across the wide range of issues and the stance on crypto and a.i. it's tuesday, july 9th, 2024. melissa lee is here. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm melissa lee along with joe kernen. becky and andrew are off today. nice to be with you, joe. >> i just said, if i'm going to talk about it at the top of the show, the most important things happening that people want to hear about. you are burying the lead. in my view, you are burying the lead. >> america, joe is being sincere. i do appreciate that. >> i am.

it's always -- it's like anything, though. it is like a hybrid. >> exactly. a little bit -- >> no. it's like 90/10. >> i'll take that. u.s. equity futures at this hour pointing to a higher open. we saw the 35th record high of the year on the s&p 500 yesterday. right now, we're looking at an open of up 13 points. the dow looking to be higher 48. nasdaq looking to be up 78. this comes after the dow dipped yesterday. nasdaq as s&p looking for highs. the ten-year yield at 4.286. bitcoin has been under pressure since the beginning of june. we are seeing the higher trade this morning up by 2.2%. interesting from bp. a warning -- kind of specific to bp itself. shares are falling in london.

the energy giant expects to post an impairment charge of up to $2 billion in the second quarter related, in pactrt, to a refine in germany. lower refinery margins would weigh on the results. those are among the same factors that led to a drop of profits in the first quarter with both exxon and shell warning recently of some similar trends. update on hurricane beryl. now a tropical depression. it released severe weather in southeast texas yesterday killing at least four people. the storm flood highways and closed oil ports and canceled more than 1,300 ports. the mayor warned it could be two weeks before some people get their power back. the storm is now expected to bring heavy rainfall and flash flooding from the lower and

mid-mississippi valley up to the great lakes today and into tomorrow. a lot of its strength was taken out before it hit the mainland here. as i mentioned with governor abbott yesterday, hurricanes in galveston, it was between corpus christi and galveston where it hit. 1900 in galveston. it was the 1900s. 12,000 people died. 12,000. >> 12,000? >> the estimates are 8 to 12. closer to 12,000 people. i guess it had gone over cuba. there was an idea of what was coming. no satellites. you're down there and you're like -- >> what's that is? >> that is a dark sky. you have no idea how wicked.

>> the other warnings. >> it also -- now we name them. this was a category 1. it's july. this is what happens. none in the north atlantic. you know, i was in camille in 1969. i know. i know. you were a glimmer in your grandparents' eyes at that point. i remember being scared down in florida quite a bit being in florida and the windows. now they're named. think of the names andc katrina. it strikes terror. camille is still striking terror to me. i jump if you say that. >> a new weapon. overnight, the white house is responding to reports of the parkinson's disease expert visited the white house eight times over the eight-month

period. in the letter, the white house physician confirmed dr. kevin kinnard examined biden for each of his visits. he had not seen a neurologist outside of his other physicals. he did not show any disorders, including parkinson's. dr. kinnard has been associated with the white house since 2012 and helped the active duty military officers assigned to white house operations. >> that's what the press secretary was emphasizing yesterday. a lot of people he could be coming to see. you know, i don't want to delve into it. i'm not a neurologist. don't play one on tv. there are some people that say

parkinson's can be less severe or slower moving than some type of dementia. i forget the specific dementia. a lot of people get it. it's called dementia, but it is getting old. kidneys, your liver, your heart. it gets old. no surprise that your synapses. he slowed. no doubt. he has slowed down. last couple of days, he has been -- he hadn't been any worse than the joe biden that got 80% or 90% of the primary votes. same guy. i don't know how many people voted for him to make him the presumptive candidate. he's not really any different than who they were voting for. that's why it is con ffusing toe that people in charge looking at the polls and say hold on a second. we knew this all along, but

now -- >> the debate really underscored everyone's fears. >> it's like jake tapper day. i love jake. jake was talking about the elitists -- i'm like, not a hint of irony in you talking about how the elitists were ignoring what was goiing on. i commend those two. dana bash and him. they conducted the debate that has us all -- it shined a light on what we're talking about here. i don't talk about what they should do. i don't know. i'm not going to get into it. they have to decide themselves. aoc came out. >> he decided. no change. >> robert wolf was on yesterday. there are people, each donors, saying i'm with biden. you know, the alternative might not be so great. >> what do donors dough straight

f donate for? influence. he ends up in the white house anyway. it gets complicated. >> some people say mar-a-lago and there are cheers coming out. karl rove, one of the biggest never trtrumpers on the planet. >> we have emily wilkins with the latest. >> reporter: melissa, like you said, he started the week vowing to stay in the race. democrats i spoke with last night have made it clear that biden still needs to prove to them that he can win in november. now, again, we know of at least nine democrats who said biden should withdraw, but many more are raising concerns. those will be aired today when house and senate democrats huddle for the first time since the debate.

scott peters of california said biden needs to accept that what happened at the debate wasn't a blip, but a real problem. >> we had 300 something constituent contacts from voters, constituents, 10 to 1, suggesting that the president should step aside. >> reporter: senator jon tester, one of the most difficult races for any democrat in november, said yesterday that biden, quote, has to prove to the american people, including me, that he is up for another four years. while the concerns are real, there are dozen ws who are sticking with biden and those with the black caucus or the hispanic caucus who put out a statement last night saying they stand with biden and harris. lawmakers told me a lot is going

to be decided this week. guys, we will keep a close eye on what happens in those me meetings and translates to any potential pressure on biden. >> yeah. jon tester. i don't know. i guess he should focus on his own future, but that is what he's doing. exactly what he's godoing. a lot of down-ballot hand wringing is what's going on here. the other one. jerry nadler, the most high profile guy, of the other ten. there are no huge names. marc warner. he backed off a bit. well will see if that continues. the leaders of the party have not done anything. >> reporter: that's the question, joe. will democrats put pressure on ja hakeem jeffries and chuck schumer to say you need to come out and speak. >> chuck said i'm with joe. he flipped a burger and said,

oh, no. the cheese. he flipped the burger and said i'm with joe yesterday, didn't he? >> reporter: he has. that reflects the fact and you saw jeffries say it as well. the question we have is as they hear from more and more of the members, does that tone shift or change at all? do they have more private conversations with biden? i think there are a lot of questions at this point of how far biden can continue if you have other prominent elected democrats in the party who aren't behind him. you could see biden stay or schumer or jeffries continue to support him. members kept emphasizing we need to talk today and we need to get together and basically do a vibe check and see where everyone's at and how to move forward. >> that was the karl rove quote. if things that can't continue, don't. that seems to be what's happening. then again, i have definitely

some empathy for who president biden is saying. the democrats now want to pull the rug out from under him. they knew. they knew. they have been gas lighting. they knew what was going on as he was racking up all those delegates. he did. what percentage of people voted for him for the nomination? you think he's really changed in an hour and a half? they knew. oh, my god. where did this come sfrom? they are getting what they deserve. maybe watching him squirm. the squirming will continue, emily. thank you. coming up, the s&p and na nasdaq at reported highs. mike wilson talking about bearish. details about his new call next. and we will talk to tim scott about the veepstakes with

donald trump. the new platform and the take on president biden staying in the race andhe t senate banking committee stuff, too. we'll be right back.

did you find everything you needed? yes, thank you. oh, who are you tapping for today? dinner for my kid, i guess... no, no when you tap your mastercard, you help support stand up to cancer. so - who are you tapping for? we all have someone that comes to mind when we think of cancer. auntie gigi. my sister, she's a fighter. when you tap or order online at participating grocery stores and restaurants, mastercard will donate one cent,

up to 5 million dollars, to stand up to cancer. standing up for the people we love: priceless. share who you stand up for.

when we're young, we're told anything is possible... standing up for the people we love: priceless. ...but only a few of us go out and prove it. witness the greatness of anna hall on a connection worthy of gold: xfinity mobile. only xfinity gives you the most powerful mobile wifi network, with speeds up to a gig in millions of locations. and right now, xfinity internet customers can buy one unlimited line and get one free for a year. get the fastest connection to paris with xfinity. morgan stanley's mike wilson is calling for a significant pullback in the stock market between now and the election. he told bloomberg yesterday that a chance of a 10%correction is likely and the third quarter will be choppy.

wilson's 2023 bearish outlook, and before that, but mostly 2023 when we did 25% failed to materialize. in may, he finally threw in the towel. at one point, he was 3,000 or below that with things really hitting the fan. he called for a gain in the s&p by june of 2025. abandoning his position as the biggest bear on wall street. wilson said if his new correction call plays out, it would be an opportunity for investors to buy into the market. i would just say mommy, don't let your babies grow up to be strategists. >> terrible job. >> you can't win. you're always wrong. you can't get timing and direction correct. >> many say it is a compass. you know what i mean? it is not a specific call. >> it is also probabilities, too. nobody knows if there's going to

be -- take your pick of the black swans or gray swans which can cause something that just come out of nowhere. >> last year, it was a.i. who knew that nvidia would ignite the a.i. turn around that we saw? >> now i'm starting to agree with some of the people that say the amount of money being spent and when the payoff comes -- it's a lot of money and payoff in terms of monetize. >> that's why nvidia and all -- >> right. >> the hardware makers are benefitting. our lives are transformed. that comes years down the line. >> right. but human level or just a little bit of insight or instead of just really fast chips that allow you to search everything on google and put it together so it is seamless, but they never go to the next step of interpreting and analyzing the

things that humans are able to do. it is never near that. will it be? i guess. that's a big leap of faith, though, to think you can get there. >> the work and -- >> if you're in college and going out every night. >> if you are an insurance company and go through reams of paper work. >> a great time to be in college. great time. >> is it? >> or -- or we have these -- i've got physical -- no, i don't. that's not something to joke about. tourettes. i hated writing. >> you are saying you want to cheat? >> i don't view it that way. that's a strong word. that's a strong word. i'm putting the right stuff in to ask. i haven't done it. i haven't done it. i'm just saying. >> i'm saying you would? >> our next guest is bullish on the markets.

i'm not sure if she plugged in what i read today in chatgpt. sylvia jablonski. do you feel that we are right for a 10% correction like mike wilson, sylvia? >> good morning, joe. i'm not looking for a 10% correction. i like the analogy of don't let your babies grow up to be strategists.compass. i think we're due for a pullback. pullbacks are also opportunities to come back into the market. you have $6 trillion on the sidelines in the 5% money markets. the market is doing a lot better than that this year. 17% on spx over 20% on nasdaq. i think pullbacks are only a good thing if you have cash on the sidelines and in it for the long run. don't look at your account for the next couple days. i think a healthy pullback is good at this stage.

