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 up after the

company did top earnings and revenue estimates, even though they were both down. we're going to discuss the quarter with ceo chuck robbins. and warren buffett's berkshire hathaway builds a new stake in ulta beauty. july retail sales blows out expectations. walmart jumps on this quarterly beat. comps 4.2%. sam's club, 5.2. >> the electronics on this number, up 1.6, building materials up, you wouldn't have gotten that from home depot yesterday. the assembly -- the mosaic of what's going on at walmart is extraordinary. we've got overall boxes now deflated, food's been rolled back so i know there's a big move in washington. let's go after price gougers. well, certainly isn't walmart. frozen veggies for a dollar sell really well. rebok, free assembly, chaps, polo usa all showing strength.

it's not just about the basics anymore. if you didn't know anything, david, we were coming out of a recession. coming out of one. >> i know. the way that reads. and yet, i think the question was asked and answered by the analyst just on the end of "squawk" there which is, is it a sign of broad strength or is it coming at the expense of other retailers? she seemed to believe that it was coming at the expense of other retailers. >> target's up huge. it's not coming at the expense of costco. i checked there. you're getting the same kind of thing in costco as walmart. i will say this. if anyone's been to walmart lately, it's not the old walmart. the -- like the fashion side is designed by people from fashion avenue here. >> you've been saying this for more than a year. >> my daughter and i go there, and it's the most fun place, because the basket of what you buy, i mean -- and she's a vegan. i know this sounds strange, but they're like -- they cater to vegans. they cater to anybody, frankly, but their stores are so attractive that they are taking people from dollar, taking

people from literally any mom and pop, and this is a very strong showing. their e-commerce is really strong. >> digital up 22. general merchandise positive after 11 quarters. >> that's significant. >> and the other side is that we now have ulta, berkshire, pershing, nike. >> ulta, the numbers are too high, and it's been a terrible moment for dave kimble. doesn't matter if it's ulta or e.l.f. or estee lauder. their all bad. that category is bad. it's got a lot of china exposure. this is one. you're buying ulta because of buffett here. what happens on monday? you buy it again? think about it. people are buying this up, and there's nothing to sustain it. >> no. >> i mean, nike, i don't know whether he's in or out. >> we can talk about nike later. i want to come back to the consumer, because you know, when walmart says, we're not seeing any sign of a weaker consumer, none, i mean, they make it very clear. "we aren't experiencing a weaker consumer overall."

then they go on to talk about the four things that their customer wants, which is value, broad assortment, convenience -- they want enjoyment buying them. >> i told you. >> i know you did. you told me, me, and they said that's a constant. but it is interesting. and -- >> zin the past it was about socks. >> these are the broader takeaways for what is still, i mean, with amazon, the most important retailer in the country. >> well, don't forget costco, because they all rolled back prices. >> i won't forget costco, very important, but i mean, walmart sells a lot more than costco, no offense to costco. sales-wise. >> well, walmart does more than anybody. i'm just saying that walmart, costco, and amazon, that's the country. >> i'm talking about $170 billion in a quarter. >> that's the country. i'm just saying that, you know, carl, i think you're having some growth with lessening inflation, and that's good. we don't want no growth, okay?

then we already know that the fed's behind. but some growth with declining inflation is nirvana. that's as good as it gets. i spoke to a couple large investors today who were miserable. and one of them, i said, this is your own fault. you're miserable, you're rich. stop it. there's lots to buy. it was a dispiriting conversation. >> what are they miserable about? >> market's already too expensive, given the strategy i just laid out, which is that fed's going to cut, whatever. no, the market's already moved. in other words, like, oh, walmart, thanks for nothing. and that kind of thing. and i come back and i say, you could have bought walmart yesterday. you could have bought starbucks on monday. you could have bought best buy. don't give me, it's expensive. what's happened is since the yen carry trade that david's just nonstop talking about, what's happened is there were great buys and jeremy siegel came on and did the five-alarm fire, ten-alarm, i don't know how many alarms it takes to get a lot of people over, but we had an

opportunity, okay? there was a window. and it was created by people who didn't have enough money who were very complacent, and look what you got. >> by the way, odds of a 50 in september, i think around 20%, although jpmorgan is still calling for 50 in september. >> why? >> as to david's point about walmart's commentary about whether there's further degradation in the consumer, take a listen to the call. >> in the u.s., for both walmart and sam's club, comp sales were fairly consistent throughout the quarter. food continues to be strong, and it's encouraging to see improvements in general merchandise. our u.s. health and wellness business in walmart and sam's club, primarily due to sales of glp-1 drugs is contributing to our strong comp sales. so far, we aren't experiencing a weaker consumer overall. >> and by the way, jim, some of their inventory levels seem quite manageable going into the rest of the year. >> down 2%. >> yeah. >> if you're in retail and you're doing this, this is about as good as you can get.

mcmillon, this is just what a retailer has to do. it's extraordinary. david, this is extraordinary >> and they have built e-commerce as we know. we've talked about that. that was up 21%. >> very well done. >> obviously, you can fulfill by picking up at the store as well. and it is worth going back and taking a look at the performance of the stock over time here. i've made this point any number of times through the years. mcmillon inherited a company that was in need of new direction, of tough decision making and it's very helpful when you have a shareholder, so to speak -- it's really walt enterprises, llc, and the walton trust or walton foundation. i don't know if our viewers are aware of what their percentage ownership is of this company right. do you know? >> 10%? >> 46% of this company is controlled by the waltons. so, that helps when you're doug mcmillon, taking this years ago. >> what was the buy? do you remember? >> it was when they had the

blowout -- >> we were right upstairs, down here, going, what's going on? >> they raised wages, made everybody pretty happy, then started broadening the food, then they took the price of food down. see, one of the things that bothers me about washington, i'm not going to say which party, is they say, food prices are inflated. if you go to walmart or you go to costco, they're not inflated. they have been rolled back. have they gotten the 2019 prices? that's very hard to do. but they've rolled back prices. you just have go to them. now, you -- dollar tree, not really. dollar general, i don't see a big rollback. some of these supermarkets that, you know, that are just, like, i think kroger's trying. but they don't have the scale. >> but you would agree that some retailers used the last few years to build margin. >> and i hate that. >> that's what this is all about. >> and i hate that. and these guys are rolling back margins. david, i know you drink camus.

>> especially at parties that you throw when i can drink it for free. >> i had to buy everything from boston to baltimore to get that. they've got a bottle now, cab, 69 bucks. >> is that a good price, jim? >> what am i going to do with him? >> just asking. is that a good price? i don't know. >> educate him. i don't know. >> probably $120. >> so, it's a good price. >> yeah. >> okay, great. should we buy it there and resell it somewhere else? >> i'm not going to tell you -- i'm going to buy every single bottle. i don't need you. i got rich people talking about buying every single nfl team. can't i go buy this? >> that's probably why transactions were up, what, 3.6%? transactions up with the average ticket. >> this is incredible. i don't want to just sit here and say this is the most amazing number. i am saying that we have this confluence, inflation coming down, and store sales like walmart being so perfect that it might not stop up this much. it might not. it's kind of exactly what you want. and i think a lot of it is, they

want you to go to the stores. they want people from -- who do what we do to go to the stores because the stores are not what you think. they're not. i mean, they're -- they have things that they once again, like the old days when sam walton -- still own 46%, but when sam walton was there, i remember going once and they had rubbermaid coolers that you have when you were coaching soccer, and winning -- >> yeah. >> winning every game because it was necessary. >> yeah. >> and i had it. it was like, 28 bucks. and i went and said, how do you make money on that? they said, we don't make nmoney on it at all. it costs us $30. >> loss leader. >> yeah. but i didn't -- win leader when it came to soccer. >> merchandising, important. you want the milk to be at the back. these are simple lessons of retail. you'd know that if you -- >> super funny. laughing on the inside. >>l let's get to cisco, the networking giant announces another round of layoffs as it looks to cut costs and focus on some growth areas, including

