could hit the consumer. big family dominates the box office. it is monday, august 12th, 2024 and "squawk box" begins right now. ♪ good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm andrew ross sorkin along with kelly evans and mike santoli. joe and becky are off this morning. welcome to the circus. a lot going on. let's show you where equity futures are right now. s&p opening four points higher. nasdaq up 32 points higher. the dow is off 18.5 points. we will flip the board around and show you treasuries. ten-year at 3.9. the two-year at 4.097%.

mike. >> in other words, calm from a week ago. we did a full round trip on the s&p after the drop monday. we with will see how it develops. bank of america ceo brian moynihan is looking to ease interest rates for consume ares. here what is he said on "face the nation." >> if he they don't start taking them down soon, you could d dispirit the american consumer. >> moynihan would advise the fed to be more careful of down side risk of not starting to move down rates, which, kelly, captures the mood, i think, of what people conclude is the down side risk to the economy opposed to inflation. >> i didn't see the rest of the interview. was there anything else with a sign of the times? >> the consumer is okay. if you do the snapshot.

>> he has been bullish on the con siesumer for a long time. >> interestingly enough, jamie dimon was bullish. i thought maybe i'm putting it too strongly, but compared with the economic storm coming and the past couple years. the middle of last week? it was -- i'm not saying it is a different tone. >> measured tone? he is always the one more cautious. >> i think temperaturem mentall he is measured. its brand on wall street is we're the careful ones. we'll be here. the market rewards him for it. he has the highest valuation. why look for risk and do things differently? >> it is weird they almost get a risk -- nervousness premium. many with a nervousness discount. apple. it takes the stock down.

jpmorgan chase. >> they have too much cash. they have to do something with it. vice president kamala harris disagreed with the suggestion that the u.s. president should have the say in the interest rate decisions. here is what trump said at the news conference at mar-a-lago. >> 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 instincts than many on the federal reserve or the chairman. >> vice president harris responded saturday saying she couldn't disagree more strongly. >> the fed is an independent entity. as a president, i would never interfere. >> harris is preparing to reveal a policy platform in the coming days which would include a push on the end to tipped income taxes on earnings.

harris matched that pledge from trump back in june and trump accused harris of coping one of his proposals for political purposes. just quickly on the fed thing. this is not new for any of us who follow trump and the presidency back when. go back to 2018 and 2019, his instincts were better than powell's. we know no one wants the fed polit politicized. maybe someone should make him a governor. >> has his instincts ever been higher? >> they don't want him to lower? >> it will help his election. >> fexactly. >> that is why you don't want him to be doing this. >> no one wants him to be doing this. is there some point that maybe his instincts were better than powell's? >> i'm going with mike. i think his instinct is always lower. lower and politically not

valued. >> it is fascinating to listen to what donald trump says about inflation because in his view, as a business person, there was his biggest cost. he thinks of interest as inflation. >> maybe it is. >> for him, yeah. he's not saying -- former president trump's campaign saying it has been hacked by the iranian group in june. it shared internal documents in july which included research papers on at least two of the contenders to be his running mate and jd vance. the disclosure released by microsoft that the iranian group sent a phishing e-mail in june. spear phishing -- >> what is it? >> you get an email from somebody you think you know or

maybe you think is amazon or whatever and asking you a question and saying here's a picture. here's a picture of the kids, but it's not coming from your friend or from amazon. you click on the link to look at the picture or click on the link or whatever it is and boom. they're in. that's the game. spear phishing is targeted to you. it is not a widespread sending to 10,000 thing. it is a selective. >> if you are going to that much trouble targeting your campaign. >> watch your emails. >> did you get the one where we did a trial attack? >> i have seen those. i have seen recent ones from amazon. i get them on text. >> the text. >> you know where i'm worried

they could come? on twitter. >> if you click a tweet. i wonder. it already happens. >> i was thinking. if somebody wants to really get you. >> yeah. >> i suppose. >> i don't want to give anybody ideas. disney unveiling plans for the theme parks and cruise business at the expo on saturday night. the company is planning to spend $60 billion on capital investments, but did not provide details at the time. they are expanding the magic kingdom with the villains theme park and monsters inc. they will focus on dinosaurs and featuring rides after the "indiana jones" movie and adding a handful of rides at the california adventure park focused on the marvel universe. they showed the stock around

$89or so. probably not much move on this. although, "cars" could entice me down there. >> big picture, disney widens out across the platforms. the question is the cyclical on theme parks. that's been the dbig question right now. it has been holding its valuation. it is right between netflix which won everything and then you have wbd and paramount who can't be helped and disney is a blend of the two. >> more takes of one of the big tech platforms. should buy one of those. >> if they're permitted. >> do you think they'll be permitted? >> this is the business side. peter pushing the idea that apple should just buy warner bros. discovery to get hbo if it wants to be in that business. i don't know. it's a $70 billion proposition

for apple. >> still? >> the conundrum is not the market cap. the market cap is $17 billion. >> 40 billion of that. >> you have to pay a premium. i don't know. >> it's not nothing. >> let's back up for a second. if we think the issue were regulators, this company has twice as much debt as market cap. >> i'm not sure this regulatory regime would allow it. the question is does the harris regime or trump? >> okay, fine. you don't want to strengthen big tech, but what happens if no one takes them over? >> the debt maturity is pushed down. >> i actually think if you look at warner bros. discovery, they will be okay for the next several years and the question, of course, is, you know, we were talking about the nba on friday. i think you will know a lot more in the next year about this. i think a lot of people are calling for the death of warner

bros. discovery. i'm not preparedto call for the death of warner bros. discovery so soon. i believe they will get a better carriage fee than people expect. >> that would be a bit of a cushion. apple has not made -- >> beats. talking about dr. dre, did you see? >> the closing ceremonies? 12k >> what? >> dr. dre and snoop dogg and tom cruise on top of the stadium on the wire. jumping off. >> one thing i was curious, it brings it full circle. they will try to do some mass transit thing. they will try to make it a

car-free experience which is fine if you are paris and it worked out quite well. i'm in the sure about that for los angeles. >> you can't drive to the venues? >> that's what i hear. i don't know if that was part of the big reveal. >> that was not part of the reveal i saw. >> o. activist investor tstarboar value is taking a stake in starbucks. the size of the hedge fund stake was not immediately clear. starbucks management is in talks with elliott management amid the slump in the u.s. and china markets. starbucks cut guidance twice this year. elliott had overlapping investments before. you see here not the greatest year-to-date chart for starbucks. meantime, sad news.

former youtube ceo susan wojcicki died at age 56. she had been dealing with lung cancer for the last two years. sundar pichai said she was the most influential people he had ever met. she rented garage space at her home to the company's founders. that is where the company was born. she oversaw the design and build of the google advertising and and analytics projects for years. she advocated for google's $1.65 billion acquisition of youtube and became its ceo in 2014. susan wojcicki was 56 years old. >> one of the great acqu acquisitions. her mom wrote a book about raising all those girls. incredible what they have done.

>> ann creating 23-and-me. i got to interview her mother years ago. i knew susan. a very special family. >> such sad news. our hearts go out to her family. all of them. i didn't know she was that sick. tric.ag coming up, we'll get you ready for a busy week of economic data and earnings. "squawk box" will be right back. because this game is for everyone. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates

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inflation data in focus this week. we get the july producer price index tomorrow followed by consumer prices on wednesday and retail sales on thursday. on the earnings front, reports from home depot and walmart will offer color on spending inflation in the state of the economy over the next few days. joining us now to talk about how this fits in the market is stephanie link of hightower. good morning, steph. >> good morning, mike. >> obviously, it makes sense to dial back a little bit to figure out what the market is contending with and where we sit right now. a more pronounced slowdown with the economic data and destabilized market with the acknowledge acknowledge straighting factors. has that re-priced the market

for the slowdown or created enough opportunities for snu. >> i think we're not done with the volatility, mike. i know seasonally august and september are tough months in the year. the good news is that we're kind of still in the thick of earnings and we're getting real-time information from companies. at the end of the day, there is a lot of noise out there with regards to the economy and with regards to the fed, with regards to elections and other things happening with the yen carry trade unwind. earnings matter most. at the end of the day, that's what i'm paying attention to. all of last week, i was buying last week because i heard from companies like eaton and lam research and amazon and bank of america. they all had really pretty good things to say and earnings are actually getting revised higher. i think you want to use some of the volatility to be adding to positions. that's what i've been doing.

>> there's no doubt that as promised the earnings growth has broadened out to some degree away from the largest growth stocks, at least coming off flat line levels for a while. that's played through in the second quarter reporting numbers. i guess the question is you mentioned a few stocks, eaton and lam and bank of america which probably need the economy to hold together reasonably well to make their numbers going into next year. i guess that's the question. are we just sitting here going economic data release by economic data release to figure out if the economy is well? >> i know. we are going by release. that's kind of a challenge on an every day basis. for the long term, i think we're running at 2% to 2.5% gdp. i know the atlanta fed tracker is 2.9 which is probably too high. i know the consumer is hanging in there.

the labor market is shoft, but okay. the 30-year mortgage rate has gone from 8% to 6.4%. there is a lot of pent-up demand in housing. i think we're in okay shape for the time being. all these things to worry about, but i worry when i don't worry because we're all complacent. >> sure. certainly the market hasn't been complacent about consumer trend. if you just look at consumer cyclical stocks, they suffered for a while. is that an area you are focusing more on now? we will get home depot and walmart this week. >> yeah. i do own home depot. i'm a big housing bull though. i think as interest rates continue to come down, you do, as i mentioned, a lot of pent-up demand. we have 5 million homes short in this country. you have millennials which are first-time home buyers.

we will get real-time information from the consumer. all is not perfect, mike. there are stress points for the con con consumer, but watching the labor market is important. i don't own chipotle, but it is down 20%. it is certainly on my radar screen especially since they have 40 million rewards members and a very sticky customer base. i'm looking for opportunities within consumer. >> they have been caught up among other things in the momentum stock retracement there. we will see if that has an effect. steph, good to talk to you. have a good week. >> thanks, mike. >> we're so energetic first thing in the morning. probably went for a run. coming up, hollywood couple topping the box office. blake lively and ryan reynolds coming up. you see bitcoin is falling

2% this morning down to 58,000 and change. "squawk box" will be right back.

