to need to keep your house maintained. but we also, again, still like some areas of tech, whether it's a.i.-related like nvidia and broadcom or the new pc cycle that we think is coming which we think will benefit amd and qualcomm. >> i'm going to write them all down as quickly as i can. time's up. thanks, joanne. join us tomorrow. "squawk on the street" is next. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at post nine of the new york stock exchange. futures are red as alphabet and tesla earnings lead to some mag seven weakness. meantime, some macro worries getting folded in as well from visa, capital one, lvmh. two-year yield is the lowest since february. our road map begins with warning signs for mega cap tech. tesla and alphabet fail to impress. plus visa saying consumer spending remains strong while

jpmorgan sees signs the macroeconomic picture may be "cracking." and at&t delivers a beat for wireless phone subscription additions and the shares are higher, at least a half hour before we get started with trading. let's get started with trading this morning, tumbling in premarket on that earnings miss. on the call last night, elon musk did stress the importance of autonomy and optimus going forward. >> i can't emphasize just the importance of autonomy for the vehicle side and for optimus. all of the numbers sound crazy. i think tesla producing at volume with -- essentially enabling the fleet to operate like a giant autonomous fleet

and to take the valuation to some pretty crazy number. arc invest thinks on the order of $5 trillion. i think they're probably not wrong. and long-term, optimus, i think, is -- achieves a valuation several times that number. i want to thank the tesla team for strong execution, and looking forward to exciting years. >> biggest miss in a few years, jim, although you spent much of the morning defending the name. >> look, i think that ever since the stock broke down, based on the autos, it's not been as great a story as people want. it's come back very quickly. if you want to know what's going to happen with fully self-driving, autonomous, you want to know what's going to happen with robots, you want to know what they're going to do with energy to the grid, david, you've got everything you wanted on this call. if you wanted to hear about great auto numbers, well, go to

gm. >> no, gm was crushed yesterday in the stock market. >> adam jonas killed gm. >> even though it had strong numbers. tesla's going to be down. you're right. listen, i advise anybody who's interested in just the future to listen to these calls. now, with a great amount of skepticism, perhaps, in some of the targets and the numbers that mr. musk shares, because he does tend to be a bit overly optimistic -- >> and he said that at one point. >> he admits it in terms of when the robotaxi or when full self-driving will be ready. they're coming out with 12.5. he says that's a huge increase. but he talks about governments acting rationally, almost, saying, well, when the number of accidents by humans is clearly in excess of what full self-driving would be, everybody will just allow full self-driving. that doesn't seem to work in the real world. >> you say the federal rules. >> they'll just change.

that may be a bit optimistic. >> i think you're right, david. the stock is down much more than it was when the company reported but this is a quarter where the conference call just said to me, all right, look, we'll do well with auto, but you've got to start thinking better than auto. >> he's been saying that for some time. >> the margins, obviously, are people are focused on and they did not come in where there was a hope for. we all know about the price-cutting that's taken place, the increased competition, the decreased demand, at least, and for example, his former home state of california, which is a huge market for evs. you have to wonder whether his political tilt is impacting in some way. sometimes i do wonder on the sales front. but so many other parts of the business, musk, once again, reiterating, if you're interested in building cars, don't buy this stock. we're about full autonomy, robots, and storage, energy storage, and he spoke at length about all of those. you know, i love when he gets

into things like valuation numbers. no other ceo ever talks that way. >> no, they don't. >> and actually, one of my favorites, several times that number in terms of talking about overall the valuation as a result of how many robots they'll sell, and he says, at this point, i'm not sure what money even means. >> it was great. he said, carl, one of the great moments in the call was, we're all going to have robots that do all the things we don't want to do. that's not that far from what jensen huang says with nvidia. nvidia with a big shoutout, 50,000 nvidia chips in this one plant. he has to take a shot at nvidia too because he says he needs more, he can't get more, so we have to make our own. >> dojo is their own. they're in such demand. i think we have that sound. >> you want to play that? >> sure, we'll play it. >> go ahead. >> what we are seeing is that the demand for nvidia hardware is so high that it's often

difficult to get the gpus, and the -- there just seems to be this -- i guess i'm quite concerned about actually being able to get state-of-the-art nvidia gpus when we want them, and i think this therefore requires that we put a lot more effort on dojo in order to have -- that we've got the training capability that we need. so, we are going to double down on dojo, and we do see a path to being competitive with nvidia. >> there it is. i mean, over time, he's basically saying these -- those chips are going to be in such demand that we need to have our own. >> the blackwell 200, that's the new iteration. he's got a game plan for it. carl, this is one of those calls that the stock market doesn't like because it's too far out,

but there are investors like cathie wood that embrace this very far-out view, of which he was glad to share, but in general, i listened to it, and i say to myself, i think it should be enough, but it's not at $176. it's now up much more, and there are people -- i mean, i know people who sell today. he would be as contemptuous toward them as he was toward mary barra and gm last night. >> turns out the robotaxi delay was not fake news, as he suggested. bernstein says today, "if you believe what elon is saying about his robotaxi, sell uber. if you live in the real world, buy uber." >> i like that. i like that. at one point, someone confuses the uber role versus the -- i'm sorry. the airbnb role. he's saying, listen, the airbnb role, that's who we are. you think we're the uber, and the whole call was so theoretical, it was like a really great seminar, like the

seminar that you wanted to take but you were afraid that the professor would yell at you, so you skipped out. but it was a tremendous seminar. >> listening to him, it's one of thinks great superpowers, he can speak with such enormous specificity about different parts of the business and different industries, and then he obviously makes these long-term projections that seem insane, frankly, at least to some. on energy storage, also, he's talking -- most people don't understand how much demand there will be for energy storage because they underestimate the demand by orders of magnitude. total energy output, he talks about, but he talks about if you actually have power plants that can operate at a steady state, it's two to three times the amount of energy that is currently produced because of the gaps because they go low, high, low, high, and they aren't producing as much as they could at steady state, so when you get storage that's available to you, they can just store their energy that they produced, and that business, by the way, has been a significant growth driver for the company. >> yes, it's really big off a small base, but ge talked about

a similar thing, that the fastest growing part of the u.s. economy may be the demand for electricity. if that's the case, then again, you've got a good reason to buy tesla, not sell it. >> yeah, you're all over ge vernova today and nantucket and wind. >> they got the hearing tonight, and they've got unbelievable -- the side that understands some of the issues with windal has an incredible series of pictures. my friend amy will be talking about that. carmine was the former ceo of ey. i've seen her pictures and what she has to say, and it does not reflect well on the bonding of the windmills, but i would say, also, that offshore wind is not why you buy that stock. offshore wind will go away. windmill is going to be positive next year. i like the ge vernova, but windmills that break up on a beach that's a nice beach -- >> doesn't go over well in these beach towns. >> no. no. david, you ever walk on one of

those beaches that has windmill shards? wear -- maybe get a couple deckers. wear some crocs. >> that's not a good thing. i didn't know that was occurring. >> oh my. i'll show you the pictures during the break. >> i'll add it to my series of concerns when i walk the beach. a windmill that -- what is it from? they break off and get into the water? >> no, they go to the beach, david. i mean, it's miserable. >> that sounds horrible. >> yeah, well, do i show him during the break? >> it also may not be good for the whales. >> the indictment on the whale situation is so bad. >> that's why that whale got very mad. >> 1,000-foot pile driver. it's got everything bad. >> that whale was not happy. >> i would not have wanted to be on that boat. >> my favorite "star trek"? really, come on, save the whales. >> is that five? >> it's going to hurt as well. i'm doing this anyway. they're very smart, but i'm going to make a point, even if i'm inflicting pain on myself by destroying this boat. >> i say, stay tuned. the fireworks are going to be something for this hearing.

