you know? was that the -- >> wells is still down 5%. >> was that the highlight of your day, would you says? or just being here? >> being here with the banks. what a combination. >> it was a slice. it was a real slice. >> electrifying. >> yeah. when are you back? not for a while. >> not for the foreseeable future. have a great weekend. >> "squawk on the street" is next. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, sara eisen at post nine of the new york stock exchange. cramer has the morning off. futures, pretty solid as we watch for signals as to whether yesterday's rotation was the real deal. bank earnings in focus. ppi does come in a tad warm. yields still lower at the short end. our road map begins with the banks. investors watching for warning signs in the banking system. jpm and wells, a profit drop.

at&t reported hackers stole nearly all records of customer calls and texts. shares set to sink after a second day after a robotaxi launch delay let's begin with market reaction to the banks today. interesting split in the action, sara, at least price-wise, between, say, citi and wells on their results. >> well, i also just this -- the higher rates picture is affecting these banks differently. we always look at the net interest income, and it was a big miss on wells, and that's partially potentially why the stock is getting punished today. we're going to talk to the cfo of wells fargo on money movers, but the 9% decline in net interest income, david, the fact that they don't appear to be making as much progress on the expense side, which was the bull case in part for the stock. that's certainly two of the knocks against wells fargo i'm seeing this morning, but for jpmorgan, that net interest income number was a beat. a slight beat. and they reiterated guidance.

so, i think there's a question of how rates settle now that we're expecting two cuts from the fed, and whether we've seen the bulk of the gains that the banks have made profitability-wise from these higher interest rates. >> yeah. jpmorgan, as you say, a different story. as you take a look, the stock is not doing much. it's perhaps going to be down. they got -- i mean, they posted a 20% return on tangible common equity. bigger than expected buyback as well. the strength there was capital markets. wealth management and cards. there were sort of trends in loans and deposits, a bit flattish in terms of guidance. nii to what sara's been talking about, came in more or less as expected. but generally, seen as a very positive quarter for jpm. nonetheless, as you can see, the stock really doesn't seem to be reacting, although quite a difference from last quarter when the stock was down sharply

on earnings. wells fargo, i think, there are a lot of investors still lined up there for the what is yet to come in terms of the benefits of the turnaround that's taken place under charlie scharf, although this is not a quarter that's going to particularly excite them. >> when the asset cap will be lifted, which we don't know. we ask every quarter, and they don't know, and the fed doesn't know, and nobody's telling us anything like that. the other thing i noted in the jpmorgan quarter is that the credit loss provisions were higher than expected. there was a $3 billion build -- $3.1 billion of credit costs, which was higher than anticipated. they had an $800 million incremental reserve bid. that's always something to watch as we wonder where we are in the credit cycle and how these -- what these banks are seeing ahead. the commentary from jamie dimon continues to sound a bit cautious, even in the face of good news. it came right up top in his statement, in the release, where he said there's been progress of

inflation, but he's still worried about it. well, market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks. there has been some progress in bringing down inflation, but there are still multiple inflationary forces in front of us, large kesfiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world. therefore, inflation and interest rates may stay higher than the market expects. these bankers continually warn about this. >> unfortunately, the statement's all we have because he was not on the call because of a travel conflict. we did get the cfo, jeremy barnham, saying u.s. consumer is fine. there's some elevated dialogue regarding m&a, although regulatory pressures continue. i think we have some sound from the call. take a listen. >> when you look at the system as a whole, just to go through it, you know, qt is still a headwind. loan growth is modest and not enough to offset that and our pe

seems to have settled in roughly at its current levels and there are reasons to believe it might not go down that much more, although that could always change and supply extra reserves into the system. but on balance, net across all those various effects, we still think that there are net headwinds to deposit balances. when we think of our balance outlook, we see it as, you know, flat to slightly down, maybe, with our sort of market share and growth ambitions offsetting those systemwide headwinds. >> meantime, assets under investment management up 14. record number of first-time investors. and the city -- or the wells commentary as well. the percentage of investors who are moving into higher-yielding instruments has slowed. pretty interesting. and then credit performance is in line with our expectations. that's the word over at wells. >> yeah, moving cash into it. one bright spot, david, in all

of them consistently is investment banking fees. i mean, they soared. citi's investment banking revenue, up 60% from a year ago. now, it was lower base, maybe, but wells fargo fees, up 38% from 2023. but slipping from the previous quarter, i guess, is another trend. but way up, year over year. as you've seen activity come back. >> there has been more activity. more capital markets activity for certain. m&a, not as much in terms of advisories, perhaps there had been a hope for when this year began and things seemed to be, perhaps, in a holding pattern ahead of the election. you know, you most recently -- you're the most recent person here who interviewed jane fraser, i think, so i'll come to you on citi, which as you see is up a bit. on revenues that were up, what, 4% over the prior period. what was the highlight from this quarter? anything? >> just incremental growth in a lot of the businesses, and i think that's important for fraser to show as she has gone

through this big restructuring, which included layoffs and included a number of the departments under her getting restructured. she said it in the release this morning. "we have made incredible amount of progress in simplification both strategically and organizationally." this is what they have been embarking on. "we are modernizing our client structure to strengthen controls. we will continue to execute our transformation and our strategy so that we can meet our medium term targets and continue to further improve our returns over time." so, potentially, some incremental progress on that, despite some credit card losses, which we watched big business. >> not enough progress being made, at least in terms of the -- from the regulators' standpoint, in terms of enhancing their data quality management. i know you saw this a couple days ago, sara. we didn't give it a lot of attention, but they got fined $75 million by the occ, another $60 million by the fed as well for what they say is a violation of the 2020 consent order they

entered into. they did an examination in 2023. they found that citigroup's continued to have ongoing deficiencies in data quality management. just note that, because it's not an insignificant combination of fines, and they continue, at least, to apparently not, you know, toward the implementation, we so far, the fed says that has not been adequate, and we all know that has been a big issue for citi in terms of just overall data, and of course, you go back to when they wired all that money to one -- unknowingly to a creditor. >> we watch the expense side on a lot of these, which appeared -- for citi, it was a good story. this is a bank that eliminated, what, 7,000 positions in this restructuring. they were expected to generate $1.5 $1.5 billion of annualized run rate expenses as a result of the transformation, according to frazier a few months ago, so that's been a positive story. obviously, the regulatory

setback, just a reminder of what kind of regime these banks are still facing, i think, all of them. it's not just wells fargo. clearly, citi and a lot of them. as we debate what's ahead for basil iii. >> it's very specific to citi on this one issue they have been dealing with, and obviously, she's been taking steps to deal with for years now. and to your point, wells is more or less out from under most of the regulatory issues. >> except for the asset cap, which remains sort of a stranglehold. the set-up was interesting too, because the banks had rallied pretty nieccely this year and io this report. the big banks outperforming the regional ones which have seen more pressure on profitability and how it could be interesting to see how they're dealing with some of these net interest income and what they say about the consumer as well and whether they're hit harder just because they don't have the investment banking fees to lean on, the market gains we're seeing in

some of these banks. >> ties into the macrodata we got this morning. ppi came in a little bit warm after yesterday's pretty tame cpi print after rekindled hopes for a fed rate cut in september. ppi, 0.2. looking for one. got some revisions higher. year on year, 2.6 is going to take you back to the spring of last year. yields kind of gyrated a bit but didn't really change the story, and santelli pointed out wholesale inflation doesn't move the needle the way cpi does. >> it was hotter than expected. not goods, those. it's services, and that's when where we saw it, and it's potentially why the fed has remained wary and wanted -- wants to have more confidence, because the inflation side of the services sector has remained sticky and stubborn, but after yesterday's big relief on cpi, and really, that was the fourth month of data where we were starting to see good inflation progress, i think the market's pretty confident in a september

cut, and a december cut and a potential pivot in the language, a set-up for those cuts from the fed, either in the july meeting, which is almost three weeks away, or the jackson hole in august. he's got a number of opportunities. he's speaking next week, in fact, with david rubenstein at the economic club of washington. >> that's monday, right? >> yes. and we'll see. if he gets a specific question about how he reacts to cpi, which would be good, judging by some of the other -- we've seen austin goolsbee, chicago fed president, react. they're very pleased. >> profounder encouraging was the word out of goolsbee yesterday. and tim timiros suggests we'll start to look for ways he tees up in september. big piece in "the journal" this morning. "it's time for the fed to end the waiting game." why wait until september? the herd's argument is september is procedural. there's no meeting in august. it's not an economic reason in their view. >> but july might suggest a

