and reports that elon musk's private jet lands in china this morning. he is expected to meet officials and visit the tesla shanghai plant. today is the day that elizabeth holmes reports to prison for the 30-y-year s sentence it is tuesday, may 30th. "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 joe kernen andrew is off today. >> it is us. we're here. >> here we are it is tuesday. >> feels like a monday >> four-day week

>> they did it >> they did it reached a deal we will see if it gets voted on. >> they have to do it. nobody -- i was proud that president biden was conciliatory about the whole thing. he didn't seem mad >> both sides, i think, have to sell this at this point. they need votes. >> the perfect deal in terms of the far left heads explodiexploding. it's the perfect deal. it must be perfect >> there's a few things that can happen rules committee and we talk to kayla in a moment about this it has to be voted on in the house where they pick up 70 or 100 votes from the democrats depending on how much of the republicans say no it has to make its way through the senate where mike lee and lindsey graham raising questions.

we'll see. >> you don't need one party or the other? >> no, you don't >> right >> there's a center of both parties. both parties are far apart on a lot of things. the diagram got bigger >> if you look at futures. dow futures indicated up by 80 points dow was down last week by 1% for the week s&p is indicated up by 23.5 points s&p was up .30%. the nasdaq was the big winner. nasdaq last week up 2.5% this morning, indicated up 163 points in the futures. treasury yields. you saw a narrowing of the spread of the 2/10 more than 70 points. the 10-year treasury at 3.72%. the 2-year treasury is 4.512%.

and the short-term treasury. one-month at 5.804 two-month at 5.04. one-year at 5.299. the top story is the debt ceiling in washington. for the latest and path on the vote in congress, we bring in kayla tausche. kayla, what is the progress expected to be or the vote tomorrow starting in the house potentially? >> reporter: they are working behind-the-scenes, becky after biden and mccarthy brokered the deal for two years in exchange for lower spending levels. they are looking to raise support before the june 5th deadline the agreement would see flat spending next year and cap growth at 1% in 2025 military spending would rise 3% this year. $21 billion reallocated from the irs to elsewhere

food stamp recipients need to work until age 54. those are all stepdowns from what president biden said represented a kpcompromise. >> that means no one got everything they want >> reporter: now comes the hard part getting lawmakers on board with each party's base up if arms, republicans have committed 50 votes and democrats need 70. some progressives will vote for it, but others say democrats have an earful for the white house. >> i expect to have to hold the phone out here based on what we hear from the progressive members. it is far from over the finish line yet and if it doesn't go over the finish line, we will see the market reaction none of us want to see >> reporter: the bill must overcome gop opposition on the house rules committee before vote tomorrow. some in the senate vowed to hold

up the process as you mentioned, becky, that was before the contents were made public. they are trying to shore up the votes to move swiftly through each chamber >> kayla, i heard you saying they need to pick up at least 70 votes in the house i heard greg say he heard closer to 100 votes is there any expectation they will have a problem or is that an issue of whatever the number is, they will round them up? >> reporter: the republicans in the house was projected 150 votes. that was with the opposition from the freedom caucus that has been vocal since the beginning of the talks anything less than the bill they passed the end of april would essentially be a non starter for them this is essentially the republicans assuming the freedom caucus does not support this they are pledging 150 votes.

70 votes from the democrats feels doable it depends on how much opposition there is behind-the-scenes. there are many lawmakers on the left who will not vote for it and said it represents accarthy nothing in it for democrats. whether they can deliver 70 is close. that is what the white house is working on now >> kayla, looking at the republican caucus, it has come a long way since 15 votes. you know, there are times that he is in a pretty good position. i know there are five guys that could all ask since it takes one to ask to remove him as speaker. is there anychance that happens? that would go nowhere, wouldn't

it >> reporter: it is hard to know exact ly what would cause the member to remove him and that process and if this bill would trigger that that is one of the reasons why mccarthy has been holding so fast to the principles that he pledged to his conference during the speaker fight. for instance, having 72 full hours reading the bill before voting on it he could have chosen to waive that pledge and more it more quickly. one reason he is holding to that is because he promised that during the speaker fight he promised he would not put anything on the vote for the floor without unanimous support from the rules committee it has nine republicans and four democrats. two suggested they would oppose the bill does he choose to put it up for a vote if there is opposition on the rules committee? that is something he pledged

during the speaker fight would they see that as going back on the promises he is still working to show republicans that he is the right speaker for them and he can hold fast to some of the things he promised and the process is going to be a clear indication of that. >> i have seen grudgingly outlets say this is a big deal for the speaker to have done this it is a win and extracted things from the president we didn't think was possible some of these republicans, i don't know, you know the guys i'm talking about -- guys and gals do they see it -- it has been a while since they won anything. is this a win? should they take the win or are there still guys who never voted for any debt ceiling increase ever and never vote for it those guys will always be around there are not enough here for them to really be throwing a

party. don't you think they grudgingly say yeah, let's take the win and move on? >> reporter: you are right there will always be some republicans who will never vote for a debt ceiling increase. thomas massie of kentucky has suggested maybe we should default. maybe that is a good thing for the country. you will always have those of the itmembers. the proposal passed at the end of april was reflective of priorities it would not have gone anywhere in the senate. that made the deal a non starter. something that is viewed closely to the starting points in the bill it meets the democrats, i would not say halfway, but can get a vote in the senate perhaps he can spin that as a win to them. those are conversations

happening behind-the-scenes as we speak. >> mcconnell is important, obviously. he is working behind-the-scenes. becky, you want to thank kayla >> put us in triples >> can we both express our gratitude? kayla, thank you. >> i'm more sincere. >> thanks, i appreciate it >> we'll check in with you later. this is a moving target. >> sincere, but not overtly. sincere enough i'm sincere. are there grades of sincerity? >> sure. are there grades of everything >> on a scale of 10? >> i wasn't saying that. >> on a scale of 1 to 10 >> i do appreciate kayla tausche. >> i'm at least a 7. time for the squawk planner. on the data front, we get shiller home prices at 9:00 a.m.

thursday, jobless claims and adp. again? friday is the employment report. i can take a week off. >> rip van winkle. >> hp reports after the closing bell salesforce and nordstrom report tomorrow afternoon we hear from lululemon and macy's and broadcomm and dollar general. coming up, the reaction to the debt ceiling deal in washington futures are up a little bit. the s&p is above 4,200 i don't know about those people who think we're going back to 3,200. something hbad has to happen. as we go to break, look at shares of nvidia is that $1 trillion? will it hit it today >> very close. >> areyou are watching "squawk x

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joanne feeney. joanne, i'll start with you in terms of the s&p or whatever you want to call the stock market. it held at 4,200 do you expect it to be a major impetus to go higher now it looks like we are getting a deal >> joe, there are two stock markets out there. one is the super seven stocks that really have driven the increase of the market year to date apple, microsoft, nvidia, et cetera they have been responsible for virtually all of the increase in the 157s&p 500. the rest is barely up .3%. that is telling us something about how investors feel about the risks. recession risk, inflation. that is still top of mind.

the debt ceiling issue has been in the news and caused concerns, but the recession risk is more prominent and continue to be as we get through the bumpy week seeing how the votes play out in the news it will be a question of the probability of recession and do we get another rate hike and how long will rates stay high? that will drive enthusiasm for the market we expect given that recessions are temporary, even if we get one, investors will eventually come to embrace the stocks that barely moved a lot of them are at attractive valuations. >> that would be my question when you have a very narrow advance and the breadth isn't great, sometimes that is a negative signal. in your case, maybe the market catches up with the super seven. the super seven don't come down to meet the market, maybe the market comes up or meets them in

the middle above the 4,200 on the s&p >> it is hard to know what the overall index will do. we don't invest in the index we like to be selective about the stocks we buy for clients. we own 40 or 50 stocks in a client portfolio it is helpful to pick and choose the real value the super seven stocks show earnings catch up to the valuations over the long haul. these are stocks that have seen a step change in the future earnings profile which is why they rallied so hard on the opportunities presented by a.i the rest of the market is more trading in line with the recession risks that everybody is going to continue to talk about after the debt ceiling gets resolved. >> victoria, we have been obsessing about the debt ceiling. you know, when we do get through this, there will be a jobs number that will be stronger than people want

the fed, at this point, that pause we thought we could count on more and more now hearing o overtures, oh, yeah. we are back to worrying if the fed is going back above 5% >> back to regularly scheduled programming with the fed you saw rate increases 60% will get a rate hike that is up from 13% a week ago the hot data print is making traders nervous that the pause is not a given thing now we feel the debt ceiling is likely to get through, there will be rumbling it is a consensus deal they are targeting the middle the. both outsides will yell about it senate may be dicey. it is a solid middle ground bill that will get done before the 5th. we have to get the house through on wednesday we go back to data watching. we are almost through earnings

we focus on unemployment the pce numbers and last week made you check for a pause we have the debate is the lag enough? will they want to see how this tightening of the banks and tightening of credit weighed on the economy? it puts them in a pickle i don't think i want to be fed chair no matter how much you paid me. you always get it wrong. >> all right i have been out for a while. i'm in a good mood i haven't been here. i would think if you were going to normalize rates from these ridiculous levels and the economy continued to do pretty well -- i don't know if it is growing way too fast or the labor market and wage pressure are that great wouldn't this be the goldilocks scenario you are raising rates and we orchestrate a soft

