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 melissa lee and robert frank in for joe and becky today. thank you, both. the coat always looking good on you. >> i'm not there yet. >> she's got a coat on, too. >> i knew robert frank was going to be on set. i had to up my game. >> equities fultures are lookin good. dow is up 27. nasdaq up 92. let's look at treasury yields. the ten-year note at 3.92%. the two-year, i have to crane my

neck, 4.029. we are watching oil prices. oil topping $80 per barrel as the pentagon is deploying more forces to the middle east over questions how this will all escalate. in the meantime, we have other news. home depot shares are dropping right now. down 3% on reporting earnings moments ago. melissa rucker joins us. >> earnings of $4.60. that is better than the $4.90. for revenue, $43.18 billion. slightly higher over what was expected by analysts. the forecast is big news. the company cut the sales outlook for the year saying it expect a decline of 3% to 4%. it expected a decline of 1% previously. the forecast for total sales went up because home depot added sales from the recent acquisition of srs distribution.

otherwise, it would be a cut of comparable sales. the cfo said the home depot is dealing with a challenge of high interest rates. it heard that from contractors. pros tell us that for the first time their customers are not just deferring with higher financing costs, but deferring with a greater sense of uncerti uncertainty in the economy. that is something they are hearing from pros and diy customers. >> it is interesting because it felt like going into the numbers, the street was bracing themselves with low expectations. they are taking down numbers. they said july would be messy with weather. we have the next shoe to drop. is there a sense from the cfo there is a trough in sight? >> there really is not an expectation that trends would change. the notable thing here is home depot's consumer is not the typical consumer that walmart

has. 90% of diy customers own their homes. they are in a better financial position and they are cautious about spending. >> the assumption here is the pros and contractors, people doing renovations, they are seeing weakness there because homeowners are just not renovating? they are not repairing? what is your sense? >> the cfo said people are in a deferral mindset. that persisted. you layer on the uncertainty where people are nervous. they are seeing a slight increase in unemployment. maybe they are feeling nervous in general about inflation. i asked him about that. generally, you would not think of a homeowner worrying on a project. he also mentioned that interest rates are expected to get cut soon. a lot of those consumers are telling pros i'll put off that

kut kitchen remodel or bathroom remodel until rates come down. >> brian moynihan had an interview with cbs over the weekend. he talked about the consumer needing stay the rate cut otherwise it is hard to get them back. there is the depth of negativity. once they get there, it is hard to get them back to spending mode. it looks like that's what's going on here. let's hope that consumers will see the rate cut as some sort of relief. >> i did ask him if there is any historic information to predict quick how quickly you see an up tick. one things they noticed when mortgage rates have gone down in the past year, they have seen housing turnover go up. they do have the money to jump back in, but taking this more wait-and-see approach and feeling more uncertain because of the macro. >> melissa, thank you.

melissa repko. home depot shares down 3%. this is a more expensive stock and the s&p 500. people are looking at the valuation of the stock and guidance in light of where it's pricing in the s&p. >> you wonder if it is 25 or 50 in september -- it is interesting what brian said. will it really make a difference in given how expensive everything is and given if you have renovated your home or bought things or already bought those things, will 25 basis points make a difference or is it the direction people want to see? >> i think it is the direction or if you are planning on doing a project and see this cost and knock that interest rate down by whatever will come down, you think i'll wait. i don't think it's going to bring people in and say 25 basis points, i'll redo my bathroom. thank you. on today's squawk planner, the july producer price index is at

8:30 a.m. eastern. economists expect to gain .2% from the previous month. spirit aerosystems patrick shanahan will receive a payout of $28.5 million. shanahan will receive a cash payment of $2.3 million converted restricted stock unit worth 26.1 million and perks and benefits worth $45,000 as part of the package known as the golden parachute. payments are commonplace and intended to incentivize management to sell a company even if it means ending their own employment. that will cause a lot of controversy. google looking to get a leg up on apple by pushing the pixel smartphone launch originally in october to today. the event at 1:00 p.m. eastern time. it will reveal the smartphones

and operating systems and a.i. integration. we will keep our eyes on that. we have more coming up this morning and the highlights from the elon musk two-hour c conve conversation. i made it on after the technical glitches last night. we'll talk about that and the former president's return to x, formerly known as twitter. as we head to break, here is the price of bitcoin. $58,874. it has been a wild ride the last couple weeks. we're coming right back. n i got. 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.

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5-year price lock guarantee. switch today for a limited tim. welcome back to "squawk box." former president trump returning to x yesterday. he posted several campaign ads on his personal x account. marking it the first time he used that account since august of 2023. he usually restricts to his social media platform. after trump posted on x, shares of trump media slipped 5%, but since regained ground. that's the social media side of the story. then there's this. the conversation that took place last night on x with elon musk was nearly detailed by a number of glitches in the first couple months or first half hour of the scheduled start time.

users tried to log on, including myself, to the event and reported they could not join the live stream. musk saying there was a cyber attack that happened that froze the platform. cnbc and a number of other media organizations unable to verify the attack took place, but x continued working throughout the glitches. the event lasted two hours. 1.3 million people appeared to be watching the interview according to the x tally and it will be on replay. let's replay some for you now. >> this was the coop. t coup. he said we can do it the nice way or the hard way. all of the stuff you are seeing now -- look at israel. they're all waiting for an attack from iran. iran would not be attacking. believe me. when i was there, i say it with respect because i think we would have been good with iran.

i don't want to do anything bad to iran. they knew not to mess around. i know putin very well. he respected me. it is just one of those things. we would talk a lot about ukraine. it was the apple of his eye. i said don't ever do. don't ever do it. you do make a great product. that doesn't mean everybody should have an electric car. these are minor details. i know you are a big fan of the a.i. and i have to say that a.i. and this is shocking to me, but a.i. requires twice the energy that the country already produces for everything. you will have to build -- we will have to build a lot of energy. i want to close the department of education and move education back to the states where states like iowa and states like idaho, not every state will do great because states basically aren't doing good. >> joining us right now to talk

about it is steph knight, axios political reporter. we tried to listen. i got on and listened for an hour or hour and a half. i have an early broadcast. >> i got a message saying there is not enough space. >> steph, thank you for that. what was your highlight in all this? >> i also had trouble getting on initially and did end up sticking around and hearing the lengthy conversation. it was more than two hours. it was a long conversation and chat. when it comes to the substantial of what trump said, there wasn't a lot of news making. a lot of the things he said we heard before. especially in the beginning, it sounded like his stump speeches. he made promises of having the biggest deportation in u.s. history. that is something he said before. he repeated that promise. he promised to close down the

department of education. something he said before. it was remarkable to hear him talk about his relationship with world leaders and him saying he feels like many of the global conflicts would have been avoided if he was in the white house as opposed to biden. the only thing i noticed was how frequently trump decided to go after president biden rather than kamala harris given the ticket switch and the fact that trump is not running against biden anymore. he did offer critiques of harris as well, but it was sudden to see how often he still went after biden for his policies whether it was on inflation or immigration or the border or other issues. >> was there anything on the economy? the thing i kept listening for was true policy stuff. i don't know if you heard anything, robert. >> you know me, i'm obsessed with taxes. i thought there would be a lot of discussion given how much elon musk paid in taxes.

there wasn't much. to me -- >> he was on inflation for a little bit. >> inflation, yeah. the bread and pubutter and marks and taxes. it wasn't there. >> it was a brief conversation on taxes. he touted the first term with the tax cuts set to expire next year. he promised tax cuts for middle class income. there was discussion around government regulation as well as cutting spending. that is something musk tried to get trump to talk about is how he plans to cut government spending. we didn't get a lot of meat out of that conversation. >> what is your sense of the twitter audience or the x audience? i was looking through the names of the folks in the space. i don't know how accurate --

>> the names actually are. >> stef, i think it is based on the follower count. the people i saw at the top like marjorie taylor greene was at the top because she has a big following? >> i believe that's how it works. to be honest, i'm not sure which profiles get pinned at the top. lots of people were watching. even at the end, it showed more than 1 million people listening. that is something that trump himself liked to make note of. he cares about crowd size. we know he has been very bothered by the amount of atte attention kamala harris has been getting recently. her campaign has been getting a lot of zoom calls and how many people are joining those. this is just another example of trump trying to kind of turn the conversation back to him. he's been very frustrated there's been a lot of reporting that he has been irritated by

the amount of attention that the vice president kamala harris ticket has been getting recently and frustrated by the crowd sizes. it was note able to me he point that out. >> stef, i don't know if you saw the quote that harris' spokesperson gave to the "wall street journal." it effectively attacked elon musk directly which i thought was somewhat surprising. i know the relationship between the biden administration, obviously, and elon musk has been frosty for lots of reasons which we talked about ad nauseam on this broadcast before. the quote that the harris' spokesperson is the trump campaign is in service to elon musk. self obsessed rich guys to sell out the middle class and cannot run a live stream in the year 2024. i actually -- that's much more fighting words than you usually hear from at least historically from the biden campaign.

>> yeah, it was an aggressive approach. i think it does layout the strategy this campaign is trying to play. they are trying to show kamala harris as the middle class option. they are trying to convince people that she's the person who will speak out for, you know, average americans as opposed to we wealthy business owners. elon musk is a controversy figure. there is a lot in the ownership of x and the misinformation and disinformation. the general frostiness with the democratic party and elon musk these days which is mnotable because he considered himself a moderate democrat and now a trump supporter. >> stef, maybe the focus on this whole conversation should be elon musk as power player in washington should trump be

elected or reelected, i should say. elon musk has a number of government contracts and stands to really increase his power and influence in d.c. at a time when policy is made around artificial intelligence and around energy policy which he also has, you know, a business in, the solar business and around evs. >> yeah, no question, elon musk was using this to raise his own platform. you see the conversation and they were encouraging throughout each other in the conversation. trump said he knows elon musk is good at cutting things and the conversation of cutting government spending. there is a relationship there and musk had this conversation on his own platform promotes self interest there. i found it notable how musk described his own political philosophy on various occasions. the not only having this c

conversation with trump and he used it as an opportunity to explain his own -- how he arrived at the political beliefs he has now. >> how much is it with the elon musk political views and trump political views? >> one of the more interesting conversations came to the end and showed that difference when they did start talking about climate change and environmental policy because that's a space where musk is, you know, said he thinks that the u.s. should be moving to prepare to move away from fossil fuels. he doesn't want to demonize the gas and oil industry is what he kept saying. that is one part of the conversation where it was a little bit of difference and tension on the best approach there between trump and musk as the rest of the conversation focused on issues they both see eye to eye on. >> stef, thank you. we have to leave it there. we appreciate you listening to the conversation and bringing it to us this morning.

i'm sure we will continue to talk about it today a lot more. thank you. >> thank you. coming up, jetblue under pressure again today after yesterday's 20% plunge. details after the break. later, fanatics ceo michael rubin will join us to talk autbo the massive event for fans in new york this week. "squawk box" will be right back.

