they could continue raising rates later this summer. what a concept data dependent. elon musk reclaimed the top spot as the world's richest pers person the latest update on the wealth. fr it's thursday, june 1st, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc live at the nasdaq market site in times square. i'm kelly he evdavidevhe evans.

the dow looks like it is up 57 bitter news after the fed officials. the 10-year treasury is 3.67 we should show bills at 3-month p. p -- 3-month. am i one thinking get while you can? one-year at 5.2? >> i would rather buy bitcoin. >> you would rather own bitcoin? >> how much? >> i would take that 5%. all day. we have been in the options. >> you got $500 at the end of the year >> you have something to show. >> what kind of wine do you drink? >> it can be meaningful.

>> utes lik-- it will move movee n -- move the needle. two fed officials signaling yesterday they are likely to hold interest rates steady before raising them later this summer in the speech to washington, jefferson said skipping the rate hike at the coming meeting would allow the committee to see more data before making decisions about the extent of additional policy patrick harker spoke at a conference yesterday he said he thinks the fed can take a skip for a meeting and potentially do more tightening at every other meeting harker is a voting member of the fmoc this year

i watch your show. maybe you have a reason for not watching i was ranting about mester all morning long i don't see any reason to stop the fed didn't see any reason to raise at zero. it is all rear-view mirror.ror e now. >> if you compare the speeches, they cite the same data in the prong transitory camp and now in the longer for higher camp >> maybe you did watch yesterday. >> i'm always watching >> mester yesterday. she moved the notion there would be another hike. we went from zero to 60 as of yesterday. now go back down >> exactly phil jefferson crosses the wires. i forget after that. both in the skip camp.

you saw bond yields move the odds dialed back makes sense. no movement in equities. why? >> i don't know. the debt ceiling we're up 50 points on the dow. >> s&p was down .50% >> you saw the article and they are lessening the volatility >> they are like beta in the market when it is calm, they are calmer. >> robert frank will be on later and talking about the cash with rich people. i don't know she's a non-voting member. do they send her out to say that to throw us out? was she wrong about saying that and they sent these guys out >> i'm sure they are responding to what everybody else is

saying they're on the schedule. these are the comments they are choosing to make it is weird to me. the market is giving credit de free -- credence to the ones who are significant. waller is seeing the influential market. >> this is hard for me. >> waller is seen as the leading indicator for the fed. he didn't go in the skip camp. >> skip will become a word like pivot >> for a time. the bill to raise the debt ceiling passed 314-117 president biden thanked speaker mccarthy and urged the senate to pass quickly leaders on both sides said they wanted it passed in 48 hours. >> mulvaney was out in the

lobby. i complained to him about the way business is done there 79 said no oh, they're so brave they're so principled. if any of those guys had been the vote to take us to default, they were all free votes they all get to say i voted my -- they all are worried about about primaries. everybody worries about the primaries. come on, the rules vote with 29. how many democrats were coming on board it was a free no vote to pretend they are fiscally responsible. >> not to memory lane it i don't know where you were 2011 >> i was with tea party. >> why were you >> i've always had a little bit of affinity. >> why all of a sudden

debt-to-gdp doubled. deficit and interest rates higher than they were. we face a more meaningful problem and we have not that the debt ceiling is the right fight, but less of a push for austerity. i can't figure it out. >> what i can't figure out is the people who want to have government be the answer to helping people and if i think it was effective, i would be on full board if all of your money is spent on paying off interest, you don't have money to do any of the stuff. education, safety net. they have to connect those dots eventually if rates go up and you have nothing left after you pay debt service and you can't grow >> i really thought there was more drama this time around. with the other analysts, they say it doesn't poll that high.

they don't want the austerity. it is interesting. >> mccarthy is one of the most popular politicians in the country right now which would oneno one would have said. voyager kept getting more powerful growing in power by the time it came back, i'm not saying he'll be an evil force. it was a scary thing f the voyager went off >> a good transition elon musk is the world's richest person according to the bloom beberg index $192 billion fortune lvmh ceo is second with $187 billion and jeff bezos is third with $144 billion.

you see the wine he paid for in france they were making fun of him. $4,000 for a bottle of wine worth $600 doesn't matter to jeff shares of tesla in may and lvmh shares declined in may >> what is going in the luxury piece is interesting lvma you saw what happened with gucci. they do a survey and there is a luxury recession people have talked about the white collar recession with the tech layoffs to see it hshow up has been impactful. that is a soft patch you see from april and may. >> is remy -- i looked at the

headline expect sales down 40%. why? because there was a post-pandemic bounce in liquor sales a year ago they are not seeing that now. >> we had moet on and she said the u.s. weakness was felt in bars and nightclubs and restaurants. they see a slowdown compared to this time a year ago. >> you know who our guy is on this this robert frank he knows what rich people are doing all the time not saying he is he is fine, i'm sure. on the squawk planner, the adp payroll report is coming out this morning at 8:15 followed by jobless claims and q1 productivity. on the earnings front, macy's and dollar general and hormel.

we have dell and lululemon after the bell i'm not saying lululemon is the luxury >> i have lululemon pants on every day. >> they're pricey. they're not versace. they are not dollar general. >> someone handles that for me they handle that for you >> that is where this lovely ensemble came from >> i like being dressed by my mom. >> a boy's dream >> put your big boy pants on. coming up, salesforce sales under pressure and what marc benioff said on "mad money" last night. we will hear from mike novogratz on the bitcoin ebate you are watching "squawk box" on cnbc

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expected on "mad money," the ceo marc benioff spoke with the power of a.i. >> pay attention to the tech environment and moving in the measured environment to aggressive environment the catalyst is something i can see with customers which is a.i. >> for more on salesforce, let's turn to greg branch at veritas greg, good to see you. let's start with salesforce. is this because the hope and expectation was about expense control and they did not have that or what is going on >> i don't think it was that the cap was 243 opposed to 245 that is allowing them to point to they didn't raise revenue guidance they can't control the macro or margins.

they did raise the estimates what i think this is about and you mentioned this before is he talked a lot about a.i. and what a.i. was going to do we don't have any numbers. he doesn't have an estimate in terms of the impact with the business so, i think juxtapose with nvidia, that was a let down in numbers. as investors separate those truly a.i. companies against those a.i. washing i think salesforce is doing that. >> greg, he would be better off not bringing up a.i. other than bringing up with substance >> depends when he was going to talk about it. you have done that pre-nvidia, the market would reward him for that the day after, the market would have rewarded it now several days later are, we

have tangible results from nvidia because nvidia is an a.i. company. there are three ways one can be an a.i. company. you are either building the infrastructure with chips or connectivity or data center to run the storage or you are a provider of delivery to infrastructure and security or face recognition or bringing to market a.i.-enabled apps if you are not that, you are not an a.i. company. you are using a.i. maybe salesforce will be the latter of that >> which is fair in fairness to salesforce and piling on for a stock which is up 68% this year and only $50 off the late 2021 highs. it has been on an incredible run. less than 60% taking this move into account

investors seem to be rewarding them for a lot of the clean up they have done and turn around and not just in the near term, but you start talking about getting to all -time highs. >> this is trading at 15 times cash flow. if something delivers 12% over the next year as we go into full recession, which they will wiggle out and trading out, that is a safe haven as you think like i do with the market overvalued we see breadth we need to narrow i don't think they need to a.i. wash >> quickly, if people said salesforce is a place to hide, you know, it is not out performing today, but where else can people look at with stocks or areas in the market where

they don't want to be in a.i >> two things to look for. earnings growth. they are not growing like the year after the pandemic, but the tech names offer growth. energy may commodities may come down a bit. they may gain leverage the earnings growth will beat the market in a relative basis and salesforce demonstrated this with the sectors where you see operating leverage to play out that is where the safe haven can be found i prefer to stay behind the curtain. >> i'm keeping score everyone who says to be in t-bills. >> it's safe >> we will compare notes. >> t-bills >> it doesn't an solve -- park your cash. park it there.

it's not a long-term investment. it's safe. great. >> keep the duration short seize the opportunity. >> right it's fine. it's fine. >> greg branch thank you. >> my pleasure coming up, bill ackman -- every waking thought -- that's what i love about him. calling for jamie dimon to run for president. we'll talk about that after the break. it's jobs week in america. adp payroll report the employment report is tomorrow tomorrow srt week. >> 8:15 eastern. i knew that. "squawk box" will be right back. how far we take an idea is a question of willpower.

because progress... is a matter of character.

hedge fund manager bill ackman posting an essay on twitter asking jamie dimon to run for p prem president ackman said now is the time for dimon to run because biden is weak and cognitive decline he said dimon could beat president biden in a general election ackman said jamie needs a push from people he respects and from the broader electorate >> i would love to see him in a debate, if nothing else. it is fascinating when you see people translate from one avenue to another it is very hard to make that pivot. i guess dimon opened the conversation by making a big supportive comment. >> he is classic

a lot of times we're in settings you can't talk about it. i have been around him a lot when he is unhinged, he is more -- he is unhinged all the time he is amazing. >> some of his comments which you think he could never repeat -- but what he said about jpmorgan chase outlasting. those would, i think, be broadly interesting appealing to people. they come with a business risk as well. we are seeing it now as he is in whi china. look at the value. when he left, compare citi with jpmorgan chase he has some broad name recognition. can you imagine going back to the financial crisis and say the biggest banker of the country should run for president it shows we have come a long way. >> elizabeth warren would have a coronary >> if he floated dimon treasury

secretary? >> he has a better job than that right now. i think president is the only thing. i have no idea if he would consider it. i wouldn't recommend it. look at the people we end up with doesn't that tell you something? >> it does it would be cool if he tried >> right >> later, we will get details from the jamie dimon deposition of the jeffrey epstein lawsuits. and as we head to break, here is a look at the s&p 500 losers and winners >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure bark-ery

