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essential that you keep these banks and brokers. you have goldman sachs, the regionals acting good. you don't want the message

>> that's one of the largest spreads in history. i think the bond market is screaming the better go, and not just 25 certainly 50 in september. >> interesting that i view it as the tail wagging the dog. so you're saying there's nothing under 380 as a technical support. >> yeah. >> so the next is three and a quarter. >> yeah. >> if that were to happen the technicals would tell you the fundamentals had 20 deteriorate quickly. >> it's hard to come up with an excuse. >> reporter: >> i think the clues within the equity market that we should be aware is what are the equity markets doing. a pair we've looked at for years to get the market perception of the economy. that's generally still okay. i would not want to see discretionary get worse from here, it tells the story why

would yields get much lower? think about the evolution of the leadership, we've seen reits improve, utilities improve, a little life to health care. staples general not involved, you include the staples you wonder why is the cyclical leadership about to emerge. >> it's like the market if that weakens, if we do see this then the economy is not doing what we think it's doing. >> as yields have come down it hasn't been great for tech. that's the same thing you saw in late '94, '95 the fed with the rate cuts, putting about a 12% top norms tech from 94 to 95 tech underperformed. in the last couple of years where you couldn't own bonds and you owned tech in place.

if you can own bonds i'm not sure you need to own as much as the top of the market and the improvement at the expense of qqq or the semis is telling the story here. look at the semis. i know nvidia reports today but a lot aren't involved, no amsl where's qualcomm? >> but the broadening makes you bullish still, that's the bottom line? >> yeah. >> so we're not going to go below. i think we can say, okay, i'm not going to buy -- 380 is as low as we get in your view. >> it's essential we hold there. if we maintain the status quo. >> we should hold there if what we think about the economy is correct. >> absolutely. joe i would add to it. if you look at the tech name, tech's lack of leadership the last four or five weeks has not come at the expense of other sectors the rest of the market has gotten better. we have to welcome that. >> right. thank you. when we come back, apple

sets the date for the new iphone launch while the tech giant also announces a major management shakeup. we have the details right after this.

a shakeup in apple's top management tier and steve kovac is here with more on the details. >> this was a shocking move here. cfo luca maestri is stepping down from his role. that's going to be effective on january 1st of next year. taking over is kevan parekh one of luca maestri's top lieutenants he was expected to get the job. he'll join the executive team

reporting directly to tim cook and luca maestri is going to lead a corporate services team at apple starting in january. he has a long tenure at apple became cfo in 2014 about a year after he joined the finance team since then stock is up about 680%. parekh has been there for 11 years. we're seeing an interesting trend with apple executives leading the leadership team. phil shiller is now an apple fellow and dan riccio he was over hardware and now he's on division pro. the execs leave but don't really leave. >> i was saying earlier i think that should be comfort to apple shareholders. >> 100%. >> it would be a different situation if he was walking out the door and leaving abruptly,

that would cause concern i think. >> exactly. >> if you can build the team of leadership and continue to keep people interested in and not burn them out at a pace, keep them interested in things they're doing that's good. >> yes. and apple has been good with the leadership team. >> luca maestri is very key. >> luca is very key. i meet with him every quarter but parekh is in the room too. this is not foreign to him. >> this is something that tim cook does so well. >> you don't see it at starbucks, disney. even another founder led company like amazon figured it out but some other companies just not having it. >> it's kind of shocking to see -- >> barely reacting. >> it tells you how well they've done the move. >> when it first broke last night it was down .8, paired back after people digested it, it's a nothing thing.

steady as she goes. >> he's not old. >> 60 i think. >> he is 60 but -- >> to me that's old. >> to you that's old. >> to me it just means wise. he actually might know something which doesn't come till about 45. how old are you? >> 31. >> any guesses on how much he's worth. >> the new guy or -- >> the old guy. >> a lot. >> i know. they didn't disclose it but people figured it out. i don't know if it's exact. 506. >> million? >> yeah. >> that's more than i make. >> for a cfo. >> not a founder. >> it speaks to the importance -- >> i think they're looking at his holdings and adding it up. i don't know if it's exactly -- i wondered. >> probably holding to apple's shares for a long time. >> a lot of rsus.

>> i don't know why i immediately think how much money has he got. i'm not trying to keep score on someone based on money. >> but the performance of the company. >> that's what i mean. >> yeah. >> if you're cfo and the stock is up 800% what are you worth. >> and record stock buybacks for shareholders. >> stay for a long time. coming up, our latest edition of sectorsector nomics. but first here are yesterday's winners and losers. okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet,

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let's turn to dom chu with this month's sectornomics with a focus on industrials. >> the industrial sector has been an underperformer so far this year versus the broader s&p

500. out of 11 sectors it's in seventh place. not great but still respectable. the industrial sector spdr is up about 13% so far over the course of the year-to-date period compared to 18% gain for the broader s&p 500. that gap has widened out more just in the second half of what we've seen so far in this year to date period. with regard to where we are seeing relative strength compared to the rest of the overall market and the stocks in there. we looked at the stocks within the sector and compared their current price to where they traded the last 200 days on the rolling basis, that 200 day rolling average. among the names in the industrial sectors versus their average trading place in that span, check out shares of 3 m maybe that turn around taking shape for those investors out there. it's 39% above the 200 day moving average. another one to keep an eye on is

a name we don't often talk about it's axon enterprise, the company formerly known as taser. those shares are 25% above their long-term trading average. so axon is on that side of things and another one is rtx, up over 40%. the gap above the longer term trend line is roughly 22%. compare that with the underperformers in the industry as well and one name in particular stands out. that's united parcel service ups, down 23% over the last year and trading at roughly 11% discount to where it has traded the last 200 days. there's your look at the sector, relative strength and weakness becky. back to you. >> they're begging me for no cross talk. but 66 to say, like it high and tight, nice cut. >> thank you got it done yesterday. >> you got it done? you got your hair done?

you mean you got it cut yesterday is what you meant to say. >> just behind the curtain, i do my own hair every day because you joe back when i first started here told me you like to do your own hair. >> nobody touches the hair. i don't want anybody to find out what's going on. that's why. >> fair enough. >> could be whipping it around. i could be -- coming up -- >> come in closer, i can't reach that far. >> you can do whatever you want to this and nothing is going to happen. >> i know. >> you know that. >> i've taken the leaf blower to it. >> but it does take a lot of work. coming up the nvidia effect, how the a.i. nvidia game chip taker turned the fortunes of reil investors. people could have become millionaires if you bought it a while ago. the stock up 3,000% in just five years. we're coming right back.

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people are waiting for this. even talked about it right at the beginning of the week. nvidia scheduled to report results after tomorrow's closing bell we'll hear from professional investors, analysts and strategists all the time. we do about the high flying stock now we'll hear from retail investors that got in early. nelson young bills computers as a team. where we learned firsthand the importance of nvidia chips the initial position from 2016 is now worth over $2 million. >> as a teenager when i was growing up, i'd build computers

so i'd source those components including nvidia's graphic cards. because i was buying them very frequently i figured it would be a good idea to own a piece of their business as well. so i bought approximately $25,000 of nvidia shares in may of 2016. and i've still held onto the majority of that original investment and those shares are worth a little over $2 million. it's been a roller coaster for sure. in 2021, when interest rates were lower and cryptos were increasing in popularity, there was a boom in nvidia's shares during that time. in 2022, that was a period where interest rates were starting to rise and the crypto bubble started to burst a little bit so there was a drop of nvidia stock

by over half of that period which was a painful period to go through. i ask myself, do i think the stock will be trading higher than where it is today five years from now? so long as i can answer that as a yes, i have the conviction to hold my position. >> and there you have it. 25,000 to 2 million. just takes picking the right stock and having that conviction. when we come back, politics and policy. what the markets and investors need to watch from the candidates on the campaign trail. also, check out shares of hershey, moving lower after a downgrade from citi. analysts at the firm expect a challenging year for the chocolate maker with recent price hikes probably not enough to osefft cocoa inflation pressures. you can see the stock right now down by about 1.75%. "squawk box" will be right back.

