yesterday. it's june 2nd, 2023. "squawk box" begins right now. good morning welcome back to "squawk box" here on cnbc we are live at the nasdaq market site in times square i'm andrew ross sorkin i'm back after being sick to torture joe kernen nice to see you. >> you are only at 70% >> i'm never perfect i am in the 70%. i have it in the throat and nose >> what about this strain? >> i don't have a strain >> could you be contagious you have a strain of something. >> a cold. >> you know for a fact you are not contagious now, but here you are? >> i'm four days in. three and a half days in, four days in.

>> i'm not worried about it. i have four dogs >> you are a very healthy man. >> you know what dogs eat and i kiss them. i see everything oh, that thing >> i struggle. my kids had something. >> are you good? kelly is here. she was here yesterday >> she is filling in doing a great job. >> what is weird is she said this is what i'm wearing tomorrow i said what can i do i found this >> a coincidence. >> it's working out. >> dweeb like. >> you know what else today is >> doughnut day. they said that in makeup >> doughnut day. i'm sick, but i want the doughnut >> people sending doughnuts. >> do we know something is coming >> i don't know. we can only hope. >> there have been inquinquirie.

>> something wicked this way comes. i like the bakecon glaze. >> go for a cronut they were talking about cronuts. >> i like a nice light glaze >> nine of them. >> in the volume take a look at u.s. equities this hour. by the way, in the next two hours, this is likely to move a l lot. the dow up 152 points on the back of the debt ceiling deal. maybe some hope about the jobs number we'll see. s&p is up 18 points. nasdaq up 67 after the dow gained 53 points yesterday the s&p rising by 1% the nasdaq rising by 1.3%. the highest level for the s&p and nasdaq since august of 2022. of course, look at treasury yields 10-year treasury and 2-year treasury you are looking at the 10-year

treasury at 6.14 the 2-year treasury at 4.347 >> i'm not going to do it. >> what can you get for cash right now? >> i'm not going to ask andrew >> andrew -- s >> go for it what is it >> a t-bill is end-all for 5%. >> i was thinking of putting my money in the apple goldman saks pro -- goldman sachs program. it is hard to get your money out. >> we don't talk 10,000. talk 10,000 increments put it in the mattress for a year, you get $500 you make -- >> tell him the alternative. >> what? >> the one-year t-bill.

>> what did he tell you? he said it was the best performing asset >> i think bitcoin is like gold. it will peak it has purchasing hour >> based on stock to flow. >> i know. >> you know all this stuff and you have bitcoin >> i do. >> she has it. >> i'm bullish on it >> i still think $1 saved is a $1 made. if you make $500, you have $500. i'll go to dinner and enjoy it >> my friend said does kelly sleep with her light on? who can buy stocks and buy a piece of the future of the great u.s. company maybe with 10% >> by the way, this is bad the only other time i tried was ten years ago and it did not go well >> let me know >> you are doing the opposite.

the debt ceiling standoff is over and the fiscal responsibility act passed by a vote of 63-36. president biden will sign the bill and address the nation at 7:00 p.m we moved through this quickly. andrew, i did to the get your macro take on the whole thing. a lot of praise for mccarthy and biden. >> ai'm happy it worked out. i give both sides credit >> we did that yesterday >> good news >> the president and mccarthy. the daily beat phrased it. is it the return of sane republicans? i love the premise for six years, there have been insane republicans there was a picture of speaker mccarthy i thought it was funny >> he is getting accolades of

the deal >> that fall >> that was a scary looking thing. the next big thing is the employment report. forecasters expected economy added 190,000 non-farm jobs. the unemployment rate is expected to tick higher to 3.5%. there is a narrow window where this doesn't impact the markets. higher than expected hawkish. >> the wage gains. you look at hourly it is all the devil in the details with this, too it would be nice if we didn't have to go to 6% unemployment to satisfy the federal reserve. it would be nice if inflation moderated and wage gains got in line -- with more in line with not being inflationary europe is in recession china is not doing great we're like the last holdout

which makes me wonder. shares of sentinelone, a cybersecurity can be, plunging it missed revenue guidance it issued three months ago. that's a long time in this world. executives show a slowdown the decline would make it one of the worst and the company's ceo will join news the 7:00 hour to tell us probably we don't concern ourselves with the daily issues of stock. >> especially cyber security stocks with an incredible run. >> okta getting hit. it had a great run and got hit in the past earnings report. some did not seem that bad >> they had to have a good previous quarter

why all of a sudden the about face are they giving back gains >> are we going to break at 6:6 6:07 >> i hesitated >> i saw you we usually have more to say. what's up? >> no. i'm in the same camp let's rolling. coming up, we watched nvidia stocks soaring last week we dig into the report by rival broadcom. and meta is asking workers to come into the office three days a week. ur'll talk about that later this ho you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most.

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safe from cyberthreats? so we can better protect our customer data? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with global secure networking from comcast business. it's not just possible. it's happening. welcome back shares of broadcom down 2% quarter guidance came in higher than expected. in the a.i. space, are you ex -- you are expected to do that. broadcom is up over vaneck 14% shares of lululemon are higher that was 30 cents above estimates. revenue in china was

particularly strong. contra and este was up from a year ago that was reeling from covid restrictions i know we have two lululemon lovers here. >> broadcom? >> by the way, the recents news -- recent news of the tests they need something. should nvidia replace them in the dow? >> amd with 50% higher market down intel. what happened? intel. intel! intel inside >> they fell so far behind >> legacy tech game. >> $31 stock is the lowest in the dow at this point. >> the market cap. joining us to talk about the stocks on the move is sylvia

jablonski. sylvia, i don't know if you know about sentinelone, but cybersecurity is strong in the market this year what happened here >> yeah. i think there have been winners and losers in the space. they didn't make it. if you take a step back and talk about the inertia in the space and the cloud which powers tech spending we are not worried about the sector itself, but it has been a poor report. >> why is the guidance so bad? broadcom and nvidia to one side. everyone else is coming out with guidance cuts. all sorts of sectors >> i think the spend has already happened in the space of the

t index. if you look at the five-year mark, you will see growth. you will need cybersecurity to protect all of the data and protect computing. there will be opportunity in the future here. >> yeah. opportunity is kind of people going i don't want to jump into something that is cut 35%. this stock was up 40% this year. it has given all of that back in just this move we are showing not the whole peer group is lower. if you get a sense they are calling on forperformers >> i think they are. you are looking at the winners out there and those will be companies like palo alto and certain spaces on the a.i. side, you saw the rally with nvidia. you see amd pick up that win it is the companies actually

with marvell on the list as well these companies generated significant revenue and have plans for excess production to produce significant amounts of revenue from technology. >> we have to mention lululemon. the retail reports have come in soft and light and weak. china was a concern. they come in with the opposite what is the take on that here? >> i think lululemon is a story of the haves you look at the retail sector earnings out there the higher income consumer continues to spend and those stories are positive like lululemon and nordstrom. on the lower end, dollar general, the lower-end consumer having less to spend on goods and services lululemon is winning the game there. they have the china reopen of spending in stores and online spending there lululemon is a great win in that space.

>> if you want to offer a parting thought of the market as a whole. 4,200 on the s&p on the one hand, it hasn't gone anywhere in two years and it hasn't crashed where does that leave you? >> i'm picking my stocks in the market last year was the tech recession. i'm geared toward the a.i. trend. there is growth there. multitrillion dollar growth. everything goes into it with 5g and semiconductors and then dollar cost average. i say this, but it is hard time the market if you look back ten years, we are getting toward the end of the fed hikes, hopefully there is good momentum in the market and if you can stock pick exposure to the index, it tends to win out over time >> just steady eddie >> stay ininvested >> sylvia, thank you >> thank you. coming up, if you are

unhappy with your job, sadly, you are not alone. i love my job. we will talk to the author of the book of how to find meaningful work. and counting down to the may employment jobs report we have a lot of predictions ahead and analysis as the number comes. the rks lliky vemaetwi lelmo a lot around this morning. stay with us "squawk" is coming right back. impossible-to-change problems. [beeping] from developing treatments at unprecedented speed to addressing threats to global health. we're leading the way with a revolutionary mrna platform that could teach our bodies to do extraordinary things. we're here to do something more than make medicine. we're here to change it. moderna. this changes everything. ♪ opportunity is using data to create a competitive advantage. ♪

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i'm christine mahon. and oi'm retired frommeone whopublic health nursingion. and from the army reserve. my retirement funds allow me to enjoy what i love to do. as long as you can make an impact, why stop? good night! hey corporate types. would you stop calling each other rock stars? 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. ♪♪ our next guest says over 70% of americans are unhappy with careers and the work force is seeking meaning from their jobs. with us is bruce the author of "the search.

this is out this week. i have a bunch of questions about this i think we all are trying to figure out how to get meaningful work i want to know the post-career world. >> my work is helping people navigate life transitions. i collected life stories from people from all walks of life from all 50 states no is nothing involves more with people than finding meaning work the career was investvented 100 years ago for men and you pick an occupation at 21 and do it for years sdplc >> this guy has been doing it for a while. >> i was a stockbroker for ten

years. >> the way we talked about it was a lineal path an re resume series of climbs now we stigmatized making change the new generation of workers. younger and female and diverse are normalizing changes. my data shows we go through one work quarter every two and a half years that's 20 in the course of the life work quake is a jolt you are forced to or you choose to reimagine >> maybe i'm too old school. when i see a resume of potential people we're going to hire and i see they moved around for the last five years or six years and have been at four places in five years, i think is there a problem here >> that's because you are of a certain age. four of five resumes >> this is old >> compared to the new work force. the problem is we had a definition of success and that

applied only to a certain worker the new work force is having a different way of looking. >> two sides of this the worker in terms of what it means to find a meaningful role and also let's talk about the mindset of the employer or person hiring like myself in certain cases, looking at the resume maybe i need to rethink. >> here is how to think of the worker 6 in 10 millennials say meaning is more important. 9 of 10 are willing to give up a quarter of the lifetime earnings to find meaning. >> meaning over money? >> means over means is how i talk about it. if you are in a work quake, here is what you do here is what i do when i talk to people happy about work. they don't just climb, they dig. they do what i call personal

archeology ask a series of questions. what are the upsides and down sides you learned from your parents? hard work. workers want to work number one down side overwork followed by unhappiness and strain on family that explains what is going on the workers want meaning and balance. here's how i think about it, kelly. i think about the formula. work equals numbers plus words 2/3 of the way we talk about work and on this channel or more is numbers productivity, efficiency, hours, profit, loss, stock price. when you talk to workers as i have been for six years, 2/3 of the way they talk about it is words. happiness, meaning, growth, development. until we siync these two sides up, we will have what we have. i'm not coming back to work. that tension is going on.

