market site in times square. i'm andrew ross sorkin along with melissa lee who is in for joe and becky. the markets are continuing to claw back from monday's selloff. it is a claw back of sorts. looking at fair value. dow would open up 95 points higher. s&p up 19 points. yesterday, the major averages rallying after the weekly jobless claims. the data helping to soothe concerns of the state of the labor market and the s&p 500 jumps 2%. the best session since 2022. the dow adding nearly 2% and the nasdaq adding nearly 3%. i don't know which jobless claims number or unemployment number -- what are we supposed to look at? >> andrew, think about it. you have done the show for a

long time. when have jobless claims been a mark mover? >> very rarely. >> exactly. on "fast money," never have we talked about the jobless claims and impact on the markets. >> does that mean this is a head fake and the market is looking for anything? >> the yen carry trade has been mostly de-leveraged. i heard an estimate of .75 de-leveraged. that is a finite amount of de-leveraging. >> are you saying the all is clear or is this a head fake? >> i'm not saying it. don't you think the reaction to the jobs report was a little bit extreme? >> it feels that way. >> exactly. >> that's a head fake then. >> perhaps. we'll see. >> we'll see what happens today. >> exactly. let's get a check on the other markets this morning. starting off with treasuries,

the ten-year yield at 3.95%. the two-year yield at 4.034%. gold -- bitcoin was higher yesterday. gold is flat at $2,462. as for crude -- we will check on that. some relief surrounding that growth scare we have seen. we have wti crude at $76.37. we mentioned bcrypto. bitcoin above 60,000. it is up 1.7%. ether is up 3% right now. if you were watching "squawk" on monday during the selloff, we had jeremy siegel calling for the fed to make an emergency rate cut. >> this may surprise you. i'm calling for 75 basis point emergency cut in the fed funds

rate with another 75 basis point c cut at the september meeting. that's minimum. >> now the professor is backing off that call. siegel saying it is no longer vital for the emergency rate cut, but he still wants the policymakers to move quickly and aggressively. i don't know if aggressively means september, 25 basis points. 50 basis points maybe in september? that's aggressive. >> it seems like it was open-ended for a reason. if you call for 75 on monday and flip days afterwards, what does it tell you about that call initially? it was a knee-jerk reaction. >> that's what has been happening all week. >> when you see economists and wall street flip the forecasts for what they want or see the fed doing on one data point when jay powell said we will be data dependent and not data point dependent.

wall street was data point depe dependent. >> what do you say last week versus this week? >> the probability is still low. jpmorgan moved to 35%. it felt we moved from 25%s to 70%. the expectations with the fed would do in response of one data point is an extreme change, i thought. check out shares of paramount global. rolling out quarterly results and job cuts. it will reduce the work force by 15% or 2,000 jobs. this is part of the cost reduction plan ahead of the merger with skydance media. it will take a one-time $6 billion impairment charge for the cable networks. for the first time, the streaming division made a profit. profitability now, but not the

next two quarters. a couple of stocks to watch. take-two interactive reporting better than expected profits and provided an upbeat outlook. it expects net bookings to continue in 2025 and 2026. it has about 40 titles in development in the pipeline through fiscal 2027. shares of e.l.f. beauty are under pressure despite the top and bottom line beats. fiscal q1 sales increased, but tepid guidance. the ceo is still bullish on the macro as consumers have become quote choosey. >> i'm in a situation where i don't have to go down the scale

in response to the economic conditions. i'm fortunate that way. >> cheers. it's true. >> when it comes to things like chips, i will go down the scale. shares of expedia topped expectations, but expedia saw more challenging environment and softening demand in july. we heard airbnb of slowing demand in the united states. that goes on the theme of what consumers are spending. we have the latest salvo in the blame game with the global outage. delta says the global outage caused it $500 million and $380 million in revenue with canceled flights and sky miles. the company reiterating plans to sue crowdstrike and microsoft for the damages causing the disruption unacceptable. crowdstrike says the narrative is misleading. microsoft says delta doesn't

have the technology to withstand that kind of outage. we have an analyst coming up to look at delta and the sector. it is really a he said, she said sw situation. if this goes to court, you will know if they were microsoft or crowdstrike systems or other systems. crowdstrike had the problems over here, but delta had not just us in this group, but they had a daisy chain of other software over here. we may have helped knock that out, but most other airlines didn't have that problem because they did not have daisy chain or other technology and the like. delta says not so. we have to find out who is telling the truth. >> yesterday after the bell, in response to crowdstrike, we offered all this help and they supposedly had emails. it is interesting to see what is

documented with the offers of help and the responses to the offers, if there were offers. i guess that is a lynchpin. former president trump holding a press conference at the mar-a-lago residence with the response of the interest rates and fed independence came up. >> i feel the president should have at least say in there. i feel that strongly. in may case, i made a lot of money and was very successful and had a better instincts than others on the federal reserve or the chairman. >> back in april, the "wall street journal" stated a series of changes would be made should he get the white house. powell was trump's pick. separately, harris and former president trump will face-off in the debate on september 10th. trump wants additional debates before the election. >> i wish joe was here this morning for this conversation.

>> then you can go. >> you can go if you like. the point is when the article came out, there were all these people around former president trump who said no, no, no, no, no. that's not what he wants. he would keep the fed independent. there were a lot of other people saying, no, no, no. read the story. now we have videotape where he says he would like to have that. i wonder what that would do. we had all these people on air say if the president impeded the independence of the fed, that would be a real problem for the fed and our economy and treasuries and everything else. >> right. >> i don't know what people -- you watch that tape and that's a thing. >> it's been a confusing sort of narrative. >> it's not confusing. you don't think it's clear? >> i don't know. he said in the past he would leave the fed alone if they -- he said if they did what he liked or wanted them to do if he

was happy with them. i guess if he is not happy with them, i don't know what that means. he also said at rallies, we will deliver tax cuts and we will deliver rate cuts which does imply he has some hand in that. that's interesting. meantime, did you see this? the u.s. men's basketball team and what they did yesterday? the u.s. team coming back from a 17-point deficit to beat serbia in the semifinals. they were down 11 in the fourth quarter. the u.s. now facing france in the gold medal game. we will go to france in a bit to talk to carl quintanilla. coming up, what are the charts telling us about what could be next in the markets?

"squawk box" is coming right back.

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let's get a closer look at the technicals after after a volatile week. we have carter with us. >> thank you. >> we have the benefit of

hindsight. what do you make of the action this week? >> a couple things. the first thing is as of now is it is fairly normal. we know the high for now was the 16th of july and this selloff is 14 sessions in the making as of monday's low. down 9.7%. put that in context. there have been 241 instances in the inception of the s&p 500 where you had a 5% plus selloff. the average decline is 8.2%. 11.8%. this is 9.7. smack dab in the middle of the average. in terms of duration of a week, they typically last three or four. that is acknowledge medium. typically, that is not coming from a complacent set up. we have gone on the longest stretch without a 2% move down

or up and because of the steep and uncorrected nature of the advance before the 9.7% selloff, my hunch is that will not be average or medium and off we go to the races. it will be longer in terms of magnitude and duration . >> car ter, what is notable, th mag seven under performed the nasdaq. what do you make of that as an underlining current with the selloff and the ability of the markets to stage a comeback to speak? >> that's right. so much capital is there. the hope was the rotation, of course, would save the overall market. if money came out of the leaders, it has, it is, the money would go into smaller cap and value names, it did. those would hold their gains. in fact, the small-cap stocks have given back as much.

the iwm and mag seven and others. the reset, while normal, my hunch is because the steep nature before the selloff, we won't escape with a normal selloff. one other thing to consider. selloff is so severe at this point that basically the gains on the year are almost gone. consider the s&p is up 11.2% year to date. the performance of the average stock is up 4% in the performance of the medium stock is 4.2. the year to date performance is driven by the super cap mag names. those are the ones that are still under pressure. >> are they under pressure, carter? is there anything in the charts to lead you to continue they will under perform? >> yes.

the circumstance that is common to most of those is they all had heavy volume drops and gaps. they had been weak with the market and news related earnings drops and gaps that happened with microsoft and amazon, among others. we will see about nvidia. at this point, because of the severe nature of the selling aggressive what you call distribution, that's what the word is when you drop in gap in the volumes four and fivefold. if the smaller cap had given back all the gains with the so-called great regional banks that were doing well all gave back gains, it doesn't feel the set up higher from here >> there is no focus on nvidia, carter, when the hyper scalers came out and reaffirmed or moved higher the estimate for cap ex on a.i. specifically. the fundamentals seem to be in tact. arm-chair technicians will look

back to june 20th as the key reversal day for nvidia hitting a new high and closing on the lows. s as a real technician, carter, is that a watershed moment? it did precede the selloff we witnessed since the beginning of july. >> those are very important days. key reversal days and you are citing it right. market had the low in october of 2022. what it represents is a cr crescendo of panic selling. at some point, there's no one left and intraday, almost like a child slipping from a chin-up bar, it goes down and down and down. we are down substantially. in many ways, what nvidia says

will help encourage the bulls. we are still so far down, it would take a lot to recoup the losses. my hunch for the market is the highs are in for the year. >> i want to end with a bright spot, carter. a stock you think will go higher. you put out a note recently that you like exxon? >> yeah. in a way it is a defensive name and obviously it has two circumstances that are quite bullish. one, how much better acts than other energy whether integrated or drillers, what have you, but the relative performance to the s&p. finally, this is a stock that's in the two-year range and has not made a new high as the general equity market has. i think exxon is a great place to be as a defensive consideration. >> carter, thanks. carter worth. coming up, in just a moment, the appetite for a.i.

investments remaining red hot and one startup is seeing its valuation soar. we will tell you about it next. as we head to break, check out the mega-cap meonnnas the move. meta, apple and tesla on the move. "squawk box" returns in just a moment. and retirement savings. presentation looks great. thanks! thanks! voya provides tools that help you make the right investment and benefit choices so you can reach today's financial goals. that one! and look forward, to a more confident future. that is one dynamic duo. voya, well planned, well invested, well protected. at aes, our energy solutions have powered the world forward for more than 40 years. and as demand continues to scale, so do our solutions. introducing maximo - our new ai-enabled solar robot.

