it's tuesday, july 16th, 2024. "squawk box" begins right now. ♪ good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. we match. didn't notice that until this second. >> thank you for letting me know. i'm becky quick along with joe kernen and andrew ross sorkin. >> thanks for the text. >> wow. it is really bright, too. it's so bright -- >> is that canary? >> i think it's called -- >> canary yellow. >> what's the word? >> banana. >> a minions banana? >> i have a much yellower tie.

i didn't want to go with a full yellow. i don't know why. >> big bird banana to me. >> a fishes skeleton. >> it looks summery. it does. let's look at what is happening with the u.s. futures at this hour. yesterday, you did see the dow close at the all-time high. the s&p hit the intraday high before pairing the gains. the dow was up 200 points. the s&p up 16 points and nasdaq up over 70 points. this morning, those gains continue in the pre market. dow up 60 points. s&p futures up 6.5 points. the nasdaq indicated up 20 points. that feels like a broken record. how many times have we talked about new highs and the futures indicated higher again in the morning. this is a market that just does not want to slowdown. if it you check out what is happening with treasury yields, those yields are lower. the ten-year at 4.17.

the two-year at 4.41. we have comments yesterday from a jay powell. we will talk about that in a little bit. the numbers we have seen in the last three months have shown a softer job market and improving continuing on inflation. that sets the stage for what the fed will do next. bitcoin this morning looks like it is at $63,000. we are talking about bitcoin which had a big jump since saturday. we're watching the price of cryptocurrency ethereum as well. reuters report says the u.s. securities and exchange commission has given preliminary approval to at least three of the eight asset managers hoping to launch spot ether etfs. all eight could be approved on monday and start trading on tuesday, july 23rd. you see ethereum up close to 50% this year. it pulled back slightly within last few minutes. in the meantime, fed chair

jay powell setting a path to cuts. here is what he said at the economic club of washington, d.c. >> we have been very clear you would not wait for inflation to get all the way down to 2%. our test has been for the past quite some time that we wanted to have greater confidence that inflation was moving sustainably down to the 2% target. what anincreases the target is e inflation data. >> powell saying he thinks a hard landing for the u.s. economy is not a likely scenario. also something that may be helping the markets. let's talk about the planner. the last of the big banks set to report today. so far, financial companies beat estimates for earnings and revenue. it hasn't all been good news. wells fargo shares down 4% since reporting a 9% drop in net interest income. today, we will hear from bank of america and morgan stanley. as for economic data, we will get june retail sales and import

prices all happening at 8:30 a.m. eastern time this morning. and former president trump has selected ohio senator j.d. vance as his presidential running mate. vance is just 39 years old and joined the senate two years ago. he gained quite a bit of fame in 2016 through his best selling memoir "hillbilly elegy." it became a ron howard movie with glenn close. he served in the marine corps after the towers came down. deployed to iraq as a combat correspondent. when to the ohio state university and graduated in less than two years and went to yale. worked for the 3m capital. it is run by peter thiel.

started his vc firm in 2019. he ran for the u.s. senate seat after rob portman left office. in an interview with fox news yesterday, vance received a call from trump yesterday asking him to be the running mate. he said he could help trump win and i don't know if i would call it rustbelt states, but winning in pennsylvania and michigan. he's from middletown, right near cincinnati. right between cincinnati and dayton. i guess, i was on kelly's show yesterday. i'm a hillbilly, too. from the west side of town in cincinnati is the not quite the side of town. i began my life in an orphanage. i had great parents after that. i identify a little bit with coming up if that type of upbringing in the midwest. >> the book's amazing.

>> amazing life. amazing life story. he looked tall yesterday walking around, i noticed. i didn't know he was that tall. he has a nice wife. i don't know. he's already -- you know, they already had opposition research ready to go. there's a lot of stuff swirling around. >> just in terms of things he said in the past. controversial. >> you talked about ron howard. ron howard has come out publicly saying he made the movie. i think he thinks that j.d. vance was a different person when he was writing that book. there's a whole sort of -- we can come to you for it. how many points? >> ten points? >> i don't think so. i've known him and talked to him over the years. >> he's been on the show. >> the j.d. vance that people saw and the person that he saw was a different j.d. vance.

>> he is still the same person. >> j.d. vance did have strong opinions. he was against donald trump before. >> you know how politics works. not the first time. kamala and joe were at each other's throats at the debate. i was the little girl on the bus. elon musk plans to donate $45 million a month -- that's a lot of money, to a super pac backing former president trump's campaign. other backers of the group called america pac include palantir co-founder and the winklevoss twins and kelly craft. it is focused on registering voters and persuading constituents to vote early and wering mail-in ballots in swing

states. president biden speaking to nbc's lester holt last night. the president defended his decision to stay in the race amid concerns about his age. >> me. look, i've been doing this a long time. the idea that i'm the old guy. i am. i'm old. i'm only three years older than trump, number one. number two, my mental acuity's been pretty damn good. i've gotten a lot done. >> you can see more of that interview right now at nbcnews.com. the administration is planning to call on congress to pass a law that would ensure that landlords cap rent increases at 5% or risk losing out of tax breaks. that would apply to landlords

which hold more than 50 units. the braiiden administration is looking to sell land to provide more afford aable housing. biden is set to visit a swing state in the election. 1.43 million teamsters union consider backing no candidate at all in the president atial race. the relationship with the union and the biden administration has been deteriorating in the recent months. sean o'brien speaking out yesterday and offering no endorsement. the union is no beholden to anyone or any party. i would actually suggest this is a good thing overall. >> to be frank, when president trump invited me to speak at this convention, there was political unrest. on the left and on the right.

hard to believe. anti-union groups demand the president rescind his invitation. the left called me a traitor. [ crowd boos ] >> and this is precisely why it's so important for me to be here today. [ crowd cheers ] >> think about this -- think about this, the teamsters are doing something correct if extremes in both parties an think i shouldn't be on this stage. president trump had anthe backbe to open the door to this convention. >> o'brien is not scheduled to

speak at the democratic convention in august. you may remember sean o'brien got into a fight with senator mullen of oklahoma. it wasn't just a sparring, but a -- >> yeah. >> it was -- it almost became quite physical. >> interviews with him yesterday. he reached out and has n't hear. he hasn't been invited. >> you notice the messaging in the ties -- >> mine has no message. solidarity. >> former president trump had a red tie and j.d. vance was wearing a blue one. sean o'brien was wearing a purple tie. >> you think that was planned? >> yeah. really. >> >> purplish?

>> i'm not sure. >> i think that's the messagime. my guess is somebody told them to wear those colors. >> funny. we probably said that before. we get hate mail from both sides. i guess we're doing something right. we get a lot of love. mostly love mail. united health just reporting. $6.810 a share. better than the $6.66 a share. ahh! revenue was better than expected. the company is affirming its guidance for the year for the full year. the outlook absorbs an estimated 60 cents a share of business disruption for the affected change at hethsalthcare service >> it got hacked. >> the unh said it restored the majority of the affected change

care services after the cyber attack. coming up, we will talk strategy with the dow and perhaps if it's indicated higher this morning -- yup. that would be another new fresh all-time never before seen record high. the first time in history. that's next. in the next hour, we will talk to north dakota governor doug burgum. he was on the short list. now mr. call him mr. secretary for some reason. "squawk box" will be right back.

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dow closing at a record high and the market rotation seems to be gaining some momentum. for more on that, let's bring in john mowry at nfj investment group. maybe everyone is getting a little ahead of themselves, john, but we keep hearing trump trade on people's lips. a long way to go. do you see evidence in the market that reflects an expectation that trump will win or a sweep in congress. do you see that yet? >> a lot of things are

coalescing with trump over the weekend and the debate performance with biden. on top of that, you actually have a negative month over month cpi print pulling it down to 3% and all that further pushing powell look to cut rates. all those things are shaping up for a really interesting dynamic. on top of that, joe, you've got the small and mid-cap bank stocks and large bank stocks trading to the tech bubble in 2000. all of th those are setting up an interesting rally. that started all last week. >> you think if it is not a clean sweep, gridlock is probably positive as well. it seems like that might be the base case as well in this senate and house?

>> i think that is the base case. i think gridlock is welcomed by the markets and they want clarify. obviously with the vp pick yesterday, the market has more clarity in the direction that trump is going. he clearly is making age, vitality, youth part of the debate and further pushing that forward. i think that will be interesting to see how that plays out. no doubt, joe, trump has made it pretty clear he wants lower rates and friendly to the market and friendly to the certain sectors. powell, also has made it clear he wants to lower rates. the u.s. has some of the highest rates in the world. you have to go to latin america to find higher interest rates. if you look at what the bond market is telling the fed, particularly since may of actually 2023, the two-year yield has been below consistently the fed funds rate. even though you might have been late to raise rates, it doesn't give you the ability to be late

on this side. powell is worried and investors should act accordingly. s i said this before the show, the s&p bank sub industry is now beating the s&p 500 by 400 basis points over the past year. that's pretty impressive given you don't have nvidia, microsoft or apple or the faang stocks. that is barely a move off the bottom of where you can go with the nims expand under the next president. >> even though it may go up based on the steepening of the yield curve which is good for that sector is what you are saying? >> no doubt. i think the long end could depending on inflation. the reality is all of the numbers point to inflation going

lower. if you strip out housing, you've got the cpi sitting there at 2.2%. the reading here at 3%, joe, is pretty favorable hishistoricall. you are right there in line. what i would say is when you think about an inflation that is obviously a very regressive tax on the u.s. consumer, but interest rates being high is also a regressive tax on the u.s. consumer because more people with disposable income is pushing and i bempacting the lower-end consumer. i think congress and how the president will have an interest in lowering rates, if they can, and inflation is providing a window for them to do that. the other thing i'll say about trump is also if elected, he probably will see the trade deficit narrow. one way to do that is the weaker