bigger sense of urgency. what do they see in the data? they see the same data we see. but the belief is just given powell's style and his cadence, he likes to set it up rhetorically for the next meeting. although he -- he's not going to precommit. you know, from july to september, because there's still a number of data releases. >> we got to talk about yesterday's market. >> crazy. >> as we head into trading here in 18 minutes. i mean, you saw historic moves yesterday in the russell versus the likes of the mag seven or the qqqs, kinds of moves you have not seen in -- i'm seeing here, largest one-day move in 23 years. that is the differential in performance. i mean, that was just stunning yesterday. we talk a lot about the quantitatively driven funds that are enormous in size and can have that kind of an impact. but you can take a look there, what happened. it is historic. i think worst day in ten years

when you -- worst one-day move since the large cap acronyms started being thrown around in 2013. i'm seeing some research here in terms of that difference. and yet, you know, we're fine, across the board, but you can see yesterday was just bloody when it comes, at least, if you own them very recently and you were short, perhaps, the russell. wow. whether that will continue, of course, continues to be a question. it was based on rates, as we all know, the sudden move to small caps perhaps being a beneficiary of a lower rate environment, and the idea being that somehow big cap tech growth is out. now, that typically has been a one-day move in the past, when we've seen these kind of things, although never to the level we saw yesterday, or not in a long time. >> wells takes a crack at it today. "we believe the great rotation needs lower rates and earnings optimism. cpi delivered the lower rates,

but earnings concerns linger post-delta." we'll talk more about lufthansa today and their guidance, which got absolutely slashed. "we see this as an oversold bounce, not a rotation." >> it's the flipside of what we talk about every day, which is the narrowness of the market rally. some stunning statistics. 87% of s&p members outperform the s&p 500 yesterday, because the index moves based off of big tech. david rosenberg had this stat. $600 billion of market value wiped out from the magnificent seven yesterday, and then everyone -- a rotational move is not the same as a broadening out move, according to matt mayly of miller tabek, and how do we read into that? what is it going to mean for the averages, and the pain out there, despite the fact that everybody's been rooting for small caps? >> the mag seven has added some $2 trillion, some incredible number in market cap and that

has sucked the liquidity out of the rest of the market, essentially. when we come back, tesla's 11-day win streak comes to an end. stock is slapped with a sell rating over at ubs today. we'll talk about this reported delay in the robotaxi event on ergust 8th as futures hang in the on this friday. what an eventful week. stay with us.

when we're young, we're told anything is possible... ...but only a few of us go out and prove it. witness the greatness of anna hall on a connection worthy of gold: xfinity mobile. only xfinity gives you the most powerful mobile wifi network, with speeds up to a gig in millions of locations. and right now, get up to $800 off the new galaxy z flip6 and z fold6 when you trade in your current phone. get the fastest connection to paris with xfinity.

shares of tesla extending yesterday's losses, at least in the premarket. you can see, perhaps, down another 2%. ubs downgrades the stock from what had been a neutral to a sell, describing the rally as too much too soon. of course, that call comes one day after tesla shares snapped an 11-day winning streak. there was a report out from bloomberg saying the company is delaying its robotaxi launch. it will now be in october, says bloomberg. it previously, of course, had been scheduled for august 8th. no word from the company as yet. they say that two-month delay has been communicated internally, at least, citing people who are familiar with that decision.

of course, tesla shares, as we have been talking about for some time, have had an incredible rally, having been down as much as 30% on the year as of yesterday at its high, i think, was up about 9% before this report and the subsequent turnaround, and you can see, month to date -- that's just month to date. it's only the 12th. it's still up almost 20%, far exceeding the $800 billion market value. not a surprise when it comes to delays involving robotaxi. obviously, if you go back -- and mr. musk certainly admits to this -- he has promised this technology and full self-driving for many years. i mean, if he had been -- if his original promises had actually been accurate, these things would have been on the road for some time now. >> did you see uber and lyft moved up on the news as well? >> dramatically. >> pretty substantially. almost as if it's not happening

at all. >> right. >> but look, i think that's the -- the bulk of the ubs downgrade has to do with just the share price reaction to some of this hype, the sort of non-auto-related business, which is what the market has gotten excited about, whether it's robotaxis or humanoid robots. according to ubs, they say, it's always had a premium on the stock. properly valuing that additionality is difficult. the premium has widened of late, we believe, on the a.i. enthusiasm. while tesla is investing heavily on a.i. and the tech is making progress, investment is costly, pace of improvement may slow, and the payoff is long dated. they say, basically, 60 to $90 a share, carl, is the core auto business and the other attribution is $140 a share, now $175 a share, so they're looking at the sum of the parts and the valuation, and showing, this is when it starts to trend down. >> yesterday, adam jonas of morgan stanley, who's been bullish on the name, talked

about a client lunch where he does every month regarding tesla. core auto business didn't come up at all. he said, we talked for 90 minutes art energy, humanoids, china, geopolitics. the logic of cars was almost completely absent from the discussion. >> is that bullish? >> kind of amazing. that's what musk wants. that's what he's asked of his shareholders. he said, you don't want to own this if you really just care about the car business. we're an a.i. and robotics company. essentially, and full self-driving is a key part of that. the market value is now below $800 billion, at least at the outset today. that was a dramatic reversal yesterday from where the stock had been. but nonetheless, you know, you can imagine that enthusiasm will once again be built up conceivably if, in fact, the new date, whatever it may be, holds, and again, we haven't gotten confirmation of the story at all at this point, although typically musk would correct. >> that's what i was about to

say. >> he would correct. >> reuters is fake news or something. in this case, it was bloomberg, but he normally comes and issues a very rapid retort. >> absence spoke volumes. i think it was looked at at a catalyst, and now what's on earnings? slowing sales and profitability. >> the stock did benefit from the delivery numbers that did seem to, at least, indicate there was some momentum and the 1.8 million 1.8 million estimate would be met. july 23rd, definitely important, coming soon. >> next week. when we come back, here the chips have taken a detour, but the sector is still outperforming the major averages so far this month. we're going to look at what's in store for the semis for the rest of the year. also looking at futures, pointing a little bit higher. nasdaq lags again. so, we'll see whether we're going to get some sort of repeat ofhat ta trotion from yesterday. "squawk on the street" when we come right back. can you hear me now?

(dj) can you hear me now? (runner) stay with me now! (teens) oooo! (woman 1) mírame ahora! (woman 2) get em now! (roger goodell) we're ready now! (woman 3) have fun! (fan) ooo, pinch me now! (woman 4) save me now! (toddler) let's go now! (woman 5) check me now! (toddler) catch me now! (gamer 1) cmon! (gamer 2) play me now! (toddler) okay, bye now! the future is not just going to happen. you have to make it. and if you want a successful business,

all it takes is an idea, and now becomes the future. a future where you grew a dream into a reality. it's waiting for you. mere minutes away. the future is nothing but power and it's all yours. the all new godaddy airo. get your business online in minutes with the power of ai. my fear of recurrence could've held me back. but i'm staying focused. and doing more to prevent recurrence. verzenio is specifically for hr-positive, her2-negative, node-positive early breast cancer with a high chance of returning, as determined by your doctor when added to hormone therapy. verzenio reduces the risk of recurrence versus hormone therapy alone. diarrhea is common, may be severe, or cause dehydration or infection. at the first sign, call your doctor, start an antidiarrheal, and drink fluids. before taking verzenio, tell your doctor about any fever, chills, or other signs of infection. verzenio may cause low white blood cell counts, which may cause serious infection that can lead to death.

life-threatening lung inflammation can occur. tell your doctor about any new or worsening trouble breathing, cough, or chest pain. serious liver problems can happen. symptoms include fatigue, appetite loss, stomach pain, and bleeding or bruising. blood clots that can lead to death have occurred. tell your doctor if you have pain or swelling in your arms or legs, shortness of breath, chest pain and rapid breathing or heart rate, or if you are nursing, pregnant, or plan to be. i'm focusing on what counts. talk to your doctor about reducing your risk. ♪ check out some nasdaq 100 laggards as we get set for the opening bell. more pressure on mega cap tech and what we'll see if it's, in fact, a follow-through on yesterday's enormous rotation. tesla, we already mentioned, that downgrade to sell over at

ubs. don't forget, you can catch us any time anywhere, just listen re: eng llpoasthe "squawk on the stetopinbe" dct. with absorbine pro, pain won't hold you back from your passions. it's the only solution with two max-strength anesthetics to deliver the strongest numbing pain relief available.