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welcome back to "squawk box" this morning. a.i. startups continue to attract investment. enterprise company glean for a deal to double the valuation from six months ago to $4.5 billion. the company is set to raise $250 million in finances.

dst global found by an israeli investor. executives and investors have been pointing to productivity apps as more lucrative generative a.i. than consumer facing applications. coming up on the other side of this. fix that house. an uptick in the second quarter and will that trend continue and which stocks should investors watch? that's next. ahead of the gold medal soccer match, we will bring you the interview with the soccer league commissioner jessica berman. as we head to break, here's a look at yesterday's s&p 500

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good morning. well come back to "squawk box" here on cnbc. we are live on the nasdaq market site on times square. the s&p 500 is up about 13 points as we try to get back the week. is it like the week will disappear? >> you mean the losses on the week disappear? >> yeah. >> no. we're headed for the fourth straight week of declines. >> i understand that. what do we have to do to get completely back? everyone thinks we're going this way. we need to go this way. >> to get back to flat for the year? >> i want to get flat for the week. i want to get flat for the week. >> we're close. >> that's my point. >> we will see if this holds. we have lost about half of the

gains we saw from early this morning. >> yeah. high interest rates have not only hit home buying, but remodelling. is it finally turning around? we have diana olick with more. >> reporter: a mixed bag, melissa. renovations did see an uptick for the first time in two years. despite that uptick, they are less optimistic in q3 with the current political and economic unsrcertainties and challenges with the costs and availability of labor and costs and materials. sentiment was in positive territory in q2, but ticked down. the indicators for future projects dropped. finally, spending on all those home improvement projects has been dropping on an annual basis since the start of the year and is expected to drop before q4

before improving in 2025. annual spending on maintenance and improvements is expected to reach $4 billion which is below this year's levels. this affects home depot and lowe's. back to you. >> diana, thank you. diana olick. coming up, how wall street views the race for the white house and what insiders want to see from the candidate. that is next. reminder, get the best of "squawk box" with "squawk pod" and listen to us anytime. we'll be right back.

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welcome back to "squawk box." there are 88 days left until the presidential election.

joining us now is lena. >> good morning. >> summer friday. what do you think is going to happen here? what are you hearing? >> wall street is all in on kamala harris. they feel a sense of responsibility for having her there in the first place. they credit themselves correctly or incorrectly with biden out. >> you think all of wall street is in for her? >> i'm not going to paint with a broad brush. you look at some of the bigger folks, there is a concerted effort led by financiers. not a lot of time left, but we are looking at an effort. people want to donate in october. they want to donate in september to really sustain that momentum. a lot of these folks met her back when she was running for

president in 2020. they feel they have known her even though she is newer to the national stage and the top of the ticket. they feel they got to know her and develop a relationship with her the last time she was a candidate. >> here is the second part to the question. there is a frustration among wall street democrats about the biden administration's regulatory regime. all of the bankers who cannot do these mergers and all that. you see this group of people who are all-in on harris, would love for her to tack to the center on regulatory issues. do you think that she will and how is that influence playing? >> those tax cuts next year is center in everyone's mind because a lot of these people and this is painting with a broad brush. some feel they have known her long enough and they feel confident she is a little maleable. if you look at her time in the

senate, she had a progressive voting record than almost everyone. you would never see them rally behind bernie sanders. because they feel they have a relationship with her at this point and they point to her time as a d.a. and somebody building relationships with people in california, they feel confident at some level that she's going to have a lighter touch on regulation. it is an interesting situation. she is a candidate or a rorhshak test. she shows the private sector. i have known her for years. they are confident she is the best person for the job. >> it is a benefit that joe biden stepped aside late in the game so there is less time to know what she stands for. what is your sense? you said we don't know. does she like lina khan?

>> that's a big thing. we are seeing lina khan is a very controversial person. some people who are publicly calling for khan's outster. i think she is embracing the honeymoon phase. the fabltct she is new to the g and you juxtapose her with biden who is senile and older. she is young and vigorous and people are excited about that. >> is your sense -- is your sense that she's somebody that wall street -- that the bill ackmans of the world -- bill is not turning back. bill ackman originally said biden should step down. he started with biden should

step down. not i'm voting for trump. then he moved to trump. there are a bunch of people who moved that way. are any of those people moving back? >> i don't think they will publicly backtrack in a really aggressive way. i think they had a moment where they were at the rnc where you see a lot of silicon valley types. they feel jd vance is their guy because he was a venture capitalist. now that has dimmed a little bit. i feel these people feel they are too far in to the trump campaign to take a step back. at this point, you want to bet on a winning horse. if you made an investment in one campaign, you want to stick with it. of course, all of these wall street guys grow up dreaming of becoming finance secretary. >> i was going to go crypto next. >> i thought you were going treasury secretary.

>> i didn't mean to steal your thunder. we can do the one-two punch. >> crypto first. she or people on her team are reaching out to people in crypto land, is there any movement there or is that self defeating? >> it is interesting. there was a bit of a kerfuffle. trump spoke at the bitcoin conference. she and one of her staffers reached out about her speaking. there was hope she would make appearance. whether or not that was a campaign conflict or whatever it was, she wasn't able to go and attend in person. there was interest. there's always an effort among congress member ro khanna to make it a big tent party. kamala hasn't embraced that yet at this point in the way that republicans have where they put it in the platform they want it

to be pro-crypto. the zoom meeting held to get democrats and crypto types on board that did not go smoothly. that is a concerted effort. i don't know that is really landed where they like to see that land. >> here is the second part of the one-two punch. finale. treasury secretary. in a harris administration, who is it? >> who is closest to buying in? >> the people leading the charge on wall street, you have maguire and effron and lasry. they will putting themselves front and center. who she chooses remains to be seen. jamie dimon. who do you think? >> i'll say i think her first pick, if she had her own vol volition, she would try to get jamie dimon to do it. whether he would do it or not is the question.

after that, she would pick gina raimondo. i have a huge respect for gina raimondo. ma m maguire. >> i don't think jamie dimon would want it. >> that's interesting. >> why wouldn't he want it? >> i think he doesn't want to answer to anybody. >> okay. >> really? you think somebody could turn that job down? i feel like secretly everyone has dreamed. >> i think potentially this -- >> you think it could be it? >> the timing works. the rebuilding is up on park avenue. there's been talking. >> the legacy. >> sure. >> by the way, if you have a lot of stock and you want to put it in treasuries, there's a great opportunity. you leave and go to the white house, the tax benefit, at least in the immediate term, is quite rema remarkable. >> public service.

>> lydia, thank you for coming in on a summer friday in your whites. >> summer whites. winter whites. which ever way it goes. coming up on the other side. we head to paris. carl quintanilla is there as the olympics head into the home stretch this weekend. he's going to be joined by the commissioner of the women's soccer lgueae. jessica berman's going to be with us. you don't want to miss that conversation. we're coming back here on "squawk."

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mine. >> really? oh, jessica says hello. >> hi, andrew. >> jessica berman, the commissioner of the soccer league. good to have you. >> thank you. >> huge game. what's on the line in terms of delivering engagement for the sport for the long term? >> i think the fact they are playing in the gold medal match allows us to capitalize on the incredible momentum on the team and performance. it is really a new generation of players which has captured the attention of the average american to realize the next generation of the u.s. women's national team is formidable and here to compete and competing to be the best in the world. of course, if they win gold, takes it to another level. of course, this is a win for our league and for the u.s. women's national team regardless. >> as a business, we talked so much about women's sports this

year. wnba as an example. i still think it was women's soccer that pushed the boundaries first, is that fair? >> having spent my career in men's sports and coming to the league to be commissioner two and a half years ago, i said the unique thing about women's soccer is one thing about sports when you close your eyes and think of sports, you think soccer and women. there is no other sport where that is true and it gives us a running advantage with american fandom and sports and american sports fans love to cheer for the best in the world and we are the best in the world and this is another testament to that. >> right. viewers may not know what's happened with viewership and ratings. world cup from 2019 to 2023 was up 70%. >> correct. >> how is that -- what makes that happen? is it about the personalities on the team or some sort of marketing firepower you are

using behind the scenes? >> it is all of the above. it starts with the players and we need to be the best in the world and we care in the country. we know there is huge competition for the average consumer and american sports fan and there is a lot of great product out there. we believe we're the best in the world. if you love watching the best in the world at the world cup or at the olympics, you can actually watch these athletes compete in our league. on the pitch tomorrow in the gold medal game, we will have 19 on the u.s. women's team and eight on the brazilian team. the best in the world, aside of the u.s. women's national team, actually play in the u.s. american soccer league. for americans to know that and reco reco recognize that, our viewership is up 30% year over year and attendance is up double digits growth year over year over 50%. we add expansion.

we're now in 14 cities across the u.s. and continuing to expand and continuing to expand in 2026. we have a team ready to capitalize on the olympics. >> we talked on the momentum of the olympics. >> so is the next story about valuation? we talked a lot about iger and willowbee and angel city. >> two years ago teams were selling for $5 million. we sold an expansion team in 2023 for $53 million. and this year as you mentioned, willowbay and bob iger bought angel city for $250 million. the growth is there, and the enterprise value i think demonstrates that. and it is rooted in actual data that is based on revenues and a real business that has been built around this incredible game. >> right.

finally, thoughts about the job they did here and what's on the line for l.a. in '28? >> we're really excited because i think for the first time we're able to see youth of our league in the national women's soccer league displayed on the pitch with the u.s. men's national team. so the players who are performing at their best and leading the charge in these games are actually the youth of our league. this is the next generation of stars. so when you think about it, i think they coined themselves sophia smith, mel swanson and trinity rodman call themselves trinity espresso, they said that, not me. they're the next generation of talent, they're the front three, everyone is super excited to watch them. and it is our job at the league to make sure we have the professionalized environment to really ingest their stardom and their greatness and make sure we're there to support them with professionalized training environment, with 20,000 fans per game and giving them a chance to continue to thrive and grow and develop as the best in

the world. >> right. all eyes will be on them tomorrow. that's for sure. >> we'll be there. >> jessica, thanks for coming in. great to see you. andrew, we'll talk more this hour or maybe next hour and all day actually about the incredible epic comeback in men's basketball last night. >> that was unbelievable. >> yes. and just looking at the journal piece today, i think the headline is they almost blew it. but being down 13 at the beginning of the third, it was -- i mean, it has been talked about a lot here this morning. >> excellent. we're looking forward to it, carl. thank you. appreciate it. coming up, the war of words continues between delta and crowdstrike. the airline claims that the global i.t. outage will cost it more than half a billion dollars. we'll look at dealt wlta and th sector next. "squawk box" is coming right back.