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billion of debt with half of that backed by the true blue customer loyalty program. take a look at that chart. boeing reports later today and they expect to restrict production of the 737 max due to the number of fuselages coming from spirit aerosystems. a lot going on in the aerospace. we want to check shares of home depot on the back of earnings. the earnings and revenue beat est estimates. the decline of 3% to 4% after the expectation of 1% drop. shares are down 1.76%. we should note lowe's is falling in sympathy. we will talk to an analyst later on this hour. coming up, lawmakers in high tax states may have found an

opening to fix the s.a.l.t. tax, but they need to win re-election first. and why the white house wants to eliminate taxes on tips? as we head to break, a look at yesterday's s&p 500 winners and lo losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, 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

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good morning. welcome back to "squawk box." we are live at the nasdaq market s times inqsquare. we have movement on the dow. nasdaq up 38 points. the s&p 500 up 8 points. meantime, we have other news to bring you. cnbc learning that brian deese, familiar to you here on "squawk box" now advising vice president kamala harris as she develops her economic policy. he served as council director

under president biden. harris said she plans to release her economic plan in the coming days. they are alumni, if you will, of blackrock, under larry fink. a lot of folks focused on what they may say behind the scenes which may auger the plan is as we talked about on the broadcast, moving to center. where does that lie? i don't know. >> it will be great to finally have one that we can all talk about. what will she do with taxes and regulation? >> what we also talk about is because there is no plan, there is no plan to critique. >> right. >> it is all the honeymoon period. >> what happens when that policy comes out and what happens if the policy really is more to the center than folks and i'm not

pointing at you, but we had vivek on the broadcast and mccarthy. do you have the potential where she is accused of being a flip fl flopper from one direction to the other. that was effective against john kerry back in the day. >> right. she can't distance herself too much from the biden economic plans, particularly on taxes which well which talk about in a second. speaking of, one of the more contentious issues ahead of the november election is what to do with the cap on state and local tax deductions which affects high tax areas like new york and new jersey and all of us here on this desk wish this would change. it is all set to expire next year. emily wilkins joins us now. >> thanks, robert. if republicans want to win the house next year, they need to hold on to seats in new york and

new jersey and california. one issue looming over the races is the $10,000 limit on the state and local tax. many republicans want to keep it in place partly because it is a way to help pay for other expiring tax policies they want to continue. anthony despisito will push for a ban of the cap and go for something to get enough support to actually pass. >> we've said that we're not looking to get up to the plate and smash a grand slam. we would love to restore the deduction fully, we are working toward base hits and getting around the diamond to eventually score. >> republicans are keeping their options open on what they want to see. one proposal put forward would raise to $60,000 for single and $120,000 for couples. congress member nick lolota will

oppose it as well as six colleagues. with the margins, that could be enough to sink any tax proposal. >> we heard that from the democrats. a lot of the s.a.l.t. awe cuscaucus said they will not support any. how much pressure in the end do you think they will have and how would they pay for the loss of revenue? i don't know if they scored this particular proposal, but re repealing s.a.l.t. over ten years? >> that is a big question. the pay fors will come in. what is different this time is it is always harder in congress to get something done than stick with the status quo. since the caps are eliminated at the end of 2025, the status quo is in favor for the republicans for the first times since 2017.

it brings a different dynamic how they can negotiate and push for it. robert, we both looked into the tax package coming. lots of things in the pay fors. there are a lot of things up in the air as far as what this might cost and what proposal they might weanind up agreeing . this is a big sticking point for republicans and we know it would help win re-election, but this will cost quite a bit and we're concerned about the national debt and deficit. >> emily, thank you. emily wilkins. coming up, big inflation data points head for the market producer price index today and cpi tomorrow. home depot dragging down the dow. the dow is indicating a lower open of 89points. guidance down 5%. we will talk to an analyst in minutes. and just ahead, michael rubin

joining fans together for the f fanatics fest. we'll have that and more. we'll be right back.

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welcome back. markets are bracing for a pair of key inflation data points due today and tomorrow on producer and consumer price index. let's talk about that with gabriela santos. great to see you. >> great to see you. >> it's amazing to think a week ago we were sitting here looking at the rubble and confusion of the previous monday's close. nasdaq, s&p down 3%. what questions remain from last monday that haven't been answered yet? >> so, i think when we were sitting here a week ago, we were trying to figure out how much of this is technically driven which

we think a lot of it was and really amplified the moves. the question now is how much of that technical unwind is still left, especially of the yen carry trade. it's very tough to put numbers to that. there's some estimates it is 65% of the way unwound. the worst of the technical pain is behind us, but it doesn't mean things can't be choppy from here. the second bit is what has actually fundamentally changed and is there a need for an actual positioning adjustment. there i think the macrodidn't change dramatically. i think recession fears are overblown, but the balance of risk has changed and it does make sense for the fed to bring forward the rate normalization much more so than before the jobs report. the number one thing that's changed for us is we've got to add duration.

rates are clearly coming down and coming down fast. a lot of investors are positioned short duration. now is the time to add. we think three-to-five years makes sense. >> what do you think recession fears are overblown and at the same time, you think the fed should push forward its rate cuts? >> i think from their perspective, they're sitting at the top of the mountain with restrictive rates. i mean, we can argue all we want how restrictive they are, but clearly they are having an impact on housing activity and big durable goods purchases and on the mid and lower-income consumer. we feel they need to get back closer to neutral or neutral rates which estimates point to around 3%. so, if the economy is downshifting and slowing and the momentum of the labor market is slowing, the balance of risk makes it so that they should get to that 3% neutral rate as soon as possible. really, it's still a no

normalization rate cuts if we get closer to recession. you can have both. still an okay economy while you still have 200 basis points of rate cuts over the next 18 months. >> do you feel the equity markets and on the equity side versus the economist side, do you feel there is a bit of offsides here? from the equity perspective, as you said, the belief was an a lot of this is technical. it was a little bit of growth scare, but technical because we're okay because we're up 3% since monday. on the economist side, including jpmorgan, another part of the house, tripped over itself to say 50 basis points in september and november, to use jpmorgan as the example. >> and raise expectations. >> i think 35% recession risk

still means 65% no recession risk. >> right. >> the 100 basis points in cuts by the end of the year? >> just because we're so restrictive, the fed -- we agree with that other side of the house, that the fed should bring forward the rate cuts not because recession is the base case, but momentum is slowing and recession risk has gotne up and they should go neutral. >> that one jobs report is why? that's what i find so interesting. the jobless claims report. nobody was talking about it. okay. we're off to the races again. >> mosaic of the labor market. jay powell talked about this on july 31st before the job report. they were seeing several signs of slowing in demand for creating new positions and for a

slight rise in unemployment claims. that's all. mosaic was showing the labor market was slowing. that's it. the jobs report confirmed that. i think the fed had already prepared us a little bit before they see the balance of risk as such it is important to start reducing the restrictiveness. i think for the equity market, if we look at what suffered the most during the selloff from july 16th to the monday low, it was the mag seven which fell 14%. the rest of the market fell 4%. so, to me, the economic change and rates change impacted the bond market rightfully so. for the equity market, it is much more a story of good, not great enough tech earnings plus the technical factors and that's appropriate. one rate for the equity market is the rotation into small caps and we were saying it's too recall for that. the economy is slowing. that's one thing that we don't see coming back.

there's still plenty to play for in large cap within quality cyc cyclicals. >> one thing that was surprising to me last monday. i was on the phone with family and investors and no one i talked to was buying on the dip. they were still hold ing a lot f cash. some were putting in longer duration bonds. what should investors do based on what you seeing? >> the number one thing is duration. for a lot of investors, maybe they already had bought equities, but didn't care for fixed income because the curve is inverted and cash is doing great. >> going out to ten or five? >> no need. a lot of investors are in t-bills. no need to go to the other extreme. ten-year bonds or 30-year. the sweet spot is five years. clearly rates are going lower,

wink-wink, nod-nod, chair powell. that is the rate going down to reflect those future lower cuts, so you get a little bit of price depre depreciation. that is where they are offsides. it is a core index, not fixed allocation. i think another one is to look at periods of selloff for equities which have been concentrated on mag seven for example with the u.s. investors. you see where has the fundamentals have not changed, but price gotten better. for us, a clear action call is japanese equities which were very much believers of and technically driven. >> tough sell. they all said it would be choppy before the election. gabriela, thank you for joining us. >> thank you. coming up on the other side of this, a potential tipping point on the election trail.

both candidates proposing eliminating taxing on tips, but at what cost to the economy? robert is here to break it down to feel eefr to understand it all. >> feel free to tip. >> "squawk box" is coming right back. ( ♪♪ ) because this game is for everyone. growing your business is easy once you know the moves. with godaddy websites plus marketing, you can quickly create a website, and ai will customize it for you. get your business out there and get more customers in here. no sweat... for you anyway. create a beautiful website in minutes with godaddy.

test tells test there's been tipping inflation i want to just put out there.

serve asks for tips. person at the grocery store feel free to tip. take out food they want a tip. vice president harris and trump proposing to end taxesing tips at a rally in vegas saturday. /we will continue our fight for working families raising the minimum wage and eliminating taxes on tips for service. trump first proposed this plan in vegas back in june. neath has said how they're going to pay for it. the tax foundation says it would cost $100 billion in lost revenue over ten years. others put it at close to 200 billion. companies would have an incentive to structure more pay as tip income to reduce taxes and create be a labor market and

could weaken social security since income taxes on tips contribute to social security and medicare. the irs has always had a tough time collecting tip income yet reported tip income at the same time increased by 50% between 2012 and 2018 to $38 billion. it's not chump change. any change would have to be approved by congress. >> do you think by the way the tip inflation that's taking place how much is function of technology. you can tip on your uber app, when you go -- >> venmo somebody a tip. >> the machines at, you know, checkout counter where they say 10%, they don't say 10, 15, 20, 25, 30. right. >> my problem is it's another arbitrary tax cut for people. like you say we're going to make the cutoff $400,000, if you make less than that you're not going to get a tax increase under the biden plan or harris plan. wipe 400,000? why is certain -- it's income.

tip income is income. why just because you receive it that way, if you're a which tress or a service or hospitality business, that large personal of your income comes from that -- >> a teacher, fair to a doctor, fair to a nurse, a lot of folks. >> we were joking hedge fund managers can structure their carried interest as tip pay, but the harris campaign saying we're going to make sure in a carve out that we prevent hedge funds, private equity funds from labeling their pay as tips. >> i'm in the service industry, right. >> we all serve the public in some fashion. >> that's right. >> feel free to tip. >> but what -- it's clearly an effort, i hate to say it, to buy votes, right? that's what this is? >> it's nevada, a swing state, and saw how popular it was when former president trump proposed it the union initially proposed it and then the members were

like we love it. >> what's the chance this would be approved and pass? you could probably go out and say -- >> carve out this, that. >> i'm going to send money to every american that might -- you could say that all you want. >> given that congress has been good at approving tax cut and spending, who is going to oppose it? both parties want nevada. so that -- i think they got a good shot. if you want to hear more about taxes and what the wealthy are doing with their spending, their investing, any business in the business of serving wealthy clients read my newsletter "inside wealth." look at the qr code or type in be cnbc.com/inside wealth every thursday in your inbox. put a lot of work into it. and i should put a tip thing at the bottom. >> you should. >> why not. >> tip jar. >> start at 20%. you're worth it robert. >> at least. >> coming up, home depot shares sliding this morning after