so, do your thing like a pro, pain-free. absorbine pro. (grandpa vo) i'm the richest guy in the world. hi baby! (woman 1 vo) i have inherited the best traditions. (woman 2 vo) i have a great boss... it's me. (man 1 vo) i have people, people i can count on. (man 2 vo) i have time to give (grandma vo) and a million stories to share. (grandpa vo) if that's not rich, i don't know what is. (vo) the key to being rich is knowing what counts.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives,

and responsible investing. all right, welcome back. we're keeping an eye on shares of at&t as well. the company telling us about a significant hack where customer data was illegally downloaded from a work space on a third party cloud platform. now, the data is nearly all of at&t's cellular customers from may 1, 2022, to october 31, 2022. these are phone call and text message records of all of those customers. the records identify the phone numbers with which an at&t number interacted during the period. they do include at&t land line, if you still have one, a home phone, also included counts of those calls. that said, it doesn't include the content of any of the calls or texts. it doesn't have the time stamps. it doesn't have any details such as social security numbers, dates of birth, other personally identifiable information.

it's at&t shares. it's also the third-party platform. that's snowflake, guys. we'll get to that in a moment. >> let's get the opening bell here in the cnbc realtime exchange. at the big board, it's the 99ers, the 1999 u.s. women's national soccer team doing the honors at the nasdaq. ingredient supplier, above food, celebrating a recent listing via spac. it's within a few points of 5,600. and we'll keep our eye on the russell as we really did yesterday on that 3% gain at one point. >> i'm just watching the nasdaq too, which is down for the week, down 0.4%, but it could have been a lot worse judging by yesterday's ugly action. s&p 500 for the week, overall, still up 0.4%, even though it gets hit on the index side when tech is losing. it looks like, you know, the best performing stocks have

really been, besides some of the small caps lately, the yield-sensitive stocks like real estate is the best performing group of the week. it's on a nice 4.3% move. the reits, a group that have been shellacked by the higher interest rates and their businesses affected as we have seen a big move down in treasury yields that got boosted again by the benign cpi data. today's ppi wholesale inflation took a little bit of the shine off the cpi, consumer price inflation data, but didn't move yields a whole lot, and we're still below 4.2% on the ten-year, and that's really helped this group, like real estate, take charge again and go to the top of the market for the week. a week, you know, where tech has been the underperformer because tech does well even when rates are high. >> and we are taking a look at mega cap tech. again, we went into it with some detail, that enormous selloff yesterday in the likes of the mag seven and particularly versus the russell, which had a

big updraft. apple shares now regaining a bit of their footing. their up 0.5%. meta, though, still down, as is amazon, microsoft, they do have shares of nvidia up a bit here at the outset. we'll see how things settle. again, back to tesla, which continues to have some downdraft. i did want to come back to at&t. we were explaining that story to you about that enormous hack. again, no personal information, which obviously is important. no social security numbers, dates of birth, or other personally identifiable information, but there is another company involved here and that's the third-party platform that they -- a cloud platform that they reference. that's snowflake. and snowflake shares are taking it a bit harder than are shares of at&t. the concern being, perhaps, and i'm seeing some notes here, that does it disrupt a sales cycle? given what's left in the quarter, maybe some impact on

bookings. there was also a fairly negative ubs note, i believe, out on snow this morning. so, we'll keep an eye on shares of snowflake. >> can they see the text messages that i send to you? >> if they want to look for them, but they don't know it's you and me. >> they don't have the content of the messages, just the record. >> just the record that there was contact. you don't have to worry. >> we're fine. >> we're good. now that you've -- now you've told everybody. >> best performer in the s&p right now is fastenal. it's always a good early read on industrial activity. they are a manufacturer of many different parts that go to the consumer. and hasn't been that much of a robust environment for the company, and actually, the quote from the ceo on the outlook wasn't all that strong, but they did better than expected, at least, or they met expectations, and it's being rewarded for that. consumer sentiment remains challenging. regional leadership is seeing more layoffs, shift reductions, and planned plant shutdowns. >> actually, referenced the

manufacturing pmi being sup-50 for 19 of 20 months, which they said is uncommon duration. >> it's been a contraction for the better part of two years, the last two years, manufacturing activity. that's been weak. it's why the stock is up 3% this year and has been unde underperforming and is getting a bit of a boost. the read was okay. it wasn't that robust as far as what's going on in the industrial part of the economy. look, there are reasons to be hopeful if you do get interest rate cuts, and i think the next debate is going to be that we're going to have, okay, september, december, look to be baked in. hopefully powell will hint at them. and then what? where does the path of rates go? what is neutral? where do they want to land? are we talking about rate cuts at every meeting? every quarter? there's no real consensus on this from wall street. some economists think it's every meeting. some think that it's every few meetings. some think they're just going to pause afterwards. >> that's why -- you tell me, because you just talked to him,

but when powell folded in the, not just the timing of the first cut but not kcutting enough doe pose risks to economic activity. >> he would not go there on the path, just like christine lagarde won't go there, and the reason is they don't know. they want to see how the economy responds, and they want to make sure they don't flare up inflation and financial conditions get super loose again and that puts price pressures and takes away some of the progress. they just don't know. they don't know where that neutral rate, where naythey neeo land is if it's higher now in this economy. the neutral rate was the destination where you're at a rate where it's not hurting the economy and not helping the economy either. >> ppi is getting a second look. b of a cuts their forecast for core pce. pantheon's out saying it was really about trade services, sort of a very narrow element of the construction of the print that resulted in that. >> i'm going to need to read, like, ten economists' interpretations of this ppi

report to figure out what the culprit is. usually, wholesale inflation is a read-through into pce. however, there are some weird things in here. like airfares, for instance, went up. prices went up on the wholesale level versus what we saw in the consumer price index yesterday, where airfares went down, what, 5%? if you want to know what's going on with airfares, listen to the delta ceo, ed bastian, yesterday, and he made it clear, excess capacity equals price cuts and that's what's going on in the industry. >> we mentioned lufthansa. they were at 2.2 billion euro, now down to 1.4 to 1.8 billion euro. i don't know. they're talking about elevated costs and yield pressure. delta was more about yield than cost. >> on the supply side. yeah, you put it together, and it's disinflationary. from both of them. at in what pepsi said yesterday about consumers really being focused on value. this is a company that's been able to raise prices quarter

after quarter after quarter, so some of these stronger parts of pricing pressure economy, airlines, packaged food, are now sounding the alarm about the consumer and are now talking about reinvesting in price to take it lower, and that's also another positive sign for fed chair powell. >> do want to come back to the banks, which we led the show with. all the banks that reported earnings this morning have their stocks down. jpmorgan, of course, the largest by market cap and by many other measures. ostensibly delivered a fairly strong quarter. nonetheless, you can see it's down 2%. citi, which had looked up in the premarket, has reversed course, and wells fargo is the worst performer by far on what were, again, as sara told you, disappointing numbers just in terms of the basics there of net interest and the like. but not a positive morning for the banks after reporting. next week, we get goldman-sachs, morgan stanley, perhaps a bit of a different story. you never know, given capital

markets was a positive certainly in the reports that we've gotten you might anticipate that would follow through in some of those results and both those stocks are up. bank of america also down as, again, you might imagine, even though we haven't heard from -- >> it's a net income interest story and that was the weak spot in the wells fargo report. i would just note, though, that the financial sector's still up almost 2% this week because it has been a beneficiary this have so-called rotation. just to put it into context, the violent change in the market towards the small caps and away from the tech stocks, bank of america does their flow show where they put out the flows in the last week, and the flows in large cap growth at its highest versus small cap value since 2000. so, that was the backdrop we were coming off of, just so much money had been moving into these large cap growth tech stocks and away from small cap value. perhaps one of the explanations for why in move was so violent

that we saw yesterday. question is, does it continue? >> we talked to jim yesterday about whether or not the banks were going to start to demonstrate cost efficiencies because of a.i., widely considered the sector that will, in the end, benefit the most, but we're not getting that yet. if anything, the expense guidance is going the wrong way on names like wells and citi. >> yeah, it would seem to be a bit early to anticipate or at least expect that to be coming through on the income statement. jim did make the point of how many chips jpmorgan has ordered from nvidia, how much time jamie dimon has spent with jensen huang, how many computer scientists they have at the bank, for example. all of which, you know, when he did his -- i think he did something on "mad money" this week, the idea of what will be in the trillion dollar club in the future. jpmorgan was an outlier but one he thought perhaps could. >> what's their highest expense? it's labor. >> they do spend an enormous

