>> "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen. andrew is off today. we are getting ready for the olympics. you had soccer, you had rugby, you had water polo take aing pl yesterday. you have riotous situations they had happen, but taken place. >> nice piece of what france is trying to do in terms of security. never been this threat to olympics turns paris into an open-air fortress.

we got that going for us which is nice. i think the bears in tech stocks won a gold medal, do you not? >> i think they probably did. technology stocks really taking a beating yesterday. the worst level we've seen since october of 2022. >> a crappy month. >> if you look at the equity futures this morning, you are not seeing a big bounce back. nasdaq futures are indicated off another 50 points. you have the s&p futures down 6. dow futures are higher. indicated up 47. it was the s&p and nasdaq that were the worst performer yesterday. yesterday, the dow was down 500 points. it was the relative winner. decline of 1.25%. the s&p was down by 2.3%. you had the nasdaq down 3.6%. all of the losses followed under w wheming reports from tesla and

ford. these were great performers. that is not the case for what we saw yesterday. all of the major tech stocks fell yesterday. nvidia down 7%. meta platforms down 5.6%. microsoft was down by 3.6%. we'll be getting more earnings next week. microsoft and meta and amazon and what they have to say about what is happening with the cloud. i was talking with steve kovach. he said if those companies say what we heard already from alphabet in terms of the cloud, you could be facing issues. his point was for alphabet, they spent $12 billion to win $10 billion in revenue from the cloud. it is all of the hope for a.i. that has not materialized in terms of profits and sales. you wonder how long investors will continue to wait and see what happens. >> that is the big question. you are putting a lot of money in and are we sure it will

payoff? we just heard steve talking about sundar pichai who said he would rather spend more than less and not enough. >> you don't want to lose the race, but don't want to be in the position meta was in. >> following everyone off the cliff. everyone else is doing it. >> is this when facebook turned to meta and the spending or is this different? >> or like '99 where we got so excited and it was a huge deal. it changed. >> the dot-com bubble. >> internet changed our life. >> it wasn't the players that were there. >> tech stock sock puppet. >> we don't have that yet. to this point, it has been different for these companies. you have companies investing and using the cloud. >> who is the one person you like to talk to about the overall averages this morning? >> tom lee.

is my wish your command? i haven't seen him yet. >> he's here. he'll be on soon. within the next 10 or 15 minutes. all right. the small cap russell 2000 index was down 2% yesterday. just talking about his call on the smap ll caps. do you have people who are starting to question and wonder about that. we will talk to him about that in a moment. treasury yields. the ten-year at 4.22. the inverted yield curve with the two-year above the five-year and ten-year. you want to look at the spread with the two-year and ten-year? here is where it stands right now. i think it was something like almost 13 basis points on the inverted spread. >> shares of ford tumbling. earnings of 47 cents a share

missed estimates of 68 cents. company maintained its full-year guidance. that's a really big move for $12 stock. disappointing investors who are expecting a hike after gm raised guidance earlier this week. ford said profitability, if they had better revenue than expected, but worse earnings. it was warranty reserves they had to increase. that's used to pay for vehicle issues. the company and its cfo did not disclose warranty costs. he said they were $800 million higher than the prior quarter. the company is making progress on raising quality and reducing complexity which would reduce the warranty costs in the future. i have a ford which i like a lot. a lincoln edge. the reason i'm saying that is because you remember what ford used to stand for and everything else. >> no. >> found on road dead.

all those types of things. the quality issues from a different life. this lincoln navigator -- it's my favorite car. i need to put that in. i started laughing. there were other ones about what and you remember fiat. >> i remember fiat. >> i think we don't need to tell you. it's a funny one. it is not chrysler anymore. stellantis. it is, but, you know. jeep maker stellantis. shares are falling. company reported a 48% drop in profit in the first half of the year citing reduced volumes and lower market share in the u.s. let's get a check of tesla. the most important automaker that we follow now in terms of stock market action. shares dropped 12% yesterday.

added to the malaise and hundreds of billions of dollars of market cap lost in the stock market and nasdaq specifically. the stock market briefly turned positive for the month, but now given back much of the gains. it is a volatile name for sure. elon musk was at the netanyahu speech yesterday. sitting with one of the hostages. yeah. >> he had gone to israel and visited. sd >> he had. i tweeted something out. him being there will somehow sc generate more hate from the left. i tried to connect the dots. i'm at a loss. >> he went on a listening tour. people were angry at him for comments he made. >> yesterday, i tweeted this out, too. the unc frat bros that held the

american flag up. half the room stood and applauded and the other half sat there. they didn't sit on their hands. it's weird. who votes for those? why can't you stand up and applaud for the american flag? you saw what happened to the american flag afterwards. pictures of it being burned. it's a strange place we find ourselves in right now. >> it's a fraught time. >> 100 democrats there out of the house. >> netanyahu is spmeeting with e president and vice president today. it was not well attended. >> no. it was, not by democrats. jd vance wasn't there. he was campaigning in the midwest. massie wasn't there.

he is against funding ukraine and israel. in general, it wasn't republican. shares of ibm are higher this morning after earnings came in at $2.43 a share. street was looking for $2.20. revenue also beating estimates and the ceo saying the company's book of business for generative a.i. now stands above $2 billion. that number was above $1 billion in april. on the call, the company remains confident in the positive macro outlook for technology spend overall. that stock up 4.1% this morning. there is a bright spot when it comes to technology. shares of chipotle mexican grill are higher. earnings and revenue ahead of estimates and same-store sales rose a lot more than analysts expected. traffic jumped 8.7% despite backlash on social media fueled

by customers who said their burrito bowls are smaller. shrin shrinkflation. the company denied it and the company is training to make sure food items are made consistently and correctly. >> i don't know if you have seen the hacks to give them extra scoops. people who do this on social media. here's the way if you order in this way and say i want this, but i don't want that and you can get extra portions of it. the company is probably trying to make sure it is consistent throughout instead of being able to hack the system. >> the one tricky kn i know is are supposed to ask for french fries without salt. you put your own salt on them. >> i like the way they salt them. >> you can do that. just put a lot on. >> i don't want that much. >> that's the only tricky know. don't mess with my burrito bowl.

>> there have been angry videos. you are not giving me enough. >> i need to take a half our and 45 minutes to set it aside. >> to get through? >> yeah. to get the food. it's okay. too much cilantro. >> nobody goes there? >> it is that or the people are slow. ceo brian nichol said we have leaned in generous portions. do we need generous portions across all of our restaurants? it is a core brand of chipotle to make you fat. the company is gaining market share and transactions grew across every income level. that butts the trend from mcdonald's which said low-income customers are pulling back on spending. southwest announcing big changes and phil lebeau is

joining us on the squawk news line. hey, phil. >> reporter: becky, this is the change in the way southwest will do business next year. the company, for the first time in the 57 years of flying, will offer assigned seating. it will also be offering for the first time ever, business seats. business class seats with extra legroom. you are looking at a differentiated cabin as opposed to everything we have seen since 1967 on a southwest airlines plane which is one type of seat throughout the entire plane and noassigned seating. that is changing. the response to the southwest management to the activist group which has said these guys can do better and must do better. bob jordan and gary kelly should be fired. we will talk with bob jordan later on "squawk on the street" following the release of q2

results. again, a dramatic change for southwest airlines. next year, it will offer assigned seating and business class seats with extra legroom. guys, back to you. >> phil, southwest has always kind of lagged minbehind any ofe other airlines and proudly so. saying we will not charge customers for these things. what you see is what you get. i was interviewing herb keliher and said the big three would charge you to check your bag. i forget if it was $25 or $50 at the beginning. someone came in while i was sitting set waiting to talk to him about this and we told him the news. he said no, way. he laughed and thought that was the way southwest stood out. for a long time, it was. the idea of no frills and keep costs low and no bilk you.

this is last vestige of them holding back and looking for the revenue. this push from investors to say we want more. just some really interesting transformation on the way. >> reporter: bags fly free has been wildly popular for southwest airlines not just as a marketing term, but southwest customers, loyal customers love they don't have to pay for their bags. you hit on the key point. we're in an era now when it comes to the airlines where revenue generation has to be front and center. as part of that revenue generation, southwest has been forced to say, what can we do? we're not charging for bags. we're not going to try to nickel and dime people with ancillary charges which you see on the lower end of the airline market. what is it that customers want? southwest clearly believes that

assigned seats and business can class seats with more legroom is what their customer base will embrace. i think there is probably some valid arguments there that there are people within the southwest sphere of customers who would like that who fly for business. you know what? i'm not crazy of standing in line here if i can board early. i want to go one place to another and know i have a seat waiting for me. don't forget, elliott management is putting impress mmense pres southwest. not that they were increasing revenue, it was already down the path. this is the world they are in right now and that is why you are seeing the dramatic changes. >> phil, thank you. big news. it will be followed by more big news. we will see phil later this hour wore southwest earnings and american airline earnings we are getting today and still questions of what is going on with the airlines getting back

up and running after the i.t. global outage last week. >> i said how much i liked my lincoln. >> yeah? >> and farley and the company. >> yeah. >> the other one was fix or repair daily. >> oh, right. yeah. >> we don't say it. no one says it anymore. >> that's not true. >> the quality is there. >> i had a ford explorer i really liked. >> i like them. this is my third navigator. i love it. it's almost self driving. close on a long drive. crews control is amazing. up next, tom lee will join us to talk about yesterday's selloff. as we head to break, honeywell reporting of $2.49 a share. revenue of $9.58 billion. for the full year, honeywell is lowering guidance for earnings now to 10.05, but raising ref

flew guidance. take it all into aouccnt. down 3.13%. we're coming right back. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley power e*trade's easy to-use tools make complex trading less complicated. custom scans can help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley

dave's company just scored and stay on top of the market. the comcast business 5-year price lock guarantee. high five! high five! -i'm in a call... it's 5 years of reliable, gig speed internet... five years of advanced security... five years of a great rate that won't change. yep, dave's feeling it. but it's only for a limited time. five years? -five years? introducing the comcast business 5-year price lock guarantee. powering 5 years of savings. powering possibilities. all right. on today's "squawk planner," we have key data due at 8:30 a.m. eastern time. we get the first read for gdp for the first quarter. forecasters expect growth of

1.2%. we expect jobless claims and durable goods orders for june. we will hear from hasbro, nasdaq and southwest airlines and american airlines. all of that coming before the opening bell. we will have an interview with robert isom after that company reports. we will speak to nasdaq chair adena friedman after that report. our next guest is tom lee. thank you for being here, tom. i don't know you need an introduction at this point. people tune in to hear and it is almost like a salve. i think you will give us a little bit of that today from our wounds yesterday. not entirely. you think the s&p is probably going to be flat for august overall. >> yes, that's right. >> that's unlike some of your recent calls about the s&p with friendlier inflation data. you made some calls about some big near-term moves.

that's not what you are saying today unless you are talking small caps. >> that's right. part of what we saw yesterday is the rotation which is painful away from large caps. i think tesla earnings and google exaccelerated some of th. i think there is uncertainty about the fed's commitment to cutting although we expect inflation to fall like a rock. when the fed cuts, it is good for small caps. i think overseas, that is unwind in the japan carry trade that hurt the nasdaq. to me, this is why the s&p had a great first six months. maybe it needs to consolidate those gains. now russell 2000 has 11 pe and earnings growth of 800 basis points faster. it just posted 11 days where 10 of 11 days had a 1% move. the nine times it did that since

1979, when you weren't in a bear market, we are up one month, six months, 12 months later. >> you are very popular. i would warn that this is not good you are saying this. you think the rotation is driven by expectations of a trump white house? is there another way to say that so you don't have to devlve int it? you think trump will win the white house or the betting markets? >> the second. the betting market of a 65% trump white house. the biggest beneficiary is m&a and small cap stocks. >> that's the link. you think we have seen a trump trade. even after the betting markets have moved somewhat, he's come down. vice president kamala harrishas

moved up since the weekend when the news came out. you still think that's at play from here on and not just to explain the rotation that we've already seen and you think it will continue? >> that's right. from this point forward, there is an opportunity in msmall cap. part of that is when the fed cuts, that is good for small caps and the regional banks. it boosts m&a. there is a lot of overlap with the fed cut imminent and trump white house. that's why the interplay is positive for small kacaps. >> i still don't understand. you don't think the large caps are done. you just think it's a slowdown for the s&p 500? >> that's right. i think the mag seven was very attractive at the start of the year because growth was scarce and they had great visibility. they're not expensive.

