good thursday morning. i'm sara eisen with carl quintanilla live from the new york stock exchange. is the country headed for a debt downgrade? fisch and morningstar putting u.s. on credit watch we will speak to the executive to the executive who downgraded u.s. in 2011. holly newman kroft will join us says the market is overly dovish on a fed pivot. house financial services committee ranking member maxine waters on where we stand in the debt ceiling negotiations as congress gets ready for a break and as treasury secretary janet yellen's june deadline inches closer. market story being largely driven by nvidia after those blowout earnings results last night driven by the significant ai demand that's taking the nasdaq and other ai exposed names with it. interesting note out of the morgan stanley desk that says

intel is lower and all these other players, micron, marvel, are tricky because there is the possibility that even though hypergrowth spending gets a boost in the ai migration, they might sacrifice some networking spend or dram spend. >> in other words, it's eating all the capex. >> so you don't end up with the halo you do with some of these tech stores. >> the only sectors higher in the market right now are information technology, thank you, nvidia, microsoft, amd, and communication services as well and otherwise it's a tough day just in from matt, breadth is 2 to 1 on the s&p. it's 2 to 1 negative on the nasdaq 100 as well, which is the tech exposed we're watching rising treasury yields and a few weak t-bills. we're at an all-time high on the one-month treasury because we don't have a debt ceiling deal right now. we're also getting some good data in, which is leading

treasury yields to rise. better vision on gdp nvidia may be keeping the rally in check rest of the market has its eye on d.c. as debt ceiling talks continue with no resolution and the possibility of a u.s. debt downgrade growing. leslie picker hear to explain. you've been looking at the technicals of what the next few days might look like >> the technicals and particularly as it pertains to ratings agencies the fitch headlines putting the u.s. aaa rating on watch, catching the attention of wall street this morning. jpmorgan's head of asset management speaking at a conference in d.c. saying the most nerve-racking part of the debt ceiling drama is not the day-to-day developments but the rating agency's moves. >> the rating agencies have their own fiduciary responsibility to act not in arrears. some of them act in arrears, but some of them are -- act in

advance, and they need to do whatever they think they need to do that in and of itself, forget about what's happening in the government, can trigger all sorts of things that the world's not necessarily prepared for and then i'm not sure that the nuances are picked up. >> her point is that treasuries, particularly t-bills allows billions of transactions to occur every day, every millisecond. a downgrade and especially a default would change the risk tolerance for counterparts holding u.s. government debt it could caused forced selling to be clear, the ratings agencies believe there will be a resolution before the deadline, but some believe they're not doing enough they should be doing more in the meantime we spoke a short while ago with morris cramer, part of that group that made the decision to downgrade the u.s. rating while at s&p in 2011 he told us the rating agencies this time around are acting,

quote, quite late and quite timidly. he said the political situation is at least as severe as it was in 2011 and it's not what you would expect for a country with the highest level of creditworthiness guys >> leslie, that's well said. good explaining of the environment we're in with us this morning, one of the members of the group who did downgrade u.s. debt back in 2011 at s&p, taking the credit rating down to aa plus, joining us former s&p head of sovereign credit ratings, david bier, senior fellow at financial stability. thank you for being with us. >> happy to be here, carl. thank you. >> is this giving you flashbacks >> i'm not losing much sleep, but, yeah, it has certain parallels with 2011 and certain differences, too >> there's a lot of talk about what's different now than in

2011 late cycle versus early cycle, inflation hot versus cold, m2 growth falling rather than rising i wonder how you compare the two eras, this one and that one. >> well, of course, the u.s. government debt burden is higher it's actually higher now than what s&p projected based on the independent congressional budget office back in 2011 because we looked at a ten-year horizon and even before 2021, the public debt burden was rising more rapidly than what we assumed the other thing to say is to remind your listeners is the fact that s&p downgraded the rating from aa to aa plus after

the debt ceiling was resolved. that was because we pointed out, raised two issues. one was public debt rising public debt burden, which i just alluded to before, and also because we felt that the political polarization in country would lead to recurring problems, such as what we're seeing now in having congress and the administration come together on fiscal policy. >> here's the one argument i have against the rating then and the warning now, which is as long as we have the reserve currency of the world, which we do, despite some people thinking we're losing it, we're not, and that's the u.s. dollar it's not a problem, right? we can finance that debt the world wants our debt we have the deepest and most liquid market of our debt. and even if the payments have to get delayed, the money still will flow into the u.s