amount on technology. >> biggest buyer of software is financial services. >> they're spending a lot of money on that tower, by the way. it is beautiful. i don't know if you guys have walked by. >> go past it all the time. >> i'm talking about jpmorgan's new -- >> it looks like a rocket ship. >> it's incredible, and the engineering that has had to go on in part because they've got the train station below it. i think it's close to getting topped off. i don't know. i was up high yesterday looking at the very top of it. it's quite a structure. >> but an expense. >> they spent over $3 billion on it easily. >> good for midtown. midtown needs the activity. >> we only hope some of the other big financial services companies build their big towers. i'm talking about you, blackstone. >> let's get to leslie picker, who can give us some insight, at least on costs in some of the other metrics we got today, as well as dimon's absence from the call, leslie >> yes. so, the story of the three reporters this morning, jpmorgan, citigroup, and wells fargo, as you guys were just talking about, it's the extent

to which noninterest income is offsetting muted net interest income. noninterest income encompasses line items like fees, as opposed to net interest income, which is largely driven from loan making, and for jpmorgan, investment banking fees jumped 50% to $2.4 billion, something ceo jeremy barnum addressed on the call. >> it was progress, right? we're happy to see the progress. you know, people have been talking about fee wallet for some time and it's nice to see not only the pop from base but also a nice sequential improvement. >> now, of course, the year over year jump is off a very low base last year. but barnum said he's hopeful they could be seeing a better trend here with elevated dialogue within clients, but some caveats as well. those include the pull-forward effects, particularly in debt capital markets, and that encompasses a lot of refinancings in the first half

of the year as the ipo market does still remain pretty dormant. on the net interest income side, barnum said quantitative tightening remains a headwind and loan demand is modest and not enough to offset those forces. barnum added there are net headwinds to deposit balances, although he says thesees their growth ambitions support those forces. he said it's too early to call for the end of overearning in terms of the importance of net interest income in a higher interest rate environment because of the murkiness around what exactly the fed will do from here. worth noting, guys, as you mentioned, chairman and kre jamie ceo jamie dimon was not on today's analyst or media call. he had a travel conflict. i believe he is in germany. so, we didn't hear from dimon on the call. we did hear from him in terms of the statement, some of the same concerns and conservatism surrounding geopolitics, the potential for inflation to come

back again due to the deficit and due to things like the deficit and the spending, the fiscal spending we're seeing from the government. >> leslie, what do we have up next, call-wise? wells fargo and then citi? >> wells fargo. yep. that's correct. just checking my schedule here. we have wells fargo at 10:00 a.m. for the analyst call. citi at 11:00. and i know sara is sitting down with the wells fargo cfo in the 111:00, and i'll be sitting down with the citi cfo this afternoon in the 1:00 p.m. so, we should be getting a lot more color on the macro environment, on what's going on with net interest income and some key drivers there. we heard -- i was listening in on the media call for wells fargo, when they talked. they kind of alluded to the fact that they would discuss a lot of the drivers for nii on the analyst call. there were a lot of questions, but they kept punting and saying, we'll discuss this further on the analyst call. we should be expecting headlines on that front starting at

10:00 a.m. >> i mentioned on the citi, obviously, jane fraser is in show-me mode after she's done undertaken this big restructuring, split the business into five different units, 7,000 layoffs. how much progress did you see in the report? it did look like they showed some good growth in parts of the business, particularly in the banking business. >> particularly in the banking business, that's one area, as well as in wealth. that saw growth about 2% for that division. and then on the cost side, we actually saw some tailwinds there for just overall expenses that were able to offset some of the other costs, especially the fines that took place from the fed in the occ earlier this week, related to internal controls and their management of data. so, some of the org simplification was able to offset some of the fines they saw that they had to account for in the quarter. as well as some of the other kind of broader impacts that they're seeing.

so, it's absolutely having a direct effect. i believe expenses for citi were down 2% in the quarter year over year. so, that's significant, given everything that's going on on the regulatory front >> although shares have given up their premarket gains. citi is now down about 2%. still a lot more to come, as leslie points out. thanks. as we go to break, dow is up 123. about 100 points shy of 40,000 once again, and we're trying to knock on the door of 5,600 s&p. watch bonds as the ten-year now ticks back above 4.2% as we continue to dissect the wholesale inflation present from this morning. stay with us. morikawa on 18. he 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.

(intercom) t minus 10... (janet) so much space! that open kitchen! (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.

♪ watch apple today, as it wrestles with cracking $230. "the ft" does have a piece arguing that the company is struggling to attract, in their words, fresh content for the

vision pro with, they say, just a fraction of the apps available compared to the number of developers that created product for the iphone and ipad in their first few months. meantime, dow is up 121. 5,600, s&p. don't gowa ay.

z's baking the house special.

arisa's styling a new look. and steve's filling his biggest order ever. with the first ever comcast business 5-year price lock guarantee, these business owners get five years of value on gig speed internet and advanced security, all from the company with 99.9% network reliability. so now they can focus on doing what they do best for the next five years. that's a lot of bread. you got this. the comcast business 5-year price lock guarantee. switch today for a limited tim.

back to "squawk on the street." let's give a check on nvidia and on the overall chip sector for the second half of the year. you can see the performance thus far. next guest, top large cap pick in that sector is amd. piper sandler research analyst joins us with ratings on nvidia and amd. let me first, let me get your reaction to yesterday's amazing move, you know, just overall in sort of the mega cap tech but also the chips, as well. does that concern you when you look at at the correlation across the board in much of the sector for the stocks that you cover? i think he's very concerned. >> a man of few words. >> almost speechless. >> a tour question.

>> your -- tough question. >> your question rendered him mute. >> i've done that a lot. we'll come back when we get that unfrozen. >> on the subject of chips, though, intel is no longer the biggest dog of the dow. it's nike as intel's benefitting from this confusing run last five or six days. >> this week up 7.5% intel stock. so value, value play, cheaper value part of the chip injury overlooked. >> lot of leverage maybe, as well. any of those companies that -- >> lower yields. >> lower rates have been helpful to a lot of companies that in some ways are struggling. harsh is back. i don't know if you heard my first question. it was basically trying to get your reaction to yesterday's incredible moves and the correlation we saw across semis. is it a concern in the future in terms of if in fact we do get this rotation continuing? >> so first of all, thank you for having me your show. i think your question just left me confused and dumbfounded.

now i'm back. but look, guys, we are not worried whatsoever about the future of semis, at least in the near and the midterm. guys, as you know very well, the reality is there's a 90% correlation between the macro economy and the semiconductor industry. and as you recall, all talks of recession are now off. the only talks we hear about are rate cuts and basically the pace of the recovery, whether it's going to be exceptional or moderate. but talks of recession are off. in those environments semis have done well. that's at the broader level. when you get down to the end market itself, all the end markets have depleted all excess inventory and are all rising. it's probably most evident in commodity stocks like micron. when you look at the stock and run it's had, it's indicative of the environment.

we are bullish on semis as we get into the election, into the back half perhaps for the second half of the year. so i think yesterday's move coming back to your question was just regards to nasdaq selling off. and probably some software stocks catching a bid. the fundamentals for semis remain very strong. >> yeah. obviously there are many on wall street who love nvidia. you certainly are positive on it. but why is amd sort of your top piblg -- pick, harsh? >> we had a chance to spend time with amd. what we heard was interesting. at the time that we made it our top pick, amd was about ten points cheaper than nvidia was. now that itself is not a great reason for making it the top, but what was happening is they're the only real competitor to nvidia. they were massively supply constrained in the first half. those constraints will get materially better into the back half of the year. so we're expecting a pretty nice acceleration. they've got 100 some-odd

customers. they've got some breadth as far as the customers go for the mi300 chip. and the traditional server business is also starting to look up. it will do about -- the market will do about 10% better, these guys will take another 5%, 6% share more. that said, we love amd. we love nvidia. we think there's room for both companies to do extremely well. >> what about the cyclical nature of this group? it sort of disappeared in the face of a.i. excitement and what's going to right now. who's exposed as we make this transition and we deal with a slower economy? this group used to be the tip of the spear when it came to weakness in demand. >> yeah. so what happens is when in good times our memories get very short. i'll take you back to 2023. and if you remember, the first half of 2023 was all about cyclicality for companies like amd, companies like, you know, nvidia and others. and the sector was quite in the dumps, if you will.

so i think right now we have come off the bottom. cyclicality remains a very real facet of this industry. what tends to happen, as you guys very well know, is our customers of my companies get excited and overheard and you get into the macro, and the stocks take up the gains that they take in a previous cycle. it's only been a year or so since we're coming off that cyclical correction. >> harsh, thank you, thanks for sticking with us. have a great weekend. appreciate it. >> thank you. thank you for having me. when we come back, s&p trying to close out the week with a small gain. we'll see if michigan can cap off this busy week of macro prints when we return. ♪ in any business, you ride the line between numbers and people.

what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there. municipal bonds don't usually get the media coverage the stock market does. in fact, most people don't find them all that exciting. but, if you're looking for the potential for consistent income that's federally tax-free. now is an excellent time to consider municipal bonds from hennion & walsh. if you have at least $10,000 to invest, call and talk with one of our bond specialists at 1-800-376-4376. we'll send you our exclusive bond guide, free with details about how bonds can be an important part of your portfolio. hennion & walsh has specialized in fixed income and growth solutions for 30 years, and offers high-quality municipal bonds

from across the country. they provide the potential for regular income are federally tax-free and have historically low risk. call today to request your free bond guide. 1-800-376-4376. that's 1-800-376-4376. (man 1) can you hear me now? 1-800-376-4376. can you hear me now? can you hear me now? (dj) can you hear me now? (runner) stay with me now! (teens) oooo! (woman 1) mírame ahora! (woman 2) get em now! (roger goodell) we're ready now! (woman 3) have fun! (fan) ooo, pinch me now! (woman 4) save me now!