27 times earnings isn't demanding. now there's a visible catalyst for small caps, investors are taking profits. nasdaq was up 20% and putting it in small caps. >> we were talking earlier about the mag seven in particular and the spending on the cloud. if alphabet's results are indicative of what we will hear from microsoft and amazon next week where it comes to the cloud where they are spending more than what they are able to bring in at this point, is this a problem? it feels there is a little bit of a sentiment shift even if it is a brief one and early on. >> i agree. i think perception is important for equity valuations. the money spent by the companies in a.i. has a high expected return because they have moats that are getting stronger. there aren't companies like this anywhere else in the world, so they're very scarce. i don't think it is wasted

capital. if investors want free cash flows and 11 pe stocks, that is becoming attractive. >> flat s&p, but russell or small cap gain of 15% in the month. >> yes. that's right. i think for the month of august, small caps can do something -- more than 15% even because they under perform dramatically and the type of move we have seen in the last two weeks is something that only happens at the start of the pretty significant advance for small caps. >> do you think the earnings that we see for the big caps will they continue to confirm your case that maybe -- could anyone blow their results out of the water and change this for big caps and say, wow, we're wrong and things are still okay. yesterday was 600 plus points. it had a lot to do with

earnings. not completely. it seemed like it was ready to happen anyway. do you think there will be surprises in that group? >> i think so. at the end of the day, i don't think these companies are not capable of positive surprise. a lot of good news was baked n. the line in the sand ultimately will be nvidia when they report. they are the last one to report. over the next ten years, the outlook is good for all these companies. i don't think investors should lose faith. profit taking doesn't make sense. >> i think we will continue to have you back on. you have been so good with the markets and that other stuff. i'm going to make sure that happens. >> thank you. >> you're welcome. all right. when we come back, some more big stock movers to tell you about, including another drop for luxury stocks. that's next. roight now, as we head to

break, look at squawk stack. gold and bitcoin prices are pulling back. we are watching shares of viking they'r they'r therapeutics. we'll be right back. tamra, izzy and emma... >> announcer: squawk stack is sponsored by principal. let our expertise round out yours. 't "c e back" they're already there. they wear business sneakers and pad their keyboards with something that makes their clickety- clacking... clickety-clackier. but no one loves logistics as much as they do. you need tamra, izzy and emma. they need a retirement plan. work with principal so we can help you with a retirement and benefits plan that's right for your team. let our expertise round out yours. (aaron) i own a lot of businesses... so my tech and my network need to keep up. and benefits plan that's right for your team.

thank you, verizon business. (kevin) now our businesses get fast and reliable internet from the same network that powers our phones. (aaron) so whatever's next... we're cooking with fire. (vo) switch to the partner businesses rely on.

♪exciting music.♪ [mud splat.] [bird squawk.] and that's why i never drive those guys. the party's over big guy! we're tired of hearing “i don't wanna get my truck dirty.” with weathertech laser-measured floorliners front and rear... a seat protector ...and full bed protection... trucks are totally covered. you just got weatherteched. yeah, buddy. let's get dirty. [bikes in mud.] drive worry free with these american made products at weathertech.com. we're here for adama. just like she tries to be there for her children. always watching. loving. so when adama's eyes were failing her, we became her eyes, removed her cataracts, giving back her vision,

so she could see her children grow up. because we're here for adama. welcome back, everybody. shares of gucci owner kering plunging in europe right now.

it issued a weak forecast for the second half. you can see that stock right now down by more than 7%. kering said there was a marked deceleration in china and trends did not improve in north america and europe. that is a repeat of what we have been hearing in the recent weeks. luxury stocks are lower across the board this week because we heard this again and again from just about everyone of the luxury retailers who has come up. lvmh was down sharply earlier this week. it is down 4.25%. kering is down significantly at 11.5%. hermes is down close to 3%. >> i need to know whether it's more than just not as good as last year because that's what they're saying. china emerged from the pandemic and people had pent-up demand and bought a lot of stuff. the comps a year later are not as good. is that all it is or actually --

>> it is more than that. if the comps were not as good -- s >> that's what i mean. i think china is weakness in luxury. it is double digit. mostly china. >> china is the big issue. >> not japan. that area of the world, but mostly china. >> they were behind in terms of coming out from the pandemic. >> still lockdown. shares of viking therapeutics soaring. the obesity drug is advancing to phase three trials. everybody needs it. >> thank you. >> every company needs an obesity. >> you said everybody. >> many people in this country. positive early trial data and notes by analysts who said viking's weight loss treatment could be best in class among injectable drugs. that's strong. that includes lilly's zepbound

and novo nordisk's wegovy. for people who actually have diabetes instead of weight loss. viking plans to begin a phase two study for the oral version of the drug later this year. i'm telling you what still works is you don't eat anything you want to eat. you eat everything you don't want to eat and you will lose weight. you never feel full because you can't have anything you want. you can't have bread, crackers, pa pasta. you can have a little bit of peas, but can't put it on a cracker. >> vegetables? >> you can put it on peppers or something like that. you never feel full. you don't have carbs, you never feel full. >> i found a recipe. cottage cheese on parchment

paper and seasons on that. >> my wife has a recipe for bagels that are not made of flour. made of yogurt and everything bagel stuff on it. you bake them. i don't eat cottage. curdled milk. it is like snacks. you don't have to eat that many of them. you need to lose weight -- not you. people in general -- people in general need to lose weight especially as you get a little bit older. i can do five things. ap apnea, high blood pressure,

diabetes, asthma. all these pills. you have to put six things in there so you don't screw up. you don't need one of those if you lose weight with the smaller burrito bowl. >> that's why the glp-1s are so hot right now. >> i'm not going to do it. let's get to southwest airlines. they are just out with the numbers. phil lebeau lhas the report. phil. >> reporter: becky, this is the beat on the top and bottom line from the second quarter. the company earnings 58 cents a share. the estimate was 51 cents a share. $7.35 billion in revenue. better than the $7.32 billion. they cut the guidance revenue per seat mile. it was down in the second quarter. better than the previous guidance. still a drop compared to earlier in the second quarter.

q2 cost per seat mile up 1.8% versus the second quarter of 2023. the big news from southwest, they are changing courses or changing course in terms of how it will handle seating. assigned seating in 2025. premium seats with extra legroom and the company will be offering redeye flights for the first time. all of this starting in 2025. in terms of the company's capacity for the third quarter, that is what a lot of people are focused on. it is going to be up 2% compared to the third quarter of last year. in the fourth quarter, capacity will be down 4% compared to the fourth quarter of last year. that's the drop in capacity that many in the industry have been expecting. not just at southwest, but other airlines as well. the company says it expects to take delivery of 20 737 max planes in 2024. they are obligated to receive 58 for the year. this is fewer than what they expected from boeing.

don't forget, we will talk to southwest ceo bob jordan on "squawk on the street" at 9:30 this morning. you don't want to miss what he h has to say about the second quarter and guidance for the year. this is a big change for southwest announcing offering assigned seats and premium seats starting next year. a change that you probably ever expected from this airline, guys, but southwest for the second quarter beating on the top and bottom line. i'll send is back to you. >> phil, can we talk a little bit more? guys, show me an intraday chart for southwest. it looks like the shares are off by 2.6%. i want to look at the tick by tick. you brought us the news before the news came out. it looks like the chart won't show us. the stock is down 3.4%. it picked up. looking at this here, you see it picked up with the earlier announcement that you came on to

talk about actually assigning seats and charging up for selling business seats and sold off after that. i guess there will be a lot of questions of what to expect. down 4.25%. this is the knee-jerk reaction. there will be questions associated with those larger plans and what is happening with the earnings. >> all of this is discussed with bob jordan on "squawk on the street." in terms of revenue generation, assigned seating is going to help southwest. as you pointed out earlier, for 57 years, they have been doing business a certain way and its worked. generally speaking, it has worked for most of the 57 years. now they have to change course and that's what they're doing. >> it's weird admitting. concession. we have to change. we have to change in this world. you know what? it's weird, phil, so many other

guys you interviewed that are running these companies. they're not shy about saying, yeah, we're going to cater to people that have money. it's weird. we will have more of the beds. more first class. better lounges. in a time where you are supposed to feel bad about having all those things. they are embracing it almost. >> the demand is there, joe. that's what i would say. this is not a case where they have said, look, we're not interested in the basic economy market. southwest still has tons of basic economy seats. the demand is there for premium products. you have to meet that demand. if you don't, you shouldn't be running an airline. if the demand is there, you meet the demand. >> exactly. all right. thank you, phil. coming up, much more on the airlines. american airlines ceo robert isom will join us in the next

hour after the company reports. we get to see phil again. next hour. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai.

(♪♪) car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

the long rumored nba media rights deal was announced yesterday. disney, aemazon and comcast wil pay $76 billion to secure broadcasting and streaming rights for games. the nba rejected warner bros. discovery's bid. it believes the league misinterpreted the contractural rights. the deal includes nba games. the deal is reportedly $200 million per season. that's weird. more than three times the current deal, but figure it out.