landing? why can't i look at this that way? why is this not a bad thing that the economy is hanging in there? >> you can nobody is rooting for economic demise to be an investor, you have to be an internal optimist. that's what drives things forward. generally speaking, goldilocks is still seeing it is too hot. you have could wonder if you have gone too far. the data hasn't shown that he is in the pickle of he knows the lag effect and housing is iffy you have seen the major things unemployment hasn't budged spending remain strong earnings remain strong you see the banking crisis really be very, very contained and not necessarily continue to have contagion there is a lot of pressure to get this right some of the things he is doing now is like steering an aircraft carrier. you will not know the effect because it takes long to move one direction or the other i feel sorry they heare in the

tough spot it is not goldilocks on inflation. i call it the elite eight. beyond the magnificent seven >> joanne, shouldn't the inflation numbers sort of takeover i would like to think labor numbers -- we don't want to go to 5%. is there any way to stay at full employment and inflation continues to moderate? would that happen? that would be a pretty good scenario >> joe, that would be nice, wouldn't it? it is hard to know it is a really tough situation what is changing within the u.s. economy is the shift from a lot of manufacturing that took place during the pandemic and immediate aftermath over to services that reallocation of labor is

challenging and slow and bumpy we don't see in history cases where we have driven down inflation as much as it needs to go here without getting some increase in unemployment whether we get severe increase in unemployment that would be disruptive that would cause massive amounts of people to lose their jobs and curtail consumer spending, that remains an open question and looks at this point doubtful given how many firms are hoarding labor because they worked so hard to get people in seats they needed to fill it is hard to see impetus for the decline in potential for the economy. that is what the fed has to consider as it needs to get inflation under control. it is still an open question the fed will watch that data coming out this week and next before they make their decision. >> thank you, joanne feeney and

victoria greene. thank you, both. when we come back, making a pl splash at the box office "the little mermaid's" weekend haul. we talk to dennis tajer over the latest and what to expect at the airport. "squawk box" will be right back. you need more than technology. you need cdw who can help transform your organization with built for performance lenovo thinkpads. pre-configured for management flexibility and equipped with the intel evo platform. responsive collaboration tools give your team effortless connectivity to stay focused wherever they work. fetch. lenovo makes seamless productivity possible. cdw makes it powerful.

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elon musk arrived in china this morning for the first visit there in three years after a meeting with musk, the foreign minister said the country will promote a better international business

environment for enterprises. musk is expected to vice out the shanghai plant tesla shares up 2.9% jamie dimon is in shanghai as well for the first time with an in-person jpmorgan chase and china summit first since 2019 i wasn't going to visit during covid. >> exactly >> the way they -- >> you have to engage your enemies. frenemies. >> big businesses. >> you remember sebastian in a live action "little mermaid? >> cgi >> my favorite character ♪ under the sea ♪ >> it would be hard. they did it. disney's live action remake of "the little mermaid" brought in

$118 million in north america ticket sales fifth best memorial day weekend opening of all time. the movie brought in $186 million internationally. every time we see a successful opening and suddenly i hope we have -- i like theaters. i like -- >> imax. >> the idea of opening and streaming at the same time zaslav's got that right. >> it is a dark screen i thought if you kept talking. >> who plays the bad ursula? >> the witch >> ursula in one and her sister in the other >> you saw that one, too wow. >> yeah. yeah you didn't >> i did i know exactly who she is. she was the next witch >> the voiceovers were good.

coming up, we will talk about the odds of the debt ceiling passing in congress. jake sherman from punchbowl is joining us next. later, we talk markets with mohamed el-eri ael-erian "squawk box" is coming right back >> announcer: "executive edge" is sponsored by at&t business. at&t 5g is fast, secure and reliable the reless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. what if buildings could tell you how they could be more efficient? i'm listening. well, with ibm, you can use software to help you connect and analyze data—

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. we are in the green, especially after last week with nvidia. 4,200 and maybe adding to that on the s&p that's the upper end we haven't been able to get through we got through 4,300 and a lot of strategists would have to revisit 3,600 tests. some are still down at 3,200 guys we had on were looking at me stupid. are we really going back

remember >> i do remember i know who you are talking about. >> we never forget. >> i do. you're an elephant you never forget the nasdaq -- you know what is amazing is the nasdaq. after nvidia last week it is off to the races again up 2.5%. it is indicated up 160 points. >> a.i. is the holy grail. >> we had bradley on last week he brought up the point that not all of the companies are going to be successful with a.i. just talking about we could have winners in here. he thinks it is mania to see all stocks lifted. >> we have seen this movie before it sounds like 1998 or 1999. a couple of them. >> choose wisely >> pets.com. maybe not. president biden and speaker mccarthy come to a deal to raise

the debt limit for two years joining us is jake sherman he is punchbowl news founder 72 hours to read this when you see it is a 99-page bill everything refers back to something else and you have to find other legislation and you have to put in the pieces. i understand it. it will take time to work through all of this. where is the whip count? how are they doing >> it is an interesting vote it will be an interesting vote it has to be carried by 150 republicans. the rest democrats 70 house democrats need to get this through mccarthy promised in the 15-round vote to get speaker that he would give lawmakers 72 hours to read bills. this is the contention people jam through bills and they don't know what is in them.

it is something mccarthy had to do two years of budget caps with additional four years if republicans keep majority. the initial analysis is the bill, if kept for six years, would save $2.1 the trillion republicans are touting this as a successful control spending. becky, neither side got what they wanted. republicans got a little bit biden was able to protect his legislative wins with the inflation reduction act and other key priorities this bill will come up for a vote tomorrow most likely after the market closes. it looks like it should pass and joe biden needs to lean in and get skeptical democrats to vote for this bill because there are a lot. >> even though moving through the rules committee is tricky.

two and potentially three republicans will not vote for it there. >> this is the other thing that came back and bit kevin mccarthy he put conservatives on the rules committee. three of them, massey and chip roy and norman expressed skepticism we expect tom massey signalled he will vote for it. he will not hold up legislation. an important meeting today at 3:00 conservatives are not happy. this is divided government, becky. this is not a deal they will shout about. it is a deal both parties are upset over >> just watching it, jake, i was thinking it is not ironic, but to see the president convincing some of the colleagues in the

democratic party to go along with the mccarthy compromise bill is good it is old biden. it is the biden i was watching when he was in the senate. the dealmaking biden i haven't seen that side of him recently it will drive lefties crazy. it will drive the progressives crazy. they are already mad remember tipp o'neill. >> as recently as boehner and nancy pelosi this is not unusual to have a bipartisan deal. i got a lot of flack for saying this last time this is the issue the last couple years biden will have to convince because it is the old biden to convince the party that in

divided government and he protected the hard fought wins the republicans who control the house, they won the election, need to get something in return for lifting the debt ceiling that is how this played out. the chuck schumer and joe biden said they would not negotiate over the debt limit. that was an unsustainable proposition. it is interesting. >> i hope they get -- i hope he see what is maybe republicans have to deal with on the far left oh, my god who are these people i have been appeasing for two years and giving them everything they want and they will turn on me maybe that moves him away from the faction. >> this is not a monumental piece of legislation he is not asking them to swallow that much. permitting reform that democrats don't like there are changes to work requirements for social safety

nets we are not talking swallowing a bad bill for democrats this is a modest bill which controls spending. biden wanted to control spending all in all, a modest bill. it should get through congress i want to give you one warning the debt ceiling needs to be lifted by june 5th there is a chance it drags on. the senate could grind to a halt based on the whims of one senator. >> mike lee and lindsey graham said they don't like it. they will do what they can to slow down if not stop it if that happens, what could the treasury do? >> that's a very good question for the first time set a hard deadline june 5th before, they were saying as early as june 1st. this is the hard deadline. i don't know what they can do. they are opaque about what they can and cannot do. chuck schumer will get this

through the senate if they have the votes. he has to jump through hurdles which he has the ability to do mike lee and lindsay graham can slow it. if it is in the senate and you see a bill is going to pass and slowing it doesn't do much it delays the inevitable >> jake, one question. you said biden is happy because he was able to preserve, the most part, the legislative wins. why didn't -- i know this is looking back, but why didn't they try to protect that by doing something about the debt ceiling when they controlled the house? >> it was a flub, becky. they should have lifted the debt ceiling in december. they should have tried harder to lift the debt ceiling in december most democrats say that now. if they lifted the debt ceiling in december, they would not have this fight there was reporting that manchin and krysten sinema didn't want to raise the debt ceiling in

december i don't know if they could have been moved or swayed in one direction or the other they did a lot in december before they had to give up the house. this should have been an all incentives point and something they could have done >> jake, thank you i guess we watch and wait and see what happens >> thanks, becky that's it. >> if you are putting odds on this, what would you say 10% chance it doesn't get through? >> less than that. less than that i think when two party leaders strike a deal and mccarthy can provide the votes, i think that is high. i think it is a good chance it gets through congress is not predictpredictae it is a strange institution. when things go in one direction, they can get out of hand quickly. i would say there is a pretty good chance this gets through. >> thank you coming up, elizabeth holmes set to report to prison today.

that will ruin your day. whoa how do you do that pack a bag >> i don't know. >> get your affairs in order details after the break. reminder, get the best of squawk pod follow squawk pod on your favorite podcast app and listen any time we'll be right back. narrator: the man with the troublesome hemorrhoid enters the room. phil: excuse me? hillary: that wasn't me. narrator: said hillary, who's only taken 347 steps today. hillary: i cycled here.

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welcome back u.s. equity futures in the green. the nasdaq out performing again this morning as we pointed out, the s&p closed at 4,200 on friday. add 24 on to that. we would be above 4,200 which is a tough area to get through for months and months and quarters theranos founder elizabeth holmes is to report to prison today. she appealed the conviction, but the judge ruled the appeal is unlikely to succeed. she was ordered to report by 2:00 p.m. today. the bureau of prisons hasn't stated which facility she is assigned, but expected to be assigned to a minimum security in bryan, texas.