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good morning welcome back to "squawk box" live from the nasdaq market site

in times square. you can see the futures. dow now up 80 points you figure, you know, skipping a rate hike and getting the debt ceiling done is pretty good. we have a number tomorrow. we have one today. adp. if things are still hot and l labor strong, we are worried about the hikes. the lead today is the house passing the bill by a wide margin of 314-117 last comnight. for the latest, we have mick mulvaney here. he is now co-chair of actum. we have jane harmon. she is on the committee of the responsible budget i enjoyed your last appearance with us as well, congresswoman good to have you on. good to have you in studio,

mick i don't want to be half empty about this >> yes, you do >> no, i do not. i want to be happy i do i am happy this happened we have a debt problem i understand that. this doesn't solve it. you are talking about a guy who had a four-member margin in the house and didn't control the white house and didn't control the senate making some progress that wasn't given from the start why shouldn't we be happy? >> i wrote a piece in the hill calling it a minor miracle he had no leverage at all. >> three hands tied behind his back >> he got a better deal than trump. when trump was in, we had the white house and the senate and the debt deal took spending up it took deficits up. mccarthy had nothing and got something out of this. did he get everything the republicans want no that was never going to happen keep in mind for you who don't

follow washington, this bill has to have 60 votes in the senate period end of story it will be bipartisan. period end of story it is a bipartisan bill. you will lose the far right and you will lose the far left that is what happened. >> congresswoman, we said it for years. the extremes of both parties are both mad, you are on to something. is that wrong? >> it is right i think it is a minor miracle. agree with mick. i have seen the history here i made the hard vote in 1994 for the clinton budget which was cutting taxes -- raising taxes and cutting spending most people like me first termers who made the vote, lost re-election. i barely one newt gingrich came to power. then we balanced the budget and we did that until 9/11 almost four years.

we went back in the ditch where we are still are we made progress, but the economy cratered to hold the debt ceiling hostage to the good budget deal is wrecwrec l -- wreck we do this we punted on bol simpson we have entitlements on the table. social security and trust funds will go bankrupt in 2030 reforms are necessary. not repeal reform >> former vice president pence said the same. the only people that talk about reforming entitlements are not in office anymore. >> the people who talk about it out of office didn't talk about

it in office >> jane did. >> i did >> i'm talking more recent republicans. >> congresswoman, some things i don't understand is the democrats did not hesitate there were grousing and still grousing from the far left does the far left -- and i understand they want to help everyone and income inequality is something they talk about if you have a federal deficit so large that all you are doing is paying off interest, you don't have money to spend on any of the things they want to do to make the world a better place. do they ever connect the dots to that, congresswoman? >> i think there is an unholy alliance with the far right. in the middle the are some sensible policies. we are getting there we haven't done everything right. guess what joe manchin got his permitting

through the mess we just been in that is for modern pipelines which will, over time, carry clean fuel maybe if the far left hates the idea, maybe we can transition to clean fuel more easily because of this initiative >> mick, i was complaining to you out there about the -- i won't call them the blowhard right extreme. i won't do that. 79 of them nay. those brave souls that made no difference but can go back to the constituents and say the democrats passed this with majority elect more republicans you didn't stop it you can't end it immediately what do they really want do they want to default? >> no, they want -- >> would their vote matter

>> of the 49 that voted against it, my guess is 1/3 of them cared and understood the numbers. i have a great deal of respect for chip roy >> he was part of the problem. >> it is the folks who didn't understand the deal and still voted. there are a bunch who have no idea, but they know they have to be conservative to everybody else that is a thing. i had members walking up to me and say are you voting no and i would say why. they would say if you vote no, i have to vote no. then a bunch, more than half, would have voted yes it is safe for them to vote no >> profile is encouraged >> democrats do the same thing a democrat on tv who said she was voting no, but if they needed her vote, she would vote. there is a profile in courage. >> let my give a shoutout to #

of the time. his lobbying made a difference this was crunch time this shows the country we are moving forward it shows other people who would rather have snappy press releases yea. he is from my state. kevin mccarthy pulled out something nobody thought he could. the speakership is more secure because he did it. >> that is something the other day, mick, i think you were aware there is only one person that can challenge it >> nobody else wants the job i don't think he was at risk he has done a good job of laying stuff out. he had a pizza party for two and a half hours a day before the vote i understand they laid out the bill they walked through the bill

together as a team that never happens usually leadership will keep the information to themselves because information in washington is ledveraged and it is power go read the bill i encourage people to read the bill it is nearly impossible for a human to understand. it is not a black line document. it doesn't show where they make changes. it shows in this line of this law in this bill, change the number from 6 to 7 it takes hours information is power in washington that will serve him well in the long run >> can we give credit to president biden for the old joe who came around? he has a lot of people filling his ear and i don't like some of them what i have seen here, he came through. >> listen to what kevin said when biden went overseas he said i was making progress with the president he left to go to japan we took three steps back because the staff took over. the president came back and the

deal got done. >> biden is facing a tough re-election and bill ackman said he should get out of the race. he proven himself. he could have taken a harder line and said no everyone talks how he is the negotiator-in-chief and is this his great quality? >> treat both gentlemen the same if you criticize mccarthy for losing the right, criticize biden for losing the left. give biden the same credit they are in the same boat together. >> jane, go ahead. >> let me say something. mick and i are agreeing the whole show it is scaring me i wrote an op-ed in the hill urging he and biden have office hours the way truman did and mix it up. we could get a lot more done if there was face-to-face

conversations. he is good at this he cut a decent deal a good start i think mick and i agree on that, too. we need to work together. >> why can't we be happy i'm getting teary. we like joe and mccarthy you agree. tell me about it >> why isn't the market up more? >> it is continuing to go down. >> tomorrow. >> this is always what happens. >> true. >> you have to do better. >> i call you out because are you a sandbagger what is your handicap? >> eight >> sandbag i have seen how you play you are not an eight thanks, congresswoman. thanks, mick the overbunker feathered in horrible thank you, mick. thank you, congresswoman that was good. that was fun. >> good stuff. coming up, details from jamie dimon's deposition in two

cases of jpmorgan chase and jeffrey epstein. eamon javers brings that story next "squawk box" will be right back. don't go anywhere. >> announcer: currency check is sponsored about interactive brokers. the best informed brokers choose interactive brokers.

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we are getting more on the jamie dimon deposition in the case related to jeffrey epstein eamon javers has more. >> reporter: jamie dimon on the defensive as the plaintiffs try to play down the role over the jeffrey epstein's time at the bank jamie dimon said he was not involved with the accounts at the bank and unaware of the debate with the employees if jeffrey epstein should continue to be an account holder at the bank dimon said he was not responsible for kicking epstein out of the bank. that fell to steve cutler. attorneys produced an email from cutler in 2011 saying epstein should be gone cutler writes, this is not an honorable person he should not be a client.

it is not clear if cutler had the ultimate authority cutler said epstein should not be a client. not clear how especpstein remai at the bank after that we look at what employees knew about the epstein's interest in younger women at the time. at one point, jes staley emails an executive and says this last night, went to the huggy bar bear concert the age difference between husbands and wives what a joke. and promoting dimon to his friends as a treasury secretary. dimon says in the accept signi deposition, he was unaware of that and documents show staley at jpmorgan chase said he spoke to

jeffery epstein several times. back to you. >> where do we go from here, eamon? >> reporter: the next thing is testimony from jes staley. what has been leaked to the wall street journal indicates staley, former jpmorgan chase executive, who saw the private wealth accounts, is at odds with jamie dimon. staley said he did brief dimon dimon said he was never briefed about epstein and didn't know anything until 2017. we will see what staley has to say in the deposition scheduled for june 10th and whether or not he is willing to say that under oath on the record and then where we go from there is you are looking at court case going public in september and they will have to sort it out. which one is right >> june 10th will be interesting.

eamon, thank you coming up, data from china sparking concern as the hang seng index flirts with bear market territory that is next reminder, you can watch or listen to usive lany time on the cnbc app can be the mos thrilli. there's an abundance of reasons to get started. how far we take an idea is a question of willpower. because progress... is a matter of character.

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china's latest economic data adding concerns about a stalling economy. let's talk about this with a cnbc contributor so factory activity, some of these kind of key indicators of the economy, crude oil prices. just a nothing burger. do we have to wait for china's growth to pick up or what do you think is going on here >> good to see you, kelly.

look, i think the latest data mixed but still confirming the narrative that the recovery is stalling and, you know, to your point, there is some global macro economic conditions that is out of balance with china, who has largely been dependent on demand for its exports. laid it out, sure, that's one way to look at it. i think there is also a need for china to really address some of what they know they have to do around consumption, domestic consumption is in the tanks as well, kelly, with household income stagnant, youth unemployment at 20.4%, so you really cannot depend on demand to lead growth and so something is going to have to give, but it is clear that the economy has stalled. >> you know, the youth unemployment thing, sometimes you think, okay, well, countries are using -- but this seems to be emblematic of a bigger

problem, there aren't good quality jobs they got everybody through the educational system, but now they're coming out the other side of it and they had to say to the big state companies, you have to hire and create more jobs for the grads we know that's not a recipe for a productive economy but you got to give people jobs, that's where you start to talk about social unrest. how deep do china's problems really run >> well, i think with respect to youth unemployment, you raise a great point, kelly this is a highly educated group of chinese citizens, but with that comes high expectations for the types of jobs that they're willing to take. you heard the party encourage them to eat a little bitter is the phrase, and take some jobs that are less desirable, but the youth have not really taken the party up on that they're going to have to figure out how to really employ the youth. if not, kelly, we know the retail sector, the gig economy, all the things that really drive consumption is really depressed

