there they are president biden met with the big four on the debt ceiling yesterday. we'll bring you interview this morning with two out of the four, speaker mccarthy and house minority leader hakeem jeffries. plus, elon musk speaking to cnbc we'll show you his comments on tesla, twitter, ai, and presidential politics. it's may 17th, 2023. 30 days in may when's june 1st? it's like 14 days. we've got two weeks to do this "squawk box" begins right now. ♪ good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin.

if you take a look at what's happening, u.s. equity futures are up across the board. dow futures up by about 116 points s&p and nasdaq up as well. these are the asian markets, but if you were looking at the treasury yields, you would see right now after the talks yesterday about the potential progress being made on the debt ceiling, you're going to see the 10-year at just above 3.51%. meantime we have a huge lineup today, and i mean huge. we've had some good shows recently, but this is up there. >> i agree. 7:30, martha stewart is going to join us on set to talk about becoming the oldest "sports illustrated" swimsuit cover model. and hakeem jeffries and kevin mccarthy on where we are with the debt ceiling and former vice

president mike pence as well >> he's inching ahead to a possible announcement. >> pence potentially running for president? >> we will see. >> the market's up you know, it's still -- we know this is ahead of us, so i guess there's someone somewhere that thinks maybe something good might happen. >> both sides. mccarthy said we're not going to default. someone from the white house said we're not going to be default. it may be a ways from here to there, but both sides -- >> there's a narrowing and it's seen as a positive president biden said humor is not there. >> you don't want too many cooks in the kitchen. >> you do not. and then martha, she's still in her prime. hopefully that guy's watching and realizes martha is still in her prime.

>> martha looks fantastic. they say, oh, they airbrush it they airbrush every one of these covers she looks great. >> if anyone of us come out without makeup brushing, i'll let you know we all need a little help. seriously, you're right. i'm trying to think of another show that is this open to -- >> we've got all sides. >> we get all sides. >> where else. pick another morning show where you can do those do you think they say yes? >> i think we're doing just fine on their own. >> we don't need to think about other people. >> we don't. >> okay. >> then to add on top of that, we've got david faber's interview with elon musk and so many different topics. we want to start with muchc's comments on the fed. >> you can think of raising the fed rate as somewhat of a brake pedal on the economy frankly it makes a lot of things more

expensive, certainly things bought with credit, but it has a downstream effect on things not bought with credit so if the car payment or your home mortgage payment is absorbing more of your monthly bunt, then you have less money to buy other things. so -- and my concern with the way the federal reserve is making decisions is that they're just operating with too much latency. basically the data is somewhat stale. so the federal reserve was slow to raise interest rates, and now they're going to be slow to lower them. >> when you're operating with only a rearview mirror, really, and we'd all like to have a really good prediction about the future, but we all have opinions and we know what they're like. i respect those people, but i certainly don't think their crystal ball is any better than

anyone with all the data, how can o you be sure when all the data you use is in the rearview mirror. >> the one thing we say is if they were to not raise rates, that would worry us. what do they know that we don't. they do have access to the banking numbers on a daily basis that the rest of us don't have access to. >> they kept raising it. >> right. >> that doesn't make me think there's not an underlying issue again, and it doesn't make me think, oh, what's 25 basis points on the marks, there may be some lender somewhere where another 25 would do it, would get to the point. >> i don't think they sit around thinking is that bank going to go under. >> that shouldn't be their problem either. >> it should be the ceo and bank's problem. >> if it is something that sp spreads. just anecdotally because i have things going on, community

banks are still vibrant. they've got nobody to hassle over a quarter of a million dollars, and they're essential. >> that's why silicon valley bank was so different. 90-plus-percent were uninsured deposits. >> i don't think they'll go away they know they have most people under 250. does that make them more aggressive in offering returns they can't deliver on? that's the only thing that worries me >> not necessarily i think they tend to have relationships with the community. >> that's good but do they have to off .5%? >> the question to me, if you only lived in a world with seven or eight large banks, what would you have to do to incentivize those large banks to act like community banks not around necessarily what kind of interest rate they're going to offer you on your savings account but whether they're going to provide you a loan where they may not think that the market -- you know, where the profit margin is not going

to be the same that they can capture by loaning money to name your company. >> by the way, we should point out there's a big difference between community banks, the huge mega banks, and some of those mid ones those were all -- like what was i it the 16th largest bank. >> you can only imagine if there are only seven big banks when the prime rate goes up, it would go up in the blink of an eye. in coming down, it might take -- >> you might have to compete with apple and other players. musk also -- he weighed in on presidential politics >> president trump is allowed back on the platform he hasn't actually come back some imagine if and when he comes back, many think he'll say 2020 was rigged. i assume that's not something you believe. >> i think the answer -- the answer is nuanced.

do i believe biden won yes, i believe biden won. >> you voted for him. >> yes, i did. >> do you regret that? >> phew. man. i wish we could have just a norman human being as president. that's what i want if there's that old saying we're better off being run by people picked at random from a phone book than the faculty of harvard. i don't know who said that, but someone very wise. i would say if we could do that for the president -- >> he didn't say it though. the other thing is musk hasn't been shy about ordering his employees to come into the office you know that. here's what he said yesterday about work from home and that debate. >> the laptop class is living in

la-la land people working from home of course number working on cars, servicing the cars, building houses, making food, all the things that people consume, it's messed up to assume that they have to go to work but you don't how is that -- that is -- it's not just a priority thing. i think it's morally wrong. >> i think he's right. i think this kind of plays into this idea of it's not fair that strike as chord with a lot of people. >> it strike as chord with a lot of people, but can i take the other side of it only insofar that if there's a job you have to do like being here, the way we do our show, this is the way we do it, if you're driving a tax kr, that's how you have to do it, if you have to build a house, that's how you do it, but if there are jobs that can be done from a computer today, it is not clear

to me that it has to be done in the same room as the other human and that you have to do it that way to somehow create some kind of balance or fairness. >> i think he's looking at it as being a manager saying, yeah, this creates problems if you have some who have to come in and some don't. >> the idea that, look, in a perfect world, nobody would have to go anywhere if they didn't want to go anywhere, right all of the jobs you're talking about are effectively manual labor jobs that if he gets his way between ai and all the robots that he's using at tesla, he'd prefer people don't even do those types of jobs. those are the jobs that we in progress are trying to effectively end. he doesn't want tacky drivers. that's the whole point. >> i also think if you look at any of his operations, whether it be the engineers at tesla, the engineers, the rocket scientists at spacex, he lives

and breathes this stuff. you wouldn't necessarily say he needs to be there, but he sleeps in the office. >> he sleeps there that's because you need those other people there physically with the -- but i'm just saying there's a lot of stuff going on in the world these days that is totally, totally digital >> i don't think he said it wasn't possible, but not fair. >> not possible, but not fair. i'm saying the people who do it digitally -- anyway, one man's view. david faber also asked musk about the potential problems with artificial intelligence. >> you talk about humanity i'm curious about ai, which many say will lead to great productivity gains you showed those robots. i imagine what they could conceivably do powered by ai what concern do you have that it

will destroy humanity in. >> well, the advent of artificial intelligence is called a sing later because it's so hard to predict what will happen after that. i think it's very much a double-edged sword i think there's a strong probability that it will make life much better and it will have an age of abundance, and there's some chance that it goes wrong and destroys humanity. hopefully that chance is small, but it's not zero. i think we should take whatever actions we can think of that there's a probability ai can go wrong. >> you've called for a pause along with other people. >> yes at mit. he wanted me to sign on to the latter futile. >> it is futile. >> it's one of those things, for

the record, i recommended that we would pause did i think we would pause absolutely not. >> for more on that elon musk interview, you can go to cnbc.com. >> it was pretty amazing, i have to see the wide-ranging nature of it. >> got to a lot of good stuff. >> the free speech stuff, it brings a tear to my eye. i don't want to be too much of a fan boy, but -- and this is just my opinion gotham doesn't get the hero they need they get the one they deserve. the dark horn't hero he's the one we need, a hero that will do what's right no matter what the personal cost. he said that he even quoted a movie where he said, give me all the power in the world, all the power in the world, i don't care. >> i'm not surprised >> i've seen the transformation. >> i admire a lot of -- all i was going to say is on that front, then tell me what's going

on with twitter and turkey tell me. honestly there isn't free speech in turkey he effectively -- >> how are we going to operate in china is nba pulling out coke or nike or anybody else no anyone pull out of saudi arabia. >> you don't have the nba running around saying they're free speech absolutists. >> you have all these u.s. companies as woke as can be about voting rights and not saying a word about china. don't tell me about hypocrisy. >> by the way, look at some of the big tech companies in turkey they're different. >> what about in china they're uighurs. >> they're not there facebook is not there. microsoft is not there that's actually how it works

coming up next, we're going to take you live to washington for the debt ceiling negotiations. and later, two of the principal players, house minority leader hakeem jeffries and house speaker kevin mccarthy it will be interesting if we had them on a two-shot talking, but it will be one after the other speaker mccarthy just after 8:00, and minority leader jeffries shortly after 8:00. the only place it can happen, cnbc. >> announcer: this cnbc program sponsored by baird visit bairdifference.com

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now to yesterday's white house meeting between president biden and the big four in congress ea eamon javers joins us live. >> it looks like a big four or big three, a little big three because they're outsourcing these negotiations to a team who have been lined up here on the staff level, not the principal level to do these negotiations so we got this rare burst of optimism from washington yesterday as they emerged yesterday without a deal but with a little bit of good feeling here house speaker kevin mccarthy said the two sides are still far apart, but he also said this

>> it is possible to get a deal by the end of the week it's not that difficult to get to an agreement. when you think about limits, the bill we passed, we raise the debt ceiling, we cap future spendings, we grow our spending in congress by 1% each year. >> and we also heard from president biden who spoke of something ta's awfully hard to find in washington these ays, and that's consensus. >> there was an overwhelming consensus by today's congressional leaders that falling on our debt is not an option our economy would fall into a recession, devastate retirements and 8 million would lose their jobs and our reputation would be damaged to the extreme if we let that happen. >> as we were talking about at the beginning, we've learned the two sides have agreed to a new

structurefor any yoesh yating teams and putting staff members in place they're going to wrangle out the details. that's assuming there are details to wrangle out the white house will be represented by steve machete and omb director owe shalanda young. they want to get going, guys. >> it's my personal thing. but the inflation of moodys analytics and investors, that drives me nuts that's mark zandi. not the ratings agency whichever side likes to talk about it likes to use it i think moodys brought this on

themselves we've seen a lot of zandy's calls in the past too. they tend to lean in a certain way. i don't know what you have to say about that, eamon. >> not much. >> i know. eamon, thanks. >> i'm going to stay out of it i'm not going to pick a fight with moodys. it's too early. >> which moodys? >> right i don't even know to w.h.o. to speak with. >> later in the show, kevin mccarthy and hakeem jeffries. and target with its forecast at we'll bring you the numbers and instant reaction on wall street. shares are down by about 25 cents. ♪ to guide you through a changing world. ♪ ♪

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an appeals court has denied theranos founder elizabeth holmes' request to remain out of prison while she tries to overturn her conviction. the judge will soon set a new date for holmes to report to prison in a separate ruling the two were ordered to pay $450 million to the company's victims rouhani is already in prison on a broader range of felonies in a separate rial. meanwhile wework's ceo is stepping down. mathrani was with them.

