of the morning. treasury prices -- actually, let's look at treasury yields. the yield on the ten-year is at 4.21%. we've got a lot of earnings this week, also big data points, including core cpe. that does it for us today. we'll see you tomorrow. right now, it's time for "squawk on the street." ♪ good monday 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. the market is taking in stride the president passing on the nomination. we'll get our first look at q2 gdp. pce on friday. our road map begins with this political history, the president withdrawing from the race, throwing his support behind the vice president, kamala harris. futures are ticking higher. s&p is eyeing some gains after

the worst week since april. and the ongoing fallout from last week's global i.t. outage. crowdstrike shares are set to extend their decline. delta among the airlines being hard-hit again yesterday. let's begin, though, with the president announcing he is ending his re-election bid and endorsing the vice president to lead the democratic ticket, although we'll see what we get in a few weeks here, jim. >> these are very different people. biden has been and remains unsophisticated about the way business works. unsophisticated about the stock market by nature. picks people who have been historically bad for wall street. lina khan, jonathan kanter, antitrust. that ends. that ends entirely. you've got a person who's from california. i'm regarding this, actually, as maga versus maga. megatech does better with someone who's sophisticated, who understands california, who is not against tech. biden has done everything in these agencies that he can to

annoy, to go after tech. let's not forget her brother-in-law is tony west, who is a former general counsel at pepsico, then was with the justice department and is now the general counsel of uber, and you tell me if there's someone who's more sophisticated and knows more about business and the west coast than her brother-in-law, who would be an amazing advisor. they're close. and i just keep thinking, this is going to be a globalist versus nativist, not nationalist. nativist. >> yes. >> populist in terms of the republican party versus pro-business versus the democrat, international business. these are very big differences, and i have followed her career and followedbiden's career, and if anybody -- biden didn't hurt the stock market at all. it's pretty amazing how well the biden administration's done, but this whole idea that she's a clone of his is completely

wrong. she's very -- she's much more moderate than he. >> you think it's a net positive for the markets? >> absolutely. >> and for american business? >> absolutely. there's no doubt about it. move to the center. a person who, if she comes out hard on crime -- i'm sure that the republicans will try to say she's soft on crime when she was the district attorney for san francisco, and i come back and say, look, she can come out hard on crime. there's nothing in her record that indicates that she was soft on crime. nothing. >> people are poring through her record as a.g. where she did probe exxonmobil and look at pipelines. >> well, look, i think that you -- there's an environmental component to what she's done all her life. >> yep. >> but i think that the republicans are uniquely bad for oil, because in 2016, they were so positive on drilling that our american oil companies lost discipline, and they lowered the price of oil by their output. what matters is if you can have enough pipeline out of the

permian. one of the companies that is banking on the -- that biden's 2028 pause goes away -- what is that? >> on lng. >> yeah. look, i think that everybody -- i urge people to study her work and urge her to -- urge people to look at her campaign. she was a moderate. take a look at the people in the -- "the ft" kwhas a good sty about who was in favor of her. all the moderates. >> it raises the broader question of whether or not she is going to try to offer consistency or some new signature policy. in other words, how much delta does she try to put between her and biden? >> look, i think that you can be pro american technology and be harder line than she has been -- little more defined line on immigration. but if she comes up with a defined line on immigration, meaning, she can say, listen, we to have teeth here, and she comes out strong on crime, which she's able to do, because she did -- she was a district

attorney, attorney general, and people will say, listen, maybe she -- she was in california. it's a little tougher. but she can be strong on crime. what she offers is a level of understanding about the greatness of the megacaps that biden wanted no part of. i mean, look, biden's attorney general, their attorney general, was antagonistic to the point of, like, making fun of apple, saying, look, their phone is so good, we got to stop that. i don't have to go into lina khan anymore. i don't. everyone knows my view. there's no need to reiterate. >> yes. >> but i will say, jonathan kanter, in the end, attorney general, he goes. khan goes. these people go. you're not going to get someone who's as negative about tech as the people -- except for vance, who's incredibly negative about tech. >> right. >> vance wants to, you know, he wants to -- i don't know what he wants to do, other than he favors the worker, and she favors lower prices. that's what globalism is. it's lower prices for people. let's not forget that globalism

had some aspects -- i'm a little closer to vance than i am to the globalist view. >> your point is interesting, that she's not scranton joe, is essential what you're saying. >> god, no. >> that's what made yesterday interesting when you saw progressives and aoc fall in line pretty quickly. don't you think there will be some element of pushback to what you're saying? >> i think she stands for a lot of civil rights things that are -- that are actually a little more visible and vocal than biden, but i'm focused on our world. and i'm just saying that if you -- there isn't anyone that apple would like to see less than biden. all the attorney general did was lob calls into the -- assistant attorney general, lob calls into apple about how horrible they were. i don't think this person -- i don't think that kamala is wildly anti-apple. that's crazy. these companies are in california. she's in california. she knows the ethos. her brother-in-law is very knowledgeable about the way

business works, so he's general counsel of uber. uber is a very new company that i think biden may not have known that she knows and likes. >> do you -- directionally, the futures move today. do you think it's a reflection of what you're saying? >> yes, because, holy cow, we discovered last week that we're back in the 1890s populist party which was so anti-business -- isn't it interesting that vance said barons and didn't say robber barons? that was our job to put in robber barons. let's start calling it like it really is. a nativist plan from trump is so bad for all our companies that do business overseas. that's what's the small cap rotation. that was in favor of every company that's never heard of france. >> well, the cover of barons on saturday was all about exactly that. how the market's reaction to republicans versus democrats is much different than the '80s. >> oh my god. the republican party is -- you've got to go back, except

for we can substitute small town for agrarian, because the populist party was very agrarian. i was -- i have -- i have cleveland-cliffs on tomorrow and i was looking at the lineage of them and armor, these are companies that are pilloried in h"hillbilly elegy." a populist agenda is so horrendous for meta -- i mean, meta. they attacked zuckerberg. what did zuckerberg do? he has these really good ray-bans. vance stands for the end of globalism, which means even though you're -- of course, the endo of china. she stands for what gina raimondo is in favor of, which is measured, smart. >> we're going to talk about china cutting rates, first time since august. >> they're pathetic. >> let's get to aeamon javers fr more on the president dropping

that re-election. >> we're just about two and a half hours now from an event at the white house on the south lawn where we do expect to see kamala harris in front of cameras for the first time since president biden dropped his re-election bid. this was a previously scheduled event for ncaa teams to celebrate championship teams over the past couple years. now, though, this will be the first time at the see kamala harris in front of cameras. it will be an opportunity for her to make remarks. typically, presidents and vice presidents can make any kind of remarks they want at the top of an event like this. we'll see what kamala harris has to say at 11:30 eastern time on the south lawn. it's raining in washington today. maybe they have to move that inside. still, this will be the most hotly anticipated ncaa event maybe in white house history. we'll watch for that. meanwhile, people are trying to figure out sort of the policy differences between biden and harris, as you guys were just talking, and we can tick through a couple of them. kamala harris proposed a higher corporate tax rate at 35% than

biden did at 28%. it's at 21% now. so, folks assume that she would be a little more aggressive on tax if she had her way. she may be more aggressive on abortion rights protections than joe biden, who had sort of a career-long evolution on abortion. she may be more active on climate. she supported the green new deal in the senate. and remember, she voted against jay powell when trump nominated him to the fed, and she may be expected to pick her own fed chair in '26 when his term ends, presumably a re-elected president biden would have done the same as well. so, people are looking for those distinctions between these two candidates, but they are very similar in terms of their policies, and all of the policies that you're look at from kamala harris were sort of concocted at a time when she was running in a democratic primary, so you would think that she would tack toward the center in a general, and we'll wait to see whether that happens, and we'll wait to see this ncaa event which is really not going to be