with that level of youth unemployment >> they have a long-term problem if they can try to fix it. doesn't look like they're going to be able to do in more near term, the currency, it is weakening. it is going to be a headwind for their efforts to get off of this factory-led economy they have had. i don't know if we start talking about the currency being so weak as to kind of, you know, cause larger problems or ramifications, we mentioned how the hang seng, the index is down about 20% this year, so, i don't know and yet i still hear people say, you know, you got to look to china for the longer run and there is investment opportunities and companies who, you know, normally are trying to increase their exposure there have two reasons not to, number one, the geopolitics of it and you wonder about the growth opportunities. >> yeah, this is a good point, kelly, because a part of the confusion and you heard jamie dimon just recently mention this, there is a lot of confusion over what takes precedent between national security and growth and

development. xi jinping said both are a priority but most people believe, including many chinese officials, that when in conflict, national security will take precedence over economic development and growth and that also certainly does not lend for a lot of confidence in investing in china in the near term or the long-term for that matter. >> right, right. you see we talked about estee lauder and different companies where the chinese market wasn't quite what they were anticipating i guess, if we decouple so to speak economically, you know that's going to increase military tensions over time. it is like i can see why business leaders want to maybe be careful about their exposure there. but if we don't really have as strong a relationship as we used to, doesn't feel like it is going to lead to a more peaceful outcome. >> yeah. i think what you're hearing in washington now a more realistic view around derisking versus decoupling and understanding a

wholesale decoupling is not desirable or possible. but with respect to ceos, kelly, i think we have seen two trips this week, two very different trips. one, where you have seen some attempt to be balanced in the assessment of what the problems are with respect to geopolitics. another, mr. musk, has been pretty visible in many ways being used as a prop and propaganda for china i think the ceo visits can be helpful in getting both sides to understand what the business environment is like, and how geopolitics from both sides of the spectrum is really impacting the global economy and these two economies, china in particular i would like to see them be more productive on these trips and less of a prop for chinese propaganda >> interesting maybe take a little tougher stance that's hard to do when you're over there, i'm sure dewardric, thank you for your time this morning. appreciate it. coming up, reports from macy's and dollar general just

out. we'll have the numbers after the break. then later, investor mike novogratz on the crypto versus t-bill debate. i'm kidding when i say that. >> i'm not. >> t-bills and bitcoins should not be discussed in the same -- >> t-bills all the way. >> "squawk box" will be right back ng hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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good morning the bipartisan debt deal and it really was bipartisan it wasn't, just, like, manchin and sinema it was really bipartisan it passes and it now heads to the senate a live update on when a vote could happen that's coming up. some fed officials signaling they're increasingly likely to hold rates steady at the june meeting before potentially, we'll see, raising them again later this summer. we're going to hear from an economist and former national economic council member joe lavorna about that is on the table. he's been outspoken in the past about maybe no further increases. a big week coming up for apple as it gets ready to hold its worldwide developers conference the big buzz, a vr headset that could rival oculus that's straight ahead.

the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square i'm joe kernen along with kelly. >> good morning. >> kelly evans, who, rare sighting at this time, rare sighting at this time and you have made it well known how difficult it is. >> i was going to say, no, it is easy, a pleasure to be here. >> it is a pleasure to have you here but you know when you get up at 3:30 becky and andrew are both off. u.s. equity futures at this hour have moderated some of the gains, up 35 points now on the dow. skipping a rate hike and the debt ceiling is done that's good for 35 points.

nasdaq up about 36 the s&p, though, has stayed above 4200 much to the consternation of everyone who says -- >> was it yesterday, though? >> isn't it -- where is it right now? >> i thought it was 41. >> round up. you can round up 4180. >> right. >> it is not 3600. it is not the october lows. >> totally. >> and everybody thought we would be headed there. almost >> and everybody is moving their price target to the upside. >> short-term treasuries, you can really get -- >> you don't think this is the most tantalizing -- the short-term, like -- >> fine. >> even the one-year 2.4? >> kelly, merrill lynch, back when i started, 13% chtax free muni bonds 13%. would you do that? triple tax free -- >> i would do 5.2% on a one-year t-bill

>> you're ten years from now you're going to be barely ahead of inflation. >> just for now. the debt ceiling bill passing the house last night, advancing to the senate. let's get to kayla tausche with the latest they need 60 in the senate, right? >> they do the debt ceiling bill passing with overwhelming bipartisan support last night the vote was 314 voting aye, 117 voting nay with more democrats supporting the bill than republicans, despite republicans having a majority in the house that's led some gop lawmakers to suggest there will next be a discussion over speaker kevin mccarthy's leadership. but mccarthy last night claimed victory. >> we didn't do it by taking the easy way we didn't do it by the ways that people did it in the past by just lifting it. we decided that you had to spend less and we achieved that goal >> now it moves to the senate where if no one objected it could move forward quickly with

unanimous support. but at least three members have vowed to slow that process, which could delay a vote into the weekend. those include mike lee, a utah republican who called it a deal from hell, rand paul who said he would offer an alternative more fiscally conservative amendment and bernie sanders who also voiced his opposition. senate minority leader mitch mcconnell said he helped cooler heads would prevail so they can go ahead and pass it. >> i can tell you what i hope happens is that those who have amendments, if they will yield that time so that we can finish this thursday or friday and soothe the country and soothe the markets. >> the senate begins its proceedings today at 10:00 a.m., so watch that space. if the senate wanted to bypass the rules that allow senators to logjam the process, the soonest they could do that next week the x date is monday june 5th.

time is of the essence. >> kelly, thank you. we appreciate it anything further or should we get to -- >> i don't know. macy's is important. i like -- we do talk about this other stuff. and it was always going to happen and we spent hours talking about it >> i will be honest, i wasn't so sure >> really? >> yeah, i mean, it just seemed like why would it be this easy after people decided to make it a fight and then suddenly it wasn't a fight. >> it wasn't easy. it did -- there was a sea change when mccarthy passed that bill in the house, where -- that's the only body that passed the debt ceiling raise and it was hard for the president to -- that position he staked out of not negotiating, that was no longer an option. >> and the details that mick mulvaney gave us, the transparency with mccarthy and the pizza party and telling them what was in the bill and -- >> were you wondering what kind of pizza they had? that was -- that's only me that has these weird -- >> there is like, two kinds, cheese and pepperoni.

>> it has to have pepperoni. >> someone will have the detail, i'm sure. >> all right >> let's check macy's, out with quarterly results, big stock mover to the downside. melissa revco is here. you get to the guidance and you're, like, what is happening here. >> hey, kelly, i just got off the phone with macy's ceo jeff gannett, he said they're taking down the forecast because of what they saw in late march. they saw a weakening of sales trends across the board, but especially in the discretionary categories like clothing so, macy's beat on -- it beat on earnings, but it put up a disappointing result on revenue. for eps, it reported 56 cents adjusted versus 45 cents expected and revenue, it missed, it reported $4.98 billion versus $5.04 billion expected but, again, what he was saying is that they're really seeing macro pressure here. we heard from some retailers

over the past few weeks they attribute some of that to colder weather in the early spring. and he did mention that they're seeing some signs of life, he called it, in may, as people are buying more spring categories like sun dresses and things like that but overall, they're taking a cautious forecast and cutting that forecast because they're nervous about what may come in the years -- in the year ahead and they really think the macro pressures will continue, kelly. >> i mean, listen, this, to me, this comports more to what we heard from costco where the ceo was saying consumers are acting like we're in a recession, trading from beef to pork is the example he chose when you see macy's, which is trading at 3.5 times earnings multiple with the stock down 12% off the level now, you go, okay, a lot of cautiousness is priced in, what are they picking up exactly about the consumer in the months to come this just doesn't give you that sense of retail strength at all. >> you know, one thing that is

important to note is macy's, along with including its namesake stores, has blue mercury, a beauty chain and bloomingdale's, which has a higher income consumer one thing that they told me is they're seeing declines carry over to some of the more affluent customers during the pandemic as people had a little extra money, they were shopping more at luxury brands like at bloomingdale's. he said that aspirational customer has fallen off because they're under more pressure with their checkbook and so that would be another factor that you're not just seeing weakness with their department store, which skews toward a little bit of a lower income household to household, about half of their households at macy's make 75,000 or less, he said at bloomingdale's they're seeing more weakness and that's a more concerning factor. >> it makes more sense, like we were saying earlier that bloomingdale's would be weak to see macy's with -- in a way that under 75k was supposed to be a stronger segment, and not doing enough to offset

elsewhere, melissa, thank you. we'll check back in soon we appreciate it shares down 8% for macy's. >> thank you. >> $12, so sad. >> $12, the equity $3.5 billion market cap. >> i know. i know i can't believe it >> what is herald square worth >> it has been rough malls. everything amazon >> but has it been that rough? look at abercrombie. there are brands that have been able to kind of -- they're in the mall, they're hitting the consumer with the kind of apparently -- loose cargo pants and jeans and everything else are back in fashion. >> can't you get what you get at macy's at target and walmart, mostly >> those stocks aren't off to the races now. i don't know. >> not down from 70. >> yeah. >> to frank holland, a look at some of the other premarket movers frank is here much earlier than you every day and never complains. >> that's why i keep my mouth shut. >> by the way, i emailed kelly, i emailedyou too, but you don' read it, i love this combo

