>> dow jones off about 24 points nasdaq up about 40 points. s&p 500, up about 4 points and i hope you keep your lungs clean, my friend join us tomorrow "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange premarket continues in a range, although rates did reverse lower as jobless claims popped to the highest level in 20 months market also grappling with the fallout from these wildfires in canada, more faa ground stops today. in fact, our road map begins with the smoke warnings and economic impacts air quality alerts issued for much of the eastern seaboard to as far west as ohio and kansas millions urged to stay indoors, airline traffic slowed and outdoor events canceled.

plus gamestop shares are tumbling ahead of the open that retailer ousts its ceo and names ryan cohen and tesla, will it make it ten straight daily gain days we shall see let's begin with the canada wildfire smoke that continues to blanket the northeast and other parts of the united states new york city experiencing the worst air quality in the world yesterday. today, philly surpasses it officials urging residents to limit outdoor activity, wear high-quality masks if they must go outside the faa says reduced visibility will continue to impact air travel today and adding it will need to take steps to manage the flow of traffic safely into new york city, d.c., philadelphia, and charlotte. jim, we're starting to talk about what this will mean for the overall economy. mobility and the consumer. >> look, i think that this is one of those moments we haven't talked about, but there's a series of notes about amazon,

and when amazon has these experiences, they do grow prime. we also know that prime's talking about having a video tier with advertising, david prime has so much wind at its back, amazon has so many analysts that are jumping out and talking about it, that i think they're the way to play. the bad air quality. >> that's interesting. i mean, the stock was actually down sharply yesterday, i think, in part because of something i did talk about, this number that showed aws was slowing we talked about it yesterday we also talked about that bernstein positive note. we had the analyst join us lair in the day from bernstein. >> the hate letter >> the hate letter but jim, i wouldn't have thought you'd go right to amazon as a sort of a -- a positive play >> i'm worn down by analysts who have come out in the last 24 hours and say, listen, get on board. get big or go home, amazon i've got to tell you, david.

we have not heard exactly when we're going to see a bottom in amazon web services. we know it's been going like this >> it has. >> when you go out positive on it, they're a little touchy. but i think that we're going to see a bump >> i don't want to put words in your mouth, but i'm repeating some of the things you said, that the growth in a.i. and what that's going to mean for datacenter and cloud providers, including, of course, amazon and what it's going to be able to provide to its customers as a result of generative a.i., is going to be a significant engine for growth >> well, look, you're going to have dave kostin on the 10 now, dave kostin is talking about rather remarkable acceleration in the economy that could come from a.i. now, when you go back to, yes, the oracle of everything a.i., jensen, he talks about alphabet, and he talks about meta, and he talks about microsoft, but one of the themes that i find behind it is that you're going to need

a lot of datacenter space. that's really what they're doing. amazon so, i think when you talk to dave kostin, he's going to have to come out and say, look, what's good for a.i. is good for amazon >> datacenters consume a lot of electricity, carl. back to sort of the fires and everything else. >> i keep telling you. >> and they all look to be powered by renewables. very interesting when you're going to put up a datacenter, you yoactually -- you're amazon, alphabet, meta, you want to make sure you're securing your electricity if you can from renewable sources. >> and they like hydro they like hydro. >> that's where the capital markets, the private debt markets, private equity really comes into play as well. >> well, look, i just think that amazon, there was a piece -- big piece about amazon was the mark mahaney triple trough place that got people really going. amazon has been a not-great stock versus, say, nvidia or

meta and this is the revenge of amazon, and i think that the idea of the amazon prime ad tier, after what we learned from trade desk about the netflix ad tier on netflix, it's a surprising amount of money that can come in for doing nothing. >> today, both b of a and ubs reiterate their buys on amazon i guess the question, jim, is whether or not this fire episode -- i mean, and by the way, the season's just getting started. this one says canada will be dealing with this well into september, if not beyond, out west so, do you start to think about names that have the consumer remote, netflix and less favorably on movie theaters, theme parks? >> well, i think it's -- look, people can get used to things, but i don't think people, unless you've been in our city, and you've seen fright, i think you'll say, nothing new. but i believe that there is a move to say, listen, everybody says, get inside

doordash amazon yesterday, i had brinker on. chili's. now, they admitted that things don't travel as well, but my whole instinct from this is, you know, get inside they're telling you, get inside. you can ignore them all you want i lived in california during '77 and '78, and there were -- we had brownouts. we had periods it was just brown. david, no one went outside unless they were an idiot like me ha, said it. short squeeze. i caused it. >> it was bad yesterday. thankfully, it's better this morning, although it may get worse again, and certain other cities in the northeast are being impacted >> do you think it could change behavior >> maybe people are accustomed to wearing masks outside, so they're all putting their masks on again, and they're outside. i was -- didn't even have a mask yesterday. i somehow didn't realize >> again, i'm trying to think more of a stock takeaway look, i like your humane takeaway i think that's great >> i don't know. i just -- life goes on

>> the bank of america -- >> it's no fun, though >> the wells fargo top pick amazon inflecting $159 price target you don't want to -- >> we talked about amazon already. we're already six minutes into the show we spent most of it on amazon. you want to keep talking about amazon >> i was just trying to help people i was way out of line with that. won't happen again >> for more on the canada wildfire smoke impact, let's get to nbc's george solis at philadelphia international airport. george, good morning. >> reporter: yeah, good morning. very eerie here at the airport when you see the number of people walking around with masks, very indicative, almost reminiscent of the pandemic days and skylines virtually invisible here in philadelphia and many major cities throughout the northeast. when you think about yesterday and you saw that apocalyptic orange glow across manhattan, very eerie not as dramatic here this morning, but just driving into the airport, you kind of had to take a little bit of precaution because the visible was still so greatly impacted

travelers here that i have been speaking with say, look, we're taking all the necessary precautions. we want to wear our masks because we just feel that the air quality is not safe. and currently, it is still hazardous out there, so it is understandable that many people are being very cautious, not just the elderly, not just children, but everybody when you have this dense with smoke so, speaking of flight delays and cancellations, the faa making sure that some flights don't arrive at airports where visibility is impacted, laguardia is one of them here in philadelphia, they've paused flights from ohio, so it's shaping up to be a very disastrous travel day for many across the country because, again, this smoke is expected to get a little bit denser. we are expecting some kind of reprieve as we get later into the week, but as far as things are shaping up today, already pretty bad if not worse than it was this time yesterday, and travelers, well, they're just ready to strap in for the ride many of them, of course, looking at their apps, checking with their airlines, seeing what they can do about any kind of delays. the faa says they're on top of

it, trying to make sure people get from point a to point b or, c, but when you have this much smoke, it's anyone's guess if conditions will greatly improve. this is one of those days where being indoors is obviously not a bad thing. if you look around the airport, and in new york, a lot of people are wearing masks, and it's understandable because this air is thick >> likely to be a story for the midwest and the south as well soon, george thank you, george solis of nbc meantime, markets are still grappling with this pivot that we've seen between tech and small caps worst day for the nas since april yesterday. just the rubber band effect? >> i do a lot of work with larry williams, who i think is the greatest market historian of our time, and he said, monday, these stocks have gotten out of control. mid-june is when you sell these stocks we're anticipating a little bit, but i've got to tell you, i think it's for real. i think these stocks have had

