says debt ceiling talks are progressing, but house members are leaving town with no deal. now fitch putting the credit rating on watch. and the rocky start for ron desantis his launch marred by technical difficulties and shares of nvidia soaring on robust demand for chips it is thursday, may 25th, 2023 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with brian sullivan >> good to see you, becky. >> other end of the spectrum >> i came from "last call.

right from that show to this one. >> it works. >> good morning. >> glad to see you joe and andrew are off let's look at the u.s. equities at thundehour the dow is indicated off 45 points that would be a streak of five days if this were to stick s&p futures are up 28. the nasdaq up 260. the big reason for that gain and nasdaq is nvidia shares which are soaring. this is a word we throw around a lot. it really is needed here nvidia shares up 26% this morning after the company beat earnings expectations for the current quarter. guidance shattered expectations with the quarter that we're in right now. we will have more on that story in a few minutes if you check that out, that is a gain of $80. the dow was down for the fourth straight day yesterday was down 255 points. s&p down .70%.

nasdaq down .60% treasury yields this morning as we get close torr to the x date when we run out of money to pay obligations as a country the 10-year treasury is yielding 3.765% the 2-year treasury is up to 4.415. all of that activity, brian, on the short end in t-bills is playing in the longer run. >> amazing to see the yield. you wonder where the bank deposits are going we have our answer. >> yesterday, by the way, the one-month t-bill at 5.5% now 5 5%. put that up against any of the corporate bonds you would see. you would see a yield like that on a stock, you would think something is wrong >> in the insurance on your debt

measures the default risk. credit default risk prices indicate a risk higher than the government bonds of mexico, brazil and indonesia or a few other nations. by the way, no-knock on brazil of the lovely country. they have defaulted many times >> this is looking like 2011 at this point you have fitch saying you are on watch for a credit downgrade we'll see what happens with this. >> and we are talking about it this morning and again on "last call." no offense to fitch. they have the least juice over moody's with a negative watch or potential downgrade. in 2011, we were here. you woke up and "squawk box" had a downgrade and the market went

haywire. you probably more than doubled your money if you bought at that time. in europe, the german economy entering technical recession. now data from the stats office shows the contraction of .3% the stats office said german households spent 1.2% less in the first quarter because of the shock of energy prices stocks in europe were down a bit more on the higher inflation read than expected from the uk this morning, the dax is flat. same with the france and ftse 100. basically across the board, everybody is flat. what about the german recession? >> i wondered when they say technical recession. what does it mean? it is okay we're in a technical. >> it hasn't been declared >> for the household, don't

worry. it is only technical this story i've covered a lot. thank god natural gas prices have come down tremendously because of the weather u.s. lng supply. demand destruction has caused prices to go down. weather has been nearly perfect in the last 12 months. industrial use has come down people are cheering. that's bad that means you are not making stuff. 6.6 million people this morning in fuel poverty in the uk. the reality is when with the electricity costs at home, becky, and the quick household, and double in in 18 months we can eat it. >> spending on other stuff comes down >> a lot of people seeing the doubling in the electric bill in a year and a half. they can't afford to do anything else you have to pay the bill 20 million u.s. households that

are late in paying their utility bills. 20 million that's a lot >> it is >> prices are going to go up this summer. >> that's with prices coming down below what had been expected >> people wonder why is natural gas going down and this going up you have a six-month lag hopefully that bill will come down, but you are paying off the higher prices of before. other countries, yesterday, becky, belgium my mother's people said they need nuclear they were going off nuclear last year they woken up and nuclear is carbon free. germany is going down one path path it vis really right or really wrong. energy vende anyone know how to say good luck in german? i do not >> no.

i think they are saying move on in german. >> ann just yelled at me in my ear. to the debt ceiling standoff in washington. mccarthy said negotiations were progressing toward a deal, but house members are leaving for a week long recess fitch put the u.s. under credit watch on for a possible downgrade. kayla tausche is joining us with more >> reporter: brian, negotiators meeting for hours yesterday and no deal yet. we wait for more news over what happened behind closed doors the warning from fitch sparking frustration and fear republicans stated that is why they wanted to begin negotiations in february the rating warning under scores the need for bipartisan action to raise or suspend the debt

almost and avoid the manufactured crisis for our economy. yesterday, at least, optimism was scant. democrats on bad messaging and mccarthy said we are past the deadline for a deal. the issue is the overall spending level here is how mccarthy put it yesterday afternoon. >> it all comes down p to you know why we're here. democrats in power spend too much money we have the biggest debt ever. we spent more money under democrat control in the 50-years history on the average of gdp. all of this while bringing in more money than any other time >> reporter: that was the last time we heard from negotiators publicly. you heard mccarthy say we know what it takes to get a deal we are waiting to see what marching orders he is giving his

conference has he instructed them to stay behind or a deal could be reached in the coming days pu punchbowl news is reporting there is optimism for a deal struck within the timeframe. the white house, up to this point, has not shared that optimism we will see if it changes today based on what happened overnight. g guys, with that warning from fitch, brian, you said it doesn't have the same power as other agencies which gratddes on the ability to pay fitch is saying in this situation, it is getting too dicey and p injecting urgency. brian. >> kayla, we walked through last night on the show that maybe june 1st we could go by. can you dig in on that

people said june 1st is not a hard date. how could we get through june, but maybe the summer even without a deal >> reporter: june 1st is not the date all of the government's obligations are due. they are spread across the monday and the bipartisan center has a map of the calendar. on june 2nd, there are payments to social security benefits and military vets who get ben pefit. a few days after that, federal salaries and then interest rates on sovereign debt due. a staggered effect over the two weeks between june 1st and 15th when the treasury expected to get more corporate tax revenue the question is what happens if the payments are delayed and could they be delayed?

with treasury's technology and you could say let's cherry pick this one this could be delayed. i'm told by people familiar with the plumbing of the treasury system that the payments are automated. you know, they are wired to be paid not wired to be uncertain. it is really hard if not impossible to go in and undo them which is one of the reasons why secretary yellen is saying i don't want to be the one to do this grand experiment for the very first time ever looking at the calendar and saying june 1st is the date. the other issue, brian, if you get to the point where federal salaries and contractors cannot be paid, there could be a partial shutdown or full shutdown which adds a new element. that is something the white house wants to avoid as well you know, those are all the issues playing into the date >> fascinating

all computer ized thank you. let's get back to the soaring shares of nvidia beat the street of 92 cents a share. revenue above what the street was expecting. it was the guidance that got this off and running the sales guidance shattered expectations of over $7 billion. massive upgrade from 50% improvement from the street expected for the quarter the strong performance shows a.i. chips are becoming increasingly important for cloud providers and other companies that run large numbers of servers. with the after hours stock gain here, almost 26% increase and nvidia could add more than $185 billion of the market cap at the open today that is a number equal to the

market cap of the rival chip maker amd. this is on track to become the first $1 trillion market cap company we have ever seen. this is close to $945 billion if you are looking at the gains at the open on this this is a phenomenal run they are talking about $1 trillion in existing data center chips that need to be upgraded and swapped out for a.i. chips this is not like anything the industry has seen. analysts rushed to upgrade yesterday. saying they had never seen anything like this validating to some for nvidia that this a.i. craze that people said this cannot last and stock gains we have seen cannot last for everybody. for nvidia today, this is the story. >> it's weird. it is a little weird to see a stock -- if you have a small cap and low float and up 25%, we

don't blink an eye one of the biggest companies in the world coming in. >> all right do already doubled the market cap this year. >> it gained as much market cap as amd. >> it has. >> it is wonderful news for nvidia shareholders. i don't think in 20 years we have been doing this, i have never seen it. >> never >> that move on that stock >> i think it is very close to the market cap gains you saw for apple back in november apple may have been more than this a rare thing to see something like this ever happen. you see big moves, but this -- >> you could knit-pick the quarter. the dream of a.i what does that mean? i was joking change the name of the show. "squawk box a.i."

>> it reminds you of fads we have even in the past. you have could wonder what they said on the call about sales and what they are seeing. >> $1 trillion. >> $1 trillion they think. >> you know what the data centers need >> what? >> energy. >> there you go. >> electricity don't tell anybody coming up here on "squawk box," desantis campaign got off to a rocky start or attracted so much interest, it crashed twitter. depending on your view, you have a different view i'll have the latest coming up you are watching "squawk box" on cnbc odhudamo 65. go trsy rning.

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welcome back good morning florida governor ron desantis campaign launch on twitter last night did not start as planned the event on twitter spaces which is an online conference area suffered tech glitches and crashed several times. 20 minutes after the scheduled start, desantis was able to speak. >> i am running for president of the united states to lead our great american comeback. look, we know our country is going in the wrong direction we see it with our eyes and we feel it in our bones >> the desantis campaign insisted the technical problems showed how many people were

flooding twitter minutes after the campaign launch, the former president trump had an attack ad on his social media network joining us now is jonathan martin jonathan, how do you read it >> good morning. it was not the launch they wanted it puts an exclamation point on his rough five months since the mid midterms he had a great re-election in florida of the there was a lot of hope among anti-trump folks in the gop that we found our guy. this has not been the way they wanted to get the campaign launched look, he wanted to do an unconventional announcement to get more attention he did that. it is not the attention, i think, they craved >> i disagree, jonathan.