a.i. the restructuring is expected to impact thousands of employees, about 7% of the company's workforce. ally also a quarterly beat, and we are going to check in with chuck robbins in about 20 minutes. >> i think he's going to tell us a story of great strength. i think there were people on the call saying, listen, if it's so strong, why are you laying people off? the answer to that, we have to ask again, because i did not get a satisfactory answer, not because chuck dodged. it just was not done right on the conference call. i will say this, carl. business is surprisingly strong again for -- if things -- it's another one where if things are so weak, why is business so strong? it's across the board. the splunk acquisition's looking really fabulous now. fabulous. and gross margins, better. he has a lot of exciting things to say. it was a very, very good -- orders moving in the right

direction. >> you mentioned how it came up on the call. he did sort of address what's happening here. you want to take a quick listen? here's chuck robbins. >> we actually are shifts hundreds of millions of dollars into a.i., into a.i. networking for cloud and a.i. infrastructure, silicon, and cyber, so it's a meaningful shift, but we feel like the market's moving so quickly, we have to do that. on the restructuring, the answer to that is, no, there's nothing else out there. we had tremendous demand across the portfolio. it was very broad-based, and it was very consistent. it really is about ensuring in a rapidly moving market that we serve that we're able to shift resources into the most important areas. >> and what he's saying is, look, we can be leaner. we don't need as many people. obviously, when you merge with splunk, there's -- you can take the best sales person that you want on different things. turned out to be much better. i like gary steele. i think it was a really good

acquisition. i will say that i never heard chuck -- you know, it's been years since i've heard chuck this excited about where he is, and by the way, he's talking about a.i. we like to talk about a.i., billion dollars in a.i., and yet he said to ben righteous, listen, it's not our partnership with nvidia yet, but nvidia's movi moving up, but david, everything's moving up. >> to be fair, you still have a 12% down topline quarter. that was better than anticipated. >> better than feared. >> order numbers that are playing positive here, up 14%, which did exceed many of the analysts who follow the company's estimates. you can go back five years. it's not been a great run. you haven't wanted to own the stock, jim. >> no. no. and look, what have i been saying chuck -- i like chuck very much. >> you've got a 5.7% return. >> look, the one to own has been ari arista, the competitor. jay is an amazing ceo. >> there's the ten-year.

>> but what am i going to say? i'm not -- i don't want that history to cloud what i think might be the beginning of a big move. >> of a big move, potentially. >> yeah, i think so. if the stuff with chuck and jensen, nvidia, hasn't hit yet, well, it could be really exciting. what he says is -- this is what he says in answer to ben righteous' question. "i would say the nvidia partnership, it's too early. we're not even in early field trials yet for that solution, so i don't think there's a lot to share." of course, we have to ask him to share more than he shared an this call, because this is a private conversation among us. but i do think that if you're just now having a billion dollars in a.i., we have to -- david, that means that there's a future for a.i. away from just jensen. >> yep. >> and servicenow. i want to say servicenow, because bill watches. z servicenow. there you g. i did it. >> the squeeze makes sense.

>> what were they shorting, down 45? what a bunch of idiots. >> might have been a fear that the even higher layoff number would have sent a bad signal rather than a good one. >> one of the things that chuck has been trying to do is get leverage. if they get a series of orders, like they should, this thing's going to have much bigger gross margins and people are going to say, why didn't i buy it at $48? it's been two steps forward and two and a half back, and that's how you get the stock where it is. but i like -- look, short-term, you have to like it. what can i say? >> big morning for macro prints, philly, empire, retail sales, and now ip and nahb. let's get to rick santelli. >> yes, industrial production, expected to be down for the month of july in the vicinity of down 0.3%, doubles that, down 0.6%. down 0.67%. that's the weakest level in industrial production since january. second weakest of the year, and if we look at utilization rates,

big miss here. 77.8, and 77.8 is the lightest going back to april. and there are some revisions. last month's industrial production gets shaved from 0.6 to 0.3, so not good news here on the manufacturing front by any means, and past utilization also diminished from 78.8 to 78.4 last month, so weak numbers this month, bigger negative revisions, and get this. a two-year note yield is up 14 basis points higher than before the 8:30 eastern data. the 10s are up ten basis points, basically, since they were, both hovering around unchanged at 8:30 eastern, dropping claims, strong retail sales, and "squawk on the street" will return after a sht ea orbrk.

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all right. let's get to a "mad dash." we've got an opening bell, about seven minutes from now. got a little bit of time now. let's talk brinker. we talked about the decline in the stock yesterday after earnings. the ceo joined you on "mad money" last evening. what do we make of this? >> he had the best comp store sales number of anyone. and one of the things that kevin hochman is trying to do is get away from the episodic nature of good times for chili's. what he's saying is, i'm going to spend a lot more than people think in order to create -- and he used this word -- a dynasty, and in order to get a dynasty, you got to hire more people. you got to refurbish. i want him to put up many more stores. he won't do that yet. he said if he just kept things the same, he would not be able to handle all the people who come in, and it would start being one of those problems where -- not a yogi berra problem where it's so crowded

that nobody goes, but he said he didn't care that wall street didn't care for the fact that he's spending. that's what you do in order to become a great company. he put me through a clinic of what to do when you have a successful restaurant chain, which is, you've got to take a hit and make it bigger and better, because you've got so many people coming, you don't want to screw it up, and he has that $10.99 meal, the smash burger. i say, listen to this soft spoken gentleman who knows how to run a company. he's not -- brian niccol is not the only one, although i think brian is great. >> yes. you're a believer in the strategy, not a concern about the move down yesterday. >> not one bit. >> that increased investment. >> not one bit. >> you think it's going to pay for itself. >> absolutely. has to do that in order to create a dynasty. >> and obviously, the stock has had a very good move. >> it offers real value. what really matters is he doesn't want the customer to start having a big line and therefore being unhappy. you got to redesign. you got to make things bigger,

hire more people, and everybody treated him like, are you kidding me? he doesn't want to become one of these restaurants where the service is bad and people don't care to go. he has to build something bigger and better, and he's doing it. he's a great ceo. >> all right. keep an eye on shares of brinker. we're also going to keep an eye on shares of cisco, why? well, chuck robbins is going to join us at post nine. ithcoans o. n't go anywhere.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. china's economy is in focus today, july retail sales up, slightly above forecast, but industrial production did come in shy, up 5.1%. meantime, shares of e-commerce giant alibaba moving lower on a quarterly miss as sales were impacted by chinese consumers tightening their belts. jim, home prices there in july, a nine-year low. >> yeah. it's so far any stimulus they do is not working. i noticed alibaba was down 3% at one point. i st it started to come back. every company i deal with has

china issues. >> the chinese are not willing to do the major stimulus that many would want them to, and you've got a lot of municipalities and the local governments that have taken on significant indebtedness and they've done that in part because they thought they'd be able to pay that back by property sales. >> right. >> those sales are not happening as a result of, really, the collapse of the property sector in the country. got a lot of people who were never able to get into apartments that they had already paid for because they were never delivered. that does a lot to influence confidence as well in the country. that said, consumer was actually a bright spot, a bright spot, not for alibaba perhaps as much, but for the economy. >> for the economy. david, i think you lay out a story, and people at home might say, why don't they do it? one theory is that it's such a big problem, they don't have the money to do it. >> yeah. they refuse to do it. >> $8 trillion. >> it could be a big number. a lot of that, it's harder. the transparency is not as strong as you'd like in terms of understanding at the local

level, the amount of indebtedness. >> and there's two banking systems. there's a lot of problems. now, carl, we do, in our own inferiority complex, we do tend to think that the chinese have everything together, but the numbers say different. >> let's get the opening bell. check out breadth here at the open as we get at the big board, united community banks, celebrating its transfer to the nyse from the nasdaq. and at the nasdaq, nyc second chance rescue, rescuing critically injured dogs and cats. jim, we're in the midst of the best seven-day run for the s&p since november. >> yeah. i mean, a lot of it still harkens back to what happened with the carry trade and people getting scared and blowing out stocks. and also, shorts coming in. i was thinking about, well, what stock does fit that depiction of short? look at deere. if you did all the work on the grain complex, you would say, wait a second, it must really be hurting, deere is going to implode.

