. i don't know how you would skip over her. it is very difficult position to be in right now. >> let's get over to steve liesman, i'll show you some tape

from some of the conversations we had with peter thiel. you'll enjoy it, not enjoy it, but it will help contextualize what is going on. steve, i want to talk about the highlights that you saw. >> well, i want to talk about, you know, the candidates debating, pretty hot button economic issues beyond all the issues about the presentation and the confidence. they talked about the past and the president of the economy. not a whole lot of talk about the future unfortunately. one major issue, which is something that i've been reporting on is this issue of the source of inflation. former president trump said last night he inherited almost no inflation, that is biden, and it stayed that way for 14 months and then it blew up under his leadership. not really true. inflation began to accelerate shortly after president biden took office, just two months into his presidency. the price was above 4%, at least partly the result of the pandemic and the supply side. there was a second leg of inflation from 5% to 9% that

began september 2021 which would have been added to and likely was by considerable spending by biden. inflation didn't stay low for 14 months after trump left office. another issue, what was the state of the economy when biden took office? here's what president biden said. he said we had an economy that was in free fall. the pandemic was so badly handled, the economy collapsed, there were no jobs, unemployment rose to 15%, it was terrible. that's misleading. here's what happened when biden took office. unemployment was 6.4%. and trending down. payrolls were still down by more than 9 million. but we're coming back from a loss of 23 million. the s&p was indeed up 12% from its prepandemic high. biden did mention his plan to shore up social security with higher taxes on the wealthy, a question trump seemed to duck. he doubled down on the claims that his tax cuts spurred economic growth and didn't have a cost, a point debated among

many economists. andrew? >> steve, real quick, though, here we are talking about the substance of those conversations relative to the performance of those conversations and the question is whether you think americans are going to be taking away more on the substance side or not. >> you know, i don't really care. there is plenty of people out there who are going to talk about it. i watched thedebate and i read the transcript and i got to say, biden reads better than he talks. it is interesting. some of the things -- >> yes. >> they don't sound coherent, then you read it and they're okay. there are lots of people out there, lots of tv pundits who have a good time talking about biden's delivery and trump's stretching the truth. i'm trying to deal with the economic issues out there, they're very serious ones out there about how to think about inflation and how to think about -- >> it sounds like you're suggesting -- but you're suggesting that biden was stretching the truth in this

instance? >> in some cases, sure. nobody has a lock on not telling the truth. >> steve, we're going to talk a lot more to you, i'm sure, throughout the broadcast about these issues over the next couple of days. meantime, want to show you a little bit of that interview i referenced earlier with billionaire investor peter thiel that i had right out here in aspen. it took place literally an hour and a half before the debate. back in 2016, thiel spoke at the rnc in support of former president trump and i asked him whether he plans to support the former president this time. >> you know, you hold a gun to my head, i will vote for trump, i'll still -- i would rather have him vote than biden. i'm not going to give any money to his super pac. i'm going to be less involved in all these ways. and then, look, it is -- i don't know, i think, you know, i think

trump will win. i think he will win quite solidly. it is not -- i don't think it is going to be close. and then my pessimistic look ahead function is after he wins, there will be a lot of buyers' remorse because the elections are ab test. if you ask me to make a pro trump argument, i wouldn't. i can come with antibiden arguments and biden is not going to make a pro-biden argument. >> joe and becky, i think that was actually the most telling piece at the end, i think after this debate there is going to be real questions, given what he said about this idea that this election and the way he was even referred to was an ab test, ab test between president biden and president trump. and the question, of course, now, i think, after last night's poor performance by the president is going to be if he is replaced, what that next ab test looks like. that ab test in the future could look very different and therefore the answers could ultimately look very different. for so long, bill ackman talked

about this idea that he believed that, you know, somebody was going to come in and swap in for joe and that was -- joe biden and that was his goal. he since appears to have moved more towards trump. the question for those people, including by the way maybe even an elon musk who i don't think was truly a trump lover so much as a biden hater, you know, if there was another candidate in that place, do some of those instances change and i think listening to peter thiel yesterday, he doesn't have much love per se for president trump, but he clearly has very strong feelings about president biden. >> andrew, should the -- trump should not leave the light on for you? i don't know if you saw bill ackman. he said, you know, he's voting for trump. said trump came across as strong and reasonable on the important issues, didn't respond to biden's attacks. let's bring the country together, our divisiveness is

killing us. can i invite you into unite the country at this point, andrew? do we have any hope for you? do the republicans have any hope whatsoever? >> we all want to unite the country. i think -- >> you know what i'm asking. you know what i'm asking you. i'm not asking you -- you want to unite the country are you ready to go along with bill and say that probably in a binary choice trump is the better pick at this point? are you ready to do it? >> i'm ready to say that right now, given what we saw last night, that i think there are real questions that need to be asked about what is going to happen on the other side. no question about that. i'm very prepared to say that. i think anybody who is -- >> you will say we need a different democrat to unite the country is what you mean. and that may happen. gavin newsom -- have you seen -- >> that may happen. >> his odds are spiking. >> very interesting to see whether it is gavin newsom, whether it is a whitmer. i don't know who you think the right person would be, and, again, we talked about how difficult some of those mechanics are, and then, of

course, you have to have president biden going along with it. so i'm sure that's going to be the next sort of leg of all of these conversations. >> it is weird. the case has been made that california is in such a bad position that his -- that the bloom is off gavin newsom's rose big time. >> that's the other thing. i'm not sure gavin newsom is an easy nominee either. >> really cool hair. >> you think about the business -- we talk about who the business community would want to support and i think given all the questions about california, by the way, we got deep on california with peter thiel who moved from san francisco to l.a., he is still in california, so, maybe you can make the argument that he hasn't abandoned california completely. but i think there has been lots of questions about -- >> i was asking you something different. i was asking you to go along with ackman and just say you're going to unite the country and you're finally going to come over to -- >> i would love to see -- the

only thing i would suggest -- >> you're diverting. you're diverting. >> no, i'm very curious to see where maybe a bill ackman might actually be in two months from now, three months from now. >> he still might not vote for trump. still holding out hope. >> i don't know. >> we got the mutooch coming up next. this will be fun. he knows how to dance. he's going to be doing the -- i don't know what. the macarena after last night. (♪♪) iconic brands speak for themselves. we are so excited to welcome you to our community. today is all about you. (♪♪)

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welcome back to "squawk

box." i am live at aspen, colorado, at the aspen ideas festival. we're taking a look at the investor impact after the debate. joining us is anthony scaramucci, founder and co-managing partner of skybridge capital. somebody outspoken about your support for president biden and your criticism for former president trump. i'm so curious what your reaction was to the debate last night. >> first of all, andrew you left me here by myself with joe kernen. i just want to point that out to you. as much as i love you as a friend. >> i'm here. i'm here. right here. >> i could say the same thing. you left me here with crazy mooch here. >> there is nothing crazy about me. i try to speak the truth. i try to tell you what i saw. you know there are 40 or 50 of us that are saying the same thing. there is nothing crazy about me. but that debate, as everybody knows, was a disaster last night for president biden. and i guess the real question will now be what do they do about it? i was listening to you talk to

frank luntz. one thing left out of that is august 7 is a big day in the state of ohio. they have to caucus and they have to get somebody nominated by august 7th to be on the ballot in ohio. so that's 40 days from now. and so the likelihood of them swapping out joe biden, unless he has a health issue and god forbid not wishing that or anything like that, i don't see how they swap him out in the next 40 days. andrew, you got to be on the state ballot in ohio to win the presidency. or have a chance to win the presidency. and that's 40 days from today. >> so how do you think this changes the equation? you think president biden is still the president -- still the candidate, rather, when it gets to november? >> i'm not a democrat. i'm a life-long republican. i don't know what they're saying in the democratic circles. but i am noticing that anybody that is calling for him to drop out, like when you read about it or hear about it on tv, it is

