the market it goes back to the old adage of stay diversified >> all right, sylvia, thank you. >> thank you not a lot of time left ten seconds. markets at this point, they're okay we'll see by the end -- kind of a three-day weekend hangover i think we're seeing not me, the markets. maybe me make sure you join us tomorrow "squawk on the street" is next ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla at the new york stock exchange. cramer is live from the performance review center at ford test track in dearborn, michigan a lot more from jim in just a moment in the meantime, futures are red as investors absorb recent gains. busy week on tap although shortened with powell on the hill tomorrow and tuesday. futures point to a softer

opening for stocks today china cutting key interest rates again, and goldman trimming its growth outlook there the latest warning signs for the world's sect largest economy pixar's "elemental" with the worst three-day box office start in its history we begin with jim at ford. you teased us last week. give us a sense of what you're doing there. >> this is really about the change going from internal combustion engine to ev and how ford is managing it. of course, ford versus tesla comes up very many times when i spoke with jim farr earlier this morning before he gave me a ride where i was quite nauseated and grateful i didn't eat breakfast. they're very ventmotivated. i have a mustang ev and 150 behind me. carl, this place is so ready and

farley is so competitive that i think it's not necessarily a tesla look out it's world look out yeah, that was ill-as viezed that's where i tried to decide if the muffin should come up or keep it down it was a touch-and-go situation. right there was also -- the burning rubber is something i haven't done since i was 16. but why not go there >> doughnuts first thing in the morning, jim, normally has a different connotation. that's a different way to wake up i'm curious if you can frame the whole conversation in light of what farley has said recently, namely about what it takes to compete with chinese makers and also what it means to design your products with some frequency. he's given some shots across the bow to musk about that kind of thing. >> china has to admit they're

not ready right now, but hope to be we question whether they should be allowed to even sell here after the geopolitical tussle. i think a lot of it is just the idea, look, weave got cars that people want. tesla has got machines in factories that people are in love we spent a lot of time on faber, the faber interview. not "princess bride. we didn't go into it one bit it is impressive to see how competitive he is. not necessarily a trojan horse with the charging stations but make it so the business person knows there's a charge place everywhere he is about winning and about proving wall street wrong, carl. wall street right now is so jaded about what ford can make he's talking about big cuts, but he's also talking about the union. the union has declared war i don't know there might be a strike in the offing >> we got the writers,

obviously. we're watching the actors. i see ups did vote to authorize at least -- and we'll see what that may or may not mean later in the year. they're talking about potential disruptions to back-to-school if that happens. >> here it's a question of the union. they have a new union leader who is very antagonistic to what i regard as capitalism, but you can argue is fat cats. he's talking about how the capitalists are about being greedy the billionaires aren't letting the worker participate we tackle that head on with farley that's not the culture of ford his grandfather worked here. there's great legacy they spent a lot of time talking to deere deere also took a strike believe me, there will be forays into mexico. >> you mentioned a chat with farley let's take a listen.

>> jim, i follow your stock very closely. the stock had a radical move three points maybe your markets day was really exceptionally, but it may have been your deal with elon musk what is this >> it did pop that day i have no problem being opportunistic when it comes to advantaging my customers ev adoption really does come down to, when wep go in the mainstream, charging infrastructure when you're on a road trip. we really like the locations and reliability of their network we have the largest charging network already before tesla putting 12,000 fast chargers on the network, on your ford pass app with your lightning is going to be even better for customers. >> jim, maybe not a coincidence this morning that rivian says it's going to adapt tesla standard, and hyundai says they're considering doing the same. >> yeah. this is all about people

worrying about running out of electricity. it's about charging. you want somebody that can take you 900 miles per hour per charge and you want charge going quicker. that's maybe in the future, maybe not. carl, we're in the news business of course, i baited jim five or six times to take on musk. i really wanted him to it wasn't until the end that we got a takedown otherwise, there's this greej ality on the surface farley is too excompetitive. he'd like to race a tesla, but didn't think there was anything that could take them on. >> what's the phrase adam jonas at morgan stanley is using, it's co-opitihion >> right i think there's a lot to p port story about cost cut, a lot about whether the workers can meld between the internal

