minnesota, michigan, and wisconsin. i guess we'll talk about chris licht tomorrow going to be a lot of people dancing on his demise if that's true he did -- that's -- john malone acknowledged needed to be done at that place, and you can't do that, though >> we're out of time make sure you join us tomorrow right now, it's time for "squawk on the street. ♪ good wednesday morning welcome to "squawk on the street," i'm david faber with jim cramer carl has the morning off let's give you a look at futures. we get started with the trading day. it's a hump day, jim it's wednesday >> you bet it is >> yeah, baby. we look like we may have a bit of a higher open we'll start with the markets the s&p 500 posted its highest close since august of 2022 you're going to hear what

treasury secretary yellen as well told cnbc about the economy. >> yeah. also ahead, crypto is in the cross hairs in the wake of those s.e.c. lawsuits against coinbase and binance. of course, we were joined by chair gentzler of the s.e.c. on this very program yesterday. we'll give you the latest. plus, the a.i. effect on stocks what goldman-sachs is saying about the chances for further upside all right, let's start with that market rally. s&p coming off what was the highest close in months. the ndx is riding a four-day win streak some other stocks, tesla riding a significant win streak >> oh, and netflix you know it's like the old days >> well, when you say it's like the old days , what does that mean >> it means that analysts don't have anything to say it's early june. they feel like they have to put out these thumb-sucking pieces,raising targets for netflix and amazon >> we'll get to this one on amazon >> these people are paid >> yeah, they got to do something. >> they have to do something >> by the way, we sit here

we got to do something too >> we all have to do something i think it's important >> it's good to be busy or at least try to be busy >> frankly, i'm just trying to breathe. >> yeah. it's not that easy to do that. who knew these canadian wildfires? back to the market, my friend. >> yes >> and being like old times. expand on that thought >> okay, so, you have something like david costa, whom we like very much. he talks about how artificial intelligence, which, of course, is nvidia, could really spur growth we have netflix saying an ad tier plus the idea of borrowing passwords, out it's going to boost numbers. ad tier turns out to be worth more than we thought we have a sense that, at this very moment, crypto hangs in the balance, and yet we don't have the justice department doing anything, so it really doesn't hang in the balance. >> okay, right it's only civil right now from the s.e.c., not criminal so it's a lot of fines, potentially, if they win >> david, the most important thing, the most important piece

today. >> tell me >> it's once again someone saying, look, amazon's about to have a major move. now, the amazon major move story, david, is fun central of what people like to talk about, because amazon is pre-nvidia, what people talked about >> let's talk about it now your referring, i believe, because you and i, you know, like we don't like to talk before the show. we like to have it all be organic. >> i don't like to talk to you, period what what'd i say just making a point. >> we just want to not talk to each other now that's not true. will you stop trying to create the sense that, you know -- all right. i'm talking about the -- i'm talking about this bernstein story, as are you. >> i'm andrew jassy. i'm going to say, return to sender he's the ceo >> okay. >> i'm worth billions. you're worth nothing >> mark wrote this piece, amazon, bring back day one, a

sell-sider ghost activist as it has a price target of $140 he says it's the best idea in this area. pursuing many ideas, and weaker ideas are taking away the oxygen >> they killed 37 projects in the last 3 weeks what does he want? what does he want? >> i don't know. what does he want? he wants them to divest, seek outside funding or trim spending across health care he wants them to make a call on physical grocery as walmart is leading that category. >> they are making a big move in physical grocery >> allocate more resources to buy with prime build out amazon media re-evaluate same-day and next-day by the way, that's what he wants. who knows? >> if he's so unhappy, he should go cover another company this was such a sell-side ghost activist why don't you up jekt yourself when i was a reporter -- >> it's working, by the way. we're talking about him. we're talking about him. it worked. >> that's because he picked a day where he knew that other

than chris licht's firing, there was nothing to talk about. >> there's always something to talk about, so many other things >> i have thoughts let me stop being facetious about this i have attacked jassy directly, saying, listen, you are spending too much money on too many different things i didn't write a letter, you know why because we have a tv show. and they can write letters all they want. >> you don't need to write no stinking letter. >> exactly >> you talk more than any single man on tv. >> well, my nodes, i think, must be hurt. here's what's really going on. they hired too many people they fired more than 20,000 expensive people in headquarters they're not living efficiently, because they're trying to figure out whether to take on walmart on same-day, because same-day food is good in the meantime, the market has coalesced around liking walmart more than amazon, but amazon has a number of projects that aren't making money jassy has pledged to get rid of them >> to get rid of them. >> in the meantime, we have a

triple trough. i think amazon is about to have a major move >> they have been meeting with investors. i spoke to one they met with, and they're talking about improving delivery times to get more efficient and that will drive so many other things >> it's true >> they're still in the belief of that. i would point out, there's some data this morning about aws, citing its growth rate, slowing again in may that's got the attention of hedge funds this morning >> i attacked them on that i said, listen, you've gone from 33 down to 10. >> now they've gone up 9.3 that's just a group of data-driven research >> if you go listen to the fabled keynote of jensen huang, you know that's about to accelerate to levels that are like what kostin says. >> the re-acceleration of the cloud as a result of a.i. usage. >> this is very shortsighted this is the kind of thing i've become quite used to >> let's get back to the bigger question, which is not shortsighted it looks back five years i don't know if we have it

amazon stock has materially underperformed its closest mega cap peers by 52%, despite revenues up by a cagr of 54% and aws being five times larger than it was by the way, advertising, now $38 billion business >> those of us who have had the go-around with these guys, the go-around has been very serious and not friendly they've come to admit, yes, aws has slowed, but they're at an inflection point because of a.i., so you can go drill down on the month of may, which i have, and i think it will come in at 7.83% in growth, maybe as high as 7.84%. who the -- cares i was using the term from -- when i didn't talk >> there it is there's the look >> i was using the short-term theme for the binance people >> you see apple, google, microsoft, all far ahead meta, not. >> there is no doubt about it that they're the biggest winner when it comes to data other than

azure. the data that's going to be stored >> let's get back to this a.i.-driven market, because you're talking about a.i. driving aws and therefore driving amazon stock it's been the theme that's driven so many of the other names that we have been talking about lately nvidia, of course, chief amongst them let me come to you with a conversation i had about amd many people say, they don't have it >> my travel trust has amd their chip is not as good by any means. >> they're still relying on the pc >> there is cpu, 95% right now gpu, 5%. it's going to switch to gpu, 95%. >> is it going to switch quickly enough to reach these targets? >> amd has a cheaper version intel has nothing. that's why i believe they're selling a lot of mobile i. mobile i was a good acquisition, but amd, as much as it's painful for me because my travel trust has a big position, is just

nowhere near nvidia. no one s >> but you wouldn't think about trimming that position >> i sold some on monday >> you sold some on monday >> amd, yes, i did >> no kidding. >> highly unusual for me to sell some, but i've seen what jensen's doing you can't go against him now, let me give you a classic example. last night, i had jack in the box on jack in the box has taken a.i. and basically said to the person who does the drive-thru, uh-uh, you're gone. we're using a.i. why? a.i. has not been able to be fooled a.i. gets the order right. now, that's a good example now, jensen did not focus on that he's more focused on it being good copilot >> right >> but think about that. you have jack in the box, 2,000 stores, they're going to be rolling it out that's pple being proactive about a.i. think about the labor savings. that one person costs maybe $24 an hour. see you later. replaced with someone who doesn't exist, who doesn't get the order wrong. >> it's not a someone.

