line with expectations it was the year-over-year core at 5.3% that had been anticipated. markets took off, erckity futures took off on that nasdaq up by 130, s&p up by 23 that does it for us today. make sure to join us tomorrow. right now it's time for "squawk on the street. good tuesday morning i'm carl quinn nia along with jim cramer and david faber futures are steady marketing baking in no hike from the fed tomorrow roadmap begins with inflation's downward path, cut by more than half since last year's peak, still 4% what are the implications for the fed? cloud revenues giving oracle a big boost.

shares were up yesterday in anticipation of the earnings they're up again ahead of the open this morning. ubs down grades apple saying it sees weaker demand ahead for iphones. >> jim, i know you love to look at internals thank you, energy, down 3.6. used cars up 4.4. >> used cars is not up to date the last few weeks used cars, the margin between used cars -- msrp is down, by the way, for new, has gapped. used cars have plummeted, maybe 5% which is not captured by this that's okay. you're looking forward that's a category that is a win for the fed. all i can say, david, i don't know if you've seen some of the notes on student loans maybe people just won't be able to go anywhere and won't bid up housing. right now toll brothers a

million dollars. by the way, it can go to 1.1. >> there is an expectation that rents are going to start a fairly significant decline >> i know but where is it coming from >> what do you mean when you say that, where is it coming from? >> we have whole regions of the country where there are bidding wars for rents the cleveland region >> yes, cleveland. >> one of the oddest region in the country. >> apparently millennials are moving to cleveland. >> because it's cheap. a little anecdotal but the fact is that that i don't have an answer for i don't have an answer for housing in general. >> you're talking about ownership. i'm talking about rentals. >> rentals is cpi. i'm hopeful on that one. we need to see more building but i just think that, if that's the last one, that's not bad >> as for yesterday's action, of

course the first 52-week high for the s&p in a year, after 360 trading days some reports on one of the fifth biggest short covering episodes in about four years, five years. >> we'll probably have a quarter of the s&p that will be at its 52-week high for the last two months after today those who keep saying it's a head fake, when does a head fake turn into a profit center? what do we play here for are we here to theorize or here to make money? i got to tell you, you make money by being lock stocks right here that's what happens. okay not ai >> is there a reason you're yelling at me? >> it's echoing through the building. >> yeah, i got my voice back i'm excited. >> usually you don't start yelling at me until like 9:20. >> i was waiting for you to say the ai is going to make us all -- 13th and 14th amendment

repeal because of machines right now people are making more money than i've seen in this market than about 12 years. >> you're benefiting if you own the s&p 500 index despite the fact that many components haven't gone up at all seven or eight of them are gone up enormously. >> a guy like wilson, he needs all 500 of the s&p 500 to go up before he is certain that the s&p 500 is to go up. that's called circular reason. >> jim is referring to morgan stanley's mike wilson. >> do you know how many stocks there are in the 500 >> hundreds. >> many hundred. >> he's poised to say, listen -- >> you're being very unfair to mike wilson. >> he just doesn't exist he's the chatgpt guy. >> you're of the belief as goad

man said earlier, there will be catchups of the other names. it will be more like 2020 where everybody else comes to join the party. >> yesterday we had so many good industrials that were up, so many solid industrials starting to get some transports that are up. >> so there was a bid of a broadening, that made you happy. >> health care, yes. new leadership at goldman. way ahead of myself. there is, without a doubt -- whoa. >> journal piece is spicy. >> that reminds me, we have seen pieces periodically that are long hype pieces don't you think that piece echoes other ceos -- >> david solomon joined sara eisen yesterday for an interview. there's been no shortage of speculation for a long time, none of which may end up being correct. i say look to the board of directors at goldman sachs and

see what their thoughts are about the leadership at this point. >> when you and lloyd talked about bio -- >> i don't think it's clear there will be any changes there. that said, i don't know. the jury room decided to write a pretty negative story. >> i think it's a long piece when you have those, you tend to have the blessing of higher-ups -- what the hell is that >> that's the journal. >> i'm sorry i read it online >> which is ironic because a lot of the financial commentary we've gotten this week, gorman in particular, talking about green shoots, more discussions with ceos. >> the stocks doubled on this guy. what's it have to do triple i don't like long nut pieces we all got together and let's flood the zone and just swarm them and i don't like that. it doesn't make sense to me. he seemed pretty reasonable in

sara's interview. >> very reasonable he's not particularly positive, though he may have been talking a bit negatively about commercial real estate being another leg that is not going to be great. >> like the sky last week in the city david doesn't understand i'm going to turn to you >> what don't i understand >> -- one of the great squeezes of all time. here is what's going on. we're about to have an ipo that is going to make it so that the ipo door, window, roof, blown off. it's from a place right down the block you can go it's like i can't get kaaba the food, but i can get kaaba the shares >> i got a comparison with sweet green. >> why is that not a valid comparison >> pot belly has a 330 calorie

sandwich. >> that's not that bad, that's something. >> that was three georgetown guys, hoyas. >> when it went public it was 21. >> put up chipotle you put up sweet cream, put up chipotle 2.8 million in fees if you're the cfo, you're saying these guys have mojo for sure. >> ipo, the commentary from the financials this week, you're not looking to fade anything here. >> look, we've had a pretty good run. if the fed says listen, we're worried about blah, blah, blah, i believe people will take profits. i have to tell you, i have to go back to '84, not even '99, but '84 where you see adobe goes up 20 and then goes up 10, amend

goes up 10 >> what was going up in '84 comparable to this >> we realized tech was a sector, and it wasn't just finance that mattered. >> what was it then? >> it was telco. you could have fast telc o. >> 1984 literally the breakup of the bells. >> i'm saying that was the beginning of when you could say, holy cow, i can make a lot of money in tech. >> speaking of making money in tech, watch oracle on track to open at a record today after a quarterly beat the company says a irchlt customers recently signed contracts to buy more than $2 billion in cloud capacity. larry ellison talked about nvidia last night. >> nvidia themselves are doing ai development in the oracle gen 2 cloud.

we or partnering with nvidia to build the world's largest high performance computer, an ai computer with 16,000 gpus. the extreme high performance and related cost savings of running generative ai workloads in our gen 2 cloud has made oracle the number one choice among cutting edge ai development companies. >> meanwhile, ellison, new heights for his personal wealth, in the top five for the first time. >> i love him. you're talking about 77% growth. you have to be carful because they bought cerner this is larry at his best last night. let's remember saf rah cats is incredibly strong, up 7. i don't know what that's all about. stock was up 108 last week one of the things i like about this, if you go back to the seminal speech by jensen huang

in taiwan, what does he talk about? he added oracle. everyone knew that microsoft was a player everyone knew that everyone knew that, but he added oracle oracle went up big when he added it oracle goes up big when ellison acknowledges that's called a bull market. you may think it's bull something else the fact is, david, if you bought oracle, say, at 110, you were up $13. in the business that we're in, that's called profit you can take it. >> we're actually not in that -- >> some people think we're in the yield curve business >> did you read the book on the yield curve? >> -- >> you do that and it's great. >> i'm saying one of the things that's missing is the recognition from these strategists.