combustion engine and the e people and then the e truck people i don't know, carl i was positing whether a house divided could stand or could not stand. jim was coming back saying, listen, it's vital we make as much money alzheimer's we can from i.c.e but at all times he's got the eye on the prize which is basically being number one everywhere that ford makes cars and trucks he was talking about being number one in sweden which he is for the mach e in australia carl, they have the cars and trucks people want >> i'm glad you mentioned china, jim. i think at least four congress people today are going to be in detroit to press ford and gm to reduce their overall china supply certainly a big piece of the markets today, weave got the s&p in the midst of this five-week wind some discussion that there's a little disappointment in the china stimulus they did cut the prime rate, but

not by as much as some expected. >> i think the disappointment in the stimulus is instant. i think people are starting to be puzzled about why china takes on such a belligerent and bellicose attitude given that they've got massive unemployment by people in their 20s farley said we're going to win ourselves off china when it comes to batteries far more quickly than the president seems to realize i think everything i heard about independence from china. i have to tell you, in the end the stock market reacts to china. i don't like the way the market came in. a stock to watch is adobe, went up to 518. it keeps going lower and lower after an amazing quarter watch adobe because i think that's going to be the tell about whether the ai stocks retreat. ai of course has been the leader. >> the adobe thing, if you believe the ft this morning, is about tmaybe getting a second

look at the thinking ma deal i have to tell you after watching what adobe had to say in terms of artificial intelligence, figma will be important. ultimately i think this was a blowout quarter i haven't seen since adobe made the switch to description. yes, it does matter, and i don't know if figma is going to be stillborn. it's a very big acquisition. i like adobe as a tell of what happens after earnings versus oracle i'm very concerned about the market here, carl. i have to tell you, mr. wilson may be right for the short term in his negativity. >> really? >> yes. >> really? >> yes i think things are stretched i'm with wilson. voting for wilson like in the 1912 election. i do think what's happened here is he may have the diminishing money coming from the government, the stretch

valuations i think he's going to be able to pull this off and make it so -- he's going to be in sync with the market this week carl, that's because there are fed people speaking every day. what are the chances that even jay powell can skate through the house and the senate without saying something about a recession that takes us lower? >> that's going to be -- i'll tell you, the messaging challenge that powell has is getting talked about a lot today. you see the calendar house tomorrow, senate on thursday, jim. larry summers last week kind of said, look, maybe this was an example of fed politics cutting through. did he cut a deal with the hawks to get the pause this time rather than basing this strictly on fundamentals? >> i actually think there may have been more confusion i felt after some reflection that there's a pause because frankly they don't know what to do there's too much discord

i think they didn't know what to do i think that's what mattered. >> can you believe this housing starts number today? >> i'm not quite sure. >> up 21 -- a lot stronger than expected i guess it's just -- we're going to get darden this week. we know what pulte and lennar have said. >> although 1.6 million units, i thought that was great you need at least 2 million to make it so it's not so tight kb homes are heavily located in florida and california lennar is not making enough homes. toll brothers is rationing homes. i'm worried that that's another thing wilson is going to win on. 1.6 is great i really think they have something positive to say about that when he's on the hill. >> when wilson says that the bulls have gotten bulled up at

a, quote, inopportune time, you think that makes sense the rollover he's been calling for both on liquidity and i guess on earnings, jim -- the point was made this morning that q1 earnings came in and felt good at 4k can that feel as good at 44k >> no. i think we have to come down i'm drawing a picture that tells you what i think about wilson in general. i don't know if we can see it. this clock is going to be right twice a day, because it's stalled. that's what matters. wilson is right twice a day. he's wrong a lot of the other times. this week he's going to be right because this week is a perilous week when it comes to the fed governors who are very upset because they don't think -- they're looking for hawks. hawks mean sell stock. there's no denying, hawk sell. masters beats twice. they can't get a gag order

against her. she has a right to speak, the first amendment. it's the first amendment so it must be more important than the others some people feel the second amendment. >> the bulls would respond by saying, look, inflation expectations out of u mish were pretty good on friday. china, geopolitics, blinken's trip seems to be a success >> i think fedex surprised the upside i think carmax at the end of the week is going to tell you that used cars came down dramatically since even when the fed spoke. i think kb homes will tell the story florida and california has cooled a little bit. these are all good against that are intransigent fed people who frankly, the stock market is part of the problem. they're not talking about. when asked about a robust stock market, they can say that's part of the problem that worries me. if nvidia did not bring

