good monday morning, i'm carl quintanilla with sara eisen. setting the agenda today the future of the fed dominating the headlines. austan goolsbee says the rate impact still in the headlines. jones says the fed should take a victory lap. we'll discuss that with pimco. will the consumer continue to save the day? flood earnings and key data set to hit the tape. gerald storch joins us.

later on the letters of the day, a and i, we're going to speak with tom siebel, ceo of c3.ai as the stock soars following the earnings beat and the attacks from short-seller. >> he has the best ticker, ai. speakings much the markets, the s&p 500 little change to start the day. it's been this way all day long. somestrength in the financials being offset by weakness in utilities and consumer staples those have been the strong parts of the market. the nasdaq is higher by 0.10%. the back drop this week, a lot of retail earnings and a lot of fed speak. you know, the earnings picture so far, carl, a lot of people are talking about this, has been better profits only falling 3%. expectation was a 7% decline david kostin of goldman sachs points out revenue was up. he thinks we can have actual earnings growth this year. >> thinks the negative revision

cycle is behind us pretty amazing stuff over the weekend. breaking news out of the new york fed let's get to steve liesman >> carl, yeah, consumers giving their overworked credit cards a bit of a break in the first quarter. household debt rising just 0.9% in the first quarter, according to the new york fed's survey of household finances it's the smallest gain in two years. the credit card debt was flat following big -- a big fourth quarter and a big third quarter surge. there was a 1% rise in mortgage debt that's the lowest since 2020 and debt transitioning into delinquencies. in other words, it wasn't delinquent, now 30 days or 30 to 60 or 60 to 90 it was up for most types of debt when you look at delinquency rates remain below the pre-pandemic level we don't know, was this banks not willing to provide credit, were they pulling back on credit to consumers was this consumers wanting to

take a break from increasing debt we don't know. we know we had a better quarter in terms of the rise of debt than the prior two quarters. >> so, what's the takeaway, steve? now we're reading every data point to figure out what kind of credit tightening is going on, what exactly is happening with the consumer, is the job market starting to crack. it feels like we're at an inflection point but we don't know how severe of a turn we're taking. >> i think if you have two good reasons out there why credit might be -- credit growth might be a little lower, one is the availability of it in other words, banks raising their standards. and the other, consumers after a big fourth quarter wanting to dial it back a little bit. both of those make a bit of sense to me. it's probably a bit of both. again, sara, we are not a kind of recessionary really troublesome levels when it comes to delinquency rates, there's another slide about bankruptcies and foreclosures also being relatively low the conclusion is we have to watch this -- these numbers.

are we getting to a place where we're going to level off at normal delinquency rates or is it going to keep going up to higher levels? it's returning to normal, but also it was a good report here that consumers dialed back on credit growth. >> that is key steve, thank you very much what a morning for you steve liesman, very busy today amid all this fed commentary and barrage of data this week, there is still the debt ceiling. the president and congressional lawmakers set to resume talks tomorrow our next guest says he does see limited likelihood of a default, telling investors to instead focus on the after-effects of any potential compromise joining us at post 9, pimco managing director jerome sh snyder is with us. thank you for coming in. >> thank you. >> you say there's been limited signs of stress regarding default liability. you think that might be for a good reason. >> absolutely. at this point in time there's still a path and we all know the last second there's potential for a compromise, at least history would suggest that the practicality is we're seeing limited stress in the markets,

in the liquidity markets, the t-bill markets, even at this point in time there's only 30 or 40 basis points of stress premium around the t-bills, around the x date. right now it's fairly limited, especially in an historical sense when we saw hundreds of basis points in exasperation versus yields. we need to think of investors in total liquidity standpoint the reality is that the likelihood of impact on liquidity within the broader marketplace comes after the resolution, after the compromise in congress comes, when we actually see the treasury's general account rebuild and liquidity start to rebuild within that treasury general account, which does one thing, which is very important for investors to pay attention to, which is reduces overall amount of excess liquid within broader landscape. in other words, the excess reserves that have been put into the marketplace by either reduction of the treasury's general account in anticipation of this debt ceiling has actually going to move the other way and remove excess liquidity

