>> not big red or anything like that >> nothing like that i got my columbia lion behind me >> could be all those things thank you. we are out of here in about nine seconds we're still holding on to paltry gains. fed meeting starts tomorrow. cpi tomorrow don't miss it. make sure you do join us tomorrow "squawk on the street" is next ♪ good monday morning, everybody, welcome to "squawk on the street." i'm david faber with jim cramer live at post nine of the new york stock exchange. carl has the morning off we get started with another week of trading half hour from now, you can see an up open i never know what to do with these things >> that's why i'm here >> well, you're here for a lot of reasons >> including the fact that it's my job >> including the fact that you get paid to do it. let's get to our road map.

it does start with a key week for stocks aren't they all? the nasdaq launching its largest win streak since 2019. the s&p has seen four weeks of gains. >> you didn't mention the nasdaq >> that's what i started with. you missed it. i just said the nasdaq what are you editing the road map? investors are hoping, jim, for a fed skip or pause, as you know plus, jpmorgan settles it closes a chapter in that epstein class action lawsuit we'll go to eamon javers for that news. and guess why meta ceo mark zuckerberg has some praise for elon musk? well, as you might imagine, it's all about efficiency give me a chance to use some of that interview, because you never get enough of that interview. >> no. >> it was only may 16th. it's not that long ago let's start with the markets this morning we are set up for an important week of course we hear from the fed and go on from there, cpi. there's a lot.

what are you focused on >> magnificent seven again people keep hoping this rally is going to broaden, except for michael wilson, obviously. >> who's negative. the strategist at morgan stanley. he's still bearish >> but david, what i don't like about this market is that once again, a.i i mean, i'm not saying enough because you know jensen, nvidia, but david, amd, big analyst coming out, they have chips for server but it's supposed to be hidden a.i we've got oracle tonight now, you know, i think software katz is just amazing but stock is up four on analysts recommending it today that are supporting why? a.i. salesforce, new products announced today. why? a.i. now, there is a -- do you see a theme? >> yeah. do you take it as a negative

because it's reflective of the certain amount of froth in the marketplace given, obviously, we don't know what the ultimate impact on revenues and earnings from any of these companies of a.i. will be >> i don't want to be in the mr. wilson camp, but yes, i think it is. one of the things they need with a.i., and this is truly important, and it's been left out of the whole equation. customers. >> aren't there going to be a lot of customers >> you're a customer because you think the other guy might be a customer and you have to use the consultancies, which is google, you know, you got to go to oracle, microsoft, so you hire them like you would have hired ej or accenture in the old days and say, look, please help us. please adobe. there's a recommendation of adobe as if adobe hasn't run enough >> i feel like a lot of these analysts are just catching up. >> i said that this morning to my team. >> we'll follow some of them, but listen, there are moments when analysts are worth listening to, and then it's sort of like, okay, great you're talking about oracle now?

>> the most exciting piece was the goldman, we got oil wrong and we're going to continue to get it wrong until we get it right, which i thought was a novel way to do research we're long, but believe me, we stick with it long enough, one day, we'll be right. david, we're at that moment where we haven't had any real earnings oracle will be good. >> you think oracle will be? >> yeah, but it's up four. i mean, that's a jinx. >> how important is the call on something like oracle? not necessarily? >> very. because -- well, larry ellison will, at one point, eviscerate everyone >> does he get on the conference call >> he always has -- there's like a q&a, and suddenly he pipes up and usually just says, it's kind of like when he pipes up, it reminds me of, you know, you say batman he's like batman the original batman. he just says stuff >> the original? >> there's one coming out with

seven. >> you mean michael keaton or do we go way back to adam west >> it could be adam west but i think he's like a batman figure we haven't even mentioned warner bros. discovery today. >> do we have to can we try and stay on line here and not veer off i don't want to veer off into either d.c. comics or the marvel cinematic universe let's stick with the a.i. universe >> let's talk about what matt boss did today >> why are you moving on from our conversation that i was enjoying about oracle, about amd, about so many of these companies that you're a little concerned that the a.i. is getting a little carried away in terms of the marketplace >> i'm sorry >> you don't need to go through the whole list right away. we got a whole show. >> here's something really interesting. a lot of people want to talk about amazon web services and how the business is decelerating, but then it will inflect. i think all of the talk about amazon today is about the value

of prime prime and apparel. prime and footwear prime and the value of the prime plus, so to speak, entertainment complex. david, this is an incredible moment where they're trying so hard to talk about efficiency, and you know who's the king of efficiency >> mark zuckerberg >> do we have a quote? >> i think we can share some of what zuckerberg had to say actually, i'm not sure we can. we don't have it yet >> the reason i want to go there is because he's talking about elon musk being a person that he respects, and i thought that if we went over the elon musk archive of your interview, where does he talk about the level of efficiency that zuckerberg talks about? >> well, he does -- we actually had a specific back and forth, elon and i, about whether the

firings that took place at twitter gave cover to other ceos to pursue their own plans of efficiency >> then zuckerberg watches -- >> because when you fire 75% of the staff, it gets people's attention. i actually think we have that back-and-forth with musk >> i'm telling you, zuckerberg watched the interview and then took action. he watched your interview and then commented on it >> but i think that zuckerberg may have actually talked to musk take a listen. >> have you heard from any of these ceos who said, thank you for doing that, giving us sort of runway or leeway to at least make some cuts of our own? >> i have heard that from a few people, and i have heard that through the grapevine, yeah. but like i said, desperate times call for desperate measures, and unfortunately, those were desperate times. >> that was elon, of course, talking about the cuts he had to make at twitter, given the very precarious financial position the company was in but i had asked that question, jim, because i was hearing it a number of times, which was,

there are ceos who quietly have been saying to musk, you helped -- by doing that, you gave me cover to hire a lot fewer people but nonetheless take on sort of some of this entrenched bureaucracy, so to speak. i think we do have zuckerberg now. take a listen. >> his actions led me and i think a lot of other folks in the industry to think about, hey, are we doing this as much as we should could we make our companies better by pushing on some of these same principles? my sense is that there were a lot of other people who thought those were good changes, but who may have been a little shy about doing them >> there you go. musk leading yet again, and zuckerberg actually sort of saying that was one of the key reasons why he felt perhaps emboldened to embark on this level -- this drive towards efficiency that has resulted, sadly, in a lot of jobs being lost, but nonetheless, of course, has been rewarded by

shareholders >> i bring it up, and i think it's really important, because you and i know each other for a long time. in 2000, a lot of people want to say it was the bubble. in 2000, two things happened one is that the companies ran out of money second, they started laying off people because they ran out of money. this time, they're making fortunes, and they don't need to lay off people, but they want to make even more money, and i think that those who say it's bubblicious, they should watch that interview and listen to your interview, and the one thing you come back is, these are not bubbles. these are nation states. >> well, and even benioff, for example. >> nation state. >> salesforce. i mean, it's not just meta you can go through many different companies that have had -- in the technology area, to your point, very profitable companies, alphabet, on and on, amazon >> name the one that didn't need to do it because they were efficient from the beginning apple. >> yeah. >> and i think that they just -- it's not luck.

mls, they get mls. >> they didn't get carried away during the pandemic and go on hiring sprees that the others did and the enormity of people who were hired during the 2021-ish to '22 period >> but tim cook never did it >> right >> tim cook has always been a spartan, efficient person. by the way, who has a bigger heart than all these guys, laying off people and stuff. i think even find places to be -- even have smart enough people i don't know how many people you know who work at apple, but i'll tell you this. anybody who works at apple seems incredibly happy, because i think that they're -- they have some -- there's a degree of respect versus -- i know people who were laid off at meta, and there's these e-6s and e-12s, whatever, they've got these levels >> it's all about levels, jim. >> there were levels of people who had independence and they were expensive.

