and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm andrew ross sorkin along with kelly evans and mike santoli. welcome. joe and becky are both off look at equity futures at this hour we have green on the screen. 94 on the dow. nasdaq opening 49 points higher. treasury yields right now, the ten-year yield at 3.843% the two-year at $3.959 that cpi number we'll talk more about as we discuss how and req why we are where we are. >> and where we are is interesting. s&p 500 is now back to where it

was august 1st the day before the soft jobs number you took back all of the unwind we were talking about with the yen carry trade. now we're back to where it was soft landing >> we are not back to july 10th on the nasdaq. you go back to last year and the selloff. you could trace it back to the treasury refunding announcements and yields up to 5 in october and you know the story i don't know the whole story about why the a.i. trade suddenly ran out of steam a month ago. >> in fact, right around when earnings season started is about the peak july 12th or something like that we're cutting it pretty fine i do think at the highs, you had broad agreement, almost un universal agreement on soft landing. fed will move for the right time for the right reasons at the right pace the a.i. trade you can't fight it there's been a rethink on a lot

of those linies 4% below. >> it was the alphabet earnings. is the cap ex justified? >> that is interesting on the squawk planner, walmart and alibaba and deere and tapestry is set to report before the opening bell. a flood of economic data weekly jobless claims. an important one right now which is the one closely watched since last week's report fueled rebound on equities. we will get july retail sales and import and export prices. chicago fed president austan goolsbee is raising a red flag on the economy telling bloomberg he is concerned about the labor market -- i don't know we call it a red flag. he is following prices and d disappointing jobs data. a view that is appropriate if the economy were overheating he not comment on the size of

the rate cut in september. traders are pricing in a 37% chance down from a 55% chance a week ago more dovish on things. >> quicker to pivot. shares of cisco are higher revenue also came in higher than the street was expecting sales fell for the third straight quarter the company expects one more quarter of revenue declines as customers take time to set up equipment they received in previous quarters. one bright spot, the $28 billion acquisition of splunk. cisco announced a restructuring plan to cut 7% of the global workforce. ceo chuck robbins will be on "squawk on the street" at 9:30

a.m. today meantime, we are learning the details of the pay package that enticed brian niccol to leave chipotle it will pay him $1.6 million annually and incentives to add more than $7.2 million in cash and equity wards worth $23 million. and a signing bonus of $10 million cash and $75 million in equity one point for niccol he will not be required to relocate to seattle, but starbucks will pay for a remote office in newport beach, california he will agree to travel as needed to do his job starbucks well pay for housing costs in seattle for niccol for up to three months while he finds second an accommodation

there. look, he created $20 billion overnight. you are not paying less than that. >> the incentives are aligned. a lot in shareholder equity. he has to hit targets to receive. it is interesting the work from home nugget. >> he will have to travel back and forth. >> traveling all the time. >> exactly chipotle is in orange county that's why he's in newport beach. >> i believe they moved to orange county because of where he lived. >> exactly he likes it there. meantime, the president of columbia university is resigning. she is the third leader of the ivy league university to step down in the last eight months. it follows heavily criticized appearance before congress about anti-semitic on campus

the doctor said her resignation was effective immediately and taking a job with the foreign secretary. the turmoil had taken a toll on her family and moving on would allow columbia to traverse the challenges ahead the co-chair said they were disappointed to see her leave, but respected her decision last spring, she faced backlash from students and faculty for clearing the unoccupied building some donors said she had not done enough for jewish students on campus. this appears to be a resignation, but there was a lot of movement behind the scenes, from what i understand, to push for these things i think there was a lot of push-pull situation. >> is that because the school year is about to start >> i think from what i understand and from the donor class, there was a group of

people who had been very frustrated and trying to -- so i think there are some people who are sad today and other people who are quite happy. coming up on the other side of this, we will go whale watching we will talk about the new investing moves by some of the largest investigators, including warren buffett after the economic data, we will talk about the fed with former vice chair roger ferguson. "squawk box" is coming back after this sure, i'm a paid actor, and this is not a real company, but there is no way to fake how upwork can help your business.

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welcome back to "squawk box. warren buffett and david tepper filing 13f we have contessa brewer with more >> this is the first time i have done the 13fs. let's start with the reminder. these figures are only current as of june 30th. additional moves may have been made that we don't know about. berkshire hathaway, the big one. warren buffett's stake in apple. it was $400 million shares at the end of the second quarter. berkshire hathaway announced it decreased 49%. that appears it happened during the quarter. buffett's firm increased in giant chubb to 27 million shares that was revealed as its mystery

stock back in may. other moves, berkshire decreased in capital one and t-mobile and dissolved the stake in one. and pershing square invested in nike it bought 3 million shares in the quarter, but disclosed decreases in chipotle and restaurant brands. big tech in play david tepper selling alphabet and meta and amazon. in the semi space, you have decreasing exposure to the chips in nvidia, amd, micron viking global took a stake in nvidia and dissolved in advanced micro devices. taking a stake in asml and

increased stake in taiwan semiconductor. carl icahn took a shares of caesars. how can i come on and not do a coverage of cascasinos? >> or carl. >> this goes back to july 10th and now we learned the biggest players trimmed their holdings ahead of that. how about ulta i was cauckling we were talking to oliver chen he said sephora. it is really 12 times? that's amazing. >> it got cheap. ulta got into the zone i have to confess. i'm 13f. it is noise. this is not really dis -- it is interesting. opportunistic stuff.

ulta is a broken stock it gets cheap. small position for berkshire the nike one is fascinating. concentrated portfolio. >> and especially when you are looking at consumer pull back and to see this diving in. i guess ulta, the other play on this is, if you think consumers are pulling back, what is the conventional wisdom they will spend on cosmetics and lipstick. >> the lipstick indicator. >> the nike thing, too, though that's the position of pershing square took june 30th. the last day of june, the stock crashed 20% because of the earnings you see that vertical line lower. >> he bought in right before >> or after. he could have bought it that day on the break you don't know. >> i want to bring in stephanie link do not go anywhere

chief investment manager and portfolio manager of hightower what was the big surprise on that list for you? are you going to follow anybody, if you will? are you going follow anybody into these stocks? >> i think ulta. ulta i can't believe how cheap ulta has gotten this company is growing revenues in the 20% range and earnings also in the 25%. it's just had a bit of a stumble. i think the fact that the stock is down about 30% in the past year, i think that's really super interesting to me. i've never been able to own ulta because it has been so expensive. it de-rated. that is interesting. >> what about nike >> so, i think nike is a bet on what just happened to starbucks because the management really has disappointed the innovation has been lacking. so, to me, it's like you can own

nike if you think, a, they are going to be able to reinnovate and i think they will, but there's so much competition, andrew, at this point from hoka and from on semi they really have to innovate i think that's a play of a management change. if there is a management change, obviously, the stock to re-rate. i think the current management has a lot to prove it's expensive, by the way. >> you think there is a management change coming at nike >> i think for the stock to work, you need a management change to happen >> is there any sense that is happening? is activists showing up? what will create this moment >> the stock has been a disappointment for a couple of years and, as i said, the stock is quite expensive the numbers have been coming down and they're losing market share. something has to happen. now, i do think you have mary

dillon on a couple of weeks ago. she was super excited about the innovation, right? maybe there is more innovation coming, but at the same time, you have all kinds of competition hitting at all angles at this point in time i don't know we'll see about a management change obviously, i don't know. for the stock to work, you will need to have some change and some sense of urgency. i don't think you have there right now. >> what do you think of warren buffett buying more chubb? would you buy chubb? >> i think the insurance companies have pricing power they have it across the board. you saw it with cpi. chubb is cheap allstate is cheap. progressive is keep. they are all cheap and they have pricing power. >> the thing about chubb evan

greenberg said if consumers and customers are looking for the cheapest insurance, it's not chubb. he said we're the luxury brand of insurance and speaking of pricing power, chubb really has it because they just say if you can afford us, we're the best and you should go with it. >> we should show the multiples. stephanie, it is fascinating are you telling me you don't think kamala harris is talking about food prices and insurance is up the last couple years. i cannot imagine regulators are going to leave this space alone. >> no, they might not, kelly that's a good point. the fact is these insurance companies are leaving certain markets. so, there's less of a choice for consumers. that's what gives them the pricing power. i don't think that's going to change any time soon. >> remember, the rates are just now catching up to what the loss costs were over the last few

years. you saw -- >> home prices are up. >> materials, labor. what was happening is that the -- >> social inflation because of the settlements. >> the litigation is an incredible cost headwind it is not just the litigation itself, but the verdicts have become bigger and they set the standard across the board. that hits across different lines of insurance and multiple states. >> steph, do you know the multiple offhand for progressive? i would think they were -- >> chubb is 12 and 13. the market assuming these are not peak earnings. >> i hope for the consumer sake, i hope they are. maybe not for the investors. >> but 13 times earnings for the very best player in the industry with pricing power and, oh, by the way, the best management team that's kind of compelling. i understand why buffett is adding to it

it makes 100% sense. >> stephanie, we have to leave it there great to see you as always. >> thank you good to see you. and coming up, contessa, thank you. contessa brewer. taylor swift effect. the kansas city chiefs putting a bump to the pop star's appearance at the games. we will have details next. next, we will talk to gary vaynerch autheukbo t 2024 race and a lot more "squawk box" will be right back.

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welcome back to "squawk box. the alaska airlines flight

attendants rejected the contract deal union says it will survey members to determine key issues and try to return to the negotiating tables to address them. a u.s. judge said he is planning to issue an order to have alphabet's google to give more ways to download apps the judge said google foreclosed competition for years and years and years. we are opening the gate now and letting competitors in kansas city chiefs ceo clark hunt says the taylor swift craze helped fuel 30% increase in the fan base amid the super bowl winning season taylor swift started dating travis kelce atlast year.