dollar. one way to do that would be to lower rates. >> perversely, sometimes if you remove regulations and drill, drill, drill, there's more supply. that could mean -- and it would be good for everybody with lower oil prices, but not the energy stocks themselves. they might not flourish if you ramp up production or move any obstacles to increasing production. >> yeah, i worry about that a little bit, to be honest. you know, it kind of reminds me of whether it's energy or whether it's the ammunition stocks depending on who gets in office, depending pro or against policies. i think with less regulation, joe, it is applauplausible we c see higher. it may not be good for the profits with the oil companies. valuations there are, you know,

i would say average. they're not, you know, extremely cheap. they come off low levels when oil dipped negative. i don't think energy is the most attractive area within the value space if you are looking to allocate capital. >> all right. you didn't know bryson? when did you graduate? >> i graduated in 'an06. i'm 40. it is interesting looking at an older candidate. >> you are talking about j.d. i'm talking about bryson dechambeau and payne stewart. smu has a little cache. >> it does. thank you, joe. coming up, new report saying internal slack communications

have been leaked online. we'll bring you that next. and coming up, earnings alert from bank of america and morgan stanley. we'll bring those next and instant reaction from wall street when "squawk box" returns after this. grandmother's artistry and establishes a charitable trust to keep the craft alive for generations to come. from preserving a cultural tradition to leaving a legacy, a raymond james financial advisor gets to know you, your passions, and the way you enrich your community. that's life well planned.

data from disney's internal slack workplace systems have been leaked online according to the wall street journal report says the leak includes computer code and unreleased projects and ad campaigns. the journal saying it viewed a wide range of materials from the leak and the hacker group

released it. >> it embarrassed them? >> apparently. rite aid says customer data was accessed in the cybersecurity breach in june. an unknown person impersonated an employee on june 6th. it detected the investigation 12 hours later and reported to it law enforcement. the company determined the hacker looked at attempted purchase of products and name and address and date of birth and driver's license number. when we come back, the auto dealer incentives. the hottest year since 2020. phil lebeau will have that next. as we head to break, let's look at the latest from yesterday's s&p 500 winners and losers.

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good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. checking the futures, the dow is basically flat.

the nasdaq may open at a new high. nasdaq, you can see up 39 points or so and the s&p up just under ten after gains yesterday. >> across the board. auto inventories are at the highest point since 2020 which could mean better deals this summer and big decisions for automakers as we head to the fall. phil lebeau is here with more. phil, it has been a long time since you could get a good deal on a car. >> becky, we are not back to the days where you can go back and haggle with a nice deal or rebate. it is possible for you to get several thousand dollars back on a vehicle when you go in to buy a new one. here's where things stand according to tax automotive in june. $3,100 is the average incentive. that is up more than $1,000 compared to june of last year.

it is 6.4% of the average transaction price. at dealerships, you are seeing more people getting the possibility of a greater incentive. that said, the average transaction price ain't far from where the record high was under $50,000. currently $48,644. that is down $306 from june of last year. not a bing change year over yea. still high prices. we're a country where internal combustion vehicles continue to dominate the market over sales in q1 over q2. hybrids up 15% versus q1. you take a look at shares of toyota, gm and ford, and we hear from gm and ford next week apparent toyota in august. the day's supply in a normal market would be 60 or 65 days supply. it is 48 days supply.

this is an increase over last year when it was 35 days supply. look at shares of tesla. it reports the q2 results next week. it will be interesting to hear what they have to say about the level of demand out there in the united states. we know about the issues in it china with the pricing pressure and ev market. there especially here in the u.s., they don't like to get granular in the markets, but there will be questions regarding the ev market and ev demand here in the u.s. >> phil, if you are looking at the inncentives just over $3,00 and 6% of the price of the vehicle, what would those numbers have been, let's say, i don't know five or six or seven years ago? >> oh, pre-covid? the average transaction price was much lower. probably closer to 43 or $44,000. somewhere in that range

pre-covid. the average incentive was much higher. average incentive was probably closer to $4,000 or $4,500. >> close to 10%? >> yeah. it depends on the type of vehicle. if you are looking for a crossover vehicle, you can haggle with the dealer because there are so many out there. >> phil, thank you. see you later. >> you bet. coming up when we return, we will take you live to the republican convention in milwaukee and talk about the gop's new policy platform. that's next. reminder, you can get the best of squawk with squawk pod on your favorite podcast app and listen anytime. we'll be right back. k star. using responsible ai doesn't make you a rock star.

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for generations to come. from preserving a cultural tradition to leaving a legacy, a raymond james financial advisor gets to know you, your passions, and the way you enrich your community. that's life well planned. welcome back to "squawk

box." i want to get to the highlights of day one of the republican national convention and donald trump's pick for running mate. we have eamon javers joining us from milwaukee. good morning to you. >> reporter: good morning, andrew. a triumphant return to the stage days after the assassination attempt. the first time we have seen donald trump in public since the assassination attempt. you see i was pumping his fist in the air and met with raucous support from the audience. he was walking in to the music "proud to be an american." it was an uplifting moment for people who were concerned about the former president's health

and safety. we also saw j.d. vance, the former president's pick, to be vice presidential running mate alongside donald trump. the first time we have seen the two of them since the selection of j.d. vance. the ohio senator just 39 years old. now inherits the mantle of trumpism. whatever happens in the campaign, donald trump can only serve as president for four more years. j.d. vance, at 39, has decades to shape the trumpist movement and the republican party. is a significant generational movement there as j.d. vance is the first millennial to serve in the white house. you see them all standing next to speaker johnson of the house of representatives with another generational change there. another fascinating moment with the j.d. vance pick. we should talk about this cementing a change from the republican of party from the

chamber of commerce gop in the past decades to the populous gop. j.d. vance likes the job that lina khan is doing with the anti-aggressive push. he has worked with elizabeth warren and sherrod brown on populous economic issues. areas of concern for him. he wants to break up large tech companies and pushed for a more aggressive stance by the republican party and by the senate in terms of the big corporate power in washington. this is not your father's gop anymore. i think that has significant implications for how wall street begins to interpret where this administration would go if they are elected in november. guys, back talk. >> eamon, i appreciate it. thank you. >> you bet. >> for more, we bring in the hoover institution and fellow

who served in the romney campaign in 2012. what do you think what eamon laid out this is a different republican party and j.d. vance as the selection cements that? >> i think it is fair. you are seeing it as a leadership level and some of the trends we are seeing today really did start back in 2010, 2011 or 2012 and whether it was a populous turn on free trade and the tax or thodoxy on the corporate tax side. that is somewhere we would see j.d. vance and donald trump in a a second term would have a different view. you see it in the embrace of certain labor unions. that is something we have never seen in previous republican nominees. this is a definite shift in the neo populous direction.

that bears watching for years to come. >> lanhee, many of the major cec ceos have been waiting and the run reason they like donald trump to win more than anything else is the regulatory regime right now. the question is whether you think he will fundamentally change the way the current status quo or lina khan or department of justice and way they approached mergers and freeze on the mergers and acquisitions and if that changes with this administration? >> it depends on the issue area. the approach to competition is going to bear some similarity to what we see in the current administration. just one example of that are the comments about lina khan and competition policy that may have been more friendly from senator vance than you expect from the typical republican. i think in certain sectors, you

will see the approach much more. >> which ones? >> energy and healthcare as two examples. in the energy sector, you will see a traditional republican approach partly because of the skepticism stated by former president trump with the glreen energies and the green economy with the inflation reduction act. in contrast, healthcare, you might see an approach that is a little bit more desperate. there is fundamentally the pro-breaking up of large healthcare, that sort of competitive approach that we see in healthcare policy, that is something where i think you might see a future trump administration have some similarity to what we've seen with the biden administration. >> what about the big headlines

the last couple of years. big tech and the anti-trust cases in silicon valley and the media companies and possible mergers in that space? >> by the way, how much of that is driven by not liking the players that president trump may feel have challenged him or taken sides up against him? >> in tech, you have to differentiate big tech and old line tech and new disruptive tech. the vance pick is interesting to watch in this regard because a lot of senator vance's supporters thus far have been people from the newer tech economy. so, it's possible that you see an anpproach that difficult verges on the type of technology that we're talking about. there's no question that former president trump has been skeptical of the bigger tech players and established tech players. so that approach differs. >> lanhee, you said there may be

some disagreement on corporate taxes. i can tell you, we're going to have oren kass on later, the american compass executive director. i said there is no way trump will have a platform where he is advocating raising corporate taxes. he said 21. thatfeathers in his cap is lowering the tax rate. are you saying that j.d. vance can talk him into proposing hi higher corporate taxes? i think j.d. vance has to come over to trump's thinking on that. you think it is possible that you could see corporate taxes go up? >> well, i think you've got to look at it in terms of the broader issue that we got to get another round of tax reform done probably with expiration of certain provisions of the tax cuts and jobs act that's coming up next year. in the context of the bigger

package to keep individual rates down, it wouldn't surprise me to see corporate rates be a piece of that. >> overall, i think the approach to deficit reduction is going to be more on growth than it is on trying to and spending -- trying to cut spending although they did not do it well last time than raising taxes. the tax cutting hat that republicans and conservatives wear, they're not going to change that hat. >> i don't know. i'm not so sure anymore, joe. i think there is an orthodoxy shift in the republican party. we are seeing the move to the economic poplism which is real. we seeiticians to explain why they need to keep tax rates low for the average consumer. that is why we see the shift away from the orthodoxy of lower

tax rates. i don't think in and of itself they will go out and raise the tax rate. everything's on the table. >> it is like the ten commandments. it gets passed along to consumers. you try to compete globally with the dollars in innovation. maybe it is not hiring because you can't say if the company has more money, they will hire more people unless there is a demand. it is a basic tenet. i would go to zero if i could make the case to go to zero just to compete globally. that's never going to happen. larry kudlow has been saying zero forever as you know. >> i'm with you on this. i completely agree. igagree. i'm saying we see the shift of the republican party. >> i know. that's a total -- some

republicans don't know what the hell they're signing on to then and we have oren kass on. last time, i said you are out of your mind. no way it's a possibility. >> i do, absolutely. >> lanhee, thank you. >> good to see you. >> you, too. >> look at the democratic platform. check it out. do you have a copy? i might have to look. what's there? i can get higher taxes. that would be the baseline. >> more than what you're paying now. >> more than like 55%? >> maybe for you. maybe for you, big guy. >> i mean, new york's worse than new jersey, i think, isn't it? >> proud. proud new yorker. proud to pay. >> you hop over. just out with quarterly results. let's get to leslie picker. you are not a subway hopper?