>> well, look, a default is a default. so, there's no -- you can't say, oh, if u.s. were to default on its debt even for a day, because remember there's no grace period on u.s. treasury bonds so, a default of the day is a default. that's never happened before it didn't happen in 2011 and hopefully it won't happen in 2023 but there is a rating scale. and s&p's current rating and the rating that fitch made is aa plus and the reason why the rating was lower, as i said, is not because -- it was not -- it was not contingent on the debt ceiling going away but about the political issues, which are still very important today the divisions of the country about fiscal priorities and also about the fact that debt burden is rising. as far as the reserve currency

role of the dollar is concerned, to me that's a lagging indicator, not a leading indicator of credit. and the u.s. would be reckless if it took the view that whatever happens, including whether or not it served as debt on default, it doesn't need to worry because of the reserve currency position today of the u.s. dollar. >> so, in order to really remove the danger of a downgrade, what would you need to see? would you need to see some structural renovation of the budget debt ceiling process? would it involve -- i mean, people talked about the 14th amendment for a while now. what would that picture look like >> well, i think -- i think it's important for people to remember that the u.s. is actually unique in having a debt ceiling and there's no other advanced

economy country in the world that has a debt ceiling and i don't know of any emerging market sovereign has a debt ceiling either so, the debt ceiling in the united states is unique. and, of course, it creates problems because of the fact that congress ultimately with the administration is responsible for fiscal policy. and what the debt ceiling is now doing because the government's running up against it is saying, well, even though we took the decision on how we were going to spend our money yesterday or last year or the year before, the debt ceiling is binding. so, i think it's a needless irritant there's no evidence whatsoever empirically it has had any long-term effect on the public finances of the united states in terms of -- and that shows up as i mentioned before in terms of the continuously rising debt

burden of the u.s. >> yeah. it sounds like what you're saying is even though we might get an agreement in principle, even though we might get some kind of vote even on this in the coming week, the danger of the downgrade doesn't just dissipate because of that. >> no. that's why some people couldn't understand back in 2011 that we actually lowered the rating then for the reasons that i've already explained. after the resolution of the debt ceiling. that's because they hadn't read what we've been saying for all of 2011 because this was a process that started with a change in the outlook on the rating back in march of 2011 from negative to stable and then the rating went on to credit watch which is what fitch did today, signals the near-term possibility of a downgrade a lot of people just thought, oh, the debt ceiling is out of the way. the u.s.'s aaa rating is safe.

that wasn't the case and it's certainly not the case now. >> well, that framework obviously relevant all these years later as we can see. david, we hope you'll come back because this conversation's not going away appreciate it very much. thank you. >> happy to be with you and happy to come back. >> david beers. >> though we hope it goes away, not david, the conversation. the ranking member of the house financial services committee maxine waters with us on the latest out of washington with the deadline now just one week away. plus, holly newman kroft of neuberger berman warning on mispricing of the market dow's down 40 points s&p remains positive but don't be fooled. it's really an nvidia story. nvidia and other tech players like microsoft and amd riding its wave we planned well for retirement, but i wish we had more cash. you think those two

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do your homework even faster. come again. -sorry, what was that? introducing the next generation 10g network only from xfinity. the future starts now. welcome back when it comes to rates, our next guest doesn't expect a fed pivot any time soon. keeping an eye on what she's calling overly dovish market forecast and a potential recession in the first half of next year, all against the back drop of a looming debt ceiling crisis joining us at post 9 is holly newman kroft, senior wealth adviser for neuberger berman

nice to have you back. >> good to be back. >> you're clearly not changing the bearish tone and getting interested in the market. >> one of these days i'm going to come on and be so bullish, but that day is not today. not yet. >> what's keeping you feeling cautious >> i think there are a lot of negative headwinds in this market and i think when you look at the market today and peel back the onion on the performance that we're seeing, it's all attributable to six stocks and when you strip those stocks and look at the equal weighting of the market, market performance is actually flat so, while we do have an up market and that can be attributed to how tech has done and ai and, you know, the jobs market, employment is very, very strong and we've got strong balance sheets for both consumers and corporations we see a lot of headwinds coming our way so we don't think is sustainable for the rest of the year. >> namely, the economic downturn you feel is not fully reflected?