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shares dropping on weak guidance. joining us brian, from oppenheimer, senior equity analyst. you expected an inline quarter and guide. what was the most disappointing out of this report? >> i think what we're hearing

from home depot the backdrop is getting worse. they have to come to a conference call at 9:00 a.m. eastern and we'll get more details. this is consistent with what we're hearing from other consumer companies and retailers. the demand backdrop has gotten worse. home depot is saying that here. my suspicion this key demand backdrop got worse as the quarter progressed. home depot lowering its guidance for the balance of fiscal 24 reflecting a weaker demand trend. >> are you getting the sense or get the sense, before the conference call, maybe they're kitchen sinking for a reset? >> that's a great question, and my sense is no. make sure i say this clearly, i think home depot is extraordinarily well run company. home depot knows how to communicate very well with investors. i think home depot with the guidance and results is reflecting what's happened. my concern here and the reason i

stay on the sidelines with home depot and with lowe's and frankly with a lot of retailers, i think this sales weakness that we're seeing now is going to persist for a while. i don't think this is a short-term blip. i think it very much persists through '24 and frank lip into '25 because i think what's happening here is we're having this prolonged, post-pandemic reset. home depot, home improvement category benefitted and demands spiked higher. we're in the post-pandemic period an the point i'm making this is going to persist for a while. i don't think they're kitchen sinking here. i think they're reflecting what they're seeing. >> any hope on your part with the drop in interest rates, if there is more pull forward of cuts, is that going to speed the turnaround here, the inflection point from home depot and lowe's? >> no question over time declining interest rates benefit housing than the home

improvement sector, home depot and lowe's. that will happen. okay. my concern is that it's going to take a while to take hold. i look at it, if i step back and look at home improvement with the housing sector i think we very much have a state of housing stagnation in the united states, we need to get rates down to a point where that homeowners' incentivized to move. a ways to go, 25, 50 basis points cut is in the right direction, but it's going to take a while before the rates get low enough to incentivize the homeowner to move and purchase the home and break the housing stagnation in the united states. >> the srs distribution exquestion sigs, you like that, you thought it was interesting for the path forward. in light of the macro backdrop now, that seems like it would take a lot longer to pay off here, not a well-timed acquisition. >> it's interesting. i do think they pay enough for

it. that's a nice way of saying they pay too much for it. strategically, i think it's the right move. home depot has been in this big push in the pro segment. the pro segment remains fragmented and acquisitions like this will be needed in order to sort of have home depot further penetrate pockets. i think they did pay up for it, but i think there's a signal. the question is, why did home depot buy -- make this acquisition now? i think one of the factors is that, you know, they see continued weakness in the core business. they're looking to say how do we drive growth in our core enterprise, the diy the pro businesses they have will stay soft from we have to leave it there. thanks for your analysis. appreciate it. >> thank you. >> it is just after 7:00 a.m. right here on the east coast. you're watching "squawk box." i'm andrew ross sorkin, melissa and frank. in for becky and joe. cnbc now learning that former

national economic counsel director under biden brian deese is now advising vice president harris as she develops her economic policy plan and plans to release that agenda in the coming days and learn more about it. brian deese is of blackrock. google looking to get a leg up on apple pushing its smartphone launch normally scheduled in october, now happening today. the event kicking off at 1:00 p.m. eastern time set to feature the company's latest smartphones and mobile operating systems and new ai integration. we'll bring you the news throughout the day as it happens. kfc expanding its $5 value menu as fast food -- that chain trying to lure back customers turned off by higher prices. three options, eight chicken nuggets, the bowl with chicken nuggets and two piece drum and thigh meal. >> a lot of chicken for $5.

>> what's your choice? >> which one are you taking? >> all of sgeach. >> for five bucks. >> 15 bucks. >> half your macros for the day. >> you eat a lot -- don't do the fry. >> yeah. >> had a drilled chicken $5 special robert would be all over it. i don't think so. yeah. don't take my word. let's take a check on the futures. we're seeing the pressure on the dow. we were talking to brian nagle of oppenheimer about home depot disappointing guidance on the full year weighing on the dow here. the s&p looking to add 6, the nasdaq by 23. dom chu with a look at the premarket movers. >> melissa, robert, andrew, here are some of the bigger stories and movers outside of home depot. start with shares of jetblue falling by 2.5%. this is on top of the 20% drop that you saw over the course of yesterday's trading session after s&p and moody's downgraded

ratings on the concerns of the financial health. that after jetblue planned to raise more than $3 billion worth of debt, half backed by the true blue customer loyalty program. moody's expects jetblue to burn through $2 billion in cash this year. now dell shares are moving a little bit higher here up 1.5% ahead of earnings thanks in part to analysts over at barclays who upgraded the stock from an equal weight to underweight. those analysts saying as the ai hype washes out they're seeing less downside, server computers and pcs, but dell technologies you can see the down trend up 70% over the course of the last year, but recently down 1.5%. shares of boeing turning slightly higher by 0.2%. the aerospace and defense giant reporting july orders and delivery numbers out today expected to be well below average as boeing continues to restrict production of the 737

model due to the deliver of the number of fuselages coming from its top supplier aerosystems. down 40% from the 52-week high, boeing shares up about one-fifth of 1%. >> former president trump's conversation taking place last night with elon musk on x, nearly derailed a little bit by technical litches. some users trying to log on were unable to join the live stream. musk blaming a cyberattack for freezing the platform. cnbc unable to verify whether an attack took place. other parts seemed to be working on spaces where the conversation did happen. it did begin after about 30 or 40 minutes and lasted another two hours. here's a few key moments from that interview. >> this was a coup. this was a coup of the president of the united states. he didn't want to leave and they

said we can do it the nice way or do it the hard way. all the stuff that you're seeing now all the horror, look at israel, they're all waiting for an attack from iran. iran would not be attacking, believe me. when i was there, and i say it with respect, because i think we would have been good with iran, don't want to do anything bad with iran, they knew not to mess around. i knew putin well. got along with him well. he respected me. it's one of those things. we would talk a lot about ukraine. it was the apple of his eye, i said don't ever do it. don't ever do it. you do make a great product, i have to be honest with you, that doesn't mean everybody should have an electric car, bulls these are minor details. you're a big fan of the ai and i have to say that ai and this is shocking to me, but ai requires twice the energy that the country already produces for everything. so you're going to have to build -- we're going to have to build a lot of energy.

i want to close up department of education, move education back to the states where -- >> yeah. >> states like iowa, where states like idaho, you know, not every state will do great because states have basically -- aren't doing good. >> musk also offered to help with making the government more efficient. >> i think it would be great to just have a government efficiency commission that takes a look at these things and just ensures that the taxpayer money, the taxpayers' hard earned money is spent in a good way. i'd be happy to help out on social commission. >> i would love it. >> you're the greatest cutter. >> so that was just a little taste. you stayed up late to see some of it or hear some of it. that part was interesting. one of the most illuminating parts of all this for me was not so much trump's view because a lot were a rehash of things we know, it was more musk really talking at length about the

things that are important to him, with immigration, with climate change, but this government efficiency part was really interesting because musk went back to it three times and president trump is not known for cutting government spending. government spending grew under his administration, certainly under the biden administration, and he had to bring him back to that efficiency commission three times before trump said yeah, sure, i'll do it and you can be in charm. musk was like i don't know if i want to be in charge but we should be cutting government spending. the one example that trump used was he cut the cost of air force one from 2.6 to -- cut it by -- 3.6 -- >> that was my question, if elon musk were in charge of this efficiency bureau, if you will, would he be focused on the big items like social security or would he be focused -- no, no. but when people say there's 10% waste in the system or more, could you be renegotiating lots

of little deals, different transactions, across the government that could save you that money? >> when the debt payments are a trillion dollars in a fiscal year. >> 10% is a big deal. >> cutting a little bit on what boeing or -- >> you think it's irrelevant. >> entitlements. you have to change entitlements. i have surprised and disappointed for so many people who care about the spending equation that musk didn't even broach that topic because you have to. if you're going to cut spending. >> i don't think that's his focus. his focus is on regulations, what he thinks are red tape preventing companies from being able to start up or grow or build or what have you. i don't think he's been focused on the entitlement issue or the debt in that context, though he did talk -- his -- sort of explanation for inflation was -- >> government spending. >> government spending, right. i think government spending includes, you know, the inflation reduction act, what we're spending on chips and that stuff. more importantly entitlements. you have to throw that in there.

>> we've got a lot more coming up. coming up stocks clawing their way back after last week's big drop as investors await two key inflation reports. we'll talk markets next. next the white house knocking a crackdown on consumer hassles like how to unsubscribe. rohit chopra joins us to discuss the plan. "squawk box" will be right back. (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund

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stay connected during your move with the best in home wifi. easily transfer your services in the xfinity app. bring on the good stuff. welcome back "squawk box." futures are mixed the dow feeling the sting from home depot's disappointing guidance, the nasdaq will be up by 45. joining us silvia, the ceo, cio

and co-founder. great to have you with usp the s&p is up 3% since last monday's big selloff. are we getting complacent? should we expect more volatility? we see all sorts of stats saying the vix, you know, breaks out closes above 35 it's going to take 170 trading days to get back to the median. what should we expect? >> good morning. thanks for having me here. i think that we should expect volatility i think for the next month or two. we had some shaky data about jobs numbers a couple weeks ago, we had the japan carry trade kind of fall apart and led to some unsettlement in the market. we'll see what happens with inflation and where that leads the fed. if the market gets a sense rates are going to be cut, we can go back to thinking that unemployment is pretty stable, the consumer remains strong, gdp is between 2 to 3%, corporate earnings decent, i think that we can end up with a positive year this year. probably some volatility for the next month or two. >> if cpi comes in a little

hotter. >> yeah. >> that's complicated and the markets will be completely offsides. >> i think the market will react to that and get a pullback across most of the indices on that and that will lead to trepidation for investors to come back into the market. what i would say is that if you have long-term conviction on the mag seven under some of these new innovative trends in technology, the growth of ai, super computing, quantum, things like this, these pullbacks are opportunities to buy on the dip. i always say that like a broken record, but dollar cost averaging is wonderful when you get these pullbacks. it's hard to be an accountant short term but pick your spot on equities. >> do you have conviction in the mag seven? it was sort of three things that came together last monday, the economic slowdown in japan and the idea we're not getting a return on investment from investments in ai. do you think that was overblown? >> i think we're impatient as a

society. ai is something we just started talking about, even though it's been around pore ever. the chatgpt moment is when we all kind of piled into nvidia and things like this. it takes time to build things and get them to work and deploy across different sects. i think the spending these companies are doing is indicative of the demand and the potential of the space, but it's dg to take time before we see that play out in revenues an profits and the efficiency changes across the sectors. i am very much a buyer of mag seven. i think that this is the next tech industrial revolution that, you know, we've been waiting for and it's going to play out in the next five years or so. >> are you confident about the demand demand part of the equation? is it a case of trust us, we'll build it and people will come? because i think investors last week and over the past three weeks over earnings season are thinking maybe that's the case? maybe they're building and we don't know what payoff is going to be? >> we don't know what payoff is going to be, but i think we're starting to see there could be utility there.

when there's utility there's eventually payoff. as a firm we're using ai for a lot of things that have cut down our costs and made us more efficient. >> like what? >> product discovery, like compliance costs, like, you know, just looking at the competitive landscape trying to figure out -- >> you've decided to hire less people or you actually fired people so that ai can take those roles? when people say that i'm trying to understand it explicitly. >> so i think that we have spent less money on outsourcing for data and research, for example, because we've been able to use ai to scour the market and do some competitive analysis that has actually in some cases been more effective than some of the data we paid for in the past. i think that if we start to cut costs on different projects that we're working on, that -- >> are you using just chatgpt straight or do you have a customized version where you're using it on certain data sets that you've bought separately? what are you doing?

