goom good monday morning i'm melissa lee and mike santoli. omarin inaguilar. the so-called godfather of silicon valley, ron conway is with us, calling for strict regulation on ai before it's too late. the man who called china's boom and bust, hao hong will join us on g7 coupling and the swipe on micron. very modest moves. s&p 500 hovering just under that

4200 level we did pop above it at the beginning. nasdaq outperformance, incredibly steady theme. it's been that way for months right now. today it's microsoft, it's alphabet you do have yields not doing a whole lot and still that same story. we have a 52-week high in the nasdaq 100, first time in 18 months that's happened historically that's bullish looking out, but short term it looks likeit's a little overstretched. >> the strategists are sort of debating internally as to what will happen. we got the s&p 500 pretty much at 4200. the question is, do we keep going? bank of america raising record to 4300 saying, we're more optimistic about eps for the year we see upside to at least 210 on eps and we see the real opportunity will be in the equal weight s&p, which we have not seen, because it's been such a one-sided rally. >> the equal weight around flat year to date the nasdaq is up 20% and the

microweighted s&p is up 10%. that's the dichotomy it's five weeks and you're halfway through the year if there was going to be a real earnings collapse, i guess you would see more signs, perhaps, by now. >> topping the tape, debt default drama. president biden and house speaker mccarthy set to meet this afternoon days before the government can pay the nation's bills. >> reporter: that meeting set to take place at 5:30 p.m. at the white house. president biden extended the invitation to the house speaker yesterday while he was on air force one and the two men were speaking about the latest on negotiations after several starts and stops between their deps over the weekend. and they're going to try to broker some kind of deal we're told not to expect a breakthrough today the negotiators on behalf of the white house were on capitol hill this morning meeting with those on behalf of speaker mccarthy earlier today. we expect them to come back to

the white house. you're looking at a top aide to president biden walking down the halls of the capitol we're expecting them to come back to the white house, update president biden on the meeting with mccarthy on where things stand after talks failed to make progress on the weekend. patrick mchenry, key deputy of speaker mccarthy, had this to say to reporters earlier today >> i think the conversation the president and speaker had yesterday was productive it got us back in the room together we have a sort of update the sense of our realities we know the deadline both sides are working in good faith, but we have tough issues. we have tough issues we have to deal with. >> it's productive and negotiating in good faith. but what is on the table we're told the white house proposed a deal that would include flat discretionary spending into fiscal year 2024 they calculate that according to the cbo, that's about a $90

billion cut to federal spending. $1 trillion over a decade. the gop proposed an increase in defense spending, although cutting more steeply spending on other social programs. they're still discussing stricter work requirements for those recipients of medicaid and food stamps. there's still a disagreement over exactly where federal spending levels should be and for how long, which is just the basis of what any deal would need to include. so, we'll see if directionally they can get there today or at least move toward that before that june 1st deadline guys >> such a roller coaster, kayla. and i guess beyond june 1st, treasury secretary yellen made it seem like the midpoint of june would be unlikely we are unable to pay our bills, tax receipts will come in. it's a matter of that time frame, two weeks, three weeks or so, where we won't make it

>> right and there had been some question about exactly what happens between june 1st and june 15th june 1st is the so-called x date tre treasury calculated. there was a question, especially on capitol hill, about whether treasury could, say, not pay federal salaries, withhold benefits to military families while paying interest on sovereign debt and prioritize those payments secretary yellen said yesterday the possibility is quite low they would even be able to make it to june 15th if they did that she said they would have some hard choices to make she has reiterated many times both privately and publicly that june 1st is the deadline and that's now just ten days away >> it is, kayla. we'll get updates, plenty before then thank you very much. as this debt ceiling debate heats up, so is the debate about whether or not the fed will pause in june. minneapolis fed president neel kashkari weighing in on "squawk