from the markets that's something at pimco we think investors need to think about, as we get into the second half the year. >> you want to be positioned how? >> think about it, right now the caution of is avoiding treasury bills around the x date. have a game plan it's not necessarily a situation where you need to think about a war going on, but have a game plan of how you need to manage liquidity. for those investors who need a perspective liquidity on a specific date, absolutely, avoid certain t-bills. in the broader marketplace, let's focus on the broader market impacts higher cost of liquidity means investors need to focus on liquidity from a defensive mechanic the uncertainty of the economic outlook. that's the practical impact is that liquidity should be thought of as an opportunistic solution to portfolio management where you can earn premiums when dislocations occur, when uncertainty occurs, whether it's economic or driven by simply an unexpected fed outcome that might not necessarily be in the cards or the market believes.

>> what is the credit market telling you about the level of stress in the financial system and recession probabilities? >> right now the credit market is really focused on the regional banking sector with due cause, with regard to certain banks that have a prescribed funding mechanic, which is not necessarily in the stand point to you more importantly, the credit market is relatively benign. at pimco we've been cautious with regard to corporate credit for quite some time. we think we need to be more prescriptive, more insular in terms of how we think about credit risks credit spreads haven't moved that much. when we sit here with investment grade indexes at 80 with historical average closer to 125, that sort of says that there's not a lot of concern about overall credit, especially in the face of this probability of recession that we're all sort of awaiting for at this point in time the higher interest rates we see right now at the front end of the market are a place to effectively hide out and note there's a lot appoint of dispersion between t-bills and other opportunities to the tune of 100 basis or points or so in

that front-end landscape the notion of hiding out in t-bills may not necessarily be the only way to earn higher yields along the way. >> what do you make of what's happened to loan demand, or at least c&i loan demand among small to medium? is it nothing akin to the great financial crisis >> you need loan demand in terms of facing credit appetite. there's two aspects. you have cash which has effectively gone to money market funds and gone to reverse rebo with $2.2 trillion sitting there. that's cash that sits there, doesn't create additional loans, doesn't facilitate the credit expansion you see at banks that's been a headwind itself. now you have the overall concern about banks and increased regulatory requirements. that's a second element you have to pay attention to. it's unlikely you'll see this huge wave of credit appetite come and be admitted from the banking sector at the same time the overall note of caution we see within

the marketplace doesn't mean there's going to be a huge amount of credit appetite in structural demand on a go-forward basis it's a bit of recalibration going on, which ultimately means the price of capital and the price of credit has to go higher at some point on a relative basis. we're probably going through that recalibration process right now. >> what do you guys at pimco think the fed is going to do for the rest of the year >> when we think about where we are right now, the market and the federal reserve are on the opposite sides of the coin you have financial concerns, growth concerns and inflationary concerns those inflationary concerns are something that are fairly inconsistent with where the fed is right now we saw it in the cpi numbers last week. at pimco we think that core cpi number is closer to 3% to 3.5% by the end of this year. that's inconsistent from the perspective of thinking about the fed cutting it in an immediate sense. when you look at the market and see 3.5, 4 rate cuts by

january's meeting, that begs you'll have something drastic happen if you have inflation higher, that means it's a drastic pivot, especially compared to where we are hearing from the fed governors and what we're seeing -- >> who are you thinking is right? >> you probably have a little bit longer of a plateau here at this rate curve right now. simply given where the inflation mechanic is. leaning back on the recent cpi number it's inconsistent with the fed's outlook on a go-forward basis. >> is the commentary or the hawkish commentary we continue to get, is it like your dad saying,ly turn this car around, even though he does not want to turn the car around? >> yeah. i think that's a little like that i think there's a little more conviction in fact, one of the things we realized in the last fed meeting is that jerome powell knows he wants to keep driving the car forward and he might not be pressing on the exaccelerator. we recognize the cause for concern is inflation when you look at the inflation data, not the goods data but services and employment data, it

is robust enough to allow them to not to tap the brakes that ultimately gets them to the point where front-end rates remain higher for longer and puts us in a more conservative posture that gives optionality for a lot of clients and practitioners, room to hang out for a while and earn income without pivoting to taking a lot of risks. >> that's good stuff we covered a lot great to have you in jerome schneider. up next, will falling consumer sentiment weigh on retail results we'll get you ready for results from home depot, target, tjx short-sellers are targeting the c3.ai. we'll talk about it when we come back but stephanie got inspire, an implanted device that works inside the body. there's no reason to keep struggling. inspire. learn more and view important safety information