people -- we have nvidia news. one of the reasons nvidia is up, they're talking about a radical, better-than-expected number coming mind-blowing stuff talking about maybe doing 15 billion a quarter by q3 t. street is at 8.3 nvidia along with adobe will be very powerful tells. nvidia is bucking the trend because of the bus tour by barclay's. i think that's go greyhound if i've ever seen it. >> yeah. there's a journal piece about meta as well, jim, how they're marshaling their resources away from ai research right into commercialization which is going to be meaningful potentially coming soon. >> that's true meanwhile, this week, because i'm the beneficiary of a huge number of videos, i had actually more reels than tiktok holy cow

china seems to be in disarray. i do think that reels, he's a winner in reelz. think hi he senses he can press the jug her. farley competitive at ford, zuckerberg competitive is anyone more competitive than jensen huang he's a velvet glove fist jensen, nice guy, but he wants to win at all costs. when we come back, we'll talk about china elemental, disappointing in the weekend box office for disney. should disney be concerned about the pixar brand? take a look at the premarket, a little softness as we get set for fedex, powell, as jim said don't go anywhere.

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the july meeting. >> we will see that disinflation that's what's going to allow the fed to ultimately end this hiking cycle all around this rate. >> recession -- there's a 50% probability we're going to have one. i think it's going to be mild, an 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.

a bit of a lackluster debut for "elemental," the pixar fill, the worst in the industry. it comes after light year failed to live up to expectations "the flash" didn't do so good either for warner. this one got a lot of attention over the weekend. >> the question is does iger have anything to do with this. the other question is about this woke notion, that the movies they're making are too woke. i hate to use that term because

it's a judgment for something i haven't seen you i do think bob iger, interim ceo is going to have much more than a handful of things to worry about. there was a lot of destruction done at this company during that -- in very short interlude. i think that what's going to happen is that bob -- it's not going to be an easy fix. how about that >> it's interesting. the debate over the weekend was maybe it's just animation in general that has outlived its usefulness in theatrical relief. faber did talk to iger about creative misses. take a listen from this interview not too long ago. >> we had a couple of creative misses, i'll say that's the nature of the business one at pixar, one at disney animation. we've all learned, for those of us in the creative side of the business for a long time, you have to move pass that you have to process failure successfully they have great original movies

in development including one called "elemental" which is brilliant. i'm confident that animation will continue to be an important part of business for this company for a long time. >> interesting there's a lot of entering threads in there, maybe people deciding a certain type of movie they're comfortable watching from their house >> i have to tell you when i looked at the animation -- david will make fun of me if i talk about this the animation that jensen huang showed me about what it could look like with better shading, with better dimensions, these look like child's play they really do they look like the original steamboat mickey mouse i don't think people are willing to accept that anymore the stuff i've seen that's so breakthrough, the next generation being adopted now by gamers makes this seem just too tame it's just not exciting enough.

politics aside, it seems like a yawner you're not dazzled anymore you're dazzled by ai people are saying there's way too much ai. you can merge ai with the kind of cars that jensen is producing, and you can make it so your thing looks much more life like. i watched life like versus what we saw, there's nothing to what we saw it's old it's not interesting maybe it's dead. >> it's going to be interesting to go back and look at current day product in an era where we have a lot more. by the way, as for the parks business, jim, tsa today, highest number of passengers since 2019 in a single day. >> people don't care all they care about right now is what chapek did to the company let's move past it i know the next quarter is bad i think the quarter after that may be bad it is not a stock that you go in with two hands

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take a look at nasdaq 100 gainers. entering day for jim to talk about autos. we're getting more and more players either joining or thinking about joining tesla's network. opening bell in about five minutes. ywrecan catch us any time