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we are now just ten weeks away from the november election. and following the democratic national convention there are increasing expectations for vice president kamala harris to give her first sitdown interview this week. for more on the state of the presidential race we want to bring in kim wallace, the head of washington policy research at 22v research. kim, we're looking at that post convention period for both of these kcampaigns. each got a bump during the convention. what happens now? >> becky, what happens now is we get polling tomorrow, maybe the day after to tell us what

respondents thought about the democratic national convention. more importantly a day or two before the september presidential we'll get a flood of polling surveys that tell us where the race is nationally and whether it's reset and how each candidate stands. >> what do you think each campaign needs to do to boost their cause? >> i would think for former president trump there's still the challenge for him to broaden his appeal to voters, and 2020 he lost to biden by 7.2 million in the popular vote and 74 electoral college votes he has to take some of that market share to prevail. for the vice president i would say continue doing what has come her way and what she developed in the last five weeks. >> does that mean no interviews, speaking, press conferences, no

policy just sort of hide until the election and hope that people hate trump enough to elect her is that what you're saying? >> not at all. i think both candidates have to put themselves out there. the next two months beginning the tuesday after labor day will be a sprint and there will be enough on each of them to present ideas but mainly stay in front of voters to be judged. >> it's amazing, kim, isn't it, it's been 31, 32 days is that a strategy do you think? i don't know, shouldn't the media at this point be complaining a little bit more about not having access or voters be complaining more about -- >> you know, joe, this has been obviously an unusual election to say the least. the 24 days that trump enjoyed large and growing caps over biden, he didn't present himself much, just benefitted from the

so-called vibe. the 36 days counting today that have been unusually supportive for the vice president, she's been out there, but as you point, neither of them have really exposed themselves to unstructured interviews to campaign events -- >> that's not true. that's not true. trump has been every couple of days he -- whether it's good or bad, kim, there's a lot of people that think it's bad that he's talking -- he's had multiple periods where he's had questions thrown at them and he's answered them. she hasn't answered a single question thrown at her. >> i'm not sure that the record is clear on that, joe. in terms of the former president's appearances, many have been in interview form like he did with musk. certainly that was structured. that was not wide open and obviously that was made for tv or radio. >> you're not watching much fox.

he's been talking a lot. some people say too much. >> that's part of my point, joe. talking to fox for trump is speaking inside the family. that's not going to help him win market shares -- >> it's like talking to cnn for a democrat. >> both of them, a exactly. i think the next two weeks is going to be a challenge for each candidate to throw away their comfort zone and expose themselves to voters. >> the swing states obviously are where so much attention is being paid and it matters. they've been so close. how many are we watching at this point? seven maybe? >> still seven. i think you might have to switch a few around, for example, north carolina is suddenly in play in ways it wasn't two or three months ago. but those swing states have been very important to outcomes the last two presidentials and as you point out, becky, they've each been close. ohio, a little less close. but the others have been very

close between the national share with the republican and democratic candidates. >> if if ohio is less clear, we're still counting that. what's the other? >> pennsylvania, wisconsin, michigan. i have north carolina in there. georgia is in into play. >> so we'll be watching this closely. when do you think you will have a good feel and be able to make a prediction you feel confident with? it feels so volatile this campaign cycle. >> i won't feel comfortable making a prediction. i will wait for ap to make that. >> predictions are hard, especially about the future? that's a yogi berra -- >> yeah, that's a very good one. >> tell me that's not true, the hardest predictions are the ones about the future. i'm really good about that.

>> kim, thank you, and we will check in with you again. we appreciate it. >> have a great day. we have news from eli hreul lee, the pharma giant making a play for people who want its obesity drug zepbound but can't get it covered insure insure, and it's about half the list price. patients will need to inject themselves with syringes instead of the pens the drug currently comes in, so apparently it costs more. >> yeah, and i understand that's the shortage issues. >> lilly says the production of single dose vials will increase the supply of zepbound in the u.s. and this offering will help them reach medicare patients.

l lily shares -- >> it seems like if you can put it in the a vial and inject themselves -- >> where do you inject it? >> probably your gut. >> maybe the leg. ass cheek -- i don't think i have said in that 30 years. >> what about ass hat -- >> i do. >> we're still on camera. >> i didn't realize that. >> and then bringing a billionaire and other citizens

into space. if there's weather or anything, let's do this right. >> let's wait. >> huh? >> let's wait. >> yeah, let's wait. nasa deals a black eye on the boeing space program, deciding to let elon musk' spacex return two stranded astronauts. we'll talk about all this and more with a rmfoer astronaut, mike massamino. that's coming you know next, on "squawk box."

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wednesday morning at the earliest. the mission is onboard a spacex capsule. it would send billionaire, jared isakson, and several other citizens to space. for more on this let's bring in mike massimino, former nasa astronaut, and now a columbia university professor on engineering, and he's the author of "moonshot," and thank you for joining us. >> thank you. >> is there a day that goes by that you don't say how amazing this how this quickly moved into the private sector? >> i think about it pretty much all the time. it's amazing, actually, when you read about what they are going to be doing, it's amazing. they are doing things the government has not done for a long time putting astronauts at

a very high altitude and conducting a spacewalk, and it's a jam-packed mission filled with a lot of exciting things. >> is the risk been minimized since some of the most scarring events in anybody that has lived in a certain amount of time, we remember where we were and what we were doing for a couple of those incidents and for some reason i can't get past worrying and having anxiety when there's going to be aboard. elon musk is amazing and spacex is amazing, and doesn't this raise the stakes, or the launches, have they gotten that down? >> it has been a while since we have had a major accident. we have had close calls and had things happen on space flights

and we have been able to recover from them and nobody has been hurt on them. >> the weird o rings on one and then tiles came off -- >> these are shuttle accidents you are talking about -- >> i don't mean to pick on the shuttle accidents. >> to answer your question, i agree with you. it's a dangerous business. we have learned a lot. i mean, the shuttle was a dangerous vehicle -- i had two space flights on the shuttle and looking back on it it was a higher risk than i think nasa wanted at the time, and now the space ships are -- >> they are. >> it doesn't land on a runway and there are abort systems that keep you safer and automation that keeps you safer >> that's what i was asking. >> 100%, we are saver than we used to be but it's still space travel.

>> a fuel leak postponed it a day. >> a helium leak. a little different. >> yeah, that was at the iss problem too. >> yeah, that's different than those that provide the ones on the ground, and it's a ground advice having a problem. >> this is why you are here so you can tell us exactly. >> what is going to happen to the astronauts abandoned up there? were you shocked with the decision to not go with the boeing flight home? >> i think it's the right call. i wouldn't say abandoned -- >> they were up there for a few days and now up there until february. >> yeah, it moved from a few weeks and it was moving the date until they could figure it out and now they know. they know what the date is. they feel comfortable with what they have to do, and they had

the failures and did a lot of testing on the ground but did not have enough time. they have to bring that spaceship back and they didn't have time to figure it out and they changed the date up there and they are coming back in february. >> what should that tell us about the boeing profits? >> nasa and boeing have had a good partnership for years and been the prime contractor on the space station for over 20 years and a lot of contract people and they have a good relationship. i think that spacecraft will fly again, and i think they will continue to do the testing on the ground and try and correlate what they did in space. i think there's too far along, both the investment by the government and the investment of boeing. a lot of their own money is inside of this. i would be shocked if they abandon ship here. i think they will fly it again. >> you go up, you go up for

eight days and then they tell you it's eight months. how are you feeling and what is -- it's like, i guess -- do you have a choice? i guess i could come to grips that i'm going to hang out. >> maybe it's better once you know? >> do you have wi-fi? >> yeah, you can make phone calls to call your family and friends. >> once you get past the small amount of space that you have, then you just know you better stay inside and wait until your time comes to go. >> it's a spaceship that takes you to orbit and back is small and you are only in there for a few hours, and once you get to the space station, it's about the size of a 747 -- >> the "the wall street journal said it's about three box cars.

>> no, all the ma julys. >> you have a little more for a few days. >> yesterday, they insisted -- or they said, at this point nobody has been put on calorie restrictions. looks like we have plenty of food. >> not going to miss meals up there. >> really? they have plenty of food? >> four months reserve food and water is what they have up there, and clothing and other supplies -- >> i would wear the same thing, but i need -- i do here, i do here, i do on set. >> i was not going to say anything. but they do have supply ships, too, that bring up deliveries, and they had one a few weeks ago and have another one in

september. >> do you think it's out of abundance of caution and they are going to send that thing back because of the helium leak, and they probably would be okay. >> it was not just a helium leak but a thruster issue. i know what you said about the accident and how horrible that was. >> yeah, that's in the back of my mind. >> the folks in charge, one was a colleague of mine and he was there when i was there as well, and we all remember those things. it was 20 years ago and the folks making decisions then are there and they don't want that to happen again. the probability of that spacecraft coming back in good shape is okay. i think it will get it back and it's a high probability of getting it back, and when you think about putting a person inside it changes the whole idea especially when you have a good option. in this case they have a good option. they are okay and staying

onboard for six months and they are very experienced, so the operations of the station will continue. the crew will be able to be returned safely. that's number one, safety. and the second is operations. this is a bit of an inconvenience and disappointment but i think they will fly again. >> they are yelling at us to wrap and have been for a while. what is the biggest risk factor to you? >> there's a lot. >> everything. >> you think about launch and re-entry. the other thing we don't think about is space walks. when we talked about it as a crew, we would say launch is dangerous and entry is dangerous, and you always have to pay attention, but space walks can be really, really dangerous, and we have not had anybody hurt during a spacewalk but have come close, and we will see what they will be doing.