>> she's too tall. she would be better with you are you like 8 feet tall >> i used to be almost 5'11" i lost an inch. >> you're 6'4 ". >> i'm 6'4". you're a sweet talker. i'll get over here i'll focus on this that's not the right way to approach that question, joe, but the right way to approach the movers now, we'll start with an upgrade. csx moving higher after ubs raised the rating to buy price target from 33 bucks to 37 bucks. shares are up almost 2%. that upgrade is almost a 19% upside from today. analysts say service improvements are providing visibility into future growth. now we're going to do some earnings with a sprinkle of ai looking at salesforce right now. shares are falling despite top and bottom line beats, beat on margin and current remaining performance obligation, that's a metric that gives insight into future revenue guidance for the current quarter also above estimates dan ives called the stock

reaction a head scratcher and raised his price target from 2.30 to 2.4. marc benioff focusing on profitability and growth salesforce has an ai-focused event in new york city later this month c3 ai plummeting now, down 21%, despite top and bottom line beats. the stock falling on some soft revenue guidance bank of america out with a note saying based on that guidance, it does not appear that c3 ai is benefitting from the ai cycle. the company says it has never been better positioned within the rapidly growing enterprise ai market. again, shares down more than 21%. back over to you >> all right thank you, frank coming up, issues that matter to your money as we kick off a new month of trading and then apple in focus as it gets ready to kick off its worldwide developers conference on monday. we're going to break down what

it means for the stock and another ugly retail report, across the board, dollar general dropping after reporting quarterly results just a few moments ago. $11, down 5.5% $2.34 a share. 4 cents below estimates on revenue of $9.34 billion >> who is a better operator? dollar tree had a weak report. >> that's across, high end to low end. same store sales, you know, let's raise again. same store sales missing estimates of 3.8. "squawk box" will be right back. father's day is almost here, and dick's sporting goods has gifts for every dad. like golf clubs from taylormade, callaway, titleist, and ping. and coolers and drinkware from yeti. get him the latest styles from nike, vrst, and the north face. plus, the hottest footwear from nike,

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the dow finishing out the month of may with a loss the s&p 500 giving back almost all of its gains the nasdaq managing a nearly 6% gain, helped by enthusiasm for ai-related stocks. our next guest says that the s&p and the nasdaq are getting all the attention and under the surface there is some worrying signs. john mckoy has an investment strategy team at schroders, where he serves as head of

platform for the client group. i use the ai term there, and you just -- you just go right out and say it, john, you call it a frenzy >> it is i think it is -- i feel like fomo so coming out of covid, you had a lot of people piling into tech stocks that was going to be the way of the world. evaluation got a little bit rich you had currencies running and the bottom fell out of the stocks it feels like that is happening with ai. there will be winners, there will be companies at the center of it, that benefit from it. nvidia is the main player in that area. but it feels a little bit overdone and i think if you look at the rest of the market, whether it is the equal weight and s&p 500, cyclical stocks, the dollar, commodities, it is all telling me the slowdown is coming. i think the broader market is much weaker than the headline will tell you. >> and we have been having this discussion about whether the

broader market rises to meet some of the standouts or whether the standouts are just -- whether there is air pockets under some of those issues i think you're probably in the latter camp. you think that the breath not being very wide is an issue for the overall markets? >> i do, yeah. look, you got some great companies here they're not going anywhere but i think the valuations that they're trading at are asking a lot for investors to take on that risk today. great trade at the beginning of the year beginning today is asking a lot of investors you highlighted it in an earlier segment with the retailers struggling because of a slowdown in the consumer, 70% plus consumer oriented economy and the fed rate hikes from a year ago and earlier this year are starting to take their toll on consumer spending. it is more likely the recent winners come down to meet the laggards in the rest of the

market. >> worrying signs that you noted, i would think would be on the fed's radar. that's why yesterday i thought the comments from nestor were a little odd saying there is nothing that i see that would cause me to stop raising rates and it seems like there are some things that you can see, especially if you wait are you in the camp there is a lag effect to the hikes and that the -- we're going to see these things or are you in the camp that inflation is just too high? >> so, i think both sides of that argument. i'm going to sound like a typical strategist i think they should pause. you have a lot of rate hikes, 5% now from 0 a year and a year and a half ago that has a lag effect, some say six months, some say 12 to 18 months you see an impact on conditions. the issues we saw earlier this year are having an impact as well so, why not wait why not give it a quarter? give it a meeting or two

meetings to wait and see what the data comes in at i'm not sure why you need to do another rate hike. i think the problem this time around versus previous rate hiking cycles, over the last 10 to 15 years, is because inflation is stickier, the fed, when they pause, they're not cutting rates back to zero it is not a hike to 5 and 0. i think that's something the market is going to struggle to sort of wrap its mind around recency bias from what we experienced over the last 15 years. i'm in the pause camp. no reason to continue hiking we think a slowdown is coming, whether it is another 25 points on the pause and that's it. >> another thing is referencing the discussion we had yesterday was about 2024 earnings. and we had someone on who said we're not going to see a hard landing this year, but we might see one next year. aren't people writing off 2023 as being sort of a flattish year for s&p earnings those are supposed to come back

11%, 12% in 2024 you think that's going to happen are estimates too high >> i think estimates are way too high the problem with inflation is as long as you can pass through those import costs to consumers, and maintain your top line, your earnings are going to be okay, but at some point those import costs start to bite as consumers pull back. you have leverage in the early part, and then the cycle matures. i think unfortunately the estimates are too high for the remainder of this year and still too high for next year i don't know what the right number is. the numbers for this year are 220 i think are way too optimistic. >> i can sneak in. t-bills or bitcoin, john >> bitcoin. >> t-bills much easier to analyze >> i know. but not just for -- what would

you do if it was your money? >> he's an establishment guy, of course he's saying that. securities industry. >> institutional investor. >> of course they hate it. it is like jamie dimon hates it. >> t-bills are cratering the banking system not exactly an institution. >> of course it is mckoy because of bones mckoy are you related? >> access to some great golfers. born and raised in australia, so that's how you pronounce it. >> we'll go with mckoy bones mckoy. should have known. john, thank you. we'll always get that right now. some of us coming up, apple expected to enter a new world with its first major new product launch since 2014 we're talking about the vr headset. we'll find out what's waiting for tim cook and the tech giant in this new reality and what exactly people are expecting. and the new study shows

millionaires are hoarding cash and stock holdings are at their lowest level in 12 years robert frank will break down the numbers and tell us why the rich are pulling back on their investment exposures stay with us time now for today's aflac trivia question. what year did nvidia release its first 3d graphics card for gaming and multimedia? the swaner when cnbc's "squawk box" continues get used to this retirement thing. ahhh! coach k, there's a goat here. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill? but i have good health insurance! gaaaaaap! did you say 'gap'? he's talking about the expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? gaaaap! aflac! gaaaap! get help with expenses health insurance doesn't cover at aflac.com

now, the answer to today's aflac trivia question. what year did nvidia release its first 3d graphics card for gaming and multimedia? the answer, 1993 apple's worldwide developers conference kicks off on monday and the tech giant is expected to unveil a new vr headset steve kovach joins us now with a look at apple's new reality. if this is ai, this is so 2022 what -- >> we're talking about the metaverse again? what is going on here? >> living in the past. >> let me break it down for you. this is the first major new product since apple watch unveiling back in 2014, that's

almost nine years ago, if you're keeping count. entering a space now filled with many attempts to make the next big thing. google glass, magic link and facebook's name change to meta, putting the future of that company into unproven technology and now it is apple's turn how it is reported to work, similar to meta's last headset, there are cameras on the outside to provide a view of the real world on the screen inside then digital images are placed on top of the real world it can also be switched over to full virtual reality and we likely won't get all the details like a price or specific launch day on monday, but more important than what the device is capable of is how apple makes its pitch. no one has figured out what this category is actually for yet no killer app. look at where things stand now we have bytedance's pekos, and two models from meta, quest 2 and quest pro. none turned into blockbuster products so far and more are expected later this year beyond

what apple has, including a headset from samsung running new software from google now, apple's reputation, of course, entering a established category like mp3 players and smartphones and protecting it, but that's not always the case the apple watch was unproven and at first it did everything until apple paired back the features to focus on health and fitness still, muted expectations for sales of this apple headset. analysts estimating this spring apple is only prepared to ship 200 to 300,000 headsets this year at as much as $4,000 a pop. if true, the headset won't be a significant sales driver for apple anytime soon also important, a product to cement tim cook's legacy as he likely ends his run that began in 2011, guys. >> i never thought about that. he can't believe >> yeah, but he's been there -- not saying he's leaving tomorrow, but, you know, this is probably going to be the last major product he unveils in his

te tenure, so huge amount of pressure the watch was the last one nine and a half years ago. >> what about a flying ai apple car? >> there you go. >> with a tv set >> he may get the car out in time, but -- >> so, i don't know. >> i got some show and tell here the state of things. >> did the watch change? i won't wear one >> according to tim cook, 20% of -- more than 20% of iphone owners have a watch. they see a lot of -- >> by the way, for -- it is a big hit with moms, parents >> track your kid. >> the phone is somewhere, you got to -- i just have to dictate to this. it has its -- >> i don't know where my phone is, i have this general unwell feeling. i need to know where my phone is >> what are these headsets >> we showed a big screen of the current state of things. this is the magic leap this is one of the first companies that just captivated google was a big investor. sundar pichai was on the board

it collapsed now they're focusing on the enterprise, it can be a death nell when the company says we're moving away from the consumer, but this is their second version of the headset and you'll notice this is a little hint at what apple is going to do, have a separate battery pack, you can clip on your belt. >> better and better for joe. >> right we have one of those things at home i've never seen anyone put it on >> only for -- >> i never have. >> this is the sony one. this is -- it is a little bit different than the other ones. >> i feel stupid if i put that thing on. >> you look like daf punk when you put this on. for gaming, this is well reviewed. >> isn't -- for me, that's all meta ever was. >> what? >> for gaming. >>exactly. >> why is that -- why do you change the name of the most successful startup -- >> investors spoke you know what they're doing now. they gave it all back to the investors. >> but at some point apple and meta are going to be deeply linked because apple will make

the hardware again and meta will end up like facebook, one of the main platforms in the eu, if they get this thing past gaming. >> mark zuckerberg today in a couple hours here, he's going to do instagram live where he's likely going to try to front run apple and show off their next headset and give a little teaser for that so he's getting -- it is apple versus facebook story. >> focus on the software. >> considering how poorly reviewed and received the last headset was, maybe yes. >> can i smell the carbonara, can i feel the spray from the trevi fountain it doesn't work! >> if you like games, it is kind of cool. >> what is wrong with going there? >> this is the point how is apple going to pitch this none of the companies have been able to -- >> they're saying we got to go i think that's -- that's just virtual ai. >> that's not really our producers. >> no.