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welcome back. disney and marvel's "deadpool & wolverine" has been the second "r" rated film to earn more than $1 billion at the box office. the film starring ryan reynolds added $50 million in the ticket sales in north america last week. that nearly tipped "it ends with us" who is starring blake lively who is married to reynolds.

it is an addaptation of a love triangle. >> i want to see both. i haven't seen either. when we come back, it is time to say good-bye to paris for the olympic games and you will hear from french president emmanuel macron on passing the rcto l.a. for the 2028 games next. you don't want to miss it and all the action that took place last night. we're coming right back. okay, team! >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. i'm really juste for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

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good morning. welcome back to "squawk box." we're live at the nasdaq market site on times square. the dow would open up 16 appointmpoints higher. the s&p 500 moving higher as well. close to 10 points higher. now it is time to pass the torch from paris to l.a. keir simmons spoke to french president emmanuel macron about the next summer games. he joins us from paris.

keir, it is great to see you. i want to hear what macron said and about last night's festivities which looked unbelievable. >> reporter: andrew, yeah, it was another example of the french flair that we have been enjoying the past few weeks. the fireworks and celebrations. i've got to say, maybe the best moment and stunning moment was tom cruise sleeping from the stade de france when the torch was passed to los angeles. you had a sense of great pride and enthusiasm here in france over an olympics that is, you know, estimates at $20 billion. very different from tokyo and rio. in that conversation with president macron, you'll forget this now, but right at the beginning, there was the attacks on the rail lines and pouring rain and he talks about how

people were despairing and some desperate and yet, he says, that they pushed through and that was a symbol of audacity. i asked him what is your advice for los angeles and listen to what he had to say. >> i would say be yourself. a lot of people will despair, never stop, never stop. >> reporter: now, of course, another issue for the olympics, always, is the events around the games. paris seems to have gotten through the past few weeks without too much of that international controversy. there is a lot, of course. i did ask president macron about the vote in november and what he had to say was fascinating. he said no need to say that this vote is very important for europe and for the rest of the world. he talked about fragmented societies divided by fears and

tensions and then tried to pivot to suggest that the olympic feeling of fraternity might have an impact or have lessons for the world whether or not that really will be the case for november, well, i'll let folks watching decide. >> keir, you know, the french did a remarkable job. there i think the whole world had seen an olympics that people did not expect to go all well. was he feeling that? the other piece of it was, i remember the day before the olympics began, he did a big lunch where elon musk and bernard arnault and david chesky and so many ceos came to visit with him and he argued for people to invest in france. that was coming as he had the

snap election and politics in france had itself become quite complicated. did he speak to the political complication in france right now and, perhaps, how folks outside of the country should be thinking about that? >> reporter: well, i think that, you know, now france is celebrating. i don't think having to spent that time with president macron, i don't think we should under estimate how nervous france was and the president and his team. what you had to pull off was a logistical challenge and security challenge and get the french nation to come together in a way it hadn't done politically. they still really haven't resolved the question of government here of how that should be -- how that should be

divided. how that leadership should be decided. that's going to be for president macron. there are -- it's kind of a split screen, isn't it? there are real challenges here in france and at the same time, france demonstrated whether it is capable of. i don't know that any report, honestly, can truly value the economic benefits in terms of tourism from the kind of publicity that paris just got the past few weeks. >> keir simmons in paris. great to see you in person and great to see you through the tv now and bravo for everyone in paris and everybody who pulled this off and everybody at nbc. it was magical. thank you. coming up, we'll talk about the presidential fundraising race and the knock-on effect for the down-ballot ceras as well.

reminder, get the best of "squawk pod" and listen on your favorite podcast apps. we'll be right back after this. .

the harris campaign has invigorated the democratic base and down-ballot democrats working to hold on to the senate and maybe take back the house. joining us with more is emily wilkins. >> good to be here. if you want to talk down-ballot races, new york has a number of o ones and across the county as well. now the harris campaign has bimt built up that momentum, it is nice to see that down-ballot. >> which ones? >> you have a number of republicans who won house seats and contributed to the housing in republican hands for the last two years. now they have to hold on to the seats again. of course, it is always a

balancing act for the members who are in the moderate districts where they have to win independents and have to win democrats. how do they deal with them being at the top of the ticket? how do they present more moderate? how do they deal with issues on abortion and women's rights? those are things you are seeing more moderate republicans balance. then for the moderate democrats, they are trying to show a little bit of distance between themselves and they did it with biden and did it with harris and whoever is at the top of the ticket and showing they are independent. you can't be linked at the top of the ticket. >> even with harris? i'm curious. she's very quickly -- maybe i'm wrong to say tact to the center, but a feeling of i'm for what's going to win. maybe as the issues play and the debate or whatever, maybe that changes. >> i think for a lot of

democrats, they are feeling that enthusiasm. the house democratic campaign arm put out numbers on volunteering. the number of people who will go out and knock on doors and talk to people. the number of volunteers is up 50% from where it was in june, the last time they took a pulse. the number of doors knocked on is almost up 200%. there is enthusiasm. that is trickling down to the campaigns. i'm thinking of folks like cher ordi sherrod brown or jon tester. they have to appeal to independents and appeal to people who might not be caught up in harris' momentum. >> stay where you are, emily. we want to add another voice to this conversation. we have jake sherman from punchbowl news. what does this mean? we watched harris say over the weekend that she is prepared to follow trump's lead on not

taxing tips, for example. >> i don't know if she is tacking to the center, andrew, but i guess a little bit. i agree with everything emily said. i want to add one wrinkle here. a new poll that the ft published with the university of michigan has harris for the first time overtaking trump on who voters trust to handle the economy which is undercutting the central thesis or theses of the candidacy. to be honest with you, their goal is to play it safe for the next 80 something days. quite frankly, donald trump is doing a lot of the work for them. you see him saying increasingly ludicrous things like suggesting a rally that thousands of people were at, including many reporters, was staged by a.i. i think there is a lot of concern. i don't think, i know there is a lot of concern among republicans

that trump is saying more ludicrous things as time goes by where they would rather have trump point out kamala harris' record which he is not doing much. everything besides her record. >> jake, one of the things which is interesting is, a, we're in a honeymoon phase and, b, we haven't heard anything of policy from the harris kpacampaign. the question is does that work for them? do you need to say that? the second you say the policies, depending what they are, people can poke holes in the policies and go after them. when you don't have a policy, it is hard to say anything. we're here talking about does she move to the center or does she move to the left? >> you are right, andrew. the general thesis here is she should say as little as possible

until she is forced to. that is not good governance or politics if you are looking for substance. at this point, this honeymoon phase is really well timed. she gets in the race. next week she goes to the confc convention and she will get a bump and basically we're in september where people tune in to the election for the first time. a really well timed set of events for kamala harris. if she gets into a debate, she's going to be forced into policy positions. this does say something, andrew. it does lend credence to the european model where elections are only six weeks because you're able to maintain voter interest and voter momentum for a short period of time. it is more difficult to do that over two years. >> if i can add to jake's good analysis there. that's where the trump campaign is hitting harris on not having a big sit-down interview at this point. interestingly, you will see the

harris campaign rollout a couple more economic priorities today. especially dealing with fees and the wait times people have to have to cancel stuff. you are seeing her get a little bit more taking the baton from joe biden. >> if i'm her, i'm not going to do a sit-down interview before i get to the convention. do the convention and then you can make decisions -- by the way, you might wait a week or two or three after that because you will get into the debate period. >> exactly. there's a huge timing to this and exactly how she wants to ride this momentum and how further she wants to carry it on. it has been interesting after the trump attacks on her not sitting down, there was a video clip of her walking up to the press on the airport tarmac saying what do you have for me? >> the one thing that is not avoidable on the policy front is next, whoever is president is

the scheduled trump tax cuts. what is the makeup of congress with the down-ballot impacts, it will be close? >> it will be close. speaker mike johnson has come out and said it. whoever is speaker, the margins will be narrow. we will not have 35 or 40 points to work with. >> he said that is gerrymandering. >> you look at the number of swing districts in the house and it is 11 versus 13. it used to be in the 20s and 30s. there used to be much more room. gerrymandering has downplayed the possibilities. let's say one party is able across the board house senate president, they will have to make sure to appease all members. we see how tougher that is. going back to the republicans. they want to see the cap on state and local taxes lifted and potentially eliminated. if they have a big enough coalition, they can dig their

heels in. >> jake, do you have a view of how she will come out on taxes and where does she land on a wealth tax, kporfor example? >> i think she suggests the corporate rate should go up. emily is right. it is just talk at this point. you need to see where congress is. i don't think this gets done this year, obviously, way ahead of the expiration. if republicans have the majority in one chamber and i assume they will, they will exert influence to try to extend the tax cuts as much as humanly possible. i think the s.a.l.t. issue is difficult for mike johnson. traditional democratic position will be soak the rich. keep everything else the same. i think that's where kamala harris ends up. >> ironic thing that is gerrymandering good for polarizing democracies?

it is so entrenched. jake, you see what i'm saying. if no one can build, they can't get anything done because congress is gridlocked. a lot of markets see that as a good thing. you know what i'm saying. >> i'll let you make the argument point of view. i'll tell you this, every single member of congress, 85% of them, maybe not all of them, go back to districts where extremes are being reinforced. it leads to no compromise and you could argue from a political point of view, i'm not going weigh in on that. every single member goes home and voters are saying you are not liberal enough or not conservative enough and it pushes them to the edges. >> does it push policy toward the center. i take your point. >> jake, nice to see you. thanks. >> thanks, andrew. coming up, we'll have much more on the race for the white house with former house speaker kevin mccarthy. that's at 7:30 a.m. eastern

time. after thisre bak, we raise the curtain on the retail sector with two key reports due this week. home depot and walmart. "squawk box" is coming right back.

welcome back. walmart and home depot are set to report later this week. you can see the stocks fractionally higher. joining us to talk retail, oliver chen. it's great to have you here. we've heard a little bit of caution in recent quarters. do you expect that to pick up or go away this week? >> i think the consumer remains choiceful. those cautious tones will likely be reiterated.

