dow off about 96 points, nasdaq up about 145 point, the s&p 500 up about 16 points, and most importantly of the day, we need to wish a very special happy birthday to the birthday girl at the table at the center of your screen. happy birthday. >> almost made it out of here. >> so close. >> almost made it. >> so close. >> happy, happy birthday. >> yeah, happy birthday. >> have a great day, and join us tomorrow. "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at post nine of the new york stock exchange. futures do indicate some reversal from nasdaq's drubbing yesterday. worst session in a year and a half, worst day for semis since covid. tsm guidance is helping a bit. netflix, tonight. ecb holds steady. our road map begins with market rotation after a new dow milestone. the nasdaq selloff, of course, and the russell pulling back from a 52-week high. also ahead, the chip sector is looking to recoup some of

those very steep losses from yesterday. taiwan semiconductor is out with earnings. it does have guidance above what many analysts have been anticipating. plus we'll give you the latest from the republican national convention after jd vance delivered his vice presidential nomination speech last night. jim, you did write, they're making it hard to own some of these tech stocks. >> yes, they are, and i know at 3:30rks the nasdaq futures were up about 0.3 and then at 4:30, up 0.6, and brought them back down. i mention this only because the last half hour, even the last 15 minutes, were some of the worst i have ever seen. david, there were people who wanted to get out of stocks so badly and use the etfs to, that you would have thought tonight taiwan semi was going to blow up. that did not happen. i think that this out of tech, out of s&p -- the big tech

stocks, and into nasdaq was a program that lasted a couple days. i don't know how long it can go on. i mean, it's a program. in other words, someone's motivated to bang out the semis, bang out mega and put money in small cap, and you and i both know, small caps can't really sustain that amount of money in without just taking them all up too far. >> right. we talked to bob pisani about this, the mechanics of some of the etfs and what that will mean and how they go about mirroring the performance of the index and what they have to buy. that is something worth watching, but on the other side of this, the chip sector fell dramatically yesterday. seems largely because of the trump comments in the interview about taiwan as opposed to the potential for new deterrent actions by the biden administration against foreign companies that use some u.s. parts, and they're selling to china. >> sophisticated -- >> overall, it just tanked a lot

of the semis. amd had a very bad day. nvidia. and any number of -- qualcomm, go on from there. >> i do want to point out, and carl, this is something for our at-home investors. a study just came out by arizona state university, and it looks at a hundred years of returns of stocks. people are saying to me, jim, why do you stick with this nvidia? >> in a hundred years, the highest annualized compound return for any stock in at least 20 years of return was 33.38% earned by nvidia shareholders. this is the greatest performing stock over a hundred years. so, no, i'm not going to flee it because someone's got some damn program which takes up ten biotechs that are worth zero and blows out of the company who's no longer in the $3 trillion -- he was kicked out of the $3 trillion club yesterday. i say, welcome back. >> b of a today writes about the period last year where everybody lightened up on nvidia. >> how was that?

>> went for idiosyncratic winners like pins and amd. they think this might be a fake a.i. top. >> well, the biggest -- there was a huge day where nvidia was down nine points versus what, obviously, percentage-wise, very big. and i was vilified by people at a charity event. why are you sticking with this thing? you know what i always ask them when they say that? do you know what nvidia does? goes higher. nobody -- you have to study nvidia to realize that it may be part of a bigger trend. i don't know if it's going to go up today, but david, over a hundred-year period, the best-performing stock? isn't that worth something? >> it's worth something, but past performance is no indication of future performance. >> david. >> i'm just saying -- >> skeptics. warner bros. discovery is up 37 cents. yeah. courtside. >> let me bring up something else, though, that is also sort of coincided with this selloff, which is this idea that the

hundreds of billions being invested by the hyperscalers, namely meta, amazon, alphabet, and icrosoft, will not see a significant return on the invested capital over time. roger mcnamee brought it up on our air. he was citing a paper by a guy named david khan from sequoia. you had this report from goldman last week as well. microsoft, meta, amazon, and alphabet spent $357 billion on capex and r&d over the last four months -- excuse me, four quarters, one year, and that question as to whether or not it's -- and how long it's going to take for them to see any kind of a return on that. is that melding into the -- this -- these questions and perhaps also part of why we've seen this violent rotation? >> look, i drank the hawaiian punch. i drank the kool-aid for jensen because it's just -- look,when

he says every single thing that a human can do in terms of moving, a robot can do better, what am i supposed to do, tell jensen he doesn't know what he's talking about? this man's the smartest person i have ever met. also very humble. and i'm not going to say, you know what, you're hundred-year return means nothing to me. your view of the reality of where things going, you beat a quarter by $4 billion means nothing to me. because roger mcnamee, whom i actually really like, said, well, it may not pay off. if you don't think it's going to pay off, go buy the stock of apple. everybody wants to give apple their a.i. that's the best way to combat the negativity is that every -- all the hyperscalers want to give apple the a.i. so that apple can use it with its install base of a billion people. >> right, but we may be in a period where people are questioning what kind of a return you're going to get, at least in the next two or three years on this enormous investment being made, not to

mention the pressure on our electric grid and so many other things that are occurring as a result. >> all the electric grid stocks got killed yesterday because of this thesis, that they were overspending. look, i -- jensen, again, just quoting what he says. there's going to be winners or maybe a winner. i keep looking at the year 2000, and everybody says how horrible it is. i look at amazon. >> i made the same point with mcnamee when we had this conversation, which is, yeah, we came out of that, and much of it was underhyped because of the impact that it had, but it doesn't mean that it had that impact in the same time frame. >> if you take a hundred-day perspective, i bet you nvidia loses you money because they spent a lot of money. but if you take a longer term perspective, it's about an industrial revolution. and i believe that. he says, like the pc, like the iphone. who won in the iphone? well, apple did.

but if you picked the winners, they will -- the return for the winning stocks during this period, i love this thing, is 5 million percent. there's a bunch of stocks up 5 million percent during a hundred-year period. i want to be in those. i do not want to be in the russell 2000 pacific bioscience. oh, boy, that's a good one. >> wouldn't you like to go through this churn if, in fact, it means less reliance on seven or five or six names? >> i love a broadening, but it has to stop. it can't be parabolic broadening. i like for the rest of the s&p 500, i'd like that to be trading up. they become huge share donors. people are selling nvidia to buy an etf, small cap etf, not actually singling out stocks. if they were singling out stocks, they would never buy the stocks, and i think that usually lasts three days. that rotation in the historical -- i don't have the hundred-year time frame, but for about 40 years, we've got a rotation that's vicious, they last three days.

we're on day four. >> although wells did write what appeared to be a pop is turning into the real thing. chris harvey over there upgrades the banks, maybe, 15% outperformance in the next few months. >> look, the banks are creatures of regulation. and they're creatures of rate going down. charlie scharf, one week ago, told you, we need rates to come down for business to come up. so, yes, rates are about to come down. is it trump's polling problem? trump clearly is anti-regulation and the most regulated stock in the country is wells fargo. >> people are quoting vance today, "we are done catering to wall street and the wall street barons who crashed the economy," ostensibly in '08. >> he's the vice presidential candidate. the presidential candidate has spoken very loudly about the fact that we just cannot hamstring business, but i have to admit i was struck. i went through it, david.

