won't quit the 2024 race. we'll bring you the latest from washington. plus, vc firm and horwitz has reportedly stockpiled nvidia ai chips in an effort to win deals for ai startups. that's a good idea. it's wednesday, july 10th, 2024. "squawk box" begins right now. ♪ good morning and welcome to "squawk box" here on cbc. we're live at the nasdaq market site in times square. i'm melissa lee along with joe kernen. becky and andrew are off today. the dow pulled back by 53 points. that comes after fed chair jay powell warjed about the dangers of keeping interest rates high for too long. u.s. equity futures at this hour, looks like we're going to

extend our gains. the s&p 500 had six consecutive wins yesterday. this could be the seventh as we open up by 10 points. the nasdaq looking up by 15 and the dow by 13. treasury yields, we're watching the 2-year. 4.2 is the level there. >> i don't think those are -- i don't think they're fresh. they're stale. they're stale. they happen every day. >> to be fair -- >> they happen every day. >> well, yesterday's record was stale as opposed to a record today. >> no, no, no. but it's redundant to say fresh all-time new high. >> if it hits a record, it's a record. >> it's a new high. it's not fresh, it's not stale, it's not record, it's not all-time. it's a new high. it's a new high. >> it could be a 52-week high. >> you can say new all-time but you don't have to characterize it as fresh. >> fresh, new. >> fresh would -- >> i understand your pet peeve. >> i have a lot of those.

like single best idea. that kills me. >> why? >> because you can only have one best idea. it doesn't have to be single. stroke in white. brevity. >> not everybody can be -- not everybody can be as good as you, joe. >> no, you're good. you're very brief. 40%. i did the math. 39% is what apple has done since april. it's $3.5 trillion. so, you know, it's not your average company that goes up 40% in two months. your average company goes up 40% in two months. maybe if you're lucky, it might be a billion dollars. this -- we're talking about 40% on $3.5 trillion. that's like going up almost the amount of most of the s&p 100 in one stock for market cap. >> for the year. for the year. >> yeah. >> it's playing catch-up. >> really?

>> relative -- yeah, to some of the other quote, unquote -- >> you see what i'm talking about in april right there. >> yeah. >> 165. 165. and that was at the height of, oh, apple is behind on ai. oh, it looks like they're going to have to sort of contract out their ai efforts. >> and they did. >> they had more, i think. maybe that's the way to do it. we're watching the shares today. this is after research firm i d.c. said global pc shipments rose by 3% in the second quarter. apple saw the biggest growth jumping 21% year over year. the next was acer with a 14% growth. apple shares are up more than 18% in the last month, reaching fresh new altl-time record high where it has never cbeen before

>> uncharted territories. >> apple topping. if it was 40% on 165 and now $3.5 trillion, it was -- what do you think, about maybe $2.5 trillion there. so it's added a trillion dollars. >> around. >> not many -- >> companies, right. >> there's only a few. it added that much. tim cook is pretty good. pretty good. pretty, pretty good. do you watch "curb your enthusiasm?" >> of course, i do. i did. >> pretty, pretty good. andreessen horwitz has bought and stashed thousands of gpus. do you like -- >> i like the 200. >> i like the blue ones, the blackwells. >> i like the purple ones. what are you talking about? >> nothing.

they're different colors. i'm saying that when we say the 100 -- everyone out there says -- i have no idea an a 100 to a a 200. >> if you follow nvidia like our audience does. >> why do the experts call it nvidia? that's why they're doing it. the company has rentzed out gpus to many of its portfolio companies. in june of last year, friedman announced that he and cc investor daniel gross bought 2,500 gpus to set up an ai cloud service that they made available to the startups they were backing. kind of interesting to, you know, attract that. >> you've we've got this. you need this. come on other. musk says xai has ended talks with oracle over expanding

a deal to rent nvidia chips. he said the company's building a super computer with 100,000 nvidia gpus and was contracting 24,000 chips from oracle. amazon web services launching its fourth generation grav aton chip. it's not an ai chip but it supports amazon's chips that are ai focused on technology. you should have an engineering -- a little bit of ee background today, i think. don't you think? >> you think so? >> every story is going to be about chips. chips are everywhere. >> your washing machine. >> yes. >> speaking of amazon, jeff

bezos has sold $863 million in amazon stock. this comes after he sold $500 billion in sales of stock. he may sell as many as 50 million shares before early 2025. amazon is up more than 31% year to date. a little change premarket. now to the latest from democratic lawmakers meetings in washington and the 2024 presidential race. emily wilkins joins us now with the very latest. hey, emily. >> hey, melissa. lawmakers are still feeling uneasy with biden continuing at the top of their ticket, but they're also worried what a potential alternative could look like. after discussion yesterday, there is still no consensus and a lot of concerns, a lot of them about their own races. the seventh sitting democrat called on biden to withdraw

yesterday. she said the stakes are too high. we caught up with her in the hallway. listen to what she said. >> listened to my colleagues and thought about the future, emily, my kids, and felt i needed to advocate as strongly as possible for new leadership so we could really prosecute the case against donald trump. >> she says she's listening to her constituents and family. that's why she made the call yesterday. lawmakers are becoming more aware of the impact on more races. we're beginning to see a little bit more polling now. "politico" reports they updated six house and senate races yesterday, and all of them in favor of republicans winning down ballot. that includes some very key senate races in arizona, georgia, and nevadaing moving them from toss-ups to leaning toward a republican victory.

and, really, if any of those flipped to the republican victory, that i will be controlling the senate next year. some members are standing furthermore in their support of president biden. congressman lou correa. >> this is going to be a tough election in november. if people want biden reelected, you'd better roll up your sleeves and work really hard. >> lawmakers have two more days on capitol hill, and while conversations will continue, everyone seems to be in agreement on one thing. it's all going to come down to what biden's going to decide to do. >> and he's decided. he's the guy. he said this in many formats, so when are they going to stop because the damage as you mentioned is being felt already downballot. >> exactly. folks coming out against biden doesn't look good for biden himself, but i think at the same

point in time, lawmakers need to have some of their concerns quelled. they're looking at things like biden's speech at nato yesterday. that seemed to go well. of course, he was using a teleprompter for that one. they're also keeping a close eye on what their internal poll is showing them. their big concern and senator bennet said this last night on c, hey, if biden is going to be at the top of the ticket, there's a chance we could lose the senate, a chance we could lose the house, that the republicans could sweep next year, and i think for a lot of democrats, that's the absolute worse scenario. so i think when they're going to be keeping an eye on this going forward, the important question is if they do call for biden to step down, would another potential number knee guarantee that house victory or senate guarantee for house democrats? >> most of the people, emily, i know they're not thinking of themselves. far be it for them to think of

themselves. they're all at risk areas where president biden wasn't a lock last time either, so it's the old oldest innovation, and that's getting reelected, their own spot in congress, and they're all in -- you know, even the one i think, mikie sherrill is my person, emily. >> she does. she's northern new jersey. she's run some difficult races in the past. she's in a little bit of a safer seat right now. but you're absolutely right. a lot of lawmakers will say, i run a couple of points ahead of the president, and i'm not too worried but the fact of the matter is they'll say i'll vote for the president in one party and down ballot for others, that's been different in from the top of the ticket all the way down and a lot of lawmakers are cognizant of that.

>> a lot of americans are watching. the president was fine yesterday, i thought, at the nato speech, with the use of a teleprompter. >> there's a conference thursday. >> two of them called it a big boy press conference. big boy. can you describe that, emily? is that a washington term, big boy press conference? >> big boy press conference? as reporters, we treat all press conferences as big boy press conferences. it's just that every move president biden makes, every appearance, everyone is watching him very, very closely because there are still concerns. there's the concern that nancy pelosi had. is this one incident or part of a larger pattern? and i think that question is on the minds of at ton of lawmaker right now. again, if you have that concern about biden, how didnconfident e steps down that kamala harris or another can step up and win a

victory come november. >> there are a couple of pieces that say kamala harris can win. she can bring black voters. there's a movement afoot saying maybe she can do much better than people think. i was even watching -- he was yesterday putting the medal of freedom on the long serving head of nato, and i mean i -- just as a person, i was like -- it was talking him a while to put it on. he was working on it. when he got it on, i was like -- i was actually kind of relieved, emily. it's every single thing that he'sing down. i mean, i probably -- it would take me a while. i might finally say -- wif he s what if he said, somebody else come in and do this?

it might all be over. >> you might talk lawmakers. if you're talking people who are 80 years old, a number of lawmakers are 80 and past that number. it's the perception. it's what you show to the public and the confidence level that voters wind up having. again, i feel like i keep coming back to this, but so many of the lawmakers i spoke with yesterday said, look, it is not at that we're 100% behind biden, it is not that we don't have concerns. it's just that it's so uncertain what's going forward. even when you think about kamala harris, who her big supporters are, yeah, her name is being bandied about on capitol hill and folks are definitely talking about her, but it is not like one solid block of support that's really calling on her to come out. at this point you had the congressional spanish caucus being firmly behind biden and you haven't figured out where that harris block is on capitol hill. former speaker nancy pelosi

treading lightly. 84. 84. how can you -- it's hard to point a lot of fingers at that point. but everybody is different. >> sure. everybody ages -- >> everybody's different. i'm ageless in nigh own mind. >> you're a lot of things in your own mind. >> i think i've heard of this guy. fed chair jay powell. we're going to talk about jay powell in the markets. what happened to greenspan? in the next hour, representative patrick mchenry -- when i say ati sound patriotic. what he expects to hear from fed chair jay powell today. "squawk box" will be right back.