>> is there something going in in the u.s. over the rest of the world? the clear side to me is the in-office versus work from home. you go to europe, you go to asia, you go to other parts an of the world, everybody is back in the office. you come to the united states and it is tuesday or wednesday or thursday, whatever. is there something going on in this culture that is fundamentally different or is someone not gotten the memo? >> life, liberty and pursuit of happiness. this is a culture that is focused on personal identity our identities are built around the idea -- >> millennial in the dictionary? >> the next generation i see what is happening. >> you know what they're like. is this a shock to you they don't want to do anything? >> they want to work it is fair to say they want to

work. >> they want to work from home and go out on the hoverboard and apps >> i think this is what this generational change is what is happening. they are looking at success in a different way. >> flip it from the employer side the next time i'm alolooking ata resume -- i still think i'm supposed to give more value to the person who has been at the job for four or five years than the person for a year and a half and went to three others or not. tell me. >> the employers that meet the needs of employees, flexibility or communication. >> leave the job after a year and a half >> the flexibility to work with you on creating a job to give them what they want. they will stay if you have what a call a meaning agenda. the way to think about it is we are in the meaning moment.

the companies have to meet the moment and employees will stay >> here is what i don't understand i'll go in a different direction on a weird side commentary on unions for example i watched the union effort at starbucks or amazon or what have you. especially in jobs where the people who are quote/unquote unionizing are not in the jobs, but five months after they vote to unionize, they are not there. i don't understand this new paradigm >> here is how to think about it from my point of view. all of the changes in the workplace have been led by the workers. what do the workers do they cut from seven days to six days to five days with the weekend. right now, the achange and energ is coming from the workers. >> is there something to be said about the elon musk version of management he says if you want to make serious change in the world, you can't do it on the terms

necessarily of the workers this may sound like an issue after all of the work you have done on this are the inmates supposed to run the asylum or not? maybe the inmates always run the asylum >> you have talked at this desk for a year that the quit rate would collapse after the pandemic it came out on wednesday 3.8 million people quit a job in april. 1 million -- 50 million people double from 2013 the long-term great resignation. that has gone away the trend is meaning if you are a company, i have a blueprint. if you are a worker, you know someone in a work quake. you will be motivated to help you or someone you love get the job you want to get the happiness you seek and meaning you create and success on your own terms. >> bruce, "the search. it is a fascinating read

thank you. >> my pleasure coming up, the jobs data effect the fed's decision to hike again or skip or pause or pivot. we will ask david wessel with bookings next. he has problems. he can't get assimilated anywhere. as we head to break, here is a look at the s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network.

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welcome back to "squawk box. good morning we are live at the nasdaq market site in tiemsz mes square we will get the jobs numbers at 8:30 a.m the dow up 132 points. s&p 500 up 21 points on the back of some good news

yesterday where the market lifted by the debt ceiling news. >> we had the debt ceiling news and nothing was happening during the show. >> all of a sudden at 1:00 >> it took a while >> 40 points we talked about that yesterday 4,200. it is at that level. it will be tough to get through. joining us on the potential impact the data could have on the fed decision of whether it hikes, skips or pauses is david wessel the director of the brookings center on physical and monetary policy -- fiscal and monetary policy. it was a lot of crosscurrents this week, david depending on which fed head was talking. you see the fed futures. we thought there was going to be a pause when jay powell intimated that we went to 10% for a hike. we got up to 70.

mester, andrew, remember that? >> yeah. >> that very afternoon two with s -- that very afternoon, two said we need to skip we should be right at 50 >> it reminds me of the days when i worked at the wall street journal and a story about the federal open mouth committee i think that there are two things going on. it is getting to be closer calls. when you start at zero and inflation is 9%, there is no argument rates will go up. now we're at the close call department senior leadership at the fed was not happy with the fed funds futures. i think the vice chair's speech was meant for a signal to be wrong to expect a hike i think it is clear they will skip at the june meeting i'm really interested to see what they say about what the terminal fed fund rate is in the

cycle. the march survey of economic projections said 5.1% was the median although several people wanted a higher one i suspect it will move up. that is the big thing to watch >> we had -- i know you watched, david, all of our people santelli has said the terminal rate is in the high is in if you look at the ten-year and the stubborn inversion is in not to say we couldn't go to the new highs, but if it stays stubborn, maybe the highs aren't in it looks like they're telling us that >> i think a lot depends on how strong the labor market is and what happens with inflation. the markets, as i read this morning, is 190,000 jobs

expected we see the numbers coming in above consensus. one day it will be below consensus. another couple months of strong job reports and inflation slow to come down and i think the fed is determined to bring inflation down above everything else the end of the debt ceiling mess makes it easier to look at the economy rather than the functioning of the markets >> david, i wanted to ask about christopher waller you can explain his significance to the fed intellectually or leading indicator or not with his speech of hike, skip or pause. it was more hawkish than expected and that confused everybody. i wonder what your reaction is to that and how you interpret what he said >> i think waller, the former st. louis fed economist carries a lot of heft because of his

intellectual caliber people look at him as a serious voice on the fed he has been one who has been arguing along with the chairman that we might be able to bring down the vacancy rate without pushing up the unemployment rate i think he is positioning himself as the hawkish wing. i don't think jay powell is where he is now. he is worth listening to because analysis is sound. if you are looking for wha direction the fed will go, the people to listen to are powell, williams >> david has been all over the place. kelly used to work with you. >> yes. >> what i'm getting to is you have a lot of wisdom and experience you have white hair. >> what do you have for breakfast? you are not normally nice to me.

>> are you a fed whisperer >> he is setting you up, david >> no, i'm not i have been watching you a long time liesman says we go back and forth of a lag effect of monetary policy. is there or is there not and could it be in labor there is a lag effect or consumer spending? is there should the fed not wait and look around and see where we are in a couple of months before they do anything else or not >> yes there is a lag no doubt about that. the problem is nobody is sure how long it is given how fast they have raised interest rates and how much, it is hard for me to believe that's all been felt in the economy i think one reason to skip, but leave the door open to further rate hikes, is to see what happens to the labor market and what happens to consumer spending now it is more expenses

si -- expensive to buy a car it is expensive to borrow. people are hunkering down. my guess is fed chair jay powell would rather do too much than too little he idolizes paul volcker he wants to be the fed chair to bring inflation down and he is willing to risk recession to do that >> i hope the moment calls for a man like volcker it would be bad to fit the moment into the man. >> absolutely. there is a danger they will do too much the last survey economic projections said they expect the unemployment rate to go up one full percentage point. that was the forecast. 1.7 million people without jobs. the population of phoenix. they are projecting some pain. they may be under estimating the amount of pain it could be the effects of fed rate hikes are about to hit the

economy and they will make a mistake. i think that's why they're skipping the reason they don't talk about pause is they want to leave the door open later this year to raise again if inflation remains stubborn >> it is not you, david. i think maybe i'm generally nicer to people at the aei orbrs it is not you. >> thanks. >> it is what you stand for. kind of. you know that. you understand >> i do. >> you know exactly how we are and where we love each other and where we disagree. always good to have you on you're smart. >> thank you >> smart people -- come to the wrong conclusions sometimes. as you know. david, thanks. >> you're welcome. have a good day. >> it was not a set up >> what was that you are a wiseman. you are a wiseman.

right. okay coming up, meta platforms is asking workers to spend more time in the office we have the details after the break. later, we talk to former philly fed president charles plosser. he will be here for his take on what the fed might do at the meeting. you can get the latest from "squawk box" on your favorite podcast app. i'm a fan. we'll be right back after this

everybody's going to have some type of success, but are you complacent with that, that, or do you want more? this fuel, this energy, knowing that it takes work, knowing that you're going to have a different type of ethic, that's what's going to separate you from the next guy. that's what pushes you over the top.

welcome back meta, formerly facebook, asking employees assigned to an office to come in three times per week starting in september. according to the report that said employees designated remote workers can remain distributed it can make a meaningful impact at home and at the offers. they will refine the model for culture. >> you are wearing occulus and that is like being in the office. >> that is the zuckerberg argument the boardroom animation? >> i have done it. >> i think i need to defend work from home. >> oh, my gosh >> look into the camera.

>> i'll make an obvious point. >> are you adding in participation awards >> by the way, when you are starting out, i could not have done anything if i'm not in the office i'm not talking about that >> talk to the viewer. >> i would rather talk to you. >> don't do his heavy lifting for him. >> two working parents raising children and commuting to the office five days a week and actually have that be sustainable, you are out of your mind we never had this experiment before we never has high a share of two working parents as we have right now. the people say the fertility rate the births last year how about flexibility. how about make it easier for people to have bigger families lost in all this this comes back to 24-year-old millennials. >> they are not millennials.