>> high stakes in that relationship >> yes also, i don't know >> are you saying it is a loose definition of fan? >> are you possibly suggesting >> he might not have too many playing years left checking out shares of deere. earnings of $6.29a share that's on net sales of $11.39 billion. also topping expectations. the company has taken steps to reduce costs align production with customer needs. common theme in the results this week the stock up 5%. coming up, former president trump makes his economic pitch to voters. we'll show you what he said and talk about a coming proposal

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good morning welcome back to "squawk box" here on cnbc we are live on the nasdaq times sq square. >> as you see the five-day win streak or maybe longer. former president trump is making his pitch on the economy in asheville, north carolina. >> young people will be able to afford a home and we will bring back the american dream bigger, better and stronger than ever before >> in that speech, trump pledged 20% tariffs on foreign countries that have been ripping us off

for years. he pledged to slash energy and electricity prices within half of 12-to-18 months if elected. this comes ahead of vice president kamala harris's rollout of her platform. she is expected to test that message in raleigh, north carolina the plan would include prescription drug prices and a federal ban on price gouging on groceries, here is trump's response. >> there is no such thing. you want to create incentives so people can't cheat you want to drill for oil and get everything down. >> i don't know how she would go after the price gouging question which -- >> it's a hard one we talked about doing something for a long time. i don't know what doing something for a long time. >> have we talked about it

post pandemic. >> we heard about gouging forever. sh shrinkflation? >> is that shrink or the prices are going up >> is there some way to calibrate that >> the interesting part to me is you heard by the administration and the president himself go at this idea that corporate america is gouging you then, if you talk to his treasury secretary, janet yellen, you say is the corporation gouging? no, there is a thing called supply and demande. >> you get an economist. >> they should ban econ 101. >> the politician's job is to gesture in the thing you want to happen and hope it happens on its own. that is what is going on

the inflation reduction act, by pure luck and societal pendulum swing of, wow, it is time for something called the inflation reduction act. not because of what was in t there. >> the pendulum swing. i go and check potato chip prices the peak was $6.50 we talked about this before. it's not coming down they are starting to discount. this is how the market works >> no doubt about it vcs are not staking grocery chains. >> 4% profit margins. in the cnbc original podcast series the crimes of putin's trader is out hosted by eamon javers he joins us now with more. eamon, fascinating story how it came together. set it up for us >> reporter: mike, that's right. first of all, the podcast is live as of a couple of minutes

ago. you can listen to it on the ride to work. we were working on the project going back to september of last year the whole time we were researching the life of t the oligarch vladislav klyushin. we realized he could be part of the trade. you see klyushin in the tan shirt getting a bro hug from vladimir putin there, klyushin is behind the flower on the left siede of the screen he was among those released on august 1st we had no idea when it was coming we were scheduled to launch on august 2nd with the documentary. we scrambled and released it that same way as you see the bro hug given by putin to show the life and times of the oligarch they were stealing using hacking technology they were stealing s.e.c.

filings from american companies trading in advance tesla. they had the earnings reports first and making millions of dollars doing that >> that is fascinating it is funny. sometimes you hear people on wall street give me tomorrow's newspaper today. i don't know how to make money on it. if you have the filings and rules, you can make a good bet in that direction. talk a little bit about, you know, i guess you talked to a former spy involved in all this. what did they have to say about what ultimately were the ends of this whole campaign? >> reporter: right the question is how much are these criminal gangs in moscow linked to the putin government, right? they're operating these cyber scams in moscow. they are hitting american companies making tens of millions what is the connection to the russian government we talked to a former member of the fsb. the successor to the kgb this is the russian spy who

defected to the united states and lives here now under an assumed name we went to a location inside the united states which we can't disclose to interview this person and get his take on it from the russian perspective what he told us was fascinating. he said the putin regime authorizes these criminal gangs to go out and disrupt western financial markets in order to make sure people who are close to putin in the intelligence services profit personally they get rich themselves and disrupt western financial markets. he is saying there is an organized disorganization around the gangs where putin directs then and generally tolerates it, but doesn't authorize each individual crime, but wants it all to happen. that is part of the reason why putin would want to trade for him back once vladislav klyushin found himself in the american prison. >> and now that klyushin is back there, do we assume that, you know, the game goes on

what do we think he's going to continue to be up to >> reporter: look, i asked the fbi that the guy who worked for klyushin who was his right-hand man was the guy named ivan irmikof he was part of the russian military intelligence service. you see klyushin irmikof is the russian hacker. this is a person who is extraordinarily well connected to russian intelligence. if klyushin is welcomed back, as you seem to get the sense he was with that bro hug from putin, there's the possibility that he could just go on engaging in insider trading in western marks f markets for years. the russians won't let him go. he can continue to do this if he can find an institution to execute indicates with, he can

probably continue to do this for some unlimited period of time. the fbi and department of justs adve justice will have to figure out thousand do this and that story that came to be in the podcast of course, he is subject to the trade and a pawn in a much bigger geopolitical game >> remarkable stuff. eamon, thank you very much a sneak peek of the crimes of "putin's trader" out now you can listen anytime. coming up, we have inflation on the menu. we will talk to a restaurant operator who is feeling the pinch of the rising food costs which is leading to job cuts we'll have more when "squawk box" comes back. >> announcer: currency check is sponsored by interactive

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. welcome back food prices climbed .20% in july our next guest says his grocery bill is up 20% due to food inflation. brian is our next guest. brian, it is crucial to have you here we hear kamala harris may go after groceries for price gouging. we are equally fascinated to learn more what is your take? >> kelly, it is funny when i hear food prices are up 2% to 3% that is funny. when i look at our costs, it is more like 20% and as high as 40% on certain items i'm not sure where they get those measurements from in the

real world. >> can you be specific where you are seeing the biggest increases? >> the cost of chicken in february was $1.64 a pound today, that cost of chicken is $2.27 a pound. that has gone up people say 63 cents might not be that much until you think we buy 62,000 pounds of chicken for the restaurant my wholesale cost went from $100,000 a year to 138$138,000 a year now look at the cost of beef and cost of cheese and seafood and the numbers add up quickly. >> how does it compare to a couple of years ago? chicken prices sky rocketed and came down a bit. they are rebounding lately we are starting from february in this year. what were you spending on food a year or two ago? >> chicken does vary a bit

my wholesale cost, two years ago, we tried to run a 27% food cost across the entire menu. today, we're running a 32% to 35% food cost. you are talking about a 5% increase overall on the cost of our wholesale goods. when you multiply that out of the operation, it adds up quickly. >> do you think there is price gouging? do you feel that is what 's goig on >> it's a tough question i had this conversation with somebody last night. we buy cost at cost plus i pay 6% over what my supplier pays for it. i don't know where they are coming up with their costs are they price gouging me? i have no idea i'm on dynamic pricing there is not a lot i can do about it >> right >> what about consumers' response to all this what are you finding in the

willingness or ordering part earns? >> we have done four price increases in the last two years. at some point, you start seeing traffic drop off because people are shocked when they come in. i did a segment with a bacon, lettuce and tomato sandwich for $16. how often are you coming in for a meal at $50 when you can make that meal for less at home >> i thought that was interesting when we looked at results from chili's yesterday and the restaurant chains which had been losing to fast casual they are clawing back because they are offering a $10.99 value option and things like that which i have to imagine puts pressure on you. i don't know if they are taking margin generally speaking, disinflation

compared with a couple of years ago is giving them that opening and they're seizing it. >> i think you hit the nail on the head in the earlier segment. even we are experiencing shrinkflation by decreasing ingredients. instead of eight ounces, we go to seven instead of six ounces of chicken, they go to five they can dress it up, but the core ingredients are shrinking the amount we are putting in there which allows us to lower the prices >> in one final question on this, but i've always understood the restaurant world may be half or more is labor and a small portion is food costs. we know there is massive labor inflation. some of that is policy and some shortages. what are you experiencing and how does that cost compare to food with what you are actually charging people? >> our food cost runs 32%. our labor cost runs about 30%.

those are the biggest two items in there in our case, we're having to cut labor across the board to stay within our 30% labor costs, but have less people doing the same amount of work to combat the increased price in the food, we have to cut back on the number of people we're hiring to serve that food to keep the costs in line >> indeed. inflation is not over for you yet. brian, thanks for joining us to talk about it. >> kelly, thank you. coming up, when we return, apple may be working on a new device to manage your smart home devices. just a reminder, join the game plan conference in l.a. on september 10th bringing athletes and investors and owners together. you can scan the qr code or visit cnbc.com/gameplan. rall be there along with kevin

dunt and rob manfred and so many others. we're coming back right after this

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you sure you're, ok? you know you're down 200 points, right? lucky, she convinced me to get help. i had a concussion that could've been game over. in actual reality, you've only got one life. don't mess with your melon. if you hit it, get it checked. welcome back to "squawk box. apple reportedly pushing ahead with plans for an ipad-like tabletop device. bloomberg report saying it would be mounted on a thin robotic arm and allow the display to tilt up and down and rotate 360 degrees, could adjust its positions to face users around a room it is a feature offered now by amazon's echo, and meta discontinued portal. it could be launched as soon as

2026 i know somebody who had a google one. >> what was the calendar one called >> what is the calendar one called hold on. guys in the back, the producers, what is it called? do you know? sky light. i have a whole bunch of friends who have this thing called sky light. i don't think it is as sophisticated as what apple is trying to do but it shows you the calendar of the whole family, it can be powered by google and others, i'm not endorsing it, i don't know about it, we talked about getting it and i kind of want one. >> projected on the wall >> no, it is like a -- looks like a frame, people keep it in their kitchen, you can see the whole family, you can see what's going on you know what it is like in the old days, the old days, we used to have a calendar with a magnet on the -- >> we have a chalkboard. >> -- on the refrigerator and now nobody has a metal facing refrigerator. >> i didn't realize -- it feels

like it has been ten years and coming this in the kitchen device i was a little bit rolling my eyes maybe the moment is here >> i don't know. it's got to come. >> kitchen is the hive everyone knows that. >> they are. coming up, the chip wars, nvidia sets to report next week. we'll get into the fierce a.i. competition tecinhe stor next and we're waiting for retail giant walmart to report. we'll have the numbers and instant reaction straight ahead. "squawk box" coming right back