>> yeah. i feel the market is putting too much credence on the fact there will be a fed pivot. there's consensus there's going to be a recession. no one knows when. our view is that a recession is going to be in 2024. we think the resiliency of the market has pushed that recession into next year and if you look historically, the market tends to peak about six months before a recession. so, that would even make sense as to why the market is a little stronger today >> also outperforms when cpi peaks. so, what about that analog that we're on the back side of pretty awful inflation? >> inflation is coming down. it's nice to see those numbers coming down but it's coming down too slow the inflation number is too high to really be sustainable the fed is committed to combating that number. they haven't veered off their long-term target of 2%, but we don't think we're going to get there until the end of next year we're dealing with higher rates,

for longer and high inflation. >> and any discussion of productivity or ai or reinvention of workforces is too long a cycle to get in front of that cycle >> yeah. this news is great we don't think it warrants companies doubling or tripling in such a short, condensed time frame. we've seen this movie before we've talked about it with crypto you know, sectors get hot and then they come down. the market tends to get excited and react and then think so, ai's been round. we've been considering it in our evaluation of tech companies and portfolios for a very long time. we don't think it's going to take over the world just yet >> so, let's get to the advice you manage $3.5 billion of assets for wealthy clients where are you putting them, fixed income stuff >> we're positioned quite defensively. admittedly, that has hurt some of our clients' portfolios for the beginning of 2023 because we

continue to be underweight equities we are overweight high quality fixed income, short duration and we are continuing to be overweight alternatives. we still like private equity we like private credit and although commodities have had a pullback, we think they have a real strong position in portfolios. >> why commodities if you're expecting recession? >> well, there's a hedge to the inflation. we expect inflation to stay around for quite some time. >> it sounds like if there were a rally, right, like a move to 4300, it would have to be dramatic for you to chase it, or maybe you wouldn't chase it at all? >> we position our client portfolios for long-term outperformance most of our clients are taxable investors. we think about the market with long-term positioning and we try very hard not to inflict short-term tax implications on our clients. >> if you one day say i'm going

to come in here and be bullish, what's the market going to be on that day how cheap would things have to get? >> i think not so much cheap but i think we'll be further along and inflation coming down. the market, you notice, priced in at the beginning for expected cuts it's down to expecting only one. we'll be closer to the fed pivoting the world will just -- the debt ceiling crisis will be averted there will be a lot of news. it's not just the price. >> are you guys games out worst case scenarios on the debt ceiling? >> i think you have to game out worst case scenarios neub neuberger's deal is we have will a deal, whether at the 11th hour, the 13th hour, we'll have a deal there will be a lot of volatility and a lot of negative news between now and then, but this is not going to be a crisis >> and i think the other thing you mentioned was private equity, which we -- is that a defensive play, just to stay out of the public markets? >> yeah. i mean, look, there's been a lot

of valuation pressure in the private markets. so, you're out of the volatility if you can afford the illiquidity and go direct, we think it's a great play. there's a lot of different forms of alternative investments someone can make now some liquid, some illiquid so you can get exposure the market, previous exposure, had such outperformance, we think long-term equity returns are back in line with historically averages of 7% to 8% forward looking the real place to find outperformance will be in the private markets. >> and no cash >> i mean, we're very short duration fixed income. we're going to use that for when we see an opportunity to go back into the equity markets. >> thanks, holly good to get an update. appreciate it. we've got a lot to talk about here holly newman kroft of neuberger berman. house financial services member waters, we'll talk about the debt ceiling impact coming

up. tomorrow don't miss our interview with cleveland fed president lowretta mester dow down 100 s&p stays positive thanks to nvidia what if you could make analyzing a big bank's data... no big deal? go on... well, what if you partner with ibm and red hat, use a hybrid cloud solution to connect data across multiple systems globally, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time... check. . ..to make quick decisions? check. aaaand check. that's the hybrid cloud solution ibm and a global bank created. what will you create? ibm. let's create.