it's a something >> well, i mean, now, get this the greatest thing upsell a.i. knows how to upsell you they can tell you, right, would you like the mint milkshake? the odds are that with a.i., you'll take it versus the human who can't. that's a.i it's the mint milkshake. if you have no other takeaway from this show, other than mint milkshake. >> i don't like mint milkshakes. >> and chris licht >> who drinks mint milkshakes? i hope you're drinking mint tea, by the way this thing's holding on, by the way. >> i know. and it's worrying me >> don't worry, you're going to be all right you're indestructible. >> the fact is that you can't breathe the air. that's playing a big role. >> you want to move on to crypto i know you have a lot to say there. let's move on from the wildfires. that is impacting, by the way, not just new york but i think philly as well who knew, frankly?

washington, d.c. we'll see when the wind changes. let's turn to crypto, though >> i'm shocked >> i'm going to read something here first i'm going to set up the story. coinbase allegedly was operating as an unregulated exchange the ceo was on "squawk" earlier today to respond >> we were disappointing to see this complaint from the s.e.c., because i feel like we have had a long history of being very transparent with them and every regulator around the world that we have worked with. we're going through time and chair gentzler has statements to congress saying he doesn't feel he has the authority to regulate the industry, and we're seeing conflicting statements from the cftc and the s.e.c. chair. we filed a formal petition, asking them for clarity, which they never responded to, and then this wells notice and a complaint arise. and so, this isn't good for america. it's not good for the industry, obviously, and we now need to get clarity from the courts. >> it's not good for america, jim. >> i love someone who comes on

air and gives a completely ill-advised series of statements >> why were those ill-advised? >> because, gentzler came on yesterday and said, listen, we've gone on forever. we need to be -- you need to be regulated. you have securities. this is america. so, this man, mr. armstrong, with a straight face, says a lot of things that sound very compelling, that are completely add odds with the 1933 and 1934 act, which have stood as well as a country. which i've actually studied and spent a lot of time on and did quite well there. in other words, what i'm saying is, i can't believe this guy has the guts to come on our air and say something that's completely contrary to a man who actually runs a commission that determines -- determines what should be -- >> he's allowed to come on and say what he wants. right? he's allowed to try to come on and defend his company yesterday, the s.e.c. chair said to us, these companies, their business model is based on

noncompliance. >> they're two companies one, they're saying, is outright fraud. they're saying it's going to be like sam bankman-fried they commingle the justice department should have filed something this very morning, because if you read the brief binance, they say it's $2 billion, just gone. this man, on the other hand, is saying, listen, congress is doing this, and these people are doing that no we have a commission >> let's listen to the commission again let's re-up what we heard from gentzler >> the commission is the government >> take a listen >> these trading platforms, they call themselves exchanges, are commingling a number of functions, which in traditional finance, we don't see the new york stock exchange also operating a hedge fund, making markets, and as we alleged in binance, having a sister organization flooding the platform with transactions called wash trading and the lack of controls on the platforms is

really a web of deception and conflicts. >> jim, armstrong said, the courts will figure it out. what do you think happens? >> i think that armstrong loses, because the commission has a very open-and-shut case. >> you believe that? >> yes because they're saying, listen, regulate accept our regulation, and everything goes away just be transparent. it's not a hard case binance is not s.e.c that's got to be justice >> yep >> but i just -- look. i mean, the pleading is the pleading it's very clear. armstrong loves to come on and say they've done nothing wrong >> it may end up that they get a fine, they have to change their business, but they stay in business it's not as though the justice department is along with the s.e.c. yet >> exactly, but why not -- why not accept the fact that we do have regulation in this country?

you can't just go against regulation you can't just say, you know what we are a shadow institution, and we have every right to be a shadow institution and no one has any right to regulate us. you know what? this is called the united states of america stuck with it. sometimes like it, sometimes don't. it works >> best capital markets in the world. >> thank you thank you, jamie >> thank you, jim, for those capital markets. >> i'm sorry i bothered to read this stuff i wasted three years of harvard law. totally wasted because what i learned was that the government actually is in charge, but what a stupid school that i went to stupid i should never have finished at the top of the damn class. what the hell was that i? he's already throwing things wow. i don't even know what you're upset about. >> corporate -- i'm finished with corporate when we come back, we're going to talk warner bros. discovery. i don't mean to laugh -- >> i bought the calls in the

socal. >> cnn chief is out. he stepped down as chair of cnn worldwide. let's give you a look at futures. we open 15 minutes from now, looking for a bit of a higher open more "squawk on the street" straight ahead is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade. where smart investors get smarter℠.

let's turn to cnn. of course, a wholly owned unit of warner bros. discovery, confirming chris licht is out as the company's chairman and chief executive. that's effective immediately he steps down just a little over one year in the job. david zaslav saying the job of leading cnn was never going to be easy, especially at a time of huge disruption and transportation, and he, meaning mr. licht, has poured his heart and soul into it we have absolute confidence in the team we have in place and will continue to fight for cnn and its world-class journalism you know, some reports have ebitda at cnn going from a billion to about $750 million, jim. it's kind of where you and i think about things maybe it was worth ten times, so you've lost $2.5 billion in value at cnn >> right, but david zaslav just informed me, standing by his

guidance on cash flow, below four times lever by the end of the year that has been the investment case i do believe in mr. zaslav i think he can do it obviously, linear tv is in front and center of everything we read i have brinker on tonight, which is chili's when they want to initiate a campaign and they are one of the largest in the country, they still go linear. >> they still go linear. question for warner bros. discovery is their ability to deliver on that free cash flow in the second half of this year and whether they're going to be successful in doing that in part to actually lower their leverage ratio to the extent that they say they're going to and get down to below four times so, that's a key for the company. and given the advertising environment and given, of course, what continues to be an accelerated rate of cord-cutting from the bundle, that is still a key question mark. i want to go back to mr. licht for a minute, because the changes at cnn, really, in some ways, seem to have been

initiated from a man who has great influence and somebody that i have been close to fo many years and thankfully interview every year that's john malone we did an interview back in, when was it, carrie, '21, right? he said this about cnn >> i would like to see cnn evolve back to the kind of journalism that it started with and, you know, actually have journalists, which would be unique and refreshing. i think a coward's way out would be to sell it or spin it off and then sell it do it in some tax-efficient way. i do believe that good journalism could have a role in this future portfolio that discovery, time warner is going to represent but you know, i'm just one voice here >> he is just one voice. remember, he gave up his voting

control at discovery when they did the deal didn't get paid a premium for it as well. but the question is, that's a view of the world that may not exist anymore when it comes to these news networks. thankfully, not our own, because we still have to deal in facts every day because there's money at stake but they go down their lane, and it's not clear that there is that world that malone may have imagined and perhaps that zaslav in part imagined also because of malone's comments. >> i think zaslav did imagine it the great ron turneut, one of the great historians of our time, talked about hamilton versus jefferson they hated each other. hamilton put out a bogus newspaper every day. it's not like this is something new in america however, it is something that has defined fox as an organization that makes more money. cnn, once again, i mean, david zaslav just reaffirming how strong the franchise is, but you know, david, i think that there were issues involving a piece in