about the ncaa at all at 11:30 on the south lawn, guys. >> meantime, eamon, we're wat watching donor activity, all the speculation about the choice of a running mate. would they debate again in september? which of those questions are you most interested in today? >> well, i think the donor question is a self-solving problem for kamala harris. if she's able to wrap this up in the next 24 hours and really emerge as the undisputed candidate for nomination here, i think the donor money just switches back on hike a light switch, and she gets that money that would have otherwise gone to biden. and maybe even some more, because there's some renewed enthusiasm. i think for that, that's a self-solving problem. the vice presidency is an interesting one, and you've got to look at who you can govern with and also who's going to get you something that you can't get yourself as the nominee of the party. so, you look around for kamala harris to look at perhaps a josh shapiro, governor of pennsylvania, as somebody who might be able to help her in a

place where she might need some help going into the fall. and then, this question, ultimately, of what happens between now and then. i mean, we're going to have to see how kamala harris kicks off this campaign. the scrutiny on her is going to be entirely different than the level of scrutiny she's really ever faced before. can she handle that? does she have wobbles in the initial couple days? all of that is going to be what everybody in american politics is looking at. >> we will see. still a 20-year career of a.g. and senator and veep. we'll see how much the spotlight is bright. >> nothing like this, though. >> yes. >> she's better for the stock market. she is. she likes mega cap tech. she's not the enemy of the west coast. she's from the west coast, for heaven's sake. we're stock people. i'm looking at the megacaps, and i'm thinking, you know what? here's a little relief. biden didn't like them. vance didn't like them. trump, well, trump's trump.

there you go. there's a really smart comment. >> good summation. >> did you ever say trump's trump? that's real value add. tons to get to regarding the markets today. we'll talk about the global i.t. outage, what that means for crowdstrike, couple of downgrades today, down in the premarket, and then this rotation, does it continue after the worst three days for the qqqs sceebarin fruy of '23? stay with us. you know what's brilliant? boring. think about it. boring is the unsung catalyst for bold.

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we want to be able to say what we're doing. we want to keep people updated. we want to be as transparent as we can and be front and center with our customers, standing shoulder to shoulder, make sure they get them up and running. >> that was crowdstrike's george kurtz on our show friday after apologizing for that global i.t. outage. shares of the cybersecurity firm extending some losses in the premarket this morning. over the weekend, nearly 1,500 u.s. flights were canceled, according to flightaware, and this morning, at least two firms downgrading crowdstrike.

guggenheim, one of them, jim. just think it's not good when it happens at the end of the quarter when you're trying to close deals. >> true. that's very true, and there's a long tail of impacted systems that need more help. that's an issue. i think what a lot of people were surprised about was how pervasive and successful crowdstrike has been, that they were 18% of the protection, and i have had george kurtz on -- the ceo -- numerous times, and look, the man's a hitter, and the company came out immediately. i got a call, like -- awful on friday. i get a call from george, a text from george incredibly early saying, listen, this is on us. are you going to work? i said, let me check with lisa. i didn't say that. i just went to work. lisa set up -- the people who do this stuff at home. use the ipad, please. it looks great. the ipad is better than the expensive cameras that the network uses. there's a little saving for you. i will point out that george accepts the fact that it was all

of him. he understands that, but they got hit by this azure outage at the same time, and that was not on him. it just happened to be bad luck. lot of bad luck here. but the fact it was just an update. it was not a hack. >> right. >> and i think when things settle down, people will go right back to george. they will. we own palo alto for my trust. i saw palo alto up seven. i thought it should be up more, but the market has spoken. it's not going to be a big transfer to palo alto, or else the stock would be up 25. >> even the downgrade, guggenheim says that the response was impressive. >> yes. >> but that the restoration of the reputation may take more time. >> we'll forget about it three months from now, and what we'll remember was that george kurtz was here and worked 24 hours. he is a race car driver, legendary for not needing sleep. he can go 24 hours. the guy won le mans for heaven's sake. he's no joker. >> i'm trying to think back where big reputational risk events happened like chipotle. who was your timeline for repair?

>> two months. that one was airborne and you had to have a change of management and that was difficult. the only guy who really stayed there was jack hartung, the retiring cfo, so you needed to have brian niccol come in. 18 months is the average time. i looked into it. taco bell, jack in the box, those took 18 months. and this one -- chipotle took 18 months. >> this would be, you think, pretty short-term? >> it will be shorter term because crowdstrike has unbelievable technology, and it was not the technology that was the problem. it was a sloppy update, of which he completely owned. you know who was not hurt by this, apparently? southwest airline. they had nowhere near the latest microsoft windows. they're so far behind i expect it's going to be elliott air. >> we'll get to the elliott stuff later, and another name with elliott today, and of course, southwest has earnings later in the week. we'll get cramer's "mad dash," countdown to the opening bell, one more look at the premarket as stocks look to start the week green.

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>> the defenses of nvidia come out. nvidia's been the big worry, the stock peaked, it's come back down, really bad chart. well, this morning, we've got lou coming out. we have reuters saying there's a new flagship a.i. chip which works in china, won't be prosecuted or pulled off by this administration. we got piper sandler raising price target and talking about material upside. so, you know, when you see material upside and loop capital, material upside in piper, what you say to yourself is, man, are they ever trying to make this work. blackwell sold out. all these things are just the kind of things you get when you have analysts saying, we have to get this puppy up, because this is the key tech name. all i come out and say is that, again, a harris presidency is much more benign for silicon valley than a trump presidency. do you think they would really be able to come up with a chinese chip that trump would approve of? are you kidding me? but gina raimondo has been okay

with a certain scaled-down chip, commerce secretary. >> you mentioned piper and loop. citi. >> big-time. the most positive. and they are, by the way, because i'm in touch with nvidia. this is the fireside chat sitdown with jensen huang and mark zuckerberg at a graphics conference on the 29th. remember, i know people laugh at me on this zuckerberg, on the luxoticca, but you got to remember this was incredible that zuckerberg sits down with nvidia when jensen used to say, listen, he's for combat, he used to say, he's for combat, i come in peace. well, they are together and i think it's fantastic for both of them, but don't forget, what matters is who do you think is going to be in the white house. >> and we'll talk more about the smh. it's been a rough few days. >> easy come, easy go. it's up huge. >> get the opening bell in a moment. stay with us.

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as we begin a new week of trading, following the president's decision to exit the presidential race, s&p/nasdaq coming off their worst week since april. small caps were in the green as you might know. you got the mag seven names. tesla, alphabet, leading a pretty busy earnings calendar this week, jim. tesla is tomorrow. >> look, i think that tesla, he can tell any story. let's say he decides that he wants to say, listen, we're no longer an auto company whatsoever. we're an electric company, we're a solar company. well, the street will lap it up. the street wants to stock to go higher. cathie wood will come out and raise their price target. you can't do anything wrong, nor do you want to do anything wrong because you don't want to be on the wrong side of history when it comes to tesla and musk. >> of mega cap -- of mag seven drawdowns where you got apple down, for example, tesla is still down $41 from the high. >> tesla just took off in that short squeeze where the shorts overplayed their hand at $170,

and they've been reeling ever since. apple, i think, in many ways, is the key to this market, because apple represents china, which, of course, trump does not like, and vance thinks is, you know, the communist china of the pre-nixon days. versus a very enlightened policy toward apple that i think that a president harris would have. no longer just, like, let's just prosecute. let's prosecute. that's over. people have to understand. that day is over. the kanter/khan tyranny of business is over. it's mega versus maga, and people better start understanding that, when you have tony west, who's the general counsel of uber, you're not going to go after tech for the sake of going after tech. how many times do they have to sue or break up? khan stops every deal. that's over. how about measured m&a? >> in the m&a pipeline, are those conversations rooting for harris? >> oh my god, yes. you kidding? plus, according to the s&p capital, $2.6 trillion of