>> we spoke off camera about preparing yourself you took the right turn when you brought up thinking about the sacrifices >> i can't on memorial day, i can't on social media, someone has been circulating dozens and dozens and dozens of guys from the vietnam war and korean war the pictures of the 21-year-old kids gave everything for >> a cause greater than themselves i was looking at pictures from d-day yesterday. >> the higgins boat. we're so spoiled and soft. i don't know i was hoping that age would mature me into a man that doesn't come. i can't imagine. we get inconvenienced for an

afternoon and we're grousing these guys get a pa-- i get a paper cut and cry. >> you give the ultimate sacrifice. >> it's amazing. when we come back, dennis tajer from the pilots union will join us for the summer season. you can watch us live any time on the cnbc app we'll be right back. the first time your sales reached 100k with godaddy was also the first time your profits left you speechless. at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com

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welcome back, everybody if that aaa estimates 42 million

travelers traveled, and transportation secretary, pete buttigieg said the weekend would be a test for the system let's bring in our guest, an airline pilot and the spokesmen for the union that represents pilots i didn't hear any problems >> noted, it was under clear skies, so we liked what we saw all the airlines that were canceled over the holiday weekend, of those flights, only four of them were canceled, and not because of any pilot issues.

yeah, we are competitors and we like winning delta did well, and jetblue had delays that continued through the memorial day weekend we did not see any of the cancelations under clear skies like we used to. we can't get cocky, because we won but won the series using a baseball metaphor, but mother nature has not come up to bat yet. there are four carriers that carry 80% of the u.s. traffic, and two of those carriers struck deals with their pilots. we just established an agreement in principle with our company, and delta was the other and those are the two strong performers out there this year >> we are looking at the capacity aspirations really

growin growing growing expaw denytially seems like a tricky plan to pull off, just given the constriction we have when it comes to the airports, and making sure the flights go off on time and how we manage all that in the air. what do you think when you hear goals like that? >> thank you for asking scott kirby about that, and he said we are looking at doubling passenger count over the next few years and then clarified it when you enquired what he meant by that. it's upticking it during the heaviest part of travel times. bottom line is there's travel

demand up there, and we have to make sure we are out there supplying the closing of the deal, the flying of the airplane, and that will be great news if it happens what we can do is utilize the assets we have scott kirby says he has 10,000 more pilots -- it's a confession of under utilizing the assets you have we had 30 to 50 mainland aircraft not being flown in the peak, because the ceo says we don't have the people to do it, specifically pilots. we have a deal and our membership still have to vote on that, and it will ultimately lead to better ticket prices as a consumer i am one of them and just bought

tickets for my daughter so i get it >> where do you see shortages or staffing issues or other potential roadblocks to beefing up to get people where they want to be? >> you can find a couple areas where there's a little shortage, but here's the new challenge we have unexperienced folks working in the industry. we just got through a very busy historic memorial day weekend of high performance and high demand, but it's under blue skies. scott kirby said this, and i want to bring this up, and they were talking about the legislative proposal of compensating passengers for delayed flights, and i don't

want my company to make a choice, safety over costs. he doesn't have to worry about that i speak for the pilots of american airlines, but as professional pilots, we are not thinking costs just step up your game and the government won't have to be involved, and we have a business deal and when you fall down on it they expect to be compensated in some way for it >> dennis, good talking to you >> thank you coming up, we will take you live to washington for the latest on the debt ceiling agreement and the odds it will pass congress. that's next as "squawk box" comes right back from the first-ever triple action sleep supplement. to daily digestive support. to more wellness solutions every day. get more with nature's bounty. - [soldier] take a look at this!

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know you, your passions, and the way you give back. so you can live your life. that's life well planned. good morning the race to get the bipartisan agreement to raise the debt ceiling across the finish line is in high gear. futures are higher on the news we will get a live report from washington ford, nvidia and others on the move in the premarket. we will tell you what you should be walking on the opening bell of wall street that's straight ahead. succession coming to a end

on the new streams in mass the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i am joe kernen along with becky quick. >> hello you missed the commercial break. >> you have been witnessing ursula singing show tunes from "little mermaid. how do you get your voice so deep >> unfortunate souls -- my

daughter loves that. >> we have the s&p up, and the nasdaq up and the dow jones up 53 treasuries let's take a quick look. they have been backing up in yield a little bit over the last week or so because, remember, we were under 4 and now we are back to 4.5 >> that happened last week yeah >> short rates -- >> still high. >> they are still high >> only have to do it for a month -- >> oh, wait a second they came down they were at 5.8 this morning, a little while ago, unless we had the wrong chart up >> we did see crypto, which was -- or bitcoin down

>> gold sold off -- >> yeah. >> it all has to do with the debt ceiling i don't know if the market ever believed it. >> i don't think so. in fact, you see a little new advancement in the futures today. if there had not been a deal i think you would have seen the other side of it, a big drop >> you bet the hard part -- i don't want to be too negative, but the hard part is now. >> you better start pivoting, brenner. >> i don't think so. i missed the nasdaq -- >> how much did you miss on the s&p? what is going to be happen for you to be right? >> a recession >> nobody has heard of that. >> certainly, it has not

happened yet and the chances of that happening -- >> by the time we are in one, that's the bottom. >> no, the market always bottoms after the recession starts >> 4,500 on the s&p -- >> no. >> we are just going to stay no matter what? >> no. if you look at the three months versus the ten-year, if you look at the decline -- >> save all this save all this. >> you can't ask questions and say never mind >> we will come back to that >> hold that thought >> you can try to defend what was a bad call and reaching a tentative deal on raising the debt ceiling, and kylah joins us. is jason right, is the hard part now? >> yeah, it's a two-year deal to

raise the debt ceiling and lower spending levels during that period of time and now both president biden and house speaker kevin mccarthy are racing to sell their respective parties on what they negotiated to pass it the agreement would cap growth at 1% in 2025, and military spending would be rising 3% this year, and sub to the cap next year and then food stamps or snap recipients would need to work until age 54 these are stepdowns from original republican proposals that president biden said represented a compromise >> the agreement represents a compromise which means nobody got everything they want, but that's the responsibility of gove governing. >> it's that argument that they will try and use to get

lawmakers onboard. republicans pledged about 150 votes towards the fiscal responsibility act, and democrats will need to deliver about 70 some progressives said they tkp don't like it but will vote for it grudgingly. others said they will have an earful -- >> i expect to have to hold the phone out to here when speaking to some of the progressive members, and if we don't see it happen we will see the kind of reaction none of us want to see. >> there's gop opposition in order to be able to advance to a vote tomorrow. some in the senate vowed to hold up the process and perhaps that leads the senate to delay a vote until over the weekend all of that was before the contents of the deal were made public it remains to be seen how quickly it can move now and whether any of the behind-the-scenes shoring up of support, becky, will work at

this stage >> okay. thank you very much. here to talk about what all this means for your markets and money, let's start with something we do agree on do you ever notice, the word progressive? does that lead to progress >> i don't know. >> i love that it's called progressive, but it leads to -- >> the government taking over every part of your life and that's not progress to me. >> we are up 16% from the october lows in your past -- in your storied career, you have ever -- you have ever been in a position where you start where your beliefs are shaken and you have

to finally throw in the towel? >> of course >> you don't perceive that happening? >> no, joe, i don't perceive that happening because the fundamentals win out, and as far as they are shaping up for a recession, i think the case is extremely compelling for the second half of this year going into next year again, this is the most widely anticipated recession of all-time i understand that. i have a lot of our clients say if this is the most widely anticipated recession of all-time, why is there going to be a bear market, and the market always bottoms after the recession starts we have had 12 or 13 years of k quantitative easing. we have seen v-shaped bottoms, and this is more of a traditional business cycle that

is driven by credit conditions and fed tightening and interest rates. there could be an event at the end of this, but so far -- >> the fed is not going to be able to stabilize things as they have in the past or come to the rescue, and that means this is different than what we have seen >> the fed -- for now, what would make it bullish is if the fed threw up its hands and said 4% inflation, 5% inflation, that's the best we will do and start buying treasuries, and then you buy the market with reckless abandon but the fed has given no indication it's going to do that they said we have our suicide vest on for 2%, and this is it i don't think that will be the case, and if they get to 3% they will stop tightening, and they may pause at the next meeting

but i also think the fed is not done by a long shot. >> if they were to do that, you say you would buy with both hands and to be bullish on the markets but not the economy -- >> of course not it would be terrible public policy in the same way 12 years of quantitative easing was terrible, and it was much better for wealthy people than the average person, and massive inflation on assets, and terrible allocations of capital. a lot of policies might be good for the markets but not great for the average person >> i would think that if we had to go 8% instead of 5, that might give you what you are looking for. do you think that is going to be that stubborn? >> no. >> what kind of horrible thing would happen you say it bottoms do you mean below 3600 >> no, we are using 200 bucks

for s&p operating earnings, and -- let's say you are in the same range as what you saw last year >> from 4200, that's a 20% drop. >> i think that's the risk >> the risk or the likely? >> i think it's probably more likely the risk, for me, and my call is that we go up to 4,500 or up to the old highs. i don't see the catalyst for that certainly a.i., i think one of the analyst on the street described it as a gold rush and i wouldn't stand in front of those stocks because there's going to be a bit of a gold rush in those stocks, but as we new york city the stocks are increasingly narrow. without those stocks the s&p would be down. if you own an index fund, you still get credit

but if you are doing that you are doing that to diversify risks and you are concentrating risks in a small section of stocks still, that's not really what the product was designed to do >> excellent point >> thank you >> good perspective, jason we shall see and we are still in the trading range, not clearly through 4200 by any stretch >> the other thing i would mention that i think is important, is right now the treasury department is in a situation where they will have to issue a lot more debt to fill up the treasury's general account. they whittled that down. one of the things i would watch is the yield curve and interest rates. there's a chance just on issuance alone interest rates start to creep up. >> they could spread it out over time >> they could issue bills as opposed to long-term interest rates, and that's going to be a

risk in some ways the treasury department will take liquidity out of the system as opposed to providing it >> thank you, jason. elizabeth holmes is heading to a prison in bryan, texas. people are mad at me because texas a&m, i think that's one -- it's maybe the most students -- there's a lot of students at texas a&m. it's a huge place. bryan borders that, and this all has to do with an 11-year sentence, jason. >> sounds like a feel-good story to me. they are throwing away the key on her >> you are happy about that? >> i am happy. why wouldn't you be happy? >> well, you are not happy, but it's a little justice -- >> not a lot of justice around here in new york city. i mean, you should see what i saw on the way down here