and it's going to be -- make you feel twice about some of these alternative energy sources versus, say, nat gas, which is crushing it for vernova. don't forget that. >> the other side of the story on tech is alphabet, jim. search and cloud beat, but everyone's talking about these youtube ad sales. >> because they're stupid. t stock is up on the report and then people have it in for mag seven, for tesla. alphabet goes down four when we left. now it's down seven. and i thought that they told a very good story about youtube. unbelievable -- >> youtube was weak. youtube is what's upsetting people. it was weaker than expected. >> did they bother to read it? >> they were at 18% estimates. they came in at 13% in terms of ads. that's what turned the stock. >> they gave reasons. i thought they gave -- that ruth porat, the last call, she's done quite a number of calls. >> i'm aware. >> how many did you hear? >> i don't know. youtube missed morgan stanley's estimate, for example, by 4.5%

even as the company called out it's number one in the u.s. we know that. everybody streams it. >> they had good reasons. they had 30 billion hours of -- god bless you -- 30 billion viewers of shopping-related videos. who has that? a 25% increase in watch time. who has that? do we? >> there was a question as to whether there was an early cpm compression from amazon entering the -- looking ahead, they model revenue to slow to 13%, 10%, 9% -- >> okay, you had great search, unbelievable google cloud. >> all right. >> you had totally explicable problems with youtube, which are not problems, by the way. >> it's an incredible -- >> $10 billion? >> true. >> are you kidding me? >> i know. and the operating income numbers, they've never seen it. capex numbers, though, are enormous as well. >> pretty steady. >> $50 billion, they're going to spend. >> they tried to trap them.

well, you're spending too much. if we don't spend -- >> you're right. that's where he said, i'd rather spend too much than too little. >> he said, even if we are overspending, the benefits are broader than you think. the benefit to snap and pins and meta. >> i've been pushing the pins and the reddit for ages. >> the read-through, as carl -- it's about advertising, conceivably, and the concern there. little bit of concern. >> are you really concerned? let's step back. >> i didn't know you were going to defend so aggressively this morning. >> i'm all over this. >> it's a conspiracy here. >> ruth porat's last quarter, i do believe we have to tell the truth. i believe that ruth is listening and saying, thank heavens jim read the call. >> i read the call as i was watching the mets beat the yankees. >> i was watching the phillies come back in the ninth with a great hit. network, advertising revenue, $7.4 billion is the only weak number. that's the only weak number and they explain that very well. so, carl, i can sit here and

listen to mr. negative wearing two suits today for the first time ever, and all i can say is that after it goes down ten, i'm a buyer. this is not micron, which went from $150 to $115. it's not texas instruments, which i know you probably really like. >> well, we'll get to texas instruments and elliott, talking about constructive engagement and so forth, yeah. >> cool. cloud revenue crossing $10 billion. if you had told me that was going to happen two quarters ago, i would have said this stock is going to $160, but we keep changing things, and carl, this mag seven trade, versus -- i was looking at the small caps. small cap 600. go buy those. it's en vogue. i i get it. i'll go buy it. >> you do not want to let go of the mag seven. >> no. google was up 30% going in. it was up 30% going in. that's the real problem. that's it. >> carl, there's a conspiracy here. >> really? >> none dare call this a conspiracy, david. >> it's a conspiracy here.

>> you think i'm lenny la roche? >> i was a follower at one time. >> a follower? what do you mean, a follower? >> when he was very upset about the trilateral commission. >> oh, yeah. >> you have a checkered political past. >> i was a socialist workers league guy, but only because the crowd there was attract -- never mind. when we come back, one former fed official today urging the fed to cut, not just in september but next week, saying that waiting does increase the risk of a recession. take a look at the premarket. we'll get to at&t and visa, capital one, texan, got some calls on disney and gm when we come back.

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from the jpm desk saying, "the macropicture does appear to be cracking. it's unclear if that is the driving force behind that strong two-year auction yesterday." we'll get a five today, by the way. today is an opportunity to assuage those concerns with flash pmi data, jim, but the visa spending momentum, the capital one provisions, lamb weston. >> visa got worse as the quarter went on. i think they give you a pretty good answer. richard fairbank on capital one gives you a pretty good sense that the delinquencies are going down but what i thought was most interesting was when you look at housing, the way the housing cycle goes is that people, the sellers, back away because they keep thinking prices are going to go up, up, up, and at a certain point, they realize, wait a second, maybe we're playing too close to the vest. transactions then sink dramatically. that's what we have right now. and then, the panic begins by the sellers thinking, oh my god,

we missed the top, and that's how housing goes down dramatically in price. that has been the way of the world that we have had in this country, even since 1960. that's how a cycle works. and we are right now at the peak of this cycle, at the peak, and when i -- i thought the jpmorgan idea was a little panicky, but made sense. >> you got the two-year down to 4.4%. you see the dudley piece? >> geez, july, and he was higher for longer camp, and i have always loved dudley's stuff. >> basically argues it might already be too late to fend off a recession. >> he did. i think housing is the -- if housing is rolling over as fast as i think, david, you better put your place up. >> i better what? >> put your place up for sale. >> i have no intent of doing that, but thanks for the advice. >> your rental. >> you might want to consider putting one of your 18 places up. how about that, my friend? >> i think one of the mexican properties is going to go on sale. >> you're starting south of the border and working your way up?

>> if president trump wins, the pe so goes to niminus seven. it doesn't matter who's the president of mexico. got a scientist down there. >> not a fan? >> just the property values are going down because of trump. >> understood. okay, so, you're -- so, that has nothing to do with the conversation we're having here. >> no. i'm just saying, deutsche bank had bad numbers. >> broke a string of profits, although they did pause the buyback, said the five-year plan is intact. >> anna runs the best bank in europe. she gets very little credit for it. it has been a horse. this is the largest bank in europe and nobody cares. >> santander, not deutsche bank. >> i invited her to my box. how do you like that? you ever been in the box?

>> no, i haven't. i've never been invited. at&t, the cfo, we talked this morning. they're saying no weakness amongst the consumer in terms of paying their bills or anything like that. >> i thought that was a really good call. >> generally positive. >> i didn't want to say good things but i just did. >> you're such a complicated man. >> i love the tesla call. down $20. okay. okay. >> love the tesla call. >> nvidia is the big winner last night. >> defends alphabet. >> nvidia is the big winner. enough with the jonas gm. yesterday, he kills it, and today he kills it? >> well, today was -- he was a cautionary note and then today the downgrade, which we'll get to, along with jpm doing a positive catalyst on apple, speaking of mobile phones. we'll get cramer's "mad dash" and the opening bell after a break. okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet,

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opening bell coming up in five minutes. don't forget, you can catch us any time, anywhere, just listen to and follow the "squawk on the street: opening bell" podcast.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, squeeze in a "mad dash," get an opening bell. i want to talk a little vertiv here. we talked about it a lot, dave cote, chairman. datacenters. above street estimates. >> now, see, david, this is the key to this market. and the reason why is because a lot of people are taking shots that there's too much spending at the datacenter. so, this is the epicenter of the datacenter, and i think it's not true. everyone needs to keep building them out. but be aware that this is the stock that people are going to seize because the guide up was gigantic. goes to $247, but david, when you see this, you say to yourself, the long knives are out for the companies that spend on datacenter. they've spent too much. that's the rap. i disagree. i put it out there.