that being said, walmart is our best idea for the year, and we're excited about the technology opportunity as well as grocery. grocery is about 60% of the business, and that really adds a stabilizing feature to the stock. we think the focus on everyday low prices and value, that will work as well. as you think about technology, kelly, the marketplace model as well as digital advertising, those are also key profitability drivers that we like in terms of an offensive state of this business as well. >> yeah, i mean, walmart seems -- you know, barclays last week had this big downgrade on retail. from here on out, things get really challenging. i don't know if you agree on that broadly and where that leaves you on the rest of the coverage universe. >> higher unemployment at 4.3%. the consumer is stretched, more delinquencies in using credit. consumer confidence is fairly volatile. we are concerned, in terms of the sector overall, we would

focus investors on value such as walmart and costco, meaning very strong value to consumers. we'd be very selective in luxury. we like lvmh. this company has tremendous scale and power brands such as dior and louis vuitton, and on the pullback, which has been something we've been watching, we like beauty names such as elf as well as ulta as well. being defensive is one option. >> i'm glad you mentioned both of those categories, luxury and beauty. can you explain what's going on with both? beauty was this amazing performer in the 2010s and has hit the skids lately. is it related or unrelated to what's going on with luxury? if you liked a luxury stocks like lvmh in the long run. is this an opening to buy? that's a very great observation regarding luxury and what's happening. china has been a tail wind.

it will continue to be for the near and medium term in part because of housing. the housing market there and the valuations also monitoring gdp as well as consumer confidence and exports in china could weigh on luxury stocks. that being said, the real play in opportunity at lvmh is tremendous scale and about $10 billion of marketing spend and power brands that are well recognized with pricing leverage. so being selective in luxury. this opportunity to buy lvmh for long-term structural benefits and a really stellar portfolio brands including sephora is a great idea in our view. on the beauty side we've certainly seen slowdowns. we think this is temporary, in part due to inflation. ulta is competing against sep sephora, and that's having strain in terms of promotions and disruptions in the market. this is temporary. over the long-term, the beauty industry remains very vibrant across cosmetics, hair care,

fragrance and ulta's specialty retail owned the sector as well. >> i'll do my channel checks, i think, and then come back to you. try to figure out what's going on there. its weakness was notable. thanks so much. we appreciate your time today. >> thank you too kelly. have a great week. > 're coming off a volatile week for the tech sector. we'll dig into big moves coming up after the break. "squawk box" will be right back.

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energy fuels, a leading american uranium producer, is ramping up production to supply expanding nuclear markets and diversifying into rare earth elements, key ingredients in many clean energy and defense technologies. energy fuels. last monday investors woke up to a sharp selloff in the equity markets, but by the end of the week, the major averages nearly came all the way back including the nasdaq, which was

only down fractionally by friday's closing bell. joining us to give us some perspective, doug clinton, good morning. among the many things going on in markets in recent weeks has been a little bit of a rotation out of some of the bigger crowded trades that has included some of the mega cap tech stocks. where does that leave us right now in terms of i guess creating your hierarchy of opportunities? >> it has been a volatile week. it's been a volatile month, and our bet right now is that the worst of the volatility for tech, at least for this particular correction, is likely over, and we've referenced this data before, but i think it's really important from '94 to 2000, goingback to the last technologically driven sort of boom period we've seen in markets. there were 11 corrections in the nasdaq over that period of 10% or more, and then monday when we had that yen carry trade sort of blowup, the nasdaq hit down

about 15%. when we look at that historical data, we actually think it's sort of a signal for psychologically just how do investors process corrections when we're in these technologically driven booms, and it feels like down 10, 15% from peaks. you have sort of this clearing rate where you get a little bit of exuberance of the market, and i think that's exactly what we've had happen right here. >> although, when it comes to let's say semiconductors as a group, down 25% last week i mean from peak to trough, and still down 20%, it just seems to be a little bit of a rethink of the ai investment cycle, when we're going to get payback on that, how is that playing through to the stocks that you focus on? >> it is a little bit of a rethink. we've had more of this conversation about when will we start to see meaningful revenue from all of this capex that's going into ai, hundreds of billions of dollars likely over the next few years, and the reality is this for us. number one, when we think of

when we're going to start seeing pay back, i still think there's this mismatch between the companies who are actually investing in this technology and the investors on the other side. i think investors are hoping to see pay back, you know, over the next year, 18 months, and if that's the case, they're going to be disappointed. i think we won't see meaningful ai revenues for a lot of these companies for a year plus, and i think the companies like the mag 6, the mega cap tech companies who are driving this boom, they have longer horizons in terms of how they're thinking about payback on this technology. that mismatch is always a risk. when we look at where we're trying to play it, taiwan semi's been a name that we've owned now for almost a year. it's a name that we've lieked fr a while because when we think of this chip revolution, everybody has to use tsm to build these advanced ai chips. last week taiwan semi posted their july revenue numbers up 45%. it was an acceleration from june

at 33%, so the demand for these ai chips is still strong despite what the stocks have been doing. >> yeah, almost whether or not they're worth it, the demand for it is there. we've got to leave it there, thanks so much. >> thanks, buddy. it is just past 7:00 a.m. on the east coast. you're watching "squawk box" on cnbc. i'm andrew ross sorkin. among today's top stories, former youtube ceo susan wojcicki dies at the age of 56. she has been living with non-small cell lung cancer. s s she was response for the birth in many ways of google, which took place in her garage literally and then the acquisition of youtube, perhaps the best acquisition ever made.

meantime,back of america ceo brian moynihan calling for the fed to cut rates. speaking with cbs "face the nation," he said consumer spending could weaken the central bank. and the big event for investors this week will almost certainly be the july consumer price index. that's going to take place on wednesday. we'll get those numbers. other key data points include july ppi and housing starts on the docket. >> let's get a check on those futures after a really -- i hate using the word volatile, turbulent week last week. dow futures up 28. let's get to dom chu with a look at this morning's premarket movers. >> good morning, kelly, andrew, and mike. let's kick off our monday morning movers with a look at eli lilly first off, the pharmaceutical giant is up north of 1%, about 1.25%. that's thanks in parts to analysts at deutsche bank who have upgraded from a buy to a hold. they've raised the target price of 1,020 a share. they're citing the pharma giant's big beat on diabetes

drugs including mounjaro and obesity drug zepbound, and high growth prospects as an appeal for investors. eli lilly up 1%. robinhood markets, piper sandler upgrading from an overweight to a neutral. they think the recent pullback in that stock as you can see here is a good place, an attractive place for buying the stock. they think the increased trading activity in growth and margin loan use in the future will help offset any headwinds that that company could see from future fed interest rate cuts up. up about 1 and a third present goldman sachs is initiating coverage of the sector. a buy rating for conagra, general mills, mondelez and a sell rating on hershey's and kraft heinz. they're citing a well-positioned frozen food portfolio, snack portfolio, also good free cash

flow yield. conagra relatively unchanged, but general mills, mondelez, hershey and kraft are all moving in the premarket on that particular note. by the way, for that and other top analyst calls of the day head to cnbc.com/pro where subscrib subscribers can get access to added details. >> you know i'm kind of on sayses obsessed with this whole cpg. the etf is an all time high, consumer staples. i don't get it. there's not going to be more disinflationary, conagra especially. >> it's not just that, these things are also decent dividend payers, and if the prospect for interest rates go lower then they might welbecome more attractive. >> it might make more sense that costco and walmart are in that etf and are humongous parts of that. >> fair. there needs to be a non-costco walmart -- maybe a cpg etf.

>> stuff on the shell was. >>. time for a look at swing voters and the issues that could impact the white the house. steve liesman joins us now with the latest cnbc all america survey results. good morning, steve. >> mike, good morning. yeah, with former president trump and vice president harris neck in neck in our cnbc all america economics survey and harris showing a lead in other polls, the election is going to come down to the perplexing group called swing voters. they look like republicans in some ways and democrats in others. our somewhat different definition of swing voters is this, independents or undecided voters or harris voters who want republican control of congress or trump voters who want democrats to control congress. the poll of a thousand people has a margin of error of 3.1%, but it's bigger. it's 7% for the swing group because the sample is a lot smaller. how small? they represent 20% of all voters in our poll.

31% of latinos, most other groups look a lot more like the average voter, 24, 25%, for example, for that 35 to 49 group. the share looked to be winnable by either campaign. what stands out really remarkably is how much they dislike former president trump. swing voters are net negative on trump by minus 39. that compares to minus 9 for average voters. their net approval for harris is the same as the broader sample, but by a 28% margin they see themselves as better off financially under trump than harris, except that a huge majority of 60% don't think it matters at all. far more than the average voter. on the issues they're more likely to look like republicans on the importance of the economy, crime ask safety and taxes when it comes to their vote, but they look like democrats in their concern for the issues of health care,

abortion, and social security. for trump, well, the way to the white house looks to be improving his approval rating among swing voters. for harris it would be gaining their confidence on steering the economy. both campaigns could do a much better john appealing to latinos. a correction on the cnbc retail monitor we reported on friday. when i will the overall monthly and yearly changes were correct, the sector breakdowns were wrong for several categories due to a computer errors by our data providers the nrf and solutions. you can see restaurants and bars, general merchandises and the year-over-year numbers when it comes to 1.1% for general merchandise, negative on electronics and negative on furniture and home. we're working with the providers to make sure this doesn't happen again for this new index we've brought you. the top lines were correct, sector breakdowns were wrong. guys.

>> steve, can i ask you a quick question. i don't know if you saw this ft poll over the weekend, this was the -- >> i did. >> and university of michigan saying that harris is now, quote, more trusted than donald trump on the u.s. economy. how do you square that with the cnbc all america survey? >> so, i've been studying this. i don't have the ft poll, but i would point out they asked trust on the economy, and what happened in that poll from what i could gather is harris now has a one point lead, 42 to 41. trump remained the same. harris came up by seven points. i think the word trust is doing a lot of work in the ft question. in our survey, we show that people think they'd be better off financially under trump by a large margin because republicans believe they'd be better off financially under trump, and independents and democrats don't care much. the other way to think about

this is they show when they ask who -- under when your life will improve more, better outcome, they show a ten-point trump lead and we show like a 12-point lead on the issues of the economy. so it's a different question asked in a different way. we might end up asking both questions in our next poll. i like that question about trust, but i also like our question about who you'd be better off under financially. it's also very interesting to me that republicans have always thought it matters a whole lot who's in the white house for their finances and democrats and independents think it matters less, and democrats are much less motivated on the economy when it comes to their presidential vote. >> steve, thank you for that. appreciate it. we got a lot more to come this morning, a look at the market week ahead and what investors need to watch as we get set for two big inflation data points.

and then later, former house speaker kevin mccarthy is going to join us to talk about the race for the white house and so much more. "squawk box" rolls on right after this.