>> kind of ul all the things above. we're working on things internally that will be our proprietary information. i think everybody uses chatgpt for something these days whether it's to edit grammar check, whatever it might be. hopefully you're not cheating in school orusing it for those reasons, but i think it's wildly helpful for research at this stage and i can think about like if i were a drug company, having more information about, you know, drug trials, different outcomes that other drugs that my competitors are working on are having and that helps me become more efficient. i think that the utility of this is going to play out over the next couple years and that will essential will i make it profitable for firms to use it. >> thanks. >> thank you. >> okay. coming up, having trouble quitting your gym? what about canceling a subscription? the white house is trying to make it easier and save you all of the aggregation. cfpb director rohit chopra will join us next to talk about that plan and gearing up for fanatic

fest. michael rubin will be in the house to join us to discuss one of the biggest sports fans vi cteences ever coming to the jatsenr in new york, and it has everybody. "squawk box" coming right back. life tosses lemons your way. cirkul is your frosted treat with a sweet kick of confidence. cirkul is the effortless energy that gets you in the zone. cirkul, available at walmart and drinkcirkul.com.

welcome back to "squawk box." the biden administration has unveiled a new multiagency regulatory plan to target corporate practices that officials claim waste consumers' time and burden them with red tape. as parts of the plan they will be looking into when the use of automated chat bots and voice recordings break the law, in situations where customers think they're speaking to a person joining us is rohit chopra director of the consumer financial protection bureau. good morning to you. how is this going to work, and how much freedom should companies have as it relates to putting you on the phone with a real person, versus putting you on the phone with an ai bot? >> well, i think we're going to see companies do all of the above. i think one of the core of what we are trying to do with this set of actions is note something real that's happening in the economy. investors are rewarding companies for, number one, shifting to subscription models,

and two, trying to find ways to lower those costs. here's the problem. we see that those subscriptions can become sometimes impossible to cancel and we also see that those customer service costs reductions often lead to chaos for consumers. so we are trying to make sure that it is easy and simple to cancel those subscriptions. click to cancel model. and the ftc is working on a rule for that. and at the cfpb we're trying to make sure that when you are talking to a chat bot or if you are navigating some sort of phone tree you aren't sent into customer service oblivion and you can actually get the answers you need to. we're talking to a lot of people about how can we get this right because consumers are sick and tired of the runaround. >> the click to cancel subscription business, there are a whole number of businesses that do have a subscription

model but effectively what you're signing up for is a contract for call it 12 months to pay a certain amount of month every month. i don't know if that's always appreciated by some subscribers. i recently -- there was a piece of software that i subscribed to, i didn't realize i was paying -- i don't know 19 bucks a month, and i don't need this. when i got rid of it, it said, you still have six months to go. meaning you're going to have to keep paying for the next six months. you could pay a lump sum right now or not. how much of this is about disclosure early on about how this all works? >> well, certainly people do get surprised about the early termination junk fees and things like that. a lot of the subscriptions, though, that you do see on financial products, gym memberships, others, they often don't have a contract. companies want to say they have this ongoing recurring revenue and, of course, when they're

trying to optimize for that, they want to make it so that you have to navigate an obstacle course to cancel. what the rule will try to do to make it simple to cancel as it was to sign up. we're seeing how banks and credit card issuers are going to help consumers lock those recurring charges. but again, it has been a big shift in the economy of lots of companies wanting that monthly revenue rather than just a one-time charge because they think many people will just -- >> how much is about working with the banksor creating apps or the technology companies, google and apple, for example, so you can just go and say, i want this, i don't want this, i want this, i don't want this. >> also then the flip side of this, which is the business and i think to myself, we're in the tv business, streaming, you know, if you sign up for one of these things, if everybody can click on and off, you know, every month, you know, it's

great for the consumer, but it may change the ultimate economics much these businesses to the point where they have to raise prices or do something else because the economics don't make sense if there isn't the recurring revenue piece of it? >> yeah. but you can't build a business model that is really about making it tougher or making it complex in order for the consumer to exercise what is often a contractual right. this is sometimes about them being much more upfront and you're right, andrew, it's going to be clear, it's important to are clear disclosure, but it's also -- we've seen it. we've taken enforcement actions against some of these companies that have completely hidden how you can actually cancel sometimes have to click 18 different menus to find it. that isn't right. and i think that's something that most americans know is just common sense, that you got to be able to figure out how it's easy to cancel some of the recurring

charges. honestly, if companies are building the economics around frustrating consumers, that doesn't speak well for them. >> we have to run. two quick questions on the ai bot, if i call up the airline or whomever it is, if it says this is an ai bot, is that acceptable to you? as long as they just disclose it's not a person? >> that would be a big step forward. we are seeing companies, bank of america calls their chatbot erica and there's ways they're trying to simulate more of a human interaction one step is making it super clear that you're not talking to a human and another is giving consumers an easy way when they're the victim of identity theft, have some sort of urgent issue to be able to speak to somebody. >> okay. rohit, we want to thank you. i want two things, i want a rule so when i say, representative, representative, or operator, operator, you know telling the machine to do and it won't go

and saying what are you calling about, you got -- >> need to know more about your request. >> back in the doom movement. >> if you can fix that and maybe there should be a time limit. >> that's the doom loom. the doom loop. they hope that you will hang up and that's what we have to stop. >> should there be a time limit on hold time for certain kinds of businesses? >> it depends on how good the music is. >> i wonder whether for airlines or for cable company or something that seems like you need to actually reach these people. >> what if there's an outage and the wait time is longer. >> after a half hour there should be a fine. that would force the issue. >> by the way make tickets more expensive, but have you thought about that? is that a good or terrible idea? >> it's not always simple, but we do see when companies have major transfers, you know, they're transferring all the mortgages from one company to another, things can go wrong and sometimes they badly understaff

it and people dealing with trouble, sometimes when there's outages and no way to reach someone. so we're going to look at all the ways in which automation can help, but it can also lead to disaster. we will take -- we will take your suggestion, andrew, to heart. >> i think a half hour. half hour on hold is about as much as i think -- >> that's -- >> that's long, but i'm being sympathetic. >> yeah. >> maybe 15 minutes. maybe 15 minutes the limit. >> split the difference. >> 15 minutes. the question is you have to fine the company. the only way to deal with this is to fine a company based on this. >> they'll raise prices on you. >> they'll raise prices. >> the consumer will pay. >> okay. it's a longer conversation. rohit, thank you. coming up, a preview of today's big inflation data point and as we head to break, a check on home depot's stock right now. earnings and revenues beat estimates but the company cut

its full-year guidance for comp sales, now expecting a 3 to 4% decline for a 1% drop. the stock under pressure on that news. see that down about 2%. "squk x"ilbeig bk.awbo wl rhtac : no matter race, gender, ethnicity... the need to screen when due... for colon cancer's a priority. indeed! everyone 45+ at average risk should screen for colon cancer. these folks are getting it done at home with me, cologuard. cologuard is a one-of-a-kind way to screen for colon cancer that's effective and non-invasive. it's for people 45+ at average risk, not high risk. false positive and negative results may occur. ask your provider for cologuard. i did it my way.

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the producer price index for july will be released at 8:30 a.m. eastern time about an hour from now. the first of two key inflation data points for the markets to enjoy this week. steve liesman is here on set. >> a critical inflation report this morning a move to figuring out if and how much the fed is going to bereducing rates come september. we'll talk about probabilities in a second. the expectations this morning, 0.2, 0.2, headlining core on the producer price index, a little bit of help from the prior month 0.4 last month and then inflation, cpi, consumer inflation tomorrow a little bit of firming expected there. we'll come back to that notion in a second much what the fed should do in the face of that. the fed got mixed news yesterday on inflation expectations with a sharp fall in that three-year outlook among consumers down to it it. -- 2.3. the lowest in the history of the fed. the one-year and five-year

expectations remain unchanged around 3%. that's a problem the middle number is not a problem. markets optimistic about a rate cut in september. here's the numbers. 52% probability of a 50, yesterday we showed you a 51% chance of a 25. because it goes back and forth. we put the odds up favorite on the screen there. that goes down to -- up sorry to a 79% probability of 75 basis points total in cuts by november and then 95% probability of 100 basis points total in cuts. robert, don't be adding things to the list. those are cumulative. >> i don't add. >> you add things together. you cue mu late. a couple fed officials suggested they're not convinced on the need to cut and holding their fire until they see the july an august inflation numbers. others sound like hey, we're ready to go. the debate comes down to, which part of this line graph to you want to focus on?

more hawkish view to focus on the way of decline in inflation to the right of your screen has flattened out with worries that inflation and expectations get stuck around that 3% mark, a point above the 2% target. the other way to look at it is to account for how much inflation has declined. you see this thing, there's a big gap there. while the fed funds rate has remain unchanged real or inflation adjusted fed policy gets tighter and tighter and the economy could use some relief. that's what brian moynihan of bofa is worried about. this could be a theme at jackson hole next. how the fed balances the goal of 2% inflation target but do so without risking recession and staying too tight for too long. guys? >> prior to the jobs report last friday, was there a belief amongst economists there was a growth scare brewing? i think there were data points that indicated perhaps things were softening but i don't know about full-growth scare. i'm trying to figure out how off

sides we might be in this expectation for september 50 basis points in september? >> i don't think much. i think we were off sides. that number there that i showed you about the possibility of a 50, was 90% or 80% for 50 september and another 50 in november. that's been dialed back quite a bit. guys, i didn't ask for this, but the january 2025 feds fund contract it crashed down. that's a bit of a loaded question you ask because of the following reason, remember these economists were the ones who were forecasting recession after recession after recession. we would be in the third depression by now if the economists were right. they then came back to a consensus about a soft landing. and then it was like, if you remember the guy from aerospace company in apollo 13 when they were going to do something, and he said, no, it wasn't designed for that. it wasn't designed for that. when it did, i thought it would

do it all along. they were going back to, oh, you see that, that growth scare, i told you it was going to be a depression or a recession all along. so they ended up being like okay, they went back to their old ways of being scared about the -- i agree with what you said earlier though, about it was a little bit extreme the way some of the economists flipped to 50 all of a sudden like we're going to have emergency rate cuts. better people who i think made more money in the market, ladies and gentlemen, they kept their cool. >> yeah. >> that's always the case. listen to mike santoli. keep your cool. i thought i was the cool guy here. but then santoli comes along. he's cooler than me when it comes to the moment of panic. >> we'll see you in 50 minutes. thanks. coming up on the other side of this, fanatics ceo chl miae rubin will join us to talk about a sports festival taking place right here in new york city. we'll come right back.