>> that's where the weakness is. >> yes, it is. epicenter, datacenter. >> despite what were very strong numbers. >> look, it could be lamb weston. i mean, the french fry revolution. i thought that was july 14th. turns out it's july 24th. >> let's get the opening bell here. at the big board, it's infrastructure capital celebrating the loss of the intracap, small cap. at the nasdaq, onestream celebrating its ipo, and the ceo will be on "closing bell: overtime" later today. >> that company is bringing the financial -- the infrastructure. you go long that, and you short the big cap infrastructure, and then suddenly, you're really happy because you think you're really smart. it's hard to do. this is all algo driven. i don't mind that. a lot of trading is algorithm, but if you can buy a small cap infra, and sell a big cap. i don't know if people think quanta is too big. they're all joined at the hip.

>> it's not like smids are benefitting. >> i think what happens is they sell these stocks early and then they put the money to work later in the small to medium size. you have to sell these first in order to have the capital to play, and i think that's going to continue to play out, even though i think it's somewhat ludicrous. but people have it in for maga. mega. excuse me. maga. mega versus maga. >> they've got it in for mega cap tech. >> don't use the term hyperscalers. i tried tech titans for a while. >> magnificent seven. is it seven? could be eight, six. some days it's five. >> it's just yul brenner right now and maybe steve mcqueen. >> you wrote his obituary. >> he was a great man. people don't know that. steve mcqueen. >> okay. >> did you ever go to "bullitt"? see lombard street?

>> i have. >> go ahead. mr. embarcadero. >> what was that? what do you want to get hit with? >> french fries. >> i'll lead with at&t, see if i can get a smile out of you. >> okay. >> focus on it. when you go in real tight, let's see. he's not going to crack a -- there it is. jim never has a nice thing to say for at&t. by the way, not necessarily wrong. >> they had additions. what was the video additions for comcast versus this? >> they -- well, they added 239,000 fiber adds. they have 8.8 million fiber subs, 40% penetration. the number of people i would focus on would be postpaid phone net adds, and churn across the industry is staying very low. did speak to the cfo, saying, you know, generally, as you might expect, hitting all these things. free cash flow at $4.6 billion. their leverage ratio is down to 2.9. they expect to be to 2.5 by the middle of the next year.

you can see what the stock has been doing. john stankey, the company's ceo, on the call, guys, had some interesting things to say about upgrade cycles, and here, you're extending beyond just at&t. you're getting into apple territory. i think we have it for you. take a listen to what he had to say about the upcoming a.i. devices and whether they really will spark a significant upgrade cycle in people buying and getting new phones. >> i've been other a.i. devices that have come into the handset ecosystem over the last couple months. i haven't seen anything in them that suggests to me it's going to cause customers to immediately say this is world-changing for them, but it doesn't mean that somebody doesn't unlock the key at some point. there's a lot of ways you can experience a.i. without having to necessarily change out hardware, per se. >> not a ringing endorsement of a huge upgrade cycle as a result of a new iphone. >> what are they going to say?

listen, do this and we'll give it to you for free like we always have? not free. that's called hyperbole. >> there are some, including moffett, who thinks that won't be a good thing. >> by the way, "squawk box," when they're grilling hans vestberg, that was the case against verizon, that they're going to have to really pony up, and if that's the case, david, then tim cook is the winner and all these guys are losers. >> they may not be rooting for a big upgrade cycle because of all the subsidies that have to go along with it from the carriers themselves. but it's a big question. >> oh, yes. >> as we head into the fall now. >> especially with these -- >> next model, getting ready. >> apple is so important today because we had some incredibly positive notes about apple, and if apple can hold, then that would be the mag seven that would try to -- that's the one that -- if apple can hold, that's a better read on mag seven. >> it's also the smallest drawdown of the seven so far. >> yes.

>> but jpmorgan today does say, we expect apple to reassure investors that the upcoming a.i. replacement cycle, earmarked to begin in fiscal '25, is leveraging a more robust launchpad for phone. >> and i think that's very important. apple, not hit by the outage, crowdstrike, because apple technology was not hurt by what happened with crowdstrike. george -- by the way, george kirk reminding us that the vast of the majority of the systems are operating properly. they continue to work shoulder to shoulder with their customers, and there's a report out on the website if you want more. crowdstrike has been up the last two days, but little, teeny weenie profit taking. >> final thought from at&t. sort of an outperforming this morning. not really an impact from this affordable connectivity program that is no longer in effect. this helps subsidize the broadband and wireless bills for a number of customers throughout the country. verizon got hit. comcast as well. >> you're the only one talking

about this. >> may be hit in the next quarter. charter shares. at&t said earlier this year, they just don't have that many of those customers. so, not as much of an impact. guys, alphabet's down 5%. it's taken meta with it, down 3%, and to your point, mega cap tech is basically weaker. >> look, sometimes, it just comes together in a way that just says alphabet is up 30% for the year coming in. they're spending too much money in the datacenter. vertiv, nvidia, spending too much money, getting too much money. you've got musk saying, listen, we're paying nvidia because there's a shortage. look, there's so many reasons to sell these stocks, so they just decide, you know what? >> there's so many reasons to sell them? many of them sell at relatively reasonable multiples and still have very strong growth rates. that would be the reason to own them. >> right, but you got to let them have these periodic squalls. there's some double tops. >> the multiples have gone up. >> absolutely. >> and it's not like -- >> anybody who does it -- look,

if you take profits in alphabet up 30%, you could say, look, i don't care what they said. i just think it's prudent to sell some. >> you once wrote, 20% gains? nothing wrong with ringing the register. >> nothing wrong with it. my travel trust owns many of these, and tempted to buy tesla, it's so good, but i just say, okay, let it come in. no need to be a hero. find a -- there's a bunch of stocks that are still cheap. some of the health care stocks. you do not need to go and just get mowed down by the, you know, fire of the sellers. interstitial -- there's machine guns. interstitial. you know? when they do that? you have a kill zone. that's where the mag seven is right now. kill zone. >> it all goes back to this enormous rotation that was historic in nature, something we hadn't seen for the likes of 30 years in terms of the outperformance of the russell versus the s&p. >> and now it's switched --

>> versus the nasdaq, actually, the qqqs. >> it's switched, the s&p small cap, which i have the numbers. they're incredible. >> has that run its course? you can see, of course, i'm referring to that huge run-up right at the end of the chart. >> they sell the big cap first, and then they take the money, and they roll it into these stocks that they've never heard of, which is an algorithm, because believe me, the companies that they're rolling into, david, you don't want to even get near them. >> the quality is not perhaps what it once was. >> all suspect. >> i'm sure you read -- yeah, came out yesterday, i was reading that piece. >> that was a good piece. fabulous. >> he talked about the jpmorgan -- what is he, a strategist? >> he's a hedge strategist. he writes the eye on the market. jamie dimon reads it. >> he writes great stuff, and i always read it. carl also. he talked about, historically, these patterns of the russell outperforming -- >> wasn't that a great piece? >> there have been long periods where that hasn't been the case, but he did talk about, to your

point, the declining financial health of the -- many of these companies versus what they have been in the past. >> 40% of the russell has negative earnings. >> let's go over the top ones for the small cap. chewy's takeover bid. lumen technology. astrono. oh, must. green brick porters. forward air. who wouldn't want that? s&t bank corp. vf corp., that's burning a hole in my pocket. >> are you going to sit here all day? enough, enough. >> why? >> because it's -- you made the point. >> but this is -- there's more -- >> i just love when you say sold to you. >> sbs commerce. >> i'm sorry. all right. >> look, i guess he wants to talk about lamb weston. >> i do want to talk about lamb weston. what's going on with french fries? what's the problem? >> this could be glp-1.

