over to "squawk on the street." we're seeing not a lot of action, and jackson hole could determine what events happen. we have the dnc getting ready to start in earnest. we have gone up a little bit as the premarket session is going on. you're back one of these days. >> maybe i'll see you wednesday. in the meantime -- sorry. it's an alarm for a show. >> you're on all day long. make sure you join us tomorrow. "squawk on the street" is next. ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. faber has the morning off. futures are steady after the best week of the year for the dow and nasdaq. jackson hole ahead, the dnc, retail earnings, some benchmark revisions to payrolls. our road map begins with the

market's seven-day win streak, though, looking to build on the best week of the year. fed's in focus in jackson hole later in the week. amd escalating its battle with nvidia. let's begin with the rally, though, as we do kick off a new trading week, jim. it wasn't just about equities. cross-rally etfs last week, the jnk, the lqd, the tlt. >> we're more linked than we realize. obviously, we went down on japan, and we went up on japan. this is somewhat reminiscent, by the way, of 1987 where you would -- if japan was up, they'd come over and flood us. sometimes they didn't care whether they -- they used to buy these stocks, used to buy waste management and browning furs. don't ask me. the old days, things were -- what you would say is, well, why is browning ferris up? and they would say, large buyer. eventually, you go out for a

beer, and it's tokyo. they liked the rails. there was such craziness. but we seemed much more linked, and it's interesting because the dollar keeps going down so it's good that we're linked for a company like -- well, any of the packaged goods companies that sell overseas. coca-cola is what i was thinking of. i don't want to -- it's an enjoyable time, because what's happened is that if there's good news, stock goes up. if there's bad news, people say, well, jackson hole. maybe it will go up. people are looking for reasons to stay in, and it used to be, i think, that they used to look for reasons to stay out. >> it's a good point. >> it's very -- the stay-in crowd is like, well, what's the downside here? we have a good quarter or we have the fed bail us out. now, it's a little simplistic, but it's what's at play here. >> interesting, on that note, rbc today, laurie, increased conviction, august 5 was the low in the recent pullback. we're feeling good about 5,700

year-end. >> september, bad month. maybe we get there circuitously. i know that when you single out a month, that's when it doesn't happen. but i also know that we are up big, that last week, seemed odd. for instance, we made a lot of chatter about nvidia. now, nvidia reports next week, and somehow, nvidia is, as david would ask me, it's the key to the market. it shouldn't be. there's an absolutely terrific piece we've got about google where google is up 7,661% since it came public on today, august 9th, and what i say to myself is, okay, do i really like nvidia? do i just judge it by next wednesday, or do we look at the body of work of nvidia? somewhat like olivier. we look at the body of work. we don't just look at his final, you know, "is it safe?" not that he was bad. i think we have to remember that the great wealth is created by not reacting to a given month. >> right.

although, as you point out, 18% gain last week, right? a note on friday out of goldman saying, do we get that normal post-labor day gross-up if we -- if it did some of that work in august? >> yeah, well, look, one of the things, i was dealing with someone who is integral to the -- trying to fill in for david -- m&a process, and he said, it's august, and it's as busy as i can recall. i had a nice talk with lisa su. we're going to talk about that acquisition. but i just want to point out that we talked this weekend about what time i get up. the absurdity. my wife thinks i get up at 4:30. i get up at quarter to 4:00. what's come out at 6:00 a.m. is lisa su's somewhat competitive acquisition of a company's et. nvidia is a true oddity. it had a huge week last week.

i don't want to come in hot. you want to come in cold, but this thing is it's own animal, and there are people who are doing this work which say it's very cheap, will look back and think it's very cheap. we have google, an apple piece by moffett nathanson, which says great cash flow but says maybe it's finite in terms of its growth. i don't think so at all. i happen to love moffett's work, but he underestimates the service stream, so we have google celebration, apple underestimated services as far as i'm concerned. there's a piece about amazon this morning which is just plain-out positive, talking about how amazon is going to start monetizing much better the local stuff, the stuff that my wife buys incessantly and that i told andy jassy to stop sending my wife because i've had it. enough already. this thing -- what it is, of course, you get into this habit of buying, well, you'll say, i need q-tips. it's like ten minutes away.

when do you need them by? tomorrow. okay, fine, and there they are. and by the way, alexa, i have integrated alexa, and alexa's a little scary, because alexa also suggested -- i had some pain in my mouth, and i went to do the an b anbesol. they advertised, look, if you want more -- on my alexa, if you'd like more consumables, then do this. i mean, this is a juggernaut. >> she knows you. >> oh, she knows me. and i listen to some brahm's 3rd, and they said, here's a better vision. meantime, we continue to watch everything on amazon. >> we'll get lowe's, target, tjx, ross. >> it's going to be tough to beat target. there's a positive piece about tjx today, a recommendation from burlington. we own tjx for our travel trust. warning. headline comes out, always is great.

company then talks it down, stock goes down, you feel like a chump. i'm trying to avoid that. lowe's, i think that lowe's is a little bit more do-it-yourself, little less contractor, which actually should cut against them because the do-it-yourself stuff has not been selling well. but then, this is the classic example. you want to get out of the stock ahead of a jackson hole salespeopl speech where mary daly hints it's going to happen and goolsbee is like, well, it better happen. these people are all fabulous on cnbc, and i really appreciate them, but they all seem to be saying, hold on. cavalry is going to come and you're going say, why did i sell my lowe's? >> we're going to talk about jackson hole and what powell may say on friday. jim mentioned goolsbee. >> i don't think it's a certainty, and i don't like, as you know, tying our hands ahead of time when we got a lot of data to come in and everyone on the committee's going to get to speak their piece, and it's a committee decision.

>> we're going to get some -- we mentioned the benchmark revisions to nfp coming out wednesday. >> oh, that will be important. >> yes. >> look, i think that we can cloud our judgment with this, with jackson hole, in part because last year was so significant. it really was the time when you had to start thinking, wow, what are they doing? are they going to keep going? time of uncertainty, and then it just blossomed into a time of greatness. we remember in october, you take september off, october was really fabulous, and anyone who got in the way of it, the bears got away with it, i don't like the fact that the fed was in control of the narrative last year. i think what should be in control of the narrative this year is earnings. >> sounding like kostin this morning. >> i liked kostin's piece. i don't know if he's coming on or not. >> his point over the weekend was, all this macro drama is distracting us from an earnings season that is -- they're sticking with 241 here. >> i read the piece, and i said, i went out with this.

we kind of went out with this last week, and now he's done it and he's going to get credit, but only because he's really nice am i willing to accept that. that's the truth. right there is the truth. what he is saying is if you just decide that what matters is what powell says, you'll miss the forest for the trees. it's important to look at the earnings, but david, i was a little more charitable in saying, they are so with the trend that if you are, like -- like last week, there was a company, a good company that does decking, and anyone who's tired of wood and doing wood over and over again, you switch, and the quarter was good. trex was not good, but they have more industrial. and what i said to myself is, this is what's bothering me. like, people are not doing their place over, because they can't sell it. that's a big motivator. now, maybe they can't sell it because rates are too high, mortgage money is too high, so all these things are cutting towards, don't sell, because the earnings cavalry is here, and the fed is not going to get in the way of it.