too much run yesterday, we had this kind of move into cyclicals, and it didn't matter whether they were good or bad. that's a problem, because some of the cyclicals are not doing that well, but i think that, yeah, we got -- david, we went too far too fast, and the magnificent 7, you know, in the end, they didn't do all that well against the villagers the villagers sold them out. >> the villagers i'm not familiar with -- is that "mag nificent seven" again? >> steve mcqueen lived and yul brenner. just to finish, anecdotally, when you have these runs like nvidia, if you don't have a retracing of someone, then it's a short squeeze. it's not real. the only stock that has defied that and created both a short squeeze and been real is the stock you're well familiar with, which is tesla, which has now been up. >> nine days in a row, i

believe. >> yeah. >> yesterday, we were talking about it as well there are certain news events that people will cite, whether it's gm and ford perhaps pushing out some of their expectations which >> ford cash flow, i tell you, is going to come in more >> say that again. >> the ford cash flow, right now, the analyst is around $2 billion for the quarter i think it's going to be about $6 billion but remember, neo reports on friday, and the chinese now passed koreans and japanese, biggest exporters of cars. >> they have chinese, particularly in ev, have advanced, and they've started -- they're also doing cars that are, you know, finished much better byd, obviously, is challenging tesla in the chinese market where tesla, for some time, had been dominant. >> doesn't seem to matter. >> but they've still got, obviously, the shanghai factories, probably their most important ones >> the biggest problem in china is, if you build it, they didn't come >> they didn't >> no. the apartments are still empty

first, they say new york city where people are fighting over an apartment you want an apartment in china sold >> well, there's a big forum today in shanghai where they're, again, saying, we're open for business we've seen tesla visit we've seen jpmorgan visit. we've seen goldman visit and now this "journal" story about alleged secret surveillance sites that they're financing in cuba. it's so bipolar, the relationship we have >> well, look, they're long on time and short on money. we're long on money and short on time, which is why the weather actually is not so good if you want to travel i regard the chinese as just the chinese government is an incredible paper tiger i know that i am alone in this >> you are >> don't give me -- this is new you. >> i don't know that you're alone in that, but i think it's an interesting view. >> they don't have any money someone today upgrades rio, copper >> they don't have any money we're the ones who have -- what's our national debt

>> did you listen to president dimon, i mean jamie dimon, the other day? a lot of it was a veiled, china's nothing. >> i've heard that speech from jamie from 25 years. it's typically been right, so good for him i mean, it's -- >> i'm trying so hard here >> greatest this, greatest that. i know the speech. >> how about if the speech is right? how about if jamie dimon actually knows what he's doing >> what does that have to do with the fact that we have a $31 trillion debt. we're going to have to issue $1.5 trillion before the end of the year >> we cannot send tanks to the center of cities and say, buy our debt do whatever you want chinese, they do whatever they want but we actually take them seriously. >> and you think -- and you call them a paper tiger >> we take the chinese seriously, because they've made so many -- we sell a lot of stuff in there >> yeah, the world's second largest economy. we just talked about how they're -- what they're doing in

terms of evs you just said, exporting them. battery technology >> their unemployment versus ours go ahead >> very high youth unemployment. >> what does that mean are they canceling student debt? do they have student debt? >> the youths are not finding jobs >> i rest my case. >> i'm not sure what your case was, but well done >> the case does not hold water. >> the case does not hold water. when we come back, we'll talk gamestop and the shake-up the ceo has been ousted. ryan cohen is now chair, five ceos in five years got some calls on casinos. we mentioned amazon, but wayfair, apple, t-mo when we come back. fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund

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gamestop tumbling in the premarket. the company announcing that matt furlong is out as ceo, and chairman ryan cohen has been appointed executive chair effective immediately. they didn't provide a reason for the firing, but the announcement came as the retailer did report a quarterly revenue decline and a narrower loss. jim, we now have a cryptic tweet from cohen, of course, yesterday. not for long >> he's a vicious guy. now, here's what i want to tell you. i thought it was interesting i went back and read when matt furlong was appointed. now, i know this sounds strange, because this outfit seems so flaky, but matt furlong was one of the most respected people at amazon he had been a senior advisor on sales. he had run australia for them.

he had been there nine years prior to that, he had fantastic reputation at procter & gamble he brought a huge crew of people they looked like they had a game plan the only game plain so far is a net closure of 78 stores year over year, but david, the company has a balance sheet that's so rock solid that if they could ever figure out what to do, they have -- they got a runway it's just that furlong was a great choice, and for cohen to give him, like, an nfl "not for long," i don't know. who wants that job now >> i have no idea who would want that job to your point, cash and marketable securities, $3.86 >> a lot of money >> of that $20 you saw >> closed a few stores remember, they don't have the way that jensen's telling people to buy through pc. you don't. these guys should buy consoles >> right, you buy consoles, but frankly, when you look at at least what microsoft is saying and the argument they're making

to the appeals court, essentially what we're calling the -- in the uk there's -- you know, they're saying the cloud streaming is -- it's still on the come it's a ways away >> well, look, if you go to -- >> now, there are others who say the edge is going to become so powerful -- jensen even talked about that, right? >> it's not going to be that long >> but remember, they are pc-oriented more than xbox, but one thing is certain strauss zelnick from take two has always said, this is just the old way, and yet people still go >> it does remind us, of course, of just this week, the documentary that we ran in primetime, melissa lee's look at the man who was once known as the meme king. take a listen. >> ryan became chairman of gamestop in june of 2021, and not surprisingly, the reaction was extremely positive

>> in-person meeting we tried to get the news out that ryan would not be there we had individuals coming in bass boats and were drinking at 8:00 in the morning, waiting to get into our shareholder meeting. it was something i won't forget. before 2021, we would typically have two to three shareholders show up at the meeting i believe that our attendance was over 400 that day. >> by the way, don't miss an encore presentation of the documentary, "making of the meme king," tomorrow night, 8:00 p.m. eastern time right here on cnbc. >> degenerate short squeezes were the single biggest most important thing you could do during that period david, i made a sell call to sell gamestop at $400. my life changed rather dramatically, both when it came to personal security and when it came to destruction of my twitter feed

you just were never supposed to try the break the sweeps i didn't mean to i just $400, thought it seemed overvalued but it was the kind of thing -- i'm glad i made the call because it was the best call of my life, other than nvidia, but in some ways, i'm not. you know why because the army of people who wanted to create short squeezes turned out to be an army of young investors? >> where have they gone? have they moved on >> it's so dark outside, i can't tell all i know is this they were so wrong about the way to make money in the market. i think they gravitated to binance. >> why did gary gensler choose to allow that to go on and choose to basically try to put crypto out of business >> because the securities system worked i mean, you know, we had these securities, and they blew up, correctly, because it was really nothing there. >> took a long time. >> well, but, you know -- >> it was a manipulated situation. >> but there was nothing -- well, i don't want to --

remember, that's different from whether the securities system worked >> yeah. but, i mean, why -- you know, gensler, why isn't he protecting the people who are buying -- went on robinhood with $500 and didn't know what they were doing? >> well, because that's caveat emptor binance is not caveat emptor binance is charging that was sam bankman-fried. caveat emptor has been the law of the land for the way it's always been, like, hey, you know what >> fair point. >> if you're going to be stupid enough to buy mmtlp, what is my favorite stock now we have a guy named ben, our expert on some of the more abint abstruse situations we look at there's a torchlight merger with the meta materials, the canadian, and fin rod removed it well, that was a short squeeze gone bad they blamed the regulators they never blame themselves.

brutus, right? caesar holds up, by the way "julius caesar," dynamite. >> they had to cancel hamlet, shakespeare in the park. >> oh, no. >> speaking of short squeezes, we'll get to carvana today, got some movers in signet. haven't got more to coin and binance and nvidia 'lta a break here. cramer's "mad dash" in a moment. [due at target in 5!] copy that. make a hard left down the alley. 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. the network more businesses choose. transplant received. at&t business.