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get the fastest connection to paris with xfinity. in the first of two appearances on capitol hill this week, fed chair jay powell warned that holding rates too high for too long could hurt economic growth. let's bring in lauren goodwin, economist and chief market strategist at new york life investment. it's a huge company. it's the biggest mutual, right, but the third biggest insurance company. it's big. are you investing for clients' portfolios, or are you investing in new york life investments to make sure it's good product. >> they're the third manager of the insurance company so we're external money. >> so you're not obsessed with getting a return on fixed income so you can pay out whatever

actuarial tables say. >> that's correct. we do have insurance and pension clients and we spend a lot of time with insurance companies think about long-term interest rates and the fed, but that's their pile of money. >> for example, where you are in terms of asset allocation, mostly stocks? >> no, we're not just looking across stocks and fixed income. it's based on the foundation of the insurance company but public and private assets. >> if i were to probe deeply into your strategy right now, would it be mostly fixed income or equities? >> relative to -- relative to a 60/40 bench mac, we've been taking gains out of equity, high-yield credits is one of our more high yield predictions. >> that's where i was going because jay powell is looking

like he's counting april as the first friendly number. he's got three or four under his belt already, and he's made a tangible shift to the other mandate that the fed has, and that's employment. i don't know why people wouldn't buy more. extend maturities or duration or put more in fixed income. >> i agree with that perspective. one of the things we've been acting in our portfolio is moving from equity but cash into fixed income because this is the top end rate and that's something that wasn't clear to the market, even if it was our view three months ago or in april when chair powell started counting. one of the nuances perhaps is that duration moving way out in the curve, when the yield curve is still inverted isn't our favorite way to take risks. we've been moving into shorter duration, fixed incoming the shorter end of the curve, we've balanced that and the municipal

curve to keep the benchmark closer to neutral. >> so these are individuals that do pay taxes, many. >> well, in the long end of the municipal curve you're typically looking at taxable municipal bonds so things like infrastructure bonds, which is another reason we like it. if you think of the more structural opportunities there are in the marketplace, investments, things like grid improvements, infrastructure projects, that's where you find that exposure. >> does that parallel what you hold on your equity side seeing that the infrastructure is a story in the municipal area and saying that's a story on the equity side as well? >> absolutely. in fact, we're seeing more and more clients. we beg're beginning to do this ourselves. seeing it as a tranche on its own. that includes infrastructure equity.

typically a portfolio wouldn't have it so strong for us. we're seeing in the private equity face and the private places, direct fixed income environment. >> are you surprised that -- how successful it almost seems like the fed is -- when they stay way too long at the party, they get an f, right? we know that. are they getting an a minus for orchestrating the increase and then maybe taking thefoot off? it looks like they're orchestrating a soft landing. >> we've been in a soft landing for nine months. i think they're as surprised as us. >> it's a miracle in spite of the fed screwing everything up. >> it was my view two years ago it was their express policy goal to cause a recession. they were so worried -- frankly, i think that might have been at the time the right idea. they were so worried about 9% inflation that they said, hey,

let's crash this ship while the consumer and the corporate environments are healthy. won't have a financial crisis as a result. let's get inflation lower. i think they're as surprised as anybody that the economy has been as resilient as anybody is, but now they're in an environment where they've sort of landed the ship. it's my perspective a soft landing is just a step in the path of a slowdown, but there's no doubt the last nine months have already been a soft landing. >> you think it's going to work, inflation is coming down. he's right about that. we're not going to be stuck at 3% in the last mile, we're never going to get there, and you don't think we're going to go past neutral on unemployment. you don't think we're going to 6% up employment. >> i actually think we will see a mild recession. the mildest saw an unemployment rate increase of 1.7%. that would get us to 5, 5.1. i think 5.5 is reasonable for this cycle in terms of an investor expectation of how high the unemployment rate could go.

>> i don't know the stockmarket every day. the nasdaq and s&p hit fresh all-new record-highs in my lifetime. how many ways can i say it. no. do you think we're set up for some type of pullback soon? >> what would cause it, right? i think what we've typically seen -- >> unemployment at 5.5%. >> that's exactly right. i don't think we see major concerns for the equity market until jobless claims start dramatically rising and earnings fall. i don't agree with that. i soo e in much of the commentary, economic growth is clearly slowing. expectations aren't. there is a mismatch there. but there could be high valuations and a mismatch in expectations for a couple of quarters. so that unemployment rate that the fed is looking at more and more closely, one of the tactile indicators we can look at is the jobs report that comes out every

thursday. again, not a lot of movement, but that's something we're watching on a selling signal. >> thank you. excellent. >> thanks for having me. >> you're welcome. coming up, we'll talk labor dispute as samsung continues their strike. and taiwan beat its own estimates according to a release by the company. they're expected to schedule second quarter earnings on july 18th. we'll be right back. ♪♪ ♪♪ ♪♪ ♪♪ you were made to find inner peace. we were made to track flight prices to paradise.

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i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire workers at south korean tech giant samsung said they would extend the strike indefinitely.

the labor union is demanding a 3% increase in base wages and improved transparency in pay. they told the media chip disruption has not occurred and it will not occur with the extension of the strike. the union disagreed and said it has been disrupted. 14,000 disneyland workers going to vote in the next ten days whether to authorize a strike. the workers include custodians, ride operators, candy makers, and merchandise clerks. the company's been the talks with the union since april 24th over demands for better wages, attendance park policy and safety. they filed unfair labor practice charges against disney who were disciplined who exercised the right to wear union buttons at work. the two sides have a meeting scheduled for july 22nd. coming up, a warning from

volkswagen overnight about ev demand. that's next. plus a live report from steve sedgwick in washington at the nato summit. as we take a break, we tyke a look at yesterday's s&p 500's winners and losers. >> announcer: executive edge is sponsored by at&t business. next-level moments need the next-level network. 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

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we are watching the shares of volkswagen. overnight the company warned on profits and announced it was considering the closure of an audi plant in brussels because of weak demand for the line of electric vehicles produced there. vw said closing a plant or finding an alternate use for it could result in a hit of up to 2$.8 billion in profit this year. let's turn to steve sedgwick. >> a fascinating morning for so

many reasons. you spent a lot of o time on the show looking at president biden and looking at his performance, embarrassing interviews and debates and, indeed, in his first key speech on the anniversary meeting of nato in washington. it was a 13-minute speech. it was a speech aimed at allies, democrats, donors, foes as well including russia and china who are watching this meeting to see if there's any weaknesses among the transatlantic alliances as well. he was talking about a bipartisan majority of americans knows that nato makes them safe as well, of course, making a political point, of course, because donald trump has made some pretty stark criticisms over many years about the nato situation as well. he also came up with a very tangible piece of support for ukraine in terms of more missile defense systems with a host of allies. let's listen in to that. >> today i'm announcing a historic donation of very

defensive equipment for the united states. united states, germany, romania, italy, will provide ukraine with the equipment for five additional strategic air missile defense systems. >> that was president biden there talking about the extra air defenses which ukraine desperately needs as we saw from the devastating attack on the children's hospital in kyiv on monday as well. very interesting in his speech, though, he talked that when he became president, only nine of the 32 of those nato members were actually meeting their defense targets, which has been a huge criticism of many in the united states and certainly president trump over the years about the lack of spending on europeans defending themselves. in fact, trump made a very, very famous speech. doing know if you remember it back in 2018 where he lambasted stalenberg and the germans for not spending enough money.

spin forward to when biden was ining a rated. nine out of 32 nations were meeting 92% of their target. now it's 23s out of 32 nato members are actually meeting those defense targets as well. so a little bit of support coming for president biden from those allies who were just backing him up in terms of spending levels. but a huge question about nato and its future going forward and its relationship with ukraine. >> thank you. coming up, preparing for the possibility of terrorists if trump becomes president. and a reminder, get the best of squ"squawk box" on your favoe podcast. listen any time. we'll be right back. with every , your game plan never changed. ♪♪ some still call it luck. let them. because you know what it's always been.

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potential changes in tax and trade policy following the

election in november could provide more challenges for retailers. joining us is michael harasser who put out new notes on the potential impact on the changes in tariffs. michael, there are a lot of unknowns, so it's hard to show the possible impact. you can look at corporate taxes and higher tariffs at the minimum, so what have you found in whether who can weather that scenario next? >> let's put a frame of reference around this, melissa. number one, there's about $3 trillion of goods imported into the united states each year that's mostly consumer goods. if there's a 10% tariff that's affixed to the three imports, that's going to translate to $300 billion of additional moneys on a per household basis

quite significant. the retail sectors, there's a large amount overseas on that sight. you're looking at electronics, home furnishings. that would put best buy, williams sonoma in the cross harris of tariffs. on the other hand, the grocery sector does not import a good portion of its goods. those stores that have a significant amount of sale like walmart, target, costco could push back on vendors to better navigate through a tariff situation. but you're right, that this is fraught with risk for the retail sector and something to consider as you're putting money to work in this space. >> you actually drill down in terms of the passenger of cost of goods sold that could be exposed to higher tariffs by stock. so five below, best buy, wayfair, 46% of the cost of goods sold at those three retailers are from china.

what have they learned? what have the ones most exposed learned from the past hikes and tariffs and also the supply chain disruptions we saw during the pandemic? >> the last few years have been quite lesson-built for retailers not only because of the tariffs in the late 2000 teens. what the retail sector has learned is to be flexible. think about shifting around sources of procurement from one country to another. also the retail sector has learned about re-engineering product to make it less expensive, so instead of passing along a price increase, the sector can simply lower the cost without having to change the price, and then finally, when all else fails, pricing is a lever that would need to be used as a way to navigate through that type of scenario.

>> in terms of the impact, though, you're outlining the overall impact on the consumer, does it make you think about how the consumer will be able to spend at other retailers that may not each have goods from china but will have less money to spend because they're paying more for tariffs on goods from china elsewhere? >> yeah, melissa, it's a great point. there are second and third order effects of this type of trade policy, not only because it's going to pressure discretionary spending power for the consumer, but if prices are -- price increases are passed along, that would likely keep inflation elevated, which would also mean that interest rates are going to be higher for your longer. so there are a host of factors, a number of dimensions that need to be explored. the bottom line is that this is going to be a complicated issue in the event that it happens for the retail sector. and we think it's important to consider it now. it is starting to be talked about in the investment debate

on many of these stocks and in some cases being priced in and to an extent that it's being priced in to a great degree, that is, create an opportunity. i would highlight a stock like dollar tree, which sells a good amount of its products that are sourced from overseas, but now trades at a very inexpensive multiple. so to the extent the risk is priced in, that could create an opportunity. >> michael, thank you. michael harasser. coming up, shares of apple, hitting a new fresh all-time unprecedented never-before-seen record-high into totally uncharted territory. d e hcaadanhisteve kovach next anseife n d ytng to that.

apple's market topped $3.5 million. we bring in steve co-avalanche. since mid-april, it's about a trillion dollars more. >> apple is back on top and the shares are heading to an all-time high and for the first time it took the most valuable company spot back from microsoft on monday. and a recent slump in nvidia shares certainly did help, but apple revealed its artificial intelligence product that they'll start rolling out this fall. it was revealed about a month ago, and since then their shares are up 16%, outpacing microsoft and nvidia. the hope is it will spur a super cycle when a new model comes out in the fall, but there are

plenty of reasons to be skeptical of that thesis because apple is only rolling out its product in english, and even then, many features won't be available for months to come, some even next year. on top of that, we don't know whennite goes doing launch in important markets like china do when it is going to launch in important markets like china and europe. piper sandler analyst put out a note yesterday, saying it is still unclear if a.i. will drive the cycle, but apple is preparing to ship new iphone models more so than it did last year. 90 to 100 million units. another bright spot, even though iphone sales have been sluggish this year, services are growing again. fueled by app store coming out of a post pandemic slump. the hope is that future services will see even more growth from a.i. integrations with services like chatgpt. after the top market cap race, it is very close, apple at 3.5 trillion like we said. microsoft, 3.4 trillion and nvidia, just a measly $3.2

trillion. just one swing could just change that ranking. >> we talked about pc growth. we didn't say anything about a.i. for why it is here. is it a.i.? >> that's all they to say. there is pc growth returning and microsoft loves to credit or wants to credit artificial intelligence these a.i. pcs we keep talking about. companies are ready for a refresh. that's the question with apple too, is this really going to be an a.i. driven cycle or is it people just have older phones and they're ready to upgrade or a little bit of both. but, you know, the idea here is could this be something that, oh, i have a 2-year-old phone, i need to get the new phone to get all the -- >> don't need to get the most expensive phone on the market and you don't know what the a.i. product is right now. as a consumer, you don't have a look into what you're buying with the phone. >> 100%. on day one in the fall when this new software launches, we still don't know what -- everything we saw last month from apple, all

those cool wiz bang a.i. features, we don't know what will be ready on day one. some stuff will be pushed well into next year and other countries won't have it for some time. >> i would -- i just got this thing, okay. and i like it when it charges and stays -- 86%. >> it does that. >> the optimizing the battery. >> it optimizes the battery. >> the battery is designed to start -- can they make a better battery? could they? could they? >> that's a -- a thicker battery. >> or do they want me to have to -- >> i would upgrade to the most expensive phone if i had a battery i didn't have to -- >> now it goes down so quickly because it is 86%. i think that's planned obsol obsolescence, is it not? >> apple got dinged for this several years ago for doing exactly what you said. and so since then they had -- >> that's why i get a new phone. >> just buy the battery.