>> tell us >> i can't it's a family-friendly station, but let's just say it was revolting. at 6:15 in the morning >> yeah. >> tell us later a pause by the federal reserve is looking less likely because some bad things look less likely to happen. senior economics reporter, steve liesman, has more on this. what can you tell us >> this hoped for pause looks to be imperial, because things that looked negative, they are declining in probability that's they are looking better, a debt default would have stayed in the fed's hands, but looks like the ceiling will be lifted. pj morgan, less than they had

estimated. another area, the banking turmoil might have also stayed in the fed's rate-hiking hand, but deposits are still down from before silicon valley bank failed, but loans are up a bit but doesn't appear to be a massive credit pullback that will stop the fed from hiking. lots of hawkish fed rhetoric an if you look ahead it shows that futures are trading at 60% probability of a rate hike and mostly priced in through july. remember that gap was like 100 basis points, and now it's 16. wall street looking stronger,

and unemployment up a tick by 3% only one inflation report standing in the way of the fed and that june hike they could pause and hike it in july, but powell is the most neutral but the other folks seem to be hawkish to me. >> so in other words, good news is still bad news because it means they will have to keep hiking rates >> well, you know, it's interesting. i was thinking about this, if i had to make a trade, if you told me i could have the debt ceiling solved and not have a banking crisis and have strong job growth and trade that for another quarter point, i would do it. >> if inflation numbers are friendly, can they co-exists with strong labor numbers? could that cause the fed to pause even if we don't -- that's what i want to happen.

i don't want 5% unemployment, but i would like inflation to come down and keep a decent labor market, and that's not going to happen. >> no. i don't know if jason is gone, but many think you don't have a relationship between unemployment and inflation you can see you have a modest rise in the unemployment rate and bringing inflation back down because we talked about this last week, you have a decline in essentially the job openings and not in actual jobs >> thanks, steve >> thanks, steve >> could be okay could be okay, guys. >> one university has more students than texas a&m -- >> university of michigan -- >> university of central florida. ohio state is third. rutgers is top five. >> because if you combine the

camden and new york campuses >> where do we have to go? >> commercial, dummy when we come back, the debt ceiling across the finish line is in high gear, and we will tell you what president biden and speaker mccarthy have to do for their respective parties we are down by 17 points right now. we will continue to watch. the w dowas off by about 1% last week "squawk box" will be right back.

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president joe biden and house speaker, kevin mccarthy, struck a deal over the holiday weekend to suspend the trillion-dollar debt ceiling until 2025 joining us to talk about this deal is chris kruger he is from a washington research group. thanks for being here. we know this could be messy but you are assuming it will get passed before june 5th, correct? >> correct that's our base case that this will be handled by next monday, which is june 5th. the first test case will be this evening with the house rules committee. you do have three of the nine republicans on the committee are members of the freedom caucus, and two of them will be opposing it in committee.

sounds like sometime this evening around 7:00, 8:00, the rule will be passed out of the committee and there will be a vote tomorrow after market hours in the house, probably 9:00, 10:00 p.m. and then the senate is largely a question of when and not if if the senate wants to work through the weekend they can with yellen pushes the x date out four days, that gave lawmakers the air pocket they needed to lapd nd this plane. >> two years of discretionary spending caps and pushes out the debt ceiling hike until tw2025, and work requirements for programs like s.n.a.p. >> in reality, we probably won't have to deal with this for two

more years candidly, the other issues in the bill, there's not a whole lot there there for markets with the exception ofa boost in defense spending around 3.5% also within energy permitting reform, they kind of -- there's not a ton in there with one big exception and that's the mountain valley pipeline being approved, so those are probably the three big issues that markets would care about >> the one thing that i will say is last time this happened in 2011, where there was austerity that was built into things, we talked to other people and pointed out the cuts in federal spending, and are the cuts not meaningful because it's based on estimated growth not from growth

where where we have spent in the past >> there are two big changes the discretionary caps of 1% for this year and growth for next year, that doesn't have an intph inflation adjuster, and you are talking about the net fiscal drag there the other issue is what happens early next year with the credit raters if you look back at 2011, that deal had real austerity and had real deficit reduction this deal candidly doesn't have any deficit reduction, so that is a question with debt to gdp levels, the highest they have been since 1945, but that's another question for another >> okay. what, overall, would you say that you would advise people other than defense you might see real play for wall street?

>> getting the pipeline through. the energy permitting reform is included as well probably more than anything, though, this is the biggest self created d.c. tail risk you coul have and this is off the table for the next two years a government shutdown in the fall has also been deresisked a little bit because you have the sk discretionary caps in place, and the risks d.c. created over the past couple of months, we have a pretty smooth pathway in d.c. from a market stand point. >> thank you >> thanks. coming up, we will take a look at what stocks are on the move this morning, and then later what that deal on the debt ceiling means for interest rates and the housing market we'll be right back. ll business is going through the “woof”. but seriously we need a reliable way

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welcome back to "squawk

box. here are some of your morning movers coinbase, the rally after an upgrade overweight from equities, and coinbase is the best expression of crypto. it has retrained trading power, and it's up 3% in the market and then the price target for jeffries upgrade, and you can see shares are up about 3% ana analyst aphrplauding for its ba to basics strategy again, shares are up about t3% and a.i. trade, it's rallying on the news of the debt ceiling agreement.

c3.ai, now on pace to be up 200% year to date also looking at marvell technology, and a.i. will allow everybody to become programmer, and something to watch and continue to think about whether or not a.i. is a bubble much more "squawk box" coming up after the bring. we will look at the details when it comes to the debt deal reached in washington and it means for the economy. that much and more coming up next right here on "squawk box."

president biden and house speaker mccarthy reaching a debt deal over the weekend and now both sides will need to rally to pass it through congress the dow futures turned negative briefly and are now positive again. there has been wobbling around in the last hour or so ago s&p up by about 23 points, and dow futures up by 4.5%, and

nasdaq up by 177 the global chief economists at citi, nathan, what does the deal do to rapeign in spending >> we await some kind of further resolution of this thing, and ultimately, you know, risk the x date, so i think that's the big news here is we are not going down some of those very scary, threatening paths. >> i don't know that the markets ever thought we would? they have been relatively calm through all of this.

they had the sense there would be some deal reached >> i think what the markets were do something being probablyistic in nature. problem listic i think what we are seeing this morning is thoserisks being partially priced back out again, and that's the short end of the yield curve and the equities market to some extent. i think as we get a better sense of exactly where the house republicans are and some of the progressives and a better sense of probability as a passage, i think at that stage we will see a further relief rally on this news what it does do, and i think is notable, is in some sense congress is now putting down a marker and saying, yeah, we have a fiscal problem that we will

need to address over the medium to long run. the actual progress, though, in reducing those large deficits that are very elevated relative to history, and even relative to what we had before the pandemic, the actual progress is limited maybe while we are looking at real gdp growth, maybe a couple tenths softer than if the deal had not passed but really small potatoes relative to the bigger challenges and shocks that the economy's absorbing at the moment >> maybe a little good news, to have fiscal spending reigned in a little bit while dealing with inflation? >> absolutely. i think it's the right direction. there have been some saying, well, there's recession risks on down the road and why are we tightening fiscal policy i think we have to accept the

reality that fiscal policy cannot be perpetually stimulative, and then moving it toward a more neutral stance is something responsible from a medium to long-run perspective and if the economy needs more support along the way, the federal reserve has plenty of ways to provide support if the economy slows more than what is desirable to bring down inflation. whae >> what do you think the fed may or may not do at the next meeting? i ask because steve liesman thinks that maybe more likely that a pause is off the table and what we have seen more recently with the data would push them to raise rates once again? >> that's consistent with our view as well

we see an underlying economy that continues to have momentum, and specifically consumer spending on services as it passes through into a tighter labor market and on going nonsheltered services, inflation, and given all that we expect the fed is likely to hike 25 basis points at this coming meeting, and we see another 25 basis points and the interest rates will peak in the mid 5s. >> what does it do to your economic outlook >> our sense is the accumulate tightening associated with what the federal reserve has done, maybe coupled with a little restraint from ongoing fractures in the banking system, and over the next six months or so it

will be sufficient to slow the labor market and we are likely to see a couple quarters of recession. and that i think that's a speculative call we have not seen monetary policy bite in the way we would have expected we think that it will. we expect it will. but the transmission of monetary policy, maybe beyond what we have seen in housing and the banking sector, has been relatively limited in terms of its impact on consumption and -- >> you don't think it's a big lag affect, a delay where it all catches up >> that's what we are waiting for. that's what i think the fed expect, that the lagged affected of monetary policy are significant. you know, we are now a year plus into this hiking cycle and even with those lags i would have

expected there to be more of an affect than what we have seen so far. it's possible in this economy for various reasons, including the fact that we had a low-rate period, firms and householded households termed out their borrowing. >> nathan, thank you when we come back -- oh, look, 'tis the season. visitors yay. when we come back, media companies feeling the heat from investors when streaming services can and will be profitable, and one of the ways they are looking to trim fat is by doing exactly what they were not supposed to do, remove content. we will talk about that after this break as we head to break, let's look

at the s&p 500 winners and losers in the premarket this morning. netflix leading the way, and nvidia getting a bounce once wain, up more weill talk about all of this when "squawk box" comes right back