box" earlier this morning. >> right now it's a close call, versus raising another time in june or skipping some of my colleagues have talked about skipping. important to me is not signaling that we're done. if we did -- if we were to skip in june, that does not mean we're done with our tightening cycle. it means to me we're getting more information do we then start raising again in july potentially? so, that's the most important thing to me, is that we're not taking it off the table. >> oppenheimer in the same camp today, saying that a rate hike in june is still very much a possibility. and another in the second half of the year. so, what might that mean for markets? with us is schwab asset management ceo and cio omar aguilar. what is your current thinking in terms of the likelihood of a fed pause and how much that directly matters today for the markets? >> yes, thank you. thank you for having me. it seems to be going to what they call the hawkish pause,

which is a little related to what we heard this morning with several fed officials in different places, which is they really clearly understand that the economy has been less sensitive to interest rate hikes. after 18 months of tightening, they continue to see the economy is strong, in fact, outperforming everybody's expectations while they still see inflation pretty high and sticky with that, it's going to be more of a wait and see to -- yes, understanding that we're at the point where we're probably closer to the end of the tightening cycle, but they still don't want to claim this is the end because they want to leave their door open. now, the implications to that is obviously the bond markets will continue to be volatile for the next, you know, time because we still need to get a little more certainty where the end of the line is. >> well, the economy, as you say, being less sensitive to changes in interest rates, at least so far, can be spun, i guess as a positive, right

we had unemployment remain very, very low in fact, lower than when the fed started to tighten companies seem like they're talking about recession less in earnings calls than they were last quarter have we dodged a bullet or just pushed out the possibility of a broader economic downturn? >> well, you know, it's clearly an interesting setup because from the beginning of this tightening cycle we've bee talking about rolling recessions and certainly equity investors seem to be on the positive camp of thinking we may have already dodged the bullet, whereas if you look at the fixed income market, it's quite the opposite. every single signal in the fixed income on bond market will suggest that we're ready to start a recession. the two sets of markets seem to be signaling completely different stories, at least so far in 2023. i think the key component is down to the consumer

consumer is in consumer spending that has held the -- our economy in a pretty good place when you actually look at leisures, autos, health care, supported by government spending, we continue to see that level of spending that keeping our gdp in a very good track. the reality, as you clearly pointed out, corporations have also had a very strong balance sheet going into 2022 and 2023 that have held very well 74% of the earnings just in the last cycle -- 74% of the companies beat their earnings just in the last cycle so, the question is how much this will last at least in terms of savings for the consumers, we're probably only last another eight to nine months when you actually look at aggregate data. >> the question s how long will that last? it feels we're in this period where things are okay. when you think about the long and variable lag effects of fed rate hikes, you take a look at

jpmorgan investor presentation today, they're setting aside reserves with the assumption that unemployment will baek in 2024 what does the economy, the consumer look like under that type of scenario >> when you look at the projections overall, and i think the biggest part of what labor data and statistics seems to be completely distorted because after the 2020 and covid, we saw a lot of demographical changes affecting the way the labor market works a lot of projections that ended up putting unemployment at a much higher level within the next 18 months seem to be just using the same level of demographic data that has been used in the past decades when you actually look at baby boomers retiring and the effect of immigration and the way our demographics work, the lack of workers seem to be keeping that unemployment at a very equal level. that's what we see so far. even though we've seen some

level of layoffs, we continue to see those trends to be very slowly moving, that is very hard to imagine that unless, you know, there's a significant economic collapse, that we can actually see unemployment, you know, continue to rise at the level that a lot of these models predict. >> all right good news for, i guess, households maybe a little headache for th fed if it goes that way, omar. appreciate the time. >> thank you still to come, sv angel, co-founder and legendary tech investor ron conway is with us next he'll weigh in on how he is thinking about the ai craze. plus, a rare downgrade of tech favorite apple. is a revenue miscongexs mi nt quarter? we'll discuss that don't go away.