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it is a big week for retail. we're getting first quarter results from home depot, walmart, tjx and foot locker and april retail sales are expected to post their first increase in two months our next guest notes sales have been negative year over year on an inflation-adjusted basis for seven straight months. asking if tomorrow could be number eight joining us is ceo jerry storch we're looking ahead to retail sales and retail earnings. broadly the story has been the consumer is in good shape. got a lot of stimulus, had pent-up savings, lots of pent-up demand are you seeing signs that things

are changing >> you know, the consumer is better than they should have, but sales have been declining. if you look at a year-over-year basis since last july. it's been kind of a straight line down in terms of the peaks we saw last summer it's clear the consumer is very, very stressed. even the great growth we've seen in dining out and travel is beginning to fray at the edges i'd be cautious going into these earnings and not all boats are going to rise. >> so, you're more cautious than everybody else because everyone else thinks the jobs market is humming, unemployment rate is near record lows so, consumers should be in pretty decent shape. >> well, you know, they're still spending somewhat butit's not the level it's been at for several years. it's almost like they spent forward and now starting to run out of gas here. i'm a big believer in the value players like walmart, very strong positioning great strength in groceries, which is still where it's at

tjx, another great value player. i wouldn't be so, you know, positive when it comes to target or foot locker, for example, or home depot target has been struggling for quite some time. it's a great brand leadership is very well considered there but the bottom line is that their bottom line is strange they've said their operating margins might get back to historical levels inasmuch as three years. you know, that's a long way out. meanwhile, i did check yesterday at target. there were off-brand items in the aisles, out of stocks were pretty high, even in essential categories there was sort of a visual mismash where they have so many brand shops in there, it almost doesn't look like target any more so, it feels like they're trying too hard instead of just focusing on executing. >> are you seeing big swings seasonally in buying patterns for back to school or holiday at this point >> i wouldn't say that

holiday was weak i think by all accounts it was weak last month was weak. when i really look at it, again, i take inflation out of it sara mentioned seven straight months of negative sales year over year on an inflation-adjusted basis when you do that, you see a straight line pattern since last july it doesn't look that way to me it looks like things are slowing down maybe tomorrow's report will be a little better. easter was a little more in april this year than last year, a little later in april so that helps. as retailers we look at march and april together march was so weak. maybe april will be a little stronger don't be fooled by that. i think the consumer is slowing down and the value players will be the winners in that kind of environment. >> i just want to zero in on what you said about target but that's a company you have history with it sounds like you're raising more than just macro concerns here some execution concerns, which is something that the market really -- they consider brian cornel and target a good

operator, just some issues when it comes to inventories because they were caught offguard by declines in discretionary spending can you dig a little deeper and tell us what you're worried about there? >> the team has done very well under brian's leadership a year ago we were surprised by target and walmart, what they posted they were grossly overinventoried. people put them in the same bucket when you looked at the same results, target's were far worse than walmart quarter after quarter, walmart has gotten their ship back afoot and sailing off into the future. meanwhile, target is still struggling mightily. when i walk the stores, nothing is worse than an old retailer coming into the store and saying, look what they're doing wrong. but it didn't even look like target to me i got very, very worried with what i saw there are execution issues against the strategy, absolutely keep in mind, this has been true since both chains began in 1961.

this has been true since then. during great times, target does better people have a little more money, they spend their way up. during tougher times, walmart does better. by any measure, i feel we're in one of those tougher times we look out a year or two, which means it's a walmart time. i think there are issues strategically where they do not have the focus on food that walmart has and operationally where there are still big issues just look at the gross margin rate deterioration, look at the inverer to situation, the imbalance of inventory at target i think they have some real issues they themselves have come forward and said it may take three years to get back to where they used to be. that's a very long time. >> just for transparency, you're still a big shareholder of target, aren't you >> i'm not going to sell target. i love target. it's near and dear to my heart you cut yourself, you bleed target red i believe in the company i believe in its positioning but it's not performing that well right now and i think some of what we're seeing is a great reservoir of