>> space junk, too? >> yeah, that's part of it, too. when this private mission, they will be going up higher in orbit so it's more radiation and more debris at the higher orbit rate. i think they will be okay. >> we have all seen too many movies, obviously, because i hear spacewalk and i think 2021, and he's still going up there. in the george clooney one, that's space debris that got him, right? >> yeah, that's a movie, joe. >> yeah, i have seen too many movies. and then "alien." >> yeah, you have told anybody, i was an astronaut and they go, please. it's rare. >> impressive and amazing. >> thank you for having me. >> jack nichols in "in terms of

endearment," people were all over him. i am a fan boy. >> thank you for having me. you are watching "squawk box" on cnbc. i am joe kernen along with becky quick. i am impressed with brave people, i am. andrew is off today. among today's top stories, mark zuckerberg is accusing the biden administration making a claim in a letter to the house judicial committee, and was pressured by the fbi to not do the hunter laptop story. thanks, fbi.

and then apple set the date of september 9th for its next event where the company is expected to unveil its new iphone. lowe's has apparently become the latest company to back off of dei initiatives. according to reports the home improvement chain revealing the decision after learning it would be the next target of an activist campaign against companies pushing dei. let's get a check on the futures this morning. we have seen weakness in the dow and s&p, and the dow is off by ten points and the nasdaq flat as well. let's get over to dom chu with the premarket movers. >> and then netflix going up, and they are saying the streaming giant is in its strongest position ever financially and competitively, adding that live events and gaming will provide two

promising long-term revenue properties. also morgan stanley raising coca-cola price target from $70 to $78. it calls the drink's giant well positioned with durable pricing power, and those shares up maybe just marginally at this point now. by the way, for more on those big analyst calls and other top calls of the day, head toefr cnbc.com/pro. and then eli lilly moving down as the pharma giant is saying that newly introduced single dose vials will help eli lilly reach medicare patients that can't get the current offering by insurance companies.

it will be roughly half the normal list price for the popular drugs. it will be available through the directed consumer website. we have more "squawk box" coming right up after this break. ♪ ♪ leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire we really don't want people to think of feeding food like ours is spoiling their dogs. good, real food is simple. it looks like food, it smells like food, it's what dogs are supposed to be eating. no living being should ever eat processed food for every single meal of their life. it's amazing to me how many people write in about their dogs changing for the better.

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explore electric investment op"soulmates." soulmate! [giggles] why do you need me? [laughs sarcastically] but then we switched to t-mobile 5g home internet. and now his attention is spent elsewhere. but i'm thinking of her the whole time. that's so much worse. why is that thing in bed with you? this is where it gets the best signal from the cell tower! i've tried everywhere else in the house! there's always a new excuse. well if we got xfinity you wouldn't have to mess around with the connection. therapy's tough, huh? -mmm. it's like a lot about me. [laughs] a home router should never be a home wrecker. oo this is a good book title. ♪. let's take a look at the futures. the dow is now a little bit negative, down 17. now the nasdaq is up which is the opposite of what finally happened yesterday. joining us now, gabriella santos. the chief market strategist, hard not to like what we are seeing. nobody wants to fight the tape, i guess, but is there anything

concerning in the underlying mechanics much what you look at in the market, gabriella, or all clear? >> so i would say it's never all clear. when we think about the risks these days it's two-sided. the first on the more macro front, there's clearly a downshift happening in terms of the economic growth and soft landing and as chair powell and the fed members let us know last week, risks are now to the down side in terms of growth. for us the way to implement that in portfolio sz to be risk on. we still prefer equities and corporate credit but to remember that we shouldn't go to an extreme positioning in small caps, for example, or low quality cyclical stocks it's a time to focus on low quality. in terms of risks, here we come to the moreover extended parts

of the market like the magnificent 7 and the big reports tomorrow and we find sentiment and positioning towards the early winners of ai are pretty over extended. as we saw earlier in the summer the snap back of the enthusiasm can be painful for portfolios. >> we are done with the growth fears from a month ago when the vix hit 150. what also shakes our confidence? >> i think this idea of is the economy just downshifting or normalizing or is this the start of something worse? hopefully the fed does get going and we would prefer a faster pace to get the show on the road. >> you are not worried about inflation coming back.

you think they have accomplished that side of things and now there may be a lag to all of the increases we saw? so the risk is on the economy getting too weak? >> i think so and we would agree with jay powell and the fed's assessment that there's no risk ever, and i think sometimes you have inflation shocks. s cyclically, we do have the battles of shelter costs and next friday, of course, is key as well as every single thursday at 8:30 a.m., jobless claims and the whole mosaic of jobs data that comes out. for us it's still base case. growth is just normal annualizing soft landing and i think in terms of portfolios, whereas before it was

diversifying inflation shocks, still need to do that and we need to diversify growth shocks and bonds show they can help when we had the 8.5 sell off of the s&p. investors have equities or have cash, and the work is to fixed up a core aloe indication again. >> it was interesting. we heard the 380 is where the ten-year is, and there's nothing below 380 until three and a quarter according to the charts. if we are not going to stay above 380, then growth concerns is probably what will get us below the yields. >> i think what we have been

seeing is the range around 4%, and it has been sensitive to the fiscal discussions and what that means for the slope of the deficit and the debt. in terms of where we see the biggest room for yields to fall is in the short end of the curve. you are more two-year and below, which is interest rate sensitive. the forward curve is telling us rates 18 months from now will be closer to 3%. what is the sweet spot where you can lock in income and get capital appreciation, and it's the five-year part of the interim curve. there's no reason to go to the super long position. >> we are in a bull market, and it's going to last a while in stocks? >> yeah, we gently consider that the u.s. goes through the

secular bull markets. really we have seen that since we came out of the financial crisis. really, because the economy grows over time, earnings grow over time in the u.s. we have a lot of conviction that companies are really good at coming up with amazing new goods and services to sell their new consomers, and the last two have been great to show margins stabilized and are improving. secular bull markets that come with at times the cyclical sell-offs and we had the 8.5% correction, late july and august, totally normal. in terms of the next bigger downturn, that's usually associated with the recession if when it comes, and that's why we want to have some of those gross diversifiers just in case, but still lean into risks given the positive out lex of the next 12 to 18 months as well as over the

next few years. >> gabriella, thank you. i am writing that all down. >> i see you. copious notes. >> copious notes. you're right. when we come back, we will hear from richard greenfield next. and then a closer look at u.s./china rat a welionsndhat the upcoming election could mean for business. "squawk box" will be right back.

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media executive is clearing the way for skydance to go ahead with its deal. joining us is rich greenfield, partner and cofounder of light shed partners. this has been a saga, rich. what do you think of the latest move? >> it's a bit anti-climactic, isn't it, becky? we were just preparing for sort of the grand finale of the epic battle for paramount and edgar walked away, and that's it and it's game over. the reality, as much as it has

been for skydance the last 12 months, and the reality is the hard part starts now, they will own linear tv and streaming assets and they have to figure out how to earn a compelling return on those assets. >> what is the way forward, do you think? is it going to take a year, two years, before you think we see whether this is working or not? >> you know, i think what's so interesting about skydance is unlike every other -- becky, you covered this space with me for a long time and looked across these companies, and what is really interesting here is you will have a legacy media, like a traditional media company with a lot of legacy assets, tv stations and tv networks and studios, and you are juxtaposing that with a new ceo and owner,

meaning real owner, who had $100 billion in his family fortune and is 40 years old and a huge dreamer and has huge long-term ambitions. i don't know if you actually see this is truly working in the first 12 or even 24 months. this is a decade-long plus plan. he wants to build something -- he wants to build the media company of the future and build a streaming service that will rival netflix. look, he has the capital and sort of longevity in terms of how he's looking at the business to do it, and execution is what will matter. >> the stock is down almost 6% this morning, and meaning the bidding process is not going to continue to climb. what about the idea of shareholder lawsuits? that's what everybody said will come along the way no matter what happened because of the structure of the company. somebody is going to be mad somewhere. >> look, the stock was trading in and around, you know, low

double digits for a while. basically that was all because you were getting half of your stock at 15 in cash and the rest was obviously being valued by investors in the -- call it 7-yish range. without a second bidder, the stock is going to decline. look where wbd is and disney is. there's concern for the entire sector that skydance will have to prove over time that they can change the future trajectory of the company. right now investors are just lumping them altogether. becky, specifically with your question about lawsuits, that's the one thing -- despite him bowing out early, i think it will go a long way to mitigate the legal risks that redstone

and national paramount will face, and there will be lawsuits but it will neutralize that competitive process. >> last time you were here, we talked about this, and you wouldn't tell us who, and i am guessing, it was aol former ceo, john miller, and who along with shari redstone that invests in media and technology. is that the answer? >> that's the one we were certainly referring to that you noted that came out later that week. on top of that, steven paul, who we since learned is a very close dear friend of shari redstone. he has been trying to buy paramount on his own a while ago and that didn't materialize.

there were multiple close relationships in that con consortium. regardless of everything else, they didn't have the money to actually compete with the ellison bid. that was the part we never understood is, when you compete against one of the world's richest families, how do you win? some public market investors don't want skydance folded in, but the reality is there was not cash to fund a competitive offer so it's game over, ellison wins, and now let's see what he can do with this asset. >> good to see you, rich. thanks. >> thanks for having me, becky. coming up, the challenges for u.s. businesses in china. the secretary of state for global public affairs under president trump is going to join us, and later former fed chair,