you could argue, it's two cavalries because you have the fed on your side if the company's not doing the number, but i find -- there it is. that's a very inexpensive company and very well run by this guy, jesse singh. i don't want to get rid of things. i don't want to get rid of things. >> interesting. tied to the kostin piece out of goldman is the note where they now trim their recession odds because retail sales and jobless claims are not showing signs of recession anymore >> they've got to stop doing that. it doesn't make them look -- i was thinking of this. why do they torture themselves? just stop. just end this whole thing. i mean, you know, it's not unlike what i see, we're about to have football season and do fantasy, and there's a 20% chance i take saquon early. jan is a great, great economist, and you put yourself out, and then you have to change, and it's just not worth it. >> you don't think clients are

hungry for that frequency of opinion? >> i think that clients are perturbed by it at this point. i think that they feel, well, what's the true value? because what happens if it's going to change all the time, then you're just, again, going to be juked out of the market, and it's really important for people at home to -- i don't want people to say, you know what? i see sweet green, piper has a piece, sweet green and dutch bros, be careful. well, those are problematic, and i get that. so, steel yourself for sweet green. sweet green is interesting. don't just bail. dutch bros, i had them on and i was a little disorganized and it was very disconcerting because i have been with dutch bros since they came public because of the product, but they are -- they're stuck. they finished with the venture capitalists that were in them, but i got to tell you, carl, this thing is one of those things that feels a little too five below. when i use that five below, i used to say, guys, you're adding

too many stores, and they would say, what do you know? i would say, this is my background. the answer is i know. i know because my father sold to you guys as a gift wrap company, and they got it it shal-- to th family -- they got it wrong. on the conference call, they say, we're putting up stores, putting up stores, and i was like, what are you guys doing for pilferage? you don't have any policy, and they admitted later on, listen, we have to really change the stores where there's tremendous -- way too much. and by the way, the starbucks stories, there's three starbucks stories now in the -- from the "journal" and the one this weekend that was the most devastating was basically, can it be fixed? can it be fixed? and i think the answer to that is, absolutely. >> you mean, x-china? >> yes, because china, if you do some sort of joint venture -- i'm not sure what that looks like but that's kind of the thought but i think the pieces were a little too down beat about brian niccols' ability

because i have had brian niccol on many times and he's a very ted williams figure. he's a percentage player and his percentages are excellent. >> we're going to talk more about certainly the piper call on restaurants and what's happening with pricing. we'll get into politics a bit, talk about the dnc this weekend, chicago, as there continues to be buzz surrounding the vice president's economic agenda, comments about price gouging over the weekend and housing. take a look at the premarket, as we said, a lot's on deck the next five sessions. we'll get this one under way in just about 15 minutes. [city noise] investment opportunities are everywhere you turn. do you charge forward? freeze in your tracks? (♪♪) or, let curiosity light the way. at t. rowe price, we're asking smart questions about opportunities like clean water. and how clean water advances can help transform our tomorrows. better questions. better outcomes. t. rowe price

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welcome become. the democratic national convention getting under way in chicago. megan cassella is in the windy city with the latest. good morning, megan. >> good morning, carl. we are wishing it was just a little bit windier here this morning but things are just getting under way in chicago to give you a flavor of some of the things that are going on.

there's a big-name delegate breakfast happening. governor walz and vice president harris are already in town for the official programming which will kick off tonight in the united center, typically where the bulls and the blackhawks play in chicago but tonight, it will be center stage for president biden, handing off what is expected to be an emotional speech as he passes his torch to his vp as the official nominee. we're going to see a big slate of speakers, former presidents barack obama and bill clinton, former secretary of state hillary clinton and then walz and harris herself to rebound out the week. democrats are also having some "real people" to join their edition and we're going to hear from uaw president shawn fain. in recent years, president trump has really pulled some support from the rank and file union members. now, republicans will be counterprogramming all week, trump and jd advance holding

rallies across the country. they'll be kicking things off in pennsylvania. with economic policy in focus, trump responding to harris' economic plan that you mentioned, that we spoke about on friday. he calls it a socialist plan that would be a disaster for the country. and he's also expected to lay out some of his own ideas focused on boosting energy independence, preserving tax cuts and setting up the middle class. now, the harris campaign has been looking to return the fire. they're coming out ahead of trump's speech this morning to say that one of his key policies, which is to impose tariffs of 10 to 20% across the board, they say that would be a middle class tax -- a tax on middle class families, and harris faces a balancing act here that she really has to figure out how much she wants to stay close to president biden's agenda and how much she sort of wants to set a new tone for herself. now, one last piece that i'll highlight for you guys is the democrats came out overnight with a 92-page democratic party platform, and the interesting thing here, it's mostly democratic talking points, the

traditional platform that you would expect, but it hews very closely to the draft version that came out earlier this summer before the presidential debate when president biden was still the nominee, almost word for word exactly the same. key to watch this week is how closely harris tries to stay as part of that agenda and how much she tries to set a new tone for herself. >> megan, stick around. i'm curious to get jim's take on the comments about margins in the grocery business. and also some of the promises trump has made in recent days about cutting energy prices in half, at least. >> yeah, i mean, there's a lot of hyperbole here. it's absolutely true that everyone knows tariffs are tax. that's what you learn in economics. everyone knows the price gouging legislation has always failed. that's president nixon put it through, and nixon was a completely problematic figure when it came to the economy. so, carl, i've got to tell you that both plans are suboptimal for consumers, even as they are

able to claim that things are good. and i think that some degree, our job is to just say, look, that's just not true, historically. >> right. we'll see, megan. there's a pretty fiery debate this morning about at least grocery margins, what got held on to after the pandemic, even as some other retailers saw their margins pop and then come back down. >> absolutely. and i think to jim's point, it's really interesting here that both of these candidates are really laying out populist economic agendas, and the criticism for harris' plan has been real over the weekend. "the washington post" was out with a headline from its editorial board saying harris should have dived deeper into real economic details and instead, she gave us populist gimmicks. obama administration economist jason furman said the hope is this is more rhetoric than reality. inflation is not so much an economic problem anymore as it is a political one, but that's what we're going to be watching this week from harris. >> busy week, megan. we'll be talking to you all week

long, of course. megan cassella joining us this morning in chicago. >> grocery margins. go to costco, look at the prices, and you'll know what the margins are. period. we'll get cramer's "mad dash," countdown to the opening bell. don't go anywhere.

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time for cramer's "mad dash" as we count down to the bell. >> quizzical piece by morgan stanley. reason i say it's quizzical is that there's so much momentum in a lot of part of technology, but they are saying, i'm going to take the line that's in this, that additionally with second-half pc demand trending a bit weaker than we previously thought, wow. i mean, this is the a.i. pc, and it's weaker, and i think that's taken people by surprise. morgan stanley has excellent research, obviously, in tech, and they are saying that price target unchanged at 37, but carl, i didn't like this piece, and i didn't like it because as far as i was concerned, i had thought there was some momentum in a.i. pc. we don't really know. they say there's some factory limit outperformance. i think it's slower rollout, but i also think that maybe people are taking their time trying to

figure out a.i. i don't know. this is, again, not something i expected in this piece. >> there was a piece last week about whatever a.i. momentum there is in pcs, it's going to apple. does that make sense? >> i thought that piece was -- we had a moffett nathanson piece about how that's possible. there's an excellent piece from med mellius talking about the cash flow. the cash flow is unrecognized at apple. they don't have to spend any money. people want their audience, and to get their audience, you have to give, and they're giving at a.i., they're giving everything. >> yes. >> i mean, i'm kind of surprised that it's such a -- it's such a windfall. chatgpt now -- oh, someone's criticizing siri. i think they ought to try -- siri is on her -- don't listen -- siri is on her game and i've got to tell you, i've been using siri for music, and i say, play my favorite dylan songs.