>> i'm a subway user. >> i know you are. you pay your freight. it is cheaper than an uber. >> we will get a read on the consumer with the bank of america earnings. shares are moving higher this morning up more than 1 percentage point. the top and there's a beat you . shares are moving higher this morning, up more than a percentage point. both top and bottom line beat analysts estimates. the news line here to focus on is net interest income. it was down 3%, and b of a guidance, and bank of america says q4 will be up from $39.5 billion, and that's for the fourth quarter of the year. remember, nii is the profit loan

generated. it's going to be put in the higher yielding areas. it's rolling off at a rate of about $10 billion a quarter, which also supports nii moving higher in the second half of the year as well. on the consumer side, credit card loss rate, that rose to 3.88%, and net chargeoffs of about $1.5 billion were unchanged from the prior quarter. income generated from fee-based work was across the board, and the $4.7 billion that the division generated was the highest for2q in more than a decade. investment banking fees was up 29%. shares coming off their highest so far, but still off by about .7%, guys.

>> leslie, thank you. when we come back, one more big bank set to report today. will hear from morgan stanley. "squawk box" coming right back after this.

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welcome back to "squawk box." federal reserve chair jerome powell says the labor market is cooling off, and the labor market weakening could prompt the fed to cut rates. joining us, the korn ferry vice chairman. are they moving, the markets moving on jerome powell or trump? >> well, that's a tough one. being a market-focused guy, i got to say powell is probably the prompt. >> what is your sense now, then, of when a cut may come and how many this year? >> well, i think six months ago i would have told you we would not have a cut this year. i think we will have a cut and i think the market expect a cut

and it's probably warranted. not being an economists, i can't say for sure but certainly before the end of the year. >> do you think it comes before the election? >> that's a tough one. boy, that's kind of like playing chicken. i would say after. >> okay. >> i will go on record. let's see how i do. >> is that a function of politics or a function of how the economy may have to weaken first to get there? >> i'm a realist, so i would hate to say that politics plays a part, but it does. again, not being a political commentator, tough to predict. i think the market forces and fed does what it needs to do regardless of politics. >> and then what would the labor

market have to go to maybe force his hand? >> the have the duel mandate and inflation is not yet solved. i don't think the genie is back in the bottle there. we're down below 4%, and that's healthy. dramatic low unemployment is not a good thing. markets like consistent-level performance. what i think is we have a reversion to the means, and unemployment is reasonable enough that a rate cut wouldn't be out of the question. >> in terms of hiring, what are you seeing? >> you know, we just did the korn ferry workforce 2024 report, and what we looked at is what keeps people in job and what people want when they go for a new job. it's what i like to call sort of stop-and-go traffic.

we if it was a highway, we are now in a stop-and-go pace. we have an overheated market of job movement in 2022, and hugely robust and digested it in 2023, and now we are feeling the great aftershock where there's a great amount of movement. we are seeing people wanting to move. people are happy with the work environment. leadership is the number one driver to me. i call it leadership capital. without good leadership, people want to make a move. they are not happy they are not motivated. we have people we want to move, but we have them stuck. it's a stuck in place job market right now. >> and that relates, by the way, back to the federal reserve, don't you think? >> yeah, if you believe that a rate cut drives hiring activity

and growth, the answer is sure. also, does that create an artificial stimulus and then a bubble and then a correction again. it's delicate, man. >> you talk about moving and it's not a mobility question, but a lot of people feel locked in their homes, and they are locked at a certain mortgage rate, and they can't sell because if they can buy a home for less money, you will not see people moving around the country like they used to. >> yeah, in they sell their house they are not going to have a attractive buying transaction because of the rates and a lack of inventory. people have gotten used to the idea that i can get my job done from anywhere. i do have a standoff between employers right now saying i want you in, pick a city,

singapore, london. the employee is saying, why, i will be there three days a week or once every other week for the month. i will keep my family and myself in my home right now and i will do my job around the world remotely and i will travel when i have to. >> it's fascinating. i am sure we will see what happens next and i am sure we will talk to you again all about it. thank you. >> thank you, and always a pleasure. just past 7:00 a.m. right now on the east coast. you are watching "squawk box" on cnbc. i am andrew ross sorkin along with joe kernen and becky quick. we have a lot going on. we have bank earnings. it's top one of amazon's prime day which adobe predicts will bring $14 billion, with a b, in sales, up 10.5% from a year ago. meantime, shares of tender, building a stake of more than 6.5%, and it's discussed

opportunities, and match should improve and be more aggressive with buybacks. and j.d. vance is 35 years old and joined the senate is a political newcomer, and gaining fame through his best-selling memoire before joining the senate. let's look at the futures this morning. the do you hit an all-time record, down by 14 points. got the s&p futures up another ten points. the nasdaq up by close to 50 points. let's get over to dom chu. he has a look at the premarket movers. >> we will hit things off on the automotive side of things. general motors up a fraction

now. this is after they walked back the electric vehicle programs, and the automaker will not sell 1 million plug-ins in 2025, and customer demand will determine how fast they can reach that mark. next, we will tackle some of the notable brands of the morning, and both roughly down about 1%, and both being downgraded to neutral rating. both were previously outperform rated. starbucks goes down to 80 bucks and it was 92. the firm noted a soft second quarter start for restaurants pointing to the decline in the same store sales and competitive dynamics heading into

taoeuf-yard 2025. it was previously a buy rated stock, reddit, and it's trading at ten times the firms estimate, and loop capital is moving to the sidelines among other things, and that expires on august 9th. those shares down 3%. now, for more on that head over to cnbc.com/pro. back over to you. >> dom, that's something to watch, just the gain and the shares since the ipo more than doubling. that's a pretty big deal especially when people had so many questions on what was going to happen with that ipo. >> yeah, and they got rocket stock. a lot of this stuff was based on valuations, and it's not just reddit, but there's a lot of

questions about valuations in other parts of the market and other areas as well, and not just the ipo run ups. >> thank you. coming up, the ceo of bny melon, and then north carolina's doug burgum on trump's pick. it wasn't him. "squawk box" will be right back.

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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. welcome back, everybody. shares of bny closing at another record high. it's now up more than 25% so far this year. that does outpace the s&p 500.

over a five-year and ten-year period, it has trailed the s&p. the company reported earnings that beat on the top and bottom lines, and that stock was higher after the release of it. the ceo of bny, robin vince joins us. welcome in. >> thank you. >> bny has done well over the last 12 months. what did you change in the 12 years you have been there to see what we are seeing now? >> there's three ingredients to what we have been focussed on. first of all our people have been responding to the challenge of how we can uplift our performance, and you can see the stock price over the past couple of years. >> you mean the people are contributing how? >> it's our leadership team. all 53,000 people in the workforce together pulling as one company. the second point, i would say,

is really making sure that we are bringing the whole company to bear for the benefit of our clients. we used to deliver ourselves in different bits of the company, and now we are rallying around one, bny, to benefit our clients. >> how did you do that? it's good talking points, but how did you do that? what did you specifically do to have them work in one direction? >> culture mattered. we started off in the beginning saying we wanted everybody in the firm to act like an owner of the company. we made everybody owners. we gave all 53,000 people shares, and we got our teams to rally around to truly wanting to put clients at the center. being client obsessed is center, and that's showing up in the results. we are delivering more of the solutions that we have with the world's largest custodian. we have the market-leading

positions and now we are delivering it for clients. >> did you change your compensation structure in other ways. i understand making everybody a shareholder, and did you do other things, this is better for our client overall and maybe my pay structure is better on the result -- >> you are hitting on one of the key points of our strategy, and it's culture. >> i am talking about pay. culture follows pay. >> culture is bigger than pay. at the end of the day, pay and aligning people to the ownership mission is one thing we are doing, but we are also improving our benefits. we have been helping people -- we added new mental health benefits. we still have free coffee in our workplace. when other people shrink away from that, it's a pay expense, it's not just pay but rallying for the team.

