good tuesday morning i'm sara eisen with carl quintanilla live from santa barbara california at the ceo inaugural council summit coming up, indicate i can koch will weigh in on the debt ceiling, the state of private credit and her outlook for the second half. and john stoltzfus will join us with a contrarian call.

marc metrick on set and plus his take on a troubled commercial real estate sector. >> markets mostly lower following debt ceiling negotiations last night, were described as productive but no real news coming out of them both sides meeting on later this hour the debt ceiling has been central to the discussions we're having at the ceo council summit it is remarkable how many very large issues are worrisome, whether it's the debt ceiling or relations with china and yet aspirational, the productivity, you could get if this ai revolution turns out for real, that impined with all the uncertainty makes the debate and the discussion valid. >> and we're getting real-time information from the companies on the data points they're seeing as far as what we're watching in the market, i'm watching the home builders because they are getting hit hard for a third day in a row we were wondering why the rise

in bond rates weren't impacting the market in a meaningful way i'm watching that to see if that's starting to have an impact we had seen a big jump in the two-year policy sensitive rate we've seen a big jump in the ten-year rate. we've seen stocks pretty resilient. that's been the story of the last week and a half or so leading into yesterday so far it's pretty benign. the s&p is down a third of 1%. we're getting strength in names like tesla and amazon, meta as well, that helps the whole market just waiting to see the reaction with the rate move as jamie dimon of jpmorgan says, get used to 6% rates as fed leans towards a pause but doesn't. doesn't take june off the table. considers it a live meeting and doesn't -- and has introduced this new idea in the market that maybe they'll take a pause and go against because inflation is still too high it's very different than what the market's been expecting. >> it's been remarkable. as sara says, yields have been elevated all morning long. services, pmi beat atlanta fed still at 2.9

imf says uk is not going into recession this year. resiliency is the theme, whether here or in europe. >> manufacturing comes in a little lighter the data has painted a confusing picture because we have these covid hangover impacts you see the lowe's report this morning after home depot, no surprise weakness in do-it-yourself home projects is accelerating dick's quarter noted softness from consumer. bj's wholesale, while better noted consumers are trading down and the strength is in groceries. all those trends continuing to cloud the picture, i think, of an economy that is not in recession but is showing some signs of weakening let's take a closer look at the debt ceiling effect and all the things we're talking about in today's market joining us is katie koch i think this is the first time we've had you since you have taken over as ceo. you're a big bond shop

what do you make of risks and the fact we have seen this bond selloff that hasn't hit equities as hard this time. >> we are in the camp of the medium to hard landing when we were at milken, on the panel together, i remarked that people were too happy, the macro chiss, the investors i'm interested in my time at the cnbc ceo council summit that the ceos are actually decidedly more negative i think that's a really, really important data point because as an equity investor, which i did for most of my career, i found ceos were more real-time and closer to real data. i've met with ceos, everything from doughnuts to coffee to logistics to people in the asset management space and people are seeing real degradation, trading down, revenues being muted and job losses i think that's going to weigh on the economy. the second thing we can talk about a little bit is we're having a major call on global liquidity which will put additional pressure on the economy. >> you don't buy the idea that

inflation is still stuck too high, the fed will have to keep going and the market is too excited about rate cuts? >> i think inflation continues to be an issue it is possible we get another rate hike. you saw this morning's pricing, a 50% chance of a 25 basis hike in june. that's what i mean by global liquidity. that will weigh on us. we have regional banks, deposit flight from them we're hearing from our portfolio companies they are extending loans and tapping the resolvers which will put pressure on markets as well. we have a liquidity crunch and the combination of the slowing economy and the global call on liquidity leads us to be in the medium to hard landing camp the good news for us as investors is we're value-oriented investors and we really relish leaning into a dislocation for our clients. we are focused on the dislocations in the broad real estate market and also in private credit. >> when you say medium to hard, give us some levels that would get us familiar with what that would feel like, in economic