>> we have to -- the flexibility at some point is littleerally te only way this works. otherwise everybody has to have a nanny. child care costs are insane right now. >> if you have two working parents. >> that is society that is the way -- if we are making a choice and everyone go to college and get a job then you have to raise kids at the same time. it doesn't add up. >> i want all of the people to come into the city to service the office workers i want them to have jobs. >> so do i you have to make a choice at some point you can go back to the '50s or '90s with one working parent >> stay in the t-bills and stay in your office reits >> the argument it is going back. >> somewhere in the middle the >> as far as occulus you can program visiting rome. you will not smell the food.

you will not get smashed by the trevi fountain water >> to get smashed? >> you will feel stuff and smell stuff. >> a movie did this. christopher walken and natalie wood we have more on "squawk. add us on twitter. we will hear from restaurant owner cameron mitchell and if wnsumers are trading down weill talk about that and more on this jobs friday as "squawk" rolls on is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!! it's about to go down, baby! aflac! aflac! stop that goat!

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box. our next guest has given us regular updates since the pandemic force him to furlough staff. camera mitchell owns and operates more than 40 restaurants in 14 states and washington, d.c. as well cameron, it's great to see you we always love to talk to you because you can give us a sense of what's happening on the ground with the consumer and also on the labor front. let's start on the consumer front. there is a big question as to whether people are trading down, feeling it in the wallet these days or not. what are you seeing? >> i definitely think so we kind of say with the canary and the coal mine. we started to see traffic declines six months ago, trading down to our mid-priced and lower priced segments and particularly on a weekend, which is where more celebrations are and people

out spending, where the business week and mid-week business is still holding on pretty steady >> when you say trading down, is that trading down literally from the fillet mignon or going across the street to a restaurant that has lower priced fare >> primarily trading down in the space from the higher end going down to mid price or lower end however, within the restaurants themselves, we are seeing less, slight less appetizer sales, maybe some trading down to a little lesser expensive entree items. it's 4, 5% it's not debilitating but we still got average sales. sales are flat to down now, where they haven't been for years, especially coming out at dinner >> whenever i'm at a restaurant

trying to understand where the economy is going, i ask the waiter how the tips are. they would say the tips are the first thing to go. >> and they would say yours sucked >> thank you, joe. most tips are electronics these days in terms of being put on credit cards do you have see a shift there? >> i don't think so. people are sensitive to the service industry and the tipped employees still and i think they know they need to tip them well. i think they're doing pretty well all things considered still. >> which leads me to the labor question how easy or hard is it for you to find labor? for a very long time it was almost impossible. i remember you coming on the program saying how difficult it was and how much you had to increase wages to get them to come back. now they're back are those wages staying? are they going to end up going up some people have been looking actually at tips plus the wages, what does that look like

give us a little bit of a sense of where that piece of this is, especially ahead of the jobs number we're going to get later today at 8:30. >> well, wage inflation is still very much with us. we're up 7% year to date on our hourly and manager wages the one thing we do have in our favor right now is cost of goods is starting to decline and then the staff in itself, we're defi definitely back to pre-covid levels and it's a silver lining for the restaurants. wages have increased tremendously we're on a much better competitive footing if you will. we're opening our las vegas restaurant, i just got back from orientation interest yesterday, we hired 180 new employees and we had 4,500 applicants, which i have not seen for years that kind of applicant flow maybe that's central to vegas but we're finding the staff right now because of our

restaurant >> there used to be a wine indicator. maybe it's a 1%er-type thing, wall street bonuses, you could tell whether it was a good year or bad year based on whether people were buying a $50 bottle of wine or a $200 bottle of wine do you have establishments where you could see that is there a trade down? >> i don't know if i can drill that specific into the numbers, joe, but, you know, i would say our goal for this year is if we can -- i think i'm optimistic we'll meet last year's sales numbers. i don't think we're going to grow over that i think last year's profitability i think my goal is to achieve that or close to it we're just trying to hang in there basically with some of these pressures we're seeing across the board >> okay. cameron, i want to thank you as always it's great to get an update from you. gives us a real sense of on the

ground in the country. we hope to talk to you again very, very soon. >> my pleasure good to be with you. >> president biden set to address the nation tonight after he signs the debt ceiling compromise bill. we'll take you live to washington that's coming up next. everybody's going to have some type of success, but are you complacent with that, that, or do you want more? this fuel, this energy, knowing that it takes work, knowing that you're going to have a different type of ethic, that's what's going to separate you from the next guy. that's what pushes you over the top.

good morning it is jobs friday. we're going to preview the numbers and find out what it means for the market's and the fed's next decision on interest rates. a security software company stock plunging after missing expectations and slashing guidance >> and the debt ceiling bill passing the senate and on its way to the president's desk today. a live update from washington all straight ahead as the final hour of "squawk box" begins on this donutday. good morning to this not so final hour of "squawk box. i know people can hope but it's not true welcome back to "squawk box.

we are here in times square along with joe kernen. kelly evans is in for becky today. i mentioned it is national donut day. >> no donuts yet >> we haven't had any donuts yet and it's 7 something's amiss here u.s. equities, 181 points up on the dow. nasdaq, we call it a melt-up i guess after we heard about the debt ceiling getting over the hump of course all this may change with we see the number and figure out if good news is bad news and bad news is good year the treasury at 3.419. and oil, wti crude at 71.21. >> have that opec meeting coming up this weekend. for now the senate passing the debt ceiling bill and sending it

to president biden's desk. let's get to kayla tausche normally i would say where do we go from here but this is here now. >> this is here. the senate expedited its process to move the bill, crossed it 63-36 garnering praise from both sides of the aisle and app added affirmation from moody's that said the country deserves its triple a credit rating and the fundamentals are sound. >> democrats are feeling very good we saved the country from the scourge of default, even though there were some on the other side that wanted to lead to us default. >> the bill heads to president biden's desk he issued a statement saying "no one gets everything they want in a negotiation but make no

mistake this bipartisan great is a big win for the economy and the american people. now the focus turns to negotiating the final details of the 12 bills that dictate the nation's multi-trillion dollar budget governed by new spending limits a bipartisan commission established will evaluate the whole of the budget and the conclusions of that commission, the speaker of the house kevin mccarthy says may cause some discomfort the deadline for that agreement is october 1st, otherwise risking a government shutdown. both parties said last night they'll also seek to avoid sequestration, which is the automatic spending cuts that kick in if they can't agree. certainly this process is going to heat up now, kelly, even though they've agreed on those top line numbers >> well, it's nice that we didn't let that bipartisan sort of good feeling -- or at least schumer doesn't let it last for very long, does he, kayla. you know, republicans wanted a default. >> we've enough mccarthy sound

saying the same thing. so when the senate passed it, we'll give schumer his due for a moment >> one did pass a debt ceiling raise and the other didn't do anything but complain. kayla, thank you >> i guess he could have blocked it >> schumer >> yeah. i mean, he could have. >> the democrats saved the republic he's not go to block it. the republicans are the ones who wanted to crash and default. we all know that the may jobs reports less than 90 minutes away. le liesman is here with more. i said it should be 50 for the next hike. >> what, the probability >> i said let's make it 50 >> are you betting with that >> no being i think it should be zero >> a hike? >> yeah, because they both keep, you know, flip-flopping -- >> it's 70/30 in favor of a

pause. >> that's a flip it was 70/30 before. >> what was my report on monday? were you paying attention? >> yes >> what did you say in. >> i don't think you said anything on monday because it was memorial day >> exactly, you passed the test. >> good. how many months have 28 days >> just one. >> all of them go ahead keep going right? don't they, kelly? >> it's so early >> confirm >> here we go. here's the deal, joe ready? >> dump. >> we're expecting strong job dw growth but it's going to be a step down from last month but it's still a strong number and there are suggestions in other data it could be stronger than the consensus here are the numbers, 190, stepped down from 253. unemployment rate ticks up to 3.5. feds looking for a full percentage point increase. average hourly wages, 0.3 down but the year over year only

comes down a little bit because of the strong numbers. home base, an hr software company we follow comes out with data, says economic uncertainty persisted in the face of the debt ceiling debate, although this didn't stop small business from their summer hiring ramp up hiring was not as strong as last year and the adp and low jobless claims, i can't stop thinking about there's 28 days in every month. >> i goty you >> you got me. >> economists have been terrible at predicting job growth they've been consistently light, off average of 100,000 a month in the last year one is below 300,000 unclear why this is happening. one idea is economists keep thinking there are no more people to hire but the market

keeps hiring them. thinking the fed was going to hike rates in june that was my story on tuesday, to expecting a pause, that was my story yesterday with kelly evans on her show. a strong idea could put the june idea back in play. >> you think it could put it back in play >> oh, yeah. >> he made it sound like it was more sealed for a pause. >> i would say there's more disagreement on the fed than there has been in a long time. i think there are people out there, people like lori logan. she's been out there what we could do, what seems most likely is a skip, right we need to sort of redefine these ideas. >> that's not a pivot. >> and one thing we haven't -- right, a skip is not a pivot could you skip and pivot at the same time without falling on your face? >> a pivot is similar to an ex-tende extended pause and a skip is just one time. >> the treasury needs to rebuild

its coughers they're supposed to issue something like a trillion dollars worth of treasury bills they want the total debt outstanding up towards 20% it's now down below 15%. that could be a qt-ish kind of thing, if that makes sense, to take money out of the system there is a benign way it happens, it comes out of money markets or reverse repo out of the federal reserve. we don't know how that happens it may be one of the things that the fed wants to wait and see is let the treasury rebuild this over time and see what the effect is on the stocks and the treasury market and liquidity. >> you like bad jokes. >> i'm all over dad jokes.

>> what i love is the groan on the part of my kids. >> some think it ages you. >> i've been telling a great dad joke to my kids recently >> let's hear it >> we've been talking about taking a trip to europe. i say to them do you want to see europe do you want to see europe? how do you see europe? you wake up in the morning and you look in the mirror and you see europe that's a dad joke. >> that's a good one, too. >> it's actually my grandfather's joke, i should say. no longer alive. >> that's so bad it might be a grandfather joke >> that was a grandfather joke, proudly. >> and going to europe in this day and age. >> you wake up, you look in the mirror and you see europe. >> you obviously have a dad joke he wants to tell >> okay, i can come up with one. this is not a dad -- i have a new dog, a pit bull collie mix,

rips your head off but then goes for help >> and kelly laughed >> it took me like ten seconds is that even a dad joke? >> and he's laughing at his joke >> steve, it's lovely to see you. >> do you remember lassie? >> of course i remember lassie >> lassie come home? timmy? >> we all used to watch the same programs >> coming up next -- >> how many theme songs could we all sing right now >> we're going to do that after this commercial. shares are falling sharply after reporting results. we'll speak to the company's ceo about the quarter. what cyber security firms are doing to protect businesses and individuals against a.i. scams right now ecngchki the markets, we are in the green. back after this.