>> it's more than not taking away free coffee that affects your stock performance. >> having people come into the office every day want to go rally around that, and clients feel the difference. they trust us to be on their side and want us to help them prepare for the complexity we are seeing in the world right now, and that's about culture and how people show up. >> let's talk about what's happening in the interest rate world at this point. you guys are a really big player in the treasury markets. what do you think from the comments we heard from chairman powell yesterday, where are you kind of placing your bets on where interest rates are heading? >> the good news is the economy is actually doing well, and the fed has done a terrific job getting us to the place we were, and chair powell talked about it yesterday at the club in d.c.,and we have been surprised

by the power of the economy. in january, people were talking about six rate cuts and now they are talking about two or there abouts, and it's a strength of the economy, and we are now in the stretch towards rate cuts. we can debate is it going to be september, or a possibility for a couple weeks in july or do we have to wait for december, but we are in the home stretch. he's assuring us towards being able to start reducing rates and cushioning the inevitable slowdown. >> do you see that slowdown in the economy at this point? >> look, he said it very well yesterday. he thought a hard landing was a very unlikely thing. we share that point of view the bny, but we have had a pretty good run. inevitably, when with all of the higher rates for the period of time that we have now had them, inevitably there will be a little softening at some point. the question is how severe is

that going to be? hopefully it will be gentle. what we are doing as a company, working with our clients, is preparing. you can't put everything on black or red. are they going to cut rates on a particular date or not. it's about being ready. rates are the only thing going on. the world is complicated. we have wars and other things, and clients want to be prepared for these type of things. >> we have something not red or black. >> double zero. >> if it hits that, you are screwed. >> you got to be ready. >> i'm with you. >> do you hear more concern from your clients? is there a sense of concern about what is happening in geopolitics in other places where they are looking for more protection? we have been looking at new highs every day in the markets, and do people trust that or are

they worried about what they are seeing? >> we could all list 20 things that could go wrong in the world right now, and each of them 5%, less than 5%, maybe, and if you accumulate across them, there's a decent chance something surprising will happen when we have two hot wars going on right now, and we have the various different elections we will go through and have been going through this year, the big year of elections, and uncertainty sort of rules and you have to be ready for those things because it's almost certain something surprising will happen. >> robin, we have to run, but you are in the process of changing your name. i think of you as the bank of new york, and why the name change? >> bny is our new brand. we have 240 years of history, and we were founded by hamilton, and we have had acquisitions over time, and the name grows

with the brands. it was time to update, and bank of new york is the core of who we are as a firm. it new logo. it was time. >> thank you for coming in today. coming up after this, former president trump picking j.d. vance as his running mate. a look at who he is and what he brings to the table if he becomes vice president. that's next. we're also waiting quarterly we're also waiting quarterly results fromhing i had aflac. (aflac duck) hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent. 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! (♪♪)

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former president trump tapped ohio senator j.d. vance for his running mate. want to bring in chief economists at populist economic think tank, america compass. want to know your thoughts on how you think j.d. vance's thoughts will influence the president. >> he has been a leader in the

senate and charting the course for conservatism and economics, and understanding what has gone wrong in the economy in recent decades. the choice of him on the ticket, i think, rightfully has the old right, the wall street editorial board and so forth recognizing they are no longer in charge in this party. i think in practice senator vance is one of the most thoughtful and innovative leaders we have seen in the senate in recent years and i suspect he will bring that to the ticket and white house as well. >> in terms of how you think the president will think about some of these issues, do you think they are -- do you think they see eye on eye on all of these things? we talk about the department of justice when it comes to myrrh ju -- mergers and regulation of big companies, and trump could be add odds with things vance

has said. >> trump on policy has been somewhat conflicted on the old right view of things, and larry kudlow was influential in his administration, and i think he's bench more skeptical of market fundamentalism and much more open to shifting the party. it's always been a fair and open question, what would he do in a second term. he had choices like doug burgum, which indicated one way he was thinking, and then he had senator vance and rubio that indicated a different orientation. in senator vance, he sent a signal that he's persuaded by the new way of thinking and that's generally speaking on the way he wants to head.

i am sure they won't agree with everything, and obviously you don't pick senator vance if that's not your thought. >> i think politically this was the right decision insofar as you want to have a broad tent. does this push the party and the trump agenda one way as opposed to bringing in some folks that might have been in the middle to join? >> i guess that depends on who you define as the folks in the middle, right? the reality of what is going on in the republican party in the broader political realignment in america is that you are seeing, yes, some more highly educated and high income folks leading the republican party and heading to the left. you have a bunch of libertarians suddenly trying to decide which party they want to be in. for every one of those you might have ten working class americans of all races who are much more socially conservative to begin with and are now excited about

the message they are hearing on economics. i think if you are trying to play the game of the past couple of decades and do the carl rove thing and win by a few votes, maybe you make a different pick. if you are actually trying to build a durable governing majority that will push this country forward, i think the direction that senator vance takes things, that ticket is by far the larger constituency. >> the last time you were on, horrified is a strong word, and it sounds like heresy. it sounds closer to progressivism than classic conservatism. j.d. vance, donald trump, everybody wants to raise everybody up as much as they can in terms of economic prosperity without necessarily -- you know,

bringing the top down for us all to meet at the bottom, you want to raise it all in. it's like you are saying the jury is in on trickle down, and growing the policy on a growing policy doesn't work anymore. it may feel good and gender p populism, and do i need to be a neocon? i don't want to join the lincoln project. i don't want to go that way. is there a place for larry kudlow in this scenario? >> there's a place for anybody that is looking seriously into what has gone on with the economy in the past few days. i love growth. the reality is, as you just called it, trickle down economics, this idea that all we

need is more tax cuts and somehow doing whatever is best for capital is ultimately going to be best for everybody -- >> money in the private sector -- >> well, let me answer the question, joe. >> they are time-tested. we are the most successful in the country and the best middle class, and we have taken more people out of poverty, and these other countries are chasing us. china is rolling but their gdp per person is 10 grand. we have to go because there's -- morgan stanley is going to report, and we have to interrupt interviews because of this, but answer as fast as you can. >> well, we always had high tariffs and industrial policy, and what you are describe as

time-tested is a blip over the past couple of decades, and it's not time tested, it's time failed. wages have stagnated, and yes, people, conservatives, anybody paying attention is recognizing it's time to go a different direction. i am excited to see president trump and j.d. vance going in a different direction, and get onboard and see what has happened. >> let me look into it. >> oy.ka >> thank you. look at all those explanation points. market reaction minutes away. "squawk box" will be right back.

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welcome back to "squawk box." i am leslie pick kerr. morgan stanley stairs a beat on the top and bottom line, and the bottom line eps coming in at 182 per share compared to 165 per share. revenue also a beat, and based on the strength of the institutional securities, investment banking and trading. investment banking up 51% in the quarter to $1.62 billion, and

the firm said that's thanks to higher completed m&a abg positions, and more convertible offerings as well. equity up 18%, and fixed income up 16%, so those are two of the key money drivers there. global wealth management, slightly different story for this firm. that was a miss for this division, and net new assets coming in at $36.4 billion, which is slowing significantly from this time last year when they brought it $89.5 billion. however, the firm is showing a very impressive rotce equity of

17.5%, and back to you. leslie, thank you very much. you can see that stock up by 1.1%. up next, north dakota governor burgum will join us. you will see dow futures up by 20, and s&p futures up by 10. "squawk box" will be right back.

as you know, north dakota governor, doug burgum, was on trump's short list as vice president. welcome on, governor. >> good morning. great to be with you. >> you know what we do here on cnbc, and we are really fascinated by the economic or populist -- the way the party

may be moving with this choice, and it wasn't you, governor, and i know you got close, and j.d. vance does signify a more populist move, and can you address that? we are talking about maybe higher corporate taxes, maybe a stronger antitrust enforcement division. the vice presidential nominee complimented tariffs, and it is a different type of conservatism. >> last night at the convention, such a historic moment, electrifying when donald trump comes into the arena not even 48 hours after a assassination attempt, and a millimeter difference, we would be talking

about something different now so gratitude, and with j.d. vance, you will see the economic policies like the first term. that's good for everybody, and, of course, joe biden, if he's elected, there's economic policies to worry about because he's bragging and saying i am going to repeal and let lapse those trump tax cuts and that would be horrible for the economy. >> right. >> and president trump, his economic policies stand out so much better than joe biden. i think there's no question. the inflation, high interest rates, those economic issues willing on the table when people go to vote.

>> are you familiar with the director of american campus, because they are close with j.d. vance, senator vance, and he basically said that lower corporate taxes may not be the way to go anymore, and to keep taxes low for individuals, that some type of bargain or deal could be done to raise corporate taxes. the whole platform of american campus, which apparently j.d. vance is one of the leading, like, thought leaders for this group, it's very different than classic conservatism. do you think that president trump picking this person, do you think he's amenable to moving in those directions, do you think? >> i can't explain all the thinking behind that. i would say the economic policy is going to be set by president trump in the administration. it was not set by vice president

pence in the last administration. i think you have to look to president trump. if you raise corporate taxes, that's a cost to the corporation. they have to pass it on in higher prices, and consumers end up paying for it and it's simple economics. >> and our debt exploded under former president trump when he was president and continue to explode under president biden. do you have any hope that under former president trump if he becomes the president again that that changes, and how do you think that changes, if, in fact, you think the taxes either stay where they are or go lower? >> i think when you listen to president trump when he has been out campaigning this last spring is he's got a real understanding, yes, we have a national debt. we have a deficit. but the one thing under joe biden that americans need to understand, we talk about our liabilities all the time, the

debt and we never talk about the balance sheet on the other side, the assets, and theodore roosevelt himself put away 2 million acres of land in the country for the benefit and use of the american people specifically, and now under joe biden with all the rules and mandates, we have the largest land owner in the united states is the people of the united states, because the people own the land, and the largest mineral owner is the people, and joe biden, they don't want to cut down trees and they are blocking the development of oil and gas investments and we do it cleaner, safer here than anywhere else in the world. we help the global environment. we could access federal lands with horizontal drilling and all we are doing is sending checks

to the federal government that would help pay down the deficit. we are being blocked right now by the rule making from the biden administration from sending money to the american government without them doing anything, and apparently they don't want that. when president trump talks about unleashing american energy, that will help us reduce the deficit. >> teddy roosevelt set aside the lands with the explicit idea of conservation. i understand being able to drill underneath from a horizontal place coming in, but if you are talking about trip mining and taking the land and using it to get at the rare minerals underneath, that's not what roosevelt had in mind? >> i have to disagree with you. when he talked about the strength of our nation, he talked about the strength of those assets and he is quoted over and over saying conservation is as much as