growth or stocks. >> yeah, i would say from an economic growth perspective you could see several percentage points being taken off gdp obviously the important thing to remember from a risk perspective is that, of course, what the fed will do against that back drop as things get worse is they will cut rates and that's the path to recovery it's possible to have a recession at the back end of this year. unlike previously, we have firepower set up for a recovery. >> would you expect the labor market to start cracking now or is that more of a q3, q4 phenomenon >> the labor market has started to crack the higher end jobs, tech jobs those consumers have a lot of pent-up savings so it takes us longer to see them come under pressure whether it's the credit card companies or consumer companies, you're already starting to see the early stages of that coming through. job market currently under pressure and i would expect that to come under more pressure at

the back end of the year >> all of this bond bullish? >> i think it's possible if you are selective. we think private credit is going to be an incredible opportunity, but we think it is very important for manager selections private credit -- >> everybody loves private credit right now i have to say, at milken, katy was the only one that said, hang o i have a warning for you on private credit because everyone's in love with it. >> yeah. good point we are -- we do think it's an epic opportunity over the next ten years, but we also think it's the first time that manager selection might matter i want to say something quick on a look back and a look forward on a look back this is a very overused term but apropos to the moment when the tide goes out, that's when we'll see who's been swimming naked this is so true of what we're going through in private credit right now. we have 96% of private credit managers started post-global financial crisis we all get to be geniuses when

rates are zero to low. now we've had a massive repricing of that capital. we know that there's been some bad lending because we did not engage in it those are deals that were not covid heavy where there wasn't a lot of diligence done. there are going to be some accidents ahead. at the same time on this look forward, if you can be a conservative manager and do what we've been doing for the last 20 years and we have not strayed from and be covenant heavy, which gives you a seat at the table when things go sideways and make good loans, i agree that it could be an incredible opportunity for private credit over the next ten years. our team is very, very busy. that's -- and our team is conservative so, people didn't want our money the last couple of years because we are too demanding people need our money now. that's a good sign for us as a private credit manager and a good sign for the asset class that good deals can be done. >> are you talking first and foremost about real estate, or is it something else >> broadly we are sector agnostic

we invest across all sectors in private credit there should be opportunities across all sectors. i do think one important thing in terms of finding opportunities is to be in the middle market space. that's what we think is the most underserved and has the best potential upside yes, we work with some financial sponsors in the middle market space. that's half of our origination we can also originate on our own. you said everybody is excited about private credit, i agree with that. >> jonathan gregg called it the golden era. >> i think it could be but manager selection -- you have to push the managers, have you been at that credit committee at 2:00 in the morning trying to fight for your clients these are important things to ask your managers that a lot haven't done over the last 20 years. >> robert frank did that story that family offices are now getting involved. >> yes there is certainly -- whenever there's an opportunity, there's more people involved you just want to be with the people that have done it successfully for a few decades.

>> is the debt ceiling interesting to you at this point or is this all theater it's so short term, we think, right? >> i think whenever there's a risk of the u.s. government defaulting on debt, it's of interest we're, of course, tracking it. we -- like everybody else, we think it's highly unlikely but we are preparing for portfolios for that possibility again, we think it is highly unlikely and that's what the markets are telling us at the moment >> how do you prepare your portfolio for that >> one good thing, interestingly, we are long investors in emerging market debt which no one thought would prepare you for investing in u.s. treasury but there's a little bit of that happening in terms of preparing portfolios, we are running several contingency scenarios, if they downgrade debt, what would that impact in terms of our client guidelines in the portfolio. we're working through all that and making sure we have the systems in place to accrue those coupons in the event there is a

default. again, that is not our base case scenario but it's our job to be prepared for our clients. >> one of the firms you compete with for funds is blackrock. the trend, they've lost some money because of the politicalization around esg and they've seen divestments first of all, are you growing market share because of that and how do you talk to your clients about some of these issues in a productive way >> i can say from a tcw prer speculative, our approach to sustainable investing is centrist we are an investing company, not a divesting company. we want the widest opportunity set from which to select opportunities from our client, very returns-focused that means we don't exclude any sectors at the get go. where we own any company, where we are a creditor or equity holder, we're actually engaged with that company to make sure they are operating in a best in class way. i'll end with a quick example.