>> that's what i wondered. is this a glp-1 effect? coca-cola thinks that liquor is the one that's most impacted. >> do you think there's enough of the populace on these drugs to make that kind of dent? >> no, this is apropos of the jpmorgan. i think they're going out of trade, other than texas roadhouse and brinker. >> they're not eating french fries on the upper east side, carl, all those people going for their wegovy appointments on park avenue. >> wendy's, doing terribly. restaurant brand, doing okay. i still think mcdonald's is not crushing it. who has french fries? >> i have french fries. i think they're the greatest thing ever invented. >> mcdonald's is down 2%. >> along with milkshakes. >> well, i just -- >> almost back to the lows of the year. >> look, people aren't going out as much. i think that this is my new theory is that they have to cut the price of things. like, they have to cut the price of homes, the price of airline tickets, maybe the price of theme parks. everything got too much. >> it's actually -- >> customer's had it. >> good piece out of barclay's today, why the universal theme park weakness is not -- may not

be reflective at disney, because the difference is in price and mix. >> we have to get hugh johnson that, the cfo. >> i tried to get some answers yesterday, was unable to in terms of the impact because disney shares ended down more than comcast, our parent company. >> was that perlmutter? >> it was news reported by "the journal" and confirmed by mr. perlmutter, he's no longer in the stock. very long shareholder and represented by far the majority of the stake that was voted by trian during that bitter proxy fight that they lost. >> right. >> and he's gone. ike perlmutter, no longer a shareholder. >> he blew it all out? that's incredible. i got -- >> although -- >> this is -- this is a picture of the grand teton. tell me that isn't the disney chart. grand teton. >> it's not going to show on tv. this is a visual medium where we need the picture ahead of time. >> see it and say it. >> look, but the grand teton is

the exact same chart, and by the way, it does stop here. it goes lower. >> you're not a fan of fdisney. >> no, i happen to like disney. i sold it much higher. >> whether or not the weakness at -- at the universal parks is also attributable to disney. again, universal, they talked about upcoming -- this epic and maybe some people are staying away because they might want to come later when epic universe opens. that's a beautiful picture, by the way. >> i was waiting for that, thank you. >> you're welcome. >> the piece really did say that it's apples and oranges. i don't know. >> i don't know either. >> it's french fries and baked potato. i don't know. >> disney does have cruises. and they did get the disneyland workers now have a tentative, which averts some labor strife over there. >> nelson peltz did sell at the high. >> it was a good sale, and perlmutter getting out was a good sale right now as well. perlmutter, listen, over time, given -- i mean, how long ago he sold marvel to them, made money.

it's not like they didn't make money over a long period of time. >> but he was fired. >> it's a 15-year period. he was fired. >> it may have been ill advised to fire him. >> didn't take it well. wasn't happy about that. >> no. he's a proud person. i don't blame him. he created something great that seems to be a little bit lost in the shuffle. >> you think it's lost in the shuffle? >> the movie slate is not exactly the one that ike perlmutter would have recommended. >> speaking of things aimed at kids, jim, you had mattel on last night, nice 5% pop here. >> i had to go into the stories that el caterton may have approached them. they have so much. they have $700 million in cash. they've been buying back stock. the numbers were fine. it's questionable. we've $700 million going to a billion in cash. it makes sense that someone could say, let's take this private. >> it's possible. it's certainly the size that could do that. would hasbro be interested? what was the answer you got when you asked him about it?

take a listen. we have it. "mad money" last night. >> wow. >> beyond 2024, we believe that trends will further improve, and the industry will return to growth and continue to grow over the long-term. >> that was not what i was looking for. i wanted the answer when you asked him about the takeover. >> was reuters just wrong? >> it was a very hard call. he obviously would not say that reuters was wrong. he just talked about how he's going to realize the value himself. i think he would be a fool to sell the company right here. >> why is the stock up so much? >> because people believe that the caterton rumor is real. i mean, he certainly -- >> so, he didn't deny it. >> he said they didn't want to talk about it. david, you've been on these phone calls. they don't say, let me tell you something, that reuters piece is spot son, i'm selling the company. >> no, they don't. he believes in the long-term, as you heard, growth rate.

>> i would say, buy the stock. now, hasbro -- the idea that hasbro might buy them with this antitrust department? >> not in this world. remember 20 years ago when mattel tried to buy hasbro. remember that? >> very true. >> that didn't -- it was even before that. this was a long time ago when hassanfeld. i forgot my dates, but i think it was a long time ago. >> the antitrust division would not let a toy company merge with a steel mill. >> you mentioned caterton. it puts me in mind of lvmh and the showdown in luxury. >> david, did you hear about the champagne numbers? >> tell me. >> people must be unhappy and they're not drinking champagne. what the hell? is that really your analysis? they've never seen bad numbers so they don't know what to say. how about the cognac numbers? did you read the call? >> i read parts of it.

>> it was hysterically funny. where was robert frank on the narration of this call? >> it's not that much of a surprise. burberry did not have good numbers. hugo boss. there was concern in china. >> it was a funny call because it shows you, like lenin said, if the rich aren't happy, it's their own fault. i had had, let them eat gateau. >> we're worried about champagne and fries today. >> there's a combo. champagne, caviar, french fry. >> meantime, we're sub-5,500. qqqs, red for the month and now some flash pmis. let's get to rick santelli. >> yes indeed, and also, bank of canada just cut for the second consecutive time, 25 basis points, down to 4.5%. s&p global, july preliminary reads hitting the wires. on manufacturing, not good news. back below 50. 49.5. the lowest of the year. lowest since december of last year. if we look at services, a

completely different story. 56. 56 takes us to the highest level to march of '22. march of '22. so, that is cooking in grease, and of course, affected the composite in a positive way. the composite is 55.0 and 55.0 would be the highest read since april of '22. we still have new home sales at the top of the hour and 70 billion five-year notes to hit the auction block at 1:00 eastern. "squawk on the street" will return after a short break.

it's been a busy week for amc, the debt refinance and a preannounce on q2 with weaker than expected numbers. they do say the prolonged actors and writers strike of '23 reduced the numbers of movies released in many 2024. shares down 7%. stop trading with jim is next. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

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visit coventrydirect.com. time for jim and stop trading. >> one of my favorite companies is texas instruments, one of the first stocks i ever bought in the '80s but they did a good number last night. and the ceo was on the conference call. elliott said -- it's a release saying they took positive steps. what i think they did is actually explain themselves. they'll do a big meeting what they're up to. they've been historically spiteful of wall street to the point i found the conference calls uncomfortable. they're so contemptuous. that's gone. that attitude is gone and with that the decline in the report. so good for them.