boom, boom! >> we'll talk more about the hp call. we'll get the opening bell in a few minutes, and don't forget, you can catch us any time, anywhere, just listen to and follow the "squawk on the street: opening bell" podcast.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. we're told by nasdaq it will not trade until sometime between 10:00 a.m. and noon, and at that point, we will know whether the gaggle of google guys will be gurgling or giggling. >> that was the voice of the late mark haines, 20 years ago today, when google made its public debut. company, as jim said ago, known as alphabet, up more than 7,500% from that split-adjusted ipo price which was a dutch auction, i think? >> i said it should be at 300, and that it was just radically undervalued, and unfortunately, it was a time when there was a bit of a witch hunt for people who were really that bullish, and i got called in. i was working here. called in by counsel, saying, how could you come up with that? and i said, yeah, you're right.

should be $500. >> don't challenge me. let's get the opening bell and the cnbc realtime exchange this morning. at the big board, it's israeli map in new york which listed all the israeli start-ups in the new york area. and at the nasdaq, it is alphabet with a slew of executives alongside small business community partners, youtube creators. as we said, celebrating 20 years. >> look, i think it was the first company that -- well, amazon. these were the companies that came out, and i remember one of the things that was interesting was people felt, okay, what's going to come out of the dock on this? it came in 2004, and people were using it. i think it's the one that you -- it's the kleenex and xerox, which are now forgotten. it's the google. give it a google. i always knew google was there when they outlawed it at school.

>> and sadly, susan, who just passed away a few weeks ago, who was instrumental in getting them out of the garage. >> i remember going to hear her at dreamforce and i was a total fan boy. i wanted to get her autograph. she was that powerful. as powerful as she was, she was nice and approachable and i just kind of -- breathtaking, frankly, in terms of her vision, and her vision kind of overrode what she could do. everyone knows that youtube, when you get off the desk with executives, well, what's the -- it ain't nbc, cbs. it's youtube and maybe around network by -- really by instagram. >> speaking of media, we deid have this fubo news and the injunction. fubo is up 16 premarket. >> i don't -- i don't know that company. it's obviously a small cap company. there was a piece by wells

fargo, double upgrade to overweight by wells, thinking that fox was going to be the one. this is a very, let's say, ill advised piece because fox was a loser. a lot of people wanted this to be something good for fox, for warner -- it's not good. i mean, you know, i think warner bros. discovery is one that a lot of people lament. a lot of people want this one to work. >> yes. >> and i think that people at home have to realize there are some characters in the world that a lot of people like, and they root for, even though -- you've got, on the one hand, the balance sheet. on the other hand, you've got zaslav, and zaslav is a rootable figure because he's kind and exciting and has a feel for people, and you just say, oh, come on, man, get this thing moving. and what are they going to do with the nba if they lose nba? will barkley stay? and what does zas have?

i want people to understand why he's talked about. he's not talked about because he bit off more than he could chew. he's talked about because you kind of root for him, and right now, he's very much an underdog. very much. >> even the downgrades, i'm thinking of bernstein last week, they point out that the assets are a hedge to any downside. >> that's true, but i think that the way -- i'm in this business, but the way that things are going with tv, the new tv, it's just happening too fast. i was talking to executives about smith, cronyn, and there were just tremendous sellings, scm, and i said, geez, my typewriter works great, what the hell is that? they ended up being the chemical company, that's what they kept, but you fear that we're a typewriter. i worked at a morning paper, and i remember we were putting out of business the evening papers, but radio had it on drive time,

but then tv put that out of business with the action news, and then action news went away, because of -- well, they're a good thing in philadelphia, but because of google, and instagram is now offering this program where you give mark zuckerberg a check and he's giving you accountable advertising. he knows who clicks, he knows what they read, he knows how to design them because of a.i. and this is where the world is going, and what does anybody else have? i don't want to be radio. i was radio, and the end of radio would be, like, wow, i'm getting a health screen at this guy, and i have six cats and we all uses purina cat chow. it's like, oh my. really? >> and media has -- is evolving, constantly, jim. >> so fast, though, carl. >> speaking of all this and innovation, jim, you want to talk about this amd deal? lisa su's going to be on this afternoon. >> lisa su, when i talked to her, what she's doing here, this is a -- almost a $5 billion deal. buying private companies so you can't -- it's 75% cash, 25%

stock. you can't hedge the thing. at one point, it was up three, people didn't know what was going on. i want to look at this thing two ways, the way that everyone's claiming, which is an nvidia killer. forget about that. it's something that keeps her up with nvidia because the big custom projects that go with the nvidia platform, she hasn't been able to rival that. she now can. this is about large clusters, the big customers. this is about working for -- for meta. it's about working for amazon. it's about working for azure, and i think that google cloud -- it's very smart, but the one thing people have to realize is that she is sticking by her $400 billion, 2027 a.i. projection and if that's the case, you need every engineer possible. think about the 25% stock. that's to keep the engineers at ct, which is very smart. very smart. lisa su needed to do this.

now she can offer custom that right now they're a big nvidia partner, zt. a year from now, not as big. >> yeah. we got, actually, a very busy week in semis. there will be some conferences. rosenblatt has a tech conference. i think needham as well. we'll hear from micron and cisco and qualcomm. >> let's talk about micron. there was a moment last week when micron went back in the market at 92, and if you take a look, you'll not see a print much below 92 but when i went to sanjay, he said, please don't make that much of it. it's an skexisting buyback, but psychologically, when it came over the tape, to see someone actually buying their own stock who's very much being what my late father would have called footballed, like, the stock is being given away and then not, and that called the bottom and

it was nice. i think that applied materials was a little upsetting, but then it came right back. there is a belief that micron is -- because they make high-bahi high-bandwidth memory, that that's the bellwether for what's going to happen with nvidia. i think that's wrong. i think what happens with nvidia is nvidia. they're their own animal. >> meanwhile, we did get an s&p credit rate cut of intel on friday night and they're talking about more structural challenges in the years ahead. stock's not down. >> i'm -- it should be down. you're not going to get -- you're not going to dislodge what arm has done. you're not going to dislodge what amd has done. amd is winning the pc war. i agree with the credit downgrade. i have communicated my belief that the credit risk to the government, to the chips, is not great, but they do have partners. and they have brookfield, which is really interesting, and apollo, so they've got people to lean on, so i'm not saying, listen, it's that dire. but i'm not changing my view

that this is not the intel. read between the lines. it wasn't the starbucks of old. >> speaking of challenge names that have come back from the lows this morning, e.l. was down six at one point on earnings. >> we're bolting from the last bit of e.l. that we have this morning, estee lauder. this is fabrizio, who's retiring at the end of the year. the number of cuts have been unbearable, five going to three and change. there's a nice jeffries piece out about it. this is a -- i'm going to -- look, i don't want to minimize tragedy, because tragedy is horrible, but financial. this thing has been one of the worst performers, and a lot of it is china, but a lot of it is -- as much as i like fabrizio, there should have been a plan. there was no plan. everyone knew that china was coming away, going away. look at theguides. everyone. look at nike.

that's one where i think that you would see it go up if there were a change, but i think that estee lauder was terrible, and when i met with fabrizio, he's retiring, but he was a great executive, and then this thing really went bad. >> yeah. why do you think ulta is not only not down in sympathy, but is the number one s&p'er at the moment? >> very strange. we got a downgrade of ulta too. it's almost like people think something's going to happen there. i'm not as close to what estee l lauder is saying domestically right now. well, go ahead, make my day. estee lauder, i feel awful about this, but i'm going to say it because i would like fabrizio very much. >> i know you do. >> this was on him. >> really? >> yeah, it was on him. >> you don't think it's a macro-china turn? >> no. i think that i know that e.l.f. is not a comparison, but i think his prices were too high. and some of this is just like go substitute -- estee lauder, take

mac out and put e.l.f. in but turn the bottle around, and fabrizio, i'm sorry i'm saying this, but people don't know the difference. e.l.f. makes its stuff in china. if you put up e.l., i would joke to the club, i should have bought e.l. and then an "f" because that was the one. if you put an e.l.f. on the chart, you would say, why didn't i buy e.l.f. and why did i buy e.l.? i did because fabrizio had been one of the most remarkable ceos in the packaged goods for a long time and he made his bed with china, and china didn't come back. i'm saying that if you make your bed with china and you don't have an alternative plan, that's not good. i do think, again, nike, no alternative plan, but starbucks, no palternative plan, so china s a black hole. and i think it wasn't so hard in 2016 when president trump was elected to realize this thing's not going to work, and then hardliners come in.