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good morning and welcome back to "squawk box. we're live at the market site, times square the nasdaq looking to open up 23 points higher. target just recording its earnings the company coming in with earnings at $2.05 a share. that bead expectations of $1.76. revenue also came in better than expected same-store sales were flat

digital sales were actually down by 3.4%. the stock is trading off right now, down by about 3.6%. i have to guess that's because of the guidance that target is issuing for the current quarter. it's looking for a range of expectations, anywhere from $1.30 to $1.70 a share on an adjusted eps basis street is above that target wassed a the midpoint but expects to pick up in the second half i spoke with the ceo brian cornell who talked about how they had a very strong start to the first quarter but saw softness in april and has carried out in april and may as well, so as a result, they think they're being appropriately cautious when it comes to the outlook for the second quarter cornell thinks they'll make up for it in the second half of the year that's a situation you're going to have to trust they said they're in a good situation. they got their inventories down

16% from where it was before when you look at the disc discretionary yas, things look the home lines, apparel, home, and the hard lines, when it comes to those areas, the specialty areas, their inventory is down by about 25% margins came in better than expected freight and energy costs were down that is the good news, but they're going out of their way to say they're facing a significant headwind, the theft that's coming out of the stores. they expect it's going to cost them $5 million more this year than last year last year it was more than half a billion dollars too. cornell says theft and internet crime affects retail it's about $9.5 billion they expect to lose across the industry they want to step up to push for local, state, and federal laws

to change. they say this is a problem they've only seen in the last couple of years. it's gotten far worse since the pandemic and they wasn't to see policy changes to address some of those things. the stock off by 3.5%. you have to guess that's because of the guidance for the second quarter coming in weaker than the street had been expected. when we come back, the latest buzz from the white house, that meeting between president and the big four congressional leaders. we'll talk to alex thompson from axios next. and later we have two of the big four, house minority leader hakeem jeffries and house speaker kevin mccarthy they'll talk to us about what they're seeing, how soon they think a deal could get done. and during the month of may, cnbc is celebrating asian american/pacific islander heritage here's julie wong who is the ceo of olie peks.

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u.s. equity futures not quite triple digits on the dow after a pretty big loss yesterday, but lot of that was home depot, about a 300-plus-point loss, getting back just under 100 of that let's look at the 10-year and 2-year, which have been pretty well behaved 4% for the 2-year, 3.5% for the 10-year. and then bitcoin yesterday tried to rally above -- stay above 27,000 getting some of that back today, just under 27,000. president biden and congressional leaders met for a second time on the debt ceiling talks. house speaker mccarthy and majority leader schumer both have said negotiations have

changed. >> what has changed is the president has changed who's negotiating. appoint somebody to see if we can come to an agreement that's what the decision was made in this meeting so the structure of how we negotiate has improved. >> what gave me the most hope -- and there are a bunch of things -- everyone, including the spe speaker, agreed we have to have a bipartisan. >> joining us more to talk more about it is alex thompson who's axios' political correspondent he is on the white house beat. alex, let's talk a little bit about this this is a significant change just from the perspective that the white house is now admitting it's a negotiation it's not a clean debt bill that's going to pass. >> absolutely. you've seen a change-up not just in the strategy but the team

that the white house has sent to do this. as you pointed out, the white house has been sailing, clean debt ceiling raised, clean debt ceiling raised, clean debt ceiling raised for the last five months the team has also significantly changed. biden's lead has taken over. the speaker and minority leader announced steve machete, a legislative veteran from the clinton area and shalanda young from omb have announced they would take the lead. it wes clarified lisa terrell would stick take part. but in the previous announcement it was steve machete and shalanda young taking the lead. >> machete was around in joe

biden's past are you referencing the days when joe biden really liked to negotiate? >> absolutely. steve machete has a bit of a reputation of being a wheeler dealer he certainly was around when joe biden was going to the hill and negotiating with mitch mcconnell. you could see a repeat of those cases, which back in those days when he was vice president, he really upset the left wing of the party because he would make a negotiation at the last second you're already seeing some rumblings from the left wing in congress saying, you know, we can't make these sorts of concessions. we have a few innings here to go because you're already seeing some progressives getting a little restless. >> elizabeth warren and a few others in "the washington post" piece. there's a big difference between a two-year and 10-year.

>> that's why speaker mccarthy said even though the negotiations have changeding both sides remain far apart on the substance, and to have this all be sort of changed up and have teams change and also the tax exchange, they have a few weeks to go. it doesn't leave a lot of time you also have to remember that president biden is going to be gone for the next several days and had to cut short his international trip because he wants to at least be seen as the president for the last negotiations. >> alex, what do you think the likelihood is though i think a lot of people look at this and think there let's movement, this will get done you've also heard people on both sides say we don't want this to to happen. a debt default would be a bad thing. you saw that happen. i echo those thoughts.

>> they always seem to find a way to get it done, but there's always the chance with all the changes being made at the last second as the clock's winding down that mistakes could be made, and we could see that. i still think they will eventually get something done, but we still have a long way to go. >> if you -- you think the likely scenario is there's going to be an extension if we get to that or the june 1st date can move that was not a hard date that was the date the treasury secretary thought she was going to run out of funding and options. >> absolutely. i think what's most likely is we get very close to the june 1st date and maybe go a little bit past it. there's some flexibility as you noted with secretary yelin i imagine that both sides don't want to do a short-term five-month increase, four-month increase i think at the end of the day, they basically get this over the line to move it past the next

presidential election, november 2024 i don't think either side has really an interest in repeating this negotiation four months from now. >> that sounds like two years gets you to the election and that would be what decides it. >> absolutely. >> i worry about "the moodys," the real moodys, the s&p, and remember last time i think it set off prevention provision sniets's not helpful from the perspective of consumers that's one thing target's ceo said they do talk to customers. >> i know people who are like i'm holding off on a purchase, i'm waiting. >> are the ratings companies say we'll wait and youb grade

someone. >> they look at it as they play a role in pushing some of these things too if the ratings agencies do act, it definitely amps up the pressure normally it's the markets that do that. there hasn't been a whole lot. aside from short-term t-bill activity, there's not been a lot of activity. they just don't think they'll do it. >> joe biden's political team is extremely worried about the potential consequences of a downgrade. right now hit team is feeling pretty confident if the nominee would be donald trump or ron desantis, they would go into the next president chal situation favored. but if the economy suffers any sort of setback, they'd be going into a presidential election against someone like donald trump and it would be very harmful to their re-election process. >> that's weird. that puts the progressives on the other side of that calculus

then, and you'd think the president and his people would have to push back against people saying do not under any circumstances negotiate because you still hear that, that these are terrorists and you can't pay off terrorists when they take hostages, and that's essentially what they're going to say is happening, alex. >> absolutely. but i think the president has clearly made the decision based on what happened yesterday that they're going to negotiate, even if some progressives say don't negotiate with terrorists, they're going to do it i think the since the white house doesn't have a challenge never this presidential primary, eing i've heard and every indication is they they're willing to piss off the progressives just a little bit. >> alex, thank you. >> thanks so much. by the way, folks, stay tuned. we're going to be speaking with

house minority leader hakeem jeffries and house speaker kevin mccarthy coming up later in the show. and we'll talk about where young people are spending their money. and later, martha stewart, the oldest "sports illustrated" swimsuit cover model will be joining us at the table at 8:00 a.m. eastern remember you can watch and listen to us live any time on the cnbc app a beautiful shot of the skyline this morning coming right back. >> state of mind what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. at adp, we understand business today

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welcome back to "squawk box" this morning when it comes to buying stocks this morning, the idea of do what you say said and what you do isn't playing out in actions of young investors sharon epperson is here. she joins us with results of a new and maybe morning. >> as quite surprising younger investors claim they're going to invest more than last year but in fact they're doing exactly the opposite more than half of gen z and 43% of millennial investors say they expect to put more into stocks into 2023. here's what they're really doing. >> what we see among younger investors is a much higher propensity to have been taking action so far in 2023 in the face of things like elevated inflation or the higher returns that are available on safe haven cash investments and there was an increase likelihood of selling or withholding investment rather

than buying in response to that. >> the survey shows that almost half of gen z and a third of millennial investors sold stocks or didn't buy more this year due to elevated inflation and 38% of gen z and 33% of millennials, financial adviser jordan awoya say they're tapping accounts for everyday expenses. >> for a lot of them that stock market account is not necessarily that set it and forget it that their predecessors have been taught. a lot of them are using it actively and treating it like a savings account plus. >> they may be using that money to pay off credit card debt, buy real estate or invest in their own business but they're not leaving it there in the stock market, andrew. >> so, how are they taking money out of their retirement accounts to do this, though

>> a lot of them are going into their 401(k) >> at a loss. >> at a loss and at penalty and taxes and not thinking about all of that. a lot of surveys have shown if they don't have an emergency savings, they're much more likely to tap their retirement accounts for hardship withdrawals they may be able to take, but taking out 401(k) loans and saying that's okay, because i'm paying myself back but if you miss a payment when you set up the repayment schedule, it is a distribution. >> this is just a -- two out of five americans according to a survey were going into the retire savings if they didn't have emergency savings if you don't have it, the biggest pot of the money is the retirement. >> they're not blowing it on experiences? they're never going to get old they're going to live -- millennials -- the hoverboards, apps from the -- >> they're not, no, yeah, that's true. >> different than previous generations at that age, though.