well, no. i mean, deere just kind of was better than feared. and you're up -- you make a quick six. we're one of thoet those moments, carl, that people at home, they want to make some money, this is it right here. amazon went down to 16$162. go parse that quarter. it was not nearly as bad, but people just gave up. and they shouldn't have given up. >> deere with a revenue beat, construction, forestry beats, reiterates the guide, kind of a nice midwestern quarter. >> it's funny because, again, i look at home depot, and they did not say that that particular end was strong. so, you -- another area where the hedge funds are so smart, they were probably shorting deere, because home depot didn't say the area was strong and the grain complex was bad, and david, normally, that would do the job. >> but not in this case. >> no. >> caterpillar had a pretty decent quarter. >> yeah, it did. >> now i'm -- >> look, the industrials -- >> i'm forgetting. >> there is -- a lot of people feel there's an industrial

recession. i would say that it's almost impossible to find an industrial that didn't do really well. >> so, what does that mean? what does that say about the overall sense of the economy at this point? >> a lot of -- i have jacobs on tonight. jacobs engineering. these companies just got huge checks from the government. one of the reasons why the deficit requires the interest in the deficit requires, you know, like the largest part of the deficit, is because the amount of money that came from stimulus is just now getting in the system. >> by the way, that's a good point. my understanding is the allocations from the chips act have yet to be made at all. they have not seen the money. >> a lot of it's getting challenged in court. >> they have not seen any of the money yet. >> well, i had secretary raimondo on. i think that some of them have seen some. >> have they? i'd like to see the actual numbers because my understanding is, for example, in the case of intel, a commitment's there, but the money hasn't yet actually

been disbursed. >> do you think brookfield and apollo will have to learn how to make chips? i don't know if you read the story about hassan abandoning his work with intel because they didn't have the money to do what he wanted. devastating piece in the "ft." >> to your point, brookfield and apollo have partnered with intel in terms of new fabs. 49% partners, where obviously, they also get the actual revenue that comes from it, but intel doesn't have the capacity, dollar-wise, to actually do that on its own. >> no, it doesn't. >> but it's doing it and doing it with partners, and another sense, the u.s. government is going to be its partner. my understanding is they haven't put the money up yet. >> i've questioned whether they were the company to partner with, given the fact that their balance sheet isn't that good, and carl, when i read this morning, the piece in the "ft" about how softbank doesn't want to be with them, it's a reminder that not every -- it's not an even comeback. >> speaking of comebacks, back

above 5,500, s&p almost erasing its losses for the month to date. walmart, the best dow name, and i can i-- and i think it's the best day in about four years. >> that's incredible. i thought it couldn't have a day equal to how much it's already moved up because it's been such a horse, but i think the big thing is the merchandise. the merchandise is so superior, including the new food line that's very inexpensive. the apparel being amazing. the fact that they gave the managers much more say over their area. so, if you go to a neighborhood, they actually -- it reflects the neighborhood. these are things that mcmillon has done. they keep refining the model, and the e-com is really terrific and the deal -- the deal with e-com, it's just great. the advertising. they have the flywheel. we didn't think they could do the flywheel, but that was

because people misjudged them. they're much better than people think. >> stock up 40% year to date. the company's market value now approaching $600 billion. and as i mentioned earlier, just because i do think it's interesting, 46% of the shares, at least by the latest calculations i have from our data providers, controlled by entities associated with the walton family. which would, if it were its own entity, they would be richer than musk, for example. you know what the dividend payments are each month to the grandkids? hello. wow. >> i just find -- look, i can't sing the -- carl, i can't sing the praises enough, because when i go there with my fashion-oriented daughter, and we get the combat boots for 12 bucks and she's doing some influencer thing and people want to know, did you pay $500 for the boots? no, they're from walmart. it is every bit of the treasure hunt that costco is. it's so electric to go. it's incredible. >> meantime, pharma is a big

story. we're going to hear from the president today, talk about these negotiated prices of ten very common drugs. they include, i think, eloquis, embrel. this is part of the inflation reduction act. >> right, it is, and if you take a look at merck, which is such a great company, i mean, merck has just really got that and got whipsawed by the chinese too, and merck is a very inexpensive stock now. it's 2.7% yield. it's come down. you know that rob davis is doing a fabulous job, but it doesn't remember. >> keytruda is such an important component of their sales. it does come off patent a number of years from now. that stock got crushed after earnings, as you know >> i know, and it did surprise us, the chinese story. j&j still stuck with talc and they have a lot of drugs that are -- they have drugs that are part of this. j&j is the cheapest i've seen it, but it doesn't matter because it's got talc and the

government. let's not forget that this is -- this industry, in an election year, has historically been very tough. >> there is a halo from walmart that extends to target, which is up almost 5%. >> even though i know it's zero sum. >> it may very well be zero sum, and amazon is up another 2.6%. i assume that's just on the idea of the strength of the consumer that was expressed during their conference call. >> absolutely. and i've got to tell you, go back on the conference call. people don't understand. the conference call was very good. they made a comment, how the olympics hurt sales. >> you're talking about amazon now, their conference call. >> yes, because we were mesmerized by the olympics. in the middle of the women's volleyball, i said, it's time for me to buy a fan. are you kidding me? that stuff was so great. i know ceos, prominent ceos, who stopped and looked at the olympics and took them seriously and enjoyed them. hey, chuck.

>> are we going to bring him in now? >> you bet we're going to bring him in now. he's a real person, because we have a real ceo, who had a really good story to tell, and i am so thrilled about that. i don't know. i shouldn't be rooting. i know that that's bush league, but chuck robbins reported a good quarter and is optimistic for cisco. we have to touch on the layoffs, obviously, because a lot of people you laid off, but chuck, i have to tell you, it's been a while since you just told me, you know what, thecustomers are buying. they need our stuff, and we're ready. this was you at your most upbeat, chuck. >> yeah, jim, first of all, thanks for having me. good to see you guys. you know, if you really step back and think about what's happened over the last four years, it's really hard to believe. but this past quarter is when we just exited the overall impact from the pandemic, the supply chain shock. we went through this phase where our customers were absorbing all this equipment we shipped them and we finally got through it. we were talking about it

yesterday, and it's hard to believe this thing has been going on for four years. we thought that would end at the end of q4, which it did, and the order growth was great. we saw the demand return, we saw it across the board. and if you look at the last two years, the last go years from a revenue perspective have been the two highest years of revenue we have had in the history of the company. we had our best gross margins ever during the quarter. we had the highest sequential order growth from q3 to q4. we've seen it over 20 years. it was pretty solid. >> there were people who told me, chuck made a mistake buying splunk. i happen to have love the ceo of splunk, i happen tlo wt he's doing, and i said, i think this is one of the greatest acquisitions because security is really important, but more importantly, they were not able to get enough. they needed more scale, and you gave them scale. this splunk acquisition, well ahead of where you thought at this point. >> it is ahead, and you're right. a lot of the things that we bring to them, number one, is scale of customer reach. they were very concentrated in a certain set of customers.