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the series succession coming to an end on sunday evening on the newly named max, a big twist in the finale had fans of the show buzzing for the rest of the holiday weekend. i don't know what happened joining us to discuss the latest in streaming is editor in chief, and i think -- this is the fifth season it ended, and i am on four, episode three or four so don't tell me what happened. i don't know what the next succession is going to be. i was just thinking about this succession can you name, ben, have you seen it, the whole thing? >> oh, yeah. of course. it's, like, a job requirement to watch that thing >> as far as human beings, who

is the most positive character in succession, because i think i arrived at the doorman to the building where they lived, and i have not come up with one person who doesn't make me feel uncomfortable about humanity >> yeah, and you think logan roy is the biggest monster and in the end, compared to his degenerate children he's a paragon. >> they are either pathetic like kendall -- that's neither here nor there. i said i was glad that "mermaid" had a good opening, because i know about streaming and new media and i know where we are all headed into the metaverse and all this, but can i still like hollywood openings and premieres and stars and then, you know, you get the products

from these great openings, and then months later maybe they go streaming, after you seen it on a flight can't we go back to doing it that way we are being dragged back to that >> yeah, it seemed like the core part of streaming, and it's going backwards. it turned out to be too expensive. the streamers are pulling shows off their platforms because they don't want to license them even for themselves, and you guys had a great story on this the other day, where max pulling world off. i think broadly streaming is starting to look more and more like television, like we are all waiting for the release of a show on sunday night and there's no promise we can watch it on this thing that we signed up for. >> is it a digital nickel analog

dollar situation i would think with all of the content it would be the golden age for media, and instead, we want more so why isn't it profitable for everyone? >> i think for consumers it has been the golden age for a while now, and in some sense the companies drew their evaluations from a future of streaming and spent that money and are trying to cope with reality the fact is cable remains this incredible business model and television broadly remains the unequal business model where cable providers and advertisers sluice money your way and it's coming where you are relying on the consumer, and it's still a smaller business and that's what everybody is wrreckoning with

>> so it seems like costs are low in terms of talent and stuff. maybe that needs to change, i think. see where i am going with this >> yeah, you are right, you should take that one upstairs. and where they will tell you, sorry, the business model is falling apart and everybody is getting paid and streaming nickles soon enough. >> how badly are the writers going to take it in this -- they picked a crumby time to strike, didn't they? >> well, it's always a bad time to strike. they didn't pick it. the contract is up they have a lot of leverage, always, although not as much as they did in the desperate content race a couple years ago. >> how do you see that playing out? who will be the eventual winner? the warner brothers of the world

or the comcast of the world, or do you see the writers making gains? obviously i watch shows and i can't believe how phenomenal it is, and i don't think chatgpt can compete with a well-written c comedy or tkrdrama -- >> the writers would definitely agree with you on that and the question of can you write something like a draft, procedural 197 episode where it swallowed the first 196. i don't think it's crazy you can't get a decent draft out of it, but that's not the main city, it's whether the industry among other things with streaming is it did away with residuals, and if it was a huge hit, which you wouldn't know

except based on netflix's numbers, you, the writer, you wouldn't get a back end. some say we would like the contracts also to reflect -- to allow the writers to share in success, and if maybe streamsuc. and if maybe streaming isn't this magical new unicorn that functions totally different than everything else in the media business, writers also in their contract should start to recover some of the things that were really positive for creative people >> cords continue to be cut, but hulu is now a hot potato, you take it, no, no, you take it it's just, i don't know. i don't see how there can be all losers and no winners. maybe just the demise of cable has been greatly exaggerated and the promise of streaming greatly exaggerated. we meet somewhere in the middle, i guess. some hybrid. >> i guess i suppose the writing of media can be a business exaggeration,

and there is -- and economic trends take a little longer. i think in a way, the biggest issue for streaming is that i'm a lot more interested in "succession" than i am in max. i don't want to get back into the question of if these streaming services are just vehicles for a hit show, why should you subscribe rather than just go a la carte and i think that's going to be a huge challenge for these places. >> subscribe in and subscribe out. >> business news followed by sports in sort of the hierarchy of essential content, i think. >> followed by sports. business news, always, absolutely, at the top nobody even cares about sports >> thank you "moneyball." thank you. ben semiwith semafor >> thank you >> what a deal could mean for borrowing costs and affordability for potential home buyers and at the top of the hour,

form wteou ceff erhi hsehi o staff and omb director josh bolten will join us. "squawk box" will be right back. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley.

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we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. welcome back to "squawk box. the dow is now actually in the red, down about 17 points. but the nasdaq has actually added to its pre-market gains, up 180 and the s&p is where it's been for most of the morning. the debt limit deal going to need to pass through congress, but will clearing this hurdle

have any impact on mortgage rates, which are now back over 7% and diana olick joins us now with more to try to connect the dots between these two events. diana? >> well, yeah, joe, it's all about treasuries given that rally expected today, they'll likely come down a bit, but mortgage rates have been on a tearing higher some of it over concern over the debt ceiling, of course. but a lot of it because of recent indicators showing the economy isn't cooling off as much as the fed might like take a look. the average rate on the 30-year fixed started at the last low of 6.49%, on may 11th and in the course of two weeks, shot up 65 basis points to 7.14%, as of friday. it was the first time rates crossed 7% since early march, and even in march, rates were only that high very, very briefly. so in real money, that means if you were taking out a $400,000 mortgage to buy a house, your monthly payment rose by almost $175 bucks in just two weeks

all right, so what next? well, matthew graham, ceo of "mortgage news daily" pointed out a debt ceiling deal would now allow the u.s. government to issue more treasury bonds, which it couldn't have done if it had defaulted. and more treasury issuance generally equals higher rates. all of this is when economic indicators show that the economy is stronger than the fed wants it to be so they could go even higher if those reasons show little sign of reversing and of course, we're all looking to the all-important jobs report on friday. back to you guys >> look, diana, what's more important, the low supply of dwellings of all kinds or the higher mortgage rates. are prices reflecting higher rates? >> i think prices have -- look, prices have pulled off a bit, but not as much as we thought.

we saw them start to strengthen. i think it's a supply issue. >> i don't want -- what do you mean i might like prices to -- i want them to keep going. i already got -- i already have it >> depends if you're a buyer or a seller >> depends on which side of the fence you're on. >> exactly >> and we know about fences. they make for good neighbors thanks, diana. >> when we come back, business roundtable ceo josh bolten joins us with his take on the debt deal in washington and how it could impact the nation's biggest companies. and mohammad el-erian on the fed and much hr. stay tuned, "squawk box" will be right back billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday.

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the most popular place to find a space. good morning the s&p and nasdaq futures are in the green, but dow futures have turned negative an in depth look at the markets, coming up straight ahead the debt deal that president biden and house speaker kevin mccarthy can they find their way to "yes" and convince their parties to back the agreement and a new member of the $1 trillion club, we're going to tell you which ai name -- i think you know -- just crossed that threshold or is indicated to cross it in pre-market

trading. final hour of "squawk box" begins right now good morning, everybody. welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernan andrew is off today. he's feeling a little under the weather. hopefully he'll be back tomorrow let's take a look right now at what's been happening with the u.s. equities futures. you'll see right now, the dow futures are off by about 12 points, but you continue to see some pretty big gains, in fact, moving up with the nasdaq. nasdaq right now indicated up by almost 200 points. s&p 500 futures up by close to 25 if you take a look at what's been happening with the treasury market, you'll see that at least right now, it looks like the ten-year is yielding 3.712%. the two-year still above 4.5%, at 4.506 if you check out the short end

of the curve, you have seen yields move back down, all the way back down to 5.172%. we have been up as high as 5.18% or just north of that. you're seeing that contract as we hear more about this deal to extend theceiling, >> here's the new member of the $1 trillion market cap club, we kid ta did talk about it. it's chip maker nvidia, crossing the threshold tomorrow in pre-market training. it is currently up $17 at $406 and it was up about 25% last week, following a stronger earnings report. and then this past weekend, the company's ceo introduced a new super computer platform at an event in taiwan. other stocks on the move, carmakers tesla and ford barclays reiterating its overweight rating on tesla this

morning. sk sk and jeffries upgrading ford to buy from hold. >> let's get over to mike santoli. what are you watching this morning and what do you think explains the weakness in the dow futures? >> yeah, becky, it's honestly little more of the same in terms of the uneven performance of different parts of this market and you have almost all of this enthusiasm among the buyers chasing the momentum in a narrow group of ai-related stocks that's what's goosing the nasdaq it's helping the s&p here's the s&p 500 index fund, the spy. you see it's breaking out of this range, 420 on the s&p 4200 on the s&p. has been a bit of a ceiling. the nasdaq is carrying this up from here. people keep talking about how this is a very unimpressive gain from the october lows, if, in fact, it is a new bull trend, but it's been pretty steady. i keep pointing out, it hasn't threatened the prior lows. it's steady progress, but also a lot of unevenness under the surface. those dow stocks are full a lot of the financials and

industrials that are not as much participating. if you go back 18 months, you can see a split market look, not so split anymore people have been very concerned that the nasdaq, which was 30% year-to-date, is consuming all the oxygen in the market and that has been a very, very aggressive move there by the nasdaq 100 as you can see, it's kind of a catch-up move, the 18-month chart takes you just about back to the all-time high of the nasdaq, which was in november of 2021 so you see everything kind of converging here. the equal-weighted s&p has been underperforming. it's only flat year-to-date, but it had been built up enough of a lead, because it protected on the downside a little more in last year's weakness now, the bond market, you guys have been talking about the debt ceiling deal, and how it's causing some of the yields to come in in the shorter-term treasury yields, where there was concern about a potential missed payment. here's the one-year bill you can see it's kind of hanging out near the recent high on a one-year chart and this is a pretty good indication of when the market figures the fed is going to end up in a year's time.