- i take caring for my kitty very seriously. when i found a health monitoring kitty litter, i had to meet the creator. - oh, hi, kitten! - please! call me martha. this litter seriously stops odors and it changes colors. - [daniel] go to prettylitter.com.

we're getting a market flash on pfizer. dom chu has that for us. >> what we have are shares of pfizer spiking to session highs, up by 3% right now, acceleration in volume. the reason why is because we're getting headlines with regard to a drug that pfizer has in development right now, an oral weight loss drug and because of this drug's focus these days, there's been a lot of attention paid towards weight loss medications like wegovy,

ozempic, which has been popular from rival this drug in a steady is said to be as effective and possibly quicker than ozempic injections. ozempic is made by nova nortis these studies out from the american medical association have been out for a while, but the full content of that study is being published that's the reason why. we're also watching shares of no novanortis a pfizer oral weight loss drug is possibly going to be competing more effectively with the established drugs wegovy and ozempic. that's the reason the move is there. >> weight loss is like the ai of

the biotech sector, dom. thank you. >> you got it. >> dom chu ai is all the buzz on the street wells fargo and others noting ai has been the major s&p driver so far this year. shops including cowen, needham and keybank pointing to chipmakers like nvidia nvidia, one of the biggest gainers, up more than 100% alphabet and microsoft outdriving the nasdaq. capital projected to fall 73% year-on-year, according to pitch book joining us is sv angel founder, roger conway with seed investments in google, meta and ai. great to have you with us. >> great to be here. >> we're hearing that the money is drying up i would imagine that valuations in this space are taking a key from the public markets in terms of being -- i don't want to say

inflated, but expanded are you seeing that right now? >>. >> i don't see the money drying up i see some of it evaporating, but for the great companies, especially native ai companies, there is plenty of funding out there. the existing founders are being judicious and making their money last longer. they won't be raising as soon, which actually leaves some venture capital dollars in the pot for the new ai companies that are rising up and the beauty of that is most of those companies are rising up in the great city of san francisco, which we love sv angel, it's business as usual. we are investing in one new company a week we've been doing that for 35

years. very consistent. in order to invest in one company, we look at about 100 companies. we're very disconcerting and we have a growth fund that then invests in a subset of those but we're very excited about the up and coming ai companies we have about 50 investments in native ai companies that we have accumulated over the last five years and the pace is speeding up even more >> ron, i'm interested in exactly what those native ai companies, the startups, are attacking. what products they have, because there seems to be this impression, at least if you look at how the public markets are acting, that it's the giants that seem like the most direct or adjacent beneficiaries. it's going to be training enormous amounts -- training under enormous amounts of data, attached to search, attached to cloud services what are the startups actually

doing to try to innovate. >> well, the startups in the ai space, they use these large language models, but they use them for vertical markets. in enterprise, health care, league, pharmaceutical every industry is going to be impacted and touched by ai so, it's like the birth of small business all over again where every small business is going to need an ai-enabled version of their application. and i'm talking big business, medium, small. salesforce, all the big enterprise companies have to adopt this technology. all the health care companies have to adopt it, the legal industry has to adopt it it's a gold rush because whoever

gets there first is going to have a competitive advantage and is going to claim more market share. that's why there's so much interest >> in terms of the 50 companies that you have in your portfolio currently, ron, and i understand it's drawing every week, what do you foresee most likely, and i know it's early in their life spans, exit strategies do you think a number will be acquired by big companies that have gotten the ai benefit of the doubt in terms of valuation accretion over the past month or so, or do you think they go on to be stand-alone companies dedicated to ai? >> i think the proportion of companies that go public and get sold will be similar to technology history the last 20 years. there will be the next google-sized company, the next microsoft sized company. we don't know who they are yet

we're hoping they're in our portfolio. but it's too early to tell so there will be brand-new behemoths, in addition to google, facebook and microsoft, who are already on the scene with ai technology, but there will be new companies that are even more creative and have more innovative solutions for artificial intelligence. then there will be smaller companies that the bigger companies come in and acquire. it will be a great boon to the technology industry and to the entire economy of the united states this is an area where the united states has an advantage, and we want to keep that advantage. and sam altman was in d.c. last week did a very good job at the senate hearing and it's awesome that the tech community and the lawmakers are

communicating on a very constructive basis to allow this technology to flourish in the united states. ron, there's a lot more ground to cover, but we have to leave it to the next time. thank you so much. ron conway coming up next, goldman sachs expects buybacks to drop 15% year over year not all companies are done purchasing stocks. some surprising names making the top ten. we have those names next. watching draftkings, upgraded to buy at ubs price target goes to $30 a share as the firm sees revenue growth continuing to grow at 20% annually through 2026. stock is already up more than 100% this year, tacking on 8% quk t see wl ing. "sawonhetrt"ilbe right back ♪ the biggest ideas inspire new ones.