(toddler) let's go now! (woman 5) check me now! (toddler) catch me now! (gamer 1) cmon! (gamer 2) play me now! (toddler) okay, bye now!

here at cme hq with the last of the live breaking news. university of michigan, the sentiment and july preliminary, headline -- 66.0. that is the weakest level since nov of '23. last month's 68.2 was also the weakest level since nov of '23. current conditions, big miss. 6 had.1. that -- 64.1. that is the weakest since dec of '22. expectations, 67.2, that's the weakest level going back to november of last year. now, let's look at the inflation gauges, shall we? on the one-year inflation outlook, 2.9%, equals expectations. .1 lower than in the rearview mirror at 3%, 2.9, that equals the low of the year. to find a lower number, you're going into the way back machine. dec of 2020 when it was 2.5%. if we look at the five to

ten-year inflation, also at 2.9, 2.9 would represent the lightest month o'er month level of inflation outlook five to ten years since march of this year when it was 2.8%. we see a little bit of movement to the downside in yields based on the weakness here, and if you look at the equity markets, they're still holding lots of green today. and at 4.19 for a ten year, that is down two basis points on the session. it's down nine basis points on the week. sarah, back to you. >> yeah. market seems to like it. weaker growth, lower inflation expectations. thank you, rick. good friday morning. become to another hour of "squawk on the street." i'm here with carl and david live at post nine of the new york stock exchange. we are seeing strength for the s&p up about half a percent. so we've been building on some gains since the open. what's leading us today?

it's utility -- consumer discretionary is actually one of the better performing, and technology is higher now. up 1%. energy financials, communication services are your lagging sectors. we are coming back from yesterday's losses. nvidia has turned higher. apple's higher today. tesla also turning positive. meta, microsoft, still under a little pressure. look at treasuries right now. whipsawed by some of the data though the trend has been lower yields throughout the week. friendly number on cpi yesterday. ppi goes the other way, potentially why you're seeing these firmer yields. still the ten-year note yield under 4.2%. and the two-year yield is moving south under 4.5%. 30 minutes sbots trading session. -- minutes into the trading session. the big bang's front and center kicking off earnings season. we'll drill down on results from jpmorgan, wells fargo, and citi in a moment with all three stocks lower. wells fargo gets hit the hardest, down more than 7%. shares of tesla have reversed. they're now higher. they started lower after a dramatic decline yesterday.

snapping an 11- day win streak. the stock coming off the worst performance since january 25th when it fell 12%. at&t shares lower. hackers stole nearly six months worth of calls and text messages, records of nearly every at&t cellular customer. at&t saying it was stolen from snowflake's cloud platform. shares down even more than at&t today. we'll start with the macro setup because after that big celebration yesterday, at least in the bond market and in the small caps and most of the market excluding tech yesterday, ppi, inflation, is in focus. so the celebration was off the cpi. ppi was firmer. it didn't exactly go the market's way. the core number, 3%. so there was a little bit of a tick-up. the core number .4% higher on the month. if you go through the details, it doesn't appear that the market is particularly worried about it. carl, the culprit was trade services which i guess margins

on some of those services in the wholesale level go up. and there was an almost 2% pop on the month. if you look at some of the inputs that go into the much more important pc number, which the fed targets for inflation, which comes out at the end of july, like medical services, those were a little bit lower. and so i think economists are coming out and still look for a pce number that looks around 2.6% from last year. and that still represents progress certainly for the federal reserve. some of the numbers that were weird below the headline were air fares which showed a little bit of a tick-up in the month, portfolio services. that's really just tied to the stock market. and then there were other measures including energy that were soft on the month and ppi. >> meanwhile, russell on pace for its best week of the year with a 6% gain for the week. we talked to gary cohn yesterday about curve deinversion as i think we're down to 30-ish basis

points. >> uninverting. this is the story. he thinks it will get there by next year, where the -- where we're seeing the short end of the yield curve. short end come down, long end still stay elevated. obviously we have deficit problems, so that comes into focus, as well. which also relates to some of the outlooks from the banks today. as far as the fed, you know, this was a week where the market gained more confidence, that the fed gained more confidence that it can cut. some of the reactions are worth highlighting, austin goals bee,. this is what the path to 2% looks like. he was happy to see yesterday's number. we heard from mary daley of the san francisco fed, a voter, with the information we have received which includes data on employment inflation, gdp growth, and outlook for the economy, i see it as likely that some policy adjustments will be warranted. so they are getting there.

they're moving closer and closer. and then on the other side of the mandate, which is jobs and we watched growth and that sort of thing, we did get the cnbc nrf, national retail federation consumer read today. and i want to highlight it because it did show a tick down in the month. it's worth mentioning because next week the big highlight of the week will be retail sales. the official government report. and we strip out auto and -- auto and gas to get a core retail read. so that's what i've been looking at. and we saw a step down on the month, only grew .3% for the month. which was lower than the 1.2 that it had grown the previous month. we saw the same kind of trend on the headline number, some weakness in various categories, et cetera concluding on line. on line was strong. it jives with what we got from consumer confidence with rick which was lower. lower inflation expectations. is this what a soft landing looks like? >> everything seems to be heading into the expectation for

september cut, right? >> september cut. december cut. >> you make the point, we've got plenty of reports yet to the come. if there is something that goes against trend, you know, that will be an interesting day, as well. >> right. and i don't think that ppi was deemed to do that necessarily. it's not as important, doesn't tilt us off too much when it comes to the pce read. yes, two more flainflation repo, two more jobs reports, more evidence of weakness in jobs and disinflation would be the recipe for the fed to get on a path to cutting and not one-off adjustment. the question is, what does an adjustment look like versus a broader easing cycle? that's something we'll have to debate here. let's turn to the broader markets this morning. this of course a day after the s&p suffered its worst performance since april. really the story was not just that, it was the combination of mega cap tech down and small caps up enormously. the likes of which in terms of

differential we haven't seen in many, many years. mike santoli joins us now. of course, that rotation was violent. >> yes. >> the question becomes is it sustainable? >> yes. well, i would say it was -- extreme, it was somewhat forced, but it was not random. so that massive outperformance really an unwind of this really tightly coiled trend we've had for so long where, you know, as we talked about so much, the largest stocks are also the most crowded stocks. the most expensive stocks, the most defensive stocks. and the highest quality stocks. that's the mag seven complex. when you finally got that inkling of when you see a clear path to a rate cut and the extremes in performance were so stretched that a little bit of a positioning unwinds -- you look at small cap outlows and efts, the short positioning in the russell 2000 futures, the dry tinder was there. in terms of it being sustainable i'm going to say the russell 2000 is not going to outperform

the nasdaq, but it is workinged to. there's a distance for the mean reversions to travel even if it is just somewhat mechanical and technical. i'm a little bit suspect of the idea that this is the way a market broadens out or that this next phase of the bull market takes place, meaning net selling of the big guys, and it funnels into the rest. the s&p 500 up 1.2 yesterday, more important than the russell 2000, the whip end of the laggards. this a good bit of outperformance by the median stock over the big guy. you can see some of that, but if we're still talking about how much is the economy slowing and is -- and are earnings going to come through outside of tech, which we're still asking, you know, this quarter we'll see some of that. but mostly it's a fourth-quarter story, third and fourth-quarter story, i think it's tough for the small and left behind to be the way this market goes ahead from here. by the way, it's been really