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alexa ai subscription in october and it could cost as much as $10 a month but the classical alexa will remain free, and it could include ai generated news summaries based on your preferences. amazon sold half a billion alexa devices, and amazon shares, 175.35. seu >> is alexa running in your house? >> no. it's creepy. i am, like, super sensitive to -- >> this is me knowing i'm on -- i have a mic. >> right. the things you must say at home should never be picked up. >> even when i am alone and talking to myself, i am saying crazy stuff. a group led by an investment

is taking over red lobster. he's most recently an operating partner. that's pending final approval of the chain's sale. he was 3 when he took over as ceo of p.f. chang's. >> 33 when he took over? >> is there any lobster that is not red? have you thought about that >> white inside. >> well, if you get a blue lobster -- >> i have seen blue lobsters. >> blue crabs, and they are beautiful. beautiful. up next, we will talk china and u.s. business, and the nfl

is set to vote on allowing private equity ownership. the last of the major sports leagues to do so. we will talk about it and at wh it could mean for the owners and the league. "squawk box" will be right back.

ibm is the latest u.s. company to retreat from china. the tech giant announcing plans to move their china rnd operations to another overseas facility. for more on how u.s./china tensions, and now the ceo of purdue's university. thank you for being with us this morning. ibm looked like it was pulling out because it was basically getting replaced anyway. i think it lost something like 20% of the business last year. what is really happening on the ground there? >> yeah, i think what you are seeing with ibm and a lot of american tech companies, becky, is they are recognizing operating in china is not good for business. set the economy aside, china has made a goal of becoming self-sufficient in emerging technology so they are growing local champions in many

technologies american companies have led in for many years and ousting american companies, and it's a program called delete america, and it's just not good for business. it's not good for business to have your ip stolen or to have your employees intimidated and it's not good for business to have customer and user data handed over to the communist chinese party by law, and you are starting to see american companies taking action that are good for business and national security. >> all of those things you listed, ip theft and intimidation of employees and potential theft of your customers' information, those things were happening before but american business held their nose and put up with it because they were making money, and now the difference is they are not going to be able to make money? >> they are making a lot less money, and there's scrutiny from

the chinese government and u.s. government. you are right, becky, it has been going on for a long time. it's like if you had a friend but wanted to date this guy and was mistreating her for long time and using her and telling everybody he was going to break up with her anyway, and you would say, trudy, this is not a good relationship. and a lot of americans companies were trudy for a while and they are now making appropriate changes to their business. >> what does that mean if you are pulling out of such a huge potential customer base, what can american companies do to make up for the shortfall? >> we are starting to see a lot of movement over to india that work with the allied governments and we are seeing a shift to trusted allied partners. india is one, and appear sl made in india. i am talking with a group of about 30 latin american groups,

and they want to be a critical part of a global supply chain and of the global economy. you start to see a movement of american companies doing business with trusted partners around the world. >> we may want to separate ourselves and china may want to be independent, but we are pretty intertwined. how messy does this breakup get and how long does it take? >> i think at the end of the day, either china is going to decide how long an american company remains in the country or the business itself will decide that. the businesses taking proactive measures right now to diversify, and it could be a china plus one or china plus two strategy and do it in a smart way. u.s./china policy is not going to change. this is an american foreign

policy right now. the u.s. congress is bipartisan in the approach to make sure we win in the technology race against china. this is a long-term trajectory and american companies that take action now for this long-term business trajectory will benefit and see lot of return on investment. >> i understand everything you are saying from a business perspective. i do wonder once this separation is complete, what that means for us just from a national security, global security sort of perspective if you don't have any cooperation between the two largest superpowers on the globe at that point? it feels like we are in a bit of an icy war at this point, and is it a full on cold war at that point? >> really it's up to the chinese government. you know, the united states and many of our partners and allies across the world set rules and

norms and standards, and the chinese government has decided in many cases it's not going to abide by those, and it's china deciding it will not be part of the rules based world order and anytime they want to change that, that would be great and they would be welcomed to participate. what you are seeing is allied governments and u.s. government and u.s. tech companies just start to deal with reality and make the appropriate case for their business. by the way, economic security and reducing our reliance on an adversary, authoritarian adversary, it's not only good for business but for national security. >> thank you for joining us today. and then nfl may change the rules and provide for private equity investing. a vote is expected today.

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switch today! the nfl and team owners are meeting today to potentially vote on a significant rule, the change that would allow private equity firms to invest in franchises. joining us now, the sports business journal executive director. this seems like it would make it more attractive for these -- and we were just talking about you couldn't bet on little league, but i am not allowed to do that, the world series? >> degenerate. >> $5. but i wanted to bet on south florida. but the future is bright for franchises. >> the franchises need liquidity and need more dollars at the table and we are anticipating a vote by the nfl owners, and we

are not sure, and the league would be the last one to take private equity money, and they need the money as they think about new projects. >> what is the down side? >> we heard potential conflicts of interests, and how many funds could invest in how many teams and thinking about a 10% cap. i don't think there's a down side but it's more they are being deliberate and thoughtful. these organizations have stayed in families for so long so to take the type of private equity investment is a big step for the league. >> so it's a liquidity thing more than anything else you are saying? >> i think it's a mix between that and there are a number of facility projects on the books, and these teams are building multi-use and mixed-use developments -- >> like a foxborough or something? >> yeah, and you will see that

in nashville with the tennessee facility and you will see that around any new commanders facilities, and around the bill's facility. >> heretofore, how would you do it? >> you are starting to see them more and more. >> they are good. it's something we should want. >> yeah, it aggregates audiences to a facility for a longer period of time. >> is the nfl losing about -- the nfl makes decisions on all these things, and if they have a conflict of interest -- >> i think the nfl is the nfl, and they are the biggest thing in town. it should be an exciting day today for the league. >> so who decides whether it happens or not? >> the owners will vote today. >> will goodell tell them which way to vote? >> the commissioner will set the table but the owners, i think you could see the deals at the

end of the deal if it gets approved. philadelphia, the raiders in las vegas. >> is it going to add to the value of the franchise? i don't see how it couldn't. >> it will add to the franchise value. >> they will argue it adds to the fan experience because they will be able to use this investment to enhance the fan experience or enhance venues and they think it's going to be something that will drive the value of their operation. >> could you never see, like, an activist, this team sucked for so long i will come in -- there are certain rumors you might want to get rid of. could that happen? >> that's one of the things they are talking about is the cap of being very passive and very quiet, 10%, no say in spending or operations or in players or who your coach will be. >> a slippery slope, though. >> yeah, sit.

>> other leagues, 30%, and we have not seen -- >> they said private equity is getting in on this because it's a good lottery ticket and it's prestige to own a team. >> sports are sexy. >> gaming in each state? that's still taking too long. there's times when i'll go anyway on vacation, but i wish that it was everywhere -- >> yeah, there are still some states -- >> a lot aren't -- is it even 50%? >> it's over 50%. i think it's gone as well as they would have hoped, joe, in terms of this being overturned, but sports betting in the states. the concern is that you would see more ethical integrity issues. you've seen it in some sports, but not in terms of a total apparel in terms of the future of sports betting. >> because there's no doubt in my mind that it has enhanced the value of all sports. >> and most would agree with

that. they think it's led to higher viewership numbers, higher interest, higher ratings. >> there's absolutely no doubt. a lot of things i didn't like to watch, i really look forward to watching now and i know i'm not alone. and i'm not a degenerate. these are $5 bets. these are $5 bets. i've been taking money out for the past year and a half. >> so you're a very -- you have a huge amount of self-control as a degenerate. >> as a degenerate, i have a lot of safely control. i hate going down. i hate going down. >> i understand. i would be the same way. >> you would? >> if i was a degenerate. >> i bet $10. i don't only bet $5. my wife says it's embarrassing when you tell people that. i bet $10 sometimes. never above $20. >> thanks. >> when we come back, shares of nvidia looking to bounce back after shutting more than 2% yesterday, as investors brace for the chip giant's earnings tomorrow. we will talk about it right after the break and get you

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well, as we mentioned, nvidia reports results tomorrow after the closing bell.