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yes. right. yeah. and i don't think at that time- i think you're the one to tell me that we had the same birthday. yes. it's really unbelievable when you think about it, because it's been, like, really over 20 years that you were my mother and father's banker, you became my banker and now fran is in her third year of college and you're her banker. it's so unbelievable because i'm just 20 years old. [laughing] welcome back to "squawk box. shares of sentinelone missed

the company says they plan to lay off about 5% of the workforce, less than about a hundred employees. year to date the stock had been strong performer before yesterday's report now it's on pace to be amongst the worst performers joining us to discuss the quarter, his outlook on the cyber landscape and cyber attacks, thanks for joining us this morning, tomer. >> thanks for having me. >> analysts are pointing out you saw impressive billings growth if we want to call it that but there were also a couple of company specific issues and accounting problems. talk us through what happened here >> yeah, as you mentioned, very impressive growth still. we grew 75% on our top line. obviously that's one of the fastest growing companies on the public market today. that said we fell short of our

own expectations of what we felt we could do this quarter, so we're obviously disappointed but not discouraged. we also managed to improve our margins significantly and generally i think what you're seeing is our transition toward efficient growth and focus on profitability. there's no denying the macro effects are putting pressure on the business we need to perform better and some of it is due to our own execution. all in all most of the fundamentals are in tact >> the analysts just going through some of the reactions today, they're sort of a business confused themselves one of them said we'd like to believe that the issues facing the company are just a weak macro but given the degree of the miss after you guided in mid march and the magnitude as well of the guide down, they say it simply feels like something else is at play here. in other words, they're not really buying the macro thing. >> we understand that. i this that it's on us to earn back the trust obviously, you know, we're working very hard to make sure

that we can give reliable forecasts. to us a lot of it doesn't come from the lack of demand, it does come from our own lack of ability to execute better in a predictable manner as we traverse these opportunities obviously with deal compressions and sale cycle elong gation, i think it's a bit harder to take enough buffer to mask all of those. and what caught us by surprise is the down tick in consumption that is a part of our business and we saw it sharply decrease in terms of data, customers are looking to right size what they put into their platform, what they store we see that with other consumption players. all in all we need more predictability and will work hard to make sure that's the case going forward >> there's the historical issue about the error within the customer management system that

was double counting some renewal and that was also part of what was going on here. let's talk about the larger consumption that you mentioned we hear from palo alto, we think companies are spending on cyber and then we hear from you and we say maybe they're not or maybe they're calling their spend or focusing it more specifically. what else can you tell us about that >> i think there's still healthy spend on cyber if i compare it to the period two years ago you see two clears things one, customers are not in a rush to spend on cyber. they need to spend on cyber but they're not doing it in haste. the other thing you're seeing is that budgets are obviously very different today than what they were, you know, two years ago, even a year ago where customers are really right sizing to what they need right here right now so all of that has, you know, an effect on us, on others. up you know, a lot of folks are

focusing on selling to their own estate the bigger the company, the more customers you have, the more ability you have to extract more from your own customer base. with a company like sentinelone that's growing fast, that's hinging on new business, even though we have about 10,000 customers in our own estate. hopefully we can show better performance in the quarters to come >> just a final question, maybe you can offer an observation about artificial intelligence and the extent to which we hear that's going to renew a drive toward cyber, your data is all the more important and so on is it going to take a while for that to meaningfully show up >> i do think it's going to take a while but i also think it's going to be incredibly disruptive to cyber security and infrastructure at large. a lot of what we thought that is impossible today to do in cyber security is becoming very doable

in the near future i think you're going to see about 12 months of these applications building up unlike the attackers that can leverage a.i. starting today, for enterprises out there to leverage a.i., there's still hurdles to pass. compliance is one thing, privacy controls, guardrails generically i would say, all of these need to have a place, trust needs to be built into these systems. so all in all there's some more time to take >> what's the sense about the moat around your business and frankly the moat around so many of the other businesses in your space? the reason i ask that is in the context of a.i., do the incumbents win because of the enterprise relationships they already have and whatever a.i. you can build upon them or is it that a new entrant can come into this market given what a.i. can do and effectively disrupt everybody? >> yeah, i think it's a great

question you can't ignore, you know, the reach that some of these legacy players have and that's obviously an advantage. i do think that the ability with a.i. to build a disruptive obligation is there. i think it does work in two directions, one, a lot of the capability that you see today definitely the more nearby capabilities are just going to go away. they're going to be obfuscated away instead of thinking about security and silos, you're going to look at complete enterprise wide capability set. it i think it's a bit hard to predict. i think the large players will constantly have the large advantage in the reach, especially something like microsoft, about a $100 billion opportunity for companies like us, microsoft has about $20

billion revenue in security. that's about a fifth of that market there's still a lot to gain for all the other platform players, but at the same time i think that obviously it's going to come down to the actual applications everybody is going to be leveraging the same algorithms more or less it's the application you're going to be building, how efficient it is and the outcomes it can generate that will set you apart. >> tomer, thank you for your time this morning. we appreciate it, sentinel one >> and why one of the biggest donors, president trump, one of the biggest donors in 2016 now putting money toward ron desantis who was the first american woman to be featured on a postage stamp?

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who was the first american woman to be featured on a postage stamp?

the answer -- martha washington. her image was first printed on stamps in 1902 >> welcome back to "squawk." today is martha washington's birthday, born in 1731 in the meantime, we want to get over to christina for a look at this morning's premarket movers. there are a bunch of them this morning. >> i can only pick three let's start with shares of lieu l lululemon. up 60% year over year, helped particularly by china. one year only about 24%. even with inflation, though, lulu expects customers to keep dishing out the dough, $130 for those yoga pants and mats, allowing the company to raise guidance and shares are up 25 -- no, 27%. management anticipates revenue

will range from 388 million to 392 million, much higher than estimates. mongodb also got help in china mobile and alibaba helped add to its business account and microsoft shaures getting a small boost. can you guess why? evercore saying the infusion of a.i. represents a strong long-term opportunity. andrew >> i want to thank you for that. i was thinking of lieuululemon thinking that the stretch pants are good today today is national donut day, you'll need a little gift. national donut day has been around since 1938. it was created by the salvation army it was not like some dunkin'

donuts thing who honor women who brought baked goods to the front line in france we need to thank the good folks at the donut pub, crispy cream and -- >> donut pub is the bakery >> you like like bacon on your donuts and they have that. >> i like bacon on my everything >> they do that. they have some very sophisticated sort of different flares the crispy cream guys do a beautiful classic glazed dairy provisions, by the way, i don't know if we can get a look at that. they do sort of an apple sin mo cinnamon fritter they're marvelous. we had a counter on the screen i don't think we're going do that throw away the glucose monitor or whatever. >> if it wasn't disgusting, i would do a wine tasting thing. >> what do you mean, a wine

pairing? >> take a bite, spit it out, take a bite, spit it out i would try every single one >> and you would there's a blueberry one here that looks pretty good so anyway, what would you like >> i want one of the apple ones with the -- >> you want this >> yeah, yeah, yeah. >> i'll start with the bacon >> come over here. that's good. >> this is weeks of work going down the drain, by the way >> joe, you got to fend for yourself >> i see the bacon one right there. >> bring some back to the kids that's for sure. >> you never want to eat on t.v. >> no, i won't do that because i don't like watching people eat >> this is really good >> that's the apple. >> i have to bring one of these for my dad he would love this it's crunchy it's light >> that's a -- >> what is it? >> daily provisions

>> you're going for the donut pub, right >> donut pub, yes. >> and rise. in connecticut, the best donuts in the country >> free donuts >> no, i get nothing for free. i wait in line like every other schmo. you have to wait like 45 minutes for those donuts insane >> we got to go. >> i'm already done with this one. >> you know the best time to make a dental appointment? >> a dad joke? >> tooth-thirty. >> a former trump backer now putting his money behind florida governor ron desantis. more tooth >> i just need a little -- what do you know about rock stars?