>> i think so. i think so. >> totally different. >> i think so. >> they're entitled to everything, why do they need to save and -- >> i think they're looking also at other types of ways to make money, trying to think if i do -- if i have my own business or i put the money into my own thing and then launch my own business or i'm going to buy real estate, there are other ways they're looking at trying to invest and grow their money other than keeping it in the 401(k) or the i.r.a. >> parents are going to cover it >> sharon, thank you appreciate it very, very much. we want to get back to the great david faber interview he did with elon musk yesterday here is what musk had to say about how he plans to divide his time after picking a new ceo for twitter, which he just did, in linda yakarino. >> time triage is a real thing for me i said the only real currency is time time is the only true currency. >> where are you going to spend

the currency now that you don't have to spend as much at twitter? >> i'll devote more time to tesla. and especially on the ai development. and new product development. and then there is -- and i'll be allocating more time to getting started to orbit in the case of spacex, what i was able to do there -- as the starlink constellation started working, i was able to move some of the best people from the starlink program to the starship program. so, they're, you know -- the timing kind of worked out well that we have really some of the world's best engineers in spacex and tesla. >> time triage, we're all living in it, right >> that's true >> that is very, very true. >> he's right in terms of time

being the most valuable asset. >> it is it always made me wonder why he doesn't censor himself more because some of the stuff he says winds him up in legal dispute where they can call him in for depositions i thought the time that he has to give up to those people that he can't get back must be one of the most frustrating things he deals with. >> he's cancellable some days even with his propensity i don't think there is anyone too big to fail in this world, the current world. but he's pretty smart. he pushes it he stops just in time. i don't know anyone else who tries to do that coming up, we're going to have a huge lineup ahead 7:30, martha stewart is going to join us on set to talk about becoming the oldest ever "sports illustrated" swimsuit cover model. it is a state of mind, andrew. i was telling you that it is a state of mind. you think shatner is the same --

he's -- it is a state of mind. then two -- we made a shot of -- it wasn't me, it was -- and two of -- in the old days -- two of the principle players in the debt ceiling negotiations, house minority leader hakeem jeffries and house speaker kevin mccarthy will get it straight those two gentlemen over there yesterday and part of what's happening between now and june 1st. we have former vice president mike pence, who is taking some incremental steps towards maybe nng 2024. that's all ahead on "squawk box.

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with two max-strength pain relievers, so you can rise from pain like a pro. icy hot pro. good morning elon musk talks tesla, ai and much more with david faber we have got a breakdown of that interview coming up. plus, the latest on the debt ceiling showdown house minority leader hakeem jeffries will join us. and business entrepreneur, celebrity chef, and now swimsuit model once again, martha stewart joins us live. second hour of "squawk box" begins right now

good morning welcome back to "squawk box" on cnbc live at the nasdaq market site in times square. i'm andrew ross sorkin with becky quick and joe kernen u.s. equity futures at this hour as we get through the middle of the week right now the dow looks like opening up 125 points higher, the nasdaq 32, the s&p 500 up about 14 points. treasuries meanwhile, let's show you the ten-year note, looking at 3.532 the two-year, now up above 4 again, 4.087. >> what debt ceiling debate? what downgrade from a credit agency nobody -- to dom chu pga dom looking at the premarket movers people are picking rickie fowler again. >> he's back in the mix. which is interesting i like seeing it, first of all, because i love to see rickie fowler. >> breaks through.

>> it would be great if it was a pga. players championship there and everything else. to your point, joe, we have a pretty calm market but just like yesterday, it is a big retailer that will be driving a lot of the premarket trading action so far and sentiment this morning you got target shares now all over the board, you can see here, just jumping all over the place post earnings. up three quarters of a percent now. moving between gains and losses. trading volume approaching 100,000 share level. big box retailer reported better than expected profits and revenues inventory levels, a concern, did fall from a year ago they're trying to clear some of the stuff out. gross profit margins also grew during that time span. now, if you look at sales growth at established store locations and couple those with online sales growth overall, that metric comparable store sales came in flat on a year over year basis. target said it stands by its previous forecast for full year comparable sales as well as for full year profits. but on balance, target shares

are down, now up 1.5%. you see here that premarket action pretty volatile so far. we're also watching shares of tesla now, higher by just roughly call it maybe 1.5% or so, approaching 2%, over a quarter million shares of volume the day after the electric vehiclemaker's big annual shareholders meeting and ceo elon musk's sit-down with our own david faber for that conversation, over the course of the day, a number of things happened, but he hinted there will be new models coming out. he confirmed the cybertruck deliveries will start later on this year and pour a little bit of cold water on the rumblings and rumors he may step down at some point as ceo of tesla between david faber's conversation and everything else, shares up 2% for tesla wynn resorts, higher by roughly 2.5%, around 6,000 shares of volume getting upgraded to overweight from equal weight by analysts at barclays they cited better tailwinds from

macao, more confidence in las vegas and optimism over its planned dubai project. that is helping things wynn resorts up 2.5% back over to you, joe, with my pick and i'm going to keep going with rory mcilroy and -- >> oh, my god. he's in a drought. >> i know. i still like him. >> jordan spieth, how much does he want this >> i think he does but, listen -- >> maybe too much. >> if jason day can come out, yes, with an at&t byron nelson and his first win since maybe 2018 i got to feel like you can get something from rickie fowler and maybe rory mcilroy i would like to see rickie do it so he can get one. >> the putts he used to bury without looking at the ball, remember that? he used to look at the hole on the short putts, which is -- that's all i need to do. maybe that works. >> justin thomas seems to do

really well at p&g chamga championships. >> i tried everything, right-hand low, left hand low, claw, medium putter -- putting is sort of i can get by. it is the chipping you start one handing or clawing on chips, you know you got a mental problem >> here's what i would say, i was at a charity golf event on monday, and i got -- some of the folks out there that we were playing with are cnbc aficionados, real fans and viewers, i won one of the closest to the pin competitions and so by doing so i got a club which i traded in at the pro shop to get a new putter i have a new scottie cameron titleist putter i'm going to try out this week and see how it works out. >> they work for a while but then they break. you can't tell they're broken. maybe the shaft or the head, something shatters in the head, because they stop working. >> my wife tells me i have a dozen putters in the attic now >> i was going to keep going until they said something, but

they have said something a couple of times already. so -- >> i'll see you next time. for more on target's numbers and other stock ideas, we want to bring in stephanie link, chief investment strategist and portfolio manager at hightower advisers and cnbc contributor. and, stephanie, we saw the target numbers turned around they have been bouncing around a lot this morning you in your note said you own tjx and target, gulp were you nervous about what they were going to report this time around >> yes, especially on target because the numbers and expectations were all over the place. i think there were some positives and some negatives the negative clearly is the guidance for second quarter. then they cited april was soft, may a little bit soft too. that's correlated to the bank situation in march, scared a lot of people. we'll hear what others have to say. that's the negative. the shrinkage also, i'm not crazy about that a billion dollars in the last year is a big number on the positive side, they --

>> let me just clarify that. he said an additional $500 million this year on top of last year, last year it was north of $500 million you're talking about a billion dollars that they anticipate over the course of this year >> yes yes. and so to me, that's a head wind for sure, right? everybody is seeing that unfortunately. so, that's a negative. i get that so but on the positive side, they beat earnings the comps came in same store sales flat, expectations were something like negative 1, negative 2 okay pretty good. it is the inventory numbers they made massive improvements on 16% decline this past quarter compares to a 3% decline the quarter before that and before that it was up 44% they have made massive strides in terms of inventories and when you have sales up about 1% and inventories down, that's a good combination. and, of course, operating margins definitely back on track. not back to the 7%, 8% number they had been seeing a couple of years ago, but 5.2% is better

than the 4.4% expectation. and 3.7% in the last quarter so, pretty good overall. gross margins and this is going to be the theme, i think, across all of retail. gross margins are improving because freight costs are down substantially. and they did cite that as well so, i thought overall pretty good the stock trades at 18 times, compared to walmart at 25 times, i think maybe they're getting back on track and so i'm pleased to see it up a little bit. we'll see what they have to say on the conference call. >> let's talk about tjx and walmart. what you anticipate hearing, more of the same, or the margin story is going to be pretty important as you mentioned, freight costs down and that's probably helping everybody too >> absolutely. freight is going to be the positive theme, i think. with regards to -- so target at 55% of their business is discretionary. and 45% is consumables

for walmart, they have a better mix. 55% is grocery so, whether having pricing power, and so i think the comps are probably going to be pretty good 4.8% is expected international could be high single digit comps and freight will help gross margins, inventories will be likely be down as well if target can make that kind of progress, certainly walmart is going to as well with tj, it is a little bit different story. higher inventories is a positive for tj they're buying the stuff and they have better pricing so their transactions and basket probably are likely higher they are probably going to do about 2% or 3% comp. mar max, the bogey there is 6% or better. and, again, freight, they called out, they expect last quarter, they expect 140 basis point year over year improvement in gross margins and 80 to 100 basis points is likely to be because of lower freight costs

so, that was a real problem last year, freight costs. that should be positive. so i expect a good number from tj it usually trades off on the quarter for whatever reason. and so if it is weak, i think it is a good opportunity to be buying it. >> steph, thanks we'll see you soon >> thank you >> coming up, elon musk is going to talk tesla, twitter and freedom of speech. a breakdown of last night's interview with david faber is next and then one and only, the one and only, martha stewart, is going to be joining us right here at the table. we'll talk about her sports illustrated swimsuit cover, her business ventures and so much more "squawk box" comes right back.