joining us right now with more on what we can expect from the chipmaker, the potential impact on tech stocks, what wall street is expecting, is ray wong. he is constellation research principle analyst and founder. and ray, really good to have you in studio with us. what is wall street looking for? what does nvidia have to deliver? >> at the moment, they're priced for perfection. everybody is waiting to see, where the chips be delivered on time, will they not? what's going to happen going forward? and it's all focused on the forecast. when we do some market checks, we see the earnings will be pretty good, because almost every tech company has been investing in data center chips and in the ai chips. and on the other hand, every company budget when we tuk our thousand cxos on the market, everybody robs cybersecurity budgets to pay for ai. >> this is the point i wanted to get to. we'll talk more about nvidia in just a second, but that came as a shock to me. this idea of robbing peter to pay paul, is this going to be a mistake they all look back on

later, if there's a huge cybersecurity attack or somethingt that gets through? >> you know you're going to be breached, you better at recovering? they're making the guess that ai might get them faster to cybersecurity as well. so both are happening. >> it's not necessarily robbing peter to pay paul. this is a situation where you're beefing up ai in order to help your cybersecurity situation? >> exactly. >> that's less scary. that makes more sense. >> if we are already priced to perfection, but your channel checks are telling you that things are going to be really great, you anticipate the stock is going to go up, will it be enough of a boost to impress the street? >> it may impress the street, but not bring anyone else wit. what's happening here is unlike the internet, with the internet, it was open, it was decentralized, there were lots of players. things were coming down in price. here it's the complete opposite. nvidia has done a good job. it's centralized, it's closed, it's more expensive. there are only a few players that are going to win. and that's why the stock will do well. >> you own five of the big magnificent seven, right? >> actually, six, i own a couple

others as well. >> apple, microsoft, nvidia -- >> tesla? >> you own tesla, too? >> yes. >> that was the one that was missing from this list. which one doyou not own? >> i think i have meta as well. >> so you own all seven? >> all seven. >> and you believe that this is the right thesis to keep carrying the market at this point? >> we do for now, especially with interest rates coming down, that's going to help as well. a lot of people think it's going to go to ems when interest rates come down, but actually, it's not going to look that way. aside from india, it looks like big tech is your flight to safety, flight to growth. >> we had a guest earlier that was talking about the separation from china. looking to places like india as place to invest instead for many of these american companies. does that impact any of the big seven, the magnificent seven? >> not as much. what's interesting about india, it's actually a market that's growing. the population dynamics are in their favor. china has the inverse population dynamics. that makes them look like japan in 20 years. >> really? so what could be upsetting to

any of these stocks? what would make you sell any of the mag 7? >> i think when it comes down, when forecasts are no longer growing, if they're losing market share in terms of adding products, they can't add services, they can't add experiences on top of it. they're not seeing that linear growth on the monetization. in digital, you grow by adds, search, goods, services, and memberships. and if you don't get into all six of those, you actually end up dying. and you notice everybody that was good in adds started going into memberships. everybody that was good in memberships started putting out products. that's the progression of digital giants. >> lower interest rates is good for technology companies, unless it's coming with a recession, a big recession, that would hurt corporate spending. how do you kind of play this? what's the sweet spot? >> well, what people aren't realizing is the number of job layoffs going on in the valley. and these are real, and it's ai replacement that's actually happ happening. some companies i talked to are taking operations where they have 15% automated today, they anticipate it will be 70%

automated. they started this at meta, and that's flowing everywhere else in the valley at the moment. >> how much nvidia -- how long have you owned nvidia, have you been buying more along the way, and what would you do based on that? >> i would have to go back and see, but we are buying along the way and buying the dip. the price target there is about 180. >> 126 is where it stands right now. ray, thanks for coming in today. really interesting. >> thanks a lot. >> ray, i don't think anyone thinks that china could be the next japan. it's just not in anyone's calculus right now. there were more things that derailed japan from global leadership than just population, were there not? were there some differences? do you really think it's possible that we look back and china is not the huge threat we think of, that we see right now? >> from a capital market perspective, i do agree. i think that it's not going to -- it's a different structure. but because of the way the governments are set. if you look right now, the bond rally in china, they're betting like the government the going to

provide the bailout. the challenge there, you have a generation of individuals who have never seen a bad market. and you have a bunch of factors around world trade. >> it would solve a lot of our problems, right? we seem to be at -- >> we're escalating. >> where we're going to have to deal with who's -- who gets to be the -- you know, as an american, i figure, we're ready to accept a couple of super powers. but some -- i'm not sure china really wants another super power around. >> i actually think they have enough super power status. you look at the economic growth, their economy is going to be contracting -- >> it is?! see, i don't think that's in anyone's -- all we -- we just think that the threat is going to just keep growing and growing. >> there's the military threat, the political threat. >> everything. >> economic threat! >> i'm not as worried about -- >> it's almost like a russia situation. >> a russia situation. >> post-ussr. >> we don't think that. there's a collision coming at some point, and hopefully --

there are people who think that it could even get -- you know, the military could get involved, with taiwan. >> toulhat's true. the economic situation could lead to military situations to kaunl rest. what do you do when the economy is bad, dictators tend to invade another country to divert the situation. >> because i -- when japan -- the japanese brought pebble beach, that was the all-time high. it was all downhill. we don't even think about it anymore, what we thought back then. thank you. >> it is 8:00 a.m. on the east coast, and you're watching "squawk box" right here on cnbc. i'm becky quick along with joe kernan. andrew is off today. among our top stories, media executive edgar bronfman jr. dropping out of the bidding for paramount global. in a statement, bronfman said his bidding group told paramount special committee it will be exiting that process. that will allow david ellison and skydance media's $8.4 billion deal for paramount to

move forward. that transaction is expected to close in the first half of next year. apple says it will replace its cfo on january 1st. its current cfo, luka maysry has been in the job for about ten years. apple says he will continue to lead teams focusing on i.t., security, and real estate development. the current apple insider, kevin parra will be taking over as cfo? and spacex's dawn rocket launch has been delayed until at least tomorrow. the flight will carry four private citizens and is scheduled to include the first spacewalk carried out by a civilian crew. apparently that helium leak is coming from one of the ground pieces machinery, which is a big difference than coming from the actual thing that's going into space. >> feel a little better. less nervous. by popular demand, really, dom is going to come back. there's the futures down 25. not much going on. i would rather give us time, do.

where's the ten-year? 385? let's get back to dom. really by popular demand, you've got a lot of fans, dom? >> i think there are a lot of fans of you, becky, andrew, and the show. and i kind of pop on here every once in a while to give you a little humility here. >> we'll start off with the big pharma news of the day. that's eli lilly and pfizer. the two pharma giants unveiling big direct-to-consumer pushes. pfizer unveiling a new online platform as eli lilly releases single-use vials of zepbound, half of the list price. it's going to be available through its direct-to-consumer website. meanwhile, telehealth company, hims and hers, which offers a number of glp-1 drugs on its platform is moving lower. pfizer following lily's lead on that direct-to-consumer is up fractionally. hims and hers down because of the eli lilly news as well.

and eli litlly shares down a bi. the parent company of twizzlers. those shares go to a sell raying from a prior neutral and that target gets cut to 182. it was 195. they see a challenging year for pricing margins. we'll end with a check on ferrari. those shares are up fractionally, about half a percent. analysts at morgan stanley raising their target price on the high-end luxury carmaker to $520. it was $400. they keep the overweight rating. they're citing things like brand positioning with high-end customers, relatively low exposure to the chinese market and insulation from stalling out in vehicle sales. so ferrari shares one about a half a percent. for more on those and other big analyst calls of the day, just head over to cnbc.com/pro, joe. i will send things back over to

you guys. >> thanks, dom. for more on the markets and earnings, let's bring in katherine kaminski, chief research strategist. at this point, katherine, the highs that we've seen in the dow, all-time highs, do the earnings and the underlying performance of the companies, cousin it justify all-time highs? >> well, i think it's challenging, because valuations are still very high. and if you look at the earnings season, it's been relatively mixed. i think this week is going to be interesting, with everyone focused on nvidia, but ultimately, it's been a little concerning to us, those of us that trade cross-asset. we've seen signals that the market has really shifted since this summer. >> can i talk to you from the bottom up? how about nvidia? any thoughts? >> i mean, i think nvidia is

something that gets some momentum this week. it's probably going to beat expectations. that's going to continue people to feel that we're in a recovery mode. i think from our side, those of us that follow the technical signals across different asset classes, there's still a lot of concern for us in the sense that equity signals have become more noisy. we do expect more choppiness around, as we move into the potential cutting season. so i think that investors are just a little nervous about what's going to keep equities at their highs. >> do you -- will we see continued rotation, do you think, at this point, katherine? and if so, what trades are favored, or like tomorrow's news? >> well, i think this week, it's really going to be following the economic data. and as we see that, we'll see some rotation out of the ambition tech companies into more of the russell. we've already seen some of that. so i think we're going to start seeing a little bit of

repositioning, given the valuations and how much people have over positioned in some of these big tech names, and potentially shuffling around as they take gains. >> and you really are looking at consensus thinking on interest rate cuts and what we're expecting now? we'll get -- they'll do it in 25s. there will be a 50? >> this is a good question. i think it's pretty much, if you listen to the fed commentary last week, really from our side, it looks like it's definitely happening. and i think everyone is going to be foexcused on 25 or 50. i'm leading a little bit twarts 50, just given how much the fed has focused on the recent employment data and the shift in focus away from inflation. but i think that is going to create a lot of question and people will be questioning it, going into september. i mean, this week is generally a quiet week, so it's hard to read on market moves this week, but i think we're going to be very

attuned in the next few weeks. >> all right. have we seen, in this cycle on the ten-year, do you think we go below 380 or back up near 4 do you think? and does that matter? >> i think what happened is, you had a very, very big move earlier this month in yields. and sort of this immediate reaction that we're going to get very aggressive cuts. so you've seen some retraction from that move. what's then interesting to me from the technical side is that fixed income signals remain steady. it might be a time to lock in some of those rates, especially while they're higher, on the shorter end, particularly, because as you look at the long end, if we see some changes in inflation or other things, you may have more volatility in long-term debt. i would definitely suggest finding those higher rates, locking them in now. and maybe being more cautious on the long end of the curve. >> right. okay, katherine, appreciate your time this morning. thanks! >> when we come back, rbc's

helimacroft will join us on the big gain we've already seen in oil prices this week and the geopolitical tensions behind that rise. first, as we head to a break, check out gold. it hit its 32nd record of the year yesterday. right now, gold trading at $2548 and change. stay tuned. you are watching "squawk box" and this is cnbc. (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf.