well, president xi became a hardliner, and you know what? you're not going to get -- if you have a mini-cultural revolution, make-up doesn't factor in at a very high level. we're going to preserve the rights for women to get made up and wear expensive stuff. no. that's not -- i mean, it's a regime that doesn't emphasize that. it's a regime that doesn't emphasize gambling in macao. it's a regime that tells you what to do. we keep thinking it's somehow a pseudo -- that it's not a democracy, but it's something in between. no. it's, i would say, fascism, but people will say, oh, how do you do that? how can you say that? but there's a strong ruler, and i don't want to go against him if i were there. >> certainly china weak ness ha had an effect on a lod of commodities. oil is down. i was looking at the average price of gasoline in this country and it's down like 46 cents.

>> it should be helping the fed make up their decision. obviously, they think that's -- i would say that's fortuitous, but remember, even janet yellen was kind of wrong about oil. everyone's wrong about oil all the time. i do think that the one to worry about is steel. lorenzo was on, the ceo of cleveland-cliffs, and saying that, look, this chinese steel is flooding the world. now, that's an article about that. but i think what's really bad is it's going through mexico to up to us, because u.s. and -- the usmc, the trade, the new nafta, doesn't favor the united states steel companies. now, that company is -- if you look at that stock, that's bad, but even new core, which is a remarkable company, is being hurt and the price of the grades are coming down in price and -- see, look at that. that's a great american company. we want great american companies to be protected from dumping,

and i think that the -- the president should be focused on this. the current president. then with the union. what the heck are they doing that for? what, the union people are going to vote for trump? i know there was a split in the teamsters but what matters to me is that someone should be making sure we do not get flooded by chinese steel through mexico. >> we're going to hear more from the uaw this week in chicago as one of the speakers at the dnc. >> shawn fain is a radical. >> not only did we mention the gm salaried workforce reduction, but auto dlelinquencies, jim, ae accelerating, unlike credit card delinquencies, which are slow to this. >> you need your car to get to work. and people kept them -- people don't remember, but in the 2008-'9, people gave their keys for the house but kept the keys for the car so they could go to work. so, that is surprising. good piece of evidence, again, that the fed ought to be a little more circumspect about staying tough. that's a really -- that's a

gut-wrenching figure because that's -- people don't default on their cars. we're tested. 2008-2009, people did not default. so, maybe things are a little tougher than people realize. >> there's an interesting piece, drw today, again, points out we're 0.9 off the cycle of low unemployment and typically, when that happens, the next three months, you get further acceleration in unemployment. >> that's true. >> maybe this mission for powell on friday is to remove a sense of panic out of 50. >> i think he has to. i think he has to say everything's on the table. i also think that he's cognizant, but you have to be -- look at the st. louis fed. the numbers are all bad. the st. louis fed is the best data. the numbers are bad. they're not soft. they're bad. they're bad very quickly because of exactly what you said, the acceleration. jerome powell is seasoned. i think he sees it. he just has to put it out there that everything's on the table and -- except for tightening.

>> and you think equities respond differently depending on the size of a cut? >> i think that there will be people who are literally going to have an algorithm which says, what to do if they're minus 50, and it won't be positive. we regard it as panic. so, you have to -- just what you said. you have to assure people that they're not doing it out of panic. rates are very high, and we don't want people to lose -- massive numbers of jobs. the gm is interesting. that's kind of what happens. you start cutting the people who haven't -- who don't -- i don't want this to sound awful, but at goldman, we would have had, deadwood and that's people at the c-suite, people in white-collar, and i always felt bad about that, because these are not deadwood. they have jobs. they do things. >> sure, sure. >> but that's what you do when you're fat. you have to start cutting. the pe multiples of these companies are just so ridiculous. i mean, you're looking at 4.5 pe for next year for gm.

4.5. that usually means that the earnings are going to be half, and that the stock's really trading at, like, nine times earnings. >> speaking of cars, bernstein today reiterates their underperform on tesla. tony saccon agi, his view is tht waymo and cruise are running. >> he's right. he's right, tony. right on apple, i'll give him that due again. i would say the october 10th meeting maybe just once again maybe with a little more effusive nature because he was down beat, elon, about why it's a technology company, and he'll have other things, including self-drive, but you're right. i mean, i've been in a cruise, then a week later, it was suspended because of stuff, but it's back. i'm been in a waymo, and waymo is really darn cool, and i wish

everybody could have it. we had, like, take us to the best pizza parlor. okay. it doesn't say that, but it does it. i think that waymo is one of the most undersold pieces of alphabet there is. >> really? >> yeah. they just -- you know, they didn't -- if you look at the nfl sunday ticket, i mean, what a big piece. they don't talk about it at all. they have to learn -- like, sometimes, ruth porat is done. will you sell the darn thing? let me give you five bullet points. literally, i happen to love ruth, and she knows it. i love the whole crowd there. but i would like -- i said, come on, ruth. sell the darn story! and you know, i'm more of a showman than she is. >> yes. >> maybe the new person will be a little more. and one of the great people at eli lilly, annette, she's understated but tells a very good story. she was cfo of lilly. look at the stock of lilly. >> yes, people are well aware of that performance. as we go to break, watch bonds today. actually, the front part of the

week is pretty light on the data front but we will get some l.e.i. at 10:00 today and a little bit of fed speak as we move into tomorrow. bostic and bara tomorrow. powell on friday. stay with us. (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish.

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consumables that are taking the place of going to a walgreens, it has low margin, 20% versus 28. if you move up the consumables you are going to have not as good margin. what's interesting remember in the big selloff that we had, it was that prime was not good. retail was holding off. the selling. this doesn't mention that. it's really about how people -- there's a great, great tremendous paragraph, very well run piece, very well -- daly habits create behavior change. this is the existential threat to a target this week. why would you go to their food aisle, go to their consumables aisle, which is cvs, when you can order the stuff and have it there. they steer to some versus others. this piece the first piece i've read, don't give up the ship just because they're doing consumables. longer term the gross margins will be good. you can order chapstick, and it comes. you know they're losing money on

that i think don't bet against andy jassy for a way to be able to figure out how to do this profitably. >> i was thinking about the best dow names of the year. you want to guess the best one? nvidia. >> it's walmart. >> oh. >> the number one dow stock. by the way, the last three earnings days, have gapped up to all-time highs. >> walmart has the only incredible alternative to amazon. i think when you go out there they'll admit they have a really good program and give you a lot of specials too. walmart is so underrated. my daughter's going to walmart today. big candy run. that's ha we do. stupid candy aisle like the dollar tree. we do that. i always say go to walmart, it's cheaper than the dollar tree and better. i've said that doug mcmillon last time. my wife, like my wife -- my daughter says we have to go. >> that's tonight, jim. >> i have palo alto. this is interesting. palo alto has an extended collaboration of cyber security for the energy sector, but it's about earnings.