development as conservation. biden administration, they are about preservation. don't do anything with it. when you have the rules we have, versus china tearing up indonesia and africa tearing up their own country and destroying their environment, and if we think we are helping the environment by getting all our ev batteries from china, that's false. >> no, it's not, and it's also destroying what is beautiful in nature. those are his words -- i understand your point but i don't want to take thataway from what he created and set up. >> i think we understand that well. we are building a presidential library for theodore roosevelt

in north dakota. we understand his legacy. when you talk about 240 million acres, or even now with the biden administration, what they are doing to block energy development in alaska, which was the u.s. strategic navy petroleum reserve. part of how we won world war ii was the battle over resources, and our submarine sinking every oil tanker going to japan, and they were out of resources. now the biden administration was attacked by the far left for the willow project, and that was the equivalent of three square miles. it's barely a couple golf courses out of an area of the size of indiana. i think we can make those tradeoffs and say if we can take a small amount of federal land -- >> but, in the grand canyon, arizona has a natural wonder, which is inkind, and these are

his words. i want to ask you to keep the great wonder of nature as it is how, and i hope you will not have a building of any kind of marvel the grandor. the ages have been at work on it and man can only mar. say what you want about it, but don't use teddy roosevelt for doing it. >> i disagree. you are talking about 5 or 10% that are truly american wonders. we are not talking about touching a national park or the great aspects of the landscape of america, you know, but come out to the western part of the united states. i have been, you know, the chairman of the western governor's association. we have tracks and tracks and tracks and millions and millions of acres of land that could be developed sustainably, and there never has been and never will be

a tourist on that stuff. it's not the wonders of the world. if we think we are doing the world a favor having china tear up the world, when we could do it responsibly. we are in two proxy wars, one russia and one against iran, and they are using those against us with the oil revenue they are producing now. if we want world peace, we have to take care of our balance sheet. let's take care of the asset side as well. >> as a former businessman yourself, i understand your views on regulation around energy, but there's big question around regulating companies, big tech companies, media companies, others, and the republican party for a long time has been very critical of folks like lena khan

and the folks at the justice department today, and j.d. vance seems to be more aligned with their views, in fact. where do you think that leaves former president trump, if, in fact, he becomes the president again? >> well, i think one of the reasons why you are seeing announcements like late yesterday with elon musk and others saying, hey, we will put together a super pac to support president trump, and part of the reason they are doing that is because they know we are in a artificial intelligence arms race with china, and we don't have base-load electricity to drive ai, and we will need that. the whole time i was in the tech industry over those 30 years, we use used about 1% of the nation's -- >> i get the energy story. the question i am asking is whether you think the regulation of a google or an apple or a

microsoft -- by the way, things, frankly, elon musk may want given his views on ai will take place under former president trump if he becomes the president again, despite what has been a critique, i believe, from many conventional republicans, if you will, of the regulatory state during the biden administration. >> well, i would tell you the first thing that has to happen is president trump has to win before we can speculate about what that regulatory environment will be, but from my own experience in 1998 i was in front of a senate hearing with bill gates and barksdale was there was there representing netscape, and there was talk about we have to regulate, r regulate, and there was no mention of google, yahoo, facebook, any of the companies

out now today. ebay. none of them had even started yet. part of the way america works and lead, our greatness is built on innovation, and at any time when the federal government thinks they can step in america because a government can't keep up with regulation at the speed that technology changes. >> do you expect to be part of the cabinet in some way, governor, or are early to tell? >> well, certainly, president trump has been very generous with his comments, when i spoke with him yesterday, he opened up the phone call by saying, hello, mr. secretary, but this has never been about that. this has been for myself, as a sitting governor, of a state that's so involved in both energy and agriculture, and national defense, with our two big air bases, this was about making sure that president trump's back in the white house, because joe biden's been wrong on energy, wrong on the economy,

and wrong on national security. >> okay, we'll leave it there, governor. thanks for -- thanks for all your time today. >> great, thank you. >> okay. coming up, revitalizing downtown san francisco won't be an ey skbuonasta, t e mayoral candidate says it can be done. that story is next 7.

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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. welcome back to "squawk box." one san francisco mayoral candidate revealing plans for revitalizing san francisco for one of the cities hit hardest and one of the slowest to come back from the pandemic. kate rogers got a first look at that proposal. kate, what's going on? >> andrew, good morning. leading mayoral candidate mark fairly is reenvisioning downtown san francisco, and that means getting workers back in the office. he gave cnbc a first look at proposals that include tax incentives for businesses that relocate downtown and for those that get workers in the office four days a week. farrell says his project is akin

to other major anchor projects. this comes as data from cushman and wakefield shows just last leek that san francisco office vacancies are at a record near 35% while manhattan stands under 24%. farrell's plan includes cutting that number in half by the end of his first term. >> right now, if you come downtown, the issue is, is a lack of people. it's a shell of what it used to be. so part of tax incentives is to make sure that employers make sure their employees come back to work multiple days a week in the office to create that v vibrancy that will bring the features downtown forward. >> another piece of the planning, downtown park on the embarcadero which is right here in our backyard at cnbc, aggressive tax increase financing and local incentives for faster production of housing and conversion of commercial buildings to residential housing in places like union square, which you may remember, has lost anchor stores and malls. andrew, back over to you. >> kate, thank you very, very much. coming up, prime day.

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it is 8:00 a.m. on the east coast and you are watching "squawk box" right here on cnbc. i'm becky quick along with joe kernan and andrew ross sorkin. among today's top stories, the s.e.c. granting preliminary approval to several firms to launch trading next week of spot ether etfs. that's according to reuters, which says that the asset managers must submit final documentation by the end of this week. activist investor starboard value is pushing online dating company match group to make changes to improve its margins or go private. starboard has built a roughly 6.5% stake in match and outlined its ideas in a letter to the company seen by cnbc. and elon musk plans to donate about $45 million over three months to a super pac backing former president trump's run for the white house. that is according to a "wall street journal" report. musk himself has pushed back on that report, and said that it's fake news.

they are saying that tlhey are trying to register voters and request mail-in ballots in swing states. meantime, take a look at futures this morning as we hit 8:00 a.m. dow jones, open up higher, the nasdaq up about 43 points. meantime, i want to get over to dom chu with a look at this morning's pre-market movers. dom? >> good morning, andrew, becky, joe. let's take a look at some of the big earnings headliners of the day so far. bank of america is up just roughly 2% right now after reporting second quarter revenues and profits that both beat analyst estimates. this is america's second biggest bank by market value. it said the results stem from rising investment banking and asset management fees, in part, profits, did slip this quarter, falling nearly 7% from the year earlier. as the company's net interest income fell due to some higher interest rates. so those shares up about 2% right now. for more on those results from bank of america, we'll have ceo brian moynihan joining the "squawk on the street" crew at

10:30 a.m. this morning. meanwhile, morgan stanley shares are moving between gains and losses. shares down roughly 2.5% this morning, despite strong second quarter results. both revenues and profits came in above expectations with investment banking once again helping those results. on top of that, the bank's wealth management business is benefiting from higher stock market values, which helps it create bigger fees that the bank collects from its asset management side of the business. watch those morgan stanley shares. and we'll end on united health, which is ticking lower by about 1.5%. the health insurer and dow component posting better than expected q2 results, but its performance signaled a lingering overhang from that cyber attack. united health profit and revenues both beat expectations with revenue increasing about 6.5% year over year to nearly $90 billion, which narrowly topped consensus estimates. joe, the dow getting some help from that half percent gain in

unh. back to you. >> the s&p and nasdaq are up nine out of the past ten trading sessions. yesterday, fed chair powell helped two stocks with these comments on potential rate cuts. >> we've been very clear that you wouldn't wait for inflation to get all the way down to 2%. our test has been for the past quite some time, that we wanted to have great confidence that inflation was moving sustainably down toward our 2% target. and what increases the confidence in that is more good inflation data. and lately, we have been getting some of that. >> joining us now to talk markets and earnings, what it all means, lori cabacina. we've all been waiting for the rotation, the rotation trade. which they had a couple of false starts, but it looks like it's starting again. and you think that that might

overshadow what is too much complacency in a possible pullback. >> i think at this point in time, we've seen all of these efforts for the market to getaway for this big growth, back to financials, back to energy, back to small caps. and i think that's deserved on the cpi print that we've had. if you look at positioning on the cftc data, we've been around svb lows in terms of russell 2000 reporting. i think this earnings season is a big test, and we need see the value small cap trade to assert itself on the earnings side for investors to really be comfortable sustaining that rotation beyond just a trade. >> but do you think the cpi, which is good for everybody else, but it could mean pricing pressures for some of these companies. >> we actually have one chart that we've looked at over the years, where we look at company commentary about pricing power, and if you match it up against cpi trends year over year, it's pretty much the same chart. so we kind of come into this

saying, okay, we had that soft cpi print, we're all excited, that's good for stock multiples, right? if you have lower inflation, you get the idea that interest rates are coming down, that goose is your multiple. what does it do with the revenue side? we found a 98% correlation between revenue and cpi. there are puts and takes. we'll have to work through some of that in the coming weeks. >> but the inevitable -- what you saw as maybe a bit of softness in the stock market, if the fed is now cutting, then that may take that off the table? we may not have a pullback. >> and i think we talk a lot about conflicti ing crosscurren. so two things that argue for a pullback right now, number one, seasonality. the last five years, august, september, october, we often had some bad months. it doesn't necessarily derail the year, but it does serve as a pothole, sneak. if you look at sentiment on the survey, net bouls were at 29%. one standard deviation is about 22%. we're not quite there on the four-week average, we're about 20%. but when you get to that one