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oil prices starting the week on a volatile note. yesterday, wti saw its biggest gain in two weeks, finally. something to talk about. after a larger spate of violence erupted between israel and hezbollah. also, the government in the eastern part of libya said it's not going to halt exports. that's what helima said is the most important. helimacroft, rbc capital markets, global head of commodity strategies and cnbc

contributor. >> i think it's a really important story. that's a physical disruption that we're looking at in libya, whereas since the war in the middle east broke out in october, it's always been a hypothetical. is there a pathway to disruption, if iran becomes involved, potentially? in the case of lobibya, the eastern regional government can turn off production like a light switch. general haftdar, if he wants to shut it down, he controls all the terminals in the east, the infrastructure, so they can shut it down. we've seen since 2011, since the arab spring, since the death of qaddafi, tremendous volatility in libyan production. so the question is, are we in now for a period of a sustained outage? is this something that can be solved quickly? if you look at the last ten years, it's been really up and down, though, in libya. >> so let's go to the other fear that you say, like, it's hypothetical, whether something happens. again, restraint on both sides. >> again, it's like april --

it's so interesting. we talked about this a couple of weeks ago. >> we did. the same playbook. and that's actually kind of what the white house was hoping for. it would be less than or equal to april. they kind of got that. what's interesting is, you look at both iran and hezbollah, like, they're willing no play it in the gray zone. iran is much happier, it seems, to give the money and the weapons to its proxies and tell them to have at it. they don't seem to want to become directly engaged in a confrontation with israel. i think they would be afraid of potentially an israeli strike on their nuclear facilities. tougher enforcement of sanctions. look at iran right now. you look at a country that's put in their oil on the market. it's iran. so iran has a lot to lose in a direct confrontation, hence why they willing to sit back and basically let their proxies fight the war. let the houthis fire their rockets. let hamas do the fighting. hezbollah is a similar situation. they're sending a lot of rockets into israel, but also not willing to have israeli invade

like in 2006. >> and not nearly as many rockets as they could send. and someone earlier this week or last week said that they're afraid to give netanyahu an excuse to go after -- >> i think that was feros who you had on. he's the best one on lebanon. i think you're absolutely right. they don't want to give the israelis an excuse to roll their tanks across the border, push them off the border, because israel as a really interesting dilemma right now. there are 60,000 internally displaced people from the north of the country. the question is, do they permanently cede that story because they're too afraid of rocket attacks, or does israel go in and try to force hezbollah off the border. i don't think we know yet how that story is going to fully play out. but now it's a contained escalation. >> in recent years, there's no way anyone could really go after the nuclear facilities in iran. but after october 7th, and if this were to get worse, and if there were one more thing that

really -- you could almost say, okay, well, israel was left with no other choice. >> exactly. that's how we have to still continue to cover this conflict. because we are still one big, you know, miscalculation away from a wider war. >> or a mistake. >> a mistake, exactly right. >> a mistake that could force somebody's hand. it's kind of a fog of war situation. when you don't know the other's actual aims, you can have a mistake. and this whole thing can still go into a wider war. again, everyone is playing it within the dynamics of a contained escalation. the question is, does tlhat really hold? >> the slowdown in china or something has made it so that oil does not -- the worst-case scenario for -- >> it hasn't happened. it would be bad for inflation, for a lot of reasons. >> it's amazing -- >> it's boring! i wanted you to say something exciting today. >> i told you, i have guns, whatever! but it is an amazing story, joe and becky, that we have the russia/ukraine war still going on. we have this war in the middle east. and look where oil prices are.

>> the world is well supplied. >> and i would say u.s. policy has been designed to keep foreign oil on the market. our sanctions policy on russia avoided targeting russian oil. iran still continues to put their barrels on the market. >> we present like we're trying to stop it, but we didn't. >> well, we've gone after other parts of the russian economy. but i keep saying, price controls -- price caps were designed to keep russian oil on the market. yes, we said we tried to like cut the amount of revenue they took from that oil, but still, it was designed to keep the market well supplied. >> so the -- i mean, it's been a tight range. it used to be 40 to 100. >> we would have these wild swings. >> now it's been 70, 75. >> we've got interesting questions. continuing to pay attention to the middle east. if the libya outage is prolonged, that's important. but opec has decisions to make, too. do they take a pause? a lot of people are waiting to see what comes next with opec? >> helima, very good.

>> thank you for having me! >> pretty exciting, for not being, you know -- we still haven't gone above 80 or below 70 for how long? >> again, look to what happened? i think the next will be what happens with opec. >> aren't we hoping for some -- >> i don't know. it's fun to watch things happen. >> you like the shock and awe in oil prices? >> when it went to -- >> with a little stability. >> that was bad when it went to a negative number. >> over 100, that's been in the cards for a lot of people, and it hasn't happened. >> i think the china demand story is really what has put a cap on this for the summer. >> okay. >> thank you. >> thank you! >> when we come back, is a rate cut at next month's fed meeting so baked into investor expectations that the only question left is how big will that cut be? in a few minutes, we'll ask former fed vice chairman, roger ferguson. and eli lilly, moving this morning to try to expand the supply of its anti-obesity drug,

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welcome back to "squawk box"! the futures this morning have actually turned a little bit lower. we're still talking about some pretty modest declines, but the dow futures are off by about 40 points. s&p futures down by 5. the nasdaq off 32 after we started the morning in positive territory. the dow industrials did close at a new record yesterday. the s&p 500 awe more than 90 new highs, but notably, only two of those were in the tech sector. >> new york judge -- a federal judge ordering former pharmaceutical executive martin shkreli, shkreli is still around, to surrender any copies he still has of that rare album,

remember this, by the hip hop group, wu-tang kclan. sometimes known as the pharma pro, shkreli previously forfeited the album to the government after he was convicted of securities fraud in 2017. a cayman islands based company paid about $5 million to buy the album in two separate transactions in 2021, and earlier this year. but the company accused him of keeping digital copies of the album and playing it online for listeners. the judge in the case ordered shkreli to turn over any other copies of the album he has by friday. his lawyer told cnbc the court didn't find that the current owner's allegations are true. i've missed him. not really. pharma bro. >> yeah. meta ceo mark zuckerberg slamming the biden administration in a letter to house judiciary committee chairman representative jim jordan, responding to its investigation into content moderation on online platforms.

zuckerberg wrote that the biden administration, in his words, repeatedly pressured our teams for months to censor certain covid-19 content, including humor and satire, and expressed a lot of frustration with our teams when we didn't agree. zuckerberg also said that the pressure from the administration was, in his words, wrong, and that he regrets he and his company were not more outspoken about it when it happens. citi is ready to push back if something like this happens again. he also expressed regret that meta demoted a "new york post" story about president biden's son, hunter biden, ahead of the 2020 election, saying in retrospect, it had since been made clear that the reporting was not russian disinformation. >> yeah, no kidding! demoted? what's demoted mean? >> didn't take it down -- >> it was dpon, gone! you didn't -- gone! nobody would plusublish it.

coming up, steve liesman will join us on the great rate debate that the fed is having. really, we're still debating? going a quarter, or 50? maybe that's it. >> how big will the cut be? >> then we'll speak with former fed vice chair roger ferguson on what the latest economic data is indicating to him, as we head to break. check out nvidia. earnings are on the way tomorrow, after the close. truist securities raising its price target on the stock to 145. truist says that its regular contact with component buyers and sellers indicates that the business trends are continuing to improve still. you're watching "squawk box" on cnbc.