david bloodless kostin and i love kostin. if he takes it to 4500, forget that look at the stocks look at the money being made in nvidia join me, join me when i go out and see people that bought nvidia. >> you're excited about the fact that you talked to people and they're millionaires you should be. that's a great confirmation of what you do. >> cnbc was predicated on the idea of maybe helping people make millions, not predicated on the idea that how rich act man is good for him a lot of oracle will now have nothing -- saphra katz doesn't come on tv and talk her books, larry doesn't come on tv he's so competitive. i love him. >> it's working well for him -- >> ever been --

>> i've never been he's benefiting from his significant holdings of tesla as well i think he has about a 1.5% ownership stake in that company, and that continues to rise. >> he's so competitive do you see where he says listen, you get double which means it only costs half -- one of the analysts says, no, i don't think that's right i think your math is wrong i think ellison killed him at the end of the call. i do he got him killed >> called out a hit? >> you don't core recollect larry ellison on his call. >> you know who is more scared in the world about what happened in the world with chatgpt that i've met >> david david has concerns. >> david doesn't want to split the at tom >> oppenheimer was still worried. there was a little chance they could blow up the world. this is a greater chance far greater chance. >> my father was in the sixth army, he would have a real shot.

>> here you've got so many originators of the technology very concerned about what it will mean for humanity i don't think i'm going out on a limb to say it's something we need to be concerned about the more concerned we are, the less chance there is -- >> you're right and i'm looking at tree house foods. it's on fire look at the demographic. >> do you think we're overlooking the benefits we're not emphasizing enough the advances we'll get in medicine and education? >> we may not be. >> we were at a dinner last night where a lot of discussion or some around the benefits in medicine in particular, what this is going to mean. >> no one has any actual -- and then we found the vagus nerve and were able to -- >> carl, there's a lot of concern about what it will mean for the upcoming election and what you're going to be able to do in terms of manipulating

voice and video where people is not going to be able to tell the difference between post and fiction. >> that was the biggest worry last night good dinner. a lot of good thoughts the fact s i think a lot of people are trying to figure out what grade the gtp is, third grade. >> maybe reading at a third grade level. getting 10% better every day, something crazy like that. >> who gets 10% better every day? even schwarzenegger. when we come back, we mentioned apple and the record closing high today a downgrade at ubs >> tree house just went two bucks. >> market celebrating the cpi print. 11 months of slowing year-on-year growth. that's the longest since 1921. back in a moment old school hard work meets bold new thinking. ♪♪ partnering to unlock new ideas,

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apple is in focus a day after hitting the record high, a week after unveiling the vision pro reality headset. softer iphone and services growth premium valuation. although they do raise the target ten bucks. >> when you raise your price target and downgrade, that's grasping for strauss i do like the evidence lab i think it's like the csi of wall street. we know that service numbers are up, not down we know that some of the less

involved countries are ordering to the point where this -- i felt that this piece was not in sync with what i'm getting from apple. >> right >> i don't know where they got their stuff. >> what are you getting from apple? >> service revenue is really strong you're beginning to see -- along with china, you're seeing numbers that are meaningful. i think you can build a trajectory that says you're i ill-advised to sell it here. it's a stock that's been a winner because the company has been very efficient, done a lot of things right and has the right products at the right time vision pro, those that laugh at the $3,500 price wait until t-mobile combines that and you get that because verizon and at&t don't have the cash flow to be able to offer it the why that mike seiber can at t-mobile that's what's going to happen. >> you think so? it's so expensive. >> you get a big discount, do a

buy now/pay later through apple. >> you mentioned the impact of student loans. >> that's going to be an issue. >> ubs does cite some purchase intent surveys that are down a bit from six months ago. >> they may do the intense survey the numbers that i'm looking at are how the company is doing look, the student loan, i had a couple of things that i'm looking at this morning, student loans are real it's going to put a real crimp on spend people i think are going to be surprised, david, at how much they really do, oh, they won't be going out david, 50% of the people -- >> that doesn't mean they'll go out and spend $3,500 on a headset. >> it's going to be subsidized by t-mobile. go in now, $80 or $90 for the

iks max pro. >> for the phone. >> for the phone then buy now/pay later, and it's done that's what i think they're going to do. >> okay. >> david, homework there. >> i believe you i listen to you -- >> you want seven ways to take block better >> stop going through the list close the list >> student loans, $6 billion monthly burden. >> you've got to be in the club to read the list. >> that's for club members only. >> i'm getting sofi numbers. they're good remember when everyone said anthony noda was going to have to do an equity offering the stock is now double. i'm talking about a market where we have to remember after a very prolonged period when nobody was making money, now people are making money we'll have new viewers that come in and we can bore them with the yield curve. i'm happy to do that.

>> we'll graduate from fretting about the fed and the rates to watching for signs of exuberance. >> yes, that's exactly right cava is going to double -- >> cab va is going to be the key to the market. the flood gates are going to open because of the cava ipo. >> yes, it's going to open at twice what it's priced at, price it at 23 fidelity will get 5 million shares they'll get another 500,000 at the opening and have a great average. david, that's where we are in life >> speaking of the open, we'll get today's open in a moment unowl get cramer's mad dash and cotdn to the bell. don't go anywhere. [office sounds]

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take a look at nasdaq 100 gainers. intel at the top, almost back to 35 there's adobe, amd jd, gives us a look at what we're in for a cooler cpi and fed decision tomorrow opening bell in a couple moments. listen and follow the opening bell podcast

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let's get a "mad dash" in before we bring you an opening bell two minutes from now. always good to talk about chips. intel is certainly a lagarde or has been for quite some time >> carl was talking about what can you fade, will everything go up intel, the scuttlebutt here is it's reportedly in talks to be an anchor investor in an arms upcoming ipo which is softbank that's the kind of story that is meaningless. an anchor investorinvestor

what is an anchor investor some sort of mole? like niemann no this is meaningless. if the stock is up on this, i find that kind of gain is as bad as multiple expansion. anchor investor. you don't need an anchor investor in this market after cava. >> arm is going to come towards the end of the summer that's going to be a much more important barometer -- >> arm is a large company selling a lot of stock. >> it's a great company. it does not need intel as an anchor investor. intel is up on that? what is that >> i don't know. >> a lot of plans to spend a lot of money building foundries all over the united states they've got that. >> they've got the government on their side for certain i think that's not what you should be buying the stock on, that they might be and might not be an anchor investor.