replace the battery for is 100 bucks. >> how hard is that? >> just an hour. go, swap the battery out. >> i heard it was not that easy. >> you're going to start emailing me now and asking me how to set up your phone. >> then i have to look -- then they have to look and they guilt me about my carbon footprint. i mean -- >> i turned that off. there is no way that has any impact. >> i want to check my maximum capacity because i have to read that. oh, my god. all right. >> i'll fix it for you next time. >> and i get -- do you get the -- i like the way it feels. this is starting to -- >> -- house democrats and president biden's campaign plans. we'll talk to politico's jonathan martin next. today's challenge is to play 9 holes without the middle of your bag. how does that sound? that sounds terrible. ♪♪

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right now to the latest from democratic lawmakers meeting in washington in the 2024 presidential race. let's bring in jonathan martin, politico politics bureau chief and senior political columnist. jonathan, do you have a preference? do you like the term hot mess or do you like dumpster fire? can you combine those two? have you got a quick term for how you describe the -- what the democrats are facing right now? >> i'm not sure what the nasdaq short-hand is, but it starts with s and ends with show. >> or storm. i know what the s part is, but, yeah, show or storm.

it is just -- i don't even -- it makes me uncomfortable even watching it. and we were going to show pictures of steny hoyer, 85. so, steny and nancy, you know, talking to one another about someone being too old and whether they're going to oust this guy? >> but here's the thing about that. i think you put your finger on it unintentionally. part of the challenge democrats have had with biden, especially in the house, is they look at steny hoyer and nancy pelosi, who say what you will about them, joe, but they actually aged into the 80s, their 80s and still govern pretty darn effectively, regardless of your view of their politics. and i actually think -- i talked to a house democrat who told me just that. we thought biden was going to be okay because we looked at pelosi and hoyer and they were fine to their early 80s. and i think that did shape this. >> there are do-- warren buffet

there are others, classic charlie monger line when he was 99, he said, i'm not nearly as sharp as i was when i was 96. it is such a great line. but -- >> exactly. >> so then we're back to blaming the people that kept him out of the public eye for the past six -- i thought it was pretty obvious anyway. you think some democrats can say we had no idea it had gotten to this point, they kept him -- >> yes. >> you think they can say that? >> i do. and here's why. if you're a congressional democrat or a democratic governor, your exposure to biden for the most part is ceremonial events, bill signings, a reception, a grip and grin photo line, you're not sitting down with him and actually talking shop extensively for half an hour or an hour. there are a very small number of actual elected democrats to have that kind of exposure on a regular basis. so, yeah, i think a lot of folks who came down to the white

house for the holiday party, or when their bill got signed for a handshake and a photograph thought he had aged, but was still okay. and i think that, you know, there was a denialism because, frankly, they have been much more focused on trump and stopping trump and they didn't want to upset the apple cart and they thought that biden was good to go for one more turn out there. but, look, let's not pretend like these democrats were totally in the dark. they know he's going to turn 82 this fall. and they know that he's going to be closer to 90 than 80 when the second term was going to be done. there is other issues at play here, namely they didn't want the idea of a messy democratic primary this year. it was easier to salute and say i'm for the incumbent, i'm for biden. >> yeah. and he's got that -- working on his side. he waon it fair and square with the primary voters. and the other thing, jonathan,

in the background, maybe kamala could be a good vice president harris, maybe she could be a good candidate and satisfy, you know, certain things that the democratic base definitely is looking for. she's been a spokesperson on abortion and other rights, maybe she could take the mantle. but unusually there was some thought that, wow, that might not have been the best pick a couple of years ago, it is coming back to haunt them a little bit. >> this is still the debate among democratic lawmakers. this hour, as we speak. which is our better option? which is our better option to salvage as many down ballot seats as we can? a wounded joe biden or a healthier kamala harris politically on top of the ticket? that is literally the debate still going on. i think part of the reason why there is some hesitation among democrats to forcefully call for biden's ouster is because

they're not sure that even a politically healthy kamala harris would be better to save, for example, the wisconsin and pennsylvania and michigan senate seats. that's still very much up for debate. >> melissa actually -- this is rare. this is rare. you don't like political interviews. >> i like listening to them. >> don't ask him about nvidia. >> i won't ask him about nvidia. i might ask him about apple. but in terms of the s dash dash dash dash show, isn't part of this, though, the feeling of betrayal, that biden was shielded, and makes this whole thing worse than if the concerns had been brought up prior because you had seen him in public, you had seen him making public appearances, et cetera. there is a feeling that the tee b debate was a bombshell.

>> there is a boiling anger at biden and frankly his family and the inner circle. i heard it from democratic lawmakers every day since this debate that, you know, i can't believe that they put him out there, knowing, knowing what his condition was. you hear that all the time. and, guys, the sort of current trendy comparison in washington is that this moment is kind of like 2016 with the republicans with "access hollywood" where a lot of the elected officials didn't know what to do and some of them wanted to dump the nominee and there was this paralytic moment in the party. here's the difference, though, democrats right now, they like joe biden. a lot of them have a fondness and affection for biden, the gop didn't have for trump in 2016. which also makes it harder to dump him because they do like him, they have known him for -- he's been around for a long

time, and that makes it tougher. and also it makes the betrayal that you mentioned so much more personal and so much more biting. >> what should we watch to know what's going on, jonathan? i'm watching the predicted -- the rcp betting sites and they're saying that the president can do whatever he wants. he wants to stay, he can stay. that's what the betting sites are saying. i don't know if that changes. could change on a dime. >> i think this week is the last exit, that, look, next week is the gop convention. trump is picking his vp. i think this is the pivotal week. and i think tomorrow is a crucial day. why? because biden is giving a kind of wrap up nato press conference. i think everybody on the hill is going to be watching that press conference, can he clear the bar? and if he can, i think they'll move on and make the best of it. and i this the story will fade. if biden doesn't have a good press conference, you'll see lawmakers call for him to step

down, including senators on the fence. >> you know what they say. if you wound someone and don't kill them, i don't know if i would really want to be a person that went against the president if he's the nominee. i don't know -- >> that's precisely the issue. joe, they don't want to have a statement on the record calling for biden to step down and then have to eat that statement this fall if biden stays in the race. >> i would pull a chuck. i'm with joe. i'm with joe. i'm with -- someone just looked at me, i would just -- look at me. i'm with joe. thanks, jonathan. see you later. just after 7:00 -- wow. 5 after 7:00 on the east coast. you're watching "squawk box" on cnbc. i'm joe kernen with melissa lee who asked a question of that guy. thank you. >> i'm capable of asking about other things. but, stocks, joe. >> you want to distinguish yourself as a fast money. you don't -- you wouldn't have

jonathan on "fast money," would you? >> we would. >> to talk about the market implications. >> yes, that's what we do on cnbc in general. >> speak for yourself. among today's -- among today's top -- i do too -- top stories -- gives us some highlights -- investors preparing for day two of fed chair jay powell on capitol hill. speaking with the members of the house financial services committee today. yesterday, powell signaled to the senate that the fed is getting closer to cut rates as it weighs the risk of elevated inflation and a cooling labor market. we're going to speak to house financial services committee chair patrick mchenry later this hour. volkswagen warned overnight, the potential closure of a plant because of weak demand. the company lowered its forecast for operating return on sales to 6.5 to 7 -- from 7 to 7.5 previously. and more than a third of adults

say they have a side hustle. a new bank rate survey finds they're earning more than they did last year. the average side hustle bringing in $891 a month, up from $810 last year. more than a third of the people use at least some sort of that income for discretionary spending or to pay for living expenses. about a third think they'll always need to have a side hustle. >> what's wrong with that? you're saying that like it's a foreign language. >> are these legal things? >> yes, like a side job, like, you know, you drive an uber part time or you're doordashing part time. >> not selling coke or something. >> i guess that could be a side hustle. >> futures, hot streak for the s&p 500, the longest winning streak since january. six straight sessions of wins so far and it looks like we could expend that. s&p looking to open up by 10. the dow in the red by 8. let's get to frank holland with the premarket movers.

>> speaking of evs, we'll start off with tesla, shares up half a percent after goldman sachs raises its price target on tesla from 175 up to 278. analysts go on to say they believe that the company has a strong position when it comes to both cars and clean energy. however, they believe the market is going to be under pressure for both in the near term. shares of tesla moving higher right now, exactly up half a percent right now. moving on, piper sandler initiating targ wet with a neutl rating. that implies just about a 5% increase. analysts a little bit meh on the big box retailer saying on one hand they like the omni comhann model. piper also adds the company could face a 2025 headwind with potential tariffs and possibly management transition with ceo brian cornell's contract expiring. shares up a quarter of 1%. this chart here, legal zoom shares sinking after the company

cut its full year sales forecast. it also says its ceo will be leaving, replaced by the current chairman. legal zoom says now is the right time to make this move as it focuses more on subscription based revenue to drive long-term growth. shares down more than 25%. week to date down more than 29%. back to you. >> frank. coming up, is the slump in bitcoin over. we'll talk cryptocurrencies after the break. and jay powell says the u.s. is no longer in an overheated economy. we'll hear from chairman patrick mchenry in a bit. "squawk box" will be right back.