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delta calls crowdstrike's apology vastly inadequate and says last month's outage will cost it $550 million including a $300 million revenue hit in the current quarter. crowdstrike delta continues to push a misleading narrative. joining us with the outlook for the airline is steven trent, research airline analyst. great to have you with us. why was delta hit the hardest of the airlines? and why bother going after it when -- it seems like nobody else is right now. >> appreciate, thank you and appreciate you having me on. so i do believe that delta relative to the others had a lot more exposure to those systems. and its competitors were using different software and had different suppliers, so, delta unfortunately happened to have a great deal of exposure to that, apparently thousands of systems

internally. >> why do you think they're going after the money? it is almost becoming a pr issue at this point for them to say it is because of you and crowdstrike says, no, we extended our offers to help so many times and you turned it down. >> yeah, that's a great question. i think that from a product perspective, delta is the customer, the product failed in a catastrophic way. and, you know, i wasn't in the data room to understand whether crowdstrike called them to try and help or if delta reached out, who knows what happened there. but over a half billion dollar loss and somebody has to be, i would say, on the hook for that. delta did manage to reboot things after a while. it had to reboot apparently thousands of different systems manually. and when they were rebooted,

they're not up and running automatically. it takes lead time for them to spool up. i won't second guess exactly why they're going after crowdstrike, but the financial impact has been significant. we see a 60 cents per share impact of 3q. >> you looked through this, though? this is a black swan event, right? or does exposure in terms of more exposure to these particular kinds of systems sort of expose a new risk to the story? >> yeah, i think that risk has been there. and this isn't the first time we have had an outage or a technological failure like this. delta did have a problem back in august of 2018 that resulted in 2300 canceled flights and $150 million charge. going forward, the chief technology officers at the airlines possibly need to think about, you know, who their

suppliers are, and whether they can layer in some level of redundancy in these technological suppliers. because you look at flight operations, redundancy is the name of the game. for safety reasons, and for reasons of efficiency. so, perhaps they need to do the same thing here. >> and in terms of demand, we already heard from the airlines and we're also hearing incremental data points now from the hotel industry, from the short-term rental industry, and they're not good, they're not painting a great picture for consumer demand into the second half. i'm wondering how you model out consumer demand for air travel and at what price point, if there is going to be pressures on pricing, what data points you sort of look at out there in the economy that will guide you. >> yeah. absolutely. so i think in the basecase of a airline, what is fascinating and maybe that's one reason the sector is so volatile is the consumer can move much more quickly than the airline. so when we look, for example, at

these booking curves and, you know, how flights are trending, and what level of flights are in the system, what kind of traffic flow we're seeing today, certainly one of the places we're seeing some stress is on domestic mainline. so that's not to say that people are suddenly not traveling. there is still growth and still demand, but on domestic mainline and let's say basic economy product, this is a place where the demand has started to undershoot the amount of supply that's gone in. and that's kind of a very tough game to play. you can look at a curve and anticipate demand continuing to be strong, but maybe it starts to pivot a little bit. and you already have flights set up, you already paid your flight crews, you already have your ground staff paid up, you just can't suddenly not pay those people. so, we think in 3q, looking at

airfares, the booking curve is adjusting starting later this month, we're seeing some inflection. >> right. that's always been the knock on airlines, they had great demand, they build up the capacity and have too much capacity and that's the situation we're in now and hearing them trim back capacity. does that set up for a better financial setup in terms of their quarters in the third quarter and fourth quarter as they get more discipline surrounding capacity. it is a hard ship to turn. but it is turning right now. >> absolutely. it is like turning a battleship. i would say in terms of the group, what we are seeing is a shift towards the network airlines, if one looks at wallet share of gains we're seeing from the airlines prepandemic to now, you have a great deal of that wallet share shifted to the network airlines. very substantially delta and united. and people are talking, of course, about 3q guides and

tough prints in the second quarter. but if we look at the four network airlines, they had roughly $4 billion adjusted earnings just in the second quarter. delta is trading at a double digit free cash flow yield. i hardly think those are weak stories. if we look at the discount airlines, it is a little bit of a different situation. and when we go forward into the third and fourth quarter, we are seeing some discipline in terms of the group starting to cut capacity. what i think is going to be interesting is how the discount airlines respond in terms of trying to add premium. you know, is it going to be the case that they're going to get some incremental passenger flow from -- correct, exactly. are they going to get incremental passenger flow that some people in the network want to fly premium? yeah, sure. is anybody who is traveling economy plus on one of the network carriers going to go

down to a southwest or a frontier? i think that's a different question. >> right. steven, good to see you. thank you for coming in. steven trent of citi. >> meantime, it is now just past -- two minutes past 7:00 a.m. on the east coast. you're watching "squawk box" on cnbc on this friday. i'm andrew ross sorkin with melissa lee. joe and becky are off today. a lot going on this friday morning. among today's top stories, one of china's busiest traffic ports reporting an explosion on board of a container ship. the ship owned by taiwan's yangming marine transport, carrying hazardous goods. no casualties or injuries were reported. shares of expedia moving higher this morning. the company's second quarter results topping expectations, but expedia now warning it saw a more challenging economic environment and softening in demand in july. this is somewhat similar because we heard competitor airbnb warned of slowing demand in u.s.

markets. shares of take-two interactive popping in the premarket. this on an upbeat outlook saying it expects net bookings to grow in 2026 and 2027 as it gears up for the launch of grand theft auto 6. that happens next year. the company adding -- saying it is going to add 40 new titles it has in its development pipeline for fiscal 2027. let's check on the futures. we're setting up to extend our gains this morning, but we're still on track for a fourth straight weekly losing streak. the s&p looking to add 14 at the open. the dow looking higher by 47 at the open. let's get to dom chu with a look at this morning's premarket movers. >> let's get things started with a check on elf beauty, those shares are down big, 9% or so after the cosmetics company reported better than expected quarterly profits and revenues. net sales grew by 50% over the same time last year, driven by strength in both its retail and e-commerce channels.

but investors are still looking towards cautious optimism about consumer spending and what that could look like. and also, what future import tax, tariff policy could look like in the future administrations to come, given that elf makes 80% of its products in china and a lot of those are exported out. watch elf beauty shares down 9%. also, don't miss elf ceo who will be live on closing bell for an exclusive interview later on today, 4:00 p.m. eastern time, tune into overtime for sure. let's move on to shares of paramount global up 6% right now after the media giant posted better than expected earnings and announced plans to cut 15% of its u.s. workforce. revenues did fall shy of the mark, but the company's streaming division swung to a profit for the first time. shares there still down about 25% over the course of the last year to date period. so paramount global getting a bit of a bump. we'll finish with a check on sweet green. those shares up more than 20% after the salad chain reported better than expected revenues,

sales growth at established restaurant locations or same store sales climbed by 9% compared to last year and the company raised its guidance for the full year. the chain made improvements on its profit margins but still looking toward the path of sustained profitability. up 185% over the year to date period, up 23% this morning. i'll send things back over to you. >> i'm waiting for a thank you card from sweet green. >> how frequent? >> i've been helping them. >> you have the card, right? >> i've been assisting them. >> do you have the card? >> i don't. maybe i should get the card. i'm helping them and doordash at the same time. >> you're known to be -- >> cheap. >> i was going to say frugal. >> proudly so. i got to get the card. does that work for doordash? >> i don't know. coming up on the other side of this saladgoers, shares of cloud and cybersecurity company

akamai surging after their earnings beat. we're going to talk to the company's ceo on everything from consumer demand to the crowdstrike outage. and later, white house energy adviser amos hochstein will join us for the latest out of washington on the oil markets, middle east tensions and so much more. do not go anywhere. ♪ (alarm sound) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes!

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the markets, eric friedman. good morning to you. we could say it is the best day, but, you know, the context, of course, is in a bad week, a bad month. where are we really, eric? >> andrew, i think we're still in that price discovery phase. we have to keep in mind that the japanese stock market lost 20% in three days and that just ended on tuesday. so, that aftershock, if you will, is something that is obviously significant for the markets to suggest. we think this is a grind it out improving landscape for investors. we think the bias is higher, not lower to your and melissa's comment earlier from this morning. we're only a half a percent a way from being flat on the week. that's significant in terms of the work done across markets. we have a lot of sector stuff we can talk about, but we still think the bias is higher, but i don't want to think that this is a market that has done a good job of isolating the issues. the japanese issue was a

positioning issue, the fundamental bias we still think is they grind it out higher, that's the working thesis for now. >> how dependent is that on the fed moving aggressively and we can define aggressively in september? >> i think two things have to happen. one, you have to have some clear messaging from the fed, andrew. that's the next data point we have to hear with more credibility. it can't be, you know, hey, we're still waiting, watching, a signal has to be given about we get it that the economy is slowing, consumer is starting to feel the effects of a fed funds. right now still, andrew, 5 it is 3%, it has been there for over a year. the second thing i think we really need to see is a commitment about where rates will settle out. we know everybody else is focused on the fed will start cutting interest rates. what is more important is where do they normalize. before the dotcom crisis and what have you, fed funds is like at 7% normally. post the '08, '09 crisis, fed

funds was at 1. we think the answer is in the m mid-3% level, but they have to do a better job of signaling where they are, that's more important than where they need to start cutting. >> in terms of sectors, what would you touch and what would you runway from right now? >> for our clients that have more than a year time horizon, we don't think the story changed. we think tech -- those are the spots we want to invest in. that's where you hit earnings later today. the cyber trade is one that we still think is worth revisiting. we also think the a.i. trade will start to broaden out. that's where corporate capex will be concentrated. companies are focused on becoming bigger, stronger, faster, through tech spends. that doesn't go away. the thing that is pretty interesting to us is the strength in the real estate space. that's not really been an area, everybody knows about san francisco office, and some of the challenges within the broader multifamily landscape, but if this were really a big

growth scare, we expect to see a significantly more negative reaction in reits in particular. the fact that credit is hanging in there, the fact that real estate is still doing well, we think that's a spot that investors should have on their ledger. >> i understand, eric, you're bullish longer term on a.i. how do you think of the space in terms of thementioned about bro out the a.i. trade, nvidia has been underperforming the market for some time, for a month plus now, going to others which have not been performing. i wonder how you think about that in terms of valuations? >> i was fortunate to be on the board of an a.i. firm. seeing the evolution of the space has been really fascinating. i think right now and your team has done a great job of covering this, there is more of a concentration in the suppliers and the hyperscalers. that's the first part of what markets are still trying to

figure out. the sec ond leg that is interesting is what companies start adopting the technology and using it at a broader scale and win customers because they're using it. that, we think, is broadening out within some of the stronger consumer discretionary companies, some large are big box retailers, those are places where we think there will be more concentration, winners versus losers. that's where we think the next part of the trade is. >> you're investing that way right now? >> we are. we are. we think still, again, back to the notion of the growth and the part of the consumer discretionary, that's where the adoption is occurring. that's the space that we still think again on weakness you can accumulate. our marker, if you will, is nbx, that is key for us to stay involved on a still bias toward technology, that's the way we're thinking about the setup right now. >> okay. eric, thank you for joining us this morning. >> thank you. >> have a great weekend. >> you too. coming up, the ceo of cybersecurity company akamai joins us next to talk the

company's earnings and what they're seeing in the world of hacking. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. onr northwestern band helped spsothe lithuanian men's basketball team in barcelona in the 1992 olympics? the answer when "squawk box" returns. (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! >> at university of (♪♪)