>> the a.i. and hardware is good at this stage. what about the second derivative plays and third derivative plays on a.i.? they are cheaper, but they may be way into the future or payoff. >> exactly. they are a lot cheaper and they are into the future. i think you can look at it a few ways. if you look at etfs in this space, the large cap names like nvidia that are actually leading this cause right now and getting that performance. you are the smaller names that work in super computing. to the point you made before, we are writing college papers and looking things up for fun. eventually, this turns into data processing and data analysis. companies like eli lilly can get better data on the trials and things like this and have more efficiency in drugs and more efficiency in the research they do with disease curing. i think there is a huge runway for a.i. that is highly

beneficial in the future. it will impact driverless cars and aerospace and defense. we're in the first inning here. >> one of the individual names you talk about is micro strategies. a crypto play. we have had a recent dip in bitcoin. do you think, number one, talk about the recommendation, but also does the dip in crypto indicate anything to you about what might happen to the nasdaq? they've been pretty highly correlated. katie stockton talked about that yesterday. >> i think crypto and nasdaq have been correlated for the sake they are both risk-on and risk assets and have moved in tandem for the year. they have diffiverged actually. overall, the long-term case for bitcoin remains in tact.

you know, if you believe there is a long-term case in bitcoin and you have seen that pullback in recent weeks, micro strategy has pulled back 6% in the last couple days or so. i think with that, you have a little blit of an a.i. play there. business intelligence company. you play with that and you get a hedge. they are also a crypto company. now with crypto down, we talk about buying on dips. that's a stock to participate. >> what is your thesis on healthcare? that's a place where people might end up if they get tired of tech? >> yeah. i think healthcare is a good one. you look at eli lilly, for example, with the weight loss drugs. that's a massive phenomenon in the market this year. they also have a big pipeline of drugs. diabetes and immunology and cancer drugs and aging baby

boomers. that is ripe for the space to grow. they pay a nice dividend. if we get the mike wilson pullback, you want to have less of an impact on market correction. healthcare is a good place for that. i like those names in that space and particularly eli lilly. >> you, at times, you were recommending copper and uranium. how would people do that that typically buy stocks? >> buy an etf is the best way to do it. you have single levered etf on uranium and copper. trying to get creative and think outside of the box if we think a.i. is the biggest innovation of our time, uranium and copper will play there. we need energy sources. on top of that, what if that doesn't work out and what else is there? you have a shortage of supply for copper and uranium and bans

on russian imports on uranium and increasing political tensions and things like this. there are a couple of factors to make them interesting places to diversify. they are down on a pullback here for last couple of weeks. it could be a buy on a dip opportunity, particularly for uranium. >> okay. sylvia, i'm trying to figure out what is implicit or implied in the defiance part of defiance etfs? >> so, yeah. >> what about -- it's not de-fiancee? what are we defining? >> great answer for you. great answer for you. the movie "defiance" was made about the grandfather of our chairman and founder of our company. his grandfather was one of the

rescued in the war of the movie "defiance." that's the name. >> i don't know how i do it. i ask totally ridiculous questions that sometimes -- >> a good answer though. >> not only a good answer, but an actual daniel craig movie. >> daniel craig. incredibly meaningful movie and name. we are trying to live up to it. >> damn! >> great question. >> i know you did. i saw. i assumed. >> we have to go to break. that was a great question. >> thank you, sylvia. i sdidn't know you had that reay to go. related to the founder of the company. coming up, the rnc adopts donald trump's political platform. we will tell you about the changes in the position of a.i. and crypto.

that's next. ♪ ♪ ♪ ♪

an rnc committee adopting donald trump's platform. eamon javers is joining us with the details. good morning, eamon. >> good morning, joe. the republican party released the campaign platform yesterday afternoon and reflects new thinking on high tech areas. cryptocurrency and artificial intelligence. on crypto, the platform saying republicans will end democrats unlawful crypto crackdown and impose the creation of the central bank digital currency. it will defend the right to mine

bitcoin and self custody of the assets and transact free from surveillance and control. that is a concern over the biden administration's exploration of the digital currency although biden has not endorsed rolling the technology out. the fear on the right is government participation in the cryptocurrency could threaten the haven from the government controlled money. on a.i., the republican platform says we will repeal the president biden order that hinders the a.i. innovation and imposes the left ideas of the tech technology. the republicans will protect free speech in a.i. some have argued that the biden executive order doesn't do enough to stop the monopoly of a.i.

this is the trump platform of protecting the culture elites and trump and his party will focus on preserving personal freedom in the cutting edge sectors. joe, back over to you. >> it's only 16 pages. do you know that? that's not as long as it usually is. what was the controversy? >> it was 66 pages last time. >> short on detail. >> trimmed some. >> what is the controversy? there was some really divisive things in the 2025 document that are not in this now? i'm talking about abortion and other issues. they are being much less definitive or strident? it's not there and they're not planning on it now? >> for a president teeing up to repeal roe v. wade, this is a president who is now looking to

attack the center ahead of the election. that is pretty standard. the problem for this president is social conservatives and evangelical christians are a core of his political base. they want to go farther on abortion restrictions. the former president donald trump does not want to do that because that alienates voters that he needs. this responds to trump's initiative that says we'll dial back on the abortion stance. >> although some people viewed it as precedent and important to a lot of people. the legal nerds say it was a bad law and there were reasons to want to strike it down and start over. you don't hear that. you hear it, but it still makes it an emotional issue. >> it's an absolute cultural touchstone. most americans are not looking

at this from a legal nerd view. it is my rights view or my right to protect children point of view. it's binary. the polling suggests this is not the place to be. you see trump here trying to pull back from that and retain his base. i think he will even if he does this. we have seen statements from conservatives saying our goal is to elect trump and we'll talk about this after. >> if you don't remember the past, you're doomed. everybody remembers 2022. the pink trickle? what was it? it wasn't red. it was all abortion, eamon. that's why. >> right. the political reality is you got to attack back the center if you want to win the general. that's what this document is doing. we'll see if voters buy that or not. >> i prefer the 16 pages.

66 pages? oh, my gosh. please. >> the reality, joe, most candidates don't like the platform. they don't want one. it ties this hands and an knows annoys a lot of people. >> it implies campaign promises which no one keeps. might as well not make them. eamon, thank you. i promise you, i keep mine. see ya'. coming up, if you still pay by check at the checkout, listen up. one major retailer is abandoning that payment option. that's story is next. as we head to break, take a look at yesterday's s&p 500 winners and losers.

new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

starting monday, target stores will no longer accept personal checks as a form much payment. the retail giant is looking for an easier retail experience and with the low volumes of customers who pay by check. walmart will continue to accept

checks. >> wow. that's an amazing. >> i hardly ever write any checks. everything is ouautomatic payme an. >> somebody else writes them. bill ackman's pershing square will list on the new york stock exchange with an ipo price of $50 a share. coming up, we will talk to punch bowl's jake sherman about what he is hearing about president biden's future on the presidential ticket as democratic lawmakers prepare to meet today. that's next. reminder, get the best of "squawk pod" and listen anytime. we'll be right back. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. oh, thank you so much i couldn't have done it without you.

honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot ♪ in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there.

the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai.

some house democrats are meeting later this morning to discuss the future of the party as president biden continues to say he has no intention of dropping out of the presidential race. joining us now is jake sherman from punch bowl news. does it take courage to do this, jake? you sort of feel the tide shift a little bit yesterday and the day before. you can watch it on predictive. i think the president was up 20 points to 61% probability to be the nominee and kamala harris down 20 to like 20%. the combination of the letter in the "morning joe" appearance did turn the tide bangck to the president's favor? >> i agree.

we wrote about this this morning, joe. there's a lot of factors that are letting him slide for the time being. number one, it would take hakeem jeffries and chuck schumer to push him out. they don't have, you know, a complete uniformity in thinking. there's still a lot, a lot, a lot, a lot of house democrats and every senate democrat. no senate democrat has called him to step off the ticket. it would take 80% of them to get him off the ticket and schumer and jeffries to call for it. i don't want to say they're weak leaders, but they have not shown any interest in pushing him off the ticket. i talked to hakeem jeffries twice yesterday. he said first, i'm sticking with biden. i have not waivered in that. number two, he said, my favorite phrase when i was a lawyer was asked and answered. he basically doesn't want to

talk about this any more. i think there are level -- let me put it this way, joe. every single democrat i've talked to off the record has said he should step away. even some of those who are the most fervent biden supporters publicly, said they don't think biden can beat trump. it's difficult to push a nominee and sitting president off the ticket in july. that's just the reality of it. >> they know that a lot of those people, jake, they own this and it was not a good debate, but we've all been watching. we know what's been going on. he got and this is where i would say you're right, mr. president. i received over 14 million votes. 87% of the votes during the entire nominating process and 3,900 delegates through the entire process. then there was the debate.

no one knew anything. they were all there and complicit. i'm not saying it's a bad thing. even right now, it is almost a perfect storm because they don't have a really great alternative to the president right now. so, he's got, you know, he's got this on his side that he went through the entire democratic process to earn the nomination. he's got that and the alternatives to him being on the ticket aren't great. he's down in the polls >> i'll argue with you on the first point. the first point and i would say this, i'm not making a case he should drop off. i'm giving you the other argument the democrats did not make. they did not see this joe biden because he was performing in tightly scripted appearances. they didn't -- i think this was a very closed white house when it comes to the personality.

it's not like trump where we have a daily barometer on his mood or mood swings offer whatever. every human being has those, maybe not as many as trump. ca we don't know about biden. we didn't know or voters didn't know. >> locking into your soul, it looked like bush and putin or was it his eyes? he saw his soul. you didn't know? i think i knew. i have -- >> i'm not talking about us. you and i have talked about this on the show before. >> democrats are lying. they knew. >> let's take the second point. i had a prominent republican make it about the alternative. i had a prominent republican make the argument to me that if kamala harris was atop the ticket with an exciting number two, that would rejuvenate the base and excite the base and they could beat trump.