goodwill from years of operation, including under the current management team, by the way, as well as great relations with the consumers and with the street after a while that's going to begin to start to wear down if they don't start posting good numbers. that said, they could have negative comps even when they report or could be a little positive we'll have to see what it is no doubt, on inflation-adjusted, it's going to be negative. >> jerry, you're on fire today thank you for joining us helping us get ready for retail earnings jerry storch quite negative. after a nearly 100% run this year, loop capital finally comes off the sidelines on meta. bullish on the revenue outlook but going the other way on another popular mega cap name as ai cuts into its dominance we'll break down that call whe "squawk on the street" continues. we're looking at schwab. raymond james goes to outperform analysts say that cash-sorting issue is coming to an end which should support the balance sheet. stay with us schwab iup%.s 4

western digital gets a big boost. the companies have been hurt by a slump in memory chip demand. western digital up 9%. let's turn to big tech loop ups the target on meta to 320 saying they see a brighter revenue picture with many headwinds turning to tailwinds the firm knocks alphabet down to hold saying the transition to ai could put a cap on its valuation. the analyst behind those calls joins us this morning. rob sanderson of loop capital. on meta first, apple privacy, 4x, the reels transition, that's where it's not only become less about beating your head with a hammer but it's going to start to help. >> yeah. there's -- those are very material revenue growth headwinds the company cycled through. my estimate is something upward of 1,500 basis points. 600 of that is fx is loan.

everyone will benefit from fx normalization. the att transition and transition to reels have definitely had material revenue head winds both were normalized this year and give them some relief. i think we saw the front end of what we'll see the rest of the year i think it's better than that. it's not just compact winds that normalized, they have a real product story here that i think is generating a lot of interest in two fronts -- advantage plus and the reels monetization ramp. >> for those who say it took you long enough to come around, you're still comparing it to the beginning of '22 versus the s&p, right? >> we're looking at forward 12-month eps, consensus eps ex-cash. it still trades at a modest 5% discount to the market multiple. i think that's going to reverse and it will get a premium as revenue growth starts to

reaccelerate here. >> doesn't it -- don't you wish you had done this earlier? doesn't it feel a little late for this call? >> yeah. we were -- we were surprised by the amount of cost-cutting let's -- let's be clear and delineate the two. the revaluation that we've seen in the stock to date is on a 44% revision to eps and a 3% revision to revenue. so, this is the cost-cutting efforts that's really revalued the stock. we were -- we didn't anticipate that we were late on that but looking forward, i think it's the revenue acceleration that still is the next leg here and is not reflected in expectations at this point >> as for alphabet, i was fascinated by your line about social media companies who you think could make a real stand here in the ai space can you explain what you mean? >> yeah. i think we're going to be seeing more ai assistance launched by, i think, all kinds of apps not just social media, but social media has the reach and the engagement i think that's, you know, very

interesting long-term opportunity for providing services from all of the companies, whether it's meta or tiktok or probably all of them we've already seen a product launched by snap, although smaller reach. i think we'll see similar moves from all of the social media companies. and the question is -- on google is less about the microsoft search market share war. i think they're going to win that on product. they have much more data, much more reach, they've got a lot of ai competency. the challenge and i think the concern that's going to remain sort of unanswerable for probably years to come is what happens when there's a behavior change and users are going through different avenues to find information where they used to use search technologies. that's going to be probably not -- it's not an existential risk to google, but it certainly introduces the potential for displacement in their core value proposition. >> but is google not a cost

reduction story as well? if the street was so enamored with meta's cuts, why not so much with google, which we've seen efforts as well is it not the same scale >> they're in the estimates. so, we've seen, you know, a couple of rounds and the consensus has embedded that that's over basing our forward valuation is on something that's already, you know, priced in or modeled in, rather there's probably opportunity for greater than the street's forecasting. we actually have higher than consensus eps. but that's all embedded in our price target of $125 >> interesting pivots here really interesting, especially, i think, on the alphabet side. thanks good to see you again. >> sure. take care. positive international inflation data catching investors' attention this morning. the story abroad is next. plus, cnbc celebrating asian american and pacific islander heritage this month.