>> i know. all right. that's one theme >> you know the dw phase when i was at goldman >> i don't know what you're talking about. >> we had the dw phase that was called the deadwood phase. who's dw let's get the dw out of here >> right >> we were making so much money. what a great time to do dw >> all right, let's -- we're going to come back to the markets overall, which we didn't discuss in detail. but we will. we got to get to eamon javers here, because we did get some news >> there's carnival. >> you got time. jpmorgan saying it has reached an agreement to settle one lawsuit related to the late disgraced financier jeffrey epstein. eamon javers joins us. >> we don't have any information on the settlement amount but attorneys for joan doe had been ratcheted up pressure on jpmorgan demanding that ceo jamie dimon and two other executives return for additional depositions. seems clear that jpmorgan wanted to clear the decks of this case,

and you can see why. documents revealed so far showed an embarrassingly close relationship with convicted sex offender jeffrey epstein with one executive emailing epstein from a hot tub in his private island and others brushing aside concerns of lower-level employees about the appropriateness of continuing to do business with him after his conviction as a benchmark, we do know that deutsche bank settled a related case with a similar set of facts in this matter for $75 million back in may. not clear whether this one will be north of that or not. we're going to try to report that out in coming hours n. a statement, jpmorgan said, "the parties believe this settlement is in the best interest of all parties, especially the survivors who were the victims of epstein's terrible abuse. any association with him was a mistake, and we regret it. we would never have continued to do business with him if we believed he was using our bank in any way to help commit heinous crimes." now, a spokesman for the u.s. virgin islands attorney general

said the u.s. virgin islands will continue to proceed with its enforcement action to ensure full accountability for jpmorgan's violations of law and prevent the bank from assisting and profiting from human trafbing in the future the settlement removes what had clearly become a headache for jamie dimon. he's one of the most iconic executives on wall street. when i asked him directly last week if he was going to settle this case, he responded curtly that he wasn't going to talk about litigation in that moment here in washington, d.c., david, so clearly this has been on his mind, and if you talk to jpmorgan and get a sense of their perspective on this, clearly there's another potential settlement coming here with u.s. virgin islands that case, still pending, but some frustration inside jpmorgan about sort of where was law enforcement on all of this during this whole time you know, you hear privately from people at jpmorgan, look, if we were being accused here of being in bed with jeffrey epstein, what about law enforcement and what about u.s. virgin islands those folks should have done something in realtime as well.

some real ill feeling here around -- all the way around in this case. >> but the back-and-forth now between jess daily and jpmorgan and/or jamie dimon, that doesn't go away. >> doesn't go away jess was scheduled to be deposed this past weekend. he was a former high-ranking jpmorgan executive who had a very close personal relationship with jeffrey epstein at the time, then left jpmorgan, and jpmorgan was able to stop banking jeffrey epstein after staley left. that lawsuit between jpmorgan now suing jes staley, that continues. we'll see if there are settlements all the way around, but some of this is settled, some still ongoing >> eamon javers in d.c. for us, thank you. >> there's an unsavory person who wants to use jpmorgan to raise a lot of money you have an executive at the company that is pro-epstein. i watched everybody who's supposed to be guilty of something. mary, steve cutler

these people didn't like him, but you do have a major executive pushing him. i've got to find -- i find, personally, that it is odious that really good people who did not like him are somehow caught up with a guy -- an executive of their own company who's saying, hey, listen, do it why are they -- i mean, are they supposed to just, say, listen, we hate you, jes staley, and we're against you raising a billion dollars for us >> i don't know. it's a good question i don't know what the chain of command is and whether you're able to say no >> that's my point >> i understand. >> these people are innocent we got to tmake time. we got a lot to talk about, including that nasdaq deal it's the biggest acquisition in the history of that company. we're going to dig into it let's give you a look at futures as we get ready to open 15 t resqs from now lomo "uawk on the street" straight ahead hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. rock stars. please!

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let's take a look at shares of nasdaq, because they are down in the premarket the company's agreed to fire a software term from thoma bravo i'll go through and give you some of the specifics. it's regular reporting and risk reporting, the main customers are banks. it's a big business, and they're paying a lot for it. in fact, $5.75 billion in cash

and 85.6 million shares of common stock thoma bravo has a lock-up in place, can't sell 50% for the sister 18 months may be a significant holder of nasdaq shares. run rate synergies, revenue synergies, $50 million, so you say, that takes the multiple down i think about 31 times this year's ebitda for the company. but it is growing at 15% that does seem like a high multiple also, a very high multiple on revenues, but given the ebitda margins here, it's probably more important to cite ebitda as opposed to revenues and the multiple for ebitda as opposed to that multiple for revenues. nonetheless, the 50%-plus margins here will have the effect of raising its overall ebitda or i should say ebitda margins as well, despite what is

that very significant multiple that the company is garnering. they're going to take their leverage ratio to 4.7 times by add be 4$4.9 billion in debt, bu they say they're going to delever very quickly they were able to get the financing together in this market bridge financing will get taken out by bonds or banks or some combination thereof. thoma bravo for its part obviously seems happy to swap into nasdaq or a significant amount of nasdaq stock, but they did well here. they bought these two companies that were put together to create adenza they bought one in december of '20 for $2 billion, i'm old, and another, calypso, so that's $5.75 billion. let's call it $3.75 billion in equity they've got in there. they're going to make some money, but again, they are choosing, jim, to sort of move into nasdaq stock as a significant part of what they're taking in here for the companies they put together, bought, and

then have now sold nasdaq is not a markets business >> no, very little >> it's 77% is now going to be what they call the solutions business, essentially products like this one that they'll be offering to customers such as banks. >> well, i think we ought to consider it the way we do a lot of enterprise software companies. get the annual revenue, which is extraordinary. >> i believe 80% of revenues are reoccurring. >> you know what's really interesting about this deal? >> tell me >> when you look at nasdaq, the way it was a few years ago, it was related to the volume of the nasdaq now, that's barely a lever and we know that all there is -- all there ever is more regulation, and what a great way. you bring a company public, and you say, hey, you need this. you go back to all the companies that are nasdaq companies. you need this. then you go to the new york stock exchange suddenly, you're in everywhere

every financial. and i think it's just a very smart acquisition. i like the company much more >> are you surprised at the significant decline in the stock price, given what you think is a positive >> yes, i am >> obviously, what they're saying is a very positive thing. and they have -- to her credit, adena has transformed the nasdaq live or die, it's not a markets business it's not about new listings or volume it's about all these different services they're offering customers in the financial services industry. >> i thought this was a very, very smart acquisition when you look at these companies that have continuous recurring revenue in that area, we can go to msci, which is a fantastic company. it sells at 43 times earnings because there's so much recurring revenue. >> i asked, given that multiple, what's a good representative, good comp? sim corp. growing 8% and sold at 27 times so, you got that one there

>> how could you pay less for this >> they're getting a higher rate of growth at not much higher multiple by the way, just quickly, nasdaq apparently picked the phone up on this one and pursued it it wasn't an auction >> well, i absolutely love the fact that whatever makes it so they're less tied to -- unfortunately -- to the markets themselves, because the markets themselves have not come back from the old days. >> we got to take a icbrk.quk ea "mad dash" on the other side of this feel good. could be the food i'm eating. no artificials. or these toys that get my mind right. ♪ or maybe it's petco, keeping me healthy for less money. wait, what's money? better quality pet care for less human money. [tweet] oh, a bird. it's what we'd want if we were pets. get $10 off $50 at petco, the health and wellness company.