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a mega donor to the republican party and backer of president trump in 2016 is now putting money behind florida governor ron desantis for president in 2024. joining us from texas it point

bridge capital founder and ceo hal lambert. it's good to see you, hal. good morning >> good to see you, joe. >> you obviously made this decision for how many reasons? for a number of reasons. primarily give me the top three or four. >> let's start with the first one. i want to win. to win a general election you have to do a couple of things. you have to have a fired up base of your party and then you also have to win independents and middle of the road voters in swings states. trump can fire up the base but he's lost the middle of the road, the independent voters certainly in swing states and he fires up the democratic base like nobody else so i don't see him winning states that we have to win like arizona, nevada, new hampshire, wisconsin. we lost all those states in 2020 and, look, i was a big supporter of president trump, i raised him a lot of money last cycle. i even started that etf with the ticker magna and i just don't

think he can win you contrast that with governor desantis he turned a 50/50 state into a plus-19 republican victory last cycle. he won hispanics by 30 points. won them by 30 he won miami dade county that we haven't won in decades that hillary clinton won by 30 points, he won miami dade. he won 62 of 67 counties he won independents, he won women, he won across most demographics he's a candidate that can win those swing states i don't simply think president trump can do it. >> he did it in florida. i would say that it was not pandering to all people all the time i think he took some very precarious positions on a lot of things, covid, the voting rights, don't -- whatever you want to call the don't say gay legislation and he didn't really

waver in spite of criticism from the media and ended up with 20 points, which is a shocker to me, which makes me wonder whether that can translate into a national race. >> there's a journal piece today in the op-ed section that says desantis has a record of -- sounds luke charlie sheen -- winning but has a record of winning. and then it says the media sneer that he's unlikable and distort his legislative agreements, but here is the perceptions, he picks fights with corporations so he's not a real republican. he doesn't let the free market operate because he's doing all these things to disney did that set him back? did that make you question whether he's the right guy, any of the disney stuff? >> absolutely not. the disney fight is a fight that many americans have been wanting to have. they're upset with corporate america. you saw it with bud light. you're seeing it with target

these things have nothing to do with brands on american -- especially on children and that's what disney was doing. and then they jumped in and attacked the legislature in florida and they attacked governor desantis and he pushed back look, governor desantis is a fighter. he is going to fight he is conservative he didn't back down on any of those fights, as you just said, joe. and so -- >> what's conservative about free speech? what's conservative about free markets? historically, as joe was saying, it was actually the liberals who were the activists when it came to social issues and the like. now it's almost the opposite >> well, i think there's activism on both sides but i would just say this. it's not about free speech he's not saying disney can't say that he's saying you guys have a special tax break that no other company in the state of florida has, you've had it for decades you're getting tax benefits, you're getting independence that nobody else has. >> we don't like what you're

saying so we're going to take those tax breaks away. we know what it is >> but states have a right to do that if you look at -- states are trying to get companies to come to their states by giving them tax breaks, by doing things for them so that's what states do that's what they do at the state level is give tax breaks or not give tax breaks based on companies that they want there >> what do you think of speaker mccarthy's efforts to extract some spending cuts from the white house, you know, only had a four-member margin in the house, the senate is a democratic senate, you got a democratic president you know, bad deal, should have gotten more, should have gotten closer to default. why is he picking a fight? he doesn't like mccarthy he's picking a fight with the leader of the house, which is the one body that republicans happen to control at this point. what about that?

do you think mccarthy was a bad deal >> i don't think it was a great deal we're going to spend $4 trillion over the next year and a half. so, i mean, deficit. we're going to have a $4 trillion -- we're going to spend more like $6 trillion. we're headed about towards a 35, $36 trillion debt. the democrats got what they wanted mccarthy didn't have a hand to play this played out exactly like i thought it would happen. in fact, i thought we'd end up with fewer republicans supporting it. >> what do you think of where these polls are now? i will grant you that in previous elections we never know how they're going to play out and it goes to iowa or new hampshire or south carolina. suddenly everything changes with a win here, a win there. because national polls up to 35 points or something for trump versus desantis. how do you see it working where he gets it versus someone -- some people think tim scott is just unbelievably appealing and

that he might be a candidate to watch. there's quite a few. but why do you think it's desantis and how does he do it how does he vanquish the former president trump, who seems to have such a big lead >> president trump has the lead now but desantis just got in the race you're going to see him campaign in iowa, new hampshire i predict the national polls, which are pretty meaningless you're surveying a thousand people, many of them in california and texas it's going to narrow quite a bit. trump should drop back below 50%. the race will be on. i think tim scott is a nice guy. i like tip scott i don't see the republican party sending someone from washington back to washington i don't think we could get any senator as our nominee right now. there's too much anger at washington right now for that to happen i just don't see his candidacy taking off

>> i don't know what between now and 2024, i just have no idea. when desantis says juvenile, i mean, someone's putting words to -- some of the stuff we're starting to -- we read it and we go that's normal it's not normal. it's juvenile a lot of it and he's right about that so maybe he gets some traction. but maybe the disney stuff is juvenile or, i don't know, vindictive there's a lot of opinions to go around but i appreciate yours and especially sharing it with us this morning >> thank you very much appreciate it. >> you're welcome. we'll see you. >> very significant move >> coming up, is a.i. coming for your job looks like it already is based on that challenger data. more in a few moments. it's of course jobs friday about 50 minutes from now we've got the data and market reaction plus get the best of "squawk box" in our daily podcast. listen any time. stay tuned

the dow's implied open up 174.

everybody's going to have some type of success, but are you complacent with that, that, or do you want more? this fuel, this energy, knowing that it takes work, knowing that you're going to have a different type of ethic, that's what's going to separate you from the next guy. that's what pushes you over the top.

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the camera shot because guess what it's national donut day and he's capturing another donut. >> half a donut. i don't know what this is. >> might be blueberry. treasuries, let's show you the 10-year note 10-year at 3.601, and oil, we got the opec meeting coming up, wti crude at 71.08 when we come back, more donuts the big question, is a.i. a threat to your job and jeff lewis on early investing in technology. and later, a former philly fed president will join us with the jobs number. don't go anywhere. go get yourself a donut. points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to...

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welcome back, everybody. data from a recent world economic forum study found artificial intelligence is to be adopted by more than 75% of companies they surveyed. about half of the organizations said it would create job growth. about a quarter said it would create job losses. what does it mean for the future workforce? let's ask kate rogers. in the challenger study, kate, i saw the other day, there were already a few hundred jobs that were lost that people said was directly because of a.i. >> the big question here, will it enhance or take your job? the university of florida is

hoping for the latter for its students here. they have a public-private partnership with nvidia. the school now has an a.i. s centric data center. they've got 230 courses in a.i. and had 500 students enrolled in them last spring >> it's being used in artistic ways, being used tfor writings, predictive analytics the uses are incredibly widespread and we're seeing that more and more as employers being looking to hire our students, they want that value added skill of a.i. knowledge. >> dr. reed gave the example of a paralegal. he said a paralegal who is more trained in a.i. applications versus one who is not will have

an edge in that role in the future that's just one way that they're thinking of how this may work. >> for non-majors, how do they achieve it >> he said they're offering it from the arts to zoology he said teaching people really early coding language and make sure they're prepared to get a good understanding of what a.i. does and how it will work with their profession he's saying everyone around the table from marketing people and people in h.r. should have an understanding of how this works because that makes you more valuable in new economy. >> you said it was the university of florida, kate? >> that's right. they're hoping a.i. will enhance, not take. >> and telling recruiters that our student body in the next three to five years will look

very different because of this opportunity than it does right now. they're also marketing themselves to recruiters in that way, too >> great point >> meantime, i want to talk about the surge of interest in a.i. it is extending from public markets to private markets joining us, jeff lewis is the founder of bedrock capitol good morning to you. we've been talking every day about a.i., can't get away from chat gtp so much of it is negative. i want to get your thought on that but i think you're investing because there's a positive outcome on the other end or at least i hope so. >> certainly believe there's a very big positive outcome on the other end, andrew. as a starting point, in terms of the jobs, think back to horse and buggy repair folks what did they do they learned to repair ford automobile the world changes and folks have to change with it. they should be teaching every

kid how to prompt a.i. in schools. this should be mandatory curriculum i don't know what they're teaching in the elementary schools these days, but they should be teaching kids how to prompt and on the other side of this, i think we're going to see massive efficiency gains but the opportunities for a. inca.i. are non-obvious. there's a huge swath of non-obvious opportunities. >> give me some examples >> the non-obvious opportunities are the durable brick and mortar and across private and public market, names like hub spot and zoom info integrating a.i. and conva has launched a text-to-image generator.

we're seeing this in security where you have names like cloud flair like sneak in the public markets rapidly integrating large language learning models in the private markets with businesses like sneak. we're seeing it as well in gaming, epic games, the creator of fortnight >> if every business is going to connect in some way to large language models and regenerative a.i. effectively everybody should be to some degree catapulted meaning it's the same field. everyone will have it. no >> it's all about two things one is proprietary training data for the models so whoever has the most proprietary training data for their specific offering i believe is going to win.

so if you're canva, you have a tremendous amount of proprietary tra training data. the other edge is a lot of thieves tools are only as good as the prompt they're getting. so learning to prompt good, i'm stealing a line here but there was a wonderful learning to read and learning to prompt is a huge advantage. a.i. is a tool making humans more effective, better at their jobs but you have to learn to prompt good. i don't think it commodity in the end. >> we were talking to the ceo of sentinel one this morning. the question about moats and incumbents, the big winners, somebody who has got data that they win or is it that there is no moat

because if you have a.i., you can generate a startup that's demonstrab demonstrably disruptive or is it possible >> there's like nvidia and a.i., they have a pretty big moat. then there's this whole application layer question i do think most of the value gets captured by existing players that have applications, that have data, that have a moat i think you're going to see a flurry of regenerative a.i. private technology companies come out to the public markets over the next three, four years. a lot of those are going to be crap companies, just like we saw with the electrification wave, you saw a lot of crap companies like -- >> where are the losers in this? what would you run away from in this moment? >> i would run away from anything application layer companies. there's a lot of heat right now in the private markets around

application a.i. for legal, for medicine, for accounting i think that's all great but i think ultimately that application layer gets commoditized i would run to existing technology businesses that have already moved to integrate llms into their offerings >> okay. here's a more complicated one. if you were a student in college or maybe just graduating or thinking about going to grad -- what would you try to learn? i know you said prompting. is prompting a cool party trick that works for a couple years? does it work forever what would you tell students you talk to a lot of students. >> everyone should be learning to prompt right now. that's basic hard question to answer. i'm going to tell you what not to learn do not go to law school, okay? i hope my lawyers aren't watching this but i think the legal field is in big trouble. that is going to be one of the first to get disrupted by a.i. i talk to folks who spend tens

of thousands a week on legal bills. they're already using chat gp to generate complex contracts i would not go to law school that is what i would not do. >> a lot of people go to law schools not necessarily to become lawyers >> that's not the end of humanity that's like saving humanity. >> i know you're not a fan of lawyers. i'm from a family of lawyers >> i love lawyers when you need one, right i just don't like the business cards thrown at the ambulances >> i do think the criminal defense lawyers are going to be okay, for the record those ones will be already >> the business will be up who is going to be responsible for all this when a.i. goes crazy -- >> you need a lawyer >> someone will need a lawyer and it's not the computer. >> jeff, nice to see you, sir. >> thanks for having me.