"the atlantic" this weekend. >> a 15,000-word piece i read every word of it. >> that was devastating. >> our friend erin burnett, anderson cooper, apparently, came out against these are all people we respect in the business. >> can't lose the key people >> no, you can't >> no. >> so, but again, if mr. zaslav is right, and i care more about the numbers than anything else -- >> of course >> -- then you can stick by the stock. >> this is a big media story will it have an impact on the stock? no the question is much more about whether those linear networks can hang in there long enough and whether they can really move to true profitability on their streaming product. >> we know that sports works so, if apple decided, apple's in mls, if apple's decided, you know what? we want the nba. >> the nba is going to be a big question mark for warner bros. discovery. in fact, a much bigger question mark than the future of vinncnn, some would argue coming up, we'll get jim's

"mad dash," count you down to the opening bell lot more "squawk on the street." this thing, it's making me get an ice bath again.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, let's squeeze in a "mad dash," jim, and then we'll have an opening bell moments from now >> mark clouse is one of my favorite executives in the food industry he's the ceo of campbell's came out this morning, did not deliver the quarter i would like to see i do have him on this morning. margins decreased for some key elements he did talk about how they had some -- some volume mix pressure that's not anything that you want the stock is going to get hit

today. organic net sales decreased 1%, and that is not what you want. people are going to worry that the -- they have had their time with the covid and are going down >> all right take a break for a second. let's just let the cheering die down that happens here sometimes. that was the opening bell. take a look at the realtime exchange >> costco. >> at the big board, by the way, that was fiserv celebrating -- i don't know what they're celebrating. they transferred from the nasdaq to the nyse. costco celebrates 37 years on the nasdaq >> the cfo they are calling every company that sells into them and say, you roll back your prices.

that's why costco and walmart are chturning out to be two big winners during this period target, not, in part because of the bitcoin. the dollar stores because they have not been able to represent the value that they have at one point. everybody else is just, eh >> so, costco and walmart, you believe, are taking prices down, and that's why they're -- >> walmart's taking prices down for its private label. costco's informing everyone, look, we went from 8% to 3% inflation in food. but guess what you want to sell into us, you do this i once, at one point, sold a product into costco. here's the way it worked >> tell me >> jim, you're selling it for x. guess what you're now selling it for half-x or you're not selling it at all. so, you say, well, listen, i'd like to negotiate that and they say, okay you're not selling it at all put a company out of business within three weeks >> my first walmart documentary many, what, almost 20 years ago,

the rooms where they would have the buyers and meet with the prospective sellers, and the leverage that walmart had at the time, of course, in terms of saying, hey, that's not going to work for us. and if you don't get to the shelves there -- but if you do, you're in business f. if you don't, you don't have a business >> these two companies, as well as amazon, are doing their very best to lower prices, and i'm always concerned when i look at the baskets that are in the cpi that they don't overweight costco, walmart, and amazon, and they re they should. >> let's move on we didn't hit a lot of research. we talked a lot about amazon with this bernstein note let's talk netflix, which is up 3.6%, number of different positive notes well, somewhat positive. wells fargo, the long and winding road ahead for advertising. focused on netflix and then

jpmorgan also saying some positive things, i believe, here, in terms of their paid sharing opportunity following the rollout in late may to 100-plus markets >> so, what you have to do is go back to my interview with jeff green and trade desk trade desk said the profitability of the ad tier is dramatically greater than what anyone thought and that is why you raise numbers. i found it shocking. i did not realize how many people don't mind watching commercials, particularly the way that netflix presents them, and that's why the stock deserves to be traded higher >> okay. >> trade desk comments by jeff green. >> got it. for their part, jpmorgan says it would seem logical that 70 billion plus tv ad marketplace will be easy pickings for netflix's ad-supported tier. in fact, we think just 8.7 billion is currently up for grabs and that's the ad value that nonsports linear that isn't locked up by media companies in upfront deals. >> do you think that bob iger

did not get enough attention at the apple rollout? there's a lot of people who say that disney is the -- one of the worst-performing stocks, and yet, has so many things going for it, including the relationship with apple. there's just no pulse here what is happening at disney? >> what is happening i mean, they're combatting a lot of different things. obviously, parks are strong. they are, by far, the only true earnings engine at the company and will be for some time. this is a company not earning anywhere near what it was back in 2019. it added a lot of dealt as a result of the pandemic it's had a ceo change. it's got a current ceo in place who's got to find a successor within, let's call it, the next 15 months or less than that. going to be stepping down at the end of '24 >> other than that, mrs. lincoln, how was the play >> and facing what we talk about so often with linear cable networks having a hard time because of a shrinking universe of potential viewers, and trying to make a decision about sports. back to that back to the nba.

what are you going to do $2.7 billion now it's probably going to be a $5 billion conflict. >> you're in an existential crisis, and yet netflix is at $180 billion you're telling me that disney just got out of everything that it was losing money, maybe >> no, the next time netflix's market cap exceeded disney, it was smart to short one and buy the other. right? >> to heck with disney >> i just said it was smart to short one, netflix, and buy disney, because disney came back and had double the market cap of netflix. >> you're right, but i was busy working on who really owns paramount from warren buffett? >> who what? >> owns paramount within the berkshire hathaway because the champions league, when i look at what's going on with manchester united, when i look the at what's going on with the story you broke yesterday, i wonder if the champions league is worth more than the $10 billion that paramount's giving >> it's a good question. i made the point, $10 billion for paramount, i remember, 20 --

my god, 30 years ago when the fight for the paramount studio ended with a $10 billion deal. beat out barry diller. having to buy blockbuster, by the way, to help pay for paramount. the acquired cash flows of blockbuster helped to service the debt there speaking of paramount, for berkshire, one -- literally probably one point of apple makes up for the entire position >> i know. >> and here we are with apple once again, jim, very close to, if not in record territory a $2.83 billion market value you say buy it, don't trade it >> yeah, well, look. i think that now there's a note today, which i'm not a part of this this is a note we often have dan ives on. splendid guy and talking about how you want to own apple for the 15. now, that's just not true.

you don't want to own it for the 15, because they turn 20 on a target rate. you want to own it because of the ecosystem. you want to own it because of brazil, because of the philippines, because three straight months, the service record has gone up that had ceased to go up what i say is that apple is in splendid position, but please stop it with buy it because of the 15, the 14 that is a sucker's bet you buy it because the ecosystem and because they make an unbelievable product i will go -- i don't know if you're going to go watch their new device >> what are you going to watch on their new device? or use their new device? >> they'll show it to me what matters is they often start with something that's a canvas, a plain canvas, and then they develop a canvas that is not that expensive for some people quite different from what metaverse was trying to do so, i don't know i think that you own apple

because it's an innovator and a great technology company with great customer service, not because of any particular iteration of anything, because that's what's kept people out. and it's kept my people in my people? who the heck >> i don't know who your people are. why is tesla up every day, jim, including today? any ideas? >> it's very hard to reconcile, frankly. particularly because -- >> by the way, tesla's back to a $720 billion market value, so it's behind nvidia, but not behind much else you know, it's like number seven. and that -- that helps, you know, the twitter, the -- he paid $44 billion for it. elon, i mean, maybe he's down $25 billion on that. maybe it's worth $20 billion i don't know fidelity's marking it at 15. who cares? he's made it up already. >> i will be referenverential t partner, but i think what we saw there when you interviewed him, we realized it's just a win.

he can make cars cheaper than everyone neo reports on friday in china, but what's amazing is this is -- mongolia -- this is a man who seems to please every regime in the world. imagine berlin, asia, washington >> and you get the likes of macron saying, please, what can do in france you seem somewhat puzzled as to why the stock has had this move. >> i did a lot of work on the chart, which i know is often just values, but the chart was, according to larry williams, the best in the book four weeks ago, 75 points ago. can't disagree with that david, you have been following the travails -- >> by the way, that's an important point that he has been wanting to make, musk, which is his automobiles are not that expensive anymore. they're not viewed, i guess with the price cuts and the tax break, that they are not that expensive.