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♪♪ investment opportunities are everywhere you turn. but at t. rowe price, we're letting curiosity light the way. asking smart questions about opportunities like advances in healthcare. and how these innovations will create a healthier world tomorrow. better questions. better outcomes. now for a look at the state of the chips sector ahead of nvidia's highly anticipated earnings report later this month, let's bring in chris miller, associate professor at tufts fletcher school and author of "chip war: the fight for the world's most critical

technology." thanks for joining us. we see that we constantly go through these rounds of u.s. government putting on export controls over some class of chips to china or others, maybe it hits nvidia stock, maybe people get concerned about the market isn't as big as we thought. and then, of course, some kind of a response from china to try to do it themselves. maybe just set it up in terms of what is the state of play is, is this the world we're going to be living in for a while? >> we're almost two years into u.s. restrictions on companies like nvidia and ability to sell advanced a.i. processors into china, china is trying to respond to this by building their own high end a.i. chips. right now china's still meaningfully behind and we know this because chinese firms are importing large volumes of the lower end nvidia chips that the company still allowed to sell into china, but it is widely expected that the u.s. is going to ratchet up the restrictions

at some point later this year. we just have seen reports from "the wall street journal" that huawei is readying a new a.i. chip that is supposed to be better than the previous version and perhaps more able to compete with what nvidia can sell. this is a cat and mouse game, the u.s. ratchets up and china responds we should expect this to go far forward into the future. >> and now withholding certain technologies from china that could be used in a way that compromises u.s. national security do we have a sense of exactly how effect theyive that is, how might restrain capabilities of other countries, how much of a head start it gives the u.s. and its allies >> the difficulty with the national security rational is that the actual focus is a.i. and a.i. is relevant for the civilian sector and also relevant for intelligence agencies and the military. the u.s. goal is to make it harder for china to be a leader in a.i and i think if you look at the

landscape right now, it is u.s. firms who are out in front, and you can certainly get some anecdotal evidence from china that lack of access to sufficient computing power, the type of computing power powered by chips like nvidia is a challenge to china's a.i. researchers and to chinese companies that are trying to scale up that's exactly why they're pouring billions and billions of dollars into trying to build out their own chip-making ecosystem that can compete with companies like nvidia. >> do we have a sense of whether that's effective i guess i'm trying to figure out in a practical level, you know, what the differential is going to be and, you know, considering that the chinese internet is kind of closed to the rest of the world and vice versa, i just don't know exactly what we're fighting over here >> i think the u.s. realizes that china's a.i. ecosystem will be defined by chinese firms. what it wants is in the rest of the world u.s. a.i. firms to have a real lead the u.s. can set the rules of a.i. around the world and so

that u.s. firms create the infrastructure that undergirds a.i., not just in the united states, but in other countries too. and right now i think that's more or less playing out if you ask who is building the data centers that are going to train and deploy a.i. systems, it is largely u.s. firms, even in third countries i think that's what the u.s. hopes to see going forward by restricting chinese firms' access to high end chips, the u.s. is hoping to keep them behind, make them less competitive in third markets and therefore provide an advantage for u.s. players. >> and, chris, as a side bar not really a side bar, i know the defense industry in particular is frustrated we haven't weaned our defense apparatus' reliance on chinese chips if nothing else, it feels like maybe that's not the place to be dependent upon that supply. >> i think that's right. i think the defense industry uses a wide range of chips some pretty high end, but a lot much lower end, some chips that were designed 20, 30, even 40 years ago, and a lot of these lower end chips are produced in

large volumes in china and so it has taken a very long time for defense firms to find alternative sources and supply for some of these lower end chips. >> yeah. >> and what about the effort it is a multiyear effort to bring more manufacturing back to the u.s., or allied countries, and is that going to really shift the dynamics here? obviously you prefer to have things closer, but still it seems like taiwan semi and asml seem to be the gatekeepers for this business. >> yeah, i think that's right. with the chips act just passed two years ago, we have seen a major increase in investment in the u.s. a huge step change relative to the previous levels. but even this big increase with several hundred billion dollars of new chip-making investment expected over the next decade, the reality is that almost all a.i. processors like those produced by nvidia are still manufactured in taiwan and will be for the foreseeable future.

so, you really can't ignore taiwan when it comes to the chip industry because that's where almost all of the cutting edge processors are actually manufactured. >> yep certainly not ignoring you, chris. great too have your perspective. thank you so much. >> thank you >> okay. it is just past 7:00 a.m. on the east coast and you are watching "squawk box" right here on cnbc. i'm andrew ross sorkin with kelly evans and mike santoli joe and becky are off today. among today's top stories, the biden administration set to announce deals with ten drug companies to lower the cost of prescription drugs for medicare. the drugs treat or prevent common ailments like diabetes, stroke, heart disease and certain cancers when prices go into effect in 2026. and shares of cisco are higher earnings of 87 cents per share beating estimates of 85 cents. revenue coming in higher than the street had been expecting. the company announcing a restructuring plan that includes cutting 7% of its global workforce. it is the second major round of

layoffs this year. ceo chuck robbins will be on "squawk on the street" 9:30 on a cnbc exclusive interview and alaska airlines flight attendants rejecting a new labor deal that would have raised pay by 32% over three years. the union and the company reaching that tentative deal in june but the rank and file members failed to ratify it. the union saying it is going to survey its members to determine key issues and return to the negotiating table to address them walmart results are just out. melissa repko joins us with the numbers. >> walmart is reporting earnings of 67 cents adjusted, that's higher than 65 cents analysts expected the discounter topped expectations with revenue with $169.34 billion. that's above estimates of $168.63 billion. the company raised its forecast for the year to reflect its strong first half, saying it now expects sales it rise by between

3.75% and 4.75%. and it expects the adjusted earnings to come in between $2.35 and $2.43. i spoke to chief financial officer john david rainy who told me that walmart has not seen a change in shopping trends he said every month of the quarter was relatively consistent he said we see among our members and customers that they remain choiceful, discerning, value seeking, focusing on things like essentials rather than discretionary items, but importantly we don't see any additional fraying of consumer health it also saw strength across stores, clubs and website, notably with u.s. e-commerce sales growing 22%. and he said walmart saw another promising sign, sales of general merchandise, that's the stuff that is outside of its grocery department, was positive for the first time in 11 quarters, mike. >> that's probably going to be taken as a relief, i would think, by investors, considering july in particular, i think, folks felt was maybe a little

bit soft for a lot of the industry >> yes john david referred to that and he also referred to the concerning jobs report that created some concerns. and he said we are not projecting a recession he really kept talking about how they have seen consistent behavior, even with the start of the quarter. yes, people are still watching their dollars, but there is no noticeable change, he said that's really the key takeaway here. >> i don't know if you have the numbers off hand, u.s. comps, ex-fuel, the street was watching that. >> yes u.s. comps were up and they were up also globally and, you know, one thing that john david rainy said also is that they are seeing that people are choosing, not just because of price, but because of convenience, he pointed to that e-commerce growth and i think one thing that some investors may have been missing is that walmart made a lot of strategic plays here, growing third party marketplace, growing advertising dollars, it launched a new private label brand in grocery and those types of things are also moving the needle along

with attracting people who are frustrated by inflation. >> seeing u.s. comps up 4.2%. >> ex-fuel too >> yes >> i think the whisper was more like 3%. that would explain why the shares are up 5. >> the other thing he mentioned, they are seeing people who are just, you know, being a little bit more willing to spend for seasonal items, and so seasons are very important back to school, he said, started strong and generally that is seen as an indicator for the holiday season so that may be some good news too. >> really interesting. shares are up -- >> rlooks like an all-time high. >> walmart, jim paulsen has the walmart recession indicator, when walmart shares do well relative to luxury shares, that's typically a sign of a slowing economy. so we have to read it both ways, good or bad they're going up, i think they're going up for the quote, unquote, good reason. >> yeah. and it has gotten complicated with the e-commerce side of walmart. >> you think --

>> just the market share gains that they had, it is a little more representative arguably. >> certainly than 20 years ago i degree, much broader swath of the u.s. consumer or the kind of spending it would capture in the past, yeah >> that's the tricky thing to tease out. how much of this is because walmart owns strategic moves versus people trading down historically when walmart did well, it was seen as a concerning sign, or even upper, middle and high income consumers are being forced to go to walmart. but walmart is saying we're getting fancier or even though with better goods, its new private label grocery brand, most items are under $5, but it has flavors that might resemble a trader joe's it is a little bit more appealing to a wider variety of consumers. >> perhaps most importantly, especially for equity investors, going back a couple of quarters, they first started to talk about choice bill, such an interesting -- not choosy, but that was the beginning of a sign that stock picking and retail was going to matter and boy has

it they're sticking with that theme without saying they necessarily see any increase in softening of consumer spend overall. >> i also asked him about pricing, and inflation, and he said it was flat this quarter. so all the growth that we're seeing walmart report was from units, rather than dollars for a long period of time, obviously, that was coming from everything costing more. >> don't tell kamala harris. okay melissa, thank you appreciate it. look at walmart shares now they're up 7%. look at what that's doing to the dow, it is lifting futures, relatively big impact there. dow would open 88 right now. to dom include with a look at more of today's premarket movers >> roughly half of the dow implied higher move is because of walmart right now gives you an idea of how important it is for the dow's move right now we'll get you started off with the other stories happening right now including a very big jump in shares of lumentum, up 16% after the fourth quarter results. earnings beat forecasts, revenues fell less than expected better than expected overall

this is the provider of optical and photonic products. it is expanding its customer base which should lead to higher growth in the coming year. investors cheering that on up 16% robinhood, shares up a couple percent higher this morning after analysts at deutsche bank upgraded that stock to a buy they also call robinhood a best name for both ebrokers in the near and long-term so robinhood shares up 2.5%. and we'll end with a look at technology overall because analysts at bernstein research saying that volatility is creating an opportunity for names like uber, amazon, dell, and broadcom among others. they're calling them top picks for the sector bernstein is seeing a good amount of upside to those stocks, basing those results on things like earnings performance, a.i. exposure, including firms like broadcom for more defensive play in a more volatile chips space. those stocks here mostly in the green, fractionally up 2.5% for dell technologies. for more on those big calls, and other top calls of the day, head

over to cnbc.com/pro subscribers get full access to the details and analysis of those key reports. kelly, back over to you and the positivity around those walmart earnings back over to you guys. >> that's a biggie thank you. coming up on the other side, vice president harris expected to release her first major economic plan tomorrow we're going to have a preview of what could be in it and what it could mean for your money. later, the impact of social media on the election. gary vaynerchuk will join us later this hour. fun to talk to gary about all things going on on in the election "squawk box" returning after this tax smart investing today, helps to build a stronger tomorrow. at pgim custom harvest, our unique direct indexing approach seeks to help investors achieve better after-tax outcomes. pgim investments. shaping tomorrow, today this is our future, ma. godaddy airo.