it might come soon, might not come soon. buy softbank for -- intel for a good software company and a better chip company. intel -- [ bell chimes ]. >> celebrating 75 years. at the nasdaq, confluent, data streaming. >> confluent is doing so well. this is what's happening in this market these are companies that are doing well. >> 4360 almost here, jim there were some notes yesterday looking at -- i think evercore call it a mountain in markets. >> the two-year yesterday, 5.4 if you had fidelity, getting 4.8 in your cash reserve and feeling

really good. then you look at this and you say, you mean to tell me intel can claim it's an anchor tenant in a mall and the stock goes up big? people don't understand, in our business, this market has become i own nvidia and i've made a million dollars. the only thing you can tell them is, no, you haven't made it until you take it. we have to start getting what is the zeitgeist of our average viewer, which is i just made a lot of money if i take profits because i own stocks rather than owning the two-year. the two-year, david, is a -- it's a false god >> really? i think a lot of people feel quite comfortable earning 4.26, something like that. why not? >> your friend got into apple in january and up 40%. >> supposed to trade apple, supposed to fade apple people don't understand we're in

a bull market. it's called a bull market. >> man, you are getting bulled up in a way that i don't remember in a while. >> i've been like this for a while. i think intel is going to be down today i respect the fact that apple is down. >> you're getting excited. >> i've been excited i'm trying to get other people to realize what's happened. >> some days you are excited, other days you're not. >> it depends on celsius, frankly. it's the celsius. >> how much celsius -- >> i had one celsius i tell you one thing a bunch of interesting calls, netflix, bofa goes from 410 to 40. >> i see you at 490 and go to 550. that's like guys saying, oh, i like this. we'll have a couple netflix tomorrow and a couple tesla tomorrow. >> that's all about password sharing. >> name me something new on netflix worth watching that's a problem

writers strike. >> writers strike is going to start to bite. >> how about the journal piece on some live sports, even though this is not a true league event. >> crash me. >> it does speak to the streaming services and their participation in live sports and the leagues that many people do care about, the nfl, the nba again, i come back to the nba rights i think that's going to be very interesting to writes. >> how about the mls rights for apple. >> you love talking about that. >> miami got a good player -- >> the messi deal was fascinating. >> although denver got the nba title. >> first time. >> congratulations, by the way >> we have a list of companies >> there you go. >> a lits of companies >> there's a list of companies they just posted -- >> oh, they put them up.

>> sometimes i like to keep an eye on what people are watching. >> it's going to be interesting to see who ends up with the nba rights amazon might compete netflix not thought to be competitive there. will news in sports migrate to streaming in a significant well. the bundle is completely done. >> how about this stock that seems to react to nothing, disney. >> how about it? >> i don't know. what's it reacting to? >> i don't know. it's up. >> marginally. >> yeah. >> i'm saying they have a lot of streaming content. >> they do they do. what it will react to is frankly the ability to deliver more cash flow, the same way warner brothers and discovery will react to that, the same as paramount. investors are looking at how much can you save, how much can you deliver to the bottom line across the board because it's such a competitive industry. >> as for your soccer

fasci fascination -- >> qatar, nice play. that was unbelievable. >> the father treats something and the team says, no. >> talking about home depot. this is a good example home depot came out and said everything we said last time which you know we didn't like, we're repeating again, and now you like it. bull market. david i don't like that this is happening, but i like people making money >> right >> that's good it matters do you live ambitiously at all >> do i live am bip showsly? >> he has to he's being paid to live ambitiously. >> you live complacently >> really? >> that would be a great ad campaign with faber, live complacently. >> it worked out well for me i don't know what your problem is i'm going back to bed. >> i'm going to give david a

softball activism blizzard, win-win. >> activision blizzard win-win buy here either it gets taken out at a price above 95, or your point is if the deal were to not happen you get a huge reverse break fee and you think they're well positioned. >> who have i not mentioned so far in the show? >> jensen huang. >> yes >> we're in faeb are report territory. >> midway through his incredible keynote, he talks about the new cashingers and what they'll look like a refresh cycle that activision blizzard -- >> diablo has done well -- diablo 4 is doing well in the early going. let me explain what's going on to the extent we can we'll do it again. a double faber report with microsoft and activision yesterday, of course, we had this news. it has been followed by the complaint from the ftc saying we are getting a temporary restraining order to prevent you, microsoft, from the

possibility you would try to close this deal before you received approval from us or before you went to court to battle us. by the way, not that this matters to the ftc or at least you wouldn't think before you got a ruling from the appeals tribunal in the uk why do we think this i don't know why they think this somehow they believe that they were hearing these guys might -- in fact, they were even told by them, represented that you might try to close it by june 15th so we're not going to let you do that we put out -- we've gone to a federal judge to get a temporary restraining order. then we obviously want as well to go to trial to get a preliminary injunction against you being able to close this deal this will end up in federal court not until september most likely, it appears but it does give us some better sense of the timeline here you do wonder whether it was just a big fake-out from microsoft trying to sort of bait the ftc into doing this.

it is helpful in a way, sort of clarifying the timeline. you know you're going to federal court, although you still have to go in front of the administrative law judge beginning in early august. you have to see how that goes with the ftc and then i'll come back to the more important appeals process which is under way in the uk that will also take place most likely we're talking july 24th to august 4th. they'll have the hearing there in front of the appeals tribunal in the uk. there are many who believe they're not going to succeed there and ultimately this deal will still not make it to the finish line because microsoft will be unable to win on appeal in front of the tribunal to appeal that judgment from the cma and the uk despite what's been significant political pressure that's been brought to bear on the cma. you had the prime minister talking about wanting to be pro business and the others with the

view that the cma is not being pro business what does this mean? they're focused on the fact that you'll have to extend the merger agreement. it expires on july 18th. that's the outside walk date by the way, as i reported from what i'm hearing based on people's conversations with bobby co-deck, the ceo of activision, he seems to be making clear, not directly to me, he's very happy with the idea of microsoft owning this company. he's not going to somehow walk away from the deal, but he will look to extend it with the hope that he will be successful in seeing it brought to fruition in terms of a sale. that will mean microsoft right now is probably beginning or in the midst of a negotiation to extend the merger agreement which means how? paying more money, paying some sort of a special dividend, perhaps, of significance to activision shareholders? you wouldn't need to, therefore, refile the merger agreement. so that would be helpful, increase the reverse termination

fee. there are any number of different things that have to be thought about when it comes to what they'll be willing to do to extend the merger agreement. jim, to your point, there's a view that activision is worth a lot more now than it was when they first announced this deal back on january 18th of 2022 and, therefore, microsoft will have to pay more to extend the merger agreement, probably until march, one would think, until next year when you can imagine all the litigation being resolved. >> tremendous scarcity value when you go back to strat strauss said on the call, gave two-year guidance. that has a lot to do with what nvidia is doing. >> even if you put an ea multiple on it, many say -- they would argue you need ten bucks more shareholders arguing that. >> sensational situation, sensational. it really is

>> meanwhile microsoft, of course, its own shareholders care a lot more about chatgpt and what that's going to mean for the company than they ever care about whether they'll succeed or not in buying activision it's kind of a rounding error given the amount of the accreted market cap >> it's interesting, larry ellison said very damning things about competitors. you can argue that what larry is saying is look out, microsoft, and yet people don't care. again, i think that's difficult. you should be caring larry ellison is gunning for your clients he's one of the most competitive people on earth. it should matter in the last bull market microsoft would have been down today off what larry said, mr. ellison. >> we really are -- is any of this cpi related, this rally today, jim >> we got it out of the way. >> it wasn't a great number.