good when a .9% decline in the s&p 500 is your worst day since april. >> no doubt. >> that shows you kind of -- >> no doubt. an equal weighted -- do you and -- how much should people be concerned about liquidity overall? the idea that basically so much has moved into such a small group of stocks, creating ill liquidity in so many parts of the market. >> i think we've more or less seen the effect of that which is, you know, valuations have lag lagged. they're not super cheap the rest of the market. it's impossible to outperform the index. sarah, you mentioned that stat about yesterday. we went into yesterday with essentially a record low percentage of s&p 500 stocks managing to beat the index itself. i do think that that all -- >> 87% of s&p -- >> i'm not worried about liquidity numbers as this kind of force of nature or quantity of a thing. liquidity shows preference. and so that extreme preference we've shown for the big safe

stuff -- i think the one thing we've to recognize, too, is when the huge stocks are leading and the rotations happen, you know, between -- are we going to buy megas or buy the rest, that's a stable setup. that's why it's at 12. that's why the market was protected on these days when we doubt the macro because the mag seven was there. if you want a market where kind of the russell's leading and value over growth, you're probably going to be dealing with a choppier market, maybe it can go higher, but it's a tougher equation for the market to really advance in aggregate if we're talking about the laggards winning. >> on the liquidity question, even your -- denny again pointed to the $6 trillion in money market funds. >> i don't want to talk about the -- >> you never do. will there ever be a time -- first of all -- >> less than $3 trillion is retail money market funds. didn't we have them on yesterday, they are the biggest -- they're saying most of that's sticky. i don't think you need it as a reason for stocks to go up.

the late '90s, money market fund balances went higher. it wasn't like this zero-sum game where it has to come out of one place into another. you've kind of lost the argument if all you're saying is -- >> that's not all he's saying -- >> there are people sidelined and they're going to have to be effortsed in at some point -- forced in at some point. >> here's my question, mike -- why? what is the fundamental case for the rotation into small caps? it's not soft landing because that's been the trade all year. >> that's right. >> it's not low yields because we've seen that before, too. >> true. >> interest rates -- so what is it? what is the why? >> the why honestly, sarah, is the interest rate cuts. i think the question is is that a valid reason, right? so the playbook says if you lower the fed funds rates and have more bank financed lower quality companies in the russell 2000 or smaller cap, it is this signal that you could have a value-over-growth transition. you could have a

small-over-large transition. i think again it feels a little too cute for that to all of a sudden in one day be the trade that works now. especially -- my analogy is a football team comes out and they script the first drive. and sometimes it works brilliantly. it doesn't tell you how the whole game's going to go. yesterday was the scripted first drive of what happens when we get a rate cut. >> and it will adjust at half time if not before. >> maybe even before. yeah. exactly. >> thanks. let's turn to the banks. jpmorgan, wells, citi kicking off earnings today. all three topping expectations with second-quarter beats. next week, of course, goldman, blackrock, b of a, morgan stanley. large cap bank and consumer analyst joins us with a buy on jpmorgan, wells, neutral on citi. happy friday, erica. good to see you. >> many friday. >> looking for narrative threads. is it about some of these numbers on ib revenue, is it about expense control? what are you looking at? >> so this is actually an

extension of what you guys just talked about earlier in the segment in terms of what's happening with the market. these large caps have massively outperformed the regional banks to start the year. and so the bar for today was, you know, pretty high. so when you pair that with the excitement of a rate cut that was ignited yesterday which would be better for regionals than it is for the money centers, and then you saw, you know, wells fargo coming in at the -- the lower end of their guidance for noninterest income, jpmorgan numbers not going up, and citi having all this uncertainty with continued regulatory issues and what that means for expenses, i think what you're seeing is essentially perhaps the beginning of some reversal of this money center outperformance trade. >> really? that would be a big turn after a large -- sections of the street got positive on large cap banks.

maybe six months ago. >> absolutely. and they were very much valid to be that positive six months ago. you had really the big catalyst of bassal three end game capital rules not being as bad as feared. now here we are on the, you know, eve of a potential rate cut, and obviously the market is also starting to think about the election. the one thing that's interesting is that regional banks and cap banks don't normally trade at a discount to large cap banks. they trade at a premium because of potential for consolidation. so if the market starts thinking about a trump victory and how to invest in banks based on that catalyst, i think consolidation is a big theme, and they're going to buy the sellers, not the buyers. >> we're look at shares of wells fargo now, erika. you have a buy on it i believe. it was, you know, a somewhat disappointing quarter, particularly given i guess a miss on net interest income.

has it forced you at all to reassess your recommendation? >> great question, david. no, not at this time. look at the end of the day they did have a tough quarter, and the outlook is even tougher. no one wants to see numbers come down. and also, they had a higher outlook for expenses, and right now the call is going on. and hopefully they're explaining that the strengthened investment banking and trading could offset the increase in expenses. at the end of the day if we zoom out, if we think of the most, quote, trumpian of the money center banks, we think it's potentially wells fargo because not only do you have a true recovery story that very much parallels bank of america's ten-year story that followed the global financial crisis in terms of recovery and roe improvement, but the asset cap continues to linger as a negative. and i think that investors are thinking that if we have a republican administration that the chances of that asset cap

lifting sooner rather than later is higher. >> what explains the net interest income guidance falling between 8% and 9%? i get that they're more consumer driven and, you know, rates may have peaked. but why the outsized decline versus, say, jpmorgan? >> so there's two questions -- answers to that question. the technical answer is that they are coming from a lower deposit cost base. so any rate of change to go to market is clearly more significant for wells than for others. but i think this is where the reputational issues which are healing but still exist come in. if you think about wells fargo, they are not growing new checking accounts and retail the way jp and b of a are. they have to lead with price. additionally, they're starting to lean into corporate deposits which are at market rate. and so what you're seeing is sort of a basing effect, but in reality wells has to be more

competitive because it still has to shake its reputational issues. >> i noted you mentioned the potential for a change in administration a couple of times. i'm curious, is that coming up a lot in your conversations with now with investors? >> it's coming up at -- in every single conversation. and i think what's interesting is that while it's coming up in every single conversation with investors, the conclusion is that it may lead to earl -- be too early to put on the trade given the uncertainty about who's going to be the democratic nominee. that leads me to conclude that if the market starts thinking about a trump victory and truly pricing that in, then you could see the same thing, an extension of what you saw yesterday in terms of smid outperformance versus the large caps from here in banks. >> erika, thanks. good to see you. ubs, watching the banks as things get even busier next week. as we head to break, here's our roadmap for the rest of the

hour. shares of tesla rebounding from yesterday's big losses after reportedly delaying its robotaxi event. what's ahead for the stock from here? plus, it's not in the magnificent seven, but wall street is viewing this stock as an under the radar winner in the a.i. arms race. shares are rallying up 35% this year. wow. i really want to know what it is. and the sectors that stand to win no matter who wins the election, as we got the s&p, dow up half a percent, russell up 1%, qnon q up half. don't go away. [busy hospital background sounds] this healthcare network uses crowdstrike to defend against cyber attacks and protect patient information. but what if they didn't? [ominous background sounds] this is what it feels like when cyber criminals breach your network. don't risk the health of your business.

crowdstrike. we stop breaches. i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one. runner up nashlg north carolina. >> america's top state for business. >> virginia, finishing in the

top half of all ten of our categories o the moment i met him i knew he was my soulmate. "soulmates." soulmate! [giggles] why do you need me? [laughs sarcastically] but then we switched to t-mobile 5g home internet. and now his attention is spent elsewhere. but i'm thinking of her the whole time. that's so much worse. why is that thing in bed with you? this is where it gets the best signal from the cell tower! i've tried everywhere else in the house! there's always a new excuse. well if we got xfinity you wouldn't have to mess around with the connection. therapy's tough, huh? -mmm. it's like a lot about me. [laughs] a home router should never be a home wrecker. oo this is a good book title.