30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine!

come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

welcome back time for the chart you can't ignore today we're looking at vix daily call options volume. traders now betting on a rising vix more actively than they have at any time since march of 2020, according to data from cboe. he it began with the regional bank turmoil and eased slightly before jumping again as investors weigh the drama in washington over the debt ceiling. vix has been at or low the long-term average around 20 since the end of march, melissa. we don't have the chart right here however, there it is, you see the volumes climbs there part of this is just a function of price, so to speak. there we are essentially once the vix goes to the low end of its range,

remember, vix is like a temperature, it goes up and down, doesn't trend in one direction. it makes more sense and cheaper to bet on higher vix and you have event risk, higher debt ceiling, and the fed equation as well you can look at where the vix futures trade. where they're trading now for july and august is in the low 20s. it's not around where the vix is around 17. >> the vix on any given day, you look at the vix and think, noing is going on in the market. the vix is a functions of how much the s&p 500 moves on an in intraday basis on the other hand, there are structural influences on the vix, which may be surprising other volatility like zero day options, et cetera. >> seems like there's some effect on that what we keep talking about, which is different types of stocks pulling in different directions, a small amount of mega caps, that's actually something that drains movement and keeps the vix suppressed. according to new data from

goldman sachs, die bst backs are expected to fall pippa stevens joins us with who is buying back. >> overall companies are tapping the brakes on buybacks earnings growth slowed and fears around the broader health of the economy, which means share repurchases were down 21% year over year during the first quarter, according to goldman sachs. we're seeing a divergent between sectors. for the full year they see share repurchase growth in two areas, energy and communication services the other nine sectors are poised to reduce their buybacks with health care and industrials down 32% and materials will fall 45%. drilling down on specifically who has been buying. tech companies topped the list in the first quarter apple spent $20 billion on buybacks with alphabet and meta spending $10.4 billion, according to data from s&p

capital iq those are some of the largest companies so it makes sense they would top the list in actual dollars spent. a different picture emerges as we look at who spent the most as a percentage of market cap fox corporation tops that list at 7.8%, followed by marathon petroleum, loews corporation, meta, mosaic also were top spenders during q1. time for a news update with bertha coombs. >> here's what's happening at this hour. more than a dozen women are expected to put their names on a texas lawsuit seeking to block that state's restrictive abortion law it bans abortions after six weeks unless a mother's life is at risk. texas doctors who don't comply risk life in prison and face fines of up to $1,000. the center for reproductive rights initially filed the legal challenge in march the women who have joined the lawsuit say the texas law put their lives at risk.

the third place candidate in turkey's presidential election endorsed erdogan for the upcoming runoff. none of the kacandidates secured the victory. the tsa saw the highest number of travelers pass through u.s. airports this weekend since before the pandemic. the agency says 2.6 million travelers came through its checkpoints on thursday, friday and saturday tsa expects this is just the beginning of what will be a very busy summer travel season. book in advance to try to get those seats, mike. >> for sure. bertha, thanks so much. after the break, is a revenue miss ahead for apple loop capital thinks so. the end of the rail recession. wall street is turning bullish on the transports. a trio of upgrades to get to we'll break down the trade in to minutes.