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yes, so, a lot of people still think teslas are super expensive because we did start out with an expensive sports car and slightly less expensive sedan and suv. now we're at the point where the starting price of a tesla is below the average selling price of a car in the united states. so, teslas are actually much more affordable than people realize. and so we make sure people at least know that. and that tesla is also the safest car on the road in so many ways that people --

actually a lot of people at tesla don't even know. so the cabin overheat protection, the fact we continuously update the automatic emergency braking software and the way the air bags deploy, so we look at an accident, they say is there anything we can do from a software standpoint to improve the cars already on the road and what can we update in the design >> that's interesting. >> very interesting. that was elon musk talking to david faber yesterday. joining us now is an expert in all things elon musk, tim higgins, "wall street journal" reporter, cnbc contributor i want to talk all business metrics about tesla, tim but i want to start with one thing that is getting a lot of play as you water cooler type talk, should a ceo, a fiduciary of a public company, be allowed to speak his mind when it could impact the stock price for shareholders or like most ceos nowadays, you can almost see

the -- they almost need to adopt kind of a woke viewpoint on most things if they know what's good for them, if they have got, you know, lots of customers on both sides of the aisle, that would be the -- probably the smart and safe thing to do elon musk does not do that and he said he's not going to do it. he said he's not going to do it. is that a problem? >> i think you got your answer elon is going to do it i think yesterday was a really remarkable profile of him between the shareholder meeting and david's really amazing interview of this guy who has, you know, is pathologically optimistic and inspiring waves of people around his vision for the future, yet also can sometimes be his own worst enemy going out there and shooting from the hips saying whatever is on his mind, even if it is going to hurt advertising sales at twitter or hurt his image with tesla customers in which is part of this -- just the dramatic one of a kind executive that we have

out there. >> twitter is one thing. private now, but makes a difference i hear you on that and that could make lyinda's job even harder. tesla, you could make the case he says i don't care if it costs me money, fine, but it might cost shareholders money. >> in a lot of ways elon and tesla are the same in the public's mind in imagination and there have been some investors who are concerned about this turbulence that he creates out there for years on twitter and at this point, i think it is part of the equation if you're an investor getting into tesla, you know you have this kind of potential greatness in elon and potential huge risk. >> amazing amazing risk/reward, like the highest beta ceo that you could have you look at what he's done, what he's capable of doing, and then you look at the flipside, there is real probably fiduciary risk

there too in terms of shooting from the hip and twitter to shoot from. >> well, one of the amazing things about that -- david's interview of him, is showing the range of him, the excitement, talking about his vision, the potential for what tesla and twitter and all these things can do also, some real moments of kind of tension there when pushed about his tweets, pushed about his feelings about open ai, pushed about his future for children with the world of ai, right? and you saw some of these darker sides of elon really a moment of defiance when pushed on why he's doing these tweets that are seen as so controversial. why wade into that i don't think anyone was saying to him he doesn't have a right to freedom of speech, but a lot of people are often saying to him, why even get into this kind of mess, why put yourself into the buzzsaw and here is a guy who he is clearly defying it

saying he's going to do it because he can. >> there are certain things near and dear to him that he's willing to take the chances to do, whether it is free speech or -- i don't know you watch the world today, depending which channel you watch, the biggest story on one channel, you may not hear a single utterance on one of the other channels about what is supposedly the biggest -- so that's weird not saying there is alternative facts, but certainly journalists nowadays get to sort of decide and they're rewarded for deciding what is noteworthy of them talking about that's not -- you're not going to get that from musk, i don't think. >> that's one of the things he likes to pick at he likes to have all the conflicting things out there on twitter. you know, it is also -- it is interesting to hear him talk on this defiance of where he's going to be with freedom of speech, saying things that even might anger people himself, it is kind of the core makeup of

the man. here is a guy who has made his fortune, he has built his power on the premise of defying industries, defying rules. he's going to go to space, land rockets, make electric cars cool and sexy, and now it seems to be sometimes he's chapping at the social norms, the ideas there are rules in society about the things you say or don't say in public and -- >> and he does make a good point. we're not going to let the u.s. government dictate what happens on twitter, but, hey, some autocrat in some other nation that, you know, doesn't want certain things out there, we're going to appease them or bend to their will that's not free speech for everyone >> definitely part of the criticism this week in the last few days with twitter saying that it was limiting some of the tweets in turkey because of the government's request there, really raising the question

where is free speech elon is saying you got to follow the rules of the land. that's the tension now as the guy who owns the platform and has to do business around the world. >> tesla, new model, finally like 30 seconds. tesla, new models, competition, might start advertising at some point. biggest advertisement for me is that every car i see is a tesla. they must be pretty good where i live >> people like them. two new models he says are potentially going to be plus 5 million units annually that's very ambitious, very huge investors looking to try to understand how he's going to get it to that 20 million unit a year number he's hung out there. so we're going to be looking for new models in the years to come. >> what do you think of the idea of him doing advertising says about where they are in the growth cycle of this business? >> years and years saying no,

advertising, don't need it, viral marketing is the key i think it is remarkable that investors were cheering us on and another kind of situation, if tesla started advertising, i think some investors may have been freaked out about it, the dramatic change of stance they need to start pulling that lever to kind of increase demand but here he gets in a lot of ways a gift from investors pleading for him to get out there to kind of try to sell the brand in a different way in part to get away from some of the overhang probably of elon. the elon tesla kind of marriage and try to put the attention back on the product. >> we definitely got to freeze his brain, like, we should have frozen steve jobs. what is it einstein, edison, like one out of a trillion, it is weird, isn't it what do you think? we don't have it, tim, i don't think. >> i don't >> i don't either. tim, thank you good to have you on.

when we come back, entrepreneur, tv celebrity and swimsuit model martha stewart joins us in a couple of minutes. and then signs of progress in the white house debt limit meeting. we'll speak to house minority leader hakeem jeffries "squawk box" will be right back. time now for today's aflac trivia question. iconic guitar maker leo fender sold his company to what corporation? the answ wn bc "uaerhecn'ssqwk box" continues u, coach staley, i could really get used to this retirement thing. ahhh! coach k, there's a goat here. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill? but i have good health insurance! gaaaaaap! did you say 'gap'? he's talking about the expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? gaaaap! aflac! gaaaap! get help with expenses health insurance doesn't cover at aflac.com

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welcome back to "squawk box. the one and only martha stewart, the person behind the powerhouse brand, she's an icon in the kitchen, best-selling author, entrepreneur, cbd ceo, has her friendship with snoop dogg, social media star and now famous pool selfie at 81 years old, the oldest person on the cover of "sports illustrated swimsuit issue" in history. martha stewart, good morning >> hi. >> how did this -- tell us how this happened. >> what took so long >> you remember i was a model when i was 16. and i did pose in bathing suits back then. some of the pictures are beautiful. i have never done -- they called me in november of last year.

and asked if i would consider posing for "sports illustrated" and i said, i thought about it for about a second. >> for a second. not more than a second. >> you have to think, am i ready, can i get in shape, can i do this, can i do that >> you look great. >> i had two months to get really in shape. you have to be in shape shape. you can't fake it. you're in a bathing suit you are exposed. and not only one bathing suit, but nine bathing suits in the dominican republic, floating around in the water with the photographer and the lighting guys, everybody in the water with you and then, you know, they're prodding you and poking you and making you do odd little poses, but it was fun it was very fun. >> what is your regiment to get in super shape >> good diet, healthy food, no booze at all and i discovered pilates finally, again and i went back and i did at least three times a week and i

have a great trainer in bedford and she was great. we did multiple, multiple repetitions of every single horrible exercise, and it helped it got you nice here, nice there, elongating and muscly and it was great. >> do you like exercise at all >> i always have exercised. >> do you like -- >> yeah, i don't mind it i have to watch "squawk box. that's what -- my regiment is watch something, listen to the news and exercise at the same time. >> i like -- >> i horseback ride too, that's really good for your body. good for your core and all that. >> i want to -- as a entrepreneur and marketer, you create these moments this is the latest of the moments. do you think of them like that >> i think of them as very useful in getting across a message. and my message -- my big message, even with this thing, is successful living i just can't stand it when i see

someone kind of hobbling along the street and not living life to the fullest it really is sad to me and my mom was my example. she was -- she lived until she was 93, she was never sick she had six kids she could still wear a two-piece bathing suit, she was really in good shape. >> nutley. >> nutley, new jersey. and she lived in westin, connecticut. but she was great. and so that successful living instead of successful aging, i don't want to talk about aging at all >> you think it is easier or harder to create a brand today do you think if you were starting from scratch today, do y you think it would be just as easy not that it was easy for you >> it is more competitive now to start a good brand and then there are flukes. the kardashians that can, you know, have come amazingly fast with a fantastic brand, but a lot of the young entrepreneurs, i'm noticing they're struggling

a little bit even with social media all the help that you get from instagram and tiktok and pinterest and all the other things, it is a little bit harder now, i think, to start because of the competition >> martha, we have seen a couple of things in retail earnings and with numbers we focus on from the economy. bank of america institute said last week that higher end people were actually shrinking their spending more rapidly than even people in the lower quinn tiles and then this morning we had target out talking about how, yeah, the consumer softened a bit in april, in may they saw that, and especially whether it comes to the hard lines, home wares, all of those things, that's what people pulled back on for the last year, they have seen softness. >> that's why i'm doing wine, people are drinking wine my wine has done amazingly well for a 2-year-old wine. we got a wine enthusiast for my martha chard we have a lighter chard which is

really tasty i work hard on the tastes and the flavor components of those wines. and it has done very, very well. that's a good business the clothing business, parts of the clothing business are still good people are spending on inexpensive clothing my beautiful puffer vest costs about $59 or less. and instead of the $500 vests that are out there so, i'm always looking for the best quality at the best price and i've always done that. you know that. >> and you pushed into different spaces, though what are you thinking about next >> i'm thinking about this, silver tree. >> what is that? >> the fearlessly, live with something like this. your age, any age, because i do a lot of stuff by myself, a lot of hiking, horseback riding and if i have this, this will alert you. i don't want to use the other word, the other brand, but this is silver tree it iscomeing out, just launchin

it, with two amazing entrepreneurial engineers, software engineers and they have a very nice features you'll hear -- >> what is different than the apple watch? >> the battery lasts for 30 days so you don't have to take it off when you take a shower, it is waterproof and all that stuff. in terms of the company, we have an amazon home shop now which is very good. finally i have my own shop on amazon and that has all our good products and information, content, my evergreen content is finally being used in a very wide array of different products and my -- the funnest thing i'm doing right now is my tv show for roku and that is -- it is back to sort of the old martha show, the one that really educated and it is outside, we have gardening, we have cooking and we have entertaining it is a lot of fun we're doing like 40 shows a year that's a lot of shows. >> cbd, last time you were here, maybe not last time, but we

talked cbd a lot and snoop. >> cbd, we have just upgraded the flavors of our gummies the most delicious flavors you have ever, ever, boj boysenberrd black raspberry, and we upped the content. it is now 35 milligrams. >> and what does that mean it means i'm going to be more relaxed? >> you don't have to eat three you eat one. >> what has to happen for you to get into the targets of the world and the -- >> government, we're lobbying all the time to get the vote to allow the -- cbd, people are selling marijuana on the streets legally and we can't get cbd into the big box stores. >> we talk about social media all the time of the various platforms and i assume that some people in the back taking images of you and pictures that will show up on your social media. what is working?

what do you think has long-term -- >> with the swimsuit thing, everything is working. but instagram tells a really good story the tiktok is a really good video. a lot of how to videos on tiktok and built a very nice audience there. so it works. it works and i went on tiktok because my brand wasn't on tiktok they asked me to do tiktoks and it really does draw in an audience. >> you're still with susan magrino? >> she's right back there. >> i didn't see you back there she's helpful. >> she's doing my pr for, like, how many years, susan? like 34 years or something 40 years >> are you -- we interviewed elon musk yesterday, david faber did, talking about that interview all morning. are you on twitter >> oh, yes. >> how does that work for you?