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time for cramer's "mad dash." jim, i know you're watching nike is it through a china lens >> well, yes nike is going to report in nine days interesting enough, sportswear is holding up in china i think that matters 75% of pre-covid levels. according to an excellent piece by morgan stanley today, a lot of people don't understand that nike trades on the guide they try to trade on when the numbers are reported if they guide lower which this piece seems to be implying, i think what you'll have is a stock that goes very well on the quarter and then down on the guide. nine days, very important stock for the market and, of course, the dow. >> for sure. it kind of reminds me -- well, two things one about what john donohoe told our sara eisen a couple weeks

ago at our ceo market in santa barbara about the china market and what greg hayes of rtx said on squawk about the notion of decoupling from china. here is what he said >> what's important for the american people to understand is the relationship with china, we have to find a way to get along. there's a co-dependency, whether it's rare earth metals, pharmaceutical precursors. $500 billion in trade from china every year when we talk about pulling supply chain out of china, resourcing out of china, it's very impractical we've been derisking and making sure we have second sources for critical componentry unlike russia where we shut down our factories, pulled our people out and we completely cut off any contact with our russian customers, you can't do that with china too big, too important and too necessary to the u.s. economy.

>> jim, you go along with that >> well, i think there's an element i do go with which is that we do a lot of trade and it's important to sell our aircraft there we need those jobs what i disagree with with greg is we are right now with the upper hand we're pretending we don't. if taiwan is in jeopardy, then whatever greg says, and i've spoken to greg and he's really smart about this whatever he says is completely voided because we need to clear taiwan off the table as something thap own we didn't get that from the blinken meeting. we get that taiwan is owned by us taiwan is taiwan semi. taiwan semi is nvidia and ambaamd. let's just remember that that is the flashpoint. >> great point, jim. by the way, there's the bell just south of 4400 at the big board, eagle bulk

shipping and the leadership council. we didn't mention back ba yet. this management shift ahead of restructuring is being seen by some as part of the proxy for the economic challenges that china has in their hands right now. >> i thought when they broke out their cloud business, the stock would go up. the stock went down that day this was the so-called american chinese company, the one you could buy without problems because you knew that their financials look like our financials you know what? in the end, you can put whoever you want at the top of it. if they're missing the numbers and they've been missing the numbers, it really doesn't matter i reiterate i don't trust any chinese stock in an era where the chinese growth is going to be slower than ours and they look as if they earn imperial power over us. they have to drop that, stop it. they have to recognize we want

even and fair trade. greg hayes wants it, too, and he's absolutely right we have to have china as a partner, but as an equal partner, not a partner that they we're subservant too. >> they hosted dimon and bill gates. it's modi coming for a state dinner i wonder if you think they're worried about hanging on to leverage right now. >> cuba is hosting them, their soldier, 90 miles from us. give me a break. this is exactly what happened. you take a look at what happened in the meeting with xi and barack obama in the rose garden, and xi saying, look, we're not going to encroach on anything u.s. right after that, right to the

south china sea. we've got to be a little more cognizant that they have been duplicitous when it comes to military there are people who love their stuff and let's try to get along so to speak. i know that sounds silly and it sounds a little somerific. the fact is, carl, if we don't get real change from china, there's no use to compromise i didn't hear anything that made me feel like, you know what? we've been too belligerent >> that's interesting. we'll see. there is some discussion about maybe a summit between the president and xi maybe in san francisco later in the fall. that will be something to watch. as for the markets, jim, i think it's interesting that -- obviously a lot of discussion about sentiment getting overstretched. does that mean you're also looking for unemployment to spike and inflation to roll off the cliff? >> well, i know part of wilson's thinking -- again, i refer to

him -- he's been a very popular theorist about the market. he's been talking about it's going to hurt earnings i'm not buying that one bit. if inflation goes lower, we have the fed on our side. wilson will be fighting the fed. to fight the fed after they're done is a major mistake. the market still believes cutting is in our forecast that's ridiculous. i do think if we can just have housing get -- i mean 1.6 million is a start we have more housing, and we get it to rents come down. used car comes down. i think the fed is going to be in a box, well, i don't know what's left to come down we have to see housing and rents come down. we do not have that yet. that's the sticking point. i think they believe if unemployment were to go to 4.5 that they've won i think they're keying on how much unemployment there is these home builders are incredible the stickiest stocks their is.