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welcome back we have seen a big move in shares of walmart after those earnings a few moments ago the dow is implied to open higher by 82, nasdaq, 16 and s&p by 2 let's bring in mona mahojan for a little bit more. good morning to you. do you want to dwell at all on what we heard from walmart i think this is important. they're out there with a nice u.s. comp, even without the help of a lot of price inflation. the shares are up 7% last check. >> yeah, thanks, kelly we like what we heard this morning from walmart it seems to align with the broader narrative of a soft landing and a consumer that may be cooling, but not collapsing in particular i think the callout that this quarter has not really shifted in any notable trends, meaning the consumer has not seen a notable leg lower at the start of this quarter, that is a positive sign as well. so, of course, we'll be watching retail sales this morning as well as that jobless claims number to reaffirm some of what walmart is saying. but thus far, it does seem to

confirm a soft landing narrative, which is great. >> you're brave for coming on to give an opinion. and an hour from now, we'll learn so many key data points. i agree with you, i don't know how much they're going to move the needle increase in jobless claims is reminiscent of what happened last year and doesn't seem like it is necessarily the kind where it starts to accelerate and then keeps going, but don't you agree that's probably other than the jobs report the main economic data point right now >> yeah. it certainly seems like the other side of the fed's dual mandate has come under the spotlight. we have the inflation naisrrati that was also reaffirmed now all eyes are on the labor market we'll get the ongoing jobless claims series we'll get on september 6th. that will be the last one before the fed meeting on september 18th of course what we're seeing in the jobs market broadly that unemployment rate has ticked up to 4.3%. that's above the fed's kind of target of 4% so we're in a position on both sides of the dual mandate where

they're probably poised to move here. >> do you think cpi yesterday makes them go just a quarter point next month instead of a half point >> i think cpi probably didn't move the needle all that much. we liked seeing that two handle, the 2.9%, we're moving in the right direction. what we didn't like was seeing the stickier shelter and rent part of the equation we think that still does have room to move lower, especially as the shelter and rent catches up with some of the real time data we're seeing and we know that acts with a lag we would like to see services broadly. it has been a little bit stickier than we would like to see. as wage gains start to cool, we'll start to see that come through as well. in our view, the 25 basis point rate cut in september was probably baked in. i know there was some chatter about a 50 point basis rate cut at 25 and see two to three cuts this year. >> mona, whatever specifically was driving this pullback, we

got starting in mid-july, it definitely reset, i guess, some valuations, took the steam out of the biggest index weights, the megacap growth stocks and interrupted what seemed like it might be the attempted rotation into the rest of the market. i guess, where would you look to try and gain or add exposure if anywhere within the market >> yeah, you know, we think the broadening theme probably still has legs here. what we would say is we still prefer the large cap and midcap space to play that broadening theme. we still remain a little bit cautious on the small cap spaces, more leveraged than average and it does have less positive earners, more zombie companies. so we still stay in that large and midcap space we would say more broadly is that the theme of the last six months and the last 18 months has been you had a narrow portfolio, you were doing well if you're overweight technology, megacap tech in particular, that was a way to really generate positive alpha as we think about the next kind

of 12 to 18 months, we think the theme will really be you need to have that diversification in your portfolio, that could include a complement of your a.i. portfolio but you need to see other parts of the mark et i there as well. and even a little bit of international. we think that diverse portfolio will be the way to kind of win in the next several months ahead. >> and you see a lot of the 13 f filings reflect that as well a lot of big movers moving out of those sure thing big tech stocks and looking elsewhere mona, thanks appreciate it. >> thank you, guys still to come, the first built from scratch nuclear reactor in the u.s. in 30 years. now up and running we'll head to georgia for a look at what it could mean for the industry "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. what brand of bottled water has the largest global market share? the answer when "squawk box" returns. good thing i had aflac. (aflac duck) hmmm the cash i got from aflac

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share, followed by evian with 9% welcome back to "squawk box. nuclear energy at a turning point, seeing momentum as power demand jumps from electrification and data centers and the industry's steep price tag tripl threatening the triplf nuclear goals. pippa stevens has more >> i'm here at the plant vogel beneath the cooling tower and in the background you can see nuclear reactor four which recently connected to the grid together with reactor three which came online last year. they're the first newly built reactors in the u.s. in 30 years. they sit beside two reactors that booted up in the late '80s, meaning this plant now provides power for more than 2 million homes, making it the largest clean energy source in the u.s nuclear makes up roughly 20% of

the u.s. electric grid, but new builds have stalled. the meltdowns at chernobyl and fukushima shifted the public discourse on nuclear power, and the industry also has a history of being overbudget and behind schedule this plant is no exception it was seven years late, and more than double the estimated cost some of which falls on georgia's residents. southern environmental law center calls the price tag astronomical, estimating that a third of next year's rate hikes are because of vogel three and four southern company's ceo told me the cost overruns are because the u.s. hadn't built a reactor in so long and that to meet surging power demand we need an all of the above energy approach, including nuclear. >> we see an economy, we see a state that is growing. we see uses that are also increasing there is not a great better investment from an energy standpoint than nuclear power in terms of where we are today, and

the fact that these units are going to run some 60 to 80 years. >> now that these plants are online, there are no new commercial reactors under construction in the u.s. and, andrew, i got to tell you, this only scratches the surface we got an inside look yesterday at this highly very finely tuned operation. there are miles and miles of pipes beneath me, miles and miles of cable, and even enough cement, i'm told, to pave a sidewalk all the way from seattle to miami >> it was, what, pippa, how many years did this take to come to -- i can't even -- this is -- the fact that you're finally standing there, could it be 20 years? how long does this take? are people going to try to stick with this scope of project or to try to do something a little bit more affordable and doable from now on >> so this was started in 2009 the company notes there were a lot of hurdles that led to it

being behind schedule and the cost overruns. of course, the financial crisis, and then we had covid, and their supplier westinghouse went bankrupt at one point. and then more importantly, they say it was simply because the u.s. had lost the know how for how to build one of these. i got to tell you, it is really, really finely tuned in there we saw the steam turbine room and this just takes an enormous amount of manpower to get one of these off the ground the industry is highly regulated. they changed some of the regulations when this plant had already started construction, leaving them to rethink how it would operate. this new ap 1,000, they're the first of their kind in the u.s. and now being built around the world, just not here however, there is a lot of hope that other companies can take away some of the insights that southern company learned here and then apply those to other reactors in the meantime, as you noted, there is a lot of momentum behind smr, so smaller modular reactors >> it would be great if we could

export this know how so other parts of the world don't have to go elsewhere pippa, appreciate it thank you. big day. pippa stevens. coming up, the vice president expected to unveil her policies tomorrow. a preview of what's to come straight ahead. look at this morning's leaders and laggards walmart up there taul as well "squawk box" will be right back.

welcome back a slew of retail earnings this morning, we heard from walmart here is a look at alibaba. the earnings topped estimates, but the revenue was short of street expectation e-commerce sales were under pressure from cautious spending by chinese consumers and the shares are down nearly 4%. shares of tapestry moving higher earnings of 92 cents a share came in four cents better than the street had expected. revenue of $1.59 billion also topping estimates. the company noting momentum at coach, driving handbag revenue growth, shares up 5.4% though that's been a little bit of a rough go since march for that stock. coming up on the other side,

the economic issues impacting life and investments a look at how kamala harris plans to tackle the inflation and her ideas and how they may compare to former president donald trump's, maybe even to her current boss, president biden. as we head to a break, quick check on walmart after the company's quarterly report looking at that stock on the move this morning, higher, up abt ou7% we're going to talk retail and the consumer in a bit. don't go anywhere. "squawk box" returning after this you founded your kayak company because you love the ocean- not spreadsheets. you need to hire.

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former president trump making his economic pitch at a speech in nashville, north carolina, yesterday. here is a listen >> vote trump and your incomes will soar, your savings will grow, young people will be able to afford a home, and we will bring back the american dream bigger, better and stronger than ever before. >> in that speech, trump also pledged 10% to 20% tariffs on foreign countries he says has been ripping us off for years. he also pledged to slash energy and electricity prices by at least half within the first 12 to 18 months if he's elected meantime, kamala harris' economic agenda starting to take shape. the vice president's team reportedly working on making

housing more affordable, adjusting corporate taxes and more joining us now, former white house chief of staff under donald trump mick mulvaney, and john hope brian, founder of operation hope, a cnbc contributor. good morning, gentlemen. we have not heard in any real specificity exactly what vice president harris' economic policies are going to be and how they may differ from president biden. do you want to give us a preview to the extent you understand it? >> i think you've seen a sense of that, actually, when you look at the medical debt, which she took medical debt and made sure that for all americans it didn't count against your credit score and that because if you have something that is really a one-time event like that, you have no control of, you cannot get a mortgage, you can't get a

home, it can stop your whole life that goes a long way to understanding her mindset. i think that the economic opportunity tour we just participated in, i think she understands this is the aspiration generation. that's what i've told her people and they didn't disagree this is about growth and for all americans. i really think it resembles a lot of what i heard and saw in the bill clinton administration. president bill clinton, which is the last time we had a balanced budget and growth at the same time i don't think there is anything to fear here there is a lot to be optimistic about. it seems pretty centric to me. >> before i get to mick, i think one thing we'll hear is this idea of price gouging and corporations needing to be more responsible and things like that we heard that kind of language from president biden and others before having said that, we also talked to people like their own treasury secretary janet yellen

who would say that corporations are not gouging, that there is a supply and demand imbalance and that this is what happens in a capitalistic society >> yes again, i think that she understands the market economy there is a difference between her and president biden that i noticed, president biden really is sort of for the worker guy. that's what -- he grew up in that whole ethos and i think that i don't know if it is generational or what it is, but the vice president seems to be more about growing the pie versus cutting it up protecting you by giving you more pie to share. and i think that you're going to see an expansion -- a desire to expand the market opportunities, including housing. i don't know, but we'll find out from her very shortly. but that's my sense of things. it is not going to be -- she's a

prosecutor she's coming after -- i don't think the focus is on prosecution, it is on prosperity. >> mick there hasn't been enough details, i imagine, for the republican party to fully take on her economic policies and i imagine you're waiting to hear them and get them in stark relief so you can. what are you expecting >> which is exactly why we don't expect any details there is a basic rule in law, basic rule in politics, when you're winning, sit down and shut up and right now she's sort of moving in the right direction. i do not expect anymore more specifics than we got already. i expect a lot of aspirational language, a little bit of hope, a little bit of change, a little bit of win the future, maybe a couple things on specific provisions, but why give details when all that is going to do is allow people to attack you by the way, the first i heard anybody ever equate her economic policy to bill clinton i do not expect her to come out and say that the age of big

government is over what i expect is the same thing you've got before, which is it is going to be generalities. there is no reason for her to do anything more than that. i'm not optimistic about what we're going to hear in the next couple of days what i think you're going to hear after her presentation tomorrow, assuming it happens, is her not giving details, and then when her supporters and surrogates are asked, what about the details, they'll say, you just heard the details and they're going to move on to the next topic if you have anything other than aspirational language, abortion and trump is the devil, she's off message. >> mick, let me drill down on that for one second, do you believe that she can pursue this sort of vague strategy, which i think you think is the politically astute approach to this and i'm sure that will frustrate others, but if that is the approach, can you get from here to november without details or are you just suggesting the next couple of days, maybe once you get to the convention you