5.25%, that tells you fed funs maybe have to go up a little bit as the market is now starting to think, but down again. you never know what the path is implied. but it shows you the economy remains a little bit stronger than anticipated and maybe we have the fed in play for that june meeting, becky. >> we had jason trennert here just a minute ago. and he made the point, if you stripped out seven tech stocks from the s&p 500, you would not be looking at anything for the s&p 500 this year. that that has been the bulk of the gains, anything that they've seen, to kind of write home about. and just made the point that, you're getting into this, because you want to be diversified, but are you really when you're looking at those few stocks making up such a big part of what's happening there. >> -- again, that's a three-month snapshot or a five-month snapshot. it's not something that tells you what the market overall has been doing so to me, that's almost why the index has some utility, because it's market-cap weighted

it's going to basically privilege the winners. it can't go on forever it's getting very stretched, in terms of very lathered up stocks in the ai area and everything else is suffering. that's got to give at some point. but you don't know the rest of the market could start to firm up as we get through this debt ceiling uncertainty. >> mike, thank you we'll see you a little later and corporate america lining up behind the debt ceiling deal reached over the long weekend by president biden and house speaker kevin mccarthy the agreement would see flat spending next year and cap growth at 1% in 2025 military spending would rise 3% this year. money would be re-allocated from the irs and food stamp recipients will have to work until age 54 our next guest is urging congress to pass the legislation. joining us now, josh bolten, president and ceo of the business roundtable. i saw a lot of different business groups weighing in. and i'll say this nicely, this

was not your first rodeo you are -- you're an old hand. you've seen this movie before. i don't know how many cliches i can euse. were you watching with interest? were you bemused were you horrified or were you just saying, you know, this is business as usual, sausage making is ugly, they'll get it done >> good morning, joe all of the above >> yeah. you figure that -- i mean, did you come out with a statement that said, guys, gals, if we don't do this right now, we've got interest rates going up. we've got a possible recession on the horizon we've got $32 trillion in debt do this so that we can get back to trying to manage some of our really daunting problems >> yeah, joe, we put out a statement precisely to that effect, very strong statement

saying that default is not an option you have to do this. go ahead and have a serious negotiation about how best to restrain, at least immediate federal spending and several of the other issues, but there's no doubt that it was absolutely necessary that they reach this agreement. and it's absolutely necessary that it passed both the house and the senate in the next week. >> and you, obviously, have members that, across the gamut, the entire spectrum from republicans to democrats miami sure you even get fallout on both sides do you have a preference would you have supported a clean raise? or did you think -- did you agree with kevin mccarthy's position that we needed to at least address spending, after what we've seen in the last couple of years -- last two administrations, where where, really, you know, have added

with the pandemic, have added to our long-term dead >> yeah, well, we knew from the beginning that a clean debt ceiling raise was not going to be on the cards, because republicans control one of the three intenentities that need to agree on this. the house, the senate, and the white house need to reach an agreement on this kind of big issue. and the republicans control the house. so we knew from the start that a clean debt ceiling was not going to happen. that republicans were going to want to use their leverage to get some of the things that they were hoping for. and they did get some of the stuff. i thought the negotiation was well handled by both the speaker and the white house. and we're super relieved that they were able to reach an agreement. and now we're putting our shoulder behind, trying to help them get the votes to get it across the finish line >> so, in terms of -- i don't

want you to rate it on a scale of 1 to 10 in terms of what it does to try to rein in some of the deficit spending, but what provisions are most helpful in your view, that mccarthy was able to extract? >> well, they've got spending caps in place for the next two budget cycles. and that's really all this congress can do, because, this congress can't bind future congresses so they did about as well as they could on spending caps over the short run. joe, they did something else important, which is that they put in place a mechanism that incents the congress to pass all of the appropriations bills on time in fact, the mechanism they put in place is pretty clever that it reduces the overall amount of money available, if congress is

not able to pass individual appropriations bills and that's a really good government thing because, you don't want government operating on just the same levels or slightly up, slightly down for all the same st stuff they've been spending on you want our policy makers to actually be making adjustments about what the priorities are within the budget box. so we were particularly pleased to see that process reform >> what are you not getting and what would the business community really want. and what about 2024? you don't make endorsements, obviously, but, you know there's not a great taste among a lot of voters for rematch of the last election, josh do you have any comments that you're willing to make there or you would rather stay out of the fray >> well, let's put aside 2024

for the moment there's something really important happening down here in washington and that is that the debt ceiling bill is on the table. and that's what the business community really wanted is get a deal, get the debt ceiling off the table and out of the way, which this agreement would do for the next two years that's super important overall for the economy, that's super important for business confidence, and it's super important for confidence in the united states and the dollar >> you're going to punt completely on that how about, you want the fed to keep raising rates how about that one do you want to touch that one? >> we want a soft landing, joe and you've been right to navigate the fed into that for quite some time. and i think you're doing a pretty damned good job >> you do? thank you, josh. we just want everyone to get along, i guess who said that? >> why can't we all just get

along? >> yeah. josh bolten, thanks. you know, not every -- business, can you believe it in this day and age, to support it wholeheartedly, you actually get criticism for doing it, but i think you do god's work in the private sector that's where we get the prosperity am i wrong on that, josh >> joe, you are absolutely right. thank you. >> thank you good to see you. when we come back welcome allianz adviser mohamed el-erian helps us break down the economic implications of the emerging debt deal in washington. in the meantime, take a look at the futures you are seeing some green arrows once again this morning. dow futures now up by close to seven points s&p futures up by about 28 the nasdaq once again the huge winner this morning. it's up by 219 points above fair yoreatinvae. u' wchg "squawk box" and this is cnbc a competitive advantage. ♪

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with a tentative debt ceiling deal reached, many investors will probably turn their attention to what the fed will do at its next meeting. that starts just two weeks from today. for more, we want to bring in

mohamed el-erian, the president of queens college cambridge. mohamed, are you considering this debt deal at this point almost a done deal >> look, my working assumption from the beginning was that we will somehow sort it out and it seems like it's being sorted out i would very much echo what josh bolten just said it is absolutely necessary for this agreement to get through congress, if we are to avoid shooting ourselves in the foot again. >> all right if that's the case, let's turn our attention to the next issue at hand. i guess that has to be the fed meeting in two weeks steve liesman came on in the last hour and said that he thinks that the idea of a pause is more likely to be off the table at this point, just because the data has not been anything that the fed can say, okay, here's a reason why we should pause >> yeah, so i put a piece out earlier this morning, saying that if you take the fed at its word, which is that they are

excessively data dependent, then given the data that they would find it hard to pause. between now and the next meeting, we have a cpi report, and we have a jobs report. so this could change the problem is that because the fed is so data dependent, even the fed itself is all over the map. we have those who think we should pause you have those who think we should skip. meaning, you pause now, but hike at the next one. those who think that we should have hike, and even one person who thinks that we shouldn't have hiked this is the problem when you lack a strategic underpinning, is that the data can swing year round, and with that, we swing all over the place >> we've had a number of people who have come on and said, if you're not looking at the banks, if you're not looking at real estate, if you're not looking at the housing market, then things look great how much of an impact do those arenas have on the overall economy. >> so i think it is necessary

for certain sectors to deflect and that is because inflation has migmigrated from the good sector to the service sector the service sector is less interested to mortgage rates so the sectors very sensitive to interest rates are going to get beaten up. that's what has happened we have proivate markets that ae slower moving, but over a trillion of commercial real estate that needs to be refinanced i think there are bits that are feeling the impact of the interest rate. now, the one that i'm not ready to assume away is bank credit. we simply don't know at this point what's going to happen to bank credit. and it's important to keep an open mind on this. >> okay. so, what would you be telling people to do at this point we've heard other people say that the markets seem frothy, especially if you're looking at some of the technology stocks that are really riding ai. on the other hand, you have

nvidia turning in some incredibly strong numbers and even stronger expectations about what they can deliver in the future >> so we've seen the emerge of what i call all-weather stocks stocks that have one or both of these attributes they are seen to be writing a massive secular wave, multi-year nvidia is an example of that or trivial, they're seen as nothing being sensitive to economic and financial fluctuations think of microsoft as an example of that. and those stocks have basically, as you heard earlier, done all of the heavy lifting why the s&p is in positive territory, and that's why the dow has struggled so much. so the bet so far has been on these handful of stocks, and that makes sense i worry more about other stocks that are sensitive to the fed