my former boss, mike bloomberg, would say there is no bad press. everybody was talking about it every national news outlet was talking about the glitch a 15-to-20-minute delay. i wonder if it is a huge win for elon musk. everybody is talking about twitter and wondering if they need to be on twitter. a 15-to-20-minute delay. desantis took questions. as far as i know, they were unscripted was it everyone is trying to pile on. i don't know if it was the disaster the headlines were making it out to be. >> look, it is not how they wanted to start the campaign. >> a slight delay. a technical issue. that's -- politicians walk out 20 minutes late all the time. >> coverage is unforgiving because the coverage has been rough about desantis this is going to make it worse

in the stage of the primary campaign, that coverage is really, really important for a lot of republicans desperate to find a trump alternative and thought they found one, it will raise more questions and prompt for grumbling which creates harsher coverage i have seen the cycle before it doesn't mean he cannot be the nominee next year. it means he has more work cut out for him. it will embolden other republicans or reconsider running for president. you have now seen him stumble out of the gates >> it is a fair point, jonathan. i will say looking at coverage last night and again this morning. there has been more coverage of the 10-to-20-minute tech delay if you are a member of the white house press corps, you never

hear from the president. he has historically low numbers of press conference. should we give candidates credit for coming out and taking random questions? if i was a member of the press corps, we need to hear more from the unscripted live fashion. i'm saying it is amazing the level of outrage on one side we don't hear from the president on the other. >> there is plenty of anger in the press corps. >> true. is that a fair statement >> absolutely. historically little in the way of press access. the reason why the white house is losing the message war is mccarthy talks to the press twice a day and biden rarely talks to the press his lieutenants never talk about the issue. it is actually hurting that

debate p -- debate. on desantis, his strategy is run against the media. that absolutely helps with the gop base which doesn't like the press. it is a tactic that can be effective. it is a tactic that can create challenges when you are running for president, it is not just the florida media. like it or not, the national press does set the narrative when it comes to the pre-primary jockeying the year before the primary. the invisible primary. the coverage is important. he has not done himself any favors by refusing to engage with the press corps the question now is that going to chain inge in the weeks and months ahead real quickly, a lot of candidates thinking of running who are not ron desantis are

thrilled they see an opening. >> yeah. listen, elon musk last night -- jonathan, thank you. becky, elon musk said i'm not a desantis guy all candidates are welcome on this platform. i would be curious to see biden do a half hour live off the cuff scripted taking questions to the public >> the history between biden and musk is not a great one. >> somebody else could host. >> the idea that biden did not invite elon musk to the white house. >> elon musk has an ev business? how is that doing? >> very angry and talked about how he has been angry about that i wouldn't hold my breath. >> an mmaziamazing. elon musk built the electric car business to fight climate

change now he is vilified on certain parts of the left. it is interesting to see the pendulum move in the last year since he bought twitter of the. >> and talked openly about the thoughts that conflict that's the thing that people asked. should he speak less on twitter and talk less instead of alienate customers >> the winner of the desantis thing. who cares about the politics everybody is talking about twitter again. >> true. when we come back, film making icon brian grazer speaking out about the rise of a.i. and what it means for the entertainment industry. and as we head to break, dow futures are down after closing off three sessions s&p is up sharply. the nasdaq is up 275 points

thanks to nvidia we talked about that before. roeria with strong earnings and stng guidance for the quarter. we will be right back. how can you sleep on such a firm setting? gab, mine is almost the same as yours. almost... just another word for not as good as mine. save 50% on the sleep number limited edition smart bed. plus, special financing and free home delivery when you add any base. only at sleep number.

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kids and that was a disaster i don't think that can happen to a machine. they're not going to get cut from high school football and feel humiliation and look around the room and look at all of those faces and eyeballs looking at you and penetrating with penetrating eyes that's not going to happen they can't -- a.i. can't have the experiences that gives -- that brings life to bigger and other ideas. >> that's brian always talking about what he sees in terms of creativity and how he finds things it led to a prolific career with lots of things along the way if you want to see more of the interview, go to cnbc.com/ceo. >> santa barbara is nice this time of year >> it's early. >> not right now in general good wine and a beach.

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good morning welcome back to "squawk box. here live from the nasdaq market site in times square the dow has closed lower for four consecutive sessions. s&p futures indicated up the nasdaq is indicated up 262 the pop in the nasdaq coming from the big jump of shares of nvidia which beat estimates for the first quarter and shattered the forecast the stock indicated up 27% which is close to $190 billion if it were to open here. that would put nvidia in target of breaking $1 the $1 trillion. the first chip company to do in. analysts rushing to upgrade price targets on the stock 21 raising price targets. minutes from the fed meeting

show leaders were divided. some members saw the need for more hikes and others need to slow the growth with tightening. let's bring in kelsey from jpmorgan chase asset management and covering the equity side is kari firestone i've seen you on tv before that noon show that noon show kari, good to see you. kelsey, nice to have you in person here. kelsey, are there really more rate hikes possible? >> if you look at the dot plot from the march meeting, seven members of the committee saw the fed funds rate moving above the current target there were also ten that thought we were done here and one thought we could have been done already before the may rate hike it is not a surprise to me to hear that there is division among the fed.

our view at jpmorgan chase is that the fed is done here. we look back at this and say that 5.75 is the terminal. >> not just a pause, but done? >> correct they will call it a pause to obtain the option. we look at the growth and inflation indicators and say those will move lower as the year progresses and more policy will not be needed policy hikes. >> i'm tired and grumpy. i'm in a mood. i apologize. the dot plots are the fed projections. i think, kari, this whole group, very smart and talented people, did not see interest rates above 1% a year and a half ago that is the wrong-est projection ever do you trust the guidance, kari,

or do you use your own noggin here >> you have to be cynical with the expectations for example, at the end of last year, 12 of 12 strategists i read said there would be a recession, absolutely, before the middle of this year. we haven't had it. i don't remember reading about bank failures. there have been a number of major factors incorrectly predicted for this year. in terms -- >> amazing, the federal reserve regulates the bank san francisco fed, three banks failed biggest bank failure ever. >> what we know is interest rates have gone up a lot and the economy and housing has slowed consumers are stronger than expected, but the consumer is slowing and the fed has to accept the fact that you listen to target and you see weakness as well as home depot and lowe's with their weakness. the economy is not as strong

there have been pockets of strength you have to take into account the stress in the system >> becky was remarking this morning, kelsey, the one-month t-bill. >> it will hit 6%. how does that happen >> what is happening with rates? that's bonkers >> right one of the things right now is the distortion in the bill market is associated with the debt ceiling risk. we are approaching the x date on june 1st what you are seeing is the m masm massive pool of money in money market funds the money market funds are avoiding the bills that mature like the plague. they don't know what will happen with the negotiations. will something get done in the end? yes. in the meantime, nobody wants that risk.

>> bring the numbers back up if you can in the control room. if i think they will get a deal done and we won't default, kari, i can now get 5.94% on one-month betting they get a deal done. >> huge. >> we can't own anything i can own a t-bill i'm looking at that right now and saying that looks good it should reduce the attractiveness of all stocks in nvidia >> i bought one-month t-bills and two months and six months. look at it across the spectrum good move. >> also, you know, we have to recognize there is this week where we don't know what will happen and the market is trading on sentiment the last couple days have been a shift downward let's see if nvidia can help the market it will help the nasdaq and certainly help the s&p. >> is it valid to see the huge

gains with nvidia, but amd and microsoft? nvidia with serious sales on this we had bradley on yesterday and he said it was crazy to think all of the stocks are getting the gains from being a.i. stocks they are not all a.i. stocks. >> correct i think this focus on a.i. and using it multiple times in a sentence, practically, is a little extreme i think the market is looking for something safe nvidia, yesterday, was the poster child for market and growth and everything you want which is the opposite of debt default. the market kind of rushed toward that >> that's a weird 25% move i know investors love it if you own nvidia, congratulations. go to sizzler out and have a

good night out b becky and i were saying we have never seen it. maybe apple. >> salesforce had a quarter at the end of 2021 where it was up 25% on the quarter i think that was the high watermark. investors get enthusiastic >> this is nvidia stock that doubled the market cap this year it dropped sharply last year. >> yeah. i think that's a little bit of an extreme case. >> kari and kelsey, thank you for getting up and coming in have a great day when we come back, a warning from microsoft the company says that chinese hackers infiltrated cybersecurity structure. we have the details on that next "squawk box" will be right back. >> announcer: currency check is sponsored by interactive

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welcome back good morning microsoft out with a new warning. chinese state sponsored hackers with the focus on gathering intelligence the nsa issued a bulletin how

the hack works and cybersecurity teams should vrespond. the infiltration which focused on communication and infrastructure in guam and other parts of the u.s that was alarming because guam is the heart of the military response in case of invasion of taiwan and a large part of the b-1 bombers are based. >> look, if microsoft picked this up and we know this is out there, couple that with the weather balloons and "weather balloons" and there is a lot of things happening it is hard to know how to connect the dots there is something here and something big. >> there are dots. by the way, this is not a tin foil issue this is the u.s. government and microsoft saying chinese state sponsored hackers have hacked critical infrastructure including parts of guam where a

u.s. military base is in the first response that seems like a big story. coming up on "squawk box," target facing a culture clash with customers removing some of the pride merchandise citing threats to employees. we will have that next. later on, a closer look at nvidia and the stock that everyone will talk about stock is up 27% right now and adding $200 billion to its market cap posting the top and bottom line beat and talking about future demand for a.i. chips. nvidia rkiocng the market. we're back with more right after this >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”.