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bitcoin rising on fed chair powell's comment to the senate banking committee yesterday, outlining risks of keeping rates higher for longer. joining us now anthony pompliano. kind of doing what you have always said is possible at any time, and those are large moves, up and down. >> yeah. >> think we're getting down to the 40s or this is it already? >> look, prices go down because there is more sellers than buyers obviously. the question is who is selling. there is two main culprits at the moment, the german company has bitcoin they seized from a parroting website and they have been trying to offload it. they're going to as many exchanges as they can and trying to sell. and so they're halfway through that right now, $2.5 billion. they sold about a billion and a half or so. and then there is also the bitcoin distributed. i think people are more so scared, if there is billions of dollars being distributed back, are these people who have been

illiquid for years going to sell it? what is really interesting about this is bitcoin is still very illiquid. most of the bitcoin that is out there being held by people that have a long-term view and so when a seller shows up with just a couple billion dollars, the price will go down. now, if i told you someone was going to sell billions of dollars and the price goes down just a little, i think it is bullish. people are saying, look, bitcoin is still pretty healthy. >> how illiquid do you think the market is? we talk about the whales with the wallets sitting there forever since the inception of bitcoin. >> at the start of this year, the amount of bitcoin not moved in over a year was over 70%. very high. as the price has risen, some of that has started to get distributed, which you would expect in a bull market. the question is how strong are the hands and will they outlast the german government? will they outlast the distributions? and so my expectation is as we get further into the bull market, that number will come back down toward 50%, 55%. half of the bitcoin probably is

being held by people who have a 10 plus year time horizon. >> didn't it go up because etfs had to -- and buy the incremental amount that was the same thing that you're talking about now, wasn't enough to buy to go into the etfs. it just slips right around when there is more and what the etfs are already satiated? >> i think there is a huge part, like, bitcoin is a free market asset. when a etf gets approved, the media is talking about, people rush in. >> you need to buy bitcoin. >> 80% of the flows now after people analyze it appear to be retail. i talked to a lot of folks who run rias and it takes a while for them to go through the investment process, underwrite the risks, approve and allocate. my expectation is the second half of this year, maybe end of q3, beginning of q4, we'll see more institutional flows into the etfs and also the basis trade. a lot of people going long

bitcoin, short the futures, and as that spread has come down, less and less people are saying i should put that trade on. it is a dynamic market with a lot of inputs. i think bitcoin has a good future ahead of it. >> you had congress saying they're trying to do things, right, for clarity. you have a biden/trump election theoretically, i don't know, at this point. how does that factor into the regulatory environment? positive or negative? >> donald trump positioned himself as a pro bitcoin, pro crypto candidate. >> is he really? >> i think that if you watch his public comments, he's followed pretty much the exact thought process and journey that most bitcoiners fall. there is no way this could be real, there is a scam, criminals using this, et cetera. then you get interested, then about price, then get convinced of principles and the other ethos around it. what i do see is democrats are kind of caught in between two things, right? on one hand, you don't want to cede the crypto and bitcoin point to the republicans. but also you have a number of

people in the democratic faction that are saying we don't like this stuff. we want to clamp down on it. so what you're getting is a bifurcation where there is some breaking of the party lines and ultimately i think that people for decades have beevoting for their wallet, bitcoin and crypto is the latest version of that. when they go to the ballot box in november, they look for a pro bitcoin or pro crypto candidate. >> will that be enough to be a catalyst for bitcoin if donald trump were elected? >> i actually think the only thing we need is a catalyst for bitcoin is time. one of these interesting things about if you go and look through all the different cycles, the summer is slow, people are doing stuff, traveling, they're not sitting in front of their computer watching the chart and so when we get into september and beyond, that's enough to get the price going back up. >> we're still with just the store value, though. that's enough for you right now. we're not sending it to relatives over in ukraine.

>> maybe not a popular answer, but bitcoin has won the store value in the crypto asset class. but stable coins are winning the meme of exchange. if you look at the data, stable coins now do just as much volume as visa. and ultimately people want an asset that if they go and they spend it or send it to a friend, it is not going to be worth 2, 3, 4x more. they want to spend the dollars on a blockchain. >> you don't want to buy the pizza instead of a bugatti. anthony, thank you. >> thanks, guys. up next, preview of cnbc's top states for business, which will be released tomorrow. scott cohn will join us from a secret location, undisclosed secret location, very secure one. and then later, the a.i. wars getting complicated from data centers, rentals to chips. we'll look at how the big

players are forming alliances. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. which dog breed is capable of understanding more than a thousand words? thousand words? french bulldog, border collie, r medical expenses, or german shcepard? the answer when "squawk box" returns. ent. it really helped close that gap. (whisper) go, go, go! (group) yay! go aflac! go duck! get help with expenses health insurance doesn't cover. find an agent. get a quote at aflac.com. wish we had aflac on our team. you can! (♪♪)

>> announcer: now the answer to today's aflac trivia question. which dog breed is capable of understanding more than a thousand words? french bulldog, border collie or german shepherd? the answer, border collie. we are getting set to reveal america's top states for business. our exclusive annual rankings for 2024, this year's study includes important changes that could shake things up. scott cohn is in the mystery top state to remind us how this study works. >> part of the deal this year, they said, you can do top states again in 2024, but you have to make breakfast for the crew. so this is one of the few things i know how to cook. so, let me know if that thing bursts into flames while i'm talking. as you said, melissa, things are -- we're going to shake things up this year because the competitive landscape has changed.

here's what hasn't changed since we started this in 2007. we start with ten categories of competitiveness. the things that states use to sell themselves to business and we rate them based on what the states are talking about. this year for the first time infrastructure rises to the top. it is a race to rebuild american supply chains, fueled by massive government money, we look at roads, bridges, ports and airports. shuttle ready sites for development, broadband and which states are most sustainable. >> businesses are increasingly looking at climate risk. decisions to relocate have been driven by climate risk. >> reporter: this year, infrastructure is worth 17% of a state's scorch that's followed by workforce, which states are meeting the need for skilled workers, which states have the best economy, where is the top quality of life, we look at the cost of doing business, technology, and innovation, including which states are leading the way in artificial

intelligence. >> the state that is actually investing and allowing for people to go either into industry or into government to be able to help make a difference is the state that i think is going to succeed. >> reporter: we measure business friendliness, we grade education, access to capital, and the cost of living. so within those ten categories, we have 128 different metrics, that's the most we have ever done. we try to put the states through their paces. you can read about our study, how we do it, and a lot about competitiveness and the coverage we have been doing over the last several weeks at topstates.cnbc.com. where am i? part of the drill is diabolical hints. we'll be giving them to you all day today. here is the first one, take a hike. take a hike. remember, the hints are die

diabolical. we'll reveal the top state here on "squawk box" tomorrow morning. >> do you have any probing questions? you are always trying to get information out of scott. >> i'm trying to tell if -- is the sun up? is it cloudy? >> it looks like the same time zone. >> does it to you? >> yeah. >> sometimes i like when the marshmallow burns. you don't throw it away when it burns, do you, scott? >> no. not at all. it is kind of good. this marshmallow is dripping off the stick. >> i like it burned. i like it crispy. >> where it catches on fire. i like that too. >> take a hike. >> that doesn't narrow it down. it could be like -- >> take a hike. hike interest rates. i don't -- you got anything else? can you give us -- i know you got some more clues for later today. give us another one. use one up. can you do that or no?

>> you only get one, joe. i'm sorry. >> oh, okay. >> no good. and it is not going to be the same as last year because of the infrastructure stuff? >> well, i didn't -- i never said that. it could be the same as last year. >> you asked him the same question before. >> i just think if it it is the best place, it is the best place. scott always finds a way to -- sooner or later he'll have all 50. maybe a couple. i can think a couple that will never get there. we don't need to mention any names. scott, thanks. we will be watching. financial services committee chair patrick mchenry on the state of the economy, interest rates and the race for the white house. and here are the futures right now, as usual, s&p and nasdaq up, and the dow has been diverging a little bit anyway, lately. "squawk box" will be right back. ♪ ♪ ♪ c'mon, bear.

♪ ♪ ♪ you don't...you don't have to worry... ♪ ♪ be by your side... i'll be there... ♪ ♪ with my arms wrapped around... ♪

diabolical. diabo long time chipotle cfo jack hartung, who knew, is stepping down next year. he served in that role since

2002. the company is promoting a 15-year company veteran to fill the post. write this down, adam rymer. he's going to take over on january 1st, melissa. ui path is cutting jobs. most cuts will be implemented by next april. back in may, they announced the abrupt resignation of its ceo, co-founder daniel dimes stepped back in as ceo in june. coming up, jay powell signaling they could be closer to cutting rates than initially thought. financial services committee chair patrick mchenry will be grilling the fed chair today on the hill. he'll join us next. later, anthony noto joins us live from the tune valley tech conference. "squawk box" will be right back. ♪ yeah, they made me who i am ♪ ♪ so i'm off to see... ♪ we invent them. we design them.

we build them. and one day, we have to let them soar. ♪ i'm always coming home ♪

with the price of just about everything inflating these days, you may wonder why mint is deflating the price of mint unlimited from $30 a month to just $15 a month. well, it's easy. we know a great price on a great product is better than one of those things. right? does big wireless really believe that these things actually work?

( ♪♪ ) ( ♪♪ ) this one will never see the light of day. all right. fed chair jay powell back on capitol hill today for round two of testimony on his semiannual monetary report. this comes only a day after treasury secretary janet yellen testified in front of the house financial services committee where she echoed chair powell's comments about the labor market no longer driving inflation.

joining us now, financial services committee chairman patrick henry. good to see you, mr. chairman. do you agree that we can -- or the fed or as a country in total we can shift away from the inflation fear and start making sure that we maximize employment? is it coast is clear for inflation, you think? >> not if you ask the average american. you can ask the team of economists at the fed and that may be one metric, but the feeling, especially in this political year, this election year, the american people don't like the economy that they're dealing with, and that the consequences the biden policies. so the fed decision, i think the better the fed chair can signal what the rest of the year looks like, and enables the fed to recede from the politics and get to the basic economics and the spreadsheet math the federal reserve deals with. but the key question today and in this hearing is whether or not the fed chair will commit to

reproposing this major new capital initiative that will raise capital standards for all, you know, across the board for banks. and making, you know, holding more capital than european banks in order to deal with european regulations. i think that's the real push of today. and that's the clarity we want to hear from the fed chair is that they will repropose these rules, not try to push it before the election. >> the bazell three end game. everybody is talking about that. that will not see the light of day in your view or just -- >> what i'm prepared to say to the fed chair, if they don't repropose, you'll see this congress take action, using the congressional review act to repeal the rule. and that's a joint rule-making between the fed, the fdic, the occ, we have the fdic chair who is in the scandal of his own creation about the abuse of work environment he's created, we

have an acting in the biden administration for the, you know, the comptroller currency overseas banks. they had a four-year acting in that position because the first person they nominated couldn't get confirmed. then they can't figure out how to get elizabeth warren happy with the other nominee. they're trying to rush this before the election, which tells me it is really about progressive politics and election nearing than it is about sound economics and how to regulate banks. we'll take action if they don't repropose and i think that's the message that you'll hear clearly out of today's hearing. >> what about the crypto bill? do you have votes to overturn president biden's veto, you need two-thirds and the senate, i can't imagine. >> a lot's changed since we had this original vote. and this -- the original vote in the house, we had 21 republicans -- 21 democrats join with the republicans to repeal

this biden rule that says you have to hold crypto like it is some other object not like you hold banks traditionally hold things in custody. and so it actually makes those that own crypto go to less reliant folks to hold their assets than more reliant people. and safer folks. and so we had 21 democrats vote for that. we had 71 democrats in the house vote for a full market regulation of crypto. another major initiative out of the house. 71 democrats voted for that. what was contained in that bill was the repeal of this very rule that only 21 democrats voted for. so, that, i think, enables us to get a higher vote total today. and then the fact that we're in a political year and people are looking around and realizing it is a really bad position to be against what your voters want and having clarity for crypto with more americans owning

crypto and more americans interested in asset class and the use of these things, it would be crazy for a politician to stand in the way of that. and so we're going to give them the opportunity to move today from their original position from three months ago. >> continuing to talk about -- now treasury secretary yellen asked about the 25th amendment. she found president biden extremely effective whenever she had meetings with him recently. some house democrats are asking that question as well about whether that is the truth. sharp as a tack, whatever you want to call it. do republicans have a horse in this race? and what do republicans want right now? they want the president to stay in or they want more chaos and maybe a different candidate? >> look, he had one opponent, the democratic primary, they had their chance to replace him, they didn't take the chance, now

they're realizing what they saw in 90 minutes of debate is what i got to see privately in the oval office last summer, negotiating the debt ceiling increase. i'm not surprised. i was not surprised by the debate performance. but i'm also, you know, i'm a republican, i don't want him to get another term. but this is a complicated thing. and it is a jarring thing, just like it is, you know, taking somebody's keys away and saying they can't drive anymore. but this is the presidency. and we should not be in a position like this where we're trying to negotiate like we negotiate taking somebody's keys away when it is the presidency at stake here. and democrats have a hell of a problem today and this week and right now and the best thing i can do as a republican is stay on the sidelines and let the democrats enjoy their disarray and figure out what they're going to do.