making another mistake then i have a much more strategic view of monetary policy or alternatively, if credit proves to be a problem >> do you like this debt deal, mohamed, or would you have preferred a clean raise? >> so i'm not enough of a specialist, honestly, to know whether -- which is better >> you never met a democratic spending bill you didn't like. >> you may very well think so, but that's not correct >> okay. >> so -- but now you don't know enough to know whether you like -- rather would have a clean bill or what's in this bill, you really don't know what your opinion is on that? >> joe, i have limited time. so my working assumption from day one was, this thing was going to great set resolved. from what i hear, it's not going to make a material difference to the economic and financial outlook. when we look back, this

agreement will not make a material difference to it. what i was much more worried about is a non-agreement so i'm pleased that they have an agreement, but i can't honestly opine to all of the alternative permutations that we could have had. because i'm nowhere near those negotiations >> do you think that the debt is too high, as is? and that maybe having some type of restraint in 2023, '24, and '25, are you for that? is that a good idea, or do you think we ought to keep piling it on >> no, i don't think we should keep on piling it on i think the best response to a debt issue, and we do have a longer-term debt issue, is economic growth. and my biggest worry is this whole saga have done three things that actually undermine economic growth. one, it has diverse diverted the

attention of congress for weeks, two, it has undermined the trust in our people, and it has sent the wrong signal to the rest of the world about our ability to manage our situation so i worry, joe, that growth, which is the answer to many of our problems, is being undermined by this whole process. but i'm really glad that i got to start an agreement. >> it is scary if rates keep going up, they've calculated what our debt service on the $32 trillion is going to be and it's impossible to grow when everything that you could be spending, you know, there are things we would like to do, education and everything else. and if you have nothing left over after paying debt service, you're not going to have growth, which we all agree that that's what gets us to where we want to be >> i totally agree especially if we tend to cut long-term investments in response look, you and i have been on the right side, which is that period

of artificially low interest rates and massive injection of liquidity got people to do the wrong thing. and now we're going back to a more normal interest rate environment, and unfortunately, we have the legacy of all of these unfortunate behaviors when interest rates were artificially low and liquidity was sloshing around so we need to get through this again, we only get through it one way in an orderly fashion and that is economic growth. so there should be a much bigger focus on growth than there is right now. >> so you definitely are urging both sides to pass this, as it is, and the president's okay with it, so he's got to get his members in line. speaker's okay with it, he's got to get his caucus in line. >> because i can't see anything else that would avoid default. >> if you come up with something better, joe, then that's great i cannot come up with anything better so i would, in my humble opinion, we are all better off

with some agreement than no agreement. it may not be the perfect agreement, but we certainly -- >> -- against that >> hmm >> hard to argue against that. i don't think anybody wants to see us default >> mohamed, thank you. great to see you >> thanks for having me. coming up, white house chief of staff mick mulvaney and former democratic senator, governor, everyone bye will join us evan back in the fold. i saw him. but prior to that, it had been a couple of years. we like having him as a reminder, as we head to break, you can get the best of "squawk box" on our daily podcast. still young. follow squawk bpod on your favorite podcast app we'll listen anytime

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welcome back to "squawk box. take a look at what's been happening with crude oil prices. a little lower this morning. wti off about 1.3% at 71.72, brent is at 75.79 and natural gas down by more than 2.3% as well, part of the reason that chevron's been a little weaker that's part of why we saw the

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welcome back to "squawk box" on cnbc. the u.s. equity futures have some solid gains in the nasdaq middling gains in the s&p 500, which is above 4,200, and then the dow, which was up 70 or 80 earlier, is dow a little bit, an was the session has gone on. the pre-market session it has sort of slowly come down to where it's actually down about 14 points at this point in the red. treasury yields this morning have -- we saw most of them, the big moves last week. but 370 now on the ten-year. two-year at 4.5% among today's top business headlines, disney's live action remake of "the little mermaid" topping the long holiday weekend box office the film earned an estimated

$117 million elon musk making his first visit to china in three years. the tesla ceo meeting with the chinese foreign minister who said that his country will create a better market-oriented business environment for all businesses, including tesla. musk is also expected to visit tesla's plant in china and theranos founder elizabeth holmes is scheduled to report today to federal prison, after she was convicted last year of defrauding investors in her blood testing start-up holmes is set to serve more than 11 years behind bars at a facility northwest of houston, texas. president biden and house speaker kevin mccarthy brokering a two-year debt ceiling increase the next step is getting the bill through congress. for more on what we can expect, let's welcome mick mulvaney, former white house chief of staff, and former director of "the office of management and budget." he's now who-chair at acxiom,

and former indiana governor, evan bayh. good to have you both on senator, governor, i'll begin with you, evan, it's good to see you. would you have preferred a clean debt raise or do you think there's some things to like in this compromise, evan? >> joe, i actually think there's some things to like in this compromise first, we're going to get a modest reduction in spending over the next couple of years. once the old saying, when you're in a hole, the first thing you need to do is stop digging at least we won't be digging quite as fast. that's good for the country in the long wrun. i think what we really need, joe, is a debate among the american people as to how we want to handle our fiscal situation, how we want to grow the economy, and hopefully we can focus on those big-picture things and not an artificially created crisis here that really threatened to ruin the markets at a vulnerable time for our economy. i think there are some modest good things. but joe, the bottom line is, this is what divided government looks like

>> would you have, not as a crazy right-winger mulvaney, but as a -- who are you, evan. >> i probably belong in a museum, along with dinosaurs i'm a more moderate democrat the best thing we can do to get the fiscal situation in order is to grow the economy. so we should focus on -- but at the same time, at the same time, on many social issues, i'm more progressive. so i'm sort of a mixed bag that's what you get. >> you are you know, you're still young get back in there! get back in there! >> i thought you were my friend. >> i wouldn't -- actually, mulvaney, you are still so actively involved in all of these things

i figure, it's like g-3, they pull you back in what do you make of this >> i think the day is going to -- today is a really interesting day, joe they've got the rules committee meeting today. everybody sort of focusing on the vote on the floor that could take place in the house, as early as wednesday, what a lot of folks are missing is there's a big rules committee vote tonight, or actually, i think, early in the evening -- >> okay -- looks like a pregnant pause -- he was right in the middle -- we're going to get him back in the meantime, i'll go back to you, evan, do you see -- >> you're stuck with me. >> yeah. how much -- the likelihood that this is a done deal at this point, that it can't be. >> we can have some more in the house, and of course, you go over to my old buddy where the filibuster still exist, you could get 1 to 3 people trying to come up with the works. i'll date myself again

it reminds me of the old movie where the character holds a gun to his own head and says, stop or i'll shoot. tanking the economy, defaulting, really isn't a final option at the end of the day although, i will recall back when i was governor, the state of california, many of your viewers may not remember this. the state of california actually issued ious to people that it wasn't paying. and it's not uncommon back in the day that the state of illinois would just stop paying people for six, 9, 12 months i don't think as a country we want to do that. that would cause all sorts of chaos. >> i like that line. that's a good up with, but remember when governor cuomo, andrew cuomo, new york governor said, i'll stop lying when my opponent does. he actually said that. that's one of the -- that's a classic. nick, are you back >> that's almost like "alternative facts." >> it is but there are alternative facts -- we now know that. in this two-party system, i see it -- in the moiedia, i see alternative facts.

nick, can you finish your thought. do you remember where you were >> sorry about that. today is a big vote. there's a rules committee vote nothing can go throughout going to the rules committee there's 13 people, they need seven votes, nine republicans and four democrats it has to clear the rules committee today. chip roy from texas is on that committee, ralph northam is on that committee they both indicated they are inclined to vote against it. if it doesn't pass the rules committee, it cannot come to a floor vote i think it's not getting nearly enough attention from the press today. >> nick, do you think that the f far, that the more extreme agents of either party -- what about the extreme elements -- i hate to sate, i'll even say it this way this is what they call them, the extreme maga elements. do you think that they -- that there's a target on mccarthy's back at this point >> no, i really don't.

i think kevin has probably done this as well as anybody could under the circumstances. keep in mind, one of the reasons that the house got upset with previous leadership was that things were done in secret it was done very top-down. all the indications i'm getting from washington is that kevin has been fairly transparent. this has been a ground-up type of thing i don't think kevin's speakership is really at risk in this process your point is well made. the extremes on both sides probably move away from this bill it's not going to get the far-right or the far-left. that was probably inevitable, because the bill has to have 60 votes in the senate. so by definition, it must be bipartisan so the real question is, does it come to the floor for a vote i think it comes to the floor for a vote, it passes. that's why this rules committee vote today is so important, because the right wing of the party has more influence over the rules committee than it does on the floor of the entire house. >> mick, what i asked josh bolten about, 2042, i'll ask both of you about 2024, because this does not solve

entitlements, it doesn't -- i mean, we've got a long way to go our servicing this debt, where it is right now, even if we do cap it where it is right now, is going to be really hard to grow. who should be -- what should the composition of congress look like in 2024, and who do you think we ought to elect president -- who should run for president on both sides? >> one of the things i'm worried about is a downgrade after the fact keep in mind, that happened in 2011 or '13 >> you'll pupnt it again -- >> yeah, we punted that too. >> no, you'll punt on my question >> i think you'll have to get a new generation, new leadership from either party to look at it this in a fresh way. folks that are in their '70s and '80s are not going to change it's not going to happen with trump or biden in the white house. >> your country is calling you, evan >> ha-ha