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welcome back, everybody. at cnbc's inaugural ceo summit, nike ceo john donahoe and former merck ceo ken frazier weighed in on corporations taking a stand on social issues >> i think the important thing is to figure out which are the issues are core to your own company's values or core to our business, core to our purpose and mission. and we speak out on those, and then others issues we may care about we may not necessarily publicly comment on. we listen to our athletes and to our consumer about what they care about, and they care about racial and social justice. >> i don't think ceos get paid to get the middle of every political dispute. but i also believe that what makes our country successful and

what allows our businesses to be successful is that we have some fundamental principles of our democracy. respect for property, the ability of people to elect their representatives, a peaceful transfer of power, equal opportunity, those are not partisan political issues. >> target is the latest company to straddle a cultural divide. the retailer removing some of its pride related merchandise after a confrontational shopper threatened a store employee's sense of safety. joining us now to talk about the war over woke is eric desinhal, of desinhal resources and authored 11 books on crisis communications eric, let's lay out what happened at target it is the -- there is a front page story on "the wall street journal" about it. this came out with some transgender friendly swimsuit, there was a label that highlighted its tuck friendly

construction, somebody picked that up online and said they were marketing that to children. that swimsuit itself was not, it was for adults, but they had other things for kids swimsuits related to it, like a pride-related kids swimsuit with a black swim skirt marketed as thoroughly fit for multiple gender expressions that is what really kicked things off initially they kind of doubled down on it the ceo said that he was going to be standing firm, this is something they have done for a long time and they were going to keep with it but changed their minds and said it was a problem for staff, there were shoppers who were very angry about these things and made those staff members feel unsafe. they have now managed to, like, really enflame things on both sides. gavin newsom and others saying they have backed down and shouldn't have caved what do you do >> well, what you do is triage and you look at what the worst situation is and you try to cauterize it the worst situation noo

their employees. one of the things that is important to understand about these companies isy are very sensitive, they want everyone to love them. now they're in the politics business where you don't get everybody, you often just get 50%. and that is what you have to sit and bear down, if you're going to do it it is also important to understand what is happening inside these companies the whole myth is that these woke decisions are driven by the marketplace. they are not always driven by the marketplace. they are often driven by the personal agendas of many of the people who are in the advertising marketing and communications discipline, who are going into management, and positioning their personal views as what is best for the company. and for every company that takes one of these positions, there are 20 or 30 that are very careful and treading lightly

and are not having these problems it is important to keep in mind, though, you can't believe the whole go woke, go broke overstatement. you heard from the ceo of nike nike takes positions that are often considered woke. that is absolutely appropriate for who their market is. the problem is when you are taking positions that are showing a lot of hostility to many of your customers >> so, did target mess up by having this in the first place did they mess up by -- >> probably. >> -- by taking it out >> probably. it is a gross oversimplification, but you're dealing with consumers in this case, in the south, who are very concerned about some of these issues being raised. and the issue is often don't do something that will provoke a large number of your customers i think with target, and similarly recently with anheuser-busch, you are giving a very aggressive gesture to many

of your consumers. and the result is the result and, yes, some people are going to be offended a lot of people are going to be offended, but it doesn't mean you have to take these positions on the front end that are going to explode like this this is not happening to every company. >> did target do more? they say that this is something they have been doing for years, having this, did they make it more front and center this time around, did they push it a little too far or is it the culture environment where people are kind of looking for things to say, hey, you shouldn't be doing this >> it is both. you now have an experience -- a situation where there are people who are looking for points of outrage and they are -- and they're finding it and i think that it is not a comfortable thing for companies to be getting into this business a friend of mine, who is in the gay marketing business, was saying all of this that is going

on right now is coming from the extreme right. it is not coming just from the extreme right. you have a lot of people who are moderates, and even people who are gay activists and feminist activists who are very quietly whispering in the ears of people like me saying, we're having some problems with this, but we're never going to get on tv and talk about it, and no company that has been able to dodge this is going to get on cnbc and tell you why. >> eric, thank you eric dezenhall, great to see you. >> thanks. on deck, futures pointing to big gains at least for the nasdaq we're going to show you what is moving, including that bubble. i have a feeling you'll hear the word nvidia a million times today. nasdaq, up 254 the dow futures are down so nvidia doesn't appear to be helping the macro market, but technology could be a big day. plus, former white house

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all right, good thursday morning and welcome. welcome back to "squawk box" here on cnbc as always, live from the beautiful nasdaq market site in bucolic times square, two of the three people you saw in the opening animation are not there. >> bucolic >> look at the greenery. just gorgeous here i am brian sullivan, joe and andrew are off she needs no introduction, she's becky quick. good morning. >> good morning. good to have you here, brian. >> i feel blessed because it is a good morning if you're a tech investor >> for sure. >> nasdaq futures up 254 points. so if you own the qqq or a bunch of tech stocks, you probably will make some money today, congrats s&p up a little bit. dow futures actually down. and, of course, a huge part of that nasdaq run is nvidia, posting one of the biggest

market cap gains, not for itself, but of any company ever. we'll talk a lot more about nvidia coming up. >> let's get to the -- treasury is first i haven't been here in a while i got this later show. >> 3.99%. >> thank you >> that's all we needed. >> let's get to the debt ceiling standoff in washington house speaker kevin mccarthy saying yesterday that negotiations were progressing toward a deal, but house members still plan to leave the capitol for a week long recess last night fitch putting the united states aaa credit rating on a negative watch, saying the lack of a deal raised the risks that the government could miss payments on some of its obligations. if you were to look at the short-term t-bills, call that up, look at the short-term t-bills, this is where you see things playing out not in the futures, equity markets have not been roiled by this at any point. if you're looking at short-term treasury bills, like we did earlier this morning, the one-month is sitting at about

5.9 -- just below that, 5.185. that continues to be where the pressure plays out but specifically that one month, which would be when there was a default if there is not something done in the next week or two let's get to dom chu now, taking a look at this morning's premarket movers dom? >> so, becky, brian mentioned the market cap gain that we're seeing in nvidia we have to start there because it is pretty much the sole driver of the market sentiment around technology right now. nvidia shares are at 399 -- $390.77. that's where we stand right now up about nearly 28%. i will tell you that the high after market post earnings report was $395. so we're just off of those premarket extended hours highs right now. but nvidia shares reporting, i mean, nvidia coming out reporting basically really good numbers forquarterly profits

and revenues it was the guidance. current quarter revenue guidance specifically, that came in a whopping 50%, 5-0, half hundred percent above where analysts were look for and it was driven in large part by demand for data center chips and you can think about cloud computing, artificial intelligence, but those graphic processing unit chips that nvidia makes helps to drive the results. by the way, brian mentioned th,e close at $755 billion in change in market cap. so that kind of gain puts you at roughly $200 billion market cap gain in one day, if these gains hold so we'll watch nvidia shares, the story of the premarket also watching what is happening right now with shares of verizon. the tech telecom-ish giant is just about flat on the session right now, about enthusiast does come on heels of reports coming from the verge saying that verizon could be on the verge of thousands more in layoffs with

regard to specifically customer service roles. they cited a prerecorded message that some employees got saying we could see more details about a streamlining type operation they have for verizon. so we'll watch those shares as well and we'll cap things off with a look at carnival cruise lines. those shares are getting a little bit of a boost in the premarket trade so far, thanks in part to analysts at citigroup who upgraded that stock to a buy from a hold. they up the target price to 14 bucks from $10 they cited a potential turn for the balance sheet, deleveraging happening, more tailwinds for travel and leisure, so, becky and brian, carnival shares up 2.5%, some of the premarket movers as brian pointed out, nvidia, that market cap gain could be the biggest on record for one day for any company ever in u.s. history. >> dom, thank you. we have best buy just reporting too. want to bring you the numbers. earnings coming in at adjusted $1.15 a share, four cents better than the street was expecting. came in on revenue of 9.47 billion and that was just shy of

expectations if you're looking at the comps, this is where it was expected, but it was ugly. domestic comparable store sales down 10.4% domestic comp online sales down 12.1%. if you were looking at the domest enterprise comps, they were down 10.1%. international sales, for the guidance, the company is saying they're looking at -- where did it go here, second quarter comps expecting sales to be down 6% to 8% they say they're continuing to stick with their full year view of adjusted earnings per share of $5.70 to $6.50. they still expect cap spending for the year to be about $850 million. and second quarter comparable sales as i mentioned, they're looking at down 6% to 8% the numbers are bad on the comps, but i guess that was anticipated and expected brian? >> meantime, federal reserve officials were divided at their last meeting over where to go

with interest rates. steve liesman joining us now with more on the fed minutes and what we may glean from them. steve, good morning. >> good morning, brian the minutes from the meeting, officials were unanimous about the hype, but divided over what comes next they all agreed the next move was much more uncertain, you have the unknown effects of the aggressive tightening so far some officials saw a need for additional rate hikes due to the slow progress and bringing down inflation. an official fed speak, some is more than the several, who said they don't see a need for further hikes. so the committee took things slightly hawkish on the outlook for the june meeting and future hikes. the minutes also show some officials stressing the fed in public communications should not indicate cuts were likely this year, leading against where the market is, or rule out further hikes. all also agree fed needs to retain optionality so it can go

either way several mentions of the debt ceiling in the minutes with many officials saying it was important to raise the debt limit to avoid risk to the economy and to the financial system all bets on what the fed does next would be off if it was indeed a default we'll get a chance tomorrow at 11:00 a.m. we'll hear from loretta mester, she'll sit down with us in an exclusive interview in the 11:00 a.m. hour. the staff continues to forecast a recession in the second half of this year, brian brought on by the tightening credit standards from the bank. >> what is the next big thing for you, for the fed, for the markets? what -- it is not the jobs number, i assume what is the next maybe major fed inflation catalyst >> so, brian, i have a two-track sort of look into the future here there is one track where there

is a default of this thing going to the brink and that changed everything just as an aside to that, brian, i would normally, in what i just presented there, be giving you where the market is priced for june or july but i don't know that it matters anymore because what you guys were talking about in the last half hour, which is what is going on with rates. so, look at that right now, that's probably correct, i think. it is just when you get into july, you start to see a rate hike priced in but that could just reflect what you were talking about the last half hour, which is what is going on with the one and the three-year note, influencing how the fed funds market is trading. so, that five -- almost 6% on the one-month, all of that bleeds into what is happening in the fed funds market >> isn't that a form of -- isn't that like kind of a form of tightening it seems like -- i wonder what is this debt threat -- the fed

has to be thinking about it, it must be play into some kind of projection, even privately, i would have to assume >> oh, absolutely. you could see it is in the minutes that they were talking about it back in early may you know they're talking about it now i'm talking to some economists and other folks about what the fed can and should do. one of the things they did, i want to call this up, actually, i don't have a full screen prepared, but i was talking to joe last night, an economist, the fed issued a statement after the downgrade, brian, telling markets that it was going to honor the value of treasury securities despite the downgrade. that is an important thing remember, brian, what is going to happen here, if they do actually default, or even what is happening right now, is they're messing with the value of the treasury securities what has been the problem on the books of the banks, it has been treasury securities. so let's take a problem and let's make it way worse than

we -- than otherwise should be and hurt the banks even more and create issues about the securities on their books for which there are already questions about the values it is really quite remarkable that they're playing this brinksmanship at a time when there is uncertainty about the banking system of course, the fed has a variety of plans we think that are out there, based upon the discussions we know from 2011 and how they end up. so, you know, i've got that one track about what happens to the default. if not, i'm looking to the pce on friday. the jobs report, the inflation stuff, all the normal stuff you would be looking at, but all that gets wiped out if there is some kind of default or if we bring this to the brink. >> great point a lot going on steve liesman, thank you very much up next, we're going to talk more about that debt ceiling stalemate, the state of the ececo onomy.