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welcome back to "squawk box" on cnbc. bitcoin and other cryptocurrencies this morning are pulling back significantly. bitcoin down about 1.75. it had run up basically on the jackson hole testimony, making it more likely we do get some cuts. probably at least 25 basis points. i don't know, that's the

rationale. that if the spigots are turned back on, it's good for crypto. >> a big question for the fed now is not if it will cut, but how far to go? steve liesman joins us right now with the great rate debate. hey, steve! >> good morning, becky. yeah, after fed chair jay powell at jackson hole signaled rate cuts on the way, economists, market strategists, everybody began immediately the great rate debate. how far the fed will go, and how fast. the debate centers on a murky concept called the neutral rate, a holy grail rate that you not doesn't stimulate or restrain the economy. the highest estimates out there was 3.8%. that means if there's 160 to go, this is not exactly the right screen, guys. if you could put up the bar chart, that's the one i'm looking for there. and the current rate of 538. 2.4% is the lowest, or 300 basis points of cuts to get there. the median, 2.8%, there it is

right there. that's the 2.8. they would have 260 basis points to go. that's the median rate cut. so three different estimates there. here are some recent comments from fed officials about neutral. powell, who doesn't like this concept very much at all, in the july press conference said, i wouldn't say it's extremely restrictive. that is very far from neutral, but it's certainly effectively restrictive. john williams, new york fed president, one of the world's recognized experts on the neutral rate says the real interest rates, that is those inflation adjusted, are well above what the long-run neutral rate needs to be. and jeff schmidt, who we talked to in jackson hole said that rates are restrictive, but not overly restrictive. finally, austin goolsbee said, we are the tightest we have been. >> there's a wide range of opinions, not about weather to cut, but how much restraint rates are exerting on the economy. that's because the economy isn't exactly behaving like it's being overly weighed down by rates.

growth, as we saw earlier, a bit above potential, trending a bit weaker. you would expect below-potential growth if the fed was way tight. unemployment is rising. there is no known target for it, but that's what you would expect from the fed being tight, is rising unemployment. inflation finally, it's falling and above its own target. it would be below target if the fed was overly tight, but it could be going there. either individually or as a group, the fed doesn't and can't know exactly where neutral is. that uncertainty combined with inflation still above target. and decent jobs and economic growth, well, that suggests that the fed could cut slowly, maybe more slowly than markets expect. becky, should be a better way to run this railroad, but it's the only one they kind of know right now. >> all right. that's really interesting. if the feds -- the fed cuts could be more slow coming than the market's expecting, i wonder what that means for the markets, as a result, how much of this is priced in. if you get wavering at some

point. or i would think the other problem would be, if they go faster than the markets think, then it creates a panic and spooks everybody, thinking, what do they know that we don't? >> all of that is true. now, the market has about 100 basis points priced in for this year. 200 for next year. what's really interesting about that is in context of those different estimates of neutral, that amount is not a lot. what may be the thing where the market's a little offsides is in the speed and the timing. for that, you have to watch the data. if it comes in, for example, if growth ends up being below potential, if unemployment rises faster, the fed will get this sense that it is tighter than it needs to be, and might speed it up. if we keep getting these decent growth numbers, decent retail spending numbers and unemployment stays perhaps around this 4.3, 4.5%, the fed is going to say, hey, i've got time. i'm going to get there more slowly. and the fed doesn't want to make

a mistake on either side. there's always a debate when it comes to these situations about the timing and the tempo of these things. and there's just a lot of uncertainty. and like i said, it's not a grate to run a railroad, but there's a lot of debate about whether there's a better way, but you really have to aim for this murky neutral rate and decide how far above it and how far below it you are. you can see from those estimates that i put up, there's a lot of uncertainty in the fed about where that right holy grail rate is. >> what did goolsbee mean when he said, "it's the tightest we've been," since when? granted, i've been on vacation and haven't been here to take that into context, but -- >> thank you for asking, becky. i was trying to trim down the length of my report there. what goolsbee is talking about is thinking about the neutral rate on a real or inflation-adjusted rate. what's happened is, the fed has raised rates up to 538. inflation has come down. so from a real or

inflation-adjusted neutral rate basis, the fed is as tight as it's been throughout this whole process. just do the math. 538 minus 2.9, whatever that is, 238 or so, the fed is relatively on an inflation-adjusted basis, exerting as much pressure on the economy as it has since it began raising rates. >> excellent. steve, thank you! >> pleasure. >> joining us right now for more on the federal reserve and what looks to be an impending interest rate cut is former fed chis chair, roger ferguson. he's also the former president and ceo of tiaa, a cnbc contributor, and more than a bit of a fed whisperer. he's been telling us all along, kind of what to anticipate from the fed. as we've been seeing these things, and he's been right. roger, let me ask you the two questions that steve posed on this. how far will they cut and how fast? >> thanks for having me on, becky. so i heard what steve said. i think they're cutting a series of 25 basis point moves.

i think he laid out some of the rationale for that. the economy is still doing very well. unemployment has been creeping up, but i would say only creeping. and frankly, on the other side, inflation had been coming down, but creeping and uneven as well. i think the wisdom of the committee will be 25 basis points. how far will they go? i think only time will tell. because of the question that steve posed very clearly, they aren't really sure. and no one is, of what this so-called neutral rate is. and so they want to inch along and then let the economy and the incoming data tell them if things are roughly in balance. >> do you think there is pretty much unanimity that they're going to cut my 25 basis points this next meeting? >> i think it's probably pretty much unanimity on the committee. you know, the market will have different points of view. i think the market will be very focused on, you know, incoming labor market data, ignoring the fact that powell said that they're not data point dependent, but data dependent. but on the committee, i think 25

is probably where most people are centering their expectations for the upcoming meeting. >> so when you hear from people who say, look, the economy is really starting to take a turn for the worse, the fed needs to move quickly, they are behind the curve on this, they're not looking at the most recent data. what's your reaction? >> my reaction is, this is a very large economy, you know, there are many different sources of data. many different inputs. and this is a committee that is looking for a consensus. and so there will be some people in the committee who argue what you have just said, maybe we should move faster. some people in the committee will say, inflation is well above our target. we're predicting it will get there, but we're not sure. but part of the dynamic is a committee of 19 voices, trying to decide what best to do. and in that circumstance, rather than arguments on both sides, the central tendency will be more towards that 25 basis points. that will be something for

everybody, if you think the economy is weakening, we are definitely cutting. if you aren't sure how quickly things are unwrapping or unfolding in terms of inflation, then we are cutting at a moderate rate. so i think there are lots of dynamics that will lead us to -- lead the committee to 25 basis points, even though a few people may poison to the need to try to go faster at this moment. >> the dow hit an all-time high again yesterday. s&p has had a lot of highs this year. it certainly still seems to be the perspective of the markets that we are in for a soft landing. is that your opinion? >> i hope that's the case. and what we heard from chair powell is the expectation of pain that he talked about a year or two ago does not seem to be necessary now. he also said something very important, which is that the fed is not trying to engineer a weakening of the labor market. they're trying to engineer stability in the labor market. all of that suggests to me the odds of a so-called soft landing

fortunately have gone up. it's not done yet, however. i mean, part of the question is going to be if inflation proves to be a little sticky, will they feel the need to really try to soften the economy to get it back down to the 2%? so right now, fingers crossed on soft landing, more likely than not, but powell himself did not declare victory. and i think that was very wise of him to wait and see before we say, we definitely have achieved that elusive soft landing. >> so that soft landing, the whole idea of it. i guess you had been a little skeptical of it happening. you sound like you're more of a believer now, too? >> i'm definitely more of a believer in that. i was skeptical, as with many people at the very beginning of this, because inflation pressures, you know, moved very quick. there was a risk that it didn't happen, fortunately, that it would be built-in. some of the reasons to still be concerned about inflation is that some of it is built into

the housing sector. and that is a reflection, not of how loose or tight monetary policy is, but of some long-standing imbalances there. where, you know, the number of housing starts has been, you know, coming down a bit. it may be drifting back up. and so in that market, the way to get balance is to keep prices high and maybe even have them increase. so some of the challenge around inflation may be really hard to drive out, which indicates potentially that we still have a little risk for the soft landing. but, yes, my odds of soft land having gone up, as have most people, and i hope that we are correct in that assessment, because it would be wonderful for the economy, and wonderful for the reputation of the fed. >> roger, thank you. >> thank you! >> all right. when we come back, what's next in the race for better anti-obesity and weight loss drugs? pretty good already. coming off an announcement from eli lilly earlier this morning,

we'll speak with a top health care sector watcher. but first, a reminder that as we head to break, you can get the best of "squawk box" in our daily podcast. just follow "squawk pod" on your favorite podcast app and listen anytime we're coming right back. while i am a paid actor, and this is not a real company, there is no way to fake how upwork can help your business. upwork is half the cost of our old recruiter