i don't know whether that's true or not. i understand that argument. i just saw a poll this morning, believe it or not, i don't necessarily believe it. hillary clinton and kamala harris were up in the poll against trump. that, to me, indicates, joe, that people are looking for an alternative. >> there's no doubt. that's a given. what you just said is absolutely true. a wild card shot with kamala harris has a much better chance. that's why so many republicans and why karl rove said mar-a-lago is cheering that he is staying. republicans want to beat joe biden. you don't know what would happen with the vice president. she may out perform everybody in debates with the vice president, not hillary, necessarily, but whomever. >> we have become so conditioned with the octagerians on the

ticket. with both parties in 2008 with a young person running for president and running for -- >> jake, how old are you? >> i'm almost 39. >> all right. are you in your 40s? no, you are not. don't just call trump octenagarian. >> age ain't nothing but a number. >> there's been only one octenagarian. there's only been one. you know who else? mick jagger. he still moves like mick jagger. i just saw him running up and d down. you know who is in the 90s? the man who has never been

before. william shatner. it is not the age, but the odometer. >> joe, let me give the caveat and batten down everything i said. today's meetings is the members only and senate democratic caucus everything i said, and today's meeting, senate democratic caucus leaders this afternoon are going to be crucial. if there's a huge movement, jeffries and schumer will have to get onboard, and i don't see that yet. the chc make up half of the democratic caucus, and they are fully behind joe biden. i don't see this -- i don't see this changing, but i suppose it could. >> 39. i am going to be like reagan. i'm not going to, you know, judge you by your lack of

experience. >> judge me by my graying hair. >> but nobody should say you are in your 40s, right, because you're not? >> i am savoring that for -- >> wait a couple decades, and you will learn what the word savor leans. thank you. future contracts with boeing after the world that the company plans to plead guilty in a fraud case. if you'd been moving billions around the world. well, actually, i do. you know, stablecoins, nfts, loans. people can access me 24/7. what? but look, everyone's different. you should get your rest. you'll get after it tomorrow. tomorrow's saturday. [ethereum] monday. you'll get after it again on monday.

(♪♪) car, this isn't the way home. that's right james, it isn't. car, where are we going?

we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

a u.s. defense official telling reuters yesterday boeing expect

to talk about a plea deal before talking about what -- how it would affect them. later, former senator, bob kerrey will weigh in. at customink.com

we really don't want people to think of feeding food like ours is spoiling their dogs. good, real food is simple.

it looks like food, it smells like food, it's what dogs are supposed to be eating. no living being should ever eat processed food for every single meal of their life. it's amazing to me how many people write in about their dogs changing for the better. the farmer's dog is just our way to help people take care of them. ♪ driving the markets higher. joining us now, haarest portfolio management ceo.

paul, great to have you with us. >> always great to be here. >> looks like you are all here on the ai trade when it comes to the picks and shovels trade of it. at this point, why are you so cautious on the next phase of ai? >> what i'm worried about is, at least not yet, have i seen enough what i call needle-moving use cases for ai. what i am worried about -- not for all companies, and some companies will be huge beneficiaries, but for many companies i believe ai will be a feature, not a product, not a product platform that in and of itself drives revenue and profits and cash flow. for those companies, if it's just a feature, it pretty quickly becomes commoditized. i don't know if it has that great of a financial impact. >> that thesis can't live next

to the silo against the thesis that ai will go to the sky, and those two thesis converge, and you say that was a lot of forward on the picks and shovels side of the trade and it's time to reallocate? >> that's the perfect question, and maybe i am a little contrarian, and tech stocks have come back in recent sessions, and i think the ai infrastructure build is going to continue for a couple more years, and so that's where i am a bit different because people believe when they sell off the stocks they will go from rapid growth to absolutely hitting the wall. so it's going to be my responsibility, and i actually think the top is very far away from what you call the picks and shovels guys. >> when you look out to the rest of the year, paul, what do you

think is the catalyst for the trade in particular? for the first part it was the increase in cap x, and that is not going to happen, at least not to the same degree. in the second half, what do you see as the oxygen that will allow the trade to move higher? >> i think the oxygen is a confirmation from the hyper scalers and what they will spend, and on the last quarterly calls, and of course we get a prefresh in a couple weeks, and they talk about the cap x spend, and i don't know if they will give us more data or just a confirmation, yes, we are going to spend the tens of billions and the supply is going to continue to be tight for the semiconductor vendors and service vendors and data

networking companies, and they should start to bump up in pricing. >> there was an interesting note out yesterday, paul, saying maybe it's time to dust off the ai laggards, and we saw like, dell, ibm, intel, and we saw them off to the races in the second half and maybe we are due for a repeat this year, especially as some are questioning the valuations of the high flyers you are in. do you subscribe to that thesis that investors are going to be looking for the multiple ai trade? >> i think they will do that, but i think that's a mistake because particularly in ai, as it is with most tech trends, i believe the strong get stronger, and what i mean by that, who has the dollars to spend on cap x and rnd and potential acquisitions. unfortunately, the 800-pound

gorilla becomes even bigger, and i don't know if that's going to be a good strategy. what i stick to is not just the semiconductor companies, but as you mentioned, some of the service players like dell and microenterprise. >> thanks. it's just after 7:00 on the east coast. you are watching "squawk box" on cnbc. i am joe kernen along with melissa lee. and boeing is in talks over the deadly 737 max crashes, and how that could affect the contracts with nasa. the faa is ordering inspections of at least 2,600 737s with the

concern that the oxygen masks failed. and then a cruise ship from tokyo, and 2028 is when it would start the expansion of disney's theme parks and cruise business. it currently has five ships in operation and there are plans for three others, including one from singapore in 2025. amazon is launching a new echo spot alarm clark and features a better display and audio quality. why are they showing anderson cooper and cnn? don't we have one with -- >> or joe kernen. don't you want to wake up with

joe kernen? >> no. i have to and it's not easy. the s&p posted its 35th record close for the year in yesterday's session, looking to be higher by 14. let's get to dom chu with this morning's premarket movers. >> good morning melissa and joe. we will start on the oil and gas patch, specifically with bp, and the u.s. listed shares are down roughly 4.5%, and that's inline to maybe slightly worse than the london-traded shares at this point right now. bp warned it expect the charges up to $2 billion in the current quarter, and also weaker oil trading results that could result in a hit abruptly 500 to $700 million, so that's what is driving the shares down 4.5%. meanwhile on the analyst front,

bank of america catching a bid up, and neutral trading from a underweight. the price goes up to 42 and was at 47. atheir citing among other things a bottoming out of niii. we will end with a check on bit toeupb coin prices, up nearly 2% today. we are seeing a test of the lower end of its medium-term trading range so far over the course of the past several months here, and the key level that some traders are watching is this yellow line which is the 200-day moving average, and that

moving average stands a hair below 57,800. coming up, former senator bob kerrey on the question surrounding president biden and whether he should stay in the race. later in the show, kyle bass of heyman capital will join us -- it's the 7:00 hour, isn't it? he will talk about china, and "squawk box" will be right back. (grunting) at morgan stanley, old school hard work meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes,

helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley. the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future. a future where you grew a dream into a reality. it's waiting for you. mere minutes away. the future is nothing but power and it's all yours. the all new godaddy airo. get your business online in minutes with the power of ai.

they started as dreamers. get your business online in minutes but today, they're stars. follow every moment of team usa on the network that brings you legendary speed and reliability: xfinity mobile.

with xfinity mobile, you'll have the most powerful mobile wifi network with you on the go, with exclusive access to speeds up to a gig in millions of locations nationwide. and right now, xfinity internet customers can buy one unlimited line and get one free for a year. get the fastest connection to paris with xfinity.

the s&p and nasdaq hitting new highs as investors wait for key information this wednesday. great to have you with us. >> thank you. >> looks like we are setting up for a disappointment because there's a disconnect in terms of earning expectations and where we are at record highs? >> i do. i think there are ingredients coming together for market pullback and consolidation. the reason i say that there's a disconnect between the economy that is slowing and earning expectations which are lofty. if you look at the indexes it's deeply in negative territory and trending lower for the last several months, and atlanta is down from 4% than it was in the beginning of the quarter.

you compare that and contrast that to the earnings expectations and they have done nothing but move higher. and in this quarter, they moved lower a touch, much less than they typically do, so you look at the setup and you look at what i call extreme market comfort with this goldilocks scenario, and volatility is low and everybody is in the trade and that's giving me a little discomfort here. >> you think earning season will p play out, and companies will miss expectations or severely lower guidance for the rest of the year and we will have to sort of come to grips that the slowing economy is hitting? >> i think the initial reaction would be that we are not going to get quite as much of a surprise as we typically get in the prior quarter, and it was 7% and we outperformed expectations, and that's not going to be the case this quarter. there's a bifurcation where the

tech trade is alive and well and the resized earnings have been up and everything else guided down. maybe you can argue that we reset the bar lower for cyclicals, but probably not quite as much. the first reaction will be not quite as what the earning surprises. >> we were talking last night on "fast money" about the implosion that we have seen in fast-food stocks. we have seen real reversals in how the stocks are trading and the consumer is pushing back, and you look at the household incomes, and it's not just mcdonald's, you know, it's all the way up to chipotle that has reversed, and nike and lululemon. are you worried about the consumer? the market structure is you need tech to work, really? >> that's been working for the

last couple of months and the stock market has been able to push all new highs, and the s&p stalled out, and consumer finance stocks, for example, they also stalled out. broadly speaking i am not worried about the overall consumer because of where the unemployment rate is and the aggregate household rate is, and if you look at the delinquency rates for consumer finance companies catering to the lower income cohort, you are starting to see the delinquency rates rise. we shouldn't completely dismiss the rise in unemployment rate, because half of the rise of the unemployment rate can be explained by layoffs, and that's clearly affecting some part of the consumer as well. i think it's a risk that bears watching, and the biggest reus sbg the headline risk around the election, and that rhetoric is likely to pick up and volatility likely does pick up into the

election. >> volatility doesn't mean pullback. >> no. >> and we are at record highs now. >> yeah, this time around, they could coincide. we could see a spike in volatility, and that's what history suggests. there's a chance for consolidation in the tech trade as well, and there's a lot at stake in the election, and when you think about the sector likely to be vulnerable to the rhetoric, it's likely the tech sector. tech was the largest beneficiary of the tax cuts, and if you think about tariffs and restrictions, those are likely to hit more of the internationally exposed stocks, and, again, that's the tech trade. i think the trade for the next few months could be consolidation pullback in tech, and the move towards the defensives, so that's what i would be thinking about in

portfolios. >> luckily volatility is low right now, and you can protect your portfolio pretty cheaply? >> you can. you can do that instruction investments, and or just trim a little tech and add things like yao utilities. >> thank you. >> thank you. and then bank of america from underweight to neutral this morning. banks always come first, and that's this week -- you might be here on friday. >> no, i'm not. no, i will be. >> why do i know -- >> i try to take it one day at a time? >> we are actually going to have a nonalcoholic beer guy on in a second. anyway, as we head to break, another day and another call on nvidia this morning, and a new price target of $180.