welcome back, everybody. it has been a few months since we last heard from brian deese, but he is joining us this morning in his first post administration interview to share his thoughts on what is happening with the debt ceiling, the fed, the banking crisis and more brian, thanks. great to see you in the studio. >> great to see you both. >> let's talk about what is happening with the debt ceiling. this is weird. it is getting into some unchartered territory it feels like we're getting very close to the x date you think we'll have a deal? do you think we'll have it before the x date? >> we are in unchartered territory and it is weird and unfortunate. i think that the news that came out from fitch overnight, i hope it will be a wake-up call for everybody involved here that this is getting real and can get really real and the impacts can get very significant very quickly. and so i hope that what we will see is that this kind of sign

will jolt everybody at the negotiating table to say, you know what, i -- the holding on to those last set of ideological demands is not worth the harm that we're going to inflict on the american economy here. this is all macro economic downside here. it is all an unnecessary and unintended risk factor to the economy. the sooner we take it off the table, the better. i hope we will see a reasonable and rational agreement here and i hope that the political system will actually be able to move it through before the x date. but given the circumstances we have today, the risk that we trip that in the other direction is higher than it has ever been. >> what is weird about this is the market, at least the equity market, stock market doesn't seem to be too worried at all. that's where you've seen much higher yields. other than that, people think this will get done because it has to get done. without having that pressure from a stock market drop, maybe

it doesn't put that pressure on. >> look, i think what we have seen in prior crises is people are calm and confident they're not. and the risk of pushing up to or beyond that point becomes compounded if people really -- if people's expectations are dashed the second thing is this brinksmanship, this experiment in risk here can have longer lasting impacts, negative impacts and this is why i say -- >> what would happen play it out in the macro. >> i mean, we saw in 2011 when we got downgraded as a nation. it takes years to come back from that kind of thing so even if they're able to go up to or close to the x date and resolve this, doing it the last minute has consequences, economic consequences, the risk of putting upper pressure on our borrowing rates because we lose our aaa status would far swamp

any impact this deal would have economically it is all negative it is all downside the sooner we eliminate that risk, the better but we don't want to -- there is a lot of conversation about what happens the day or two or three after the x date and there is lots of planning going on on that front. >> meaning what, prioritization, spending, which bills we pay, which bills we don't. >> what we can do given the systems we have, but all i can say is that while there is prudent planning going on, there is no prudent plan that can evolve the chaos and confusion and once we go past that, we will do damage that will be very hard to repair, would take years to do and all of that is economic cost with no -- with no intended benefit the sooner we get this all of the way, the better. >> it is a big game of chicken if you listen to the republicans on this, they'll say we have a bill, we passed the bill in the house. we have been trying to talk for months and months, it has been very recent that the

negotiations are there it takes both sides to come to the table and say, okay, here's where we're going to give. why have we not been able to find some common ground around that >> i would say a couple of things, i think that there is -- has been and continues to be common ground that could be found around the budget and budget levels and in fact that's how budget agreements happen consistently i've been involved in debt ceiling increases in the past, and if you look back in 2013, 2015, other times, you have a rational agreement around budget levels, and that's how you get things done. think that what is different and what is particularly dangerous in this context is this close to the line, having anybody and in this case, we're seeing this out of republican leadership, basically say it is not our obligation, it is not our responsibility to increase the debt limit, that is on the other side that's an incredibly dangerous dynamic. dangerous to the economy because debt limit is not understood as a shared

responsibility and a core congressional priority than the risk that we end up making an incredibly damaging error and now at some point down the road goes up. and the markets are going to -- the markets are going to internalize that risk. >> but aren't we going to be here again in march. if we get a deal, we're likely to be back at a debt -- first off, the debt ceiling was actually breached january 19th, was it not, brian? january 19th >> so you end up with extraordinary measures. >> we have been limping along. the debt ceiling is not breached on this so-called x date it was breached on january 19th. and we have limped along number one, could we be here again in less than a year. number two, we did something on my show last night, there is a scenario where you can go past this june 1st deadline, slowing bill payments, wait for the quarterly tax collections june 15th, kind of do it again, limp along to the quarterly tax collections. how hard do you think that so-called x date is. >> so, in your first point, i

think that the negotiators are focused on how you could get an agreement that would extend the debt ceiling beyond 2024 and i think that -- >> the president does not want to have to do this again next year i'm told there is an election. did you hear about this? >> unbelievable. look, i don't think anybody, any rational person who cares about our economy should want to do this next year i don't think we do this -- i think this entire episode underscores sadly why we need to get rid of the debt limit and the debt limit drama entirely in our economy. this is just -- >> the only thing i will say is that the budget talks are never very serious it is a tool for negotiating that's what it is being used for. why not get something like a commission out of this that would simpson bowles commission, that didn't work because it wasn't made mandatory, but get a simpson bowles commission that has some teeth. >> i think the -- there is a fallacy that the debt limit can

become leveraged to have a rational fiscal conversation and that is has never actually become the case. the debt limit itself is so existential, and so if anyone says this is going to be my bargaining chip, immediately you end up in a situation where you're not having a rational fiscal conversation. >> okay, that's a fair point warren buffett -- we have nuclear weapons, but we don't use them. >> we need to have a fiscal conversation, a serious fiscal conversation but this episode is a good example. we started this conversation, taking revenue off the table, taking entitlements offer the table, saying on defense spending we would increase defense spending what you're left with is 7% of our spending and revenue to even debate around in the first place. >> which is never going to make a dent. >> never going to make a dent. it is like going and saying i want to lose weight, but i'm going to focus on having a couple -- fewer bites at sunday

brunch >> 60 minutes last sunday, okay, talking about defense overspending, we know this has been going on, $10,000 toilet seat, the 1990s. cnbc, numerous reports, $100 billion a year, a year, in waste, fraud and abuse, largely in medicaid and medicare, bills being set to identity fraudsters, russian hackers, whatever it may be can we agree, there is a frustration in the person public to say why didn't the federal government just act like a rational business, and if we actually cleaned up a lot of the garbage payments, going to hackers in russia, versus women and men who need it here in the states, that we wouldn't even have this debate we could probably find 200 to $300 billion in savings, which is not cutting anything. it is just making sure we don't pay the wrong people i think that's the frustration that the government wastes money, both parties, by the way, i would say they spend like drunken sailors, but it is fleet week, i met some drunken sailors last night, true story, and i

don't want to insult them. >> i think on the one hand, should we improve program integrity, should we demonstrate that we can actually be effective stewards of taxpayer dollars? absolutely are there places we could make big strides on that? unemployment insurance is a great example. effectively spent resources on going after fraud and abuse in that program can return 5, 6, $7, but the other place you can do that is in tax enforcement, that our system of tax enforcement has become so broken and so worn down that people can operate through the system and basically avoid paying taxes by hiring very expensive lawyers and accountants. in all of those cases, by demonstrating that you can do more effective government engagement, you can get high return, 5, 6, 7, $8 of return for every dollar invested. and at the same time, that's not

the solution to our long-term fiscal problems. it is important to show and build trust for the american people that we can actually collect the taxes that are owed, that we can spend dollars effectively, absolutely. we're going to need to change structurally, change revenue, change spending. that's not a conversation that is going -- >> get into conversations that have been third rails politically. nobody wants to talk about brian, thank you for coming in really good to see you. >> great to see you both. >> brian deese. we'll be right back. time now for today's aflac trivia question. what movie did apple use to hype its quick time format in 1999? x"hecn'ssqwkn bc "ua bo continues ing you, coach stal, 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'?