all anonymous stuff, until somebody big gets to the president, remember barry goldwater went to richard nixon, said i'm really sorry this is going to end for you, you're going to get impeached and convicted or you have to resign, you need a moment like that, if he's leaving, that probably has to come from somebody like first lady jill biden, or somebody on his staff, maybe ron klain, but i don't know if they're going to -- willing to do that or not. i wouldn't leave him in that position, though. and i think you guys made this case earlier, joe made it, it is true, any ceo in a position like that, the chairman of the board of that publicly traded company would go to them and say, look, i'm really, really sorry, it is time to step down, imagine guys, jack welch, the three of you worked for the legendary jack welch, imagine him observing something like that as an independent board member of a publicly traded company what his reaction would be to last

night's debate. >> so let me ask you this, how does this impact, as you see it, the markets, and investing over between now and the election. in some ways you could argue having looked at the polls, you know, for the last couple of months, ere was a sense that former president trump would very well -- maybe not coast, but become the next president of the united states. i don't know -- i don't know -- i don't believe that's what you want it to happen, but the numbers would have demonstrated that. now everything could be thrown into disarray and all sorts of ways and who knows where things land. >> when you make a flaw in your analysis, you got to speak openly about it. i was analyzing the election based on a joe biden of 2020 which was a relaxed confident joe biden, and he did very well in those two debates. last night we got a 2024 joe biden and i guess what i would say to my democratic friends out there, what is joe biden going

to look like in 2025, '26, '27 and '28, and you have to be honest about that. you have the best stock market, best stock market activity, decent economy to run on, but the president in his current state is not capable of selling that to the american people. he was having a very tough time last night and i think they prepared him in a way that you can't prepare somebody his age. as an example, the legendary roger ales, he prepared ronald reagan in '84 differently than the way president biden was prepared last night. they were trying to get him to memorize facts. he said he created 15,000 jobs as opposed to 15 million and it went downhill from there. to me, the great irony is he's done well with the economy, he's done well with nato, he's a force for good, he's a force for the integrity of the system, but you can't debate like that and

be successful in a presidential campaign in my opinion. >> that's what i wanted to ask you. i want to ask you about former president trump now, which is to say, given the disappointing performance of the president, do you see a switch or a flip in the former president where he could demonstrably try to bring people together or try to reach across and capture some of those democrats who might be saying to themselves i don't feel comfortable with the age and state of president biden. >> well, listen, he's got a very organized team. i know a lot of the people on his team. i've been in republican party politics for 25 years. president trump would be well served this morning if he gets out and makes some public remarks that are compassionate related to joe biden this morning. i think if he does that, it will win him people that are in that middle. and whatever you want to say about president trump, he did

well last night from an optics perspective, he did well from a composure perspective. and people were saying that the debate schedule and the rules of the debate were going to hurt donald trump. they helped donald trump because he didn't interrupt joe biden once. he responded, and then he had a kill shot, andrew, that -- when ronald reagan said there you go again, donald trump said i don't know what he said just now, his last sentence, and i don't think he knows what he said, but i think that will be the kill shot historically in that debate. >> one of the things, when we're talking earlier, kind of glossed over it, you still think ackman is ready to vote for whoever democrat they put in, he didn't say that. what he really said, i know you saw this tweet, i know that -- he said that he thinks everyone has got to get behind trump and one of the reasons is -- one of his biggest concerns is whether he could build a first class team. the good news is that very capable people that i know are

excited to work in the new trump administration, he will be able to start recruiting top talent immediately. i'm telling you this too, i haven't mentioned any of the names, but i know -- i know about five people that are ready, willing and commerce secretary, ag, treasury secretary, and top notch people, maybe they have amnesia, i don't know what you want to attribute it to, but -- >> if you were the comes director, you could -- >> i can't -- i got -- i got a lot of bills so i won't be going there. and you think i'm going to face the white house press corps. >> i think you would be good at it. >> yeah, i would lose it. i would lose it. you've seen it happen here. i lose it on you and andrew, i can't do it. can you say eff off to a reporter's question? i don't think you can. >> i've never said that. but i've used other colorful language. >> you have with me. >> two things, i want to ask

anthony about it and then show you some -- a clip of peter thiel related to bitcoin. on that issue, anthony, how do you think about it? i made the point to joe there were a lot of people looking at this as peter thiel was, an ab test, a binary decision and given where his views about biden he was going toward trump. and at least he seemed to be indicating that if it was a different person on the other side, maybe he would be thinking that way. do you think that the ackmans of the worlds or the elon musks of the world or lots of folks out there who might have said to themselves, you know what, i feel uncomfortable about president biden given his age, given that performance we saw in the debate, but i -- from a policy perspective, i don't agree with president -- former president trump and don't necessarily agree with some of the other things about the way he approached being the president last time. therefore if there was somebody else in the seat, maybe things would be different. what do you think? >> all of that makes sense to me. that needed to be litigated labor day weekend of 2023.

president biden needed to say, listen, i did this for four years, i'm going to be 81 or 82, it is time for me to step down and open the primary to a new group of younger democrats and see them, one of them get to the candidacy. they didn't do that. and i think if you pull him now and slot somebody out in, particularly with the situation with kamala harris, what happens to her, i think it is a disaster for them either way at this point. >> gavin newsom might not win and joe manchin, who, love him, too late for him. larry hogan -- >> you got to get the name -- >> they're good people, but it is not this time, it is too late. >> chris sununu is a republican, but, yeah -- >> i know he's a republican, but he's a -- >> landrieu would be a good candidate. >> manchin is an independent. >> bottom line, whether you like it or not, the united states is

faced with two people running for president, combined age of 159, and so it is not impossible to see what we saw last night. i guess what the real question is, who is going to step up beyond these two people in 2028 because we have a country to run and we have serious problems in this country, and neither one of these candidates want to address the deficit, and just quickly, we go from george washington to george w. bush, $7 trillion, barack obama, donald trump, joe biden, $29 trillion now and counting. so you got a $36 trillion barrel you're standing at, it has to be addressed. and so, we got to get there one way or the other. it was awe ve very bad night fo democrats. >> before we get to that, anthony, before i let you go -- i wanted to -- i want to show

you something, though, because you made the case for bitcoin many a times on this broadcast and peter thiel who was out here yesterday made the case for bitcoin too historically. then he broke a little bit of news about his views about bitcoin, which may be a little different than you would have expected when i spoke with him yesterday. take a look at this. >> i think it has gotten partially unlocked with the bitcoin etf, but then probably the part where i'm less convinced of it is this question of the sort of ideological founding vision of bitcoin or the transcrcryptocurrencies as a sypher punk crypto anarchist thing. >> isn't that what got you interested? >> that's what i thought was terrific about it.

and then the question is does it really work that way. maybe larry fink with blockrock etf surrendered to the forces or maybe it is more like bitcoin's been co-opted by them and i worry it was more the latter. >> i don't think we actually showed the full clip there, anthony, but as he continued that conversation, he effectively, i asked him about the price of it and where he thinks it is going and he thought maybe that we were basically 61,000 that was sort of -- he said the move has been made, and it sounded like he had lightened up actually, he had sold some of his bitcoin and that he was clearly not as bullish about it. he even made a point, at one point, joe, you and i talked about this on the set a million times, he said, look, the fbi looks at this stuff and it is used for, you know, all sorts of nefarious purposes. it was very interesting to see this sort of not a full reversal, but a shift in his take on this. >> i would say three quick

things. he's an og in this space, and it is clearly evolved. if you see it as digital gold, if you see it as a store value, it is not how it started. and i guess the question is evolutio evolutionary-wise, if that's even a word, is it there now. i believe it is. second thing i think he's underestimating is the wall street selling machine. you have wire houses all over wall street that are about to prove those etfs and i've been on wall street for 36 years. we sell things to people, and they will expand the demand for bitcoin at a time when obviously the supply has been constrained. and i think the last thing which is an important point here as well is bitcoin is mainstreamed and it is an asset class. and so it is no longer in my mind an investment as much as it is an asset class. and so let's just take gold as an example. if it is half of gold, andrew, it has a way big run ahead of it. if it is gold, it has an even

bigger run than that. >> million dollars. the latest, andrew -- >> this is something joe and i agree on, by the way. >> pomp was on the other day and then michael sailor retweeted what pomp said and that -- they think i'm antibitcoin. people watch one time. but pomp kept saying all the wealth created by a.i., the trillions of dollars of it are going to be, you know, from a.i. are going to be protected by investing in bitcoin. peter is smarter than me. i would say to peter, i would say look at joe picking on me -- such a good night last night. >> that was a horrible night for everyone. it was a horrible night for everyone. if it weren't for people in denial. >> a time machine for you, joe. >> a lot of people -- >> i think peter is missing the selling mechanisms of wall street. i would ask him to factor that into his analysis.