>> opec meeting this weekend and we're just over half an hour from the number of the morning the may have jobs report out at 8:30 eastern time. we've got the data and fed implications "squawk box" will be right back. is it possible? well...with comcast business...it is. is it possible to help keep our online platform safe from cyberthreats? so we can better protect our customer data? aww-yeah. absolutely. what else you got? can we use predictive monitoring to address operations issues? before they even exist? we can help with that. - hmm. can we provide health care virtually anywhere? we can help with that, too. even out here. you, sir. something on your mind? is it possible to survey foot traffic across all of our locations? with wifi analytics? easy. order for nina! can i teleport our guests to their rooms? technically, no. or power thousands of mobile check-ins

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good morning it is jobs friday in america and we're getting ready to bring you the big number and talk about what it could mean for the fed's next rate decision in the meantime, the senate okaying that increase to the debt ceiling president biden expected to sign the fiscal responsibility act and address the nation we're going to go inside the bill and ask oil expert lena kroft what it's likely to mean for energy and energy approvals. the final hour of "squawk box" begins right now got so many dad jokes. >> you can't put that genie back in the bottle. >> good morning.

happy donut day. >> donut day i still prefer taco tuesdays >> you can't say that. it's trademark >> we're live from the nasdaq market site in times square. i'm not tan from the sun i'm dad from the earth i'm joe kernen along with -- >> this is a function of the dad jokes. if you're just coming to us right now, we're doing a lot of dad jokes and it's national donut day so we got donuts >> no, i'm dad from the earth. becky is off today u.s. equity futures are indicated up about 160 points. that's where they've been. it's been like zero standard deviation, waiting for what happens at 8:30. that is the big employment report from may, which is coming already. seems like it came really quickly. >> well, it's the 2nd. >> yeah, it is that's as early as can you do it i don't think they do it if it's

on the 1st it's the first friday, unless it's not of the month. those treasury yields, which not a lot of movement there. 3.60 on the 10-year. i guess when kelly's here we should bring up those boring treasury bills >> you know, in a couple months when you're going, man, i should have gotten that 5 point -- >> look, it's up from yesterday. >> that's only if something bad happens. be positive. be optimistic. the future looks bright. bipartisanship >> with just days before a potential u.s. government default, to joe's point, the senate improved an increase in the debt ceiling the vote came late last night. the president expected to sign it into law today. biden said no one gets everything they want in a negotiation but he called the agreement a big win for the u.s. economy. rating service moody saying the u.s. deserves its triple a

credit rating. fitch put us on watch. now they dictate the 12 bills for the budget 12, wow. the guest last hour was not so pleased, it sounded, by the deal you asked him about -- >> i know, but he conceded, you know, you're going to a -- like a -- i don't want to use any references you're going to a fight where everybody else is heavily armed and mccarthy had very little he had -- to get that much, don't you think that was an extraction >> when i listened to what he said, i started to worry a little bit he's backing desantis, who apparently sounds like wasn't happy. >> that could be posturing >> if thens next couple of months there's more sour grapes, republicans feel like they didn't get the deal they wanted, maybe we have to all of a sudden worry about government shutdowns.

>> we got two years for this >> for the debt ceiling but for the these government funding bills they're talking about. if people say we didn't get it last time or -- >> never undermatestimate the government government's ability to screw something up >> yeah. >> the economy is expected to gain for may 10990,000, down fr last month whatever the number is, big implications for the federal reserve when the central bank des decides whether in two weeks to hike interest rates again. we've heard more about floating the possibility of a pause in raising rates. >> let's go over to michael santoli at the new york stock exchange mike, this feels like a market -- i always think of you when we keep rallying and all

the people are saying all the things with their analysis and it's just like the market is just -- we just have to listen to the market. so over to you >> exactly kelly, you're exactly right about thatthe there's a lot to worry about and people are plenty worried. the s&p 500 has what looks like a breakout we've had three closes above 4200 in the last week. we've only traded above there for nine or ten days in the last year that was last august people are worried or at least professing to be concerned about the manner in which it's happening. everyone has their own version of it's only a few stocks driving the up side in the index. this is a two-year chart of the equal weighted s&p which is flat year to date against the market cap s&p which is up about 10% year to date it looks a little bit less stark right now. it's unusual for them to go in different directions you have a potential breakdown in the average stock

at some point you want them to come together, a more durable advance would be one that is more inclusive there is the possibility that you get some of the lagards perking up look at the retail, the srt, a broad spectrum of retail chain stocks and this is a three-year look. this is kind of right by the floor. it's indicated maybe to perk up today. you have lulu on a big up side mover. this is the parts of the market that you have to look at for the possibility that we have internal self-repair going on. i would point to energy, basically at the march lows, indicated higher today another thing to keep in mind as we kind of figure out where the macro is and the recession is not really coming through as quickly as many might have thought. this is the pay roll processors. steady slowing in the economy and deceleration in the job market, it's still well above those levels of let's say a year

and a half ago it doesn't look like the most encouraging chart but it's also holding above those levels from before we started to get concerned about what the fed was doing to the economy, kel >> what about zip recruiter? they're laying off 20% of the workforce. they had that horrible commentary last quarter. >> absolutely. we're going from mega tight generationally scarce labor to something else, to where we're softening up around the edges. i don't know exactly where it lands. i don't think anyone knows where it lands everyone should be very concerned about saying, why don't we just get the mild recession out of the way >> no. >> because i don't think that -- when recessions start and when you plan for them bad stuff can happen along the way to exacerbate it. but i do think this week the fed kind of gave investors permission to worry a little bit less if they're talking about skipping a tightening move in june, it means they're not looking to really drag the labor market lower in an urgent way right now.

>> mike, thank you as always, mike santoli. >> our next guest has mega cap tech stocks have become the new safety trade as hypes over artificial intelligence grips the market joining us now, i'll look at the guest notes. andrew, will you help me with this one >> ethan >> you no eme. i would just say loud and proud with confidence. >> efan defit. >> efan? >> you said it before. >> i forgot. that was like an eternity. chief investment officer at moneta we had someone this we can use the "f" word, frenzy at a.i., valuations are out of control. >> you can say frenzy, hype, it captured investors attention anything with the mere mention of a.i. is sending stocks into

the stratosphere so we have to wonder is this overdone is this actually playing those stocks that are actually going to make money out of a.i.? all we can say is it's transforatr transformational we've been expecting the market to show more breadth, to go back to small caps and include more defensives in that rally but it's been disappointing. whenever that does happen, it's a very short lived rally we think investors can't lose. it's the classic adage of can't lose by buying ibm they're buying not ibm but the equivalent the lack of breadth in markets shows that markets are still fragile. >> yeah. it's a safety trade but it's illusory >> yes the element of safety with tech is never guaranteed. it's not paying at high dividends.

it's very levered to growth. when confidence turns and we saw that with meta earlier in the year, it can inject quite a lot of volatility into the portfolio. these are strong business models, they've got dominant market conditions, large moats around them. it's less illusory now than maybe a decade ago >> i've been asking that question, the five or six mega cap tech stocks that are responsible for some -- the lion's share of all these gains in the nasdaq and even the s&p, i always ask is the rest of the market going to rise to those levels or do these six stand-outs join the rest lower to call it a safety trade is kind of contrarian to what most pee people think they think these names are out over their skis.

calling it a safety trade, you can still park money into those? kelly wants to go into t-bills >> i'm in, i'm in. >> she's totally into t-bills. >> that's a traditional safety played i'd say that mega cap tech is being perceived as a safety trade in equities. if you're going to be in equities and i see that the rest of the market will start to be shored up as some of the froth comes out of tech. i don't think tech is going to crash and burn there's a lot of money on the sidelines that has not yet found its only in equities it's currently in money market funds. >> it would have been nice to know when we began the tightening of 500 basis points because the narrative was that that's going to hurt multiples in tech. as it turned out, the least those names have been stand-outs, even in a rising interest rate environment.

>> that relationship has been blown apart, the relationship between interest rates and value stocks was supposed to go a certain way, as was the relationship between tech growth stocks that rely on discounted cash flow and the discount rate used that was supposed to go a certain way. it didn't. it's behaving in i'd say a very abnormal way but then we saw that last year with the correlation between bonds and equities being so positive when they're supposed to act as a hedge. >> good to have you. richard f-in bernstein >> when we return -- i got donut throat or something. >> it's a thing. >> it's a thing. i'm on number three or four here the main employment report from

the labor department plus instant market analysis from our jobs panel. but next, as the senate passes the debt limit bill, we're going to ask helima kroft what it could do for the energy process. and guidance disappointed when it reported first quarter results last night, down about 36% last night as we head to a break. here's what the company's ceo told us earlier this morning >> generally i think what you're seeing is our transition towards more efficient growth, more focus on profitability, but there's no denying that the macro effects are putting pressure on the business we need to pfo bteerrmetr.

we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch.

welcome back energy permitting reform was a key selling point to some lawmakers as they considered whether or not to raise the debt ceiling. when president biden signs the bill, it is expected to speed up permitting for infrastructure and make it easier to build both f fossil fuel and energy impacts we'll get back to our guest in just a moment. this was one of the things that people thought, okay, if we can

actually get bipartisan permitting reform out of this, maybe we got something significant to happen. is it going to be significant enough to overcome what right now is an incredibly laborious process? >> for removal that's how you got the left in, all in finally >> right >> permitting involves -- get permits for those projects as well what do we call it, legacy energy >> what do you think it's good to see you this morning. how significant will this be for old energy and new >> this is a key ask of joe manchin as part are getting the deal done was the pipeline that is something that has been deemed in the national interest to be completed in a timely manner this is the big issue that the u.s. oil companies has said to the biden administration, you want more oil from us, we want from you help on permitting.