we don't have to listen. thank you. the ipo market in a slump this year. could ai bring it back to life we'll find out if the ai hype train wi bng mllriore companies to market. you're watching "squawk box" and this is cnbc they could be more efficient? i'm listening. well, with ibm, you can use software to help you connect and analyze data— from hvacs to elevators to lights. what if we use ai-driven insights to pinpoint inefficiency? yep. and act on it. saving energy, money... ... and emissions. yup. that's a big one. now you've built something better for everyone. that's the sustainability solution ibm and a global real estate company created. what will you create? ibm. let's create.

welcome back to "squawk box. let's show you shares of macy's. the company reported earnings half an hour ago adjusted earnings better than expected they missed on revenue and really cut the 2023 guidance shares off their worst levels. they declined about 12%. i don't know if we can quickly show you dollar general as well. it wasn't just macy's. dg with a big miss there, same store sales were pretty horrendous for the quarter, came in half of expectations. shares are down 8% after competitor dollar tree had a rough quarter about a week ago some of that was already priced in ipos not on the radar this year with only 68 companies going public so far. that's down 93% from the 2021 peak, which saw more than a thousand debuts. could the rise of ai startups help the market make a comeback. joining us is tom soznoff of

trady trade. he they think ai will benefit big corporate incumbents like the common megacap tech names we all know and love. >> well, so far that's been the case no doubt about it. let's hope that it extends well beyond that. but so far, that's -- that's what we have seen. >> would you then bet on any major -- i'll say ipo wave, but there is a few -- there is instacart, there is one of the payment companies, stripe, there is a few that have been kind of stuck out there waiting in the wings. and wouldn't this be their market moment? i don't know if they're going to have a lot better window from here >> well, clearly when you get -- the market loves new technology. and when you get this kind of excitement, and this kind of frothiness around technology, you know, it is good for speculation. so, it is good for the ipo market especially stocks like, you know, instacart and things like that and stripe that have been waiting a long time to bring their stock public i think, you know, obviously it is a better market than it was a

year ago when they were thinking about it so from that standpoint, the answer is yes. >> why aren't they going we have seen some spin-offs, we saw the j&j spin-off, that went reasonably well. if you're instacart, stripe, why not go now >> well, probably because, you know, the market is very foretelling and the market is also -- they have a really good sense. it is not like -- it is probably a strategic decision based on the amount of interest you know, either at that specific price or, you know, how much interest they're seeing in the stock. if they're not going, it is -- there is a reason for it which means they can't get their stock really placed at the price they want to. >> yeah. what else would you say about -- is there a little bit of a sense that investors have been burned by the performance of recent ipos and spacs and that's making it less palatable now? >> of course if you look at the -- i don't know exactly what the statistic

is, but it is in the mid 90s of the spac failures if you think of what happened the last couple of years investors have a right to take a step back and be concerned about any ipo or price they have been -- they have been force fed some really bad deals over the last couple of years. and, yeah, it does -- things like what is happening -- things like what we have seen recently in the ai space with nvidia and microsoft and all the big names, but these are trillion dollar companies. when trillion dollar companies get frothy, the rest of the market gets scared about some of the speculative plays. but, again, it can't hurt. and with the strength of the nasdaq, you're probably looking at a space that could absorb a couple of decent ipos. i know for sure from a trader's standpoint, we would love to see stripe in the marketplace, we would love to see instacart in the marketplace. >> and maybe it would give better pricing to the public investor than it would have a couple of years ago. a quick final question, then, i still have to imagine there is going to be startups who are hoping they can hit the public markets with somethingrelated to ai. are you saying people should maybe be a little cautious about

that >> well, i mean, you're talking about a space that is no question we reached a level of probably some upside capitulation and a little frothiness so, i mean, i would be i think you saw today a lot of the stocks that had earnings, especially in the ai space, including ai they're down pretty significantly premarket. i think, yeah, of course, you got to go into it with, you know, understanding what has happened and how expensive these stocks are on a relative basis now. you got to be careful about that. >> tom, thank you, sir we appreciate it >> thanks. coming up, sitting on the sidelines, the world's wealthiest investors staying out of the market. robert frank has the stats on their very large cash rwdsfoar that's next. stay tuned you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one.

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welcome back to "squawk box. want to check on the shares of advanced auto parts. that's nice. nice suggestion. after a ginormous move yesterday down, substantial, hefty, major. >> sizable. >> so many other words other than massive and huge.

the stock losing 35% yesterday after -- i don't like saying things like that -- after it missed first quarter earnings and slashed its dividend by 83%. >> yeah. almost to zero. >> if you add a yield stock -- the numbers were, like, they missed their estimate by, like, 70% and then cut year estimates for the next three quarters by -- >> after a double beat in february what changed that? >> the revenue number wasn't bad. >> and then -- >> a lot of competition. they had to -- >> deflationary. that's what i read into it. >> the number of downgrades this morning, go figure something these analysts are seeing in the results. goldman sachs and jpmorgan both downgrading the stock this morning. both to neutral. nice they had a bye raymond james going to market perform. price was 160, consolidating a

little at lower levels at this point. they haven't updated that yet. why listen to any of these people is the question shares are down again this morning. >> we're always so hard on analysts everyone in the market missed it that's why the shares are down 35%. advanced is one of the first companies i ever covered. >> you missed it >> i missed it, of course. i'm a homer. the world's millionaires are holding more than a third of their portfolios in cash according to a new report from cap gemini, among the highest levels we have seen. robert frank has the details hi, robert >> kelly, you could say a ginormous amount of cash, wealthy investors still in wealth preservation mode those with a million dollars or more, they now have 34% of their portfolios in all cash that's up from 24% a year ago. and it marks a brand-new record going back at least 20 years that's all according to a study from cap gemini. their holdings of stocks are at

their lowest in 21 years, with stocks accounting for about 23% of their portfolios. you look at alternatives, that's private equity, hedge funds, that's holding steady around 13%. and more than two-thirds of these investors now say their top priority is wealth preservation rather than growth. look at family office, that's investors with typically $100 million or more. they're moving money to the sidelines as well. they're planning to add more fixed income from 12%, 15%, and they plan to trim equities lower to 24% that's according to new family office survey from ubs one family office told ubs, quote, we're not making big bets on anything right now. kelly? >> so, i don't know if i have time for a question, robert, but do -- is this different from the financial crisis did they get conservative before that as well or was it really only more after the fact >> they didn't get this cash

conservative before that or after that and they missed a lot of the financial crisis downturns they're not necessarily predictive investors, they don't always know what's going to happen but what is interesting is that they're not seeing opportunities right now despite the decline in the stock prices and in the private markets to put that money to work. i think that's the important message. >> yeah, waiting on the sidelines. not in bitcoin >> they should be. and i'm only kidding when i say a lot. i'm pandering to my bitcoin followers is what i do because they need a little help. >> they do >> 65,000 at one point robert, they're not spending it on stocks. are they spending it on any luxury goods anymore dollar tree, dollar general is bad, macy's is bad are high end doing any better? i thought we were already trading down down to what >> yeah, if you look at lvmh

stock, that declined elon musk has now passed bernard arnault as the world's richest man. the luxury stocks have come down because of signs of weakness in the u.s. on luxury spending. we're getting a bit of a rebound in china, that's balancing a little bit but we are seeing a slowdown in the high end consumer in the u.s., especially on clothing, even leather goods, handbags, that kind of thing the art market had a little bit of a mixed week during the big sales in new york. we're seeing a decline in pre-owned watch prices and pre-owned car prices we're seeing the high end consumer pull back in all the categories not a disaster yet, but certainly a slowdown and decline in prices. >> i guess elon's going to survive his losses in twitter? you think he has -- that's keeping him up >> he'll be okay he'll be okay, joe. >> you don't think he's really, like, what did i do? that's what i love about him eh. >> lost 30 billion on it. >> but he did it for us. he did he did it for us.

>> he's back at around $200 billion, he's back at the two handle >> good. thank you. coming up, the june pause in play for jay powell and company? we'll hear from former national economic council economist joe vorna next and the latest crypto outlook and the broader rks.maet "squawk box" will be right back. ♪ ♪ [typing] ♪ you were made to act spontaneously. we were made to help plan accordingly. ♪