>> anthony, thank you for coming in today. >> thank you, good to be here. thank you. when we come back, peter thiel's take on social media and what elon musk is doing with x. he spoke with andrew at the aspen idea festival and we'll bring you those highlights. "squawk box" will be right back. >> announcer: time now for das latoy'afc trivia question. what is the only state that borders one other state? the answer when "squawk box" returns. uh-huh... - hip-hop! - limping! mmhmm! medical bills! uh-huh! - pancakes! - cash! who pays you cash when you have medical bills? grrr! no idea. [tapping] gap! the gap left by health insurance? who pays cash to help close that gap? aflac! oh, aflac! get help with expenses health insurance doesn't cover at aflac.com pictionary?!

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welcome back to "squawk box." we're live at the aspen ideas festival. we want to bring you more of that interview with legendary silicon valley investor peter thiel, who made a lot of news here yesterday. he was one of the first people to make the first outside investment in facebook. and yesterday here at the festival, i asked him what he thinks of elon musk's x platform and social media today, by the way. he used to work with elon musk. he ended up pushing him out of the company at paypal. >> my judgment is, you know, a lot more surface area for debate, discussion, and i think what, you know what elon did with twitter was i think

extremely important and i supported his ideological project. i worry about it as a -- as a financial, as a financial thing. i don't know if that works. e elon's question with twitter, are you allowed to do this and keep the advertisers. >> with you make it harder? >> it is super important what elon did as a nonprofit. it may not -- it is going to be tough as a -- >> what about truth social? >> they have a few other problems they have to solve first. >> not something you would invest in? get your head around the $6 billion valuation? >> if i wanted to secretly funnel money to the trump campaign, get around the campaign limitations, the stock price goes up and he can sell some stock and fund his campaign, that might be a reason to invest. >> the surgeon general was here in aspen. and i think you probably have seen the last couple of weeks that he came out and genuinely

believes that social media and the facebooks of the world, really, have done a real disservice to young people in the country. and i just wonder what you think of that. as somebody who invested early in facebook. >> man, there is -- i think, you know, i can't say that he's 100% wrong. the place where i always push back on is that i feel it is too easy to turn tech or the social media companies into the scapegoat for all of our problems. and so, yes, there is probably -- there is some kind of an interesting critique one can make of the tech companies and if you ask how many of the executives in those companies, how much screen time do they let their kids use and there is probably sort of an interesting critique one could make.

>> what do you do? >> not very much. and i think -- >> what's not very much? >> an hour and a half a week. >> an hour and a half a week. >> something like that. >> guys, peter has two children, 3 and 5, an hour and a half a week is the number. maybe age appropriate. but it is actually quite indicative of what's going on in the valley when you talk to a lot of the ceos who run these major companies. they don't let their children get a lotof screen time. and so, it is interesting to hear somebody who invested so early in this company talk about that. he also got into his decision not to invest in x or x a.i. but he is now a big investor in spacex. his investment in spacex may turn out to be his best investment ever. facebook appeared to be that earlier. i told you before that he had worked with elon musk at paypal and ended up being involved in a coup to push elon musk out but created a relgationship with hi all over again where he decided

to invest in spacex. making this interesting decision not to go into some of the other things. we had a number of guests who are all in, cathie wood, has invested in anything that elon musk has been involved in. and then comments about truth social, quite interesting. we got into a whole thing about how he's actually talked to people, i said do you know people are trying to funnel that money that way from a campaign finance perspective, and he -- i think he demurred exactly about who he had talked to, but clearly i haven't heard anybody specifically say that out loud, at least at his level, guys. >> and now i'm confused again. so people are or aren't funneling money to trump that are ceos? i just -- i heard the not and now they are. tell me, which is which. they're all doing it surreptitiously? is that it? >> i think we don't know. it was interesting to hear peter

thiel, someone of his magnitude would raise that prospect given his own politics. before we go, let me show you a couple of other clips because i think you're going to appreciate them. a lot of folks have been focused on the issue of monopolies, concentration of power in tech and also, of course, lina khan. take a look at this. >> there are dynamic monopolies that invent something new, that create something new for the world and we reward them with patents or things like that, that they get. and then at some point there is always a risk that these monopolies go bad, that they become, like, you know, like a troll collecting a toll at a bridge, that they're not dynamic and that they sort of become that -- >> are we there yet? lina khan would say we got there a long time ago. >> i think -- there are all these -- all these ways i would -- if i had to defend

google, and i would still say that -- that it is -- it is -- it is still better run, even in its silly woke way, even in a slightly troll-like toll collecting way than whatever completely destructive path lina khan would have for the company. >> joe, i don't know if remember, we had peter thiel on right when he brought his book out, about ten years ago, "zero to one," we talked about monopolies and monopoly rents and he was making an interesting argument why you needed to have monopoly. if you had a monopoly, you could do all sorts of things. you could pay attention to customers, and your employees and do all sorts of things that that's very hard to do if you are worried about making money. and it is now very interesting

that actually i think part of the shift in thinking is if you have competition, competition is what is actually forcing a company like google which might have actually gone a little bit too far with some of that to actually come back, if you will, and that was another sort of interesting evolution, i think, maybe in his -- some of thhis thinking. >> he's an iconoclast. i have a lot of admiration. and a courageous one too. i still think he's a little bit, i don't know, i think he's a little bit wounded from the whole experience. i don't think he can really be as outspoken as he would like to be. he's not elon in that regard. elon is so fearless that maybe that changes too because you can only take so much, right, andrew? so much incoming at this point. let's look at the market technicals with craig johnson,

piper sandler managing director and chief market technician. i never find myself in a position where i'm a market hater, but i just have been feeling increasingly uncomfortable with the narrow leadership and nvidia really and a.i. and maybe fiscal stimulus, all these things that don't seem organic that the market is feeding off of, you feel the same thing a little bit, that the engine warninglight is on? >> 100%, joe. we do think that the engine warning light is on. we think this is a market that does need to correct and when we start stacking up all the things that we are observing technically on this market, among the stocks that are above the 200 day moving average, the number of stocks making 26-week new highs in the market, the number of stocks and the concentration in this market, joe, right now, 30% of the entire investable market is technology. we haven't seen numbers that high since '99, 2000 period of time and then when you take nvidia, microsoft, and apple put them all together, they have a

market cap combined that is 320% larger than the entire russell 2000. that's crazy. and everybody says we got to keep buying nvidia, keep buying nvidia, a.i., a.i., a.i. but at this point in time, it just has gotten to be so far ahead of itself, and go back and look at all the semiconductor historical charts, going back to the inception of the stocks index, or the dow jones semiconductor index and you'll see that we have never been this far above a simple 200 period moving average since '99, 2000. >> even fundamentally, if you just think about how things work, so, we're building out the a.i. infrastructure. we're ready to go. >> all right. let's use it. and some college kid is going to say, i got a paper that i got, when does it become a money-making endeavor for everybody that is now using the

bill? i understand nvidia has to build it out. a lot of money in fast chips, all that stuff. but it may be on -- it is just going to take a while. a.i. is not going to transform the world in the next two years, is it? >> no. a.i. is truly transformational. no question -- >> by when? >> you got to look -- >> when is it a big moneymaker for everyone like the internet? >> i would look five to ten years down the road. they ripped up all the streets in new york, minneapolis, everywhere else, laid all the fiber. they're still lighting some of the dark fiber that has been sitting there for years. that took a very long time. it took a long time to build out all the applications, change human behavior in terms of doing more self-service with the internet versus customer service. same kind of process with a.i. we tend to get ahead of ourselves from an investor perspective as we chase these themes and i think you're there now. >> transports are lagging. there is a lot of -- so under the surface there are some trouble signs.