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. welcome back to "squawk box." new york city is about to be the center of the sportsworld this weekend as the fanatics fest kicks off this friday giving fans access to some of the biggest names in sports

including tom brady, peyton manning the list goes on and on and on. joining us right now is the ringleader disrupting the world of sports and collectedbles michael rubin, fanatics ceo. nice to see you. >> good to be here. >> this is going to be huge. >> i'm excited. there has never been a sports festival ever in the world. think about so many other industries we have it, comic-con in new york city, gets 250,000 people dressed in, you know, their favorite costumes, walking down, taking over new york city. all the music festivals and south by southwest. no one has ever done this in sports and we're the perfect company to bring together hundreds of the best athletes in the world, the teams and leagues together, incredible for sports fans. this weekend. >> tells us what's going to happen. i used to go to card trade shows, baseball card trade shows back in the day, even at javits. nothing like this. >> that's where the idea came from. there's this card show called the national happened a few

weeks ago in cleveland where 150,000 collectors come to it. i have two reactions when i go. the first is, this is unbelievable. 150,000 collectors that are coming to the show. the second thing is, it doesn't look that different from when you and i were kids and that's when i went to comic-con. >> people buy tables. >> right. it's an incredible show, but it hasn't changed much or evolved. which ent to comic-con, this is spectacular. why don't we have this for sports. i said find out who runs comic-con, great news, you're going to come to fanatics and start fanatic fest. that was the origin of it. this weekend the best athletes in the world, more than 100. you mentioned tom brady coming, kevin durant andan anthony edwas straight with their gold medals from europe, derrek jeter, davi ortiz, bunch of the new york knicks, jalen brunson.

>> mike tyson. >> jake paul doing a press conference peyton manning is going to help officiate. incredible. so many wwe stars, roadie rode, hulk hogan. >> some kids get to play with some of these people? >> here's what's crazy. i now have players reaching out saying hey, i want to do basketball with the kids, football with the kids. we're now in the place where i think anybody else would be working hard with athletes and celebrities and artists to get them to want to do things. i was tog to travis scott, wayent to do basketball with the kids, football with the kids. jay-z popping a 4040 in the middle of fanatics fest, travis scott launching his cards that are going to be insane. we've got -- and we have so many stunts that people don't know about. this is going to be -- my goal we take over social media this weekend and we're the most

relevant thing on social media. i think we will be because we have so many stars. >> what's the most expensive vip experience ticket that you're charming for this? >> i don't know. i don't think it's that expensive. probably 1,000 or 1500, that's probably a lot of cnbc audience. i think we only made 1250 available of the tickets. general admission is 50 bucks. as a sports fan you can come from start 9:30 on friday until close 7:00 and great content every hour on the hour. >> how much is content you you can watch like panels and conversations, how much is activities you can play, how much is, you know, seeing trading cards or speakers or whatever is going on? >> trading cards will be about a quarter of the show. we wanted to make sure it was important and relevant, but that the show was a sports fegs val panels are going to be -- there's two setups. one main stage that holds a couple thousand people and steven a. smith interviewing tom brady there and david ortiz interviewing derek jeter there

and a new york knicks panel with brunson and josh hard and ben stiller and spike lee which will be insane. the rangers version of thatand wwe version of that. so you have panels every hour on the hour. a center stage where they're doing podcasts that have another set of content. i would say as a sports fan, i could go for the entire weekend an just watch great content but then there's going to be so many stunts with the athletes interacting. for basketball probably 15 or 20 individual nba players top streamers by the way, aiden ross, sketch, destroying some other extremers we'll announce in the next couple days. most will be streaming live from this >> according to the notes i have, the premium packages go up to 8990. okay. >> what do you get for $9,000? >> i actually don't know that answer. what i can tell you it's probably access to everything. >> wow. >> most people are buying the general admission ticket $50.

i think there are limited amounts of the higher packages to get your pictures with the athletes, autographs from the athletes. for us, we want to do is basically for every sports fan. we'll have tens of thousands of sports fans that will immerse themselves where you can watch great content and each league is going to be there. so the nfl will be there with all the super bowl rings the lombardi trophy. wwe, i've had three or for big athletes call me and say hey i want to come out like a wwe superstar. come out in the full wwe outfit, can i surprise somebody and be somebody different. there's going to be, again, stunts every hour on the hour all weekend long. >> is the goal long term, would you do this in other cities over time? take this on the road and turn it into a traveling circus? what's the goal? >> so i think when the dream kind of popped in my brain, it was about how do we do comic-con of sports. fanatics fest in every big city in the world. now the u.s. may only be able to do this in two or three cities,

new york city, best city in the world where we're starting in javits this weekend, l.a., maybe chicago. why don't we do this in paris, in brazil, why don't we do this in china? why don't we do this in tokyo? this is all about creating an event for the best super fans in the world. one example, when i was at the national card show a few weeks ago, i saw two fans in full head-to-toe oakland a's baseball uniforms, and it struck me, everyone comes in a costume to comic-con, why don't we do the same things for fanatics fest. i said anyone who comes in a full sports uniform or dressed as a crazy super fan, every hour on the hour we're going to pick the best dressed fan to meet one of their favorite athletes one on one. full brady with the helmet, shoulder pads, jersey, pants, that best fan we're going to take him to meet tom brady for five minutes. same with peyton manning or eli manning or jalen brunson. so we're going to like -- we want this to be a crazy sports

festival, but i want people open to close, all three days, just getting everything they ever dreamed of and making dreams come true. for me as a kid like i would want to move into this do all the things with the trading cards, the launch products but all this great content and get a chance to play basketball with my favorite player, my favorite streamers and same with football and hockey. >> very cool. very, very cool. congratulations. >> you can't congratulate me until after it's done. >> starts on friday. get your tickets. $50 or 8,000 bucks. >> $8990. >> for you and 50 for everybody else. >> are you coming? >> i am coming friday morning. >> bringing the kids. >> i have to work on the kids. >> who would you dress as? i mean i would probably -- go back in history and i would -- >> you can't meet that athlete. >> i know. >> a lot of people back in history. who would you dress as? >> michael jordan and get the

knee brace. put the knee brace on and flip the black to red over, you know what i mean. that would be my move. >> friday morning i expect you as michael jordan, shoes, the whole thing, knee brace. if you are you got to tell me who your favorite athlete is. we're going athlete is that you haven't met. i know you've met a lot of people and have a lot of access, but i expect you as michael jordan, exclusive here at cnbc -- who are you going to be? >> i don't know. we've got to go. we'll be right back.

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welcome back. following elon musk's interview with former president trump on "x," we're taking a look at the risk and rewards for musk's

portfolio of companies. let's bring in tim higgins, the wall street business columnist and a cnbc contributor, whose cl columns are always so fantastic when it comes to looking at what helon is thinking at any given moment. what did you make of last night, especially as it relates to elon and what we might have learned about his own political views or his views of trump? >> yeah, you can kind of, for firsthand -- for the first time, kind of here him interacting with the president, to see how his world views align. a lot of the things i said, we already knew. we already know where trump stands on a whole host of issues. and because of "x," and because of elon's huge use of that platform, we already know his political views on a lot of these things. but it was interesting to hear him talk about immigration, talk about regulatory reforms that he wants. talk about a whole host of other issues, with the former president in a way to see how they might align. sometimes, they seemed in full agreement. sometimes they seem like maybe they were just talking past each

other, in kind of sort of agreement. >> and how much of a risk is this for elon musk. he mentioned on the discussion last night that he had been a moderate liberal or moderate left, now he's not just endorsing the president, but probably contributing a lot to his campaign. and now this. why do you think he's taking such a big bet on president trump, given that we now have a very close race? >> well, the risks were just evident in the day. just hours before the event, the european union sending a letter warning him that the potential of violating their online content laws with this event, the idea that perhaps "x" could face some sort of fine if he was to violate those laws, just an indication of the -- kind of the scrutiny he's under there.

we see that tesla customers, where he's the ceo or some of them are concerned, of course, maybe some of them are turned on by his activities, but it throws kind of more uncertainty into that business. and then, also, we saw just in his kind of full endorsement of trump and the comments against the vice president, if she is elected, yet again, he's going to have a political enemy in the white house, if she is elected. >> and they also have, in some ways, overlapping demographics. one of the key voter groups that former president trump is targeting is young men. say, men under $30. to what degree does the musk audience that came last night, and that follows him, could that help trump, could that be transferred to trump as voters? >> right, going into last night, you probably weren't getting moderate voters or people who were not already having a decision of what they believe in

trump, or what they think in elon. remember, the event started 45 minutes later, so you really wanted to hear what the former president had to say. now, of course, there's the opportunity for viralty of these clips that will go ahead and occur today. but if you wanted to hear it live, you were kind of already committed to the camp. so in a lot of ways, the benefit is kind of revitalizing that base, turning on elon's supporters, what i call the ecoverse of almost $200 million people that follow him. and kind of reminding them that to get into the game, to be excited for this candidate, that now is back on the platform for really the first time in a while. and in the meme war, returns to the original home of that kind of viralty that so -- that made trump so popular to begin with. >> and do you think this ultimately helps "x"? i mean, "x" is not having a great time right now, as a business, if you look at users,

if you look at advertising. does this move the needle for them, or do you think it hurts them in terms of advocating for one side and being political? >> well, if you look at third party data, clearly, users, it's not as big as it once was before elon took over. although i'm sure "x" would dispute that. they say their showing growth. but even the third party info shows a spark in interest, downloading that app, even if it was after the first debate, after the failed assassination attempt. people have this hard weooirhar of turning to the app during big, communal moments. and the trick for elon and "x" is getting people to stick around and see stuff, that they want to make as a daily habit. having people come there for a big event is helpful. >> as long as they can get in next time. tim higgins, my favorite

elontologist. tim, thanks for joining us. >> it is just now a little after 8:00 a.m. on the east coast. you're watching "squawk box" right here on cnbc, i'm andrew ross sorkin along with melissa lee, robert, joe, and becky are off today. among today's big stories on deck, check out shares of dow component home depot , as we speak, that stock off over 2%. topping second quarter revenue expectations, but home depot saying sales will be weaker than expected in the back half of the year, as high interest rates, consumer uncertainty weigh on the demand. the company now expecting full-year comparable sales to decline by 3 to 4% versus last year. that compares to a previous forecast of a fall of about 1%, and it's a trend we seem to be seeing by companies coming out with earnings and weaker than expected guidance, almost across the board, around just the health and strength of the consumer. meantime, lowe's shares also down after that home depot report as well, off about 1.5%, with under three months now until november's election, vice

president harris fleshing out her economic team. we're hearing that -- cnbc is learning that former national economic council director brian deese has begun advising harris and we're expecting harris' first formal platform to be reid in the coming days. d deese, of course, formally worked for biden and worked for black rock. and general motors cutting staff in china. we'll soon meet with its local partners to plan out a restructuring in the country, that's according to a bloomberg report. that says that the cuts have come in areas like research and development, and also says capacity cuts in china will soon be on the table. >> let's take a check on futures here. that disappointing guidance from home depot, not weighing on the dow right now, although we had seen the pressure before. the dow looking to be higher by 25. s&p 500 looking to be up by 18, and the nasdaq looking at 80 at the home. let's get to dom chu with a look at this morning's pre-market movers. >> melissa, andrew, and robert. shares of warner brothers discovery are in focus. they're down about a percent or so, now even unchanged.