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just don't miss a day about which fed official might be saying something now we're back to do this skip or not skip. that's the question now. the fed's rate hike guessing game kicked into high gear yesterday. first, it was nestor saying, yeah, nonvoting, but nestor almost said the same thing, like they were sent to do it, suggesting the central bank may consider skipping the june hike. let's bring in the former sen tall bank economist. do you watch the show? >> what show >> this show >> nestor says i don't see any

reason to star hiking. did they see any reason to start hiking at zero no can they see the future? they always use rear view mirror if you don't know the effect yet, why would you make that statement? and i think the other two guys are watching me because i have delusions of grandeur. >> austin does >> we were at 60 >> and to 70 >> now where are we? >> jay powell came out and mentioned pause and chris waller, who is his right-hand man from everything i understand came out and said we might be hiking wait a minute. the left and right hands aren't connected here the reality is once they pause, the market is going to assume they want to ease, which is the right conclusion the market will draw >> the right conclusion? >> it's the right conclusion i don't want to get into

drinking analogies too recall in the morning, but that one final sip puts you over the edge i think that's kind of the tightening it's the straw that breaks the camel's back >> do you throw up that's tmi >> exactly leading indicators are down 13 months in a row, inflation's lagging. they're making a classic policy mistake. i think michael bury said the fed not trying to make the fed made of the 1970s is making the mistakes of the fed in the 1930s. if they raise rates again, that's going to exacerbate the problem. the hurdle for hikes has got to be really, really high they're really going to start up again? >> it's odd to me. i can understand if the fed goes we don't want to trust the yield curve because whatever but leading indicators are such

a part of normal business. we're talking -- why don't they talk more about that >> there's too much group things, too much consensus the economists don't agree on anything look at the supreme court. all of a sudden you have 19 people who all of a sudden degree >> we had auston on. he said it looked like a hostage state. someone said -- i think paul tudor jones said there was no doubt auston didn't want to go >> i don't know why we have to have debates that's part of it. why is it the yield curve is not a useful gauge it is. the curve is deeply inverted it only normalizes because the fed cuts why would a 10-year note sell off with inflation coppinming d

and break even expectations around 2%? the funds rate would have to go to 7 or 8% it's not going to happen >> so we're above the terminal rate >> as you look back at 2019, the fed funds rate couldn't even get to 2% and the fed had a cut. this economy to me is not as dynamic as it was in 2019. i'm sorry, i just don't believe it how the heck can we sustain 5% plus funds i think we're going to go under 2. >> what? >> who was it that said the other day the economy still has the same low natural rate as it did prior to the pandemic. >> you have very little gdp. the last five quarters, it's grown 1% you've got high employment that confirms you have terrible productivity numbers you have aging population. this is where i do agree with

larry somers real rates are probably positive, not negative, the natural rate >> i do somewhat understand when they say payroll is positive and inflation -- okay, i kind of get that those are the facts. what are the facts going to look look six, 12 months out do you think? >> whenever the recession happens, people will be surprised. that may seem like it's obvious will you the same thing happened in '08 i remember in '08 thinking the economy is going to roll over and gdp was 2.5% and the surprise will be when the unemployment rate gaps up three or four tenths by the way, the average fed easing is about 400 basis points >> it's almost like if i was president biden, i would have wanted the weakness to come already. >> the fed is going to get

blamed regardless. they kind of put this bullet on his back because it was way too easy for way too long. they went from one extreme to the other extreme. and you don't want to talk responsibility for things you can't control, which is predicting the economy and controlling it the fed fund rate is a very blunt instrument they don't know how qe works, they don't know how qt works bernanke has said as much. >> i thought we were normalizing rates. how can we be 400 basis points too high that's going to call -- 1% is an emergency sort of pandemic -- >> if inflation moves back to 2%, which i believe will happen in the next year and a half, two years, maybe sooner, the real rate being zero -- >> i was thinking 400 basis

points had we used to be at much higher levels. on a percentage basis, that's 80% of what we just raised >> but we're not going to get probably any fiscal help, not with the finances the way they are. the pressure is back on the nfe to do it again they'll be doing qe again and all the shenanigans will start >> i think you're smarter with the glasses. >> do i sound better >> you seem smarter to me. >> what about -- >> no, dumb, dumb. ma it's like wonder won. she changed. >> either way, glasses on. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this.

edward jones

investors begin to shift their attention to the fed's next move after the house sent its debt ceiling raise across the capitol to the senate. and macy's and dollar general hit hard on their latest results. and can crypto rebound from its worst month of the year? we'll ask mike novogratz in an

interview. the final hour of ""squawk box" begins right now good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with kelly evans. she wants to come every day now. she likes it so much becky and andrew are off today >> i think i'm more tired. >> i have that effect. on viewers, too. u.s. equity futures up about 20 points, nasdaq up 28 and the s&p getting back close to 4200 what's going on? treasury yield >> were we green earlier on futures? i thought we were red? >> no, we were always up not

enough we were 60, 70 >> that's right. >> we were saying debt ceiling deal and maybe interest rate hikes, what's the problem? it's at the top end of its range. >> it is it's been glued there. >> almost a two-year range >> ten years at 364. the short term, one-year t-bill. i'm not saying it has to be -- >> do the math $10,000. $500 divided by 12 >> you can get that for one year you wouldn't take that >> no. i don't want it. keep it. >> two big earnings movers to tell you about these are pretty telling in terms of what's going on with the consumer macy's beat analyst estimates. first it looked good but revenue missed and guidance was terrible they slashed '23 guidance and

that's why the stock is down 9%. they expect sales to decline 6 1/2 to 7%. the ceo saying he thinks macro pressures will continue. we'll talk more about that later this analyst and we're also watching dollar general. earnings and missed sales and profit forecasts it expects eps to be negative for the year it accounts for 1.36 in an inflationary market like this. so the shares are down >> you know why the 10-year is -- you're going to be in your stupid bill and you're going to come to the end of the year -- >> you're going to stay in your one year and then you going back to the stock market. that's the game plan

>> the debt limit clearing the house, 314-117 more than twice as many republicans backed the deal than voted against it, but the measure still won more democratic votes it was truly a bipartisan bill senate majority leader chuck schumer formally placed the bill on the calendar for today. it's unclear how long it will be until a final vote a number of senators made it to offer amendments joining us now national economic director i guess that's the wild card i'm really surprised the market's not reacting. are we missing something about the devil in the details here? is there more to do? >> look, we don't count our chickens before they're hatched. we still have to move this bill through the senate as you noted, it's a really good sign a strong majority of democrats and republicans voted to support this bill i think it's a sign the

president reached a good, fair compromise that reflects the realities of the divided government we have now and our hope and anticipation is it will move through the senate and get to the president's desk in advance of the deadline. >> i hate using overused expressions but you know the dog that catches the bus and now what this doesn't sound our problem we still have issues, do we not? the debt to gdp is too high at this point that means we need revenues or more spending cuts or entitlement reform we're just getting started this just gets us to where we need to start making hard choices. >> the president in march laid out a budget that would cut the deficit by $3 trillion there's some wasteful spending we can cut the president thinks we spend

way too much on the prescription program. we can cut hundreds of billions there. we can cut money that goes to the oil and gas industry, subsidies that seem unnecessary in a world where the oil and gas industry made $200 billion last year and we can impose taxes not on anyone making under $400,000 a year and that allows us to cut the deficit by $3 trillion we're eager to work with democrats and republicans on implementing the rest of the budget >> one other thing that's getting a little bit more bipartisan is the wish for more growth, for more -- just more growth, grow our way out of things instead of, you know, instead of just hunkering down and i guess my question and i don't want to upset you but do you think that growth in

government is a better remedy than growth in the private sector do you want to raise taxes now on corporations? that just doesn't seem like the way you get to higher overall growth for the economy >> i think the proof is in the pudding here in terms of the president's approach if you look at what he did coming into office in early 2021, we've had two strong years of economic growth if you look at our growth compared to the rest of the g7 we're well above their levels of growth the president did that by providing relief and providing support directly to lower income and middle income families he believes when middle class families are doing well our economy is doing well and when the american consumer is doing well and has money to spend, that's the driver of strong groh growth. we can reduce the deficit and at the same time continue the strong growth we've seen

we don't think the targeted taxes impinge on that. they allow us to make the investments we need in infrastructure, new manufacturing capacity in the united states that help drive growth for the long term >> the growth this you're talking about that the president was able to manage included the corporate tax rate being at those lower levels you don't think -- would it have been better if the tax rate was at higher levels or can you see that maybe that's helped for the last two years. >> look, i think that the evidence about what happened after the trump tax bill dramatically slashed corporate tax rates is we didn't see a surge in investment. we saw a surge in buybacks and executive compensation we think we can impose targeted taxes on very large corporations and still see the inclusive growth that we've had over the last two years remember last year the president put in place a corporate minimum

tax for 15% so no corporation that makes tens of billions in profits pays zero income tax to the federal government that again helps us fund investments that we need, whether it's in high speed internet for every family in the united states or improving our ports or airports so goods can travel into the country and out of the country more quickly. all of that is good for long-term growth in this country. >> we've had people make the case that in terms of regulations that if you were long regulations, you're doing pretty well, too do you think that's the way to engender more economic growth, layering regulation after regulation offer the economy >> i think it's a case-by-case thing. the president made clear when regulations get in the way of growth and aren't protecting something important, he'll get rid of them. cla classic example is the president

got rid of regulations that require hearing aids to be sold only with prescription now they're over the counter in cvs and best buys across the country. new companies are entering that market and innovating in that space. that's the kind of deregulatory step the president is comfortable taking if we're talking about deregulating that threatens the air and water that we drink are then, no, the president is not particularly interested in that and not clear that would be helpful for the american economy. >> i think we did have record revenue, tax revenue in the last couple of years. so i'm not sure why that indicates we need to work on that side of the equation. seems like if you got record revenue, live within your means and spend less why -- you tinker with that and move more out of the private sector where the risk takers are and the entrepreneurs and the about us creators and everything

else and then you move to the other side i'm not sure that's the way to go but that's where the president wants to take us gli >> i want to be clear on that. the spike in revenue we saw last year has actually started to come back down to the 15-year average level -- >> that might be capital gains nobody's made any money in the stock market >> i want to be clear about something, which is that the president put in place incentives for companies to invest in america. what we have seen over the last two years is $480 billion of pledged private investment in american manufacturing, in american production, whether it's in semiconductors or it's in clean energy production here at home. the idea that the president's agenda has been restrictive to business investment is just not based in reality i think what the president has done is made america a very good place for companies to invest and companies that have their choice of which country all across the world to invest in are choosing for the first time

in many cases to invest in america. i don't think that's a coincidence that's been the president's priority since the day he stepped into the oval office >> it's funny who watches our show, dr. scott gottlieb of the fda said that he advanced that regulation on hearing aids it came under trump, finalized under biden. so you didn't stop it but you didn't do that so he said that. i thought it was funny i didn't know anything about arg dsheinai and regulation. great to have you on today we hope to see you again you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪

welcome back to "squawk box. a big beat for adp for the may payroll estimate in the private sector, up 278,000 that is a huge increase from what the estimate was of 180,000. you can see right there the goods sector 110, service sector 1 186,000 and the non-farm payrolls

adp, not always accurate, but it is pointing to a beat coming on friday small business powering up 235,000, medium up 140,000 and large business down 106,000. i'm not surprised to see some let-up right there and you look at by sector and up see leisure and hospitality 208,000. so the bulk of all of the hiring came, again, in the leisure and hospitality business that sector is still down below where it was before the pandemic by 400,000 jobs. there's still work to be done. construction 64,000, education and health services down 29. that had been an area that had been a source of strength. financial activities, you've heard about layoffs in that sector and manufacturing also struck with the ism manufacturing at 10:00 today it's been down several months in a row. when it comes to the median change in pay, wages have been

coming up. the average increase for a person staying in their job, 6.5%, one of the lowest we've had in a while, down 0.2 and job changers up 12%, down from the prior month. one piece of data from a different source, we follow high frequently data from ukg they're saying they see job strength we saw labor market strength across every sector, they said, we didn't see any pockets of weakness throughout the month. i just want to check while we're here and i'll toss it back to you, joe, we're still running -- and we'll talk about this again at 8:30 after the data it's not really much of a change but a 33% chance now of that rate hike. it had been 70% before the fed officials yesterday started talking about a skip joe? >> once again i was just struck

by how i was reacting to that. i was like, oh my god, great hiring, bad. other, they're monitoring, oh that's good. everything i'm hoping for, we should be hoping for the reverse. but know the world we live in, i got it how about they're saying there's no diversity on the fed. maybe not when they vote when push comes to shove, but leading up to it, they're all over the place. we had nestor yesterday who went up to 70%. she was implying there was no reason to pause. and then, you know, within hours two other fed heads said it's time to skip now this number comes out, i figure someone is going to come out today and say we definitely got to go up again we're getting buffeted back and forth. >> i'll give you a little context. remember we did a report, i

don't remember how long ago it was, we looked at the number of dissents under yellen and greenspan. we can fuind that chart again fr another day. much less dissent. we're going on the biggest divergence from the fed. i reported on monday the idea that it looked like the fed was going to hike again, even though the "pause in peril" was the title. and nestor saying, hey, we might need to hike again we'll talk about this later. jefferson, the vice chair nominee, is he now talking for the chair?

>> save that monday report for after the job number tomorrow, steve. we may need to bring that back we may make the round trip back to 70 by tomorrow. don't you think, if it's anything like the adp report >> we could. if there's more strength, if there's a strong wage growth, that's a good point, joe >> don't throw it away put it in your safe file >> coming up, more breaking economic data, including a new look at jobless claims and billionaire investor mike novogratz joins us you're watching "squawk box" on cnbc

and today along with the rest of the nbc news group, we're announcing the return of the inspiring america franchise event. all next week cnbc will feature business leaders who have made a positive difference in the world around them and the following weekend, as it does every year, nbc news will broadcast a network wide special spotlighting this year's inspiration list honorees, including eva longoria, lebron james, gary sinise and more.

you can watch that on june 10th and 11th or stream on peacock. >> oil is coming off its worst numbers in a month and a half. they say they are unlikely to expand cuts when they meet on monday rita, it's great to see you. we've heard reports about opec turning away certain members of the press. what do you think is really going on here? >> i think there's way too much speculation right now about what's driving this. there's definitely been media speculation about a potential rift between saudi arabia and russia, which we know is absolutely not correct i think that's why the decision has been taken to keep certain media sources out of opec. i've had so many questions since yesterday about does this mean opec is going to break up, et cetera, et cetera. no, that's just the market trying to almost fit a narrative

to the price action. we have seen very weak price action but there is no rift within opec russia, saudi arabia, they have been constantly talking. they very much are keen to make sure we don't have a surplus in the market they remain vigilant so, no, i'm not expecting any, you know, headlines around are they going to break up none of that this is generally them trying to address all sorts of speculation about a rift or imminent price war, all of which is basically not true >> basically you think maybe they're punishing outlets that had those reports but more importantly for the oil price, if there's a rift that seems bearish for oil and if there's not is that bullish? >> yeah, i think the issue right now with the market is that we've seen inventories not build

very much at all so far this year, but at the same time we've seen prices continue to come off. this is a time through may where we should be building inventory. refineries are under maintenance. demand continues to come in higher than what we've been pencilling in. if asked me what we missed at the start of the year, it's the high interest rates, which just meant that we are seeing massive amounts of destocking right now everywhere, particularly refineries in asia because the cost of capital has gone up so much go on, sorry >> only because we have a couple seconds. i would have thought the high cost of capital would have acted in a different way, maybe constrained supply why do you think it means people are dumping supply and how sustainable is that? >> if interest rates have gone up, if you're a refiner, it's more costly for you. if you're anybody storing goods, it's more costly to store the goods. you have to pay a higher interest rate for storing it that's why i think we are going

towards a world where everybody is just going to hold lower inventory cover. that does mean you can get potential spikes down the line but right now that's what's happening and that's why the market is weak >> thank you very much a lot of insight there we really appreciate your time >> thank you >> up next, breaking economic data, jobless claims and produ productivity as well when "squawk box" returns

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welfare come back. let's get the jobless claims with the dow negative on the morning. rick, how are they looking >> jobless claims and we're looking at productivity. let's start with productivity, shall we we're expecting the number for first quarterfinal to be minus 2.4 and indeed it came in a little bit lighter, which is not a bad thing, less negative, minus 2.1. so that is what goes in the books. it is still the weakest quarter in terms of productivity since june so second quarter of last year if we look at the associated uni

unit labor costs, 4.26%. initial jobless claim, 232,000 that is what little bit light. we were looking for 235, 237 officially we're up 2,000. 232,000 the highest level since the last week in april when we were at 242,000. we looked at 1,795,000 still under, under 1.8 million on continuing claims. that's three weeks under 1.8 million and that is a big deal it's a psychological level you can see, though, that traits have moved down just a little bit. i'm actually a little bit surprised by that. maybe it the non-farm

productivity number. i don't see the year-over-year productivity, joe and kelly, but something needs to be pointed out. your productivity, we've been following it since 1948. the all-time low throughout the entire span was in the second quarter of 2002. it has improved just a bit but productivity is the special sauce of the u.s. economy and it isn't tasting very good as of late we still have a lot of numbers left we s&p pmis and those have reflected weakness we're going to see not only manufacturing but we'll see the services side. we do see that interest rates continue to fall we're at 362, but down 3, 3 1/2 basis points, 438, they're town about two basis points

we want to continue to monitor the and we see how interest rates interest continued to slide a little bit i think i agreed on this a while back and remember, we can skip, we can hop, we can jump rope but in the end, if you're going to sell a pause, you need to sell it as a skip, otherwise the market's going to jump towards all kind of conclusions about this is the end, i jump to that conclusion pretty much now as well joe, kelly, back to you. >> yeah. i don't know we sure do -- a lot of words spent on 25 basis points i'm saying for a while i wish the private sector could just do what it does without having to think of every nuance from every fed head about what it means for our lives

it gets a little old >> are the government's in such a micromanaging job, it's absolutely unprobably we can't put the toothpaste back in the tube, can't put officialism and productivity back in capitalism. >> you can put the genie back in the bottle but genie does go back in the bottle, right? >> but only if -- i think it needs to want to, though, doesn't it >> there's some special way of doing it but toothpaste never goes bad. you can never unscramble an egg. that's true. >> the horse can -- >> if the door's open. >> the door's open all right. steve liesman is like what are you doing?

>> i was going to say with job claims the way they are and zip recruiter warned a couple months ago that activity could be way worse but they're not picking it up in the government data yet. >> yeah, just a little messy here trying to get that toothpaste back into my tube here it doesn't really seem to go >> no. >> i'm not sure what you're -- here's the thing the job market, at least in the measured numbers we're getting, and the stuff we've been reporting. and the jobless continuing claims below 1.8 are mortgages, psychological. it seems to tell you the people losing their jobs are not on continuing claims. they're going back to work, it would appear, relatively quickly. and i am not at the moment concerned about the productivity

numbers. let me explain why i don't know if but if you look at the -- oh, they're so good there. that i can a look at that line to the left there before 2020. try to draw up in your mind if it continued upward like that. we would just about hit where we are right now. is that clear to you guys there? what had happened is we had shed a bunch of the less productive workers in the economy we still kept growing andnow we've brought many of them back. so i think we're sort of on the line we otherwise would and if you look at what's happening in leisure and hospitality, not tremendously productive jobs you drink them being and we're still 4,000 below. that's going to mean a reduction in activity, at least until we

normalize this economy and i think people forget we're still in this recovery process from covid, for better or worse, but we're still coming back to be a part of the job growth but the economy seems to be relatively healthy from the jobs standpoint caller: well, leisure, people still doing all that but why? aren't there anecdotal evidence from some of these companies that there is a slowdown we keep hanging our hat on, yeah, people still want to go places in the summer so you need hotels, restaurants and planes i mean, which is it, steve is it we don't have a clear picture to listen to >> the definitive answer is yes, we really don't know i talked to phil yesterday i called him after one of his reports and he said the whole european thing,io, is yet to come americans haven't really

returned to europe so that's another big part of it a lot of places, the hotel rates, the airline fares are still high and planes and hotels are just booked. there does not appear to be weakness america raised its guidance for the year and i was like, wait a second and they still seem to be off of o -- i mean how many bicycles do you have in your basement right now? do you have two, three, four right now they seem to be off of the peloton thing and on to the airplanes. >> right it's just -- it's not clear one way or the other where are you now? we should be at 50%, next hike i'm sorry, go ahead. >> i have to report, i forgot to do this. i misreported a comment by tom

barkin i said he's on the high side when it comes to his rate outlook, it was actually his inflation outlook, not his rate outlook. >> okay. we're going to get that right. you're supposed to thank him you didn't want to thank him you didn't offer him anything? >> i don't need to jump in >> i'm thanking you, steve thank you. >> thank you thank you, steve >> maybe you didn't deserve thanks coming up, what's next for crypto currency prices following the worst prices of the year and ethey are is up 2%, its worst month since last december. you can get the best of box boggs in our daily podcast >> i do love the podcast >> do you? >> i do.