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taking our games from that... to this. yes sir. kpmg performance insights are transforming the game for the entire lpga tour. some nasdaq 100 gainers this morning. lucid is going to lead you reuters with an item cite ago company executive that they're getting ready to enter the china market and perhaps even produce there. we mentioned amazon earlier

today. there's workday as well, up almost 2%. opening bell is coming up in just about four minutes. don't go anywhere.

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leader in income, alternatives, and responsible investing. all right, let's get to a "mad dash" with jim. we got an opening bill a minute and a half from now. signet reported numbers. what do you think? >> this letter, remarkable turnaround for a company that we know is kay or kiss begins with kay, terrific names, zale. this morning, they cut numbers i had them on after a recent full day analyst meeting, which went pretty well now, here's something you probably haven't thought of, and i know you think of have very many thins do you know that we now have peak engagements >> i did not know that >> there was an engagement peak, okay and i'm going to read this our signet team delivered our revenue and bottom line commitments despite economic headwinds worsened late in the quarter in line with our predictions, there were fewer engagements in the quarter

that's resulting from covid disruption of dating three years ago. so, now, we're beginning to see the denouement of engagements. when you think about things that happened during the pandemic, this is an example did you know thatengagements soared >> makes sense >> the company's stock is going to be hurt i do think that it's going to make a comeback, but -- and she did flag this, but david, i think there's a lot of people who don't believe these things actually happened. you mean like more people were engaged during the pandemic and now aren't and the answer is, sure. so, one more thing i mean, i had mark clouse on yesterday from campbell's. well, you know, people ate a lot of campbell's soup during the heyday of work from home now they're not as much. mark disagreed with my thesis. my thesis is from danny meyer who said, one thing we've learned, work from home, is that we still crave companionship

we work from home, but man do we ever go out for dinner that would be against campbell's soup >> yeah, danny says the 5:00 seating is tough because people have been in their apartment all day, working from home >> i love that call. >> by the way, signet also said mother's day wasn't so hot either >> that was a surprise i usually don't think that mothers -- i mean, david, mothers are like apple pie you don't shaft them it looks like mothers got shafted here >> i'm sorry to hear that. >> father's day coming let's see. maybe there's a global shift there too. >> when is father's day? >> ask hallmark. i don't know >> next weekend. >> when was the last time you get a present for father's day >> from my kids? i don't know >> me too. >> i mean, jenny gets me something, i think it's very nice of her. >> mine was an iphone. perfect. are you going to go look at the -- the view mask >> no. no plans to. have you -- do you have a time and a place arranged for us to do that? >> are you kidding me?

yeah >> if tim will allow me to do it, of course i'll be happy to >> tim cook? >> yes, tim cook, the ceo of apple. >> i've been dying to see this thing, because i frankly have a pathetic life at home. i do my research, and then i have nothing to do this could fill in for mezcal. >> less lonely the reviews were quite good, although "the journal" did say maybe it made her a little bit nauseous >> just take some pepto-bismol >> no, no. you ever do the virtual reality rides at, you know, whether it's at universal or at disney? i did that "star wars" one >> i can't even go on ferris wheels >> i'll still do a roller coaster before i'll get on one of those things. >> i continue to point out that loneliness is a national problem. and this is an antidote. >> you keep coming back. >> what are you going to do when you've got the goggles on? you're going to be able to interact with people in what

feels like a realistic fashion somehow? >> yes, with people who are shut in now, look, i'm not laughing at this stuff there's suicides suicide is, for teens, the greatest source of death we do know that loneliness is a major source we learned this from the pandemic >> that's true >> of depression i do a lot of work with brain foundation, and we study this. not we >> what are the applications, therefore, that will be available to somebody who spends $3,500 for this -- the apple goggles that will allow them to not be lonely? why is that different from participating in a video game, for example, where other people are participating? >> or just facetime. >> yeah. or facetime. >> the 3d is much more realistic. it's more engaging you also have something to do rather than just, you know, there's a lot of different things to do hey, listen, don't laugh at me what do you think this reason why? you think it's because of messi? this is a major issue. i got to give a talk on friday about this stuff

>> well, b of a estimates 1.5 million units in the first full year. >> there you go. >> at $3,499, that's almost $6 billion >> i still think the price comes down i want to wait to see if t-mobile adopts it mike seifert is a very smart guy, close to apple, head of t-mobile >> you got to get -- you've got to get the developers. >> they will >> that was the whole key to make content >> but you like realistic or more cartoonish thing that mark zuckerberg is delivering >> i don't like either one, and i won't experience either one. i'm not the -- i'm not the first user >> you're one of the lucky people in the world that has a happy family you've got terrific mom, whom i love myself. >> yes >> and there's not everybody has this >> that is true. >> i'm very grateful i'm very grateful. >> i was at a gala for the american brain foundation. i don't want to bring up my charities too much, but -- >> i get it. i get it although the price point is going to be a very difficult thing for some people to overcome >> that's true

maybe they'll give you a loneliness discount. i don't know >> that kind of brings us to a.i., jim, because yesterday, mark, great essay on how a.i. is going to change education, medicine, make wars shorter. on the other hand, you had ken griffin from citadel argue that the purveyors of a.i. are not doing themselves any favors, because they are facilitating hype, in his words >> i don't think that's fair i think that what's happening is, one by one, we're finding out what it's good for and we don't know. and now, the single biggest use is not talked about. the biggest use that nvidia thinks it will be will be a dramatic decline in waste. the biggest issue they intend to tackle is the $40 trillion factory issue, the building of factories, and if you build them first in digital twin, you'll use a lot less waste now, how is that hype? see, i think that what people don't understand is that nvidia is saying, this is the business company. it is not a business to

consumer so, the people who call it a fraud or say it's a waste of time or overhyped, they don't understand you're never going to see it it's about trying to make it so that a company, you call up alphabet, and you say, look, i run a business, and i'm trying to figure out how best to get my food to the consumer off premise in a restaurant because i have too many mistakes. a.i. makes fewer mistakes. there's just all the -- >> that's why the microsoft -- the chatgpt government solutions bit yesterday said, maybe we can start to get rid of some waste in federal spending or state spending >> i think there can be. it's also easier, jensen's saying over and over again, it's easier to code, which means, less waste the most impressive thing that -- i can't find anyone talking about, and it's driving me absolutely crazy, is in the advertising world, right now, you retrieve an ad you look at a car ad, and you retrieve the ad from the page. what jensen is saying, is from now on, ceo of nvidia, is it will be generated for you. so, let's say you want a kia,

okay right now, a kia ad pops out what you will get is the kia car or suv you want with the colors. this is a major step change, which is why wpp, who many people thought, david, largest advertiser, would be haurt by this, is actually intended to be a big winner i keep finding -- you try to find companies that are able to cut back nikesh arora from palo alto, out of the s&p, will tell you that he's been able to figure out what areas of his company are bloated where you can do a better job but more importantly, he is trying to stop what i think you're really worried about, the impersonation of yourself. >> yeah, that's one of my worries. certainly one that's near term further along, i think, our viewers at this point know that i share my concern with those like elon musk and even sam

waltman of humanity's ability to continue >> was that elon musk? >> it was when i sat down with him, yes it was >> did you know that -- >> he said it was a hologram. >> what jim is talking about is the ability to create versions of well-known people that are indistinguishable from the real thing. >> not to be sacrilegious but i could literally do a video right now of the queen of england, not to be sacrilegious, praising david faber's work with montoya. >> yes, with elon musk thank you. happy to have the queen do that. >> i could have biden do it. that's what's frightening. i could have joe biden do it >> i don't even know -- is she the queen? charles's wife is now called the -- >> was the king's consort. i'm not sure if that changes or not. >> let me get wilf on the phone. >> i did like what druckenmiller aid yesterday about nvidia