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standing down. we've got an opening bell just a few minutes away

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all right. let's get a "mad dash" and followed by an opening bell. what are you focused on? >> okay. both bank of america and jpmorgan upgraded carnival cruise at one point, carnival views, if you remember, in the depths of the pandemic, they had to raise money. they were the first one to actually come through. david, what's interesting here is that matt bos at jpmorgan, excellent carnival cruise upgrade, says, this is still post-pandemic. i call it the revenge travel, long on money, short on time people are still doing international. if you meld that with what i was reading, mastercard has a piece out this morning, they do their survey of spending david, it is incredible. we are still seeing consumer demand for experiences continue in may, restaurant sector posted stronger year-over-year growth mother's day weekend was very strong so, we're still seeing

experience spending, and i think the carnival cruise is working, royal caribbean has been tearing. it's a good buy here >> okay. opening bell right now take a look at the realtime exchange back at our headquarters we are open. there at the big board, stellar bank, and over at the nasdaq, it's a blank check company >> they're back, huh >> i don't know if they're back, but they're still out there selling these. >> i want to start with regional banks. very quick note on u.s. bank co corp. this morning understand that all the regional banks are really caught up in the mini-bank crisis, and have to put up more money, and i saw this as -- u.s. bank corp. is a very good bank, and i would say to myself, at what point do we

go back to these but david, when you look at what's going on in a regional bank versus what's going on, say, with amd, people just won't -- they just won't go there. they will not buy a regional bank, betting that the numbers are too high no one's going to anticipate a number's too high. >> it's not that they're as concerned any longer about deposit flight because of a lack of asset quality as much as they're in a position where they're having deposit flight because they can't pay enough and therefore, they're not in a position, really, to earn a spread that they want to, and they're not lending as much, so that becomes a difficult position in terms of the earnings power of many of these banks. >> right, but that's a huge part of the s&p and people don't want that people are very long on drug prices i've been going over that merck lawsuit against -- you know, the lawsuit about medicare and the prices that they'll pay. medicare will pay. david, the drug companies could

face a world of hurt later on in september when mayoedicare is gg to start, not negotiating, but fiat i thought other companies would drug merck they haven't yet the folks at merck are very conservative people. >> you don't undertake litigation like that out of nowhere, but they're disciplined, to your point >> it's a great lawsuit. i don't like the -- >> what was the connection between talking about the regional banks and merck how did you get there? >> so, i'm talking about sector elimination of where you want to put your money >> oh. >> so, you take the financials out and take healthcare out. i can make a very strong case against retail versus, say, walmart. >> so, it goes back into your overall -- not your magnificent seven thesis >> magnificent seven >> says, can't invest in regional banks, don't want to invest in pharma, necessarily. >> not with that lawsuit people should get really -- they

really got to focus on the merck lawsuit. >> retail a mixed bag to say the least. >> yes, and even off-price was under assault today. i said, where can i go where the numbers are too low? >> how about you go to tesla because everybody else seems to be going to tesla, jim stock is up 101% this year it is approaching an $800 billion market value again. it is well off its all-time highs when it had more than a trillion dollar market value nonetheless, this would be, i think, 12 straight, right? 12 straight days >> the reason this is all important is that -- >> of gains. >> is that, you know, you look at what mike wilson says he's talking about a narrow market well, it is incredibly narrow. but then you look at what kostin says from goldman. he raises his s&p guess to 4,500. what happens if -- and this is their worst nightmare. what happens if all of the gain in the s&p comes from ten companies? but that's where we're going >> all right still means if i own an s&p 500 index fund, i'm up >> i'm with you.

>> what do i care >> i think you're absolutely right. i think the analysts are really hung up on how we get to 4,500, and that's ridiculous. there's no asterisk. this is not maguire hitting a lot of home runs where you have to asterisk it these are hall of fame stocks. >> they are hall of fame stocks. >> and there was an article in "the journal" about, can nvidia handle its trillion dollar -- what is it, like, can it handle the fame what it has a product that no one else has that you can't do generative a.i. without where the ceo is a visionary, the oracle of a.i., jensen huang, and i find myself thinking, why are people trying to figure out when tesla stops and what -- and the money goes to tractor supply to ulta? i got to sell tesla and buy ulta i like ulta. >> interestingly, amd is up again. i know you like the stock, but when it comes to being able to

furnish the a.i. chips that are needed, they don't really have them yet >> they better announce an arrangement with hp and microsoft. they need to do that >> what does that mean >> they need to do something that is -- >> an arrangement? what are you talking about >> i would like to see my pc be a little more a.i. >> okay. >> if they just do datacenter, datacenter's not even that -- servers. servers. not that strong a business we have a note this morning about micron calling it micron, like, it's time to buy micron because we might see a tro trough, but then it says, end demand for servers is weakening. i like the idea of buying micron before the inflection but not when demand is still going lower. micron, by the way, spoke recently, and i was liking micron, listening to the call, and i said, what an idiot i am they don't like micron, and i'm liking micron. sanjay, who i love very much, is just simply not a promoter

actually, none of -- there are very few promoters among the companies. >> he's not a promoter when he's come on, he doesn't really -- >> sanjay at micron? >> we have had some interviews with him, like, come on, man we have. >> well, i want to go to hock tan and where we are with vm ware >> okay. why? >> because there's talk about -- >> always nice when they do that, isn't it >> i know. this morning, they talked about -- they broke in with the idea that european authorities have said yes to this deal i come back and i look at broadcom, and i think, broadcom and marvell are the two companies that make it so you can go from the exclusive nvidia chips to melonox and then to where you need to go, which are the datacenters. >> okay. >> i'm just trying to get people to understand the flowchart of what -- of how narrow the number of companies that really benefit from a.i. is, versus the ones that claim to benefit. >> well, right, this is, again,

in the chip side of it, as opposed to the usage side, for the likes of amazon, meta, microsoft, alphabet, all of which conceivably are seen as big beneficiaries of generative a.i. >> right >> as it grows over time >> well, oracle surprised me in the great keynote -- >> and oracle. >> jensen huang talked about oracle and was, like, wait a second >> oracle's moving up almost 5% into the earnings announcement after the close. >> while i love oracle and i have been recommending for a long time, do you buy at a -- this stock is a stock that does pure way you can buy it at five the other day, someone criticized me and said, jim, how could you not tell people to buy nvidia up 18 i said, no, we have been owning nvidia from like day one what, double down up 18? >> it's not irresponsible. you've never told people to sell it outright, but you have said, be judicious >> i was at a bottle signing this weekend >> really? how's that going

>> we sold out it was smithtown, long island, and wine guy, and what was interesting is how many people have become millionaires off nvidia, my dog, nvidia, millionaire, millionaire, millionaire, sell house, retire. >> buy lots of mezcal. sell house, retire, buy lots of mezcal >> but the main thesis other than pushing the mezcal was, do you mind taking something off the table? you don't -- you haven't made any money until you've sold. so, i mean, if you had a double on nvidia -- i say, own nvidia, don't sell it, but there's a contrary discipline that says, well, maybe i should take it long because i don't want millionaires to become sub-millionaires >> what are you selling a bottle of mezcal for these days, jim? >> well, $110 for the blanco >> 110 bucks >> it's premium. it's tobola. >> i hope it's premium >> it's 15 years the flplants tk to grow up

they're great agave. my wife was down there last year >> that's a high price appointment. >> we're crushing it i shouldn't say that we're doing well >> you're doing okay >> it's very hard. i want to move back to some news about the s&p leaders, and amongst them is illumina we don't hit this story that often. i did not weigh in very much on the pretty heated proxy fight that took place between carl icahn and the company. pressured shareholders so they didn't re-elect the chairman, john thompson, he left, and now icahn gets something else that he wanted, which is desouza is out. i think he really wanted new management general counsel will serve as the interim ceo, and of course, again, we're talking months of a heated battle between the

illumina and mr. icahn will the board sort of streamline now one of the key questions was grail. this is a company that was owned, that can detect cancer. >> amazing company >> and it's an amazing potential technology or it's being used. they owned all of it then they sold a lot of it, only to want to buy it back, but regulators said, no. we don't want you to do that, both here and abroad, and they did it anyway. and they're -- they are so embroiled in a lot of potential court cases, challenging the ftc, as they try to make their way to actually own grail, which, of course, they decided they didn't want, only to turn around and decide a number of years later they did want. desouza is out unclear what it means for the future of grail, although there are plenty that would say, give this up already and move on. >> you have illumina you have thermo fisher and dan