i thought of you immediately. i went through the speech, and i compared that to the famous 1896 cross of gold speech by william jennings bryant. now, william jennings bryant, a great populist, was in favor of the farmers. he felt the wall street barons were selling out the farmers. >> true. >> right, it was true. it was true. well, has the wall street barons sold out smalltown america? any maybe. >> lehman brothers started in alabama. buying cotton, right? >> i know. cotton. i'm not -- you read that book too? >> i've read a lot of those books. >> i didn't know that. i don't want to get too far afield. >> really? you don't want to get too far afield? that's the first time i've ever heard you say that in 12 years together. >> having been a union person and led a wildcat strike and helped destroy a company because i was part of a union -- >> yes. >> i recognize that it's entirely possible that you could say, as i did when i was hard

left, that small towns were destroyed by companies that pulled out and put factories in india rather than having india -- i don't know if you saw trump's comments, but very good. >> india instead of china? >> he uses -- what he's saying -- what trump is saying, and what vance was saying is that, look, small town america was decimated because we put factories in other countries rather than pay the tariff. and that's true. but the last time i heard that, it was from solid left-wing people, not right. >> part of this free market, neopopulist debate that we'll hear more about tonight as the former president formally accepts the nomination tonight. his first major -- meanwhile, it was vance's first major speech accepting the gop nomination for vice president. eamon javers has been in milwaukee all week, has been well versed in this discussion, eamon, that we're having yet again today. >> yeah, that's right, carl. you're mentioning that quote from jd vance last night about wall street. i want to play that for you, because i think it does mark a

real break. i was surprised, frankly, at how much economic populism was in this jd vance speech last night. we knew this was coming with the jd vance pick. we knew the jd vance pick signalled a shift in the republican party's thinking about the economy, but he went much more overt with it than people were expecting. here's what he had to say about the republican party's relationship with wall street. take a listen. >> we're done, ladies and gentlemen, catering to wall street. we'll commit to the working man. we're done importing foreign labor. we're going to fight for american citizens and their good jobs and their good wages. >> i was just emailing earlier this morning with one of the architects of the conservative economic populist movement, and this person -- i said to this person, you know, people on wall

street are a little bit stunned or surprised by some of that language last night. this person says, "they shouldn't be stunned if they've been paying attention. probably they should take even greater note of what wasn't said in that speech last night. no mention of tax cuts, shrinking government, deregulating or job creators." those are the sort of archetype cal republican positions of the past. this is a very new republican party that's aimed at working class america. they're aimed at union voters, union participants, and they want to reach out to that base that has traditionally been a democratic political base. if they can do that, it's a sea change in the american political landscape, but it also has enormous implications. as you guys have been discussing, we've all been discussing all week, enormous implications for wall street and big business as well. >> eamon, notable for sure, but what about the idea here in terms of how much of this is actually part of former president trump's thinking?

and how, in any way, the views and perspectives of his vice presidential nominee will actually translate into action from the -- from a potential trump administration should he win? >> right. well, look, a striking difference, right, between that bloomberg business week interview with donald trump earlier in the week where he was talking about, you know, he wants to keep on jay powell, he wants to lower the corporate rate, maybe, to 15%, down from 21%. that that's stuff that wall street will eat up, but donald trump has a political skill of telling different audiences exactly what they want to hear. donald trump, in that bloomberg business week article was speaking to wall street. this is the republican party last night speaking to main street and a broad array of american voters, not just maga, but the rest of the country as well. trump could have excised those lines from jd vance's speech last night. they had control of the pen of what jd vance was going to say. they did not do that. the reason they didn't do that

is because the campaign believes this is a winning message. >> but eamon, you do have conflicting doctrines. on the one hand, you have a presidential candidate who favors deregulation, which often plays to the wall street barons, so to speak, because deregulation means more takeovers, more ipos, easier business, and on the other hand, you have vance's message, which really is not really about deregulation but is about protecting the working person. how do you explain the dichotomy of views? >> well, look, i think if you look at the idea of the american government as a system of sort of levers of power, and regulation is a lever of power the government uses over business, just think about donald trump's approach to governance and sort of the chips that he has on the table. i don't see donald trump necessarily looking to unilaterally disarm and give up levers of power. i think you look at donald trump's approach to all of the

transactions, both political and business in his life. he wants power. he wants to be able to use it. he has an instinct for leverage, and regulation and the ability to oversee that gives a president leverage. >> eamon, it will be an important night tonight as we watch the former president's speech and acceptance of that nomination. eamon javers in milwaukee, of course, doing such great work this week. take a look at the premarket. tons of calls to get to on crowdstrike, palo alto, gap, e.l.f., and news on abbott, horton, novartis. the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

the moment i met him i knew he was my soulmate. investment objectives, risks, charges, expenses "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.

got some s&p gainers to look at premarket. a lot of them are earnings-related. m&t and horton are good examples, but we'll get to david on these reports about wbd and a discussion, potentially, of how they might one day split the business between legacy tv and studio digital. take another look at the premkease oko art wlo tunwind some of yesterday's action. more "squawk on the street" when we return.

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all right. we're standing for today's "mad dash." we've got an opening bell seven and a half minutes from now. want to talk a little meta, which -- stock of which has been down lately quite a bit.

>> stock from hell. >> i wouldn't go that far. >> stock from the sixth circle of hell. >> this has been -- >> dante, listen to me for a second. >> yes? >> this is an example of how difficult it is to get a hyperscaler, huge company, a tech titan, to move. but they took a 5% -- taking. i'm sorry, they're taking a 5% stake, we think. it may not happen, but "the journal" reports it and eft saying they're in talks with luxottica, because that's who makes the glasses that are so amazing. the first iteration, take pictures on instagram. iteration -- they have factories in italy, and i'm told by my sources working 24/7 to meet demand. still doesn't mean anything, because it's such a big company, but david, the next generation -- i heard what they can do. you see a crowd in front of a store. you say, what is the crowd in front of the store at 14th and

six? what is that? it tells you, that's because they're introducing a new shoe at that store. you ask it things, and it's a.i. -- instant a.i., and these are 20 -- the ones they have, david, you can't make them fast enough. i've asked mark zuckerberg to come on and talk about it. that was not happening yet. early. but i do think that you have to watch that this is the beginning of some of the stuff that meta does. remember the division that just loses money hand over fist? this is a hand-over-fist production, and i think that taking that stake in luxottica is a very big deal. >> and you think this product has real legs, so to speak? different than the apple vision pro? i remember when zuckerberg compared the two. >> the really cool ray-bans, my daughter has them. they're not even that expensive. they're very cool ray-bans, and at the same time, you can say, take a picture of this. do that. my daughter's a real instagramer, and i have to tell you, david, it's cool. david, a lot of people are on

instagram. it's a big deal. >> that's what i hear. >> they're on tiktok. >> that's what i hear. >> you see what he said, the president, about tiktok? >> tiktok is going to hang around. >> and like zuckerberg. >> all right. >> guess who's out of prison? >> peter navarro. lot of your buddies are out of prison. we've got the opening bell just a few minutes away. it's five minutes away. you can catch us any time and anywhere, by the way, by listening to and following the "squawk on the street: opening bell" podcast.