this can be seen as a down payment on the biden administration's pledge to help u.s. oil companies get more out of the ground and on to the water. >> no sooner had we heard about that that first of all he had to negotiate to get that pipeline into the bill, which doesn't sound like a win for everybody and his neighbor, tim cane is threatening to strip that pipeline amendment from the bill >> this just shows the challenge that president biden faces with the whole energy program, with democrats in congress. you have a number of progressives that would like to keep all fossil fuels in the ground but the biden administration has taken more recently a more pragmatic approach wanting more u.s. oil and gas to help deal with inflation issues in the united states again, president biden is trying to walk a middle path but certainly there are challenges with the democrats on this issue. >> obviously it didn't work. the pipeline remains in. are there broader kind of -- what do you call them, ways in which the bill, helima, help

fossil fuel and new energy projects gets done what's in the bill what changes from here in. >> again, the most important thing is clearly going to be on the pipeline process i'm sitting in vienna right now, energy prices, you're flashing them on the screen the big issue we want to talk about before this segment is over is we have an opec meeting happening this weekend and president biden has been very focused on diplomacy to the big oil producing states in opec to try to have help in terms of opec production policy one of the issues right now in the next couple days is in terms of energy prices is really what happens this weekend with this opec meeting >> obviously i totally agree there's regions of the country, northeast, whatever, where, you know, they're paying higher prices because they don't have the infrastructure and that's more of some obstructionism as opposed to just the process piece of this.

so you're in vienna. i guess they tried to block some journalist from attending. they said there's no rift between saudi and russia no rift sounds bullish, i think. what do you think? >> the big question is what is going to happen tomorrow and sunday with the opec meeting russia said they would do significant production cuts. if you look at the secondary source data, they are not fulfilling the production cuts they said they would do. saudi arabia and iraq has done the bulling of the heavy lifting with the cuts announced since october. the question is does opec believe you have to do more. are we potentially looking at another production cut coming out of this meeting? one thing that i say that's important when you talk about the white house is in october the response from the white house was obviously very angry about the opec production cuts what we are hearing now is if opec were to proceed with a

modest production cut, you would not get the same type of blowback from the biden administration they are much more cognizant of the fiscal pressures that the oil producing companies are faying so while they would not be thrilled with a production cut, we're not going to see the same type of angered response we saw. >> tom mcclellan is out there calling for oil at the bottom. thanks we'll leave it there look forward to getting more updates throughout the weekend >> thank you >> coming up, yup, i forgot for a second the employment report is coming at 8:30. economists expecting a gain of 190,000 jobs it's the donuts i was focusing on after that, reaction from former philadelphia fred esenpridt charles plosser and sara malik

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welcome back to "squawk box. up next, the may jobs report our panel is standing by they're going to break down the data staytuned. we've got some donuts here as well it's national donut day. are you going to eat a donut beforee go w, steve? >> not before we go. >> only after. too much sugar op, save for college and our retirement. but we got there,

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welcome back to "squawk box" on cnbc. we're now just two and a half minutes away from the government's may employment report ahead of the number, let's bring in our jobs panel, tyler

goodspeed, former acting chair of the white house council of economic advisers under president trump, now a kato scholar. wendy edleberg fellow at the brookings institution. and rick santelli and santoli >> we have indicators leading up to it. there are questions from the adp report like where did all those natural resource and construction jobs come from? claims have been low and we have not seen the flow from claims into continuing claims

>> wendy, are we going to be disappointed by a strong report, which makes no sense is that what's going to happen >> i think a jobs report that started with a one would be good news we know that the labor market has to slow. we have a smaller labor force than we were on track to have before the pandemic because of deaths from covid, because of less immigration and we know to get employment to a sustainable place consistent with low and stable inflation, these gains have to outlast them a hundred thousand a month >> by the way, the whisper is about 225. of a yesterday, the expectation a little higher. >> tyler, what are you thinking? strong weak >> if the median is 190,000, i think the distribution should skew toward the up side. when i look at adp, when i look at the claims data, when i look at jolt, those that's dated, it tough for me to see a major

slowdown from the 253,000 last month. >> rick, you got 20 seconds for your pre and then you give us the number >> i personally think we're going to be coming in on the weaker side, especially on the earnings i think this report is going to be about earnings. we popped up to half of 1% on month over month i think that's an anomaly. year over year we revised out lower reads at 3.2 i think that's the threshold to pay attention to and the numbers are out for the may jobs report. boy, it certainly wasn't on the weak side. 339,000. 339,000 non-farm payrolls. that's the best since january when we were at 472,000. private payrolls 283,000 the unemployment rate, 3.7%. 3.7% there is a surprise. last time we saw 3.7% was october of last year to find a higher number, you

have to go back to february of last year. that's quite a ways back now, let's look at those earnings yes, that .5 turns into an up.3. up .3 and we've had many of them that is the lowest month over month since the lowest one in february when it went to zero. now if we look at what's going on year over year, 4.3%, coming right down to that threshold i believe is important at 4.2. 4.2 equals marshch let's look at the work week. it's down 0.1 from the rear view mirror trust me, it makes a bit of a difference, especially if you're looking at things like productivity finally, labor force participation rate unchanged 62.6 is what we expected it's what we had last month and

what we have this month. how does 62.6 compare? well, the lowest read we've had of late has been 62.3 and that was -- i'm sorry, i take that back the best rate that we've had is 62.6 and we want to pay attention to that. so we're equaling. we had two just this year alone. this would make it number three. and finally the underemployment rate known as u-6 is 6.7%. it ticked up a bit 6.8 is the high ground for this year 6.6 the low ground for this year interest rates, well, they've moved a bit higher but not much. here we hover on a 10-year at 3.63 we said last friday at 3.80 and we're at 3.61 going into this number 2-year note at 4.30.

we see yields have popped a bit. they haven't popped as much as i thought they would on a non-farm number maybe many are paying attention to that earnings i'd like to hear what the panel thinks >> futures are right where they were, mike santoli can't we just have a strong jobs environment and maybe inflation moderates because it's not all wage -- couldn't we live in a perfect world where we don't have to hate the jobs number >> that's the hope and it's conceivable but you want to see it in the numbers. i market is not going to assume that's what we have. depends on what you want to focus on on this number. there were upward revisions from prior months the household survey shows it's showing a little softening, which is good news and then moderation in wage growth. i think maybe why the market is not alarmed by the number is

because of all the preparatory speech work that the fed has done this week trying to delink this exact jobs report from what they're going to do in a couple of weeks we'll see how it plays through the day. >> i want to get to wendy. you got what you wanted, wendy, you got a one but you just got it three times >> i am surprised. and i don't think that these kinds of numbers can be consistent with stable and low inflation. we just don't have the population growth or the structural changes in labor force participation to support these gains. it's not consistent with a stable economy >> can i just ask a question >> as always >> tyler, this is a really interesting report because on the one hand the payrolls number was much stronger than expected but on the other hand, the increase in the unemployment rate is much worse than expected and very significant, as you know usually when we rise by half a point from the lowest unemployment rate it means the

economy is going in recession. we just rose 0.3 and we're up 0.3 from the low in other words, if this isn't revised away, the increase is potentially more meaningful than the continued strength we're seeing in the payroll cycle. can you just comment on that >> we've seen a few instances in the past couple of years where there's been a lot of disagreement between the two surveys. i would have placed more weight on the establishment survey. but the household survey is showing an inkracrease in the unemployment rate and an increase in those not in the labor force and a big decline in employed the household survey is showing a lot of weakness, the establishment survey showing a lot of strength. the one caution i would introduce on the establishment survey front is it tends to miss turning points we saw this in 2021 that they were undercounting initially a lot of job gains because new firms were starting to come in

during the recovery. they can also miss the turning point at the upper end of a cycle because there's some firm attrition from the sample. so, yes, we just got some upward revisions to recent months but the general pattern over the past few months in the establishment survey has been downward revisions i think we have to be on the look out for downward revisions on -- >> it the fed fund flip? >> i'm not really seeing any movement at all. >> that's what the stock market would say. >> i'm not even seeing movement in july. july was -- i can double-check that it just takes a little bit of time here. but it looks like, yeah, it's still 60% probability of a july hike this is a very weird number. i almost can't get up to 339 by looking at the number. there's all these little bits of job increases but no big thing

the only big thing in there is this big jump in health care and social assistance at 77,000. but when you go through it, with these sort of big things i've been used to seeing, oh, it was 150,000 on leisure and hospital tee but it wasn't. i'll give you that number real quickly. it was 31,000, which is nothing. it was 18,000 on local government, education. it was i'll give you the construction number. manufactures up 11, construction up 15. 15, 10, 20 somehow that adds up to 339. by the way, with a bunch of negatives in there that suggest there's quite a bit of churn going on i don't know what the diffusion index is, which is what we look at to see what percentage of industries had job increases but i think it's going to be a small number, joe. this shows strength of a job market that won't quit but there's a little bit of something in here that there's

some churn going on. >> i like the half full perspective that the market seems to have. i think santoli nailed it when you said they already massaged us and told us they want to skip maybe they'll still skip and we still have a strong labor market wouldn't that be what we want? we do want a strong labor market we just don't want them to keep hiking >> well, we want it in the abstract we want a sustainably strong labor market what you don't want is to be out of balance to the point where the fed feels they need to slam on the brakes. that's what they're suggesting right now, they don't feel that real impetus to do that at the moment yes, i do think that they drained a little bit of the suspense out of this number, but it is interesting. it also is that eye of the beholder effect. a big headline jobs number but the quit rate was down it's really a matter of emphasis and what you want to focus on to decide what is telling you what the emerging trend is as' p-- a

opposed to the headline jobs data >> i want to say something to tyler real quick of course i respect everything you save but i just want a little bit of advising on the increase of unemployment we've seen this before and this economy has had a way of absorbing these unemployed people if it continues for the couple months, i'd say you're on right track. the history has been people have within losing work and moving from an industry that's shifting down from, say for example, covid employment i'm not sure it's time to say we have this increase in unemployment that's worrisome right now. >> i wouldn't disagree with that i'd say it's a data point that we need to watch i would add that, yes, this is a labor market that has been reequill brating and price has