tesla reportedly postponing its planned robotaxi event. the delay which would push the reveal from next month to october leaves the stock as one of the biggest losers in the s&p for the week. although it's still doing quite well for the month. our next guest calls it a nonevent, believing the ev maker's stock is going to double. joining us, deporter asset management's gene munster. why is it a nonevent? if there's any roar here it's a history of -- history here it's a history of delays and unfulfilled promises when it comes to full self-driving. >> the history is the reason why this is a nonevent, is that they occasionally postpone their actual events. keep in mind elon kind of did this off the cuff, announced this out of a reaction to a report of a discontinued low-end vehicle. so i think that that was hastily

planned. but they -- sometimes delay these events, but they always, and i choose that word carefully, delay product announcement -- product launches and the subsequent ramps. and if you look at the -- the breadth is eventually they will get acceleration from these products. as far as fsd, that undoubtedly is still this question that is beg thiing -- begging that's ben delayed. elon said in that fsd would be available at the end of the year. at the first a.i. event he talked about a million robotaxis in mine months. so it -- nine months. it's a nonevent because this is a well traveled road. ultimately the reason the stock is rallying back here is investors are asking a simple question -- is do they believe that transportation eventually is going to have an auto me angle and what is temps's position? and -- tesla's position? and my view is absolutely in the

future transportation will be autonomous. i think tesla has a pole position in terms of capturing that opportunity. >> so it doesn't matter as much as whether it's -- it's coming, it doesn't matter as much as when it's coming, gene? i mean, i would think for a discounted model, you want to determine value, you've got to have some date in mind where this is going to begin to contribute to revenues and cash flow. >> you do, and it's probably '27 or '28. and i want to put some context. you mentioned earlier about the potential for the stock to double. right now the company's going to do about $100 million in revenue, by 2027 that will be with $100 billion. by 2027 that should be $-- a similar that yields a double from here. but i think that's kind of the year that investors should be focused on is 2027. which means we're probably a year away from fully discounting

that. but keep in mind that that 2027 benefits from two factors -- first is accelerating demand for vehicles, whether it's for consumer-owned vehicles or fleet vehicles. and certainly, more importantly, of course, is margin expansion. i believe that autonomy is a killer app, they will have higher margins because of that. to answer your question, i think it's 2027. and i think that's going to get progressively discounted in the stock over the next year. >> what about the humanoid robots? how do you factor that into the valuation? total addressable markets and potential for profitability, or is it just too early? >> it's not too early for investors who have a five-year time window. and think of this as the a.i. cake. there's three layers to it. the first is just fsd. the second layer that's probably '26, '27. the second is fleets, that's probably '27. the frosting layer, sweetest layer is optimist.

at this point it is a eye roller, a potential punch line of a joke for many investors. but optimist does hold an opportunity that could create more value than the collective business all together. and when you think about the concept of really automating work across the board, i think that that is a massive opportunity. this is still an $800 billion company. there are $3.5 trillion companies that i think are doing less that to advance humanity -- less to advance humanity. i think that optimist should be part of the conversation, although it's not today. >> yeah. also doing a lot of planning in spacex apartment for life on mars -- apparently for life on mars. gene, while we have you, a quick diversion to apple because it's a name, my god, you've spent so much time talking about over these last years. give me a take sort of, you know, on the current quarter and the cycle and what lies beyond. >> current quarter, the street looking for 3% growth. that's for the june quarter.

because the strength in china the last two months you should see an upside, call it 4% growth. we'll see accelerating growth again in september, december, and calendar year next year. as far as the cycle, the question comes down to how potent are these a.i. features going to be. samsung this week revealed some data around their galaxy a.i. they said their circle to search a.i. feature, 55% of users are using that on a weekly basis, and their annotated image is 23% usage. that is far more than what they expected. the bottom line is this is going to create a boom in demand for apple devices. it's going to take probably six quarters to build that momentum. but this is probably the most exciting six quarters of iphone that will be emerging related to really opening up a.i. to the masses. >> yeah. we'll be following that closely, as you well know, gene. thank you. >> thank you.

watching oracle on a related note. it's lower for the week, but it's been one of the under-the-radar a.i. beneficiaries this year. kate rooney here with a look at where oracle is positioned at this point in the a.i. race. good morning. kate. >> reporter: hi, good morning. yeah, so we don't talk about oracle every day, but it's been leading in what some are calling the second tier of a.i. winners. shares up 35% this year. it did get hit this week after reports of elon musk's ex a.i. scrapping a $10 billion deal for oracle servers and chips. wall street shook off the headline. the muted reaction underlines some of the excitement in injury kelly's a.i. story, outweighing -- oracle's a.i. story, outweighing what seemed big news in the loss of a customer. jeffries saying the deal has, quote, no impact. they said it wasn't factored into revenue and oracle continues to see, quote, exceedingly strong demand with the pipeline growing faster than bookings and revenue. it comes down to what wall street sees as endless demand for servers and for cloud computing.

oracle's cloud business has proven demand so far with some key partnerships including openai, you got microsoft and google, ceo said recently on earnings that they're seeing, quote, enormous demand for training a.i. large language models. part of the story was the setup coming into this year. evercore said sentiment toward oracle was at a low water mark and that oracle went from zero to hero in 2024. it was their contrarian pick at that firm. there's more confidence in the cloud growth story and then revenue acceleration. oracle does trade at a discount, if you compare it to microsoft at least. 28 times earnings. microsoft around 35. and then a possible tiktok ban, that seen as one potential hangover on the stock, oracle's cloud, power that social media app. >> appreciate that. come we come back, why a crypto indicator is showing bitcoin could be in for a drop. and watching carvana. a buy of 1.55 targets as the car

company has a, quote, compelling future. d) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

is it me... or is work not working? at least, not the way it could work. your people are buried in busy work. and you might be thinking... can ai make it all work? it can. on the servicenow platform, ai transforms your entire business. your people work better, your customers are happier, and todd... well... he's practically euphoric. practically. so, let's get to work. (♪♪)

welcome back to "squawk on the street." bitcoin's trying end to the week in positive territory following a rough start to the month, as you know. new data shows the cryptocurrency may not retest its record run until later this year. bitcoin valuation indicator, crypto quantity's bitcoin profit and loss index, is hovering around its own 365-day moving average. in the past, a crossovert index to the downside has marked major corrections including one between may and july of '21. and another that same year between november and december. so far this year bitcoin's still up 35%, trading around 58k, let's say. interesting measures to see where the price may go from here. >> you know what else is making people bullish on bitcoin again is donald trump who has declared himself the bitcoin candidate. he did that back in may, and actually we've seen a pivot from the biden administration friendlier, as well. people are excited about that. i noticed the flows into bitcoin, bank of america, merrill lynch, on the flows last

week, were also very strong. all right. with that let's get a news update. hi sylvana. >> good morning and happy friday. the jury in bob menendez's trial expected to get the case today after receiving instruction from the judge. the new jersey democrat pleaded not guilty to 16 felony counts including that he accepted bribes and acted as a foreign agent for the government in egypt. if convicted he could face decades in prison. lawyers for former president trump want his recent conviction in the new york hush-money trial thrown out. in a filing made public last night, trump's lawyers say the recent supreme court decision on presidential immunity proves that certain evidence and testimony in the trial should have been withheld because it was related to official acts of the presidency. and dollar general has agreed to pay a $12 million fine and improve safety conditions at its sports. the labor department -- stores. the labor department and osha

reaching a settlement with the retailer resolving allegations including blocked emergency exits and fire extinguishers, unsafe storage, and electrical panels that couldn't be accessed. dollar general will be required to reduce inventory and improving stocking to prevent hazards and high hire more -- and hire more safety managers. >> thank you. after the break, more market reaction to this morning's data with stocks inching higher. we're now up almost .7%. information technology back at the top of the market. super micro, tesla, nvidia back in the lead. consumer discretionary also up more than 1%. the only thing lagging really in terms of sectors, financials, er, d mmicioengyancounatn services. we'll be right back. [crowd chanting] they ignored your potential, and mocked your ambition. but it's not the critic who counts. with every swing and block, your game plan never changed.

♪♪ some still call it luck. let them. because you know what it's always been. inevitable. ♪♪ ♪♪ at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience,

helps investors meet their goals. pgim investments. shaping tomorrow today. [♪♪] your skin is ever-changing, take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond.

welcome back to "squawk on

the street." wells fargo shares taking it on the chin down 7% after net interest income dropped to the lowest level in two years. the company expects that nii to be down 7% to 9% this year. a disappointment to the street. our next guest manages new berger berman's equity fund. wells fargo is their third biggest holdings. sandy pomroy joins us at post nine. i believe your biggest holding in financials. you've got to be disappointed with what you got. do you reassess anything? what explains it? >> we clearly are disappointed because we want to outperform every day. that's what we're trying to accomplish. i think this is more of a temporary issue. we believe the net interest margin problem is really related to the -- the yield curve being inverted. and so when we do finally see the fed begin to loosen up and

wells fargo is uniquely positioned. when we bought it, it was by far and away the cheapest bank stock. it's caught up a little of that. it's got more self-help in terms of the costs they can cut and what not. we're sticking with it. >> part of that was the expense side. that was a disappointment. >> i think investors were hoping for a faster pace on the expense cuts. we're not -- we're not thinking that this is a -- a catastrophic problem. it's just more of a temporary problem. >> is it you're view that they're having to spend money to save money in the long term? >> you know, depending on what needs to happen, yes. if you need to spend more in technology or need to sort of rationalize your staff, it always costs more up front. but then you get the payoff in the outer years. so that might be part of it. we need to have sidebar conversation with the company and figure out what is really going on and whether our investment thesis is on track or not.