i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. some more weakness in the airlines today as united airlines warns on q3. actually, so does alaska, jim, although united did say that mid-august is where we might get this inflection point regarding demand and supply. >> i read it with ennui. i said, oh, now it's august inflection, and i kept thinking what you say to me almost every weekend, the tsa, you say it's the greatest week ever. i don't want to hear if it's the greatest travel week ever that i can't make money in united. that's the way you play it. it turns out you play it with

royal caribbean, play it with viking, but you can't play it with an airline because it's they're not well run enough. american airlines is where it was during shutdown in covid. i found this was a very discouraging report, because the stock's been down. i thought they would say some things that would make me feel great. instead, they give me a tease on august, and i believe it when i see it. >> you're not ready to take flyer, literally, on these things? >> i just don't think it. i get very discouraged by buying airline stocks. even delta, which was a really well run company, ed bastian, fantastic ceo, i say, look, until the airline situation clears up with spirit where they can discount very much, with jetblue, i don't want to touch these stocks. you can own that. i don't care. i've got other fish to fry like abbott that we have in the next -- >> you're going to stay with us for the interview at the 10:00 a.m. hour. meanwhile, jim, talking about consumer weakness, beigebook, five of seven districts saw flat

to negative activity. >> rate cut, rate cut, rate cut. there are people who are still clinging to the july -- again, that july story, no go. but september rate cut is so good for so many companies that i would tell you small and medium-size business would benefit. >> let's get the opening bell and the cnbc realtime exchange. at the big board, it is health care provider ardent health, celebrating an ipo today. at the nasdaq, insurance broker twfg, also celebrating an ipo. >> that's why the morgan stanley conference call was so important. they were talking about triple the number of deals that they had last year. we're going to be very busy with ipos, carl, and that's very good for small and medium-size business. that's who's doing this. >> people were looking at chart to schwab, sticking with the banks yesterday, jim. some of these -- it's been a tough couple of days. >> well, schwab, you know, it was really more of a story because they had -- people are saying they have to give

higher -- they have to pay more for certain accounts, give them more interest. i have come back pretty assured from the schwab people that you're really -- there's nothing like it was in the ini-bank crisis, and people think that it was. it's not. at a certain point, you got to step in and buy it and i think that point is now. >> greg adding to the why wait camp, saying if the fed were truly data dependent, they would not wait until september. >> i think that's true, but does that not signify some sort of worry, concern? that's not the way that i feel historically that powell's worked. if they do what i would consider to be almost an emergency rate cut, then i would say, wait a second, maybe things are worse than i thought. just say september, we're going to do a long process, i feel much better. we can't have a number that's hot and then have them -- have you and i say, did they move too soon? that's the cardinal sin.

did they move too soon? that's what he has to worry about. >> shares of tsmc, one of the larger companies in the world, are up nicely this morning, guys, helping the chip sector. i'm looking nvidia up, amd regaining a bit of the significant ground that stock last yesterday. revenue expected at tsmc between 22.4 to $23.2 billion. gross profit expected to be between 53.5 to $55.5 billion. that kind of guidance was, in part, what is fueling the stock, because it was a bit ahead of a number of the analysts who follow that company, and of course, this is, as we know, the maker of more or less the manufacturer of all the high-end chips in the world under its founder, morris chang, and what he was able to accomplish in taiwan with the help of the government, of course. and that did figure prominently into former president trump's comments in that interview we've referenced any number of times this week with bloomberg business week. >> if you go over the conference

call, this ccy, the chairman makes the point, we've observed strong a.i. and high-end smartphone demand from our customers. a.i. is nvidia. smartphone is apple. you have a reason to say that this selloff might run its course soon. i'm not going to say point-blank that it's done, carl, because there are too many people who are trying to jam down stocks yesterday, so typically, what you have is retest and then it goes. but there were no flies in the tsm quarter. it was true. >> tons of news in consumer products and food. you got dpz and this discussion about international. you got beyond meat. you got darden, chewy, and you got bud light falling to third place. >> if you go to the darden, chewy, that was very bullish. spent $600 million and get a tex-mex chain. there's a lot of these chaompans are just for sale. david, you know, in the m&a side, these medium-size businesses are just dying.

i point out that i thought that darden made a good -- they had cash. they did it. and the stock is down for whatever -- >> what do we make of domino's, the stock of which is down over 11%? >> that's international. >> they went through guidance for 1,100 net restaurant openings due to challenges, they say, with their largest international franchisee. that was a bit of a surprise. get some highlights here from kate rodgers, who covers the company closely for us as well. you've been -- i think you've been quite positive on the stock. >> i've liked it since it was $10. dp enterprises could be the reason. 12 countries, 3,800 stores. this is a big franchisee, and they are weaker, and so the growth -- the growth forecast was pulled. the growth of stores forecast, not the actual domestic same-store sales, which were fine, and the international growth is really, frankly, an integral portion of the story. it was very, very disappointing. >> well, mostly because a lot of the recyclivals are putting thel

to the metal on store count. >> this is pizza. pizza's supposed to be the hottest area, and russell weiners, really good ceo. we should have had a better handle on the international. if they're really in trouble, we should have known. it's a publicly traded stock. >> while we're in the consumer neighborhood, amazon out with some overall framing of how prime day went. obviously, records as we were led to expect. >> i think that amazon's part of the great rotation out. i don't think you can just turn on a dime and get the thing going. there's too many people who are trying to sell in the last 15 minutes to a half hour yesterday. and what that tends to be is they didn't finish. so, they will greet any lift with more selling because they've made their decision to get out of amazon. so, don't panic if you see the stock not holding. it's what happens. a guy wants to sell ten million shares of amazon, maybe he sold nine million, and he was frantically trying to sell it in the last few minutes. that guy comes back. he's already decided, i don't want amazon.

i want -- i don't know what he wants. horton? what does he want? >> guys, blackstone reported earnings. john gray, as he often is, a guest on "squawk box" this morning. we usually look for john to give us some broad commentary in the macroenvironment. as for the numbers, as you see, getting sort of a tepid response from investors. and by the way, the stock, should be noted, is well below many of its peers. it does trade at a higher multiple than some of its other alternative asset manager competitors. but i would note, shares of apollo up almost 30% this year. kkr, up 36%. blue owl up 25%. and blackstone, barely up. up 1.8% for the year. as for the numbers themselves, the fee-related earnings came in a bit below what was

anticipated, at least, take a look at apollo. i mean, that's just a machine, what they got going on at apollo in terms of the insurer and private credit. but back to blackstone's numbers, up quite nicely from $24.5 billion in the first quarter of '24. that was seen as a positive. but fee-related earnings were a bit lower than many of the analysts who had followed the company estimated they would be. realized performance was fine. investment performance, generally positive, but it comes back to sort of this higher multiple than it does because it's blackstone. and whether that should necessarily be the case, given what, again, jim, it's been fine but not a great quarter. >> no. and they do have great businesses, obviously. a lot of people feel this is the halcyon moment for a lot of these companies, and they would do well under trump because of deregulation. this is what we're talking

about. vance would be against private equity. >> well, i mean, it's a lot more than private equity. in fact, as we made the point many times, private equity, while we still think of it as really a small business for so many of these companies, apollo being another name, private credit, real estate, obviously, when it comes to blackstone, alternative assets, generally speaking, infrastructure. you go through so many things. blackstone's market cap and goldman-sachs's market cap are identical, just to put that in perspective. and blackstone has not done much this year. this is an enormously important company with deep tentacles into the economy across the board in the united states and around the world. >> they are rigorous thinkers that have made a lot of money for people, and i'm -- i'm surprised that it's not doing better, so to speak, but look, it's been a great investment over time. >> it has, over time, since it came public, without a doubt, especially once they became sequel. that was a key moment. >> maybe datacenter businesses, you can't see how valuable it is because it's buried within the

company. >> it's owned within the real estate, but their datacenter business is going gangbusters and as john gray is always happy to point out, they aren't as exposed to commercial as you might expect. it's much more about datacenters, warehouses, and things of that nature, which have held up very well. and in fact, in parts, grown. >> i had first horizon on last night, carl, and first horizon, which is in the growth area of the country, nashville, tennessee, they're saying -- they also have a lot of business in florida -- they're saying they're seeing increased c competition for opening of accounts, because other banks are coming into their area because it's a great growth area of the country, southeast, so they're not making as much money and the stock was hit. now, i think it's a great stock. >> i'm thinking about what dimon says about branches. people like to go visit their money. you would think where there's population growth, there's account growth. dfs, by the way, pretty good quarter. net chargeoffs down sequentially. that was interesting. >> yeah, but key was a little disappointing. i mean, it depends -- by the