geographically, providing international reach. the partnered community that we have that they really hadn't established, so we have all of those opportunities, and we saw during the quarter, we saw roughly ten deals that we have now closed with the teams working together, and it's only four months in. you got to remember, we didn't even expect to close this deal until september, and we closed it in march, efarly, so it's running ahead of where we thought. >> one last question before we give it up to everybody. i was not shocked that you had to lay off people. you made a giant acquisition. you don't need three people covering one account. this was not a sign of weakness. i thought it was done out of -- no one wants to lose their job, and you don't like to lay off people but it was done out of strength, not weakness. >> this is about investments in efficiency. as i said on the call, we shifted hundreds of millions of dollars into these fast-moving markets. if you look at what's happening in the web scale space with their demands, every customer

has a different set of features they want. every customer wants a different silicon to be designed, so we had to invest more in silicon to run parallel path development. we've had to invest more in software development for the different features that each one might want. we're working on the nvidia solution that you talked about earlier that's not in market yet. cybersecurity stuff that i said three quarters ago was going to ramp in the second half. we saw high single-digit growth in q3, double-digit order growth in q4. that's without splunk. and in '25, it's going to kick in, and i think it's happening the way we expected, and security was strong. right now, we feel like we're past the pain points that we've experienced, and demand should be normalizing. >> you don't think there thereby fu -- will be future layoffs? >> it's hard to say that would happen in the future but that would be our intent and our desire. >> you talked about it as a reallocation as opposed to really being driven by cost savings. that's what you said on the

call. i'm curious, if you can sort of give us more sense there. conceivably, you could reallocate manpower without laying them off, couldn't you? >> we will do that. we have a whole process that we'll go through where we'll do skills matching. some of these people that are in that 7% won't leave the company. they'll be -- they will move into some of these roles if the skills match. we've built this process over the last seven, eight years to try to make sure we're doing that, so that is the intent. >> you're chair of the business round table, yes? >> yes. >> you talk to everybody with pretty high frequency. do you think we're on the cusp of some broader layoff trend, our cycle? >> i don't think so. i don't think so. i think that, you know, the big question that we talk about going into this is, is everybody going to think this is a.i.-driven? i do think the g&a functions can become more efficient. you can use that using automation systems. there is an aspect of a.i. that will go into that, but i don't think this is a sign of a bigger trend. >> you talk about customers upgrading for a.i., and you

becoming a beneficiary. i'm wondering if you can explain, when you say they're setting aside money for a.i. to modernize infrastructure, what does that translate to when you modernize your infrastructure for cisco? >> we heard this for the first time this quarter. we had customers telling us they were actually upgrading their -- they're switching infrastructure, their enterprise routing infrastructure, the data points we gave on the call, high single-digit growth on enterprise switching, sbrenterpe routing, million dollar orders in wireless, up 20% year over year, so they're just basically -- they know that when they build these applications, they're unclear about what the traffic flows will be or what the traffic demands will be, but they're pretty convinced that whatever happens, i need to have the latest and greatest equipment in my infrastructure. >> i've been asking all ceos this question. what -- which one do you use? are you on meta? are you on claude? do you use gemini? chatgpt? how often do you use them?

>> oh, well, we -- if you look at what we've done, we actually are using a lot of different ones. we have -- we created this billion dollar a.i. investment fund, and one of the things that we did differently is in addition to investing in some of these players, we also wanted to build strategic partnerships with them, so we looked at them and said, what is your unique differentiation that we can actually go? some of them might be better at helping us run language models that apply really deeply into customer service. so, we have investments and partnerships with mistral, with cohere, with openai, with scale a.i., so it's a -- we're using all of them, depending on what area of expertise they really have. >> and you're -- you mentioned that you're still not there yet with jensen, and nvidia. now, is that because they're using more of their own and they're not using you yet? >> no, i think we're on the same timeline, we always have been. we were supposed to go into

early field trials in the fall, which we're on schedule to do. >> is it blackwell delays? one of those things? >> no, nothing -- that's not really impacting us. this is our normal cycle of development, and enterprises are still very early. super early in what they're going to do, and this is -- we had lots of enterprises say, i'm not even sure what those a.i. applications are going to look like, but i know when they get here, i need to be ready. >> i'm curious as to how you characterize it. early. i don't do the baseball thing, but it just -- are we just at the beginning here? >> do the football thing. >> you don't like baseball? >> i love baseball. unlike most of the country. >> it does matter, right? you could be in the fourth quarter. >> watch it, watch it. >> oh, that was a -- that was uncalled for. >> not unprecedented. >> tom brady did remind me of that recently. >> yeah, you have a tight end i'm going the pick up. >> any sports analogy you want. where do you think we are? >> it's the very beginning. it is the very beginning of the enterprise a.i. movement.

i mean, they're -- and as i said on the call, i think over time, it's going to become increasingly difficult, more difficult, to measure what is attributed to a.i. from a sales perspective, because i mean, if i have to upgrade my network to accommodate an a.i. app, is that a.i.-driven investments? we'll have to see how it goes. right now, we're sticking with the pure definition that we have had, as we've been reporting this. >> cisco is the biggest beneficiary of the internet. i don't know if that would be the case this time. >> are you doing the 1999 thing? >> we just want to be a beneficiary, david. >> jim mentioned splunk, and i know you're still absorbing that, but do you think the ground for m&a gets more fertile from here, and does that fget yu more interested, net-net. >> i don't think it changes how we think about m&a. we're really pleased. it's interesting, when you do a really big deal like this, you're probably more focused n the successful integration, so gary steele as done an amazing job. he's leading the integration for

us and taking on the president of go to market for the whole organization. we've done a bunch of technology integrations already, which we've announced. we had our first deals that we've sold, cross-selling between the cisco and splunk sales teams, which is encouraging and we're going to stay focused. >> you're climbing out of 51% on subscription. you you said you would do it. >> 56%. >> this is renewing, which is much more sustainable than some of the bears who are into me. hard knocks coming for those bears. >> it's a hard, long journey to shift from a net 30 business model to get to 56% of your business coming from subscriptions. >> you have a tough compare coming up, q1 fiscal year '25 versus '24, right? >> last q1, a yearing ago, is we unloaded all the backlog. it's comparing against supply chain started to clean up, we

just started shipping. like last -- q1, a year ago, we think we shipped about $4 billion more than we normally would ship to customers, so the compares are horrendous. >> i remember that day because we talked about how this generation of ceos has been through wringer after wringer and how much that's fed their bed of knowledge. >> and i think that's why we just keep moving through these crises, don't d-- and don't say we're going to stop or what we're going to do. >> chuck, i'll tell you what. i'm going to let you play a lot of golf this weekend. >> thank you very much. >> i'll let you -- some of the best clubs, how about that? >> connect me, right? >> oh, yeah, absolutely. i think you're just coming out of the tunnel when it comes to the falcons. >> thank you. >> there's no disappointment yet. >> all right. all right. we'll see how it goes. >> chuck robin, congratulations on a great quarter, ceo of cisco. comes, by the way, when things are bad, he's still there. >> oh, yes. not a fair-weather fan >> he's a rain-or-shine guest. we love that. >> market's doing very well here, dow is up 400 after

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take a look at the s&p this morning. being led by two groups. that would be the consumer and technology. the best performing sectors in sort of the encapsulated by the results out of cisco and walmart. the two best dow names of the moment. speaking of the dow we're up 408. "squawk on the street" continues in just a minute. by a heart valve problem,... ...we're going for a better treatment than warfarin. eliquis. eliquis reduces stroke risk. and has less major bleeding. over 97% of eliquis patients did not experience a stroke. don't stop taking eliquis

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let's get to jim and stop trading. >> top of the show you mentioned stocks that are short, people covering. a lot of covering today. ulta was heavily shorted. tech has been heavily shorted. bath and body. dollar tree has been shorted. i want to come to lululemon. lululemon people feel it's way out of line in terms of the price it has, there's a lot of competitors and has a big short position and that is up 5%

today. so what's happening is i think the shorts got put on after the yen carry trade and those people made a lot of ill-advised decisions. >> we didn't even mention tapestry, dillards was sort of the outlier to the downside. >> tapestry, i was surprised. that was just plain out better and, you know, it happens. didn't think it would happen. >> jim, we'll see you tonight. >> yeah. exciting time. it really is exciting. david, you're a little excited. >> i'm very excited. >> i know you can't tell but on the inside. >> excited on the inside. >> wow. >> "mad money" 6:00 p.m. eastern. dow is up 400. don't go anywhere.