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welcome back to "squawk box." making headlines, "the wall street journal" reporting activist investor starboard value has built a stake in starbucks and wanted to take steps to boost its stock price. stock up about 2 3/4 percent. >> two quick things about that, both the way they've partnered on a lot of these. what's that about? >> another activist investor has been in starbucks. >> it's not new the idea that

when activists, when many of them get together they can have -- >> when management has seemed to be vulnerable or responsive, i guess. the other interesting thing is what they might propose. >> the question is what do you do with a starbucks at this point in the ball game? do you spin off china? >> is that what people are saying? >> if you're trying to do some kind of financial engineering, there's not lots of -- >> it wouldn't surprise me if they would push for them to franchise. >> which they really don't, they mostly own their own store. >> the question is whether those are good things or bad things f. you're not doing those -- there's not sort of classic financial engineering things you can do. a lot of it is actually real operational work that needs to get fixed at the company. >> that's where i was thinking, is way too operationally going, we've read the detailed profiles but how to make the drink machines quicker. when howard came back, a lot of this is what he tried to do is fix it operationally. if he's left and none of this has happened, what is there left? they've done well on the digital

front, everything they could mine from there presumably they've mined. >> the question is operationally i could tell you how to fix the company operationally. the ethos of the company needs to go back to the old. >> meaning? >> the whole problem with starbucks today is that the experience used to be you went into starbucks, they gave you the cup. they wrote on the cup. the barista was nice to you. they smiled, they said your name. all sorts of things happened. that is over in the digital world where you go in to just get the cup and to leave. and it's turned the -- >> it's a drive-through company now. >> it's turned the baristas into human robots. that's what's happened. >> ironically for the company that pioneered the idea of investing this your baristas. >> it's no longer that third place. i honestly would hire greeters at starbucks. i would have a human being at the front of the door like walmart to say hey, kelly, it's great to see you. i would like really try to change the whole experience. >> almost like chick-fil-a

style. chick-fil-a is the most forward with -- have you been in a chick-fil-a drive-through line, they come to you. >> it's a great experience and you feel great about it. >> if they took that a step further to your point, finally you get something more pioneering out of the experience. >> all that probably adds costs. >> but you spin off china. >> i don't know if you spin off -- >> if you do spin off china that was always supposed to be the great growth engine of the company. are you giving away the long-term value by getting rid of china? howard schultz spent 25 years -- >> if that moment is over, how much opportunity is there really? >> that's the question. >> i don't know the answer. >> it's a tough one. let's take a closer look at the markets. j.j. kin han is here, j.j., how would you fix starbucks? >> it's interesting, i just saw a podcast with howard schultz and he said kind of what andrew said, what made them great is the experience, and he's trying to figure ways to bring that

back. that's what they've lost. now to the point i think you were making there, andrew, they are just another transaction, and he used the word community. he said we built our business around community, and the community is what's lacking right now, and if you look, you know, they're one of the companies that just came out and said they are afraid for the consumer, and if the consumer doesn't feel that sense of community, i think they do have some tough times coming up. and hey, maybe my retirement plan, andrew, will be being a greeter at starbucks. >> i'll see you there, i always wanted to be a walmart greeter. >> they've also priced everybody out of the market. >> it's all like -- >> and they could do -- i would do drip coffee for $0.99 just to get people in the door. it's the highest margin product they sell, just to get people in and not make people -- >> it's the lowest margin product they sell or the highest. >> coffee still is? >> black coffee is the highest margin drink because there's nothing in it. >> you give that up just to get people in the door. >> you just give it up to get

people in the door. you try to make people feel there's a value. but you also do it without trying to cheapen the brand. that's the other thing that's happened. everything's been cheepened. there's always a sale. you're always getting these notifications every ten seconds on your app. half price, this and that. that doesn't make you feel like you're at a high value operation. >> not at all. >> it's why i think all the -- i'm sure you guys are experiencing it there too, think of all the independent coffee companies that have popped up even since covid, et cetera, and they are competing and taking market share away because they have been able -- a lot of these smaller one or two person shops have been able to get that sense of community. people hang out there, et cetera. you just don't see as many people sort of hanging out at starbucks as you did at one time, and it's become very transactional. >> other than the high school groups in my town. what i was going to point out about this, a week ago at this very moment i think the vix was at 65.

here we are talking about how starbucks should change itself. what an odd market is that. >> if you went to sleep a week ago sunday night and woke up last night, you would be like last week must have been a humdrum sort of week. what's really interesting to me on the last week, kelly, is when we see markets like this, what often happens when the market collapses is you see retail traders, the first place they tend to go is things like spx and spider. the indexes are index related etfs. what we saw a lot of our clients do is go and start buying stocks, we're selling puts on stocks taking advantage of the high volatility, in order to play for a snapback. i found that behavior odd compared to other weeks, and so you know, one of the two places it really is programmatic almost, the two places retail tends to start, apple and microsoft, we isaw it again, great companies, great cash

flows. e they went to goldman sachs and coca-cola, similar profiles. that was to me one of the most interesting things is there was a change in behavior where people viewed this as a buy the dip mentality, much more than a run around screaming with their hair on firemen t mentality. >> i'm sympathetic to the idea that this whole story has a few more innings left to it, but i don't know. >> well, you know, usually these things don't just end so quickly, and it's all is back to normal. i do think one of the side effects you'll see, if you think about the vix was trading at an under 15 level for so long. as we speak right now, it's right around 20. i would expect the vix to stay near this 20 level for a lot of the rest of the year as people are taking into consideration again, hey, the market actually can go down. we just hadn't seen it that quickly and seen volatility explode back quickly in quite a

while. i would expect the side effect to be that people are a little more respectful of the downside than they have been to this point. let's face it, there really was no reason, the market kept going straight up. but i also think people are reassessing their portfolios. some of the names that got momentum, if you will, just because they were involved in ai, et cetera, i think one of the things you saw from this earnings season is how are you actually going to monetize ai. you've bput all this money into it, what's going to happen to it. i think that free pass is gone for many stocks going forward. >> great to see you, thank you for your time. >> nice to see you, kelly. up next, hezbollah firing dozens of rockets toward northern israel. the u.s. ordering additional defense vessels to the area as tension grows in the region. we'll talk about it next. and then we'll hear from former house speaker kevin mccarthy on that issue as well as the race for the white house. "squawk box" will be right back.

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kid proof your vehicle with american made products at weathertech.com. hezbollah firing dozens of rockets towards northern israel. this took place on sunday. no casualties reported but the country remains on high alert for a retaliatory attack from

iran. we've been talking about that prospect. joining us with the geopolitical headlines heading into the week, former deputy assistant secretary of defense for strategy and force development under president trump. good morning to you. you know, we've been talking about some kind of retaliatory effort and how much things escalate from here. what do you see? >> well, great to be with you, andrew. it does look like the israelis are thinking according to "axios" that a strike is likely to happen in the coming days. iran and hezbollah have said pretty direct things about some form of retaliation. it does seem likely, and of course the u.s. moves with the carrier and the guided missile submarine and other assets suggest something is likely to happen. >> okay, so play this out, let's play the cards out. let's say there's a retaliatory attack. then what? >> look, i think we have to assume this is going to go on for the foreseeable future. the administration is trying to push a cease fire hard.

i think the parties or at least some of the parties, i don't think hamas, are are going to g together on thursday to try to come to a cease fire. it doesn't seem like there's a meeting of the minds there. there does seem to be a conventional wisdom that none of the matters including iran, really wants a regional war. it's not clear that it's entirely within their power to do so. hezbollah seems to be pretty aggressive as we've seen. it's not clear that they're going to do exactly what tehran tells them, even if tehran does want restraint. >> how strong is bibi netanyahu's position inside of israel right now given all of the pressures both from the u.s. but also, of course, from iran on the other end? >> it looks pretty strong compared to where he's been, andrew. i think, again, the administration's clearly tried to push hard on him and ideally, they would have preferred another leader. i think if we'd fought back in october, would bibi still be here in august of the coming year, people would be surprised, and it does seem to reflect a strong sense within israel and i think fairly so that they can't

allow a perception that they've been defeated in gaza. you've seen the israelis continue to be operating there and going after hamas's military forces and so forth. so again, i mean, it doesn't seem like there's a clear basis for, you know, a true resolution of the conflict where we'd see something approaching stability. >> and maybe that's why the oil price is up, even as even says, you know, they do too much, they strike the oil facilities in iran. it sucks people in more broadly. what about ukraine's incursion into russia, what can you tell us about that? >> look, i think everybody's been pretty astounded and impressed by the ukrainian move. i do think there were questions about what exactly the ukrainians are trying to achieve. they've advanced into russian territory, but you know, the main sort of thrust of the conflict is in ukraine's east where the russians continue to make progress. perhaps kyiv is trying to sort of switch the narrative or pull russian forces away, but it's not clear how that's going to work, and i mean, that's what the journal was saying today, that even some ukrainian forces

in the east were saying, hey, you know, what about reinforcements here. we'll have to see how it plays out. the ukrainians have certainly impressed and i think the kremlin's kind of been knocked on its back foot a bit. i don't see this as fundamentally changing the trajectory of the war. >> can you sort of prognosticate how you think this election here in the united states could impact all of what we're talking about? >> well, look, i think it's a huge question, andrew. to me it's got to be one of the key factors in the election for americans is looking at the world, it's an exceptionally dangerous time not only the places you mentioned but the korean peninsula and of course the chai inese are still prepar for a conflict. there's a deep structural tension at the economic level where you see basically the chinese continuing to focus on an export-led industrial production model, and the rest of the world worrying about another china shock. that's a deep, very serious source of tension. look, i think, i mean, i'm biased. i support president trump, but i think the current trajectory that we're on is not a good one. i mean, there's a lot of the rhetoric that people here, which

is, you know, the rules based international order and so forth, but what you really see is a yawning gap between our capabilities ask our pledges. the carrier i mentioned, for instance, i believe there's no carrier in the pacific right now, and the a.p. is reporting that the u.s. is behind on pretty much all of our naval programs. so we're talking big b, but we' not really following up. what we need is a fundamental reindustrialization so we can produce for ours and our allies like israel, ukraine, taiwan, et cetera, but also a strong military that we use sparingly. i think that's the kind of model we need. we're headed to a pretty bad place right now. >> elbridge colby, thank you so much for joining us this morning. appreciate it. >> a budget stretched in all directions and now being stretched on that important front as well. coming up, fans of the happiest place on earth may be avde happier after this weekend, we he tails next.

and "squawk box" is back in moment.