what would correct that? what would you be looking for that would wring out this whatever you want to call this, is it complacency, speculation, what is it? >> a couple of things need to get wringed out of this market. transportation, that has lagged the overall dow by over 15%. when you a, the theory is not confirming the market. made a high not with the transports. those that followed that theory for years tell you this is not a timing signal, but it's definitely a warning sign on the market dashboard you got to pay attention to. also you have to pay attention to the fact the yield curve has been inverted over two years now. not an immediate timing, but, again, another warning sign. how far do we need the market to correct? i would say minimum. just go back to the 200-day moving average, joe, you basically are correcting over 10%. i think that's a good starting spot over the summer months to play out. >> is your, piper sandler chief

market technician, is michael still there? >> absolutely is. >> you're kidding me? what is he now? now is he bullish, or where is he -- so wrong for so long. i mean, where is he now, if you know whether -- i just need to know. that would give me a lot of input how to play. >> you know what? a great interview for another -- you could have him back on. >> why would we? why would we? thank you. >> yes. thank you. >> all right. coming up in the next hour, north dakota governor doug burgum will join us on the short list of possible running mates for donald trump. up next, though, speaking with arthur brooks about what he saw last night at the debate and how americans are dealing. we'll be right back.

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for more watching and less spending... x marks the spot. do it all on the network made for streaming, and bring on the good stuff. all right. welcome back, everybody. joining us right now to help digest last night's presidential debate is armer brooks. he is american enterprise president emeritus and harvard

university professor. before the debate you were saying what you really liked to see is somebody offer a positive outlook, a positive leadership role and positive ideals for the country. what did you see? >> not that. unfortunately. good morning, becky. i think like a lot of americans that watched the debate, just kind of a feeling of sadness. a little bit of sadness. not that, what they said specifically, but that we couldn't do better than this. we have 330 million americans. we have the best leaders in corporate america watching us right now, and we actually don't have leaders that can actually be presidential candidates. we didn't get vision, aspiration, ideas. we got fear. what it came down to, because that's the language of these two candidates and the language of american politics, extremes of the parties actually are running parties at this point and fear, which crowds out love and aspiration and crowds out the future is making it such if

gives a feeling of sadness as we watched a debate like last night. >> is that a reflection of who we are as an american public at this point? or is it the opposite? what comes first? the chicken or the egg with this, arthur? >> one of the problems we often have is that leaders can actually get into this sum optimum equilibrium. it's how we talk. americans want something different but more afraid of the other side than we are of anything else. the result of that is that bullies can really run the parties. bullies can be at top of the tickets. that kind of bullying behavior starts to manifest itself in the kind of thing we're seeing today. the good news. americans don't want it. 93% of the americans hate the way we are in this country. we want better. imagine somebody broke form last night.

imagine one of the candidates said, look, i've had it. had it with fear and hatred. talk about what we in the spirit of love can do to bring the country together, lift people up and bring everybody together! as much as we can. not the 5% at margins trying to drive us apart to make money, gets vote and social media followers. the rest of us that don't hate our neighbors is what america is really all about. somebody came forward like that, it would be a big day today. imagine the news? and cruising into the election. >> arthur, do you think possible to find a popular leader that wanted to shake up washington, that wanted to go in to all the insular agencies that we see, that wanted to cut regulations, wanted to close the border, that -- take all the things that trump wants to do and tell me where you're going to find someone that you just described that everyone likes and thinks is such a good, nice person? or do you need someone that is -- and you're, you know,

you're an aei. you're -- you can discern between the platforms of joe biden or whomever the democrat is, and donald trump's not a typical republican. just pick a, you know, pick an issue and decide which side. i don't care how much you hate someone. what did you say? you don't get the leader you want you get the leaders you deserve. a sad commentary, but it's binary. it's binary. >> i get it. i completely do. >> i didn't hear it. you're here to make me happy and you were making me unhappy. >> no, no, no. now the good news. truth is this actually can be done but we don't have people in the parties right now that are cultivating the skills to get that done. my ph.d. is in policy analysis. i understand how difficult these things are but i also understand looking at the data that 70% of the things we need to do both sides agree on, except the 5% margins.

5% margins have a weird understanding of winning. winning for most of us is, i get a lot of things i want, you don't walk away empty-handed so we can live together forever. that's how -- >> talking breaking down democratic and republican structures? the way it's set up now it's not how you get through the system and 5% controls the writtening mwrittening -- winning side? >> a popular rebellion saying we're tired of these battles. tired of the hatred and fear and actually want something better. that ultimately how things change. people start to demand something better. look, we want that. we actually want that as a country opinion i talk to people all day long, so do you. by the way, you want it, too. that's the thing. the problem is that nobody actually is willing to break through this duopoly in the democratic and republican

systems. >> there is a third choice it's rfk. what do you say to that? >> that's probably not what most people are looking for either, but i don't know. something to shake up the system would be a really -- >> arthur, who would you rather have? i mean, just throwing this out. rather have facing down the squad? mitt romney or donald trump? >> mitt romney facing down the quad. >> really? >> i would. >> you need to get a -- need to get elected and actually have the moxie to actually do the things -- he was, like, walking in, feet of clay, and still -- >> i understand. >> why you might need someone like crazy donald trump to take on somebody who's on the other side. >> maybe need somebody tough as nails, very reasonable and loves america and also loves the people with whom hety agrees. jamie dimon? somebody like that? somebody tough as nails, man,

but, you know, nobody's going to think he hates the country or hates his enemies. on the contrary. here's the deal. we need somebody who's willing to say i have strong opinions not not get everything we want to have. the state of massachusetts, charlie baker as governor. incredibly successful. incredibly popular. larry hogan. how do they do it? i got strong opinions, a lot of citizens don't agree with me. i can't get through things that i want. >> i wish for all of these things. unfortunately, we have a binary -- well, now we don't. probably got a much more than a binary choice at this point. >> yeah. no, but i -- the point is, look, we have evidence from localities and states that people can break through. larry hogan broke through. charlie baker broke through. gina ramundo broke through. people who can govern for

everyone. >> speak to thea-b choice. buynary argument. came out for president trump because of uncomfort with the current president and i think based on his performance last night that's only, that view's only going to get stronger. if he were to get "switched out" lack of a better phrase, how does that binary vote change or are people already so anchored? >> depends who the person is. joe biden left the ticket another democrat came in and another democrat who who don't vote for democrats, don't have a standard aggressive policy line, you get the same problem. not somebody who has so much trouble in a debate, but the same problem we've had. on the other hand, somebody who says, well, i'm going to govern the whole country. work for the 80%. not the 20% of bullies and