"squawk box" will be right back. 9:30. you don't say? yep. you'd want a little shut-eye too if you'd been moving billions around the world. well, actually, i do. you know, stablecoins, nfts, loans. people can access me 24/7. what? but look, everyone's different. you should get your rest. you'll get after it tomorrow. tomorrow's saturday. [ethereum] monday. you'll get after it again on monday.

switch to shopify so you can build it better, scale it faster and sell more. much more. take your business to the next stage when you switch to shopify.

piper sandler upgrading bank of america raising its price

target by $42. joining us now, the managing director at piper sandler. scott, great to have you with us. >> melissa, thanks for having me. >> you do see an inflexion point -- people are asking it's up 20 plus percent for the year, and you do see an inflexion point probably having happened in the second quarter? >> yeah, we think they will trough here in the second quarter. as you can imagine, given the prior rating we have been more cautious given that we think their guidance was more ambitious, and you know, that said we think we are finally at inflexion point and we should start to advance more robustly into the second half of the year and more importantly into 2025. the universal sir sraul outperformed this year, and fundamentally the tide is turning in bank of america's

direction, so we thought neutral rating was more appropriate at this point. >> i am wondering at this point in the cycle, you see sort of a recovering investment banking, and things should turn a little, but in price of valuation, are things priced in? should we be trading at that level right now? >> always an excellent question given that jpmorgan is a popular name and trades at a rich valuation, in our view, however, their earnings are so much more rapidly than virtually anybody else in the industry, and you have that that is very helpful. and for jpmorgan, their guidance is conservative, and they have got just an excellent credit profile and eventually, once we get to more clarity on where capital rules are going

industry-wide, they have capital return and share repurchase should be bigger parts of the story as well, and lots of levers for jpmorgan. >> and this morning there were reuters headlines saying the federal reserve will revisit requirements, and the scenario the capital burdens on booanks will be alleviated in the next six winds or so? >> we hope so and we want a safe and sound banking system, but it seems to us that regulators have just sort of layered kind of buffer upon buffer on buffer on these banks and it's hard to argue that they are in a position where they have some sort of, you know, crack in the armor that is not visible to all of us. you know, i think there's been maybe a little overreach. the industry has done a great job at lobbying to having those

proposals dialed back, and looks like we should get something in the second half of the year that would water down the proposals, and still maintain a very safe and sound system for customers, the economy, and et cetera. once we get that clarity, we should be in a position to see much more robust capital return for the banks, given that we have such big cushions as it is, as we stand here today. >> we already saw them increase payouts after the stress tests, and you think there could be more, more substantial payouts? >> exactly. what we saw after the stress tests, it boosts dividends, and share repurchase seems to be the bigger toggle once we get more clarity on the pending capital rule, and that's why we have our eyes mostly focused right now. >> who are you most concerned

about on the recovery list? >> the tide is turning well for the group over the next several quarters, and we have nii inflicting, and ideally loan growth will get better. we have underweight in our coverage, huntington, sort of a valuation and mow mmentum call,d that's a story that will experience a lot of the same sort of things that the group as a whole will experience. >> scott, thank you. >> melissa, thanks again. appreciate it. suddenly i am kind of a believer in the next story, and i never thought i would be, but alcohol-free beer. >> yeah. >> i think there's a place for that. up next, the booming business of booze-less beer. we will speak to that ceo on the set next. pressure is ramping up on the white house.

we keep saying that, and it's 61% now, the probability of him being the nominee. nobody high profile is urging president biden to pass the torch. we are going to talk to former senator, bob kerrey, thank god. "squawk box" will be right back. a bigger space, brought on another employee, and ordered new branded gear for the team. it was so easy. i just chose my products, added our logo, and placed my order. bring your own team together with custom gear. get started today at customink.com.

new this morning, nonalcoholic beer company, athletic brewing, announced it raised a 50 million equity financing round, and bill joins us, and i asked you initially, is everybody a friend of bill w, and by that i mean somebody would get in trouble if they had alcohol, and some are, i would imagine, and many are not, people that are drinking nonalcoholic beer for that reason? >> yeah, i think in general the word sober is somewhat outdated in many ways, where i think people are super busy, modern adults and we have funds in our hands and want to feel better and be more alert. pe people tend to drink one day a week or one day a month, and

there's a lot of occasions outside that and a delicious beer goes great with lot of different parts of life. >> you are talking about a nice fundraising round. let's get that out of the way and then we will talk about the implications, because i have a lot of thoughts. so what happened? >> we announced a big investment. we increased our west coast production capacity a couple weeks ago, and we are welcoming general atlantic to the cap table, and $50 million investing to the company, and beyond that, and if you ask anybody in the financial world, a short list of well respected investors, general atlantic, we are excited to have them onboard. it's such an honor to be having their investment. >> what does your valuation go to in this round? >> we are a private company and

don't tend to talk about valuation. i can say that we are -- our revenue more than doubled than 18 months ago and it was publicly disclosed at that time that our valuation was about $400 million. >> you went from 855 cases to hundreds of thousands of cases, and in the ipa, you are one of the ten largest brewers and it's nonalcoholic, right? >> yeah, we sold well over 3 million cases, and did over 90 million in revenue last year as a company and are growing beyond that as a company. from one of the smallest just a few years ago. >> i am drinking it and it's good and it tastes like beer. i am starting to think that maybe there's some type of placebo affect -- is there -- there's not, right? there's no alcohol so it's impossible you are feeling

anything? >> i think what you are feeling is the placebo affect. people have been drinking for thousands of years, and very little of that has to do with the alcohol. that was a key insight for me, and as i was doing survey work for athletic brewing, and i was in the financial world previously, and when i started to share the germ of the idea with people, and people were, like, that makes sense and i would be drinking that all the time, and i am sick of alcohol. >> why is the time right now for the nonalcoholic beer, where in the past you had a no tkaolz -- >> it tasted like swamp water. on "the simpsons," they would have the nonalcoholic in the convenient store, and it would be a false front, and nobody

would ever open that, and it would be a place where you go into the back of the store because nobody checked that door. so you are working out, and it's 6:00 in the morning, and if you go out with your friends in the financial business and you have five or six beers, you are not feeling good at 5:00 or 6:00 in the morning to work out. >> yeah, i was out to three or four work dinners a week, and in the beginning of the career, it was steak dinner and boozy dinners, and i felt terrible. and people started to hit the day running, and i think a big part of the reinvention is it's both product and marketing. our cofounder, john walker, is an extremely talented and highly awarded brewer. >> johnny walker. >> yeah, and it was a universal signs that was so obvious, and

it should have hit me over the head that he's the right guy. he's so talented and so are so many of our teammates. another bdifferent kwraeuter -- >> i asked you this, and i play golf and it's hot and i like to drink a corona or something, and there's a little feeling. i could drink one, but if i hang out, i could switch to this, couldn't i, so i am not, like, driving after three or four beers. you could drink a beer and then have three or four of these. i am like brett kavanaugh, i like beer. remember when he said that? i like beer. >> i drink an ipa at 3:00 or

4:00 in the afternoon -- >> nonalcoholic? >> yeah. >> and people may have five, and they can get in the car and meet their kids at the pool, and there's not a line in the sand -- >> yeah, the one thing that i will mention, and it used to be one glass of red wine is good for you, and now they are starting to think alcohol in general, it's never great for you because your liver is dealing and your brain, and when you get older it's much more difficult to process the alcohol, i think. >> i think whatever peoples' views are on health and alcohol, and the world is stressful and i don't want to take away people's alcohol, but ten years ago, if you were not drinking and you went to dinner -- >> it was seltzer water. >> yeah, maybe the occasion base for alcohol is shrinking, but we

want to welcome people into the beer world and they can drink seven nights a week and feel good about it. >> i like it. was it really bad -- all the previous intro of nonalcoholic beer, was it crappy beer? was it bad? >> if you walk around a grocery store -- >> i never had one. >> when i stopped drinking ten years ago, i would walk into the grocery store and it had not seen any evolution in years. it was hiding in plain sight. we're trying to be positive about it. >> i would have thought if i am going to get the calories and carbs from drinking a beer, i might have alcohol, but i am starting to rethink that. you have to drink something when you are socializing. >> yeah, generally 1,000

calories for one ab. >> i entered wall street in 2005, and i listened to you guys all day, on the commute, so appreciate it. >> good luck. >> thank you. > coming up, former senator bob kerrey on the race for the white house, and the potential vp pick, tim scott. "squawk box" will be right back. . (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

when you need to prepare for unpredictable adventures... (gasp) you need weathertech. [hot dog splat.] laser measured floorliners front and rear. [drink slurp and splat.] (scream) seat protector to save the seats. [honk!] they're all yours! we're here! hey, i knew you were comin'... so i weatherteched the car! can we get ice cream? we can now. kid proof your vehicle with american made products at weathertech.com.

overnight the white house responding to news reports that a parkinson's disease expert visited the white house eight times over an eight-month period. and kevin o'connor contpurpbld the expert, dr. kevin canard, was a specialist that examined biden for each annual physical. doctor o'connor said president biden's last physical was in february and did not show signs of any neurological disorder, including parkinson's. he has been part of the white house medical unit since 2012. later this orning, house democrats will meet to discuss the future of the party.

while president biden continues to say he has no intentions of dropping out of the presidential race. joining us now, former u.s. senator, bob kerrey. >> it has been too long. you look good. >> i guess, what do you think is the right path forward for the democratic party and for president biden right now? >> i don't know. i mean, first of all, it's a very unusual situation where the condition of the candidate's health appears almost suddenly. the white house is saying there's no problem with him being old, and in north carolina after the debate he goes down and says, yeah, i have trouble walking and i shuffle and sometimes get confused, and so there are cognitive issues.