11 years. 2.2 billion out of $76 billion. i hate to say it. >> it's a growing portion. >> i know. it's nice we added that. it's definitely an nba story. what i got out of that story was reading about peacock. peacock will be able to p propriatarily. remember the nfl game they streamed last year. the peacock subscribers are up 38% from last year. now this is a tentpole. the olympics, too. to have this for 11 years, if you want to watch these games, you need peacock, i think. this is great for, obviously, for the parent company. >> you understand why zaslav is

saying it. >> it is not as lucrative a deal that warner bros. was offering. >> a right to match the over. was that there? >> does it match? >> the question is are they allowed to match with the streaming rights? that is where the question comes down to. what i will say, amazon put in a poison pill and angreed to put the entire amount in escrow more than $5 billion. >> you want to compete with comcast and disney? >> they should say they should match the amazon portion. amazon put in a poison pill. i don't know why they put in a poison pill if they thought warner bros. puts in. there will be legal action

taking place with this. all it does is tells you how valuable these properties are and how much people are willing to go after this content. when we come back, we'll talk about how to take the emotion out of investing. sharon epperson has that story. as we head to ea l'sbrk,et look at the major currencies this morning. we'll be right back. >> announcer: currency check is sponsored by interactive brokers. the best informed investors choose interactive brokers.

energy fuels, a leading american uranium producer, is ramping up production to supply expanding nuclear markets and diversifying into rare earth elements, key ingredients in many clean energy and defense technologies. energy fuels. morikawa on 18. he is really boxed in here. not a good spot. off the comcast business van. into the vending area. oh, not the fries! where's the ball? anybody see it? oh wait, there it is! back into play and... -oh no, it's in the water. wait a minute. are you kidding me? you got to be kidding me. rolling towards the cup, and it's in the hole! what an impossible shot brought to you by comcast business.

after the s&p 500 and the nasdaq posted the biggest one-day slide since 2022, you can expect more market volatility over the next few months. that's what strategists say, especially ahead of the u.s. presidential election. many investors are anxious about what the election outcome could

mean for their money. and that's where we find our sharon epperson. she joins us right now with some ways to calm those jitters. hi, sharon. >> hi, becky. a lot of people are worried about their investments right now, according to a survey from betterment, more than half of investors are feeling anxious about what the upcoming election could mean for their portfolio. and 40% of them expect to move or pull some of their investments based on who was elected. i talked to a few financial therapists about how to keep election jitters in check and what to do to emotion-proof your portfolio. here's what they recommended. first, picture your goals, literally. financial therapist erica wasserman recommends posting a photo of what you hope to achieve with your investments on your front door or office, a picture of a house, a business, where you want to retire, that's your vision. separate fact from fiction. write down what worries you about your finances and investments, mark it with a t or f, true or false. deal with what's true and what

is necessary to help you reach your doles, your goals, put aside everything else. third, take control. keep in mind your time horizon and spread out the stressors. megan mccoy recommends s writin down what stresses you and write down the steps in your control that you can take to address the issues and use that exercise as an outlet for your stress and anxiety. you can find out what more you can do by scanning the qr code on the screen or go cnbc.com/yourmoney. >> what are some of the misconceptions that can exacerbate the concerns that investors have? >> i think a lot of people have a lot of what if scenarios they're running through, based on what they're hearing from politicians about what the promises are. that's not policy. that's not necessarily going to happen and will take a while for that to be implemented. also, one person wrote to me and said i'm going to park my money in cash until this is all over. no. make sure you're diversified, make sure you understand that

there is going to be a lot of volatility ahead of the election, but history shows that we actually see stocks perform pretty well after the outcome. >> sharon, thank you very much. >> sure. when we come back, some new polling data on the race for the white house, following president biden's decision to drop his bid for re-election. "squawk box" will be right back. energy fuels, a leading american uranium producer,

is ramping up production to supply expanding nuclear markets and diversifying into rare earth elements, key ingredients in many clean energy and defense technologies. energy fuels. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

new polling this morning from change research on the race for the white house in the wake of president biden's decision not to seek a second term. joining us now, betsy app, change research lead analyst in 2020. change research was shown to be among the most accurate polling in battleground states for the latest poll, a total of 2,137

interviews were conducted with registered voters from july 22nd to the 24th. the model margin of error is 2.4%. and here are some of the results. if the election were held today, who would you vote for, this was before the debate on june 27th, and former president trump was up by four points. a month later, in the 2024 election held today, who would you vote for, harris 44 and trump 43. and that's not totally different than what we have seen, betsy. i'm looking at the rcp results from today. and confirming or at least similar to yours was the reuters ipsos which had vice president harris up two, but immediately, i think you saw this, people said, all right, the sampling of that group, there were 402 democrats and 361 republicans that were sampled. do you have the same breakdown in yours? do you know how that broke down

in your samplings? how many republicans versus how many democrats? >> that's a great question. and we don't really know what the electorate will look like in november. that's one thing that's really reshaping right now in the wake of biden's announcement that he's withdrawing from the presidential race. and so, we're trying to model what we think that electorate will look like. we're seeing increased motivation among some key groups of voters. in fact, 44% of the registered voters that we interviewed are saying that they're more motivated to vote in the wake of biden's withdraw and harris' near certain nomination. so, i think all of us pollsters are doing our best to predict what that likely electorate -- >> i was asking whether you knew of the -- this poll that you just told us about, where vice

president harris was up by -- do you know the political affiliation of the sample that you used? here's the reason i ask. if you look at the rcp average today, the cnn -- the average has trump up 1.7%. cnn up 3. npr, up one. the reuters poll had vice president harris up 2. but then quinnipiac, trump up 2. n consult, trump up 2. yahoo! a tie. forbes, trump up 6. cbs news, trump up 3. fox news, up 1. emerson, trump was up 6. so the reuters poll, you could call it almost an outlier, not an outlier, but they did oversample democrats. did you oversample democrats in your poll? >> we did not oversample democrats, no. i think one thing that is really -- >> so what were the numbers. >> -- to wait on -- >> what were the numbers that you did for political

affiliation? >> we don't ask people's party affiliation, but we do ask who did you vote for in the 2020 presidential election. what we're finding is that that is a key variable in addition to other demographic characteristics, geographic characteristics, that help us understand who the likely voters will be. >> definitely a lot of -- the enthusiasm is matched now. that was a problem with biden and it is definitely trump voters are much more enthusiastic, but now maybe even on democrats, maybe they may exceed the enthusiasm. >> i was going to say, when you ask them what they voted four years ago, then you try to match it up for even number of biden and trump supporters from four years ago? >> that's exactly right. yes. so, biden won nationally by roughly four points. that's what we're seeing in our polls. i'm sure that's what the other pollsters are seeing as well. >> how often do you take these

measurements and how often do they change, i guess? if i'm looking for a vix measure, a volatility measure as we would say for the stock market. >> sure. yeah. we're measuring all the time. rarely do we see shifts of this magnitude. in fact, it is exciting to see, frankly, as a pollster who has been measuring this race that has been largely stagnant january through up until the june debate. >> do you -- there was an interesting -- i think i saw it -- i read so much, but buttigieg is still the favorite. the core democrats, right? and although mark kelly is getting a lot of attention as well. do you have -- what do you think finally happens there? do you have poll numbers on what should happen, betsy? >> we do. well, we do. i think there are a lot of variations that go into selecting a running mate. among voters, voters are

excited, 23% say that they are excited about the possibility of transportation secretary pete buttigieg being kamala harris' running mate. but not too far behind is u.s. senator from arizona, mark kelly, with 20%. i will say that mark kelly's support among voters is more regionally specific. it is more driven by voters in the southwest, voters in arizona. >> yeah. trying to -- there is a lot that goes into it, right? you don't want to necessarily take a popular senator away from a state, necessarily, or a governor. pennsylvania is such a huge -- >> that's a big decision in arizona, absolutely. >> and if you could do -- if you could guarantee pennsylvania for vice president harris, i mean, that would be an important thing to do too. but then you got -- you got all the implications of taking the governor, popular governor out. betsy, we appreciate your time. we'll see you again, i'm sure. we have 100 days -- >> thank you for having me. >> you're welcome. american airlines just

reporting, phil lebeau joins us now with more. >> joe this is a beat on the bottom line for american airlines in the second quarter earning $1.09 per share. the street was expecting $1.05. it fell short of revenue estimates. quarterly revenue for the second quarter came in at 14.33 billion, just shy of the estimate of 14.36 billion. the metrics within the quarter, revenue per available seat mile down 5.8%. costs per available seat mile excluding fuel, down 0.1%. operating margin of 9.7%, free cash flow $850 million. and then there is the all important guidance, and this is the reason you may be seeing shares of american coming under pressure, in the third quarter, the company expects its capacity to be up 2 to 4% compared to q3 of last year. for the third quarter, it expects to be approximately break even, that is well below what the street was expecting, coming into today. they were expecting 44 cents a share for a profit in the third

quarter. and american is slashing its full year earnings guidance, it now expects to earn between 70 cents and 1.30 for the full year. the previous guidance from the company was to earn between $2.25 and $3.25. lots to discuss with robert isom, ceo of american airlines, we'll talk about where the company is in its effort to rebuild. a lot of business that was lost as they changed the way that they were doing their outreach and reservations and business, especially the corporate customers. we'll discuss all of that with him along with the company's new guidance. again, a big drop in guidance for full year, 70 cents to 1.30 profit is what they're expeexpect i expecting. guys, back to you. >> you're so much better on camera. the first two times you were here, looking at this picture -- good picture, really a good picture, but so much better to see you, you know, moving

around, talking. >> the hamster wheel wasn't going, the camera was not up. it takes time. >> i thought it was an alarm clock issue. >> not on phil's part. >> it was not an alarm clock issue. >> little squirrels in the alarm clock. thank you, phil. good, he always gets -- coming up, nasdaq ceo adena friedman will join us to talk quarterly results. the ipo, big one today, we'll talk about that later. and much more. and then later, we focus on the magnificent seven, all of those stocks fell by anywhere between 2 and 12% yesterday, losing a combined market value of three quarters of a trillion dollars. we're going to talk big tech and whether there is more downside. "squawk box" will be right back.

(♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

team usa is back! investment objectives, let's see that enhanced 4k from xfinity. wow. everything you'd want is right here when you say... “olympics” so, what if your favorite athlete is... "grant hollowa”" nice. or you can't get enough... “swimming” definitely adding that to favorites. now let's check... “medal coun”" and when is gymnastics on? “olympic schedule” it's that easy. find it, see it, count on it with the best seat in the house. get the fastest connection to paris with xfinity.