sociopaths actually trying to drive us apart, but for the rest of us who want compromise and progress. something like that, that would be a cake walk. >> arthur brooks. thank you very much. talk to you soon, arthur. >> thanks. all right. just after -- actually a little bit after 8:00. three after 8:00, you're watching "squawk box" on cnbc and three after 6:00 at the as z aspen ideas festival in colorado is andrew ross sorkin. delta? flying out today? he's dying to go to the delta lounge. have you seen it? >> yeah. i have. >> sit in a big chair, get a massage or something? i think there's a -- >> i happen to be flying delta, by the way, and landing at jfk. we'll see. maybe i'll have the opportunity. i think it's only for -- >> the way out. not the way in. >> for international-only and/or

completely cross-country flights. i don't know. >> at an airport lounge on arrival, you got problems. there in -- queens and the airport lounge. dom chu, with a look at this morning's pre-market movers. >> joe, becky, andrew, dow component. nike that chart a big down one. athletic apparel and footwear giant down nearly 15% over 1.3 million shares volume after an earnings beat miss and cut full-year guidance expecting to see current quarter sales fall by 10% given software sales in china and uneven consumer trends globally. perhaps not surprising, a slew of analysts on wall street cut ratings on the stock this morning as well. nike down nearly 15%. shares of another dow component. apple. up nearly 8% now. around 250 shares of volume. iphone and app services giant help from citi group moved stock up to second highest conviction

pick within communications equipment behind their top pick, which remain as risk to networks given more optimism over robust iphone upgrade cycle in 2025. apple shares up nearly a percent. by the way, for more on those and other analyst calls of the day head to cnbc.com/pro. subscribers get more detail and analysis. end with a check on walgreens. shares of retail drug store operator pharmacy benefits manager down just about 1.5% today. after a crushing 22% drop yesterday tied to a disappointing earnings report. also a cut to its full-year guidance. walgreens saidsi a number of underperforming stores as way to keep costs in check. back to you, andrew, in aspen. >> thank you, dom. an ideas festival spoke with peter thiel. made a lot of news here yesterday, and one of the things i asked about, his take on nvidia and whether the a.i. giants can maintain its position as one of the most valuable companies.

>> i suspect nvidia will -- i think it will maintain its position for a while. you know, i think the game theory on it is something like, all the big tech companies are going to start to try to design their own a.i. chips. so they don't have to do the ten x markups to nvidia. how hard for them to do it? how long will it take? if they all do it, then the chips become commodity and nobody makes money in chips. >> i also asked thiel about tiktok given his early involvement in facebook and whether he thinks tiktok is a national security threat. >> we are incompetent slow and bureaucratic and will never get our act together dealing with problems with china until they day they invade taiwan and then shut down within 24 hours.

since i think a 50/50 chance china will invade taiwan in the effects five years, my advice, take your people and computers and get them out of china. once taiwan gets invaded it will be too late. that's my advice. you don't need to worry about us doing anything before then. >> putting a 50/50 chance on that, by the way. becky and joe, i showed you a clip, i know, of peter talking about bitcoin earlier. looking at a different clip. he made a market call that is very succinct. show you that now. >> have you sold any of your bitcoin? >> i still hold some. yeah. i've, you know -- all of these ways, i didn't buy as much as i should have. and i -- i'm not sure it's going to go up that dramatically from here. >> from here? >> that clip is even longer. hopefully show you some of that.

able to find all of this by the way online. i'm sure we'll talk more about it. >> i had someone say this person has to be fired, one of the -- the other day i was saying, yeah. if you bought it at eight, i can't imagine -- i would be -- i'm afraid at $60,000? $60,000 is a lot, what it was dropping. oh, yeahs got to buy it here. pomp was on. that's right. pomp on saying, got to buy it here. buy it here. it's like if you bought it at eight, 60,000's a lot to buy one bitcoin. believe like tom lee, you should. >> tom lee or cathie woods, you believe it keeps going. >> i do -- i guess i believe it, but everybody's got the feeling i think of peter thiel to some extent. it's run up somuch at this point. but you know, then pomp says, all of the a.i. wealth will go into bitcoin where it's protected. see, that's what the, the orange

polled person says. i don't know. i understand what people are saying for sure. then again, you heard the mucc. goes to half of gold at half a million dollars. >> i wonder what the trajectory? how long of a time frame to good to that point. >> a lot of good things happened at 60. >> differing views make the market and smart people on all sides of it. when we come back, breaking pce inflation data. get it to you. next the debate again. biden campaign co-chair chris coons from delaware to talk about what he saw on the debate and the implications for the democratic party going forward.

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presidential debate, joining us chris coons of delaware, who co-chairs the biden campaign. senator, good to see you this

morning. >> good to see you joe. always good to be on with you. a late night, and i'm looking forward to talking it over with you. >> let's talk it over, and it's gist a tough subject for us. i know you've herod a lot of the commentary. are you urging the president to hang in there? it's full sp-speed ahead for th re-election of president biden at this point, senator? >> i am. frankly, a rough night in which neither of these candidates gave their best performance, but i think the difference was clear and the difference gives the american people the contrast that they need and deserve. yeah, joe biden's voice was raspy, but the difference in his optimism and his record compared to donald trump's torrent of lies and aggression was stark. this is a country right now where the stock market just hit an all-time high. where crime is going down. where we are producing record amounts of energy, both oil and

gas and renewable energy, and frankly we have the longest, lowest rates of unep employment since the second world war. some of the things donald trump lied about were hard for joe biden to handle. lied about how much joe biden supports and loves veterans. lied and saying despicable things. his own chief of star confirmed. one of the most memorable depressing lines of the night the former president saying, i didn't have sex with a porn star, and the conversation between the two of them about our future in nato, in the indo-pacific, the inflationary and delusional ideas that donald trump put out as his policies and a strong defensible record joe biden has of making a lasting difference in infrastructure rebuilding manufacturing and putting our stock market on strong footing, overall i think the american people got to see the contrast

in their records and views of the future that they deserve. >> senator, i think, you know, we've talked about, i forget the term used, where it's a hate-hate kind of election. the people that don't like donald trump are very well aware of a lot of the things you just said. i'm just not sure that that going to be enough in terms of supporting president biden after last night, and, senator, just -- >> the term you're looking for called double haters. people who don't like the choice in front of them. >> donald trump aside, just let's just leave him out of. let's say that it was, you know, charlie manson. i mean -- what some people think of -- i think he's actually up for a lot more felonies than charlie manson. believe it or not. say it's charlie manson. talk about president biden and what he'll be like two, three, four years from now? that's what people are worried

about. we've all seen it maybe in our own family, and it's tough. we're all at a certain age where, you know, organs like kidneys and everything eventually goes and so does the mind. it looked to a lot of people like he's not in a position to handle the job of the presidency for another four years, much less for the end of this term? >> well, i disagree, joe, and i think joe biden, our president, is going to need to show the american people that joe biden, those of us who work closely with him know. he had a very strong and forceful state of the union speech and a chance as a convention speech, at a second debate. on the road in north carolina and the days ahead to show this was just one bad debate. former president obama had a terrible first debate when he was running for re-election, and then promptly was able to show the american people that he was in full command of his agenda for his second term. i believe president biden will do the same thing. i also think he's got a

fundamental difference between his view of america, his optimism, his confidence in us, and his clear-eyed capabilities on the world stage and here at home that is in such sharp contrast to donald trump, that folks are going to make a choice for joe biden. that's what polls show from last night and what we'll see ahead. >> i hear you but i spoke to a number of people in and around the country, high levels of the democratic party and concern was real. the conversations taking place, i have to imagine, you were getting the same phone calls, and they were the kinds of conversations joe referred to family. i remember many years ago when our family had a conversation with now lie late grandfather whether he could drive. that was the conversation. whether he should be driving at his age. and the question now, i think, is, whether all of the conversations are happening last night are going to be brought to the president, or not? and what the mechanic of those