♪

disney unveiling new plans for its theme parks and cruise business at the d-23 expo. the kcompany said it was plannig to spend $60 billion on capital investments, but didn't provide details at the time. the company now says it's planning two major expansions at the magic kingdom park, including a villain's theme land and a frontier land inspired by the cars franchise at animal kingdom. disney plans to redo a section currently focused on dinosaurs. it will be redesigned as a tropical america's land, featuring rides theemdmed. and it's adding a handful of rides at its california adventure park focused on the marvel cinematic universe. disney's cruise business is adding four new ships. disney did not have ip on dinosaurs for the animal kingdom. so it's now something different. coming up next on the other side of this, former house

speaker kevin mccarthy is going to join us. we'll talk about the election and what may or may not happen next. in addition to that, the futures right now, take a look at where things stand ahead of the market open. we've still got about two hourshours to go. dow up about 45 points, and the s&p 500 up a little over 10 points. "squawk box" returns with kevin mccarthy after this. ♪ 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.

i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

welcome back to "squawk box." joining us right now to weigh in on the state of the race for the white house, former house speaker kevin mccarthy. it's very nice to see you, sir. >> good to see you. >> there's a lot to talk about in this election. >> yes. >> tonight we're going to see former president trump speaking with elon musk on x. i don't know if you think that's going to improve his fortunes in this campaign or not. >> i think it will. i think there's an opportunity there. elon brings a brand of independence and also taps into this frustration of expansion of government, more limited government. i think that will bode well for trump in that manner. >> can you explain this, the financial times has a poll out, which i'm sure you saw, with the headline, kamala harris is more

trusted than donald trump on the u.s. economy. what do you make of that? >> that's just euphoria that biden is no longer the nominee. i mean, look, are democrats in a better place than they were with biden? yes, but with biden, they weren't just going to lose, they were going to crater everything. what i read in that poll democrats are playing defense. i mean, if you think of the electoral college and you give president trump just what he won last time, all he has to win is pennsylvania and georgia, and he's at 270. the whole play is defense. and if you also read that poll, democrats are excited they're head by a couple points. well, hillary was ahead by further. biden was ahead by further, but the other thing is trump didn't diminish. he actually went up to his highest points in the three swing states at 46. so she has to play defense. now, it's a different race for us. if this race, whoever this race is about loses, if this race is about the economy, if it's about

the border, if it's about crime, kamala's in a very weak place. if it's about personality, it gives her an advantage. >> what do you make of her pivot or move over the weekend -- and i don't know former president trump's calling it a copycat move effectively to say, you know what, we're not going to tax tips as well. sort of this idea, and we keep hearing it but we haven't seen it fully realized yet but that on some of her policies economic and otherwise she may shift to the center and how much harder does it make it for the former president if, in fact, she does that? >> i would have her say that, then i'd come right back and show exactly what she did. not only did she vote for, she was the swing vote to hire all the new irs agents to go after you on how you reported your tips. so she would become a flip-flopper on almost everything, which would be a bad position for her. you haven't contested this race yet. you haven't laid out in her own words on every single position she's in a weak spot. now, look, kamala always starts

strong. when she went to run for president, she had the best opening. she had 40,000 people in oakland. she had all this money came in, but she never even made it to iowa. on a long race, kamala doesn't do well. this is a short race. >> you made some headlines suggesting she's some kind of puppet for obama and that he's running the campaign or something. what is that about? >> i didn't use the term puppet. they editorialized that. >> that was the idea. >> my take was it's a much different race. you can tell biden's people are no longer running the race. she's taken one play out of biden, don't talk to the press. when she talks without teleprompters, she does poorly. keep her out of the press. >> so you think the idea is -- i'm assuming, maybe i'm totally wrong, ha she has to get to the convention, she wants to put out all of her policy stuff at that convention, and then i imagine, i hope that she will end up talking to folks like us on cnbc and others, no? >> you would hope, but it

doesn't look like she's going to that much. biden didn't. it's the one place that gave them an advantage just to not make it about themselves. she's bringing new people into the campaign, obama people. hillary didn't work hard. bi never went anywhere. they're going state after state. that's a different campaign. that means republicans have to work harder. her messaging is better. anytime it's an open seat for the presidency, it's aspirational. you use the term future, she's us using language that i used when we ran to win the congress, an economy that works for everyone, right? so she's using language that has nothing to do with her policies. >> so how do you think former president trump is doing right now? there were a whole bunch of stories over the weekend that said he's very frustrated, that he's angry. that sort of this honeymoon period for her is putting him in a tough spot. what does he do to recalibrate? he says he doesn't need to. >> i think he -- on the issues itself, he can run on the

border. he can run on the economy and he can run on the crime. he will beat her every step of the way. you just have to run on those policies. this is a man who's been through much worse. i don't think america has seen this much in a nine-week time frame of politics, a president almost become assassinated. a president being convicted. a debate, a president pull out. that's a lot to go on with. you have to recalibrate the race. every sunday the football team puts a new strategy because it's a new defense. it's a new offense you're going up against. >> does he recalibrate? >> it's a different race between biden -- biden's race was all about his age and capacity, and even democrats weren't voting for him. it was all collapsing. now it's a different place. i would look at it from this. there's pros and it's cons. it's a new person so it's a tougher race. but this is the weakest person they could have picked. had they selected somebody else, the race would be much tighter.

>> the race would be much tighter. >> it shows he's losing right now. >> even axelrod's -- you look at axelrod, he says the enthusiasm from democrats is actually wrong. the advantage is still to trump. they're playing defense, they have to win every single state -- >> the electoral college math is still an advantage for former president trump, right? >> yeah. >> but you would have to say if the game at this point is activating people who hadn't made up their mind a month ago or just were anti-biden, he -- trump seems to have a ceiling. an amazingly strong core, and he's been around for nine years and we know what it is. her slogan has become we're not going to go back. >> that's a good slogan. it's an important one. that's why trump has to lay out the case for where you go, and i think you can make that case against her based upon her policy. she's from san francisco. the other thing too is when biden won and you think that was a big race, right? he won by a big margin, you think, 82 million votes? it only came down to 48,918

votes and his favorability was plus 10. that's not where she's at. >> j.d. vance, does he help or hinder the trump ticket? >> well, the vp doesn't determine the outcome, but i'm watching j.d. vance in the last week be an asset. i watch him being the place that trump shouldn't be. you want an attack dog. you want someone to go do the negative and you go do the policy, and that's exactly what he's doing. i thought his movement while he walked across the way and just literally challenged the press to why haven't you asked her a question. now you're all talking about it. before no one mentioned it. they just gave her euphoria, right? that was a smart move. it changed the debate. you're looking at him. he's going out. you need an attack dog. >> what did you make of trump claiming over the weekend i think incorrectly or not that i think, i know incorrectly, that her audience at these rallies is somehow produced by ai.

we have vivek ramaswamy coming on the program in the next hour. he took to twitter and said, you know what? the president shouldn't be making these kind of claims. >> this is a place -- remember, i give president trump a break. this is a man who a month ago almost became assassinated, literally that part, right, and then the person you've been running against for more than four years is out. so there's a shift here. stick to the issues. keep it off personalities. stick to the economy, to border and crime, and use just kamala's language. >> in like ten seconds, what should we all be thinking about the tax cuts and what happenings with that? it's a ticking time bomb, what's going to happen? >> it is a ticking time bomb, article 1, section 7, all tax reform starts in the house. so it's however this election turns out, it's got to start in the house. >> it's going to be so close regardless, so what can possibly get done? >> remember the last tax cuts you had the same way where you had to come in. some were sustained and some went away.

i think that same thing is going to go because the ones that you keep out there that have to be debated are the most popular ones. the others got locked in. it's hard to move some of those away. >> what do you think is locked in? >> well, the ones we already took away. the ones that are up now, i think salt becomes a debate. i think it's harder to keep that going. if you do nothing, it goes away. >> can i ask you one other question, we talked about it on the set. "the wall street journal" came out with a report that said former president trump if he wins wanted to have more sway over the federal reserve and its independence, and joe and you -- i asked you guys all about it, and you said, well, that's -- who knows what these people are saying. you know, these stories are totally wrong, dada dada dada. okay, then we see former president trump last week on camera physically saying, yeah, i'd like to have a bigger say in all of this. what are we supposed to think about that? >> tell me what law has changed

that's going to give him more sway. the president still gets to appoint, and cincsenate confirm. the senate's going to have a few senators that are going to control a lot, so whether they confirm that person or not, i think that's going to be a major question. >> do you think he picked powell because he thought powell would be more swayable, even just in a broad, you know, way? >> i don't think that was the point. i think -- knowing the time of when he was doing it, i think it was the experience and where we were going through at the time. >> nice to see you, sir. >> good to see you. >> thank you for being here. >> look forward to coming ba. we'll see you back soon. coming up, lazard ceo peter orszag on the fed's rate path and the markets. "squawk box" will be right back. we really don't want people to think of feeding food like ours is spoiling their dogs. good, real food is simple. it looks like food, it smells like food, it's what dogs are supposed to be eating.

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isolation and the israeli/palestinian conflict. oil prices rising again. what a ramp-up of attacks and even a full-blown war could mean. later, vivek ramaswamy joins