"if i'm right on a.i., i could own nvidia for two or three more years or maybe longer. >> as a person who named his dog after nvidia, i thought that was hyperbole. the issue with nvidia is, is it an iphone moment in other words, is the -- it's all about the trillion dollars that jensen huang thinks that has been spent in the datacenters that's worthless all based on moore's law, of course, the founder of intel, worthless. and now, a whole new order coming in that is so much faster and doesn't burn that hot that there's no use for every -- everything that's ever been created inn technology. that's a big use can you imagine if everything that you have, if you're amazon, is no good >> if we're at a point here where long-only managers don't own enough of the russell, they sell some mega cap tech to buy some, how long do you wait before you consider names like nvidia a bargain >> nvidia, you know, scott

wapner did some great work on nvidia yesterday, away from getting the tickets for messi, and what he said was that every time you look back, nvidia turns out to be cheap. now, there was a moment when nvidia sold at 80 times earnings in 2016. turned out it sold for 16 times earnings any time you raise your guidance by 4 billions for the next quarter, it's going to happen. the issue is, do they have enough h-200s jensen told me he does in a conversation i had with jensen, he said, listen, jim, we are going to have enough by year-end, so, yes, they can do the numbers. i thought it was amazing that they could do it he's a universally loved figure. and one of the reasons he's jovial, it's terrific, but he and -- using cadence, which is going to put everything together, he has enough h-200 for tsmc that's the really fast chip. to make it so the datacenter we see now is worthless incredible >> you got to explain what that

means. worthless? >> it's too slow it's too slow to do chat >> it's not really -- is it slow or just -- yeah. i mean, the gpus, the parallel processing, it's all run on cpus, chips. >> cpus are not fast enough to do the kind of -- >> amd intel. other chips. >> marc benioff is going to give some presentation next week about einstein, which does a trillion calculations. >> it's not all going to be generative large language models >> but if you're mark zuckerberg right now, you're saying, guys, i got news for you we have a lot of bad hardware. let's go all in jensen, which is true that's what he's doing he's doing it. >> well, you've also got a lot of these companies designing their own chips. >> oh, geez. give me a break. everybody's just -- everyone tried to design against intel. >> tesla's designing its own chips. apple designs its own chips. isn't amazon they all -- they're all -- and

they all send them to tsmc or samsung. >> they're beggars jensen is so far ahead of them, it's frightening that's all daughterross it's dross it's chaff >> it's not just all jensen. it's because he hired the best people it's because the best people want to work -- >> he has 22,000 engineers he's been good friends with sam altman they were the first that got together to do this. he would tell you that, like, i went out to see him, and he said, one day, people are -- something's going to happen. there will be a moment, and everybody's going to realize how great this is, and then chatgpt and a hundred million people watched it in the first month, and that was it. he had it all along. no one could figure out a use case >> speaking of use cases, adobe's leading the s&p this morning. rbc does go to $460, jim, and we talked a lot about -- you mentioned advertising. and graphic design i mean, this is -- you can see the thread right there >> jensen believes that firefly,

adobe's product, is one of the greatest use cases for this. so, let's say you're a baker you want your instagram page -- >> you happen to know one. >> i do. they have an instagram page that you want to update constantly and you want the cookies, david, to be maybe for a wedding, maybe for a bar mitzvah, maybe for a christening, all these different holidays i haven't even thought of you can adjust it instantly using adobe firefly and change pricing. it used to take weeks for you to do something that maybe takes seconds using adobe firefly. and by the way, again, nvidia called out the firefly as being an amazing product totally gets it. a lot of people felt they, too, would be hurt. >> they did. they thought, also, they questioned whether all the images would be able to be created not out of wherever you want them. you don't need adobe to do it. >> well, but what's great is that let's say you're not a coder. you can just say, i want the

background to be blue, and i want those bar mitzvah cookies to be made into wedding shower cookies. done or, you know, it could be wedding shower into baby shower. i'm not really trying to be -- i can be as ecumenical as you want >> i appreciate that so do our viewers. >> not a surprise that norion, big "ft" piece today warning regulators, don't stifle what we've got doing going here >> he's so great look, we don't know where it stops. we do know, can the bad guys get it can thrush get it? thrush can get it easily >> he's also trying to get his deal done. still got to get that through regulators that's a big part. >> what's going to happen? >> i don't know. but there's some question about it >> do you think albertson-kroger will ever happen >> that's problematic. they're going to go to court, and that one, you may see the antitrust regulators have a case that they can win. >> i knew it finally, he gave me some love. >> unlike a number of the cases

the ftc has brought, for example, amgen horns, which i have yet to speak to anyone who thinks that case has a chance if it goes to court, hence this continued question as to whether there will be some sort of settlement that gets the ftc something they can say good things about >> does she think that the people who do -- does she regard the people in m.a. as malfactors of great wealth. >> i'm sorry, where? >> m&a >> i don't know lina khan, and i've never even interviewed her. she's been on with our colleagues on "squawk box. i would have a lot of questions about what they've done at that agency and then certainly there are reports as well about the staff, perhaps, being somewhat not in tune or in line with their chief. >> oh, you think so? the harvard law piece? people who do deals are just doing it for -- to enrich

themselves, and it's against the consumer >> wait. she was at yale, i thought >> she wrote it for harvard. it was a devastating piece it was not unlike when i was a spartacus worker and i believed the workers should own the means of production, not the people, which is what lenin said and was much more into trotsky >> there is a belief amongst certain aspects of the administration and/or this one when it comes to antitrust regulatory that we can chill the market we can stop big companies from thinking about doing things, and it's worked, even if the legal cases that they actually would rely on or the law they would rely on, they're not in a position to really win you can chill things and by the way, when you're gary gensler, you can also chill things just by talking in front of your fireplace. >> he hasn't been able to. >> which you never leave never go to that office. >> cathie wood has said it's a big win. >> not once. sorry.

>> by the way, has anyone seen the justice department on the fabled binance work? >> no. where are they >> well, that's what i'm asking. >> i don't know. if there's no -- >> are they champs maybe it's too dark to see them. that piece, that 191-page brief, was like justice department, where are you? where are they >> they might -- i mean, you know this. when they have something, oftentimes, they'll come together >> i know. >> s.e.c. and doj will work together >> the fact that that didn't happen is noteworthy to our viewers. >> well, also, it's a higher bar, isn't it? for bringing criminal. >> meaning, go to jail versus being slapped on the wrist yeah >> beyond a reasonable doubt >> oh, yeah. mean meanwhile, home depot has a meeting coming up. >> we didn't get to carvana, jim. >> oh my god >> ebitda coming in ahead of plan >> what a squeeze. what's so interesting is that yesterday, manheim, the index

that shows how much used cars are worth, was going down. so, people felt that amazon would not be able to deliver the quarter. the opposite, david. carvana, they're claiming, you know, ebitda positive. >> wow >> i know. what a short squeeze remember the days when apollo was going to take them up? >> reports that they were close to bankruptcy. also, meanwhile, also in autos, tesla $226 today is going to take you back to last fall. what a run that's been take a look at the broader markets here dow down 25. s&p down 4%. we've got to get to next week when the real action begins with cpi and the fed. you can always get in on the cnbc investing club with jim sign up and find out more, cnbc.com/jointheclub or as always, you're welcome to use the qr code on your screen even though we're in a fed blackout, got some relief on rates today. how about the one-month t-bill below 5% >> this whole inversion stuff is almost over. >> yep

and yields uniformly in the red as we got claims, 261,000. that's the highest since october of '21