conversations could turn into, and just, i know you don't even want to accept that possibility, but to the degree that that is on the table, how you think that conversation goes? >> andrew, i know that the president is surrounding by capable and insightful and sharp people. and that to the extent there's an after-debate discussion about how to sharpen his public performance and how to strengthen his voice and make sure that he's the best joe biden he can be when we next see him in public, i'm confident that conversation's happening. i also got calls and texts last night. not from senior leaders in the campaign. not from senior senators. expressing concern, but lots from long-time friends and supporters saying, oh my god, oh, my god. had that happen several times over several episodes and events in politics. this is not new. this is what democrats do when there's an evening a little off, where there's a slow start, where he's not his strongest

self. this is fundamentally different from the conversation you were describing in your family. joe biden has delivered an incredible record. you can't deny the fact he has been an incredibly strong and capable president. the speech he just gave at normandy on the beach about the defense of democracy and importance of a strong nato. and donald trump's inability to make it clear that he would keep us in nato, that he would stand by ukraine, that he would accept the results of the election, the things donald trump said over and over and over make it clear not just to me but to his former senior advisers that that man belongs nowhere near the oval office his own vice president won't endorse him. his own former secretary of defense, national security advisor and chief of staff had said donald trump belongs nowhere near the oval office. so the conversation about taking away the keys is happening and it's happening between the people who are loyal lifelong

republicans, but who serve close to donald trump. they've told us their answer. don't give this man the keys again. >> senator, i want to call you, if i need somebody no matter what i do. i need you in my camp. i appreciate you coming on today, senator. >> thanks. good to be on with you. >> okay. thanks. when we come back, north dakota governor doug burgum will join us. mentioned as a ve esenalicpridti candidate for donald trump. we will be right back. (♪♪)

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all right. welcome back, everybody. for nor on last night's first national debate. mentioned as possible vice presidential pick for donald trump, doug burgum. welcome to the program. good to see you. >> good morning, becky. great to be with you. >> i take it you just heard

senator coons layingous his defense, differentiation between the two candidates. what did you see in terms of differentiation last night? >> i saw what the american people saw. president trump is strong on issues that mattered to them and president biden is weak. not just weak in his performance last night but weak with foreign adversaries, anything related to the economy and on the border. i think last night, the american people got to see what a lot of people have been trying to hide, which is that it's not just about a bad debate performance. i think americans have to wake up today with a sense of apprehension, which is, you know, who's running the white house? i mean, if it took a week of preparation to deliver last night, what's happening today at the white house? who's actually running the country? and last night from joe biden, when you talk to the american citizens today, they're worried about the issues you talk about

on this show every day. inflation. high interest rates. nothing offered last night by joe biden how he's going to turn those things around and, of course, a lot of talk about immigration, but it's not really about immigration. it's about national security and it's about public safety. those are the issues the actual voters are concerned about today talking about having an open border. i think you're going to see a ton of momentum for president trump today. he's off to a rally in virginia. enthusiasm is high. the donations are going to keep climbing, and i think the democrats are going to head to the locker room and try to decide who should be on the playing field. >> governor, is the trump campaign's tactic, i guess at this point, try to talk about what it sees and wants to see happening in the country, or is this more of a case, you stand back and let people focus on president biden's performance from last night what the democrats may be doing? >> i think a few days here where if there's going to be a lot of

focus and a lot of people scrambling, wondering whether joe biden, it's not a question of, can he make it to the convention in july? can he make it to the election in november. i think, again, for americans. the only people not watching the show, putin was watching, wasn't just americans. ayatollahs were watching. china was watching. all of those folks, you say what's the national security risk for or country between now and next january? it's considerable. i think there's some bigger issues that have to be discussed in not just the white house but among democrats about leadership of our country for the next six months, and of course, president trump's message is resonating with people around the country. why he keeps climbing in polls. his map is going to keep expanding to places like virginia and minnesota. and it could be, could be a historic win, but for the business folks watching the show, of course, i spent three

decades in business before i ever ran for public office. you'd have to say, if you're a board chair or you sit on a board, would you, would any board in america for a local nonprofit to a small business to a family business to a big corporation, would any board say, hey, it's time to renew joe biden's contract for another four years? let's go for it, after what we saw last night? i can't imagine anyboard in america doing that. for folks to keep the facade going, somehow this is a guy that can lead the country another four years is a disservice to the american people. >> governor, you have been mentioned on a very short list of potential running mates for former president trump. the "wall street journal" op-ed piece came out, saying you're the best pick versus the three ho have been mentioned most frequently. are you prepared to leave your position as governor and to run as vice president? >> well, i think that's a decision that would have to be made, if there was an ask.

i think right now president trump has got a lot of degrees of latitude who to pick as his governing partner. you saw last night here in atlanta, there's dozens, the bench and the republican side is deep and it's wide. he's got a lot of choices he can make and only one person knows who he'll choose and when he's going to do it. that's donald trump. when i see joe biden's run on the economy, wrong on that, wrong on policies, wrong on national defense. two big air bases, 360-mile border, this is a, again -- one of the most important things for north dakota as sitting governor, we get president trump back in the white house, because he's right on the issues that matter most to most americans. >> governor, got a game theory question for you, which is, i think we would all agree that if the election were called today, it appears at least by numbers that former president trump

would be the president again. you've been critical of president biden and effectively i think may be suggesting he step aside. i don't know. from a game theory perspective if you were on the republican side wanting to win, the question now is, whether you'd prefer to be going up against president biden or the replacement of him? we don't know who that person would be, but potentially are they stronger? would the disarray in the party be a net benefit to republicans, and to president trump, or not? >> well, if you think of a sports analogy, this is not anything that republicans have any control over. the democrats, like i said, they have to go into the locker room and decide who they want to put on the field, but the strategy from the side of president trump remains the same. doesn't matter who's out there. put out a different candidate, it's not going to change the huge increase in cost that hit american families in the last

three-year years. price of food, price of energy. price of rent, price of electricity. the price of gas. all of those things. than does change. interest rates, i mean, the current environment is sort of killed the american dream of home ownership. none of that changes in the short term so president trump will continue to be strong. >> love to have you back. i know running out of time. just want to quickly -- ask you -- i kind of see you as a classic conservative. and i know that being vice president would be great. wondering, would you pushback against president trump on former president trump on what we might wall not classic conservative principles? you're a businessman. i don't know. some of the tariffs that we hear talked about? are there times where you wouldn't just be nodding and you'd say, mr. president, that's more of a populist position that you're taking? i don't think it's the right thing to do right now?

>> well, one of the things that president trump has done very well on is trying to level the playing field for american companies, and i know a lot of economists in, that are sitting in universities get twisted around on the tariffs but i think if you actually looked at his track record, he's got a basic, simple thing. tear up us we're going to tear up you. pretty simple. >> that's an example. what about entitlements? what about social security? what about, you know all the problems this country is is if aing. right? more tax cuts with a 33 trillion dollar deficit. would you say, mr. president, this probably isn't such a good -- i don't know if i'd say that to him. might be another, a different vice president next time you turn around. >> well, i think the thing that's great about president trump is that he's a business guy. he understands whether it's a construction worker in new york city, building a high-rise or whether a union worker in

detroit, and, of course, i know in my own state the farmers and ranchers love president trump. you know, he understands what they're going through. he's going to be fighting for them. i mean, the republican party's becoming the party of people that actually work. people that ask a paycheck and have to make things meet end of the month. it's the party of common sense. i think that's what you'll see from him going forward, and i think whoever he surround himself with, people saying we have to get our economy going. relative to the deficit and our debt, one thing president trump understands is we've also got a balance sheet. that balance sheet is enormous for our country. joe biden is not develop resources get them from adversaries. joe biden's policies are funding the two proxies. funding the wars between russia and iran against the united states are funded by an ideological approach as opposed to a pragmatic one. if you cared about the environment you'd want to have

all the energy produced in the united states because we do it cleaner, safer, smarter than anywhere else. >> governor burgum, hope we have you back soon. appreciate your time today. >> thank you all. >> thank you very much. all right. rick santelli is standing by with market reaction to that breaking inflation data. r rick, looks like it came in as expected. >> well, yes. yields are dropping. anying a expected or slightly better news, of course, pushing the metrics of fed easing in all of the associated market activity. if we look at income for may, up half of 1%. better than expected and juiciest level and ties march up half one a percent. started year 1.1%. spending, spending is less than expected. so the income's holding up. spending is dropping a bit. up 0.2, which actually was last month, but last month got revised only up 0.1.