>> but david -- >> and he may start advertising as well, remember? because that came out. >> maybe nfl >> he didn't say where or how, but somewhere else >> i want to go back to the idea that the oil companies still are very unthreatened by ev. they just, you know, mike wirth, who's now become the statesperson for the industry, talking about natural gas remains the transition fuel. united states, obviously, going to be a big exporter of oil. it hasn't -- there's a new refinery being built for the first time are you not surprised that this industry is not in decline, given the fact that what can be built? >> well, when you speak to people who seem more realistic, perhaps, on what really is possible, without plunging the world into darkness and/or depression, you know, they talk about it 20 or 30-year transition and so, many investors may agree

with that. and therefore, the ability -- not to mention, of course, i mean, you know, decarbonize shipping, decarbonize flying i mean, you got a lot of things where fuel is used beyond automobiles, not to mention, obviously, for a lot of other areas as well. fertilizer >> yes but what's amazing to me is that there's more money being spent right now on infrastructure in oil and gas than i can recall. and yet you think that's counterintuitive >> you would that would be something of a surprise >> yes >> the fact that where are we going to be? potentially as high as 14 million barrels of oil a day produced in this country >> which brings me the to darren woods speech you had an unbelievable piece. >> yeah, almost a year ago, we aired our documentary on exxonmobil >> he's talking about technology that's going to make it so that we're producing dramatically now, dramatically more oil than people think dramatically and i think he has become a

visionary. we are going to be such a power in oil that we'll be laughing at stories about the saudis cutting back we'll care more about the saudis and golf than about saudis and oil. >> lot of people care about the saudis and golf. i learned after yesterday. >> geez, it's all people want to talk about >> you and i are not a fis aficionados of the game. it's an m&a deal, the merger between liv golf, saudi-controlled, and pga. a lot of pushback on jay monahan during the course of yesterday in terms of, how could you possibly have said all these things, kept these players on the tour and said you're doing a patriot duty by not taking the money from liv golf and then turn around and do what you're doing? rory mcilroy, by the way, one of the -- one of those, in fact, one of the more important of that contingent, he'll be

speaking a little later this morning at the beginning of a tournament, and we'll monitor his comments i hear he may -- there's an expectation that he may be more supportive of the deal than would have been thought. we will see. >> very thoughtful gentleman stayed a the my house for the pga. >> did he really >> yeah. did not do well. ate all my chocolate but then gave me a box of chocolate. >> there you go. nice man >> yeah. >> you want to talk about this story at reuters that says salesforce's benioff is shaking up his top ranks they're citing a source. you're my source for all thing salesforce >> look, i've been trying to get this confirmed my problem with getting it confirmed is that marc talked about, on air, that, look, he's going to run his company pretty much like everybody. if you don't deliver, you don't deliver. now, that sounds almost --

>> chief revenue officer and salesforce chief marketing officer. >> he was not happy with his revenue for the quarter. it had dropped to the lowest in many years he did blame macro forces, but this is a new marc benioff if you don't deliver, you're gone and i think that this is all in preparation for a terrific dreamforce, and a very big launch, we know, that you'll be involved with. you'll see next week big launch coming. >> big launch. >> yeah. remember, his a.i. is actually pretty valuable. >> that's, you know, again, for investors to sort through your a.i. versus your a.i. versus yours and what is going to breakthrough and become a meaningful generator of revenues and profits. still a key question >> what company do you think was mentioned most positively by jensen huang about the actual

plumbing the answer is not marvell. >> who was it, jim i don't know >> cadence design. >> oh, you said. >> terrific. i had an interview with him. i had no idea the level of importance that he is. >> ken griffin from citadel says, we're still way ahead of ourselves here it will be transformative, but it's still the early innings obviously, it is but you know, a lot of hype on near-term implications of generative a.i >> when does it become the pilot and not the copilot? >> and of course, my other question, when does it actually gain full consciousness, become smarter than we are, and want to destroy humanity he says it's not going to happen i'm not so sure. before we break, let's give you a bond report. we should do bond report according to chatgpt it will have a lot more to say than i do. just looking at a chart and saying, hey, the two-year yield is 4.5%. we're back after this.

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fiserv ringing the opening bell, transferring to the ncy from the nasdaq. the chairman and ceo joins us at post nine. second largest listing and exchange history in ten years. i want to ask you about that, frank, good to see you but let's start with news. wall street journal then showing you the headline, lawmakers trying to curb visa, master card fees with broader support. you're in the middle of this where do you sit with that effort for it, against it >> we enable commerce every day possible so our job is to support merchants and issuers.

and whatever way people are going to transact, whether it's p to p, cards on the rail, we're supportive of it so really want to support both sides of our client base always. and, you know, we'll always have change we have zelle, we have venmo, we have multiple avenues. so i think it's common practice to try to change methods of payment and enable more methods of payment so for us we're supportive of our client base. >> which means what, though. the big banks and networks and their trade groups have lobbied against this bill. are you against it >> i'd say what we're for is what i'll -- what are good for consumers, good for mer chants and enable commerce. >> is this good for consumers and merchants? i mention it because it has more support now, more chance of it

becoming a reality. >> the reality of it is, these are tried and true methods that have been used for a very long time, has large consumer adoption, large merchant adoption to the extent there are other ways in which -- we've seen many other ways we are supportive of every way. >> bringing down network fees. >> bringing commerce easier for clients. consumer choice. >> i want to make news here. i know you're a product lover, us in the restaurant business. if you were to give away your product, you could blow up the whole industry, take it all by storm probably get 100% marketplace. why let the fin tech companies loved by wall street but we know as merchants aren't any good, why do you let them survive? why do you let them survive when you could own the whole landscape because your product is superior? >> i like to think about it is, scale is a strategic advantage we've built out a platform like

clover from nothing to an entry leader you've seen us do that in other areas, even in mobile banking. the way i look at it is, competition is good. but as you look at the company, we were the original fin tech. and for a moment, fin tech changed its being. where it meant disrupt financial services >> right >> i think it's back to where we always were. driving innovation for the benefit of merchants and financial institutions >> but, frank, i'm a big believer, as you are, that people should make money and not lose money i think people are watching the show, should understand. that if frank is involved, frank wins, other guys lose. you like competition but don't you also like winning? >> we like winning, we like winning in the client's office and we like providing value to them so i think we've been fortunate.

and i appreciate our client base, which i think is the best client base in the industry. >> let's talk about that for the last moment here what are you seeing? you have a sense for the economy given the small and medium size businesses you serve, how would you characterize business overall? >> i think the consumer is o spending they may have changed the exact areas but we get a swath of data around savings because of what we do for banks. savings are still strong and spending is still strong it's obviously off of a verona shus peak but it's strong spending. >> happy to be back to the exchange >> 100%. >> good to have you here. >> thank you what do you have tonight >> i have chilly's and then campbells. marvel cannot confirm the reason they're up but they have a good

relationship with nvidia >> aweawesome. thanks, jim. we have a lot more for you stay with us