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i'm not sure exactly it's just too many players >> you know what's fun, paypal, two-year, i mean heat done in the payment. >> it's extraordinary. apple keeps winning including mls. the messi pick. >> tweeting about it. >> apple believes soccer is worldwide so if you're -- this is going to be a windfall. soccer is worldwide. mls. >> because they want - >> we like watching the premier league. >> argentina wants to watch. >> now they do. >> we're not going to count you out tonight. >> i've got a metals company i like the metals company very much it is one of these companies if

you believe like i do that crypto is not the place to store value, you want to listen. >> gold, 10% of your assets should be in gold. call me old fashion. >> when the machines come for you, those who have gold are going to get out alive. >> really? the machines are going to take our gold, accept gold to keep me alive? here's my gold thank you. >> like a leather pouch? >> it can be bought like anybody else, the machines, the machines in the end are tawdry. it's just about money. >> always about money. >> usually robots. we'll see you tonight. "mad money" at 6:00 p.m. eastern time we continue to chop wood in the high 4200s goldman's chief strategist david cost on what the a.i. ombo means for the economy. in a moment.

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good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber live for you as always from post nine of the new york stock exchange take a look at stocks here in the early action s&p unchanged, nasdaq seeing

strength with tech leading again today up 0.2%. the dow is a little bit higher, consumer discretionary the best performing sector. amazon is a big part of it, tesla up a percent as well tech, staples, health care, all your leading sectors the worst performing real estate financials and materials 30 minutes into the trading session. here are three movers we're watching tesla trying for what would be the tenth now consecutive day in the green. shares are trading at seven-month highs and up 30% gamestop shares plunging after it fired ceo matthew furlong and appointed ryan cohen as executive chairman effective immediately. gamestop results showing a decline in revenue the move in signet jewelers, shares dropping after cutting its outlook after shares slow. gina drosos will join us this hour on what she's seeing now from the consumer. >> got the jobless claims

numbers this morning inventories with rick santelli hey, rick. >> yes this is our april final read think manufacturing. down 0.2%. we shaved that in half it's down 0.1% here's something notable, carl we haven't had a positive number in inventories since november when it was up 0.8 last year we've had a couple goose eggs but not a positive number. in terms of trade sales, a big improvement. we're up 0.2%. now that's much less than up nearly 1% we were expecting, but here's the deal. last month it was minus 2.1, it gets ramped up to 2.7. both numbers are the worse since april of 2020, think covid here, when it was basically at the worst levels since the all-time level, which was all the way down at minus 16.8 last month's revision is nasty,

so the up 0.2 is an improvement and we know what's going on in the ports in l.a. so we want to continue to monitor how that may inventory in the sector that slowed 281,000 initial claims, 19 month high since october of 2021 sara, back to you. >> thank you very much a number the bond market liked, the higher jobless claims than any of the economists expected, 261, highest of the year and highest since 2021 if you dig through it it wasn't massachusetts this time, which is the problem last time we got a jump, it was that and turned out there was fraudulent data. a number of other states, including ohio, connecticut, interestingly had a nice subtraction, things going well in connecticut the bottom line that is the focus today. we've got -- i would say it's a lack of other sort of macro directional drivers, higher jobless claims makes me wonder

whether the labor market is starting to show meaningful signs of cooling we read about the layoffs every day and report on them on cnbc it's not surprising you would see this and we're not at recessionary levels. you have to get into the 400s. can't count the covid recession, we saw 6 million jobless claims during that period it's elevated and we're going to watch it it's a good real-time indication for what companies are doing and how consumers are feeling. the job market has been the underpinning of this strong recovery and the fact that it's lasted so long. >> and is the reason that there still seems to be revisions to forecasts of an impending recession the longer we go without one. sara, i wanted to come back, i don't know what else you've got on a list of things you are watching every morning, but i saw the ray dal leo comments to a conversation we've been having a few weeks, saying we're going to run out of buyers dalya is not involved.

it's been a negative one your thoughts about the comment -- >> he thinks in terms of debt cycles and long-term thinker we will have him on on monday. >> i'm sorry i called him a billionaire -- >> people care about his opinion. >> they do. >> he has $15 billion worth of. >> opinions. >> that worth to prove it. >> he was a good marketer too. >> what's interesting, everybody is worried about this treasury and the lack of liquidity and the treasury issuance we're about to see and whether that manifests in a weaker market one thing i'll point out, in the stock market is actually, we get these aaii sentiment numbers every week and we just got a new one. it measures investors' sentiment about six-month views on the market there was a spike. look at the end of the bar chart in bulls that's the bulls bulls went from 29% all the way up to 44.5%. bears fell to 24%.

not outsized bullish numbers, cycle highs, cycle high for five years, 56.9, but big spike in sentiment could -- the fact that everyone is getting bullish off the sidelines could, you know, bump up against the liquidity headlines and the treasury issuance and qt and hawkish fed could be a signal that things could turn don't want to be too bearish but something to note. >> the biggest jump in bulls in almost three years, november 2020. >> people are watching that because the argument was always, everybody is bearish and sentiment is so bad. the market penetrate is higher and market can go up i'm not saying that's the only reason we have had good economic numbers as well, but it is something. that could be bearish. i also brought you another wonky chart. >> please. >> that people are paying attention to this is good news if you're rooting for inflation to go down, the mct, the trend of

inflation, that comes from the fed and liberty economics. it's hard to see because there are a few lines. all you need to see is the bottom line the blue, which is going down farther than anything else, that's the mct it's a model that basically looks at 17 indicators in the pce which we know the fed pays attention to, to look at the persistence of inflation and we had a sharp decline. it declined to 3.4% in april from 3.6 in march. the only reason i'm pointing that out is because a lot of people -- you know we're all trying to figure out the best way to measure inflation -- people want to know the persistence of inflation and this comes out from the fed showing a sharp decline. if you're hoping that fed can pause and have justification for pause, it's another indicator that shows you things are really cooling on the pricing front. >> yeah. that says pause to me. i saw that chart and i said pause. >> people got worried after canada yesterday there was a move in the bond market after that. a lot of justification for the surprise hike and hawkish

commentary we can relate to. it's been better data overall. it's been a little bit higher inflation than expected. it's been stickier i guess it depends where you look not anything is definitive on inflation. >> speaking of canada, sara, anybody who has been outside in the northeast is probably aware now that the fires in canada continue to burn out of control. we're talking about nearly 7 mineral acrhe -- million acres that have burned nowhere near stopping the fires. the smoke has a dozen states issuing air quality alerts new york city's air pollution ranked the worst of any big city in the world yesterday reached a level considered hazardous for all residents. here's pictures from yesterday you can see today, things are a bit better today not where you would expect on what otherwise would be a beautiful, sunny blue sky day. nbc news reporter emilie ikeda joins us, and she's got the latest from brooklyn emilie >> reporter: hey there, good morning. well tens of millions of people

are waking up to smoky cityscapes like what you're seeing behind me, and we all experienced yesterday almost an other worldly environment. it felt like we were on mars this is actually an improvement compared to yesterday. still, you see the heavy haze hovering over the region typically from where i'm standing i should be able to make out clearly the statute of liberty. that is not the case as we see the air alerts plague 16 states today. that lack of visibility impacting air travel the faa warning of delays and potential ground stops to play out across a number of major airports, including laguardia and new york city. we could see philadelphia impacted washington, d.c., down into charlotte. and the smoke continues. it's continuing to pour in from those out-of-control wildfires we're seeing playing out in our northern neighbor canada more than 9 million acres burned so far making it an unprecedented start to their wildfire season. president biden calling on all available federal fire fighting