>> did nxp lower the stock on these guys? >> i would say a little bit. but texas didn't even say a lot of good things. they said look we have a long-term plan. that's great to hear because typically they never said anything to you. the conference call was likely frankly i don't give a damn. >> they want to change the approach to cap x. >> yes. they have a meeting coming up. >> they have an event in august. >> i think that's going to be positive. >> elliott saying they're looking forward to it. do you think they're having an impact? >> i think the company is changing the way it communicates with wall street and does many good things and it's going to be a terrific story. >> how about tonight? >> i have benioff. maybe he can tell us a good story. the problem with enterprise software we fell in love with

hardware then didn't love hardware and then loved small, medium size business stocks and then they were nothing we heard of and just buy the index. >> and you have ibm and ford -- >> remember jonas likes ford. >> yes, he does. >> don't forget, david, avocado prices through the roof. >> again? i always feel like they're go up. always hearing about avocado. >> i don't know how to roll my rs, but it's guerrero. >> that's the state in mexico that makes the -- or grows them. they're grown, not made. >> your blackstone thing how is it doing? >> great to bring up the stock we haven't mentioned at all at the end. >> commercial real estate down, cut the dividend. >> judy marks admitted -- if you have six floors or below you're fine. the service numbers were very good. can i stay? i have a lot on my mind.

>> you're done. you're out of here. >> see you at 6:00, though. "mad money "at 6:00 p.m. housing data after the break. her2-negative, h, node-positive early breast cancer with a high chance of returning, as determined by your doctor when added to hormone therapy. verzenio reduces the risk of recurrence versus hormone therapy alone. diarrhea is common, may be severe, or cause dehydration or infection. at the first sign, call your doctor, start an antidiarrheal, and drink fluids. before taking verzenio, tell your doctor about any fever, chills, or other signs of infection. verzenio may cause low white blood cell counts, which may cause serious infection that can lead to death. life-threatening lung inflammation can occur. tell your doctor about any new or worsening trouble breathing, cough, or chest pain. serious liver problems can happen. symptoms include fatigue, appetite loss, stomach pain, and bleeding or bruising. blood clots that can lead to death have occurred. tell your doctor if you have pain or swelling in your arms or legs, shortness of breath, chest pain and rapid breathing or heart rate, or if you are nursing, pregnant, or plan to be. i'm focusing on what counts. talk to your doctor about reducing your risk. ♪

good wednesday morn welcome to another hour of "squawk on the street" i'm sara eisen with david faber and carl quintanilla live as always from post nine of the stock exchange. we have the s&p selling off 1.3%. the nasdaq is down almost 2%. consumer discretionary the biggest drag on the s&p. that's because tesla is down almost 12.5% but taking the entire sector with it. the only two sectors higher right now, utilities and health care. that's a defensive safe haven bid. tesla at the bottom of the pack. but nvidia, broad com, alphabet all lower today as well.

looking at treasuries right now you have buying with lower yield. 30 year yield goes higher, two year goes lower at 4.4%. not a ton of economic data this week. we're 30 minutes into the trading session. three movers we're watching. tesla i mentioned one of the biggest losers in the market. shares are falling after missed estimates for the second straight quarter. google parent alphabet also in the red. ad revenue coming up short. we'll talk to an investor who calls the stock a top holding still. and amc, forecasting a second quarter loss due to fewer big releases. >> got new home sales data coming out, let's get back to rick santelli. good morning, rick. >> good morning, carl. new home sales for the month of june we're expecting a rebound because last month was the worst

pace since last november. instead of 640, 617,000 seasonably adjusted annualized units, which means back-to-back weakness and last month a subtle revision to 621,000 but both these numbers with definitely remain the lowest levels, lowest pace of the year. and just as a side bar, we learned in may that new one-family houses for sale had an inventory backlog, it was 481,000 that was a 16-year high. so we see new home sales inventories probably going to continue to be a negative issue and, of course, we see that the ten-year yield on the strong s&p global services pmi about 15 minutes ago boosted yields a bu bit. they remain a bit higher in the longer maturities as we see the yield curve dramatically becoming flatter and flatter,

less inverted, twos to tens now minus 16 basis points. let's go to diana olick for more color on our new home sales miss. >> this count is based on signed contracts during the month. in june we saw the average rate on the 30 year fixed over 7% for the entire month so it was a miss but it's not completely unexpected that you would see that as buyers pull back due to affordability. the median home price was $417,300. that was essentially flat year over year but what the builders are doing is they're buying down those mortgage interest rates for the buyer. that's how they get them in the door but it's not working because with rates over 7%, prices still high and the supply. we're holding at a 9.3 month supply that was unchanged from may but still a high supply. however, when you match that with the extraordinarily low supply of existing homes for

sale. you balance them out together of the entire market you have between a four and a five month supply, six month supply is considered balanced between buyers and sellers so the builders are trying to make up for it. i'm hearing from various analysts that people may be waiting until the fall to see if mortgage rates have come down more, they have come down to the high 6% range. to get buyers in the door you have to see a five handle on the 30 year fixed, but we don't have that yet, sara. >> a way to go to get there. thank you, diana olick. talk about big moves in the market, just paying attention to the dollar versus the japanese yen. this has been more of the crowded one sided trades, and it's ripping the other way. the japanese yen is ripping, a 1.5% move you don't get every day in currencies so people are paying attention to it. people are saying you never know they could be intervening. but you have interest rate

differentials in focus. bank of japan meet next week, e expected to maybe hike rates, fed leaning towards cutting rates so finally this is going the other way. and when it snaps it goes hard because we know japan has been cheap, the conference call talking about japan becoming the best shopping destination in the world, especially for asian travelers because of the weaker yen. so we're watching this. it could put pressure on the treasury yields because of the weaker dollar. the fed is in focus ahead of next week, and bill dudley, the former new york fed president publishing on bloomberg this morning saying i changed my mind. the fed needs to cut rates now. he's been a proponent for higher for longer, make sure we can take care of inflation but here's what he's saying now, he's pointing out the weakness in the labor arket. deteriorating labor markets have

a self-reinforcing feedback loop when jobs are harder to find, households trim spending, the economy weakens and businesses reduce investment which leads to layoffs and further spending cuts. although it might already be too late to fend off recession by cutting rates dawdleingly now unnecessarily increases the risk. he's saying they should cut rates now. i would bet fed members pay attention to him. he was their colleague, influential. i don't expect them to cut next week it just gives powell more room to sound moredovish and telegraph the next move. i it's becoming consensus. >> is jack hole next? >> yes. the speech is coming at an interesting point although his style is meeting because he does a press conference at every meeting. >> yes, he does.