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get a check on the cruise lines today. citi takes carnival to a buy on the back of strong travel demand they go from 10 to 14. many cruise lines now seeing occupancy at 100% but some returning passengers as promotional pricing in the fall has led to a surge in bookings there's a look at cruise lines a big piece in the journal today about overbooking the way airlines do and being offered rewards not to go on the vacation you planned and take one later on. >> it was a delayed jump start to the business, but it is happening. and i think back to that carnival quarter when we talked to josh weinstein.

europe markets set to close in a minute. overseas choppy trade highlighted by major gains in tech stocks. food and beverage lagging behind in the session the story abroad today has to be germany, officially in recession after two consecutive quarters of negative growth revising gdp downward for the first three months of the year here's your quote of the morning from germany's federal statistical office the reluctance of households to buy was apparent in a variety of areas. it's interesting to -- to juc juxtapose the german market with the german dax, which is at an all-time high, fueled by - >> by chips. >> yeah, some stories around technology and also around the idea that central banks are moving into more of a pause mode although we're rethinking that, right, as we get hot inflation data, especially in europe. >> by the way, even with this

revised now recession, it's not as deep as we were fearful of back when the ukrainian war began. >> no. and it's good. it's not all doom and gloom. i was talking with the ralph lauren ceo, he saw the recession numbers, but actually european luxury business has done quite well and remains resilient and not weaker not seeing the weakness in the lower income consumer, which is a little more on why they're cautious on the outlook. >> meantime, we continue to chop around around 4140 let's get a news update with pippa stevens. a rare shootingand stabbin attack in japan left three people dead, including two police officers. local police say they were called to a home for a report of a man stabbing a woman when officers responded, they say the man started shooting at them with what may have been a hunting rifle. the stabbing victim and two of the officers were shot dead. gun violence is rare in japan, which has some of the strictest gun laws in the world. super typhoon is now

barrelling towards the philippines and taiwan after hitting guam the storm brought hurricane-force winds to the territory and brought widespread power outages. no deaths have been reported. and fda approved paxlovid today. the pill is specifically advised for the treatment of mild to moderate cases in adults older than 50 or in people who suffer from certain high-risk medical conditions the fda first made the drug available in december 2021 under emergency use authorization. the latest decision means there is now extensive clinical data showing the drug is safe and effective. back to you. toll brothers trading at the 52-week high this morning. rb says it can go higher we'll talk about that next. cnbc celebrating asian american and pacific islander heritage this month, sharing stories of influential aapi

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let's get to some notes catching our attention first up is toll brothers. shares are rallying on the fiscal q2 results and rbc upgrade. the stock saying sentiment has been relatively negative given the company's exposure to high-end west coast. the ceo did join us earlier this morning and talked about it. >> this is not an inflation story. it's not something to be afraid of when i think the fed is figuring out what to do. this is a story about 15 years of underbuilding in this country. there's a huge supply/demand imbalance. on top of that, we have

incredible demographics. we took a pause. when rates went from 3 to 7 last may, from the end of '22, we didn't sell very many homes as the market digested new rates and the higher prices that came through covid. january hits, the spring selling season, and the buyers come back out. they've absorbed the new rate. they don't love it i don't love it. >> the average 30-year fixed mortgage did hit 7% this week. our own diana olick joins us this morning to talk about it. fascinating to hear him sort of discuss this generational runway they have. and then compare that to the multiple, which still trades at a discount to the market >> yeah. it doesn't make a whole lot of sense, does it, when we think about. but he's completely right when he talks about the supply/demand story. toll brothers on the luxury end of the market, it has an advantage because its buyers coming in aren't entirely mortgage dependent if they are, they can perhaps swallow a little more of the higher rates than entry-level

buyers he also said they're seeing a fair amount of entry-level buyers when you talk about the markets discounting toll, saying they have this exposure to california, the inventory in california is just awful i was there earlier this week. i saw a teardown in venice on a tiny lot being listed for $2.5 million. so, you know, toll really does fit in nicely in there because they have that much product. >> so, how does it get fixed, diana? mortgage rates continue to climb. if that's not going to do it, what will? >> well, what will is more construction, but he talked about that as well you know, there's this long lag time of three to six years getting your land permitted, et cetera, in certain places. it's not so easy to just start building so many homes builders are starting to do more spec work, that's building the home before it's sold to get more on the market there is more inventory on the home build side. there are headwinds. i want to note something that was written after the pending