the question is how comfortable are democrats nominating somebody with those conditions given the apparent vibrancy of the trump body. in this case, it's causing democrats to say is there a better candidate? i think the president's letter -- i was imagining if i was in the senate and got that letter, i would be angry. basically saying if i question yourself, i am a threat to democracy, and that's not. i am part of the elite, and i am a proud graduate of the university of nebraska, and so don't say anybody challenging this is on the wrong side. i don't know who talked him into that letter, but it doesn't make

a bad situation better. it makes a bad situation worse. >> in the president's defense, he got 85% of the votes for the delegates throughout the nominating process. now, do you think that we need to blame people that kept him out of the public spotlight, his staff? because, i mean, it's not a total shock to people. an hour and a half doesn't change what we all saw, which was a different president -- a different joe biden than he was three or four years ago, obviously, but it still had not gotten to the point where he didn't garner all the votes in the primary, and he was going to be -- he wanted to run for re-election and the democratic party gave him a clear path to being able to do that, so to just change their mind now because the polls are not in his favor at this point, it just

seems -- that's not the way it's supposed to work. >> joe, it's not the polling data. certainly the polling data will contribute, but people are seeing something they have not seen before. >> okay, and how did that happen? >> i don't know. >> he was kept out of the spotlight, then, by people. >> no, i just -- >> go ahead. >> no, i just haven't seen -- normally debates don't matter, but right from the beginning, and i was watching the debate, and i thought, oh, my god, what is going on here? this is worse than i thought. i am not an enemy of the president, and i have not been watching him but it was a significant change from what he was relatively recently. people were startled by it. i don't know what can be done, frankly, to repair it. if joe biden continues to say, you know, i am going to go to the convention and be the nominee and i am going to fight

and win, that's his choice. >> right. >> so he can do that if he wants to. if he loses the race, in my view, it's because of the stage-related issues. they were denning it was a problem. >> right. >> i am 80. you know, i am -- i am much, much older than you, and i wouldn't say i am in cognitive decline but there's no way in hell i can measure up to the way i was when i was 50 or 60. >> chuck grassley, he's running five miles every morning and he's 87. >> it doesn't matter. >> no, it's not age. it's the way a person -- >> the number of miles you are running don't matter. >> no, but there are people that are 90 that are capable of -- not everybody who is 81 is like president biden. i don't think you are either.

you would have done fine in the debate. >> there are no living human beings who are 80 years old where if they went to sleep and died in their sleep where people would say, that's a surprise. >> that's true. that's true. that can happen anytime, too. >> yeah, and it can happen anytime. that's right. >> the democrats kind of did compound problems, maybe, and you can go to the "wall street journal" -- this is not me talking and go to the op-ed and saying it was identity politics and they wanted to pick a woman, a, and a woman of color, even better, and maybe she was not the most qualified individual to become vice president. that's already done and ancient history, but it does compound the problem with what democrats can do here because wouldn't it be hard to pass vice president harris over if the president were to decide to step aside?

>> she's in the line of succession, and if he dies, she becomes president. i don't believe the rules are in place to say if he decides to get out of the race that the presidential nominee becomes the vice presidential nominee. >> i will buy popcorn to watch that. >> and, of course, nonalcoholic beer. we're a new party now. >> buttered popcorn and nonalcoholic beer. you know your party. you are from nebraska and that doesn't completely separate you from the coastal democrats. >> well, what democrats, i think, nationwide would object to, and let's say biden decides -- it's up to him and not up to me, and he gets to decide, and if he changes that decision and says i want kamala to be the presidential cnominee

and works it to where no other candidate has a chance, i don't think that will fair well in the general election. it's a practical problem, and certainly -- let's say you have five candidates presented at the convention trying to get a majority of delegates, and it's exciting and these are young people, including her, but she's got to be one of several in my view, otherwise -- it's my view, now, and otherwise i think it makes it difficult to say it was not cooked, corrupt. >> melissa doesn't like to get involved in these types of conversations. do you own nvidia? anything you can ask him about? >> i am curious about the donors, and a lot of them are revolting and saying they don't want to support biden and are shifting funds away from the presidential campaign to the down ballot, and do you think

that will impact ultimately his chances? >> well, i think it certainly owe -- if you are running for the house, and biden is at the top of the ticket, it puts neglect pressure on the down ballot candidates independent of itself, and independent of how much money is available. >> ever had a nonalcoholic beer, senator? they are not bad. >> have i? no, they are not bad. i will buy the one you were trying out. >> it was good. i liked it. i never thought i would do that, but, you know, there are times when you don't really feel like -- >> is the can better looking than it appears on television? >> yeah, it was okay. here it is. this is the ipa.

do you want a better design for -- >> i can't tell from the television. you tell me. >> i don't have a problem -- yeah, maybe they could get a graphic artist to do a little better. it says the athletic, and i am not but i like to think of myself as one, but i am not. >> why you drink. >> senator, good to see you. >> good to see you. >> you were just in a debate, and you would do fine. >> thank you. coming up, a looking at the futures. we are looking at a higher open across the board. we'll be right back.

dave's company just scored the comcast business 5-year price lock guarantee. high five! high five... -i'm on a call. it's 5 years of reliable, gig speed internet... five years of advanced security... five years of a great rate that won't change. yep, dave's feeling it. yes. but it's only for a limited time. five years? -five years. introducing the comcast business 5-year price lock guarantee. powering 5 years of savings.

powering possibilities. coming up, nvidia leading the way when it comes to the growth of ai. the stock is over 200% over a 52-week period. we'll find out if the other players in the space can ride the ai wave. and kyle bass will join us on what investors need to watch when the nato summit kicks off today. "squawk box" will be right back.

nvidia up by about 1.5% pre-market. two firms raising their price targets yesterday and demand for the blackwell ai chip. joining us now is another

analyst who's also bestablish o the stock, vivek armya. great to have you with us. >> good morning. >> i was reading your flnote fr just a couple of weeks ago or last week, it could be. it says nvidia is relatively underowned, which i thought was really surprising. the assumption is that the mag-7, particularly nvidia, the probably the most owned trade on wall street. what have you found. . >> sure, thanks, melissa. the most important thing is we have found that we went through phase 1 of a large language model deployment. now we'll start phase ii. that's when we'll see a lot more optimized morals getting alarm in scope, to increase their accuracy, but also getting a lot smaller and optimized, and that requires a very flexible set of hardware, software, silicon, and that is the ecosystem nvidia has pioneered and created. and that's just at the start of

their gen-2 product, blackwell, which will start to kick-start this phase ii of ai. that's really important to realize that even though the numbers have gotten really big, they're still at the start of this deployment phase. when it comes to ownership, what our strategy team has found out, if you take a snapshot of active long-only fund managers across the u.s., that yes, a lot of them own nvidia, but the way they own nvidia stock relative to the s&p 500 is essentially just market weight, right? so even though it is one of the fastest growing stocks in our coverage and across technology, it's not actually among the largest holdings in a number of active weight manage funds. we do think a scope for both a better earnings upside and of course a lot more weighting in investor portfolios. >> how do you see nvidia trading for the remainder of the year, in that -- in the first half of the year, it was all about this massive capex spending raise by

the hyperscalers. that was a huge boost to the ai trade and nvidia in particular, and then you had jason wang raising on the old chip, but at last going to be plenty of pl pl blackwell revenue for the last of year, so they seem to be raising their own bar. what else do you want to hear to keep this story going? >> the largest customer is the u.s. cloud customer. they have just gotten started. and if you would double click on that, the most useful models that are out there, one has been developed by a start-up, openai, and the other has been developed by a company, meta, which is not even a cloud service provider. so that's why i think it's interesting when someone tries to decide the peak of this cycle, when some of the largest

companies don't even have a large language model that is rolled out and is being adopted in full scale. that's point number one. i think point number two is that the demand of it started from the cloud providers, i think it would slowly start to expand into enterprises, a number of enterprises across a number of verticals, whether it's health care, financial services, transportation, retail, they also want to extract insight from all the data that they have, and a lot of timeshey wan do it on premise. and all of the demand, each of one that wants to have its own set of large language models, that are optimized for their own language, their own culture. because of the diversity of demand, is why we think the diversity of needs across i nvidia, and now it's blackwell. that's the key. the demand is a lot more diverse, and that is why you need the diversity on the product stack to address it. >> vivek, thanks. appreciate it.

vivek aria. it is just before 8:00 a.m. usually it's just after, so it's 7:59. >> when they tell me to wrap, i wrap. >> you do. you do. i don't. >> we're on the east coast, you're watching "squawk box" on cnbc. i'm joe kernan along with melissa lee. becky and andrew are off today. among today's top stories, power coming back for a portion of the millions of homes and businesses that went dark when beryl, hurricane beryl, hit houston yesterday. the storm is being blamed for several deaths in texas and louisiana. shares of oil giant bp sliding. the firm expects to post an impairment charge of up to $2 billion in the second quarter, also warning lower refining margins will weigh on its results. and bill ackman launching a road show for the ipo of his hedge fund, persian share. the prices will expect to be in

the range of $50 a share. he'll apply to list on the new york stock exchange under the ticker symbol, psus. the futures right now are once again indicated to open higher, at least at the beginning after more new highs yesterday and the s&p and the nasdaq. treasuries have been under control. ten-year, 421. actually, 430 right now. let's get to dom chu with a look at this morning's pre-mark movers. what's going on, dom? >> joe, melissa, we'll start in health care. eli lilly and knovo nordisk specifically, those shares are moving in opposite directions. lilly is up fractionally, novo is down 1.5%. this is driven in large part by an analyst that was published in the internal medicine journal that shows that eli lilly's glp-1 obesity drugs led to faster and more significant weight loss from competing drugs from novo nordisk. those trials were based on

health records and pharmacy dispensing data as opposed to clinical trials, pitting those drugs head-to-head against each other. we'll keep an eye on eli lilly and novo nordic shares. moving on to the earnings front. shares of helen of troy are tanking, shedding about a quarter of their market value on 60,000 shares of trading volume. this is the consumer trading company behind big brands like oxo, vicks vapor rub, braun. they also fell short of expectations. they cited things like increased macro uncertainty, and a more promotional environment. helen of troy down 25%. and we'll end with a look at those computer chip stocks, dow component intel up over 2.5% right now, 1.7 million shares of volume after that big gain yesterday tied to more bullish commentary out of mel just research about the potential for

second-half stock gains in intel tied to ai chips. shares of intel had been stuck in this narrow range. they've kind of broken out, as you can see, going back to the highest level since april 25th. keep an eye on intel shares. at up with point, we did see a 40% drop on a kind of year-to-date basis to the low so far this year. we'll see if that trend reverses again with the trends in intel, guys. back over to you, melissa. >> by the way, dom, for the novo trade, apparently an analyst over in european union put a sell rating on novo nordic, which is very interesting given the stoexck's run. >> there's all kinds of things that play right now. but at least the report out of jama is getting some scrutiny right now, given whether or not there was an apples-to-apples comparison over some of those drugs. >> dorm, thanks. joining us is jason trennert,