this is after bernstein analysts downgraded that stock to a market performer neutral from a prior outperform. they saved two bucks off the stock's target price. it goes from 10 down to 8. analysts are citing a disappointing quarter, where the media giant missed expectations on a number of key metrics they were watching. revenue falling by 6%. free cash flow tumbling by 43% from the same time last year. warner brothers discovery moving right now unchanged in the premarket, but it's kind of been moving around up and down. up next, shares of hormel foods, which are up about 3.5%. the food processor behind big brands like its namesake like skippy is getting upgraded. the target prize goes up to 37 bucks. analysts see upsides for profit, citing among other factors, improvements in underlying retail sales trends. also improving profit margins for certain key product lines. hormel foods up about 3.3%. we'll cap things off with a big earnings mover this morning that's not home depot.

it's on holding. right now dropping about 6.5%. this is the trendy athletic footwear, sportswear company backed by tennis great, roger federer. it reported earnings earlier today that appeared to fall short of consensus estimates. on is maintaining its annual forecast. it did note, though, some inventory levels that were lower, supply capacity constraints that kind of contributed to some of those moves there. so andrew, i'll send things back over to you. >> okay, thank you for that, dom. we have some breaking news to bring you, and this is big. starbucks' ceo lacksham narasham is standing down. the company has named brian niccol as chairman and ceo. that will be effective september 9th. in the meantime, the company's cfo will be serving as interim ceo. this is big news in the world of both starbucks and of course, in the world of investments, because there have been a number of activist investors around.

melody hopson, the current starbucks chair, will become lead independent director. and we're going to be able to break all of this down hopefully in just a couple of minutes. she'll join us on the show, but we've been talking about starbucks for quite some time. lakshmanan taking over the companion about a year ago. the stock down since he took over, just in the past year, you're looking at the stock down 23 to 25%. by the way, the news here, up now, putting the stock up about 8% on the back of this news. >> i wonder what chipotle is doing. >> chipotle is down 7%. >> we'll take a look at chipotle as well and see who's going to ultimately run that company. you can see the confidence that people have in brian. >> keep in mind what has happened to chipotle stock since nichol took over in 2018. the stock was split adjusted roughly five bucks compared to where it is now. >> wow. >> so that is the kind of operator he has been. they've been able to fight inflation with price increases, innovation to the menu, a lot of

technology improvements, the autocado, which automatically scoops out the avocado. if he can impart some of thoat o the starbucks story, for the first time offering a $5 pairing m menu, because they have to join the fight of consumers just push back on prices. that's what narasimhahn has not been successful at. >> it's amazing they got brian. >> it's truly amazing. >> they must be paying him a lot. >> i want to read from howard schultz, starbucks' founder. the chairman emeritus. he says, having followinged brian's leadership and tr transformational journey at chipotle, i have long admired him and recognized the critical human element it takes to lead a culture and values-driven enterprise, and i'm underlining

those words, because if you think about the criticism that howard schultz has levelled a this the management, i believe he is the leader that starbucks needs at a pivotal moment in its history. he has my respect and full support. he goes on to respect melody and the starbucks board. one of the big questions now is going to be what the activist investors, eliot and starboard, who have taken positions, think of this. are they going to still pursue trying to get seats on that board? what kind of other pressure points are they going to push? or are they going to say, you know what, these are the operational decisions and moves t that have to be made. we have said, this is the kind of company that would struggle. there's not a financial engineering program that you can put into place. some people have talked about, do you spin off china, do you franchise the business? i'm not sure any of those things are now going to be on the table, and maybe this will give them some room to try figure it out. >> chipotle has its own release out about bhwho is going to rese

the role. scott boatwright, the current chief operating officer, but jack hartung, who had been the president or ceo of khchipotle prior will stay on as the president of strategy. >> that stock down almost 10%. >> wow. wow. >> it is a blow. >> this is a huge move in the world of of fast -- i wouldn't call it fast food, something else. >> brian niccol is probably one of the best operators in the business, and probably one of the best ceos out there. and it's interesting that howard schultz had to be brought in to give his approval, because he has been sort of the -- i don't want to say the third person in the room all the time, but you know, always sort of second guessing, right? he had that open letter that was published, saying that he didn't like the direction in which starbucks was going. and so he has a say, even if he's away from the company.

>> to your point, the great things that he did at chipotle, aside from technology and being great operator, was always doing things that made chipotle feel special. they were doing sort of, you know, in that context, high-end things, special menu offerings, that made it not just another commoditized maker of rice bowls and burritos. and that's exactly what starbucks needs. >> there's a reason that people are willing to pay 20 bucks for a bowl. >> and they still feel like, oh, we're getting chipotle, that's special. >> so can you do that with a cup of coffee? >> that's the question. we were discussing yesterday, what do you have to do -- >> to your point, just to get people in the store, 99 cent coffee? brian would probably go the other direction, probably try to move up market and make it more special. >> i think the question is, how do you make it special? and the cost right now, unfortunately -- >> are too high! >> are too high for this macro environment. >> wlhat is the kind of product you can bring and what is the experience.

>> it's all about the experience. >> and the human interaction, and we've all lost it, because we're buying everything on our phone. and you know, they've had a lot of trouble, by the way, just even fulfilling the orders. you go -- look, the good news is, there's long lines, the bad news is, there's long lines. how do you fix that? fix the experience in the stores, how do clean up some of the stores? there's a lot of work to become done. but wez a lot of respect in the business and we'll continue to talk about this story in just a moment. >> if you're just joining us, brian niccol, the former ceo of chipotle, joining starbucks. the stock up is up 5.5%, chipotle is down by 10%. mellody hobson will join us live in just a few minutes. sk skbrul producer of inflation data is on the way. stay tuned, you're watching "squawk box" on cnbc

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welcome back to "squawk box." right now we want to welcome a very special guest to the

broadcast. he heads up the department of justice's antitrust division and at the forefront of some big government battles against the tech center. joining us is assistant attorney general for antitrust, jonathan ka kanter. it's great to see you this morning. we appreciate you joining us. there's a lot of speculation right now about what's going to happen to, frankly, a lot of the cases that are in play and what's going to happen in this presidential election. and i actually in an odd way want to start there. just to understand how you think about this election versus the cases that you have either brought, or the cases in the pipeline. >> yeah, thanks an andrew. it's great to be with you. for starters, i can't think about it. i don't have that luxury. i'm a sitting government official and my job is to focus day in and day out, putting one foot in front of the other, one step at a time, and making sure we're enforcing the law to help the american public. the work that we're doing, the cases that we're bring, and frankly the cases that we're winning over and over again relate to issues like health care, technology, agriculture.

things -- groceries. things that are central to the lives of everyday americans. and so it's important for us to bring those cases, follow the facts and the law, and make sure that we are winning them. and if you look at the back of our baseball card, our statistics look pretty darned good. >> you did have a very big win in this google case. i'm curious how you think about not just the win, but what an appeals process looks like, how long this will go on for, and also, what kind of remedy you might be seeking. >> yeah, so the process will have to play out in court. and we respect that, and so we'll be in court in september, talking to a judge about the next phase, which is remedies. and that's an important conversation. we look forward to having it within the process that the court lays out. but let me just say this. that case, u.s. v. google, was the first monopolization case, the first litigated

monopolization case since u.s. v. microsoft. these cases don't come very often, and when they do, they tend to be quite large and kuwait big. when you look at the history of major monopolization cases brought by the department of justice, you have u.s. v. microsoft, u.s. v. at&t, u.s. v. standard and oil. we're really thrilled we had this decisive victory in u.s. v. google. >> you had this decisive victory in the case, one of the questions, though, and we had a number of guests speak about this, is this idea that, you know, just as -- just as you're winning this case and there's a question about search, the world of search is being upended, all over, by artificial intelligence and all of a sudden, people are talking about perplexity and the possibility that microsoft and its bing service might become a competitor to google. how do you think about that? >> antitrust is perhaps most important during times of

technological change, at inflection points. so if you think about u.s. v. microsoft for example, that came at the dawn of the broadband internet era. and the theory in that case, the focal point in that case was the extent to which a company that had dominant power and monopoly power, can keep the flexion inflection point from having its full potential, creating disruption in the case of u.s. v. microsoft, it was the open web that led to the development of companies like google and so many others. as we sit here at the next technological inflection point, it's extremely important that we protect the competitive process to make sure that the benefits of innovation, the excitement that we're all feeling from ai, and from these new technological developments relating to machine learning, can reach consumers in a full-throated competitive way. what we want is we want two things. we want the next generation of exciting new companies and technologies, not just to emerge, but to thrive. and what we also want is we want the existing incumbents,

companies like google to work harder and deliver more, because competition is nipping at their heels. >> jonathan, if we could turn to health care, because that's also an important issue for consumers. the doj launched an anti-trust investigation into united health. united health recently abandoned two acquisitions in light of this increased scrutiny. and sat news started to launch these investigative pieces. and one of them was really just mind blowing in terms of the number of doctors they spoke to, who said they were effectively micromanaging payments. they were making patients seem sicker than they actually were in order to goose payments and were booing rewarded when it came to their performance reviews as well as bonuses. what's the status of the investigation, particularly as, you know, this investigation by sat news is underway and it's being laid out there that all of this is going on. >> thank you for this extremely important question. so, obviously, i can't talk about ongoing investigations, but what i can say is, health