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and now the answer to today's aflac trivia question. what american band helped sponsor the lithuanian men's basketball team in barcelona in the 1992 olympics? the answer, the grateful dead. not only did the bandeau nature to the team to get them to spain, they also gave them tie-dyed warmup shirts and shorts with lithuanian colors. the team walked away with a bronze medal. akamai stock up big this morning to the tune of 8% after reporting second quarter results. the company beat on both the top and bottom lines coming in with revenue of $980 million. joining us now, tom leighton. a huge sigh of relief when your results came out because people were spooked by what they had talked about before and that's

customers sort of re-examining their budgets in light of concerns about growth. what are you seeing on that front in the second half of the year? >> akamai is a very different company. you know, majority of our revenue is in our market leading security products. a lot of demand there and growth. and, of course, our compute product line growing very rapidly. and two-thirds of our revenue is now security and compute with very strong growth. >> noted. and i guess the concern overall is just the spending suck that is happening. spending that goes to a.i., spending that goes away because of economic concerns. just in terms of your customers' ability and wants to spend, the wallets are open? >> you know, it is always challenging to earn revenue from customers, especially, you know, with macro economic challenges. some geopolitical challenges, but customers need security more

than ever. and with our compute solution, we help them save money compared to what they would be spending with the hyperscalers. so, that's a very good market for akamai in our leading product lines today. and with a.i., yeah, there is a lot of spending going towards a.i. and, you know, there are a lot of a.i. applications running on our compute platform today. so that helps drive revenue to akamai. >> is that part of the -- you mentioned the growth that you've seen in security and compute, compute was up 24% year on year in constant currency. security was up 16% constant currency year on year. is part of that -- can you attribute part of that to a.i.? part of it is just your general strategy, right, to sort of sell in these higher growth adjacent areas to your core delivery product. >> i think some of it is due to a.i. but a.i. is in the very early days, i would say. i think that's where you look to

potential future growth is there is more adoption of the new gen a.i. technologies and we're using it in our products with the new akamai platform which protects the enterprise of a network with our zero trust segmentation solution and we use gen a.i. to provide a very easy to use human language interface so that our customers' operations teams can literally talk to their internal networks to find out what's going on, where defenses might not be as strong as they need to be. >> and since you're in sort of the same business, tom, i got to ask you what your take is on the crowdstrike outage, such a massive outage that shows our vulnerability as a society to -- that single point of failure notion. >> obviously very, very bad. a lot of lessons i think for the industry to learn starting with one that we learned the hard way, actually 20 years ago, which is, you just don't deploy

data or make up dates to the entire platform at once. 99% of the time that's fine, but eventually there is going to be an unintended consequence. if you update everything at the same time, you're going to have the problem everywhere at the same time. and so, when you make updates, you want to do it in a phased rollout, even after you tested it and you think it is okay. just to make sure you don't cause a big problem. and i think another fallout is going to be, you know, an appreciation that reliability really matters. it is not just the functionality or whether something is popular, but if you've got something you're putting on your critical infrastructure, it is important that it really be reliable. because if it is not, you can see the damage that can take place. >> tom, just related to this, from the outside, do you have any sense, you know, we have this sort of he said, she said situation going on between delta and crowdstrike, microsoft. delta saying, look, you know, all of our systems were busted

by this. crowdstrike and microsoft saying, yes, some of your systems may have been busted by this, but then you had daisy chained them all together with systems that were not our own and with outdated systems and that's why you have the problem you have. who do you believe? >> got to be pretty sympathetic to the enterprise using this software. and getting wiped out. you know, unintended consequences happen. the i.t. infrastructure, the digital infrastructure is more fragile than i think we would all like. and so that's, i think, why you do see events like this, not to mention all the cyberattacks. you got to have really state of the art defenses to not be taken down by ransomware or victimized by data theft attacks. it is a tough one to blame the enterprise here. >> going back to what you said before, it sounds like do you think it is industry standard pretty much not to roll out a

massive patch like the updates all at once, that it should be phased? for the very reasoned you say? >> it should be. hard to know industry standard because companies don't really talk about it. it is something that, you know, we have done for 20 years, we put an enormous effort in to reliability. and sometimes, you know, it is customers don't always appreciate that until after the fact or they seeing some like this. and in fact, our goal is five 9s. we were very pleased. one of the world's largest banks received five 9s over two years and that means less than ten minutes of downtime in two years for all reasons, including cyberattacks. and that's just incredibly hard to do and you got to put a lot of investment to make that happen. and not all the companies probably do that. >> tom, great to speak with you. thank you. >> thank you. >> tom leighton, the ceo of

akamai. when we return, how jpmorgan is making use of its new a.i. assistant powered by chatgpt. and then later, we're going to talk to white house energy adviser amos hochstein on what he's seeing in the markets. "squawk box" returning after this.

news out of cnbc.com this morning, jpmorgan giving its employee an a.i. assistant powered by openai. joining us to discuss that, hugh sonnen. what's going on. >> it is great to be with you. so, you recall back in april jamie dimon said that generative a.i. was going to be as potentially significant as the advent of things like electricity and the internet. and that it would be sort of a coach sitting on every employee's desk sort of helping them out, helping them write emails, generate reports, do research, things like that. and now we have an idea of what he was talking about. they rolled out to 60,000 employees and ultimately i believe hope to have it really ubiquitous within the bank a program called llm suite.

and llm suite is their front end, their wrapper, their portal into large language models of openai, which is the oimb chatgpt and will be the llm behind several other models. it will be several other models of llms and so this is essentially going to be sitting on jpmorgan's employees' desks and helping them do cognitive tasks and really kind of a surprising advent for the technology, andrew. >> in terms of what it is going to be able to do, is this just looking through all the documentation that exists within jpmorgan? >> yeah. >> is it the entire suite of everything that is inside jpmorgan? i assume it is going to be very siloed. i don't know. >> yeah, well, the point is, you recall last year they actually banned -- they restricted chatgpt from employee use and that's because they didn't want to expose their proprietary

jpmorgan data to the models and train the models of openai. so they're containerizing their data and this is an ability for them to use the data of jpmorgan without exposing it to the outside world. but, yeah, they're going to be able to use it to do research, to do specific tasks. >> i'm assuming there is going to be -- they're going to have to containerize all sorts of parts of this. so, the folks in the wealth management business can't be searching stuff that would exist in the banking business. the bankers shouldn't be searching stuff from the analysts, right? how does this all work? >> i would assume that's right, andrew, that there are specific rules and obviously walls between the different parts of the business. you wouldn't want parts -- for instance, in wealth management folks to get potential data access from the investment bank, for instance. and they really took -- it took them about a year to create this

portal, and i think it is really because they want to do it in a way that was data secure, andrew. >> okay. hugh, great to see you. appreciate you bringing us that news. thank you. >> you got it. coming up, the health of the consumer in focus. steve liesman will join us with the latest retail monitor and insights into where americans are spending and holding back their money. "squawk box" will be right back.

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the futures looking up, not nearly as up as they had when we began the broadcast. looking at the dow up 15 points. nasdaq up 7 points. the s&p up 2 points. treasuries, looking right now at the ten-year note at just about 3.955. the two-year, just over 4, 4.039. look at bitcoin right now, because it has marched back up at $60,480. the july cnbc nrf retail monitor out this morning. steve liesman joins us now with more on that. what does it reveal? >> modestly boosting their spending in july, melissa, compared with june. that's according to the cnbc nrf retail monitor. good growth in ten of 12

spending categories. the data offering some confidence that the economy and consumer are keeping their momentum going in the summer here. total retail sales ex-auto and gas, up 0.7%. better than the 0.5% on the prior month. core retail, which we call core retail, takes out restaurants as well, up healthy 1%, better than 0.3 in. the year over year, 1.7 compared with 3.1 in june. the data derived from real credit card spending during the month. gathered and clenched by our friends at affinity solutions. it looks to be helped by back to school spending, furniture, furnishing the dorms and online sales promotions like prime day that happened in july. here's what we got. gas stations up 3.4%. restaurants and bars did pretty well. and general merchandise, furnishings up 1.4.

negative on health and personal care and building and garden supplies. looking at the year on year, pretty good year of general merchandise stores. all those things doing pretty well. the gas station is down, maybe down again next month. sales in the retail monitor have been running a bit above their own trend the past few months and a bit above census retail sales data. we're showing a bit more strength through the consumer. nrf economists say consumers are cautious but still spending where they find value and says there is a focus on val yaue an price. look for a 0.3% gain in the headline retail sales numbers, that comes out thursday by census. just 0.1 ex-autos. after that weak friday jobs report, markets have been hungry for any data showing whether the broader economy is weakening or the july report was an outlier. the retail monitor suggests rumors of the economy's demise are premature. andrew?