home report we got that showed sales were flat across the nation he said 40% home prices on top of 7% mortgage rates is its own headwind and toll brothers can do just fine, as i'm sure many of their customers pay cash. that does not reflect a broad, healthy housing market it's just their dynamic. he's separating toll from the rest of the market >> we talk a lot about the consumer and their excess savings and how fast is it going to run down. but there was a discussion earlier in the year about the untapped equity, home equity, and whether the heloc market would give the consumer yet another chapter of consumption i wonder if you think we've even gotten to that yet. >> there's record amounts of home equity right now because of the 40% jump in home prices pre-pandemic levels. homeowners are not tapping it quite as much as you might think they are heloc rates are very high.

so, nobody's going to give up their current mortgage and get a cash out refi because then they're trading 3% for 7%. then they go into the heloc market and those rates are far higher and not always fixed. we're seeing a little, but not as much as you might think. >> interesting it's fascinating what's happened with housing the last couple of years. thanks. coming up next, let's turn to disney's dtc aspirations. they say there's more for the bulls than the bears they note near-term headwinds include espn, the hulu bid may create an overhang on the stock and make it range bound. citi does take the other side. says the shift from linear to dtc could expand the multiple at about $20 a share in value julia boorstin joins us as disney shares have cracked below 90, julia. >> it's so interesting because there's so much consistent enthusiasm around disney's parks

business and they have this unusual ip there is this question about the streaming business, right? and how strong is it, how much is it going to be able to grow and also this question around cost and profitability another note out today from atlantic points out the obvious fact that if espn's penetration halves as it switches to direct-to-consumer, its price needs to double. there is this question of when we will see espn go direct-to-consumer as you know, carl, sports are really seen as the glue holding the bundle together. we've seen the linear tv bundle drop to about 55% of the population, down to dramatically over the past decade that there is this question of sort of the stability of that linear business while disney is trying to build this new business. and the awkwardness of that transition i really think that's what all of these analysts are concerned about, even the ones that -- key has an overweight rating on the

stock. they just lowered their price targets. >> did desantis, he launched his presidential bid any fallout for disney >> it's interesting because that has been a side show here. it's not what the core issue that investors and analysts are so concerned about, which is this transition from the shrinking linear tv business to the potential for growth in the streaming business and then a reassessment of that streaming business from a couple years ago being all about growth in subscribers to now being about profitability. we'll see how the desantis thing will play out in the courts. it's going to be a long legal battle ultimately, disney's park business, demand for the parks business continues to be strong, regardless of whatever else is happening with the economy. >> thank you good perspective. the surge in nvidia continues to be the story of the morning. taking broader tech, chips and other ai-exposed names up with it along with suppliers, taiwan semi, and others are getting a boost. we'll break down that trade

straight ahead. a programming note tune in tonight for a special encore presentation of faber's elon musk interview. 8:00 p.m. eastern time right here on cnbc good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.

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deirdre bosa with our "techcheck." pretty historic day. >> it is nvidia is looking extremely pricey there may be other ways to play this ai boom nvidia is a fabulous semiconductor company, that means it designs a chip but it doesn't actually manufacture them sigh wan semi, that is the company on the other side of that dynamic that makes nvidia's advanced ai chips. all working to design their own artificial intelligence semiconductors its adrs are up 10%, more than that today investors are looking at it as the next beneficiary but its valuation is a whole lot more reasonable forward pe 20 times, nvidia, 828. arm is looking to ipo this year, unlike nvidia which sells

finished chips, arm helps companies bring the chip inhouse, ie, own more of the process and potentially cut costs by cutting out the middle man, aka, nvidia apple, amazon, meta, google, microsoft, they're all working on this and doing so with arm. for that reason it's known as the switzerland of the chip industry may be helpful to zoom out look at the potential generative ai cycle as a whole. morgan stanley looked at mobile internet as a case study in this chart, semis were the first to benefit and recognized in the market. infrastructure was next, think apple and samsung, the companies making smartphones, and then you have the software and services, the gateways like search so far we are extremely early in the generative ai cycle. chips are still the picks and shovels. markets are already betting on the next big tech to come. it's going to be the winners of the last cycle