>> well, it will have to keep calling me, joe. i'm not on the menu. i think the odds are we'll continue to have divided government that's just a mathematical fact. the house is so narrow, it could go either way. the democrats have a slight majority in the senate, although it's tilted somewhat against the democrats if you look at the states that are up the presidential races have all been closed. the former president has a slight advantage now, but my guess is that will narrow. the electoral college has a slight tilt towards the republicans, so that advantages him. i will say one thing, my party is not famous for stepping forward and saying, look, we need to look at entitles, particularly health care spending is growing so rapidly but the former president maknow it's not popular it's not popular but at some point we have to address it and get it done, and that's going to take compromise. if i take my hat off as speaker, i don't know the president, but i do, is willing to take on the

extremes in both parties to get us over this debt ceiling crisis and to the election where the american people say, we want aren't government where people come together and solve problems, rather than just yelling out there across the divide >> yeah. >> well, you've known the president in a former life, too, mick and, you know, for as mad as the progressives in his party are, i think that this is -- i don't know, i was gratified and sort of relieved at this sort of old joe biden reemerging >> yeah, i would be curious to see if he can rally the votes necessary on the floor i think he probably can. but elizabeth warren is not going street for this deal, alexandria ocasio-cortez is not going to vote for it so you have to give joe biden credit for realizing he's going to lose half of his party. an idea that a bill could be bipartisan in the senate in one

party in the house just people that suggested that don't understand how washington, d.c. works. >> right no one understands how washington, d.c. works it's all right nick mulvaney, thanks. evan bayh, senator, governor, thanks good to have you on both of you. and fingers crossed. still to come this morning, we've got what to watch ahead of the opening bell on wall street. the futures this morning have been in the green. nasdaq futures up by almost 2 2 points this morning. the dow up by close to 5 former treasury official john taylor will join us next on atth d.c. debt ceiling deal student you're watching "squawk box" and this is cnbc.

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all right. welcome back, everybody. i want to talk about the fed and the broader economy. joining us to do just that is john taylor. he is professor of economics at stanford university and senior economics fellow at the hoover institution. s of course, he's a former undersecretary at the treasury department john, let's talk about the taylor rule for just a moment. part of the taylor rule is that when you've got inflation that is above target, the fed should be raising rates they have done a lot of rate raising lately we haven't gotten inflation back to the target. do you think they need to do more or is there something of a lag effect do you think they should have a pause this time around >> i think they need to do a little bit more.

we've been at 25 for a little while. a little bit more would be a little bit better, a little safer. other people are arguing that as well the taylor rule is one way to look at it, as you mentioned thanks for doing that. but a lot of publicity recently about that but i think a little bit more would be better. >> a little bit more meaning, 25 basis points, 50 basis points, or is it data dependent. >> you know, 6%. so that's a little bit more. some people are talking about that but that's what the rule would say at this point. >> so where do you think we stand in the economy how are things measuring up? >> well, the economy is a little bit slower than we would like. there's a lot of things that are going on i think this is, monetary policy is part of it, fiscal policy, regulatory policy, international policy it's all part of the picture but i think a better policy would lead to stronger growth and that's what we should be

doing for. >> when you first came up with the taylor rule, you weren't dealing with stuff like the pandemic that we've just been there. problems with the supply chain the taylor rule still stands out, because it's the tools that the federal reserve has to work with, right? >> well, they've been focusing on a lot it's in their report now they took it out, put it back in and there's always debate. they all know about it quite pel, it's also international whether central banks know about it it's a guideline, when they get too far away, as they were a year and a half ago, there are some problems that are persistent, and it's good to get back on track. they're close, they're not all the way. and i must say, other central banks have a ways to go, too inflation is quite high in europe and japan and even latin america at this point. it's more of a global issue. and i think this idea of a

so-called taylor rule, it's 34 years old, believe it or not, even longer when you look pack at where it came from. it's there >> let's talk a little bit about monetary and fiscal. the monetary is what the fed can control. fiscal is what congress in washington have to be dealing with we've just seen this debt deal come through, potentially congress still needs to vote on it, still needs to be signed into law but what do you think of the contours of it at this point >> i think it's good that they got an agreement it was a struggle to get there we didn't want it to blow up that's good to see the details, to see what's going to go on but i think there was little action on the fed's part, which basically is there, keeping it straight but the main thing is fiscal policy and there's some -- as you mentioned, there are things that are part of it. but the main thing is to get the deficit down and have in way as your chart shows that's substantiative to some extent, it looks like a

good agreement it's not perfect, but it's what we could expect for this point but it's fiscal policy doing the right one as monetary policy >> what would you like to see more of? >> i would like to focus more on the regulatory side. it seems to me, we've got monetary policy moving in the right direction, needs a little bit in the right decks, but needs a little more but what about regulatory policy a lot ofissues there that's always been a very important part of what we're doing. there's very little discussion of that. mostly monetary policy and physical policy. the regulatory part -- also, let me just mention international. it's not just the united states. it's the rest of the world to some extent the rest of the world is a bit behind the curve, too, trouble with europe and well as the uk. >> do you think the dual mandate has outlived its effectiveness >> well, i think it's important to pay attention to inflation as part of the dual mandate

it's also important to pay attention to inflation -- to unemployment, the state of the economy. that's part of it. the so-called taylor rule has always had these two factors it's surprising to people that those two matter so much it's worked in other countries as well. i think the thing is, when you say dual, it's really inflation and some measure of how the economy as a whole is doing. >> i don't know. i think an argument could be made that, if you have price stability and dollar stability, let the private sector generate the employment, just leave it alone and let it go. you can't do both. a lot of times you try to satisfy both and you end up satisfying neither or they're mutually exclusive, the things that you're doing. >> only two variables. it's not so hard you inflation and you have the state of the economy some people used to have 20 variables.

this is only two it's a lot simpler what's so hard about two you don't want the economy to go down to twos you don't want to accelerate too much that's a measure of how the economy is doing inflation is a part of it, sure. inflation is too high. nay haven't given up that 2% target, which is good. you don't want to just let the unemployment rate go anywhere it's going to go. >> john, very quickly. you just mentioned internationally, that other central banks kind of have to be wear of what's happening, too. we did see the dollar rise to the highest level friday since march 17th, i think. i guess that's a little bit of an acknowledgment of that point. >> i think so. i think it's basically this so-called rules for setting policy it goes back a long time i think the european central bank has gotten a little behind. they're trying to catch up

don't forget latin america is way behind they're still catching up. we have this problem in asia as well, japan. we just had the former central bank governor kuroda out here for our annual conference. he spoke in a way which was helpful that japan needs to get back on track. it's a global issue. it's not just the united states. remember the united states is a leader people pay attention to what the fed does it's affecting the whole world effectively. >> john, good to see you jontay lore, appreciate your time. >> thank you god bless. when we come back, we'll have much more on the markets. rbc's amy wu silverman will join us next. stay tuned ghu're watching "squawk box" rit here on cnbc, live from the market site in times square. , tending hives of honeybees, and mentoring a teenager — your life is just as unique.

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our next guest says she's starting to see cracks in the overwhelmingly bearish sentiment that's been the narrative for months in the option market, specifically i think about tech to some extent joining us now, amy wu silverman from rbc capital markets

is that bullish or bearish >> i think bears are doing a lot of soul searching post nvidia's earnings if you'll recall, when we start to see these signs in the options market where there's this overwhelming demand for call buying. we saw that in nvidia, starting to see it in amd, within single stock tech overall weight reminds me of, joe, is when you get that call buying frenzy in january of 2021, in the options market when that cycle begins, there's a lot of positive momentum that ends up being exacerbated along with it. >> put call ratio, when things get too bullish or too bearish, if you want to take the other side we're in the early part of seeing the bear sentiment unwind >> yeah. it's been really interesting i think investors were mapping the debt ceiling essentially to

2011 where you got that mix that was kind of muddling along like it is now, but then we started to peak around 4850 in august of 2011 the problem is we didn't really get that, right? we had a pretty underprized right sale knock on wood, there's a couple days left. we're starting to get a deal that's going to go through you'll have a lot of hedging going on in vixx calls they won't get rolled over and reinitiated. those still in the market are questioning do we need to get back on the momentum train because the breadth of the market is incredibly narrow and we all know that. >> what does all this say to you about, not just tech, but 4,205 on the s&p are we at the top of a range if we get through it, is there more upside? >> that's a big question our head of equity strategy just raised her price target this

morning which is interesting because you could arguably say that she was among the more bull on the street. what was interesting about that, it was a psychological barrier for investors on our side of the fence to overwrite essentially say here is the capozide on the market if we're seeing in nvidia sur praise a trillion market cap, a handful of names going through what you could argue is more of a secular story than that sensitivity to long duration and rates. i do think there's underallocated investors who really have to decide if they're going to plow in as well >> real quick, her old target was what and her new target is what >> her old target was -- i'm going to get it wrong, 4,200 or something slightly below that. it just raised i think to 4,250. >> that's pretty good resolution

there for exact calls. amy wu silverman, always great to have you on and get the options perspective. it's important thanks. let's take a quick final check on the markets you'll see green arrows across the board. dow is up by about 2.5 points, s&p up by 23, nasdaq up by 191 that does it for us today. make sure you join us right back here tomorrow. we'll see you later. time right now for "squawk on the street." good tuesday morning, welcome to "squawk on the street." i'm carl quintanilla, david faber, jim cramer. all eyes turning to the debt ceiling vote count yields are lower, futures up busy week. plenty of jobs data. our roadmap begins with that d.c. deal-ish in the race to avoid defaurlt, facing a key vote on capitol hill this week