assets to assist in that fire fight. the administration calling these fires an alarming warning of the climate crisis and reminder at times this week, as i mentioned before, it's felt a bit like mars we've seen scenes play out in the midwest, northeast and now down into the mid-atlantic where we are expecting to see some of the worst air quality today. as i mentioned before, an improvement we're seeing behind me, compared to yesterday. still, officials are urging people to take precautions as we see unhealthy and hazardous air levels, precautions like masking up, something i will be doing after this report. guys >> good advice for more on the smoke from the wildfires and how new york city is coordinating efforts, let's bring in department of environmental protection commissioner and nyc's chief climate officer on the phone commissioner, it's great to have you. i won't ask you to give the forecast or the five day, but i wonder if the city is doing some

longer term modeling work as to what the summer is going look like for the entire northeast? >> thanks for having me and thanks for taking this so seriously. as the president said, fundamentally this is about climate change and so there's long-term modeling what we're really focused on is how do we get ahead of the climate crisis? this is part of our new normal it's like the fact that we face hurricanes and sea level rise, we lost 11 new yorkers two years ago to rainfall, some of whom drowned in their basements due to rainfall that was double the previously recorded rain that -- rain intensity in all of new york's history just like yesterday was the worst air quality of any record that we have good data on for new york city so in terms of the summer, forest fires are hard to predict. smoke patterns are hard to predict. as late as tuesday afternoon there was nothing in any of the models that suggested that wednesday was going to be higher

than 150 and, of course, we got to 218 and -- i'm sorry, yeah, monday we got -- >> nighright. >> it's difficult to predict how quickly smoke will spread or dissipate and we all saw yesterday morning was at one level, in the 170s, and by the afternoon we were at 480 within matter of hours. thinking about a summer, what we really need to be thinking about is making sure we're all attuned to the fact that the weather in the northeast can now hurt us, whether it's rain storms or smoke, we have to take precautions as individuals and thinking about the work we have to do to reduce carbon emissions to prepare our city for things like sea level rise over the long term. >> i know d.c. and the white house is coordinating efforts to send federal firefighters to canada is that likely to have any impact over the next, say, several weeks? >> well, certainly i mean the faster those fires can be put out, the more, you

know, the less smoke there is emitted into the atmosphere and frankly, the other thing we have to remember, is how much carbon is being emitted into the atmosphere from these fires, right. that's a huge emission on its own. so one of the great things about what the president has done and the governor of new york is also contributing aggressively now to the canadian firefighting effort is reminding us that we are all connected, that a fire in canada is not just a fire for canadians. a fire has global implications and affects us like we're all tied together by climate change. >> is the city doing any work on dollar impact on the impact say the suppression of mobility in the city itself? >> i'm sure we will look back on what it is, but right now, you know, we're focused on the health of new yorkers since the first indications this was a challenge. we've been sending out the warnings, wear masks people at risk should certainly be inside, even on a day like

today. most new yorkers should be inside the mayor was out handing out masks at public housing last night. and we've got masks available to all new yorkers who need them at fire stations and police precincts because staying home, keeping your air purifier or air conditioner on and wearing a mask is what you need to be doing right now. >> thanks so much. >> thank you >> crazy all being in masks again. turning back to the broader markets here stocks are holding up this morning. dow is up 41 points. s&p higher led by tech today our next guest says the a.i. boom could fuel the s&p 500 by as much as 14% here at post nine to discuss david kostin welcome back sir. >> nice to see you. >> this call got a lot of attention because, obviously, a.i. is front and center right now. how do you get at the numbers to put a number on what it should do to multiples in the market? >> sara, it's definitely the number one question portfolio managers are asking and one of

the ways we think about this in a structured form, the translation between the productivity gains that a.i. may result in and benefit companies and the profits and the level of earnings we think about a dividend discount model, we think about level of profits in the next couple years and the next ten years and then ultimately out years 11 to 20 and perpetuity in the long distance. discounting all that back to today what does that mean? the impact of a.i. will benefit some companies, nvidia, clearly and some of the other tech giants, benefitting right now, but longer term, the argument would be it raises the productivity for all companies and the margins and the revenue growth you're looking at the value of the market today if you are to assume that all this productivity was to be realized, there would be 5 to 14%, use 9% as an example, 9% higher today that assumes that productivity is realized.

there's uncertainty around that. the timing and the magnitude. >> what's the key assumption on productivity you're using, the number you're assuming >> 1.5 percentage points increased productivity above the trend. i'll say the trend is 1.5. >> the hatzius report basically. >> my colleague jan hatzius and the impact of economics, impact on the earnings in the market. earnings is what portfolio managers care about and that, you know, in my experience is for a long time, the guide higher in nvidia was shocking to go from 7 billion revenues to $11 billion and galvanize so many asking what does this mean for the broader market it goes to an issue david, we talked about before, which is that 50% the return to seven stocks is up 50% this year the rest of the market basically flat and only 30% of fund managers are actually beating their benchmashes, core, growth and value managers that makes it a challenge.

those are the biggest, largely viewed as winners in the - >> you're talking about broader than just the tech stocks that are getting the benefits of investment you're talking about what, banks? productivity everywhere, right >> talk to individual companies, individual analysts. every company talks about focussing on ways which a.i. can benefit. a certain amount of hype involved that doesn't materialize and the way you get the benefits when it's broader and that distribution into the market, into the economy may take ten years for that to achieve which is why when we look at what's the value of a company, it's the value of the future income and the future income discounted back to today with some uncertainty. that is a debate now one of the issues is what may offset this. you could have higher taxes and all that incremental revenues, instead of nearing to the investors and the portfolio managers, could immeasure to the government and distribution. that would be a risk we have to think about discounting -- >> or the lost earnings from

people whose jobs are displaced is that folded into this >> experience has shown in other big productivity gains and innovation activities that those displaced workers ultimately get reemployed in other industries, and the overall economy grows more dramatically. that's the argument. there's near term dislocations jobs are different but that would be the idea that there's some winners near term if you will, beneficiaries near term, but broadly speaker the economy is larger. >> jan said 1.5 points over ten years, electricity and the pc and the internet. >> correct. >> you have no problems with those comparisons? >> not necessarily, no it's the potential put it this way, carl, the potential to that would be significant. i want to emphasize that's probably not -- the benefit to the broader economy take years to kind of get into the systems. everybody is more efficient. think about it in terms of the electric vehicle, the idea of the autonomous cars. everybody using it then you have

traffic accidentes go down, but if only some are using it -- some will be early beneficiaries and adopters and some may be later. >> are you talking about, let's be clear, when you talk about margin expansion and efficiency you're talking about mass layoffs, aren't you >> well no companies can grow more rapidly they can do more and be more productive. >> with fewer people. >> more things with the same people. >> okay. >> two different ways of approaching it this is the analysis to think about, the -- what are the potential benefits of the a.i. and, of course - >> chatgpt is that what you did? you said chatgpt what are the benefits of this. >> model the s&p. >> and asked bared as well triangulate on value, let's look at the different a.i. approaches. >> what about the notion that although the nvidia guidance, although historic, it's just one set of guidance and we're drawing these decade long forecasts from one company's

view. >> one company produces a product that is hugely important in driving some of the technology the idea, though, is more efficiency in more areas of the economy and allows the economy to grow more rapidly that would be the affirmative argument on why higher revenue growth and earnings ultimately are worth more today and then we have to apply some type of factor as to what is the risk that doesn't materialize or does materialize. faster and - >> or that it's a bubble and we see dotcom style hype. >> it's interesting. yeah, the overall market is not pricing either of those, the long-term growth in the tech bubble as an example, went to as high as 19% expectations and actually right now they're expecting around 11% we're not getting anywhere near that kind of a magnitude - >> what economy looks like when humanity is wiped out that's going to - >> that's going to hurt the market. >> i like to end the interviews

on that note. >> such an optimistic note. >> appreciate it as we head to break, oroad map for the rest of the hours. s signet jewelers. one sector feeling the heat as the wildfires continue to wreak havoc across the east coast. >> a.i. how it's breathing new life into a certain kind of hedge fund when "squawk on the stre" ntueafr e eak.etcoins teth don't go anywhere.