>> all sectors are green except for utilities, jim, led by energy a day after goldman cut their forecast, they go down to 86 for year end. >> i would fade that we're exporting a great deal, but the russians are going crazy, they're pumping like mad to finance the counteroffensive. >> to finance the defense against the counteroffensive >> true. i do think the prices will come back down. i think they reflect the endless nonsense out of the prc about the stimulus >> nonsense in what sense? >> there's not much they can do. they've got a stagnant population they've overbuilt. what will they do? give each person $25 off an iphone what's left? give them free starbucks what do the chinese have left in their more abundant economy? >> i would not underestimate the ability of the chinese to figure

something out. >> just, like, confiscate from some and give to others? >> they cut some reverse repo and the overnight so far there's talk about some bigger package they could unveil in the next couple weeks. >> they could. speaking of the -- there isn't anyone i know that's thinking about expanding in china i don't know any companies. >> how about this piece today that says all kind of industries are starting to create products that are ex-china, whether that's services, components, goods. >> the reshoring move in this country is real. there are -- there's a trillion dollars that is meant basically to take business out of taiwan, out of china, put it in arizona and cleveland. >> and move as quickly as you can, because we cannot have our advanced manufacturing of chips beholding to taiwan, simple as that that just can't be the case. it's going to take years, jim,

years. you can't build these things overnight. >> true, but it took years to -- remember we had the 18th largest armed forces in the world in 1938. >> it also took years for this to happen. 20 years ago, 25, we were dominant provider of chips and actual manufacturing >> japan is back to where it was in 1990. we're seeing a lot of changes in world economies that are not good for china a year ago we would sit here and talk about how the chinese have us nine ways to sunday we're not hearing that anymore you talked with musk musk is still basking in the glow >> musk like nike, like starbucks, like apple, they're deep in. you can't get out. >> give me one more company that's deep in because there aren't any that same list, that same list including the pathetic parody --

my charitable trust owns -- i'm very upset about that. >> got the alt upgrade. >> that's good a lot of people hate target. >> loop goes to buy, 520. >> walmart, 52-week high. >> i thought the ulta call, the stocks traded down the last quarter. elf is a good proxy and they're doing well it's funny because the other company that didn't have a good quarter, really awful quarter, foot locker. when mary dillon took over ulta, she created it after the first quarter and there was no looking back she created foot locker but no one believes, no one believes. >> you think it's a habit? >> i believe in mary dillon. i think she's an amazing executive, and i'm not going to give up on her so easily. >> okay.

it's great, but you have to crater first that's not good. most people would prefer to do without the crater >> jokic was asked last night in the postgame how he did it first you have to get bad, then you get good then you fail when you're good and then you figure it out. >> i love that he said we came and did what we had to do. >> it's worked for him. >> come on, man. cheer up he's happy >> doesn't care about stats. tesla, jim, going for 13 straight there was some interesting headlines today about new battery plants in indiana on the gm front we've already talked about the charging network completely consolidating. >> we need the rare earth, need the metals which mp materials is making. >> didn't joan news put out -- >> he had legendary -- >> tesla is above $800 billion

there's one of the jonas notes in terms of using -- providing financing. >> devin is up because of that goldman call it was really the least rigorous call i've seen in a long time. if you're buying devin, you better know of a takeover which i do not dimaggio, 56-win game streak >> 56 straight maybe we'll start with 13. >> he's going foe dimaggio. >> if anyone can do it, it will be musk. >> i was at a dinner last night, every one of them watched david's interview, chapter and verse. >> it's very gratifying that that has been well received.

>> self-serving for each other. >> we're a team. >> you were ambitious on that. >> i was not complacent. but afterwards, then i was complacent. >> back to complacent. >> i can sit back now for a long time. >> a pallet of celsius coming your way, partner. as we go to break, watch bonds today. two-year down to 4.5. >> i stayed out of this market because of the ten-year. >> there it is yields, although 30 year back to 3.9. we hit an intraday high today so far of 4,373 we're back in a minute

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we'll talk about it all day and get stop trading with jim after a break.

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the difference between companies doing well and stocks go up and companies where

they're staying in research. first horizon, it's a very good bank, supposed to be bought by td, brian jordan, a note today, saying listen, headwinds, regional banks are not doing well, i don't know why that stock is up. be careful you should be buying stocks where the research is positive, not negative i don't think the research for home depot is all that good and i like home depot. >> right. >> let's not get too excite the about things that are -- >> in the interview with becky he wouldn't quantify shrink where as, obviously, target has done that. >> that hurt target. >> becky pushed him, and he wouldn't tell us >> oracle is up big yesterday. why shouldn't it be up big today. there are things that have happened and i like oracle. >> what are you going to get tonight? >> david, hold your ears go like this, david. >> earmuffs. >> kava. i'm going to explain why you must be some cava, put limit

orders in if our viewers can get cava from brokers they should do it these are the old days these are the good old days. she was something. >> these are the oldgood old da. >> carley simen. >> >> let's -- you know, like walgreens, the negative, don't buy walgreens, buy things that are good used car information is so much better people don't like carmax. >> huge influence on the monthly print along with aparls was 0.3. shelter 0.6. as you tweeted that's got to come down. >> tjx having sales on apparel target is having sales on apparel. they do good work on the numbers. everyone i see has sales on apparel except lululemon. >> we know where inventories are. you can game out -

>> exactly. >> i don't think these are bad numbers. we're going in the right direction. >> don't buy companies whose numbers are being cut right now. that doesn't make sense. >> jim, we'll see you tonight on "mad money." s&p 4370 at the open that's going to take your year to date game to about 14% on the p.t a n'gonywhere. w thinking, ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪

good tuesday morning welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber live for you at post nine of the new york stock exchange. stockshigher again today following the big cpi inflation report 4% higher than last year and that was enough of a moderation to keep the markets in a good mood the s&p up for a fourth day in a he row, half a percent tech is again leading the nasdaq up 0.3%. nasdaq 100 hoas been outperforming. the 2-year note yield is lower three movers we're watching, oracle, touching a new all-time high after the company beat on the top and bottom lines more on that quarter in just a moment apple gets a downgrade ubs moving its rating to neutral

from buy citing continued pressure for iphone demand and then home depot holding an investor at the nyse reiterating earnings decline projections for the fiscal year of 2024 of 7 to 13%. remember that was a big disappointment the last quarter and the stock moving a little bit higher i think we should pull apart cpi a little bit because this was the big report to watch and it's rare that we get it on day one of a fed meeting here we go the bottom line is, if you look at expectations for a hike today, they call it below 10%. it was seen as good enough to let the fed do its skip thing which is really where the market consensus is right now 4% prices rising from last year. it's still high but lower than expected and shows signs of progress two things to pull out, there's core cpi which strips out more volatile food and energy and still had a 0.4% rise from last

month and rising about 5.3% from last year. its moderation from when he got the prior month good but still too high and seen as problematic by the fed and the policy sensitive services inflation excluding housing, the super core that we know the fed and powell has mentioned and been looking at, increasing 4.6% from a year ago again, progress, but higher than where we need to be which is why the market is 50% odds of a july hike and that's the skip thing we started talking about here weeks ago but that is what the market thinks is going to happen the damage that's been done, wait it out, see what's happening in commercial real estate and in credit markets and continue to monitor -- >> another cpi report between now and then. >> sure. >> employment report and everything else. yeah. >> one thing that hasn't happened is the labor market really has not broken. i just did a discussion with a bunch of cfos and, you know, not one of them, i said raise your