♪ (upbeat music) ♪ ( ♪♪ )

constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall. at pnc bank, you can find us in big cities and small towns across the us, where our focus is to always support the people who live and work there. because you call these communities home, and we do too. pnc bank.

from the desk of moot capital, an apple downgrade going from buy to hold on the stock, seeing material downside risk to revenue for the coming quarter, still maintaining a price target of 180. that's $5 or $6 above where it's

trading right now. with the stock up more than 40% just just this year, steve kovach is with us to break down that call. steve, now revenue, to be clear, for this quarter and next, were already expected to be flat to down versus a year ago maybe really the story is about fiscal 2024. how does this call sort of shape up with the stock near its highs? >> yeah, mike, what they are saying is they are seeing weakness and slowdown in iphone builds, which they're saying is going to lead to just more revenue declines for the june quarter. now, to your point, mike, that is correct apple did say that they're expecting revenue to be down about 3% year-on-year for this june quarter so, not unexpected we do know demand is weakening but the real mystery here is what we heard from apple for the march quarter about this better than expected performance, especially in china. there's a real kind of mystery going on in china right now, mike, with tim cook telling me,

when i talked to him after earnings a couple weeks ago saying, look, china reopened and people went out there and bought iphones. then we hear the opposite story from other manufacturers, especially qualcomm, which supplies chips for android phones i was talking to jim cramer about this a couple days ago we're scratching our heads, what is going on with smartphone demand, especially in china? it's almost as if the country woke up -- or opened up and everyone went out and bought iphones and nothing else i'm curious to get more data from the retailers to get a read on what's really happening over there in china >> historically, steve, we can all recall times when you do have these reports, whether from an analyst or from a news outlet about the supply chain, trying to figure out the channel checks and what the contractors are up to in terms of volumes it hasn't always matched up that well with what apple itself eventually ends up reporting, whether because they're getting pricing or just have a clearer

window on demand >> that's right. this loop report does point out they expect the back half of this calendar year to be relatively okay compared to what we might be seeing in the june quarter. part of that is because new iphones are going to come out, of course, in the fall and also because we're seeing this trend, mike, of people buying the more expensive iphones. so even if apple sells fewer units of iphones, they're buying -- the consumers are buying those pro models that cost $1,000 or more. i think. loop said they expect the average selling price of an iphone for this calendar year to still be 1,000 bucks that's way more than android phones. >> for sure. we're seeing just a modest little pullback in the stock in reaction to that call in part, steve. thank you. >> thanks, mike. meanwhile, from the desk of citi, stop railing on rails. upgrades for csx, norfolk southern and union pacific along with trucking company knight swift as they call for a bottom of rates and the end of the so-called freight recession. frank holland joins us on that frank?

>> hey there, melissa. citi's bullish on all four of the big transport names. only knight swift and norfolk southern in the green out of all four names the theory is we are at or very close to the bottom of the freight market we look at trucking rates. you can see his arguments. over the last three months we have seen a rebound when it comes to trucking rates. look at them right now, a big rebound when it comes to may, down only 21%. the other two previous months down 28%, 29%. you are seeing an upswing. but they still are down year over year. you have to remember, this is on some very tough comps. truck rates hit an all-time high in january of last year. and, you know, obviously they kind of had to decelerate from there. again, very tough comps. and to put this all in perspective, they're still higher than they remember in the beginning of 2020 when the pandemic was really feeling demand things aren't as bad as they look on paper.

when it comes to rails, the theory is that, at least for christian weter by, right now it's a attractive value. they are trading at a discount to the s&p he says he sees rail growth in 2024 and right now is an attractive place to buy, even when volumes are down, especially when it comes to container shipping container shipping down 11% year over year. we're seeing the reports from lowe's, home depot they're trying to right size their inventory and not stocking as much as they were that's the bread and butter when it comes to rails. >> i would think it's difficult to make those sorts of calls given the lumpiness because of the inventory overhang at so many different retailers and how we've seen it lag over time. we saw walmart come out with that seismic inventory build and gradually we're seeing the same thing happen again and again across retail. it wasn't just all in one quarter. it was sort of like a drips and drabs in terms of the inventory

problem. >> yeah, absolutely. but one big thing with the inventory problem is a lot of the retailers, they stocked up on things they thought people wanted at one period of time then people shifted their demands from goods to services amazon, ebay, wayfair buying the same thing so they got, quote, unquote, stuck with inventory. you'll see more demand for inventory as things right size one big tailwind is e-commerce requires 2.5 to 3 times more inventory than general in-store retail stores. we buy things online, try them on, send them back it requires more inventory for trucking that's a bigger tailwind and the macro factor of near shoring. that will be a big boost for the rails especially. >> frank, thanks frank holland. micron is falling by more than 3% this morning we'll take a look at what is driving that move right after this break. wall street turning more bearish on the china recovery. new data shows the world's second largest economy could be losing steam we're ba itwckn o.