>> steve, before we move on, i want to tell you about a different story or want to ask you about a different story, which i'm sure you saw, former president trump holding that press conference in mar-a-lago yesterday where the interest rates and the fed's independence came up. i'll show you that tape. >> i feel the president should have at least say in there, yeah. i feel that strongly. i think that in my case i made a lot of money, i was very successful. and i think i have a better instinct than in many cases people that would be on the federal reserve or the chairman. >> so, back in april, you remember the journal reported that advisers close to the former president would be looking at a series of changes to the central bank should he regain the white house in november. then there were other people telling us, steve, he really wasn't interested in that, and now we have it on tape to some degree. what do you think of this? >> well, i would suggest that the former president take a look at turkey, that would be a good

place to start if you want to put up a turkish lira there and you can see what happens to a country's currency when the president can dictate what happens. there has been study after study showing that essential banks independence leads to better outcomes for the currency and the economy. that's in the first thing. the second question i guess i would have is which particular instinct is donald trump talking about? the smart instinct that bought mar-a-lago and trump tower or the one that did trump university or the one that built the atlantic city casino? the third thing i would say, andrew, is the fed has plenty of flaws. and there is plenty of room for reform there. but it is worth pointing out that the way that the fed is constructed is in a way that reflects our values and our culture as a country. you have a kansas city fed that has an equal voice to a chicago fed that has an equal voice to

an atlanta fed and you to have washington and new york balancing with chicago. and it is a real balance of who we are as a country, not that you couldn't reform it, for example, san francisco is a ridiculously large one, why are there two federal reserve banks in missouri, but ultimately, what you have is a reflection of what is the best way to do this? yeah, you could probably have in any case, andrew, if you have the right dictator come in and make laws more quickly than our congress could. but if that's the way you want to do it, i'm not sure. so, it causes great concern and i just wonder how the people who support the president, especially on the business side, kind of rationalize this kind of talk. >> let me ask you, i think the rationalization would be that presidents, historically have tried in their own way, often

times more privately to influence the fed, they haven't done it as openly and the question is does he want to actually fundamentally change its independence and the actual structure of it, or is he saying, you know, i want to have a say and i'm going to talk more about it and frankly other presidents were doing that all along, they just never did it out loud? they said the quiet part out loud. >> you're right. you're right. we don't know what exactly he means by this. that's sort of a problem. harris doesn't talk and that's a huge problem. trump talks and we're not sure what he's saying and that's a big problem. so, i would, you know, put a box -- if you're going to talk about fed independence, from a market standpoint, we would like you it talk with more detail and what exactly you're talking about. and i shouldn't, by the way, just go to turkey, for examples of fed independence. look at nixon and other politicians when it came to

making u.s. policy and the inflation that resulted from that. if you're a president, what do you want? you want essentially low interest rates all the time, and you don't want to take the hard decisions or have anybody take the hard decisions that would slow the economy, especially coming up to an election, et cetera, and that's why you got the inflation that you had. and that's pretty much why one of the reasons we have a fed system that is an attempt to be insulated from politics. i don't believe it is entirely insulated from politics. the members of the federal reserve board, they live in the culture, they live in the society, they're certainly influenced by it. but very much the way you try to create and insulate the supreme court, you've done the same thing with the federal reserve, it does, however, report to congress. and the idea that there could be more transparency, more accountability, i think that's a fair criticism. >> okay. steve, want to thank you. appreciate it very, very much. have a great weekend, my friend.

when we come back, we're mping to talk to the ceo of one coany using a.i. for drug discovery and development with partners at bear and nvidia. don't go anywhere. you're watching "squawk box" and this is cnbc. 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

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bring on the good stuff. our next guest will tell us about a new acquisition, the use of a.i. in drug discovery and so much more. chris gibson, co-founder of incursion which announced the acquisition of a smaller rival in an all stock deal. good morning to you. >> how are you, andrew? good to see you? >> i'm great. i'm great because we're talking to you. i find your company, we talk about a.i. all the time. and consumer uses and b to b uses. your use cases is the one case that actually seems to be working in a remarkable way. for those who are uninitiated with rekucursion, tell us what

you're doing. >> absolutely. biology is extraordinarily complex. so complex that 90% of drugs that go into human clinical trials actually fail before they ever make it on to the market. and so at recursion, robots are doing millions of experiments, and then we're using a.i. to understand all of the patterns in those data to try and essentially move failure earlier in the pipeline so that when we take a medicine into the clinic, our hope is that it will be two patients faster, at a lower cost and eventually make better medicines available for people all around the world. >> is there a good example of this where it worked so far that you can talk about? >> absolutely. we have five programs that are in human clinical trials right now. and over the next 18 months, we're going to read out seven clinical trials and with the proposed business combination we

hope to read out ten programs in the next 18 months and in our industry in biotech, that's quite a number for such a small company. >> well, that's what i was going to ask you about. in terms of what that deal does for you, effectively it is providing you with more to train on or no? >> well, absolutely. the process of discovering and developing a medicine consists of hundreds of different steps. and then we have been working on the problem for over a decade, and we really built some incredible solutions on a lot of the biology and the early chemistry and some of the later parts of the process. and the team has led the world in the precision chemistry components that go into the middle of the discovery process and so by bringing these companies together, two smaller upstarts in the face of this massive biopharma industry, we believe that we're going to be able to build an end to end full stack solution of tech-enabled drug discovery that is going to bring better medicines to patients sooner and one day we

hope at a much lower cost. >> so does this speed to market or speed through phase one, phase two, and phase three trials? is there a cost savings or a quicker to market aspect to this? >> yeah, thanks, melissa. absolutely. our goal to prove that over the coming decade that this kind of approach, this experiment we're running about whether there is a better way to do drug discovery, different way to do drug discovery, it will mean faster to market, less expensive, more efficient. we're in the early stages. it takes a couple billion dollars and roughly 12 to 15 years on average to bring one medicine to patients. we're an 11-year-old company, with five medicines in clinical trials and as i said before, this business combination comes through, our hope is to read out ten trials in the next few months. we believe we're on a trajectory in our first 20 years as a company becoming a true platform, a company that is using these tools of automation,

m machine learning and a.i. and incredible teams at the companies that are coming together in order to really really improve the efficiency of this industry. and at the end of the day, what really matters is bringing patients medicines because they're waiting and there is a lot of diseases where our medicines just aren't good enough today. >> chris, is business will use similar technology? what are the patterns on your technology versus others? >> absolutely. we believe the competitive mode in our field is data. we are seeing commoditization of a.i. tools across the space and think the differ wrencentiator data. real experiments running in our own facility. at the end of the day, though, what really matters is that a patient is getting a medicine. they don't really care if that medicine came from a.i. or if it came from a traditional approach. we think these toolles ls will

dramatically increase the pace of the delivery. >> great. take care. >> you, too. coming up, making a retond, etht rebound. talk about future of streaming and more. we'll be right back. sure, i'm a paid actor, and this is not a real company, but there is no way to fake how upwork can help your business. search talent all over the world with over 10,000 skills you may not have in house. more than 30% of the fortune 500 use upwork because this is how we work now.

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nvidia and other chip stock surge over 5% thursday as tech led a market rebound. joining us, senior researcher vivant arya. great to you have with us. we highlighted the gain nvidia saw yesterday. for the week nvidia is underperforming the philadelphia semiconductor index. nvidia's down about 2%. stock up almost 3%. there have been doubts since probably that june 20th universal date where nvidia shares hit a new high and closed on lows. where the stock has been struggling. where do you come out on how the stock is valued? and if there's too much hype in the stock? >> good morning, melissa. so i think practically speaking, whether nvidia or the rest of the space, we could say later this month and have a required

reset and any delays associated with their new backlog which i think is actually not that big. if you take a step back, we have to separate what's happening in the market from the fundamental side. i think what's happening in the market and the volatility has nothing to do with semis, but this is where all the gains were, because a.i. was the best game in town. and that's why these companies saw the most growth during this activity. look at fundamental side. number one, every one of nvidia's top customers whether amazon, meta or microsoft or google, they all said they are investing more, not less, in a.i. two, look at nvidia stock supplier. taiwan semi. very strong outlook. this morning very strong guidance to their last month, and number three, look at nvidia stock partners supermicro. they got dinged on the market side but if you look at the sales growth they showed for the

next 12 months, up 90%. what people are modeling for nvidia. so i think the fundamentals are still extremely strong, but the market is going it go through its volatility, which we think should subside by the nvidia results. fundamentals are very strong. final point on valuation. phi take the mag seven outside of nvidia they are trading, and the broad market, it's trading roughly two times its earnings. and nvidia trading .8 times. right? less than 30 times for over 35, 40% earnings growth. fundamentals are strong and valuation similar to that. >> unless a doubt on the earn earning's growth. get more guidance from nvidia. in terms of reports to delay to the blackwell chip, reports out of the information, interesting. we hear about delays to other hardware items. think about it. is it going to be a sale denied,

or a sale delayed? in your view, these are sales that will be delayed. correct? that these sales will actually happen. it's maybe a push down a quarter or two quarters, whatever? >> yeah. so if we look at the nvidia proper product which is the product before blackwell. demand is off the charts right now. what we heard from super micro. guided well above consensus and a lot is actually based on the hover product. because we just have had a spirit of insane supply constraints in the industry, and just because blackwell delayed a little bit doesn't mean the supply constraints are going away. so any customer who can put their hands on offer is still able to buy that product. when it comes to blackwell, there are many different versions of blackwell. the most extreme are in the highest, most densest version of the architecture. they are perhaps pushed back a quarter or so. that can be reflected in

numbers, but when it comes to other versions of blackwell, i think they will start to ship from blackwell later this year. the key point, the demand of copper and blackwell is extremely stongrong for them. >> amd is having a pretty good week and gaining on the notion they're going to gain from intel's woes. downgraded indell last week. do the gains continue, vivek? does intel continue to sort of give share to others? >> sure. you know, when we look at cloud computing overall, i think this is still the best place to be. you are exposed to the most reliable customers on the planet. right? not just in tech, but these are the most reliable customers. they're investing in a.i. mission critic many, cloud customers. you just had recursion on before the segment. building one of the fastest super computers to invest in

drug discovery and partnering with nvidia on that. i think this is a very broad market phenomena. now, cloud computing, favorites nvidia and broadcom. once we get oiutside of nvidia and broadcom, giving a lift to others, whether amd, marvel. intem is definitely behind in this area, invest at the right time and still trying to catch up on the manufacturing side. i think a tough few quarters ahead of them and really need the broader enterprise market, china market and the bc market to recover. favorites are nvidia and broadcom. >> is there a shot that intel loses any of its chip act money, vivek? >> that's hard for me to say. what's important to know is that we are all for more domestic manufacturing. i think the fact that we are so