they don't want to see pulte up. horton, they want that thing at 108. if powell spoke plainly, he would say, listen, my job is done when lennar trades under par. >> maybe for jackson hole. remember how short last year's jackson hole was there's going to be pain, and that's it. >> i hope they catch more and talk less. go fishing, leave us alone that was a jarring -- >> the home builders' sentiment getting back to 50 and above in such a short period of time, it's been pretty remarkable in the face of this sea change in rates. it is remarkable >> if you think you're 2 million short units, then put up 500,000 -- they can't do it. they're constrained. all these home builders are in the mode, kind of like the oil companies, we're not going to build just for the sake of building we're going to build because we

have customers strangely enough, we want them to be reckless and we want them to build, build, build and have the fed raise the interest rates. toll basically says we will build, you tell us what specs you want it was an amazing call look at that stock that's nvidia of a home. they're nvidiaizing that stock >> it's amazing. a verb. >> it's a dog, it's a verb it's anything. >> home builders are leading the market although chips aren't far behind intel is up a percent. some discussion about building a new plant in germany the government would cover about a third of the cost. i think i saw, jim, it would be one of the biggest foreign investment projects in the history of germany as well as under consideration in israel. >> carl, no one knows how to spend money better than intel. they're fabulous at it

well, maybe my wife. what i'm looking at is not a spend-a-thon i want good tasting tuna there's a 30 billion euro, german relationship. how about the relationship that nvidia has with its customers? they can't get enough of them. that's why you have such big earnings i love the fact that intel has this very positive outlook but what i want is earnings. that's what nvidia has >> we played the sound of greg hayes at the paris air show, jim, where airbus was the one that got the historic order, biggest commercial plane order ever out of india. boeing did say at least they'll boost output of the max pretty soon. >> i think boeing is a huge part of the economy there's millions of parts in a plane and a ton of suppliers boeing has been a hot stock

going into the paris air show. that's profit taking phil's stuff has been incredible there. we know this is one of the strongest parts of our economy airbus has got a bigger backorder than we do as phil said, you don't know how good the back orders are you can say i want a lot of planes and phil was teaching me, you don't have to put a lot of money down to say that if you want a lot of cars, you have to put money down if you want a home, you have to put a lot of money down. unlike the consumer packaged goods stocks, they've been real dogs maybe they can have a run. >> i wonder what you think is behind that, some of the names in the package space philip morris is in there, jim is that about riding the back side of inflation where your input costs are coming up and your consumer pricing is sticking >> i think it is pm is an upgrade it's a top bako stock that doesn't like to be baca. it's like stark industries when they got out of the military and

they were a defense company. i do think that we have to watch tech come down the nvidia -- the big nvidia boost is throwing the bears for a loops. i think you buy the consumer packaged goods companies when -- they don't have to cut price dollar tree is not cutting price, but the costs are going down the only outfit that doesn't want that to happen is costco which is demanding lower prices. they have about $230 billion a year in sales. they may be able to control some of that. look at costco that's been a horse, too i'm watching pepsico as the tell for this that. i'm watching kbh and horton. horton is so hot that's a bad tell for the fed. >> yeah, wow the horton chart is amazing. 2% today for dr horton as for the dollar stores, jim,

interesting piece again in the journal about dollar stores getting a i hooer percentage of sales from high-income shoppers. the dynamic that walmart has talked about recently. >> i do question some of that because when you go -- when you go to my dollar general, they've got a lot of stuff that's more than a dollar. i thinkwalmart comes underneat dollar tree. i've done a lot of price checks. i think you've got to stick with walmart if you want something cheaper. you've got to check the sizes. it's shrunk a little go to walmart. walmart is cheaper by the way, the house brand string beans, just as good as green giant. >> yeah, story over the weekend. >> walmart may be trying to convince its shoppers to be a little more fashion forward. jim, i thought of you because there was a call out of morgan stanley on avis today.

they go to overweight, 230 got to get your thoughts on the rental business as well. >> well, i spend a lot of time talking to steve sherry who used to be ceo at goldman, now running hertz. they're doing fabulous but not reflected in the stock i know he's upset about that a very driv guy. the fact is that avis has been the winner i thought hertz would be over 20 bucks by now i got that one wrong i like the way he trades cars. also a huge buyer of tesla he's mystified by where stock trades i am i think hertz is undervalued. amazon as bofa adds to the u.s. 1 list. pal land tear as well. ray gentleman goes to out perform 18 as the market is clearly looking for new players in that silo