have to provide some more details or maybe post convention once you get to a debate period, you have to provide some details? >> no, i think you play it out as long as you possibly can and hope you can get to november here's why i couple of different things first of all, this is a very unique election, only going to be 82 days or something like that left. so it is not the two-year campaign, not the pressure to sort of continue to feed information to the media she is riding a honeymoon period right now, she might be able to ride that the next 82 days plus, there is the other opportunities you get to sort of to offer details that won't be there. my guess -- i'd be surprised if there is -- there might be a debate you heard talk about three debates. i don't understand why she would debate if she is winning i just think you can ride this out. the last issue would be this the folks who have undecided, and fewer and fewer of those every single day are the folks undecided for a reason, they don't pay attention and they're not driven by the specifics of

policies, they're driven more by personalities. it is a unique situation with a short period of time, small number of undecided where you might be actually able to run for and win the presidency without offering any specifics. >> john, you agree with that >> yeah, i don't know whether to love what mick is saying or hate it i agree, if it ain't broke, don't fix it i think she's got a movement here, not just a campaign. but i disagree that it is for any reason that she didn't have a plan what america needs now is a balm, they need healing. we have been told this problem is that person's fault and you're my enemy and call this person a name and i think people are exhausted. they're worn out by all of this. and they want to feel that we're better together. so if that's what mick is saying, yes, i agree with that, that we actually -- that's not a

cover, that's essential because this country is not a country, she's an idea, and the idea is that we're better together and that's how you grow our economy because the people at the bottom look different than the people at the top. >> the fundamental question is, are we going to learn -- i think a lot of viewers would want to know, i would want to know this -- what is her tax policy what is that going to look like come 2025? what should the rate for ordinary income be for individuals? what happens to salt under her, in her view of the world, what happens to the corporate rate. these are fundamental questions. what kind of regulators would you like to have at the ftc, at the department of justice? how do you think about cryptocurrencies and the like. the question is whether she needs to describe in any detail how she feels about those things and then, of course, and i imagine mick is just getting ready, you know, just getting ready to run the ads on the

other side of it, but, you know, to the extent that she says anything different than she had said a year or two or three or four ago, then there is going to be the critique that, you know, she is changing her position, right? >> i think that -- not dealing with an unknown entity she has been vice president for four years she did help the administration come out of the pandemic, the worst pandemic since the spanish flu. the reason we have inflation, which is now becoming baked in unfortunately in some regard with price increases, which i think she is going to battle, the reason we have that is because we have all this stimulus and the covid situation which shut down the economy. she did help manage a crisis the policies i think have grown the economy, i think has grown the economy. it could have imploded, frankly. the fed has lower interest rates and the economy has -- the economy has held together. so, you have seen what she's done as a co-lawpilot.

you're about to see what she does potentially as a pilot. my conversations with her have been conversations that are rational and reasonable and down the middle it reminds me of talking to president bill clinton what she is going to do, how she's going to govern versus how she's going to run for office might be slightly different. again, i'm saying the country needs healing right now. look how the excitement of -- look at the excitement of young people, look at the excitement of people on the edges of the ma margin, they're, like, okay, fun finally a breath of fresh air. there is a time for everything this may not be the time we get all the detail you want, but i think the writing is somewhat on the wall and i don't see anything crazy she knows we need to grow the economy. and she doesn't hate rich people let me make that very clear. i know that for sure she doesn't hate rich people she thinks prosperity is a good thing. >> andrew, here's what you're going to hear. you're going to hear make the rich pay their fair share, no

taxes on anybody making under $400,000 a year, not a word about how to balance a federal budget or deal with social security or medicare i'm agreeing with john, by the way, that's the smart play at this point his message about people want healing is probably correct. that's the winning message right now. not economic policy. if you're an informed voter and there is not many of those left who are undecided, fewer and fewer people seem to care right now. the election looks like it is turning into a personality contest as opposed to policies as republicans, it is frustrating because our policies are better right now than the democrats, but that's not where the voters seem to want to be today. >> mick, what do you think of the polls and the reason i ask is it does appear there is a movement afoot that would put vice president harris in the driver's seat at this moment though i know there are others, especially inside the party close to trump, who would say, look, these polls are undercounting trump voters >> there is all sorts of details

and so, the bottom line is this, it is still a 50/50 race and you may feel the pendulum swing two or three more times in the next 80 some days close regardless of what polls you're looking at. >> mick mulvaney, john hope bryant, good to see you. thank you. coming up, more reaction to walmart's results which came out top of the hour and had the stock on the move big time it is influencing the dow as well there it is, up $4, 5%6. and gary vaynerchuk joins us to discuss social media and the election, the impact that will have on this very tight race "squawk box" will be right back. weathertech products are designed and manufactured in america using only american raw materials. most competitors make things seven thousand miles away... and then wonder why they don't fit. with weathertech in your vehicle you may hear angels singing as you marvel, how do they do it? simple.

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consumer behavior and shopping trends joining us now to break down those numbers, chuck grom. great to have you here the street is embracing these numbers. it is a little bit of a different tone than what a lot of companies have offered in terms of the consumer condition and fatigue. do we extrapolate from what walmart is saying here to the overall economy? >> we'll find out over the next couple of weeks with retail earnings i think walmart is going to be more of the exception than the norm here. i think retail sales in july, we'll find those out in about 30 minutes. i think it will be weak. i think the consumer is under a lot of stress and i think what we're starting to see here is a lot of market share between three big companies in this country, walmart, costco and amazon and walmart's results today on the surface are good, when you dig into the details, they're tremendous across gross margins, across membership, across advertising. they basically checked almost every single box we were expecting this morning >> and so that tells you what?

they're tremendous walmart is executing, in the right place for this economy does the stock account for that at this point? we're at an all time high, stock up 6%. >> i think the stock is going a lot higher over the next couple of years we're starting to see the flex of their second pnl into the margin structure, which means earnings are going higher. the stock is expensive, but so is costco and costco is hitting 52 week highs as we're seeing. i think to your first point of your question, mike, on the consumer, i think the consumer is extremely focused on value. our price work shows walmart's price gaps are at an all time high and that's leading. the value is also coming through convenience and giving walmart's digital move and the walmart plus when we saw today on the membership numbers, we're starting to see that strength as well there too >> so, it is interesting, because it does allow us to look at other companies and saying, yeah, maybe a tougher environment, but also you're just losing to walmart i wonder what that says about

the overall economy and whether, you know, a little bit of fed rate cutting is going to help anything in terms of refreshing consumer energy. >> one thing i didn't point out and we saw in the release today and i think this is the lateral across other companies that you're asking about is walmart's general heroic on the surface but a big improvement after two years of seeing declines in general merch. starting to see that good for companies like target and other discretionary names we see. short-cycled categories doing better apparel and home long-term doing softer like ce and ochs supplies and bigger ticket furniture again, we'll find out over the next couple of weeks ons surface this is a good number by walmart. it's probably an indirectly good trend for retail. >> yeah. i'll note that target shares in the pre-market are up about 3.5% chuck, great to talk to you. thank you. >> thank you very much. coming up, the creator

economy and the election gary vaynerchuk joins us futures are positive s&p 500 up -- oh, well not quite a quarter of 1%. dow up 134 thanks to the big pop in walmart nasdaq ahead by 50 points. we'll be right back. pgim has established a track record of helping investors capitalize on growth opportunities. pgim investments. shaping tomorrow, today.

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welcome back to "squawk box. president biden hosting 100 influencers at the white house yesterday. the first creator economy conference that the administration, trump and harris campaigns tapped into social media to spread their message. joining us, "the" expert in social media messaging, gary va vaynerchuk is with us. good morning. >> good morning. >> who's winning >> america's 50/50 who's winning depends how you want to look at it most important, when you think what they did yesterday. for people watching this program, i'm stunned that washington, d.c. is sometimes ahead of madison avenue. i think the real punch line is that fortune 500 companies are

grossly under investing in influencer marketing and it's wild to see that the candidates are starting to, and the white house, is starting to understand the power of it, because these humans of media outlets. no different than cnbc you know your platform, my platform your platform. so i think how is it going to play out i think it's going to play out -- so polarized people will vote the way they're going to vote and an influencer won't change their mind, but i think the business impact is huge. >> what do you think of the idea of a campaign reaching out to influencers to use them and leverage them, if you will, in these campaigns? including potentially -- i don't know the truth of it you may know more about it some sort of, all an accusation or speculation among some influencers that some of these campaigns will start paying the influencer on their behalf >> as long as they're disclosing that like they're supposed to do on everything right? if this water pays an influencer

putting #ad. d.c.'s pretty clear on this. >> i don't know if that's happening. >> crazy if they weren't wouldn't it be worse if they didn't pay them in a way >> i don't know. that's the issue. >> less of an issue and more of a dawn of starting to understand that, at end of the day attention is the punch line. back to the format we're on now and presidential elections go to your history books, kids, the jfk/nixon debate played out different on radio than television i don't know how people don't get this the obama win and trump win eight years apart happened because of social media. the reasonthat people continue to be -- >> but not the obama win, but the trump win? did we have -- >> of course >> barely. >> not barely. the 2008 facebook execution that the obama campaign did is historic and the preview to 2016

trump twitter. social media has attention of the end consumer at a scale that it our society continues even now to underestimate and those who know how to create, communicate and execute on it win. >> which platforms do you think are "winning"? meaning, so donald trump going on x the other night with musk how much influence does that have versus whatever you think he's doing, or she's doing now on tiktok or instagram >> i think both campaigns are grossly underexecuting on linkedin and facebook. >> linkedin? >> uh-huh. tiktok, we all know, kids talk but don't vote i'm a businessman. this is just practical to me both campaigns are getting caught up in the same thing that fortune 500 companies are getting caught up in going to the cool place. >> wait a minute you just said facebook in '08 and -- you could have said at the time just the kids kids votes don't matter, but

evidently they matter. shouldn't you go to the hot new thing now? >> good validity to what you're saying in '08 such momentum and different time, unique campaign, plus kids only vote during times of hope. kids vote when they're hope and optimism there's no hope and optimism in the air right now. let there be no confusion. nothing but fear weaponizeds no hope in here. >> i think harris is trying to -- i think -- >> the problem is, i respect that, and that's a great call but i think it's got to be contextual look at 2024's verse of hope, it looks very different than 16 years ago and definitely different than clinton and jfk we're in a very different place. but i do want to say this -- facebook is grossly underpriced organic reach. that's the other thing unlike spending a fortune on a television commercial or a billboard, when you know how to do content on social as a business as an entrepreneur and