>> i've been on twitter since the very beginning and i got nervous -- i owned the stock for a long time. i sold it at the $54 price with everybody else to elon buti tell you, i knew he was going to really rip it apart and he, i think now with his new hire, a new ceo, i think it will become one of the great news platforms and i'm not -- i think he's a genius. so -- >> i see you have a blue check mark do you pay for that or did they give that to you >> i didn't pay for it >> you got granted they took it away from the rest of us. >> 3.4 million followers. >> plausible deniability that might not be me i don't want one could be somebody else. >> i think we'll be surprised. >> the whole left stigma cracked

me up. she is so -- she's about as similar to carl schwab as i am -- she is nothing like -- >> can we go back to amazon. you love being on amazon now with the store >> yes >> between amazon and the other platform, not talking about social media, just e-commerce platforms, that's the winner for you? >> it is it still is. again, i've known jeff bezos since he started the company and i have perkins as my first backer and he backed amazon and stuck with it for all these years. he's floating around in the mediterranean. jeff bezos, martha says come back and, but -- >> come back to amazon. >> come back >> you want him back. >> i want his brain back. >> and he's amazing and i think that it is a very good platform for selling with a demise of so many of the regionals, you have

to really look for where can you reach the largest audience and that's one of the biggest audiences ever >> you are a phenom. you're bigger and better than ever and there is some life lessons there, i think >> and it is energy. energy, curiosity. >> optimism. >> optimism. even in this world, even in this world, you know, the optimism has to persevere and you get the right leaders, and hopefully -- >> how do we do that >> i don't know. >> elon musk. >> don't promote the bad ones. >> another elon quote. >> i just want a normal human being as president, is that too much to ask. >> that's my feeling a smart human being. >> they're nodding >> the one and oernl mnly martha stewart, thank you. >> thank you so much when we come back, house minority leader hakeem jeffries on the debt ceiling talks. and coming up at the top of the

hour, the other side of the aisle will join us too house majority leader kevin mccarthy will be our guest a reminder, get the best of "squawk box" in our daily podcast. follow squawk pod on your favorite podcast app and listen anytime. we'll be right back. what if buildings could tell you how they could be more efficient? i'm listening. well, with ibm, you can use software to help you connect and analyze data— from hvacs to elevators to lights. what if we use ai-driven insights to pinpoint inefficiency? yep. and act on it. saving energy, money... ... and emissions. yup. that's a big one. now you've built something better for everyone. that's the sustainability solution ibm and a global real estate company created. what will you create? ibm. let's create.

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welcome back to "squawk box. the futures right now about static, where they have been 127 on the dow nasdaq up a little when we return, house minority leader hakeem jeffries is our special guest we'll be right back.

welcome back, everybody. congressional leaders on both

sides of the aisle striking an optimistic tone after a second meeting with president biden on the debt ceiling impasse joining us right now is house minority leader hakeem jeffries, and leader jeffries, thank you for being with us this morning we're trying to get a feel for where things stand, it means a lot to just investors and consumers, but obviously the future of our nation, what happens here i think the one thing that is now clear is that there is a negotiation that is taking place. this is not going to be a clean bill that is passed, clean debt ceiling limit bill that is passed and i guess we're still trying to figure out where things stand in those negotiations. what can you tell us at this point? >> well, good morning. they're certainly ongoing discussions and in our view those discussions are proceeding on two parallel tracks one, we must avoid a catastrophic default on our nation's debt. it will be the first time we intentionally default in our 247-year history

it will result in triggering in all likelihood a job-killing recession, cost the american people millions of good paying jobs, hurt the economy, hurt businesses, tank the stock market, hurt the retirement security of millions of americans and, of course, dramatically increase costs all at the same time and so we have to make sure that america pays our bills in a manner that is done without gamesmanship, partisanship or brinksmanship. at the same time, democrats under the leadership of president biden have always maintained that we are, of course, willing to discuss the budget and the appropriations and the types of spending decisions, vest decisions and revenue decisions that should be made to protect the health, the safety and the well-being of the american people. it was a very positive meeting yesterday. it was calm. it was candid, in terms of the discussion, and i'm optimistic

that common ground will be found in the next week or so. >> coming out of this, just trying to figure out what's on the table, what isn't. we're going to be speaking with speaker -- with leader -- with speaker mccarthy next. he has said to the press that when it comes down to it, they're going to be insisting on tougher work requirements and said this is a red line that was drawn for what he expects to see. you called this a nonstarter >> yeah, work requirements, so-called work requirements, are a nonstarter first and foremost it is important to understand that in 2018, the last time we discussed the farm bill, 145 republicans explicitly voted against an amendment that would impose so-called work requirements on snap recipients, including then house majority leader kevin mccarthy, voted against it and so it is entirely

unreasonable to think that at this particular point in time, in the context of a debt ceiling showdown that has been manufactured as part of an effort to avoid a default that these type of so-called work requirements can be imposed on the american people, when there are already significant work requirements that exist under law and republicans previously and explicitly voted against them we can have a discussion about those issues, but that should be done in the context of the farm bill, not with a gun being held to the head of the american people in a hostage-taking situation. >> you know, it is good to have you on obviously today two years caps ten years i don't know what that looks like in terms of spending caps how do you -- do you split the difference do you not do anything and what are the chances for

something that goes longer than just for lack of a better term kicking the can down the road. is that still an option to get this done and revisit it in less than a year or will it go out past the next election what do you think finally happens? >> well, we can't continue > >> we can't continue to find ourselves that's a inflation with default our view has consistently been that any resolution of this matter has to be at least two years in nature and that was a position that was once again made clear in the meeting yesterday. at the same time, we should have a very aggressive discussion about deficit reduction into the future president biden under his administration in addition to all of the significant legislative accomplishments that occurred in the last congress, including around infrastructure or the chips and science act or

inflation reduction act reduced the deficit by $1.7 trillion and then presented a budget that would not only protect and strength general social security, build an economy that works for every day americans, it would also reduce the deficit by an additional $3 approximately. that's $4.7 trillion in deficit reduction. that matches what the republicans are proposing. so let's have a conversation about the best way to get there. it can't only be draconian spending cuts that would hurt the safety, the well being and the health of the american people we also have to make sure revenue is put on the table, that we revisit sort of wasteful subsidies for big oil and big pharma that's a conversation we can have in the context of the budget and appropriations discussion >> nobody is talking about raisin raising taxes in the debt ceiling negotiations at this

point. this would be later, leader? >> our view is if we're going to have a thoughtful conversation about deficit reduction, that can't be one-sided based on the right-wing ideological perspective from a handful of magna republicans. >> is there a conversation happening in the room that revolves around taxes in a meaningful way, either extending the tax cuts under president trump, which by the way would continue to add to the deficit or shifting or changing those programs down the line is that on the table right now is that what you're saying >> what i'm saying is that if we're going to have a meaningful conversation about deficit reduction, which my republican colleagues have said they would like to have that that conversation has to involve an evaluation of spending, revenue and that point was made very

clear yesterday in the white house meeting. >> can i just ask do you think there is going to be a deal that's done two weeks from now because it sounds like you all are very far apart and this is before we even hear from speaker mccarthy >> no, as i indicated, i thought it was a very positive, forward-looking meeting and i think that everyone articulated their positions but three things were made clear. one, we cannot allow a default to happen. two, this is going to occur in a bipartisan way and, three, we all need to get to work with the fierce urgency right to you to make sure america pays our bills -- >> i don't think anyone disagrees with that. once you start talking about taxes, tax hikes, tax cuts, that's a conversation that takes longer than two weeks to resolve. the question is sort of how does that get resolved? does it get kicked down the can, is there a three-month reprieve

and you'll continue these conversations so we're back having this conversation all over again come september? what does that look like >> well, what it should look like in the view of many of us is that we should make sure we avoid a default in the same way that has been done on the democratic presidents and republican presidents, including three times under the presidency of donald trump. not in the context of gamesmanship or partisanship or brinksmanship. >> i understand all that i'm talking about practicality over the next two weeks. >> the practicality is we're not going to solve the fiscal health of the american people over the next ten years in two weeks. that's what republicans are suggesting they'd like to do temperat we're saying we should have a serious discussion about that to build an economy, to continue economic growth should be part

of that discussion if we can't do that in two weeks, then of course that's a conversation that should occur along the usual budget and appropriations track while avoiding a default >> but leader jefferies, taking a stand and making the point that you don't negotiate with terrorists, which i keep hearing, and that there's hostage taking and you're not going to do that, would taking a stand right now and insisting on a clean debt bill, is that worth -- is that the hill you should die on if it cause as default or do you acknowledge there's going to be negotiations to get it done it's not going to be a clean -- is that worth dying for as a terminology? is that worth it >> first of all, i've not heard anyone suggest that we don't negotiate with terrorists. i don't view my gop colleagues as -- >> well, you call them maga demands. we heard the ultra maga trope.

i've heard other democrats say we won't negotiate with terrorists >> first of all, extreme maga republicans is not a trope donald trump had made clear that it's a party let's not -- joe, let's not take us off track >> okay. >> what we're trying to do is to arrive at an agreement that avoids a default and sets us on a course to address the fiscal health of the united states of america in a responsible way in the context of divided government where joe biden is the president and democrats are in the majority in the senate and it's a closely divided house of representatives >> we got 30 seconds 14th amendment, you think you could work longer term down the line, could you ever use the 14th amendment and actually challenge it in court if it's

something you think needs to get undone >> i think we have to find a bipartisan resolution and i'm confident that we will that can move the country forward >> but not in court. okay >> leader jefferies, thank you for your time today. >> thank you >> we've got another big hour of squawk still to come speaker of the house kevin mccarthy will join us with his perspective out of washington after that big meeting on the debt ceiling and former vice president mike pence and an exclusive interview with the ceo of roblox.