welcome back, everybody. nasdaq second quarter results out this morning with a beat on both the top and the bottom line. earnings came in at 69 cents a share, that was a nickel better than the street was expecting. it came on revenue of $1.16 billion. joining us now is the nasdaq's ceo and chair, adena friedman. thank you for being here. >> it is great to be here. >> so it looks like a big part of the strength in your earnings came from this demand when it comes to fintech, just for things you have been offering when it comes to fraud protections and compliance issues. >> yeah, so we're really proud of the results for the quarter. we had 10% growth overall. a 29% growth in our index business, and then 16% growth in

our fintech business. and that, of course, has been an area that we really focus on strategically. as you mentioned, we have our antifinancial crime business which grew 24% in the quarter and we also have the acquisition of adenza, and together they grew over 20%. so it has been just a really, really exciting quarter for us. i think that the demand from our clients has been strong. we had 67 new clients sign up for our fintech solutions. 100 upsells and then four cross sells, which is really starting to show the power of the platform. so, we're very excited about that. and we're also innovating. we're bringing more a.i. into our products. every quarter we're launching new capabilities to streamline the processes that our clients go through and the work flows they have. >> let's talk about a.i. what specifically can you do now that you couldn't do a year or two ago? >> i think there we had a lot of algorithmic capabilities for

some time. but gen a.i. is an area of focus. with an antifinancial crime, we rolled out a process, i think 250 of our clients now are using this tool that really helps take down the time to research potential, control activity, and research entities within their banks by about 90% and so it is really exciting there. and we also have a new tool that we launch in our investment platform that summarizes the meeting minutes from pension boards, which then allows asset managers to look at understanding the strategies that they might be par taking in, and it gives them a leg up in terms of their sales opportunities there. so those are the types of things we try to do to enable a.i. inside the products. >> your chart looks great for the year. one year, a gain of more than 23%. we have seen a lot of activity, a lot of excitement about ipos coming back and you got the biggest ipo of the year, that is happening today at nasdaq. it comes a day after we have seen the biggest drop in tech

stocks since 2022. and it has got people a little bit on edge. it has been remarkably calm, it has been remarkably steady in terms of the upward climb for technology stocks too. what do you see right now in terms of demand for ipos and where the market stands? >> we have seen a slow progression of ipos coming back to the market. we're so pleased to have lineage come and ipo on nasdaq today. very excited about that. we had a good week also with one stream and going public yesterday. so, but it has been a slow progression this year. and i think that's really still the result of the monetary policy still, the cost of capital still being high, trying to understand when the monetary policy could take down the cost of capital, as well as just the overall environment around us continues to be very dynamic. generally, though, if you look at our index business, it is a good bellwether, our index business is up 29% year over year. you still -- as you mentioned, there has been strong progress. but every day is a little bit of an adventure in the markets, and this week we have seen a fair

amount of adventure. >> and, it is such a strange situation when you look at ipos. they want a strong stock market, they also want lower rates. you look at both of those issues. what happens if they get the rate cut, but the stock prices come down? what is the calculus? >> it is a great question. on the one hand, the reason why, of course, the reason why the fed has kept monetary policy as tight as -- as high as it has, i think that is because of the fact that we really wanted to bring down inflation. and but now inflation is coming down, also because of the higher cost of capital it is bringing down gdp growth. so it is a delicate dance that the fed has to navigate in terms of when is the right time to start to ease off and bring down the cost of capital, meaning bringing down rates, without waiting too long for that gdp growth to really slow down too much. i think that's the delicate dance. we're getting to the point, though, where you're seeing inflation at least approaching 2%. you're seeing the average consumer starting to have more challenge with the higher cost of capital.

and so i think that you're feeling like now is getting to be the time where change of the monetary policy would be welcome by the markets. >> what would you rather have, though, when you're looking at the ipo market, a strong market or lower interest rates? >> i think the question is are the interest rates really sustainable where they are, given the gdp growth of the country? right now we have a 2% to 2.5% gap between where the interest rates are and what the overall fundamental growth of the country is. that's a pretty big gap. so, they could bring down the rates and still have really healthy markets. having a lower cost of capital for companies overall is going to be -- could be a boost to growth. and so, it is not necessarily an either/or, it could end up being an and. >> it is less than a week since the biggest global i.t. outage we have seen in history took place here. there were some markets overseas that had trouble starting up because of the microsoft crowdstrike implementation of that new line of code.

there were no problems here. nasdaq opened on time, it was great. if you looked at other airlines, there were massive outages around the globe, some of those companies got up and running more quickly than others, delta still kind of having some delays and issues that have been out there, and people say that it was because it was so reliant, so heavily reliant, maybe more than half of its systems reliant on microsoft for that. you always talked about the importance of redundancies. what happened last week, how did you deal with it, and, you know, what is the lesson you take away from this, watching how this played out? >> yeah, so our markets were unaffected and the technology that we provide to other market operators around the world were unaffected and the technology we provide to our clientele was unaffected. we were, you know, we were largely unaffected. we had some internal pcs that were affected. redundancies is critically important as well as thinking about your architecture, understanding how the software,

both your own save the ware and third party software is integrated into the solutions, and making sure that you're thinking about that from a redundancy perspective is a critical part of building that resilience. our clients rely on us. we are a critical infrastructure provider ourselves. we provide critical infrastructure technology to banks, workers and exchanges. we're constantly learning from situations like this and i think that's the best thing we can do to make sure that we also look at it and say how can we improve even though we weren't affected by this particular situation. >> adadena, thank you for being here. last time shares were up -- we did see the numbers up -- yeah, okay, up by about 50 cents, a gain of .75. adena friedman joining us from the nasdaq, thank you. >> thank you. we're watching ford. shares this morning, 47 cents a share of the earnings missed estimates of 68 cents. and revenue was actually

slightly above. so, sounds like a margin issue. the company maintained full year guidance, but disappointing some investors who are expecting a hike in the outlook after gm raised its guidance earlier this week. we're going to have some other morning movers with dom chu after the break. later, robert isom joins us to talk about the most recent quarter at that airline, the state of the airline industry and much more. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. what major retailer opened its doors in 1962? the answer when "squawk box" returns. good thing i had aflac. (aflac duck) hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent. it really helped close that gap. (whisper) go, go, go! (group) yay! go aflac! go duck! get help with expenses health insurance doesn't cover. find an agent. get a quote at aflac.com. wish we had aflac on our team.

you can! (♪♪)

>> announcer: and now the answer to today's aflac trivia question. what major retailer opened its doors in 1962? the answer, walmart. checking the futures, not a lot happening. the nasdaq is flat at least. not adding to yesterday's losses. the whole family is gathered around the tv set, dom chu is here with a look at this morning's premarket movers.

dom chu. >> i love it. appointment television here for our morning movers, joe. so, if we kind of look at this, it is continuing to be dominated by earnings reports. so we're going to start in the fr friendly skies, southwest airlines, shares down 5% at this point. the budget friendly airline posted a modest beat on profits and revenues, but profits did dive about 46% over the year. and the airline posted a modest beat on earnings and revenues overall. it is facing some headwinds as it deals with overfly for air travel capacity during this peak hot travel season for the summer. southwest is also said it is dishing its decade old policy of not assigning seating. it is going to offer premium cabin seats as well. its bags fly free policy remains in tact. you have that to look forward to. southwest down 5%. honeywell shares plunging as the mixed guidance overshadows stronger second quarter results. they raised the full year sales outlook but lowered profit guidance as the firm sees

pressure in industrials and the impacts of recent acquisitions. those shares down 4.5%. let's end on a look at two pharma giants moving in opposite directions. as competition continues to heat up in the industry. astrazeneca shares down 4% or so, even after posting an earnings beat. profits and revenues better than expected. sanofi up around 3%, raising guidance on strong demand for its skin and asthma medications. so, check out sanofi, astrazeneca, joe, back over to you for this appointment television hit. >> yes, yes. and you delivered, dom. thank you so much. >> you got it. >> i think we'll see you again. >> yes. all right, we have bad news for bill ackman. shares of one of his biggest holdings is losing about a quarter of its value in overseas trading. universal music group reported a surge in profit of 46% for the first half of the year. and a 7% increase in revenue, but its subscriber concerns that are weighing on the stock this

morning. subscription and streaming revenue grew by 4.1% in the second quarter, and that is well below the 10% that analysts had been expecting. an analyst at jpmorgan said that the speed of the slowdown in subscription revenue caught the company and the street by surprise. ackman's pershing square held a 10% stake in the company. that stock off by more than 25%. up next, if the democratic party nomination is like a job application, vice president harris is going through a highly unusual interview process. was this the best way to find the best person for the role? jon fortt will weigh in next. programming note for you, tomorrow, we will bring you an interview with the chairman and ceo of luxury giant lvmh, bernard arnault, as the olympics get under way in paris. a lot to talk about. the luxury stocks in the cross hairs. "squawk box" will be right back.

[window slamming] woman: [gasps] [dog barking] ♪ woman: [screams] ♪ [explosion] [explosion] ♪ [lock clicks shut]

if the democratic party nomination is like a job application, vice president kamala harris is going through a highly unusual interview process, considering the

circumstances. is this a good way to find the best person for the role? well, we have the right person here to weigh in on that, jon fortt. >> becky, well, know, this is not a fair process. it is the equivalent of a company posting an open job, but the hiring managers already have an internal candidate handpicked. here is how we got to this place. president joe biden was 78 years old and sworn in as president in 2021, old but workworkable. today is a different story. he didn't face a serious democratic party challenger in this 2024 election cycle. meanwhile, handlers shielded him from speaking on his feet and speaking off script to the broader public. his debate with donald trump on june 27th was an emperor's new clothes moment. people had to admit what handlers denied, he's too old to run. after three and a half weeks of pressure, biden dropped out of the race and endorsed vice president kamala harris. a normal nomination process would have seen her go state to state, debating party rivals.

because biden waited until july to drop out, that didn't happen. now instead of picking from the broadest possible pool of democratic party hopefuls, voters will likely have one choice on the blue side of the ballot. today's vice president kamala harris. >> all right, well done. this year's process for settling on a democrat to run for president was unusual. but does that mean it was worse? what do you think? >> well, becky, on the other hand, the hiring process that led to vp kamala harris becoming the shoo-in for the nomination, it is better. let's talk about how a nominee would normally be chosen. states totally insignificant to a democrat's chances of winning a general election, and the candidates then stage winter and spring debates where they eviscerate each other ahead of the summer convention where they take it all back. she's actually the best. the normal process is the problem because it lets

megadonors choose who runs and it is the wrong states winnow the field. this cycle, kamala harris didn't have the megadonors in her pocket. just last week, as recently as monday, some party billionaires were calling for a midwestern moderate to lead the ticket. the party base rallied around harris, forcing the big money to follow them. so how do we know this is close to what democrat voters probably want? well, all the rumored vice president picks to pair with harris are basically younger versions of joe biden, white male moderates with blue collar credit. >> let me throw this out there, i don't want to defend the process as it stands for how we wind up with our dual party. >> have to be crazy to do that. i just did. >> i don't know that hand picking -- getting handpicked by a small number of elites within the party is the right way to do it either. >> this is weird, isn't it? >> it is bizarre. >> i mean, we live in interesting times. >> i would only say that in

watching it happen, it could not have gone better for vice president harris at this point, and for democrats. now, we won't know whether it was the right thing to do until we find out whether who wins -- >> that's -- >> in november. and some of the -- we had novogratz on, he would not -- he was, like, holding out. i think there is some fear that because in 2020 some of her positions were not mainstream enough for her to do well in the nominating process in 2020, people are saying she needs to be sort of a kamala harris 2.0 in terms of some of those issues and say, you know, ways a senator and i rethought some of these things, and i think she can probably move that way. but if she doesn't, then you're going to have the second guessing after the election. >> people are going to wonder

about the whole primary process as it is set up right now. >> it forces them to talk -- we have no idea what -- right now she just is a very, you know, i'm not going to say -- i'm saying it an attractive candidate, not an attractive -- an attractive candidate just in general for democrats right now. >> what we need to figure all this out is the on the other hand newsletter. and fortunately, we have that, and there is a qr code that we put on the screen sometimes as well. we're going to do it this time? or no? there it is. you can also type in cnbc.com/otoh and get the full text of both the arguments i gave and you can share it with people. >> the entire process points out, it is a huge reminder that we are not a democracy, we are a representative democracy because it is the people who get to make the decisions at the conventions who have the power over all of this. >> and that's not even really representative, right? it is like -- >> right. >> i've seen the argument made, though, about people that are in favor of this that she was on the ticket with president biden,

the delegates all voted for that ticket, he's not going to be there, so -- >> it would have been much, much messier. >> not that much of a stretch to -- that qr code, looked very similar to my qr code for security in paris. are you sure that that's the -- have you seen yours yet? didn't it look just like -- >> they all look the same. >> hopefully your security in paris is just one sided, just works. >> supposing there is so many police in paris. >> they brought in people from many other countries for part of the security detail. they're expecting 300,000. >> they're swimming in the seine. i'm not swimming in the seine. coming up, the ceo of american airlines will join us live. shares of the stock down sharply after the company cut its full year guidance. and as we head to break, here is a look at the shares of stellantis, under pressure from jeep, dodge, a 48% drop in net profit in the first half of the

year. that's headed the wrong way. "squawk box" will be right back. y state street global advisors. today's challenge is to play 9 holes without the middle of your bag. how does that sound? that sounds terrible. ♪♪ ♪♪ ♪♪ ♪♪

i'm andrea, and this is why i switched to shopify. it gave me so much peace of mind. if we make a change, my site's not going to go down. and just knowing that i have a platform that we can rely on, that is gold to us. start your free trial today. american airlines out with results this morning. phil lebeau joins us with a special guest. hi again, phil.