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so they can do more of what matters. benefits. payroll. compliance. trinet. people matter. hello, i'm contessa brewer here's your cnbc news update this hour. european union regulators approved microsoft's proposed $69 billion acquisition of gaming firm activision blizzard today. europe's approval marks a huge win for microsoft. of course, the fate of the deal is still uncertain after the uk's top competition authority blocked the deal last month. the transportation security administration, tsa, is testing a new facial recognition technology to boost airport security the pilot program currently in

16 airports uses technology to compare a traveler's appearance with their id. critics have raised concerns about questions of bias in facial recognition technology. the battle over the ballpark continues in las vegas bally's and its landlord announced a binding agreement to bring the oak atlanta a's to a new stomach to be built at the tropicana on the las vegas strip. a few weeks ago it was a binding agreement with red rock resorts. all of this is contingent on nevada putting up public money and major league baseball approving that deal. waiting with baited breath, can they hit it oul of the ballpark. >> i guess there's a lot of intrigue european markets are closing right now. mostly higher. quiet session. instead investors focused on the election results out of turkey

heading to a runoff with the lira hitting record lows erdogan likes to tell the central bank what to do. the story abroad is soft inflation data across the globe. german, sweden, japan and india all oorting drops in wholesale prices with the back drop of eu raising growth forecast this morning. we forget sometimes inflation is a global issue and not just a u.s. problem especially food prices i looked inside the german wholesale numbers, still very high, more than 20% growth in food you're seeing declines in some of the other parts of it, of the equation usually wholesale is a good leading indicator for consumer prices. >> you would hope. >> you would hope. >> i mean, the conspiracy theorists would say that's when the consumer price sticks and the wholesale price doesn't and you wind up with greenflation, so to speak. >> but overall, i think when you see it come down, it takes the pressure off global central banks, especially in japan,

which people were looking for as well to see if there's going to be a change. you want to see it moving in that direction and to see the wholesale price in germany with its first year-over-year decline since 2020 during covid days, that's progress. >> #deflation, you have to keep your eye open for it. >> disinflation at least. turning back to the u.s. markets, let's get post to post with bob pisani. >> the good news is we're getting modest bounces in key areas, particularly in the bank stocks here's the bad news, overall while they're bouncing, there's no particular buying enthusiasm. let me show you, for example, co-m comerica was $45 not long ago. a few weeks ago. it was lower on friday, obviously. it's up a little bit today here's what i don't like you see this volume, 1.4 million shares on some of these names we would routinely do four, five times what you would see this time of day. and we're talking now, you could be doing three, four, five

million shares that's very, very low volume so, yes, we're bouncing off of recent lows, but the buying enthusiasm is very, very muted so, you're not getting selling intensity anymore. that stopped but the buying enthusiasm isn't really there here's also, pnc is another good example. again, we would be doing 3, 4, 5 million shares in the late morning. about a month ago. and, yes, we're bouncing pnc was 130 a few weeks ago. it dropped down to $110, $111 last week. yes, it's bouncing today at $113 but not a lot of buying enthusiasm for all of these stocks so, if you're a technical person, you not only want to see it stop going down, you want to see some volume indicating buying interest is starting to come in. it's not just sellers are exhausted. what you're seeing here is essentially stabilization without a lot of enthusiasm. by the way, this is also happening today in some other

sectors that have had a tough time semiconductors, for example, metals and mining stocks the entire cyclical sector has been under pressure as the china reopening story has been a little bit of a fizzle oil has been hovering around $70 for a long time on top of that so, we're trying to get the market to stabilize and move away from the big cap tech names that have dominated, but it's been tough sledding. we need to clear up this debt ceiling overhang right now and then move on to dealing with the longer-term issues of inflation and what we're going to see in the economy in the second half of the year. guys, back to you. >> we hope we can get there, bob. early on "squawk" today, paul tudor jones weighed in on the impact at i will have on the market. >> i think we're going to have a more bifurcated market than we've ever had over the course of the next five or ten years because i do think that the introduction of large language models, artificial intelligence, is going to create a

productivity boom that we've only seen a few times in the last 75 years. and within the stock market, there are going to be huge winners and huge losers. >> one of those winners this year at least, c3.ai, stock up more than 100% in 2023 despite the short sellers alleging some accounting issues last month tom siebel will join us. elon musk live tomorrow night, 6:00 p.m. eastern sitting down with our very own david faber in a wide-ranging interview off the back of tesla shareholder day. don't miss that tomorrow night we're back after a quick break on "squawk on the street." dow down onl10ois d e y pntanth s&p has gone positive. i'm a retired school librarian. i'm also a library board trustee, a mother of two, and a grandmother of two. basically, i thought that my memory wasn't as good as it had been. i needed all the help i could get. i saw the commercials for prevagen. i started taking it. and it helped! i noticed my memory was better. there was definite improvement.