and we told people from the investing club, we have a position, this thing has been a rocket ship. maybe too much of a rocket ship. and we downgraded it from the point of view we bought a lot when it broke. we don't want to get people hung. there's cloud strike problems. don't get ahead of. some of the stocks have had big runs. >> busy week ahead. see you tonight. >> man, is it busy. >> "mad money." haiuupex nt. don't go away. my fear of recurrence could've held me back. but i'm staying focused. and doing more to prevent recurrence. verzenio is specifically for hr-positive, her2-negative, node-positive early breast cancer with a high chance of returning, as determined by your doctor when added to hormone therapy. verzenio reduces the risk of recurrence versus hormone therapy alone. diarrhea is common, may be severe, or cause dehydration or infection. at the first sign, call your doctor,

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(♪♪) good monday morning. welcome to another hour of "squawk on the street." i'm carl quintanilla with leslie picker here at post nine of the new york stock exchange. david and sara have the morning off. kicking off a busy week between jackson hole, dnc, retail

earnings, benchmark provisions to payrolls, and some fed speak. we'll watch all of it as we get to a nice start. dow up about 0.%. >> here are three movers we are watching. estee lauder shares in the red off the morning lows beating estimates issuing weak guidance announcing their long-time ceo who joined the company as coo in 2008 is retiring next year. amd shares gaining on news that the chipmaker is buying server maker zt systems for $4.9 billion in cash and stock. amd says the transaction will boost its ability to make ai hardware. and don't miss an exclusive interview with ceo lisa su later today on "closing bell: overtime." also take a look at shares of gm. the company laying off more than 1,000 employees across its software and services divisions. we'll bring you details later this hour, but shares down about 0.15%. >> let's get to the big data point of the morning. rick santelli has l.e.i.

hi, rick. >> l.e.i., leading economic indicators for the month of july. what's fascinating here is that it is now out at down .6%. that is not as good as the estimate which was only down 0.4%. the magic number here, is 29. it's been 29 months since we had a positive integer for leading economic indicators. the last positive integer was february of '22 up 0.3. in between then and now the best we've had, is february of this year when it was unchanged. so down 0.6 is the worst since october of last year. you can see yields moving slightly lower on the long dated treasuries like 10-year. we see twos and threes up a little bit on the session. so we want to monitor, but it does seem as though some of the slower economic news that's coming out, is taking a bit of a toll and that toll seems to be more on longer maturities.

carl, back to you. >> all right. rick, thanks so much. rick santelli. stocks are coming off their best week of the year so far. s&p, nasdaq with some seven-day win streaks kavg out some moderate gains for the month. dow still working on it. mike santoli is with us with a closer look at whether the august volatility is helping or hurting the bull case. >> it could be played both ways. i think the way i think about it, a month ago friday was the peak of the market, the s&p 500. july 16th. at that point you had extremely high expectations about soft landing, ai profitability, what we're willing to pay for the ai profits, whatever. policy outcomes. everything seemed like it was going in line with the bull case. we needed a test of that. i think sometimes a proper scare is the only way you know what are we really afraid of, has anything changed and where does it go from here? i think we surfaced a lot of those issues, which is softening job market, the consumer, you know, yeah walmart was great last week, but probably off the

boil. at minimum. the way that the market came back from it, tells me that it was mostly a routine correction that got there because of this extra glitch in the matrix scare we got from the liquidation of all the hedge fund strategies. so far so good. i think one thing i'm focused on to see if it's really an all clear is the character of this market comeback. it's been slightly less aggressive, slightly more defensive. you see things like semiconductors way off their highs. that doesn't yet look like a convincing comeback. nasdaq 100 even has been lagging. bitcoin has actually traded far below its record highs and bond yields are not up that much. so altogether you're saying, maybe there's a little bit more of a defensive tone running through this market, even if earnings are coming through and, therefore, we support the s&p 500 just under, you know, 5600 so far. >> is there still a risk, though, that some of the knee-jerk reaction that we saw in early august could still come to the forefront? i mean, i know a lot was driven

by the carry trade which may still have some room to play out potentially. >> i'm open to the idea that any time you have seen one of these real extreme pulse liquidation events where you get the vix above 50 and everybody seems like it's sell everything, usually it's not a purely isolated thing. people are starting to call it a flash crash. and it might in some respects be that, only until options market because so much of the stress occurred in the premarket and it was essentially no bid and all the rest. i don't think any really flows, but what is interesting to me is that every day you go by and the market seems calm and the gears are locking together, and it seems like we have the regular rotations and nobody is really needing to sell, it makes people look back and say, that was a fluke. and so i think that, you know, we're good for now. if i can go back to 2015, you had the chinese devaluation in august of that year. another kind of flash crash

looking pullback, you actually recovered all of it like by the end much like october, and it wasn't over in terms of reckoning with the underlying fundamentals. i don't think we're going to be able to get too far away from are we late cycle? you know the lchblts e.i. hasn't worked one bit as rick was saying. we're two and a half years into negative l.e.i. and no recession in sight. i don't think you're going to be getting to the moment where people are em wrasing the idea it's no landing for a while. >> shorter term trshgs goldman's desk commentary the pain trade for equities in the next two weeks as everyone is on vacation is high. the bar for being bearish at the beach is high. this is new. do you agree? >> i think it's new in his framing of things. his last said we're in the eighth or ninth i think of the correction and by that point the correction was over, at least right now. it seems the correction was over. you can get cute about figuring out which week is going to hurt more people by going up versus

down. in general terms, i do think that -- look, bonds did their job in this pullback. i keep going back to that. therefore, portfolio stress was otherwise than it would be in a 10%. that's different from a last year. last year stocks down, bonds down, getting hurt at all sides. we can hang in there. he's looking at corporate buyback flows make sense and maybe no more need to sell. i say fine, but we're going to get back to the highs if we do and you're still going to say valuations are high, exposures are pretty high. how much more can we squeeze out of it? >> good setup. thanks. mike santoli. let's talk about where stocks go from here. dan is with us, richard bernstein adviser's deputy cio. good to see you. >> thanks. good to see you too. >> you feel like we have our legs back or not? >> i do think we have our legs back to some extent. i mean i think that we do have to recognize that there has been some softness in some of the economic data recently, but the problem with the markets is, it's a shoot first, ask

questions later market. so the market says to overreact, and some of the players in the market tend to overexacerbate some of these moves. the reality is the data is coming in a little soft, but at the same time, we also have to step back and recognize that the fundamental driver of markets is earnings and earnings growth is not only accelerating more importantly it's broadening out by sector, by size, and globally and i think that's a pretty good support for the markets outside of the normal type of volatility that we've just seen. >> right. would you characterize the q2 beats as interesting or material and do you think that some of these revisions coming in a little shallower than we're used to is a good sign? >> yeah. i always think it's a good sign. i think that when you set the bar low, particularly for some areas of the market where, you know, it's hard to imagine the bar getting any lower, i think you're really setting up for some positive surprises, especially with this sort of negative narrative around growth. in terms of sort of the earnings

season, i think what's encouraging is that you are seeing the number of companies, the percentage of companies, that's -- that are missing estimates, you know, remember companies -- no one manages around missing estimates. if they miss estimates something has gone unforeseeable wrong. the percentage of companies your seeing that has gone down despite what people call lackluster earnings season. i think that's an encouraging sign and this growth story, isn't falling off a cliff, part of the worry i think the markets have. >> one thing we were talking with mike santoli about, was the potential for another bout of volatility. do you expect august 5th to essentially be kind of the short-term lows here, or do you think there will be additional draw downs throughout the remainder of the year? >> yeah. you know, leslie, i don't know in terms of what the volatility picture is going to look like. i think it's reasonable to expect that volatility is going