>> look at pal lan tir last quarter was good. jacobs thinks they're a very good partner i don't know i question the value of making amazon job one right now why now? did they have a problem over the weekend? wow, i've got to recommend something? amazon number one right here does not help. there are plenty of stocks that haven't moved up yet that you can identify amazon doesn't strike me as something that's really revelatory >> that remains the bull case that you see acceleration out of aws, the advertising business. maybe they steal some share from physical lee cases in north american retail. i know you've been paying a lot of attention to vf corp and we

now where bracken darrell is going. >> i love bracken. he's been on the show several times. that was a strange departure, log logitech, comes out he's not there. names a successor and he disappears we didn't get that he wanted to spend time with family, we didn't get that -- he likes the jacket business. but he's a winner. that last quarter was not that good for logitech. the last quarter for vf corp has been oh doors. he's cleared the decks for bracken. the problem is that vf corp, in the end it's vans at the fulcrum, at a deceleration for a look i'm too i went to foot locker and it's jammed with vans look at that chart it's the opposite of the amazon. no one is going to make that number one pick. i think bracken really

understands style because he had a lot of style at logitech let's see what happens. >> one of the management shifts we've been watching today. you mentioned fedex. i wonder if you have high hopes for shipping, logistics, tr transports in general given your view of the markets and the economy right now. >> well, i think raj is doing great things trying to take out $5 billion in costs. this is a cost cut play. you know what everyone is subtly thinking, they're thinking the same thing with ford there's the strike and what happens. let's say you make these yearly contracts and your contracts have come up in the last couple months you might be saying, listen, i've got to go with fedex because of reliability i'm worried about the ups strike i'm very worried about a ford strike i've worried about the union now energized with a new boss is saying, listen, we've got to take on the fat cats i'm in fat cat city. of course, i don't believe that. i think ford has a great culture

and this notion that they've been winning over the unions i think is false, but it's in the air. i think the same thing at ups. that gives fedex the edge. raj will not dwell on that i've tried to bait him on the ups strike many times, just like i tried to bait ford on tesla. these guys are so good now, carl they see the questions coming and they have an answer. >> well coached. >> it's not fun anymore. yes. i like what raj is doichlkt i think fed innings is going to do fine by the way, we haven't mentioned tesla which goes up every day. i think it's galling to farley i was doing some spinouts, some wheelies with farley what was the discussion? enough tesla couldn't do half the things i did out here. they can park well i don't know >> amazing 2.65 -- remember 1.02 back in

january. oh, my gosh. we had a debate about whether that was actually you in the car. >> it was me it was a stick i'm not that good with a stick here some of the things we did i thought were definitely, let's say, vertigo-inducing and some were oust-and-out death-defying. oh, there you go see you how smoothly i handled it >> like the in-laws. you're the alan arkin character. certain tien. >> it's a certain tien i did that to jim. he didn't think it was funny at all. >> you're having fun today look how i handled it. it was natural i found myself just thinking, this is like a roller coaster that actually -- that i thought whiz going to break any second jim knows how to drive >> yes, he does.

yes, he does the dow down 180 to start the session. let's get to bob pisani this morning. >> happy tuesday 2-1 declining to advancing stocks the broadening out is very popular but hard to do you can see this in the sectors again today. tech is generally leading, consumer discretionary leading kimberly clark, clorox advancing. the lagarde sectors, energy, health care. we've been wading for these to come forward it's the one weak link in the whole rally. look at the s&p gainers, the same we've seen in the last few weeks as jim mentioned there's tesla, there's nvidia, and there's the home builders breaking out if you look at the laggards, we keep waiting for industrials to broaden out, materials to broaden out, even energy stocks like slb to broaden out. again, you see hard for that to happen sort of the weak link we've had out there. the big debate over the weekend, what would it take to have a