very topical at the moment let's take energy. we do invest in traditional hydrocarbon companies for our clients. let's just talk facts. we need hydrocarbons to run this country over the next coming decades. we will invest in those companies. we buy the best in class operators. we're creditors to them. we engage with them to make sure they're running those companies in a way that will generate sustainable returns. in addition, we will also own companies part of the energy transition the iea has told us we're going to spend $4 trillion on that transition a year out to 2050. we want a piece of that for our clients, too i would describe our approach as returns focused and very balanced. >> katie, thanks so much it's good to have you here. >> it's so good to be here. >> and good to have you on set >> congrats on the summit. it's awesome. >> thank you. wall street leaders like jamie dimon have reiterated longer for higher. oppenheimer agrees calling for another hike at the june

meeting. we'll talk to john stoltzfus next. ee we're keeping an eye on tesla. stock's up 16% just this month "squawk on the street" will be right back markets still under a little pressure it's being offset with weakness from apple, microsoft, alphabet and nvidia today we'll beig bk. rhtac meet gold bond healing. a powerhouse lotion that moisturizes, heals, and smooths dry skin. with 7 moisturizers and 3 vitamins, you can pay more but you can't get more. gold bond. champion your skin. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

i do think inflation continues to be an issue it is possible we get another rate hike. you saw markets overnight and this morning's pricing and a 50% chance of a 25 basis point hike in june. >> tcw group ceo katie koch telling us it is possible we get another rate hike. maybe in june. our next guest agrees, saying not only could we get one in june, we may get another one in the second half of the year. joining us, oppenheimer chief investment strategist, john stoltzfus. talk to me why you think the market may have this wrong. >> carl, thanks for having us on cnbc great to be here with you. we've been thinking the market's been wrong about this pause or cut business for quite a while the inflation is simply running too high while the -- we have the federal reserve thus far has taken inflation down, the headline

number, 9% to a little under 5%. there's a long way to go to that 2% target. and the fed speak keeps telling us it's not so much bifurcated, it's just diverse amongst the economists there the thought is some think we can pause, others thing -- heard bullard once rates go higher from here, we certainly think so but we don't think it disrupts the markets. >> i was going to say, how would the s&p react to a june hike >> you know, carl, i've been in this business for just around 40 years. so, when i came in in 1983, paul volcker was still ruling the fed, and the question still remained amongst clients and amongst professionals in the industry, you know, is inflation coming back? will the fed fail, what have you? and yet if you look at the markets from 1979 through 1990,

you have a lot of plus years when rates would vacillate going from higher to lower the market gets used to the fact that you're dealing with higher rates from the fed, especially in this case we're just getting over free money. it's the end of free money, which we saw had been achieved by a combination of fed policy and fiscal stimulus by politicians that took us to 40-year highs. but this is not a case where we feel that powell has to become a volker he just needs to be powell and these modern times and we think he'll bring down inflation on a very sensitive level he's done it so far. >> so, john, if you think there's another rate hike in the cards and the market's got it wrong, does that include your earnings outlook and your equity in market outlook? wouldn't that mean that the

chances are higher for, as what katie mentioned, a medium to hard landing, which is not factored in? >> we think -- actually, we think because of the slower growth that will likely come through the system as a result of the regional bank problems we've seen in that space, you know, where you have a crisis of confidence that will likely see increased regulation, tighter lending practices from that group and its implications, it will contribute to slowing, which will allow the fed to remain very tenssensitive in tes of how it's hiking ten hikes in the box thus far, i'm looking at my screen on a year-to-date the s&p's up 16.93% from october 12th low. it's -- i'm sorry, the s&p 500 year-to-date is up 8.94%

from the october 12th low it's up 16.93%. curiously enough, you have real big gains in technology, of course, in communication services but also industrials, materials participate in these rallies and consumer discretionary it's quite a story what it shows is a progression wherein the better players, the quality stocks are able to move higher even as the fed sensitively adjusts interest rates to rid us of this free money environment we've been in, which is not good for the markets or for main street >> the so, with that in mind, john, what's your take on where tech valuations have risen to? we have a new target of 400 on microsoft out of jeffries. are you worried about that getting stretched? >> you know, carl, our opinion on these big stocks that are profitable companies established in deeply indebted in the lives of both business and the