guys, there could be others. even take a snowflake. it's plunging on disappointing guidance but they are making moves to capture the infrastructure part of the cycle. as we saw in that chart, the recognition of those companies has come later in other cycles, other technological platform shifts. >> we're still in the picks and shovels phase. you talking about the valuation of tsc we had an analyst who raised the target on nvidia and saying nvidia is cheaper than where it was yesterday. we decided to chart it where you can see the stock price. you put that up against the multiple, the forward pe, and it is just because of the tremendous earnings power that we've seen and the surprise boost. >> earnings potential. >> yeah. i guess it's just faster and larger than what the whole market was expecting >> yeah. really it's the only game in town at the moment

but that could all shift in the years ahead, right as i mentioned, a lot of these companies, the big tech companies, hyperscalers are looking at making their own artificial intelligence chips. it's mentioned sometimes when you look at the risk factors for nvidia because it is seen as so far off. nvidia, is so far ahead. maybe that's something the bears, the few bears are thinking about is it always going to dominate, that's why some people think it is pricey. when you go to a tsmc or arm, they are the switzerlands, they don't have to bet on any single one company, any one shift they are sort of spread out. >> there's the multiple, karlg. >> when you guide revenue 50% above the street but your stock's up only 30%, you can see how that math works. i'm glad you brought up the morgan stanley point they raised two points one -- nvidia is usually conservative on upward revisions, historically. the other argument they make is

the spend on ai is happening so quickly, it is beginning to crowd out spending on traditional servers and legacy tech >> right and i like that you bring that up, carl, because something i was talking about this morning, how do the hyperscalers fit into this we talk about this narrative for much of this year, but revenue slowing down at aws, at amazon, for microsoft cloud, for google cloud. you see this back drop that is harder for data centers. i think nvidia benefits anyway even if revenue is slowing down because they need to upgrade their infrastructure another thing this year has been increasing capital expenditures or capex at these companies. either way you look at it, nvidia benefits, even if you think enterprise spending in the cloud is going to slow down. you're still getting the shift to artificial intelligence and the hyperscalers are going to need to upgrade their equipment. it's kind of a perfect storm for this company, which is why you see it nearing $1 trillion, up

30% after this incredible run already this year. >> deirdre bosa on nvidia. we all are today it's driving the entire market up more than 25% 5% now from being $1 trillion company. ranking member of the house financial services committee maxine waters with us next. we're watching shares of ralph lawyeren the ceo telling me this morning after the back of a big earnings beat, the core consumer renanz resilient. that's the luxury consumer the company is seeing its strongest growth in full price items right now. that consumers are increasingly moving into what they do well, which is elevated, put-together looks, oxford shirts, sweaters, jackets. eps coming in more than 50% more than forecast. revenue projected to grow in the low single digits. he says the caution is on the low-end consumer

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talks are ongoing in washington, d.c. to try to avert defaulting on u.s. debt, which would be the first time ever ahead of that june 1st deadline set by the treasury. one week from now, we're told talks are going well, but the deal remains elusive we'll talk to representative maxine waters in just a moment

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sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. house speaker kevin mccarthy saying this morning that progress has been made on the debt ceiling but congress is still set to head home for the holidays fitch, one of the big three, a rating watch negative on their

aaa credit rating for the u.s. writing while it expects a resolution in time that the risks have risen and the government may miss payments on some of its obligations, and dbrs morningstar warning even if the two sides do end up reaching a deal it may need to lower its rating if we can expect repeated standoffs in the future. first on cnbc california congresswoman ranking member maxine waters. it's good to have you back, congresswoman. what are you hearing about the status of the negotiations right now? >> well, i'm delighted that you're carrying the message of what's going on here we are going to be in a meeting in a matter of minutes with all of our caucus. everybody is going to come together, and we're going to get the latest update on the negotiation. we're going to understand better what is being insisted upon by the republicans, particularly as they hold us hostage for the

cuts that they have indicated that they want one thing for sure, it is going to be very difficult to agree to some of those cuts, because they're much to harmful to too many people in our society for example, the veterans and the seniors. i mean, we have people who depend on food stamps, for example. and so they're talking about deep cuts there. and so we're going to get these updates. we're going to evaluate them and we're going to not only learn where they are at this point in the negotiation and find out whether or not they're near a resolution or whether or not it has been too difficult to reach and they're going to have to continue to fight. one thing for sure, i believe that in the final analysis, even if it's up to the last minute, we're going to be able to raise the debt limit they -- neither side -- can