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. welcome back to "squawk box." the futures this morning, a little weaker. dow futures off by close to 70 points now. s&p futures down by 10. the nasdaq off by about 45. treasury yields are higher this morning. you're now looking at the ten-year at 386. the two-year creeping up to 395 and change. sony announcing that it's hiking the price for its flagship playstation 5 console almost 20% in japan. that will start early next month. the company cited a challenging

external environment for the price bump, including fluctuations in the global economy. but it's unclear whether gamers are going to shell out that much for a higher priced machine, especially as it's been close to four years since it was released. unit sales of the console actually fell in sony's june quarter, but profit and revenue at the company's gaming division rose year over year in the quarter, as existing players kept spending on games and other playstation devices. some sports news for you today. nfl owners are expected to vote on a rule allowing portions of franchises to be sold to private equity firms. that proposal is being put on the table at an nfl owner's meeting in minneapolis and is likely to be approved. if so, it would make the nfl the last of the major american sports leagues to take this step. >> eli lilly announcing single-dose vials of its

anti-obesity drug, zepbound. the company says that these will be available for self-pay for patients with an on-label subscription, and that they'll be discounted. lily says this will expand the supply of the drug in the face of high demand. joining us now, jared holtz, mizuho securities strategist. did this come as a surprise to you, jared? and exactly what does it mean in your view to the marketplace? >> hey, joe, thanks a lot for having me. not ultimately surprised. the company has been talking about offering, you know, different versions of this medicine for a couple of months now. and this lily direct is basically their way of getting around all of the third party channels that make it, at times, more difficult to get treatment. so not surprised. i think it's probably a neutral

in terms of how most are going to look at the stock, but it's going to expand access. i mean, these are for patients that probably cannot get zepbound either through insurance or through medicare and medicaid. so it's a vilal, it's not one o these pens that are super easy to inject, but still improve access to a lot more of the population here. >> so it's hard to make those pens? i remember there was a shortage -- i remember it was mylan labs and remember, joe manchin's daughter and -- is that what it is? is it that it's hard to manufacture? is it expensive? it consudoesn't seem like an advantage to have to inject yourself out of -- that's an actual vial, hypodermic needle and everything. i would rather do the pen. why? >> sure. i think a lot of it comes down to cost. these are expensive to manufacture. you're looking at one -- for

each dose, you need one of these pens. so, you know, there's a lot that kind of goes into it. i think between novo nordisk and eli lilly this year alone, they're spending close to $20 billion just manufacturing these single-use pens. the fact that you can only get one dose out of each actual injector kit, so to speak, you know, makes it pretty difficult to you know get this to as many patients as they want to. the vial's obviously much cheaper to make. >> that makes total sense. there's probably a lot of people that would like to do this, and it's a lot of money, but there are people that have money that probably want to do it. and you know, it's insurance problems, medicare problems, so they spend 500 bucks and they can do it. they can get on this drug? >> yeah, exactly. i mean, when you kind of look at what the glps do, in terms of other health benefits, we always talk about preventive medicine and the fact that so many of the

drugs we take are kind of after the fact. after we've already contracted some sort of illness. these prevent so many other, you know, underlying medical conditions. so heart attacks, stroke, diabetes. i feel like $500, if you know that all of these other vital signs are going to improve, plus you lose 15 to 20% of your weight, is actually not that expensive. obviously, it's going to come down to, you know, so many economic factors, aside from that. but i think it's a small price to pay for some of the data we've seen. >> 15%. i don't want to lose -- i would look like -- i would look ill, i think, jared. and i'm trying to -- okay, so i don't get diabetes, i don't get all of those things, but i still have to inject myself with a needle. is that a -- i'm -- i get that it would definitely be -- you know what else, jared, sleep an nia. i mean, anything that you can

think of of just being overweight, i'm just wondering, whether, is that how it solves all of these underlying conditions, just from making you thinner or is there some other underlying -- i guess there is a -- for diabetes, there's an underlying mechanism whereby with it actually has efficacy, too. >> yeah, these drugs have been approved for diabetes for over a decade now. so that was the first indication. that's how they kind of figured out, you know, when they saw patients losing weight on the drug, that's how they kind of pivoted to obesity. and mow it's going to be the biggest market. >> what if you're merck or pfizer. or what if you're not in this -- what if you're not playing in this marketplace? do you need to be? >> you're late, for sure. this will be the biggest market in all of drugs, within a couple of years, joe. so i think you've got to be here. merck has made several comments publicly that they're looking at the space, looking at differentiated next generation

technologies. not exactly sure where that is. there's a bunch of public and private companies in this space, so they have their -- iyou know so the assets to choose from. pfizer is working on an oral glp. they're kind of in the dose discovery phase, so to speak. they'll have more news onspeak. we'll have more news on that next year. they're trying to figure out exactly what dosing to move forward with. so they're kind of in the game. merck is talking like they want to be in the game. 100-mill dollar plus market, i'm not sure as a pharma company why you're not here. >> what's next, to finally get this mainstreamed. andrew is not here today but he wants a pill. a micro dose pill. is that feasible? does that take more research? when can we expect that? >> yeah, i think that's the next chapter of the story, novo is working on the pill. a couple of smart caps working

on the pill. i'm not sure, the weight loss they're getting off the injections is so significant. but as a maintenance therapy, i feel like anyone's who taken zepbound or who has taken wegovy could pivot and take an oral every day to keep the weight off, even if they're not looking to lose more. i think as a front line or a maintenance therapy, it's going to be a massive market. . so, oral -- >> i'm looking at that call you made back in 2020. i think you told people to put all your money in pfizer and nothing in -- you didn't do that. i'm kidding. do you have a monitor? you can see that? pfizer was the bell of the ball during covid. pfizer is down 11% in the past five years, lilly's up 753%. they're both like blue chip pharmaceutical companies. it's staggering. it's just like beyond comprehension almost, isn't it? >> it's unbelieve -- it's unbelievable, i mean, i think about it every day. you got, eli lilly is now the

largest drug company by a mile. it's three or four times bigger than pfizer at this point. >> could add up to all of them? >> all of them, yeah. pfizer used to be the company that we kind of started with in pharma from a size standpoint, but now it dwarfs lilly. this is such an unbelievable story your lilly and novo nordisk. you don't have to do much work here, you know what the pricing is, it's not that difficult. >> was is saerendipity, or was t a lock? when somebody decided, the first glp for diabetes, did they notice, wow, a lot of weight is coming off? is that really how it happened? and now we've got a trillion-dollar drug company? >> yeah, that's definitely part of it as an industry, biotech

and pharma has been working on obesity for a while. >> right. >> it's just the prior generation had side effects that they couldn't get around but the glp side effects are not tool severe. >> remember, fen-phen bad. >> really bad. >> we thought it was a miracle drug, too, fen-phen, obviously been around a while. >> jared, if you do read this every once in a while, i went off this, this happened to me. you do still read -- i don't know whether it happens to a lot of people or not. but we can pretty much think these are totally safe. we don't even worry if we go on these things? i don't know, depressing thought. when you go off you gain it back? >> i mean, these are all -- in the context of people that are really medically obese, i think these are small drawbacks -- >> benefits. >> yeah, yeah. >> jared, thanks. i was kidding.

you didn't say that, that would be horrible. maybe did you. i don't know whether you did or not. you probably didn't. buy all the pfizer you can, get ripped. eli lilly, buy pfizer. >> i didn't think he did. >> he didn't. he didn't. i totally made that up. probably not a good idea to make things up. >> probably not. >> said in jest. when we come back, what to watch in the markets as we approach, nvidia earnings and the dow coming off of its first record in more than a month. stay tuned. you're watching "squawk box." and this is cnbc. this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo

a little more than a half hour to go from the opening bell on wall street. get a check on the markets right now with the chief investment officer at bemo family office. why don't we start with the fed. that's part of the reason we saw the dow new high yesterday and so much enthusiasm when it comes to the markets. last week, the market heard everything it was hoping to hear from jay powell and maybe more. i just wonder, though, if the market's getting ahead of itself and kind of off to the races now? the question we're asking is it

a 25 or 50-point basis cut. we just heard from roger ferguson, he said, look, expect 25 basis cuts to come in 25-basis point increments. and maybe they take it slow and wait to look around still. is that something of a surprise if that were to happen? would the market be less enthusiastic about that? >> the market would probably be less enthusiastic if they did one small cut and then waited. particularly, when you listen to the fed governors and what they've been saying on the speaking ircuit, as they're talking to the local companies, those companies really want the fed to not only set the framework but to be consistent in what they're doing so it's is not the start/stop, start/stop, because that leaves businesses really unsure what to do or how to proceed. and businesses when you think about it have been told the last two years that recession was around the corner but they really want reassurance that the

company is actually doing solidly well. policy isn't just high, it's restrictively high, as inflation has come down. so, they really want to see the fed start cutting, but back to the original part of the question relative to markets. markets are teetering on that, expecting a perhaps higher than 25-basis point cut first, just to get that policy rationalization process started. >> very quickly, your take on whether you'd be putting money to work here? >> if we saw a pullback like we saw a couple weeks ago, a sort of a pullback, we most likely would, because we are seeing a broadening in market leadership which is very positive as well. >> short of that, though, no? >> pardon me? >> short of a pullback, no, you would not put money to work? >> maybe at the margins, if i didn't have any in. but we expect you'll see continued volatility, especially now through the election, will

be very data-point dependent. we've gut nvidia earnings coming out after the close tomorrow. so there's a lot of things that potential could drive markets down in the short run. and we prefer to step in more actively on those sorts of pullbacks. carol, thanks a lot. >> thank. >> all right. that does it for us today. >> to be continued. >> to be continued. >> make sure you join us tomorrow. that's right. "squawk on the street" begins right now. we'll see you tomorrow. ♪ good tuesday morning, welcome to "squawk on the street." i'm david faber, he is jim cramer. we're live from the new york stock exchange. carl has the morning off. let's get a look at futures as we get ready for trading a half hour from now, we're set up for lower. >> nothing happened since i got up at 3:30, nothing. >> okay. thanks for that color. >> no problem. >> let's get to road map, tech