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good morning glimmers of hope on the debt ceiling after a meeting with principals in washington and retail shares. target is volatile and we'll talk about the world according to elon musk >> i'll say what i want to say and if the consequence of that is losing money, so be it. >> full highlights from our

exclusive interview with the ceo of tesla is straight ahead as the final hour of "squawk box" begins right now good morning and welcome to "squawk box" here on cnbc, live from the nasdaq market site in sometimes square i'm joe kernen along with becky quick and andrew ross sorkin we didn't break anything at least talking about the debt ceiling costs. nothing yet anyway we got an hour to go we are seeing some apparent progress as we just heard in debt ceiling talks president biden and speaker of the house kevin mccarthy naming representatives to take $ the ld on negotiations. biden returned to washington early from an overseas trip. we spoke last hours with hakeem

jeffries it was calm and candid in terms of the discussion and i'm optimistic common ground will be found in the next week or so >> joining us california representative kevin mccarthy. it's great to have you on, mr. speaker. it was noted yesterday morning you sounded pretty pessimistic and it was a real change in tone after the meeting. what happened exactly? can you give us any insight into that >> well, the difference is our meters before were staffers and the four leaders and there was no time we were going to get an agreement continuing that way. what we really have to do is what every time before was able to do. the president should appoint either himself or people from his administration to negotiate directly with myself, something that mitch mcconnell has said, something that president trump did with nancy pelosi, which

bush and obama did before. that's a structure that can actually find a way we can come to fruition. the challenge here is the president waited 104 days until he came to this conclusion i went in february 1st i said no new taxes and no clean debt ceiling but everything else is on the table. i want to be reasonable, sensible and more importantly we want to be responsible he ignored us and said we couldn't have negotiations now is the final time that he finally admitted we're going to negotiate and we have a structure to negotiate the problem is the timeline is very short republicans are the only ones who have passed a bill to limit save and grow, raise the debt ceiling and actually make the economy stronger >> what do you think the final bill looks like, mr. speaker we asked leader jefferies about the two-year spending caps that democrats would seem to be amenable to, versus the ten-year that you're insisting on

i did the math, it would be 12 years. whatever you're not going to get that from the democrats what would you be satisfied with >> i'm not going to sit and negotiate with you we started last night already in the room >> come on >> look, we can be really sensible and responsible about this your debt is now larger than your economy you're going to pay more in interest in the next ten years than you paid in the last 80 years. we can no longer ignore this problem. whatever agreement we come to is not going to solve this because we're not tackling the bigger items but we have to put a trajectory that we're actually curving the spending level and we got to be an ability to build things in america. what i'm looking to and where the democrats stay draconian, we're talking about spending limits of what we spent five months ago, they think that's draconian. we're talking about work requirements that bring people out of poverty

and this is only on able-bodied people of a certain age that have no dependents other otherwise you want to borrow money from china to get people back to work and let's curb this inflation by bringing back money that's simply wasted we spent billions on co indicovid and it was money not spent that's the most difficult thing to make decisions on >> we pushed speaker mccarthy, the idea of work requirements. he says it's a nonstarter. you say there's a red line that's drawn that that has to happen it sounds like there's certainly a negotiation that's taking place, it sounds like y'all are making progress, it sounds like there are some pretty hardline

issues where both are digging in >> i have never said we weren't going to have a difficult time here but i was always going to be responsible remember what i did on february 1st and going to the stock exchange i have told the american people we have a problem and we need to negotiate. the other side believe you should never negotiate and just lift the debt ceiling. we know that's not responsible now we're sitting down the president as a senator voted for work requirements. we watched when the democrats had a very big night they voted for work requirement by 82% and work requirements only going to able-bodied people with no dependents you can go to school or looking for a job and be waived. it helps our supply chain and the economy and individual even stronger that's what we should be doing >> speaker, one of the things that hakeem jeffries was talking

about was taxes and where taxes are going to fit into all of this you called for i believe extending the tax cuts put in place by president trump you probably heard the cbo say that costs the taxpayers effectively $3.5 trillion in terms of adding to the debt. how does that dynamic work in this context >> thanks for the question first of all, there is not going to be a tax discussion in this debt ceiling the president admitted that yesterday at the beginning but let's talk about this. if you look at the 50-year average of how much money government brings in, average we usually bring in about 17% of gdp. right now we're almost at 20% of gdp bringing in. so what you find is only two others times in modern history have we ever been at this point, in 1944 and the year 2000. you're bringing in more than any other time so the real problem is what we are spending.

normally on a 50-year average we spend 21% of gdp, we're now on our way to 25% the problem is the spending level. it's not you the taxes are bringing in money than anyone projected, the economy became stronger, companies came back to america instead of going to other countries. you really want to look at what the democrats passed, the inflation reduction. that's costing more than three times what they projected it would cost we're watching the president claim that he cut the deficit by 1.7 trillion he didn't do anything. three programs ended from covid. he increased the deficit by more than $500 billion by what he said it would be we're spending more money by a 50-year average than what we brought in no household would live this way

and no businessman or ceo would continue this. let's curb what we're spending, let's go back five months and put in things we like to grow. if you like renewable energy, get the permit to do it and build the roads. let's help people get jobs again. let's be less dependent upon china. i think that's reasonable and sensible but i didn't think it was reasonable that i had to wait 104 days that they'd finally admit they'd come to the room and negotiate >> to the extent there are democrats watching right now and this is going to be a bipartisan deal, what do you say to the viewer who says, look, during the trump administration while you were in office, did you not push back on increasing the debt and the deficit. >> i would tell you one thing, if you're talking about a debt ceiling negotiation, that's not true president trump negotiated with nancy pelosi the difference was she argued to spend more money we pushed back and i think there's enough blame

to go around with republicans and democrats. they all spent too much in the last 21 years. but there comes a moment in time when you hit the wall. we're now at a debt that's larger than the economy more than 20% wehaven't seen this since worl war ii you can't continue down this trajectory if you want to continue to be the strongest nation in the world. when you talk to the defense department, not this year but years ago, they'd tell you the greatest threat to america is not russia or china, it's the size of our debt and this is a real concern so i haven't sat down and said it has to be one way or no way i simply asked the president can we have a negotiation about it can we negotiate can we talk about it you bring up your ideas, i'll bring up mine and let's let the best idea at the end of the day win. you have this debate in your own household. why can't we have this debate with the taxpayers' money as

well >> mr. speaker, both sides have completely different memories about previous debt ceiling negotiations and whether there were negotiations, whether it was a clean debt bill or not, but one thing that keeps coming back to me is it's been posited that there has never been this type of brinkmanship or leverage, that the democrats have never said we will not raise the debt ceiling if you don't do what we want to do, that this is unprecedented, it's never been done before and it would set a bad precedent. is that true, number one, it's never been done? and do you worry that the next time the shoe's on the other foot that the democrats will say, hey, we're able to do this, you did it in 2023 >> no, we've watched all the times before some of the best legislate ion we've got where we can curb spending came with the debt ceiling negotiations

both sides of the aisle have talked about this, but we have divided government the founder has divided the government where the house and senate pass a bill and you go to conference unfortunately in this situation only the senate has passed a bill so there's no conference to go to. when you have a president who says i will not negotiate with you, you have to have a clean debt ceiling or there's no way we can go forward, it's not the way our government is designed i believe just in business of day different opinions can get together, come to an agreement where both sides feel they win i've been asking for that since day one. let's get into the room, have a negotiation and walk out where the american people win. let's limit our ability to continue to spend crazeily in the future years, let's save money wasted and grow our economy and make us stronger again. i don't think it's that difficult. >> it was clear to you and it was no easy task but when you

got 217, a bill that raises the debt ceiling, i don't know whether that was a check mate or whatever you want to call that but that changed the whole dynamic. i don't know if you have sympathy, at least empathy for the president when you see the progressives in his party just -- i mean, heads are exploding about negotiating with terrorists and there's been hostages taken and don't you dare do anything, stick to your guns on the clean debt bill. you have to satisfy some of your guys and gals in the freedom caucus, we just heard them called that again, the extreme maga types in your matter and the president has his own issues with that wing of his party. it's hard to watch >> let's be very clear the only people i'm trying to satisfy is the american public and also make sure there's a future for our children and grandchildren. he's the president of the united states he should look out for the

american people first. and he's the leader of his party. if he truly believes we should continue to just borrow money and there's not one dollar you can find to cut, i'm not quite sure any american agrees with that >> we just heard leader jefferies say, and you addressed it already and we hear it all the time that the president cut the deficit by 1 op.7 trillion. and the budget introduced has a lot of revenue raises. that will cut the deficit. are you going to work on a budget after we get through this because everyone still hasn't seen a budget from the republicans. >> let's be very clear the 1.7 was throw pree programs created because of covid that ended. that's the only cuts taken place in government. he actually spent 500 billion more than he projected he would spend. he added $6 trillion, the democrats, that brought us inflation that armed every

single american. we have three of the four largest bank failures just in the last couple months their fiscal and monetary policy has failed in america. i'm not asking to change all that i'm saying let's spend less than we spent last year, let's find places we can grow and find places we can save and i had to argue if we had not passed the bill, do you think we'd even be in the room discussing this that shouldn't be the way government works two sides should be able to sit down and talk, even if they have differences, and find common ground every family does it, every business does it and the american government should do it as well. that's all i'm asking, it's all we have been asking for the last 104 days now we have an opportunity but we only have a few days to get the job done and i'm going to spend all my effort to make sure we get the job done. >> can anything that neither side is planning go wrong just logistically the president is cutting his trip short, not going to new

guinea now, i guess, but you're still cutting it kind of close you actually have to pass these things, right? people have to be there. you have to go through all the rules and regulations of the senate and the house i mean, it makes people a little bit nervous in the financial markets that something could go wrong. you got to get moving. >> i've been on your show many times telling you we should be nervous because the president is not negotiating. the republicans passed our bill in april, long before secretary yellen told us the deadline was june 1st i never wanted to be working toward a deadline. it's the worst way -- >> like drexel, highly confident? >> the only thing i'm confident about is now we have a structure to find a way to come to a conclusion the timeline is very tight, but we're going to make sure we're in the room and get this done. >> but you're not confident that there will not be a debt

default? >> i think at the end of the day we do not have a debt default. i think we finally got the president to agree to negotiate. that was probably difficult for him to say as president he would negotiate with somebody, but it's really what the old joe biden was good at. now we've got an opportunity for him to be back to what he used to be able to do and let's get the job done >> thank you for once again, what we get straight from you is much better than hearing things and postulating things >> i never give up and at the end of the day we get the job done and we'll do it again >> we'll leave it there. thank you, speaker mccarthy. >> coming up we have some of the top takeaways from david favor's interview with elon musk plus interviews with former vice president mike pence and the ceo of roadblocks. you're watching cnn and this is