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now the answer to today's at aflac trivia question. what movie did apple use to hype its quick time format in 1999. the answer, "star wars:episode i -- the phantom menace.

the quick time campaign sparks a net clogging 25 million downloads of the movie trailer most stocks are having a good run as they head into what should be the busiest time of the year but where are prices going to go phil lebeau joining us with more phil, good morning >> good morning, brian the prices are going to go down, not by a lot, but they are expected to retreat over the next several months. something that we're noticing over the last, i'd say, two months, is a real increase in incentives the cash on the hood, if you will what you're being offered to buy a particular vehicle, this is because we have seen inventories rise this is according to cox automotive in april, just over $1700, that's up 28% compared to last year it is still just 3.6% of the average transaction price. that's because the average price paid according to edmunds is still over $47,000 almost $48,000 and that's up 4.4% compared to last year. back in the days where you had really big incentives, they were 9%, 10% of the average

transaction price. while you are getting more to buy a car or a truck, it is not going to be a huge amount more and at the same time, we're noticing demand continues to increase the expectation, this is new, lmc automotive raised its expectation for 2023 full year sales to come in at 15.3 million, that would be the highest since 2019 interesting that you see the demand continue like this. ford ceo jim farley, when we were at the ford capital markets day in deerborn earlier this week, he said he expects prices to come back, especially as you see the greater inventory out there. he didn't put a percentage on it let's estimate 5, 6, 7% reduction in prices overall for the industry one last chart, we're going back to october of 2019, you might be saying, why are you showing us this that's because it is that time every four years we get the uaw negotiations and yesterday the president of the uaw said the actions of the big three in

particular for what they have been doing when it comes to certain plants as well as investments in evs is criminal should be an interesting call when the contract comes up >> sounds luke a good way to kick off the negotiations. phil lebeau, thank you very much all uphill from here still to come this morning, teams and social media u.s. surgeon general warning that online sites pose a significant mental health risk that needs to be addressed so should the government intervene? jon fortt is here to weigh in with "on the other hand. that's next. and today is the ninth annual red nose day the nbc family is a big supporter and we need your help to raise money to help fight child poverty. buy a red nose at walgreens for a dollar and watch nbc red nose day, a special edition of the wall" at 8:00 p.m. for more information, go rednoseday.org "squawk box" will be right back. whatever you see,

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a quick stock to watch, rbc capital markets upgrading home builder toll brothers to an outperform with a $77 price target, that's up from the $65.71 where it sits now the analyst there says sentiment

has overly negative and given the exposure to the west coast and the order flow coming in will improve margins in order growth through the first quarter of 2024. that stock this morning up by about 1% the real estate sector has been a laggard this year and it was the worst performing sector on wednesday. but there are still some opportunities in the group for those looking closely. diana olick has been doing just that and she joins us right now with this month's sectornomics. >> find the glasses half full. commercial real estate has taken the brunt of rising rates and that's why the real estate sector is an underperformer. in six months, the group is down over 8%. the s&p 500 has gained 2% in the same period. but there are still some bright spots for investors on the hunt for yield. we took a look at names in the sector that are outperforming the s&p in the last six months and offer an above average dividend yield there is only a handful of

stocks in positive territory during that time but they come from a range of industries we'll start with invitation homes. that stock is up 4% in the past six months with the yield above 3% all thanks to strong rental demand in a still very pricey housing market next we have the largest holding in the real estate sector, industrial ware housing giant prologis it is up 5% in that time period and has the yield around 2.9%. and finally, there is healthcare focused well tower, which has gained more than 7% in three months and has a dividend yield of 3.3%. so despite the volatility in the sector and really ugly numbers in the office sector, there are bright spots even for investors still looking for stable income just from dividends. back to you. >> that's amazing. we talk about the hunt for yield all the time and now you got -- quickly, randomly, any sign of

more inventory coming on the market because there was a house in my neighborhood, 42 families that were there in the open house according to realtor because there is nothing else to buy. >> i'm sorry to say, no, i knew you were going to go from commercial to residential. no real estates are down. nobody wants to put their house on the market. mortgage rates crossed 7% this week so you got 2.75 and you're thinking about maybe buying another home do you want to sell and trade your 2.75% for a 7% mortgage rate that's why we don't have any listings >> there you go. you knew i had to pivot. it is a bigger part of the economy than the stock market, real estate, we don't talk about it enough. >> i'm here for you. >> we always love a little diana. thank you. diana olick, appreciate it. now from real estate to the stock market and talk about the broader markets. sarat sethi, what do you make of

the move of nvidia $750 billion company with 26% jump this morning. is that a -- is it good? good for investors, but seems a little weird. >> yeah. i mean, look, we own the stock and we actually -- >> well, congratulations >> we trimmed it earlier this year, brian. honestly, it is a great company, phenomenal space, ai is the place to be. but valuation is a little stretched. and i think you have gotten similar momentum behind some of these stocks where investors are -- especially traders are looking to see who has the greatest growth and you have to be careful we believe in a diversified portfolio. it could be part of your holdings but there are other areas of the market as well and doesn't mean you need to put all your eggs in one basket here. >> we were talking about this at the commercial break, can we throw up intel as well intel stock is down in the premarket. i'm not knocking intel i am kind of knocking intel. what i'm saying is the nvidia

effect doesn't seem to be rolling through. >> no, and this is not one of those effects that every semiconductor will do well the market cap growth just overnight is greater than the whole market cap of intel, of amd. so, you really have to be careful here because i think sometimes investors get a little too excited as to what is the total addressable market ai is great. we're in the first and second innings, you have to be careful there. and i know, you know, a lot of people say, hey, how could you be so wrong on this, it is part of a diversified portfolio >> looking down here too as well, i'll be directionally correct, don't quote me on the accu accuracy, nvidia is gaining 2x the entire market cap of intel nvidia is gaining like 250 billion in market value. intel's market value is 120 billion. you just wonder, is nvidia --

the new king, you were trimming the stock, is there any unloved stock that you see as a quiet ai play because nobody else apparently is getting any love >> well, you know, i don't know about quiet ai, it seems like every conference call has ai, if you don't bring it up, analysts are asking for it. i would take it with a grain of salt there is plenty of value in the market elsewhere valuations like in the healthcare sector and a lot of stocks are way below market multiples. and you have to look for opportunities, not to say you shouldn't be in some of the stocks here. these are some of the stocks that could lead us going we all know things turn pretty quickly and if the economy does slow down, as most of us expect it to, you have to be in areas where you have an opportunity. >> we got to leave it there. i think i'll quote that great philosopher poet ferris bauller, remember that guy, life comes at you pretty fast. appreciate it.

thank you. >> trying to think of another line. >> the sausage king of chicago. >> buller, buller. >> something oo economics. >> when we come back, teens and social media, the u.s. surgeon general warning this week that online sites a significant mental health risk that needs to be addressed should the government intervene? jon fortt is here to weigh in with "on the other hand. we'll be right back.

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♪ this is how we work now ♪ welcome back good morning the u.s. surgeon general this week warning that social media poses a profound risk, their term, of harm to teen and kid mental health. it comes as florida governor ron desantis announces his presidential run, live on social media. should government restrict teen social media access like it did for alcohol or cigarettes? jon fortt is here now to weigh in jon? should they restrict access to social media >> no. government shouldn't restrict social media use this is a parenting issue. the surgeon general's report this week was 19 pages, it was important, dr. vivek murthy laid

out and handed data driven case that social media brings both harms and benefits to teens. at its core, the report is sobering 19 out of 20 teenagers use a social media platform. eighth and tenth graders spending three and a half hours a day on them. social media is becoming what tv was for our generation a ubiquitous questionable influence. but that doesn't mean you should ban it can you imagine if the surgeon general were to put out a warning about tv it happened. 50 years ago, in the nixon administration televised violence was the bug there. yet somehow 50 years later, despite the mandalorian and stranger things we have survived i'm not saying violence in the media was a nonissue, i'm not saying we should ignore social media's dangerous for kids, we got to get out of this rut as a society where we panic and try to save people from themselves, the rules and regulations. telling them what they should and shouldn't watch, whether it is tvs in the '70s, video games and rap in the '80s or social media today, the kids and

parents can handle it. >> yeah, maybe those warnings in the '70s and 80s weren't wrong. >> yeah. look at the world today. on the other hand, governments should require more stringent limits on teen social media use. it is a health issue the surgeon general this week cited a study that for college students, social media use was associated with an increase in depression and anxiety not only that, college students who limited social media use to 30 minutes a day, they felt less depressed. i know it is uncomfortable to legislate limits on social media use, but, look, a lot of folks seem perfectly willing when the platform is tiktok and they're limiting china's influence, like in montana, it is not a bad example. even the crittics of montana's tiktok ban mainly say if you can show data, evidence that china is having this negative impact, maybe a ban would be okay. the surgeon general's report compiles just that kind of evidence of probable harm. but it is not just from china and tiktok it is from u.s. platforms too.

i know there is also an argument the restrictions are the parents' job, not the government's we have child labor laws limiting the work kids can do before they're 16, in most states, we don't leave that up to parents because we don't want kids exploited for financial gain, even if parents won't step in at its worst, that's what social media does sacrifice teen mental health for the attention economy. limit it. >> i would argue the difference in tv is tv is scripted, it is regulated by the fcc you kind of know what your kids are getting, right >> better for you than social media? >> social media is not controlled you don't know what -- is there a proper approach? what do you do with your own kids you have a kid in high school, right? >> a 14-year-old and 12-year-old. neither of them, i apologize for airing their business on tv, neither of them is on social media. at first we got some pushback. like last week, my 14-year-old

said, you know what, dad, i'm glad i don't my friends have their faces in their phones too much. >> what is the social media app that is hot right now? snapchat or -- >> tiktok is a big one instagram is sort of their facebook, baseline, their email. but tiktok, yeah. >> you're a tech guru. is snapchat still a thing? you never hear anybody talk about it, other than look at snapchat's stock down. >> it is for private group of friends, it is a bit of a thing. there are things that come and go -- >> our kids, if you got an 18-year-old or something, those kids -- >> how is myspace doing? >> it moves along with them. >> yeah. >> myspace, no >> myspace is not hot anymore? >> or an aol account. >> jon, i can't imagine the government actually doing anything because they talk all the time about all the problems with everything from child porn

and on social media, and haven't done anything about that why would we think they would take the extra step to protect teens? it is not nearly as severe as some of the other problems that they have complete bipartisan support on and they can't do anything about. >> i think the tiktok stuff might be the root to put some restrictions in place because concern about, you know, overall, overall influence out there. so, you know -- >> because the china angle. >> because the china angle >> if a member of the communist party came -- knocked on your door and said i would like to put a live microphone and video camera in your home so we can watch you, you would be, like, out of here. >> what is safer, newsletters. here is your chance to sign up for the on the other hand newsletter you got the qr code on the screen now or type in cnbc.com/otoh. easy access to the weekly poll on linkedin. let me know which side of the

arguments you agree with more. here are the results from last week's topic is it morally wrong for office workers to demand work 79% say no it is not morally wrong to demand are remote work. 21% say it is. when w murthy. and later nvidia's stock we're going to dig into the quarter with that stock, getting a number of upgrades, as you might expect stock is up in the premarket and ever core raising its price. 390 is above 342

goldman sachs lifting. i think there are 21 analysts raising their price targets after this company came out with much stronger numbers and guidance "squawk box" will be right back. your record label is taking off. but so is your sound engineer. 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