hand if you think the fed should continue raising rates not just tomorrow but in the future not one raised their hands they're saying their business conditions declined whether manufacturing or retail, except for maybe the travel sector. but raise your hand if you're finding it easier to get workers, nobody raised their hand either. so there's still a tightening -- >> demand destruction or at least -- but at the same time the employment levels are not seeing that. >> it's not broken we still have a shortage of workers for availability there are bigger problems like congress can't do immigration and we could solve that kind of issue, but until then, i think the fed is going to look at it and worry about wage inflation because you have to pay up to get workers until they reach some sort of higher rate where they can brush demand so much that people aren't hiring. doesn't feel like we've reached that level, talking to some of these business leaders. >> you're going to wait for

congress to do immigration reform, you may be waiting a long time. >>it's a good number for bonds bonds get bought dollar weakening all that jives with the fact that they can take a pause or skip here and sort of monitor the situation and continue from here i was talking to ray dal leo yesterday, founder of bridgewater, about the prospect for bonds, he's been warning of this debt crisis and we really went deep on this. his big concern is not that we're going to not be able to pay our bills, it's that there won't be demand for treasury, there's this confluence of factors happening where we've monetized all the debt, we're in an inflationary period and china and other geopolitical concerns are not going to be willing to buy our debt, and he says that makes for a risky prospect when it comes it treasuries listen. >> we're going to have a debt problem and the question is, how quickly and does it evolve in

the way i described, debt service payments or rollovers. >> do you see the u.s. treasury bond as a risky investment right now? >> a what? >> risky investment? >> yes i think it's a very risky investment. >> very risky investment. i pushed him on what do you do he's been making warnings we're in a longer debt crisis, we're on the brink of economic war with china some of these bearish, longer term predictions he thinks over periods of years but getting him to say what do you do, actually he thinks equities would be safer in that kind of environment because you get a big devaluation and that can help stocks. >> also, his long-standing thesis has been the next election cycle on the presidential front, may not be widely accepted, which adds to his risk of thesis about sovereign debt, u.s. sovereign debt. >> one of the other factors he says that happened in history and we're in another one of these periods is just for rising inequality, rising social tensions and political instability he uses words like

civil war and says every -- he connects the dots. everything out of this the trump indictment, january 6th, it's all dots in the bigger picture of where, unfortunately, we're headed which is internal disruption of the political order, internal and external when it comes to the confrontation with china. >> but the recommendation is buy stocks, sell treasuries. >> that was. and gold he said 15 to 20% of his portfolio is in gold against this sort of debt crisis scenario. >> a high allocation, doing well today. meantime cnbc has a new fed survey ahead of tomorrow's decision respondents feeling bearish on equities st. steve liesman has the results. good morning. >> good morning, carl. amid concerns about tighter banking standards and still high inflation and, of course, a prediction for recession, respondent to the cnbc fed survey think the market could be in for a sell-off before a bounceback next year the average year end s&p call among the 33 respondents is for

4075, 6% below yesterday's close. the s&p bouncing back next year to 4456, a 2.5% gain from current levels respondents who included economists, strategists and fund managers see the market overpriced relative to earrings and economic growth. 71% say equities are somewhat or extremely high and 26% say they are about right. notice nobody saying they're cheap. douglas gordon writing having navigated the debt ceiling and near term banking sector risk capital markets should pivot to recession risks as a result of the risk-reward we have deployed an initial tranche of underweighing assets a plurality are excited about artificial intelligence. 48% say it's a real development that promises significant returns and important changes to the economy. 33% say it's too soon to tell. 9% call it hype and a bubble downbeat news on stocks with

forecasts that fed will pause and is, in fact, done for the year this forecast at odds with where the market is priced and 63% see no change in july. the market has a 66% probability of a hike. 34% agree with that from our survey, though then you can see all the white there is no change at all. 81, 84, and then 71 in december with 26% a minority saying that there may be a cut on the way. as for this meeting, 91% see a pause. but they think the fed is on hold for nearly eight months no more hikes, but no cuts in the forecast in this survey either, sara. >> it will be interesting, steve, to hear how powell frames f they do, in fact, pause and dot skip thing, frames the view forward because a lot of people think that with still a number of regional fed presidents -- you've talked to some of them in recent weeks -- wanting to hike at this meeting, the compromises he has to sound hawkish.

>> yeah. and i think the semantics will matter a lot because we've been kind of making fun of this, but it's kind of serious like a skip means you're going to come back and do it again a pause means you're probably going to hang and not hike for a couple meetings and i'll give you tgive you the tale of the tape here which is july is 63% it's down 10 percentage points or so or 8 percentage points from before the cpi report overall this is being seen as a dovish report. as you said, still too high. the fed is going to have to address this and now the question is whether or not powell and company are satisfied that what they've done so far is enough to address it. >> still too high is the key and waiting for the next shoe to drop, right, the next thing to break on those long and variable lags steve, thank you steve liesman. let's continue the conversation with apollo global management chief economist

torsston shock and citigroup strategist scott crowner the biggest surprise is the market and the resilience we've seen and the newfound enthusiasm for the market what do you chalk it up to, as someone who is not expecting this to happen, right? >> i think we've got the euphoria around a.i., that's driven the growth component of the market, whether the nasdaq components or whether it's our broader growth cluster you're looking at a 30, 33% gain year to date this is relative to the cyclical side of the market which is down a percent. defensive down 4 to 5% this is not a broader market move this is a very narrow move, if you will, from that perspective, predicated on long-term promise. our concern is the long-term promise isn't yet showing up in the fundamentals it will take some time for that to happen. we think it will happen, but between here and there, we think we're probably setting up for a digestion phase. >> it is broad in the month of june materials are up 7.5%. energy up 7% industrials are up

in recent days and weeks. >> right. >> it's broadened out. >> when you begin to get news like today on the cpi front at the margin, it takes some of the pressure off of this fed expected trajectory, takes some of the recession risk off. i think actually it sets up for release higher for the cyclical side of the market where we want to position at new money at this point. >> torston, what do you expect the fed to do and how do you think that will shape expectations for the market? >> said it very well, sara they are not done. call inflation was higher than expected and at 5% on core cpi rates are trading after the number, the gut reslun to say okay, inflation on the headline was lower than expected because energy prices year over year definitely coming down, but if you look at the core components, super core was better but the bottom line the housing market housing makes up 40% of the cpi

basket green light everything is fine housing goes up again, we run the risk 40% of the basket is not going to come down but a risk of going up and that raises the risk we're not going down to 2% there's a lot of things f we get a relief rally, not only markets but in the economy everyone saying everything is fine, that is a major problem for the fed because that's going to put more upward pressure on inflation and at these levels around 5%, it that is too elevated. >> i don't get why they're not hiking tomorrow and why the market is convinced of this. that's probably why the market is convinced but you could have an argument that pce came in stronger than expected we're at too high inflation levels they're supposed to be targeting inflation and yes, while there are signs of weakness in demand, and the economy, the labor market hasn't broken and regional banks up 20% from the year to date lows. why not keep going >> absolutely. absolutely as you can see in the fomc