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do your tweets hurt the country? are there tesla owners that don't agree with his political position and i know it because he shares so much of it? or are there advertisers on twitter that say you have to stop because i can't get ads because of some of the things you tweet. >> you know, i'm reminded of the "princess bride. great movie. >> great movie >> where he confronts the person who killed his father, and he says offer me money, offer me

power, i don't care. >> so you just don't care. you want to share what you have to say >> i'll say what i want to say, and if the consequence of that is losing money, so be it. >> that was elon musk speaking exclusively to our david faber after tesla's annual meeting yesterday. david's made his way back from austin, texas to the new york stock exchange david, well done i asked specifically for that sound bite because there were so many great moments in that interview but that was by far my favorite and the silence while he thought about it and came up with his answer i think just shows what a true answer that was, how he really feels about things and got to the heart of such an important question i was blown away, incredibly well done and we learned so much out of this that i didn't know

before what's your biggest takeaway coming back? >> and that's, becky first of all, i certainly very much appreciate that like always when we do those interviews, you know, why didn't i ask that one, even now i hadn't actually watched it since i did it >> that was my favorite moment >> the pauses were fascinating, and it's interesting to just watch his mind work. i wanted to actually say, of course, you killed my father, prepare to die, but i was sitting there going -- but i didn't do it because i also wanted to hear what he had to say. we obviously got into a back and forth that he hasn't really engaged on that much, which is why do you seemingly give voice to conspiracy theories why do you, you know, make these sometimes seemingly outlandish tweets about things, whether

it's -- >> and a pretty good answer, wasn't it, david the laptop how about that conspiracy theory about the wuhan lab, that one sort of -- >> you and i both don't believe that was a conspiracy theory at all, joe at the same time i do wonder where is he -- we did have a back and forth about that shooter -- murderer in allen, texas, whether he was a white nationalist. i mean, he had a nazi tattoo i didn't push him on it but you wonder sometimes where he's getting all his information, how much he's being challenged he said on twitter community notes is going to really be the way that people are policed. you know, i guess we'll see. he says it's happening now >> hey, david, what did you think -- you briefly touched on china. he talked about himself being a

free speech absolutist, and we talked earlier about what's happening with twitter and turkey and here he is saying i will speak my mind, you know, money, power be damned, doesn't matter and yet the truth is there's a lot of things he doesn't speak his mind about >> absolutely true and he rarely, if ever, says much about china they have important business there of course, not just the shanghai factory now they're building a battery plant as well. and you're right and, by the way, i wish that i had on my list, as you know, andrew, sometimes you don't get to them, sometimes you miss the question on turkey it's a very good question as well and an important question so i'm sorry it wasn't asked perhaps i'll get another chance. because it played such an important role in elections and the fact that it's been throttled back at the request of the current government could be concerning for sure. so you're right, he's a free

speech absolutist but the question is that always the case or not i will say to his credit he doesn't block anybody on twitter. and, by the way, when it comes to free speech, guys, he said nothing's off limits in the interview. >> we started -- i remember when you walked in actually you remember that? how many years before you didn't feel absolute terror if there was silence after someone asked you a question on tv it's got to be the most frightening feeling in the world. it took me probably ten years to be able to be comfortable with the silence. that was 12 seconds. i'm in shock that he sat there and didn't panic and decided i'm going to give exactly the answer i want to give i don't know he's a unique individual they don't come along much like that guy >> i agree with you completely, joe. he is unique there is a reason, as i say certainly the most consequential

businessman on the planet, in one way or another and being at the factory in austin is awe inspiring. you look at that thing and you think oh my god, look what has been created, by him and everybody else associated with it but also by our own capital markets. that stuff doesn't happen unless you can fund losses for a long time i mean, it's staggering, it really is. to have been there as well is just a great thing >> we're up against this data so we got to go quickly i did want to say the tough line that they have to walk now with twitter, it's not a public company anymore but he does have investors. he's got linda yaccarino there a great talent he's still going to say what he wants to say it does point to the friction that still exists. >> agreed. it will be very interesting to see when she begins a few weeks from now how she's able to

navigate that herself and bring advertisers back to the platform he wants it to be a free for all in some ways but at the same time he's saying lives will be effectively policed. i'm like you, curious to see how it all shakes out. >> david, it was an amazing, amazing job. can't wait to watch more, watched everything last night. i want to hear all the stuff you guys had to say. thank you. welcome back be >> rick santelli has breaking housing data take it away >> we're looking for our april housing starts we're expecting a number in the vicinity of 1.4 million, seasonally adjusted annualized units, spot on, 1,401,000, exactly as is expected and in the rear view mirror, unrevised 1,420,000. if you look at that as a percentage, it's up a couple of percent from the revision we

just received at 1,371,000 permits, 1,416,000, a little light to expectations but very close. a subtle upward revision from last month's 4.13 million to 1.7 million, which means we're down over a percent on permits. interest rates moved noticeably to the upside, maybe a basis point or so, not that big a deal to be frank, i'm not sure it had much to do with what we're witnessing now the big disparity between single family and multi-family. multi-family in march was responsible for at good chunk of the dropoff and that's because multi-family seems to be settling down a bit. it was one of the big driving forces in housing before interest rates really moved up many are considering how interest rates may have affected financing in some of those

construction projects that are being cancelled in the multi-family dwelling space. of course we continue to monitor how interest rates below their peaks, especially in mortgage land, may affect some of housing numbers. we know supplies are an issue. so many people have good rates on mortgages they don't want to give up. >> you got that right. we want to bring our own diana olick in tell us what we should think about this >> it's just what rick said when you look at the multi-family and the breakout for april, you're seeing a big drop in multi-family that could be due to finance and oversupply in the market we saw an okay in the bump up, 1.6% for single-family housing i thought it might have been more than we saw in the builder sentiment yesterday.

we haven't been in pos titive territory since last summer. the builders are saying they're getting this great demand because there's so little supply on the existing side listings were down 20% year over year that's new listings. you would think the builders might put up more and there could be issues with getting construction loans due to banking issues >> diana, thank you. steve, how about you >> we have a federal reserve trying to slow the economy the likely things are things like housing sector. and nobody has figured out how to solve this puzzle, that we need more housing, where housing never got back to the growth in households and we can't quite figure it out.

meanwhile you would think housing would even fall more but there's this tremendous demand out there even at these rates and people can't figure out should they or should they not sell their home in this particular environment we're seeing gdp forecast come up for the second quarter. we'll have to talk about that a little builtit more tomorrow but we're not getting the slowdown on the gdp side that perhaps the fed wants as well as >> thank you very much coming up, former vice president mike pence is going to join us. "squawk box" coming right back

our next special guest joins us to weigh in on the debt ceiling standoff in washington, the 2024 presidential race and the economy. in new hampshire yesterday he focused on the need for entitlement reform joining us former vice president mike pence mr. vice president, it's good to have you on this morning >> good morning, good to be back >> i heard you weren't going to take the jacket off because you weren't in studio but we're working here, we're finding solutions. >> it's "squawk box. >> that's right. where to start last time you were on you talked about entitlement reform a lot that may be the last time i heard anyone talk about it it's still the third rail of american politics. >> well, look, joe biden's

policy is insolvency the leading candidate right now for the republican nomination, my old running mate, has an identical policy but, you know, with a national debt the size of our nation's economy that is on a trajectory in the next 30 years to multiply by a factor of five times, i've just continued to talk about it. i gave an economic speech last night, joe, here in new hampshire and i talked about the need to make the trump/pence tax cuts permanent and roll back and release american energy but we have to put our nation back on the path of fiscal solvency. that's going to require national leadership that is straight with the american people about the debt crisis that this and future generations are facing and offers common sense and compassionate solutions to put us back on a path not just to a balanced federal budget but toward preventing that moutntai

range of debt from hitting our kids and grand kids. >> i want to talk about the fed and the dual mandate and maybe making their job a little bit simpler since a lot of times the dual mandates seem to be mutually exclusive, a crazy way to do things you like maple syrup in new hampshire? you weren't skiing was that a coincidence you were in new hampshire to give an economic speech? are you gearing up to run from president? and there's this pac with your blessing that has been formed with the gentleman in a imagined br -- that managed brian kemp's campaign in georgia. are you going to wait till june to announce? you can do it now and really reach the right people