>> we should note you own jpmorgan which has performed better. >> yes, we own a lot of the insurance cultures, as well. within our financial -- companies, as well. within our financial ratings we've been super focused on insurance. >> what's the case? >> the case is pricing is very, sister strong. it's incredible -- very, very strong. it's incredible. >> a viewer can attest. >> yes, anyone who's been renewing their auto policy or homeowner's policy. it's like, whoa. so -- and you know, for the time being we think that's sustainable. so we, aig is a large position, progressive's a large position. so if we were to say like within financials, what are you favoring, it's more the insurance companies. >> part of the macro discussion lately, and we saw this in front this week, that is the period of huge rate increases might be behind us. you think that's off track? >> not necessarily. i mean, what's really matters to them is not just the revenue side but the -- like are they underwriting it properly. so can -- if rates come down but the combined ratio goes up,

that's positive. we look at it in tandem, not just a one-dimensional thought. >> we appreciate you giving us an update especially on the financials which are in focus today. >> okay. >> good to see you. sandy pomroy from newberger berman. in "money movers" we are going to check in with the cfo of wells fargo. we'll talk about the quarter, expenses, certainly the economy at large. that's coming up at 11:30 a.m. eastern time. so join us f tt. ayitus.rha [♪♪] your skin is ever-changing, take care of it with gold bond's healing

formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond.

okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

i think i'm the most qualified person to run for president. i beat him once, and i will beat him again. >> that's president biden at yesterday's nato news conference vowing to complete the job and remain the democratic presidential nominee despite these growing calls for him to step aside. our next guest says 2025 should be a better year for industrials no matter who wins the election. jeffries equity analyst harry -- sari burnsky joins us.

it's been a busy day with clyburn on the "today" show and jeffries -- the easiest playbook to write is one that doesn't depend on one nominee or the other, right? >> right. thank you so much for having us today. you know, we've been calling for lower capital investment in 2024 since the start of the year. companies are going to be hesitant to invest during periods of high uncertainty. we're hearing of capital projects being pushed out. lincoln electric lowering guidance. our view is that capital investment's going to return most election under either candidate, as companies have greater certainty and regulatory environments. >> are you starting to hear from folks who are making a bet either way whether that means m&a discussions gets more robust, something like that? >> we're definitely having investors starting to become more interested in the upcoming election. you know -- either candidate, the strength of that return could vary just

-- >> apologies to saree. being bedeviled by audio/visual transmission problems today, david. >> it's interesting how we've sort of gone back into time when it comes to technology in a way on tv. >> medium's only been around for a few decades. >> there was a period when we could guarantee things were going to be fine. >> the peril of zoom. >> so much less expensive, though. do you remember when we used to have to send a satellite truck for people. >> yeah, they can join us. that's always the best. >> that's always the best. >> love that. your turn. >> oh. this monday you're not going to want to miss a huge interview here on "squawk on the street." blackrock's chairman and ceo larry fink will join us at post nine, that follows the company's results that will be released earlier that morning. so around 9:30 a.m. eastern, you're not going to want to miss it. stay right here.

sure, i'm a paid actor, and this is not a real company, but there is no way to fake how upwork can help your business. search talent all over the world with over 10,000 skills you may not have in house. more than 30% of the fortune 500 use upwork because this is how we work now. (man 1) can you hear me now? more than 30% of the focan you hear me now? can you hear me now? (dj) can you hear me now? (runner) stay with me now! (teens) oooo! (woman 1) mírame ahora! (woman 2) get em now! (roger goodell) we're ready now! (woman 3) have fun! (fan) ooo, pinch me now!

(woman 4) save me now! (toddler) let's go now! (woman 5) check me now! (toddler) catch me now! (gamer 1) cmon! (gamer 2) play me now! (toddler) okay, bye now!

jeff bezos is selling more shares of amazon. robert frank with us.

why is he selling all this stock, any idea? >> not yet. look at the stock prices, a good time to sell. back in march, remember, bezos filed a plan to sell 8.5 billion by the end of the year. he sold that in just a matter of weeks. earlier this month, he filed a second plan to sell an additional $5 billion by the end of the year. that will bring his total, if he sells that entire $5 billion, to $13 billion in total sales just this year. he's already working on that $5 billion tranche very quickly. over the past week he's sold in three traumnches, one last frid, two this week, tuesday and wednesday, totaling about $1.2 billion for the week. he will only own about 9% of amazon shares. still clearly the largest individual holder. the big question, david, is what is he doing with all this cash? maybe he's using it to fund some

of blue otrigin, his space company, a very expensive endeavor. he purchased $200 million worth of planned in miami to build a new house. he and his wife, lauren sanchez, have been spending some of the summer on his yacht off the coast of greece. he is saving a lot in state taxes. he moved from seattle to florida last year. he will have saved by the end of all these sales nearly $1 billion in state taxes by make willing that move to florida in stock sales. we should also add, guys, mckenzie scott received all those amazon shares as part of their divorce settlement. she's worth $40 billion. that is after she gave away $17 billion to charity. >> yeah, nobody gave, i think, away as much money, as you well know better than i, at a faster pace than mckenzie bezos did. what you added up there is a small percentage of $13 billion.

i have no idea what the capital needs are for blue origin. one might imagine they are fairly significant. that said, could it just be diversification, a bit, away from what is almost a $200 billion position in amazon that he has? >> you know what, you usually hear, as you well know, from executives as part of financial and estate planning, it's unclear -- he and lauren, when they get married, what that's going to involve and what he's pledged to that. maybe there's some family dynamics here. even at $8 billion, there was a question with blue origin, okay, maybe they need to buy a large rocket company. that's even -- the largest rocket companies weren't $8 billion. this is way beyond anything that seems to be sort of attached to blue origin, but we also just haven't heard from him at all about what he wants to use this capital for. but it is a major amount of cash that he's going to be sitting on right now.

>> staggering numbers. >> are there any nfl teams for sale? i don't know. >> i mean, yeah. there always is at the right price, conceivably, given 13 bill, yeah, half of that would go for any nfl franchise. >> and also a really nice wedding. we could do that all day. >> that prenup, man, i just hope -- i'm sure he's got the best lawyers ever on that thing. robert, thank you. thank you. wells fargo earnings call still under way this hour as the stock is getting hit pretty hard. let's get back to leslie picker for the latest. leslie? >> quite an ugly day for those wells fargo shares. the declines you're seeing in that stock price are largely centered around net interest income. it's something we talked about last hour as well. that's the profitability metric for loan making that came in below expectations. the firm reiterating guidance of declines between 7% to 9%. urged investors it will likely be steeper to the 8% to 9% of

that guidance range. shares down 6.8%. however, the call is still under way. executives there say they believe nii should bottom toward the end of the year. cfo noting that calling the exact quarter of a trough is tough, but he noted funding costs are starting to moderate. >> happening now for a while, you know, from checking into savings or cds, it's still happening but at a slower pace. you can see that over the last couple of years as it's been, you know, pretty stable the last quarter or two. but it's definitely slowing as you look at the quarter. so, i'd anticipate you'd still see more migration, but continuing to slow as we look -- as we look forward. >> average loans were lower in the quarter, down about 1% for consumer. wells fargo also updating its expense guidance to about $54 billion up from prior guidance

of $52.6 billion. that includes higher revenue related compensation expense, operating losses and other customer remediation related expenses. fdic, that's currently what they're discussing on the call. back to you. >> leslie, look forward to your further reporting. that's going to wrap it up for us. take a look at shares of apple. did note that stock is up as much as 2%. perhaps some of these reports about foxconn, the big manufacturer it uses to make apple iphones ramping up for what, i guess, many hope will be a lot of demand for the next generation iphone. did want to note that stock well above the other mega cap tech, other than nvidia, of course, which is up 2.5%. we're done here. but a big hour coming up of live market coverage. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah. the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai.

. good friday morning. welcome to "money movers." i'm sara eisen with carl quintanilla live on the floor of the new york stock exchange. wells fargo's cfo is with us after stock getting hit.

goldma