real spending adjustment for inflation up 0.3 in march. beginning of the year down 0.3. look at the price indices and this is the main reason we're seeing the market move that we are with lower interest rates. pce price index month over month unchanged as expected. but that does follow-up 0.3 unchanged equals november of last year to find a smaller number you're going down 0.4%. back in april of 2020. if you look at a month over month of the pce price, what we're looking at there. excuse me. year over year. excuse me. it's 2.6. that is 0.1 less than last look. we're making some progress. it's still not 2%. many say doesn't matter if you reach the target, as long as the fed is confident we'll get closer to 2%. 2.6 actually isn't the lowest of the year. we had 2.5 the first two months

of the year just to put a face on it. now, if you look at pce core, and this is a month over month. up 0.1. exactly as expected opinion rearview mirror, actually an upward revision up 0.2, up 0.1, finding a smaller number back to november of last year when it was up 0.09 and finally, year over year, 2.6. the core. maybe the most important number. that follows 2.8. 2.6 is the lightest level, i have to go back a bit here. 2.6, light et level going all the way back to march of '21 when it was 2.25. once again markets say it all. dropped a few basis points. we have made progress. the real question is, is, how's the federal reserve going to handle progress in a world where inflation may return and be bumpier?

flexible? lower rates a bit only to raise them again? these are all questions that we really need to answer, and i don't know that we're going to get enough data points to do it before we get the first ease, which still looks like september. back to you, andrew. >> hey, rick. thank you for that. we want to talk more about this inflation data. bring in ben harris. brookings institution economic policy director. also veronica, a political economy chair and our own steve liesman. steve, go to you first. what do you make of these numbers? >> good numbers. and, in fact, just going to add one number to what rick gave you, which is this special index. the super core that powell has been following. that was up 0.1. go back quite a long way to find what i'm looking here -- let's say back to october 2020. this is the core services x housing. year over year on that i can give you as well.

that came in at -- let's see -- 3.39. which is really heading down from where it was. you had a good, real spending. 0.3. so the question was whether or not the consumer was giving it up here. take out the inflation component of it, and look at real spending, pretty good. income as rick also pointed out, was quite good. so now you've got this count that you're doing. right? which is, april and may pretty good. we'll see june come in before the july meeting. and then it looks like the economy is back on track. one other mention. 2.6 on the core rick told you about, year over year, is below where the median fed forecast is for the year for pce. core. >> right. steve, before we get to the rest of the panel i want to read you something from larry summers. a conversation here in aspen yesterday. he said my best guess there is a bit too much optimism about the

pace of disinflation. i don't think monetary policy is quite as restrictive as the consensus view thinks. i'm curious what you think of that. >> i personally think that monetary policy is very, is restrictive, and what i would challenge larry to do is, to go through -- i know he has answers to this. what has changed so dramatically about the world from the pandemic that you have this sort of permanently higher funds rate that -- neutral funds rate, that makes the current rate not that restrictive? i think you go back and sort of in austan goolsbee camp on this. go back historically. hard to find a real funds rate higher, and that the idea is that there's plenty of straightening exercises by the federal reserve on the economy. i think it's harder to get from 3 to 2 than from 9 to 3. >> your thoughts on that, and

this pce number that just came in. >> it's the number we expected. right? i mean, to me, it's -- another signal that i think larry summers is right. i think there's way too much optimism. i think a lot of people are expecting rate cuts, and i think it would be a mistake, even though it actually, if you think about it in terms of payments, that the higher the rates, the more, the larger the interest payments, the more in a way, because there's no fiscal consolidation on the side happening, the more it feels inflation. so i think it's, like -- i mean, it could help temporarily, but i don't think -- i think people are too optimistic about the prospect of many rate cuts and i think this doesn't changeance probably, the fed's calculation. they're not going to raise rates and they're going to wait, going

to wait longer, and i think that's the right, the right thing to do. >> okay. ben, wait or not, at this point? >> no. this is the definition of a soft landing. you know, steve noted we've seen inflation come way down. when you look at inflation outside of housing, i think we have a housing problem more than an inflation problem. but we've made enormous progress on inflation over this calendar year. prior to this print markets expected a six in ten chance see suing a cut in september. that's got to go up with this prints. another print next month anywhere near 0.1 or even 0, look, you can pretty much lock in that september 25 rate cut. >> before we go, rick, try one last thing on you, if i could. another quote from larry summers. particularly i wanted to ask you about it. >> why larry? why larry? why larry? >> larry, because i think he was probably going to be on the

other side of this issue with you and i wanted to ask you about what he said, which is this -- about the election, actually relates to the debate. i think the combination of inflation pressure and things in populist things are likely to follow from president trump or likely to do substantial damage to the economy over a four-year period. though the latin-american experience suggests it may work out and feel good for six to nine months like a sugar high. add 6% price level over three years back to a 5% inflation number. what do you think of that? >> a would make no comment on that, because he was dramatically wrong with all of the other economists in 2016 when trump won and how the markets would respond. i would rather bet on a winning lors and make a comment there. with regard to words like "populist" and "populism" all that. know what? in the end we already have this guy as president for four years. didn't call out the troops to surround the white house. he didn't do most of the things

the press said he did. sorry. i think when we start mixing people that are trump haters with the market movements, i just think you end up way off course. >> rick, ben, vernique, thanks. >> i heard speaking in florida, glen hutchins, larry the speaker. a year in to the first trump presidency in 2017. things were going pretty well. unlike what steve rattner said. didn't go down 10,000 points in the dow. dow soaring. economy doing well. larry summers talked about a shoaler high for four years. up to the pandemic. sugar high, sugar high, sugar high, sugar high. rick's absolutely right. he was dead wrong. dead wrong. >> interesting -- >> any sugar high we're in one right now from all the fiscal

spending that biden did at the beginning of his pleddy. >> >> -- presidency. >> so interesting. larry wrong about certain things i argue and you have argued on the air a period of time you thought he was right. where this administration, president biden and janet yellen saying that inflation was a transfer, and -- and he was on the other side of it saying he was right all the time. >> i know. john fetterman's in israel right now. i'm ready to run him for president. just depends what they're saying. >> depends on -- that's the point. and that's the point. >> both of us are like that. so -- heal thyself position. coming up mary daly jos in us. stay tuned. you're watching "squawk box" on cnbc. restoring his father's jazz club, and in the process, revitalizes a community landmark.