dependent on taiwan is definitely a risk factor. now the question becomes, how do we get back manufacturing in the u.s.? is there have to be some combination of taiwan semi, samsung and intel. already the three companies that know how to do leading-edge processors, and they have the capability to do that in the u.s. intel is falling behind in that, and i imagine that chips will have certain milestones in place to make sure that all of the investments that are input, put in place, there's actually a return on them. it's hard to say what happens to the chip side. on the earnings, definitely indicate add strong commitment to their manufacturing in the u.s. >> all right. vivek, thank you. >> thank you. it is 8:00 a.m. on the east coast and you're waging "squawk box" on cnbc and the party just got a little bigger. i'm andrew ross sorkin. brian sullivan just joined us, in true olympic fax taking the

baton from melissa lee for the final hour. >> can't take it any more. >> you're done. joe and becky are off on this summer friday. a lot gone on. preparing for a merger with skydance, pair ramount, talk ab that later in the hour. then this story causing a lot of commotion. former president trump saying if he's elected in november he should guest a say in federal reserve interest rates decisions. trump making that comment at a news conference in mar-a-lago. he feels he has a better instinct about all of this than fed members or the central branch's chair. researchers at microsoft saying iranian groups are increasingly trying to affect the vote. breaking into an account of an unnamed high-ranking campaign official. that happened in june and breached a county level

official's account weeks before that. good to be here, by the way. is there an actual baton, melissa? taking it for the 5:00 p.m. show tonight. where are you going? but not here this afternoon? >> undiscloseds location. >> i know where i'm going to be. >> on assignment after this show. >> sleeping on a couch in about two hours just waiting -- good to see you in-person. >> in-person. >> talk about futures. jump right in. what a week, guys. think about the fact last friday, huge declines. followed through on monday. massive declines monday. oh, my god. yen carry trade unwined. i heard about or "fast money," 5:00 p.m. and all of this stuff and now the market's recovering the last couple of days futures are mixed. seeing s&p and dow futures slight will you higher. nasdaq lower. in other words, we have no idea which way the market is going to go today. what about treasury market? because yields, they've been moving as well.

ten year collapsing. yield on monday, it's come back now as well. treasury yields just over 4%. anyway, i've done enough. mike santoli knows a lot more than i do at the nye. feels only a month, only five days. >> no doubt about it. distance travel, volatility surge we saw on monday and then really just what seemed like very forced, concentrated liquidation to start the week has calmed down a little. i would say still somewhat tentative. always a repair process. we got to the recent low, from peak, to a low, almost 10% correction. monday's low 5100. did not challenge the last couple of days. failed rallies. yesterday finally won stock more than 2% up on s&p 500. where it leaves it. still has work to do to prove it can clear more hurdles. 50-day average, 5400. a lot to do. i point out like the last low of

the april pullback is more in the 5000 range opinion if you're above that, still kind of working in the upper range. we'll see what we get today. look at the momentum etf relative to the s&p 500. a big story of the year. right? momentum stocks. the big you know, secular growth bets driving this. nvidia and broadcom like 13% of this etf together. you see this huge reset lower. still outperforming on a one-year basis, but it's really sort of a gut check in the crowded popular positions. look, too, at health care versus tech. similar story. now health care actually year-to-date basis slightly outperforming tech etf here. again, coming off of multiple years of massive out performance. this is where we set up today. i think the market's hoping for just a little bit of calm and stability in the twoway action as opposed to have be to worry about a lot of those macroi macroinfluences. yesterday's weekly jobs gains

calmed things got out of the way without incremental bad news. >> that's the new good news. mike santoli, thank you very much. by the way, because he won't do it himself i'm doing a tease for mike. hosting a cnbc special. "taking stocks." 6:00 p.m. eastern time. like we said. a crazy five trading days. maybe that will follow through, andrew. more today. for now seems relatively calm and enjoy that on a friday. >> for the moment. for the mope. coming up talking oil prices and tensioning with white house senior energy advisor amos hochstein and then back to paris for a big special interview with the wnba commissioner cathy engelbert as the u.s. women's team getting ready to play in the semifinals today. so much action before the closing ceremonies taking place on sunday's evening. you're watching "squawk box" and this is cnbc.

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welcome back to "squawk box." futures looking a little bit now worse for wear than where we started the program. in the green. things turned the wrong way on this friday morning. dow now off about 25 points as we open up, nasdaq off and s&p off about 8 points. our next guest talking in light of ongoing tensions in the middle east. white house senior advisor for energy and investment, amos hochstein. lots of concern whether things are escalating over there and what will happen next. what is your state of mind? >> good morning, andrew. good to be here. look, i think we're, you saw that yesterday the president of the united states together with the presidents of egypt and qatar put out a statement announces we're going to go back to accelerating and refocusing on the negotiations over a

cease-fire that brings hostages home and starts to bring an end to the war in gaza, which i think will bring down the tensions across the board. whether it's in lebanon or elsewhere in the region. so i think the focus that we have, or the president has, is to bring down the tensions, and to go back to getting as soon as possible, achieve a cease-fire agreement that brings it's hostages home and brings an end to the war. >> you know, we were seeing reports last weekend that there was going to be a retaliation by iran. on israel. we have not seen that yet. what is -- about what do you know about that and what can you tell us? >> obviously, i can't discuss a lot of the details that we're watching, but i can say this -- we are, we urge and hope there will be no retaliation, they'll be no aggressive action taken by iran or any of its proxies. having said that, the united states together with its allies are fully prepared to defend

against any aggression in the region. but, again, the hope is that we can avoid any further escalation. that's the last thing anything in the region needs. we're both prepared and doing whatever work we can do to refocus the attention not on escalation but rather de-escalation and bring tensions town. >> this is brian. first off doing yeoman's work there. >> with the rain. >> apparently a storm just blasting you. on the radio, just getting dumped on by tropical storm debby coming up here. more serious aspect, follow-up to andrew asked. have you been in touch with any of our allies, saudi arabia, any of the major oil-producing allies or opec nations to try to gain some confidence that if there is any kind of disruption to iranian exports, that we will be able, not just with the u.s., but with the help of some partners, to make up for any

loss of volume, should we get one from iran? >> so, brian, first, look, this is my commitment here in the rain to cnbc. i'll note that. look, we are in touch with opec countries all the time with oil producer because it's such an important impact on the u.s. economy and american families. i am very hopeful we do not get to a place of disruption. that is not the plan. that's not what we're hoping for. but we always plan for that. and a few thing ice can say. look, we're at a much better place on energy prices right now than we were earlier. we are, oil prices are lower than a year ago. gasoline prices are lower than a year ago. and we have production now is at an all-time high as you know in the united states. over 13.3, 13.4 million dollars a day. that is really the highest its been. so we are working with our allies. also making sure we have what we need here at home. as you know we have been

replenishing the spr and will continue to do that. we announced another purchase just the other day. as soon as prices went down. we're going to continue to do that. so we are able to have both max production at home and have the inventories necessary, if we need to take any steps. >> looking at -- doesn't like to talk price. really, right? >> no. but he will talk price with regards to sspr and making mone on the repurchase? >> making money on the repurchase? >> absolute will you. we sold oil at $95, andrew and buying back at about $75 to $77. i think that's a pretty good oil trade. i think president biden has proved to be a pretty good commodities trader. >> and by president biden, he means him. because he works for the administration. >> amos, leave the conversation there and get you out of the rain. >> unbelievable.

>> seems like a real storm there. >> literally just started as i went on the air. >> are you getting wet? getting wet? >> no. i'm okay. >> he's under that -- got that little popup. >> wondering how you get from there to the white house? do you have an umbrella. >> i do. i appreciate your concern. >> the strategic water reserves as we speak. >> hope we have a very quiet weekend in the middle east and hope we have continued, the growth in the markets and make sure that we have what we need to -- look, this is very serious stuff to defend both israel, the region and make sure we have what we need to defend american troops and our people across the region. >> we want to thank you again for joining us this morning. have a good weekend. we will hope about this weekend as well. >> yep. i think inadvertently giving a weather forecast what's coming here in a couple hours. on deck, jpmorgan's chief

economist joins us on his call a recession is more likely than he previously thought. we're going to head back to paris. wnba commissioner cathy engelbert your special guest as ade women's basketball team gets rey for a semifinal against australia. carl is up with that. "squawk box," ahead. ♪♪ the enemy is always adapting... deepfake: hey handsome. ♪♪ [inner monologue] ...always iterating. ♪♪ hi, my name is damian clark. and if you have both medicare and medicaid, i have some really encouraging news that you'll definitely want to hear. depending on the plans available in your area, you may be

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all right. welcome back to "squawk box" everybody. i am brian sullivan if for joe. if i look a little weird. self-conscious, got stung if the face by hornets a few days ago

and it's not doing well. >> get you anti-buybiotics. >> i look a little funky. futures in the red. higher since i got here. s&p down 5. in the red. see if this little momentum off of monday and last friday's big declines continue. cryptocurrencies? >> up at $60,000 now. look at that. >> back to 60? >> yeah. moving, on the move. >> a buyer at 48? a couple days ago? >> should have been. now up to 61. meantime, a prettier shot this morning for you. the u.s. women's basketball team -- >> anything is prettier. >> to paris. usa set to take on another team in the serm mifinals. carl is with us. >> team usa one game way from their eighth straight final. joining us on-set here in paris

always good to see cathy engelbert. the wnba commissioner. >> nice backdrop. good to be here. >> andrew mentioning dominance of this particular team. what explains that? few presidents in all of olympic history that compares to this? >> next 12 up and next 12 after that generational rookies and college game so strong. i think it's the feeder system into professional basketball in the u.s. and we're also one of the longest tenured women's professional sports leaks at the wnba in the world . a few older. built on the shoulders of lisa leslie and chairman swoopes and sheryl miller back in the day. a strong u.s. women's basketball, talked wnba most of the year now. i wonder, how early on you knew that this year was going to be epic for the league? >> yeah. i guess it is the confluence of

a lot of positive elements at one time. we raised capital two years ago. did a digital transformation. grew the business, then hit this great build rivalries, household names. aja wilson and breanna stewart coming off a better free agency system we now have and these generational rookies, caitlin clark and a rivalry coming out of college, angel reese. attendance and viewership has been great this year. >> we tend to monitor. viewership, attendance, s sponsorship and now it's about media rights and valuations and sdp expansions. talk about what the media deal means for you? >> enormous. undervalued for women way too long pap competitive process with the first deals announced. proud of what the equality of play, too, on the court has to be great and it has been.