♪ good thursday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with david faber and contessa brewer with us at post nine of the new york stock exchange. sara eisen has the morning off.

the s&p's best seven-day run of the year continues today. dow is up almost 400 points as walmart raises guidance, retail sales beats, market responds positively to cisco's results. yields firm up here and some of the bets of at least a 50 basis points cut in september come off. >> 30 minutes into the trading session here are the three big move errors we're watching. walmart posting quarterly beat and raised guidance with comp sales up more than 4%. you can see the stock moving up 6%. cisco shares also gaining. we saw top and bottom line beat. orders growing 14%. yet, cisco's going to cut 7% of its global workforce. you saw ceo chuck robbins characterizing this as a reallocation in spending in ai because there is tremendous demand in those stocks. watch ulta top gainer on news that warren buffet's berkshire hathaway has taken a stake in

that name. we're seeing shares pop 10%. >> economic data just crossing the tape. rick santelli has it for us. >> yes. business inventories, this is an important number i'll tell you why in a second. this is a june read so the last month of the second quarter, expected up 0.3%. it delivered up 0.3% right on the nose. so consider this the three months of the second quarter we had 0.3 on the -- in april, 0.5 in may and now 0.3. you have to go to the third quarter of '22 to find three months with positive inventories of this strength. why is it important? because 2.8% gdp advanced look in second quarter gdp was heavily boosted by inventories. now we have national association of home builders market index and to that we aim easy east to diana olick. >> sentiment in the single family housing market dropped 2

points to 2349 august and july's reading revised down one point as well. the street looking for unchanged at 42 and this is the lowest level since december of last year. anything below 50 is considered negative. sentiment was at 51 in april and 50 a year ago. now mortgage rates dropped pretty sharply in august from over 7% to the 6.5% range, but the builders said a lack of affordability and buyer hesitation stemming from elevated interest rates and high home prices are all holding sales back. so of the index's three components current sales conditions fell 2 points to 44, buyer traffic also down 2 points to 25 but sales expectations in the next six months increased is.249. negative but up. that last one is likely because builders are expecting lower interests and that's not just going to juice buyers but help them with their borrowing costs which for the smaller and mid sized borrows that have weighed heavily that is critical. >> diana olick, we have fresh

fed speak, strong data as well. let's -- helping stocks this morning. you can see the nasdaq the biggest gainer, 1.75%. let's get over to steve liesman sort of can put together some of the headlines for us and what we've heard so far this morning. steve? >> you put it just right. dovish fed talk after some strong jobs and consumer data. let's look at alberta, the new st. louis fed president, saying the time may be near when an adjustment to moderate to restrictive policy may be appropriate his comments coming after the data this morning. he said the labor market no longer is a clear upside risk to inflation. that's part of that shift in the balance of concerns at the federal reserve. the balance of risk he says on inflation have shifted. he's more confident in the path of inflation back to the 2% target. and it seems to have returned, he said, the path has returned more to the 2% target on inflation. he says he says a 25 to 30%

recession product, a bit elevated from normal with 1.5 to 2% growth for the remainder of 2024. on those headlines, jobless claims allaying fears perhaps of serious situation in the job market coming in below estimates 227. retail sales, rumors of the consumer's death may be premature. up 1%. three times i guess the estimate there. ex-auto 0.4. there's the auto parts up 3.6%. pretty strong right there. a little bounce back. electronic and appliances doing well, food annual beverage, sporting fwoogds down 0.7, that's one discretionary item that was on the negative side. look at the probabilities, really interesting. i think you guys talked about this, the probability carl mentioned the probability of the 25 or the 50 in september is down. it's down in november as well. still banking on the 25, but a 50 expected in december, so the end point of 100 basispoints or

security is still there. the most important thing he said is, an ease would be an adjustment from a more restrictive to a less restrictive policy. translation, you could still have decent growth and the fed should still cut because it's overly restrictiontive -- restrictive, back to you. >> really quick. bostic talking to the ft, this line about we don't want to be late, i know it's removed from sort of the broader context of his remarks, but how interesting is that? >> it's very interesting, and i want to check my notes here because musallam said something similar where he talked about the idea, the fed is not behind the curve because the labor market is still strong, but inflation is still above target. but you tonight want to be too restrictive for too much time. i think that the, carl, the idea being you can still have this

tee decent growth, reasonably strong or not weak labor market and the fed should cut. the question is how do you look at it? we will make some progress and understand it in jackson hole next week. how much room to you have to cut rates and still be restrictive. by the fed's own measure of say a 2.8%, 2.6% long run rate, look, we're at 538, so there's plenty to come down and you're still tamping on the economy and still holding the economy back, carl? from that's a great setup for our next discussion. thank you. steve liesman. by the way, s&p is extending its win streak for a sixth day after this morning's strong data. our next guest does say markets are stabilizing and does think a 50 basis points cut in september is justifiable charles schwab investment strategist liz ann sonders joins us. >> i know you just heard steve. what does the argument for 50 sound like? >> it may be just final based on

how real rates have gone up. i don't think the fed is going to do that and today's data reinforces the fed's bias at this point is probably 25 basis points. i think the jobs report will be the next key measure. the fed hasn't put inflation data in the rearview mirror, but they clearly have elevated the focus on the other part of their mandate which is the labor market. i think that could be the next potential needle mover for expectations around fed policy. probably not going to be pce because once you have cpi and ppi in the books you can map what pce is going to be and doesn't look like that's going to be an outlier. i think the labor market will hold the key. >> i'm looking at something jpmorgan wrote last night looking at the next jobs report, they say job gains in the range of 160 to 200 would likely erase much of the fear invoked by the july print. something of a low 100 they say would put the risk balance back into growth and deliver a larger cut. do those numbers make sense? >> they do, but i think you have

to go beyond the payroll numbers. the inerts of the jobs report are as important as the headlines around payrolls. the unemployment rate, long-term unemployment, what you see in terms of wages, hours worked, the differential between the payroll survey and the household survey and not just the print on payrolls, but what the revisions are for the prior two months, and any additional assessment about the benchmark revisions coming in the first quarter of next year i don't think you get anywhere near the full picture if you stop the analysis just at the payroll print. >> you know it's interesting because the global fund manager survey from bank of america shows recession risk is the number one concern of these fund managers. given the data that we're seeing this morning, are those concerns justified? >> we will get a recession at some point, but i think the cycle has been unique in the rolling nature of it, and it's something we've been talking about and writing about for a couple of years now.

you had recessions in key segments of the economy concentrated in 2022, housing and manufacturing and housing related and a lot of consumer related goods. you recently saw a little bit of weakness in services, but that seems to have bounced. i still think that's the best way to think about this economy. that said, in terms of the launch point for the hiking cycle and historically how many quarters it takes for that to bite and help to bring on a recession, interestingly, we're right at that point right now. ten quarters ahead. i don't think we're past the expiration date on things like the long and variable lags in terms of monetary policy, the weakness we've already seen for quite some time in the leading indicators, the fact that yield curve went from a deep and long-term inversion back into positive territory. those are historically recession triggers. you've got the sahm rule. there's a lot that's different

in this cycle and that's why i think people are reticent to say, boy, it's coming, just because of the unique nature and rolling nature of this cycle. but when, you know, when corporations are telling you that they're concerned about risks, then a recession risk, it's something you have to heed. >> how about getting back to the market for a minute. it's only a few weeks ago when we saw rates break down significantly, i think it was the cpi report, i forget, and the rotation that lasted a couple weeks where everybody was talking about small caps is that not sustainable and are we back to a megacap led market? >> well, i think there's some sustainability in the broadening out and some money looking for opportunities down the cap spectrum, but what i think you need to do as an investor is you absolutely want to fade any of the lower quality components of what you're seeing move in an index like the russell 2000 and lean into the higher quality.