speeches there's an important debate some members, lori logan and messer in, everything you've listed we have to keep going we're 5% away from the 2% market others and jay powell probably falls in the camp take a break, or a skip, and figure out what's going on the market is certainly under estimating in my view the risks that rates will stay higher for longer the market is pricing a cut in november but all fomc members even the three i mentioned them all, everyone is here saying well we are at least going to keep rates at these levels well into next year you're right it depends on when you put this on the scale, what gets the most weight and different individuals have different views on that where we sit at the moment i agree the risks at the moment are tilted more towards higher for longer. >> scott, what does that mean if you believe that to be the case as well? >> i mean it's a scenario we're assuming so the citi view is two

more 25 basis points hikes june and july or out, it's still out there. the way i think of it, the transfer mechanism, it has to come back to fundamentals. the earnings picture hasn't improved improved materially from here. so we entered the year 213 of s&p earnings, we bump it up to 215, that's relative to the move we've had in the nasdaq and s&p, i don't see it go materially higher the second half is going to be a function of a couple of moving parts. yes, you're going to have an easier compare on currency, which is going to be good relative to dollar affects a year ago er lower input costs earnings picture steady as she goes, the better opportunity for earnings improvements later into 24. >> this morning you had reasons why the economy has ended up being more resilient and among them, you list high yield and investment grade corporates like extending duration, battle, getting their battle stations

ready for whatever recession may come that's going to be part of it, suspect it >> it absolutely this is an important argument. during the pandemic, companies were told extend maturity of your debt so you're not sensitive once interest rates go up and now the fed trying to cool the economy down, because you're not sensitive we have to keep rates higher for longer the whole goal whiz -- with raising rates is to slow down consumption, hiring, and earnings with companies having locked in low levels of yields far in the future, fixed rate payments, therefore, not being sensitive to interest rate hikes, it actually gets more complicated to your point for the fed to really try to achieve the goal of cooling the economy down. >> prices are still up 13%. i always check that first as a good indicator i always get hate mail from still buying white bread.

>> let's unhealthy. >> there's no nutrition whatsoever stop buying white bread. >> up 11%. >> eggs down 13. we'll take that. >> meat, bacon, pork prices down a lot. i'm not buying a lot of it, but food is still a mixed bag. higher away from home in this report than at home. that's shifted a little bit. thank you. it was a good session. scott and torston. head to break, our road map for the rest of the hour tech on a tear, number of names hitting new ighs, oracle, how to play the space from here. >> if you are hunting for yield, where to find income in this market. >> and amd taking on nvidia, set to unveil details on its new thi. chip, what that means for bo companies when "squawk on the street" continues. don't go anywhere. 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.

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this is a critical new moment in technology it's -- these come along every now and then and every company needs to reevaluate including salesforce, what i'm doing every company. what are the hy doing to take advantage of this technology to make their companies more productive >> salesforce's marc benioff last night the nasdaq on pace for the best first half since 1991. leading this morning is oracle jumping as it beats on the top and bottom line, cloud services revenue surging, quarterly guidance above estimates joining us jeffreys can talk

about it, a target and buy rating on oracle great to see you i've seen one note that asks, is oracle thenext gen a.i. winner train leaving the station. what do you think? >> they are definitely one of the trains but they're not the fastest train. it's going to be microsoft, google, amazon. if they're getting $2 billion of a.i. investment, the others are seeing multiple times the size of that. so oracle is in a really good spot we've covered this company over two decades. there's to question that they've got their act together on a go to market as well as the technology side. remember, there are multiple years late to the others that are ahead of them. microsoft is like 40 laps ahead. when you think about the size of their business in cloud versus aws or microsoft, i mean, it's not even -- it's not even a fair comparison. >> right. >> yes, look, oracle has their act together

they're doing well we think the stock grinds higher first time i've had a buy on the stock for five years nothing to takeaway. great job, they're engaged but not where the others are at. my point would be if we're seeing what we're seeing out of oracle in this tide lifts all boat, the boats are way better - >> aren't clients asking you to add some names to at least to this point is a narrow bucket in this school? i wonder are you -- >> absolutely. >> having trouble to find names -- >> no. >> on the list >> no. oracle is a great example. the buy side not there on that one. adobe two weeks ago, everyone thought they were roadkill from a.i., and we did a demo of their firefly product and the stock has jumped in the last two weeks. adobe was off the radar. we think there are other names on the list. no question that we're finding

some of these names. i would caution when you have thecues up 35% year to date, everyone is in, our tech traders said this morning in terms of prime brokerage overweights on tech are screening kind of record year highs. so everyone is there and that's the concern we have in the short term is that can this continue. microsoft last night put out a video from their cfo saying hey, be braced. look this isn't going to be cheap. so i think we're getting set up for revenue is going to be good, but, pens a-- but expenses are going to be high in the a.i. wave, require capex, it's not going to be cheap. just be braced and again most of the revenue still has yet to hit for software it will happen in the back half of this year into '24. short testimony, i think there's a little bit of concern from our desk that this may be a little bit overhyped. no one wants to give up over the

next two years everyone is long similar to what happened in the internet wave, the cloud wave, no reason to get super cute with this you still want to be exposed to these names. >> you want own the biggest names who have the most fire power and can afford the huge capex upgrade you're talking about? >> correct it's a.i. winners are simple, those with users and the data, and that's amazon, google, microsoft. you stay with the big ones they're going to be -- there are going to be very few a.i. winners that benefit our semiconductor analyst has loved nvidia for a long time and tons believe in that story there's a number of other names that our tech team follows that we believe in, in other sectors, but the number of names that really benefit is going to be narrower than we think and they will take share because of the cost and investment they have to put in in our view microsoft you still

the best position story given the openai partnership and the investment they've made. >> you didn't list salesforce. interestingly, crm is down today. after the a.i. day, are you not convinced on the montization or what >> again, i think -- we like atmospheres. t -- salesforce this is no doubt a recovery story on margin. from a perspective of a.i., there have been multiple attempts at this with einstein, genie, a number of these solutions and i think ultimately they'll come the pricing model still has to play out it's to the really going to to have a direct impact their starter kit was $360,000 there are not that many companies that can afford a starter kit at 360 this is for the larger enterprises. it's going to take time. we believe in the salesforce story, but we believe more in the margin upside than massive revenue upside from a.i. in the short term there's no question they

benefit. we have a salesforce.com system at jefferies and we would like the system to do more work for us, instead of us putting more time and data into the system. we as users would like this and think we'll see it but it better stories benefitting more short term salesforce will benefit. i don't think it's because of a.i. but other factors we like the story. >> that's good pretty candid and frank stuff there. appreciate it very much on big names. >> thank you. >> we'll see you next time as we head to a break, let's give you two stocks to keep an eye on in the auto sector tesla would be if it ends today up a 13th straight day of gains for that stock the company now has a market value that does exceed $800 billion. also check out shares of toyota. that company announcing plans to roll out a full lineup of next generation battery evs in 2026