to be -- come in fits an starts and be elevated this year. that's normal for an election year and normal for a period where big chunks of the market are seeing slowing earnings dynamics. that's normal for a year where, you know, there's a lot of geopolitical events. i think when you look past all that short-term volatility, i don't think there's a real reason to be worried about imminent collapse. we have to keep an eye on some of these leading indicators that are, you know, potentially, you know, starting to show some signs of weakness. but i think even in the scenario where those indicators are indicating some sort of recession in the future, we have to remember that outside of these shocks, these exogenous shocks, recessions take time, and it feels like death by a thousand cuts. the people that expect a recession is going to start tomorrow or three months from now, i think that's a bit too early. in the meantime, there's a lot of fundamental earnings spuppor here. >> there was a note over the weekend looking at basically the pilars that dictate consumer health, right, employment, wealth, and credit. and i wonder of the three, which

would you pick to worry about first? >> well, i think they're all showing signs of weakness, carl, and i think that's, you know, part of that is really coming off of these, you know, gang buster levels that we saw post-pandemic, right. some of that, maybe two-thirds of that story of slowness is really a story of normalization off unsustainable levels. i would say that we've gone beyond that and wage growth and jobs growth, hours worked, all those areas that are drive total wealth and spend powering are coming down. but we're still pretty healthy levels and i don't think there's any reason when you combine that with balance sheets and confidence to expect that's going to collapse, you know, in the next few months. >> right. we'll see what -- how certainly the fed chair frames all of this in just a few days, dan. really appreciate your time, especially on a week like this. thanks. >> thanks, carl. quick programming note, do not miss our coverage of jackson

hole. the economic symposium there begins thursday and on friday we'll hear from the chair live as he begins his remarks right here on "squawk on the street." as we head to break, here's our road map for the rest of the hour. today marks 20 years since google's ipo. shares are up more than 7,000% since then. we'll speak with one analyst who is forecasting double-digit gains from here. >> 30-year mortgage rates holding at fresh lows. time to start buying the home builders with rates potentially on the horizon. >> goldman sachs cutting their recession odds. the man behind that call, jan hatzius, will join us. "squawk on the street" is back after this break. don't go away. since my citi custom cash® card automatically adjusts to earn me more cash back in my top eligible category... suddenly life's feeling a little more automatic. like doors opening wherever i go... [sound of airplane overhead] even the ground is moving for me! y'all seeing this? wild!

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you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh welcome back to "squawk on the street." the tech sector coming off its best week in almost two years. deal news today with amd buying zt systems for $4.9 billion in cash and stock. it's also the 20th anniversary of google going public. stock up more than 7,000% in that time. so what's ahead for that stock and the tech trade from here? jefferies analyst brent phil joins us has a buy rating on alphabet with a $220 price target. brent, thanks for being here. if we can, i want to start broad and get your sense on kind of where you think the fate of the rotation trade is from here for the remainder of the year? >> it's all been in ai

infrastructure, so we think that over the second half of this year, you're going to see money transition from the ai infrastructure names to some of the software names. so we still like microsoft servicenow and a handful of other names inside software, so we think that rotation starts to begin later in the year, given all these big capex cycles we've seen. we continue to like google on the antitrust concern. we don't see the company getting broken up or paying a big fee. we think, again, almost 12 times ebitda, it's a pretty cheap-story. amazon is also a top favorite when you think about what's happening in -- with aws and the advertising opportunity that they have and that business continues to reaccelerate growth as workloads move to the cloud and ai continues to build momentum. so again, it's been a tale of two cities. it's all about ai infrastructure

that's helped fuel semis. we think this will slowly melt over to the software side and we think that that will have a bigger impact as we go into '25. but we're still fundamentally positive we continue to see good things ahead for big cap tech. we don't see big red flags right now given some of the valuations that have pulled back and we continue to be favorable about the fundamentals. >> so capex cycle favorable. regulation, favorable. valuations even, you see as favorable. what about the m&a cycle? i ask this because as we mentioned amd buying zt systems for $5 billion, do you see this as more of a defensive or offensive play for them as it pertains to the competitive landscape? >> i think m&a is going to boom, and i think we see this later in tech cycles. there hasn't been an ipo market you hadhigher rates, you have a lot of companies that haven't been doing as well, and so we think there's going to be an m&a

boom. you've already seen it in software with a number of acquisitions. we just had another $1.5 billion deal last week that roker bought in the private market. we think m&a booms for a number of reasons, partly because there's too many companies we're seeing the consolidation phase and we think ultimately you have big balance sheets from a lot of big cap tech names that want to put money to work. aic haven't deployed any capital and investors are like what are you doing. >> your job is to deploy capital to do m&a, so it's been really slow, so, you know, you're going to see a boom. as it relates to the deal, russia speak to the deal, but i think it speaks to the importance of ai, what amd is doing and i think you're going to see a lot more of this. there will be a huge consolidation in ai. there's too many companies going after too few deals and as we learned in ai the companies with big capital, big users and big

data win. those are literally you can count them on both your hands who those winners are going to be. amazon, apple, microsoft, google. >> speaking of google, it's a good day to reflect on the company. we were playing sound of the ipo 20 years ago today. just this year the issues of what ai would -- how it would threaten search and since the judge's ruling i wonder if there's more onus on doing some of the parts analysis if a breakup really does happen one day. >> yeah. we don't think a breakup happens or a big fee based on our regulatory experts, but if it did, it would be good for investors. if you look at the sum of the parts when you break google up, break amazon up, the sum of the parts is greater than the whole right now. we think, again, we published a note last week that shoesz shows the sum of the parts breaking that apart. we don't think that happens based on what we've heard.

there will be changes potentially in the way that they go about their business, but we don't see it breakup. >> what do you think -- obviously, a 7% thousand gain over two decades is remarkable and i know a lot of investors when they do tend to kind of buy these high growth tech companies at the ipo, they think of google and perhaps a fomo trade there. where do you see kind of the next google as it pertains to kind of two decades of just amazing momentum, amazing growth, and execution from the date of that ipo? >> that's a great question. we vice president had a lot of ipos. it's been a drought in tech. we hope we can see this come back because it's been super boring in the ipo land. we don't have a lot of names right now. i mean there's emerging companies that everyone is keeping their eye on, data bricks, canva in the private market. you've seen interesting emerging stories on the other side,

private companies like perplexity, i've said this, the perplexity number searches on that system versus google are rising because consumers want a choice and i think perplexity has been a great choice for consumers. we'll see what happens. again, obviously, these are all private companies. we don't know when they're going to come public. but right now i think as we've said in the ai trade it takes capital users and data and google, amazon, microsoft and meta all have that. it sounds boring, but these companies are going to win big, and i think don't confuse it and don't try to make this complicated. they're going to continue to win because of those elements of their business model. >> it's amazing how much the tech industry has really changed over the last two decades as well. brent, thank you. >> thank you. >> still to come this morning piper sandler cutting shake shack, dutch bros and sweetgreen this morning. we'll talk about why after this

when we're back in a couple minutes.

got a bunch of movers in the

consumer space today. dominic chu has been tracking that action. hey. >> good morning, carl. we're focused on the well-known stocks on the consumer side of things and driving the headlines today. we'll start off with food and beverage. the shares of premium burger chain shake shack, sweetgreen and custom drink maker dutch bros getting attention this morning. shake shack, dutch bros and sweetgreen all lower. and this is due in part to analysts at piper sandler who downgraded shares of each of them, all go to a neutral weather, they were overweight before. they're saying they're tempering their view on the fast casual restaurant stocks given diminishing pricing power and more balance risk-reward. shake shack's price target lower to 114 from 121. dutch bros to 36 from 41, and sweetgreen gets upped to 39 from 3 after a massive upside move so far this year. sticking with that quick service restaurant side of things the biggest one by market cap in the s&p, is mcdonald's and today analysts at evercore reiterate

their outperform rating on the golden arches and raise the target price from 320 to 300. they think the brand remains strong and on track to gain momentum for value consumers as it rolls out more menu options for premium and middle-pricing tiers. mcdonald's shares up 2.5%. switch gears to the cosmetic side for our final consumer update. shares estee lauder swinging to a gain of 0.3%. well off the worst levels of the premarket after the brand behind its namesake brand, clinique, mac, bumble, all these brands report quarterly results that appear to have topped estimates gut gave a full-year forecast that fell shy of expectations and announced ceo fabrizio freda would be retiring and the board searching for a replacement. down after earnings and that announcement of the ceo stepping down. it will swing into a gain up 0.3%.