private equity. of course they want -- go read the comments of brad carr, who is the manager of paul weiss in "the ft." they are in the middle of the road. except for kanter, who was there and joined the left wing. over. over. end of tyranny. >> let's get the opening bell. at the big board, it's rail car manufacturer the greenbrier company, celebrating 30 years. at the nasdaq, global x etf's doing the honors. we're still sub-5,500. >> you can't just turn on a dime. first of all, most people don't even have my view on what i've been talking about, but that's okay. they'll come around to it. second, i do think that any attempt to try to undo the small cap -- there's so much money went that way. i think you try to kick it in again. and i understand because trump's

still heavy favored, and the small cap is about favoring small business and medium-size business over globalization, which means favoring workers' wages over prices being lower for all of us. these are very difficult, i find, you know, great theoretical discussions. do we want small business favor because we have had so -- small towns decimated by small business leaving or being crushed or do we want lower prices a la walmart? it's a very difficult question, and i think philosophically, you'll find that harris is to the left, and vance, who's very sophisticated about this stuff, is to the right, and i believe that trump will listen to vance on this issue, because he's got a pretty compelling rap. >> we did talk about some of the choices that, as an economy, we've made over the last 30, 40 years. >> "hillbilly elegy" is a good manifesto. >> goldman is out, "feels like the highest velocity of

derisking could be behind us." lot of charts about prime book degrossing over the last few days. >> i like that, and let's see whether nvidia can rally. let's see whether apple can rally, because these are the stocks that i think a lot of people feel like, wait a second, what was i still doing in these? i was supposed to sell these and buy small town, you know, cintas and paychex, and i think that trade was fun and it was a -- a lot of it was a short squeeze using etfs. they came in really -- blitzed them. it was a very impressive short squeeze, but because a lot of people have been anti- -- remember, liz ann saunders with very good comments on twitter that russell was one of the worst years ever in 2023 but the best since november of 2016. what happened in november of 2016? you figure, trump comes in, you bought the russell 2000, it worked. trump comes in, you buy the russell 2000, it will work again. i think that's simplistic if only just because the vice president this time is not pence, who stood for, we don't really know, to a rather

remarkable intellectual vice presidential candidate who is so smart and so sophisticated on the issues and really does present a kind of very stark reality, which is a nativist versus globalist, and i think there's a lot -- i think that resonates with a lot of the country. >> clearly, that's the bet that the republicans are making. you mention apple. we did get verizon today. hans vestberg on "squawk." shares down 5%. they keep the full-year and the ca capex guide in line, jim. >> i just care about, and it was not really clear how much they're going to have to spend on the new apple phone. they need to open a lot of counts. they need to stop t-mobile, which continues to crush them. the answer to the fixed wireless that andrew asked, i thought was not comprehensible. i think that vestburg is best not around reporting period.

>> it's basically on the same level as pre-covid. then, i think what is important for us, we have a very high quality customer base that is very resilient and strong. maybe we're a little bit set aside from other industries that might have some softer consumer feeling, but in our case, we feel really good about the products. >> i don't know what to say. >> yeah. >> look, he says that wireless revenue and he says that broadband are doing well and i think these are all relevant to what we hear from the other guys. he's first. he can say that. i'd be interested to see whether att is hurt by that hack. i see smooth sailing for t-mobile and their fixed wireless. comcast is in the mix. david's not here -- >> i think we'll get earnings tomorrow. meantime, speaking of the consumer, i know you were mentioning earlier, elliott, starbucks, the news we got on friday. also, mcdonald's is going to keep that $5 meal. >> they have to. i don't think they have any choice. actually, really good. i have domino's on tonight and

they got hurt by international. they still represent the value. i think we should talk about starbucks. i think that if i were elliott, i would believe that you can work with these guys, but that the execution's horrendous. i believe they think that the brand is unassailable, so if you fix the execution, then i think you have a big winner here. we own it for the trust. we bought some here, some above, but i think this is a clarion call to starbucks, saying, listen, you can fix this, but in typical elliott fashion, i would say, if you can't fix it, then we will. >> yes. in other words, like, when someone steps on your toe and you're like, please get off, otherwise i'll help you off. >> i think it's like that. i think that they are kind of astonished at how poorly that -- that last quarter was so bad. it resonated in corporate america. and i think that laxman narasimhan has a shot here to

work with elliott. i would bring elliott in and say, tell me what to do, similar to what bill newlands did at constellation. that's what i would do. say, look, what do you want me to do? give me some help in throughput, some help in what drinks i should -- i don't want to lose the brand? the brand the great. the problem with starbucks is they have too many customers, like a yogi berra thing. if starbucks can either be friendly or antagonistic, it's up to starbucks. elliott wants to help, and it's not like the irs showing up. they want to help, and they can do a lot. >> you mentioned constellation. thinking of salesforce where it was very much a handshake, and then you have southwest and disney. >> elliott goes to -- i think they would have expected a lot more resistance with salesforce. elliott goes to salesforce, and marc benioff says, tell me what to do. they're thinking, like, give me a break. no, he said, really. let's meet. let's meet constantly.

i'll meet with you on saturday. i mean, there was an amazing synergy between what elliott wanted to do and marc thought the stuff at salesforce -- really great. and then southwest, it looks like they wanted total overhaul because southwest is not where they think it should be. newlands and constellation, very good. if you work with elliott, they have a lot of good people. it's kind of like bringing in mckenzie but not having to pay for it and being more attuned. i think that starbucks is a very big buy here because of elliott. >> well, you've been saying, right, have you not been saying, like, you did with best buy, to $90? >> yes. >> has that been the -- >> i think elliott -- elliott recognizes that, try as they may, they haven't crushed the brand. and i am being vicious there. i do think that there was a problem with pro palestinian protests, maybe as that -- i don't want to say anything dies down because it's not right and it's a political issue, but that has really hurt hundreds of starbucks stores.

so, if that goes rear view mirror, then you've got the wind at your back, and i know that elliott is -- they always -- they come in peace, not unlike ten bears in outlaw joesy wales, but then it gets ugly if you don't respect their view. you got to respect their view, and if you don't, you're really out of your mind. >> you point out the quarter was one that burned in the ears of wall street and on this desk. this was the conversation between jim and laxman narasimhan just a few weeks ago. >> i think that if i look at the u.s. occasional customer, they have clearly cut back on visits to us. if you look at the value for money scores we have, they're still strong, but there's no question that the occasional customer is cutting back on visits to us. we have not been able to communicate to them the value that we provide. >> we'll see if that changes. >> i think that a lot of that occasional customer may have been put off by protests and that -- i want to give laxman his due here.

who would have thought that was going to happen? at the same time, i do think that there are big issues with throughput that were solved by, say, chipotle, which had a real problem with throughput at one point. you can solve these issues. mcdonald's had issues, 2015, 2016. they solved the issues. that's why starbucks is a huge buy here. it isn't like anyone's saying, i'm never going to starbucks again, the coffee is awful. no one's saying that. they just want their coffee on time and hot and a value orientation more than laxman indicated there. but most important, they offer -- they come in with a plan, and the plan is always really reasoned and rigorous, and the managements that give them the heisman, so to speak, stick their hand up, that's just a very ill advised move. really ill advised to take that stature. >> it's definitely an engineering question and then a marketing question after that. >> totally right. >> on berkshire, b of a, what'd you make of this trim? >> bank of america's been an incredible standout. i think it's one of those things where you just -- it makes sense

from a portfolio management that you don't want to be the bank of america fund. like you don't want to be the apple fund. bank of america has been the unsung hero this whole way. they've done a remarkable thing. no one talks about them because brian moynihan, to his great credit is not -- he doesn't hog the spotlight. he's a very good coach. it's been the big winner. we have had big losers like schwab, which i think is probably overdone at this point. wells had some problems, but now they're a big play on lower rates. no one thought that jpmorgan was anything other than good, but it was brian moynihan who quietly has built this franchise that warren buffett -- it's like the old days when warren had this position in wells fargo before he dumped every bit of it because of the chicanery we discovered. bank of america is a big win. congratulations to everybody. if i were buffett, i would trim it too. >> financials doing okay here, although almost every sector is up except for utilities. handful of downgrades today, jim. bernstein cuts american. ray jay cuts e.l.