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rising geopolitical tensions in the middle east and recession fears keeping the energy sector on edge. joining us now is goldman sachs head of oil research. great to see you here. kind of in this offsetting currents, i guess, in the energy markets. oil's been in a range. what do you think is, i guess, the key swing factor here? >> yes. we have been calling for brent in 75 to 90 range. we did test the lower for last week. from here we think with move a bit higher. positioning is very low. net managed by money manager, 2000. seeing drawstrings of the last part of the summer season. into next year we think risks of skewed to the down side. >> because of -- the economy? demand? >> we do think that demand growth has slowed, and sort of

normalizing to its long-term trend. 1 million barrels per day. the last post from the recovery is behind us. i think upside is capped by opec's plans to bring those barrels back from october anwards in the market allows it. >> what do you make of the way the market either, i guess, has or hasn't, or is occasionally, reacted to these flare-ups of geopolitical conflict? i mean, sometimes it sort of shows you what the market kind of is primed to do anyway, but, i mean, how are we digesting this? >> the sensitivity of the flat oil price to geopolitical tensions, still ongoing wars both in ukraine and in the mideast diminished over the last two quarters. key reason, we haven't seen significant disruptions to oil markets, oil supply. second, a lot of spare capacity. meaning if you were to see, for instance, drop in supply from iran countries like eu and

europe would likely step in shortfall and keep markets balanced as they've been the last few years. >> i guess, you know, with u.s. production where it is in terms of being at a record at this point. is it just a smoothing effect? what is the refilling of the spr? >> refilled at a very slow base. call it 3 million barrels per month. the level of spr entries is quite low. you would argue with the u.s. being an exporter of oil, the eq equilibrium you need is all right. >> and how much it would tyake o fill it. a lot. now nearly nothing. and maybe we bounce, do you think, in terms of crude prices and may lower from there? >> basically for next year still

brent in low 80s. wti high 70s. and to downside because of spare capacity. possibility of recession definitely another base case. but our economy sees a 25% probability. if that were to happen and opec not respond aggressively cutting further you could see dropping of prices up to $30 per barrel in the medium sided recession. >> gotcha. another reason not to worry quite as much as inflation. thanks. appreciate it. meantime, just closing in on 8:00 a.m. on the east coast. you're watching "squawk box" on cnbc. i'm andrew ross sorkin along with kelly evans and mike santoli. joe and becky are all today but the circus continues here on "squawk box." bank america's ceo brian moynihan saying if the federal reserve doesn't cut rates soon it could dispirit american consumers. he appeared on cbs's "face the nation" saying once consumers

start to have a particularly negative outlook it's hard to get them back. also on the fed. former president trump's vice president, j.d. vance, and kamala harris disagrees. and becoming the second r-rated film in history to top $1 billion in the box office on pace to become the highest grossing r-rated film ever. >> woo-hoo. a quick check on futures. looked to opening higher after last week's big monday sell-off. dow by 66. s&p 12, nasdaq 41. treasuries saw big swings up around 4% percent ten year. 3.95 latest. more options this week, refilling ones they call it.

and dom chu with pre-market movers. >> hi, kelly, mike and andrew. start this edition off with shares of walmart up a half percent. that's thanks in part to positive commentary ouch the analyst team at evercore, opening up a shorter-term tactical positive call on retail giant ahead of earnings this week. they see current quarter sales growth existing stores locations comps and per share profits in line with consensus and an affirmation of full year guidance thinking walmart stock is a safe haven in a volatile consumer landscape. watch walmart shares. shares of keycorp surging 5 per5 -- 17%. scotia bank agreeing to buy. giving scotia rudgely 15% stake in the company. paid $17.17 a share. that price representing an 11% premium to the weighted average price of that stock for the last

20 trading days. that stake will be built in two stages. 4.9% expected later on this year and then 10% in fiscal year 2025. 18% on that. cap things off with a look at starbucks. after the "wall street journal report" that activist investor starboard value jeff smith's outfit took stake in the coffee giant. shares up 3% as the report comes as another activist recently built up a sizable stake in the coffee giant. pivotal for starbucks and its ceo sales in u.s. and china markets are slowing dramatically this year. keep an eye on starbucks. even more activism. >> interesting move, dom. keybank paying pretty good premium for book value in keycorp. some follows what banks lie t.

do dominion. >> absolutely. bank of the west. a lot has to do with the idea chinese away from real estate and other markets in canada. whether growth or not remains to be seen. certainly a diversification plan. >> for sure. kelly, maybe set a marker for some regional bank valuations out there. >> i wondered. up 17% on that. okay. whatever strategic fit scotia sees, regional bank investors rotate into smaller caps because big caps -- >> and on some of the regional banks, 14, 15, and something like comerica, 7 billion. remarkable. >> wow. >> thank you. coming up, talk markets and the economy as we get set for a big week of inflation data with

lazard ceo peter orszag. and later vivek ramaswamy will join us. stay tuned. you're watching "squawk box" on cnbc.

. welcome back. s&p firmed up. finished last week last in after 3% decline monday. dow up about 60. nasdaq also to the upside. >> okay. more market catalysts coming this week. cpi anddata. maybe talking politics, too, lazard ceo peter orszag. good to see you. a wild week last week and almost like it disappeared. happened. didn't happen. give wrn where we were end of t week, what happened? >> u.s. markets overreacted to, wasn't good, but not a terrible jobs report. point one.

point two clearly an unwind of the carry trade in japan. that's natural as the japanese raise -- >> how cautious walking into the fall? heard from brian moynihan on "face the nation" yesterday, relatively bullish on the consumer for a long time and had a sort of hesitancy to some of his language. >> good news inflation continues to come down. that's a positive. the consumer has largely held up, although there are signs of especially lower and moderate-income families additional stress. generally decent as is the labor market. i think it's pretty good. a risk factor coming for the middle east now. overall i think the picture is actually pretty positive. >> when your clients making deals and thinking about what's going to happen this fall, are you saying, go do it? or saying wait until the election's over? saying wait until the fed cuts rates by 50 basis points?

50 basis points 25? what are you telling them. >> look past the noise like last week. inflation continues to come down. the fed will cut rates. i personally think 25 basis points in september. >> we can talk about that. antitrust and regulatory environment will get better, not worse. >> under either? >> under either. >> do you believe if harris win as move towards the center as opposed to the left or even remaining where the biden administration sits relative to the way people -- >> i'm not sure. i know the government continues to lose in court especially vertical immigration cases. that's going to dominate even without a personnel shift. >> is a personnel shift in the making? >> i don't know. all of this public talk about who's going to take which roles et cetera, who's going get replaced is vastly prema sure.

ag premature. laws haven't changed. interpretations have over the past years. >> a chilling effect just by default if you have a certain -- what do they say? personnel-less policy. >> do i think it would be different? yes. >> asking a different question. we heard the last few weeks, at least privately people close to the harris campaign, i should call it, that you're going to see a pivot in terms of her talk about the economy, in terms of her talking about regulation towards the center. then people saw the tim walz nomination, or appointment to be her vp and said, oh, maybe that's actually a left return then a lot more calls from other people that's a head fake. don't think about that. that another thing. >> and what i would say. i think talking about the personnel take, which slots, leave that up to whoever wins

this election, but what i will say is i think it's clear that the harris-walz campaign and if they win the administration is much more open to business interaction, and that goes back. the vice president has been meeting with business leaders for years. i've been involved in some of that. there san openness to an interaction. whether that, i think she should have the right to determine exactly what the implications of that are. but at least ant interaction and discussion. >> you mentioned a couple times inflation continues to come down. most respects it does. we get cpi this week. maybe will go sideways. do you feel inflation has come down, pervaded enough in term what's what average consumers experiencing? slow to change. >> biggest on inflation, entire analysis wrong. almost all of inflangstion up a down driven by supply not

demand. maybe 80%. >> then how does ngpd grow 77%? >> what's happening to inflation to this day, entire narrative, inflation caused by excess covid release increasingly turning out just to be wrong. >> how do you get nominal gdp to grow 10% by supply shortages? nominal size of the company, 10, 12%? >> combination of real growth and some inflation. the question, what caused that inflation? try to parse out what's happening in the labor market, happening in supply chains, happening in margins, by the way, not greed flation but inventory management concerns when supply chains get disrupted you need to be careful about what you're doing with your inventory to make sure you're not alienating consumers. put all that together, the vast

bulk what happened is inflation. interesting a be that is also on the way down vast bulk supply chain also, which means, implication is, very little of the disinflation is actually due to -- >> fed's riding all along? >> very little to the disinflation we've seen. >> the confidence in the boardroom. faber asking me last week, i was in paris. he said, what's the confidence like of the ceos? interesting. beginning of the week very confident. end of the week -- weren't that confident at all. what do you actually see? actually frankly a function of their own stock price? >> a little bit. at least in terms of deal activity we're seeing continued momentum a lot has to do not only with confidence but underlying drivers. massive changes in technology. revolution in biotech. energy transition. supply chains moving. all big forces for thinking about how you, reconfigure your business.

yes, you needs the confidence to move forward. that's not the only thing. >> in terms of dealmaking and the like? not seen that. i don't know if you think it's regulatory regime keeping it mapping but you don't see massive transformative deals? >> there are a lot that are still under discussion, and the deal environment continues to improve. we had a record first half in our advisory business this year. pause and think about that. >> can i ask about this a send? >> yeah. >> what were those deals that are still happening? u.s. deals? cross-border, whatever? how much do you think is people doing deals under different names? we see what's happening in tech, licence and hire whatever you call it. people take stakes in companies but not buying them outright. a will to get it done. maybe in a different form than we traditionally are used to? >> outside of energy, there have been larger deals, there have been deals in the -- midcap, medium side, $1 to $10 billion

range disproportion any strategic. companies doing transactions with one another. it's starting to spread more private equity. >> used to be 35%. now it's 25%. >> it will come back at rates go down. >> lps want their money back and in addition as rates come down, big spread in valuation one of the imp petediments will narrow. that's the next stage. >> pushback and -- moment for private equity to step up. rates -- >> ftc and others started to look at -- >> that, too. >> think they should be? >> a little bit of a stretch, myself. various ways in which the antitrust authorities are acting at direct, in direct conflict with other initiatives. health care, for example. a task force on vertical integration and that's the policy impetus, what it's towards. different parts of the

government in conflict with one another. >> can they do anything to stop acquihire? is to be tech from gobbling up the next bing thing will they come up with another way to get around that? >> part of the antitrust st statutes and more about monopolization. there's a court case right at the moment where generative a.i. and -- >> upending search. >> right. >> what happens in the google case? >> we'll see. haven't see remedies yet. the irony happening right at the moment -- >> fighting the last war when there's a new war upon us. great to see you. >> thanks for having me. up next, what the latest drop in mortgage rates could mean for homeliers and sellers. and later challenges facing warner brother's discoverytely

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let's talk housing and impact of recently lowerered mortgage rates. late last week fell to lowest in over a year. joining us, ceo of zelman's. nice to see you. pick up on what influences everybody. what do you see, early signs what direction that's going to play out? >> at this point home prices are likely to go higher. i think continue to accelerate. although drop in rates have a bit of a mixed result. it's early to say. remember, mortgage rates were over 7 late april and first half of may. it is about 50 basis points down, which certainly helps. a good rule of thumb is that a 25-basis point decline in rates about a 3% decrease in price.

today i still think it's a buyers' market and looking for opportunities for incentives from those that are buying new construction and mortgage rate buydowns. it's tough sledding out there. >> a buyers market or still a sellers market? >> buyers market for new construction in that there are great deals. for example, i talked to a builder late friday that said, see any benefit from drop in rates? no but able to buy commitment for mortgage buydowns. good for the consumer. 3.99% mortgage rates is attractive and probably gets you back to normalize affordability. new market is about 10% above trend line. existing market's still about 20% above trend line even if you account for the drop seen in rates. >> wow. amazing how they flip-flop how it used to be 10, 15 years ago.