chairman of strategas. >> thanks for having me. >> what do you make of what's going on? it's a key week for president biden in terms of whether or not he stays in the race. there's a key meeting amongst democrats today. the nato summit is all week, and he's going to be on showcased with the opening remarks and a press conference on thursday. does this matter for the markets, or is this just political theater? >> i think it's a little bit more political theater at this point. i think if you look at the betting markets, it seems clear that people who are betting seem to be pretty confident that donald trump will likely be the next president, personally, i think it's way too early. four months is an eternity in politics. certainly, with what's happened since the debate, i think, clearly, popular opinion has certainly moved that way. so market's a discounting mechanism. i think it's largely in there, but i think people also understand that there's a long way to go. it seems unlikely, in my opinion that president biden will be the

nominee in november, so i'm not sure anyone is really planting their feet and they're waiting to see how this works out, which i think is wise. >> betting markets, if you're going to cite the betting markets, you might as well set them for biden. he's at 65% to be the nominee, versus 20. why do you think he's not going to be nominee? >> i think -- i just see what i see with my own eyes. and i'm not sure he's going to make it. and i think when push comes to shove -- >> if i can continue, it doesn't. >> that's carville's exactly -- >> herb stein. >> if he doesn't decide to go, you can't tell him he has to. unless you're -- i think he said god could tell him that. >> the lord almighty could tell him that, which, he -- he all tells us something, but doesn't seem likely that he's going to tell president biden to get out anytime soon. but, listen, i think there are just realities of running for president, that kind of physical and mental and emotional strain would be tough on anyone of any

age. it's certainly tough on someone that is older and let's say not in the greatest of shape, i don't want to offend anyone, but i think we can all see what's happening. >> that's the backdrop to what would be an interesting few months in the markets, especially with the s&p now sitting at a record high today. we're entering earnings season. we've got jerome powell on the hill this week, a lot of stuff happening. how do you think we're setting up? i mean, are we in for the correction of 10% that mike wilson? it feels like there are a lot of nervous bulls. you have to acknowledge what the market is doing, the momentum it has, and yet, you don't really want to jump on the train, to stay on the train. there's part of you that just looks at valuations and says, we're at peak valuation right now. >> melissa, you're so right. and it's something we struggle with every day. ec evaluation is a terrible timing tool for people with short

times, if you're buffet, you're not so worried about the timing. but if you're a professional investor it's hard not to be involved in this relatively small groups of stocks that are powering the market. i would be much -- i'm largely coming down to, it's obviously earnings in the next couple of weeks. it seems unlikely, i think we would have got more indications, if the ai trade was going to weakening, i have a feeling we would have more clues of that. and the ten-year treasury yield, i'm paying a lot of attention to. we found once the ten-year treasury yields hit 450, that's when the market has time digesting the current valuations, but anything lower than 450, we're at 430 this morning, it seems unlikely there'll be much to upset the apple cart. also going back to the election, there's an enormous a lot of liquidity being pumped into the market, but certainly from a fiscal point of view, there are new tools like the employee retention tax credit, the student loan forgiveness, freddy mac securityizing second home

loans, all of those things are being brought to bear to keep the economy out of recession. and so in some ways, you're fighting the federal government, you're fighting the political cycle, you're also, i think it's likely that the fed is going to ease. i still think september is a live meeting. there's a lot to fight here, even though i would completely acknowledge the fact that i'm a little nervous because so much of the chips seem to be in a relatively small group of stocks. >> jason, great to see you. >> thank you. >> thank you for having me. appreciate it. >> coming up, ahead of an important nato summit that kicks off the day in washington. we'll be joined by hedge fund manager and china hawk, kyle bass. china likely to loom large over the gathering of world leaders. and later this hour, south carolina senator tim scott is going to join us with his thoughts on the state of the presidential race between joe biden and donald trump. stay tuned. you're watching "squawk box" on cnbc.

(man 1) can you hear me now? can you hear me now? can you hear me now? (dj) can you hear me now? (runner) stay with me now! (teens) oooo! (woman 1) mírame ahora! (woman 2) get em now! (roger goodell) we're ready now! (woman 3) have fun! (fan) ooo, pinch me now! (woman 4) save me now! (toddler) let's go now! (woman 5) check me now! (toddler) catch me now! (gamer 1) cmon! (gamer 2) play me now!

(toddler) okay, bye now! ♪ i'm gonna hold you forever... ♪ ♪ i'll be there... ♪ ♪ you don't... ♪ ♪ you don't have to worry... ♪

welcome back to "squawk box." the futures right now indicating

a higher open. the s&p looking to be up by about 12 points, nasdaq up by 68, and dow up by 27. >> all right. when nato leaders began a summit today, this time in washington, they'll do so with a backdrop of china's growing influence across the board. cyber threats, support for russia, joining us now on all of this is kyle bass, heiman capital management founder and chief investment officer. interesting piece, kyle. it's good to see you. interesting piece in the journal. it's an op-ed, actually, that nato -- nato's been doing a little bit better. back in 2014, there were only a couple of countries that were spending 2% of their economy on defense. we're now up to 23. 23 out of 32, but it's still only 2%, and in this world, a lot of people say it should be at least 3. where i'm going with this is that stoltenberg, the gentlemen now who is nato secretary

general, says that the real problem with what's happening isn't even -- it's russia, but it's really china. the chief enabler of russia is china at this point. anybody that nato is facing, china is front and center. >> i think -- i think what's lost on, i think, many of the members of the general public is what's been going on in the south china sea, especially near the philippines. where the philippine general, the lead general, drew a line in the sand two or three days ago, where he said if the china boats attack his re-supply missions to his outward posts near the philippines, that they will respond proportionately. meaning that you're going to see a potential kinetic conflict here, soon. china has already deployed the sh shangdong, one of its new aircraft carriers down to the philippines in the southern part of the south china sea. remember, joe, that's 700 miles away from china, and it's right off the philippines' coast. and china lost a contested court

case in the international court in the hague, the international maritime court, saying that china has no claim to those island right off the coast of the philippines. so when you talk about nato, joe, and what percentage of gdp we're spending on defense, you know, look, the u.s. is spending 2.9% of gdp on defense. during the cold war, we spent anywhere between 4 and 6. at the back end of world war ii, we spent 47% of our gdp on defense, 1945. one could argue, with a ground war in europe, with the iran and proxy war against israel and maybe anyone that's, let's just say, not shiite islam, muslim, i think one could argue that we should be spending a hell of a lot more on defense roight now and nato is catching up. the u.s.will be spending more on defense. and we sit at the hinge of history today, and we better

catch up. >> yeah, and it's an interesting piece. i guess stoltenberg talked about $40 billion a year baseline for ukraine, and it's being sort of characterized as an insurance baseline level against the trump presidency, because i guess nato still thinks that trump wants to, i don't know. even president biden says, you know, look what i've done for nato. look at what this other guy has done. jerome points out that there are many european leaders who think that trump is more dangerous than putin, because he required a lot of these countries to actually pony up and get somewhere near 2%. and even 3% would be better. >> yeah, you know, to say that trump is -- has any kind of comparison to putin is just crazy. i think that weather trump's tactics are seen as good or bad, he does have tactics. and you pointed out, joe, that a

number of the nato members are now spending more than 2% on defense. well, with you know, putin is knocking on their door and, as we saw last night, russia took out the largest children's hop in ukraine. i differ from some people, i think, on the far right, where i think the ukraine conflict is an existential crisis. it is democracy versus authoritarianism. we have to win that fight. and if you've noticed, the biden administration began saying, we'll never send medium and long-term missiles, and now we're sending medium and long-term missiles. it's really hard to do the right things early, because the right thing is the hard button. this administration hasn't pressed the hard button, we only pressed the easy button. we didn't sanction putin, didn't touch his energy business, we didn't touch anything as far as the blood growing to the tumor of vladimir putin. we let the blood keep flowing. and we're doing so again in placating and appeasing china and appeasing authoritarians or dictators has never worked and

we'll realize soon that it isn't going to work. i think nato sees what's coming, and i'm pretty sure that the supreme allied commander of europe is certain that this war is going to intensify. >> the point you made last time, it's still kind of interesting -- i don't know whether i was here, but i don't remember what you said, real wages, just talking, bringing it back home for a second in the election and everything else, a lot of people scratch their heads why people don't feel better about things. you say inflation, the way it's reported doesn't really give you a clear look at how much real wages are actually down. >> that's right. >> how much do you think real wages are down since biden took office? and that would account for you know, why people don't feel flush in what seems like a good economy. >> yeah. that is a great point. you know, when you hear the talking points of the administration, they like to talk about the economy and the economy kind of writ large and

that the numbers look fine. the problem is, if you looked at the government's own index, the fhfa housing index is up 50% in three and a half years. so let's just say the cost of dwelling, the cost of rent, the cost of purchasing a house, has moved 50%. what do you think wages have moved in this time frame? i think real wages are down 20, 25%, if not more, during this period, because the way that the bureau of labor statistics, and the way the fed reports inflation is they use owner's equivalent rent. they do this crazy survey. they call a thousand homeowners and say, if you were to maybe rent your house, how much would you rent it for? it's actually out of touch with reality, joe. and it is designed to report a much lower number. everyone that watches tv, everyone that spends $1, spends a real $1. they don't spend a chain-weighted, inflation-adjusted dollar. i wish i could. i wish i could go spend one of those dollars.