standard deviation mark, typically you've got a bit of a pothole over the next three months. now, if we look at the fed cuts, what's really interesting the last four cutting cycles, you tend to run up ahead of the cuts in the market, and tend to see a bit of a sell-off after the cuts. so i think we've had so much enthusiasm that's emerged, it's kind of reinforced the idea that maybe we'll get a pothole, after we kind of get past those cuts, but maybe it pushes it off a little bit and sentiment can stay elevated for a little while. >> it always seems like we make some kind of low in october. and it's happened again. not like, horrifically scary lows, which i mean, october has a lot of days that start with black for some reason. like black monday, whatever. but even recently, the last couple of years, the lows were in october. and it could all set itself up for something like that. but we see no indication of a pullback yet, really. >> not yet. and we had a little bit -- it's kind of a baby pothole that we had back in april. you know, about a 5.5% drawdown. >> what would this one be? what do we need to shake things

out? do we need 10% plus? >> i think we need worse than 5, but probably no worse than 10. if you get it to 10% or more pullback, that's typically associated with recession fears starting to percolate. i don't think we're anywhere near that. i think this is a digestion period that we need to see. >> a lot to digest, lori, thank you. >> thanks for having me. amazon's annual prime day event kicks off today, running through tomorrow. adobe analytics saying shoppers are likely to spend about $14 billion during the two-day sale. joining us right now is brent thil, tech research analyst at jeffrey's. and jeff, i don't want to say that this is a side show for amazon, but you make the point that you're looking for some pretty significant upside here. but you think it's going to be driven by aws and advertising. when you look at a sum of the parts, what's the retail operation versus aws and what you're seeing on prime video? >> good morning. to your point, aws and advertising are the bulk of amazon's market cap. the retail business is

important, but it's a very low-margin business and investors continue to be focused on what's happening in the cloud and advertising business. today and tomorrow, are obviously a great catalyst for the advertising business that generate incredible value to these advertisers, and then you have the prime effect, which is, if you want these deals, the free music and the video, you have to sign up, and half the u.s. is already on prime. they're not at full penetration, but penetration is pretty high. so that keeps driving a current revenue stream, driving more advertisers to the platform, drives more data to the platform, and helps aws on their own side. but the bigger story, again, for us is the re-acceleration and the cloud business this year. that's driven by cloud optimization ending last year and ai picking back up this year. we believe they are second to microsoft right now and effectively there's two big ways

to play ai in the cloud, amazon, and microsoft. and while they have the reit business, you take the sum of the parts, rough ly 70% of the value, the company between advertising and cloud, the other portion is related to retail. and again, important, but a low-margin business, and not what's going to drive the future of profitability at amazon going forward. >> you do, though, have a buy rate on this, because of aws and advertising, a $235 price target. that's a 12-month target? >> that's correct. and that's based on the sum of the parts. we take all the amazon businesses, and then apply what we think is the right multiple for each of those businesses, depending on their peer group. and that's how we drive 235. so stocks had a good year. we continue to believe it's one of our top names, especially as we come into the age of ai. they will become a much larger player with their initiatives. they own 50% of the cloud market, when you combine google and microsoft together.

so when you have 50% of the data that's sitting inside aws, they have the right to do imamagical thing with that data and their clients. and the real question is, can they catch microsoft. they were out ahead with the move, with their co-pilots, and this is going to be a fun one to watch. there are going to be multiple vendors that win in the age of ai, but given that many of these big companies are restoring their data there, that's going to be a huge advantage for amazon of one of the first looks to help their clients on the road to ai. >> brent, thank you. the one thing about retail, though, you do say that they are improving their margins there. that they have managed to do this much more profitably at this point. >> they are. and they've done it largely through logistics. covid had this big pullback, it had to pullback because of what's happened. so their investment pace hasn't been as great. so amazon is in harvest mode

rather than invest mode. we expect again further optimization inside their network. many of the network logistics operators have said there's still excess capacity. so as they effectively don't have to lean in as hard in this build out and get more sales, they effectily can improve their profitability, and driven by that business, which is really high-margin, driven by their cloud business, which is a high-margin recurring business, those businesses will help offset, again, this lower margin retail oempgs operation. >> brent thil, thank you. >> thank you. when we come back, event kmaurlist bradley tusk will join us on messaging in the presidential campaign. we'll talk about how to go about curbing the heated rhetoric on social media. stay tuned. you're watching "squawk box" and this is cnbc.

welcome back to "squawk box." in the aftermath of the assassination attempt on donald

trump, both side of the political aisle are examining the rhetoric that's polarized our nation, especially online. joining us right now to talk about the exact of social media, bradley tusk, ceo of tusk ventures and campaign manager for mike bloomberg's mayoral campaign in 2009. how much do you think what we saw, the tragic events of saturday, are a function of social media today? >> i think it's definitely part of it, right? i think we now have an atmosphere, you're seeing each party blaming the other. but the reality is, it's everything, right? it's republicans, it's democrats. it's earned media, it's social media, it's activists. it's super pacs, it's podcasters, it's pundits, it's all of it. but with social media does, and we've talked about this a lot, it brings out the worst instincts in everyone. things you wouldn't necessarily say to another human being face-to-face, you feel very free to say on social media, especially with some level of

a anonymity. >> so you would fix it how? >> you have to change the underlying liability protections that the social media companies have. right now, facebook and "x" and tiktok and everyone else has more freedom to say whatever they want than you guys have here on "squawk box" or "the new york times" or any other mainstream media outlet. they are not responsible for the content posted by their users, and as a result, two things happen. one, the users post the craziest stuff possible, because that's freeing for them. and two, the platform of rational, economic actors and their goal is to make as much more as they can and they know that negative content generates more eyeballs and clicks than positive content, and as a result, they push that out there. so if you have a company that knows, i can make more money by doing something bad, they do it. >> let me ask a question, it's not just happening on social media, but it has transformed itself from social media to the real world, or the real world has transformed itself to social

media. but the point is, it's gotten meaner, it's gotten nastier. and there are very few people that seem to be standing up and saying, this meanness and nastiness can't continue. >> look, part of the underlying problem is, we have an electoral system that drives polarization. because of gerrymandering, the only election that typical matters is the primary, and the primary draws typically around 10%. who are those voters? they are the far-left, they are the far-right or special interests. and as a result, the underlying incentive for politicians, who just want to stay in office at any cost is to cater to those groups and those groups are angry and mean so all of the incentive to want to keep your job is to echo that rhetoric and it's a self-fulfilling policy. >> i always argue, there's too much money in politics. if you could use the money for good, meaning to take the influence that you have, you don't see, frankly, wealthy

donors say, i'm not supporting all of this craziness. they say, it's a binary thing, and i have to decide, you know, i like this guy better than this guy. so i'm just going to do it. >> yeah, i personally think that if we were to put our money -- and this is also what i'm doing with my money, into structural reform of the system, as opposed to just backing more and more candidates doing the same thing, that's how you change it. so for example, at my foundation, we've been building technology that allows people to vote securely on their phones, because what i learned, especially when i ran all the campaigns to legalize uber around the u.s., if you let people advocate politically from their phones, vastly more will do so, and that increases turnout, and you go from that 10% to 30. >> right, but here's the question, elon musk will tell you, you can't really let people vote from their phones. you already have them, in this moment where people who don't

believe the vote. >> we already have a system that, "a," is highly vulnerable, "b," nobody believes in it, "c," our entire electoral system and our entire political system is a dumpster fire. "d," elon musk for all of his accomplishments really benefits from the status quo, right? he is a genius at acting like he is subverting the status quo, and yet what does he want? he wants government contracts for spacex, section 230 preserved so that "x" can make more money, he wants lots of taxes for electric vehicles for tesla. this is a guy who very much has a strong economic interest in "a," keeping things the way they are and "b," betting on who he thinks will be the winning candidate because it translates into a lot more money for him and his company. >> that wasn't the case for biden. >> well, yes and no. biden has and nasa and dod have good compliance of spacex and the infrastructure bill and if you look at the climate measures and the inflation reduction act

have put more money into green energy, more money into electric vehicles, electric charging, anything else, than any time we have in history. so while musk has been -- and section 230 have been completely preserved under biden. so while musk may be vocally more republican and he may think, i can do even better off with trump, he's done pretty well. >> i think he would say, look at how much has been wasted on the ev -- not just -- not the tax credits for the cars, but the build out of the charging stations. that has not worked. >> both of them. >> excuse me? >> bottom of them. >> both of which? >> both of the charging stations that we've built. >> right, have not been a success. >> same thing with broad brand access. >> i'm here all week. >> for sure. but at the same time, tesla literally never gets off the ground without all the tax relief it needs. >> i agree, 100%. by the way, what do you make of his pac? >> i think he is a really clever

guys and in a lot of ways he reminds me of trump that he's seeking maximal gain for himself at all times, and one of those things right now is how do i get enough attention as possible within and if you endorse trump right in the aftermath of the assassination attempt and say, i'm going to give $45 million a month, which is kind of a weird number, but let's just say it makes him the biggest donor to a trump super pac, that will "a," get him a lot of attention. we are literally sitting on national television talking about him. >> what do you think that does to his business? >> i think these unique ability to inspire retail investors in a way that literally no one else does, and every time he does something that they deem to be smart, that benefits him and his businesses tremendously. >> bradley, it's great to see you, sir. >> thanks for having me. coming up, june retail sales numbers coming out at 8:30 eastern time. plus former president trump has floated the idea of big new tariffs if he wins the white house in november. we'll get into how that could affect u.s. ties around the world and the american economy,

as we head to break. check out the shares of reddit. a wonderful social media company like we were just talking about. luke capital rating the hold from buy to valuation call as rg.res approach loop's $75 price taet stay tuned. you're watching "squawk box" on cnbc.