goldman cuts lennar. we mentioned the crowdstrike calls. >> i wouldn't have cut lennar the way that i saw people reacted to horton, which was just an okay number. no wonder lennar is barely down. i do think that the home builders, if there's going to be a change at the federal reserve, that would be bad for the home builders because jay powell -- be interesting to hear, why would they change? i mean, maybe because it's his term's over and he doesn't want to serve, but i think that anyone who would want to say, look, if you want to stay on, i think that would be well received by wall street. i think a new person, who is a wild card, not well received. >> you would welcome more powell? >> yeah. i mean, vice chair for -- fed chair for life? fed chair for life, powell, why not? look what the guy's done. we had the hottest inflation in years, and now we've got inflation going the right way, and i think that inflation is a far more determinant about who's going to be president than any and all realizes, and i don't

know whether she will be tagged with the inflation that biden has. >> harris, you mean? >> i think main street america feels that prices have gone up and that we've lost jobs and that therefore trump represents a salvation to that. biden got hit by a lot of infrastructure spending and maybe too much, and who knew that they were going to get under control? i think that there's -- the inflation to put it on biden would be silly, even though he was in favor of some very big programs. but inflation has a lot to do with supply chain, and that was nothing to do with biden. we haven't had a lot of prices come back down. that's the problem. you have to go to costco. you have to go to walmart. you have to go to amazon web services. by the way, 20% discount was back below 2019 prices. that's how amazon figured it. amazon prime, their prime day got you prices that were below covid, and that has been what people are not -- the unsung hero of this has been amazon, but you know, they're big cap

tech and they're hated by vance and people think that harris will hate amazon. but she won't. that's just a bad read. >> that's interesting. that's a really interesting corner that you appear to be seeing around, regarding harris and technology. >> people -- look, just remember, i think your chief advisor will be tony west, general counsel of uber. is there any more internet-oriented company in the world that's been created during this period than uber? >> yeah. i mean, look at the winner's list this morning. the top ten are almost all semis. do you think it's just the rubber band snapping back, or is it having something to do with what you're talking about? >> these are all etfs, but i think it's something to do with what i'm talking about. i think there's a recognition that trump is listening to vance, and vance is very for real. he represents a populist strain that is so horrendous for international trade, but let's understand, most americans think that international trade, i think, is horrendous, because what that means is you lose your job. everybody gets a little lower wage, but it means that your factory is exported to the

country that puts up the tariffs, and you say, well, our country's going to let that happen, and the factory moves there, and i lose my job, but we all go cheaper to walmart. i'd rather have my job than pay less for jeans. >> right. lilly coming off the, i don't know, jim, the worst week since march of '21. >> yeah. >> it was up for 12 straight weeks before that. >> well, i think that lilly -- it was one of those moments last week where i had -- i had raush on where they introduced the pill and how they were going to do it on "mad money" when i was out there in january. suddenly, they reintroduce it and everyone goes gaga. it's not a question of pill versus injection, because lilly's working on the same thing. it has to do with factories, and no one wants to believe that. they don't understand. these are like foundries. ask intel how long it takes for a foundry to go up. lilly is spending billions to build factories in order to make the drug. that's why hims and hers can sneak in there because they

are -- there's a special rule that the fda allows other companies to be involved. but i would come back and say, listen, guys, it's about factories and throughput of injections. it's not about a pill. >> right. >> but wall street went gaga over viking therapeutics. they should have gone gaga over viking cruise lines. they got the wrong viking. there's the minnesota viking. >> it's like the old days, cvs and cbs, right? >> you buy the wrong one. you're a dead man. >> channel 2. >> never, ever call it cbs. it's channel 2. that may be the people on the outside of new york don't know that. but it's their loss. >> olympics are coming friday, jim. >> yeah. >> lebron james is going to lead the delegation of american athletes. nike, over the weekend, with this ad. pretty fascinating marketing framework, basically athletes asking, am i a bad person for wanting to win? take a listen. >> am i bad person?

tell me. am i? i'm single-minded. i'm deceptive. i'm obsessive. i'm selfish. d does that make me a bad person? am i a bad person? >> nice little willem defoe voiceover, by the way, birthday boy today. >> i think nike is -- look, the endless bleeding at nike is probably down 32%. i don't want to go against nike anymore. >> really? >> i've been very negative on nike, but i think down 32%. i don't want to buy it because, remember, i think -- i used the word china and pathetic and i did that because they can cut rates all they want. eunice yoon told me, $6 trillion in bad loans. that is not the resolution trust committee when president -- when the first bush was president. that's where we had a big s&l

crisis. that's like an s&l crisis times a hundred. they can cut rates all they want. the only thing i care about is who would defend taiwan? 2016 trump was very, very eager to defend taiwan. the 2024 trump is basically saying, you know what, it represents international and globalism. we're not going to defend them. they have to pay us. that was really bad for the stock market. now, i think that president trump may be saying, jim, there's more to life than the stock market, and i would come back and say, yeah, but i'm not, like, i don't work for world peace. i work for -- what do you want me to do? i no longer care about helping people make money. what i care about is that we help small town america. what am i, williams jennings bryant? go get his ghost. william jennings bryant. cross of gold speech. >> jim, the other thing that's come in this week in addition to earnings is q2 gdp. we figure out where we're tracking and then pce friday. i think the consensus is the

10th, which would be pretty mild. >> it's going -- it is definitely going paul's way. autos are coming down. lumber rallied last week, which was negative for the housing portion, but look, rates are doing what they're supposed to be doing. they're hurting a lot of america, and the defaults are going up. lot of people felt that the american express conference call was a linchpin of the economy really slowing. i didn't mind that call at all, and i thought that steve squeri was doing a good job. but wow, the reception to that is wildly negative. >> we talked briefly on friday after we had hung up about marketing spend. guidance was up. >> i think he's got the money to do it, but people are saying that travel and entertainment budget, that's kind of cutting back and that was very negative for a big thesis that has worked for a long time. >> we'll take a break here. dow up about 50 points. watch bonds as well. as we said, busy week for macro, at least. not much today, but we'll see

what gdp and certainly the inflation data bring us along with things like starts and inventories later in the week. for now, ten-year, 4.22%. don't go away.

♪ we mentioned that nike ad about being a bad person as they start framing their marketing for the olympics. interesting back and forth between nike and kevin durant who is a little bit i think annoyed that he was not included. he himself asked am i bad person? but it all brings to mind that our olympic coverage will begin quite soon as "squawk" takes week one, and you'll be seek "squawk box" live from paris as cnbc and all of peacock and nbc's coverage begins friday, july 26.

stock trading with jim is coming up next. for babies, but for adu. it should be called wiffle tennis. pickle! yeah, aw! whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free.