you still have about an 18 percentage point spread between the performance of the zombie companies versus the non-zombie companies within the russell 2000. obviously, in favor of the non-zombie companies. i think it's really dangerous to think about small caps in any kind of monolithic way. there's a huge spread up and down the quality spectrum within an index like that, and there are times where moving down the quality spectrum makes sense. if you've got -- that's where the leverage is to a manjor upturn in the economy that happens coming out of a recession, i don't think we're at that point in the cycle. so the opportunities may exist, but you absolutely want to stay up in quality, profitability, high interest coverage, strong balance sheet strong free cash flow, that's the way i would approach any continued rotation. >> we'll see. september has been negative last three years and with an election coming up too. thanks. good to see you. liz ann sonders. >> as we head to break let's

give you a road map for the rest of the hour. it includes a closer look at how walmart shares are doing. of course, they are up hitting a new all-time high after the company beat estimates and raised its outlook. >> "squawk on the street" goes whale watching. we break down key new positions and cuts. wall street's biggest names are making. >> the white house out with the results of its medicaire drug price negotiations. it could mean billions sedav for american consumers. we'll get some details when "squawk on the street" comes back. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

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ja walmart defying fears of a consumer slow down beating estimates and raising their guidance for the year. less get to melissa who has a lot more on the quart. >> hi, carl. company shares hit an all-time high after the company posted a solid quarter and raised its forecast. same-store sales in the u.s. rose 4.2% and e-commerce sales jumped 22% in the u.s. and 21% globally. as the nation's larger retailer and grosser walmart is seen as a bellwether for the u.s. economy and the leaders shook off fears that household finances in the u.s. have gotten worse. chief financial officer rainy told me it has not seen a change in shopping trends and said every month of the quarter was relatively consistent. he said consumers remain, quote, choiceful, discerning and value seeking but added, quote, we don't see any additional fraying of consumer health.

for the first time in 11 quarters walmart's sales of general merchandise outside of the grocery department turned positive. still he said the company decided against raising expectations saying it wanted to be guarded since the election and conflict in the middle east could hurt consumer sentiment. in terms of pricing, rainy said inflation was flat in the quarter and all of walmart's sales came from unit growth not higher prices. >> thank you for that. let's talk to ubs analyst michael laser who has a buy rating on the stock, price target here of $74. i want to start where melissa left off there with the guidance because what they said was, they were raising their guidance from their original forecasts, so when you're looking at full-year eps guidance it's coming in at a mid-point about 9 cents higher. but still below the consensus expectations at this point. my colleague robert hum is

attributing this to the big beat in the first quarter. where do you stand on this? is it real the rosy guidance for the rest of the year? >> good morning, contessa. it is real, but what walmart issing to very effectively, i might add, is straddling that line between showing how much momentum and power it has in its business model, but at the same time, maintaining some level of conservatism to support what has been a really dramatic increase in estimate revisions that have been driving not only the stock price higher, but the multiple to expand. i think everything we saw to date from walmart suggests that that is going to continue, and this should be a core holding for investors. >> what we've seen is really inconsistent results on the consumer from different retail companies, strong retail sales out this morning just smashing expectations.

tell me what investors should think about the space, given what walmart is reporting, and whether walmart really is a standout as opposed to a bellwether? >> walmart's a standout, without a doubt. you were right in that retail sales and consumer spending has become more consistent and episodic. that is most likely going to continue through at least the rest of the year. there's so many distractions in the consumer environment that are making households a bit uneasier and that is going to a willingness on spend. what walmart is showing is it's on its own path. to put that in perspective between the second quarter of last year and the second quarter of this year, sales in the u.s. for its core business grew about $4.5 billion. huge number. with about so million households in the u.s. that equates to each household spending $35 more at

walmart this year in the summer than it did last year. and that's because it's very convenient to do business with walmart. its prices are compelling, and its experience has been really top notch. so i think that continues, and this is less about what is happening with the overall consumer environment because it has been challenging and more about walmart. >> all right. so michael, to the extent that they're taking market share then, which is what i think your agency saying, given the market doesn't seem to be growing much, who are they taking it from? are there names investors should be keeping in mind on the other side of this. >> i think it'si coming from al sorts of places. one thing walmart benefits from is the consistency with which it engages consumers. on average, 100 million households shop at walmart each week. when you have that regular interaction, it means that it's more likely that that shopper is

going to add an additional item to the basket. there's other ways it can do business with those consumers like growing -- it's growing its online business. where is it coming from? out of the discretionary retailers that are going to report are going to have results that are nowhere near as good as walmart, whether it's in the home furnishing space, consumer electronics. it doesn't necessarily reflect the share shift, but it does show that what walmart is doing is really on its path itself. >> interesting when they're seeing the strength in health and wellness they give credit to the glp-1 drugs, you know, the new weight loss drugs fueling that. i wanted to can you about ulta because we're seeing shares on fire this morning up about 10% after warren buffet's berkshire hathaway revealed in a filing a small stake there. what's your view on ulta? >> we like ulta. the stock has been too penalized for a slowdown not only in the beauty category, but also some

increased competition . there has been a dramatic increase in the number of distribution points for prestige cosmetics and hair care over the last few years. what that is going to ultimately do is lead to a shakeout for the industry. it is putting some short-term pressure on ulta, but we think ulta emerges from this situation in a much better situation, much better position, and so we think this is a prudent investment. the stock has been far too penalized and the risk-reward here, even after this move today, is still quite good. >> michael laser, great to see you. >> thank you. >> another mover we're watching this morning is cisco. the company did report what was a beat on the revenue and earnings line despite a third consecutive quarter of falling sales. the company announced it will cut 7% of its global workforce. we did catch up with the company's ceo chuck robbins on the last hour of "squawk on the street" and talked about the

quarter as well as how cisco sees the ai boom, reflected at least in its longer term sales plan. >> it is a very beginning of the enterprise ai movement. i mean -- and as i said on the call, i think over time it's going to become increasingly difficult, more difficult, to measure waze attributed to ai from a sales perspective because i mean if i have to upgrade my network to accommodate an app is that ai driven investments? we'll have to see how it goes. we're sticking with the pure definition we have as we've been reporting. >> discussing as well the fact that they are starting, contessa, to see consumer spending. they don't know yet what exactly they're spending for on their network but they have to upgrade it to use the applications that are yet to come, but will clearly you heard him say in the early days. >> i mean it's clear, too, he doesn't want to see this as a reduction in workforce, that he's really thinking about being nimble to address whatever is coming down the pike with ai.

so fascinating. >> on the call he talked about it being a reallocation, the 7% cut. he did say here it's possible they will reallocate some of those jobs to other areas of the company, so perhaps it won't actually be quite as much as 7% of the workforce if i heard him correctly. >> a little bit farther to say he isn't think it was the beginning of a broader trend in tech. he has other contact with ceos. bofa has an interesting list of layoffs, intel, match, intuit, fastly, so there's been a few, but it hasn't become something that we talk about a lot. >> no. >> all right. coming up, "squawk on the street" goes whale watching with a look at new moves just essclosed by some of the world's biggt investors. you don't want to miss this. we're back in two.