consumers, especially with all that's coming on track with ai, as well as developments within semiconductors and the importance of semiconductors in our lives, we have to think that ascribing higher multiples to technology makes sense at this point. we don't mean getting back to tech bubble lieuunancy but where the growth lies tends to attract investors, at times like this, especially when you have bulls and bears thinking, how much do we slow? i don't think anybody's disagreeing with the fact we're slowing some so, that encourages us to buy growth within technology >> yeah, those charts definitely don't lie, at least what's happened lately. john, we'll see what happens in june a couple more prints between now and then see you then. >> great thank you. >> importantly, inflation and

unemployment rate, hard to make a call before you get that still ahead, the ceo of saks, is the luxury consumer starting to spend or is recession fears stifling demand? we'll get his take and ai as well. ltye dl.d com inking this mui-area at an al time high

narcotics europe set to close in just a moment mostly lower as investors continue to wait out the negotiations on the debt ceiling here in the u.s. household goods and retailers, the underperformers today over in europe. brutal session as well for the luxury goods stocks.

the luxury ten about to post its worst one-day drop since december all down pretty significantly today. worries over china persist copper is down again the biggest mover on the session was julius baer, missed on currencies the bank said q1 was, quote, a challenging back drop of wealth managers our story abroad to talk about today is the about-face from the imf on the uk saying the british economy will now avoid a recession and actually outpace germany this year. projections now up to 0.4% growth after predicting a 0.3% contraction last month pretty significant upgrade and they commend british policy when it comes to tackling the financial problems and the banks, the better supply chain healing, the fact that britain has dealt well with the energy policy problems around russia and ukraine and now think they're going to grow 1% next

year, 2% beyond that it's a pretty big vote of confidence. >> we were talking with carmine about the resiliency there's a lot of wringing their hands of brexit and would things have been better if they made other decisions in the past. you can't argue with the fact they definitely surprised, with a little bit of luck mixed in. >> here's the problem. they still have 10% inflation. they've got to continue that fight on inflation from the central bank and that, obviously, increases the risk that it will hurt growth and weigh on consumers, which we're already starting to see. food inflation is a big problem there, just like it has been here. >> we'll see if that -- if they get any relief, even though global food prices have been on the mend a little bit. let's get a news update with our seema mody. >> great to see you. hungary's nationalist prime minister publicly declaring he will back donald trump in the 2024 presidential election the nation's longest serving

prime minister made the comments today at an economic forum he is widely regarded as the most pro-kremlin leader of the 27 european union nations. state democrats are demanding south carolina governor henry mcmaster apologize for remarks he made during a republican party event over the weekend a reporter at the event tweeted mcmaster said he looked forward to the day democrats are so rare we, quote, have to hunt them with dogs, end quote the governor's office said he was joking when he made the comment. lebron james said he has not made up his mind on retirement after the los angeles lakers were swept by the denver nuggets in the western conference finals the 38-year-old said he has a lot to think about when making that decision. he is under contract for $46.9 million next season with the lakers and the superstar has expressed a desire to play with his son, brony, who is expected to enter the nba in a few years. carl and sara, back to you

>> seema, thank you. seema mody. still to come, despite predicting a broader downturn for the energy sector, one firm upgrading chevron saying a 20% rally could be ahead it's one of the leaders on the dow, which is a positive. cnbc is celebrating asian american and pacific islander heritage this month, sharing stories of influential aapi business leaders, like this one. >> growing up in an asian household, my parents have instilled values of hardship, believing in myself and giving back to community. i'm charted my career based on those values i have taken up opportunities where historically there has been a very low representation of women i have siem seeked out mentors that value diversity, that value who i am, what i bring to the table, so i think mentorship, giving back to the community, and as you you get more senior, creating that time and space to nurture the next generation of

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welcome back to "squawk on the street." we are live from santa barbara,

california, site of cnbc's annual ceo council summit. we will look at notes catching wall street's attention. we start with meta, it's up more than 100%. but the street pointing to more than one reason for the rise we've got ubs pointing to improved engagement in short-form video thanks to instagram reels moving to best in class, bottom funnel advertising tech and piper sandler says its add tech is likely to improve thanks to its ai initiatives, which it thinks could spur revenue gains this year. we have julia boorstin on set. what do you make of the new calls on meta? feels like the street is increasingly looking for reasons to get more bullish. >> and two very different reasons. on one hand have the fact meta, its different platforms, instagram with reels and even on facebook, seeing this increased amount of video that's consumed on these platforms