way, ohio figures, obviously, senator vance is from there, but there's a bunch of ohio banks that are doing well but not doing well enough to inspire people to buy them. the regional banks are just okay here. it's jpmorgan, and it's wells, it's morgan stanley and goldman that do well. it's the true wall street barons. wall street barons. >> guys, did want to talk about warner bros. discovery. how could i not? i will note, of course, that netflix's market value is well more than ten times warner bros. discovery. we are waiting on those netflix numbers after the bell tonight. a lot of people getting their numbers together, because you do see movement there. but let's talk about the movement here. couple of days ago, jessica wrote a report sort of unbundling the answer. there's an "ft" story today talking about them, at least drafting break-up plans at the company itself. there's a reference to that report, arguing exploring

strategic alternatives, asset sales, restructuring, mergers would create more value versus the status quo, and that is what's going on here does that mean anything's going to happen? of course not. companies are always thinking about these things in the case of warner bros. discovery, take a look what's happened to the stock price over the last tcouple years that doesn't even include the archegos move higher you're going to be focused on making sure your stock is not seven bucks anymore. from what i understand, certainly, they are thinking about any number of things is there an opportunity to create value by splitting the company perhaps into what would be a pure content company with the studio and the direct-to-consumer business with no debt? and then, putting the linear assets in a separate asket, loading them up with that $35 billion or so in net debt. how would that be? what are the covenantslike a lot of it is covenant-light,

i'm told, but that doesn't mean they wouldn't get a lot of pushback from their bondholders if they were to try to do that again, none of this means it's going to happen. there are any number of things they certainly might consider. is there a possibility of selling the polish assets? that thing does 3 to $400 million in ebitda, and i'm told there might be interest there, whether it's at a high enough multiple for warner bros. discovery to hit the bid, unclear. gaming even the likes of cnn. these are things that conceivably could be sold. will they be i don't know but you would have to believe, as was in the research report from jessica reef, that all options are on the table if trump were to come in, you heard zaslav say this last week at sun valley, maybe it would usher in an easier regulatory environment. would amazon come along and say, we'll buy you, as we did mgm possible you have to be aware when your stock price has fallen as much

as this one has, of activist investors who might be pushing something on you, perhaps not dissimilar from the plan, at least, that, you know, that the various things they think about at the company so, none of which is to say any of it will happen, all of which is to say or at least to say that all of it certainly does seem to be on the table in terms of what can we do to improve the future for this company beyond just operating the assets as they currently are constructed and dealing with what we've discussed for years and years now, the slow but steady -- not even slow. the steady and significant decline in linear cable viewers. >> now, can you -- you mentioned one of them will be debt-free. they would spin off, what -- why would they do that don't you want to offload some of this horrible debt? >> you want to offload it to the linear, put all the debt on that and then have a pure play content company. you would have the studio and

all the content making together with the content distribution in the streaming world, and then you would have the old media, so to speak, which does generate a good amount of cash flow, being the key there in terms of meeting the interest payments. >> do you remember when you and i suggested to jeff that they should do this remember what he said to me? >> what'd he say >> "you don't know anything. >> meanwhile, he did hit the bid. he did create a lot of value he was very happy to see them, and he did a good job for shareholders >> he sure did very smart guy >> we'll continue to keep an eye on it. the nearest term thing for warner bros. discovery, as i said many times, and i'm going to remain focused on is the nba. this is any day, any hour now we're going to get at least some details here in terms of what are the matching rights there that they have and as i've said any number of times, you could see this thing end up in litigation that will be a story warner bros. discovery suing the nba.

i hear they're lured by the nba, so perhaps they're ready for what may come as a result of, again, warner bros. discovery saying, hey, we'll match that amazon package and the nba saying, not really, because you're not really a pure streamer, and warner bros. discovery saying, well, we have a deal to match. it was written ten years ago, and you're not going to honor it well, then, we're going to sue on behalf of our shareholders. so, you got that going too >> well, i do -- the disparity between what the nfl got and the nba is what made me say, i can't believe the nfl might not try to renegotiate. the nba is worth a lot i think the nfl franchise is the best in the world, and it's surprising >> the nba deal, worth some $76 billion over 10, 11 years. pretty big number. >> really big, but i think the nfl does a fabulous job. i'm surprised they're not making more money versus the nba. >> we, of course, parent company of nbc, were one of the key reasons why that nba deal got so hot. >> yeah. >> but again, we haven't seen any of this done yet, so to

speak, but we're waiting >> meanwhile, carl, it's important to point out the sellers are back in these big tech companies, and they're saying, i got to get out it's the same level of panic that we saw. you have to let them be. let them come in and bang these stocks up. don't be a hero. >> while we're talking streamers, netflix, tonight, jim, i think i counted four price increases in the last two days, although there's also the expectation of the fewest sub ads in eight quarters. >> i just continue to think that if you have something that -- if you have an offer, an option with commercials, that younger generation, the frugal generation, i'm calling them, they say, yeah, you know what? i'll watch the ad. i don't want to pay up and that frugal generation is making a lot of money for netflix, because ad support is really great as they figure out how to connect ads to target ads, ads are going to get the highest cpms so, i think netflix is really smart in figuring out exactly what ad they should show to what

people >> meantime, nice round of upgrades for retailers morgan stanley ups gap citi ups vf corp., and baird ups e.l.f. >> now, we go over those e.l.f. is because they had -- they make their stuff in china people are fearful of trump. vf corp. is, frankly, the balance sheet got fixed by the sell of supreme, so people feel bracken darrell is going to follow that turnaround off, and gap stores is just not recognized as -- we recognize abercrombie as being great gap is the one that's having the great resurgence, and it's really well run now. >> it is >> yeah. i think that that stock's -- i'm not saying anything's a steal in this market, but i think that gap stores, which had traded much higher, has come down enough that mr. dixon at 12 times earnings, i'll take it it's not bad >> i just -- bracken darrell how can that guy not win with that name? a guy named bracken darrell is going to win >> my father always said, a guy

with two first names, stay away. >> i might go with bracken darrell faber. that's an unstoppable force. >> bracken darrell -- logitech >> watch out for that bracken darrell. it's coming barrelling towards you. >> bracken darrell is going to fix vf corp. he's going to fix it >> i think that's as good as any investment advice you could give >> p&g diaspora. >> i like that estee lauder, they got hurt in that diaspora there. >> what about estee lauder >> never mind. >> that's a good answer. never mind >> what are you talking about? you're mumbling. >> yeah. domino's pizza didn't own it. >> just south of 5,600 watch bonds today. busy day in fixed income claims were a bit elevated continuing claims, again, highest since 2021 we got three fed speakers on deck, philly fed's already on the tape and lei in a few

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abbott labs a little bit lower today after a good quarter. 114 beats 110. they raise the guidance. we're going to talk to the ceo in the next hour you like the print. >> yeah. look, johnson & johnson was down big initially and ended up being up five. people don't understand the story and the litigation that's fine. maybe we'll enlighten people when mr. ford comes on. >> subdued headline tape dow up 9 "squawk on the street" continues in just a moment

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constellation, 10% tax under trump. people feel it's tied in with illegal immigration. i don't want to go there it is a growth beer and they have a lot of different products but right now it's misunderstood because of glp and cannabis, not because of illegal immigration. >> miss you owning the bar and getting us real-time data. >> about cannabis. >> can you get the bar back? >> no my wife owns a mezcal country. you can't own a bar and liquor company. >> miss thebar the time of year we go and have the party. >> we got to be in -- >> i think she's very happy. >> she's doing well with that product. >> see you in a few moments. breaking economic tada in l.e.i. don't go anywhere.