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welcome back take a look at c3.ai, surging on better than expected preliminary results, saying it is seeing the most active environment for enterprise ai since the company's inception. the company had a short april ride after alleged accounting issues president the company joining us to talk about this in a cnbc exclusive, c3.ai ceo tom siebel good morning. >> good morning. >> first of all, why did you preannounce today? >> as can imagine, we're doing a lot of fiscal planning for '24 and '25 and planning for new

products, new customers, and increased growth and so as the word continues to get out in our planning phase, we wanted to avoid even the possibility of an inadvertent selective disclosure, so we wanted to make sure this was announced to the market in a manner consistent with regulatory requirements. >> you've had a lot of good news in there on track for nongap profitability for your target. revenue higher than you're expected and it sounds like you're getting a lot of new business, tom. can you tell us what's happening there behind the scenes? >> business is good, sara. we've been predicting for some years that this -- that this market for artificial intelligence and predictive analytics to business processes would be quite large what we call enterprise ai and now it's very clear that the rest of the world has come around to sharing that vision. and so this issue of applying ai to business processes now on the tip of the tongue of virtually

every ceo and every government manager in the world so, we've invested almost a couple billion dollars in a technology foundation. we have 42 turnkey products that address the needs of this area so, the market has come our way and the interest in what we do appears to be increasing quite substantially. >> i was looking back, tom, at your recent visits to our show last september you said the economic downturn is real. our customers are scrutinizing big deals as never before. this is way before the street got their arms around that idea. would you argue that process has bottomed out >> i'm not certain if it has bottomed out i think it's a very good point i'm not certain if it has bottomed out as it relates to global economics and deals related to inflation, political instability, supply chain problems but it is very clear that what we're seeing is the interest in ai, generative ai, supervised

learning and unsupervised learning applied to business processes is huge. it's growing and we are seeing that interest in our business activity levels. >> how do you -- do you compete with a microsoft or -- who else is in generative ai? amazon, oracle, ibm, they're all working on that. where do you fit in there? >> well, google would be a partner. microsoft would be a partner and amazon would be a partner. so, these people, sara, they're all investing billions of dollars in advancing these large language models. as these large language models come available, be it bard or palm or google or chatgpt from openai, we're able to take advantage of these technology developments in our platform architecture so, all those billions of dollars are being spent, basically, advances the capabilities of our solutions. >> tom, got to ask you about

this new record. we talked about a prior report but the new one in april,which caused your stock to lose a quarter of a value, accuses you of serious accounting and disclosure issues. haven't heard from you since that was released. can you just comment on what they're alleging >> well, let it be -- so, our committee issued a statement on that this morning, so our committee has conducted an independent investigation with independent outside counsel and auditors and concluded all of the assertions in that report are unmitigated bunk we understand because it's widely reported in the media that this organization is under investigation by the department of justice for stock price manipulation and just let it be said, we hope to be able to cooperate with the department of justice fully in that investigation and when the day is done, we

hope justice will be done. >> there's a lot of swirling around that report and your baker hughes relationship. can you explain what that relationship is and why it causes so much controversy >> well, it only caused controversy because a short seller misconstrued it so that a short seller could make money on their short position to the detriment of the retail market so, that's the only reason it caused controversy the baker hughes -- baker hughes is a large customer. baker hughes is a development partner. baker hughes is a distributor of our products and they have opened the oil and gas markets to us as a result of our relationships with baker hughes i think we have closed $650 million in bookings to date into the oil and gas industry we've recognized $350 million in revenue. so, this has been huge and our relationship with baker hughes is really closer than it ever has been.