>> sounds like -- as an -- i like to use the american -- don't you like the english better than the german, schadenfreude. why do we have to use a german word? as a republican you can do that. but as a citizen, as an american, we need to care about this, and, you know, someone asked the question yesterday, hopefully our enemies, you know, have a chart of different time zones and, you know, nothing will happen past 8:00 p.m. and stick to the guidelines of when we can respond to a threat from outside, because, you know if they mess up the time zones in russia, with whatever they're doing -- whatever threat they have, they could mess up the sleep schedule of president biden. this is an important topic, is it not? >> it is a very important topic. and the democrats had this in full sight and full view and what they're trying to tell the

american people about joe biden is the same thing they're trying to tell the american people about the economy, which is don't believe your lying eyes. don't believe your own experience. don't believe what you see. and i think that's a really -- i don't think that's a good political message going into an election. but what i'm seeing on capitol hill is the press lining the capitol, democrats opining about this, but taking no action. but words, no action, which benefits the president holding on to his nomination, and in my view makes the choice much, much easier on election day for tens of millions of americans. >> all right, congressman, we're -- what did you say, sit back and enjoy. yeah, it is -- it is something to behold, it just -- the debate itself gave me a sick feeling. not a positive, happy feeling.

>> it did. it gave me the same feeling. the pit in my stomach. but i was not surprised. i was not surprised. this should not be a breakthrough moment for my democratic colleagues. folks that have interacted with him should not be surprised by his debate performance. by the way, right now, before the debate, biden's numbers were in the can because the economy, because of how he's governed, he ran as a moderate, he's governed as a progressive, he's put more regulation in, he's driven up spending, he wants to raise taxes, let's not forget the facts of the matter here, the american people don't like the economy they're experiencing and joe biden is the reason why they have got this shabby economy and the bad experience they have. so, separate that out from his debate performance. they don't actually like the dog food that they're keeping on the american people. so i don't lose sight of that. i'm staying focused on the

issues at hand, that are going to impact the american people. and it is going to be up to the democrats and whether or not this guy continues to be their nominee. but it is a bad policy that i'm going to fight, i'm going to fight every day. >> regardless of the nominee, the policies would still be front and center, you would think. congressman, thank you. >> great to be with you, joe. >> good to be with you. cnbc will have full coverage of chair powell's testimony beginning at 10:00 a.m. eastern time today. coming up, are youavg sin enough for retirement? new data on where generations stand on their savings just released from blackrock. we'll bring you all the numbers. we'll be right back.

[ put a little love in your heart by david ruffin begins to play ] my bad, my bad. good race. - you too. you were tough out there. thank you. i'm getting you next time though. oh i got you, i got you. down goes jewett. jewett and amos are down. what a lovely sign of sportsmanship. you okay? yeah. ♪ ♪

more americans say they're on track with their retirement savings this year than last. that's good. according to a new survey by blackrock, that optimism is not shared across generations. sharon epperson is here with this now to break it down. just make sure i know what

you'retalking about. >> i will make sure you know. >> the generation xxx -- you're right, generation -- >> i'll let you know. >> are they 45? >> for generation x? >> yes. yes. they're in their mid-40s and 50s. >> and millennial beneath that? >> yes. and then gen z below that. blackrock asked employers and workers about retirement saving plans and the impact on their future. gen z in their 20s and mid-30s, the youngest in the workforce, feel confident about retirement. 77% of them say they feel on track to retire with the lifestyle they want, the most of any generation. still, 69% of them worry about outliving their savings. gen xers in their mid-40s and 50s are the most steady savers, with 80% saving a consistent amount for retirement. they're also the least likely to feel on track. >> they might have started their

career, you know in the late '80s with the crash. they have gone through the dotcom, they really were in key working years during the global financial crisis. they have seen a lot and they are probably less swayed by the fact that the market's up. >> overall, workers are feeling better about retirement savings than their employers. 68% say they're on track. 58% of planned sponsors said the same. blackrock's ackerley says worker confidence has been bolstered by strong stock market performance, but planned sponsors are more worried about longevity. >> they're thinking a lot about people are living longer, they're looking at what people are saving, and are they getting the match. and they're feeling a little less confident than workers that their employees are on track. >> to make sure they're ready, employers and plan sponsors are looking at how they can help employees generate income

retirement. one way to be an annuity option for a steady stream of guaranteed income. joe? >> in the old days -- how many 401(k) and work place retirement plans offer annuityies and in the old days, that would be an annuity would be for tax deferred income. why would you put it in a qualified plan anyway? >> people want to have a steady stream of income. they're very concerned about -- they're going to have the sams in a 401(k). what a lot of companies are doing, one industry group says about four out of ten plan sponsors are looking at putting an annuity option in their retirement plan or having some way you can get to it, linked to the plan outside of it, and employees are saving, saving, saving and then particularly gen xers want to know what am i going to have for a steady stream besides social security and there is nothing really there unless they do an annuity. >> you can do the annuity outside of a 401(k) and get the

same benefit. you don't need the tax deferral in the 401(k). >> here's the thing, will you do it? so i think that set it and forget it, which is what a lot of people do with their retirement savings, this is one way to make sure you have the option in there. >> i guess i care about do -- >> this is for you, too, joe. it's amazing how many people don't realize, when they're over 50, when they turn 50, the year they turn 50, that birthday celebration should include maxing out your retirement savings and taking that catch-up contribution. so now with your 401(k), if you're 50 or older, you can put in $30,500 this year. some people don't know that. some people don't know how much their social security benefit will be or they haven't estimated that. you can go on the social security administration's website and check that out. and figure out how much it would be if you delayed retirement to 70, which is the maximum time that you could do that to get the maximum benefit. and in this survey, it shows that not everyone is working with a financial adviser. some people don't need one. but if you need to get on track,

stay on track, and figure out all the other things that may weigh into how you're doing with your retirement, like caring for adult children -- not caring for them, but having them on your payroll, paying for your elderly parents, all of those things can weigh in on your retirement. whether you're a baby boomer, whether you're a gen-xer, and even some millennials -- >> translator: the calendar year you turn 50? >> the calendar year you turn 50, you can do it. >> joe, you still have time. >> i do still have time. you as a generation z person -- >> firmly, i'm "x," i'm "x". >> we don't need to talk about what any of us are -- >> we're all timeless. >> we're just people. >> sharon, thanks. coming up, competition in the ai space is tough, but there are also some strange bedfellows. that story is next. and check out futures ahead of the open. the longest winning streak for the s&p 500 since january, looks like it will be the 17th day of gains today if we hold on to this, nasdaq up by 76. we'll be right back. day,

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(intercom) t minus 10... (janet) so much space! that open kitchen!e meeting today at creativeplanning.com. (tanya) ...definitely the one! (ethan) but how can you sell your house when we're stuck on a space station for months???!!! (brian) opendoor gives you the flexibility to sell and buy on your timeline. (janet) nice! (intercom) flightdeck, see you at the house warming. our next guest says the race for semiconductors and data centers is getting really complicated with the big players forming strange alliances. joining us now with more for scoop in this issue is jessica

lessen, founder, editor, in chief of the information. great to have you with us. we already see sort of the strange lineups that are happening right now, particularly, you know, in this most recent story with microsoft turning down the observer role in openai and apple having that same sort of situation. but specifically, you're talking about oracle chips and microsoft. can you explain what sort of strange alliances are going on and how long you think they will go on for, before just this competitive nature really kicks in and you know, them saying we can't do this anymore? >> absolutely, you know, the land grab here is really for the tens and hundred maybe billion dollars of compute power, to power ai. and yesterday the information broke that elon musk, who had been talking to oracle about partnering with them to train his competitor to openai has said, no, i'm going to go at it alone. and actually, the talks broken

down over disagreements how fast a super computer could be. so that shows you kind of where we are in this ai race. but what's interesting to me is so elon was talking to oracle, is doing it alone. at the same time, oracle is helping microsoft supply its compute power to power openai. so what we're really seeing here is a very, very expensive land grab over what we're now calling super computers. and i think it has a lot of implications for really the business models and cost structures of these companies going forward. >> i mean, it's strange to think that if oracle was going to build that for xai and it's building it for microsoft, what this means in terms of it being hired to build data centers across the industry, so everybody is going to be running on an oracle data center. i mean, when you think out about the implication, it just seems like they're going to have a certain players will end up having a monopoly, because everybody's in this land grab, and they're just getting the equipment and the data center

they need as quickly as possible. >> well, clearly nvidia also benefits, because they're supplying -- they're the picks and shovels. and microsoft still has an incredible amount of power itself, but to supply what it needs for openai, plus all of this other customers, it sort of needs the spillover from oracle. so you know, i think it's early, melissa. i think it's very early in figuring this out. at the same time, these data centers need to be built years -- i mean, even further in advance, which is why we're seeing, you know, these alliances be struck. and i think it's really interesting to see once again, elon kind of trying to go at it alone here. it is a sign to me, too, that his ambitions for xai, the product is called grok, the chat bot, are perhaps bigger than even we realize. and obviously a player like elon coming into this ai race, which so far, has been microsoft, openai, google, little bit of

anthropic, i think it's also a sign that he's really, really serious and that he wants to be a player in this as well. >> we must have our own hands on the steering wheel rather than be the backseat driver. he thinks the race is that fierce at this point. i mean, what are your -- how do you think about what grok could be and what his sort of grand plans might be. >> you know, i think the time will tell with the technology. one of the things i'm interested in is this race is really in the realm of large language models, which is a certain type of ai model. for good at certain tasks, not very good at other tasks. personally, i'm very interested in seeing next generation models that can go beyond mlms. that's the fight elon's getting into it. of course, his model, he says, will censor less than the other models. there's certainly a free speech

threat he's pursuing, much like x itself. but it's very early to say. we are still in the land grab for compute power. we're in the land grab for talent. ai engineers are really the cream of the crop in terms of talent these days. and it's exciting to watch and i think the future is unclear. >> yeah. jessica, thank you! >> thank you very much. >> jessica lessen. >> it is 7:59 on the east coast. it's going to be 8:00 soon and you're watching "squawk box" on cnbc. i'm joe kernan along with melissa lee. becky and andrew are off. among today's top stories, federal reserve chair jay powell is set to answer house members' questions. this is a day after testifying in the senate. and speaking to senators yesterday, chair powell said that holding interest rates too high for too long, which we heard they were going to do, could jeopardize growth. we're going to talk more about powell's message later this hour. microsoft says it will give up an observer seat on openai's

board of directors. in a letter to openai, microsoft's deputy, general counsel said the company no longer needed to maintain the position of big artificial intelligence players like openai and microsoft, who have also been facing regulatory scrutiny from governments around the globe. that could help explain microsoft's move. and honeywell is buying liquefied natural gas process technology and equipment business or equipment business from air products for $1.8 billion. air product shares moving higher on that news. meantime, futures are indicating a positive open. the dow flipped to the green, just in the past few minutes. s&p looking to add by 14. this would be its seventh straight session of gains here. the nasdaq up by 72. taking a look at treasuries, the two-year yield right now is hovering just about a three-month lows. it's at 4.61%. let's get to mike santoli at the new york stock exchange.