(reporters) over here. kev! kev! (reporter 1) any response to the trade rumors, we keep hearing about? (kev) we talkin' about moving? not the trade, not the trade, we talking about movin'. no thank you. (reporter 2) you could use opendoor. sell your house directly to them, it's easy. (kev) ... i guess we're movin'.

welcome back to "squawk box." the futures have added to early gains. the nasdaq is now up 44. dow chipping in, up almost 80 and the s&p higher as well. and we've got half of july is gone now. the s&p has had just one negative session since the start of the month. and check out the rotation we were just talking about. the small cap russell 2000, yesterday it hit its highest level since january of 2022.

and fund strat's tom lee told cnbc he thinks small caps could gain 40% over the next ten weeks. another one of those calls, how much and in what period of time that he's done so well with. and that would be something to behold, 40% in ten weeks. >> yeah! you think? >> yeah. >> we are getting set for retail sales figures in just a few minutes. ahead of that, we want to take a look at shares of german fashion house, hugo boss. they're slumping after the company got its full-year sales outlook. it's attributing that move to persistent macro and geopolitical challenges, in their words. yesterday, you had shares of burberry plunging after a first quarter performance led them to issue a profit warning. hugo boss shares are off just over 8%. >> meantime, the owner of the nba's new york nims, james dolan, continues to criticize the league's revenue-sharing

policies. in a letter shared with the nba's board of governors, dolan outlined his projections to a league proposal shared with owners, about how revenue from the new $74.6 billion media deal would be dispersed. nolan said it is a move towards the nba model and it would take down successful franchises and redistribute to the less successful. >> trickle-down economics? >> you know, look, he's in a big s city. having said that, my long-suffering nicks, we got a little bit farther this year. >> a lot farther this year. you have some of the best players -- >> the question is what's going to happen next year. >> they're exciting now. i bet on them now. >> now you bet on them? the first time you've done that in a long time. >> no, all year. >> 25 years later -- >> jalen. >> 25 years -- i'm literally -- when did patrick ewan retire?

>> for you -- >> we're waiting. >> you skpand spike. >> coming up, breaking retail sales data, as promised. that's coming up right after this. 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.

welcome back to "squawk box" right here on cnbc. we are just a few seconds away from june retail sales and import prices. the futures have been higher this morning, with the dow now indicated up by about 80 points, after closing at a record yesterday. s&p and the nasdaq up higher as well, this morning. rick santelli is standing by at the contrme in chicago. rick, take it away. >> yes, we are awaiting june retail sales, and as becky pointed out, import/export prices. the growth story is a biggie, this goes a long way towards addressing that. june retail sales headline, expected down 0.3%, comes in better, unchanged, unchanged, unchanged is actually pretty good, compared to up 1/10. so we've had back-to-back months that have not been negative. last negative month we had april, was down 0.2%. don't see revisions yet. if we strip out autos, the number improves dramatically. up 0.4%. that's the best level since march when it was up 0.6%.

and if we look at ex-autos and gas, it continues to improve, up 0.8%. that is a solid number. up 0.8% equals where we were at one year ago in july. to find a higher number, you go all the way back to january of '23, when it was 3.2. i do see the revisions start to come in. i'll get to those in a moment. the control group for retail sales, and that's the number inputted into other higher up the food chain economic release comes up 0.9%, another powerful number dwhthat equals where we e in march. to find a bigger number, april of last year when it was 1%. if we look at the revisions, we've had some. 0.1% comes up 0.3. ex-autos and gas becomes up 0.3. so all of the revisions are positive and all the numbers are better than expected. and other than the headline

number, all numbers sequentially higher. now, if we look at import prices, expecting down 0.2%. they come in unchanged. last month's get cut in half from minus 0.4 to minus 0.2. if you look at exhort prices ex-petroleum one 0.2. exactly mirror imagine of the minus 0.2 that we were expecting. up 0.2 is the warmest since april when it was up 0.6. if you look at year over year perspective on import prices, up 1.6, definitely warmer than expected on this one, and 1.1 last month gets upgraded to 1.4. so 1.6 in this one actually becomes the hottest number going back quite a ways, all the way to dec of '22. that's going tyo take a few points away. export prices month over month, minus 0.5 going the other way, that's a big drop minus 0.5 follows minus 0.6 we, which becs minus 0.7. so back-to-back, big negatives

on the export side of the equation, that might tell us a bit about overseas demand. and finally, on a year over year perspective, they're up 0.7, a bit less than expected, following up 0.5. after all of that, we do see that we went from 4.17 in a ten-year to 4.19, but that's still down four basis points on the short end, we're currently at 4.33, which is three basis points higher than we were, but still down three on the session. so to summarize, less growth, that story is not born out in retail sales at all. so we want to continue to monitor the positive revisions and this should be good for stocks under normal conditions, but it may have fed implications, although the july meeting certainly doesn't seem to be on the table, and nothing at the economic club of new york according to my fed sources really change that dynamic. becky, a very lot of numbers and revisions. back to you. >> excellent job, as always, rick.

we thank you. and as you were talking about talking about, the ten year, the yield hitting 4.2%, a little higher than we've seen through the course of the morning based on all of those numbers we just heard. let's talk a little bit more about the economy, bring in lindsay, stifel's chief economist, and forrester research retail analyst. let's start with these numbers. rick's right. this does not kind of portend that slowing growth story or doesn't add any relevance to it. despite what we heard from powell yesterday. >> no, it's a pretty solid report, particularly when we strip out some of those more volatile components, as rick mentioned. food, energy, building materials, and look at the core component. that was a relatively solid report, zsuggesting that there s still a good amount of borrowing and spending power on part of the consumer. and this is in line with the larger story that we saw, looking at the latest consumption report in may, still up over 5%.

and heading -- gaining momentum, i should say, on an annual basis. perpetuating the notion that the consumer, the backbone of the u.s. economy, continues to remain on relatively solid footing. >> it's been a volatile number, though. it kind of swings back and forth. why do you think that is? >> well, it has been quite volatile, month-to-month. and i think this is in part a reflection of the fact that consumers are changing their preferences to those outlays of dollars away from goods towards services. and a reflection of while the smer is still solid, we are feeling pain. the average american is feeling fatigue from higher from higher borrowing costs, from the resumption of student debt payments, but we're talking about this second derivative decline of momentum. a slower pace of still positive expenditures, but again, there is that sense of fatigue, as consumers are continuing to foot higher-priced bills. >> so, let's talk a little bit about the winners and the losers. lindsay is right to point out that we are seeing changing

tastes. what are some of the beneficiaries of the retailers that have been doing better? >> right, when we look at the last six months of spend, two of the categories that continue to do very well, that have done well for several years now are the restaurant sector, that food away from home is still outpacing the food at home group, so people are eating out in large part because when they're comparing some of the inflation-led food costs, although inflation has stabilized in the grocery sector, food is still for the most part 20 to 30% higher than what people had expected when we were going into the pandemic. so food at restaurants looks relatively affordable. and then you have, of course, e-commerce continuing to do well. the non-store retailers are still outpacing every other sector in retail. when you look at the furniture sector, do-it-yourself, that

sector is not doing as well. clothing is still sputtering along, improving, but it is definitely continually challenged. department stores, of course, which are adjacent to that sector are also suffering. >> but then you've got the smaller retailers in the mall that seem to be doing pretty well. it's a weird dichotomy. you have to wonder what the future brings if the anchor stores go down, but the rest of the stores are doing okay. >> right. and what we've seen over, i would say, the last decade is just changing shopping centers. so you have everything from these mixed use facilities to try to drive more traffic to ultimately the department store anchors being essentially pushed out and replaced with anything from a big box sporting good store, in some case, grocery stores, gyms, fitness facilities, hotels in some cases.

big changes to the landscape of the shopping center. >> hey, lindsay, when we're looking at these numbers, rick was right to point out that normally you see strong retail sales, and that's something that people get pretty excited about. the markets tend to do pretty well. but now you've got this issue where the markets really want to see the fed cut rates. to your views, how's the economy doing and would you rather see a strong economy versus rate cuts? >> well, i think at this point, it's very clear that the economy does remain solid. i don't know if we can quite qualify it as strong, per se, as we're talking about sub-2% growth, but it is on a solid trajectory. and the consumer, as i mentioned, still exhibiting a good amount of spending and borrowing power. this is why the fed has been so cautious not to become overzealous with a one-off cooler than expected june cpi report, for example. and why they need further evidence that this backup to a 23-year high in terms of rate is having the desirable retarding effect on the consumer, on the broader economy.

and by extension, then, inflation. but what we're seeing is with the consumer still resilient, the economy still growing at a positive pace, inflation still above target, there really is very little justification for the fed to be considering a near-term rate increase, without considerable improving data on the price front, in july and august. but barring that scenario, it's very likely that the market has become above and beyond optimistic in terms of rate cuts. and the fed is likely to disappoint, pushing out that first rate cut, to the end of the year, if not early 25025. >> so everybody else is convinced that a rate cut is coming in september, except for you? >> that's right. i just don't see it in the data. if the fed sticks to the bar that they've set themselves for many months of convincing data, we had somewhat of an improvement in april, a little more in may. that's not enough data to meet that threshold of many months of improving data to justify that first round reduction in policy. >> all right.

lindsay, thank you both for helping us wade through these numbers today. >> thank you. >> coming up, some top takeaways from this morning's bank earnings. the entire financial sector, as well, now that the biggest players have reported. next, though, with the republican convention in full swing, we'll talk top g geopolitical priorities for the gop. elbridge call colby will join us. he served in the trump administration at the pentagon. it's all the things that keep this world turning. it's the go-tos that keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone. powering possibilities.