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>> hong kong is officially allowing crypto trading for retail customers through

regulated exchanges, first time. and so we're seeing an asian adoption and we're seeing in some ways up 65% this year, and lower volatility than we see in lots of ways, these have been two of the best performing assets there are >> last time you were on someone took offense that you kind of conceded that a lot of the buying was by people that already own it or people that are already involved and there's no new adoption and that that's a problem. is that still -- >> what we're seeing is the new buyers are all small and they're aggregated on these platforms, robinhood or the cash app from square and they continue to buy small amounts and hold them. and so, you know, in some ways that makes a pretty healthy market because these are

long-term -- >> stackers. >> we're not seeing the institutions come in that got stopped by a combination of sam and gary, sam freed and gary gensler you're seeing a lot of interest, just not a lot of activity >> so will you help kelly with her -- >> no, no, no. >> we've been talking and obviously it's totally about what your risk profile and tolerance is whether you one-year t-bill or bitcoin at 27 >> you to tell me you would take a 1-year t-bill at 5.2% all day long no >> you have to have some 1-year t-bills but i've always kind of lived on the risk curve. we're on an i.a. bubble. having watched bubbles my whole life, it's a pretty exciting

one. it makes trading the stock market complicated because everyone knows that stat, 494 stocks of the s&p are up changed and the other six make up all the gains. it feels early the a.i. story is just starting. we started using chat gtp three months ago bubbles don't last three months. they last a lot longer bubbles always happen around things that fundamentally change the way we live bubbles happen around the way we live people buy way in advance add get caught up in the frenzy. nasdaq is way outperform it can continue to outperform. >> rather than the bitcoin, rather than the t-bill, he wants to chase -- i don't know in you want to chase nvidia that's what i'm hearing. >> it's something we have to watch really carefully >> if you really were going to

invest $10,000 right now, would you think 27,000 for bitcoin is a better buy than a year where you'd get $500 back -- >> 100%. listen, the fed is going to pause or skip or whatever you want to call it -- >> listen to the billionaire >> and then we'll see the data come in. and if the data continues to slow -- it's mixed data, right the retail services space continues to be vibrant and the rest of the economy is slowing, but if what i think is going to happen happens and we see a real slowdown in the second half of the year, the fed will be cutting rates by october and crypto will be off to the races. >> i think they're taking liquidity out, mike are don't you? you know these dynamics better than anybody they're sucking liquidity out. it's going into a.i. but the fact it's going into a.i. is all the less reason it needs to go into crypto. >> yeah, but they will be

hawkish until they're not. and the moment this economy really turns -- look at chile all of a sudden. it was way ahead of america, they raised rates 900,000 basis point and all of a sudden their economy just rolled off a cliff. you will see rate cuts really fast i like to think that's the canary in the coal mine as one of my friend calls it. the u.s. economy will slow all these interest rate hikes will have impact the banking prices will stop letting the small businesses, which will funllinally show up employment, which takes a while. if we talking in october, the fed will have a very different tone and that will be the catalyst for assets, especially gold, silver, bitcoin, etheerium. >> someone says i'll take a one-year t-bill, you don't think the market will be substantially lower in the next -- like there will be a better entry point when you're redeeming maybe that

coupon than there is right now you don't think it goes down >> listen, if you're a wonderful market timer, there could be a dip and you might be able to buy the dip. it feels we're range bound and low volatility you could pierce either side of the range and have a quick move. i don't see any urgent sellers orr or nervous longs i see people who are kind of bored and stacking the government is going to sell some bitcoin later in the year there are some sellers but it's not like we have a leveraged market right now where people are sitting on pins and needles. a leverage is at a low, volume is at a low. >> if you got ten grand and you put it in your mattress, at the end of the year you have 10 grand. you put it in a t-bill, you have 10,500 that's like kissing your sister. what if bitcoin is at 40,000 >> you really think bitcoin is

taking off this year >> i think it gets higher highs and higher lows, don't you think? >> volatility adjusted is still -- >> it's 65,000 >> so? >> mike, how much did that guy who bought the pizza, what year wa was that it was $220 million now. >> it's an expensive pizza, no doubt about it >> you got to get with the program, young lady. >> i am very nervous because you guys are far wiser -- >> oh good, i'm mansplaining >> i can't go up against you >> you can there's wackos everywhere. you got to know your risk to go into crypto, mike. >> no one listens to me. on a risk-adjusted basis, bitcoin and ethereum are the best assets to invest in over two years, three years, six months again, it used to be an 80 vol

aetna asset and now it's a 40 vol asset. so you don't buy as much bitcoin as jpmorgan, but it's been a better bet >> based, this guy thanks thanks, mike >> what did we settle about -- it's definitely bitcoin? >> yeah. and you are just totally out of touch. >> in la-la land total boomer >> anachronistic coming up, we'll get the inside scoop on what drove atcy's first quarter wh's going on with the consumer stay tuned you're watching "squawk box" on cnbc this. we got this. we got this. we got this. we got this. yay! we got this. we got this!

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welcome back the losses for salesforce are deepening premarket, it's down 7.5%, a couple points worse than earlier on the company beat revenue and earnings estimates, but it saw higher costs, and that's been a real sticking point. they raised their earnings forecast for the 2024 fiscal year but left revenue intact salesforce also had news on artificial intelligence, announcing einsteingpt to help salespeople and marketers do their jobs better. here's ceo marc benioff talking

to jim cramer last night >> i was just with sam altman, the ceo of open a.i. and the one app that he had open was slack, using that from day one at open a.i. and i'll tell you, jim, my dream is that all that data that's inside slack, well, as we work on our own llm, that slack is going to almost wake up and become intelligent itself. it's going to be an incredible revelation for our customers >> slack announced earlier this month it is planning to add a host of generative a.i. features to its program, including message summaries and note-taking, all of which sound good from a user point of view, but not helping salesforce right now. meta platform threatening to yank news content in its home state of california if the state government mandates the tech companies pay publishers at issue is a bill called the california journalism preservation act under which companies like facebook would have to pay producers or news

content if that content appears on online platforms. a meta spokesman said the payment structure would benefit out-of-state media companies, even as it purports to support california publishers, and they had that written in the teleprompter, spokesman, and i had thought quickly enough, i would have said spokesperson i apologize. that was not me. >> listen, the fact that tech companies or any company has to play this thing where the most progressive or the -- where that state or that country gets to set the agenda for everybody gets a little old at some point, and you wonder if there's a way -- i know it's difficult from an operations point of view uk, you get what you want. accepting cookies on every browser. what is the point? it didn't make -- anyway i don't know macy's is under pressure after reporting mixed quarter results and cutting it 2023 sales and profit guidance. joining us with her take on the quarter is a retail analyst with forester it's great to see you.

macy's shares, by the way, are coming well off the lows, down 12 or 13% when this first crossed. why do you think that is >> i think that macy's has just had some challenges over the last couple of years, and the truth is that the department store sector has been challenged macy's has, to some degree, overperformed -- outperformed the rest of the sector, but the truth is that the department store sector has been generally very, very challenged. retail continues, particularly in any mall sector, it's really problematic. the consumer is just simply not spending as much there apparel sales have been underperforming relative to the rest of the retail sector, and i think that's why you're seeing a large part of what you're seeing >> the valuation is so low you know, under four times, maybe now three and a half times. do you think what steve liesman said earlier is true, that we are just seeing a huge dollar shift into services like he cited american airlines in

particular, and its better forecast, at the expense of goods right now? >> yeah, absolutely. i mean, there's no question that there are sectors within travel that are rebounding. the consumer is still spending in sectors like eating out, so the food sector is absolutely considered parkint of that servs world, and the consumer is not spending as much on physical goods. you also have to realize that retail spend overall is still better than it was in 2019, and the -- and while the numbers are relatively flat in 2023 over 2022, much of that more recent flattening and to some levels even a decline is going to be due to some of the issues with consumer confidence, the inflation numbers we're seeing now, all of those factors that have been weighing on the economy, but we haven't seen it -- we didn't see it reflected in 2022. we're now seeing it in 2023. >> just a final comment then, is it macro, or is it company

specific >> i think it's largely macro. that's really what the truth is. i mean, when you're looking at a sector like department stores, this is a sector that for the last two decades has been on the decline. we're just hoping that the numbers sort of regress to 2019, and if you are there, that's great. and anything above that is a huge win so, i think that there were some expectations that the growth that you saw in a sector like e-commerce would continue forever, and that's just simply unrealistic, because the consumer is much more complex than that. there were huge sectors like travel that were off, that are now rebounding >> nordstrom had, you know, on earnings as well, so it's not all of them. it wasn't abercrombie. thanks for your time this morning. >> thank you >> appreciate it >> the -- good having you. this is episodic markets now at some of the low levels, lowest levels we've seen in the dow anyway, but we still have green on the s&p and the nasdaq

we got the adp report today. that was strong. but tomorrow, we got -- and jobless claims but tomorrow, we got the big jobs report. >> but it seems less likely it would go negative now. >> this is a prelude to tomorrow who knows, some fed head might say, we're back to raising >> i might rejoin you for that big jobs day >> that would be amazing >> thank you for having me >> two days in a row >> if i sleep. >> make sure you join us she might be back. "squawk on the street" is next ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange first day of june kicks off with the debt ceiling bill that does pass the house, moves to senate. big diet of eco-data today, adp runs hot, but yields mostly lower. ten-yea ten-year, lowest since mid-may salesforce