>> quite date for that company. dom, thank you. after the break goldman sachs cutting its recession odds saying recent data shows no signs of a slowdown. the man behind that call, chief economist jan hatzius joins us next. don't ay.gowa it will take billions of solar panels to power the world today. aes is making scale like that closer to a reality. introducing maximo, our new ai-enabled solar robot, designed and built in america. with max on the team, aes is transforming how solar farms are constructed. what was once strenuous is now faster. safer. smarter. at aes, we designed max with powerful features

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i. wrelcome back to "squawk on the street." i'm bertha coombs with your cnbc news update. secretary of state antony blinken warned today the latest push for gaza cease-fire and hostage release is probably the best and last opportunity for a deal. he made the comments meeting with israeli prime minister benjamin netanyahu and president herzog this morning. negotiations are expected to resume this week. sources tell cnbc british tech entrepreneur mike lynch is among the six people missing after a

super yacht sank off the coast of sicily during a violent storm today. local officials say a strong storm and tornado hit the area about an hour before the luxury yacht capsized. 15 people were rescued. and billionaire activist investor carl icahn and his company agreed to pay $2 million in civil penalties to settle sec claims of hiding billions of dollars in stock plenls. federal regulators say he failed to disclose billions in personal margin loans pledged against the value of his icahn enterprises stock. in a statement icahn wrote that he's, quote, glad to put the issue behind us and will continue to focus on operating the business. unquote. leslie, back over to you. >> thank you, so much, bertha coombs. stocks just about an hour into trading, holding steady in the green there. the dow up about 0.3%.

the s&p up 0.2%. let's get to bob pisani on more what to watch. >> in theory a strong market. two to one advancing to declining stocks. you see the s&p is kind of flatish because tech is under performing and it's pushing down the s&p 500. folks, we have essentially a defensive tone this morning. look at the leadership here. real estate, tech and semis lagging but real estate, health care, consumer staples, generally are on the tough side and leading here. big cap tech leading. weakness in semis today the tech rally appears to have stalled out. three days in a row we haven't been able to get tech as a big leadership group. alphabet and amazon are flatish to slightly up. we have a fairly wide dispersion this month amongst big cap tech. meta and vidnvidia up, apple is

plattish. where are we on the markets. the soft landing scenario intact. economic data shows some slowing but job growth is strong. the fed is expected to begin cutting rates in a few weeks and earnings have been remarkably stable, even if some companies are experiencing some pricing pressure. margins, however, are holding. perhaps most importantly, the recent volatility in early august caused a significant unwind of many crowded trades, including parts of the yen carry trade. that may help make markets a little less volatile in the coming weeks. on the negative side other than the week after christmas, the next two weeks are the late test volume days of the year. volume typically will drop about 20% below average in the coming weeks. also, remember, september to october remain among the worst months of the year. finally although earnings growth expectations remain strong at roughly 10% this year, 15% next year, robust expectations, the

valuations are high, 20 to 21 times forward earnings that leaves little room for error. i think the important thing you want to watch today, one other thing, fxy, my etf of the month a couple weeks ago, the yen carry trade etf, and here you see it's been up. it goes up, it means the yen has been strengthening an you saw the big issues that we had, the big rise there a couple weeks ago. the yen strengthened there. that's been going up the last couple days. i don't see a lot of tremendous activity. people are keeping an eyen that one in particular here. rubin, you mentioned earlier, at goldman, mentioning that the next two weeks, the pain trade is up. that's based on the idea that we have had a tremendous amount of volatility sort of taken out of the market. it's a very interesting call that he made. i saw that this morning. typically not much will happen here unless you get a data point and without a lot of people around, normally if you get a data point where you get a weak economic number it will drop quickly in the next two weeks. that may not happen given all

this yen carry trade being taken out of the game here. the real problem is, we don't have any idea about some of these trades that are out there, and this yen carry trade we had no idea how big it was. couldn't put an estimate on it. nobody knew. all we knew was the effect was a dramatic drop in the nikkei. we saw the outlying issues around it, but we don't though how big it is. the lack of -- the high opacity level, particularly in the fx trade, we have no idea what goes on in the fx business and the reason we don't it's all over the counter. so we have -- normal stock exchange we can see where the money goes, the trading and we can say where -- what the numbers are. i know how much money is in the u.s. stock market right now. i know how much is in the global stock market. we have no idea where the money is in the fx market. we have no idea where the money went in the yen carry trade. that creates a lot of problems figuring out exactly how do we make predictions on what's going on. we don't have a lot of very

good -- our hands around the derivatives trades that are out there. they're in the trillions. we have no idea what they are. this causes a lot of, i think, uncertainty around the markets. it's the one thing that bothers me. i like being the stocks guy. i know where the money is going. i have no idea where the fx markets are and where a lot of derivative markets are now. i can't get my hand around it. >> we got a lesson, that's for sure, the last couple weeks. as you know the fed chair is gearing up for his big speech at jackson hole later this week. many expect him to lay the groundwork for a rate cut in september. goolsbee on "face the nation" talked about policy. >> i think you've got to have caution when you see small business defaults rising like they have been rising, when you see consumer credit delinquencies, credit card delinquencies rising like they've been, those are warning signs. there's some others that are more positive, but they're definitely of concern and if you

keep too tight for too long, you will have a problem on the employment side of the fed's mandate. >> meantime, goldman lowering its odds of a u.s. recession in the next 12 months from -- to 20% from 25. joining us is jan hatzius. jan, great to have you even remote. thanks for being with us. >> good to be here. thank you. >> i had to think friday when i read your note, retail sales and claims must have been pretty decisive for you to trim your odds so quickly after raising them. >> yes. i think they were definitely encouraging data points. claims the last couple weeks, retail sales, you know, plus 0.7%. if you take core reetail sales and translit them into real numbers, adjusted inflation numbers, but i think in general the last couple weeks have basically said that the economy is still doing fine, and, you

know, typically when recessions occur or when risk is really rising sharply, things happen pretty quickly. so if you see a couple of weeks of data that say the economy is still doing fine, you want to put some weight on that. so we went from 15% to 25% after the employment report. we've now taken that halfway back to 20%. and we also said that if the august employment report that's coming up in early september, if that is okay or better, we'll probably take it back to 15% which is the long-term sort of unconditional average probability of recession. >> right. that said, you do point out that a lot is riding on the august jobs number. we all know what's happened the floimts runemployment rate comig off the cycle low. do you think it's important for powell to frame a cut on friday in a way that would make a 50

basis point cut not seem frightening? >> i think he's not going to be specific in the moves that are coming. i'm sure his comments will be consistent with the idea that i us risks are two-sided and there are sides of softening in some areas and more importantly, or as importantly t inflation has come down. i don't think he's going to let himself be, you know, nailed down one way or the other. you know, i think if the data supports 50, they should do 50 and they -- you know, i think they will do 50. but i think it's much more likely that things will look good enough for a series of 25 basis point cuts to do the job. >> do you think that the 50 is necessary to your projection for a recession? does that have any basis on kind of whether you lower it down to