as a candidate, you get reach for free. >> it's expensive now. >> no -- >> organically if you do ads it's really gotten expensive. >> dramatically cheaper than every other medium in the world. google, television, print, it's not. more than free, but the price of cpms is dramatically underpriced and another thing. all of this is base and reach. how many people can you reach? social media, the way the news feed works you don't know that the next picture or video is an ad when i watched cnbc, you're like, all right, see you after this i know an ad's coming. i'm in my phone in the car i don't see the billboard. more social media ads are actually consumed on their reach than the potential reach of every other medium and their cpms are lower i argue it's underpriced that's above and beyond the fact organic reach is free. >> one question about this hope idea for a second? >> please. >> does hope work on social? >> of course it does

how do you think i have 40 million followers? >> i think it does. >> me, too there's only two extremes. hope which is hard. >> right. >> love and hope. and optimism is hard. fear and negativity and citizenism is easy and lazy. yes, hope works. the problem is, most people aren't talented enough for hope. >> but that's what i was going to say it becomes this sort of train wreck, you know? everybody's -- you know, rubbernecking. that seems to work. >> that becomes societal accountability before we blame the candidates and social media, and our parents, i actually think it's time for everyone to, instead of are pointing fingers to point thumbs if you are leaning into citizenism and negativity that's your fault >> awesome message before we let you go, you're heading over i'm going tomorrow, dressed in full gear, as my jordan, my jordan uniform from the old days. >> i don't like that, because

i'm da die-hard knicks fan. >> i get that. back in the day, supposed to -- >> no! >> i understand. >> we talk about a lot of important stuff. most important you are not allowed to be a michael jordan fan if you're an over 35-year-old knicks fan. >> my question is this you're going to be there >> i will be there fanatic express there. >> you used to dcom. >> natural sports car convention i am on the road this summer. >> doing tomorrow? >> setting up the v-friends booth. building a pokemon a meets marvel ip. a setup. 10-year-old pumped and speaking on a keynote panel on sunday about the state of the hobby like the business of col collectabilities and mingling and shaking hands. >> what's the state of nrts? >> like i said, in the hype of

it 99% went to zero just like 99% of sneakers, watches and trading cards and art is worth zero. right now the 1% continue to hold but the macro brand is in the carnage. just like in 2000. the web brand was in the garbage, all the stocks collapsed but the macro technology of the blockchain is profound and actually right now is the time to be very thoughtful. >> is it like a value play to buy the apes now >> with the 1% >> if apes is nike if apes is lacoste, no becomes a question of, like, whos the ceo look at starbucks? >> you've been right about a lot of this stuff. >> i feel very right. >> what would you be buying? >> i don't want to guess and be wrong. one of the reasons i tend to the right is i don't like guessing people misunderstand the nft market 99% is zero. nobody hears that when things are hyped. nobody hears be careful of

inflation on the back of us printing unlimited money >> gary vaynerchuk, thank you. just after 8:00 a.m. on the east coast you're watching "squawk" on cnbc opinion key earnings reports coming up in walmart topping revenue expectations and retailer raising forecast for the year sales of general merchandise of walmart positive, first time in 11 quarters. look at the stock. up over 6.5% in the pre-market then take a look at this, folks. flip side. alibaba following short of earnings in its june quarter internet giant facing headwinds in its core ecommerce business thanks to rising competition and a cautious chinese consumer. cisco saying it's going to cut 7% of its global workforce the second set of mass layoffs at that company in the past year back in february cisco saying cutting and then reporting better than expected fiscal

quarter results on both top and bottom lines don't miss chuck robbins hanging out with the gang on "squawk on the street" and explain what's going on at that company at 9:30 a.m. this morning, eastern time. futures helped by positive walmart results. stock last check at $4 30 points or so. doesn't hurt the futures say the dow would open 131 nasdaq 41. s&p 10 90 minutes until the opening bell, michael. what are you watching? >> obviously retail sales. how it affects the bond market catalyst and how the economy is hanging in there but we're in an interesting spot going into that news in terms of s&p 500 rebound over the last seven trading days taken is to 52-day average relief rally can take a pause or reset sometimes. rare relief rally it would have to give way to a true resumption of the uptrend 4% away from all-time highs only about a month ago.

not as if this is a severe correction but velocity of it on that monday with that unwind at 3% down day really did, i think, purge a lot of optimistic sentiment. see if that benefits us. the last six months nasdaq 500 and equal-weighted s&p 500 looks pretty similar nasdaq 100 up 28%. equal-weighted s&p up more like 12%. still not an all-inclusive market but taken care a little of that over concentration you had a while back even though small caps have not kept pace in the rebound rally finally, volatility index. the fastest-ever decloin from above 35 as a close to under 17 as a close long-term average 17.5 shows you that it was this kind of mechanical concentrated panic on that day. did not seem as if -- people are calling it a mini flash crash in macro. so it did obviously create a big

pulse of panic and we've receded from it. >> all right mystery broker. >> get you caught up meantime on stocks making moves in the pre-market and this company topping forecasts with help from stronger pricing and court control efforts for deere. preserving deere's margins despite what appears to be weaker demand for heavy machinery. that stock up a little over 2% and jd.com rising. profits above estimates. thanks in part to a midyear sale and aggressive price cut why in platform look at the assortment of names talked about umtlta, apple, nike in common? favored by some of the biggest investors in the world last quarter. new 13f filings, and -- also small position, looks like

hedge fund manager big ackman buyiing nike when did he buy? you made the point before the fall or right at the -- >> end of second quarter. >> as the nike was funded? we don't know. and dan lowe building a stake in apple. taking the opposite tact that warren buffett was taking. >> true. indeed. coming up, the white house out this morning with the first results of medicare's negotiation on the price of key medications. we'll ask those details after the break and speak with the administrator of medicare and medicaid services. stay tuned "squawk box" will be right back.

we have news out from the white house. result of the first medicare drug price negotiation bertha coombs is here with a look how drug price plans will change next year for

beneficiaries and insurance companies. >> that's right. big changes coming administration touting $6 billion in savings when those new negotiated prices go into effect, but that's not until 2026 there william some fundamental changes to medicare part d under the i.r.a. that could raise costs in the near term next year out of pocket costs for part d beneficiaries capped at $2,000, which hss estimates will save patients $7.4 billion next year. under a new program also be able to smooth out their drug costs over time. kind of like buy now, pay later. that extra coverage will mean high other part d premiums, but those premium increases will be cammed at 6%, which means that insurers will face higher costs after patients reach that $2,000 cap, because the government is also scaling back its scale of payments or reinus insurance

with brand names from 80% to 20% of the cost. from generics 80% down to 4% cnbc says bids from insurer more than doubled as a result, but they are offering insurers the option of subsidies for the first three years to help stabilize premiums during this transition, and as a result, cms tells me for patients base premiums for part d will go up about $2 next year nonetheless, it's going to be a big shift for patients in terms of what they're going to be responsible for for these drugs what are you hearing from drugmakers >> the drugmakers have said, as reported their earnings, that these prices, if you take a look at some of the prices, a huge one, a big cancer drug, the price just over $9,300 drugmakers complaining some of these you know, discounts will be huge, but that's about a 38%

discount according to cms. we don't know what the apples to apples are in terms of what the pbms that negotiate for each of these plans have actually been getting as a discount, but if you look at the out of pocket for patients, according to drug channels the average out of pocket for patients on imbrovica, $6,800 a year next year, $2,000. >> curious what they think about -- we'll get into that. >> get into all of it. bertha, don't go anywhere. chiquita brooks-lasure, administrator for medicare and medicaid services. you just heard the report from bertha context or things to add but i think there's a question really underlying what you were just suggesting, which is the incentives here and what do you think ultimately happens a lot of good comes out of it in the short term what are the impacts in the long term. i did hear the report.

let me start by saying, thank you for having me. this is a historic day that we are so excited about, that thanks to the president, president biden, vice president harris, that for the first time medicare is able to negotiate the price of drugs, and i just want to say how important this is how life-changing this has been to the millions of seniors that i have been talking to over the last two years how much relief there is in this country that the president and the vice president have taken on drug pricing there are people across this country who are choosing between living and dieing. whether or not to put food on the table. whether or not to see their grandkids, and i think it's really important as we talk about all of these issues about what pricing are going to be like what innovation is going to happen, that we really keep at the korb of that, that this

country is full of drug companies that are making the most innovative drugs, but if people don't have access to them, it doesn't matter, and what we did in negotiation, what we did in the overall law, is make it more possible for people to be able to get access to, we started with these ten drugs, but even more than that, this out of pocket cap, it is a game-changer. for our economy. for not just the seniors and the people who depend on this program, but for their children. for my children, and our future children. so i just want to make sure we don't lose track of that. >> as you say, it's a life or death issue if you can afford the medicine or if they exist in the future. bristol-myers and others saying disincentivize. high-stakes development especially rare diseases and cancer and yes rare diseases are exempted but might not be for

different uses and disi disincentivizes their development. are you share, drugs like cancer, the most important objective for the president, this incentivizes for those drugs could be continued to be developed in the marketplace? >> so many factors go into a drug company the decision, and i have worked in the industry. i understand, and we have thought about that when we talked with the companies and worked on negotiation. we all are committed to making sure that drug companies will continue to want to innovate. it is crucial that we have a strong market, and we included that in our process. that was in, baked in the law, to include things like research and development costs. to include things like how much does it cost? we thought about things like, are you saving money to the medicare program kboverall. would want to leave the impress by allowing medicare to

negotiate, just like everybody else does. just like your employer insurance does and the v.a. does, that we are not going to allow innovation to not continue. it absolutely will continue. >> pick up on that point in terms of others negotiating. there were concerns from people that the law doesn't really address what the pharmacy benefit managers, what the plans do in terms of their negotiations, and even if you have these prices, that might not necessarily be the preferred drug. there are some people who were concerned that you still might have these drugs on a different tier. what sort of moves are you going to make, to make sure that patients get this price and that they are actually paying their co-pays based on this price in the plans? >> certainly. this is an issue we are thinking very, we are monitoring very closely and i would say a couple of things. the law clearly outlines that

pbms and hil plans that cover, that provide coverage for these drugs need to put them on a formulary. we will be monitoring and making sure that plans are not playing games with the company -- with the drugs that we have negotiated prices for. we take very seriously, both parts of it. getting a deal from medicare. getting a good deal for the medicare beneficiaries, but also making sure they get access, because as we are talking about making sure that there is access, it's important. it's important to the people. it's also important to the drug companies. >> administrator, thank you for joining us on this important day. appreciate it very, very much. thank you. >> thank you. >> thank you for bringing the news. coming up, breaking jobless claims and retail sales data, but before that, a take on the state of the american consumer with manny chirico former ceo of