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good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber, live as always from post nine of the new york stock exchange. take a look at stocks here in the early action looking a little bit firmer than we were yesterday up 0.3% on the s&p 500. nasdaq is higher it's rebounding a little bit 0.3% after yesterday's big selloff. it is still down for the week to the tune of almost 2% so far inside the s&p you've got the cyclicals rallying industrials at the top of the market along with real estate, that group has really come to life lately. utilities, consumer discretionary, energy, financials all up today. consumer staples having a strong day yesterday, seeing fol through today as well. what's lagging, it's actually health care and technology and communication services are higher, they are not at the top of the market. nvidia is back up, so is meta and tesla, microsoft, alphabet under pressure treasuries it's been a story of lower yields, a little bit

firmer but towards the bottom end of the year on the 10-year 4.169% with expectations at 100% of a cut from the fed in september. 30 minutes into the trading session, three movers we're watching dominos pizza one of the biggest laggards on the s&p slumping after second quarter revenue and same-store sales missed estimates. taiwan semi on the move, beating on the top and bottom lines thanks to booming demand for ai chips. more on the state of semis in a moment watching shares of abbott labs today, lower despite beating earning system and raising its full-year guidance the chairman and ceo will join us this hour with a rare interview you will not want to miss. >> meantime, l.e.i. is out on a busy day for macro good morning, rick santelli. >> good morning, carl. notice the dow making new highs here look at the fixed income markets. yields moving a bit lower. what's going on? leading economic indicators and

leading where is it leading us minus 0.2% for june. that's the second best number of the year the best number this year was 0, and that was in february okay outside of that, not really a positive number, you have to go back almost 2 1/2 years, to february of 2022, to actually find a positive number so long and variable lags is a phrase often used to describe monetary policy. i think it's a good discrypter for leading economic indicators. it seems to be taking quite a bit of time. yields virtually unchanged on many of the maturities this goes along with the notion that if you blur your eyes a little bit, your note yields hovering around the lowest closing level since february 10-year since march. definitely, sara is right, a downside pressure, we need to continue to monitor because with 100% of a rate cut coming in

september, how much of that is already priced in the yield curve. sara, back to you. >> leading economic indicators have been leading us down the recessionary road for a long time, rick how long does this lag last? >> yeah. i'll tell you what, it's never been a big favorite of traders we monitor and many ways a lot of the metrics that have put it together are older news. they're leading us towards a recession and i guess sooner or later we will have one the question is, will it be this decade or not based on some of the data we continue to get? >> right all right. rick santelli thank you very much the 10-year as rick noted 4.173. the other big central bank news this morning, ecb coming out as expected unchanged on interest rates and then everyone wants to know what's going to happen in september? well, president lagarde, like fed chair powell, is not precommitting to a particular rate path right now. they sound very similar after they were on stage together in sintra a few weeks ago, even

though the ecb, unlike the fed, move already to cut rates. here's what she said about the decision from here eye. >> i see very much the discussions we had this morning on the one hand, on the other hand. >> that's it on the one hand they still have sticky services inflation, on the other hand they are continuing to monitor in the weakness and the downturn in the economy and balance out the risks like the federal reserve is that's the predicament the market still sees cuts for this year. the euro is just slightly weaker we have that this morning. we have jobless claims which sort of resumed their uptrend a i little bit, nothing alarming, but the number of americans filing for jobless claims did tick up in the week after last week which was lower but a lot attribute that to the holiday. texas was high and maybe something to do with the storm, the hurricane that was there i want to mention continuing claims, the number of people on

jobless benefits who continue to claim them, and it speaks to the lack of hiring enthusiasm out there because those numbers are elevated and actually with a tick up, david, this week, they're at the highest levels since 2021 when we talk about the labor market cooling continuing claims is another chart to show evidence of that. >> right we did tick to 4% unemployment. >> 4.1. >> 4.1 the last employment -- >> things are good in philly something going on in the philly manufacturing that's been an outlier compared to the other regional manufacturing indexes we got that number this morning and it was much better. >> employment best in two years, new orders best in two years, on top of industrial production yesterday. that's why we got some of the trackers on gdp going higher. >> right maybe things have bottomed in the industrial manufacturing economy and especially with the eye toward lower interest rates things are looking up.

most of the regional fed surveys have been in negative territory. philly fed an exception, above 0 for the last six months according to peter who writes about that the beige book, which i'm sure, you know, you guys all found to be a stimulating read, as i did, which gives the report from the fed districts, and it always is a good snapshot. the upshot of this one was, so basically half of the districts are still experiencing economic growth and more of them are seeing either flat or declining growth that was the headline to me. three more than the last time around have shown flat or declining economic activity. here's just some fun tidbits i pull out because i learn something, new york city, tourism is steady. food festivals, food halls and international cuisines the inspiration for so much summer tourism and social media exposure is spurring many visits to new york city did you know this. >> i didn't. i thought they came to see our

scaffolding. record-setting. >> they come to take pictures for social media and go to food festivals. >> food halls. >> one economic tidbit is that more new york city tourists are shopping at grocery stores and convenience stores than eat than eating out at restaurants because that is proving very expensive. >> very different picture, though, from cleveland, right? >> i pulled out, you know, they do a community notes section, just other community color from the different districts and in cleveland, it did stand out to me that especially the stress in the low income here's ap anecdote from cleveland, to cope with the increased demand for their services one food bank contact mentioned handing out less food per visit to stretch their supply while another contact shared their organization was spending from reserves speaking to demand for emergency assistance and food benefits as the low income american gets stretched because of high rates, high inflation you know, savings that have worn

out. it's not exactly the most robust picture, i would say, but the beige book hasn't been and the fed pays attention to it so as the risks come into better balance, we do see deterioration in the economy that's the bottom line, i would say. and then we got reads from corporate america which is interesting to hear. d.r. horton, home builders, this is such a dynamic that continues. even with the high mortgage rates, although inflation and mortgage rates remain elevated the supply of new and existing homes at affordable price points is limited and demographics supporting housing demand continue to be favorable when we talk about why haven't the high rates, you know, 5.25 rates, why hasn't it hurt the economy more we expected it to send us into recession. these were historically high rates that happened very quickly and this is a big reason why because people are locked into their lower mort gains usually monetary policy works a main transition mechanism

through high mortgage rates, hurts housing activity, hurts the economy. people are in their low -- low inventory, they've got low mortgage rates and not, so they're preserving that spending power and that purchasing power that they would have otherwise having to buy homes. this is a big reason why the dynamic continues, with i makes it more trooek tricky for fed to figure out. >> 40% of homeowners are mortgage free. biggest in the history of the country. that's more good news for the consumer and why it's not filtering through. the high mortgage rates. people aren't needing to go out and buy a home if you have -- if you're mortgage free why would you pay 7% for a 30-year mortgage. discover financial noted some of the deterioration in the consumer spending, though, as well restaurants, they say, which is a large category of volume declined accounting for the influence of promotional categories was stable we continue to sea a cautious

consumer evidence by less card member spend with lower income households affected. it is starting to filter through. just not in as big a way you would have thought at the beginning of the tightening cycle. >> mooepts, the nasdaq is coming off the worse days in a couple years. all that said the small caps holding on to their gains for the week to dominic chu to talk more about this big market rotation good morning. >> it's still in effect to that point. we're seeing a bounceback today. out performance still in the russell 2000 small cap index even during yesterday's tech led selloff. if you look over a one-week basis on the iwm, the russell 2000 etf versus the s&p 500, which has cracked with today's moves a gain of a half a percent. the real focal point here, there's been such out performance in that russell 2000 trade versus the qqq if you take a look and drill down into some of the dynamics within the marketplace overall, on that year-to-date basis, iwm