been reequilibrating, high matches between openings and unemployed workers but high wages have been -- the reequillibra reequillibration is consistent with the fed's market. >> i hard you did some really great stuff on kelly's show, rick, that you don't do for us on "squawk box." you did some charting yesterday. >> did you hear that >> that's all right, all right fine, fine >> guest used to how joe is on the other show >> that's the one. so you brought it. don't rub it in. but my point was if you

looked -- your long-running prediction that the highs are in for yields, rick, the labor market would have said you're absolutely -- if you just followed every first friday of every month, it would be rick's full of baloney because that's not what happened. but you look at the 10-year and it's saying that you've been right all along. >> yeah. as a matter of fact, i've always had the suspicion that if you're going to be right on something, the theory and the abstract is pretty interesting but show me the money. the stock market saw green today, interest rates have definitely peaked and once again i've said it many times, if we wait for federal reserve officials to give us guidance that it's good to buy equities and be happy about the economy, most of the opportunities will be in the rear view mirror now consider this. we are now seeing huge drops in bund yields on the week, in 10-year, in 2-year and it's week after week i know there were distortions on the default issues, but all

things being equal, joe, you're exactly right. if alls you do is pay attention to the fundamentals, you would have missed the boat if you pay attention to markets, it's really pushing you in the right direction. i think that fed fund futures for july may show a slight possibility of a rate increase, but i would take it one meeting a t at a time. i would make the bet that they're done >> what's the bet, rick? i'll take that >> really? >> just for fun. how about a ride in one of your classic cars that you have there, rick? what about that? >> while we eat a couple of dozen donuts. >> i'll give you a guitar lesson >> i'll bring my accordion >> that's hot. you don't have an accordion, do you, rick? >> really? i got one from my parents when i graduated college. how's that >> wow

>> that's a long lost art. >> this whole segment was worth it just to learn that. >> i mean, do you do polka >> i do polka. but i think my favorite is "new york, new york." i can really dazzle it up on the old accordion. >> i want to see that. >> i'll play that with you, rick >> wendy, you got anything you got to say you all right? you good tyler? everybody's good >> i think information in hand will probably increase at the next meeting >> so rick would lose the bet and have to take you for a ride. >> oh, rick means fed fund >> completely done i thought maybe the 4% 10-year >> you mean the fed's done, rick >> yes >> thanks to our job panel, tyler, wendy, rick we used to have an eight box, which included a chihuahua that

calls chihuahua lucky. we had paris hilton in there and we put it on for a second. >> that's hot. >> they're dying in the back >> they are? >> yeah. >> i turned it off >> coming up, we'll have more on what the new jobs number can mean about the fed's next move and former philly fed president charles plosser will join us and check out a bloomberg report about they're in talks with a mobile service, reports are amazon is talking with t-mobile and verizon. what do you think? ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪

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welcome back to squawk right here on cnbc the may employment report coming in much hotter than expected, 393,000 jobs versus expectation of 190,000 unemployment rate up to 3.7. joining us to talk about what this number might mean for the fed's next move, charles plosser is here, now a visiting fellow with hoover's financial institution. let's put you back on the board, back in your old job

you've been sitting around the table with mr. powell and the rest of the crew what are you saying to them? >> i'm saying there's a surprisingly strong employment report there was a disappointment in the household figures but the unemployment rate ticking up a bit. it's hard to argue the labor market isn't in pretty healthy shape and it seems to be very resilient. so i think i would advise lots of caution about the tendency to want to pause or skip a rate increase >> so you're saying you'd hike >> i think i'd go for another 25 basis points now, yes. >> what about the argument that -- that by the way, the hiking not really working to some degree? >> well, it's either not working. that's one interpretation. or we haven't done enough. >> right >> now that you have these

numbers, is it hike now, take a pause next month or is it you got to just plan at this point to be hiking for the next couple months >> i would say so. i mean, think look, they've barely moved the inflation adjusted interest rate into positive territory this is not -- not only that the banking turmoil that was so much of concern for the last couple months has really not materialized and i think that the danger is that by pausing, the interpretation of the margin is going to be they're done and i think very dangerous message to send or risk of sending that message >> but, charles, in terms of creating instability in the banking business, in the banking sector, is there the prospect if you were to raise or raise too

fast, some people thought they were raising too fast and that's what led to some of this already, that you could topple things >> well, look, there's always that risk. if it didn't topple in march when all the turmoil started, it hasn't toppled yet, 25 basis points is not going to make a difference but it will send a strong signal that the fed doesn't believe it's done yet. inflation really has been running between the pce core between 4.5% and 5% now for a year, and it's not drifting down, and i think they're in danger of damaging their credibility. >> look, i've been in the camp that they were going to keep raising and could keep raising the entire time. my question to you, though, is, is there any benefit to almost a shock and awe raise? which is to say, don't give them 25 basis points. go 50 and see what happens >> well, i think there will be lots of people arguing against

that i wouldn't be opposed to that necessarily. i would have to think hard about it but i think the right message to send is that we're not done yet and we need to keep moving forward, and i think a good consensus call would be to say, yes, we don't want to raise rates too much, but we need to keep moving forward, and get rates up to a more -- a higher level if we're going to bring inflation under control. so, i think 25 would be the right number >> charles, we always appreciate your perspective, especially on a day like today, and appreciate you joining us thank you. have a great weekend >> thank you, andrew good to be with you. coming up, what to watch 200 points on the dow. go figure. but we'll talk about the opening bell, some individual names following that jobs report and nuveen's saira malik will join us as we head to break, check out the mobile operators not homes. these are phones

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welcome back, everybody. about half an hour out, a little more from the opening bell on wall street, and futures are pretty unchanged, believe it or not, from where we were prior to the jobs report when it crossed at 8:30. the s&p is up 19 dow is up 18 8 nasdaq, 37 let's talk to saira malik. the market seems to be taking this report as kind of pushing us to the pause category for june and maybe since that was the expectation prior, maybe that's why we haven't seen too much movement. what's on your mind? what do you think is kind of the -- what have we learned this morning? >> i think two factors are going to drive the markets from here and that is technology stocks and what does the fed do today's payroll number gave something for the bulls and the bears. if the fed's looking at it, we have household and unemployment as fodder for the bears but also wages are moderating, and establishment surveys are better

for the bulls. i think it gives the fed the ability to pause in june and take a wait and see attitude if that trend doesn't continue pretty significantly to the downside, i think what you're going to get is a pause and then likely rate hikes again going forward as the fed continues to battle inflation and target 2% quick note on technology ten stocks have been over 100% of the s&p returns year to date but there's more tailwinds for tech lower yields moderating inflation and people expecting a slower economy, all of those are tailwinds for tech to keep working from here. >> it's interesting because you're not saying tech's overvalued and it's time to look at other quality and value parts of the market. are you saying, like, if i don't own those big tech names or i've been thinking about trimming those positions, are you saying the opposite >> there's going to be haves and have not in technology the a.i. winners are going to be big winners. when you see these transformational shifts in technology, you can see outperformance in a long time. these are some of the arms

dealers, broadcom, nvidia, while the fluid a.i. business models and monetization ofa.i. is unclear, the ones in the background, the suppliers to a.i. companies, are going to continue to win. i think that can continue for a long time. >> i mean, amazon looks like they're going to maybe go to the wireless business, saira details are sketchy, but would you include them as one of the companies you're excited about >> we like amazon for other reasons. some of these mega cap technologies, amazon, meta, they started to restructure their business models earlier. we've seen that with meta as a big winner year-to-date. amazon made large investments into their logistics during the pandemic they basically overspent, but now they're starting to fill that capacity and look for other areas to cut costs i think that's why amazon will perform better and that was a good strategy for them to -- more control over their logistics, given what's going on continuously with supply chains. >> can the s&p stay above 4,200 if we are going to have a recessionin the next 18 months

>> well, this is definitely a feeling and a level that we want to see the s&p hold. it's been a very narrow market led by this narrow band of technology stocks. i think that does pose a challenge, but as long as tech still has tailwinds, and as i mentioned, it's more than just a.i. it's the positive from yields rolling over to inflation moderating i think the s&p can continue to climb higher what we're hearing from clients is that almost a quarter of their portfolios are sitting in cash so, my concern is that you might enter this period of fomo. we have the s&p up 10% now, nasdaq up 25%. people are sitting in t-bills, the fed pauses,people might start to rush back into the market >> could we skip a recession not just skip a rate hike, could we just skip a recession, just say, let's don't and say we did? is there any way that's possible obviously, there always could be another recession. but let's say, no recession for two years. is there any way that happens? >> i think it's challenging when you have this 14, 15 months of

significant rate hikes to completely skip a recession. the data we see today, just with today's employment number, tells us a recession is not imminent, so i think what the markets are saying is that we don't see a recession coming any time soon could there be one in 2024 that is our expectation, that eventually the consumer rolls over because of tighter credit, the employment market starts to roll over, you hit that recession. that's not today today is about technology, yields moderating, inflation moderating and the market continuing to climb higher because clients are holding a lot of cash. >> i used to talk to saira about muni, joe. i don't want to scare you. >> double digit and i'll buy one. >> saira malik, thank you very much this morning. >> one check of the markets. neer neither one of you or me if you said whatever it was, goes up 200, no way. >> no way. >> but you add the unemployment rate >> you would have thought it would be good news-bad news.

>> i see unemployment rate up, i see temp jobs down, i see average workweek down. >> and you heard plosser say, they raise rates >> they ain't going to >> i'll raise you a doughnut >> those are free. >> make sure you join us -- >> happy national doughnut day >> thanks, kelly >> thank you for having me >> "squawk on the street" is next welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber jobs number beats. best since january, but unemployment does raise to about an eight-month high, and while yields are up, futures are holding. markets still betting on a fed pause later this month our road map begins with the macro picture and that blowout jobs report.