>> hey, becky. robert isom, ceo of american airlines joining us here. let's talk about q2 and the guidance for the rest of the year. you beat by a little bit in q2, but the guidance, you slashed what you're expecting in q3 as well as for the full year. what is going on? >> hey, phil. we're not pleased with the results. i said in may a couple of things. one, there is a supply and demand in balance leading to pricing weakness and we're addressing that. we pulled down our capacity, the capacity growth in the back half of the year had been growing at 8%. now it is about 3.5% in the back half. the other issue is we put in place the sales and distribution strategy in 2023, it is not working. so we're taking quick and decisive action and we're making sure that we're regaining that share that we lost to some of our biggest competitors. >> we'll talk about that reset when it comes to corporate travel and your corporate customers. i want to ask you about what happened over the weekend. late last week with the microsoft crowdstrike outage

that hit a number of airlines including american. two questions here, one, you came back online much quicker than a lot of other airlines. how did that happen? and also, how do you ensure this doesn't happen again? there are a lot of people who are saying this should not be able to bring down so many airlines for as long as it did. >> shoutout to our team. we recovered faster than anyone in the business that had this problem. i'm incredibly proud of them. we have a lot of experience dealing with disruption in this business. especially in the hubs that we operate. we gained experience and one of the things we have done is we put in place technology to make sure that we keep track of our equipment, our crews, everything -- and that technology, and those practices and procedures and the experience, that was put into play and served us very well. the very next day we were back up. now, we talked to crowdstrike, we simply can't have, you know, patches that take down not just the airline industry, but let's face it, you know, that impacted

a great part of the world. we're working right now to make sure that if issues like this come up again, we're protected. >> let's talk about the reset when it comes to corporate reservations. you had a lot of your long time customers when you changed it who said, see you later, we don't want to be part of this at american. how much time have you had to spend reaching out personally to ceos and other executives to say we're wrong, we're changing? >> first off, as we identified that our strategy wasn't working, we took quick and decisive action. we made organizational change and immediately made sure that our product was available for sale wherever customers wanted to buy. on top of that, we made sure that we're working with the big travel management companies, and i'm pleased to say we have a new deal in place with amex gbt and we'll do the same with other agencies. >> you still haven't gotten all the way back. >> no, we're not. from a corporate perspective, i've talked to dozens of ceos, asking them, hey, give me the straight scoop on how you

perceive us. and i wasn't pleased. but we're taking -- >> what did they tell you? >> they told us, you didn't support us, you moved too fast on technology, you left us behind. we're resetting, and we're making sure that we do things in an appropriate fashion and i'm pleased to say that even the start is showing we're regaining that share, and i know that the steps we're going to be taking are going to help down the road. >> you have seen the industry, you're doing it, cut capacity, second half of the third quarter and then the rest of this year. is that enough of the capacity coming out to bring pricing power back for american and for other airlines? >> it is too soon to see. but i do think that the industry is setting up better in the back half of the year. we're doing -- as i said, pulling back growth, we'll see how that goes. i haven't built anything into our forecast that suggests yet we'll get back to where we were. but, i do think things are setting up better. >> are you more optimistic about what you're seeing with

corporate travel now than you were a couple of years ago? >> with american, this past quarter, our business revenues grew by 2%. our top competitors grew by a larger amount. that loss for us is attributable to our sales and distribution strategy. as i said before, we're reversing that very quickly. >> as you know, we're in a time where premium is the key. people want premium seats. your competitor across town mentioned this morning they're offering business class seats for first time ever. the premium growth that is there, there is so much of it out there right now, are you able to meet that demand as quickly as you want? >> well, premium is a bright spot. it is one of the things that we did really well in the last quarter. premium revenues grew by 9%, which is, you know, certainly matches -- >> are you able to add the seats when you retro fit your -- >> on that front, american already has the most premium seats in the industry flying. and then over the course of the next two years as we get down to

2026, we'll be growing that by about 20%. american is going to be very well served, we got great experience in this, and quite frankly i know our customers love it. >> your customers want it, i'm getting to a question that i heard -- a point i heard over at the bureau, the seat companies cannot keep up with demand right now. that's the problem with the supply chain, one of the problems. >> on that front, i'm proud of what we have done to make sure we're working with manufacturers, to make sure americans' interests are protected. whether it is the 7879s that we're bringing on, the reconfiguration, we're going to be taking care of because of american status in the industry. but, you're right, phil, the supply chain still has a lot of kinks to be worked out and seating is one of those. >> with regard to the supply chain, you have a number of boeing aircraft that you fly obviously and you'll be receiving more. are you seeing any change in what is happening with boeing

that gives you confidence that they are turning the corner? >> look, for us we need boeing to be incredibly strong. and my message to boeing is simply this. produce quality, safe aircraft, that is job one. we're going to be there, we need boeing in the long run. we got a great relationship and a history with boeing. but they got work to do. >> have you seen the turn, though? >> look, we're working with them on our 737 product, the maxes, we're working with them on 787s and i'm confident in what they have told us about deliveries. but we got work to do. >> robert isom, ceo of american airlines, rough day here at the headquarters for american as they slash their full year forecast. guys, back to you. >> okay, phil. thanks. coming up, the nasdaq, the average posting its worst day since 2022 after a really strong run from may to july. is it a sign of an overdue correction in an overbought

market? or something else? we'll talk about that after the break. and check out the shares of lululemon this morning, moving lower after citigroup downgraded the stock from a buy to a neutral and lowered its price target to $300 from $415. good call. 265. lowering it from 415 to -- thanks for that. we'll take that toin consideration. citing further deceleration and active apparel trends which they completely missed. we'll be right back. i can't believe you corporate types

are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

nasdaq posting its worst day since october of 2022. that wasn't that long ago, it was a terrible period, remember? we hit some lows. led largely by underwhelming reports from alphabet and tesla. joining us now, brent phil.

very easy to say brent thrill. has that ever happened? you're an analyst at jeffries. >> i've been called worse. >> we got a few of these big names to go. is it going to be -- is it going to rhyme with big tech? will it be disappointing or have we had this shakeout already from just those two reports? >> yeah, good morning. we think we had a lot of the shake. look at last night, service now, ibm, good software numbers. i think we're seeing a rotation inside of tech. we're seeing a huge outperformance of semis and internet. you've seen underperformance of software. and so our belief is the back half of the year will start to begin its move back up, based on the underperformance and pretty good results. so, if you look at last night, again, good numbers, no signs of

massive demand cracks. i think we have an overbought situation in a lot of the seminames. you've seen such a massive run. many of the names are up between 40 and 100%. internet up about 10. software up about 2. so, again, i think you're seeing a little bit of a pull yesterday, time out, reassessing where they want to go after their swim time, and we believe, again, there is going to be a mini rotation, nothing to take away from semis and we think fundamentals are alive there. but right now, i think ultimately we have seen money come out across the group and a lot of that money actually went into financials and industrials and other subsectors beyond tech. so, that's what we saw yesterday. again, couple good reports last night. so, our belief is a lot of the clearing event has been put in, and there may be a little more

to go in terms of the rotation. we think there is some attractive subsectors now like software. >> is there a -- something you can point to definitively for the -- what makes the russell 2000 suddenly more attractive to people? is it an interest rate cut? is it -- is it the notion that maybe the a.i. craze has gotten at least for the main players has gotten a little bit ahead of itself and you're looking for maybe beneficiaries that are further down the chain? what do you attribute it to and how far will it go? >> well, just as i see it inside tech, that's my seat, i think you've seen just an overcrowding in a handful of names, amazon, google, microsoft. there is a broadening event that is going to happen. that's number one. number two is what you said on the rate cut, that should essentially help. three is the increase in m&a.

we're seeing material pickup in software m&a. a number of transactions from strategics, privates, a lot of smaller midcap names downstream not buying the large ones because we can't get those through the regulators. we think there is a number of factors in interesting. do you, in your view, think that we've overspent on a.i.? underspent on a.i.? or just the right amount? and when, how far down the road do you have to look before you see the payoff, do you think? >> yeah. the payoff is still years away. think about all the software companies this year, joe, saying no revenue in a.i. in '24. the ramp really begins in '25-26. microsoft is leading that pack. we think in a phenomenal position. could be a low digit percent of total revenue this year and grows going forward. so it's still a ways out. we are definitely at the

beginning of the curve. we have to spend, as microsoft has said, to our investors when they've asked, how much are you going to spend? do you want 6% market share in a.i. or 60? we're at beginning of this curve and i think many have the analogy this was the internet beginning in, in the '90s. this is the move to cloud, the move to sass, would you want to spend more money at the front of the curve or the back? everyone said, it's the front. the question, is the payoff going to be there? all the semis are reaping the rewards capital from the software companies. we won't see real return in these products, again, for probably several years. so we're continuing to see capex go higher. google higher by a billion on our forecast. continuing to see 30, 40, 50%, some cases doubling of capex in many of the software names. so we're really, really early,

and, again, there are going to be a bunch of companies that don't make it and a bunch that do make it. we can see the companies that will make it, and enterprise a.i. is going to be amazon and microsoft, the easiest bet and a lot of vendors that don't hit, again -- it's harder to see now because we don't have the data points but we have clear data points mk icrosoft and amazon a going to win. >> thank you, brent thill, tech research analyst. coming up, reaction to the president's address to the nation last night. and plus talk tax policy, race for the white house. he is nrsc chairman. so he knows all about who's up, who's down and all the purple states and the prospects for veer the senate looks like after nomb. so he'll be with us momentarily. "squawk box" will be right back.