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that -- ulta beauty. a and, john, the numbers weren't great. same-store sales were down double digits and decline in same-store sales in the current quarter. they did stick in line with what they're expecting for the full year maybe that's the silver lining here, people knew this was going to be bad. >> thanks, becky great to see you i think that's exactly right the quarter is in line with what they had guided and the second quarter floats with the piece of recovery they told us to expect as we move through this here it increases management credibility that 2024 will be a rebound year with a number of positive for the consumer electronics category >> what products are coming out that gives us a bright are

future >> we'll hear more at 8:00 but in the computer area, around television and home theater. with the cycle i'm also referring to the fact that we had this huge surge in demand that was now three years ago and some replacement cycles will start for some of these products as well. >> best by -- by the way, you say you do not own it right now. what do you think about the stock overall? >> yeah, that your a wonderful operator management deserves a lot of credit for how aggressive they've been with cost and standing up new growth factors for the business, but we see it as the wrong place at the wrong time, selling highly discretionary big ticket items we're seeing it, we just sort of discussed the weakness in current results. we do think this will be a great recovery story with a much improved cost structure when things do get better

we're just not seeing they've turned that corner just yet. >> dollar tree is the largest piece in your portfolio. >> it has a management team that has a great track record and they have the assets to turn family dollar and dollar tree around it's getting people into the store and giving people a reason to come back and drive in traffic. we saw that in spades, 5% traffic growth is going to be amongst the top in retail. overall the results today were disappointing, the quarter was disappointing, the guide down was disappointing. >> the stock's at 10%. >> yeah, deservedly so it was another disappointing guide down not to sugar coat it but i will say the two main explanatory

factors there will be, number one, merchandise mix our view is that works itself out over time as the macro stabilizes, you can get some better normalized mix there. and the other issue is shrink and we think that is sort of a transitory factor in that everyone in retail is experiencing a lot of shrink or product theft. i think in the end that's going to get passed through via pricing to consumers, although it certainly doesn't feel good when you're living through the quarterly miss or the guide down >> thank you, john, for your time today we'll have you back another time >> thank you >> coming up, nvidia shares soaring. we'll break down an amazing quarter. stock is up 28%. plus, we are expecting the lal latest data on jobless claims. nasdaq futures up 279, folks

you can thank nvidia we thank you for listening and watching

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all right. good morning this is the part of the show where we tell you what stock futures are doing and the

direction of the market. it's a completely mixed picture. nasdaq futures up 280, dow futures are actually down. by the way, technology, nvidia fueling nasdaq's gains, closing in on a trillion dollar market cap but still making investors nervous, the debt ceiling fight. we'll bring you the latest on the negotiations or lack thereof. the final hour of "squawk box" begins right now good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick. joe and andrew are off today but

i'm joined by brian sullivan thank you, brian >> you're welcome. >> dow futures down once again that comes after four days in a row of closinglower. dow indicated off by about 72 points but the nasdaq is the big story today, indicated up by 287 point. that's a gain of better than 2%. you can thank nvidia for that. nvidia shares up in the premarket by more than 27% that is helping a few other stocks, if you look at amd, microsoft and others, we'll talk more about nvidia, its huge beat and it's a big guidance lift in the third quarter. other major story, what's happening with the debt ceiling. that's where we turn to the treasury market right now. the ten-year has picked up the yield. 3.752% if you turn to t-bills that's where you see the action the one-month t-bill 5.9%.

it's hard to even get your head around those number. >> meantime, the treasury department x date has been set by janet yellen around june 1st. that's around one week from today and that is the day that yellen suggests we may not be able to pay all of our bills one of the three credit rating agencies starting to get nervous. for the state of negotiations on the debt limit, let's bring back kayla tausche. >> reporter: good morning, brian. they met yesterday and the house is set to leave on a week-long recess later today then there is the new warning from fitch rating, putting the u.s. on notice sparking fear here in washington republicans reiterating this is

where they wanted to begin negotiating in february. the white house saying default is not an option and a treasury statement says that the warning underscores the need for swift bipartisan action to raise or suspend the debt limit and avoid what they're calling a manufactured crisis for our economy. yesterday optimism was hard to find democrats were airing frustrations on bad messaging and a slow process and mccarthy's top negotiator was saying we are past a responsible deadline for a deal. the major issues continues to be top line spending issue. >> it all comes down to you know why we're here the democrats in power spend too much money we have our biggest debt ever. we have spent more money in our expenditures than in our 50-year history just on our average of gdp and all of this while we're bringing in more money than at any other time

>> reporter: a white house official tells me from its perspective, it's more concerned with reserving certain programs than doing a broad swipe across the top of federal spending levels we will see what today brings, whether there are any breakthroughs. the house is set to leave and speaker mccarthy said he still plans to give his conference a full 72 hours to read whatever agreement is reached before they vote on it then the senate would have to vote after that. so we are very near the time where there would be no time left to do all of that >> can i ask why that your sending congress home for a week-long recess mccarthy was complaining last week about why joe biden left and went to the g7 >> i think that they would say they reserve the right to bring congress back, both the house and the senate if there is something to vote on or weigh in on, they could read the bill certainly from their home district if that's where the 72 hours takes place, but speaker mccarthy is still committed to offering his members we're still waiting on him to

give those instructions. the operating assumption is that they will take that recess because that has been scheduled, and so far we haven't heard any formal marching orders from mccarthy to republicans on whether they should stay back or whether they should go ahead with their travel but that would have to happen today, becky. >> kayla, thank you. right now we want to get back to the markets and check in with dom dominic chu. let he get where you're starting. >> it's where u you guys have been going all morning nvidia, it was as high as 395 it's 394 and change right now. a 29% gain you mentioned the $1 trillion club we closed market cap wise 755 billion and change we need 245 billion more we'll get about 200 billion of it just with the pace that we're

on now for the opening bell. so nvidia could be the biggest one-day gain in market cap in american market history and of course artificial intelligence and data center driving the big, big move higher because of the upgraded outlook for revenues there. also on the earnings front moving the opposite direction on technology, cloud computing snowflake shares down 13.5%. they come out with better-than-expected quarter results but its current outlook forecasts, 33, 34%, and that's good but it's down from what they expected. earlier this week luxury home builder toll brother reported better than expected results today rbc market analysts upgraded toll brothers to an outperform rating and upped the

target price to 77 from a prior 55 they think demand is strong and tail winds will persist. up nearly 3% premarket back over to you >> thank you right new we want to talk more about the markets, the fed earnings, the debt ceiling standoff, all of it jumbled together joining us is jim grant. it's great to see you in person. >> thank you, becky. it is nice to be here personally >> there's all this laundry list of things we can talk about but my guess is you're probably focused on what the fed is doing. >> i think the debt drama is mainly a monetary problem. i think one x date in the somewhat misty past is the august 15th, 1971 x day in which nixon closed the goal window the only chart that begins to

resemble nvidia is the growth in the public date since that date. it's an exponential band the nature of the dollar is so prolific and so easily produced is a not-so-remote cause of the proliferation of debt and of the somewhat artificial and somewhat substantive debt drama we're talking about today. >> with the debt drama, do you think plays out in any big way >> i think it will be resolved but not solved there will be a resolution as they did in 2011 they promised 2.2 trillion savings in ten years and that increase was the result of deficits of 11.5 trillion. so on form, and i thank david stockman for his fabulous fiscal digging, but on form this i

think imminent resolution will entail a lot of out year promises that are based on history and will be forgotten. >> and kicking the can down the road, it then rolls into a sewage pipe. >> or snowball that keeps moving >> and then melts. >> the can is filled with ni nitroglycerin so don't kick it too hard >> why do you say that does debt matter >> yes, yes. the united states lives a charmed life, a reserved currency issue i think reserved currency is kind of a poisoned chalice, to mix of metaphors we are an importer of stuff, a net exporter of currency

the acceptance of the currency and the debt denominated in those dollars, that acceptance we must not take for granted i think the rising rates that we see on the screen today are t the alliteration the long bond is knocking on the door, 4%, where it was when i got in the business in 1967 actually >> when you look at the fed and what their next decision is going to be, what do you think happens here is the fed going to stick to its conviction and continue to keep rates high >> i think the fed will say banking difficulties have introduced a new sort of strain on the economy, like a physician telling you for watchful waiting. that's always good news if you're the patient and i think

the market would like that, too. >> but do you think the fed is going to -- we heard from kneel cash kashkari last week >> it's very volckerian. it's in the the capacity for the economy to absorb much higher rates. you see this in deposit trends if you get 6% or near -- let's anticipate 6% money market mutual funds and the bank is offering 2 1/2 >> not to revisit history. both parties agreed to stimulate the economy because of covid in 2020 it was terrifying. i get it but they kept stimulating into

2021 the president came in again, not blaming any political parties except the ones in power the first stimulus was bipartisan for the most part we kept stimulating. i traveled to 20 states during covid. i only bring that up because only half the country basically never shut down or shut down very briefly but we kept stimulating as if the entire nation was locked down and nothing was happening. and that's history, i get it but at that time the fed saw 1% fed funds rates now they're fighting 5 1/2 to 6% is there one point in time you could go back and say this is where the fed and/or congress really screwed up? because somebody screwed up. >> well, when you suppress supply and stimulate demand, you have the reasonable expectation of rising prices of inflation. and i think the central screw up, as it were, was the fed insisting upon transitory when

inflation was at 5, 6, 7% they were buying mortgage-backed securities and treasuries implementing qe at a time of manifest rising inflation. that's the arrogance, i say, of the phd standard of monetary management, the improvisational unstructured, unconstrained admission of dollar bills on the authority, which patently do not work >> i couldn't agree more and i wonder how much that is because they were in their not only econometric bubbles but personal bubbles. people were buying cars yet we're still stimulating into an already hot and, by the way, constrained economy because of port delays.