real serious pullback. i don't mean a 5% decline in the s&p. we're up 15% on the year you know you'll get 5% what would it take going back to zero everyone seems to agree, you have to believe the soft landing isn't going to happen. to do that you have to be a believer that we're going to have a big drop in employment, that the earnings situation is going to crater. right now we're about even compared to 2022 you have to believe they'll drop 10% or more and believe interest rates are going to move up even more than the federal reserve thinks or wants the interest rates to rise. that's a lot to ask of the market, to go to zero here we have seen a very strong history in the first half of the year when the first half is really strong, the second half tends to be strong. the s&p 500 up 15% or more in the first half ten times since 1980 closed higher for the full year 10 out of 10 times here is the question what would it take to go to

zero the average gain for the full year those ten times it's happened is 23%. it's on average gained more going into the close these are powerful, historical trends you deal with probabilities and 10 out of 10 s&p ais a pretty gd probability. the look at the s&p 500 versus the average, the orange line is the equal wait s&p, the white line is the s&p 500. you see when the tech rally started in march, it pulled away up 15% on the s&p, average stock up 5% right now. so important thing here is that the rally has been strong, but it's been narrow here. if you look for advances elsewhere, yes, the s&p 500 advanced, decline lines fantastic, above february highs. mid cap, small cap rally, better in june u be still not great let's call it modest here. if you want something to worry about, carl, the biggest thing i see is the competition with bonds and cash out there ft had a great story over the

weekend pointing out that cash money markets still are near 5%. short-term treasuries are still near 5%, and the earnings yield on the s&p, that's the inversion of the earnings situation is about 5% what that means is bonds, treasuries and cashbonds, treasuries and cash, are still very heavy for stock and that's going to be an issue for the market. >> when or if they get tired of that, bob pisani. watch bonds get ready for fed speak this week as well as the fed chair on the hill. you'll see the 2-year around 4.7, the 10-year around 3.73 the dow down 175 be right back. ♪

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is ask . all right. jim, how are you going to package everything for tonight >> first the stock is down a percent at ford and that's disappointing because jim pays attention to it. we're going to drill down on the big issues and talk musk and trade. but it's the transition. how do you make a transition from internal combustion engine to ev and then you get to watch me be nauseous in a car, inexplicable at my age, that's the end of it, which my life did flash before my eyes including "mad money" and this show. >> it's good tape, jim we can't wait to watch more of it we'll see you tonight. >> it's fun. thank you. >> 6:00 p.m. eastern time. we'll take a break dow down 186 to start this shortened week don't go anywhere. an a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts

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we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on is is is i isitting on a goldmine, and you have no idea! hey, guys!s is

you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're i sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. s good tuesday morning welcome to another hour of "squawk on the street. carl quintanilla live from post nine of the new york stock exchange david faber has the morning off. stocks half hour into trade and the s&p is down about a half a

percent. nothing extreme. 200 points on the dow. tech holding up better nasdaq down 0.3% after a now big double digit run-up this year 30 minutes here are three movers we're watching shares of dice therapeutics soaring this morning on news eli lilly plans to acquire the biotech company for $48 per share or $2.4 billion in cash. the company specializes in immune related disease treatments and boelgts both stocks are higher. baidu in the green on an upgrade to buy from morgan stanley the firm calling it the best play in china and could capture some of the market in the u.s. we continue to watch apple shares are now just $5 away from a $3 trillion market cap as evercorps reiterates its out perform rating on the stock this morning. we'll talk about that. and carl, a quiet holiday shortened week powell testimony from congress tomorrow which we'll be looking

for headlines about why the pause, what are they thinking about july, 75% odd they hike in july and then housing starts, which are never that interesting, were interesting this morning because we saw a jump, the highest since 2016. >> high nest at least a year, up 21, looking for flat people still trying to get their arms around how the data came in the bigger story for powell on the hill may be how they explained the pause and the dots was there some kind of horse trading between the hawks and doves. we did get minutes from australia's central bank where they did see signs that inflation was getting entrenched and why they moved again. >> right i agree. i want to hear what he says about why the pause, if by all accounts they're worried that inflation is too high and it is relative to their target and their growth projections got revised up and now seeing signs of knife home building shouldn't say the highest since 2016 housing starts surged by the