but the reason the electorates around the world are voting out the parties that presided over 40, 50% real inflation, are because that is killing them. it kills the poor. it really hurts the lower middle class and middle class. it takes mobility away from them. and the rich end up with all the money. and so these elections around the world, whether you're looking at france, at the uk, or the u.s., i believe they're about two things. they're about runaway migration, and inflation. and that's that. and the incumbents will be voted out. >> it's a little weird, because you don't -- you point out, we created 40% more money during the pandemic, but there's the key word, the pandemic was -- the incumbents that are being voted out, weren't they just responding to something out of their control, the pandemic? there's inflation everywhere. >> joe, we created -- we added 40% more broad money to our system in 18 months. when you look at the way the

world works, the world is priced in dollars. whether or not transactions are settling in dollars, everything is priced in dollars. so we, as a country, the 18 unelected people that run the fed and the person that runs the treasury, created 40% more money, because that was the response that they deemed necessary to kind of save our economy from collapsing during covid. we didn't know what was going to happen when that disease moved over the rest of the world from wuhan, china. we just didn't know. they didn't know. but if you remember, we had spending bill after spending will after spending bill. thank god joe manchin was alive. we would another 2.5 to $2 trillion of gasoline thrown on this fire. they went incredibly overboard on the way up and now they're not going to be able to take that much out on the way down before they'll have to stop contracting the balance sheet and start expanding it again. so we exported like 50% inflation to the rest of the world, and we broke many of the

countries that were already moving along the bottom in the emerging markets, we broke them. so the financial architecture of the emerging world hasn't looked this bad, call it, since the end of world war ii. that's why we won't have some rapprochement to these conflicts. >> in this country, if you think the incumbent is going to be voted out, who is that incumbent that will be voted out in november? >> i mean -- i mean, my -- my guess is it's going to be kamala. you know, if you look at the supporters in the democratic party, the editorial board in "the new york times," david axelrod, the big donors. they've all -- biden can't survive this in my opinion. who knows? i'm a wall street guy, but i think biden's out and i think from what i'm seeing in the betting markets, itlooks like kamala is their lead horse. >> not today, though.

it's 61/20 biden over the vice president. i think they're thinly traded, they move so fast. they moved the other day based on that letter and based on the "morning joe" interview, they totally flipped. it's something to watch, something to behold. thanks, kyle bass. >> thank you. >> okay. see you later. coming up, fed chair jay powell set to testify before the senate banking committee this morning. ahead of that hearing, we'll speak with the ranking member, tim scott of carolina. but first, bank of america, from a neutral to a net weight, and then go higher, it sees less chance that the b of a stock will underperform. that stock is up in the pre-maety strk bju under a percent. stay tuned. you're watching "squawk box" on cnbc. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills,

you can stay on top of the market from wherever you are. e*trade from morgan stanley power e*trade's easy to-use tools make complex trading less complicated. custom scans can help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley

hackers getting rich off of cryptocurrency this year. a report from blockchain research firm trm labs says that hackers stole close to $1.4 billion in digital coins between january and the end of last month, and that's more than twice the amount taken in the same period a year ago, although crypto prices have also been higher this year, so makes the number higher. large hacks account for most of the ill-gotten gains. the biggest height this year took place when thieves stole more than $300 million worth of bitcoin from japanese crypto exchange, dmm, bitcoin. the country's biggest lenders could be in line for good news. the fed is weighing changing how it calculates an extra layer of capital it requires from the most important banks in the country to adjust for economic growth. that could save america's eight largest banks billions of dollars in capital.

the reuters notes no final decisions have been made. banks have sought for years to reduce the so-called capital surcharge. and coming up, recent housing stats would have many conclude that we're in a housing glut, but if that's the case, why are prices so stubbornly high? after a break, diana olick will let us know what to expect from the hougsing market in the secod half of this year. and south carolina senator tim scott joins us ahead of a meeting, which will feature fed chair jay powell. and as a reminder, as we head to break, you can always watch or listen to us using the cc nbapp. stay tuned. "squawk box" is coming right back. old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

are you keeping as much of your investment gains as possible? high taxes can erode returns quickly. at creative planning, your portfolio is managed in a tax-efficient manner. it's what you keep that really matters. book your free meeting today at creativeplanning.com. (reporters) over here. kev! kev! (reporter 1)hat you keep any response to the trade rumors, we keep hearing about? (kev) we talkin' about moving? not the trade, not the trade, we talking about movin'. no thank you. (reporter 2) you could use opendoor. sell your house directly to them, it's easy. (kev) ... i guess we're movin'. - [narrator] we just signed the lease on our third shop. my assistant went to customink.com

to get new uniforms with all the locations. he found great products, uploaded new art, and had boxes sent to all the shops. custom ink makes it so easy. get started today at customink.com.

some housing industry watchers have been thinking that home prices will ease in the second half of the year, but so far, that hasn't been the case, even as the supply of homes on the market finally increases. dinah olick joins us to explain why. diana, good morning. >> well, good morning, joe. yeah, we're in a housing market now, unlike any other. and that's due to economic forces unlike any other.

the foreclosure crisis, the great recession, the pandemic, and the unprecedented quick cut and then quick spike in mortgage rates. so take a look at supply of both newly built and existing homes together for sale. it shot up during the 2005 housing boom and the ensuing foreclosure crisis, which flooded the market with homes. so home building essentially ground to a halt. by 2012, new homes were just 6% of all supply. then, told supply dropped even more in the pandemic, when demand spiked in those first two years. now it's finally climbing back slowly, but, in a weird kind of twist, it's mostly newly built homes. the months-supply of new homes for sale is now almost three times of that of existing homes. months supply is how long it would take to sell that supply at the current sales pace. now, new and old home months supply usually track pretty closely, but not so much now. now, new construction, it's making up 30% of total

inventory. and this, of course, is due to roller coaster mortgage rates, dropping to historic lows at the start of the pandemic and then spiking to 20-year highs just two years later. that makes homeowners who wanted to move up instead stay put, cutting existing supply further, and it makes buyers look for cheaper homes. you can see that in the months' supply of home for may in the price tier. it is lowest in the $100 to $500 price range, because that's where most demand now lives. and that is despite the fact that supply has increased the most in those lower tiers. the homes are just getting eaten up that fast, and that, joe, is why prices just keep going up. >> so, what does that -- who should -- which home builders should we buy, then? we should buy the ones that can make houses between $100 and $500,000. you don't want to buy the luxury or premium house builders, then?

>> well, the home builders who do have that entry-level supply are doing the most in sales right now. we see strength in toll brothers, which is the luxury home builder, but that's only because they're not really reliant on those mortgage-dependent buyers. but home builders like kr home and dr horton who have that express brand, that real entry-level brand, they're still seeing a lot of demand. but we should also note that the home builders don't necessarily have to worry about that nine-month supply we're talking about. people think, oh, my god, are the home builders in a glut of home. that's because just 20% of that supply has been built yet. that's how they measure that supply. it can be houses that have been permitted, houses under construction, or houses that are finished. the home builders have a lot of control over what they finish when and what they even start, depending on that supply situation. but once again, probably that entry-level builder is going to be the best bet. >> if interest rates were to come down, are there a lot of people that want to sell their existing homes if they get the

chance or not? >> i certainly think there's a lot of pent-up seller demand. you know, there are aging baby boomers in big homes who would like to downsize, but they're thinking, why do i want to get rid of my 3% rate and trade up to 7% rate, especially when the market is this pricey, but they're also lured by the fact that, hey, the market's pricey and i can sell my home for a lot. if rates come back into that 6% range, that we saw last fall into the winter, people did start to move. sellers decided to say, okay, i'm going to go range, that 6% range is a little less, shall we s say, unsavory than the 7% range. >> i resemble that mark. aging baby boomer. i might sue you for defamation -- >> we're all aging, joe, even babies are aging. >> i might sue you for definition of character. i might sue you. see you later. for more on the housing sector, let's bring in lawrence

sooun. it's great to have you with us. >> good morning. >> you think housing prices are stabilizing at this point. have we seen the worst in terms of the high prices? >> well, i hope we stabilize, because as we know, the home prices really shot up, like 40%, 50% from pre-market 2019 levels to now, certainly income has not grown as much. and now affordability being hit by larger, higher mortgage rates is not good. it's difficult for the buyers to come in. so what i anticipate is we are seeing more inventory of existing homes beginning to rise. this is implying that despite the fact that many homeowners have that lovely 3%, 4% rate, some are saying, life-changing circumstances, baby boomers who are considering downsizing or people who are in energy considering moving to florida markets, all of this is leading to more inventory.

and a s we get more inventory, home prices will stop accelerating. i think there will be slight growth, but not the strong growth, and we certainly need more stabilizing home prices. >> how are the dynamics in the rental market flinfluencing whas going on in the housing market, are rents still high, and therefore people look to swallow the bitter pill of a 6-plus percent rate, 7% rate and buy? >> the first-time buyers, despite the affordability challenges, in the recent months, have come up, so they were below 30% consistently for the past two years, but in the recent two, three months, it's been a little above 30%. it's a minor gain, but this is saying that first-time buyers are toughening it out. they understand that initially, mortgage payment may look a little heavy, but that is fixed. it doesn't change. while the rents would rise and

rise over time. so many people who are looking to build wealth over time understand the true long-term value of ownership, so first-time buyers, even in a tough market, they're getting in. >> you know, when we talk about higher for longer in the context of the federal reserve, lawrence, we're talking about where the fed is going to stand. how does that translate in terms of your view of mortgage rates and where the new normal will be. >> well, you know, long-term average mortgage rate is around 7%. that's where we are today. certainly compared to the past decade, when it was averaging 4 to 5%, it is higher, but i believe that the federal reserve needs to cut interest rate, and the reasoning is the following. what we are seeing is that apartment construction activity has really begun to come down because of higher financing costs. with lack of supply, it could accelerate future inflation. so in order to ensure that inflation is calm, the housing

component will need more construction, we need more supply. so the high construction planning cost today is restricting some of the developers, and that could actually lead to housing shortage and push up future inflation, in order to prevent that, i think the federal reserve needs to cut interest rate, so that more developers get active, and we have more apartment supply, and that will continue the inflation. >> what is the golden rate in your view? we're talking about to the ceo of compass a couple of weeks back, and we said 5.999, anything under 6% would increase the velocity of transactions in the market. what is that number, in your view? >> i think that the new normal for mortgage rates will be around 6%. so the fed clearly has indicated that they will be cutting interest rate, even with delays. certainly, whatever they're going to do this year, it will get pushed into next year. but the mortgage rate will not go down to 3%, 4%, or even 5%.

i think the new normal will be around 6%. we do have large federal budget deficit, that government borrowing, it means less mortgage lending availability. so consumers should anticipate that 6% should be normal. right now, close to 7%, and again, the first-time buyers recognizing it's for the to get in now rather than to wait later when much larger number of potential buyers will be rushing in at 6%. >> yep, you can always refinance. lawrence, thank you. lawrence yuan. >> thank you. >> coming up, an interview you do not want to miss with south carolina republican senator, tim scott. we'll ask him about a hearing later this morning, featuring fed chair jay powell, the state of the presidential race, and much more. stay tuned. you're watching "squawk box" on cnbc.