air. these have all been terrible stocks, and yet they're great companies. they were all levered in some way or another to biotech and ipos and the need to have more equipment, and the way to make it so illumina was diversified was grail. i thought they made it so they weren't stuck. >> it's easier than saying illumina is used by so many different companies. very important technology. also the idea with grail that you could go and detect a cancer that is barely detectable in some ways as a result of one drop >> yeah. david, i've got to tell you, that company, i can't believe that it stays up here, given the fact that what you really have to hope is a takeover, and yet, who can buy them >> in this market? >> in this market. >> let me look at the market cap. if it's big, you got to wonder $32 billion with a premium yeah it would be a bigger company

tough to say that's going to happen >> not going to happen >> given the stance of this doj and ftc, something we've talked about very often in terms of really chilling the market for a lot of m&a, even if the cases they're bringing may not ultimately prevail i've talked a good amount about horizon. amgen did respond to that complaint with their own answers. we can get into that at another time but we'll see what happens with illuimina. i wanted to hit catalent they finally filed their financials this was, again, another name that was thought to potentially be close to getting bought, maybe by the likes of danaher at one point. that chilled, butyou can see what it's doing to the stock price. it's a long awaited third fiscal quarter financials revenues were a $1.37 billion. adjusted ebitda missed original

estimates. they had a minor restatement to fiscal year '22. and yeah so, that's where things stand there. wouldn't be surprised, would you, jim, to see an activist show up in this name i think the entire board is up the entire board, nominating window opens a couple weeks from now. but did want to hit that since i had mentioned it a number of times, and look at the move in the stock, finally, with those -- that full third quarter report out they did, again, cut, let's call, yeah, a couple of analysts can you wanting their estimates as you might expect. >> they are the kings of biolics, which is, of course, the hope for medicare, hope for all over the world that you can have biologics that would make it to the likes of a humira priced to come down. >> they manufacture them >> but the fact is that when you don't have financials, david, it's suboptimal situation. the stock is down, i mean, from its high >> we can take a look at what

it's done. it's brutal. again, it had moved up in part with some speculation of a potential takeout, only to -- only to decline dramatically when they were unable to come up with financials for anybody for quite some period of time after promising a number of times they would do so. but they are finally here. those financials we'll see if it results, again, in any activity in terms of shareholders >> this company, cardinal health, cah, which has been in the dog house for a very long time, and is now starting to -- it's got another upgrade today they are the ones now that they have a market cap. >> yeah. >> they are the ones that should buy catalent they have a terrific business. it's been good for a long time, but they have not been able to have any momentum. a natural merger there, and if they do it, i ask for nothing. >> nothing all right. that's another one of your sort of charitable recommendations, so to speak. you're making the

recommenda recommendations, you don't get paid for it. >> i garden, i sell mezcal, and i do this. >> you advise on potential deals on the side. >> absolutely. >> but you get paid for the mezcal >> true. >> well done david, there's a couple other companies i want to mention. >> make it quick, because pisani is waiting he gets very impatient >> bills.com has been downgraded be careful of that intuit does everything bill.com does much cheaper. >> got it. thank you. there it is. now to bob from bill to bob good morning >> i'm eager to get paid in tequila. i'll take that bet >> it's mezcal, bob. mezcal >> i'm sorry let me get it right. i'll get paid in mezcal too. we'll all go have a drink with jim any time hey, we're waiting for a new high on the s&p 500. closing high we didn't make it on friday. meantime, the market keeps advancing, but it's a little narrow again today remember there was little green shoots broadening out of the market last week very narrow. it's tech again today.

take a look at the sectors the important thing, semis moving nicely, tech, there's ark innovation strong, consumer discretionary is strong. what don't you see in you don't see healthcare, consumer staples, even industrials, cyclical sectors which had been advancing, lagging today, although many of them are up right now. just take a look at the movers here you can see that salesforce is strong apple on the upside. amex has been strong recently. merck, doing nothing chevron, brief rally a few weeks ago and really sideways ever since then so, theimportant thing is the momentum is with the tech stuff. look at where the big momentum is right now, it's with the nasdaq 100, to a lesser extent with the s&p 100, and consumer discretionary has been strong recently consumer staples, healthcare, defensive stuff has been notably lacking. in fact, notably lacking since the jobs report, spconspicuousl

lacking. i'm not willing to say there's a turnaround, but look at the russell 2000 etf versus the s&p 500, and there's the s&p on the orange line. what happened was when tech started really moving in march, it just blew the s&p forward, and the small caps, the white line, was not keeping up you see that move up on the far side with the white line there that's small caps since the jobs report that's the hopes of a broadening out of the market and a soft landing. we'll see if that continues, but you can see that's just a very, very small move in a very short period of time as for what's going on now, well, look, we're waiting for the new high 4,305 was the old 52-week high, august 16th, i believe we are knocking on the door of that i think everybody is anticipating the cpi report. this is sort of the last line in the sand for the bears they have to have a lousy cpi report, or the market's going to go up again. remember, the pain trade is higher everybody's on the sidelines many people still on the sidelines. and if we get a benign scpi

tomorrow, market's going to move higher that's a big line in the sand. one of the things that's happened as well, earnings keep getting revised upward remember a couple months ago, earnings were being revised downward that has stopped in the last month. now, these numbers are starting to rise in the last couple of weeks, and they're going to rise even more, particularly if we get a benign earnings cpi tomorrow finally, we'll talk about this in the 10:00 hour, but the important thing here is with a little bit of green shoots in the ipo market, cava this morning, a fast casual market, raised the terms of its ipo to 19 to 20 this is going to be thursday, scheduled for thursday at the nyse it was $17 to $19, so we're going to raise, david, $280 million that's sort of a mid-size deal, but at this point, the long lines of people waiting to go public companies, including reddit, a.r.m., hopefully as the market moves to new highs, more people will finally start going public >> it's a long line, as you say.

>> you want a long line? go to cava it's going to start the whole ipo window it's going to be huge. you're not going to be able to get a share. >> we'll find out. not if it does well but if the ipo window opens behind it >> it's going to open big when cava starts. >> cava, key to this market. get in on the cnbc investing club with jim. point your phone at the qr code on the screen. we'll take you there let's give you a quick bond report before we head to break, check out treasurys this morning, haven't talked about the treasury market too much as of yet two-year note hanging in there at 4.60% we're back after this.

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guest on "squawk on the street." you will want to hear his take, of course, on a wide range of topics he will talk the markets, the economy, whatever sara eisen wants to ask him atilbeomg ithth wl cinupn e next hour.

. well, that time for stop trading. >> housing has been on fire, and a couple days lennar reporting, but home depot has a big meeting tomorrow and the one area that has not been on fire is renovation and remodeling. home depot was weak last quarter. people trying to get ahead of that that will be the tale of the next leg if we can seat home building industry spill into all the companies that produce things that go into homes, that would be a bit of a broadening, right now we just have the home building industry. so many people looking for broadening tomorrow morning 9:00 a.m. >> 9:00 a.m. that meeting. >> i think it's going to be important. we need to watch pill frag and shrink because home depot hurt by that a lot and they're straightforward company. >> what do you have tonight. >> marc benioff, what they're

doing, they've been doing a.i. for a long time and reintroduce this marc has done great things in terms of how to close on its yield and a lot of that is to try to realize what people are thinking he's been well ahead of predicative a.i. and with generative a.i. he's going to the nx level i'm very excited. >> as you should be. you always want to hear from benioff. always interesting thank you for a nice monday morning. >> we have a lot of things going on at the same time you could argue that these are just analysts as you said catching up with the stock. >> right. >> see you later. >> thank you. >> okay. when we come back, or when we return, which ever you prefer, we'll have an exclusive with that man, goldman sachs' chairman and ceo david solomon

good monday morning. welcome to another hour of "squawk on the street. i'm david faber with mike santoli. we're live from post nine at the no stock exchange. we're going to see sara, she has a big interview later this hour. goldman sachs' chairman and ceo david solomon will join sara but first, over to you, mike.