the rookies, historical for all of women's sports and thrilled to have nbc news come in. long-time partner espn disney as well as amazon. we're excited and some to go still. >> i was going to say. follow-on effects. will it be about salaries or salaries caps or things like that? >> obviously salary and benefits we can do now for player experience. important getting into the next collective bargains agreement. see what players want, owners want and go to the negotiating table. >> your goals for the league? >> you mentioned expansion. only 12 teams in a league and country of our size and scale, a world with global basketball being so popular. getting to 16 teams. announced team 13 and 14 in golden state and toronto. got more to come. announced going up to 16 and we have a lot of demand now, and so we have to look at expansion globalization. our sport's pretty u.s. centric in the wnba.

globalizing across the world and making sure these players are known globally like the nba has done with global game series and how popular some of these athletes are across and then having more international players in our league. we're about 17% nacinternationa. the men's side, serbia, a great game against the u.s. a lot of nba players obviously on both sides. we need to get more to that part growing the game globally. >> talking off-camera compared to other leagues pairing you and the nba, the number of days, really, of content delivery, frequency and the duration, kind of hard to match in sports. yes? >> hard to match. the media landscape shifted, streaming is important to linear, traditional linear and streaming, tech companies. we, late october. nba starts october into june, finals. we can provide year-round programming with the streamer together with the nba. a huge advantage for us to go to

market with that. >> you mentioned, valuation pa parity. right? those who want to criticize valuations on the men's side saying they're overdone. a bubble in sports valuations works that money then flow into the women's side? how close to parity can you get? >> made enormous progress. when i first joined the league less than 5% of all media coverage of sports was women's sports. now 15 to 20%. recent estimates 80 or so games on national platforms now over 200. i think if you build it they will come is lifting us. i don't think it's necessarily an allocation from men's sports into women's but i think people are seeing the beauty and value of supporting women, endorsing women athletes. in 80% of never consumer purchasing decision is made or influenced by a woman, why wouldn't you support women's sports looking at allocation of those discretionary dollars. >> a female viewership larger

for wnba? >> it is. 55% men, 45% women. larger than other major sports leagues but huge influx of a lot of other fan groups, younger viewers, hispanic and african american viewers. seeing a huge lift across all fan segments this year. >> finally, perceptions about the paris games and expectation is for los angeles? >> i think amazing across all of sport. a great unifying cultural moment i think for the world and this divisive society we live in, and i'm so excited to be hosting it "at home" in the u.s. in l.a. so, again, our women going for their eighth consecutive gold. >> unbelievable. >> so all the best to all the teams but certainly, go usa! >> cathy, thanks. good to see you. andrew, before we toss it back, take a moment to celebrate cnbc's coverage here on week two but also "squawk"'s coverage on week one.

we are here at the seine river about to turn into a spectacle. ♪ >> i think people are excited to be together. to feel the olympic spirit and that's what we're seeing whoer in paris, one heck of a screen. isn't it? >> yeah. it's not a green scene. we are sitting here. >> no. >> welcome to this whole operation we have. 3,000 people working to bring this broadcast. peacock, xfinity, nbc, all working together. >> the trough is at the center of all of this. >> we want to be where our target is engaged. >> everything really smooth. >> i saw enormous potential. >> france is an enormous part of the economic ecosystem. >> every company has to make decisions how they'll spend their dollars. >> an opportunity to celebrate the greatness of the event. the world's largest event and

incredible human drama that happens every day. >> take it incredibly seriously and understand what it means when they have their country on their chest. >> we get a camera down on these shoes? >> i want snoop to know i'm wearing his skechers olympic sneakers. >> this is station f. the world's largest start-up campus. welcome to the eiffel tower. perched about 200 feet in the aird and premium lounge. gustav '24 with panoramic views here at the love. site of the world's greatest athletes. >> try to let it sink in but yot think it will hit me for some time. i'm not done yet. >> guys, congratulations to you and our thanks, of course, to the entire crew that makes this possible. andrew, you know more than anyone the photographers, audio, i.t., you name it. logistics. it's a herculean effort and fun to be a part of every time. >> awesome, awesome thing, carl.

done an awesome job, and thank you to everybody who was a part of it. i should also say, i think both of us, carl, would agree. we should thank france and paris, because they pulled this off in a way i'm not sure anybody anticipated. everyone says this is one of the greatest olympics i think we've seen in a generation. in large part due to what that city did to make this whole thing so magical. >> their ability to weave the games into the urban setting has been almost seamless. and really beginning to see some reviews, quote/unquote, come out as we get into the final weekend, but i think they sum up your view almost exactly right. >> tell you, by the way, those in the travel business are saying, if you think it's hard to get a plane ticket to paris this past summer, you might need to book your plane ticket next summer right now. because this is going to spike the popularity of paris. >> can we get a little

carl/andrew duet on the -- >> happily. >> andrew, we've done a couple of these together. just need to coordinate better when we get to milan. >> yes. do that. we will do that. by the way, i want to say, i think this is the beginning of a new generation of folks fascinated by the olympics. because when you start to think about, you have it in paris now. milan next. fashion capital of the world. then go to l.a. then you're going to the french alps. then going to brisbane and then you're going to go to salt lake. so just think about -- think about that sort of run of amazing places, and just i think the excitement. >> you guys need backup. happy to go to milan. no issue with milan. carl's looking so stylish. i mean -- >> italian -- >> this is, this could be money movers permanent new home.

>> time difference also helps. >> oh, i didn't want to bring it up. carl's not getting up 5:00 in the morning. >> morning show. a good place to do it. carl, congratulations. looking forward to seeing you later today, of course, as well. and then into the weekend and closing ceremonies. so look forward to seeing you back here at home soon, too. >> i know music's playing. one highlight really stuck out to you and your week? was it fencing? got to say fencing was great. table tennis opinion. >> you're a big fan of ping-pong. >> i will say seeing simone biles in person and seeing katie ledecky get gold medals. >> the most american woman ever. >> katie ledecky. >> four things. greco wrestling women's water polo. >> in the same screen. choose a multiview on the peacock app. >> noticing you could do that.

also interestingly do it on the youtube live, tv live appi, put two or three. >> choose what auwudio you hear thinking about a possible recession, coming up, going from a 25% chances to a 35% chance, an investors getting a lot more economic data next week including cpi, ppi, retail sales and housing starts. all of that on deck. what is it going to say and what's it going to mean? we'll tell you, right after this.

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it's piled high with tender beef that's slow cooked and smothered in tangy memphis style barbecue sauce. it's no fuss, no muss. just tons of flavor. the best barbecue beef is only a togo's. try one today. morning. jpmorgan chase seeing a u.s. or global recession before the year end as a little bit more likely than previously did. 3 35% versus 25% chance recently. still a greater chance it won't happen. the bank puts a chance of recession before the end of next year at close to about 50/50. joining us, jpmorgan chief economist and managing director. bruce, great to have you on. hope i made the point. you do see a slightly increased chance, i'm no math whiz, but

35% is not a majority precise chance. >> totally right. i want to emphasize what we're arguing is that there are signs thing, happening raising concern for us. particularly as we're slowing the labor market. some sirens we're seeing job shedding behavior, shifting business behavior giving us concern. our baseline still to think we make an orderly transition from an economy growing quite strong to something growing at a solid pace. another thing is going on here. risk around inflation as the labor market eases and we see wage gains moderate and seeing still strong supply side performance. from my point of view, the modest change in recession is, it's interacting with the change in inflation pressures coming from the labor market that has a much bigger affect on interest rates. the bigger story how interest changes, fed path changes as they have i think a lot of news

that's going to shift them away from the gradualism they've been guiding thus far. >> what would be the biggest one? is it that we're seeing a slight uptick in unemployment rate? is it we're seeing a slowdown in job creation? are you worried about u.s. household debt? $1.1 trillion in credit card debt? bruce, if you picked one or two thing on your watch list, what would it be? >> the main thing here is business behavior. there's a number of things obviously that influence it including high interest rates. including the fact that we've lost some momentum in the global manufacturing sector. and the question is that we see a moderation, labor demand. to be expected. over 200,000 job growth wasn't going to be sustained. and businesses feeling a need to 14ed s shed workers. that's where the concern is. something shifted here that certainly has gotten us somewhat

more concerned. wha . >> what would be the one thing you would like to see? is there anything? is it a rate cut? some sort of larger quantitative, back end quantitative easing program? anything the government can to do mitigate those recession chances from 35% back to 25%? >> two issues here. one, what's in the oven right now as a result of fed policy, as a result of the whole set of things happening in the economy. these things probably can't be changed by the fed. over the next few months. the first thing we want to see is calm in terms how the next labor market reports play out. how the consumer spending plays out, and just see that the economy is settling into something more moderate but not actually breaking nap would be the first thing. the second thing as i said with some of the inflation risk profile shifting in the labor market as well, the supply side doing well, to get the fed to move earlier and put us on a path here where we're going to

have a level adjustment. i would argue about 100 basis points sometime in the next few months from the fed. that changes financial market conditions. it shifts the profile on growth into next year and allows this moderation of growth to be more well-established at a solid pace looking into 2025. >> if we loosen financial conditions couldn't that respark inflation? >> sure. what's been holding the fed back right now. i think, again, we're talking about a move from what is a restrictive policy stance to something that's less restrictive. i'm not convinced at this stage that a move from let's say 5.5 on policy rate to the 4.5 is going to be followed by something like a move to 3 or below, which the markets are starting to price in. i think the argument for rebalancing risks by ptaking a level adjustment down, doing it earlier not quite at gradually. the big shift taking place here and that can and probably will have a positive impact on the outlook as we look into '25, if

year not breaking now. of course, we come back to this original point there's things to be concerned about in what we see in the latest data. >> jpmorgan, bruce, appreciate you joining us on a friday. have a great weekend. >> take care. coming up, takeaways from a very big week of news in the streaming world. rich greenfield joining us talking about paramount's new results, job cuts and all the news from warner brothers discovery as we head to the break. check out this result from the latest cnbc generation lab youth and money poll surveyed people between 18 and 34 years old. 35% respondents saying they think the american economy's getting a little bit worse, closely followed by 34% who think it's getting much worse. 26% felt it's getting a bit better. only 4% think it's getting a lot better. where do you stand on all of that? you're watching "squawk box,"