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good wednesday morning welcome to another hour of "squawk on the street" i'm sara eisen with david faber take a look at stocks higher in the early action here. up .75%. the leaders cyclicals. that's what's working. the nasdaq is up almost half a percent, week to date up .75% on the nasdaq, a third of a percent on the s&p here are three big movers we're watching netflix headed higher as j.p. morgan raises the price target to $740 a share they see gains ahead in the paid sharing program. a few chip stocks seeing gains as well.

rosenblatt initiating with super micro. meanwhile shares of marvell technology rising again on an order for amazon second gen a.i. chip and tesla on pace for the ninth day in the green we'll break down the name and why later in this hour but one thing i wanted to highlight was the expansion of the rally and what's happening with small caps. the russell 2000, totally left behind so far this year and everything seemed to switch in june where there's been nice performance. look at the month to date chart up 8% on the russell 2000 better than the s&p 500 and part of it is the banks kre, the regional bank index which was down march, april, may, is having a nice rebound, still down 25% this year but the stability is notable and the

expansion of the rally is surprising people. everyone expected the narrowness of the tech rally to yield a weaker market and it appears to be doing the opposite since the jobs report on friday. >> is there a reason -- we'll talk to mike santoli in a moment too to weigh in on this, but what is the sense in terms of the rotation, if you want to call it that, into small caps. which to your point have under performed. apple's market value is still, i believe in excess of the entire russell, so there's that. >> there's that. a few factors. number one the economic data continues to surprise in a better way and sometimes the market doesn't like that because it's worried that the fed is going to have to do more and sometimes the market thinks, well, that's good. we're having a soft landing. we've had all this tightening in a short amount of time and the economy is holding up. especially on the jobs report. if we can continue to get solid job growth with moderate wage

pressures, which is what it showed it's the good kind of weakening in the labor market not the bad kind where we give up jobs and see a higher unemployment rate that's part of the story the other part, david, is inflation. moderating. >> anything you took from yellen's interview this morning on "squawk box"? >> she continues to make the case for that soft landing that inflation can moderate, the labor market can heel and the economy -- here's what she said about inflation. >> i see a path to bringing down inflation while maintaining a strong labor market. and i think the data we have seen recently and over the last year suggests that we're on a path with those characteristics. so clearly the labor market remains quite strong with unemployment close to 50-year lows and very healthy job creation.

but on the other hand, we are seeing some signs of easing pressures in the labor market. which may be important in terms of bringing inflation down >> that's been her case and clearly she's politically motivated to say it, but so far that's proven right and i think it's what the market is reacting to in the month of june, moderating inflation pressures while decent economic growth just the latest, campbells soup reported, food inflation is on everyone's mind. we've seen impressive price, smucker's yesterday campbells today. here's what the ceo said, less impact on food inflation this quarter. last quarter the core inflation was 14%, this quarter 8% but he doesn't see it coming down to flat immediately he said it's still a mixed bag seeing prices rise in some of

their costs, like agriculture. tomatoes are getting more expensive but logistics side, costs are coming down. he said don't expect deflation in food but moderating from the sharp levels we've seen in food inflation. which is good. >> just to bring back to something i've discussed with you as well, the treasury issuance that everyone is talking about, what it will mean are we getting any sense or is that going to play out over time or do we feel that's subsiding as a concern >> people are worried. it was on the cover of the journal this morning. >> i know. the way this works is clearly the treasury has to issue a bunch of debt, as much as a trillion dollars to refill the coffers. so there's going to be a lot of demand i think there are two outcomes just to understand this. money market funds reallocate or it comes out of bank reserves. and the bank reserves piece is

the one that piece worry about at zero velocity money it sucks liquidity out of the system and we don't know what the balance is if it comes out of money market funds it's less of a problem we don't get the data until june 13th from the new york fed they posted it on their website, the rrp balances, the money market, if it's less than that, it's a big deal but at the same time we're seeing qt, letting the balance sheet shrink, at the same time they're not ruling out an interest rate increase, even though everyone expects a pause next week, they're leaving july on the table even though the odds are they go in july. >> which is changed dramatically really in just a couple of weeks? >> there's a concerted -- >> where were we a few weeks ago? >> there's a concerted effort to keep july on the table and

signal if they're. ing -- if they're going to pause they're not necessarily done. >> now we're back to june being -- >> the skip. pause in june, go in july, that's what the market is thinking we get an inflation report, cpi on tuesday >> let's bring in the afore mentioned mike santoli give me your take on the market with tesla at almost 4%. >> we have seen some broadening out of the market, small caps outperforming today but not to the exclusion of the old favorites at the top of the nasdaq and it's important to remember it's never a zero sum game it's helpful to go back to when the market started to crowd into the giant stocks and it was right at the moment svb failed it was three months ago. i think three months ago friday was when it all came together. and at that point, massive expected tightening of financial conditions regional bank stocks crash,

small cap go down and everyone went to the strong balance sheets i've been saying from the beginning what that seemed to do once you had the initial shock pass is it seemed to get you a slightly less aggressive bed than you otherwise would have had and the question was, what's the economic cost of that? remember, when svb hit, we were talking about 6% fed funds we were in the wake of the strong january economic data so now i think the market is embracing this idea, as you say, sarah. the softish landing looks possible or the economy is not worsening fast enough to really rad fie the doomsday views that had gotten into some parts of the market you had also seen the forced participation in the rally once it barrels on for longer, talking about a 10 month high in the s&p right now. there's an instinct to go after stuff that hasn't participated

yesterday heavily shorted stocks were flying. you did see that, small caps go into that category, mid caps go into that category sometimes that happens when rally is running its course and you get capitulation from the bears but it's a phase in recoveries it's how it happens. you have to have people get involved and i think we're not at the point you have to say people are overexcited, broadly speaking, about the markets. etf flows are moderate yes, seeing some of the short term indicators getting frothy but that's not something that undermines the entire run. clearly long and variable lags, reaction to tightening, we don't know if we're just in the lull period where the economy seems to be in decent shape. that jobs number reassured folks but i don't know it's going to necessarily get us out of that mode of saying it's late cycle we expect a lot of things to weaken up along the way.

earnings have firmed up. earnings expectations in general. >> they have >> they've flattened out saying we're holding these levels in terms of consensus right now. >> is it harder to pry people away from getting 5.3% from the t bill than it was a year ago? >> it seems like it. you would probably expect to see more etf flows into equities when you've had this nice move up 12, 13% year to date. so presumably people are more comfortable to earn that i also, though, i know robert frank said this, what a boone it is to people who have enormous sums of money to get that 5% in case, what are they doing with the coupon are they spending it all probably not rolling it to t bills or putting it in stocks as well because you'll have some kind of balance. >> the stock argument is interesting. thank you. goldman sachs out with a

fresh call on a.i. in the market today saying it could drive anywhere from 5 to 14% of gains on the s&p thanks to profit boost and productivity gains with that said, what does a.i. mean for the fed and the broader economy? steve liesman is looking at that angle. steve? >> it's interesting, sara. net netscape, remember the internet explorer program that launched a few months after the fed had completed cranking up interest rates by 300 basis points. they hit a level north of 5% right around where they are today. that raises the question what impact higher rates could have on new investment in in a.i. and is this a tech bubble reduction that the fed should be thinking about leaning against. the trurkt of the economy could change in important ways if i was jay powell i'd have a whole unit in place right now thinking

about this stuff he said about equality the netscape i.p.o. launched a massive investmentment that lasts a half decade. and, of course, one of the great investment busts of all time hedge fund investor glen hutchins sees potential in a.i. technology but he points out this is the third tech hype cycle after big data and crypto. when it comes to the impact on rates he tells me, for the moment, hype trumps rates. folks will pile in despite higher interest rates. confusing effects from a.i., among them more demand for capital means higher rates short term depending on how capital intensive a.i. investment turns out to be. productivity should increase over time as goldman subjggests lower inflation and return, but right now higher stock prices

creates a wealth effect for the fed. the fed should be paying attention says jason furman. this is part of a broader loosening of conditions. finally i asked bing's chatgpt it would have it said rates could go up, down, or a mixed effect when i asked a.i. what answer it liked best, it liked the mix answer >> i think that's job security for all of us with that answer before we go to break i want to mention something really important just happened. the bank of canada raised interest rates and that was not ex expected they paused last time. very brief pause so they did a skip raised rates why? the data is better a 3% gdp last quarter and saw inflation firm up.