care is -- there's no higher priority than making sure we are protecting competition and health care. we started a health care task force, to focus on exactly these kinds of issues. americans are deeply concerned about the state of the health care system. and it's not just patients, it's practitioners, nurses, doctors, who want to deliver high-quality care. health care professional workers, who are being squeezed. and so it's absolutely essential that we remain vigilant in focusing on preserving competition in health care. if you ask americans what keeps them up at night, it's not the lack of health care m&a, it's the fact that health care concentration in the health care system is not delivering the results that americans want and need. and demand. and rightly so. >> so, the issue with united health specifically was the optum acquisition, which the result was that one in ten u.s. doctors actually worked for united health or work under their influence. and i'm wondering if there are other concentrations of health

care that you're looking at right now, or is united really the only one? >> again, i think we were looking at the space broadly, but we as antitrust enforcers care about the biggest companies with the most power. health care has become extremely concen concentrated. the largest health insurance companies are now the largest health care providers. the largest pbms with, the largest clearinghouses. and they're accumulating data at an extraordinary clip. and andrew just talking about ai. eventually we're going to see or we're starting to see data-driven delivery of health care. and we're seeing acquisitions of in-home health care, as you mentioned. and so, in many respects, it's almost the platformization of health care, where these intermediaries are emerging, that really run the table from top to bottom. and it's extremely important that we understand that and take action when there are violations of the anti-trust laws. >> jonathan, you have also talked about looking at middle men. obviously, live nation being one of those examples. but, where else should we be thinking about the idea of

middle men? >> yeah. so if you look at a lot of our cases, they tend to focus on intermediaries, commonly called middle men. whether it's technology, health care, concert tickets, agriculture with meat processors and packers, we're increasingly seeing these sort of faceless intermediaries that facilitate transactions between buyers and sellers and sometimes that can generate a lot of benefits and positives, but increasingly, middle men are extracting a higher percentage of the rents and acting regulators of their industries, dictating what happens and how companies can do business. this is a common theme throughout the economy and we're seeing it in health care, seeing it in agriculture, seeing it in housing. and obviously, in technology, many others. >> and finally, i wanted to ask you about the world of private equity. for a very long time, private equity made up -- last decade, private equity made up about 35% of all mergers and acquisitions. and historically, was never

looked at in an anti-trust context, because they were seen as sort of temporary owners, if you will. they would own something for five, jooseven years, maybe, an they would sell it again. it wasn't about concentration, but you've taken a different look at private equity, and i'm curious where you think that goes? >> yeah, i think the approach we've taken to private equity is designed to be pragmatic. and so, we're agnostic as to business model and there are plenty of private equity deals that happen each year without event and without even a look by the antitrust division at the department of justice. but it is a business model and a business model that sometimes benefits from rolling up companies. sometimes benefits from buying companies and selling them off for parts. in those instances, it can have competitive consequences. and so we think about private equity as just in a business model and a business reality, that affects how markets function. and simply, we just want to call balls and strikes. >> assistant attorney general jonathan kanter, i want to thank

you this morning for joining us. >> thank you for having me. great to be with you. >> you bet. meantime, we want to get back to some of the big breaking news that literally just happened moments ago. starbucks' ceo laxman narasimhan is stepping down, effective immediately. starbucks has named brian niccol as ceo effective september 9th. the stock moving in a very big way on the back of this news, up 14% over at starbucks. and chipotle, by the way, it's the other direction. and mellody hopson, the current starbucks chair will become lead independent director and she joins us right now. and we welcome her to the broadcast. thank you for joining us, especially as this newsis just crossing the tape. mel mel mellody, tell us how this happened. there's obviously been a lot of challenges at starbucks over the past year. >> it's my pleasure to be here. thanks for having me. it happened because our board a couple of months ago started to engage in a conversation about

the leadership of the company and i made an overture through someone to brian and he took the call. and we thought we had the opportunity to engage with one of the biggest names in the industry, someone whose track record is just clearly proven. not only through the spectacular results that hooe's had at chipotle, but also at pizza hut and taco bell. he knows this industry and we thought, he would be the right leader for this moment. >> obviously, there's been a number of activists involved and we can get to them in just a moment, but speak to what you see and what you think the pboad sees as the challenges that the company is facing today and also how you think brian is going to address them. strategically, how he would be different, for example, than the approach that laxman has taken? >> first of all, i want to be very clear about the fact that laxman is a brilliant mind. i have very much enjoyed working with him. he's a good guy, he brings great humor to everything that he does.

he faced some headwinds and some challenges as he was coming into an industry cold. and we have to acknowledge that. and at the same time, he actually pushed us forward on a bunch of things. we saw or partner gaengagement scores go up, turnover go down, so there was movement there. but what we saw with brian is someone who's quite honestly, been there, done that, through all sorts of market environments, all sort of cycles. and when i talked to him, i remember him saying, i know what to do. and he said, this is a speed bump in this company's history. this is not something that i fear going into. and that was something that for our board, was extremely encouraging, because that's how we see it. we think this is a fundamentally sound company. the iconic starbucks brand will continue to be great and we're happy to have brian there to help us restore that greatness. >> when he says, i know what to

do, what is that? what are the kind of changes you think you'll see? >> you'll hear it from him when he comes in. i'm not going to get in front of him, and clearly he gets the opportunity to assess. he's not in the seat yet. let's let him get there and then let him come out with his plans. >> i mentioned that there were activists, eliot, of course, involved in this, starboard more recently. have you consulted or discussed the possibility of bringing skb brian onboard with them? >> we have not. so we look forward to engaging with all of our shareholders about this new development. >> you mentioned eded that you engengage a couple of months ago in this process, so i wonder if the q2 results were a tipping point for the board? >> there was a lot going on. we were looking at the business in lots of way. i don't want to make it about one things. there wasn't a moment where we said, okay, this is what we're going to do. this is a smart group of people in that board room and we were assessing a lot of issues at the same time, and ultimately

decided to make a decision to pivot in terms of leadership. >> mellody, when you look at the brian niccol playbook, whether it was taco bell or chipotle, it's always been, fixing the culinary and fixing technology. what did you see about his specific talents or strategic focus in the past that made you reach out to him, as opposed to a lot of other great operators in the coffee space, in the fast dining space? >> there was a lot. first of all, he's a retailer, through and through. he's an operator. he understands operations and how they should work and how to be efficient. he's an innovator. he's used innovation to move that company forward. he is a culture carrier. that is something that is very big at starbucks. our culture means a lot. he understands how much the people affect the outcomes. he's taken care of his people. he's a beloved leader. when we looked at all of those

things together, we said, this is the right person for this company. and especially when you think about the culture of starbucks, the mission and values, what has made us great? i think that he just speaks to all of those sensibilities. >> mellody, there have been questions about the china business, strategic questions about whether an activist would push to franchise the business. with brian in place, some of these big strategic moves, are they taken off the table? >> no, everything's -- he will have the wheel. so let me make that extraordinarily clear, that he will be the one who will drive the strategy and the board will govern. and i would imagine that he will look at everything, as he should. >> in your sense of the relationship with labor, that's obviously been another big source of a controversy, challenges and the like. how does that change? >> i think that we have made a lot of progress. we've had very constructive

conversations and i think he'll be pleased with that progress. we also made note that howard schultz, the longtime leader of this company, has made a number of critical comments quite publicly about laxman, maybe not by name, but indirectly. he's out this morning in that statement of yours from starbucks very supportive of brian. how does that relationship change? >> so i want to make a point about founders. because i think it's very important. founders have this unmatched intuition. and they have deep, deep, deep expertise that is not to be dismissed. i know a lot about this because i'm married to a founder, george lucas, i work alongside of a founder, johnary arielle and h been in a board room with the most important founders of our generation. when you think about those

individuals, they care deeply about the company they created. i call them the owny one committee nobis of their generations. he has no formal role in the company. he's our chair emeritus. he does not have a board seat. he's our founder who is always going to be revered and respected for what he built. and his relationshipwith the leader of the company will be one that he will build with that person. but i know how excited he is when i told him what we were working on, and he said, mellody, that's a home run. >> consumer price indexes are out, they're cooler than expected, so we're seeing a reaction in the futures to move higher. but we want to continue our conversation with mellody. i'm just curious, when you called howard and let him know what was going, was this before

and after you signed the contract with brian niccol? before the contract was signed? >> we were in serious conversations. he met with brian last week to sit down and talk about the company. so that will give you that sense. >> mellody, one of the big questions, we're talking about ppi and frankly just inflation across the board and how challenged the consumer is. you know, one of the critiques is that the price of the products at starbucks is just too high and that there has to be some kind of re-think about what that product mix looks like, what the cost looks like, what kind of value plays can be brought to bear. how are you thinking about that right now? >> we have a lot of conversations about all of this in our board room. everything that you can possibly imagine, the obvious and not so obvious. but we look forward to having brian come in and assess where we are and provide his leadership on these issues. so, stay tuned! >> then, i was going to ask, we mentioned technology, which is something that brian -- you know, how prepared is the

company and the board to making big capital investments in technology at this point? >> i just want to make it clear that, you know, you want specifics, i can't be that specific, because we have a new leader that's going to come and they're going to look at and assess all of this. and we will do the right thing for the long-term viability and success of the business. whatever we have to do, we will do. and hopefully we've demonstrated that in the past, and we'll continue to do so in the future. we have great, great, great hopes for our business under brian's leadership. and we know the starbucks brand will continue to shine into the future. >> mellody, i know you have to run. final question. what has the lesson of this past year been for you and the pboar? >> wow. there's been a lot. this board and this company has had challenges. we've been hit with a lot. the major lesson for me, as i think about it. i don't want to speak for the whole board, but for me, sometimes you have to make tough decisions, and those tough

decisions are the right thing to do. and despite the news and the way the media wants to portray it, it isn't absolutely because of outside forces. it's a room full of people that are accountable. we're not passing any buck, and we understand, we have a job to do and we are doing it. and we're doing that and trying to drown out the noise. and that has been the major lesson for me. do what's right and just, you know, you can't be a weather vane with all the people around you who have an opinion. >> mellody hobson, we very much appreciate you joining us, especially as this news is crossing and helping us understand all of it. and we look forward to talking to you soon and hope we have an opportunity to speak to brian very soon about how he sees the company and its direction going forward. so thank you again. >> thanks for having me. >> you bet. let's get to that ppi number. rick santelli is at the cme in chicago. rick? >> yes, ppi for july,which hit the wires came out at up 0.1% on

headline, cooler than expected! if we look at ex-food and energy, it was unchanged. zero. goose egg. that is the least month over month going back to minus 0.1 in march of '23. it continues. if we look at ex-food, energy, and trade, this goes the other way, up 0.3. up 0.3 is the warmest since april when it was up 0.5 and last month was revised from 0.4 to 0.3. now, let's consider the year-over-year numbers. these are important. year-over-year headline, 2.2, cooler than expected. 2.2 is the lightest going back to march. if you look at year-over-year ex-food energy, it's up 2.4. up 2.4. that's also cooler. last month, of course, it was 3%. 2.4 equals april to get cooler, you go to march.