>> fed chairs didn't do that before him. >> this is interesting that dudley chose to do it at all. >> he was clearly sending a message to them. and i made a chart in honor of dudley who points out that unemployment has risen. and inflation has fallen. this is the dual mandate here, pce headline numbers have gown down to 2.6%. >> what are you waiting for? >> dudley argues that he's actually maybe what's taking so long is powell is trying to build a consensus within. >> a broader consensus. >> and pieces like this help. >> there are hawks on the committee, thinking of michelle bowman for instance who want to make sure they have a good handle on inflation. it's not just the unemployment rate. one good stat from his piece, the ratio of unfilled jobs to unemployed workers, so this is the openings. 1.2 now. and that's back to where we were pretty much before the pandemic.

he also pays attention to the three-month average rate which has risen three points in 12 months. so he says pay attention -- by the way, canada just did it, they just cut rates in the last hour saying down side risks are becoming more important. that also leads the fed to do the same thing. we get the good corporate commentary on what they see in the consumer. here's visa. >> growth in the high spend segment remains stable, we saw a slight moderation in the lower spend consumer segment. >> there's that lower spend consumer that they're all talking about. capital one ceo sounded more optimistic. listen. >> the u.s. consumer remains a source of strength in the

overall economy. of course, the labor market remains strikingly resilient. rising incomes have kept consumer debts servicing burdens relatively low by standards despite high sfinterest rates. >> and lvmh points to some struggles within the categories for the luxury consumer. champagne sales they talked about severe demand short fall when it comes to champagne. continued economic and geopolitical uncertainties are still impacting certain businesses, notably wine and spirit. as far as the u.s. in particular they talked about the aspirational consumer as they say in the early part of the year, a little bit under pressure due to inflation and higher interest rates that are taking a toll in terms of purchasing power particularly in

the u.s. and a lesser extent europe. some brands particularly in the u.s. are paying the price for this situation. they talk about for instance engagement rings at tiffanys at a time they're trying to boost that company not doing as hot. it really is brand specific in a way because they do have some -- they have this brand that is really killing it right now and we know hermes and brands like b burberry and gucci. >> it's not nice. >> taking a toll. >> we talked about lvmh at the end of last hour as well. >> other reports that you highlighted. >> it's brand specific as well. trying to turn around a luxury brand with an aspirational consumer right now it's not a good time. if you've already got it, you're good. >> these guys had it. >> lvmh has it. >> they got it.

>> but category specific and brand specific. they mentioned some issues in champagne, for instance, and in tiffany's and that's i think a lot of the mack koe story. that's also china which has been a problem for them and the luxury brands. the macro story in china doesn't seem to get better. >> no. >> tepid is the word the coke ceo used yesterday. >> let's get to a big story of the day, in terms of the stock market. tesla shares down about 12% after an earnings miss. revenues down 7% from a year ago. and perhaps more importantly margin estimates were not met. phil lebeau, of course, has it all and a lot more for us. phil? >> mentioned margins let's start there. look at the drop in margins for the second quarter over the last couple of years, second quarter came in at 14.6%, the street was expected 16.5 or 16.9%. over the last couple of years this is the story with tesla. it used to be a margin story,

not the case right now. down to 14.6%. two yearsi ago at 25.1%. few things happening we talked about the pricing in china and here in north america saying so many models have come into the market it's forced auto makers to cut ev prices that weighs on us as well. what about a lower price model? that's expected to happen in the first half of 2025, details are scant in terms of whether it's an all new model or if we are going to see a model 3 or model y that has been decontented and tweaked so that would bring the price down. in terms of what might happen post november, post the presidential election. what if former president trump is re-elected and he moves to get rid of the ira? which basically helps ev sales with incentives. elon musk was asked about that on the call last night. here's what he had to say.

>> it would be devastating for our competitors. and it would hurt tesla slightly. but long term probably actually helps tesla would be my guess. >> as you look at shares of tesla he's saying look, other automakers because they don't have the market size, scale they have, they need incentives to bring in customers, as opposed to tesla which could with stand not having the $7,500 federal tax credit. and the robotaxi, that unveil is scheduled for october 10th. that's when we are supposed to get more details. he said yesterday on the call he was asked when is the first robotaxi ride, he didn't say it would be the first robotaxi ride but he did say you have to have unsupervised full technology in place he expects the first ride in a tesla to happen next year.

he also said he tends to be wildly optimistic about things. he didn't say take it with a grain of salt but read between the lines. >> meantime, phil we talked about rising inventories and pricing pressure in the industry, downgrade in gm today. did i see manheim used car data going the opposite direction this morning? >> when you look at what's happening with used cars i have not seen that data yet. i've been in the chair waiting to go on. so i have not seen it. but i'm not surprised if you will see used car pricing which has been coming down the last year it's supposed to stabilize and slightly tick higher in the second half of this year. but certainly not anything close to what we saw as we came out of the pandemic when there was such a rush to buy used vehicles that you saw a huge spike in prices. i think we're getting into a more normalized market. >> good take on that. we'll see what happens when we get full month data for july. thanks, phil. let's move to alphabet as well this morning, shares are

lower, earnings did meet expectations revenue up 14 driven by search and cloud which topped $10 billion in quarterly revenue and a billion in operating profit for the first time. but there was youtube's ad revenue that missed the mark. joining us is bill mark good to have you. >> thanks for having me. >> some takes this morning defending how resilient search at least continues to be in this environment. >> yeah it's funny, carl. every quarter when i come on because alphabet is one of our largest holdings there's concern of what the a.i. effect would be on search. it's one of the questions how do we get comfortable with alphabet as a large holding and, you know, the fact is this is the sixth quarter in a row that the growth in search has accelerated. you have a $200 billion business

growing at 15% and each quarter is faster than the last. so our analysts actually raised their target this morning on what they think alphabet is worth because the search growth is so much more important to value than the slight miss in youtube. >> as far as spending goes there's obviously some cap x worries among some, highest revenue in years. others argue good operational efficiency. margin beat. which side do you take? >> we took a lot of comfort in how well controlled costs were in this past quarter. i think ruth generally gives conservative advice. maybe she triggered some people when she talked about potential for expenses to tick up a little bit. but we're very happy with the margins and especially happy with how rapid the growth has been in search. and market share just continues as if it's the only company in

the search business. >> bill i know this comes up as a value name because we always talk to you about that. i'd love to get your take on the rotation we've seen the last few weeks. in terms of the russell. can it continue? are you happy about it? >> sure. you know, in our portfolio, alphabet is one of the only megacap growth names we own. if you adjust for the losses in other bets and what the value of the cloud business, we think we're paying about 75, 80% of the market multiple and we think alphabet is a better business than the market. but that's the exception for us. i wrote in my quarterly to shareholders that's available on o oakmark.com about what a radical change we've seen in the the s&p 500 it's a coon traited growth

fund because of the growth in the megacap tech names. it's important to understand it's a many much riskier index. we talk about alphabet in the highest holding it's in the high 3% of our portfolio. we like to think that oakmark is a fund that most investors can put most of their capital in, not look at it for a decade and at the end of the time period be happy with the results. because of that we don't like to hold more than 4% in a name but there are four names in the s&p 500 that are over 4% of the portfolio. so it's actually a more concentrated portfolio than the oakmark fund which is concentrated relative to other mutual funds. so we think the smaller part of large caps, lower organic growth companies, the companies that haven't been doing well in the stock market the past year, are

really attractive opportunity set today. and our portfolio is deeper in value territory than it's ever been. >> that is saying something given the set up we have, russell lower today but outperforming the broader index. >> we'll have you on again soon maybe talk about youtube index. >> thank you. as we head to break, the road map for the rest of the hour. a new warning for vc firms when it comes to cyber attacks. plus the kamala harris economy what her policy could mean for invtiesng. >> and the housing datatoday, "squawk on the street" continues after this break.