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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. bear in mind, cnbc's game plan conference in l.a. september 10. we were just talking about kevin durant as we sort of buff up our

sports coverage, jim. >> i love the sports coverage. kevin durant had a great speech about his mother a few years ago. he's a tough guy. a tough customer. >> yeah. meantime, jim, what's on "mad" tonight? >> i just wanted to say crowdstrike george kurtz saying cloud remediation starting to work, reboots starting shortly. he's spent 24/7. what costa mean? he's an endurance driver. can go days without sleep. some people said he looks haggard. are you kidding me? this man wins le mans when he's haggard. there were international problems, an problem when it comes to domestic so a lot of good things are happening at domino's and you're getting at a reasonable price. >> it wasn't so much the comps as the growth, the unit growth forecast, right? >> and it was because of this, they have a master franchiser who just didn't do well, and we

have to look into that obviously but the sales-store sales numbers were going. i'm not saying don't stop buying it. stop selling it. >> we'll see you tonight. "mad money" 6:00 p.m. eastern time. >> thank you. >> when we come back, tom lee on the markets and on the president's decision to drop out of the presidential race. don't go away. 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 with our retirement. i'm

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>> this was not a code update. >> it was not a cyber attack. >> you're watching the show right now saying i can't get on my computer? who should these people do? >> really depends on each individual system. it's as simple as a reboot. it's really up to the i.t. company that has the impact. we're doing everything we can to get in front of it. ♪ good monday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla live as always from post 9 of the new york stock exchange. david faber has the morning off. take a look at stocks starting on the positive note with the s&p up .75 of 1%. tech is back in charge and on top of the market. information technology at the top thanks to invidya which is up 3.7%, qualcomm, lamb research

and last week it was all about small caps, a bit of a reversal. that's why the nasdaq is up 1.3%. as far as what's weaker, energy, materials, consumer staples and financial. take a look at treasuries as we kick off the week as well. it's kind of a mixed picture. the ten-year yield 4.2%. there's some buying, especially at the long end so we're flattening out after steamning last year. the two-year yield a little bit higher at 4.5% and nasdaq helping out the gains and we're here at the end of the trading session. crowdstrike said a significant number of the 8.5 million microsoft devices that were impacted as a result of their software update are now back online and operational. the stock getting a number of price target cuts on the street today. details ahead on the show. verizon shares moving lower,

too. the telecom giant posting mixed results. profits meeting estimates and profits falling short and ryanair tumbling after quarterly profits plummeted. they see materially lower summer fares ahead. average fares per passenger fell 15% from a year ago. similar warnings from other airlines but this one was a doozy. >> more airlines earnings later in the week. we'll begin this hour with the fallout from the president's decision to withdraw from the presidential race endorsing kamala harris. we've got wall-to-wall coverage of an historic decision. the latest from the white house, reaction from business leaders, what donors are doing at the moment, and reaction from china as well. well, let's begin with eamon javers bring us the latest from d.v. >> just about an hour and a half now from seeing vice president kamala harris at the white house. this was a previously scheduled event at the white house on the south lawn with ncaa champions of the past year or so.

this is typically a knock burger event, sort of typical thing that you see in the daily life of the white house today. today it will be an everything burger for vice president kamala harris because it's our first chance to see her on camera since joe biden withdrew from the presidential campaign yesterday and since the biden/harris campaign became the harris campaign alone last night officially in fec filing. we'll watch what she has to stay. they can top off the remarks with the news of the day. very difficult for calla harris to come out and simply talk about the ncaa champions and not address this giant elephant in the political room so we'll watch that very, very highly scrutinized moment coming up here, and then, of course, later in the week, we do expect to hear from the president, joe biden, who, of course, intends to remain as president of the united states until january. we haven't seen him on camera since that announcement yesterday. he will, we would assume, seek

to reassure the country that he's fully in charge and capable between now and the end of his term in january, guys, so a lot at stake here and a lot to watch for in this very uncertain moment. >> so what does the timeline look like from here, eamon, because it's short and there are some decisions that have to be made. she has also to accept the nomination if that's where they go. >> we know the democratic national committee process will begin wednesday at 2:00 p.m. with the first meeting of the rules commit being to beginning heching out where this is going to go. the first 24 hours it's pretty loose here, sara. the idea is if kamala harris can wrap this up and clear the field and keep anybody prominent from getting in the race against her, she has the democratic nomination locked up and the convention becomes a formality and a marketing opportunity as so many conventions are for her as the nominee. if a big foot democratic candidate gets in here in the

next 24 hours or so, that could change things dramatically, but we just don't see any indication that that's happening. we see a rally around harris movement going on in the democratic party right now, and so i think a lot of scrutiny will be on these remarks in about an hour and a half's time just to see how she handles herself for the first time as the fronter for the democratic nomination. you know, you can kind of be under the radar as a vice president. you can be under the radar even as a senator running for president, but when you are at the center of global attention, it is a very, very different scale of attention and screwed any, and we'll see how she does on that stage here in about an hour and a half time. >> to your point about this early wave of support. we've heard from shapiro in pennsylvania, bashir in kentucky on "morning joe," walt disney a moment ago and pritzker from illinois. the blue state governors aren't taking much time. >> yeah, and some of them are running for vice president,

right, so one or two might want to be considered for vice president as kamala harris campaigns at the top of the ticket, and then you've got to look for the big feet, where is barack obama? where is nancy pelosi? where is chuck schumer and hakeem jeffries? haven't heard from any of them yet, and there may be a sense that they may not want to feel like this is a top-down decision, like it's a bottom-up decision from the party rank and file, and they don't want to be out in the lead endorsing harris too early because that would feel too heavy-handed, but at some point they will have to weigh in, and i think a lot of folks in the party will follow their lead. >> eamon javers, thanks very much, and we'll take vice president harris live as it happens next hour. meantime, carl, investors are watching the predictive odds which, of course, is how they have been trying to filter what people think and how they game out what policy looks like. the trump odds are still winning

out although you do see a spike over the last few days, including over the weekend for kamala harris. it tightens the race is how i would put it, and -- and, you know, i red a note from ben emmons who said what you're seeing in the market is a little bit reversal of the trump trade so they are trading it. underperforming, russell 2000, thoughts of being bigger winners on the trump trade. bitcoin is lower for the first time in a lower on that very view and technology is rallying back on top. not exactly clear what harris policies -- economic policies would look like. haven't heard a ton from her and whether it would be very different from biden so this is just the early read in the markets. obviously we're going to the research notes today to find out what wall street is saying about it. morgan stanley note, i picked out. they say if the nominee is harris, we think policy paths should be relatively unchanged as she represents largely a continuation of the biden administration's policy priorities. we think the most impactful takeaways for the market are

still those expokesed to a potential trump win. one that mike wilson says while markets have been focused on the odds of a trump term, we're focused on earnings revision breadth which has softened overall but remains bifurcated. and then we get gdp on thursday, pce important in that number and the pce monthly read on friday which is the fed's preferred measure of inflation, and especially core has been very truth isnized lately as the odds remain quite high for a september cut, and i remember if the tradeable event is november because the odds for november are 60% that they cut again, and maybe that will be, if we get more weaker data, those odds will go up and that could be dovish and friendly and opposite if the data is still firm. >> you and i talked to vemo on

friday with a wrinkle in september. >> i know you'd be skeptical. >> it was raised and on purpose. >> because the view is the economy that is softened and the fed wants to make an adjustment to prevent recession, right? i don't know. the economy has softened, but it hasn't spelled anything like recession, and in fact if you look at the economic surprise index which shows basically where economic reports are coming in relatively to expectations, it's ticked up and hooked up lately. it came way down in recent months, but it has hooked up, so the urgency of a 50 cut, i don't see it, but, look, we've got a fed meeting next week so we'll see if there's some talk. "the journal" did a really good takeout this morning on consumer weakness and how the consumer is on shakier ground and here's one chart from it which is unpaid bills. the blue line that's spiking are renters versus homeowners, and clearly those numbers are going up, right, and it's not -- i mean, it's not overwhelming if you break it down by car