>> go back and forth to the midwest multiple times a year. shocked at what i saw. thank you. i'm all worked up now. got to switch to decaf >> i thought we did. >> it's too late i had a cup of regular >> no more coffee for you. >> thank you very much coming up, we're going to go inside with nvidia and it reported verizon has alerted employees of possible layoffs. more details will be shared today. ouch and investor carl icahn, reuters cited sources on a preliminary vote tlyal his iep has lost half its value

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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. welcome back to "squawk box," everybody. we've been watching the futures and, wow, this is not like watching paint dry today we were seeing a lot of activity, some in different

directions dow futures off by about 70 points, s&p up by 30 but it is the nasdaq that has captured everybod every everybody's attention today. it now indicated to be up over 300 points and that is thanks to nvidia >> nvidia's market cap nearing a trillion dollars what it's gaining right now is effectively but not quite close to double intel's total value. >> total market cap. >> nvidia is about to add two intels to its market cap what happened to intel, by the way? it scored and beat estimates,

the most in five years i'm not giving you grief for raising it you're going to probably have to raise it for compliance. it seems like everybody was caught off guard you were positive on the stock but did anybody expect this or is the market reacting a little too gidily >> we've never seen a quarter like this. in 25 years of doing this across any of my coverage i think it's the context that's so important a quarter ago this company was caught up in the same budget pressures of cloud spending as everyone else. they missed their data center number for the january quarter we first started seeing strength in march around this end ten weeks after that we're growing 18% sequentially and guiding for something like 100% sequential growth in data center it emphasizes the shift towards

a.i. spending, the focus all of the software and cloud companies are putting on this. the earnings part of the country has moved materially higher. so i think it's a reasonable move certainly it an expensive stock and will continue to be. but it's also in rarefied territory. the one company can put up numbers like this and beating and raising while not entirely meeting demand, it really impressive performance i would say the move is consistent with just how good these are. >> is it worth the value aation, though >> i think so. we raised our numbers to about $11, which is more than where we were that puts it at a multiple now, you know, in the low to mid 30s. in is an important platform shift in the market. these an.i. investments are the

trend, you guys talk about it all day long from every cloud software company, this is really important and there's really one company that benefits from it so much that to pay a multiple like that is reasonable over time there will be competition. there will be a lot to think about here but right now this is really the most exciting thing we've seen in some time and at the price you're looking at, $400, it not inexpensive. it's priced at what you expect a company that offers this growth. >> do you cover intel, joseph? >> i do, i do. >> what the heck is wrong? becky and i have been talking about it all morning forget about nvidia. they're going to add two intels. what happened? >> today >> what's happened to intel? inside inside, you're getting a

d dell, bro, whatever it was >> intel has a plan and having investment leaves them in the position of not having that much near term cash flow. we're optimistic where intel it go over the long haul but right now the focus, the growth that's coming from this environment is coming from a.i. we're not seeing this in an environment where cloud budgets are through the roof and the economy is really good it's the opposite. cloud budgets are coming down. so what you're actually seeing here is the cloud budget is being shifted over to a.i. and negatively affecting everything else >> intel, i'm sorry, the nvidia

chart, you saw a huge drop off the cliff. are you sure that won't happen again? >> i am sure it won't happen again. last year was crypto related i don't see it falling off like that again >> joseph, thank you >> thank you >> when whe come back, breaking jobs and gdp data. "squawk box" will be right back after a quick break. aspercreme . full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

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up next, breaking jobless claims data and the revised look at first quarter gdp don't go anywhere. we'll be right back.

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north carolina. ranked america's top state for business. welcome back to "squawk box," everybody. we are awaiting those jobless claims and gdp data numbers. we're looking at the futures again. nasdaq indicated up by 300, s&p up by 30 rick santelli is standing by in chicago. rick, take it away >> yes, we are expecting some potentially market moving numbers, especially on jobless claims initial claims for the week of may 20th, 229,000. that is well below the 245,000 we were expecting. and of course that's going to keep the fed more on the hot side than the cool side, 2 229,000. to find a lower number, about back to the last week in march when it was 228,000. now, if we're looking at continuing claims, same dynamic,

1.8 million is an important psychological area, becky. we are under it, 1,794,000 second week we are now under 1.8 million after one, two, three, four, five, six, seven, eight weeks above. and 1.794 million of course may also be something that motivates interest rates to the up side. so we want to pay particularly close attention. now, let's look at gdp this is first quarter. our second time visiting and 1.3. we end up improving 0.2, that's rather dramatic from 1.1 expected to 1.3 and 1.1 was also our first look consumption numbers, we added a tenth at well. that's quite juicy, the best since the second quarter of '21. if we look at the pricing

indexes, 4.2%. this is 0.2% hotter than our last look. the high water mark was the second quarter of '82, at 9% even though we're well below half, it's still 0.2 higher than our first look this is an older number and there's other areas that we measure the ceconomy that my gie us more up-to-day pictures and if we look at the expenditure quarter over quarter, it's also a tenth hotter at 5% versus the 4.9. our last look high water mark there also the second quarter of 21 when it was 6%. of course that's being stubborn, as we've learned, with many of the core metrics we see that interest rates are at 3.75. all in all it's kind of washed out. it's about where we were if you consider the volatility we had, i expect it to continue the rest of the day. of course we try to handicap

what's going on with the fed, with the debt ceiling and just what's going on with negotiations some of these issues, well, let's go to the tape many of the politicians that have a view of one way now were exactly the opposite when parties switched who was in the white house. this is insanity get it done! becky, back to you >> from your lips, rick. steve liesman joins us now with more no signs of a slowing economy here >> yeah, i mean, that one 3 we have is definitely down from the fourth quarter but it's up from the initial estimate of 1.1. it comes, by the way, as rick pointed out with the higher inflation number which means the real number had to jump even further to get to an increase. it looks like it was export, consumption. it looks like the consumer is not giving it up maybe one of the reasons they're not giving it up is we don't

have any weakness to speak of in the jobs market. we have shifted upward to this level of 240 it looked like maybe we were on the rise there now back down to below 230,000 we're not seeing it picked up in the claims number pip i said this last week but it seems to remain true to the extent there's any increase in claims, people are finding work so they're not ending up in continuing claims, which is the thing you'd look at for, what would you say, a gathering weakness in the jobs market it's not there, at least not yet. and a look at the fed rate funds outlook. you have these high rates but they may as well reflect concern about near term interest rates and the possibility of default so we really don't have a great read right now, guys, on what the market thinks the fed is

going to do at least beyond june where right now they're 70-30 banking on a pause but as for beyond that, there's a height kind of built in for july and august but i'm not sure that's right, guys >> because you don't think they're going to hike any more this year, steve >> sorry, i should have been a little more clear. i don't think that's right as to the market's reflection as to what the fed is going to do because of the way the high one-month, three-month and six-month t-bill yields are priced in the market i actually think there's more people on the fed that want to hike rates rather than want to pause here so june could be more, as was said yesterday, a skip rather than a pause we have collins coming up at 10:30 and loretta on tomorrow morning and by there we'll have

a pretty good read of where everybody stands >> thanks, steve >> joining us now to talk about the new gdp numbers, the fed, d.c.'s debt ceiling fight and the impact on the economy is ethan harris and city economy veronica clark thank you very much for joining us veronica, first to you aside from all your other just regular forecasts, how does this debt ceiling debate and this risk of running out of money, how does that factor in or screw up the models? >> yeah, i mean at least in terms of how we're thinking about, you know, the upcoming data, what the fed will be doing in june, our base case is certainly that we can have a resolution on the debt ceiling before then so hopefully that's in the past, but it absolutely is adding to uncertainty right now certainly in the markets it does add uncertainty to our

forecast into 2024 we don't know what a final spending deal would look like. it does certainly cloud things >> ethan, what do you think? is there a way to say here's our benchmark forecast on the gdp and economy but if there's some kind of default or the government stops paying its bill, then "y," you know, x, y >> we think they'll pass a debt p ceiling but it will only come at the very last second why would they make a deal now they've got a week to go and these guys can never make a decision quickly unless it lasts for a while, unless we violate the debt ceiling for a number of weeks, it probably goes down in history as a blip.

and i do think that steve is right that the hawks on the committee are still really thinking about possibly hiking again if they could just get some of these risk factors aside, there's a real chance of another rate hike down the road. this idea that the fed is going to cut in the second half only makes sense if you're expecting disaster out there >> ethan, can the fed kill inflation without also killing the economy? >> i don't know if that you will kill the economy you have to wound it it would be remarkable if we had double-digit inflation and there was no consequence i mean, we have a very out of balance labor market and service sector you can't get rate down by federal budget -- unfortunately they let the party go on too long and they have to get the unemployment rate up

could they by some stroke of luck avoid a recession yeah is that the most likely outcome? no i think a mild recession is the most like live outcome veronica, would you agree with that >> yeah, i would that is our base case and it really does come down to we believe the fed will do what it takes to get inflation down, that is the number one job here. we are pencilling two more rate headaches in our forecast, but that does unfortunately come with a mild recession and that's what needed to bring inflation back to target >> is there an outlier event that may change everything what should we be worried about is possibly happening? >> kr year and others a lot of different stories. it's certainly clear this week the debt ceiling could be one of those outlier events, that's that seemed to have died down recently and i think it part of -- when

we're looking ter actual economic data right now, what seems like the most like lip scenario is we're still running pretty strong activity and with that still pretty strong inflation. >> you know, ethan, i don't know if you heard our conversation with jim grant a few minutes ago, but we're talking about sort of where did this go i don't think. because somebody obviously messed up to get this level of inflation still stimulating. do you agree that it was just overstimulation, both fiscally, monetarily, by the federal reserve and the federal government as the economy was underlying certain things, booming and we had a shortage of goods due to port issues would you agree that was where they kind of blew it or maybe you don't think they blew it at all. >> i think if you look at what happened, a lot of the port issues and the supply problems

were unpredictable and you can't blame anyone for that. but over stimulus of the economy is a big factor here it was both the fed and fiscal authorities. when the economy started to reopen and it was clear the vaccine was going to worknd all that, you needed to back up dramatically if this was stimulus and it didn't happen. we kept on getting money plowed into the system. the supply chain problems was because there was a massive demand for u.s. consumers and the system couldn't handle all that spending. so you have to blame easing demand policy by both the fed and the biden administration for a lot of the inflation and i would put particular blame on the fed, to tell you the truth. i'm a former fed employees and i love the institution, but they're the ones who ultimately our job is to control inflation. and when the fed didn't respond

to the very big fiscal stimulus, record stimulus and the rising inflation, that was a big policy mistake. now, they've caught up and they're doing the right thing now, but the legacy of that mistake i think is the number one story. >> trying to right the wrongs in a very short amount of time as they just continue to stimulate, even though it's clear the economy was booming. it's going to go down in history as a big footnote. ethan, veronica, thank you both very much. have a great day >> thank you >> let's get to this morning as slate of row tail earnings and there are a lot of them, right? >> it's been a busy morning for all of us. best buy reporting better-than-expected earnings on weaker revenues though the total comparable sales down