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welcome back to "squawk box," everybody. i'm brian in for joe today. futures losing steam. nasdaq futures down, not saying 100, andrew. 99 or 97. then were in the green earlier today. could be a tough friday. remember that market carnage not only on monday but also last friday. t two-day selling 6% on the nasdaq. come quite a bit back from then. major average negative on the week but by less than 1%. so, andrew, big sell last friday. this monday. come back. see what happens. >> meantime talk media. the company reported a profit in streaming division and announced cutting 15% of its workforce. stock down 25% year-to-date and linear tv networks in tough shape. talk about that and also talk

about warner brothers on the state of streaming including those headaches that it appears warner brothers is struggling from. rich greenfield is here. good morning to you. talk warner brothers first? want to talk paramount first? dealer's choice. >> a tough week, andrew. what we're learning, right, the case of cord cutting is accelerating. this is not a new in phenomenon >> the getting worst. what spooked broadcasters, all told investors get to profitability in the streaming. all are. you mentioned paramount, disney announced profit. all improving, but it's how they're improving. improving by slashing amount of programming, cutting back on marketing, and jacking the price on consumers. they're not doing it because consumers are, like, so in love

and willing to pay more and spending so much time. like, it's -- it's a pretty depressing way of making money. >> well that was my question. long term. look at a netflix, obviously, super profitable at this point. do you see a path to which disney, which, of course, now just, a quarter, faster than they thought gets to profit act that ever looks like netflix? >> really depends on willingness 20 to invest. to win in streaming you need to be global. everyone, zaslav talked about the importance. you need to be global. this is a global game. but you also need to invest in a tremendous amount of content. the way you keep subscribers have they absolutely love your service, you can't live without it. people can't live without netflix or spotify. you need lots of content. the industry seems to actually going, hey, we have a churn problem can't spend enough on

content. know what we're going to do? go back to the old thing called the bundle and try to stuff as many as we can into a bundle so it looks cheaper. thiy tied them all together so you won't churn. shoving things you don't want at the same time just to cut the price. why not just price the service where it actually has the right price value to the consumer? >> the problem, of course, is if you price it where you think it would have value of the consumer, a lower price. then you have margin prop all of a sudden. problem all of a sudden. >> look, you need to build this -- there's no cutting corners or skip the line and jump to the front. building streaming, think about the building blocks. it's invest in content. get consumers completely engaged where they're obsessed with it. raise the price. invest in more content. drive more timeline. a very clear, the way you do this properly, it's consumer

love. >> rich, we all agree. in violent agreement about that. my question to you now is on the screen netflix, walt disney, warner brothers discovery and comcast. okay? >> market's ktelling you these companies can't do it. look how these companies are trading's look the last several years. these stocks all destroyed because the market doesn't believe -- they believe core business is gets worse and don't believe streaming will be successful enough -- >> my question, would you buy any of them? some of them? short some of them? what do you do? >> continue to buy netflix. everyone cutting back is basically handing this industry to them. handing it over to google and youtube. right? just the amount of time spent, shift happening, and i would look for other companies that are benefiting from this consumer love of streaming. look at something like spotify and look at how much progress

they've, becoming a real business over last couple years. you have to look much more broadly across the media space for great ideas. this is a tough sector. i don't think you can make -- there's no pretty house on a bad block. >> where's this -- >> rich, where is this bigger picture going to go? all i hear about, news corp. chugging along fine. comcast doing well. all i hear about is, losses. losses, losses. ratings decline. losses. at some point that either ends or at some point it ends. i think you know where i'm going with that. either a good or bad ending, number one. did zaslav mean to break up warner brothers discovery, sell it off in parts and be done? sounds like a homework question and andrew chime in on this, too. not for comcast, read an article talked about comcast out-maneuvered warner brothers stealing nba rights and enabling them to -- >> lower the carriage fees.

>> break up warner brothers sdovsdov discovery and longer term where does this go? >> two things you're talking about. on a major event that happened and not enough people are talking about people thought paramount+ would go away. falling apart. like, paramount in a death spiral. now paramount's bought by one of the wealthiest humans on earth nobody believe it's getting shut down. a change in the land scape. the hope of lesser competition has evaporate d because of the skydance. in terns of warner brothers thesis, the problem is, breaking it up, andrew, sitting we david zaslav onstage and asked about the nba. he responded, paraphrase. like, we don't need to always rent sports. we want to create more and more

content. implication they have enough to survive without the nba. investors are worried. didn't really answer the question. probably because they're in the middle of a lawsuit, but can't speak freely right now and investors hate uncertainty. they've created uncertainty, but i want to address brian's question. if the nba is catastrophic is c the lawsuit talks about, then breaking up the company, you can't do that because you don't have a viable cable network business. if losing the nba is actually financially accretive, and this was a smart decision to let comcast and nbc win the nba, then why would you want to break up? the market is wrong, and this stock is going to rip when people realize that they can renew deals at higher prices with comcast and directv and others. and so, i don't think breaking up -- you're at this point where we need to know whether warner brothers' cable network business is viable without the nba. can they do deals? >> rich, what's the answer? what would you be betting on? >> the market's telling you they're scared. they're really scared. i was going to say --

>> i know. i'm asking what you're saying. >> look, my guess is they're not going to get dropped. will there sub fees scale back? >> i don't think they're going to get dropped either, but i imagine the fees might come down. >> the fees is really going to be a battle and it's going to be hard, and it's why, again, we wouldn't have put all the cable network assets on to max. we would have kept it hbo and really protected the value of that bundle so that you couldn't drop these channels or pressure these channels because the only way to get them was within the bundle and this content on max has made it easier to disrupt this business. >> i know we're a little inside baseball here, but if viewers don't know what we're talking about, you send a bill in for cable, you're sending probably $3 a month for tnt because of the nba. >> specifically tnt. >> specifically tnt, whereas usa and bravo and others may be getting 50 cents to a dollar. so the idea being once the nba goes away, that $3 share, that

renegotiation comes back up at probably 75 cents. i don't -- looking at the debt load on warner bros. discovery, and i'm not picking on wbd, i got a lot of friends -- we all, over there. >> yep. >> okay? does cnn survive, rich? >> look, does ufc rights go to wbd, turner? does major league baseball, espn supposedly opting out? we don't know. brian, you're looking at it where it sits today. the question is -- and this is the challenge, what makes this so hard, and this is that uncertainty that's pressuring the stock -- can wbd cobble together enough to protect the business? that is the fundamental question, and the fact that they can't talk openly and that investors obviously don't believe right now is creating this downward spiral in the stock, and you know, we'll see. they've got a lot of work to do. but obviously, you know, there's definitely fear, growing fear, across the entire industry right now, to be honest. >> rich, i want to thank you, as always.

have a great weekend. >> thank you. you too. >> thanks. coming up, we're going to go back to retail, back to the consumer, we're going get a preview of next week's key reports with a top analyst on just how good or bad things are with the consumer. u' wchg quk x." tomorrow. at pgim custom harvest, our unique direct indexing approach seeks to help investors achieve better after-tax outcomes. pgim investments. shaping tomorrow, today - [narrator] we're coming together pgim investments. for our yearly service project and running a t-shirt fundraiser

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all right, so, we got a couple of big retail earnings reports coming out this coming week. we got walmart, and we've got home depot. those are pretty big ones. let's bring in michael lasser. michael, what are you expecting from both of these, and how much of a tell, really, are they on the macro consumer? >> good morning, brian. how much of a tell is walmart going to be and how much of a tell is home depot going to be? i think the overall theme is that the consumer is erratic and episodic right now. and there are going to be mixed messages from walmart and home depot. home depot, most likely, will take a more conservative view on the outlook for the back half of the year, reduce its guidance, but still be in well positioned for the long-term and an eventual upturn in home improvement spend. walmart is probably going to raise its guidance, owning to

the very good execution and strategic initiatives that it's got in place. walmart's on a glide path where it's emulating some of the strategies of its major competitor and proving to be very lucrative, and we like both of these stocks. we think they make great basket for investors looking for exposure to the consumer sector. otherwise, it's going to be a rough reporting season, and the market should be prepared for that. >> this is a critical thing, because -- and the reason i ask that, michael, is that people look at walmart because of its size and the retail operation, and they say, okay, this is a tell on middle america. all walmart has done is print investors money. it's doubled, basically, in the last five years, and going to this part, walmart, i think, what you were hinting at when you said major competitors, walmart is quietly, i think, becoming this massive advertising giant, almost amazon-esque, is it not? they're a media company.

they've got vudu. they're doing stuff that has nothing to do with the retail box store, as i understand it, that is just maybe flying under the radar for lot of american investors. >> you are absolutely right. and this is a strategy that's been a long time in the making, and it's the early stages of just starting to be harvested. to put it in perspective, walmart as of last year did $3.4 billion of high margin advertising revenue. most of that is going to fall to the bottom line. to put it in perspective, walmart, as an enterprise, generates about 26 or $27 billion of operating income. it just shows you how meaningful this can be over the long-term, and again, it's in the early stages of this. it has more data, more insight, and more exposure to the u.s. consumer than, really, any organization on the planet, and it is beginning to monetize that in very lucrative ways.

>> my point was, in a broader way, not just a tell on the consumer, walmart just doing a lot of stuff behind the scenes. what about, quickly, target? they're not godoing that stuff. >> target's a little more exposed to some of the discretionary categories where there are challenges, categories like home furnishings, consumer electronics, toys. those are all under pressure as the consumer is being more choiceful about what his or her spending habits are focused on at this point. so, that's going to be a reflection of what is happening at target. with that being said, target is a very inexpensive stock. if anything goes right, that is a loaded spring that has potential to be a meaningful shareholder value creator over the long-term. >> they used to trade together. now they are not. michael lasser, ubs, watching walmart and home depot. andrew, i've enjoyed being here. i'll be on at 5:00 p.m. tonight, "fast money." tornado warnings just hitting in

new jersey. if you're out there, seriously, check it out. tornado warnings just got one of these things on my phone. >> means it might be coming to new york after. >> yep. >> okay. folks, have a great weekend. if you're on the east coast, stay dry, and we'll see where the markets end up and hopefully be staying dry in the markets as well. have a great weekend. "squawk on the street" begins right now. ♪ good friday morning, and welcome to "squawk on the street," i'm david faber with mike santoli. we're live from post nine at the new york stock exchange. carl quintanilla is at the olympics finishing things off there. of course, big day and weekend ahead in paris. jim has a well-deserved morning off. let's give you a look at futures as we wrap up a volatile week. you know, we use that word a lot, but i think it's really applicable this time. it has been volatile, and we are looking, it would appear, for a lower open, but again, doesn't mean much of anything given what we've already seen this week during the