>> we are 30 minutes into the trading session. here are three big movers that we are watching. as we have generally a green opening in the indexes illumina, one of the top gainers on the s&p the ceo resigning from his role, effective immediately, following activist pressure on that company by carl icahn. the stock up 1.3%. nasdaq shares falling on news the company plans to buy software company adenza in a cash and stock deal valued around $10.5 billion you see nasdaq down almost 10% finally, we're watching abercrombie & fitch, getting upgraded to by at argas, with a $41 share price target the stock has rallied almost 50% since may 22nd more on today's upgrades coming up. >> we have inflation data a fed decision and mike, always great to have you on set in terms of setting things up and getting your take on what we talk about a lot, certainly a lack of broad

market action and this focus on a handful of names that continue to drive us higher. >> that has been the big terror. we've seen some amelioration of that in the last seven or eight trading days, and it comes at a time when there's a big debate that happens do we have a new bull market on our hands it's kind of interesting, you can only make that determination with a lag in retrospect and i always like to point out, it's a process not a moment, just because the s&p was up 20% from a low and by the way, today is the eight-month anniversary so to speak of that low it's kind of a minimally acceptable standard for a bull market being up that much in eight months it's an under achieving one because of the poor breadth that you mentioned. we did check out boxes along the way here very much a comprehensive washout low in october, good fourth quarter rally, momentum thrust in january. first quarter you absorbed the svb fallout without going below the december lows and crossed above the moving average, almost

three months ago all that stuff lines up, what it doesn't tell you is, whether we have great returns coming from here because there have been 20% gains that were head fakes it happened in '01, it happened even really in '08, at the end of '08 after lehman brothers the big relief rally in retrospect you say most of the damage was done, it didn't feel like it along the way you have those things happening at the same time, again, you have this sort of weird cycle that we're in right now. we're supposed to rally after the fed starts hiking rates. we went down straight into it. we can't bottom. the fed is tightening. we have been off the pattern for a little while shorter term the market looks overbought i think sentiment is getting warmed up. you're seeing people notice it and speculate in the options market you're seeing the survey show a little bit more bullishness, but that's expected when you have the market up 20%. it's not a matter of oh, no people are getting bullish, it's time to get worried.

people are recognizing the market has been resilient for a while and it's kind of following in a sense the normal psychological life cycle of getting toward a more bullish trend. final point if the october low was the real low you could go down 15% and not hit it. that's how much room we've created above that level already. >> this debate rages amongst the strategists on wall street david kostin, s&p 500 target, a narrow year to date rally will broaden beyond mega cap tech mike wilson, so right for a period of time, continues to call for a lower market and doesn't believe the individual stocks will deliver -- will be enough to deliver overall or meaningfully in his words, a change of trajectory of the overall cyclical earnings trend. >> that's his big call really, is that there's going to be a sharp, short and deep earnings setback in the second half of this year. he even says we're kind of

bullish for what earnings can do in 2024 but doesn't think the market will be able to look through it we're almost halfway through the year and we're going to clock more than $100 probably in eps for the s&p in the half of the year the second half of the year, disinflation bad for earnings like earnings were kind of boosted by normal growth it is a good debate. i also think it reflects a very hybrid environment here. it's not clearly bullish it's, you know, what does it mean not fight the fed if the fed is going to keep rates higher for longer but almost done it's difficult to make that call. >> yeah. thank you, mike. let's get over to eamon javers, more details on the story he brought us earlier, jpmorgan settling with at least some victims of jeffrey epstein eamon? >> that's right. we're getting new information now. "the wall street journal" reporting the settlement amount was $290 million to settle this lawsuit

accusing jamie accuse jp morgan of having a relationship with epstein. the settlement with the jane dough plaintiff who sued alleging that jpmorgan allowed jeffrey epstein to do business with the bank long after his conviction on sexual charges and long after employees inside jpmorgan were warning the bank should no longer conduct business with jeffrey epstein. we're getting this amount. we don't have this confirmed from jpmorgan yet, but jpmorgan agreeing to pay $290 million to settle the lawsuit according to the "wall street journal." back over to you >> the added detail. meantime tech has been a key part of this rally in the broad market the nasdaq the outperformer, up more than 30% from its october low and 27% this year. let's get to kristina partsinevelos with a closer look at the most overbought and over sold parts of that index. >> if you're the type who prides themselves on being different, then you might want to consider

avoiding tesla as it's the most overbought stock on wall street right now. the metric, rsi, measures the speed and magnitude of recent price moves. if an rsi above 70 it's considered over value and below 30, over sold. more importantly, though, it can indicate a security may be ready for a trend reversal in price. tesla's rsi is over 90s. the stock is up over 25% just in the last three weeks or so, just on friday. it ended its 11-day win streak then you have meta up at 71, signaling that the stock is more crowded than apple, amazon, netflix, even nvidia is lower on the rsi scale, despite its 165% run up in the stock year to date and it's not all about tech within the nasdaq. you have non-tech crowded names like fox corps, fox news utility firm constellation energy and enface and match

dollar tree hasn't been a favorite its rsi 24, stock down 17% in the last three weeks excel, energy and starbucks in oversold territory and there is a senior portfolio manager of new edge wealth who says investors right now are looking to move from technology, like the -- given the concentration risk you talked about, and he predicts the rotation could reverse the big tech major gains for meta, nvidia and provide a catch-up trade with regional banks. you're seeing that movement in the care etf up 19% in the last month or so, at 24% year to date and it's rsi was as low as 4 in march. david? >> kristina, thank you kristina partsinevelos. over to dom chu tracking the notable street calls oracle, of course, amongst them. that stock hitting a new high. you know, dom, some piling on now, maybe a little late, but the stock is up ahead of

earnings report. >> no doubt, david the oracle call specifically is one we'll talk about, to cap things off, only because it is an earnings catalyst move that we'll have after the bell today. in the other parts of the market you are seeing some industry boosts this morning due in large part to the analyst calls. in cruise lines specifically you have carnival in particular, seeing a bigger bump in the early action right now you can see they're up about 12%. it got upgraded to the equivalent of buy ratings of jpmorgan and bank of america jpmorgan's call cites continued positive momentum from booking, cruise demand, everything else thattes go along macro with the industry alongside better balance sheet dynamics leverage is a key part of that story. the target price goes up to 16 bucks. it was 11. they upped their target prices by the way on royal caribbean as well as norwegian. they're getting a move higher. on the bofa side, carnival goes with the target price hike to 20 bucks from 11.

they are also looking at the strong travel demand out there better vessel mix versus prepandemic and less balance sheet risk the price targets there also got upgraded for both norwegian and royal caribbean as well. you can see a bigger move across the entire business. on the auto front, auto zone very much in the zone so to speak. the car parts retailer up to outperform at evercorps isi. the price to $2700 it was 2640 before they cited the recent nall stock prices you can see on the right-hand side of the screen, as well as a continued are trend of americans keeping their cars for longer cloud with oracle, slated to report its results after the closing bell the shares are record lie so far, up 4.5% right now up over 12% in just the last month. the wolfe research upupgrading out perform to peer to peer perform. they put a $130 price target on it they cited oci

jpmorgan raised its target price to $109 from 93. to your point kind of like that me cra kulpa upgrade over there. they maintain the outperform and the stock is trading above it the oci, cloud infrastructure, is the driving force behind a lot of this expectations, david, to your points here are very high for oracle for a stock that's already seen a sharp move higher not looking just at the momentum but the expectations very much a big part of this story david, mike, things back over to you guys. >> thank you yeah, a good point a lot of analysts playing catch-up on oracle larry ellison making his way up, net worth probably number five or four. >> it's incredible. >> and tesla also benefitting -- >> huge chunk of tesla and an enormous stake in or reacle. >> it's one of the exceptions to the old legacy tech rule where they're getting the benefit from the market for being a player in the new wave. >> yeah.