here's the fly in the ointment. all the exes, ppi, ex-food, energy, and trade services, 3.3%. it's hotter than the rearview mirror, which was 3.1, and it moved to 3.2. this is the warmest 3.3 going back to when it was up 3.4 in april of last year. but what's knowable here is in between that number and today, it was down at 2.5% in november. this one, ex-2350, nrnl, and trade services is definitely warmer, the month over month is cooler. net/net, we're basically right back to where we started on the ten-year, what was at 389 before the number. it got down to 385 and change, it's back to 388 and change. the two-year moved more. now it's at 398, but it did get down a little bit forward. and bone real quick point. this morning we had business

optimism. the problem is, still well below covid levels po. melissa lee, back to you. >> more, let's bring in betsey stevenson, a former labor chief economist, who is now a professor at the university of michigan. and our own steve liesman is here at the table. so, what do you make of it all, steve? >> well, i want to talk about what rick was talking about and alluding to. why did the ppi fall and should you think about this number with the exes or without the exes? >> yes. >> what fell in this number big-time was trade services. trade services, you might raise your right eyebrow. what the heck is that and why is that in the ppi? it's a measure of profit margins. how much companies are adding on to their costs for profit or just margins in general, and

when you think about this number, and this decline in profit margins, you have to ask yourself, what role that has played in the inflation process and do we see two things happening? one is that prices by themselves are coming off, but also, margins are compressing. and the importance of that from an investor standpoint is in this world where we're on the other side of the slope of inflation, are we in a place now where prices are coming down and margins are coming down faster, equal, or slower that that? and that creates a really good question that inform ours discussion of home depot this morning. it informs the question that andrew asked of starbucks just a minute ago. >> we have been hearing it. >> what's happening with your prices, what's happening with your margins? so i don't think -- look, i'm not saying rick is wrong here or right, but you want to consider yours, whether or not that

ex-trade services is something to think about, when you consider the inflation dynamic or something to throw out? >> betsy, what's your take? should we consider it or not? >> first of all, let's just say what everybody is going to be looking at is cpi. really ppi, and is ppi predictive? and when you look at this report, i don't see that it's necessarily going to tell us what we're going to see tomorrow. i was surprised to see the big decline was in that services, and as you just heard, it was in trade services, but you can actually get underneath that, so we can come back to the starbucks conversation, big decline in food and alcohol, the component within trade services. i think there is something about prices are having to adjust and we have to figure out how much we can charge consumers and how

much of a margin you can take. i don't want to accidentally walk us down a path of talking about greedflation. i don't think prices are going up because of greedflation, but i think we are in a period where things are stabilizing. this is the kind of movement you're going to see. >> peter, how about you? obviously, all eyes are on cpi, but what do you glean from this report from the health of the consumer as well as inflation picture? >> i think what has to happen now, we need look at a few of the key opponents of the ppi. health care, financial services, transportation services, and those play a role in about a third of the pce that we'll see later in the month. if those are running hot, we know about a third of the personal expenditure index, the fed's preferred benchmark for inflation, will be hot also. those coupled with the shelter prices portions of the cpi will give us a pretty good insight into what the fed will be looking at and thinking about at

the start of september. >> steve, you were doing the thumbs up? >> i think that's exactly right. here's what's kbgoing to happen. a bunch of this stuff feeds into the pce. and betsy is also right, the focus is on cpi. all of this points to a good pce number. which has always -- >> tame -- >> yeah, you betting against the house or with the house? >> i want to be clear. >> here's the thing. we have been running this country based upon the 100th of a point on the -- on the pce number. is it 0.14 or 1.16 okay? the question becomes, if it rounds up to 0.1 or 0.1. i think -- zpr you have to explain a number this much, it's too hot. >> we've got to leave it there,

guys. peter, betsey, rick steve. next, inside the donald trump/elon musk huddle or whatever you want to call it. that's next.

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welcome back to "squawk box." elon musk holding a live chat on his social media platform "x" with former president trump, but the event was marred with some technical difficulties. steve kovach joins us with the details on that. >> that's the real story, spaces, the live broadcasting feature on "x," just completely collapsed. let me explain what happened here. minutes before the 8:00 p.m. launch time for this conversation, trump posted a

link to the "x" spaces and there were just errors for people getting in for several minutes. musk eventually tweeted that it was a ddos attack, which means basically attackers flooding the site with fake traffic in order to take it down, also claiming that he tested it with 8 million concurrent listeners before the event, but i would just note that the rest of "x" was working fine, outside of that one "x" space. and it finally started around 8:40 or so, 40 minutes late. here's musk explaining the delay on the space last night. >> hello, everyone. so, i apologies for the late start. we unfortunately had a massive distributed denial of service attack against our servers. and all of our data lines, basically hundreds of gigabits of data were saturated. we think we've overcome most of that and, so it's now time to proceed.

but as this massive attack illustrated, there's a lot of opposition to people just hearing what president trump has to say. and so -- but i'm honored to have this conversation. i want to emphasize, it's a conversation. >> so, look, maybe that's but i likely spaces crashed like it did with the ron desantis campaign launch that failed last year. the first question that musk did once things got going about he asked trump about the assassination and trump spent about 20 minutes answering that one. at one point during the conversation -- by the way, it lasted over two hours -- a commission evaluating government spending in a potential second trump term. overall it was like a little mini trump rally on your iphone that lasted, again, over two hours. so, look, the day after we should be asking ourselves, what do trump and musk necessarily get out of this? on the x side, the musk side, political ads. the trump campaign appears to

have paid to promote last night. for trump it's not quite as clear, not necessarily speaking to the voters in swing states and so forth that he needs to focus on or people in his party have been saying he needs to focus on. i think that's where the conversation takes us, what do the two men get out of the relationship they've developed in the last few months. >> truth social? >> that was interesting. we saw truth social shares not just on the earnings go down. 16 million in losses on 800,000 in revenue or something like that. that was part of it. but then trump last night, or yesterday, rather, was tweeting again. it was his first time being active on x since he posted that famous mug shot. he's been largely absent on there. yeah, not a good look for truth social. >> steve, stay where you are. for more, the ceo of strategic consulting firm, an alum of salesforce, uber, google and senator john mccain's presidential campaign and hosts the podcast tech'd up.

good morning. >> good morning, andrew. thanks for having me. >> so what was your reaction to last night, both the technical issues and maybe some of the content itself? >> on the technical issues, i think we just had too many people calling in at once. it's probably not a ddos attack but we'll never know. my takeaway from the conversation itself was how little tech came up considering elon musk was the host. i was surprised so few issues came up. >> that was what i was going to ask, meaning, what do you think -- it was interesting. we talked about it earlier. it was very little about even the economy. >> right. >> on the call let alone tech. >> the first 30 minutes was trump recounting the assassination attempt -- >> do you think anything substantive would have come out of this? musk is not a journalist. >> he's interested in technology. >> he's interested in technology. >> okay, fine. >> niki, what did you make, though, there was an interesting moment they were talking about fossil fuels, talking about

electric vehicles -- >> climate change. >> -- climate change, and the president said they even have a be debate about how long fossil fuels will last in the united states, for example. >> right. so that was one of the few times that they did talk about technology, because they also pivoted from that, the former president pivoted from that into talking about a.i. and its energy usage, but obviously for elon musk, he needs people to care about climate change to buy electric vehicles. president trump was talking about nuclear change and nuclear warming, and he was pivoting away from one of the issues that they really don't have in common, which is that elon musk needs people to care about the environment not, dig, baby, dig. >> a broader question, do you think that kind of conversation, given the amount of people that watched it, all of our conversations about it, impacts the election in any way? >> do you think, like, suburban women, swing voters in pennsylvania, were listening on twitter last night?

absolutely not. >> it's getting attention today. look, former president trump has not been in the headlines on a given day for a long time. so it worked in the sense that we're talking about it. it's all over the pages, and he's back in the headlines, at least for a day. we'll see how long it lasts. >> niki, steve, we want to thank you. appreciate it. >> thanks. >> we have a lot more coming up after is.th we will talk more about the starbucks' move in just a moment. while i am a paid actor, and this is not a real company, there is no way to fake how upwork can help your business. upwork is half the cost of our old recruiter and they have top-tier talent and everything from pr to project management because this is how we work now.

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joining us now on the markets, the portfolio manager of dcla. sarat, always good to have you with us. your take on the starbucks news, brian niccol, a master operator, one who has seen his stock go from 6 to 50 plus in a matter of his tenure. >> i think it's a great move. brian has done a phenomenal job. he's turned around the company, and i think this is a great new way for him to get something that needs to be turned around. we all know starbucks has a lot of work that needs to be done. unfortunately, the last two years, it didn't really do well. so i think it could be a good opportunity. there's a lot of low-hanging fruit at starbucks. >> the other big story is home depot. disappointing guide, even though

wall street reset expectations going into the quarter. what does this tell you about the earnings we're expecting? >> it's just confirming what we're seeing. we're seeing the consumer slowing down, retail sales are coming down. you've seen it across mcdonald's, starbucks, the other companies are reporting. so i do think you're seeing that. at the same time you're seeing ppi number today, cpi. it's confirming what the fed needs to do, which is basically start cutting rates. the big question, is the fed going to be cutting rates for the right reason? and hopefully it's nor because inflation is coming down not our economy needs it more. >> when you listen to economists and they're pulling forward, it sounds like their hair is on fair and they're going to be cutting for the wrong reason. in your view, what is the reality? what is going to happen in your view and for what reason? >> i think you get 25. i don't think you want to scare people to say, wow, things are a lot worse than they are. if inflation is coming down faster than, which i hope, retail sales and the consumer, i think the economy is in a better place. >> a lot of people in the market think the fed missed the boat in july that they should have cut.

what do you think his message might be in jackson hole? >> i think it's, listen, we can't be that reactive all the time. we know. they have been saying we're cutting. if they do it now and do it after this volatile 9% correction, i think they're just going to be data dependent at that point and respective of the election coming up, too. i think they're on the path. i think you would see the market down a lot more than it is today just because of the reaction, they're seeing more things that we're not seeing. >> more volatility into the election? >> absolutely. when you get slower earnings, companies that are going to miss, and then all of them are going to guide down, we've seen that. the guide down the next couple quarters is pretty wide now. i think that's where valuations will matter and i think even starbucks at these levels trading at 25 times earnings. what are you stepping into in terms of depressed earnings versus true valuation, and the

other part is dividends. dividends will start to matter because you see interest rates coming down, that's where you want to be. >> thank you, sarat. nice to see you. >> nice to see you. i want to thank you both for hanging out. >> a pleasure. >> as we discussed elon musk and donald trump and the big news out of starbucks. that stock up making big moves on the back of brian niccol joining. join us tomorrow. we'll talk more about it. "squawk on the street" starts right now. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. whether that starbucks, home depot, geo politics, pfpi. breaking news at starbucks. the company replaces the ceo laxman narasimham with chipotle's chief, brian niccol. all the details. >> ppi comes in cooler tha