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we're looking at potential sale of green sky. i don't have an update at this point. that's where our focus has been. we announced we were removing the market loans we had our balance sheet and we've done that successfully. we've narrowed the focus and making progress. as i've amplified every time i've asked a small portion of the firm a drag. >> a lot of investigator questions or media >> it's media. the questions come from the media. it's appropriate people want to understand everything we're doing across our business. >> that was goldman sachs ceo david solomon yesterday at this hour we sat down in new york and covered a wide range of topics including the company's reach into the consumer business that struggled. that was the sound bite there. "the wall street journal" out with a piece this morning on the turmoil within goldman partners there running goldman's consumer business telling solomon they weren't sure it was a good idea to fire greensky among the gripes i would say that are documented, david, in

this piece, which, you know, in a way it's nothing new because we've heard this before, but i think reflects partner grumbling, right, about what's happening and the unique partner structure of goldman makes it somewhat news worthy i'm told there hasn't been any more partner churn than normal at goldman it's a difficult time for the investment bank and he's making changes people aren't happy with. >> he does attract a good amount of criticism, perhaps -- i can't say whether it's more than is warranted but it comes up a lot. and then questions about whether he will remain in the job. you know, then when i check on it, the board. i mean the board is not -- >> the stock has outperformed since he's taken over. >> it hasn't outperformed morgan stanley and that ends up being an issue, i think. you're right. >> jpmorgan -- >> the stock performance has not been back. they've gotten heat for marcus,

should not be left at his door it was his predecessor but it continues and it's interesting the "journal" chose to write the story when they did. >> one reason we didn't get into it yesterday the criticism has died down. people have been quiet about everything and that's why i thought it was telling he said media asking the questions more than the investors on the consumer business, that it's been sort of this media story, and i'm sure there's a lot of people inside goldman sachs talking, but again, the results if you look at the stock and the performance, now i do think that there's some reasons for caution, for instance, solomon talked to me about commercial real estate and the exposure there yesterday which i think was pretty new and that he said there's going to be a little bit of pain. listen to what he said on real estate. >> constrains lending and so, you know, given that people have, you know, these assets on lending balance sheets and when

you look at the regional mid-sized banking system, 65% of commercial lending falls into the regional mid sized banking system and in this environment that will constrain more additional lending and makes capital more attractive and crowds out, you know, some economic activity and that's just something that we're going to have to work through and probable be some bumps and pain along the way for a number of participants. >> that was actually him talking about regional banks and the credit pressures there when i asked about that. more specific to goldman, what he said, there's some exposure there was an article over the weekend about them being exposed in various areas through the equity investments, through lending investments, to commercial real estate in particular, and that investors should expect a little bumps and bruises there on the quarter that i thought was notable but again, has to do with the performance of the firm and the business, not as much as other stuff. >> no. listen, he and john wahl number two at the firm, they're both

not particularly positive near testimony. i mean it's hard to be when the capital markets have not been open jim was talking about the cava ip ipo opening the market. >> he did say there could be green chutes m&a also these are two important revenue sources for the company and have been shot to some extent. >> which is why we didn't rule out further head count reduction in the business. it's tough there are green chutes and expects recovery in 2024. >> their big case they've been making for some time to investors is that we need to be getting a higher multiple because we have an alternative asset manager that doesn't get what it deserves in terms of the multiple blackstone inside goldman. i'm not sure it's going to reflect it in the stock price. there may be a point at which the fees from that business hit a -- hit velocity that takes it beyond and gets noticed and

deserving of a higher multiple it hasn't happened yet >> we'll see long-standing story, both inside, term and internal concerns. >> let's get to pippa stevens. >> the denver nuggets beat the heat 94-89 last night to win the first ever nba championship. but things turned violent in the city police say nine people were injured in a shooting overnight in an area of denver where fans were celebrating it's still not clear if the gun violence is connected to the xwralgss a suspect was taken into custody and three of the victims are in critical condition. president alexander lukashenko would not hesitate to order the use of russian tactical nuclear weapons if belarus faces aggression he says those weapons are set to deploy to his country in several days russian president vladimir putin claimed russia would maintain control of the weapons but

lukashenko's statement seems to contradict that. pat sajak says he's retiring next year after 40 years on the job. say jack took the helm of the show in 1981 alongside vanna white. he has not said who will replace him. sajack's last season of the show begins in september. carl, more than 40 years. >> amazing run amazing run. thank you. pippa stevens this morning. coming up after the break, former vice chair al blinder is with us, we'll talk about the decision we get tomorrow the fed meeting has begun. and materials and energy leading the charge at 4360 back in 2. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep,

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let's get over to bob pisani and see what's on his radar this morning. bob? >> four to one advancing to declining stocks, david, and the good news, we're seeing a little bit of broadening out in the market that's been the worry. s&p at new high, but we need to

see more participation look at the participation today. encouraging. energy stocks, for example, material stocks, bank stocks, tech is lagging a bit here that's a really good sign because those sectors, energy, material, banks, have been lagging. the tech moves up. a small amount of participation in the market is going on. the market leadership today, look at individual stocks. what do you see here in comerica, bank stocks leading. you see energy stocks leading. there's halliburton. material stocks, steel dynamics, and other material names like freeport this is what i'm talking about when you get broader participation in the market. you think the s&p at a new high there would be dozens of new stocks at new highs. only about 30, 34 at new highs and some familiar names, oracle, of course, on great numbers, walmart has been at a new high for a while. home building stocks have also been off on the new high list and small groups of industrials like eaten and ingersoll rand.

i wouldn't say there's dramatic expansion of new highs this goes to how narrow the leadership has been with big cap tech moving things forward here. i want to talk about that narrow leadership we explain this in different ways to people but let me show you the s&p up 13% so far this year 60% of all the s&p, 500 stocks, are up this year but 40% are actually down on the year. the s&p up 3%, 40% of the s&p is down for the year. that is one other way of slicing and dicing this idea of very, very narrow leadership what's moving the markets? today's cpi very important, the bottom line is inflation is still high, but declining. the fed pauses likely. earnings have stopped going down in fact for 2023, they are rising slightly and they're going up for 2024 which is what a lot of people are looking at now, the 2024 earnings estimates. overall the important thing, the pain trade, what would cause discomfort to the greatest number of traders is higher and

you can see this looking at the bofa global fund manager survey. every month surveys 140, 150 global fund managers, what it's found today they're still underweight the market even with the s&p at a new high. most global fund managers are underweight stocks and very long bonds. what this means is, the potential for people who have to go back in cash levels, 5.1%, that is lower but still very high it was 6% the prior month. a little bit better here the most crowded trade, everybody is in big tech that means there's room for things to move around quickly. finally, take a look at global markets right now. i want to show you the acwi, the global etf that owns the whole world. it's a 60% united states, but as it also japan, it's the uk and also some of the big asian countries that are out there like china, for example. this is a new 52-week high so the global markets are slowly rising, not just the united states sara, i want to show you one