the advertising growth has not met that they see this as a huge opportunity, especially if you look at the fact the tradition appear tv bundle where so much advertising was sold for so long, that industry is declining. they see short form video ads as an opportunity to take share from the tv ad market. on the other end of the equation you have ai, meta is investing in ai, making the product more engaging, serving you different videos or based on what ai thinks you would like to see, and also making the ad business more effective these two pieces of pie making the two analyst notes bullish here. >> ai, do they get as much credit as perhaps they deserve at this point? they've gone a different strategy to a certain extent but they are quite advanced, at least according to many who follow the company >> i think it's too soon to say. right now they're rolling out ai tools to help the advertising delivery and ad content be more

effective. it's still early days. what a lot of analysts have been saying is meta took a step back and really suffered from the changes that apple made to its operating system that limited its ability to target ads. but with ai, that could effectively compensate for that and find new ways to target ads that are more effective. i think the question is whether it's an incremental benefit or a sea change in what meta can do in terms of the efficacy and return on ads. >> what is the difference between the algorithm and what they can do with ai? >> that's the thing, they are using ai to improve the algorithm. meta, along with many of these companies, have always used ai the question is how they are using generative ai and can they use it to make it much, much easier to not only make ads but test the ads and figure out which ads will be most effective. >> and even deliver things into your timeline not necessarily that you're following it that are potentially of value to you. the year of efficiency continues as well. jim and i were talking, continue

to hear there are more layoffs yet to come. unclear if it's part of what has been announced but not normalized - >> i've heard it's pardon of what was announced they announced there will be massive layoffs done in three different tranches and the final one is supposed to come within the next week. the question is, is that it or will there be more >> by the way, david stepped in for carl during that commercial break, in case you were wondering. carl aon-stage duties. >> here i am. >> we collected david and all of our friends here julia, thank you a lot of retail news to get to lowe's cuts guidance, dick's with a earnings beat and bj's. how is the consumer holding up we'll ask the ceo of saks and nser he's seeing from the luxury coum he'll join us in santa barbara next

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travel for summer. joining us is saks ceo marc metrick. thank you for coming. >> thanks for having me. >> what are you gleaning from the new data >> first, you want to look at it in glass half full more than half of the respondents responded they would spend the same or more from the prior three months the deceleration is how they respond the last time around which was 62% last time indicated they would spend half if not more, and that was january. we're seeing an overall pullback from the luxury consumer looking more at sort of that core luxury consumer, that high-end spender, that's where we saw the first drop from them in all of the surveys we've been doing. about 57% of them, which again is more than half, said they were going to spend more over the next three months than the prior three, but that's down from 62%. >> you think luxury spending has peaked >> i think it's peaked and i think you're starting to see a

pullback across the entire continuum. not just the folks at the beginning. >> when you look at your sales, they're still higher than 2019 at this point, aren't they >> absolutely. >> how much higher how much better? >> on the e-commerce side we're about 120% ahead of 2019 and even the bricks and mortar stores are well above where 2019 levels were. i think that's strategy and how we're executing versus just the overall macro. >> how do you change your strategy at all if you were going to respond to these surveys in some way and see a d diminution in terms of spending from the high end? >> i think you need to be conservative on the inventory and not get yourself well overboard with your investments. make sure you don't have to be promotional or incrementally promotional to where you normally would be. and you have to keep a close eye on what the consumer is saying they're also telling us, hey, we're traveling. 77% of respondents indicated they were going to travel. and they've already booked a trip in the near future and they also said, hey, i'm going to buy

some stuff from you when we do it we have to have stuff people can wear when they're away, moving and reacting to how consumers are saying, we're not going to trade down and i heard them talk about that when they were talking about dick's our customers said that. we may buy less or fewer but we won't trade off luxury. >> how far back have you gone with these surveys >> we've been doing this for, i think, about a year and a half or so. >> and has it been accurate? i mean, has it largely actually predicted properly what would happen in terms of spending? >> yes, absolutely the canary in the coal mine is sometimes even the data we see on our site itself just an example, people ask me, are you going to have to be more promotional? the consumer in the survey indicated the 47% of respondents that said, hey, we're going to pull back on spending, when asked what would make you spend more over half of them said a sale or promotion. and we're also seeing that on our site, but we started to see that about three months ago when