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visit indeed.com/hire welcome back to "squawk on the street." investing giants like warren buffet, david tepper and bill ackman filing 13-f reports for the second quarter giving the rest of the world a look inside their ports, at least portfolios as they stood on june 30th

berkshire hathaway disclosed the size of its apple stake, 400 million shares and decreased by 49%. buffet's firm increased its holding in global insurance giant chubb to 27 million shares remember that was the mystery stock revealed in may. and then as i mentioned a bit ago, ulta got a boost from a small new position from berkshire. the stock up more than 10% on the day. pershing square making moves in consumer discretionary bill ackman's fund revealed a new stake in nike. it bought 3 million shares in the quarter and disclosed small decreases in chipotle and restaurant brands. and you thought peloton had stopped spending, guys no david ionhorn revealed a new stake of more than 6 million shares in the company in dme capital management's q2 filing so somebody believes that the wheels are still spinning. big tech -- if it's crickets it

doesn't count -- temper's aplieusa sold alphabet, meta, and microsoft. dan loeb's third point sold alphabet and meta. ap loose sa decreased exposure to the chips nvidia, amd, micron, qualcomm, taiwan semi and lam research that's a mouthful. new stakes in amsl and micron and increased its take in taiwan semi because i'm the reporter, guys, we knew that carl icahn took a stake in caesars now it's been revealed 2.6 million shares, so, you know, like we got -- this was fun for me to dive into where the big money is at play and where they're going in and out saw endeavor show up on a lot of 13-fs. >> that's getting taken out. it's still private. >> that would be a normal play i mean, berkshire is always interesting. the ulta move. you never know sometimes if it's

buffet or not really buffet behind the position. paramount, i remember a lot of people got excited about that and never amounted to anything that was just a lost cause for them at berkshire in terms of owning that. we have to keep a close eye on him given he's the greatest investor of all time ackman on nike is interesting. some people kind of want to believe, perhaps, i noticed the stock moving after niccol got the job at starbucks and narasimhan pushed out, donnawho maybe that changes everything i hear is no way on nike, is donahoe going anywhere. and phil knight has the votes. he controls the board. >> but there's so much enthusiasm if you look at what happened with, you know, chipotle and starbucks, like there's so much enthusiasm when you get that kind of leadership change. it's hard to ignore it. >> it is hard to ignore but in this case from what i hear talking to people who would be in a position know, highly unlikely unless he chooses to

exit himself, donahoe at nike. don't know what's behind ackman's position. >> you're not a huge fan of the 13-fs because of the delay. >> the delay. >> we like a lot of high frequency information. >> listen, berkshire you want to know what buffet is doing for any number of reasons. we cite a lot of hedge fund managers whose performance is not particularly good and they own what everybody else owns i'm not sure it's that helpful no offense, though. >> still a great read. >> that was great. >> none taking. >> i went from alaska whale watching to whale watching from here. >> stocks are riding high here after the strong jobless claims number lowest since july and the retail sales beat more about this market as the s&p is about 5 points from going green for august

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. welcome back i'm silvana henao with your cnbc news update. an american russian dual citizen was sentenced to 12 years in a

russian penal colony today for high treason ka sena carolina allegedly donated about $52 to a ukrainian charity after russia invaded the company. the 32-year-old was arrested in russia while visiting family her defense team says it will appeal. law enforcement sources tell nbc news that police have made an arrest in connection to the fatal overdose of actor matthew perry last october the medical examiner's office in l.a. attributed his death to the psychedelic ketamine police said earlier this year they were investigating the source of the drug and the u.s. men's national team is reportedly hiring mauricio pochtino as its new coach according to espn and the athletic he has overseen some of the biggest clubs in the world, recently serving as the manager of chelsea his hiring comes about a month

after the team fired greg burhalter following a first round exit in the copa america tournament. >> thank you let's take a look at stocks as we are a little over an hour into trading we're having a very strong session. look at the nasdaq up 1.8% the s&p it's back to up 15.7% for the year let's get over to bob pisani right here on set and find out what you're watching and what this means man, it's that yen carry trade a thing of the past, isn't it? >> notice the charts we're back to where we were the day before are the disappointing jobs report august 1st august 2nd was the jobs report the bottom line here is what's going on is the soft landing just got some major support today. today's retail sales report and the strong commentary on the consumer by walmart is reinforcing the idea that the consumer may be slowing, but it's still very resilient. here's where the markets are right now. three to one advancing to declining stocks that's a strong advance led by banks, consumer discretionary,

technology stocks. the only sectors down are defensive sectors, health care, real estate, and utilities modestly in the red. bottom line, this is a growth tilt chart for sectors as for the s&p 500, i just mentioned it's executed a complete round trip from roughly 5500 to just prior to the jobs report that was august 1st 4186 was the close on august 5th. that was yen carry trade freak out david was mentioning we're back to roughly 5500 complete round trip here saits with the volatility index, the vix, it's inverse. round trip, same period, 15 to 60 on that day august 5th and back to 15 round trip here. this has all happened while the market sentiment has remained mostly neutral which may be surprising to you. one investor sentiment gauge the weekly survey of investors for the american association of individual investors is largely neutral. during periods of euphoria here, bullish levels you see here this% typically go into the low 50s when euphoria is high.

a reading in the low 40s is below any kind of euphoria let's look at other measures of the market the fact that earnings growth estimates are holding up is critical here. inflation is trending lower. interest rates are -- rate cuts are expected growth slowing. no recession the s&p 500 earnings growth right now really critical, 10% for 2024, 15% in 2025. that's very little changed in recent months. true revenue growth is not as strong as we would like and much of the reason earnings are holding up is cost cutting that and the need for more revenues is a big issue, but that is a 2025 issue so regardless of what's going on right now, look at what i showed you there. inflation moderating, growth slowing, but no recession apparent interest rate cuts coming. earnings still holding up. folks, that is the definition of the soft landing if none of this impresses you and you're still skeptical, here is walmart's cfo john david rainy, telling us this morning on the cnbc interview in this environment, it's responsible or prudent to be a little bit

guarded with the outlook, but we are not projecting a recession there it is. so what is remarkable to me is the most improbable of things have happened. we were talking about a hard landing in october 2022. remember the recession that was imminent we were down 20% at the end of 2022 on the imminent recession that was coming that never came. then the fed started aggressively raising rates and we were a year ago talking about the imminent recession that was coming out of that and yet, the soft landing through all of this has simply remained and that has been what has actually been happening. i think it's most improbable, remarkable to me, but here is the data that supports it. it's in front of our face. i keep waiting for earnings cuts and they don't come. 10%, 15% next year you can say there's a lot of cost cutting but the bottom line still holding up i think it's a remarkable story. i think the skeptics where people should be skeptical about the whole thing but it has

worked. >> soft landing is real. >> we're going to close with 11%. >> yeah for q2 q3 is a little bit lower than it was a month ago, but that always happens in the first month of the new quarter because analysts are a little too optimistic and they start cutting in the first month. it's all within a very, very normal range right now and eventually it will come back up for the third quarter numbers. so again, just -- be amazed that the most -- the probability that the fed would avoid a recession when they had to raise rates in the face of inflation, is remarkable there should have been something happening. >> there were a lot of naysayers. >> rightly so. i was among them historically this is the most improbable of outcomes that we are getting right now. heaven knows we may still get one down the road. >> you know what they call it in my world a jackpot. >> it's a good idea of having a long-term plan if you're an investor and staying put you know, trying to trade your way or market time your way in the last two years, would have

led to tears for almost everybody. >> what's the saying, give me a couple good stocks and a good book. >> yep and a beach. >> bob, thanks bob pisani. >> i got a few. vix back below 15 this morning. futures traders raising their odds of a 25 basis point cut in september after the retail sales number today joining us with his take on the road ahead goldman sachs chief u.s. economist david miracle what a treat for us. good to see you. >> thanks very much for having having me. >> how are you feeling about this month's growth scares. >> we were always a little bit skeptical that the economy would spontaneously turn down. i think we, obviously, have seen a deceleration from 2023 to 2022, but that's fine and to be expected the economy grew over 3% last year job creation was very rapid because we're in the midst in the big immigration boom that's cooled off a little bit and we seem to be converging to something more like a normal growth pace in the low to mid