mike, interesting week with powell going on and the controversy over biden's candidacy going on as well. >> yeah, and the market in general kind of netting it out to, i guess, holding in place. in fact, what's interesting is, you mentioned, this would be the seventh straight up day, the s&p would be the sixth straight record close, but by almost comically close increments. one day 0.07%. still a selective market. i want to point out, here's the one-year chart. remember that pullback in april, 5.5% or so. since that low in april, the s&p 500 is up 12%. that's an amazing risk/reward. you have 17% of total year-to-date upside, and only a 5% pullback. however, take a look at the industrial sector. and you see it relative to its april low. and it's actually right about there, right? it's essentially got no upside since that year-to-date low. the equal-weighted s&p is up about 3% since that april low. it suggests that the internals

of the market didn't get a full flush. they've stalled out here, some of the cyclical groups. take a look at the equal-weighted consumer discretionary sector. it's up nicely on that up with-year basis. but most of the gains were into 5 and march. and there's that april low and it's hovering right above there. that's why you can see the market getting a little more sensitive to any signs of growth. which is probably why powell's comments were welcome, that they're attentive to the risks that policy remains too restrictive for too long, and at least they're seemingly setting the scene for a potential ease in coming months. >> all right, mike, thanks. mike santoli. for more on the markets and the new highs we've been seeing, let's welcome greg branch, branch global capital advisers and a cnbc contributor. good morning to you, greg. >> good morning, melissa. >> so you think in the short-term, at least, we're safe in terms of this moment being preserved? >> i do. i don't think we can identify a catalyst that would turn this to

the downside in the near-term. more importantly, this coming cpi number is probably the most important one we've had in a long time. those of us who kept our reservations throughout that first quarter, i think, when we look back, did so with good reason. inflation itself was accelerating, as we jumped to the top of that 30 to 40 basis points band of month -over-mont growth, but the underlying met rigs jumped as well. we saw jobs numbers in the 300 ds. well, that -- we experienced a market change last month, when we saw for the first time, 0% month over month quarterly growth. so i think those of us who had a bearish posture had to take a pause and say, maybe the fed is actually winning this, even after the fed themselves in the may 1st notes, we saw put the possibility of hikes back on the table. >> right. but as powell said yesterday, you know, inflation is not the only risk we face.

it's also an employment, and we saw that in the latest report. and so how much of a concern is that for you, because, i mean, unemployment tends to tick up, but when it ticks up, it's a quick turn there, greg. >> you're right, melissa. so neutral for now. we'll see where we are come the fall. employment has come up each of the last three months. we're now at 4.1%, getting closer to that mid-4 range that the fed indicated that we would need versus a sustainable 2% inflation. but that comes with a cycle. and we have yet to enter it. and so we'll see what the environment looks like and how hardous it is in terms of earnings. you know, whether we're looking at a very deep slowdown. i don't use the r-word. a very deep slowdown, and the length and duration of that slowdown, and where we are versus consensus. that will be determined, i think our posture, from there. >> you don't use the r-word out of principle, or you don't think it's going to happen.

>> it's semantics. slowdown, recession, one in the same. when we started this year, we started with zero rate cuts. we thought that would be a catalyst. it turned out not to be. it turned out to be overwhelmed by the enthusiasm, not only of ai, but we've now had the two, if this quarter comes in 59%, we have had two strong earnings quarters in a row. if we go to single digits or go back to negative growth, how much of a catalyst that will be remains to be seen. >> what are you expecting for earnings season? we start on friday and it really kicks into high gear, greg. do you think expectations are too high? and i'm thinking in particular of some of the ai names, the big 7, big cap tech sort of names, that have held the market up. >> i think consensus has got it right and i think consensus in what we'll see will play into our long-term view for the year. i think as the year goes on and as we start to enter that economic cycle, the sectors and

groups that have put up the 20 to 25% earnings growth will continue to do so. so i think we'll see leadership continue to be narrow throughout this year. when you look at the projections, communication services, projected 18.4% and information technology is projected for about 16%, when we start to enter that economic cycle, leadership and investors will crowd around those names that cproduce 20% earnings growh in a world where everything else is low to mid-single digits. >> greg, we're going to leave it there. thank you. >> my pleasure. >> greg branch. the greek government is defending a new policy that sparked outrage online. it allows some workers to work six days a week. greece' labor minister tells cnbc that the policy is an exceptional measure that would only be applied in specific circumstances. it gives employees in some businesses the option of working

an extra two hours each day or adding another eight-hour shift thir schedule. the rule only applies to businesses that operate 24 hours a day in shifts. the labor minister said the rule protects employees from their work being miscategorized, so they can now be compensated fairly. she shot down reports on social media that categorized the policy as a shift to a six-day workweek, saying it doesn't change the five-day, 40-hour workweek mandated by greek law. coming up, an exclusive interview with sofi's fanthony noto. but next, the wealth flight from higher tax states. who's up and who's down? robert frank's going to tell us. stay tuned. you're watching "squawk box" on cnbc.

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hello. i'm ethereum. and i'm big finance. you look really tired. just calling it a day. but it's 4 p.m. yeah, and i've been working nonstop since 9:30 this morning, so. 9:30. you don't say? yep. you'd want a little shut-eye too if you'd been moving billions around the world. well, actually, i do. you know, stablecoins, nfts, loans. people can access me 24/7. what? but look, everyone's different. you should get your rest. you'll get after it tomorrow. tomorrow's saturday. [ethereum] monday. you'll get after it again on monday.

payment giant block and bitcoin mining company core scientific announcing an agreement for block's new mining chip. the deal will give core scientific first access to block's new technology and includes an option to expand, making it one of the biggest bitcoin mining chip deals to date. new government data shedding some light on how wealth is moving around the country. some big wealth just joined us on the set here. robert frank joins us now. you look like you're loaded. >> looks like a million bucks. >> you look like a million bucks. >> i cover the wealthy. >> as you should. >> more than 250,000 taxpayers moved out of new york and california in 2022, that's according to the latest immigration data from the u.s., and when they left, so did they tax revenue. california lost a net $24 billion in net from

out-migration. that brings their total loss since the pandemic to $136 billion. new york lost $14 billion, bringing its total to $60 billion over that three years. the big winner was florida. they added $36 billion in income in 2022. texas gained $10 billion, and south carolina, $5 billion. now, there is some good news. out-migration is slowing down by about 10% for both states. and the flows from florida to new york, we don't hear about that much, they were up, suggesting that some may be coming back. but the taxpayers who are leaving are high earners. the average income of new york ester moving to florida was $182,000. now, in california, those earnings more than $200,000 accounted for three quarters of all of the revenue lost. those lost tax dollars are one reason california is now facing a budget deficit of $46 billion. now, for more on where the

wealthy are moving and spending and investing, you can sign up for my inside wealth newsletter at cnbc/inside wealth or just check on the flow code, like joe did last week. cnbc slash inside wealth. >> and that kind of explains why you don't hear gavin newsom as a possible replacement -- >> you do, you do hear him, but you have to guarantee that will be the issue that's brought up if he becomes a candidate, whether it's this time around or next time around. >> are any other -- if i were a state that had a pretty nice climate, i would try to go to zero or down on income -- i would try to outdo florida -- >> or texas. or any of these states. >> it's not the only reason that people leave, but there certainly is a pattern, especially since the pandemic, where the migration from high-tax to low-tax states, as well as from blue to red. and taxes and weather is part of

it, and this -- people were planning to retire in florida anyway or texas and this accelerated those plans. >> luckily, pretty soon, we'll have florida weather in south carolina, as they're moving back. >> yeah. >> it's -- st mit's moving up. but what's new jersey now state tax? it's like unbelievable. >> the state tax is $10.9. >> do the math. >> can't deduct it. do the math, figure what that is per month, free rent. free rent in florida or -- >> and if you're in new york city, it's 14%, so that's a free house in florida. that's -- depending on what your income is and everything else. it adds up. >> i'm not a smart man, but don't we -- do any of the politicians up here understand maybe it would be better to -- >> cut taxes? >> and maybe not do quite as much on the spending side of thing. >> they understand that. i think it's hard when you've got this built-in infrastructure

of subways and social safety net and the infrastructure and everything -- everything costs a lot. >> it's almost like a vicious cycle. and more people leave and you have fewer revenues. it's like out in california. >> but one thing that's not going to help, and our friend gosh gotheimer will be disappointed. it doesn't look like either side will change the salt tax limit of $10,000. and to your point about what you can deduct versus the old days, that's going to -- that has continued to hurt these high-tax states. >> all right! thanks, robert. >> thank you. >> are you going to keep coming in the studio, or do we have to go to you on a remote in florida? >> i'm here. for now. >> me too. we have a news alert on intuit. jon fortt joins us now with more. >> melissa, intuit's ceo just sent out a note to employees announcing a 10% cut to the workforce, affecting 1,800 people. gadarsi writes that this cut isn't about reducing costs, it's

about spending differently in the ai era. he says that after this, the company will hire about 1,800 new people in engineering, product, and go-to-market roles. so when intuit reported earnings about a month and a half ago, i asked gadarsi in an exclusive pre-analyst call interview about whether and how he would be looking at the workforce differently and here's what he said. >> i'll give you three examples, actually, that areas that we're looking at. one is although we'll be adding to engineering, our engineers are actually far more productive now with all of the ai capabilities that they are using. so we'll be shifting engineering off of certain work where ai is not going to do the work to more important work. another area is our investments that we've made with ai across our customer success operations. we're able to have ai do a lot more of the work and reduce the manual entry for our customer

success folks. and therefore, we'll be able to do more with flecless investmen. and the other is content generation. we're leveraging a lot of our ai capabilities to generate content internally that others would have to manually write. so those are areas based on investments where we'll be more efficient, more productive, and move the dollars. >> that insight first on cnbc about six weeks ago. there is what i would characterize as plainspoken language describing the roles illuminated in goodarzi's note. he says 150,000 people weren't meeting performance expectations, he's cutting 10% of executive roles, closing offices in edmonton and boise and eliminating 300 roles on top of all of that. intuit stock is up about 40% over the last 12 months, about 8% year-to-date, guys. >> jon, thank you. you talked to him before and he gave you some insight, so net/net, it could sound like maybe the workforce levels will

be the same, even though there are cuts, because they're hiring in different areas? >> yes. and this reminds me of some moves i've seen, even out of microsoft. they have been making cuts in certain areas, video games and some other units as they seek to double down in ai. so whereas a couple of years ago, we saw companies taking cuts because the overall enterprise demand, the demand for enterprise software was constricted. now we see companies perhaps starting to make cuts because they don't have unlimited resources and they're looking to place significant bets on where they believe the future growth is. in a way, you know, sasan's been the ceo of intuit for a while and made karma right before the pandemic hit and carried through on that. i would characterize his leadership style as being pretty decisive. we'll see if other companies do similar things at this scale. 10% is a significant shift. >> mm-hmm.