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you hear about the broader housing shortage but below the surface it is particularly acute for certain groups of buyers diana olick joins us now to give us that story. diana. >> even in a housing market that has been significantly slowed down by rising mortgage rates, the supply of homes for sale is still about half of what it was in 2019. a new report from realtor.com shows it is far worse for a huge share of potential buyers. right now buyers with an income of $100,000, which by the way is slightly above the national median income, they can afford a house of a maximum price of $341,000 just 39% of the homes available for sale are in that range in a balanced mart of supply and demand, 64% of homes should be affordable to them so the market then currently lacks about 285,000 of those listings just five years ago, those same earners could afford two-thirds

of the homes for sale. now with the higher price ranges there are too many homes for sale for the number of americans who can afford them. for every listing above 680,000, the market is actually lacking twice as many homes in that more affordable category. location is everything in real estate the areas that have the biggest deficit of affordable homes are in el paso, texas, boise, idaho, spokane, washington, several florida markets and riverside and california areas with the most affordable homes continue to be in the midwest. the top four are in cities in ohio, followed by syracuse, new york, pittsburgh and st. louis unfortunately, the home builders say they are in increasingly unable to build more affordable homes due to higher prices for materials and especially for labor. back to you guys. >> diana, thank you. diana olick this morning. still to come a number of hedge funds riding the a.i. craze, more about that as the markets try to find green

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while this a.i. high pressure has pushed stocks to fresh highs one key group is breathing a sigh of relief, tech focused hedge funds. leslie picker joins us. >> good morning, carl. after a difficult 2022 tech focused hedge funds came roaring back in may to be the best performing strategy year to date on average tech funds up 3.8% last month, that's the best monthly performance since february 2021 when they gained 5.1% funds with exposure to both semiconductors and companies benefitting from the a.i. boom some overlap between those two, are helping drive the strategy according to hfr which collects data on returns. equity tech funds are up 6.4%, having lost more than 15% last year well-known funds seeing a resurgence, tiger global has done better this year after dramatic losses in 2022, for example, and cotu seizing opportunities putting cash to work in the markets. just to reiterate, it's not the

whole sect fund managers are bullish on the industry was actually moving away from tmt tech and media, and putting capital to work in areas namely big tech, nvidia seen as beneficiaries of the a.i. tailwinds guys >> i've been hearing a lot, leslie, about the hedge fund shorts, the a.i. short, those who get -- suffer, get disrupted by tech and by booming a.i have you heard anything about that any names? >> it's a fair trade according to this goldman monitor, they did show kind of the biggest increases in net shorts as well i didn't see too many a.i. names in that list, rivian was at the top of the list in terms of the increases in net short activity during q1. given kind of what we've seen over the last few years with certain areas of the growth market, whether it be spacs, whether it be crypto companies,

companies that were exposed to crypto, you send to see as the stocks go higher an increase in shorts as well people are hedging or just kind of making sure that they could capitalize on the downside if it does turn out to be a fad and, you know, a short lived kind of growth experience for those companies. >> yeah. leslie, you mentioned two companies hedge funds very much invested in the profit margin as well where do things stand in terms of where they're marking things an what those portfolios look like for them? >> that's a really good question, david. there's a lag usually with what you see with regards to markings of private portfolios vcr sus what's going on in the public markets. tiger was down 50% last year its private portfolio down a third. you see kind of a disconnect there, even though they're still operating in the high growth market, all of which were seen as, you know, kind of suffering in a higher interest rate

environment. a lot of people are expecting that to catch up throughout the course of 2023 but in the meantime the public markets are higher, so there is definitely a gap there the question is kind of whether that gap closes or whether these companies, these firms that hold these private stakes, are able to kind of miss that, you know, the really severe markings that took place in the public market. sara >> all right thank you. leslie picker. still ahead, gina drosos, ceo of signet jewelers, as shares fall pretty sharply today down 9.5%. same-store sales dropping 14% in the quarter. june is pride month and cnbc is celebrating all month long shares stories of corporate leaders. here's madison reed's ceo and founder. >> diversity is the key to having a culture that is robust and allows people to access their genius when you can't bring your whole self to work, you're not your

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welcome back to "squawk on the street." i'm contessa brewer with your cnbc news update here we are another day of air quality warnings for millions of americans as smoke from canadian wildfires blows across the boarder. the faa grounded flights at philadelphia and newark this morning. phil murphy giving up an update on air quality urging residents to stay inside as the situation improves the main suspect in the 2005 disappearance of natalee holloway in aruba has been handed over to u.s. authorities in peru.

joran van der sloot being transferred to u.s. custody to face fraud allegations, allegedly he took $25,000 from holloway's mother in exchange for false information about the location of natalee's body which has never been found pat robertson, the conservingtive evangelist and founder of christian broadcasting network has died at 93 "the 700 club" host ran for in the 1988 and helped make religion central in republican party politics through his c christian coalition. >> thank you contessa brewer. signet jewelers shares under pressure despite reporting a beat on the top and bottom line, lowering the fiscal year guidance due to a deceleration in consumer spending shares are down almost 10% gina drosos signet jeweler ceo joins us exclusively thanks for taking the time good to see you. >> good to see you too thanks for having me back.

>> you're welcome. tell me what you're seeing from the consumer those 14% lower comps and lower guidance were disappointing. >> well, we saw consumer spend decelerate toward the end of the quarter, macro pressures increasing on consumers, lower tax refunds, the regional bank failures i think continued narrative from the fed they're trying to get inflation under control by creating a higher unemployment rate, all of these things have an impact on consumer spend and so we saw that impact make its way up the value chain a bit two real pressures on the jewelry category right now those macro pressures, also we're seeing a temporary lull in engagements. people weren't dating, they weren't able to with the covid lockdowns about three years ago, and so that's a lull that we expect to continue, but really start to rebound toward the end of the calendar year and we're seeing all those signs in our

data. >> yeah. i was wondering, what you're seeing just in recent weeks? mother's day was also disappointing. and what you've seen since then. >> yeah. really just pressure on consumer spending i think, you know, we had three key messages this quarter. we were pleased to deliver at the high end over guidance for revenue and ebitda in the quarter. when we saw the pressures on the consumer increase, we leaned into our differentiated capabilities we leaned into higher priced fashion and to services to deliver the quarter, both of those performed very well. we think in this environment, we have a tremendous opportunity to gain market share. we expect the jewelry category to be down more than our guide, and so we're leaning in and strengthening our investments so that we are gaining market share in this environment. >> how are you planning around inventory levels given the weakness that you're seeing in the consumer >> our inventory is very healthy. it was down in the quarter

we're very pleased with our turns. that gives us i think two real opportunities. one is, because of our vertical integration, we offer great value to customers so we're bringing in newness as fast as we can we're able to do that we think faster than our competition given that turn. the other thing is that we can strategically use promotion. we think about taking earlier marks in order to preserve margin, but still give customers a heightened value in an environment like this. >> any change on the supply chain costs? that was something that you actually had a competitive advantage around. >> it still is a competitive advantage for us our vertical integration is working. we talked on our call today about the sourcing savings that we're seeing in the year we doubled our expectations for overall cost savings this year and a big component is merchandise cost savings our sourcing capability, our strategic vendor relationships, those are really a big help to

signet and to our customers. >> gina, can it all be about mix or do you actually have to lean into expenses as well and try to get some operating leverage here through head count reduction or anything else? >> well, we announced today that we were increasing our cost savings expectations for the year from 100 million to 225 to 250 million. there are a number of components of that. one is that we're continuing to optimize our store fleet this is something we've done consistently throughout our transformation we expect now to close about 150 under performing stores this year we'll lean into the sourcing savings that i talked about. our marketing spin is becoming increasingly personalized and we are holding a to s ratio but seeing higher efficiency in that marketing so that really gives us some opportunity to think about how we round out our promotional and marketing mix.