>> i don't have anything to announce this morning. i'm very humbled by the outpouring of support that we've received from around the country, the committed to america super pac that was formed i'm grateful that people have come together to encourage us. we'll let our intentions be known i'm confident before the end of june because i think this country is in a lot of trouble the reason i came here to new hampshire in part is because when you're in new hampshire, it seems like you get a little bit more attention when you're talking about things that matter and with families struggling with record inflation, i just thought it was important to come and talk about not only the things that we did before, that we've got to continue on energy, on taxes, on regulation. but i think the time has come for us to get the fed focused back on its original core mission. it ought to be focused on monetary policy, on protecting the integrity of the dollar. i authored legislation more than a decade ago to end the dual

mandate of the fed we ought to be looking at congress for full employment, hold them accountable for that at the time places like china working hard to replace the american dollar as the reserve currency in the world, the fed ought to stick to it and make sure it look after the dollar and make sure we don't find ourselves in the kind of situation -- >> they're trying to raise the unemployment rate right now so i don't know how -- it just depends on any given day what the heck's going on. people say they want to get the 5% to slow the country >> mr. vice president, i wanted to ask you in the context of the debt ceiling -- how are you, sir? the cbo just came out with a new score suggesting that, tend be -- extending the 2017 tax cuts would cost $3.5 trillion and how you think about that now in a

conversation about reducing entitlements and other things and trying to keep our deficit and debts from growing >> well, i know speaker mccarthy was on "squawk box" a little bit earlier. i tell you i fully support the stand that he's taken on the debt ceiling, to demand that president biden come forward and accept a down payment on fiscal discipline and reform. i think the fact that speaker mccarthy got a bill passed out of the house has now brought the administration to the table and he ought to stay firm. the last thing we ought to do now is raise taxes in this struggling economy joe mentioned the unemployment rate being what it is but come on, there's millions of americans on the sidelines and labor force participation is at nearly all time low. i think the last thing we ought to do is raise taxes i pulled the numbers on this in 2017 they said when we cut

taxes it was going to cut revenues revenues are up 32% to the federal government since 2017 and corporations, where we cut taxes on businesses, corporation revenues are up $128 billion i'm a supply sider, i believe you cut taxes and create growth. there's more revenues, too >> you are correct it's true actually that the cbo was wrong in 2017 about what it ultimately projected cbo projections aren't always right. it's also fair to say that, yes, revenues grew in ways what weren't projected but at the same time they didn't ultimately pay for themselves i think at best it will be a wash, if it got to a wash, which would be obviously a great thing for the country. but nonetheless -- >> i know, but i said corporate tax has to be zero we're competing with the rest of the world. tax people

tax the ceos, the employee let us compete >> one of the other things that kevin mccarthy was talking about, you talk to people in the defense department they say a national security threat could be considered our debt and that's a real issue. having said that, you know, a huge part of our annual budget is the defense department and there has been very little true oversight over the cost in the defense department as you know, there are people who debated this for a long time where do you stand on that >> well, joe biden's recent budget once you factor in inflation has a 1% cut in defense spending and i got to tell you at a time when china is literally floating a new battleship every month and continuing military provocations across the asia pacific and russia's waging an unprovoked war in eastern europe, the last thing we ought to be doing is cutting defense spending this national debt is a threat to our ability to provide for

the common defense it was about a decade ago when i was in congress one of the chairmens of the joint chiefs of staff said what's the greatest threat to our national security in the 21st century and his answer was the national debt in about a year we're going to pay as much on interest in the national debt as we invest in national security. i'm all for oversight, i'm all for scrubbing it, i sure would like to see the pentagon get away from this woke silliness they're spending millions on but when a sunon in the united states marine core and son in the united states navy, now more than ever we ought to get ail h ahold of spending and get ahold of the national debt and make sure we can provide safety

>> what we go through with the debt limit, it's no way to do things i don't know how you reform that or what action you take. are you okay with the way it's been handled this time around where speaker mccarthy is using that leverage to extract some spending the shoe could be on the other foot eventually. just doesn't seem like a very smart thing to do, to mess around with the creditworthiness of the u.s. dollar and it happened in 2011. you were there for that, in congress >> you was the constitution requires we insure the full faith and credit of the united states failure is not an option we can't allow doefault to happen in all my years in congress and serving at the other end of pennsylvania avenue, generally speaking the first person to blink uses

i'm -- loses. on a tight majority, they passed a bill, rescission of needless covid spending, just an initial down payment on fiscal discipline president biden said he's not going to talk to them about anything unless they can pass a bill in the house. well, they passed a bill in the house and now it's looking more and more like they're going to reach a deal that's how principled compromise happens in washington, d.c. whether they got to work all night, roll their sleeves up, like you do on "squawk box," throw the jackets over the chair, they can figure this thing out. the american people deserve no less we got to insure the full faith and credit but we got to start back on the path and that's what speaker mccarthy and house republicans are doing. >> we don't have much time left. former president trump on that much beloved town home meeting that cnn had said that we should

default. that was one thing he said i think he differs with you on ukraine. if i went over all the things we differ on, we wouldn't have time but can you just comment on i think his lead as the possible nominee has expanded but not everyone's announced obviously but you said wrong person to represent republicans in 2024? >> well, i said there are better choices. i'm very confident of that i think different times call fo different leadership the president and i have a difference in terms of leadership in the world. i think we need to lean in to support the ukrainian military and repel the russian invasion i think that's in our interest and the interest of the free world. it also sends a decisive message to china with their military provocations i think we got to deal with this debt crisis that is facing future generations, we got to be

square with the american people. when it comes to the debt ceiling, failure is not an option we can't accept default, we can't minimalize the impact that would have on american families and american credibility in the world. we just got to demand leadership that will stand firm and achieve these things and i have to tell you, 12 years in congress, four years as a governor, four years as vice president, i know what can get done it all begins with standing firm, being straight, getting the american people on your side and if you hear more from me in new hampshire in the months ahead, that's exactly the leadership we'll be talking about. >> and you even did the blue shirt. you wear a white shirt without a jacket, it's too hot with the lights you even got that right. >> the blue shirt -- the white shirt, it can make you look a little ghosty. >> i know. >> it's a contrast he knows >> he even got that right.

we may put this on app ad or something, mr. v.p thank you. appreciate it. >> still to come this morning, we'll talk a.i. in the gaming world with the ceo of roblox how do we show strength and stability? (eagle call) a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people.

and i remember kind of thinking like, "oh my gosh, i think we could be sisters." because i think we looked... yes. right. yeah. and i don't think at that time- i think you're the one to tell me that we had the same birthday. yes. it's really unbelievable when you think about it, because it's been, like, really over 20 years that you were my mother and father's banker, you became my banker and now fran is in her third year of college and you're her banker. it's so unbelievable because i'm just 20 years old. [laughing]

final guest today heads a company that sits at the center of the gaming world and maybe a.i. now too i want to welcome the ceo of roblox last week, roblox reported a

larger than expected loss but revenue coming in above expectations i want to talk about the earnings, last quarter and of course about a.i. and how it's changing the business. the loss was bigger than some expected, but also, revenue better than some expected. >> hey, andrew, thanks for having me on the show. you know, we're firing on all cylinders. we have a great quarter. our bookings were up 23% year on year i believe what our shareholders were responding to was our bookings growth and our generation of cash this is really driven by the innovation we have been talking about over the last two years, all of the functionality we have added to roblox to make it more appealing to older people and people around the world. >> do you see any impact from the, you know, economically in

terms of how many people are both using the service but buying things on the service >> in addition to the 23% year on year bookings growth, we saw growth in all sector, all ages, all around the world japan, for example, is now growing at over 100% year on year our over-13 segment is growing at over 31% year on year, and we shared that our bookings are already growing faster than cost of sales they should be growing faster than our infracost in q3, and we've done all of this while spending over $400 million on infra, and once again, generating $100 million in cash. >> you've talked about actually having older and older customers or users on the platform are those younger people that have just grown up are those new people joining as you know, i talked about on

the show forever, the sorkin boys were early roblox users, and they're getting older, but they're still on there >> yeah, we're really happy with our retention numbers, but new older people are flocking to the platform as well the content on our platform is getting better and better. a lot of our developers are, which is, you know, our developer community is growing very rapidly as well, are starting to target content that is appealing for older users, more photorealistic-type content, so it is a mixture of both >> you've been spending a lot on a.i. and really the -- at the intersection of it, there's going to be a lot more both coding possibilities for folks and then also chat bots and other things for people to talk to each other. where are you on that journey? how much of it is going to be your own technology versus plug-ins from some of the large language models? >> yeah, we're building a full

a.i. stack at roblox in q1, we already shipped two big pieces of functionality. one is material generation, so for example, if you want a moldy brick wall, you can just say that, and roblox will generate it we also, to help people learn to code and to help our creators, introduced automatic code generation that we're really impressed with but long-term, there's so much on our platform that is going to really let everyone be a creator. you're going to be able to create 3d worlds or your avatar purely with text prompts, for example. so, really, a.i., up and down our stack. >> how much do you worry, though -- i mean, we're still at this place where, you know, some of these large language models hallucinate, say things they're not supposed to say. how do you put the right fo guardrails on these things, especially once you have kids interacting with them? >> i think once people start

interacting with simulated npcs or chat bots, that's where our history of safety and civility really comes to play i imagine us being very, very careful as far as what type of bots an under-13 would schat with but at the same time, i'm really optimistic i think we're going to have a.i. teachers, a.i. language instructors, a.i. chess coaches, and i think our history of safety and civility will apply the same principles in an optimistic way >> given the programs you have put in place, it's worth mentioning, there's an article in the "journal" about this, a children's advertising watchdog effectively came out and said that roblox had violated the group's guidelines for marketing to children under 13 part of this was influencers who were not identifying themselves as paid influencers and the like and other advertising that was not described as such.

do you agree with what the watchdog said? what are you doing about it? >> i think, look, we're all aligned in that we want to create safe experiences for younger people, and we've been very thoughtful here we shared recently that because we have such a healthy economy, there's no need for us to advertise for people under 13 on our platform at the same time, we're very optimistic about the future of advertising on our platform just because this is really for older people, a new immersive type of advertising that's really the next step between image and video, which is immersive 3d brand experiences. >> and then finally, right now, this is still a closed system. we've talked about this before when are robucks, the digital currency of roblox, will it ever live outside of roblox >> great question.

we have no plansfor that we're expanding our economy right now, but it's good to say that we do have such an active economy, that so many people are using robucks to essentially maintain a free platform that's available for everyone around the world, and at the same time, for those who want to participate, they can use robucks. but no plans to go off platform. >> at some point, we should have a conversation about the allowance that parents give their children in different regions. i'm sure you could probably have an interesting -- he probably has some interesting data on that >> you young whipper snappers, robucks means something totally during the to me it's part of sears >> oh, sears roebuck that's a different version >> i don't think you can go and spend them there i don't think there's any left >> not nymore. and i don't think dave accepts them either. there you go dave, it's nice to see you thank you so much for joining us this morning

>> thank you for having me on. >> you bet always good to see you when we come back -- i shouldn't say. we'll get a final check on the markets. dow up right now 167 points. nasdaq up 46 points. the s&p 500, up. >> we didn't break it. >> we will join you tomorrow that is true and the gang and "squawk on the street" is ready for you right now. ♪ i'll say what i want to say, and if the consequence of that is losing money, so be it. >> elon musk with faber last night in texas, covering everything from macro to a.i. to china to free speech good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla, jim cramer, david faber miraculously is back already. some optimism about the debt ceiling toda