. but it's 4 p.m. yeah, and i've been working nonstop since 9:30 this morning, so. 9:30. you don't say? yep. you'd want a little shut-eye too if you'd been moving billions around the world. well, actually, i do. you know, stablecoins, nfts, loans. people can access me 24/7. what? but look, everyone's different. you should get your rest. you'll get after it tomorrow. tomorrow's saturday. [ethereum] monday. you'll get after it again on monday.

president biden delivered remarks from the oval office to address his departure from the 2024 presidential race. >> there is a time and a place for long years of experience in

public life. there's also a time and a place for new voice, fresh voices. yes, younger voices. and that time and place is now. >> joining us now, montana senator steen daines. he chairs the national republican senatorial committee. it's good to see you. wel welcome. >> good to join you, joe. >> last night does it matter what really went on behind the scenes, senator? just wondering your interpretation. i guess it matters in whether republicans have a problem with president biden staying on through the rest of his term? and i mean, the story changed, obviously, a couple of times, as to, you know, why he decided over the weekend after being so strident about staying in the race. do we just put it behind us and just, kamala harris is going to be the nominee and we work on

the, you work on the senate from here on out, or do we look back at what really happened? and does it matter? >> well, look. what you saw last night is 11 minutes of rambling by joe biden and projecting american weakness yet again. last night our alaskan air force, northern command, intercepted chinese and russian aircraft flying in joint formation. the first time that's ever happened, challenging our air space. that's what our adversary, doing, exploiting the weakness of this administration in joe biden. he still has six more months and his condition won't get better, only grow worse. i also heard him say it's time for fresh, new voices. look, if you like san francisco politics you're going to love kamala harris. she's not scranton joe. she's truly a france radical. joe, i served with kamala harris for four years in the u.s. senate side by side. she was ranked the most liberal u.s. senator of all 100 to the

left of bernie sanders. that's chilling. she's taken these radical positions of banning fracking, abolishing i.c.e., decriminalizing border crossings. so there's nothing moderate about kamala harris. she truly is radical in her policies and evidenced yesterday by skipping the address by prime minister netanyahu to a joint session of congress. speaker mike johnson was there. it's protocol to have the vice president of the united states sitting next to speaker johnson. she skipped out on it. that sent i think a very chilling message to one of our most important allies in the world, and that's israel. >> senator, what you brought up. i mean, it was china and russia, and we know recently that that's become a more, more of an alliance, maybe, than we would like, or that we saw in the past. that's a really -- that's a real issue. are they testing us? are they likely to continue to test us if president biden stays

in office for the rest of his term? and what would republicans suggest, or what would their precedence be? do you think vice president harris should take over immediately? >> well, i don't think joe biden is capable of serving as our president. he's not able to run for re-election, he's not able to serve in the oval office, but i'm very concerned. the message, again, yesterday, when kamala harris basically brushes off prime minister netanyahu, this emboldens the iranians. the iranians fear president trump. the iranians would love to see kamala harris elected as president of the united states. that by itself ought to be a very strong message to the american people why it's so important that president trump is elected, who will restore the peace through strength doctrines of ronald reagan. we were at peace. the world was much more stable under president trump, because our adversaries fear strength.

they exploit weakness. and kamala harris is yet another weak leader, and i tell you, she's not a fresh voice. she is one of the most radical voices in the democratic party, and they're trying to scrub her record now. you're seeing it. she was appointed the border czar by president biden. they're trying to scrub that right now. she was ranked, again, the most liberal u.s. senator, they're trying to scrub that on the internet as we speak. they're trying to cover her tracks, and as the american people start to see who kamala harris really and her policy positions they're going to reject a san francisco radical and they'll elect president trump. look what we talked about, perhaps, at the new secretary of treasury. names like gary gensler and elizabeth rathwarren. that would send a really strong message to wall street. watch out. radicals are coming into the treasury. >> senator, you were very involved, obviously, with efforts to get majority for republicans in the senate, and there was a lot of down ballot

concern about president biden being on the ticket. some of the betting sites narrowed when vice president kamala harris became the pr presumed nominee. has anything changed in any of the races? is the optimism about, i don't know, your home state. montana. or any of the other close states? is it -- are you still optimistic? which ones do you think republicans are going to be able to flip? >> yeah. i really don't see harris' entry as a major reset, both in terms of top of the ballot for the president and down ballot. there's going to be a little harris honeymoon going on. probably go through the democratic convention in chicago. turn the corner monday. i'm not sure a greater contrast between two ideologists. you've seen the cnn poll that

came out still had trump up nationally 49-46. within the battleground states where it really matters i don't see it appreciably affecting our senate down ballot race. in fact, it may make it easier because we don't have to argue about joe biden's age. it's about joe biden's policies. in this case, kamala harris' policies and linking these democrats to the policies of kamala harris and the democrats is really what the election's going to be about. it takes the age issue off the table because it's back to focus on policies as the american people see that, really, the incredible difference between the policies that we stand for and kamala harris will stand for. they're going to reject a san francisco radical. >> so if you were -- just talking somewhere and wasn't on tv, are there any of these races where you're looking where maybe you weren't expecting a republican to be quite as competitive? what's really got your interest?

a couple of states you think this could be very, very interesting? any of those? what would they be? can you -- >> first of all, yeah. let me state the obvious. we're going to win west virginia. tim cheehi will win mont. kamala harris helps us in montana because she's so far left. then look at other interesting races developing. and out in new mexico. we had trump down just one point and now down three points in a state that is pretty blue. so i think with kamala harris now on the ballot, once her record is exposed the american people will have a chance to digest that, i think it actually gets worse for democrats in some of these key swing states for the united states senate, not better. >> there are quite a few races, and i mean, i'm looking at the list, and i -- >> joe, another -- yeah. here's another couple races, though. moved nevada from toss-up, in

nevada. moved michigan to toss-up. an open seat because the senator retire. that race tied at 40-40. toss-up status, just moved to that. a trump convention on saturday. withdrew from the race endorsed mike rogers. he was chairman of the house intelligence committee for many years. a great candidate. a couple of races that aren't getting the attention they probably deserve and are pick-up seats for republicans. >> always interesting to handicap and talk about those things, and you got to be a senator and you got to, win 60 seats. that's probably your goal in the senate, but a lot resting on your shoulders, senator. good to have you on this morning. appreciate it, and hope to see you again soon. >> thanks, joe. >> you're welcome. it is just after 8:00 a.m. on the east coast and you're watching "squawk box" right here on cnbc.

i'm becky quick along with joe kernen. andrew is -- on assignment today. he's at the olympics and we will check in with him there tomorrow. among today's top stories, cold storage reit lineage set to begin trading today on the nasdaq. the biggest ipo of the year so far. we're going to speak with the company's co-founders in a few minutes. southwest airlines will end open seating for its passengers and offer extra leg room seats on flights. the company is making the biggest changes ever to its business model in the face of pressure to try and increase revenue. the shares are down this morning, though, after second quarter earnings, in fact, that stock now down by 5.3%. don't miss ceo bob jordan coming up in the next hour on "squawk on the street." and american airlines stock lower. ceo robert isom joins us in the last hour. >> we're not pleased with the results. i said back in may a couple of

things. one, there's a supply and demand imbalance leading to pricing weakness and we're addressing that. we've pulled down our capacity, the plant capacity growth in the back half of the year. had been growing about 8%. now it's about 3.5% in the back half. the other issue we put in place a sales and distribution strategy in 2023 that's not working. we're taking quick and decisive action and making sure that we're regaining the share we lost to some of our biggest competitors. >> a look at shares of american airlines. actually down by 6.2 percent. we'll continue to watch all of these stocks this morning. lots more. earnings to talk about. get to dom chu a look at the pre-market movers. >> joe, becky, shares of honeywell now in focus. taking a bigger hit down roughly 4.5% or so after the industrial conglomerate that makes everything from aerospace parts to building automation systems reported better than expected profits and revenues sdriven in part by continued strong demand for the aerospace products which

helped offset weakness and industrial automation. honeywell raised full year sales guidance but cut its profit forecast. weighing down on shares down 4.5%. dow inc. next down nearly 5% pre-market after the maker specialty materials and chemicals reported a miss on quarterly profits and revenues. ceo said that the pace of the global macroeconomic recovery has been slower than expected. shares down nearly 5%. ending on fun and games. hasbro up nearly 10% at this point after the maker of toys and games like transformers, g.i. joes, nerf products, posted better than expected profits. helped for digital gaming. those franchises offset a continued postpandemic hangover for toy sales. interesting move there, becky. everyone buying digital stuff, maybe not as much toys now.

see if that changes. send it back to you. >> thanks, dom. see you later. right now talking about the latest moves in the market including yesterday's bill g sell-off. joining us, chris, talking about credit now as being a non-obvious market. what does that mean? >> sure. thanks for having me. great to be here. look, i think we've seen a big rally in the credit markets over the last year. and into this year. a big part of that is growing consensus around inflation under control, that what the fed has done is working. as a result you've seen a lot of capital coming into the market. in addition, also a lot of slowing over fundamentals. you have credit spreads tightening. fundamentals declining. in addition to defaults likely increasing. as a result, just a lot harder and not as obvious. if you look at a lot of the capital that has come in over the last year, not just the last year, maybe the last decade, a

lot of it is, like, rules-based capital. what does that mean? guidelines, a lot of restrictions, parameters put on that department has could be the type of assets they're able to buy. that could be liquidity. that could be ratings. as a result of that what you have is as fundamentals are sort of slowing, you're seeing a lot more dispersion. rather than wear a jersey with one asset class, best way to tackle the market being more nimble, flexible and bringing a multiseas class approach. >> meaning a buy the roomumors? >> a lot of times markets move quicker than actual events happen. right now it's not as obvious. you have to be a little more creative, create your own inewens. and the more flexibility you have the more ways you can win. i think breadth and depth is going to win. >> what are some potential

winning theories? >> well, i think there's a lot of dispersion in the market. be a little more concentrated, convicted, in the public markets, there's places to actually get interesting risk/reward. private credit focused on the senior secured part, direct lending. seeing busiest in the credit markets is the asset based names. increased regulation on banks, how banks are managing their balance sheets and risk weighted assets, seeing portfolios are high-quality assets that have never been for sale before. >> so pressure on the small and mid-sized banks means good news for investors looking around the edges? >> absolutely. i think it's a way to partner with the banks to provide a solution provider. if you can do that across malt p malt toll asset types, aircraft, consumer portfolios, even stepping into areas they've stopped lending or reduce

lending because of the attractiveness of the roe, real estate credit, for instance. huge opportunity. you have to have that breadth and depth and scale is what you need to actually tackle it. >> i hear your point. a lot of great assets for sale. is the concern that you don't want to get trapped in something like a real estate plate that doesn't make sense? maybe commercial real estate? >> keep it simple. fundamentals decline. not saying let's go into the distressed part of the cycle or buy a bunch of office real estate, but there's a lot of high-quality real estate assets out there you can lend against, that really the amount of capital that's coming into that market is retreated. so it's stepping into places where it's attractive today. without necessarily taking incremental risk. >> chris, thauchg fnk you for c in. >> thanks for having me. coming up, speaking with co-founders of lineage. a company behind the biggest ipo of the year.

all of those things you're looking at, refrigerator, and be glad. the food. plus former st. louis fed president james bullard joins us to talk about potential rate cuts. "squawk box" will be right back.