afford to not raise the debt limit and to use our aaa credit rating >> i hope you're right how can you guys -- how can you go on recess, on vacation today, if there's no deal >> well, the republicans run the house, and they're the ones that set the schedule and they're the ones who determine what days we work or what days we have the support systems to work and all of that, and so it's their decision to make i know we do have some democrats who are going to remain on the floor. there will probably be a number of speeches, one minutes, that will be made i don't know how long they will be able to stay on the floor, but i do know we're concerned about it we're concerned that the break is taking place, and we're going to see what we can do to get the message out. >> soyou're looking at staying >> i beg your pardon >> you're looking at staying for the weekend if you have to >> well, i don't know whether or not that's in the making, but we

do have some who are talking about staying, and i know that some will stay on the floor today for quite a long time after the floor shuts down, i do believe, and then some decisions will be made whether or not the republicans will be opening up the house for us to be able to continue or whether or not the negotiators will just continue and the others willgo home a lot of decisions have to be made >> congresswoman, reuters sources now saying that the white house and the gop proposal now differ by less than $70 billion on some of the discretionary spending i wonder if you think that is in the ballpark to where we can start talking about timing on legislative text rather than an agreement in principle to begin with >> well, actually, i don't deal with the large numbers i deal with the specifics. what are you talking about what are you agreeing on that will be cut? what is it you're disagreeing

on and so when i take a look at whether or not it's food stamps or whether or not it's veterans, i'll know better how i feel about it, and i'm sure some of the other members will be looking at the specifics of any of that in negotiations. >> are you satisfied with how the white house has been conducting these negotiations? so far there are murmurs the house democrats are worried that the white house may be willing to compromise too much with the republicans and giving them too much power on this negotiation >> well, i don't think so because the negotiations have been going on for weeks now, and the president has held very firm and said he would not be blackmailed into reaching an agreement that will be harmful, that would harm this country and so i think he's done a good job in negotiating hard, not giving in easily, and looking out for the welfare of all the people in this country if, in

fact, we don't reach the point where we can raise that debt limit. >> but you do agree, don't you, it might be a good time to look at cutting spending. i know the specifics matter and the programs matter, congresswoman, but we're at a time the economy is still running hot, we have an inflation problem. we've had a massive infusion of stimulus monetary policy is tightening. shouldn't fiscal spending be reined in as well? >> i look at each of those issues i'm not easily one to give the republicans any old cuts that they want. as a matter of fact, mccarthy, i don't think, is so much in charge, and the ones that are in charge are basically those ones that voted for him after that 15th vote, and they're the most radical ones, they're the ones that it's harder to get along with they're the ones who want to make deep cuts, for example, in food stamps, and they don't care about the veterans they claim to

care so much about and so i have to look very closely as other members are going to have to look very closely at what we're talking about. there may be some room for compromise, but it certainly won't be easy to give away and to agree to any cuts that we really do feel are going to be harmful to our families and to the people who desperately need the support of this government >> keep us posted. you're going to be meeting in a few moments with your caucus congresswoman, thank you very much i hope you can figure something out over there maxine waters. >> we're certainly going to work on it. thank you for carrying the message. >> thank you for coming on >> you're welcome. we have an s&p 500 that is higher because of nvidia and a few other chip names like amd and other names rallying alongside microsoft, a lot of the ai plays the s&p is up half a percent we're seeing a lot negative breadth.

>> some degradation midsection oil back below 72 and, of course, we've been all over the map on energy after those comments from the saudi energy minister warning the shorts and the speculators they may be. the treasury secretary in front of congresswoman waters' committee. >> i hope they can get a deal, for everyone's sake, but also investors, too, with the one-month yield now at a record high >> let's get to the judge. carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center this hour incredible, nvidia the stock pacing for its best day in years closing in on a trillion dollars in market cap shareholders josh brown, bryn talkington, jason snipe are with us today to discuss where shares can really go from here. jim lebenthal along as well. i should also let you know in a matter of moments brad gerstner will join us, too, to talk about the stunning move, the incredible trade he has made, an