versus qqq, still an under performer of the russell 2000, but this huge move higher over the course of the last maybe five to seven trading days or so has really been a driver of the out performance there. so much so, that when you talk about the five trading days entering today's session there have been literally billions, hundreds of billions of dollars worth of losses in market cap for the so-called magnificent seven type names to put things in focus over the last week, the three biggest market cap losers within that large cap kind of technology trade, nvidia shares during that five-day span entering today, we saw its market cap drop by roughly $417 billion meanwhile, meta platform saw its market value drop by about $184 billion. and microsoft's by roughly $169 billion. just that's those three stocks alone. what's curious about this now if you take a look across the

magnificent 7, i put those names up there, but in total, across those big names, apple, nvidia, microsoft, alphabet, meta platforms and tesla, all of those names together, sara, have lost about $1.13 trillion in market cap in a five-day span. it's certainly something to put numbers to the percentage we're talking about. but the magnificent seven trade has been leadership for so long. the question is whether or not it becomes the leadership for the next leg i'll send things back over to you. >> the numbers are just gigantic as we say. thank you, dominic chu speaking of nvidia, the semi sparking the tech selloff, rebounding today following taiwan semi's latest earnings. seema moody tracking the action. >> hone in just on chips yesterday's selloff was significant because the semiconductor index alone losing more than $500 billion in value since last friday, and nvidia no longer in the $3 trillion club however, all of these stocks are

bouncing back this morning following taiwan semiconductor strong earnings report and the ceo says ai is so hot right now, everybody, all their customers, want to put ai functionality into their devices he's referring to nvidia, apple, microsoft, among others that use taiwan semis, chips and their ai applications overall, tsmc lifted its guidance most advanced technology used in ai, 7 and below accounted for 67% of revenue which is higher than previous quarters. its capex budget did narrow. wall street was expecting a raise. taiwan semi executives did hint at capacity constraints setting challenges tied to expanding overseas saying we need the land, we need the electricity and we need talented people. shares of taiwan semi up just about 2% after losing about 6% last night carl >> huge capex. real interesting price action interesting too

seema moody. let's talk about what investors do from here our next guest does favor the banks as a trump trade but the lack of spending discipline might keep the deficit issue top of mind no matter who wins in november joining us is citi's strategist mark crowner great to see you. >> great to be here. >> before we get to the election cycle, rotation, you want to put an inning on this thing? >> i think we're early innings small cap you were featuring the fact is small cap has had negative earnings growth for the past two years consensus expectations for next year and for the first time in three years you're going to see a narrow roing of the growth gap between large and small. absolute evaluation attractive relative evaluations off the charts explainable because of the mega cap growth leadership typically when you go into the goldilocks scenario, where we get a fed pivot, easing of rate influence, combined with i think sh renewed confidence that we

can navigate something to a soft landing the small cap rally has legs here. >> that fits with your long standing house view of more cuts than the street expects. >> exactly. >> how many? the house view still for eight cuts between now and a year from now. i get a little bit concerned that what comes with eight cuts is a little bit more dire economic circumstance. i would be happy with four >> four in the next is it months >> yeah. >> basically quarterly or so, right? >> yeah. >> but the valuation gap with small caps, is there for a reason they don't have the same kind of earnings power that you get from some of the big tech stocks and they don't have the same kind of economy because demand is weakening, higher interest costs. that's why they haven't been in style. >> they become more economic sensitive. when you look at the russell 2000 as an example as half the tech weight of large cap, got twice the industrials relate, has a very big exposure to banks

which i'm a big fan of right now, so all told what you get is a more economic sensitive picture with less of the pure ai growth dynamic when you come to the fed narrative and you look at the way the price action has been over the past two years, this all got priced in in the first half of '22. >> why are you a big fan of banks? >> i think banks are the cleanest trump trade right now much easier value starting point. as we get to the steepening curve, should be net positive for the fundamentals go forward in terms of the trade talk around tariffs, i think they're less exposed to tariffs. the icing on the cake, factor in deregulatory spin, basel iii or open up on the m&a front, i think the banks are in a good position here. >> weren't concerned by the comments from the vice presidential nominee at the republican convention last night talking about wall street is the enemy? >> that's a good one that is a yes or no. >> one of the greatest responses

ever. >> that's a different discussion i'm not concerned about that right now. i think fundamentals win out and the banks in good shape. like i said the bigger issue for me anyway is how to think about trump tariffs and in relation to what i still think, as carl pointed out, we go into next year we're going to be faced with a deficit situation i haven't heard either talk about a concrete plan on spending what we have to be sensitive to is the fact that tariff talk begins to muddle the fundamental waters, small cap, more domestic focus. eliminate some of that issue all told, i think what we really have to keep an eye on on are the candidate platforms as it pertains to the setup for next year, with debt ceiling drama coming back, we're going to have the trump tax cuts expire at the end of next year the moment you start talking about lowering taxes you have to find an offset on the revenue gap to deal with the deficit

situation on that. >> we'll see 15 would bring some more hockey stick charts like we saw several years ago. see you soon scott crowner. >> thank you. as we head to break our road map for the hour netflix gets ready to report earnings after the bell. we'll get you set up >> the outlook for capital markets and m&a and wells fargo vice chairman and former ceo joins me. h cramer will join us witthe ceo after a short break. stay with us you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

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shares of abbott labs down a bit this morning not too much despite a beat on the top and bottom line for its second quarter earnings the company also raised its full-year guidance sd jim is back and has a special guest, abbott's chairman and ceo. >> it is special robert ford doesn't do a lot of tv the ceo of abbott and cochairman robert, i'm going to get right to it. this stock was down 4 bucks when it started we're going to talk about why that was first i want to know, what's driving the double-digit gains that actually is more important than what's sending the stock? >> thanks, jim good to be on. yeah, i think the people of abbott delivered another stellar performance. this is the sixth quarter of high single digit it, low double-digit growth, on a base of $40 billion of revenue. i think that's pretty impress

cinch. i think the biggest drivers are our pipeline over the last 12 months we've launched new products. the contribution of these products about a billion dollars this year and a lot of new products in the pipeline as i shared with you during the jpmorgan interview, and beginning of this year, so i think the real driver is the innovation and it's across all business segment, medical devices, diagnostic, nutrition really delivering top tier performance. on top of that, you know, we've been working hard on gross margin and our cost profile given everything that's happened over the last couple years 75 basis points of gross margin improvement, well on track for that you put all that together, the superior performance, the consistent and sustained performance of our business units, together with our pipeline and improvements for making our gross margin we felt good about the second half of the year, raised our guidance for the full year, and i think

that's going to carry as we go into 2025. >> just want people to understand when you speak devices, one that is growing that is big is libre, tell us about that. >> been doing well it's for people with diabetes. it's the market leading products globally 6 million users that use the product every day and we received approval this quarter from the nba for an over the counter version called lingo and that product is going to be really focused on people that don't have diabetes, but that are interested in using the wearable and getting more insights and developing healthier habits this is a huge opportunity to really use the libre platform and expand it across outside of diabeteses into mainstream even if you take, you know, very modest penetration rates and utilization rates it's multibillion dollars on that segment. we're excited about the launch

of this new product which will be happening in the next few weeks. >> auto let's talk about the litigation which i think drove the stock down the stock was down in '99 similar to what happened about johnson & johnson when they talked about talc litigation that stock went up $5.5. i was surprised you brought up in the third praf of your talk the litigation it's a difficult case to understand involves infant formula and a public health crisis, which you only do $9 million of revenue on it what is going on with litigation and why did you bring it up your first praf and talk the next three about it people that didn't know about the litigation were surprised to learn about the possibilities of it. >> well, i think it's -- the impact that this litigation is having on our stock is -- i think it's overblown i felt it was important to be able to explain exactly what was going on and our position and at the highest level, this is not infant formula you buy at a grocery store. these are specialized infant