john, thank you. jon fortt on intuit. coming up, sofi's anthony noto will join us, state of the consumer many particular focus. stay tuned, we'll be right back. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. ♪♪ go deeper with thinkorswim: our award-wining trading platforms ♪♪ unlock support from the schwab trade desk— our team of passionate traders who live and breathe trading. ♪♪ and sharpen your skills with an immersive online education crafted just for traders. ♪♪ all so you can trade brilliantly. ♪♪

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the annual meeting conference kicking off in sun valley, idaho. julia boorstin is there and joins us with a special guest. julia? >> thanks. i'm joined by anthony noto, the ceo of sofi. thanks so much for joining us here. before we talk about your business, i want to talk more big picture about the conversation here in sun valley, specifically about the state of the economy. given your purview, through your business, as well as the conversations you've been having with other ceos, what's your sense of the economy right now? >> i would say the conversation really kind of pivots around two

points. one is, where's the consumer, how they perform from a credit standpoint, and where interest rates are going in the economy. on the interest rate point, we came out of q1 having reported 26% year over year revenue growth with really no growth in our lending business, which is a really strong quarter and we're really pleased with how things have gone since then. we have came into that quarter thinking there would be one to two rate cuts and positioned our business to do that, which would give us still attractive revenue growth, maintaining profitability, but having a strong spbalance sheet to take advantage of when rates go down. i think the consensus view is starting to come into picture. people will continue to see an uptick on unemployment, and we'll have one to two rate cuts by the end of the year. as it relates to the consumer, we've seen really good trends in spending. we've seen really strong demand for refinancing personal loans, as people try to lower their debt, so they can make sure they're planning for the future. so overall, our company performed really well in this environment, i'm glad we took the stance of lower rate cuts than everyone else, because the position is now to benefit when

rates start to come down. i like how we're positioned, and for the first time in two years, there's a more central consensus view about rates, and where credit is. and credit actually has performed relatively well throughout the year, and that's something i heard from a couple of ceos last night. and we're really happy with where it's performed as well, in line with our talent levels and expectations. all in all, we're setting up for a pretty strong back half of the year in 2025, if we get the right fiscal policy. >> we'll talk more about fiscal policy in a minute. i want to return to something you said. i know you've been introducing new things such as alternative investments, but you're not doing as many student loans. what is behind that policy and where are you shifting your focus to effectively follow or lead consumers in where you want to be growing the business? >> sure, as we came into 2024, there was a view that rates would be cut four or five times. and we believe that for rates to be cut that frequently, there would have to be a recession or some type of underlying problem. turns out we'll get one to two rate cuts, which is where we've

been positioned, and as we thought about the environment and how much we invested in our financial services business, or sofi money product, our sophie invest product, our credit card product, as well as our technology platform, we had an opportunity to drive really strong growth and pull back in the lending business to be more conservative, to wait to see where the economy shakes out, where interest rates shake out. and now we're coming into a picture where that's a lot clearer. so we've delivered really strong growth without really using the lending business to help drive it, and now we're in a position where as we go into 2025, to use both. >> your business all started with student loans. and just last week, a federal appeals court allowed a key part of biden's student loan repayment plan to resume, staying in an order that had tra temporarily blocked it. how does biden's efforts to repay student loans impact your business, and how do you see some of these legal changes and sort of the whole appeals process and the outcomes impacting your business going forward? >> we've really focused on

people that have private student loans. those are people that are still m managing their costs and giving them cost savings on refinancing their private stludent loans. that's a smart tragedy. we gave guidance that we'll do close to $2.5 billion of revenue this year. we'll see really strong growth from the other businesses. we're much less independent on it. the fact that we grew 26% year over year in q1 with no growth in lending overall is great indication that we've invested in other areas that are really paying off for us. and the response that we're seeing for consumers in our sofi money product with a 4.6% interest rate, sofi invest, offering alternative investments and ipos, we've seen a great response there and it's allowed us to go after other growth areas and not be so vulnerable to the whim of where the political winds are blowing as it relates to student loans. we've done well with a high-rate environment and an uncertainty around credit. i'm really excited about what will happen when rates start to come down. and you can start to see the light at the end of the tunnel. when lights come down, we'll see

a real pickup in student loan financing. right now, there are people with rates at 7 to 8% student loans, but we can only offer them in the 6s. as rates come down, we can start to offer them in the low 5s. our lonely business had historically been a refinancing business. we've invested a lot in being able to do home loans and we've made a decision on home equity lines to give people lower cost to debt. as rates come down, we'll see a real pickup. as long as the economy is stable and inflation is stable. >> you've mentioned various ways that your business is growing, but stock is way down, about 35% year-to-date, down about 19% since your last earnings report. i know that you have earnings coming up in a few weeks, so you're limited in terms of how many specifics you can share. but what's your message to investors. why should they hold on when the stock is down so dramatically? >> the thing that we can control is our strategy and execution. for the last seven and a half years, our strategy has been consistent and our execution has been consistent.

we've driven good steady growth. when i joined the company, we hadless than $300 million in revenue in 2018. now we're over $200 billion in revenues. we weren't generating profits or positive ebitda, now we're generating both positive ebitda and profitability. i'm really happy with we're doing. in terms of the stock, i'm equally disappointed. we believe that the group of fintech companies that have credit exposure has been really hit hard pabecause of the uncertainty aren't interest rates. we're really pleased with where credit has performed. it's within our tolerance levels, a good sign there. and as i mentioned, one to two rate cuts would be welcomed and moving in the right direction. >> what about ai. will sofi be the one to bring ai to retail banking and will that accelerate your results? >> there's a whole spectrum of technologies that we use every day to ensure that our product is safe, reliable, and we can be

a trusted partner. where we want to use ai is to fortify those areas, but we want to answer three questions every day. because this is a financial show and we operate in a financial world, people want to talk about interest rates and consumer spending. we don't spend a ton of time talking about the product, but we are a product company and my vision for the product is you open up sofi every day and go your member home feed like you would to your twitter home feed, but we answer three questions for you in a personalized way. what must you do in your financial life that day, what should you do, and what can you do? >> just a final question about politics, because i know the conversation about the presidential election is front and center here in sun valley. what outcome do you think would be best for the economy and for your business in particular? >> well, you know, i'll make an analogy. i went to west point and played football and i want navy to win 364 days of the year. but in that one day when they play army, i want army to win. i would be lying to you and

being less than disingenuous if i didn't say, our business would benefit from a republican administration. there's more capital activity, i want our country to be strong and vibrant, and on one particular day, i'll be rooting for one particular party. >> anthony noto, ceo of sofi, thank you so much for joining us here on sun valley. coming up, author and economist judy shelton shares takeaway from fed chair jay powell's testimony. he'll face house members today. stay tun. u' wchg quk box" on cnbc. is really boxed in here. not a good spot. off the comcast business van. into the vending area. oh, not the fries! where's the ball? anybody see it? oh wait, there it is! back into play and... -oh no, it's in the water. wait a minute. are you kidding me? you got to be kidding me. rolling towards the cup, and it's in the hole! what an impossible shot brought to you by comcast business.

welcome back to "squawk box" on cnbc. futures have been strengthening all morning. the s&p looking to add to its winning streak as it's poised to open hire by 16 points. the nasdaq looking to add 89. treasury yields meantime have been fairly stable with the two-month hovering at three-month lows. the two-year note at 4.61 and the ten-year at 4.282. and fed chair jay powell continuing in front of the house financial services committee, speaking to senators yesterday, the chair expressed a concern that holding interest rates too high for too long could

jeopardize economic growth. he also said this about rates. >> it doesn't seem likely that the next policy move would be a rate increase. we don't take things like that off the table, but that does not seem the likely direction. the likely direction does seem to be in, as we make more progress on inflation and as the labor market remains strong, we begin to loosen policy at the right moment. >> joining us now with her takeaway from powell's testimony so far, judy felton. judy, since last time we spoke, and thanks for joining us, the numbers, as far as inflation, have trended in the right direction, i think since april. and i think also with employment, you may be starting to see, if you call it progress, but a weakening labor market is some of the progress that the fed was kind of looking for. you have sort of seen both. and it almost looks like, if you

just accept the chairman at face value, he's making valid points, isn't he? >> well, if you consider that the fed in its own model would say that we're not going to reduce rates until we hit our target, they're still above target. so it is interesting now to talk about unemployment going up when it's really at 4% and then it goes to 4.1%. that's not exactly a dire picture for unemployment. i find it interesting, it seems very clear that the fed would like to lower rates, and they've already said that there's no chance, virtually no chance, that they would increase them. so everyone's waiting for that welcome message, although yesterday, i thought it was significant, that senator cramer hinted in his comments to chair powell that perceptions matter. and if the fed were to lower

their target rate before the election, that might seem political. >> if that's something that -- by september, it would be too late to have a positive effect on the economy, though, wouldn't it? and it is weird the way, you know, the winds or whatever, the coincidences lined up to right before the election is when the fed would finally be able to do it. but usually, you think of the fed doing it maybe a year before the election to try to juice the economy. it would be too late by september, i would think. or does it just look good to cut rates? >> well, i mean, we see a market reaction, that happened yesterday, when powell even said that we're not inclined to raise rates. so i think markets react instantly to any insinuations from the fed about the future of rates. what i find kind of ironic is

democrats were sort of suggesting, along with certain nobel economists, that if president trump were to be elected, that we would be looking at more inflation, that terrorists would cause it, and these were the same economists who in september of 2021 signed a letter in support of bidenomics. and they said that it would be short-sighted to worry about inflation. well, eight months later, inflation was topping 9%. but i think it's interesting that five years ago, when trump was talking about tariffs, the fed decided not raise rates to fight the inflationary consequences, but to lower rates. in july of 2019 and again in september and november of 2019, powell took back three of the four interest rate hikes from