>> it does make you wonder - >> go ahead. >> make you wonder about i'm married, and we've all been, where you go in and deal with the salesperson and there's a very human to human component to shopping for jewelry i'm not saying that's going away, but it is endangered on the margin >> no. i don't see it being endangered. we have data, for example, in our e-commerce business about one fourth of all e-commerce orders are ordered as a buy online, pick up in store and we have more than a 20 points higher nps when someone interacts with one of our sales team picking up the ring they can get it cleaned, check the sizing the level of our expertise really shines through our field team. >> it does make you wonder about the mall how many of your stores are in the mall right now and are those ones that you're looking to close as you said on the savings front? we got foot locker with bad earnings, and it makes us wonder

about traffic in the malls in this sort of post-pandemic period >> we have seen some pressure on mall traffic, but remember, that we have consistently moved our fleet off mall over the last several years. some of our banners like diamonds direct, jared, are completely off mall. of course blue nile and our james allen businesses are fully digital. even 50% of our kay stores are off mall sara, i would say the predominant, the high percentage of the 150 doors that we've announced we'll close this year are in under performing malls so we continue to keep a good hygiene in our store fleet. >> you mentioned engagement being slow how big of a part of your business is engagements and wedding day jewelry and what do we do about that is that a secular trend or is it going to pick back up? >> it's absolutely going to pick back up. so what we predicted really

three years ago, so kudos to our consumer insights team, is we predicted that because it's about 3.25 years from when consumers meet to when they get engaged, we predicted that now, there would be a lull in engagements. instead of 2.8 million engagements this year we're expecting 2.4 million. signet has about 50% of our sales in bridal. we love that position. engagement rings are the financial and importantly the emotional point of entry into the category everything that we're learning about preengagement couples helps us to serve them better in their lifetime so we create lifetime value relationships. this is a temporary lull and we expect engagement to be a tailwind starting at the end of this calendar year and through next calendar year. >> jenna, appreciate you coming on to talk about the quarter and what you're seeing from the consumer. >> yes, thanks a lot.

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. welcome back to "squawk on the street." i'm dominic chu. markets have swung to fractional gains with the s&p 500 near the session high in what's been a narrow trading range so far today. now the worst performing sector on the day is real estate, giving back a good portion of yesterday's bigger gains now real estate has been a market under perform sore far this year compared to the broader s&p 500. now nearly every stock in the sector is lower on the day

among the biggest laggards on the day so far, health care, real estate investment trusts like ventis and health peek as well, boston properties, simon property group, also kimco, giving back nearer term gains over the last couple weeks one of the reits that continues to garner more attention this year has been senior housing and out patient facilities owner well tower as you can see there. the only s&p 500 real estate stock to have gained over 20% so far in 2023. getting a bigger boost early this week after upping its full-year guidance for a key measure of operating performance. well tower and the reits have been active region i'll send things back downtown to you at the new york stock exchange. >> thank you we will do so. quick programming note as we head to break, it's time for nbc networks inspiring america special this weekend lebron james, eva longoria and more will tell their stories along with a handful of business

leaders who inspire as well. here's a preview of what chibani's ceo had to say. >> when i started the first goal was can i keep this alive. can i pay the employees' salary, the farmers. when i called my lawyer, i said i'm going to buy this factory, he tried to convince me how stupid this idea was you have no money. you basically don't have money and you have to experience right. both of them are true. i think the chance of succeeding in that, very, very small. it wasn't until late 2008, early 2009, i realized that i had started something that people really wanted and this has an enormous amount of potential by 2012, we exceeded a billion in sales in the factory. >> i think this is one of the

most delicious food we've ever made. >> a couple years ago we extended into oatmeal business and creamers, excited about coffee today, chobani has over 2,000 people, two manufacturing sites. for the first five, seven years i was working with everyone shoulder to shoulder on the factory floor. every single person. has been crucially important of the success of chobani in 2016 i launched partnership for refugees we are over 300 global companies participating. it has done an amazing job looking at all the suppliers in the country. >> we basically have a simple model. hire refugees. it's very good for business. the minute refugees have a job, that's the minute they stop being a refugee. that's the minute they stand on their feet, the minute they provide for their family, the minute they become part of a new

society, a new community and that's when their life starts. we became so passionate to grow this business into the next dimension. it's not because we wanted to have more, we wanted to do more. with that power, we can make a difference on people's life. i always come back to this line, a yogurt won't change the world, but how you make it might.

it is another day of warnings about air quality from the midwest to mid-atlantic. canadian wildfires continue to rage as insurers brace for wildfire season in unexpected places con cities sa brewer joins us with that story. >> varis says the damage claims with coming in for smoke and travel insurance may cover

flight disruptions newark and philadelphia among the airports that have seen ground stops coming in broadway closures, baseball games called off insurance is bracing for longer, hotter wildfire center they predict more wildfire in it the pacific northwest, around the great lakes and upper new england. lower potential for california for june and july. historic rainfall in spring led to lush, wetter land in california and lower risk. later this summer when all that foliage dries out, that could become tinder for wildfire we'll be watching for that later this summer. we saw state farm and allstate announce no new policies in california where eight of the ten costliest wildfires happened chubb and ai left the state.

the soaring cost of repair and replacement, industry experts say that we'll probably see even more insurers flee that state. not just there but we're looking at washington state, louisiana, texas, new york, new jersey, all areas where elevated risks from climate catastrophes, lost costs and regulatory hurdles make it difficult for insurers to make these numbers work, david. >> but the fires aren't happening anywhere near here basically the insurer is going to pull out of everywhere at some point because one area can be so much impacted by another >> but it's not just the wildfires. take a look at new york. we saw in the superstorm sandy it wasn't even a category 1 hurricane when it made landfall and look at the billions of dollars in damage it did we know along all of the atlantic coast, along the gulf coast, there's elevated risks because of hurricanes. then we're seeing hail risks insurers are paying out billions

of dollars because of hail damage claims. and where regulators don't allow the rates to come up and cover those risks, we're seeing insurers shrug their shoulders and run to another state. >> and the rates keep going up for homeowners, don't they >> yeah, they do where they can where regulators are allowing it. >> contessa, thank you contessa brewer. that will do it for us on "squawk on the street" with the s&p up 3.33% and the nasdaq, outperforming the oar brde market "squawk on the street" comes back right after this.

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good thursday morning. setting the agenda today it's not just about tech anymore. under the surface this market is looking better, at least at far as breadth goes. but can that last? we'll ask charles schwab chief investment officer liz ann sonders. an orange haze putting the east coast under smoke we'll talk to frontier ceo barry biffle. and synovus regional bank ceo with us, kre up 20% from the lows we'r