american airlines and jetblue shares under pressure today after a district court said they need to end their partnership in the northeast the judge ruling the agreement is hurting consumers because of decreased competition. the airlines raising concerns that undoing the partnership would be difficult, especially during the peak summer travel season for which the airlines have already sold tickets. american down 2.5% jetblue down almost 2% up next, driven out of town.

uber, the latest company to reduce its san francisco footprint. the details after this break stay with us your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. at stores everywhere without a prescription. the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

commercial real estate, uber now reportedly offloading a third of its san francisco office space that's the focus of today's "techcheck" with deirdre bosa. >> nearly 300,000 square feet, mike, and uber is the latest piece in a very dire vacancy piece here in san francisco. a prime example of how the city will struggle to bring back workers and economy. uber's shiny new headquarters were planned in a very different era. a million square feet of office space, next to the chase center, home of the warriors, two kitchen, edible center, child care center. all the amenities tech workers had grown accustomed to. since 2021, before uber moved into that new campus, there was speculation the company would unload a chunk of it what has changed over the last year or so is what's happened to a lot of companies in the bay area cost cuts, efficiency, the stickiness of remote work, especially in technology meta has eliminated 500,000

square feet and google could pay to shrink its own footprint. that list goes on. we're talking about it all the time and i know that you guys have a similar problem in new york. record office vacancies that are broader -- that are essential to the broader manhattan economy, property taxes, the city's budget here in san francisco, some are wondering where the bottom even is total vacancy is 26% here. that is 10 percentage points higher than new york's much of our sublease space is concentrated in big tech some of those leases expire in the coming years as well that vacancy rate is expected to tick up further. you know, i go back and forth on both coasts. even where we are, one market, a lot of those smaller businesses haven't got back up running since the pandemic ended and that kind of tells you how long it's taken for san francisco to come back maybe it's not going to come back for some time still >> yeah, i mean, deirdre, you mentioned the contrast with new

york where it's bad enough with vacancies but you have the big financial service companies, i think, trying to be more aggressive to get people back for multiple days a week this is not uber saying we're going to have x number of employees in an office somewhere, right they're notchoosing a differen city, they're institutionalizing a different work-from-home model? >> that's a good way to put it uber has a hybrid work policy so workers are expected to go into the office some days a week. there's less of a discussion here about that pressure to get employees back into the office you kind of have to be here to get work done, like you hear at the financial services company i was talking to the ceo of dropbox a few weeks ago. they were the first company to say, we're actually going to go remote first i asked him how that was going he said, great it continues to help us hire i said, well, if you have to do layoffs, which they recently did, do you cheese those workers that are all remote? he said no way there is a different mentality

here i don't know if that changes but it feels like that remote work is a bit more institutionalized. >> when you're talking to ceos about this sort of move, are you getting crime as a reason also to go remote as opposed to occupy space physically? >> it's a good question. i mean, it's never been great here in san francisco. and it got worse during the pandemic but you'd have to ask -- you know, like mayor london breed, who is trying to encourage companies to open back up, but it's hard to when exactly you hear about the crime rate here in san francisco and not having people back in the office doesn't help sort of make that situation any better so, when i do talk to ceos, i won't say which ones because no one really wants to admit it, but they do cite sort of the state of san francisco as part of the reason why their workers aren't eager to come back into the city >> all right deirdre, thanks so much. deirdre bosa with that today's "techcheck." let's get to the state of china and the uneven recovery

we're seeing there april data on production retail sales and fixed asset production are missing expectations the lackluster numbers causing a divide across wall street on what happens next with firms like barclays and jpmorgan with like jpmorgan, and china will bar some purchases from micron, and sending that stock lower in today's session. joining us now, chief economists, hao hong thank you for being with us. >> thank you for having me >> i want to get your take between the state of affairs between the u.s. and china you know, maybe it's a coincidence or retaliation what is your take on how things are right now in terms of the relationship >> yeah, i think it's