curious, what are the catalyst, what drives them? people point the to buybacks and pointed to financial things they can do that aren't just on activity anymore. how do you think about them? >> the builders right now are definitely still at an absolute basis seeing pretty healthy absorption. i think because of pressure on price see a normalization of grows margins which we think should be reflected in analysts outlooks's that said, if we see further pressure than people are accounting for stocks might be under pressure near term. there are better businesses than in prior cycles. people are optimistic they can weather a down term. i don't see a catalyst in the rates drop another 50 basis points to get back to trend line. leer fi that comes to fruition. if it does i think stockless react positively. >> a tricky equation, ivy.

rates go down that far who knows what we're talking about in terms where unemployment has to get to for the market to price that in. >> right. >> same time we've seen existing inventories rise to a degree here. moving the equalilibrium sbeens new construction and existing? >> good point. last year inventories up almost 25%. a lot of florida markets seeing greatest increase. tampa up over 90%. across the board, denver up, san diego is up. because of that it becomes a more competitive market for builders to definitely have less advantage than they've had when the only game in town. i don't know across the united states, though, we could say that. in the northeast, midwest, inven stories are up modestly. i still think advantage with new construction in those markets, definitely less plenty full,

still advantage for new construction in those parts of the country. >> ivy, leave it there. thank you for joining us. >> good to see you. coming up next, a w wide-ranging conversation with former presidential candidate vivek ramaswamy. stay tuned, you're watching "squawk box" on cnbc. 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. max makes construction faster, safer and more cost effective than ever before. and with max doing the heavy lifting, even more people can join the team. solar energy is changing the world,

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welcome back to "squawk box" on cnbc. look at the stock index futures. positive attempting to follow through from friday's rally, which got the market even on the week. s&p 500 up a little less than a third percent. dow up 80 at this hour. nasdaq up about 56. that was after the big drop exactly one week ago. take a look how major averages finished last week. nearly flat. a 3% decline on the s&p monday alone. by the way, still remains about

6% below its all-time set back in july. treasury yields. dramatic move to down side early last week. kind of relaxed higher to some degree. ten year at 3.93 at this point. and 4.22 from a rocky last week. and planning to layoff 2,400 factory workers discontinueding the ram 1500 pick-up truck in michigan. entry level buyers and fleet customers. elimination not unexpected but surprising, you can see shares there. stellantis did not announce a vehicle that would replace it. current version of the ram 1500 produced nearby and will not be affected. >> amazing if you looked at market reaction to all

other -- automaker. nobody believes it. >> still get nothing. coming up latest read on the state of play in streaming wars. off a big week reporting billions in write downs. details on that story next, when "squawk box" returns. see that? that's like the gap in my health insurance. gap in your health insurance? yeah, it didn't cover everything when i got hurt. good thing i had aflac. (aflac duck) hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent. it really helped close that gap. (whisper) go, go, go! (group) yay! go aflac! go duck! get help with expenses health insurance doesn't cover. find an agent. get a quote at aflac.com. wish we had aflac on our team. you can! (♪♪) ♪

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welcome back to "squawk box." democratic presidential nominee kamala harris saying she is preparing to unveil an official economic policy flat form in the coming days. over the weekend strongly disagrees presidents should have a say in federal reserve rate decisions. joining us to talk about so many different issues, a harris economy versus a trump economy, vivek ramaswamy is with us.

he's a surrogate for the trump campaign. good morning. >> good to see you. >> nice to see you. we're all waiting to hear what the harris economy is supposed to look like. we don't know yet. i imagine we'll hear more about that in the coming days if not maybe at the convention itself. but i'm curious what you thought of both the president's view of the federal reserve rate issue in terms of his influence on that and her critique of that over the weekend? >> sure. on the federal reserve issue briefly, the idea that the u.s. president hasn't used the bully pulpit to influence the federal reserve we know is a bit of a myth. a question do it through the front door or the back door? my view on the federal reserve, this is a strong message for republicans is, fed needs to be more constrained in its scope to focus on dollar stability. go back to kamala harris economic policies. the idea we don't know what her economic vision is, i think it's actually a little off the mark in the sense that we do know what she stood for in the u.s. senate and as vice president, as

former presidential candidate. a lot to go on there to talk about. >> here's the question. if she pivots, right? we keep hearing it. she's going to pivot. you'll see a, maybe turn to the center. maybe we're totally wrong and it's the complete lefty thing. i don't think that's the case. then i imagine if she does that, i imagine you're say, as others will, talked to kevin mccarthy she's a flip-flopper. what are we supposed to believe or care about? >> look at whispers you're hearing now. supposedly opposed to a ban on fracking. about as ridiculous saying donald trump is opposed to a border wall. the idea this is a person said it was her words, not mine, absolutely in 235favor of endin fracking in state of california sued the obama administration for ending fracking. unrealized capital gains, a formula for a stc crash and a second-grade depression.

the speck policies from the past. >> are we supposed to believe her? are we not? same time, by the way, people look at some of the comments j.d. vance made, by the way, about former president trump calling him america's hitler, all sorts of things. how much he hated him and now of course his vice president saying changed his mind and grown and learned. is it possible she might? >> look, we have to value what she says on merits and substantive alternatives are. look at what she's actually done. didn't just support the green new deal, andrew. co-sponsored legislation to advance it and so much so would favor ending the filibuster in the senate to ram that through. what's in that green new deal? replacing aviation travel with rail travel. net zero by as early as 2030. in that bill as ohs co-sponsored legislation with bernie sanders for nationalizing the u.s. health care system.

actions speak louder than words regardless of words, look to her actions. >> fair enough. a lot of voters sense that was then this is now. a point on crypto interesting. pragmatically thinking you think why not be for it? right? look what gary gensler is, going after the industry time and time again. those argue a single voter on crypto this could lose her the election. if she doesn't come out and embrace it. trump all for the not taxing tips. she's all for it. will she ultimately embrace crypto as an industry? >> i predict, her verbiage will. it's a matter competing for votes she'll adopt a thoughtful position. as an american not a partisan perspective, it's a good thing. we should want great debate in the marketplace of tideas. if i don't agree with all it's a

good thing for the country. i challenge kamala harris not just cite pieties and words. say what you believe. what you actually believe whether gary gensler should continue leader of the -- specifics matter a lot. >> you're saying a general position openness is probably all the industry is looking for? it's not partisan. republicans for it, democrats against it? >> should not be a partisan issue. you're seeing a tendency to embrace whatever wins her the most votes. looking at your question, andrew, how do you assess seriousness of that? metric uses how specific she gets on the policy proposals. one thing to say i favor private insurance now. why on the democratic debate stage when asked the question, would you favor abolishing, their words, abolishing private health insurance. >> she said, yes. >> you raised bar for the specifics you have to offer for exactly what policy version you have and why you've changed your mind. >> she is now vice president of

the current administration. assume continuity with whatever was happening currently. i think the other piece is whatever positions in an ideal world she may have had at one point we have a practical matter what could actually possibly happen? that's genuinely in play given what congress ask likely to look at next year in terms where -- >> tax policy a big one. agree totally. worried about a group appreciate this well. is that tax on unrealized capital gains. this has been the undercurrent of democratic policy a long way. >> no way. >> biden-harris put this in budget plans the last several years increasing the number for it. >> in their plans. >> these people are running the country supposedly. president and vice president of the united states. i think this a real formula for a market crash. >> never seen the market sell-off on that plan. really -- didn't think it was -- >> seen polls until recently

favoring donald trump as unambiguous next president of the united states. em pounded into the actual possibilities for the market, an issue not -- >> private equity i'm not sure pepsi, coca-cola. >> i disagree, kelly. especially tech sector. people sissing on large, long-standing capital gains. it means you have to pay taxes on sales you have not yet made. even forget the stock market and think about everyday americans across the country. that means if you're a farmer or a small business owner you will owe taxes with cash you literally do not have in your pocket to pay the taxes. that is a formula for a second-grade depression and something that's been in the blood stream of democratic policy a long time. go back to elizabeth warren and bernie sanders. this is here to stay for democrats. this idea. a big one. tim walz as vice president says a lot. first represidential style

decision we've seen kamala harris make. state level favored increasing taxes on capital gains. unrealized but talks about taxing them. i worry what that means for the stock market and everyday americans. >> stock market, not 60 votes in the senate, stock market doesn't have to price it. >> i respectfully disagree one aspect of that. kamala harris chief proponent ending the filibuster to ram through her policy. she's president of the united states. my view, god forbid a democratic senate to aid her, could be 51 vets. could you get to 51 votes on a major change in tax oes policy on that? answer is yes, it's conceivable. for business leaders across the country one go ask, which is the administration more friendly to business? we don't know where she stands on tariffs or a lot of other questions, but on tax policy alone, the idea not just raising tax rates but raising tax rates and applying taxes on unrealizeds income that is a

catastrophe of epic proportion. >> do you see over the weekend, a story talking about earlier this weekend, suggesting the american public trust her more than trump, on the economy. the ft poll. only by a point. let's not joverstate this but a shift from a few weeks ago. >> saw the headline, caught my attention. when you see a headline, go into the details a little. what the headline said. i read the poll, 1.1 direction, it was 9 points other direction for donald trump asks speck question which president do you think will actually determine better for your personal finances? personal finances fare better with trump or kamala harris? nine-point advantage donald trump. due respect to the ft, a misleading headline relative to ththey're ian poll actually stated. regardless, the question, many voters haven't had exposure to what kamala harris policies actually are. i challenge kamala harris to sit

down in a thoughtful forum like the one here. so we can actually get clear answers on her economic policies. the one area that i'm a little mystified by, gop hasn't done a good job going after kamala harris record on health care. obviously near and dear to my part. an industry i came from. do you favor national health care or not? i respect bernie sanders, because he said his view. the abolition of private health insurance would decimate innovation in the bio tech industry, the medical device industry. talk about it in the open and deserve to have those actual policy debates rather than what the race devolves into. calling americans weird. what's weird? abolishing air travel is weird, abolishing coal industry, weird. abolishing private health insurance is weird. now a personal attack.

we should talk about the impact to americans. >> a question how republicans are trying to portray the vice president. on one side there's a view that she's being portrayed someone who doesn't understand the issues can't go deep enough. et cetera. on the other, a view that she is some kind diabolic's mastermind, claim she's flip-flopping but knows exactly what she's doing. can't be both. >> i agree. part of a system joe biden is a part of. talked about it in my presidential campaign. both parties much of the last 40 years people we elect to run the government are not the ones actually running the government. most policy in this country today is actually set by bureaucrats never elected to their positions in three agencies in the administrative state. frankly both sides i don't think the issue is talked about enough. back-dosh legislation and the

supreme court is trying to curb. overturning of chevron, shaping regulatory policy the next administration regardless who wins. not talking about that you enough. the number one piece economic stimulus to effect trump more likely to do it than harris. i favor either doing it. impinging private industry everyone inner actually passed through congress. in the campaign believing she is just another cog in a wheel. we're not running against an individual candidate. we are running against that system. i think a powerful message for donald trump is to say we're doing into dismantle that system. really what draining the swamp was about the first time around. it worked the for him in 2016 and a powerful message we could leverage more heading into 2024. >> vivek, thank you. >> good to see you. thank you. >> appreciate you being here. >> thank you. up next, the latest from

warner brothers discovery and what to watch in the markets getting closer to the opening bell. futures. in the green for the most part. remains so. up about 1% of s&p 500, dow indicated higher by 40. "squawk box" will be right back. tax smart investing today, helps to build a stronger tomorrow.