10.1%. that was as expected it was weaker in the united states, down 10.4% the consumer electronics retailer reaffirming its former guidance but it looks like they'll hid the mid point of this really wide range and the company says it preparing for a number of scenarios. mobile phones gaining in services were stronger the ceo says in this environment customers are clearly feeling cautious she does add that purchasing behavior was consistent in terms of demographics. and then on the call just now she said the company continues to believe this year will mark the bottom for decline on tech and demand dollar's tree earnings the ceo is calling out a shift

in consumable products and the impact of higher shrink saying it expects shrink and unfavorable sales to persist for the balance of the year. they expect the benefits of lower freight rates flow through. and those are sharply lower. and ralph lauren reporting earnings of 90% adjusted, well above what was estimated and like other high-end retailers, china sales up 30%. shares of ralph lauren up more than 5%. >> any theme you take out of all of this? >> there's so many things. can you divide it into the good and the bad. we'll start with the good. margins seem to be pretty good across the board for a lot of retailers. meaning we did see a lot of

beat, lowers did because of what woo may see happen in economy and with the consumer shifting into these more consumable, less disc discretion margins shifting more to consumables if you have an international business, strength seems to be coming more from overseas, particularly in china. the united states seems to being weaker that's true with the. we have some breaking news on the debt ceiling. speaker of the house kevin mccarthy saying just now that negotiators worked well past midnight and did make some progress on the debt ceiling he said he's instructed negotiators to work 24 hours a day to get a deal done however, there are still some

outit's not like biden and mccarthy are in there but this does seem to be a fairly positive development >> can i insert my skepticism here >> please. i'm trying to be nice. >> the sfruts come up on this but, great, show us the money. show us the deal i don't want them to say, okay, we've made progress so it's okay to send congress home for the weekend. >> remember that show there was a shell and -- >> with howie mandel >> it's like this version of that you want to open up and you hope it's this big win. >> show us what's up with this >> so us the brief case with. >> let's just resolve this, come to a solution so we can move on and have bigger talks about what needs to happen with the budget,

which i agree. it absolutely need to. figure this out. i don't think the rest of them should be holding us -- >> how long have we been doing this >> what's the definition of insanity >> doing the same thing again and again and expecting a different outcome? >> how many times have we talked about the debt ceiling >> there need to be a cut in spending but and you're going to default on your obl gaugs. whatever it. >> it's where the pirates put their treasure >> is that true? the pirates aren't good at writing. coming up -- courtney reagan is like this is why i don't come on set. >> what would it like we did in 2011 we're going to hear how things

stand and evolve if we did if go meet kevin mayer on a show that's called -- >> the host is not only hand sumsome but incredibly -- >> that's a little too much. >> you're not wrong money kevin mayer used to run tiktok we'll talk about social mea,di media, everything in between catch "last call" every night, 7 p.m. eastern "squawk box" will be right back. e who live and work there grow and thrive. we're proud to call these places home too. they're where we put down roots, and where together, we work to help move everyone's financial goals forward.

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all right, welcome back. fears of a government default or lack of payments prompting a warningfrom a major credit rating agency. leslie, you broke the news you hit the news last night on "last call. you had some time to dig in. what can you tell us >> yeah, brian, really a shot across the bow to congress the ratings agency putting the u.s. on what's known as rating watch negative, telling lawmakers to effectively raise the debt limit by the deadline, ensure debt securities are paid on time and in full, and keep levels of debt to gdp in check or else risk a ratings downgrade from aaa fitch says it still believes there will be a resolution before the deadline but "risks have risen that the debt limit

will not be raised or suspended before the x date," that's the deadline by which the treasury effectively runs out of cash and consequently that the government could begin to miss payments on some of its obligations. so far, the other two larger credit agencies, s&p and moody's, monitoring the developments closely many market participants don't actually expect any kind of credit downgrade unless an interest or principal payment is missed you can kind of see that from what equities are doing at this hour but absent a bona fide default, s&p and fitch have indicated a delay in nondebt service payments or even letting the deadline lapse could have credit implications moody's told reuters yesterday that it may change its outlook before an actual default if lawmakers indicated a default might be expected. so, to many, the whole situation is really reminiscent of 2011. at this point in the debt ceiling debate 12 years, s&p and moody's had already placed the u.s. on warning and then

subsequent to legislation to actually raise the debt ceiling on the day of deadline, s&p down dp graded the u.s. anyway, citing political bringsksmanship. even though it's been sanguine so far, prior episodes show it may not be over quite yet. as you can see from that chart on your screen there, guys >> i'm going to ask a question i know you can't answer, leslie, but i know that you can handle anything, so i'm going to do it. any indication we could hear from moody's or s&p? >> because fitch came out? >> yeah. you wonder >> definitely possible >> i know there's no answer. i'm just kind of throwing it to the wind to just generate, you know, controversy. >> yeah. i mean, i think in the last few days, we have seen kind of a tone shift at the other two ratings agencies, especially moody's. with that reuters report yesterday, where an analyst basically said that, you know, yeah, this is something that we are actually considering whereas before, they said it really had to be a bona fide

default to change the rating >> put us in double boxes for a second, leslie and i i think you're wearing my vest, leslie >> oh, look at us. twins. th tnng.wiin anks, leslie we'll see you later. are asking the exact same question: is it possible? well...with comcast business...it is. is it possible to help keep our online platform safe from cyberthreats? so we can better protect our customer data? aww-yeah. absolutely. what else you got? can we use predictive monitoring to address operations issues? before they even exist? we can help with that. - hmm. can we provide health care virtually anywhere? we can help with that, too. even out here. you, sir. something on your mind? is it possible to survey foot traffic across all of our locations? with wifi analytics? easy. order for nina! can i teleport our guests to their rooms? technically, no.

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dow futures rising just moments ago when we got some encouraging headlines,encouraging comments out of kevin mccarthy, the speaker of the house, about the debt ceiling talks you can see right now futures are down but only by about 13 points s&p futures picked up even more, up by about 37 nasdaq got a slight bump up as well to 316 points above fair value. joining us right now is meagan, chief investment officer at verdons capital advisors, and these headlines are the type of things that could potentially whipsaw the markets. you've got that. you've got the federal reserve, the fomc with their next meeting in a couple weeks. what do you tell investors at this point >> right now, we're cautious on the markets, and this market keeps going higher it doesn't make a ton of sense to me. i think they're focusing on some of this backward-looking data.

even the banking crisis didn't really take hold until the back end of the first quarter so, as i see these markets go higher on some of this data, i get more and more cautious we've been reducing our equity exposure several times over the past couple months, and it's hard not to look at this again and maybe even take some more chips off the table. >> even if the debt ceiling's reached, this is just something you're concerned at the levels >> yeah, the debt ceiling's one thing, but when the debt ceiling does get reached, which we think it will get reached -- >> or the deal >> exactly, the deal something will get done. what the market's going to react on isn't the deal itself, but what's in the deal remember, in 2011, there was a lot of volatility, and some people pinpoint 2011 and the volatility we saw in the equity market due to the fact that we -- our credit rating was downgraded but really, in effect, what happened there was the austerity in that bill, that's what caused the market to decline. there's not a ton of austerity in this bill right now we're going to be looking

closely at what kind of spending, whether it's just caps or if there's actual cuts, that's going to impact the market more. but regardless of the debt ceiling, i don't see a whole lot from economic data that's started from the second quarter that makes he optimistic that we can avoid a recession this year. >> what do you think about the technology part of all this, the a.i. story, what's happened overnight with nvidia and how that's helping out otherstocks too? >> obviously, a.i. is a huge part of what's going -- the evolution of technology. but i also think that you're seeing some euphoria around this and people are kind of grabbing on to this i don't want to say it's like another dot com bubble, but i'm cautious there's been so much euphoria around this, and it is driving the nasdaq higher. we've seen that up 25% today as of today with nvidia's earnings, but remember, the nasdaq also is very sensitive to interest rates, and we don't think that the rise in interest rates is behind us. there's a lot of data between now and the fed meeting that the fed has said they're going to be

data dependent we'll get inflation tomorrow, get cpi, ppi, and jobs reports before that june meeting right now, we think they're on pause. we don't see cuts this year. there's a chance that they could raise again. that's going to take some -- that's going to be a big headwind to the nasdaq >> meagan, thank you very much meagan horneman. i want to thank brian sullivan for being here today. >> good to be here >> right now, it's time for "squawk on the street. see you tomorrow ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, live at post nine of the new york stock exchange faber has the morning off. historic morning when you consider the record that nvidia may set in single-day market gains. speake