(vo) a law partner rediscovers her grandmother's artistry and establishes a charitable trust to keep the craft alive for generations to come. from preserving a cultural tradition to leaving a legacy, a raymond james financial advisor gets to know you, your passions, and the way you enrich your community. that's life well planned.

perishing square planning an ipo monday night. a letter that says the company intends to raise $2.5 billion to $4 billion with a hard cap at $10 billion. >> we need a big ipo year. it's been -- it's been a long time since we had a great year. just is adena friedman on today. biggest operator of cold storage warehouses set to be trading on the nasdaq. the world's biggest ipo this

year. pricing shares at $78 apiece and upsized offering, sold near the upper end of its previously indicated price range. the company raised more than $4.4 billion. joining us, co-founders adam forste, and kevin marchetti, co-executive chairman and we take things for granted, guys, but if you don't have -- if you leave food out, you can't -- it doesn't work. you need these big -- these are, like, almost like amazon sites with their, they're refrigerated and where the nation's food is stored. >> this is it. we are the food infrastructure. thank you for having us. adam and i couldn't be more excited to be here. an exciting day or for our

employees and we are the world's food infrastructure. >> you're not using a.i. maybe you will. but that not why -- kind of the classic build it, what do you call it? it's a roll up a lot of family-owned, called lineage because of all the individual companies that go into this now, it's a trust? >> call it our pedigree of the families that have become part of lineage. it was a fragmented industry. capital intensive because of the real estate. our sorry's been start with one warehouse and we've done 116 acquisitions to turn lineage into what it is today. it's amazing. so many family whose we bought companies from rolled equity into lineage as part of their transaction. celebrating with us here today as well. it's super exciting. >> so the structure of it, why does it make sense? as a reit? it doesn't make sense any other -- because you what you said? capital intensive real estate

involved? >> joe, you nailed it. our first mode, real estate, second is technology. really special centralized data asset we've created. we touch over 400 billion pounds of food a year. >> say that again. >> we touch over 400 billion pounds of food a year. >> are you sure? 400 billion? >> saying it a lot of time. a lot of food moving around the world and it comes through our warehouses and we are that food infrastructure and tell people open your fridge or freezer all that product had to go somewhere and it's come through our warehouses, a lot of that food. >> you are eight light. showed a picture of trucks. not a lot of refrigerator trucks? that's another -- >> obviously warehouse, a totally different story. why we're structured on the reit. solution business, basically everything in our warehouse chaim from somewhere and going somewhere ems. our kind of secret sauce help

our customers do that bretter. a huge opportunity to save costs. put more efficiently truck volume together and a great statability as well. >> goes through the warehouse quickly? >> can stay in the warehouse longer or shorter but getting it on the truck going to the walmart or the kroger, and you put more volume on the truck, saving truck miles. taking miles off the road. >> a bunch of less than truckload stuff and putting it together? >> yes. >> and exciting part of this whole thing, you can do good, do well while doing good. >> do you have everything in these warehouses? everything? >> you got it. you'd be amazed what comes to your freezefreezer. go to the high-end warehouse, the sushi has been in our warehouse. >> anything you don't have in there? >> a great question. nothing we can tell you about. >> right. >> got your hands on everything that people are eating. it's really no good, if it stays

out. >> perishable stuff. truly the best way to preserve product without preservatives like salt. freeze it, just as good as when it came out of the ground. frozen and fresh, but -- >> and -- >> we're global business. in 19 countries. close to 500 warehouses around the world and that's really because the global food supply chain is global. our biggest customers use us across all continents, across 10, 20, 50 buildings. >> i'd like to see that. how does it get to you? farmers and livestock, ranches? it comes to you? they way? >> comes out of, think about the kind of food chain. food has to be harvested, grown or produced somewhere. >> okay. >> goes into our freezer and then we forward, distribute that product to another warehouse where it's distributed out to krogers and walmarts or restaurants of the world. but that food has to move through the supply chain. comes out of a field goes to a freezer and turns into -- think about the life of a strawberry.

comes out of a field. it kurn into a smoothie, or turn it into a jam or ice cream. all the different ways that strawberry can travel on its journey. uncrestable sandwiches we know and love, come from our freezers. >> can you give me a quick idea why things cost so much more over the past couple years? do you see it, too? where was the main increases that you had to pass along? what was it from? >> yeah. labor costs, growth. we have 26,000 members around the world. >> 26,000? >> yeah. >> they do incredible work. they work in the cold. it's really cold in there and we really value the partnership with them. >> amazing. >> invested a ton in retention and the culture of being at lineage. wage is a huge part of that. super excited. this ipo a broad-based equity plan to make our team members ownsers of the company as well. we have a huge belief in, you know, our entrepreneurial journey about ownership and

having pride in what we do and we're so excited. quick shoutout to ownership works, nonprofit supported us and this team instituting this. >> our employees don't know yet but may have a little idea after today. >> that's great. >> it's out of the bag. >> great to have you on set and be a part of, i don't know, kind of cool. software companies. i talk about it, and we throw all of these terms but i feel like -- it seems important to me. food. i'm starving. adam and kevin, thank you. we should mention, lineage is a four-time cnbc disruptive company. knew about this. for more go to our website/disrupters. details on the nba's multimillion rights deal. programming note. tomorrow an interview with chairman and ceo of luxury chairman lvmh, bernard arnlt t olympics get under way in

paris. "squawk box" will be right back. real ai—putting you in the fast lane.

the nba finally striking a new set of media rights deals including with cnbc's parent company comcast. julia boorstin joins us now to break it down. julia, this is a really big deal. >> this is a massive deal. this is a series of deals that the nba has done for $77 billion over 11 years. nba striking deals with disney and others and nba games starting 2025-2026 seize rejecting amazon's bid ending the decades-long relationship with the nba. tnt saying they believe their legal rights were misinterpreted and they will take appropriate

action. with these deals that the nba struck with disney, comcast and amazon, streaming is front and center with all national games available on streaming sfgss, prime video, peacock and espn's flagship service set to launch next year. these rights deals are more than double the fees from the nba's prior deals. espn and disney paying about $2.6 billion a year. nbc sports $2.5 billion and amazon $1.9 billion. espn chairman jimmy pitaro, the league was supportive understanding our audiences are migrating there. in a letter to employees, saying the nba will "enhance our primetime ratings, boost ad sales across linear peacock and optimize investment across sports, entertainment and news." saying it will accelerate peacock subscriber growth and financial scale. so it's not just about

streaming, though. though there's a lot of talk about why these additional costs are associated with streaming, but nbc sports and tnt is losing games. so, therefore, the nba's increasing the number of regular season games on broadcast tv to 75. from the minimum of 15 games under the current agreement. becky? >> yeah. what's been so interesting about this. just how valuable these rights have gotten as it's harder and harder to make sure you're doing something to bring viewers in both on traditional broadcasts also on the new streaming things. so much riding on all of this, julia. in the middle you've got the league, which looks around and said, okay. we want to get the most we can for these sports rights but still want to be able to make sure we're not losing market share by not allowing everybody who wants to see us see us. right? this is the combination of broad cast and streaming, where those two elements coming together kind of changes the dynamics on what used to be the play for

cable companies. >> i mean, absolutely. so interesting here is in replacing tnt for all of those games with nbc universal, what you get is you're trading cable distribution effectively with streaming distribution plus broadcasts. to me, that speaks to what the league wants. they want scale. they want to reach as many people as possible and now people are going on streaming. so, yes. all of those company hs to pay a lot more for these rights than a decade ago, but they are securing the ability to stream those games. for that you get the ability to reach younger consumers on these streaming platforms whether prime video or peacock and espn's new service which is going to be launching just in time for this round of games that they have the rights for. i think this is really, speaks to the changing media landscape and the fact that streaming is really where everything seems to be going. both in terms of subscribers and

ad dollars. >> all right, julia, thank you. this is one to watch, and it's been something shaking up the industry for a while. we'll continue to keep an eye on it. thank you. we are approaching the first look at second quarter gdp. also the initial jobless claims in june durable goods orders. rick santelli is standing by at the cme in chicago. rick what are you seeing? >> yes. there's a litany of numbers today. we'll try to do them all very efficiently here. initial jobless claims hitting the wires at 235,000. that's a bit lighter than we expected. at least following an unrevised for now 243,000. 235,000. well, 245, upgraded last month by 2000 which makes this month down 10,000. continuing claims. the seventh consecutive week above 1.8 million. 1 million 851,000. now, go to gdp. our first look at second quarter gdpr.

better than expected. 2.8%. 2.8%. we were expecting 2%. of course, if you comp that, that is going to be bumping right up against the last quarter of last year when it was up 3.4. look at consumption also solid. 2.3%. also the best since the last quarter of last year. and these are both following much lower numbers for the previous quarter. 1.4 on the gdp. 17.5 on consumption. go to the price index, shall we? this one comes in cooler than expected, which is not a bad thing. last look was 3.1. expecting this to be 2.6. comes in at 2.3. the lightest level since dec, 1.6. once again, the number's moving in the right direction. what we have been at a lower pricing pace. look at the core pce. expected to be 2.7. last look, 3.7. comes in at 2.9. so a bit hotter than expected. cooler than our last look ux,

and compares with the last quarter of last year oos well at a much lower 2%. finally, durable goods. durable goods. these are preliminary looks, and a volatile series. these will be changed in a couple weeks and fine tuned. a huge miss. huge miss! minus 6.6%. that is the weakest going back to that horrible month, which was april of 2020 when it was down 20. this is a biggy. if we look at x transportation. now we nope why the number was down. ex transportation jumps all the way up to up half of 1%. aircraft, aircraft parts obviously played a huge negative there. up half of 1% is the best of the year. last year up 0.6 of a percent. look at the non-defense ex aircraft and aircraft parts, capital spending. a solid number. up 1%. up 1%.

that is the best look going all the way back to january of '23. shipment's a completely different story. lackluster up 0.1% comped against last month down 0.7. i point out on the capital goods order, proxy for capital investment, up 1%. it was solid, but last month was even revised lower to minus 0.9. look at orders and shipments under the guise of the big bump down last month against the pop at least on the orders side this mosh month, it kind of comes out in the wash. i like the way the market's defined everything put forth here. 435 and all that data, now see yields up back and 439. at 419 on a ten year, down 9 basis points on the session. that moved back up three basis points. what we are seeing is a little bit higher than we were before the number where there were significantly lower, and you can

see by data points what most likely pushed that up. some of the better second quarter numbers, even though the pricing improved. as i said, we've been there, done better in the past. becky, back to you. >> rick, thank you. stay with us. we want to bring in new voices for all of this new data. start with the former director of the national economic council under president biden. now a senior advisor with the american economic liberties project. senior research fellow also, at the mer khada center and our very own steve liesman. steve, get your take on this first. what you think about these numbers? >> so i'm going to remain consistent, becky, and tell you that when i told you last month, last quarter, that the gdp number was not as weak as it appeared. this number is not as strong as it appears. best way to think about this is to average the two together, and you're kind of running at or above trend at 2%. the reason, because you had, i

want to double check this, a pretty big inventory drawdown last month and you've got a big inventory increase this month. almost 5 percentage points. if i'm not mistaken. added to the gdp from the inventory contribution. that said, there's some really good things in this report. the deflator that rick mentioned is a very, very big development. a huge decline in the inflation numbers from the prior quarter that has to make the fed think that it's at or close to a point that it could be cutting interest rates, and the market has very aggressively priced in interest rates. you get beyond july we're looking at the market seems to be priced, futures market, for four consecutive cuts through january at this point. the other thing is the comp assu consumption numbers seem to be okay. consumers holding up. the other big story are the capital goods numbers that rick mentioned. investment numbers.

they've been pretty good and the equipment numbers also have been strong. there is something of an investment, i want to call it a boom going on. i don't know how much is motivated by some government programs, or the a.i. boom that's happening. whatever's happens, equipment, that side of the economy seems to be doing very well. overall, though i would take this number together with the prior number. i wouldn't see particular strength. by the way, the consensus, reported today, probably was not updated with yesterday's data, which was a little flatter on the trade side. take some off. running above trade growth. >> and i bring you two in because before we saw these numbers the two of you were on opposite sides in terms of what you think should happen next from the federal reserve. i think you're looking at this and you think that the fed runs the risk of stagflation here. that they not necessarily should be cutting rates at this point.

and the other thought, should be cutting in july. what do you two see that doesn't match up? barat, start with you. >> i agree with steve about takeaways on this report. if you remove the volatile inventory factor it's slightly better -- slightly worse than the headline but still the consumer spending number is solid and indicates no pullback from consumers. in terms. fed, look, they is a dual mandate they have to balance stability and totality of the fed now greater to the labor market than they are to inflation reaccelerating. as a result makes sense for the fed to begin cutting potentially as soon as july. more realistically september. if you add in the factthat the fed is likely to cut multiple times this year, you have an economy on a very strong trajectory given where the gdp numbers are now.