15%p i know you mention that september 6th jobs number needs to look reasonably good. i'm trying to get a better understanding of what would bring that number down to 15%? is it the combo of cuts and a good jobs number and good data? what are you looking at from here? >> it's really the data. if the next report basically provides real counterpoint to the last report, say via a decline in the unemployment rate that undoes some of this increase, then i think that would be a reason to go down to 15%. obviously, we'll be looking at a broader range of indicators, not just the unemployment rate. the payroll numbers are important too. i would say the unemployment rate has been so in focus that that will be our main, you know, our main per spengtive and the thing we look at most. >> we had a discussion with jim this morning about auto delinquencies and trying to

remember in what order people try to pay their bills and which -- what's most important. it's happening at a time that these rise in delinquencies, even as credit card delinquencies don't seem to be rising as quickly, sort of characterize your level of worry on that front. >> i think there have been weaker indicators. even in auto delinquencies it depends on which indicator you look at. the new york fed has a quarterly survey of household credit and credit quality and that actually showed slightly better numbers in the second quarter. but then there are other data out there that alsclude additional issuers that have looked worse. you're right. and that is something that needs to be watched. my overall view, though, on the consumer is that the consumer is still hanging in there and that basing that not just on the official retail sales data, but also on the earnings reports for

the second quarter, where the overall message from companies on the consumer was still okay. despite some weakness at the bottom end. overall it wasn't too bad. i. >> if the consumer is holding up so well, what do you think would be the rationale for doing a 50 basis points cut? >> i think the rationale is mainly that the economy no longer needs a five handle on the funds rate and inflation has largely moved back to the fed's target. you know, the three-month average core pce inflation rate an an annual rate, we think, it's probably going to be below 2% when the july numbers come out later this month. and the risks are somewhat more balanced. 5.38 is clearly a high level for the funds rate and they should be moving away from that. so i think that would be rationale for doing 50.

now i also know and chair powell hinted at this in the last press conference, that they prefer to move more gradually and i think it's also perfectly defensible to deliver a series of 25 basis point cuts. >> we're going to hopefully learn a lot more on friday. interesting memo from you over the weekend. appreciate you coming on to talk about it as always. thanks. >> thank you. >> jan hatzius at goldman. reminder do not miss our coverage of the jackson hole economic symposium beginning thursday and the fed chair speech on friday. after the break real estate one of the worst performing sectors on the year but as jan said as these mortgage rates fall could it be time to start buying the dip? we'll talk with one analyst who says stay cautious after this.

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with a retirement and benefits plan that's right for him. let our expertise round out yours. welcome back to "squawk on the street." raems one of the worst performing sectors this year but as mortgage rates begin to fall and investors get ready for potential rate cuts ahead, is the sector worth a lack? our next guest's top pick in the space is builders first source and also likes toll brothers which reports after the bell tomorrow. jay mccanhis joins us now. jay, why are these some of your top picks? >> sure. so thanks for having me on. on builders first source, you get the ability to play single family starts potentially moving higher. they're one of the largest companies in the building space and we think at this point whether you're looking at single

family for sale or rent, builders first is going to be one of the premier suppliers in the country to them, to the people building those homes, for rent or for sale. for capco, a manufactured housing name. you know providing a smaller ticket house in these days when affordability is ready really stretched and also with a pristine balance sheet, we think are reasons to take a look at that one. you're right, toll brothers is going to report tomorrow after the bell. we're neutral on that name. a little cautious on orders relative to consensus. longer term, we like the builders. we think there is a dearth of housing in this country but near term we've been concerned about excess inventories, especially for the entry-level builders. >> do you think that the prospect of a rate cut is already priced in to these names, or do you see a potential upside if indeed there are cuts to come throughout the remainder of the year?

>> i'm not sure about a rate cut being priced in, but i would say that mortgage rates have finally started to work down a little bit. certainly, you know, right now again, with affordability being stretched, with house prices continuing to march higher and mortgage rates come in a little bit, not back to the levels we've seen two or three years ago, any little bit will help at this point. i think some of the moves we've seen in stocks would imply that people think rates, mortgage rates, might be moving lower from here. you know, we've had the view since the beginning of the year that rates probably wouldn't do very much, and been somewhat right, i would say. you know, mortgage rates today are i think like 6.58 is the last i saw, so really haven't gotten much help since the beginning of the year but see where they go going into the fall. >> what's the trend right now on land costs, development costs? the lumber has been constructive, net, net. >> it has been.

lumber and labor have been helpful, but land costs we continue to hear from the builders that anywhere from a mid single digit it percentage gain to 20% plus depending on which builder you're talking about. that's been a consistent headwind to gross builder you're talking about. that's been consist tempt for this group and i don't see that changing anytime soon. >> jay, thank you. appreciate it. coming up this morning on "money movers" the apple price target $10 lower from here. we're going to discuss it with the analyst behind the call next hour. gm is the latest name to announce sweeping layoffs. what investors need to know when "squawk on the street" continues in a moment. and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not?

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look at shares of gm today. they will be cutting 1,000 salaried workers. who are the workers? what positions are they in? that 1,000 is worldwide and they're people in software and services. software and service technicians, engineers, et cetera, developers, about 600 of them are going to be in warren, michigan, at the tech center there, just outside of detroit. and general motors has been doing this on a regular basis. maybe not just specifically with software and services. but they have been judiciously making cuts on a regular basis and trying to be as lean as possible. the statement today saying, as we build gm's future, we must simplify for speed and make bold choices and prioritize the investments that will have the greatest impact. look at shares of general motors this year. they have approximately 53,000 salaried employs.

1.1% of the workforce is being laid off here. i think you're going to see this not just from gm, or the legacy automakers on a fairly consistent basis as they try to be as lean and efficient as possible. >> shares are still beating the s&p for the year, by about ten points. i know you were doing a piece this morning on what boeing has done since the new ceo was named. >> shares were up more than 10% earlier today. more than 10%, going back to the new ceo on august 8th. we don't know specifically what he plans to do, as ceo, in terms of restoring boeing to where it should be. but he's making all of the right moves, guys. he's met with employees. he's met with suppliers. he's met with customers. we talked with ceos like scott kirby of united airlines. what he is doing is saying,

look, i need to listen, before we come up with a plan of what we're going to do next. at some point, he will lay out what his vision is for boeing. that may be in the coming weeks or the next month or two. and that's really what i think people say, okay, now, we have something to measure his future performance against. in terms of where he wants to take boeing. >> phil, appreciate it. two very important companies on your beats, plural. we continue to take stock in some of the consumer names, specifically beauty, after e.l., este lauder, says it will be retiring at the end of '25. shares were down and avoided some red arrows in the regular session. couple that with what you learned last week out of berkshire, and the filings out of ulta. those shares are going in

different directions. >> and couple that with the consumer and how he's been perusing through some transcripts and saying the consumer is holding up better than the market is estimating. session highs now. 00w up 200, 25 points away from 56. and "money movers" starts after this.

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good monday morning. welcome to "money movers." today, we're going to find growth this weekend at jackson hole. the ceo is going to join us on why the impact of rate cuts may catch the market by surprise. we're live in chicago, as the democratic national convention kicks off. the former chief of staff to v.p. mike pence is with us. got an anishuation of apple today. >> markets are holding steady. the dow up half a percentage point. the nasdaq up 0.3%. and the ten-year treasury, holding at