>> new wave. all right. as we head to break right here let's give you a road map for the hour tesla we've discussed it, you've seen it's up again that would be its 12th straight day of gains it's double where it started the year, but, of course, one key question, can this run continue? is the ipo drought showing signs of life, signs that investors need to watch from here >> we've got a big, bold exclusive. you're not going to want to miss it sara eisen sitting down with david solomon, the chairman and ceo of goldman sachs n''somg nt. dot go anywhere.

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welcome back to "squawk on the street." forbes iconic conference under way in new york and sara eisen is there and she has a special guest for us sara >> hi, david good morning yes, i'm here with david solomon the ceo of goldman sachs thanks for taking times. >> thanks. it's great to be here with you. >> it's a huge macro week. we have to start there we're going to get inflation numbers and a fed decision and ecb decision, retail sales are you surprised at how resilient the u.s. economy has been holding up given the inflation shock and rate shock and bank failures and everything else >> the u.s. committee has been incred build -- economy has been resilient and i have been surprised. i predicted, given the economic tightening we've seen, a bumpier ride than we've seen so far. i think we're in an uncertain

moment and i said at the conference here, while our economists, again, reduced their view on the chance of a recession in the u.s., i just think it's a period to be a little bit cautious. i've got enormous respect for jan hatzius. >> you've sounded more bearish than he is >> he's been more right at this point. i think we look at it, i think we could muddle through here with a much softer landing than we would have expected if you're running a financial institution or a business, we could have an environment we have slow sluggish growth and inflation more sticky, so i think you've got to be cautious. that might not be a recession but it would feel like a recession if we had an environment with 0 to 1% growth and 3 to 4% inflation. >> last month you were at our cnbc ceo council and we were on a package together and talking about how you do expect inflation to remain stickier and the fed to continue hiking rates. >> i'm not referring necessarily to this week, but i think inflation is a little bit stickier and i do think in the

distribution of outcomes, there's a reasonable chance that rates go higher. i'm not saying they're definitely going to go there, sara, but you have to be prepared for that. what we've learned, we always think about through a lens of risk management being prepared i'm not good predictor of where interest rates will go bu but i do think given the what's going on, tightening economic conditions, stubborn inflation, there's a chance that rates go higher if they do that is probably going to make the economic environment a little bit more challenging. >> so the recession comes when >> you know, if we had a recession, i don't know, the end of this year, first half of next year we might not to the point and jan's view, there's a reasonable chance the consumer has been more resilient, relatively full employment and hard to have a recession with 3.5% noimts unemployment we're watching the data and we have to see. things have been navigated well after what was a disruptive period.

significant disruption from the pandemic, significant disruption in terms of the magnitude of fiscal stimulus and we're trying to rebalance that. there have been speed bumps but the economy has been more resill sgleents close to the debt ceiling and now worrying about the concerns on top of qt. how dot macro headwinds, the volatility in rate, impact your business, investment bank banking and trading in particular >> there's no question that there's, you know, i think our clients are more risk off right now. we've seen that over the course of the last few months certainly capital markets activity has been anemic for the last 12 months or so but that's not unusual when you change the environment and valuation so quickly we really went after a very, very robust period in 2020 and 2021 we reset valuations in 2022 and reset capital costs and that, obviously, slowed down capital markets activity significantly i always say it takes four to

six quarters to reset. we're five quarters in. >> are we seeing green chutes. >> i would expect capital markets activity to pick up as we head into 2024. at the end of the day people need capital and they can defer some of those activities, but at the end of the day they can't postpone them indefinitely. >> 2024 why? what changes what needs to happen >> you get to a point where people understand and accept this is the market that we're operating in they need to drive their plans forward. they stop wishing for the environment they were in and start looking at the reality of the environment we're in now. >> what green chutes do you see? >> there's been a little bit more equity issuance, a little bit more leverage financed activity we're starting to see in terms of our shadow activity, a little bit of an increase in that shadow activity. >> does that mean, do you s foresee further head counts in the business >> our business has a couple headwinds at the moment. we talked about capital markets

headwinds. we're looking to right size the business, and over the course of the year we've been narrowing our head count a little bit to rebalance. i talked to you before about the fact that we run this human capital business where we always do a performance reviews everywhere and during the pandemic we stopped those performance reviews. we did not stop hiring 3,000 young people every year, so we grew our head count pretty significantly during the period of 2019, 2020, 2021 to meet client activity demand, probably went a little too far. did head count work in january and doing more now and see what the environment is we're always going to right size the business to the environment that we see. >> so it sounds like yes, that's still a headwind and could come. i want to ask about commercial real estate. an article in the "ft" pointing out higher rate of delinquencies in the goldman loan portfolio and tied it to twitter not

paying its rent in a san francisco building i'm curious how problematic do you see this area? >> i think there are a couple things to think about here first, real estate is the single largest asset class in the world. and when you look at what's happened over the course of the last 12 months where we've tightened interest rates by 500 basis points there's no question that real estate market in particular, commercial real estate, has come under pressure. you know, with goldman sachs, we have a relatively small lending portfolio compared to many others, but we do have a significant amount, not a significant amount a reasonable amount, of equity investments in real estate compared to a number of our banking peers and the reason for that, and i know your a familiar with this, after dodd/frank, we grew our alternatives business on balance sheet. and so, you know, real estate affects us and we have headwinds from this in three areas first we have some lending and you'll see some impairments in

the lending that would roll through our wholesale provision and you'll see some of that this quarter. last quarter for the real estate we consolidate we showed close to $400 million of impairments an warmere're going to see more quarter. lastly we have equity investments in real estate as above our equity portfolio that's on balance sheet and we think we and others are marking down those given the environment and the coming quarters and some of that will play through in the market all of this in the context of the overall size of goldman sachs, you know, is manageable. >> what about for the overall economy? >> what it does, it does exactly what you would expect it to do it constrains lending and so given that people have, you know, these assets on lending balance sheets and when you look at the regional and mid sized banking system, 65% of commercial lending falls into the regional mid sized banking system and so in this

environment that will constrain more additional lending and makes capital more attractive, and it crowds out some economic activity, and that's just something that we're going to have to work through and they'll there will be bumps an pain along the way for a number of participants >> you're still getting a lot of questions about the consumer business, obviously, and where you are in this process of right sizing it and taking it where you want to go green sigh sale, people want to know where you are in that process and how fast you're moving. >> i think we've been pretty clear that we narrowed our direct to consumer ambitions materially we're running our deposit platform which continues to be a significant success and we also launched through our apple partnership and additional deposit platform which is going very well so far we have our two credit card partnerships we're continuing to work on, running them better and improving them we said to the world we're looking at the potential sale of green sky. i don't have an update at this point. that's where our focus has been. we also announced that we were

removing the rest of the market loans we had our balance sheet and we've done that successfully we've niarrowed the focus and making progress. it's a small portion of the firm. >> you have a lot of investor questions or media >> we don't get a lot of investor questions the questions come from the media. it's appropriate people want to understand everything we're doing across our business we'll highlight our core banking and markets business it's been sluggish john talked about that a little bit because there's been less capital markets activity as we've been talking about, but that business still on a relative basis continues to perform well and that is the lead engine of the firm. great feedback from our clients, continuing strength in our market share there, and we're super excited about our asset wealth management story, what we laid out at investor day, our ability to growth that asset and wealth management business and as we continue to reduce our balance sheet, i just talked about our commercial sheet on balance sheet, part of our alternative strategy over the last few years, we've been