payments or credit cards or mortgages, but that's just something for the fed to be paying attention to because there's stress. savings have run out. all the excess savings from covid and rates are high. >> even with some of the relief and things like air fares, we'll talk more about that this morning as well. our next guest does say that this friday's inflation data will likely shift the odds higher of a july and september rate cuts, supporting the summeder small care of the. joining us is tom lee, a cnbc contributor and head of fund research. do you want to start with the political news or economic news? what's more important, do you think? >> in the short term it's the political news, but in the longer term, to your end, it's actually the economic news. >> explain why. >> well, in the short term, markets are very sensitive to, especially the sector level depending on whether it's a republican or democrat taking the white house in november, and then especially all the

congressional elections and state elections, so i think that's what you saw last week is as it shifts -- probably shifts towards trump, small-cap industrials and financials raalte. >> you're sticking with that call, which is what, 40% over ten weeks? >> the overlap is small caps are very sensitive to a fed cut, and really the probability of a fed cut, you know, that it's finally happening, and i think it's going to look like the october to december 2023 rall owe which was almost 30%. this one should be bigger because of the amount of short positions and the amount of oversold in the russell, so, yeah, 40% by the end of the summer. >> i just want to dig into it. does it make sense that tech, that invidya and tesla and microsoft and meta should be outperforming as the odds rise for a democratic victory? >> son-in-law of that, you know, day to day it could be noise because last week you had the biggest down week for the nasdaq in quite a long time so i think there is a bit of a dead cap

bounce, but to me i agree with you. i don't think that the faangs are necessarily kamala harris taking a white house trade. >> but there is some evidence of the fading of the trump trade. russell is underperforming and bitcoin weaker today and financials are lower and so are energy stocks. >> well, again, you know, the selloff for the russell started in the middle of last week. it's down almost 5%. it is a mirror image of what happened in october after that first rookie rally. you had a 5% decline over eight trading days and then you had essential lay 25% rally for seven weeks without a drawdown. i'm not sure that's any different today. >> is your longstanding optimism about deflation, really, changing at all? do you expect any surprises on friday? >> i mean, you know, one can be uncertain, but i think the force is under way for inflation to fall like a rock are in place. the reality is there's a durable

recession. it's in housing. now it's in autos. that's like 60% of the cpi basket is in a decline until the fed really injects confidence by cutting, and so i think there is urgency for fed cuts to happen sooner, but at the same time i think the effect on inflation is there isn't another incremental driver for new inflation, so inflation i think is going to surprise to the downside and hopefully it's friday. >> energy, same story? i know we've got gasoline futures, lowest not a few weeks, and we broke 80 today on wti. brent is below the 200-day. >> yeah. i think energy is a tough trade in the near term because as long as oil is under pressure, i'm not sure i want to be overweight energy stocks, and if there's drilling under trump, that's downside pressure to oil, but over the next three to five years i think energy is a great investment, but i think this year it's not really going to be the spotlight for us. >> so the market is fully priced in september. i guess what i'm wondering is, as a cut and another one this year, likely december, what does

the market need to further rally off rate cuts then? >> well, yeah. i mean, it's 96%. >> right. >> but i think there's a couple things that can get priced in. as you know, there's some talk of a potential july cut and i think friday could actually change those probabilities from a 4%, i don't know. what if it goes to 70, right? >> it's not his style to not telegraph a major policy change. they are in a quiet period and the meeting is next week. >> there are exigent circumstances because the next meeting is not for eight weeks, and if inflation has stalled, right, if were have two prints of zero on pce and this -- and super core is rolling over, i'm not sure anybody would say you need to wait until september. i think the calculus could change because there's still a lot of inflation hawks out there. i hear it from the comments thinking that inflation has a second wave and i think that will be dispelled. >> we'll see. sigfrid important. no doubt about it. good to have you on set. >> as always.

>> tom lee. here's our road map for the rest of the hour. wall street's democrats are lining up behind kamala harris. we'll speak to one of them. >> business leaders, billionaires weighing in on the president's decision to bow out, including elon musk, and we'll go to beijing for reaction from china. and big week for tech earnings. the names you need to watch from her. big show is still ahead with the dow down one point and the s&p rallying .75 of 1%. we'll be right back.

top democratic party fund-raisers plan to help vice president harris after the president's announcement he's ending his re-election bid and backing harris himself. cnbc political reporter brian schwartz is here to talk about that. what a crazy 24 hours. you want to put some numbers like the numbers from act blue into perspective. >> disney family heiress, abigail disney, told me some time ago she would be pausing giving money to the democratic party if in fact joe biden is staying on the ticket and did not step down. well, she just told me that she is coming back now, endorsing the vice president for president in helping democrats. she told me in an email i will resume sporting, and that was will resume supporting.

it's the democrats coming home. there's a drum beat of democratic financiers coming in to help the vice president after, of course, the biden team raised what they are saying $50 million since biden dropped out and endorsed harris. a really wild, as you mention, 24 hours on the fund-raising front. >> who are some of the big donors that we're watching from here, brian? >> well, i think we have to keep an eye on reed hoffman. what we heard last night he's planning to get even more than he did when biden was at the top of the ticket for support in, support of harris. he's given north of $10 million to biden's like supportive pacs. we're hearing it's going to be much, much more for harris and whoever she is going to pick for the running mate. something to keep an eye on. another one to keep an eye on is ron conway. we've not heard from him yet. there were some questions as to what he was planning to do if biden stayed on the ticket, and

now that he's gone he's been close to the president for a while. there are some question marks as to how he's going to help kamala harris, if at all. >> where are we, brian, on how -- how -- i mean, obviously the money is always important, but how critical this money machine is on both sides for winning an election. >> it's critical, and i'll tell you why for the short term for the vice president. if anyone is thinking about challenging her in the coming days and weeks heading into the coninvestigation, a mini convention primary fight, they will have to go up against a $95 million war chest at a min. it a was just coming into this month. the vice president now controls the campaign, the political apparatus and can launch ads at a rapid clip and can push back on anyone trying to challenge her, even within the democratic party and if she wins the nomination she will be armed with so much money with the dnc and elsewhere slowly be formidable and the money is coming in at a really fast rate over the last 24 hours. we had heard from people telling

us that who used to raise money for the vice president 2020, they had received over 200 phone calls, e-mails and texts since that endorsement by biden trying to help, trying to raise money, host events and give. it's really notable how the party and funding has coalesced around her just since yesterday. >> how does it stack up against trump who is also getting, you know, elon musk, pledging $45 million a month. >> i think you're right. it's going to be a real tell who from the tech community as we started this conversation will now come and help the vice president because, you know, as you noted trump is getting major support from tech players. joe lonsdale i read is coming to support trump, elon musk and others 25tied to peter thiele. they will need help from silicon valley because trump is gathering that support as we speak and getting the money from those people as we run through this and run through the tape with the vice president trying to capture the nomination. >> brian, thank you very much. >> thank you. >> busy time for you.