2s certainly a long, long ways from actual decline that's what this morning's consumer spending data suggests, and i think all of this has a lot of implications as well for what's been the big debate for the last couple weeks, how healthy is the labor market. final demand is growing at a good pace and it would be odd if companies didn't need more workers rather than fewer. we continue to think everything is working out pretty well. >> i notice you keep chipping away at your core pce forecast what are you down to now >> we're now down to 13 basis points after this morning. we had a big decline in international airfares in the import price data. that will flow through another soft month i think the bottom line is, we've solved the underlying problems here. we rebalanced the labor market we got inflation expectations back to normal we actually had done all of that by last year it's just that these inflation reports can be a bit bumpy from month to month we think there are seasonal

adjustment problems as a result of the big fluctuations from the last few years that created some upside in q1 we've seen some softer prints more recently. but we're trending in the right direction, and i think you need to zoom out and focus on that. >> as for the labor market, what is the line that's sort of delineates danger from safety so to speak coming up in this next print. >> we're thinking that the july report will turn out to be a bit of an outlier, that job growth is probably running 150k, that the increase in the unemployment rate reflects an inability to quickly digest what has been a huge surge of immigration, but one that's now cooling down. but that it's not reflective of overly weak labor demand so if we see job growth coming closer to where we put it, trending around 150,000, if we see the unemployment rate stop rising or we think a bit more likely come back a little bit as some of those temporary layoffs reverse, then i think, you know,

things would look fine the fed would feel good about where we are and i think markets and fed officials and we would agree that's the circumstance, 25 basis points cut seems right if we get a much weaker jobs number it does raise the question of whether this is supply or demand driven. it's difficult to disentangle the two in real time we do expect job growth to slow because labor force growth should be slowing as that immigration surge dampens. >> we haven't mentioned much about former president trump's comments yesterday sort of opening the door to not just chinese tariffs but universal tariffs of maybe 10, maybe 20. i know you guys have done some work on the potential -- on the impact that might bring to the economy and inflation if he does win. >> yeah. that's right you know, if former president trump does win, we do think that there would be tariffs i wouldn't necessarily assume that everything that's talked about on the campaign trail eventually becomes policy.

you know we do think more likely than not there would be some additional tariffs on china and maybe some additional tariffs targeting autos. the really big tariff that's been talked about would be an across-the-board tariff of 10% or more. that one we think is a possibility that could be taken seriously, but one we would not say is the base case at this point. if we do get further tariffs, the impact on the economy would be to raise prices, boost inflation, but you want to think much that as a one-time boost to the price level, not a recurring source of inflation. i think that's how the fed would manage it. it's possible if the tariffs were large enough, that it could be optically awkward to continue cutting interest rates as higher inflation rates are coming in. i don't think it would make sense to kind of panic and see this as the sort of inflation we were dealing with a couple years ago where you really didn't know how far -- how long it would

last they're not going to hike. could it disrupt cuts? perhaps if it does happen. we also saw in 2018, 2019, that there was a growth scare around the tariffs, that the equity market got very anxious and in the end for the fed, that was the most salient takeaway from the tariffs not higher prices. but rather the perceived threat to the expansion frb the tightening of financial conditions so that's another complication all of this, the question of how does the market react. >> right from inflation to retail sales to the labor market, that's all good insight david, good to see you thanks for the time. >> thank you. >> over at goldman. still to come, a tough quarter for crypto currency but wall street is still buying at rkast one part of the crypto maet find out why and where that money is going next. don't go away. ng smart questions about opportunities like clean water. and what promising new treatment advances can make a new tomorrow possible.

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bitcoin on pace for a negative quarter but interest

continues to grow across wall street when it comes to bitcoin etfs to mackenzie with that story. >> hey that 13-f deadline on wednesday gave us a read on which banks and hedge funds took a position in the second quarter. goldman sachs in particular went big in q2. lifting its holdings to over $418 million up from zero exposure in q1 most of that is coming from the 7 million shares it holds in blackrock's etf. morgan stanley trimmed its to around $189 million and swapped out its grayscale for blackrock's offerings. hsp has spot bitcoin holdings in bank of america has $5.3 million in these products. ubs and jpmorgan took on minimal stakes it's worth noting most banks are likely snapping up crypto for their clients not their own balance sheets you have hedge funds like millennium management some of the biggest buyers

single largest holder of shares in blackrock's bitcoin etf filings also showed that point 72 asset management, elliott, apollo, citadel and the michigan retirement system have spot bitcoin in their portfolio. >> interesting. products in their portfolio. >> thank you for going through that. next u billionaire investor leon cooperman, he'll give us his takes on the tubts in this market and the presidential election plus, the white house announcing the results of their first negotiations when it comes to medicare and drug prices. we'll get details on that as well after a short break

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shares of alibaba continues to face headwinds in its core e-commerce business. rising competition, the obviously cautious chinese consumer stock was down double digits over the last year of trading but moving higher today, almost 2%. >> results from the white house's first medicare drug price negotiations are making headlines this morning let's get over to bertha coombs. she has a look at key changes, i

guess, which will result in lower prices, correct? >> lower prices. certainly lower costs for patients, at least the administration is touting $6 billion in savings when the new negotiated prices go into effect in 2026. now, for some of the drugs that cost patients the most, like autoimmune treatment they reach 66% discount over the 2023 list price. while cancer drug at the bottom of your screen there, it's only about a 38% discount the medicare and medicaid services administrator told us this morning they were mindful of not quashing innovation due to the pricing >> 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. >> now, the discount prices may not really compare we don't know what the real net price is, the apples to apple.

market reaction is fairly muted on the drugmakers, but there are some fundamental changes to medicare part d starting next year that really change the equation for everyone. in 2025 out-of-pocket costs will be capped at $2,000, which hhs estimates will save patients $7.4 billion collectively. patients will also be able to smooth out their drug costs over time, like buy now, pay later. that extra drug coverage is going to mean higher part d plan premiums though, the increases will be capped at 6% insurers will reach higher costs. there is no co-insurance phase and medicare is scaling back its payments medicare is offering insurers some subsidies for the first three years to help stabilize premiums during the transition so, david, they're saying that base premiums will probably only go up about $2

still, this is something that everyone is watching >> yeah, for any number of reasons. i wonder, are the insurers more at risk here are we going to be talking about earnings under pressure at some point down the road or the drug companies, given some of those numbers are coming down, rather sharply, for some of their key therapies. >> to a certain extent, both of them in addition to negotiated prices, the drugmakers, if they raise their prices above the rate of inflation, they have to pay rebates on that. that is something that's going to bring down costs quite a bit. for the insurers, the fact they have to pick up more may mean even more pressure on the drugmakers in terms of what kind of discounts they're going to want on other drugs. >> they always figure out a way, bertha they always figure out a way to make money i'm not sure what it will be, but they will figure it out. >> they generally do >> bertha, thank you bertha coombs. give you a look at this market before we head to a quick

break, continue our market coverage the s&p up 1.2%. you can see the nasdaq having a very strong session. 1.8% is the gain of course, we've discussed cisco shares, which continue their gains. up about 8% off the highs. walmart as well, up a good reflection of the consumer, it would seem, at least a positive one, is helping the market overall. certainly those shares as well a lot more market coverage straight ahead we've always been competitive. yeah... one of us always had to be first. first! first! [continue bickering in background] hold on, guys! [car honk] first. today, we're first together. we love you, mom and dad. thank you so much for making it possible. and now you can finally put yourselves first. vanguard investments and advice. for college, retirement, and all of life's firsts. that's the value of ownership.

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. good thursday morning. welcome to "money movers." i'm carl quintanilla with contessa brewer at new york stock exchange billionaire leon cooper man with stock opportunities and the presidential election. walmart shares high after strong quarterly results and guidance. nuclear's make or break moment the first one built from scratch. nuclear reactor in 30 years. we'll take you live to georgia. let's take a look at the markets and the dow is up a percent. the s&p 500