formulas used in nicu, for hospital use, for preterm babies, and, you know, as we said, the number of dprshs a revenue perspective is very small for us, $9 million the plaintiffs' lawyers are advancing a theory that the use of these products in the nicu causes this dangerous disease called nec and because it causes it, we should have informed parents in our labels. well a couple points number one, nobody knows what causes nic ngos working to try to discover what causes it so a cure can be achieved but baby -- premature babies that use human milk can get nec and premature babies that use formula can get nec. the products and ingredients were deemed safe and have been reviewed by the regulators and so have the labels been reviewed by the regulators. third the decision of how to

feed a premature baby in the nicu is up po the specialists. how to use infant formula, when to bring in infant formula in conjunction with human milk. those are decisions made by the specialists and we provide that specialist with all the information they need to make the right decision and the right treatment decision, so this is a standard of care product and this is very widely supported by the medical community which is why i said, if for some reason this product were no longer available, the nicus would not have the product and the food they need to give to feeding preterm babies it would be a public health crisis and wouldn't just affect the states, that are actually having the litigation. it would affect every state in this country we're urging anybody and all those that are involved in public health and care about the health of the premature babies they're aware of the situation and they take action to ensure that there's a safe, continuous supply of these very specialized

products into the nicu. >> back of the envelope. your market cap has lost $28 million since march against [ inaudible ] a competitor in this i think people are wondering if it's $9 million why not pull it and why is your situation so much worse in terms of market cap? billions and billions are at stake. you've got a court case going on right now. are people fearful you will lose and, therefore, we'll have a johnson & johnson situation where you have 80,000 cases and the amount of damages that exceed anyone thought when they got the lawsuit against j&j? >> yeah. i think some of the concerns of the shareholders have is exactly that i do think it's a little bit different in the sense that, you know, these are medically necessary products that save lives, and, jim, we have a history of developing products for premature babies across all of our portfolio for decades, not just in nutrition, but in

medical devices. we develop cardiovascular devices for heart failure, in our medicine business, we do it. the decision to pull a product is not an easy one but if the system that's in place today is not going to value the science and the data, if the system is not going to value what health care professionals that spend their lives treating these babies, if those aren't going to be respected and taken into account, then yeah, we have to think about at least what is the implication of removing a product. i'm hopeful i don't have to do that i'm hopeful those that can make decisions to ensure that there's a reliable and consistent supply of this product they take action it's something we've had to contemplate. >> i thought about you when the president, president trump, obviously, not the president yet, is talking about how litigation, plaintiffs lawyers, have been one of the great

impediments to innovation in this country would a president trump be better for abbott than a president biden? >> i'm assuming that's the question all ceos are getting asked nowadays our view is the following, jim, we've been around for 135 years and seen a variety of different administrations. generally speaking, an administration is a regulator and it's also a customer at its highest level i would say any administration that sees american companies, we are an american company, we were founded by an american doctor and headquartered here in the united states, any administration that sees american companies and helps american companies be more competitive in the global marketplace, i think that's good for abbott you saw that in a trump administration with tax cuts, that did have an impact. 65% of our capex before those -- before that -- before the tcga were spent overseas.

once the tcga in place, 65% of that capex is now being spent here in the united states. so that's a fact for abbott. on the other side i would say -- on the other side i would say, you know, gina raimondo is a big champion of american business and she's done an incredible job at promoting american competitiveness too. i think it's nuanced i don't think it's just a simple one or the other i think it's nuanced. >> well, at the risk of talking about your product and what you do for a living, you are growing at 10% organic growth. how many other large pharma companies are putting up that kind of number i. >> i can say within our peer group in our size $40 billion of revenue, growing 10%, and we've been doing it now for a couple years, you know, excluding covid, i think that's unique and again, i give kudos to the entire team in terms of what they've been doing during covid, getting ourselves ready for this

moment, and it's showing dividends of all the investments we made. i'm excited about the rest of the year and excited about 2025 also. >> once again, thank you so much, robert ford, the chairman and ceo of abbott labs good to see you, sir thank you for doing some tv. it's important for you to get the story out. >> thanks, jim. if you've had a baby and don't breastfeed, similac is in every hospital in this country i mean it is amazing how much market share they have between similac and infa mill which we learned a few years ago with the shortages. >> premature baby in this situation needs 12,000 calories a day which is more than michael phelps. >> did not know that. >> public health crisis if they pull it. there is a lawsuit going on and i don't think they're going to win it. >> you don'tthink they're goin to win. >> the plaintiffs is very powerful state of missouri which is one of the worst states for -- >> thanks for bringing the interview. still to come, senator j.d.

vance taking center stage at the rnc. former president trump taking the spotlight tonight. live to the rnc in milwauk feeor an update when "squawk on the street" comes right back you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help

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♪ welcome back i'm silvana henao with your cnbc news update. closing arguments in wall street journal reporter evan gershkovich's espionage trial are scheduled for friday a russian court gave the update today. gershkovich, the u.s. government and his employer have strongly denied the claims he was gathering secret information for u.s. nearly 16 months ago. >> the consumer financial protection bureau said that apps that allow employers to access paychecks early, the clarification would make the industry subject to the truth in lending act. the agency says it will allow users to more easily compare

products and potentially bring down fees. a nearly complete skeleton sold for a record $44.6 million at an auction yesterday. sotheby's held the auction for the 150 million-year-old fossil which it described as the most complete and best preserved of its size ever discovered the buyer ken griffin, the billionaire founder of citadel. >> meantime, senator j.d. vance making headlines at the rnc last night. former president trump's turn tonight. eamon javers is live in milwaukee with the latest. >> good morning to you, carl strikingly populist economic tone from j.d. vance last night as he addressed the crowd here in milwaukee we're used to over the past decades hearing from republican politicians at these conventions talking about tax cuts, spending cuts, regulation cuts.

none of that in j.d. vance's speech a sharp criticism of wall street and also of big business here what's he said. >> we need a leader who's not in the pocket of big business, but answers to the working man, union and nonunion alike a leader who won't sell out to multinational corporations, but will stand up for american companies and american industry. >> so strikingly different tone there from j.d. vance, as we go through the rest of the day today we're expecting to hear from donald trump himself tonight. i talked with lara trump brief this morning, the chairperson of the rnc, and she said we're going to see a different side of donald trump tonight and she said that side will be a softer donald trump than we've seen in the past expect a different tone this evening when we hear from the former president himself back over to you.

>> how much should we make about this message on the economic populism he mentioned that the trump administration isn't going to cater to wall street and the theme of the speech was about rural america and the worker and that's clearly his background where he comes from and who they're trying to go after, especially in some of these states he mentioned many more times than wall street, like michigan, pennsylvania, wisconsin, ohio. he's from ohio but what do you make of it you've been following the change in the republican tone and policy toward the economy. i wonder how that squares? >> look. it's no accident j.d. vance is in touch with a group of conservative populace intellectuals who call themselves the new right that have spent the past four or five years working up white and policy papers what they would do if in power again. it's an agenda they feel the republican party was too focused on corporate elites.

i think it's a real change, a generational change, in the republican party younger republicans, are very much on the populace side and i think if you see a second trump term you will not see trump working with a speaker paul ryan, for example. you won't see a gary cohn in the administration you won't see a steven mnuchin as treasury secretary. the establishment wall street business figures are not going to be part of this administration if it comes about. i think you'll see populists in a lot of those jobs. i do think it represents a sea change, and it means that a trump two i think would be a different than trump one. >> eamon javers, thank you very much from milwaukee. after the break, the outlook for m&a with the vice chairman of wells fargo we're going to get his read from the ground don't go anywhere.