retaliation of what the u.s. government did on the technology ban earlier on i feel a sanction of this level is not one day's work, so they have been working that ground for months now, and they just announced it to coincide with the g7 meeting it's disappointing, to be honest, to seat relationship has not been repaired as quickly as the market would have hoped. the market is trying to look through that, and looking for opportunities. >> it seems like this is almost a little preview of what could happen and maybe that's by design on the part of beijing. this micron ban was specific to critical infrastructure, most of the chips are sold for consumer

electronics devices and seems like the tip of the iceberg. how far do you think this could go to some extent, further bans of technology could harm the recovery in china. >> i think to a certain extent the micron chips are sort of a mid arrange chip, and they are not high-end, and there are viable substitutes being made by china technology firms and i think going forward, obviously a.i. requires lots of computing powers, and so as a result, you know, it's hard to see how china can manage to win this competition if, you know, you just keep having this technology, crucial technology

banned >> you see a stimulus package in the offering for the chinese consumer, and when you are thinking about the chinese recovery you are thinking about revenge levels when there were no stimulus checks given to the chinese consumer during the pandemic so they did not have those savings, and the chinese household is very leveraged in terms of their debt level, and also they had to fair a real estate bubble during the pandemic that bursts, so what is the hope in reviving this recovery >> i think for now it's still -- china can see the results. they are trying to see the results from previous easing and i think for the chinese consumer, though, because they

borrowed so much during the pandemic, and the income they were able to generate, and for china, consumption is a much smaller part of the economy, it's about one-third of the economy, versus 80% for the u.s. even if the chinese consumer really recovers in the second half of the year, still not enough to save the economy so they need to do substantially more than that >> we have to leave it there thank you for joining us we appreciate your thoughts. >> thank you isuz wl rethe break,alstet bzing about the all-new t t tiffany's. is it possible? with comcast business...it is. is it possible to use predictive monitoring to address operations issues? we can help with that. can we provide health care virtually anywhere? we can help with that, too.

is it possible to survey foot traffic across all of our locations? yeah! absolutely. with global secure networking from comcast business. it's not just possible. it's happening. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

welcome back while some retailers have seen a consumer slowdown, tiffany's profits doubled in the past two years and the flagship store is getting to reopen following the big expansion. robert joins us for that >> good morning. the shares up 28% up this year, that's a top performer by far in

the luxury sector. tiffany's is a big reason since it was afired, and tiffany launched more high-end products, and the big opportunity right now is taking this famous american brand overseas. >> europe for us will be an incredible source of growth in the coming years more to come in japan. china, we are repositioning the brand and renovation in a way we are looking at tiffany building ama amazing embassies than consulates in the future >> you are looking at the vip sales room for its biggest spenders the store is the most expensive store ever for lvmh. guys >> i mean, robert, so it's really fascinating

remembering back when lvmh won tiffany, and it was a high-priced or risky bet does it seem like already it has been redeemed? >> it was ill-timed and overpriced everybody agreed $16 billion for this brand at the time was going to be too much and it was amazing how quickly they doubled profits in the last two years and they have so many more room to grow, and it's the secret formula for them, you buy a brand for seemingly a lot of money and then double or triple profits and it's what they have done over and over again for the 75 brands they now own >> robert, i was going to jump in and i hesitated, and i was going to say the vip room doesn't look better than the hilton hotel lobby doesn't seem rich or wealthy or anything like that >> maybe, our pictures don't do

it justice just the art in that room is tens of millions of dollars. you know, the fittings -- it's like a gorgeous luxury apartment overlooking the park every floor just has a really special designed quality it's probably a $500 million store at the least >> i will wait for my invitation >> it takes more than that to impress my friend, robert. >> robert, now let's get to the judge and the half >> melissa, thanks so much welcome to the "halftime report." front and center, mega cap mania, several names in this market hitting highs today, and apple hit with a rare downgrade. we will discuss the road ahead, and the nasdaq hitting its highest level in more than a year joe, steve weiss -- everybody in the house here let's hit this now liz, i will go to you first.