consumers glanced view on our site we have 700-basis-point increase in the index of people looking at sale product versus the full-price product it reinforces what we see sometimes in our own data. >> how does that influence overall pricing? for some of these luxury brands, like chanel shoes, it was like there was no ceiling for how prices got has that come down >> we're not seeing that come down but what you're seeing is the consumer, they're reacting and behaving not just to the price of the shoes inflation in luxury has always been about scarcity and demand for the product. it's not been so macro driven. the consumer's used to it. i think what you're seeing now is the consumer is probably saying, all right, i'm going to wait for a sale or the price, or i'm going to buy instead of two pairs, i'm going to buy one but they're not trading off these brands the big strategy around luxury, even if i have to sell fewer units for more, that makes the inventory more scarce, that makes it more desirable and keeps demand actually going in

the long term. >> what do you see in brick and mo mortar, particularly for the flagship store people aren't coming to the office but i assume tourist traffic is very important. >> yeah. i run our e-commerce business, but we stay very close with the sfa stores we do all of their purchasing and their marketing. i will tell you the new york city flagship has been slower to return since the pandemic. we came out into that next normal out of the pandemic we have the benefit, so to speak, of it being against easier comparables but not there yet. bullish in where we are in new york city for sure. >> what about ai when it comes to targeting the customer digitally and whatever tools may soon be available, are available that you, perhaps, are using to doing a better job of figuring out when somebody wants something, even if they don't know they want it. >> that's what we do, we sell things to people when they don't think they want it we've been using algorithms and machine learning on trigger

campaigns, on personalization, and i think we just heard it from the guest that was on before me. ai and what ai is going to do, it's going to strengthen those muscles and make it an even better tool for us to go after so, i see a lot of opportunity with ai as it relates to how we communicate with the consumer, how we go at the consumer to make recommendations and to personalize. always going to want saks to have some level of high touch, authentic, personalized approach >> marc, thank you it's good to see you here at our ceo summit marc metrick, ceo of saks. shares of yelp are jumping on what are new calls for the company to consider alternatives that might include a sale. you can see the stock up almost 10%. we'll give you details next. regional banks up. pacwest, up big for a second straight day the stock's up 77% just in the past week. that has helped stabilize the entire regional bank stock

index, which has been higher week over week that's good for the overall market we'll be right back.

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we are watching shares of yelp surging today as activist investor tcs management pushes for the sale of the company. that's part of our "techcheck" segment with deirdre bosa. what are we hearing about the plan and how investors are

taking it? clearly they like it. >> yeah, they do like it, judging by that stock pop. i just got off the phone with tcs's president, he sent that letter this morning. he's making the case that yelp should consider forming with angie, formerly angie's list, to what he calls a pow arehouse in the home services market yelp is executing on a few fronts he it said survived the threat of google, its grown its home services business and has, quote, an incredible balance sheet. the problem, according to him, is nobody cares. the stock has underperformed the broader market over the last five and ten years and made the point only two analysts asked questions on the last earnings call and he call's yelp's ceo a serial numbers misser and one that he says uses the company as his own personal piggy bank while the rest of us lose money thanks to a, quote, puppet board. he also says tcs is willing to make a bid themselves to acquire

yelp he even has his own ceo in mind with public company experience, though he wouldn't name any names for me yelp's statement, let me mention that, says yelp maintains an active dialogue with our shareholders and values constructive feedback on our business and ways to create value. sumler says he has not yet heard from the company since sending the letter though that was just this morning he says he doesn't expect to the timing that may have been strategic, yelp is speaking today and is expected to meet with investors with that 9% pop on the back of that letter, some investors may be wondering if stoppelman can or should be doing more he's been in this position before and managed to fend it off. we'll see if this time is different. >> deirdre, that's what i was going to ask you

i remember another activist there. it only has about a $2.5 billion market value remind mean of the last campaign that came after stoppelman >> that was sqn back in 2019, and they said, also, that yelp should consider strategically selling itself and after yelp made a series of adjustments or improvements backed off but left saying they should be open to an eventual sale. i think we showed you the stock price. the last five and ten years. yelp as a company when it came out of the gates on its ipo in 2011 had a huge pop but never has been able to regain that momentum this is a company talked about as being killed by google. google coming in and eating its lunch when it comes to restaurant reviews and recommendations but yelp, and this is what tcs allows for as well, has done a good job in transforming itself and pivoting to the home services market.