australia surprised with a rate hike yesterday they look at those central banks as a precursor for what we could see with the fed with the pause and raise. >> as history has shown that has a good place to look. >> yes that is a good place to look >> thank you >> bank of canada raises interest rates huge news here at the top of the 10:00 a.m. hour. >> huge news. more on the markets, a week away from another big fed decision as some say a recession could be in the cards. plus we get fresh comments, in fact, the latest comments from golf super star rory mcilroy on the merger between the pga and liv golf we'll bring you those in a moment. names like tesla seeing gains this month can it continue? we'll discuss later this hour. dow is hanging onto a gain of 20 points the s&p up more than .1% we'll be right back. ♪upbeat music♪

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with the two principals as well. in part the questions of jay monahan, who will be ceo of this new global entity was well how do you explain this to players like rory mcilroy who didn't go for the bigger money they could have got at liv golf because you said it was their patriotic duty to stay with the pga take a listen. >> do you still have confidence in jay monahan as commissioner of the pga >> i do. and look, i've dealt with jay a lot closer than a lot of those guys have. from where we were a couple of weeks ago to where we are today, i think the future of the pga tour looks brighter. as a whole, as an entity

what that looks like for individual players in terms of keeping a tour card and bringing players back into the fold and then that sacrifices other people, that's where the anger comes from, right. and i am -- i understand that. and like there still has to be consequences to actions. the people that left the pga tour, irreparably harmed this tour, started litigation against it we can't just welcome them back in, that's not going to happen i think that was the one thing that jay was trying to get across yesterday, we're not going to bring these guys back in and pretend like nothing happened that's not going to happen so i do have confidence in him i think you -- you ask the people around him that deal with him in a business sense, whether it's the directors of the board of the pga tour or the title

sponsors that he deals with. he seems to be a very impressive individual when it comes to business >> during this back and forth over the past year at one point jay monahan said a deal like this would never happen out of respect for the victims of 9/11. obviously you're not responsible for what mr. monahan says but you can see why it stirs up emotions in fans >> sure. i said yesterday you galvanized everyone against somebody and that thing you galvanized against you now partnered with so i understand, it is hypocritical, sounds h hypoc hypocritical >> i think those comments from rory mcilroy are important in this world because while he seemed to have some hesitation, he did say that he supported monahan. and then, not to forget, this is

a memorandum of understanding. back to what we know here and what i know about m&a. they didn't get to an agreement because they needed to alert the squi constituencies such as the players, and it would have come out anyway, and they wanted to make their case anyway there is still a lot to go valuation being a part of that how do you value the pga, a not for profit until it won't be with revenues of $2 billion. and value liv golf that took in 2 billion from the pif but doesn't make money and then you come up with what the pif has to put in which yesterday, it was said it could be billions or will be over time billions of dollars. they're not there yet. >> we don't know the details of the deal. >> they don't know details of the deal. >> what about regulators is it anti-trust >> great question. anti-trust yes both of the leagues had been

firing back and forth at each other about anti-trust no doubt that's going to get a review you know, how that -- just hard to know whether there will be or how national interest -- who knows. >> i saw blinken made a trip to saudi arabia saudi has been cutting oil they just did again this week. secretary yellen a few months ago was livid they would cut oil production in the face of high prices when the u.s. was trying to keep prices low so all of this fits into the interesting. but on the other hand we do business with saudi arabia our government, our companies. >> how many people we know who go over there all the time. >> all the time. >> raising money >> i did ask monahan yesterday in our sit-down interview about what was going to be criticism of the transaction he said, this is what you're going to get >> to have this capital at this point in time with the strength

of this game, there's just -- there's so much opportunity. it's opportunity we have not been able to activate. but we will now. >> a lot of activation yet to come with the pif's money. a lot of stories, and saudi is going to own golf. >> you know who's happy about it phil mickelson tweeted >> yes. >> donald trump. >> yes >> mickelsonhe got the money as rory mcilroy said and monahan made clear you're not going to come back with no consequences but they took the money. >> $200 million? >> no worse for it and rory mcilroy and tiger woods did not. >> right everybody has an opinion about this >> i know. >> dinner and drinks last night. >> i did not fully appreciate what i was wading into i thought it was an m&a story. >> no. not elon musk level but

definitely buzzy we have a rally continuing this week. the s&p losing a little steam, if you look under the hood, energy is doing well, materials up 1%, consumer discretionary up .4 that's all helping out "squawk on the street" returns in just a moment

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elon musk visiting mongolia and discussing possible expansion and investment from tesla into the country with its prime minister weighing its wide availability of copper and rare earth elements for the ev battery factory. let's bring in roth capital's craig irwin, $85 price target, neutral on the company what's leading to the surge we've seen lately? >> two things. the first i call out tesla is obviously a very successful companies, the evs are inevitable it's a darling people want to own it. they want to buy a little more and it's a positive trade, a momentum trade

second thing is, and i think people are misreading this on june 3rd we had the announcement that they would -- future sales of the model 3 rear wheel drive vehicles, right, their highest volume vehicle, is going to be eligible for $7,500 in federal credits under ira versus 3,750 just prior to that which was on for a space of a number of weeks. you know, obviously better subsidy levels are good and there's been kind of news that panasonic wants to increase the battery manufacturing in the u.s. in the space of these recent days. but it appears there may have been the first detention of batteries coming into the u.s. under uflpa and that would be a major complication -- >> what does that mean >> so, december 2021, uflpa was

passed it handles the sensitive issue of forced labor. in product content and, you know, certain chinese regions. so it's the policy to exclude all products made with forced labor. and cpd only did their first enforcement in june of 2022 for solar. my colleague did work around this this looks like we have our first enforcement action for batteries. and sort of the person who raised the flag, his name is richard mohika, intimately involved in the first chinese oem to have this issue for u.s. customers. yeah, there's going to be a lot of changes, but i don't think this is -- i think this is bad.