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welcome back to "squawk box." take a look at the futures right now following now better that expected retail sales data, it has moved up. we're on the dow right now, up about 145 points. the nasdaq looking to open about 60 points higher. the s&p looking to open about 16 points higher. >> we've talked about a lot of the economics of implied, by this vp -- let's talk a few politics in focus now.

former president trump has tapped senator j.d. vance to be his running mate. trump bringing aboard someone who has argued that the u.s. should encourage ukraine to strike a peace deal with russia. and that ukraine should also be prepared, perhaps, to cede some land to russia. joining us now to talk about all of this as well as possible new tariffs, china, muchcolby, who secretary of defense during the trump administration. bridge, good to see you. president trump himself, i think, some people would characterize his global view as more isolationist than maybe what the current administration that we're seeing from the biden administration. this seems like are it's doubling down on at least that perception. and do you agree with it, bridge? >> joe, great to be with you. i don't agree with that at all. i think the term isolationist applied to president trump and senator vance is really

inaccurate and generally a canard. i don't speak for president trump or his campaign, but if you take a look at an honest look at the situation and what they're saying, it's an american first population, which means they'll put the practical interest of the american people first. if you look at the platform, as i understand, president trump had a pretty intimate involvement in formulating, it's very clear, it says it's going to be a common sense approach, it's going to focus on re-industrialization, on unleashing american energy, on securing the border, and on strong military use sparingly. and what's ironic, frankly, that sounds to me a lot like the doctrine of use of military force under president reagan, which was the weingarten force, saying, we're not looking for a fight, but if you pick one with us, we'll make sure we win. and it's also saying, alliances are important, but that people have got to pull their weight. joe, i think that's common sense. that's not isolationism. i'll tell you, that's the way

these alliances are going to survive. i think the way we're heading now, we're heading straight for the "titanic," because president biden and his team, they're great at making commitments and prod, rhetorical pledges, but they don't back it up. the defense budget isn't increasing under pride president biden. so it's a yawning gap between rhetoric and reality that's really dangerous if our debts get called. >> i guess there's quite a wedge, though, between the nominee, vice presidential nominee, and what a lot of people think about ukraine, though, bridge. i think he actually quoted as saying, i don't care -- i don't care what happens to ukraine, i care about what happens to the united states -- it's a populist approach, almost. and "the journal" -- "the wall street journal" is exploding about the economic implications of j.d. vance in terms of populism, and not your father's gop, all kinds of things like that. you don't see it that way with -- you're comfortable with

our standing in the world, maybe not being as -- i don't -- i just don't know if we would be as involved in as many places as we were now under a trump presidency. is that okay? to come off the world stage? >> that's necessary if if you want american leadership and strength to survive, we've got to reconcile the yawning gap between our commitments and what we're actually prepared to do. and the fact that our allies have in many cases, disarmed. so i think that president trump and senator vance are both issuing a clarion call. i would recommend to your attention, senator vance's remarks at the munich security conference earlier this year, his peace in the "financial times," where he's laid out a very common sense agenda, which is that, you know, and consistent with what president trump said on his truth social post a few months ago, about the supplemental, which is that the europes are going to have to take primary responsibility for their own defense and the support for ukraine, that i think is consistent with an attempt to broker peace there. also say this, joe, it's not

consistent, maybe with our father's republican party. i'll say, the republican party over the last generation, both president trump and senator vance, have made this appoint, has not done very well in a lot of respects. the old paladins of that republican party, they keep pointing back, and i say, you have a couple of failed wars and nation-building campaigns, a financial crisis, an insecure border. i would say this is a lot of going back to maybe our grandfather's republican party. much more consistent with as president reagan actually governed, didn't use the military very sparingly, concentrated on the decisive theater. president nixon, president eisenhower, a lot of the critics of president trump and senator vance like to wrap themselves in the mantle of the cold war. during the cold war, people were really serious about what we could actually substantiate. president eisenhower was very attuned to the economic costs of a cold war competition. so i actually think, frankly, if you want this american-led international system to survive, you've got to follow the kind of agenda that president trump and senator vance are talking about. >> the fear and loathing in some of our european allies about

nato and supposedly they're very concerned about the outcome of the election. maybe they've -- they do have a horse in the game. they're finally starting to put a little more into nato, but that's a recent development. >> well, yeah, i mean, i think that they're going through the stages of groief. they're actually moving in the right direction. i would suggest that they -- and many europeans are now increasingly recognizing this. they should stop wringing their hands about american dpomestic politics, which is our affair, and get down to business, which many are, including the members of the center-left, like boris pistorius or the new labor government in the united kingdom. these people understand what's up and they understand the direction of travel in the united states, so again, there's a huge yawning gap. i mean president biden, again, will talk -- i think he's really good at talking, but the backup is not there. and i think it's just common sense for american foreign policy to be practical.

there's a real difference where president biden will talk about in this kind of sacred, very fluffy kind of way, but you know who's going to pay the bills for that is the -- is the american people. and i think what senator vance and president trump, they're saying is, look, this has got to work for americans. they're open-minded. i think the platform was think clear about that. it's got to be practical and common sense. >> you've opined a lot on china, taiwan and the like. what would a trump/vance administration -- how would they view a move on taiwan by china? how should they view it? what should be done? what should be done to engage china now or confront china now? >> again, i can't speak for president trump and the campaign, but what i would say is i think what i see as the best policy, and i think this is consistent with what they've both been saying is we need to be strong, but we also need to be measured. i know president trump has kind

of struck to the traditional policy of strategic ambiguity. he's open to discussions with xi jinping. at the same time the platform is talking about countering china. senator vance talked about our scarce military resources. the platform talks about reindustrialization, revitalization of our defense industrial base. i think this idea of being in a position of strength to avoid world war iii which i think is a very serious risk. the secretary of the air force under biden has said the chinese are preparing for war. this goes back to president reagan's approach, peace through strength. the strength part that people emphasize, that's absolutely ri right, but also the openness to a modus of aven difficult with china to avoid a war if that's at all possible. nobody wants that. i certainly don't want that for americans. >> we'll probably be seeing you

in the next administration in some capacity. can you tell us -- what would you like to do? >> i wouldn't presume. i'm just thrilled to support this ticket and i would be honored if they would -- i'd be honored to serve. i certainly make no presumeses about any role. honestly, i'm just excited about where this is going. i do -- i don't think president trump is exaggerating when he talks about the risk of world war iii. i'm personally very motivated because i'm very worried about this. i think we need the right policy. the policy we're on right now is not the right one and we need change. >> we will see you again soon, bridge colby. >> always a pleasure, joe. when you come back, we've got what you need to know about this morning's big bank earnings. we will be joined by aop t analyst. stay tuned. you're watching "squawk box." this is cnbc. degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not?

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box." bank of america and morgan stanlly beating analyst profit in rev flew estimates with investment banking. joining us is devin ryan senior research analyst. i want to walk through the headlines here. maybe i should just ask you. what is your headline out of

both of these numbers? >> good morning, andrew. it's a good quarter. the investment banking and trading. we're in the early days of a recovery there. i think we're seeing some of that come through in the results today. the flip side on why you're seeing pressure on morgan stanley is still seeing headwinds from interest rates around deposits coming down and then also the higher cost of deposits because of that. i think that's what people don't love, and they do have a little lighter net new asset quarter in their wealth management business as well. >> of all the banks right now, if you could own one, which would bit? >> i'd actually own goldman sachs. where you want to be exposed right now in scaap tall markets. investment banking, equity issuance could be up 50-% plus. i want to get exposure there. goldman is exciting now because their asset and wealth

management business is really expanding pretty rapidly. i think that's going to be the next leg of the story for goldman where you see alternative assets as $500 billion at the company which puts them in the top five. only 60% of those assets are fee earning right now. that's going to be the next three years for goldman, really exciting part of the story for them. >> so what wouldn't you touch? >> we've been more neutral on morgan stanley. the reason being is they've done so well. this net interest dynamic i just mentioned has been a big tailwind for them. as rates have gone higher, that's helped. now that rates are stabilizing or moving lower, this creates this offset. even as capital markets rebound, as i mentioned, you still have a little bit of a headwind from rates moving lower. we're more neutral there. we would look to put new money still into goldman stacks -- >> what do you do with the jpmorgans of the world on one

end and the wells fargos on the other? >> i think you really want at this part of the cycle capital markets exposure. you've got goldman sachs and jpmorgan, the two capital markets business, and i would be more cautious on the traditional deposit businesses just because of where rates are and rates potentially moving lower. that being said, i think all the large diversified banks are in a pretty good spot relative to smaller banks. i think it's a little bit of what you're looking for. really you do want to lean in here still on capital markets. >> by the way, future of wells fargo since we mentioned that, what do you think? >> yeah. we don't formally cover wells, so i'll probably not give too much here. but i think they've got big

diversified franchise. i think at the same time all these large banks are looking for growth. so i think that that's something that a lot of these firms have to think about over the next couple years. >> okay. devin with a big called on goldman sachs and david salman. that stock has been working. appreciate it. thank you. >> thank you. meantime, a final check on the markets right now. we've got about a half hour before the market opens. dow would open up about 150 points higher. nasdaq up 45 points, s&p 500 up about 12 points. we will once again also be watching the russell 2000 today, up now more than 7% over the last four sessions. the ten-year note here 4.2. the two-year at 4.47 and oil finally before we maybe get to joe's favorite crypto, are we going to show the board? we're going to flip it around

maybe? we're going to run out of time if we don't flip it around. there it is. wti crude, $80.45. there's the currency check. flip it again one more time. show folks where bitcoin is sitting right now. >> weave got time. >> it's taking its time. is this a computer thing? >> it was 63,000 last time we saw it. >> there you go. >> you can put a man ton moon, supposedly. >> "squawk on the street" begins right now. ♪ good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber has the morning off. stocks look to continue their climb with the russell aiming for five straight 1 mrs gains. retail sales better-than-expected. yields bounce a bit at the short end after the ten-year briefly hit a four-month low. roadmap begins with quarterly beats for both morga