welcome back to "squawk on the street". let's get to d.c. with a news alert. morning eamon. >> american intelligence officials are issuing a warning to venture capital, private equity and startup communities. malicious tientities are using startups to gain access. they're trying to obtain pr proprietary data in startup companies in the investment process and then using it to compete in the global market. it's difficult to spot the efforts because the bad guys are

using several techniques to hide the source of their money. including avoiding cfius scrutiny. routing investments through intermediaries. using minority and pllimited partner investments. mike casey said in a statement this morning unfortunately our a adversaries continue to exploit early stage investments in u.s. startups to take their sensitive data. these actions threaten u.s. economic data and can directly lead to the failure of these companies. today's announcement is largely about chinese investment. vc investment from china has focused on emerging technology sectors like artificial intelligence and other priorities for beijing. there's advice for firms on how to handle it. they say companies should and be

aware they could get the deal once investors have been transferred. there's concerns about a potential national security investment. >> that's useful, thank you very much. rrama ill to come what a kal hais presidency could mean for business and your investments we'll discuss that when "squawk on the street" comes right back.

investors and average americans wondering what economic policies kamala harris would champion as president. steve liesman has been looking at what we can learn from her tenure as vice. steve? >> and as senator and prosecutor. kamala harris launched her campaign yesterday in milwaukee. and she drew in her first speech themes from the biden administration and her more liberal past as a senator. >> building up the middle class will be a defining goal of my

presidency. >> because here's the thing we all here in wyoming know. when our middle class is strong, america is strong. >> affordable health care, affordable child care and paid family leave. some of those have been from the biden administration some from when she was a senator. with only a modest record, one that an adviser said supporters and critics are using the past to spin the economic future of a harris presidency. here's what the president say they don't see space on the economy or economic policy saying she backs an economy that works for small business and entrepreneurs. opposes the broader trump tariffs and has worked with big business in the past and also worked against them. including a public private partnership in central america and southeast asia.

but critics point out she was found to be among the most liberal senators, supported a return to the 35% corporate tax rate, including a full repeal of the trump tax cuts and advocated for low/middle income tax credits and medicare for all. a lot of that sounded to some people like a universal basic income. and she opposed fed chair powell's nomination to the job. we don't know her exact reasons. she joined a group of senators more willing to lend based on climb change. guys? >> and also didn't she want to ban fracking? that was a campaign issue in 2022, right? >> that was an issue. the question becomes has she changed her tune? has she become more centrist as the vice president or less or the same. >> right. 35% tax rate if she goes back there on corporations is significantly higher than what biden proposed and certainly

what trump is proposing. >> i should add, though, sara, i'm told she would back the 28% number. i was pointing out she had in the past supported going back to the 35%. and now she'd be on board with where the biden administration is on the current 28% from the current 21. >> any word on the s.a.l.t. tax cap? >> asking for a friend? >> i'll call my source and say faber wants to know for a friend. >> thank you. >> it's interesting. when trump put that in place, it was one of the first times they used the -- the tax code had been used politically on a punitive level whatever other reasons there might have been for putting it in place. we'll see if it's something to broach. i am told there will be more concern in a harris administration than perhaps harris as a senator with things like the deficit because the realities have become quite acute. >> don't get me wrong i was

happy to have a huge tax increase so i could make private jets 100% deductible in year one. that made perfect sense to me. >> there you go. >> thanks steve. let's get to robert frank who knows about private jets and kamala harris when it comes to her wealth. robert? >> good morning, david. vice president harris and her husband have total assets between 3.6 million and $7 million, most of those are in plain vanilla index funds and retirement accounts. they have about 1.7 to 4.4 million in those retirement accounts. most of that is held by her husband, doug emoemhoff. he was a corporate lawyer. the retirement portfolio is very conservative, about half of it is in stock, about a third is in cash and the rest is in bonds. it includes some low cost index

funds her largest funds include a target date 2030 fund, an s&p 500 fund and a large cap growth fund. they also own a home in brentwood california that emhoff bought for $2.7 million in 2012. they have a mortgage with a rate of 2.625%. those were the days. they had combined income of $450,000. emhoff made 174 as visiting professor at georgetown. she made 225 as vice president. so very unexciting wealth here from vice president harris. >> kamala, i don't know why i

said it incorrectly. kamala harris. robert we got that breakdown. what do we get from trump? i kind of forget how much we learned or didn't learn or what he shared when he was president? >> in terms of his net worth, so i can't remember where he started. he's now at $6.5 billion, and remember one of those things that came out of the case in new york was disagreement about just how much his assets are valued. most of his assets, of course are in real es state. but he is still by far the richest president and the richest presidential candidate in history at 6.5 billion which puts him in the top 400 of billionaires in inthe world. >> wow, that is something. thank you. time for a cnbc news update. good morning, silvana.

>> good morning. israeli prime minister benjamin netanyahu is attending a memorial service for the late senator joelieberman. demonstrators are staging large protests today in d.c. in opposition of netanyahu's speech and the war. former president trump will reportedly stop holding outdoor rallies after he survived an attempted assassination earlier this month. it comes at the recommendation of the secret service. trump's team is reportedly scouting out large venues for future rallies where thousands of people can attend. and team usa athlete selected 20-year-old coco gauff as the female flag bearer at the opening ceremonies. she's the youngest player to do

this. she'll star alongside lebron james. the opening ceremony kicks off friday night. >> gymnastics and soccer not f foft tt. thank you. tesla is down 12%. we'll talk about how to play it from here. don't go away.

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let's get back to tesla, the stock is under pressure after it missed estimates or the company missed estimates for the second straight quarter. these losses send it back to bear market territory. here to break it down is jeff osborn with a hold alongside tom nuryan with a buy. musk on the call does everything he can to talk about things

other than making automobiles. but i would think you agree the fall in price is as a result of that part of the business and i'm curious whether you think i it's justified. >> i do any time the gap between what is reality and happening today versus what's in musk's mind and in the future, when that widens out the stock comes under pressure. right now we're in a void of information until the october 10th event around autonomy. it's clear unclear how you solve the automotive problem with the margins and clear can what the path forward is to reinvigorate demand around the new vehicle. >> tom, do you have a response to that in terms of figuring out problems and how important is the event on october 10th going to be? >> i agree with everything that jeff said. i think this is a near term challenge stock. that event will be important but i think unfortunately after the

conference call we heard yesterday from elon, a lot of the language was very high level. not a lot of concrete things. a lot of questions on the call about regulatory overhangs. not sure if we had clear cut answers there. but the narrative has changed on the stock. we are seeing folks who are more interested in the robotaxi narrative. remember it's a retail stock. a lot of folks are into the narrative of the stock. so it could be important just to drive the thesis even if we don't get something really concrete. but i agree with a lot of what jeff said. >> jeff i'll come back to you. obviously to tom's point we heard about storage for energy which is an important component growing quickly. we heard about robots and most importantly full self-driving but back to automotive margins, what are your expectations in terms of what we're seeing in in the market right now and production related risk that goes along with that? >> certainly the market is

extremely competitive entrants domestically and in china. unclear what the margins are for the company they didn't touch it with a 10 foot pole on the call. so the legacy autobusiness or classic autobusiness and it comes down to october 10th, is there any reinvigoration or refresh of the model 3, model y that can stimulate demand. they backed off the mexico facility and any new purpose vehicle, that would be a structural vehicle so it comes down to autonomy and what the path forward is there. which wasn't addressed on the call. >> why have a buy is it based on you're a believer in the initiatives that were dised in the call? >> yeah it's not the stuff in the call per se but it's the narrative on autonomy. i'm a firm believer in autonomy.