>> craig when you come on with us, i always respect, but $85 price target still what's got to happen for you to be right here? >> i'm going to be right i'm going to be right. >> how do you know you're going to be right? what are you going to be right about? >> about 100 new ev models coming to market this year they're going to pressure tesla significantly like we saw on the back end of last year. tesla is valued at a massive premium to toyota, sells a fraction of the vehicles they don't have anything that toyota doesn't already have. so what they have is a focus exclusive on evs and a story around taxis but that story isn't anything but a story we're not seeing taxis any time soon. other people could take as aggressive positions in the technology i find it scary when you have these ap rations in front of you causing false breaking in the

fsd system so, you know, it's a story stock. it's a story stock people -- >> but the story has been out there for a long time and it has an incredible narrater named elon musk who people fully believe in they may not get to full autonomy when he says they will but people think one day they will it's going to be solar and ai is going to be important. always somebody with tesla. >> he does a great job telling the story that's why i'm not sell rated there's levers that get pulled against them and this uflpa thing is a complication if it's tesla's product that's been impounded. and reality is, yeah, they created the market but they're making it so much easier for everyone else to come in with great products there's going to be lots of successful companies

tesla is a category king what's the longer market share? does it drop to 20, 30, 10 this is a function of the bigger picture. the other thing, there's a lot of dreaming out there about 10 million units. there's valid questions about whether or not tesla is going to get that permit to sell 3 million units a year into china. suggestions that maybe they've been declined and that was what the chatter was that i was getting from people about the actual reason for elon's most recent visit there, the timing of it. so we'll see i believe i'm right. i'm confident there's going to be successful vehicles coming into market which means tesla faces real competition, real pressure and the valuation is lofty. so, you know, trade it how you like i'm going to be practical and real with my information and i'm very bearish on the company right now. >> that's always been the bearish case on the competition and valuation.

craig appreciate you coming on to talk about it even though the stock has gone the other way thank you very much. watching coin base this morning, it's bouncing after yesterday's plunge the s.e.c. suing the company alleging it was acting as an unregistered broker and demanding they be permanently restrained from continuing to do so coming 24 hours after the s.e.c. sued binance, the world's largest crypto exchange along with the ceo and more than a dozen charges filed. gary gensler saying yesterday it's top priority to protect investors. listen. >> i think there's been clarify for years. the investing public has the benefit of the u.s. securities laws crypto should be no different and these platforms, these intermediaries need to come into compliance and protect the investing public >> coin base ceo earlier this morning on "squawk box" defending the company saying

it's always been transparent with the s.e.c listen. >> gensler has statements to congress saying he doesn't feel he has the authority to regulate the industry, and we're seeing statements, and we filed a formal petition with the s.e.c. asking for clarity in on points of on the law that they never responded to and then this, and it's not good for the industry, america. >> cathie wood scooping up the stock. and some analysts coming out for coin base as well saying they're ready for battle they expect it to be a headwind but expect it to go back to business as usual. >> gary gensler yesterday saying this is a company whose business model is based on noncompliance. therefore the question if they are to comply, what does that

mean for their business model but they say this is bad for america. the courts will figure it out. it'll be some time before we get to that. >> it's also not good for confidence in general for retail trading which has taken the hit on the decline of bitcoin on the back of the fed raises rates first you had sam bankman-fried, cz, coin base, they're different in terms of the suits and enforcement actions and allegations but it's not great. >> nope. >> doesn't make you feel safe, does it? >> is it safe, i don't know. >> cramer doesn't think so. >> he doesn't. one week away from another fed decision a arwill tell you more about that >> i'm pregaming. >> we have one guest that says a mild recession in his opinion still ahead. as we head to break, june is pride month and cnbc is celebrating all month long

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- [soldier] take a look at this! - they've left us a gift. - [soldier] i think we misjudged them. - i love horses. (birds chirping) - [soldier] we should open the gate. - let's see what charlotte thinks. - [narrator] at crowdstrike, we monitor trillions of cyber events to detect threats and prevent breaches before they happen to keep your business from becoming history. we stop cyberattacks. we stop breaches. we stop a lot of bad things from happening. crowdstrike. protection that powers you. welcome back to "squawk on the street" on seema mody with your cnbc update smoke from canadian wildfires is continuing to blanket the united states new york city and detroit are the second and third worst

cities for air pollution in the world this morning government officials are urging people to limit exposure by staying inside particularly vulnerable populations like the elderly and children the chairman and ceo of cnn is out after a brief but rocky year on the job. chris licht took the reins in february of 2022, the news comes after the release of a lengthy profile on licht in the atlantic the vatican said pope francis was admitted to a hospital in rome for intestinal surgery today coming a dpu months after he was treated for acute bronchitis the 86-year-old is expected to remain hospitalized for a few days as he recovers there surgery. back to you. thank you. checking in on stocks about an hour here into trading. looks like the dow is holding gains but we faded on the s&p and nasdaq we're seeing strength, energy up

2% as a sector today materials doing well, industrials up half a percent. weakness in consumer staples and tech is now weaker our next guest said a recession is likely. bob doll is joining us nice to see you. >> thank you >> are you rethinking your views on the market? feels like a lot of strategists are getting more optimistic given the economic data and the price action >> they are. and i would say those of us who have been cautious, the breadth, friday, monday, today. >> it's impressive >> as of thursday, the average stock was down near to date. so i was like did i miss anything from the big tech stocks we have to do some rethinking here. >> based on what the jobs report people thought was a good sign. >> i think it was more mixed

on balance it was positive but we still have leading economic indicators down 13 months in a row. that's a record. we still have an inverted yield curve. we still have liquidity issues so i'm not giving up on -- look, when the leading indicators start down, the average recession starts 11 months later. we're in our 12th month. if a recession is coming, it's still not late. >> a lot of people say when fed hikes the lag policy is nine to 12 months and we got those four 75 basis points hikes in in the middle of last year. that should hit soon. >> agree 0 to 5% in a year that has implications not just a few banks rolling over and dying and we get back up and dust ourselves off and everything is fine i think there's more impact to come. >> what do you do? >> i think you be a little cautious on rallies, let them go we've been in this 38 to 4,200

seems like forever broken topside, i'm taking money off the table. be we've talked about how long we've been doing this before coming on camera there is a benefit to remembering certain things is there a period that comes to mind that's similar to what we're going through, especially given the a.i. hype? >> we went back and looked, '99/2000, that's the only similar thing. valuations today are not seriously ridiculous like they were then but the narrowness of the market is the same this is the october low either the weakness bull market we've seen or the longest bear market rally. one or the other and only time will tell. >> what's a good tell to know? do we have to wait or is there a sense we get here? what's your prediction >> i think we have to wait if we get the recession, the market will go down back the earnings disappointment. if the recession has faded into

next year or the year after, the market will be just fine, thank you. >> what would it take to make you turnbullish and get constructive and tell people they put that money they took off back in? >> economic indicators moving higher issues that caused us to be so concern will just have to stop deteriorating. and that doesn't seem likely, sara the economy is fraying a bit the jobs report wasn't perfect the gdp numbers we've seen, the consumer numbers, they're good but they're not great. >> but they're good considering all that we've been through, the inflation shock, rate shock, liquidity drain all of that was supposed to be a doomsday. >> banking crisis. >> bank failures. >> won't fight you on any of that i see pe on trailing earnings 21 times, forward earnings 19 times. that's not a bargbargain.