eu you're just not seeing that reflected in the stock performance. >> deirdre, thank you. deirdre bosa out west. from wall street to the east coast, our own cnbc summit, everyone is buzzing about ai this morning we've got some new headlines for you next and then take a look at zoom video, falling more than 7% on the back of earnings, down almost 8%. the company reporting numbers that beat estimates, but the guidance for the enterprise division in particular softer than expected. here is what the cfo had to say about the quarter earlier on "squawk box. >> we beat on both the top line and the bottom line, and we raised our fy-2024 outlook for revenue as well as our profit targets, this was largely due to very strong performance in the online segment of our business, we've been focused on getting it stabilized and that occurred

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and chatgpt with its products. steve kovach has details >> reporter: this is microsoft build developer conference apple is in a couple weeks look, of course this set -- all these announcements are centering around ai. most notably they're bringing bing search into chatgpt now that might sound a little confusing, but if you got the new chatgpt or use it on the web, now search results from the web will come into chatgpt, so it's a big win for bing as they attempt to gain market share to really show off this technology. in addition to that they're announcing new tools for developers to make plug-ins for chatgpt and bing chat, and think of it as an ai app store companies like spotify and kayak have built these capabilities, plugging it into the ai system and creating new capabilities for their apps also, they're bringing this ai system called co-pilot, which

was previously announced for microsoft office, they're bringing that to build into windows 11 that's another one we'll shear from the ceo satya nadella, taking the stage for his opening keynote. we'll be back with more comments from him sara, back over to you >> steve, it's david if i want chatgpt 4, i have to pay $20 a month? >> $20 a month, yes. >> these products are not that, correct? >> speaking of the $20 a month thing, the chatgpt/bing relationship you're only going to get that if you are a subscribetory r to that $20 a m plan you can use bing for free at bing.com and use those capabilities >> got it. steve, thank you i've been using the freebie. steve kovach of course ai is a hot topic here in santa barbara as well dominating the buzz with multiple ceos weighing in on cnbc this morning.

michael dell we talked to earlier. take a listen. >> like everything else people start saying it's going to replace all these jobs and so forth. this is really an evolution. like everything else in technology, it will evolve it will replace jobs and it will make things more productive but it will take time and jobs will change, just like any other piece of technology. >> my net view is this is going to dramatically enhance human productivity, and certainly there will be new jobs that are created. with any new technology, you're going to have jobs that are less needed as well but, look, i continue to be an optimist about the role technology plays in our world. we can sort of doomsday about all the horrible things that can happen let's not forget all the amazing

things that will happen. >> talking about ai and personalization. john donohoe of nike talking about ai, for the first time how shoe designers are using it. it's not going to replace them, he said. we need their taste and judgment, but it is helping them that generative ai, in figuring out what the consumer wants and needs. >> when i hear dell talks about things will be amazing, oh, yeah, they'll be really good, and then they're not, once they reach intelligence then all bets are off. i like going there -- >> no one knows what to do >> do you think the machines will see the human species as having value >> it will be scary when they form their own judgment and that's what microsoft said in the latest chatgpt 4, that's what's happening but i think a profound question also for investors is on the

productivity what banks, any industry that employs a lot of people, if it's going to replace a lot of jobs and efficiency -- >> much more near term than the end of humanity. >> it has implications for how stocks are valued, how >> potentially >> we'll end it on positive despite your doom and gloom. it's been nice having you sit in continuing to see the markets stage a bit of a comeback right now, we know that they're going to be monitoring it. home depot, chevron and amgen leading. let's go to "the half" at post 9. and welcome to "the halftime report." i'm scott wapner front and center this hour, the tech tail wind for stocks. how long it might last and what happens if it doesn't. we'll ask the investment committee, debate the road ahead for your money joining me for the hour stephanie link, josh brown, jim lebenthal. take a look at the markets here. well, we're a bit muted today. i think eyes are still on the debt ceiling negotiations. we are