thing here we're at new highs on asia not just taiwan and south korea. japan, the nikkei hat a 33-year high and one of the main reasons you know this well is because the strong dollar and weaker yen, japan is an export driven economy so a weaker yen has a very, very beneficial effect on the japanese economy and again, 33-year high for the nikkei. sara, back to you. >> just one of the reasons investors are enamored with japan lately thank you. bob pisani as bob mentioned, inflation report story of the day, may consumer prices coming around half of last year's peek, that's progress, but remain above the fed's target of 2% joining us to discuss is former federal reserve vice chairman alan blinder professor at princeton university if you were inside the fed how would you view these numbers good enough to pause or skip >> good enough to pause. i would view these as, you know, within the second decimal place

of what was expected these expectations aren't always that accurate, but in this case they were. you've got both the headline and the core coming down the headline coming down fast because of food and energy that's nice. but the fed focuses on the core. that's inching down. that's not so nice they would like to see it going faster than that, but down is the operative word, the important word >> so is it good enough to stop altogether or you need to see more evidence? >> i'm pretty sure they need to see more evidence. i mean, the emphasis lately, as you know, has been on the stickiness of the core it's still sticky. it's not falling fast. and they want to see more evidence that us keeps going down look, if it keeps going down at recent rates, essentially forever, you know, for the next two years, that will be fine that will be good. but they don't know that for sure

there's plenty of stickiness and room for reversals. >> do they have to break the labor market to get that done? in other words, does the fact that labor market still remains tight, we were talking about it, cfos earlier on an event i did, and they still can't find the labor they need so they have to pay more as long as that's a problem is the fed going to be able to accomplish its mission >> it makes it more difficult. look, you just enunciated the phillips curve reasoning we've been using for decades, that you need to cause slack in the labor market in order to bring wage settlements down and thereby price settlements, price setting down maybe that's not quite true. as is well known i think but forgotten lately, the phillips curve has not worked well for this whole century, since around

the year 2,000 a reliable tool is no longer a reliable tool. at least the hope that we can do this without cracking the labor market it would go against the past history that's for sure, but the -- >> so -- >> yeah, go ahead. >> what's your best guess right now on where the terminal or peak rate is going to get? 6% or you think we can get away with lower than that >> guess is the operative word i'm glad you used it. >> yes. >> i think we can get away lower than that. my guess right now is another quarter point or maybe two quarter points up from where we are. assuming there's a pause today, which i do assume tomorrow, as i do assume and the market is also assuming that would be my guess guess is the operative word. it depends so much on what's happening with a whole variety of indicators, but especially

inflation. >> alan, curious to get your take overall on sort of the bond market demand for paper, the fact that there are some who are concerned that we have to issue so much in the near term and what that will mean and the larger issues that sara discussed with ray dalio yesterday, whether there will be longer term for u.s. treasuries? >> you know, i don't worry about that i don't want to say that ap te might for u.s. treasuries is insatiable, but it's very large. i don't know how many times they have been concerned treasuries were flooding the market and the market gobbled them up you pointed out in the last segment that portfolio managers are still very long on bonds, so, you know, even early indicators of flight from u.s. treasuries treasury bonds aren't there. you know, you can sort of see it creeping in when worried about the debt ceiling and then that

disappeared, fortunately, that worry disappeared fortunately, and it looks sort of back to normal. >> alan, this morning goldman has a note, the title is "could the fed raise its inflation target?" they think probably not but say if core cpe gets to 2.5 it could be enough to leave the rest alone and not risk a recession does that make sense to you? >> i might change the second decimal a little higher. i would like to -- i think the fed would be -- is very anxious to see a 2 handle on that number you mentioned 2.5. my gut tells me if they get it below 3, say 2.8, just to pick a number, they will be more relaxed about moving it down they want to still get down to 2, but there used to be a thing called even back in my day, opportunist disinflation inflation goes up, it goes down for a variety of reasons

as long as it's controlled and not going up and it's below 3, and may be drifting down, i think you'll see smiles. well they don't smile. you'll see euphemistic smiles on the fomc. >> no smiles allowed at the fed. >> no. >> allergic to the question in the meantime i want to ask you about the real estate market and commercial real estate in particular and guys, remember, david solomon did put out a warning in our conversation yesterday about the goldman exposure listen to what he said we have a sound bite now, about how goldman is exposed on real estate. >> real estate affects us and we have headwinds from this in three areas. first, we do have some lending and you'll see some impairments in the lending that will roll through our wholesale provision and you'll see some of that this quarter. last quarter for the real estate that we consolidate, we showed close to $400 million of impairments and we're going to see more impairments again this quarter.

>> i thought it was important to highlight because it was clearly new guidance from goldman on what you're going to see in terms of just those delinquencies and problems do you think the fed is worried about this and one of the reasons they want to pause and see what lags and the damage are of the 500 basis points of tightening >> i wouldn't have used the word worry. another thing the fed doesn't want to ever say, just as they don't want to smile, is that when we raise interest rates, we know, we think, we usually are correct, that we're going to decimate the real estate market both commercial and residential. one of the things that i think they're not saying, but i think they're finding a little bit annoying and worrying, is that house prices, now i'm talking about residential rather than commercial, sort of stopped falling. they were falling for a while. and that is par for the course when the fed tightens. after all, they are the most interest sensitive component of spending then they stopped.

that's a major [ inaudible ] monetary policy along with the commercial i wouldn't say they're worried >> it's good we have you to interpret all this no smiling, no worries all the real rules of the fed. thank you. alan binder, former vice chair. we'll continue the conversation about the fed next hour with chief economist vince reinhart who says not hiking this week is a mistake at 11:00 a.m. eastern time dow is up 165. we'll take a quick break here. don't go away.

between two of the best performing stocks of the year is heating up as amd takes on nvidia with a new chip of their own. nvidia up 175% since january 1 amd on theusp cof being a double details in a moment.

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we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch. amd hosting an ai event in san francisco. it's focusing on products aimed at competing, of course, with nvidia's dominant ai chips our kristina partsinevelos joins us now, has more for us.

>> everybody wants to know who's going to be the next ai winner amd's next event is to shed light if they can compete. nvidia controls 60% of the market the stock has jumped 65% but still trails nvidia. with its upcoming combo ai chip it certainly has a shot but there remains a lot of unknowns, as how it will perform on certain ai applications. it's not just about the chip but how it works within the entire ecosystem and the software that goes with it amd needs to get a little piece of that pie. the ai server market should see 38% growth this year, despite projected declines in the overall server market. this is according to trend force data the street is anticipating, though, a positive ai event. wedbush increased it to $145 and

ubs increased it microsoft is already said to be a customer but the bears worry about amd's margins. if it's going to be price competitive to nvidia. of course, there will be other new amd product mentions more specifically about the cpo but it's a race to win the chip market amd clearly in the lead. >> thank you kristina partsinevelos will be covering that later today as well should mention nvidia closing in once again on that $1 trillion market cap level with that stock up some 2%. "squawk on the street" continues right after this

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to guide you through a changing world. ♪ good tuesday morning i'm sara eisen with carl quintanilla. setting the agenda former federal reserve official vince reinhart saying not hiking tomorrow, which is what the market is expecting, would be a mistake. david marcus with us after correctly calling the nvidia surge on this ai enthusiasm. later the executive chair of aston martin formula 1 lawrence stroll on e