we know you'll be working the phones. >> thank you. semafor is saying some democrats will bring out their checks as well, along with our next guest. we're joined by evercore founding and senior chairman roger altman. >> hey, sara. >> great you have to, as a democratic donor, wall street donor do you line up behind kamala harris? >> yes, and listening to the conversation which you just had, i would observe that her campaign is going to be very well-financed. i think both candidates are going to have more or less all the funds they need, and it won't be money that decides this race. >> what will it be? >> well, i think the race is suddenly upended. joe biden -- let me just say quickly a word of admiration for president biden. he put country ahead of himself

through this patriotic and courageous act, and i really salute him, and his decision has upended the race. his biggest liability is age. all of a sudden that is reversed. she's 20 years younger than donald trump, is and then you have the overlay of the rematch which nobody wanted, and that's gone. and suddenly the democratic base has gone from demoralized to excited. so in one fell swoop, the race is upended, and -- and this is going to be a close and fascinating contest, and she's surely going to be the nominee. >> to your point, roger, a couple moments ago. here's the quote. president biden made the right decision for our country and i thank him for putting the interests of the nations ahead

of his own. former vice president mike pence. when do you think schumer and the obamas weigh in. >> first of all, almost everybody, whatever their persuasion, carl, admirers a self-less act like the one that president biden just made. it doesn't happen all that much at the highest levels of politics, and this stands out. as for the democratic leaders you just mentioned, i think they are just trying to be statesman-like about this. i expect that all of them will support vice president harris, although i can't prove that. but the party and the machinery are all swinging solidly behind her, and these folks, speaker pelosi, former speaker pelosi, presidents ob mah and clinton and so forth, they're leaders in every sense of the word, and

they are going to be ultimately leading here as well. >> so roger, what do you know about her policy opinions and prescriptions, is especially for wall street, for business, for the economy? >> well, nobody could give a more ringing endorsement of vice president harris than jim cramer did on this network about an hour ago. that amazing. they should run ads just containing jim cramer's observations on her, but i'm not aware, sara, of much or any daylight between what we'll call the biden policies or biden/harris policies and her own. we'll have to see about that. i mean, what do they stand for? rebuilding the country. infrastructure, green energy, semiconductor production, universal broadband and the like, and that's a strong agenda, and with inflation

coming down as was just discussed before i came on, you know, the outlook is quite good. i mean, the economy is delivering the soft landing everybody hoped for. labor markets are in balance, growth remains resilient. inflation is coming down very nicely, and markets are strong, so it's a good framework for running for president, and i'm sure she's going to take advantage of it. >> there are some that wonder if she is farther to the left than president biden on issues like taxes. when she campaigned for president the first time around, she actually was in favor of a higher corporate tax rate than president biden and clearly then former president trump is talking about. >> yes, but that's a long time ago, sara, and in politics it was a millennium ago. we'll see, but as i said, i'm really not aware of serious daylight between her and the

biden/harris policies so far, but we'll see. his policies represent a good framework, as i just said, for running for president together with the very good economic data, and i think you'll see her stress efforts to get the cost of living down because that's been a serious issue with voters and remains one. there will be a lot of talk about medicare, prescription drugs and insulin costs, student loan forgiveness and so on, but i think that that will be a big theme. the cost of living and get -- cost of living and getting it down further. >> you know, the praise for president biden clearly coming from all sides, and you talked about it. i do wonder though if it raises the question, roger, if he didn't feel fit to run for re-election as he does remain in the president for the next few months, especially on the foreign policy front, a lot of high-stakes meetings this week

including with prime minister netanyahu. >> i don't buy, that sara, and i'll tell you why. he decided not to try to run for a four-year term as president during which had he been healthy he would have been 86 before it ended. what he's doing now is committing to serve of out the remaining six months of this term and foregoing the four years beyond it. i don't have any doubt that president biden will handle these final six months with skill and success, and i don't think that that's a farrish u. it's just comparing an apple to an orange? >> thank you for coming on and talking about all these issues. >> especially someone who puts their money where their mouth it, roger altman of evercore. >> thank you. when we come back, tech coming off the worst week since

april as we go into major. we'll get the playbook set up after a short break.

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welcome back. here's your cnbc news update. secret service director kimberly cheatle facing questions over the assassination attempt of former president donald trump earlier this month. there are questions how a gunman was able to get so close to trump at a rally in pennsylvania. this comes after senate minority leader and others called on cheatle to resign. israeli prime minister benjamin netanyahu is on his way to washington. he's expected to meet with president biden, one day after he ended his re-election bid and is scheduled to address congress on wednesday. and u.s. olympians chose

lebron james to represent the country at the summer olympics opening ceremony this friday picking him to be the male flag bearer for team usa. it makes him the first american men's basketball player to be picked for the honor. the female flag bearer for team usa will be revealed tomorrow. i'll send it back to you. can't wait to find out who it is. >> silvana, thanks. >> the president dropping out of the 2024 presidential race and that's causing strong reaction from business leaders. >> musk has been weighing in on biden dropping out since it was announced onex basically throughout all day yesterday and today. he formally endorsed president trump after the assassination attempt several days ago and just before are that "the wall street journal" reported musk has been donating $45 million a month to a pac backing trump. musk has denied and corn firmed

he's making those donations sews it's not confirmed how much he's donating. he was like many pro-trump supporters claiming some of his smartest friends are switching to team trump and glomming on to the theory that biden stepping down was a long con by democratic party insiders to get biden to step down and subvert the will of primary voters. seeing the effects of musk's own money on the republican side over the weekend. at a rally in michigan trump praised musk and spent a lot of digital ink admonishing his online. >> i love elon. elon endorsed me the other day, i read this the other day, didn't even tell me about it, but he gives me $45 million a month, a month. not $45 million, gives me $45 million a month, and i talked to

him just a little while ago to say i was coming leer, how are you doing, and he didn't even mention it. didn't mention it. >> now in that same rally the former president softened his rhetoric around learning vehicles saying, quote, he's totally for them. sara, back to you. >> 45 million a month will do that. thank you. steve kovac. tech rebounding from its recent selloff after the nasdaq posted its first week since april 19 with alphabet and tesla's quarterly report is on desk. our next guest sees two key pressure points and ai ad placement and winners and losers. before we get to the earnings, how about this idea, barton, that big tech is rallying off the increased odds or prospects of kamala harris winning the election? does that make sense? is there a direct link? i think jim cramer was talking about this as well that it would be good for tech from california. she has ties to the industry.

what do you think? >> i think there's been a lot of discomfort with biden, right, and i think there was, you know, obviously some movement around the idea that trump was in the driver's seat, and he probably still is with the polls, but i think were kamala, yeah, you don't necessarily expect her to have the same antagonism that we've seen with the antitrust efforts, you know, under biden, so, you know, time will tell. i mean, you know, i haven't heard that she necessarily splits with the biden kind of antitrust approach and the regulatory approach, but, you know, i can see why maybe hope springs eternal given where she comes from. >> so let's get back to the results. what do you think as far as the expectations around the role that ai plays in a quarter like alphabet's as investors try to figure out the return on all this investment. >> look, i mean, i think aye is a bit of a big in a python. we've seen massive investment really driven by these

hyperscalers so the amazons, the metas, the googles, and, you know, those guys we estimate are on pace to penned $50 million for in 2025 than they spent in 2023 just on new a.i. initiatives, so there's a massive amount of capital flowing through the system that's been supporting the chips and the data center companies, but this needs to, you know, drive a return on investment. you know, that's what i hear, you know, investors really kind of focused on. one of the early theories is that that could drive, you know, a range of corporate kind of initiatives that would help the cloud services companies like aws. certainly already helping microsoft azure with open a.i. what we're hearing going into this quarter is there's not the big infliction. people are interested at the corporate level but they are not necessarily rolling out the big initiatives that would really move the needles so you're seeing some of the consult sis like public sichts, a little bit soft waiting for a.i. by not seeing the big lift there, so what i think is coming into the

lead for the next iterative kind of driver is edge. i think we're seeing and feeling a ramp-up in devices for apple iphones. i think we'll start to hear more about that when apple reports the june quarter and the outlook for the september quarter, and then i think that that will buildas we go into next year, so i think it's edge first, you know, and then, you know, perhaps more the corporate deployers helping the cloud later. >> barton, thank you. keep it brief with all the political news. barton crockett from rosenblatt. >> thank you. coming after the break, we'll go across the pond where aerospace and defense giants rgthering for one of the world's laest air shows and the ceo of embrar will join us. back in two minutes. 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!