>> it's tech stocks. >> back it out it's still not that cheap they've been coming down, first quarter better than expected earnings but analysts didn't change the numbers much. which means they're taking earnings out of quarters two, three, and four and that bothers me. >> bob, thank you. we appreciate it making the bearish case, bob doll even the wealthy are starting to cut back due to inflation according to results out of our latest millionaire survey robert frank joins us with those details. >> good morning. investors betting that inflation is sticking around at least another two years. that's where we surveyed people with a million dollars or more in assets saying that 52% say that inflation is not going to fall to the fed target of 2% for at least two years a third say it's going to take at least a year and saying interest rates are higher for longer half saying interest rates are headed higher by the end of the

year only 18% expecting the fed to cut rates by the end of 2023 inflation rates starting to take a little bit of a bite out of their own spending more than a third of millionaires surveyed have cut back on restaurants due to inflation and 18% have delayed the purchase of a car. one in four has given less to clarity due to inflation and if inflation ererpersists, third of them going to cancel vacations. and a third say they plan to borrow less this year. we asked about the biggest threats to their wealth now, inflation was second behind the stock market more than half think the market is headed lower. can you read more about our findings, including who millionaires support for president in 2024, at cnbc.com/milli cnbc.com/millionairesurvey guys >> i'm curious about who they

support. >> you're not going to tell us that's a tease do they get things right >> they get good advice and their allocations tend to be fairly good. right now heavy into cash and cash equivalent. that's been a good investment this year. the crisis in 2008 and leading up to the pandemic, they're not good at predicting when the market is going to fall but they do tend to stay invested, relatively speaking and then get the upside when markets come back >> robert, thank you i guess that's an indicator, of sort or contraindicator. still ahead bernstein out with a note calling on amazon to refocus capital. we'll talk to the analyst behind that call in a moment. dow up 53 points s&p still in the red but just a little bit. stay with us we'll be right back. doors can take us to new adventures and long-term goals.

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bernstein out with a note this morning calling on amazon to refocus its capital into ideas that only amazon can do, saying the company is simply pursuing too many ideas that ar, saying the company is simply pursuing too many ideas that are taking its oxygen -- or the oxygen out of its core business. amazon shares are slightly, actually kind of substantially lower this morning joining us now is bernstein's mark has amazon as a top pick. he has a buy rating price of $140 as the target why'd you write this letter, other than obviously get yourself some attention, which is working, by the way but beyond that, mark? >> first off, good to be on the show but, the letter came from a place where post last earnings call, i felt my role was less of an analyst and more of a therapist, listening to kind of investor feedback on things that amazon could effectively do

better and i'm certainly bullish on the name i've actually moved it to my top pick but i think in addition to just core fundamental improvement, i think there's just a lot of self-help sitting here on the table that amazon can do if they so choose to pursue it >> well, you go through a number of those, what you believe would be self-help seeking outside funding, exit underwater international markets, you know, they had been trying to get more efficient, haven't they >> you know, i think they have and you know, in my view, there's small things you could do, kind of on the side. i know they've cut 37 projects, things like, you know, the kids' video conferencing product so that's not going to move the needle what we're looking at is some of these big investment items that have really sucked in massive amounts of capital you know, they're operating in markets like brazil, where they're certainly not the market leader and they're losing share. you know, they're investing a significant amount of capital in things like health care and, you know, project kuiper, which just

don't seem to be those areas that only amazon can do. i think there's better places to put that capital to work >> as you say that, i think about the grocery business they've invested a lot there and they've got some pretty big, tough competition with walmart and kroger what is the strategy, do you think? what have they said about the aspirations? >> yeah, look, i'm actually all for the grocery business if we, you know, step back and say ten years from now, who's going to be amazon's main competition when we look at u.s. retail, you know, it's walmart and walmart's the leading grocer in the united states also turns out, people like to buy groceries in person. so i'm all for trying to build out a complimentary physical, you know, grocery solution you know, what worries me is, you know, what we hear management on the call saying, we really haven't figured out product market or what the right format is, yet they built out 44 of these fresh stores. i think there are going to be some stores that they have to divest acquiring is a far more

efficient path forward for grocery. >> i do wonder, though, mark, can i imagine some years back, what are you spending that time on aws for it seems like it's not going to scale. obviously, it's become the profit engine for the company. i mean, they seem to be committed to the idea that health care is going to become something important for them >> yeah, you know, i think -- and i've certainly heard that sentiment. and i've certainly -- i believe the company themselves very likely plobelieves that as well. i think it's probably the wrong example to anchor to i'm all for those types of opportunities exist. in my opinion, something like buy with prime, effectively acting as the fulfillment engine for all of online commerce to me feels far more comparable than what they really built with aws, where they were sitting on excess capacity and they had some unique capables that really no one else could go replicate i think those opportunities do exist. health care just feels like it's too broad and ambiguous, and they keep trying to, you know, rather than having a single strategy that they're really

committed to to scale, more of a try a lot of different things, do a bit in pharmaceuticals, do a bit in telehealth, do a bit in insurance, and try to find something that works it feels a little bit less defined and less clear i think there's better opportunities that they're already working on that i would rather see capital allocated towards. >> is andy jaffe the guy the right leader for this company at the right time? there used to be some buzz and wall street talk about maybe jeff bezos will come and pull a howard schultz what about jassy's leadership? that is really when the stock started to underperform. >> you know, to be fair, the stock is up 50% year-to-date, which is to answer your question, why put out a letter like this when the stock is working. even prethe jassy area, the stock hasn't outperformed the s&p. you would have been just as good putting your money into the index. i'm not here though claim whether andy is or is not the right person for the job

i look at my notice, something that can help enable him, and help work towards where there might be some opportunity levers he's the guy that built aws. he's certainly got the trust and the respect of the amazon workforce and employee base. i'm still very much in his camp. hopefully my note kind of maybe jolts some new fresh ideas and new ways of looking at things. >> i'm surprised in a way, though, that you haven't come after amazon media you actually say build it out. i've talked to other who would say, listen, i don't quite understand why it needs to be a part of prime. and they're spending billions on it it could so easily just be cut and immediately go to the bottom line why are you supportive >> yeah, you know, i view the media world or property gets a little bit bigger. i include all the advertising in there as well. and they've built nearly a $40 billion run rate ad business granted, a lot of that is product search and branded search on amazon but they're building out complimentary assets i think getting in the live sports via the nfl, certainly

not economic currently but you can see how it could become a one-stop shop for an advertiser, you know, going into a universe that is going to be increasingly privacy centric who's gotta first-party data to sell the most recent kind of announcement deal with pin pinterest, you know, pinterest has a problem, they can't find enough advertisers to fill demand on that platform. amazon is sitting there with a wealth of advertisers and knowledge on customer purchasing behavior you know, it feels like they've got something very compelling in that space, beyond simply how much they're spending on content. >> and you only have a $145 price target >> the stock certainly up over the last couple of weeks or so, when we upgraded it to our top pick in that price target. in our note this morning, we put out that if they're able to do some of these initiatives, we sigh a pathway to $180 to $200 for this stock primarily from some re-rating, but also taking off some expenses off the books >> and finally, the question

everybody wants to know, mark, will you be surfing today? >> unfortunately, not a lot of waves outside this morning >> no? well, sorry to hear that you can always take another day. >> get back to the office. >> get back to the office. i could have said that to g gensler yesterday. >> u.s. government is not fully back >> how can the s.e.c. not be doing their job as well as it could by not being in the office >> i don't know. i agree with you >> i got tired of asking that. >> that's itor u fs this hour, but sarah doesn't go away. she stays right here "squawk on the street" continues after this break network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go.

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i'm okay. good wednesday morning i'm sara eisen with mike santoli live from the new york stock exchange setting the agenda for us, rbc's head of u.s. equities strategy, lori calvasina plus, wall street's china battle the recent slew of negative data has many saying it's time to bail on the country, while others say it is too cheap to ignore we'll speak with