>> veronixue? >> bringing it down to two. when i hear economists say, know what? don't worry about inflation, the fed has the tool. those tools are crude and they imply actually, i mean i know that the fed's been trying to do a soft landing, but i think a soft landing is always really hard, and when i look at the overall situation in the u.s., i see actually still a fair amount of strength. like labor demand is still stronger than supply. and i really worry that effectively trying to balance the two mandates will mean that we're going to get stuck. going to get stuck if the fed indeed reduces. there's a real risk we won't go

back and stuck at 2.6, 3%. so that's -- and i -- by the way, i sympathize with the fed because i actually think what they're trying to do is extremely difficult. >> i'm told we're out of time. >> becky -- >> go ahead, steve. >> i want to correct something i said. i'm sorry. the change in inventory added 0.8% after taking off 0.4%. overstated that prior. it's still adding a percentage point to growth. took that away, which you don't want to do, because you want to put it back, but it was 0.8% to gdp inventory. >> thanks, steve. thank you all as well. coming up, we're going to get reaction to the gdp numbers and talk about what they could mean for the fed's rate path. ormer st. louis fed president jim bullard. "squawk box" will be right back. . custom scans help you find new trading opportunities,

while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley while i am a paid actor, and this is not a real company, there is no way to fake how upwork can help your business. upwork is half the cost of our old recruiter and they have top-tier talent and everything

from pr to project management because this is how we work now. -cologuard®? -cologuard. cologuard! -screen for colon cancer. -at home, like you want. -you the man! cologuard is for people 45+ at average risk, not high risk. false positive and negative results may occur. ask your provider for cologuard. ♪ i did it my way ♪

snee. coming up, jim bullard joins when you say he sees the fed pulling the trigger in lowering interest rates, and a programming note -- the ceo of mistral a.i. tharur

mensch joins us from paris tomorrow. we'll be right back. to help you see untapped possibilities and relentlessly work with you to make them real.

the first look at second quarter gdp showing the economy grew at a rate of 2.8% from april to june. well above expectations. for more on the fed's rate, indication, bring in former fed president jim bullard. unshackled. didn't you know that was comes? >> as if i wasn't before. >> now -- that's true. now purdue university's business school. good to see you, jim. >> good to see you. >> i mean, we're down to one, maybe. does this throw that into question at this point? what would you do? tell us, finally be honest with us. be honest, finally. >> i think today's gdp report will take july. there is a little bit of

residual talk about july i think it will get taken off the table here with this report. this is reassuring that the first half growth rate was probably underlying growth rate probably between 2 and 2.5%. pretty close to potential growth rate of the economy. inflation news, just very recently, it's been good, but the committee has two more reports before theseptember meeting and will want to see those. i think, i think the committee's on a pretty good track here at the july meeting to not signal too strongly that they're probably about ready to go in september and beyond that. >> in recent weeks you can sort of feel the perception growing that the labor market may be slowing and maybe even more than people think, and i saw someone throw in the towel. i guess it was dudley. you saw dudley's comments, i guess. right? >> yeah. >> he said, okay.

i was wrong. we need to cut now to make sure it doesn't get worse. oh. there it is. i can't believe that. i did not plan that. but the fed needs to cut rates now to make, to stem what could be something even worse in the labor market. is that wrong? that could be wrong. >> i don't think the probability of recession is any higher right now than it is in ordinary times. of course, we live with the probability at any time there could be a recession, could be a big shock, but i don't think these numbers are really pointing to recession at this point. this is more normalization in the labor market. the number of job openings per unemployed workers a couple years ago was two. that came down to 1.2, which is the pre-pandemic number, but that's still very high compared to when we were talking 2013, 2014.

that period it was way below 1. i think we've got normalization in labor market. we've got inflation just 50, 60 basis points away from target. you've got the economy growing at potential. this is a soft landing, and the last piece of the soft landing is to get the policy rate back to normal, a more normal level, and get the yield curve upward slowly, which should also be happening. >> on almost any metric you look at in terms of the first friday of every month, or the gdp numbers, it's -- surprising almost for, i guess, at least a year. maybe 18 months. is it -- is it good? is it better productivity? is it residual government stimulus? is it the size of the fed's balance sheet? i know -- no. of course not, because you were a part of that, but what do you attribute it to? how has it been so surprisingly

resilient for so long? and is it a -- is it because of good things or because of -- i mean, we did have inflation. that's what happens when there's too many dollars floating around. was that it? or is it productivity improvement? >> i'm optimistic that productivity's improving. it's notoriously hard to measure, and you know, my gut instinct is that you are getting pretty good productivity, but if you look at the numbers, they're not really there yet, and so we'll have to see if that story holds. i think another thing that happened here was last year, you had this overwhelming prediction by wall street and global financial markets that the u.s. would go into recession in the second half of 2023 based on the problems at svb. that turned out to be epically

wrong. instead of shrinking in the second half of 2023, the economy boomed, and i think that just set everybody scrambling to change their ideas. but the big picture is that the economy is slowing and has been slowing for a while, but that's because it was growing way above trend post-pandemic. it's not slowing to a recessionary situation, but just to the trend pace of growth, and that makes a lot of sense. you would grow rapidly after the big shock, and then you'd slow down to the potential growth rate. i think that's exactly what's happening. that's the soft landing. >> so, you think that you grow rapidly after what we went through, but it just seems like it's been of a longer duration than anyone thought. does any of it have to do with -- >> i kind of agree with that, but this was -- if you look at the charts, i mean, just a gigantic shock, and you really

had to dig out from that. it was pretty much a v-shaped recovery as far as macroeconomics is concerned. you'll probably never see anything quite as v-shaped, but still, it takes a long time to recover from such a big tsunami. >> interesting. but i guess the infrastructure and the chips and i.r.a., none of that hurt in terms of stimulating some demand. i mean, we got a lot of that left to still spend too. did that have any -- >> i was surprised the other day. a lot of that has not been spent, and i think it tells you that that kind of expenditure is really more about the public infrastructure over the medium term and the long run and probably doesn't affect business cycle-type dynamics that financial markets worry about quite as much, so yes, there's some public projects that move forward, but many others have

not, and that's -- if i recall, it's a ten-year package, so it's a long fees on that. >> are you sticking with the cardinals? who are you close to now, the cubs or the reds? are you sticking with the cards? not great this year. >> i'm sticking with the cards. second place last time i checked. maybe they can pull it out and win the division here. >> all right. so, even though you're up there. all right. there's no -- indiana doesn't even have a team. that's sad, isn't it? >> they've got chicago teams. >> unfortunately for me, there's a fair number of cubs fans here. >> yeah. yeah. >> chicago teams. >> maybe reds. maybe the reds a little bit. >> it's close enough. >> i was white sox when i was there. >> right. >> pick your teams. >> they got the colts, or did they move? i don't know. jim, thanks. thanks, dean. when we come back, inside this morning's earnings and a

postmortem of yesterday. the worst day for the markets in a year a and half. stay tuned. "squawk box" will be right back. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ what tractor supply customers experience is personalized service. made possible by t-mobile for business. with t-mobile's reliable 5g business internet. employees get the information they need instantly.

this is how business goes further with t-mobile for business. it's time to get away and cash in at cache creek casino resort. this is how business goes further to rock and to roll. to go all out or go all in

with four stars and rising stars. northern california's premier casino resort is the perfect place to do as much... or as little as you want. make your getaway now and cache in at cache creek casino resort. the futures this morning are up ever so slightly after

yesterday's big market slide that saw the s&p post its first 2% decline in more than 350 trading days. you saw the nasdaq with its worst performance since 2022. joining us right now to talk about it is stephanie link, hightower chief investment strategist, also a cnbc contributor. what happened yesterday? we watched the vix jump to 18. it's been really modest and tame to this point. what was yesterday? >> well, i think you're just going to see a lot of volatility for the next several months because there's so many things that we don't know. uncertainties, if you will. the market doesn't like uncertainty. you've got the political environment. you have the fed. you have economic growth, which was very pleased to see the number today being a little bit better than expected, and of course, you have earnings against very high expectations. but becky, what's really interesting, what's happened in the past month, ever since the cpi number came out a month ago, you have had a shift. russell 1000 value has beaten the russell 1000 growth by 6

percentage points. the iwm is up 10%. the s&p is up 0.3%. so there's very subtle changes happening under way, and i think you just have to step back from this macro and look at fundamentals. luckily, we're in earnings season and running at about 6.5% so far. only 36% of the companies have reported. but there are companies out there that are growing much more than 6.5%, and on the declines like you get yesterday that you want to be adding to the good companies that get kind of -- get thrown out, kind of baby with the bath water, if you will, companies like ibm, texas instruments, all those companies continue to fall. you want to use that as an opportunity, because i do think we're still in a very good environment for the economic growth. >> a pullback of just over 2% for the s&p and just over 3% for the nasdaq, is that sufficient?

i mean, you look at how rapidly we've packed in these gains. that's enough of a pullback for you to say, okay, time to buy? >> i don't think so. i mean, i think you want to pick your spots, but i do think this is a stock picker's market. i don't think you just, you know, buy the whole -- just the s&p or even the iwm. that's why i highlighted a couple of those names, because they are seeing good fundamentals, and when they -- when they go down, that's what you want -- you want to put your shopping list together, and so maybe not down 2 or 3%. maybe it's down 5 or 10%, but you want to remember the good companies with good fundamentals. those are the ones you want to be adding to. >> okay. steph, thank you. >> thank you. let's take a very quick last look at the markets. you do see the nasdaq and the s&p futures in positive territory. not by a lot, but it's more than could be said just three hours ago when we started the show. again, you had those numbers

that came out, the data that came out on gdp and other factors. steve liesman says, look at gdp over the last couple quarters. he says average them out for around that 2%. treasury yields with the ten-year at 4.24%. that does it for us today. make sure you join us back here tomorrow. right now, it's time for "squawk on the street." ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. stocks do look for some stability after wednesday's long absent 2% decline. q2 gdp solid, thanks to inventories, but these disappointing earnings at ford, american, whirlpool, nestle and others briefly take the ten-year below 4.2%. futures turn green, investors weigh gdp after stocks saw the biggest one-day drop since '22 with meg