changing that strategy, redeucing that legacy balance sheet and now focusing on a client fund model. as we get behind that, that, obviously, improves the returns in that business materially. >> i was going to ask, what the return, how you get the path to return on equity how do you get to the 14 to 16% improvement? >> we have a big global banking and markets business, you know, that i think, you know, in the first quarter performed very well you can look at the returns at mid teens. i think that business is mid teens through the cycle and doesn't mean you won't have a quarter where the returns are materially lower, but through the cycle it's a mid teens business and significant part of the firm as we continue to reduce this legacy balance sheet, which right now in this environment is a big headwind to our returns, you start to get meaningfully improved returns in our asset wealth business. mark at investor day laid this out clearly. it's going to take a period of time, a couple years to work through that, but we're relatively confident we can work through that and bring the consumer platforms to

profitability, that reduces the drag there so we think we have a clear plan we think we're executing on it the environment is not a perfect environment so we have some headwinds. as i just mentioned around that. what i look forward to over the next two to three years the way we're exkrugts and in particular executing for our clients. >> the svb fallout the bank failures. what sort of regulatory action do you expect as a result of that and how would it impact goldman? >> there's no question that there are regulatory headwinds and that overall regulatory oversight of the banking world, you know, continues to look potentially for more capital and regulatory structure a lot of that certainly is going to be focused on the regional and mid cap banking system out of svb the large banks have been a source of strength i don't personally think that they need more capital i think there's a risk that in this - >> you're preparing -- >> we're preparing for that. we can adapt for it.

at the end of the day, you know, if you put more capital in the banking system, what ultimately happens is the cost of the capital is passed on to end users. that will take a little bit of time, but there's no question that as you put more capital into the banking system, it does get passed on in terms of cost of lending and cost of capital overall. >> we're past the acute phase of this mini crisis, whatever you want to call it. what do you think is going to happen to regional banks in this country and do you anticipate more failures? >> well, there are long-term trends that are in place here and we've been focused on the short-term disruption. i think you have to recognize if you go back 25 years, there were 13,000 banks in the united states and today there are a little over 4,000. there are reasons why the consolidation is pushed in the direction that it has. there are pressures on banking institutions, especially regional and mid sized institutions, liability costs are going up, obviously, the technology that's necessary in a digital world scales much better with scale than it does in

smaller businesses that's a cost and headwind to returns. and in addition, more regulatory burden is a headwind to return our research analysts talked about the fact that they see a 3 to 600 basis points drag on the roe of the mid cap system given these hipdss if that continues i think there will be have to be more consolidation or more institutions that have some pressure it doesn't have to mean that there's a lot of crisis around that, but i do think you have to watch that carefully you have to understand not everybody in the regulatory world or in washington agrees that that consolidation is a good thing, and so there's a healthy debate in washington as to whether or not that consolidation is a good thing. >> it feels like there's a little bit of an opening, a window, for bank mergers. >> on some fronts. i'm a believer there needs to be more banking consolidation - >> are you interested in growing through acquisitions of goldman -- >> the bar for us to make a bank acquisition would be high. we run a business that's a

slightly different business. we run a big, global banking and markets business, a big asset wealth management business we're going to continue to grow. for us to buy a big, you know, infrastructure bank with branches that doesn't fit strategically with where we are at the moment. we're growing our private banking activities and continuing to higher private bankers and given disruption, there have been interesting opportunities for us to hire individuals in that space, and so, you know, we're looking at that i would never say never. but that's not a focus of ours at the moment. >> what is your focus level on a.i. and how do you use generative a.i. -- >> i mean, you know, goldman sachs has used a.i. in its business for a long time these large language models and generative a.i. super interesting for us i think the thing that we're most focused on is we have an extraordinary data set that's proprietary to goldman sachs and as our ability to build models

around that data set does that allow us to serve our clients in a much more effective way. i think the answer is yes, and we're super interested in the way that technology can allow us with our proprietary data to strengthen the leading position with our clients in businesses like banking and markets >> we need another interview for that topic david, appreciate you taking the time today. >> it's my pleasure. thanks for having me good to see you. >> you too david solomon the ceo of goldman sachs. back over to you, david, at the studio. >> sara, you have a few more interviews as well today to come what do you got? >> yes we're going to talk to ray dal leo in the next hour, founder of bridge water who has strong views and made headlines about being in the beginning affiliate stage debt crisis and thinks about the world in years and in cycles and in history and he's really focused on three key issues -- debt, and he's not feeling better about the fact that we got a debt ceiling deal. worried about the long-term trajectory

he's worried about the politics and thinks ability things like civil war. we're going to talk to him about that of course the changing of the world order, u.s. and china as someone who has been in china for decades and has good relationships over there also toto wolfe, the ceo, team principal, and part owner of the mercedes team of f1 and you know how obsessed i am, david, with f1 toto is a billionaire investor and he's got lots of thoughts on the explosion of f1 in this country, around the world, and then, of course, you know, runs it like a business they have to think about inflation and supply chain as well looking forward to that one as well. >> i'm sure you are. yes, i do, both mike and i know how devoted you are as a fan of f1 sara, thank you. >> indeed. >> after the break, is the ipo drought finally coming to an end? why some at least are arguing yeah we're going to discuss that. don't go anywhere.

welcome back, everybody. i'm constess test sa brew performer italian prime minister and media tycoon silvio berlusconi has died at the age of 86. he launched his media empire in the '70s which propelled his political career nearly two decades later. the cause of his death has not been released, but he was treated in april for a lung infection linked to an undisclosed case of leukemia. intense security preparations under way to make sure donald trump's court appearance goes smoothly tomorrow law enforcement officials tell nbc news they believe there's a risk that loan extremists could try to disrupt those protest the former president spent much of the weekend lashing out against the 37 count indictment that allegations he mishandled classified documents the tony awards made history when alex newell and j. harrison ghee became the first nonbinary

actors to win. the writers strike left theaters biggest night without a script but david, it's almost like something that cable has known for a long time, sometimes there's scripts and sometimes there's not and the show must go on. >> for sure. our first hour of this show, we don't have a script at all. >> you don't need a script. >> no. >> you do it live. >> making it up. thank you. contessa. we are over an hour and six minutes into the trading day let's get to the man to my right here on set, bob pisani see what you're focused on this morning. >> we're all about ad libbing when need to still rising, 4305, still waiting to pass that it's still tech dominating the market we want the market to broaden out. we had moments where it's happened not today. what's moving semis, tech doing well, ark innovations, strong, consumer discretionary strong. you don't see health care or consumer staples or some of the

cyclicals like industrials leading the chart. narrow market today. consumer discretionary having a good day tesla we keep talking about this 12 straight up days. carnival got the upgrade from bank of america that's a new high royal caribbean a new high some of the other stuff in the discretionary sector like mgm and the casinos doing well i want to point out what's going on with ipos because this week we have an ipo and they upped the terms. cava is sort of a mid sized $280 million market cap it was 17 to 19 and they raised it this morning to 19 to 20. that's got a lot of people excited because unfortunate th wonderful things you get in market is the valuation. you know it's been a disaster here, 18 months of what i call the ipo drought. the most important thing, strong up market. we've got s&p 500 right near a new high that's number one. number two stable or lower interest rates they've been more stable in the last month, it's not a headwind, at least not a headwind and

finally higher valuations we saw that with cava raising the valuations the ipo etf this year has outperformed this is the first time it's done this in a long time. some of those names that have gotten clobbered like doordash have done better better after market, more stronger ipo market in general and generally higher stocks generally helping the market here last year the ipo drought we raised $7 billion last year. a disaster. normally 50, 60, $70 billion we'll see what's going on and david, the waiting list is long as my arm for the companies that are sitting out there. we have fogel, which filed a year and a half ago, reddit, instacart, arm look at this, panera, strikes impossible foods on and on. flip cart, stub hub sitting out there. we have no idea when that's going to happen. >> they're ready we'll see that's another piece of the bull market that has kicked in.

thank you. still ahead, tesla on a tear, shares doubling since the ere t of the year. whthe company and maybe the stock go from here stay with us could be the food . no artificials. or these toys that get my mind right. ♪ or maybe it's petco, keeping me healthy for less money. wait, what's money? better quality pet care for less human money. [tweet] oh, a bird. it's what we'd want if we were pets. get $10 off $50 at petco, the health and wellness company. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever.