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welcome back to "squawk box" this morning. pce inflation data crossing moments ago coming in as expected. here with he now at the aspen ideas festival mary daly, president and ceo of the san francisco fed. couldn't be more pleased to you have. >> grad lad to be here. >> what we do with the experts. you are the expert. what did you make of this pce number? >> came in as expected as you

said and it's additional news monetary policy is working, inflation is gradually cooling. a relief for businesses and households who have been struggling with persistently high inflation. it's good news for how policy is, would go, but more work to do. not done yet. >> not done yet. that's in the fundamental question. speaking with larry summers yesterday. talking about this issue how quickly inflation really comes down and whether monetary policy is going to be tight enough? >> well, we're getting evidence it's tight enough. it's really challenging to look anywhere and not see monetary policy working. we have growth slowing spending slowing mayber market slowing, inflation coming down. that's how policy works. it's taking longer than we'd like, of course, but that doesn't mean it's not working. >> give us a little of the timeline? all trying to figure out. >> sure, okay. >> what you're thinking about when september comes, what you're thinking about when november comes, what you're thinking about in this calendar year? >> this calendar year you know data dependent.

said that before. right now looking at scenarios. if inflation stays stickier than we like or coming down more slowly than expected, of course, we'd hold higher longer. that is our commitment. if, on the other hand, inflation coming down like it did end of last year, and the labor market is staying intact or falters we can actually adjust policy to respond to that. it's really too early to tell, and my projections exactly what we'll do to be not optimal. american people want to the know we're on the job and paying attention to both sides of the man tate. >> make an argument to you you may disagree about. that last night's debate performance has actually just thrown a huge amount of uncertainty into the economy, which is to say that if you believe that president biden, even the possibility that president biden gets replaced as the nominee, that there will be a lot more uncertainty about what this election looks like? therefore -- that may change how

a ceo decides to invest or spend money. at least between now and november? >> so let me take a different perspective on that. one of the jobs of a regional fed president is to be out in the community, out in the district. i have the nine western states. that's a lot of different businesses talking to the utah, arizona, nevada, all the coastal states. what i'm hearing from ceos of small, medium and large firms is they are already you feel uncertain. they've been uncertain the last year. uncertain about when inflation's coming down. uncertain about the strength of demand. uncertain about the global economy. and what they're doing, though, continuing to do core work and ready to respond to the world that they're given. i think of that as just generally what is -- >> uncertainty. talk to some ceo who say, look, maybe under president trump a macro uncertainty about just lots of different, different types of uncertainty. but they would say maybe under president biden, that their could be more tangible forms of

uncertainty. what happens to tax policy? in 2025. things that are, they can actually look at in a more, very specific way? >> the job of ceo is to think of those options. the job of the federal reserve, apolitical. not talking about the debates or speculate. the job of the fed is not to we're not going to talk about the debates or speculate. the job of the fed is to look at the data, respond to the information and make the best policy to achieve both our goals. full employment, price stability. i don't feel like that is not working. monetary policy is working. we're getting the job done, and that's what americans want from us. >> let me ask you a different question. one of the big conversations here has been a.i. sam altman has been here. microsoft's a.i. peter thiel was here yesterday. we were talking about what it could mean for the economy going forward. sam altman made a very ambitious prediction, which he believes over the next ten years, gdp

could double. peter thiel thought that was an ambitious number. what do you think about a.i. in regard to the types of predictions you might make around what gdp looks like in this country? >> in between the enthusiasts or the everything could be much, much better and the fearful, like, the world is going to really challenged by this lies usually history. and so, i'm a student of history, and in the middle is where we're likely to be. i anticipate that a.i., generative a.i., specifically, will be a boost to the productivity of firms, which we're already seeing. but it's way too early, i mean, way too early to speculate about -- especially if you're a policy maker for the fed -- to speculate. i do think we should expect it to improve productivity for firms and individuals. >> the flip side of that is going to be unemployment, though. >> not necessarily. there's no technology in the history of any technology -- in the history of the world that's ever reduced employment on net. what it does do -- that's why

people are worried about it -- is it changes what skills are valued and what tasks are done by humans versus people, but let's just put ourselves in mind of, we have had automation for decades. we know how this works. firms automate. they do other things, but people still find jobs. we have to have a responsive and dynamic labor market, which we need to continue to improve. >> another topic here was geopolitics, and a number of panelists discussed the idea of tariffs, and i know this gets political again, but i'm curious how you think about tariffs, because they are potentially inflationary, and there's a question mark right now when you look at a president biden and a former president trump's plans about tariffs, what that would do to inflation. or whether those tariffs are -- whether you're supposed to judge those predictions about putting those tariffs on the numbers themselves, or do you say these are political cudgels and they may not get used the way they're being described by some of the

candidates? >> it's really useful to be a student of history because you can look over time and see that in our economy, we have had different trade policies. we have had different policies on investment, different types of economies, and every time we continue to manage the economy we have, and that's what the fed's job is. i'm not in the speculation modality. i'm in the, live with the economy we have, and right now, we have an economy that still has too high inflation. that's where my focus is. >> let me ask you a different question. how would you grade the economy? it's political to some degree, but a lot of americans are saying, how is the american supposed to feel about the economy? >> i love this question, because here's the really important thing. you can't give the economy a single grade. it really matters where you're sitting. you're sitting in a rural part of the country that isn't seeing some of the proceeds of investment in other things, they don't grade the economy very well. if you're sitting in a place where inflation has eroded your purchasing power and you're

feeling the burden of that, you're feeling pretty bad about your future. other people are feeling good. there's lots of investment out there. i think the overall thing is, my job is to get inflation down to 2%, do it as gently as we can. then, people have the fundamentals that they need to think about their career, their community, their family. >> what do you think is realistic? the 2% number? >> when? >> if we get the calendar out? >> we got to keep working on it. i think we'll continue to see inflation print above 2%, potentially, through 2025, but every time we make progress on a monthly basis -- >> right, and we should -- and the fed should not change the objective ever? >> absolutely not. well, i don't know ever. why would we say ever? that would be like saying we're stuck in a box and we're not going to look around. but there is no reason to change our objective, and americans are trusting us. we said 2%. if we move the goal posts and say, oh, sorry, we changed our mind, that's bad for credibility, but it's also bad for the people we serve. absolutely not.

>> mary daly, thank you for coming in this morning. >> great to be here. >> beautiful location. >> absolutely. >> becky, back to you. >> andrew, thank you very much. when we come back, we'll tell you what to watch in the markets on this final trading day of the second quarter and the last day of the week. right now, though, as we head to a break, here's a data point from the latest cnbc delivering alpha investor survey, which brings together the market intelligence of the nation's leading institutional investors, top strategists and our very own cnbc contributors. 45% of people said their best investment right now is large cap tech stocks. that was followed by energy stocks, and then health care nas. st ted we'll be right back.

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pretty amazing to look at the shares of nike now below $80, and nike talking about sales for fiscal 2025 being well below expectations and, in fact, down even though analysts were looking for up 1%, looking down mid-single digits. warn of uneven consumer trends, and said it expects sales to drop as much as 10% during the current quarter.

ceo john donahoe said the upcoming paris olympics would be a critical moment for the company to communicate its vision of sports. >> just looked at shares of foot locker this morning, kind of wondered how they would be trading on this. they're indicated down, i think, somewhere between around $24.20 after a $25.52 close. this will put pressure on nike to partner up with more of its retail partners, but it raises a lot of questions about what the demand is in this arena. >> let's get a final check on the markets, i guess. there's a lot for us to summarize, sorkin. you still with us? >> i'm here. i'm here. >> amazing, what we were talking about with chris coons, was it not? senator coons. we didn't know. he's in the biden campaign, solidly, and so we got his take on that. so, i don't know, does anything change? we thought we might hear something in 72 hours.

>> i think you're going to not hear anything for a couple of days at the earliest. >> 72 hours. >> there's a lot of conversations clearly going on behind the scenes now. >> how great was that, that we had doug burnham on after that? what a day. what a week. what a year. what a life. i still think it might be a simulation, and it might all just be happening to me. don't you ever think that? i think so. it's 9:00. we're going to do it again next week. probably be just as crazy. please join us. "squawk on the street" is next. andrew, come back. we'll see you. >> i'm coming back. see you. ♪ good friday 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. final trading day of the month, the quarter, and the first half as futures go green on this friendly core pce print, mostly in line, annual rate down to 2.6%. bonds do catch a bid. ten-year, 4.26%. road map begins with politics,

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