the prior year and said that it was trade tensions. they even came up with an acronym for it at the fed in their research department of trade policy uncertainty. and that was used to justify lowering interest rates by the f fed. >> the poll numbers for bidenomics are disastrous. i point it out again and again. and people say, well, they actually claim that the media has not been trying to help joe biden enough in terms of the economy, which i like hearing that. i think it's insulting to the average american to say that you should be feeling better about the economy, with real wages actually being down. but here's the thing. wages -- real wages surged during the trump presidency, and they're down since biden took office. still down, but the pandemic could be blamed as the soul

re reason why that happened. you could say, well, at the end of the trump presidency, covid came along, supply chains tightened up around the world, inflation surged around the world, so president biden couldn't really have done anything about the global inflation since it was at 40-year highs and 9%, that did hurt real wages. but that's the only reason. because of covid. and i don't know, trump lucked out by having wages rise sharply during his presidency. real wages. >> i think real wages went up under the trump presidency, because inflation stayed under the 2% target for the entire time, consistently. so think when trump came in, the very next month, the fed raised interest rates. in 2017, under janet yellen, they raised rates again three times. in 2018, after chair powell came

in, in february, they raised another four times. and trump was then accused of jawboning. he made it very clear that he disagreed with fed policy. and his point was, look, we have record low unemployment. we're including people who have been disenfranchised from employment. we have good economic growth, good productivity, and we still haven't broached the 2% target. so why are you trying to curtail growth and increase unemployment? and he took back three of those four raises. it's interesting, either they caved to the president -- i don't think they think that's the case, either chair powell and the fmoc came around the agreeing with the analysis by president trump, or perhaps they did cave. but to me, they tried to disguise wanting to lower

interest rates by saying that it was due to those trade tensions, which was meant to be a dig by president trump, that the tariffs would be disruptive. but their answer was to reduce rates. >> i guess my question goes back again to, if republicans are going to say, look, the reason joe biden has added more jobs or more jobs have been added under him than anyone else is because of the bounceback from covid, shouldn't republicans also admit that a lot of the inflation that has caused real wages not to rise overall, that that was out of biden's control, too. it may not have necessarily have been all the fiscal spending. it might have been that supply chain disruptions from covid were why we've had the tough inflation for the first two or three years. >> no, i would disagree with that analysis. i think it was a v-shaped recovery. i think we were well on our way to getting back to pre-covid conditions, and then i think the

piling on, the fiscal recklessness, that continues, that is what caused the inflation. and for the fed to go along with it, i think that's a real problem. it's kind of crazy to have the fed enforcing what has been this restrictive policy rate in the face of expansive fiscal deficit spending. no, i do blame it on the biden administration and i think it is condescending to say, well, you should be feeling good about this economy. i think that the wages have been very slow to catch up to inflation and it's been a net loss in terms of their purchasing power and they're feeling it and they have a right to feel it. >> right. how many economists -- were they really the same economists, do you think, that wrote -- that -- first time around and this time

about the trump proposals for the -- really? the same ones? >> pretty much. i'll say one of them is the husband of janet yellen. so i know that one's not allowed to even insinuate that the fed is political in any way or should be affected by political views, but i find it interesting that the former fed of the chair, yellin, ends up being the treasury secretary, the most important member of the cabinet, i think, certainly in the economic realm for the biden administration, the vice chair, lael brainard, went straight out the door from being vice chair at the fed to being the chief economic policy provider, vice provider, and promoter of the biden economic agenda. so i don't think these people became democrats just the day they left the fed. if you look at the economists who work for the fed, and there are some 400 of them, the

registration, politically, of those economists is 10-to-1 democrat versus republican. >> right. >> it's like journalists. but the amazing thing about an economics nobel prize, you can basically say, completely opposing things and win a nobel prize. you say this and you're absolutely saying it, and the other side, you're absolutely saying it, and they're mutually exclusive. any other nobel prize, physic, chemistry, medicine, anything else, there's absolute truth. the other side, it's insane. it's not a real nobel prize, anyway. it's by a committee. alfred nobel did not -- he didn't set up one for economics, because he was smart. sorry. >> well, it's -- >> not to kimpugn economists. >> it's a social -- >> but they use models to

quantify so they could get an absolute truth. but i think the models can be very misleading. >> right. well, we know about models, how well those works. judy shelton, thank you. good to have you on today. >> thanks, joe. coming up, nike's road ahead. where the biggest pain points for the athletic guidance. what can they do to turn things around. stay tuned. you're watching "squawk box" on cnbc. zable 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 daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer. daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪)

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it has been a tough few weeks for nike and the last friday in june, the stock plunged 20%, the worst day since nike's ipo in 1980. that came a day after the company cut its full-year kb guidance, warned it expects sales to drop 10% in the current quarter. they're bringing back the senior executive to oversee struggling retail partnerships. joining us now is adrian ye, the retail analyst covering nike at barclays. adrian joined multiple analysts in downgrading stock after the

fourth quarter report. adrian, great to have you with us. the stock is like $10 away from pandemic lows. things look that bad at this point. the bulls will say, nike is already working to improve the innovation. they're going to have a bunch of new products in the pipeline. why did you get so downbeat on the stock by downgrading it. >> we downgraded the stock, thanks for having me on, because the level of uncertainty in running the business from a strategic standpoint over the next 12 to 24 months, has just increased. we are pleased that they are engaging in all of this innovation and they have this pipeline, but they launched a bunch of new, you know, new products, about 30 new products at the paris innovation summit at the end of june. and none of those are proven in the marketplace. so there's so many moving parts here that are going on. in the early part, about three years ago, four years ago, they wanted to move more to dtc, they

did that. they're now retrenching on that. dtc was down 8%. 8%! and really, the brand house relies in that retail side of the business. so we have a lot of question marks about whether the demand will be there when they actually launch these untested products. >> you said 12 to 24 months? so, this is a show-me story for the next potentially two years? >> 100%. remember. think of how the branded manufacturers, they are two degrees removed from the end consumer demand, from reading demand, so this product that is coming in the pipeline over the next six months will be then sold into the wholesale marketplace early 2025. the demand read on that will actually be sort of mid-2025 before we find out whether all this new innovation is actually driving the business. at the same time, they are taking their biggest franchises, air force one, air jordan, aj 1

and the dunk, and they are franchise managing them, meaning they're taking them out of the marketplace. that is a very, very dangerous thing to do. when we think about kind of demand, it would seem that they are using the outputs as inputs into the system. >> how much of the situation nike is in right now is their lack of innovation, not enough good product out there that consumers want versus the inroads that hoka and on are making? >> so, what i would say is nike was uniquely hurt by the vietnam shutdown in the production shutdowns in late '21. they did about half of their footwear manufacturing there, and they were sort of blanked out from that manufacturing for probably a good six weeks. and then, it was like a ramp to get back. during this period of time, we had kind of the nascent hoka and

on that came to the market in running with a new form factor, a high-rise, wide sole, lots of colors. they weren't able to actually get back into this innovation pipeline until may of 2022, and remember, greenfield innovation takes about three years. so, it was a rush to market. and they were able to come out with peg 41, air max dn this season. we're seeing a lot more of that run innovation in the back half of the year, but it's kind of late. we actually think we are going back to a flat bottom casual, the adidas samba with this kind of new silhouette shift that's going on, we think air force one is going to be back in vogue. >> i guess you think the olympics is not going to be much of a catalyst here? i'm wondering, when you say that all the problems stem from the vietnam shutdown, is this, looking back, we should have known that nike would have this innovation dearth because of

that? >> you know, there were so many things going on, and so it was that, and then it was the supply chain, and then all the product landed in like august of '22. they then, what i call, stuffed the channel in late '22, and all of '23 was cleaning up all of these mistakes. so, it's not that any of these things could have been known. it's that while this was happening, the easiest places to take margin back are going to be in innovation and research and development and demand creation and those two are the life blood of future growth and sales. >> thank you so much. coming up, credit card debt in the big banks. ahead of financial sector earnings later this week, we're ptilar tell you why plastic is inarcufocus this quarter. stay tuned. "squawk box" will be right back. old school hard work meets bold new thinking. (laughter) at 88 years old,

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credit cards in focus ahead of big bank earnings which kick off later this week. leslie picker joins us now with more. how so, leslie? >> hey, joe, good morning. yeah, as prices remain elevated and excess savings depleted, americans are spending more and more on their credit cards. a $100 billion jump in balances

over the last year and a 40% rise in the delinquency rates were partially to blame. fed data out this week showed credit cards were a key driver of u.s. consumer borrowing in may with so-called revolving credit up $7 billion month over month. data from wallet hub showed credit card debt in may was up, although adjusting for inflation, it's below the record from just before the financial crisis. the rising credit card debt may be in part responsible for some of the muted retail sales we've seen lately, especially as higher for longer rates have kept interest rates on credit cards elevated as well. that showed rates were at 22.7% in may, up more than six percentage points since 2021, and we should also get another snapshot of credit card debt and

the state of the consumer with the big bank earnings on friday, specifically from jpmorgan, wells fargo, and citigroup right here on "squawk box." >> doesn't sound very nice. 22 point what? >> 22.76% for credit cards that do charge interest, and as you can imagine, joe, there are a lot of consumers out there, particularly in that millennial and gen z cohort that are paying the minimum amount on their credit card to get by, so that has some concern if there's a big downturn or recession, what happens to those people who are carrying these sizable balances and just paying the minimum on a month to month basis? >> i'm going to call senator warren. that doesn't seem right, leslie. i mean, what's in your wallet? 22.76%? >> much higher than auto loans, much higher than you see pretty much anywhere else in the consumer pocket of the economy. this exposure for the broader economy is less than 10%.

credit card debt is less than 10% of u.s. consumer debt in the nation. so, it's small relative to other types of lending but significant for those who are feeling a pinch. >> you add this to rising auto delinquencies and you got a credit picture that is more concerning. >> yes. maybe if the fed cuts, we'll go down to 22.75% once the fed starts cutting, leslie, do you think? >> once the fed starts cutting, those rates shoulder follow. >> that's the way they do it with the prime rate. if the fed even twitches during some system, they raise the rates. the fed can drop, like, three or four times, and it's, oh, we're thinking about it. banks, i don't know. they get a bad rap. they're not our friend, i don't think, leslie. >> no, that's absolutely true. if the fed cuts rates, you would expect to see those rates go down as well. >> we've got to go. i'm going to get in more

trouble. are they sponsors? >> thanks, leslie. >> final check on the markets. 78 points now on the nasdaq. now the dow looks like it's going to open in positive territory. do you think you could say anything in front of the house that changes things? maybe, right? >> it's possible, but probably not. >> i'll miss you tomorrow, but see you friday. >> see tonight on "fast." >> that's right. join us tomorrow. "squawk on the street" is next. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. five record closes in a row for the s&p. futures suggest the bulls will take aim at a sixth with powell, day two on the hill, more deflation out of china. two-year yield, lowest since march. our record begins with the records rolling on. s&p and nasdaq extend to new highs. tesla targeting its 11th straight daily gain, and apple tops $3.5 trillion. plus, chips, semi a.