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welcome back to "squawk on the street." one of the world's largest air shows currently under way in england, let's get to phil lebeau with a special guest.

hey, phil. >> hey, carl, francisco neato, joining us. a busy show already. you just announced a busy order. >> we're very happy. just announced an important deal with the governments of netherlands and austria for low emission aircraft. >> that is one part of the show. the other part of the show is that so many people look at the big airplanes. they don't appreciate the regional aircraft that you've come to dominate that market. what kind of demand are you seeing around the world at embraer air? >> we have business units. we have a very positive for all the business we have, commercial and defense. >> as strong as you are regional, there's an open given the fact that boeing is struggling. on the lower end of the single-aisle market. is there discussion of going up and trying to take on boeing with your largest aircraft going even larger? >> well, we're very happy they

recognize our capacity in terms of technology, but at this point in time we don't have any plans to go to a bigger aircraft. >> how is the supply chain? >> well, we are still -- it's improving in general, but we're still struggling with some specific products, but we are trying to manage in order to deliver theaircraft that we're planning for this year. >> people are saying the same thing, 59% of the supply chain is okay, but there are specific few areas, few companies that are really struggling. are you seeing the same thing? >> exactly the same thing. exactly the same thing, but we're confident that we'll deliver the aircraft that we planned for the year. >> last question. in terms of demand that you're seeing around the world right now for air travel, we're in the midst of a record year. do you see it slowing down at all? >> i think we're seeing a greater demand for our products and all the business units, either commercial or otherwise.

>> in terms of overall demand you don't see it slowing down? >> no, i don't see it slowing down at this point in time, for our products at least. >> that's good. we'll send it back to you. >> we'll talk to you soon. still to come, china's reaction to the president dropping out of the 2024 race. we'll head live to beijing for the latest when we're back in a moment.

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welcome back to "squawk on the street." president biden dropping out of the 2024 race endorsing vice president kamala harris as the democratic nominee, and while both biden and former president trump have been vocal about the need for trade restrictions on china, far less is known about what a possible harris foreign policy would look like. we have more now from beijing with more on what leaders from china are saying about the political shake-up and the press, too, eunice. >> that's right, sara.

so far they are not saying a whole lot. in fact, the foreign ministry declined to comment on biden's exit or on harris' endorsement calling them u.s. internal affairs. the expectation though is that a harris administration would adopt president biden's china strategy, the strategy and the poll statehouse go along with it viewed as damaging here in china. bows his economic actions such as the chip controls as well as the coordination with regional allies to counter china. in fact, harris has been to the region several times, most recently in southeast asia where she was very critical of china. now in terms of the state media response we did see what would be expected here, and that is a bit of getting -- squeezing a little bit of propaganda development out of the united states. the news agency said today that it exposes the chaos and embarrassing reality of american

politics. however, what's interesting is how chinese social media has been reacting. you can see that people are fascinated by the developments of the u.s. electoral process. in fact, a lot of people are expressing their disbelief and shock that a leader could actually exit himself or herself potentially out of a race like this. >> yeah. believe me, the sentiment may be echoed here as well as someone is able to walk away from that power. >> meantime, eunice, i want to get you on the chinese and interest rates. what does it say about their confidence in being able to hit their economic targets for the year? >> reporter: well, that's the big question that people have been talking about here. on the one hand you see that the chinese government and central bank was deciding that they are going to slash rates. i mean, cutting them by about ten basis points but various

different rates so only a very important -- one important rate but then another two different rates when it comes to bank lending rates, so these are for loans that are for consumers as well as businesses, the mortgage, a reference rate, and people have been concerned about what this the second quarter numbers last week were weaker than expected. and then the past couple of days have been filled with policymakers saying they're going to be pushing through big reforms, but so far those reforms appear to be lacking. >> just thinking about the political implications here of kamala harris and china, so she hasn't traveled to china as vice president. i mean, president biden didn't travel to china. he was the first, i think, in decades that hadn't, but he's had meetings with xi. what is the key issue for china? is it trade? is it taiwan? is it ukraine and israel and some of these other foreign policy issues?

what is the sort of swing factor in terms of the opinion of the populous in china? >> reporter: right now the opinion, at least from what we see, especially on social media and conversations with academics, is that either a biden administration, harris administration or even a trump administration isn't going to look a whole lot different from each other, from a chinese perspective. a lot of people believe the u.s. is going to be tough either way. and, in fact, you're seeing that spilling over in some of the commentary on social media. people have been talking about how in a trump administration you had the tariffs. we had the -- you know, the sanctions on huawei, but one distinction with trump is that he's seen here as somebody who is much more transactional. and somebody who you could negotiate with on issues that are not important to him, seemingly, but are important to the chinese, such as taiwan. so, in that way, he he could be

a better partner for the chinese. >> yeah, i mean, it's not as clear cut because trump's considered hawkish on trade, but then he told bloomberg, you know, he was very critical of taiwan. compared them to an insurance company and said they didn't contribute. >> reporter: that's right. and he seems to be somewhat enamored with president si. in a recent rally he said president xi had issued him a beautiful note right after the assassination attempt. so, you know, so because of that, that's another way in which the chinese think they could have a little bit more push with president trump. >> eunice, thank you. eunice yoon in beijing tonight. after the break, how the street feels about crowdstrike. doesn't look pretty. another 11% drop after friday's global i.t. outage. second day in a row that shares are getting crushed. also coming up next hour, td cowen's jeff solomon about president biden withdrawing from

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welcome back to "squawk on the street." crowdstrike shares, take a look, down almost 11%, getting slammed

again. a host of wall street calls on the stock this morning. not great. dom chu is here at post 9 to bring things down for us. hello. >> what's interesting, sara and carl, a lot of the commentary, yes, is negative. maybe we can understand what happened with the global i.t. outage, but it's not all. some people are actually stepping back and reiterating their buys. just to put things in context. with a 10% drop today following up on that 11% drop we saw on friday, we now have roughly $18 billion worth of market cap lost on crowdstrike in just two trading days alone. we are now below not just the 50-day but 200-day moving averages. so, again, some of those technical breakdowns happening right now with regard to the analyst commentary out. we have guggenheim cutting that stock from a neutral to a buy. they've withdrawn their price target. it was $424 prior to that. they think there's likely resistance to new deals coming up, people signing new

agreements because of the overhang. and morgan stanley saying it's our top pick but we're going to lower the target down to $396 from $422. near-term headwinds, long-term opportunity, so they still say it's overweight. to close things out, we have goldman sachs coming out and saying it's still a buy and we're still going to keep the $400 price target on it. we think there's going to be minimal market share shifts within the space for cyber security. so, it's something to certainly keep an eye on. it's not all divisively and decidedly to the downside. >> a nice basket of downgrades. american and estee lauder and others. "money movers" starts after this. my fear of recurrence could've held me back. but i'm staying focused. and doing more to prevent recurrence. verzenio is specifically for hr-positive, her2-negative, node-positive early breast cancer with a high chance of returning, as determined by your doctor when added to hormone therapy. verzenio reduces the risk of recurrence

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not imported junk for a few bucks less. get the world's best floorliners and support america. find your fit at wt.com (♪♪) good monday morning. welcome to "money movers." i'm carl quintanilla with sara eisen. the president dropping out of the presidential race, endorsing vice president harris. what's next for the party and how crucial will her vice presidential nominee be? we'll discuss. plus, td cowen president jeff solomon on what the shakeup means for investments an