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welcome back. walmart results have the consumer back in focus. we learn more from monthly retail sales out in a couple minutes' time. joining us to talk about this, manny chirico. it's great to have you here and a little sigh of relief with walmart. maybe retail sales won'ts about bull yant. what do you think? >> under pressure as much as we're seeing a bit of easesing on inflation. i think that's going to take a little bit of a while to work through the system. i think, you know, consumers are still looking at higher prices than what we looking at a year or two ago. and that's just putting pressure on top of the, an election. so i think the consumer's under

stress but continuing to selectively spend. you can see that with walmart. value is really winning the day. they are really delivering on the grocery side of the business in a big way and i think you'll probably see really strong results coming out of costco and particularly target as they start the anniversary of comps. >> target is higher, a little bit of halo effect what walmart reported this morning. you mentioned the election starting with amazon. other retailers and analysts said it's a real thing during election years consumers get more cautious and pull back. did you experience that yourself? >> yes. just about all the time. this is also, i don't want to play political scientist, but this is also an election that's pretty negative. you know? we have had some elections that have been more about hope and the future, and i think right now it's really, puts a pale on the consumer, particularly going

back to school and start to lean in that direction. >> gary vaynerchuk just was saying that, too. they have to order early? july shipments way up still because of that. don't want to be stuck with a lot of product to discount. what would you do? >> i think the best thing that most retailers are doing is they're really managing. and i think second half, i think, if you listen to what the retailers and some of the big brands are talking about, they're really talking about margin recovery. and i think if you, if you remember, this time last year as we went into back-to-school, business was pretty good, but as we got into the holiday season sales really did slump, and a lot had to do with weather. a very mild winter. so -- and it required significant promotional activity last year. i think we're still very

promotional today, but just inventories are just so much cleaner, and i think that should position a number of the retailers, and brands, to really deliver better profitability as we go into the second half of the year. >> yeah. certainly maybe seeing something of a sigh of relief after walmart's results this morning that maybe it won't be worse in the back half than that earlier trajectory might have suggested. time will tell. manny, thanks. appreciate your time today. >> all right. great talking to you. take care. >> you, too. coming up next, breaking econicom data, jobless claims retail sales and more. "squawk box" returning after this. to remove boundaries... ( ♪♪ ) because this game is for everyone.

we are under two minutes away from new economic data, and important initial jobless claims report, july retail sales, import prices and more. jobless claims especially in focus fon investors trying to define what the fed will do next what the underlying strength of the labor market might be after that soft june, or july jobs report. take a look at futures setup right here. s&p 500 up only about 10 points. 1/5 of 1% leading to the dow 135

trying to follow through on the recent several days worth of garins. nasdaq up 44 points as well. treasury market, you know, these yields are firm, but at relatively low levels after the big declines. big rally in treasuries as we know over the last few weeks. you see the ten year at 385 at this point. the low around 3.80? >> go back to, two weeks or so when we got the big spike in jobless claims to 250. i believe come right before the bad jobs report. >> right. >> had people until a big panic mode. the fact it's come in a little last week a nice development. want to see it keep dropping. same pattern happened last summer. went way up and then came down. let's see what rick santelli thinks about all of this. rick, number's not out. give us staging, please. >> of course, we know that it's now a handoff from inflation concerns to slowing labor market, but with the inflation numbers yesterday perceived to be continuing cooling, although

you had to squint to really see it, retail sales almost takes on added significance to see if the consumer, like the labor market, is another valuation in a the economy is holding up or not, and, of course, claims. well, the big move last week was because initial claims moved from 250 to 232,000. huge and had an impact on the market like i hadn't seen in years and everything is hitting the wires! manufacturing for month of august down 4.7%. that follows down 6.6%. we have had a lot of negative numbers. as a matter of fact, every number this year has been negative. now, look at retail sales. headline number. 1%. double, plus expectations. 1% on a headline number. that's the best going back to -- april of '22. april of '22. let's strip out autos. shall we? diminishes, still much better than up 0.1%.

up 0.4%. strip out autos and gas, still up 0.4, supporting core retail sales up 0.3. a pretty good number. 0.3 and follows up 0.9. i don't see revisions yet on the retail sales but it may be forthcoming. look at philly fed. this is an august number. like empire. philly fed comes in at minus 7. expecting a positive number. minus 7, well, we were at minus 10.6 beginning of the year. that is your comp. now, let's look at initial claims. initial claims. 227,000. that's definitely below the 235 we were looking for. a slight revision to 234,000 for last month. that means down 7,000. that is something to watch. it's probably why yields are moving up a bit, because, of course, this demonstrates the economy might not be slowing as much, and the labor market

actually might not be diminishing as much as the jobs report demonstrated. now, let's look at continuing claims. are we going to have the tenth consecutive month over 1.8 million? indeed we are. 1 million 864,000. and finally, a lot of prices coming in. these are july import prices. month over month. up 0.1. expecting a down number. up 0.1. that's the biggest positive month over month since april of last year. strip out petroleum and it is now up 0.2. up 0.2, follows up 0.2. and if we look at year over year. those are month over month. now let's go year over year to import prices. expecting up 1.5%. up a bit higher. 1.6. that equals right now a revision. last month's 1.6 now becomes up 1.5. but these are some of the juiciest numbers going back to the end of '22. look at export prices. month over month, expecting a

goose egg comes in higher at .7. equals april of last year. to find higher go back to august. august of '23. finally, export prices year over year expected up 0.1. buckle up. 1.4%. 1.4%'s the hottest since january of last year. now, we see that yields pretty much up, and equities up. good news is good news! some of these, of course, showing the economy is doing better. labor market not deteriorating as much but a split decision. claims initial decision going down. santoli, back to you. >> rick, thank you. continuing claims hanging tough maybe slightly below forecasts. stay with us for more on all the new data. we bring in mike many strain, american enterprises. director of economic studies. and our own steve liesman. steve, what jumps out to be here?

>> you know, mike, i don't often do this but i am going to quote myself from earlier this week saying, rumors of the consumer's demise were premature. we had our cnbc nrf retail monitor showing strength. a lot of things have now pointed to the idea that the -- the july jobs number that spooked everybody about growth was maybe an outlier in terms of how much weakness there was. obviously, we'll see what happens, but this number here. it shows strength. maybe one of the things leading to the strength was catch-up to the auto sales that were down in june, but, you know, came back in july. i don't see a whole lot of weakness here. ship in clothing. some's in sporting goods. that's about it. but, really, this is a story that -- the consumer's relatively strong and we don't have underlying weakness in the jobs market. just because the idea of

shifting that we're focusing less on inflation and more on growth doesn't mean the growth story is all that weak. leave it there, mike. >> no. i guess certainly now we were clenched up for something worse and hearing from companies anecdotally about july being weak. uptick in up employment building to concern here. katie, your response to firmer numbers, because you, i think, were believing that maybe the fed should have cut rates in july? and looks behind the curve. does this make you re-assess at all? >> i'm really glad to see that the american consumer hasn't, hasn't pulled back yet, but i think it's really important to zoom out and see what is the fed trying to do? we were supposed to be getting to a place of normal interest rates for the long run, and battling inflation. it's great news if we have managed to bring down inflation, as supply chains eased over the course of the pandemic, without seeing a bottoming out in the labor market or retail sales.

the fed should not wait for that bottoming out to happen to bring interest rates back to a normal level. the fact is we've seen month after month of falling and stabilizing inflation, and, you know, it's really important to pull back the curtain. we've got cpi data earlier in the week. what we saw was not only continued cooling in inflation, but yet again about 90% of the inflation we did see was in the housing market. and the fed's high interest rates are actually making housing directly more expensive. the stuff that make me re-evaluate what the fed should be doing because they should look at the actual data. comparing it to what they thought was going to happen and assessing whether high interest rates are necessary or even counterproductive at this point. i think it's great to know that they are. we shouldn't take some good news in retail sales and unemployment claims and assume there's no softening in the labor market. there's been a significant uptick in unemployment, and perhaps that does not indicate

that we are about to enter a deeper problem in the labor market? but it's a real risk. at this point, the fed's high interest rates are really doing more harm than good, and this for the last few months. i continue to think the fed should have cut in july. should be cutting aggressively for making up behind the bcurve. two years ago they raised 75 basis points a pop month after month after month. i'd like to see symmetry in here. >> michael, fed officials acknowledged risks now seem pretty balanced between a weakening in growth and a rekindling of inflation. data may be falling in line with that. i guess arguably the data-dependent approach with five weeks to the next fed meeting is not necessarily looking too far off. what's your thought on the growth numbers we got here for july coming after yesterday's

cpi? >> yeah. i agree with that. i think we should wait to see for what the next report tells us before coming to a conclusion about september. i certainly don't think the fed should have cut in july. i'm not convinced the fed should cut in september. if the next jobs report is weak, then that might indicate that a cut is appropriate, but we don't know that's grooing to happen. i'm with steve. i think the death of the american consumer was called a little prematurely. to me consumer spending looks strong. that's not a surprise, because income growth is still strong. that's not a surprise, because if you look at now casts for third quarter overall gdp growth you're talking about forecasts that are above 2.5%, above the economy's underlying potential. you know, that kind of brings us to the labor market. the reason we have this strong income and growth, the reason we

have strong consumer spending is because i just don't -- i don't see the labor market softening that everybody else seems to see. yes, the unemployment raid te w up. 1040,000 workers went up and unemployment by about 350,000. so maybe it will take those workers a little time to find a job. the other rate going up because the labor force participation -- sorry. because of size of the workforce goes ip up is a different problem than a bunch of people laid off. in fact, layoffs are currently below their pre-pandemic average. so businesses are not laying workers off. we're seeing a growing labor force. we're seeing the economy adding 150,000, 200,000 job as month. >> michael -- listen -- >> i think that inflation gets stuck above the target. >> not hiring any of to absorb the labor force. what would incentivize hiring?