the robotaxi thesis i think it's a multitrillion dollar opportunity above where the auto industry is today and their ability to -- >> we lost tom. >> i was listening very intently to what tom had to say there. >> jeff we still have you, right? >> i'm here, can you hear me? >> i wanted to ask you about some of the political considerations here. it came up with regard to the mexico factory and some questions about who wins the election, former president trump has threatened tariffs on auto production in mexico that's a factor. the $7,500 ira credit, a driver of demand. how do you look at the political risks for a stock like tesla especially with musk now supporting donald trump? >> he was all over the map on that topic. certainly the mexico facility and one built in india were the two that had been talked about to structurally improve the cost

structure with their unboxed process, a new way of making the car. now the company has too much capacity relative to demand affecting the margins. we need to see not only what musk calls the machine that makes the machine or a new way of manufacturing, a new way improved tech advantage to improve the car margins but i'm still of the view that today evs are more expensive than comparable cars. i think we need a glide path on tex credits to stimulate that demand from society. so if trump is elected and we roll back the 2027 epa targets clearly it helps some of the oems that have not made the investment in the ev space, others talked about bumping the brakes which makes sense given the anemic demand out there.

the question is what happens with the model three and the y and what's the path forward with a new vehicle to stimulate anything from here. >> jeff, tom thanks to you as well. we'll have you back soon, guys, appreciate it. z. still to come on the show, a read from the ground when it cos meto housing. what the ceo of taylor morrison, fresh off the earnings there. and off of disappointing new homes data earlier this hour. we'll be right back.

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potential home buyers being held back by high rates with mortgage demand at a five-month low. home builders are reporting an increase in closings. the next guest company upping the full year forecast. joining us is taylor morrison ceo, cheryl palmer. welcome back good to see you. >> good to see you. thanks for having me. >> thanks for being on. what are you seeing right now with regard to activity given the lower but still high

mortgage rates? >> fabulous question. we just reported our second quarter earnings this morning and our sales were up year over year just about 3%. i would say we're moving back to more seasonal normal patterns, sara. we saw kind of a peak in april with our sales with some modest moderation into may and then into june. i think when we saw interest rates move in may we saw some signs from the consumer, some trepidation but honestly as we've seen rates come back to where they were, honestly we've seen a good pick up in traffic. and in activity. >> because the bulls are zeroing in on the increase in your gross margin guidance and the unit closing guidance. so what's driving that? >> yeah. once again, given the velocity that we saw in the first half of

the year, it did allow us today to increase both our closings as well as our gross margins. we took the midpoint of our cl closings up a few hundred units. and the margin growth we have seen honestly has been with us for the best part of the last six or seven quarters right around that 24% and that's what we've seen year-to-date and expect to hold that through the balance of the year. some of that is, you know -- is certainly kind of relies on the incentive environment based on interest rates but even as interest rates moved a little bit in the second quarter we saw a reduction in our incentives. >> so what does inventory overall look like? it that's been the prices of why prices have remained so high. is that changing? >> it really is, sara. i think unfortunately what we hear about is kind of this

supply and what's really necessary is to get into the detail of what that supply looks like. we gave a few examples this morning on our call but nationally i think the inventory is somewhere in the low 4s. i've seen anywhere from 4-1 to, you know, just over maybe close somewhere around 3. on honestly, it was a little higher earlier in the year. we saw inventory closer to 4. but we've gone through a great deal of analysis understanding what that inventory really looks like. a great example of that is there's been a lot of discussion around southwest florida, naples. we saw ourselves double year over year in naples. and when we look at the inventory, you know, one of the examples that i think really helps everyone understand, and some are like, call your county, when we look at south collier county, we're seeing nearly ten months of inventory. when we look in northwest call ye

iers county, we're seeing just over four months of inventory. we've actually seen inventory drop across the board since earlier in the year. and when we really break up that inventory and look at, you know, price point, true competition to what we're selling, price points, square footage, the vintage of the inventory, which on average across the country is about 40 years, we see a significant reduction in competitive inventory. so a long way to say, it's really not impacting. something we'll keep a close eye on, but really not impacting on the sales floor. i think the consumer is really preferring new today, given the quality and location of the inventory. >> interesting. sheryl, is there anything regarding land cost or development cost that would prod you to do something to average square footage or move into a different price point? >> you know, we've seen our kind of consumer sets move a little bit, carl. we continue to inch up on that

first-time buyer, because there's such a need, but we have to be careful, because they're the most sensitive from a qualification standpoint today. so we work with them very, very closely on programs to help them get to a mortgage payment they can afford. when we look at square footage, it is interesting, we've seen a modest quarter over quarter and year over year, a slight change, maybe 50 square feet in total down. when i look at expectations for the year, it's generally same year over year. and we haven't seen more than 50 square feet in kind of difference over the last many years. b what points to that more than anything is our to be built, maybe our move up, our first, second moveup, they're continuing to want more square footage, put in the options on premium lots. we're actually forcing the square footage down with our inventory, because generally,

that will serve our first-time buyers. >> sheryl, thank you very much for joining us with some of the color on what you're seeing. appreciate it. >> thank you. good to see you. take care. >> you too. sheryl palmer of taylor morrison. coming up this morning on "money movers," terry duffy breaking down some of the earnings from that name. where the broader markets go from here. plus, we'll get some more on the movers you mig he ss da a there have been a ton, as a third of the s&p reports this week. stay with us. unsung catalyst for bold. what straps bold to a rocket and hurtles it into space? boring does. boring makes vacations happen, early retirements possible, and startups start up. because it's smart, dependable, and steady. all words you want from your bank. for nearly 160 years, pnc bank has been brilliantly boring so you can be happily fulfilled... which is pretty un-boring if you think about it.

i did want to note one of the few significant gainers this morning on earnings is at&t. the company reporting numbers, revenues $29.8 billion. equipment revenue -- with equipment revenues, down 0.3 billion. but overall, a positive response in terms of the growth of post-paid wireless, churn staying at 0.7%. generally for the industry at this point, people seem to stay with their carriers perhaps more than they did in the past. free cash flow is $4.6 billion. that does still include about $700 million from directv. remember that deal, of course, quite some time back. and they are levered about 2.9 times, with the target being 2.5 times. not seeing an impact, as verizon did from the affordability

connectivity program, affordable connectivity program, which is being phased out, and will help pay their wireless bills. overall, a positive quarter. speaking to the cfo earlier, also saying, there does not seem to be any credit issues a amongst their many customers. and john's thanking the company's ceo on the conference call. also, at least, putting a bit of doubt on whether there's going to be a significant upgrade cycle given ai capabilities that will be a part of many of the new phones that come to market. speaking of markets, we've got a lot more coverage of them straighthe. aad at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real. you are bountiful. your skeleton can support two times your weight. it's in your nature to stand strong. supplement your bones with high-absorption magnesium.

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good wednesday morning. welcome to "money movers." i'm carl quintanilla with sara eisen here at post nine of the ngoc stock exchange. cme chief terry duffy is here with this record revenue. >> plus, an inside look at the state of the consumer with the ceo of fiserv. plus, reaction to quarterly results. the share's up nearly 20% this year. then, longtime tesla bear toni sacconaghi on the drop in shares and this 12% fall in auto revenue. we'll talk some margin.