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it's been a strong month for the stocks of many automakers. you can see them right there with double-digit gains. tesla is well ahead, though, now on track for what would be its 12th straight daily gain, risen 100% this year the current share price well above analyst price target co consensus, although well below its all-time high, up like 50% since my interview on the 16th just saying. here with his take on all of this is john mcneil, ceo of dvx ventures, former executive at tesla, and he sits on the boards of gm and lululemon. i'm not going to ask you about lululemon. >> they make a great suit.

>> i have a number of those pairs of pants. >> they're the best. >> we talked about lulu and now let's talk about tesla and gm. let's start with the charging partnership, so to speak what do you make of it >> how significant is it for tesla and the board, for the company whose board you sit on, gm >> i think it's good for everybody in the sense that first question i get from friends when considering an electric vehicle, what about charging i hear it's unreliable i may pull up to a charger, and it doesn't work. i think gm looked at that and said to get adoption of evs, we need to have reliable charging the most reliable charging on the market is tesla standard elon, on the other hand was saying i'm willing to open source my standard to help with the adoption of evs. so it's better ergonomically, better reliably. when you pull up to what i'll call the european standard chargers, those may work three out of four times. one out of four times not working is not acceptable.

a tesla charger works 99% of the time. >> what's the benefit for tesla? you get the traffic and the standard, perhaps, in north america, but you're allowing your competitors to sell more evs and say to their customers you don't have to worry? >> elon does have this vision. when the nissan leaf came out a number of us on the management team had a competitive response to that. he said this is great, there are more evs on the market and celebrate with every leaf we see on the road. there's a purity of the motivation within him. on the commercial side, tesla is going to be able to access tax credits by opening up the standard and so they'regoing t get help funding the network further and this, as dan ives said last week, might be their aws moment they will have an ability to make money off the infrastructure they've created that's going to cost and now is going to be a revenue source. >> recurring revenue source. >> potentially. >> investors like to put a nice multiple on. >> where do you think we stand in terms of the wave of ev

adoption right now it's interesting, we're seeing oil prices actually kind of tank again. they're at levels we were at four to five years ago some of that is probably because, you know, on the margins, ev kind of zaps demand from gasoline but maybe changes the equation some in customers' minds in terms of the cost advantages of going electric. >> chargers and in the u.s. there are about 40,000 fast chargers in china there are 4 million so gives you a sense of the growth we're about ready to see in the super cycle of electrification of automobiles and at my firm we're investing in actually multiple companies in the ecosystem, because the ecosystem will build beyond charging want your ev fixed you can use one of our companies and have somebody come to your driveway and fix your car we're going to see a lot of these kinds of businesses sprout in the ecosystem because we're really just at the beginning we hit this tipping point in december where 5% of evs sold or

cars sold are evs and then 7% in the first quarter and the numbers show in europe and china, when you hit 5% within four years almost half the cars sold are evs. >> you think we're on that path >> we'll be on a steep curve for sure. >> tesla and gm, i want to toggle, musk, he would say, he did say to me, that he has a pricing advantage because ultimately he will get to full autonomy these will become robo taxis an the margin will skyrocket as a result of what he can do from a service perspective. do you believe that? >> i think this is one of the untold stories you mentioned gm, gm has a hands-free driving product, super cruise, that is higher rated than the tesla autopilot system they own cruise, fully autonomous and row bow taxis are rolling out. if you could change the car business from an episodic business, i sell one car every five years to what if i could

earn a quarter million dollars a year with recurring revenue off that vehicle, that's a completely different financial platform, financial model, for the industry that's what's coming with these fully autonomous cars. >> $250,000 a year potentially >> you've got row bow taxis that can make 250,000 in revenue. take that over that cost base and you're talking about a different cash flow profile for these businesses. >> finally, i'm curious as to what, you know, in the gm board room, not that you can share necessarily, i'm curious if you can characterize the level of conversation around the transformation of this company, what role you're playing there, debates that may take place? what's that been like? >> history, if the books will be written about this transformation, mary barra is taking on this hard task of taking a gas car business and turning it into an ev business it's what we talk about in the gm board meet ags lot, but she has got the hearts and minds of the organization headed in this direction. i think if she pulls this off,

and looks like she's going to, she will go down with ford and sloan and some of the heros of the industry because she's taking this iconic american brand and really reworking it from the inside out. supply chain, factories, car design, et cetera. so they've got one of the best -- they're the number two selling ev in the country, ev manufacturer and multiple models coming out and the silverado pick-up will be a hit. it has 450 miles of range versus the ford f-150 lightening at 320. this is going to change the pick-up market which is our biggest market quickly. >> back to the initial first question, does gm success come at tesla's expense >> i don't think -- the market is growing so quickly for electric you will have multiple players growing, and so as gm doubles and doubles and doubles its evs, tesla can grow and have significant demand, even though their market share is shrinking, their overall sales an revenues

will continue to increase. >> john, appreciate your being here join us again soon. >> thanks, david. as we head to a break, june is pride month and cnbc is celebrating all month long, sharing stories of corporate leaders. here is the ceo of health. >> i get asked why do lkt lbgt i people need different health care the reality is that our lives are completely different by virtue of who we are and love. we are more likely to suffer heart disease and mental and behavioral health needs. when we build our families it's a different experience and so i think in a world where people like to think that maybe things are more equitable and we've come a long way, the reality is, our experiences are still very different i would invite folks not members of the community to really elevate the voices of those who are and listen when we tell you why it is different and we have different needs.

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retailers looking for a boost are turning to old avenues. courtney reagan is here to explain. >> and so every brand wants to own their consumer from the experience to the data but after the direct to consumer model explosion, more are realizing the value of wholesale. after nike exited about half its retail relationships between 2017 and 2021, it is coming back to macy's and dsw. levi continues its dtc push, but its wholesale business grew 25% last year. pvh is deepening wholesale partnerships and elf says its business grew 70%. they are expanding their relationships. and after more than 100 years of direct to consumer, ll bean moved into wholesale in 2020

and continues to expand and says that the strategy helps us diversify our geographic reach and sevens us a a great growth vehicle to get closer to existing and new customers meantime even fast growing dtc companies that relied heavily on social media marketing have conceded that the model doesn't often work as the only way to sell remains to be seen if it helps but apple privacy and ad tracking helps doesn't help, but even without that, wholesale has always been a valuable channel for brand discovery with a lower cost of consumer acquisition back over to you >> courtney, thank you mike, wanted to end with a look at nasdaq because the stock is down, pressuring an etf >> yeah, i just noticed a lot of the asset managers and other exchanges are down with it like t rhowe price.

>> and this the result of the deal that is both cash and stock to buy what they say is a fast growing software company that was created between two companies. and now selling. and actually going to be ending up as a 15% owner of nasdaq shares after the deal closes >> market pretty expensive there. basically giving a sixth of the company's equity and nasdaq to tumble bravo and then paying almost $6 billion on top of. and so one way to think about the steep price. >> yeah, 31 times ebitda at least this year. and it will lever them up to 4.7 times. that can sometimes concern quk t see "sawonhetrt" is coming back right after this. e seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989!

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good monday morning. i'm dominic chu live from post nine of the new york stock exchange we have a huge hour ahead. and for that, let's me hand it over to sara eisen who is out just up the road here. we have a lot of power players what will happen >> reporter: good to see you yes, we will talk to ray dalio, founder of bridgewater, about