welcome back to "squawk box." more gains, at least for the

nasdaq and the s&p indicate, perhaps today, be a long session today, all the way to 4:00. and this will happen, too. fed chair jay powell set to testify in front of the senate banking committee, just a little more than an hour. joining us now to talk about what's on the agenda and also, the presidential race, south carolina republican senator, tim scott. i hope you've had some coffee, senator. ranking member on the banking committee, and his name, obviously you've heard this, has been floated as a potential vp pick for donald trump. there's nothing that you could do that would get him more high-profile attention than being on "squawk box," senator. so this is smart. >> good morning. >> good morning! >> thanks for -- >> thank you very much. >> thanks for joining us again. >> thanks for having me with my -- >> you're welcome! >> this is really important. powerful, powerful, powerful show, i watch as a business guy. so thank you. >> anything we can do.

all you got to do is call. so he's going to come on -- it's kind of interesting, isn't it, that he's going to probably cut rates in september. is that too late to actually help whomever the nominee -- we'll talk about that, whether it's president biden or whoever the nominee is, rates do seem like they're going to come down right before the election? >> there's no doubt that joe biden broke this economy and jay powell is struggling figuring out how to fix the economy. listen. over the last three and a half years is what we've seen is a loss of spendi ing power by the average american around $28,000. rate cuts would be helpful, but doing it in september looks pretty political. i had a conversation with jay powell yesterday and one of the things i left with is that he sees inflation coming down s, s the prospect of rate cuts, i think, are going up. if you do it in september, not july, i think there will be a lot of conversations around the political nature of rate cuts.

more importantly, though, we have to figure out how to keep this any thriving for the first-time home buyers. how do we keep single moms like the one that raised me, being able to afford buying food 30% higher, putting gas in our car 30 to 45% higher. those are the issues i will talk to jay powell about, as we have a hearing in about an hour. >> i was having that conversation just yesterday with my son, actually, the economy, blah blah, and i go, scottie! his name is scott -- senator scott -- scottie, if you have less money every two weeks at the end of your paycheck than your mother and you say, no, i'm sorry, we're not getting that this time. if you're waiting for a paycheck and you have less every couple of weeks than you have pbefore. it's just that simple. there's no way to dress that up. there's not enough lipstick to put on that to help people. >> 100%.

listen, we went 52 paychecks in a row where inflation outpaced wage growth. recovering from that is a long-term prospect. the challenge, of course, is baked into our economy today, is significantly higher prices for everything -- everyday americans have to afford. whether it's housing, buying a house, renting a house, groceries, making decisions in line about what can you keep in your basket, or gas, energy for your homes. those prices are fixed into and significantly higher than they were just four years ago. >> but not all of the blame goes to, obviously, the biden administration. it's a global issue following the pandemic. some of the energy things, i will grant you that, that -- that -- some of those -- those executives would help. >> i would encourage us to look back at the first decision that joe biden made, was to pass a $1.9 trillion spending package, call it a covid relief package,

but 1.7 trillion went to fueling the type of economy and inflation that we have today, which led to a 9% inflation, i think it was june or july of 2021. we haven't recovered from that, because joe biden doesn't have a clue on how to fix this economy. he thinks that government is the answer. we know that the free markets and capitalism is the answer to creating jobs, not the government. >> you pressed chairman powell, getting in the weeds here, on basel 3 and the end game proposal. are you getting anywhere with him? >> yeah, i think we have a significant progress over the last several months on basel 3 end game. the bottom line is this, parking more capital on the sidelines makes it even more difficult in a challenginge ing environment have your first-time home buyers have access to capital, for small businesses to start their businesses. so having that conversation about a reproposal, i'm encouraged by the signs that we're seeing, that there's a strong possibility that we're

gong to see a reproposal put back to the market, having an open period of comment once again. i hope they take their time and get this right. this is a significant impact on the health of our economy, and if jay powell and the other powers that be are wise, they will take the time to hear from the public, the stakeholder, and we calibrate even that approach in this final proposal that goes through the apa. >> senator scott, i appreciate the awareness of what the average american is going through in terms of dealing with inflation and having to make really hard choices, but there are certain things that are sort of built into the economy at this point and are being proposed that are inflationary in and of itself. near shoring is increasing costs of good or will increase costs of goods. and the tariffs that president trump is proposing, 60% on chinese imports, 10% on all u.s. imports. while these are proposals that may never actually come to

fruition, that's the direction that president trump would like to go in. those tariffs would be inflationary as well. how do you reconcile wanting to reduce inflation, ease the burden on average americans, but also being in the party that is proposing all of these tariffs which would add cost to consumers. >> well, let's not forget the fact that while president trump did a very good job of pushing back on china, what president biden has done is kept those same tariffs in place. so the question and conversation around tariffs is one that bleeds into this administration. the real question we should ask is can we have a fair process of trade while being a free trade nation? i think the answer is "yes." how do you do that? you do that by pushing back on those bad actors around the globe that continue to use, manipulate, whether it's a currency, whether it's taling our ip. we need to make sure that we have in place the kind of headwinds that makes it more difficult for countries like china to lie, cheat, and steal.

i think that is what president trump has done. and frankly, it's one of the reasons why president biden has not eliminated tariffs. >> senator, we alluded to -- i don't know, actually, i was talking to kyle bass about it. he said, the incumbents have been getting the uk, france, et cetera and it could happen here. i said which incumbent are we talking about getting voted out here. do you know which incumbent you're trying to get voted out in the united states, who that incumbent is? >> we know the democrats are in a hot mess, as we say in south carolina. there's no doubt. it doesn't matter what they call the person, joe biden or kamala harris, the bottom line it's the incompetence of this administration, not joe biden's mental acuity. >> do you have a preference. >> i don't. they have to solve the multimillion dollar plus problem

by replacing joe biden. i think the day of reckoning is coming on november 5th. i don't care whether it's joe biden orr kamala harris. they both have been the same powers that be that's led up to a wide-open southern border, leading to 10 million illegal immigrants coming to our country, the highest inflation since the jimmy carter here. crime in the poor, inner city neighborhoods has never been worse, at least in my lifetime. >> one of the things as president is people talking about yesterday was since the debate, the president has been all over the place. he said where the heck has donald trump been? i think i have a pretty good idea that may be laying in the weeds after that was the right move. >> that's what i would do. that's what i would do. when their house is on fire, let them figure it out. right now their house is on fire. >> i don't know whether to ask you about the veep position.

we'll know soon enough. >> i think you're right. >> at the beginning of the convention you think or when do you expect to hear? >> i think it would be an honor to serve as vice president of the united states for anyone that gets that opportunity. bottom line is, i think we'll know something in the next ten days. more importantly, it's not who he chooses, it's what's the focus of his administration will be. it has to be looking back at the years where inflation was 1.4% or 1.5% as opposed to the 9% we've seen after joe biden. we have to go back to the glory days when illegal immigrants was 1,000 per day versus 10,000 during december 2023. when we look at the glory days, we know the person who will be leading the ticket is donald j. trump, and the best we can offer to the american people is getting the same economy we had in 2017 back in 2025.

>> i don't know. on "squawk box," the capitol, have you seen the shot behind you? >> i can't see the shot, no. >> it's a nice shot. i just saw scott leapfrogging over some of those -- could you feel that, him leapfrogging over some -- >> no comment. >> no comment. i didn't really see it, senator. i was imagining it. will you call us if you find out before everybody else or something? >> you'll be on my top five, joe. >> i think that was sarcastic. >> facetious. >> senator, thanks once again. good to have you on. >> have a great day. take care. >> coming up, news just breaking on big pharmacy benefit players. ay tedstun for that. "squawk box" will be right back. (vo) a successful business owner sells his company and takes on a passion project with his son - restoring his father's jazz club, and in the process, revitalizes a community landmark.

from selling a business to giving back to where you come from, a raymond james financial advisor gets to know you, your family and the way you bring people together. that's life well planned.

the ftc issuing an interim report in its two-year probe into the big pharmacy benefit middlemen with some damning conclusions. we were right all along. bertha coombs joins us now. >> the report arguing pharmacy

benefit managers have gotten too big and points to the ways these midd middlemen inflate prices. it outlines how the big three pbms have amped up their sales growth by designating more and more drugs as specialty pharmaceuticals which they then make patients buy at their prefshd pharmacies. one example the report highlights, the plies of the generic price of a cancer drug. pbm preferred pharmacies were reimbursed $2,700 for the drugs, the net cost is $66. a pbm rep admitted to a consultant that they actually designed their plan to, quote, aggressively steer customers to home delivery with the generic cost is 200 times higher, over

19,000 where none preferred outlets like costco which customers may not know to go to charge $97. chair lina kahn sums it up by saying how dominant pharmacy managers can hike the cost of drugs and squeeze independent pharmacies. one thing to know is while the 67-page report makes the case for greater scrutiny and regulation, it stops short of outlining a remedy. >> kind of scomber resting. it's always like that. that's pretty definitive. maybe everybody is to blame, right? >> there's a lot. pharmacy benefit managers will argue. cvs showed some of their admission saying independent pharmacies charge more. the big change, discounts of 12.5% in florida, for example.

there's a lot of puts and takes on this. >> bertha, thanks. let's check in with dom chu with a look at the premarket movers. >> a couple of mag seven calls getting attention. apple shares steady in the pre markets. 5% up against target price. it goes to 225 from 190 in a bit of a catchup move. shares are already north of that point right now. also, individual higher by roughly 1.5% after a big gain yesterday. analysts interrupting their target price on the world's most valuable computer chip company from 180 from 130. uk-based oil and gas giant bp, the stock is now down 4.5%, over 200,000 shares of volume. it warned it could have an asset impairment charge of roughly $2 billion in the current quarter

and its oil trading performance could take a hit as well. joe and melissa, big movers. i'll send things back over to you. >> we'll get a final check now on the futures. they've been up for most of the session. in fact, the dow is slightly positive again. nasdaq morning highs, same with the s&p. what's today? i'll see you tomorrow. make sure you join us. "squawk on the street" is next. futures pretty steady and the s&p comes off the 35th record close of the year, takes aim at a 36th. busy day on the hill with both powell and yellen in testimony. powell's last appearance before lawmakers ahead of the election. roadmap begins with the s&p 500's longest winning streak. >> tesla's nine-day win streak, the shares hav