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box." talking about recent developments in the streaming and legacy business. catalyst for the conversation, write-downs at warner brothers discovery and paramount. joining us to discuss, strategies of managing partners. here with us, matt bellamy. great to see you. >> you, too. >> start with warner brothers discovery. rich greenfield on last week. speculation now that the nba deal is, well, in litigation, what ultimately happens to warner brothers? what happens to tnt, and most especially what happens to the carriage fee and right now appears most analysts and investors are believing that warner brothers discovery is not going to get as much as they used to get and maybe get a lot less for it, something you've written a lot about, but same

time, i was drilling down into this thinking they have more -- they would say this -- more sports content on that channel than they had beginning of that contract. and when it comes to a ratings perspective, it's unclear whether the nba was holding it up or frankly all of the other sports are holding it up. i wonder whether it is overdone or not and what you're hearing? >> well, that's the bet the company questioned right now. whether the lack of nba is going to cause the carriage fees to go down or whether they have been bulking up lately on lesser sports think believe -- and bigger with comcast. comcast, remember, is the better than won the nba. clearly comcast believes taking the nba away from warner discovery, where its nbc

properties, is going to allow it to put the squeeze on them, and get a lower carriage fee for those channels. nobody knows what's going to happen there. i think that's going to be a big indicator where this stock goes, because right now the investment community has really low confidence in warner discovery ability to maintain that carriage fee, and i would probably agree with them. i mean, necessarily it has to go down at least a little bit. >> well, that's the question. i mean, i think that is the fundamental question. look at the stock now at $7 a share. that's the question. if they get the same fee or more and i imagine they're going to go in, by the way, asking for more. not go in asking for the same fee. >> always ask for more. >> always ask for more. can che hold the line and does comcast, parent company to this network cave to that? look at ratings?

college football, march madness and other things coming later in the game. right near these contract negotiations. does it get really tricky? when those ads start going on tv. saying, you know, call your cable provider to keep us on the air. i mean, how it has always been very persuasive that the channel owner typically wins because they had that relationship with the consumer via putting the ads out there and telling everybody, you know, if you love cnn, you're not going to get cnn. i think cnn is a big one here, you know, owned by warner discovery, part of this package, and they could say, like, you know, what happens if another major news event happens? you want to at least have cnn. and the question is, how much comcast is willing to let all that go. and the history of the television business has been that they have not been willing to let that go, but we are in a brave new world of television

right now where all these companies are much more focused on their digital offerings. comcast has peacock, and the others have their own thing, and maybe they're willing to say, lrngs guys, we're not going give you $3 for a channel that does not have premium sports. you might have march madness, college football. that's replaceable. you don't have this nba content that people love, so why should we pay you $3 when something like usa gets 50 cents or 75 cents? there's got to be a comedown there, and the entirety of this company is based on that $3 price. if it comes down to $2, comes down to $1.50, that is disastrous for that company. >> let me ask you a separate question. you probably saw peter kafka making an argument, suggesting that apple should buy warner bros. discovery. i'm not sure if regulators under

a trump or harris administration would allow it, but the bigger question i would ask you is whether you think that's something that apple would want to do. >> everybody floats, apple should buy this, apple should buy that. this has been happening for six, seven years in entertainment since they launched their streaming service. they've never shown any interest in any of these major acquisitions. yes, they bought beats for $3 billion or whatever it was. that has proven to be an outlier, and over and over, apple has said, we are building our entertainment assets on our own. would they benefit from hbo? absolutely. they expressed interest in hbo in the mid-2000s, but they didn't want any of the television networks along with it. those tv networks still exist, by the way, and would come along with hbo if they were to buy that. i still think it's wishful thinking to think that apple is going to come in here and be a white knight, if the government would even let them do it. >> matt, in terms of the business big picture as it stands right now, and maybe you

can do a glass half full when you say many streaming players are at least near or if not break even or profitability. box office, has it been a pleasant surprise in the last couple of months perhaps? and everyone was sort of saying, you had to fight through this year after the strikes to get to a point where you might have a fuller slate and maybe a little more to sell. is it a stretch to say that things are looking less bad? >> i don't think that's a stretch. i think things are looking less bad, but when you talk about streaming, getting to profitability does not mean that these streaming businesses are replacing the tv cable bundle. the chasm there between the money that these streaming services are making and the money that is dwindling in the television business is just not even close. unless you're netflix, of course. netflix has figured out streaming and is generating billions of dollars in profits. the other -- they got to streaming, some of them earlier

than expected, but this is not television, and they know it. >> matt, here's the different question, though, which is, you're looking at some of these streaming networks effectively say they're going to -- they're either profitable or on the verge of being profitable. part of that has been a huge cut in terms of how much they're spending on content, and there's been a lot less new content on some of these services. and whether that is a long-term, sustainable proposition to continue to either grow new subscribers or, frankly, to avoid churn and prevent them from leaving. >> it's a big problem, and the solution for these streaming services, so far, has been, a, to raise price. all of them have raised their price over the past two years. b, cut the amount of content and fire people, which has led to, you know, fewer shows, less content. and they're looking to see what the happy medium is. they think that if they can goat

profitability and generate some money off the services, maybe then they can invest a little more in the content, but the netflix secret sauce here has been a fire hose of content. something new all the time. and that is extremely expensive, so the answer, they hope, the streaming services right now hope that these bundles will also prevent churn. disney has had some success, and they changed their pricing to really push people into the disney bundle with hulu and disney plus and espn+ because the numbers have shown that is lessening churn, and they have had some pricing power there. the others, it's unclear whether these bundles are helping, but ultimately, they know from the cable business that the bundle is very helpful. >> all right. matt belloni, we always enjoy your newsletter. thanks so much for joining us this morning. just over half an hour until the opening bell on wall street. joining us now, joann feeney.

good morning. i mean, it seems like things have calmed a bit here, that intense kind of liquidation we saw, whatever leverage trades that were getting unwound a week ago, that has passed through, but we're still left with how much we have to account for the slowdown in the real economy and the potential impact on earnings. what's your view right now as we've stayed about 6% below record highs in the s&p? >> that was quite a ride we took last week, and as i wrote in our commentary this morning, you have to look through that big adjustment, which had a very specific cause, to the broader economy and the opportunity for equities here. we see a couple things happening. one, the u.s. economy is still pretty strong, and the consumer remains the big driver here, with disposable personal income adjusted for inflation still growing year over year. gdp growth, still pretty strong. the aggregate picture, despite concerns, is still pretty supportive of equities, and then you turn to earnings, and while

folks might have been a little disappointed in how some of the megacap stocks are spending on investments to enable a.i., the fact is that their growth is really quite exceptional. now, some people are saying, hey, but you know, where are all these big returns to a.i.? how come you guys aren't reporting that? i have to counsel people to be patient because artificial intelligence is going to take some time to appear. and what we also need to look at is the earnings growth of the other 493 companies in the s&p 500. >> yeah, and that had some focus a few weeks ago. remember the talk was all about, the market's going to magically broaden out without pain along the way, we don't have to have a correction, but it is a good point that i was looking, home depot, bank of america, union pacific, all these real economy businesses have basically been flat on sales and net income for three years. so, is that an area to look at in terms of nontech, non ssecul

growth? >> i think that's a good place to look for a few reasons. most of those companies have an appealing dividend yield. while volatility is always part of equity investing and maybe more so now, and having that income might be reassuring to folks, but also, structurally, when you think about where the shortages exist in this economy, one of the areas is housing, and so if people can't find a new house to move to, because they maybe want to hang on to that low mortgage or simply because there aren't any available if you're a first-time home buyer, what are you going to do? as a current home buyer, you're going to fix up the house you have, get ready for it, so home depot is a good place to be, even though it hasn't performed well over the last three years, as you said. it's really set up for a good ride, we think, going forward, and beyond that, look at lennar, positioned to build houses for first time and one step up home buyers. that is where the market is. the demand is there. the shortage still exists after many years of building. there are places to look in the real economy, as you put it, and

in industrials with the infrastructure bill yet really to pay out a lot of dollars. we're seeing some bridges go up. we're seeing some demand for even hotel rooms because of the construction that's coming. we like some of the industrial plays like a honeywell, for example, or emerson or eaton in that space. >> still playing that big policy-driven capex boom, i guess. joanne, thank you so much. >> you bet. let's take a quick look at shares of jetblue. the company just announced plans to raise more than $3 billion in capital through separate debt offerings to improve its liquidity. the shares are down about 9%. the majority of those will be backed by its loyalty program, true blue. mike, some thoughts on this? >> it's fascinating. it's being taken as a bit of a slightly desperate move, but those are -- that's where the value is. if you look at delta, it's the value is in the rewards program, believe it or not in these businesses. >> by the way, it's been a tough

slog for a number of airlines. you can see the year to date performance, jetblue is lower 1%. let's take a final check on the markets. dow looks like it would open up about 47 points higher in about half an hour from now. s&p 500 looking to open about 11 points higher. i want to thank you both for hanging out for the three-hour ride. make sure you join us tomorrow. "squawk on "squawk on the street" begins right now. ♪ good monday morning, welcome to "squawk on the street," i'm david faber, that is jim cramer. we are at post nine of the new york stock exchange. carl is traveling back from paris. he is going to be back tomorrow, all three of us, barring unforeseen circumstances, injury, you never know. >> stop it. >> i'm kidding. you know, like, in the game, you know? your knee. >> if you come out of the tunnel and go to the