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ago. morgan stanley's cfo telling analysts dialogs are active and markets open joining me wells fargo vice chairman, the former cfo of jpmorgan and led global m&a and investment banking at jpmorgan and ran an activist hedge fund and also a public company ceo. and he's not even that old look at him. doug, good to have you here. >> great to be here. thanks for having me. >> i mentioned all those other things because there's things we can discuss with you start with m&a which you are once again focused on in part in your new role. what are you seeing and hearing in terms of dialog to reference the morgan stanley cfo's comments on their call >> i would say there are four factors that make me cautiously optimistic about the m&a marketplace going into 2025. the first is the data. so if you look at activity year over year, it's up about 20% globally, but up about 35% here

in the u.s. and the level of activity is getting close in the u.s. back to prepandemic levels. so that's a very encouraging sign the second thing, i would say that's really helpful, is capital markets have adjusted to the new rate environment, and are really wide open for business, so there's been close to record volume of investment grade issuance this year, high yields is up almost 100%, term loan b the noninvestment grade market, up close to 600% year over year. markets are open the third thing that's really important is the spread between buyer and seller price is starting to come together. >> is it starting to >> yeah. >> i wonder, because often times in talking to practitioners, what i've been hearing is, i get something, it looks good, we go down the road and then it falls apart. it's not always regulatory as

you might expect given the environment we've been dealing with it is often actually price expectation. >> yeah. so again, i'll start with the data so the average public company in the u.s. premiums, paid this year, is a little under 28%. that compares to a five-year average of almost 32%. that doesn't sound like a lot, but it's that last percent or two or three that often is where a deal falls apart so that valuation gap is compressing. the second thing is, actually you look at the average multiples being paid and they're pretty stable, but earnings and ebitda are up. so a stable multiple on a higher base makes for a great gap closing methodology. the third thing is, you know, stock market rallies, you're not trading off your 52-week low

you're trading off closer to your 52-week high and makes it much sue heasier to be a seller. >> are we ever going to see the big trade, you know, the stuff that gets us excited in the media or is that just still sort of more difficult in terms of getting it done? >> yeah. so actually again, i'll look at the data the billion dollar plus and the $10 billion plus deals are up quite dramatically year over year so you're starting -- >> we're off a terrible year last year. >> we are off a terrible year. i would say that the -- the stability in financing costs this robust stock market that's helping also buyers with their own equity as a form of consideration, and the depth of the capital markets there's -- there is a significant uptick in large m&a discussion. >> there is? you're finding that. >> yeah.

i think people -- people need stability and so one of the issues over the last 24 months is where are rates going >> i think, you know, there's a general consensus that rates have certainly peaked. how quickly they come down is a question but if you're the board of a large acquiring company doing one of those big transactions. >> yeah. >> you've got a much greater degree of confidence of what the next 12 to 24 to 36 months look like most companies -- >> even with the election looming is that keeping people on the sidelines. >> it's not that many weeks away now. >> but, you know, i would say if you step back and you look -- i've been on wall street for close to 40 years -- if you look at the 40-year history, elections have short-term impact on the markets but there's no discernible long-term impact whether it's red or blue

i think what, again, ceos need to know are -- is what are the rules of engagement and then i can act and i would say to you, i think the general driver of activity is confidence in the economic outlook and confidence in one's own business. and it feels pretty good out there right now. >> i want to divert to another area that you have some expertise in as i mentioned you had run an activist hedge fund a bit different. you were focused on mid and small gap on the operations taking large stakes. but, you know, we've seen this incredible rally in small caps over the last call it week or so but tell me what your experience was in that market in terms of liquidity and things people, perhaps, should be thinking about. >> so as you know, i was -- i was focused on constructive engagement. >> yes. >> with the small and mid-cap companies. i would say there's been a

pretty significant change. i was in that investment business for almost a decade i served on half a dozen public company boards i would say the biggest change, despite the near term rally, which you can certainly argue has a lot to do with technical rotation, there has been a fundamental decrease, a systemic decrease, in liquidity in these companies. when you look at the ownership by the index funds that often is 25 to 35% of the float many of these companies inside ownership usually accounts for 5 to 10% you're talking about illiquid names with very little float it becomes very difficult to get institutional investors to be long-term sustainable supporters of those businesses. >> the sponsorship is hard to come by. >> it's hard to come by. the number of research analysts that cover these investments has

declined pretty significantly over the last decade and then the third piece, which i think is sort of the burgeoning trend, if you look at the go private transaction volume in the public markets, that activity by financial by f sponsors is up almost 100% year over year. it's actually on a year-to-day basis running at the highest level it has over the last five years, david so, one of the interesting opportunities, i think, for many of these small cap companies that really don't trade at full fair value is to actually find a better home and better ownership with private equity, where you can really generate value from that cash flow. >> i have to go. is that something you'll be focused on for wells fargo in terms of increasing the franchise and m&a? >> we are focused on the whole range of corporate finance activities for our customers

i'll tell you, there were three compelling reasons for me to join this platform. >> i need you to go really quickly. >> this platform is extraordinary in terms of client relationships. we need to bring intellectual capital to it. we have a great management team in charlie and others, and the skill set i think i bring, it's wonderful to be at a place where you really think you can make a difference. >> i'm happy to see you and happy to have a chance to talk to you a bit as well, doug thank you. >> great seeing yo didu,av. >> and you. a lot more k "squawk on the street" right after this

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netflix reporting results in a few hours after a quarter of underperformance for the name. let's get to julia boorstin for what to watch out for. does this quarter include season three of "bridgerton"? that was a big hit. >> it was a big hit. there's a much bigger question the future of netflix's ad business and newer business in

focus. after netflix cracked down on password sharing drove its growth, the question is, what's the next growth driver analysts are predicting 16.4% refuse new growth and predicting 44% growth in earnings per share. after last quarter the company's 9 million subscriber addition soared past expectations and analysts are looking for 4.8 million new subscribers. though the company, which is stopping reporting subscriber numbers next year, is trying to focus -- shift focus away from subscribers and towards profitability. and profitability will hinge partly on ads. analysts are largely bullish 60% of analysts have a buy rating 60% have a hold rating loop capital reiterating the price target predicting netflix will eliminate the ad-free tier in the u.s loop also forecasting a price increase this year particularly on the standard tier coming

ahead of netflix streaming christmas day nfl games. even rosenblatt, which has a rare sell rating, is bullish on netflix's ad business saying its indication of $4 to $5 billion of global ad sales is readily attainable at least by the 2027-28 time frame and perhaps even a year sooner sara >> julia, yeah, it's funny i've been watching amazon prime lately the ads, which they've been piling up. this is -- we're just going back to the old ways, aren't we we're going to watch television and there's going to be a lot of ads there. >> that's right. these businesses, whether it's amazon, which is really building up the ad business, or netflix, are shifting focus to the ad-supported tier because that's how they'll get more and more subscribers. >> and keep the price, perhaps, lower than that very premium tier. >> keep the low price, dual revenue stream. >> julia, thank you. we'll be keeping a close eye - >> what are you watching on

amazon >> jack ryan it's good. but it's been around really enjoying it. >> i haven't seen it i need something new after "bridgerton. we have a lot more live market coverage straight ahead with the s&p up ever so slight e sd dn.ly we're back after this. (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

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good thursday morning again. welcome to "money movers." i'm sara eisen with carl quintanilla live on the floor of the new york stock exchange. is there more room to run for the small caps the russell 2000 up 5% this week bank of america head of small and midcap research joins us. a luxury letdown in retail as burberry and hugo boss warn of this consumer. the regional, the ceo of regional bank synovus will join us. meanwhile, not much of a reversal of yesterday. s&p is down a couple of points dow up a couple of points as well watching the ten-year. got to 414 yesterday lowest since march mike santoli is with us. are we going