so, i'm not sure what's not to like >> so, no fictional revenue is what the allegation there is when it comes to unbilled business. >> i think $350 million to date that, you know, has been audited by kind of a big outside audit firm does not qualify as fictional. >> what about the diversification away from energy and utilities, given now everybody's getting into ai. is government an opportunity >> government's a huge opportunity. defense and intelligence is a very large market for us we've been -- we've been established by the united states air force as the ai system of record for all predictive maintenance for the united states air force i believe this is the only snl -- ai system of record in all of u.s. department of dod. so, we're involved in the department of army, the department of navy -- i'm sorry, not the -- yes, navy, air force,

intel. so defense and intel is a large and rapidly growing business for us. >> tom, appreciate the time today. big move up. stock going even higher up 18.25% thank you for coming on. >> thank you >> tom siebel, c3.ai speaking of ai, ad titan martin sorrell joins us live after the break. newmont buying newcrest for $19 billion, a 27% premium where the stock was trading prior to merger talks after gold comes off the first negative in three weeks. . goodnight! and bethany... [guhhnnaaaghh] identical twins. both struggle with cpap for their sleep apnea. but stephanie got inspire. an implanted device that works inside the body to help her sleep. unlike her sister. there's more than one way to treat your sleep apnea. if you struggle with cpap,

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the up fronts kick off today, the annual advertising sales events for media companies, and what impact a.i. is going to have joining us for tech check today, martin sorrell >> sir martin sorrell, thank you for being with us. the up fronts are getting under way this week, and what are you seeing in the ad market at the moment or are you seeing signs of improvement >> it's afternoon here in london, so glad to be with you i think the answer is q1 was a little bit slow.

we saw sale cycles lengthen. but if you look at the forecast for the year, from the industry, from the platforms and from the media companies there, will be an increase in the growth rates as we go into q2, q3 and q4. firstly, because budgets would have been fixed. they fixed the budgets in the first quarter of the year rather than last quarter of last year.

>> so on "techcheck," we have been talking about the role of artificial intelligence, and one firm is calling a.i. road kill ad agencies, and you you said a.i. is a blind spot yourself and you are laughing, though so clearly you are feeling comfortable -- >> the reason i am laughing, i am at an investment conference here in london and i am laughing because a lot of -- as you well know, they are based on symantecs and views about what may or may not happen. no doubt about it, a.i. is an industrial revolution, whether you call it the fourth or fifth,

it's a shift and we think at the end of the day it will be a net positive for our industry. there are some areas we are seeing traction in the first is the hyperpersonalized at scale is that's a net positive. that's the holy grail in digital platforms. now we are going to be able to d deliver creative -- >> sir martin, let me ask you, though, a lot of the things you are going to name, certainly the ad agencies have been doing it for a long time, and amazon giving tools that it would displace and eliminate the ad agency middleman >> you are talking about small and medium enterprises, and what will happen is in a way it goes back to the days of when agencies -- we don't compare

ourselves to the ad holding but more of a tech service, and we are joined at the hip with the platforms. to be blunt about it, you wouldn't give your media budget to cnbc and say get on with it, and you won't be able to do that with platforms, either we will be there to check the results and verify the results and make sure the platform is delivering the present so this is nothing new google's involve in a.i. goes back to 2014, and gmax is a good example where google is building directly through agency

partners, and almost as resalers, dare i say it. we -- >> sir martin, we are running out of time. i am sorry to cut you off. i appreciate the confidence and i think a lot of businesses are figuring out how to work with artificial intelligence and their people thank you for being with us. i will hand it back over >> thank you we'll be back after a quick break.

the debt ceiling showtown from the deputy secretary, and he's calling for congress to act and is talking in an interview with npr saying default will make people question treasuries. clearly they are trying to get a deal done. he says the best option is congress raises its debt ceiling, and echoing yellen as not go into the 14th amendment or any other options and just get it done and stick with the

june 1st deadline. >> we will find out if this meeting happens tomorrow as scheduled, and then your point about the consumer earlier was such a good one, and depot will be our first crack at it tomorrow >> are we seeing job losses at the higher income which is where the spending power is where that comes from let's get to the judge >> thank you so much welcome to the "halftime report" sz the tech trade as one committee member from that sector, joining me from the hour, everybody here at post nine let's take a look at the markets. there's your picture we are watching the debt ceiling and searching for a little direction, and there's the nasdaq again, it's outperforming and it's up a half of percent and that's where i want to begin. you told our viewers last

wednesday that at the close you