probably lower interest rates. >> kelly, we've seen this before. michael is really on to the story, which is one that tells people to chill out a little bit. we've seen this influx into the workforce before. the pop in the unemployment rate, and then a decline as people find jobs. we have to have this influx of immigrants into the workforce, and not everybody finds a job right away. kitty is right. a creep up, but i think that the message is to find space between michael and kitty, don't get freaked out by it. it's something to watch but we've had the pattern before. before crunching -- >> michael's point is he thinks the fed should not be cutting rates. >> i think it'sish -- . >> i think it's premature. i think -- calls for july rate cuts were misplaced. i think it is premature sewto s

whethered fed should cut in july or not. and increase in unemployment rate, if the august jobs report shows a lot more unemployed workers in the month of august, then i think a rate cut could be quite reasonable. i just don't think we know that that's going to happen. i think -- >> i'd like to respond to that. >> a big increase in size of the workforce takes a little while for those workers to finds jobs especially -- >> so what's behind the influx? what's behind the influx? isn't that what we should be asking? if what's behind the influx consumer needs to lock and reload that has consequences. it doesn't mean we're not slowing. it just might mean we have a longer runway to the type of slowing that really would trigger an ease. an ease, right? yeah. the equities markets are suffering. i don't think so and approaching $2 trillion in budget deficits. maybe the only way to stop spending is for the fed to make

extra spending that you borrow really expensive? >> kitty, you wanted to get in here and worth raising, go back a few months the idea behind the fed pivoting towards easing was just that inflation came d appreciably not waiting for the fed to slow? >> exactly. is the job of the fed to soften the labor market and bring on recession? i don't think the fed thinks that's their job. the job of the fed to set interest rate policy to respond to inflation, and inflation is down dramatically opinion it is on a downward course. and i want to reiterate, the inflation that remains is actually being made worse by high interest rates. the data-driven approach is not to wait and see until the labor market crashes. it's to wait and see until you think that interest rate policy is no longer serving the

american people, and then start bringing interest rates back to normal. and i do want to emphasize that -- >> the markets do that. >> projections when they began -- the fed's oh projections when they began their interest rate hiking had inflation higher right now than it is. dramatically higher. and had interest rates lower. their data-driven approach, start cutting interest rates quite some time ago and to be living with slightly higher inflation. i think a data-driven approach is to look back at that and say, we have vanquished inflation. time to bring interest rates back down to normal so people can buy a fed. >> it wasn't to usurp markets and have interest rates be, remain monster of the universe menu, and it wasn't to have a balance sheet that never's going to get under $7 trillion. no. i think if you look at the fed, the fed has made serious

blunders keeping interest rates too low for too long. this is the comeuppance. >> look at the market, rick. rick, look at the market. you said look at the market. the market has taken -- >> let it breathe. >> the market has taken, has takesen 100 basis points of tightening out of the economy. have you not seen what's happened to the two year? have you seen what's happened tos yot look for the futures? the market is easing. the fed would simply be following the market. why wouldn't you be happy about that? >> and closed last year, higher today than they closed last year. >> look i think -- >> pre-'91. >> important to remember, if you think the fed is too interventionist through the interest rate policy then the fed should bring interest rates down top the long-term normal rate. >> for crying out loud -- >> and you should be with me that the fed should be bringing interest rates down quickly to

what they think the long-term normal rate is. >> spending. not lingering supply issues. that's a political statement. >> michael -- quick final word. >> look at the data. >> the point is exactly right. >> please do. look at the data. >> if you think that monetary policy should have, be in an easier position than it was a few months ago. good news. the market is doing the fed's job for it by loosening overall financial conditions. i disagree with kitty. the fed's job was explicitly to soften the labor market. not cause a crash, but soften the labor market. the labor market has been softening, inflation has been softening, risks are starting to become more balanced. i still see a risk inflation gets stuck above 2.5% the rest of the year and today's data making me more worried about that than before. that makes me a little more skeptical whether the fed should

cut rates in september. >> all right. debating it for a few weeks more. thanks, guys, michael, kitty, rick and steve. other side of this, speaking with former federal vice chair roger ferguson on all the new data the fed has as it weighs an interest rate cut now that today's jobless claims just crossed. talk to the one man who's gotten it rhtig thus far. you're watching "squawk box" on cnbc.

welcome back. joining us to talk about what this big week of data to mean for the fed and thinking of central banks is former vice chairman roger ferguson. vice chair now of business counce imand a cnbc contributor. you, sir, welcome. hopefully can help answer this rollicking debate we were just having opinion should they or shouldn't they be cutting right now? welcome. >> thanks. pleasure to be here. let's start with the data. i would describe the data seen

thus far as good in the sense that it validates the thought that inflation is coming down, but it is not concerning. so it doesn't play into the concerns that we had after the labor market report that showed unexpected weakness and got a lot of excitement in the market. you know, i think all of this data thus far data thus far, for a data-dependent fed, is consistent with an expectation that's building in the market of a cut in september, but i would say the cut, which would probably be more 25 basis points as opposed to 50. >> got it. and why do you say that? there are some who would say, you know, 5.5% is just way too high. why not cut more quickly in order to get back to something that could prolong the expansion? curious what you think about that. >> so, look, the argument is certainly that they should be cutting. why do i think 25 versus 50? let's be fair, it's a close call, but let's recognize that what we've seen is some data that shows the economy's holding

up quite well, consistent with a soft landing. there's something called the fed now, the gdp now cast from the atlanta fed that shows, based on all the incoming data, expectations of growth in the third quarter of 2.9%, which is probably somewhat above potential. we just saw the retail sales data, which certainly belies the thought that consumers are collapsing. and so, the fed needs to think about both sides of its mandate, and i think right now, they want to move cautiously to make sure that inflation, indeed, is coming down, and still give them room to move much more quickly if it looks as though they're falling behind the curve, but i think the data right now don't support a rapid move. it supports a more cautious move because inflation, while coming down, is still high, higher than it should be, and they want to make sure it's going to be firmly on that downward trajectory. so, i think a slower, more cautious move right now is what's called for, because i don't think the evidence is that they're far behind the curve just yet. >> roger, you say that the data

are consistent with a soft landing, which certainly seems true but it's also worth reminding folks that on the way to a soft landing, you always have a lot of conflicting mixed messaging, so you're going to have a growth scare, followed by comforting numbers like we just got on retail sales. does the fed, do you think, look at the two-year note yield at 4.09%, up quite a bit this morning, and say, well, that's a big gap between where the fed funds rate is above 5.25% and that. that's a market telling us we have to get moving, or are they just going to strictly look at the data flow? >> look, as you heard chair powell said, they are data dependent but not data point dependent, and certainly they always get a briefing on financial conditions, which will talk about some of the things you've just raised. all of that needs to be taken into consideration. the fed, the market is doing some of the fed's work for it out at the long end of the yield curve, not so much at the shorter end, so i think in order for the two-year to move in a

direction that's consistent with the fed, the fed has got to itself move and validate expectations of a cut without appearing to be panicked, because as you say, there's always conflicting data, particularly on the way to what we hope for and fingers crossed will become a soft landing. >> you don't think the market's doing the work for them, roger? a market by taking rates down? >> no. as i said, they're doing the work for it at the long end, where the rates have certainly come down. i think a two-year at 4% is not consistent with doing the fed's work. so, you know, we see some still a little bit of an inverted yield curve, and i think we need to -- the fed needs to work on messaging clearly what it expects to do in order to validate the rate cut expectations at the long end but also get the short end to cooperate. >> i don't know if we should call you the whisperer, you're sort of, you know, writing the song for them almost. it's been great to have you here, and thanks for your time.

>> i'm speaking up pretty loudly, so thank you. >> there it is. he hears the whispers. brings them to us. up next, a wrap-up of key results th misorning from retail giant walmart. "squawk box" will be right back. at aes, our energy solutions have powered the world forward for more than 40 years.

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welcome back to "squawk box." walmart reporting better than expected results last hour, raising its forecast for the year. joining us right now to go inside the second quarter, forester research retail analyst. stock up, by the way, on the back of this news as really the guidance, i think, up over 8% right now. what do you make of it? is it idiosyncratic? what does it say about the larger economy? >> well, walmart had another great quarter. it's been trending really, really well for the last year, but the question is, is this at the expense of other retailers or in line with other retailers? i really think it's at the expense of other retailers. yes, the retail numbers were strong, but the strength is being driven essentially by two companies, amazon and walmart. when we look at other retailers, they are much, much more challenged. target's numbers are expected to be out next week. it's been a company that's been actually declining in its revenues for several quarters. so, i think that walmart's

numbers are a bit of an anomaly. it suggests that the consumer is really challenged, and the consumer is -- it's a flight to value. it's a flight to inexpensive goods. it's a flight to, you know, kind of wherever they can find private label and great prices. >> so, you're looking at this and saying this is bad news? larger picture? >> well, i think that there are definitely challenges that are being overlooked with the consumer. when we look at the retail numbers, nonstore retailers, which are essentially the e-commerce numbers, are the lowest that we've seen them in years, perhaps in decades, so i think that that suggests that the consumer is definitely pulling back. you look at the restaurant sector, which has been doing very, very well for the last several years. it, too, has experienced the softest numbers that i have seen in a long time. so, i think that definitely, there are suggestions that the consumer is finally not spending

anymore. they've spent through all of the excess savings from the pandemic, and really, they're just more financially challenged now, and you're seeing the results of the fact that prices now are more than 20% than they were prior to the pandemic. >> okay, real quick, because we're going to have to go, is there any company right now besides amazon and walmart that you like? >> there are, you know, kind of the typical retailers that have been trending pretty well like lululemon, but for the most part, i think that retail in q4 is going to be pretty challenged. there is going to be heavy promotional activity and i think that retailers are definitely going to be challenged to comp their numbers from 2023. >> sucharita, i want to thank you for joining us. good news for walmart, maybe bad news for the rest of the economy. that seems to be the message of the morning. i don't know if you think that's right or wrong, guys. >> i think the data proved that that's wrong. even though walmart's doing well, it can be the good kind of doing well and not the bad kind.

>> we can hope. >> the market is -- i thought it was going to be hard for the retail sales number to surprise to the downside because we were clinched up for something pretty rough but it's pleasantly surprised. >> it was a strong number. core is strong too, and dow is up 388 points now. >> kelly evans, mike santoli, thanks for hanging out this morning. "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. futu futures firming up here as last week's growth scare fades further into view with walmart raising guidance, best headline print in more than two years, ten-year is above 3.9%. our road map begins with that consumer strength and walmart's big beat. stock is surging premarket, all-time highs. says they see a stage consumer health. another big earnings name to watch, cisco. those shares are u