most since 2016. just showing there's momentum there. the home builders feeling good supply is an issue and that plays into the role. permits were also up i mean it was multifamily, single family, so i think you pair that economic data with, you know, you talk about australia and inflation expectations being entrenched one good piece of news for the u.s. we got the university of michigan sentiment numbers on friday and the one-year expectations, that was good news really coming down, now the lowest since 2021. we know the fed is watching the inflation expectations to make sure they're anchored. signs inflation is moderating helps underpin what has been a pretty nice and unexpected rally in the market. >> it's true although now we're getting goldman and citi coming with sentiment indicators that show we're pretty stretched to the upside here. citi may be the most ever given a short period of time, so to listen to jim this morning, basically side with mike wilson that even though a broken clock is right twice, it still is

right twice in that maybe some of these lag effects from the fed are going to crack at least some earnings as we wait for q2. >> wilson remains bearish. he was right last year dead wrong this year and this morning's note, it was we've been wrong, we were wrong to say that, for instance, when the fed was saving regional banks and extending life lines that wasn't quantitative easing, it wasn't but it was liquidity he backtracks on that this morning. what was most interesting about the note he's not even bullish about a.i., at least in the impact on the stock market i pulled this quote, he said we believe in the a.i. theme and believe it will be a big component in the next boom we just don't think it will prevent the deceleration that is already in motion, talking about earnings for this year we view a.i. as mostly a cost in 2023 that will pressure margins further as the top line disappoints. so the question on a.i. is, now or later because i compare that to what david kostin has been happening

at goldman sachs but it will add to valuations and help margins and preserve margin growth in this environment because it will make companies more efficient. the big question mark on a.i. is when for valuations and companies. >> that is interesting isn't kostin's time period more ex extended >> yeah. over the next year or so i haven't seen a pushback to a.i. in terms of margin compression because of the cost factor that was new from wilson. >> you have to spend money to make money. >> i guess so. fed chair powell heading to capitol hill for a semiannual monetary report, as many wonder is a soft landing still in the cards. let's goat steve liesman who has the latest cnbc rapid update on the economy. steve? >> yeah. powell thinks it can be a soft landing and tentatively a consensus developing among forecasters for a soft landing in the forecast, that is one where growth flatlines but doesn't go negative. the quarterly forecasts in the

rapid update coming after last week's retail. first quarter coming in a bit weaker than expected in march above 1% but the rapid update outlook shaping you to be a percentage point higher than the march forecast and instead of going negative in the second half of the year, gdp has seen pretty much flatlining that's not the right chart there. maybe we'll get that up in a second the third quarter was negative and now it's positive about 0.8 move there's the chart. thank you very much. there's the second quarter quite a bit stronger bank of america writing, quote, we revise in favor affiliater and softer down turn our forecast is a growth recession as it is a mild recession. bofa had forecast second half growth averaging minus 1.5%, now sees it down a quarter percentage point the big change, labor supply and demand coming more into balance and will let the fed hit the 2% target, quote, with less adverse

consequences there are those who acknowledge the current will still see a recession on the way joe at smbc writes the bottom line because an economic downturn has not yet started does not mean one has been averted and does not mean whenever it happens, the decline in economic outlook will necessarily be short and mild. on inflation, core pce inflation to fall more slowly, ending above 4%, next year closer to 3 before edging down towards the fed's target in 2025 the rapid update forecast for this year, 1.3% for the full year, not far off the fed's 1% outcome. as you've been debating whether the fed fulfills its forecast to hike twice more and if that turns a soft landing into a hard one, sara. >> i think one of the questions that is confounded a lot of people is can inflation continue to moderate back to levels the fed feels comfortable with, with

unemployment still relatively low, right, under 4% or so, with things accelerating now, housing in the economy with financial conditions easing as well which is what's happening this year? can all of that add up to an inflation rate that's coming down >> i think it's going to be hard i don't know if you saw me breaking the housing numbers this morning, but i didn't believe them they were so high 1.6 million. i thought i was looking at the wrong set of numbers i think, sara, the way i think about this economy is one of a series of rolling downturns in different parts of the economy, and it may that be housing has bottomed and is on the way up. need to ask diana this question, but whether or not people are starting to learn to live with and accept the idea that mortgage rates are going to be in the 6, 7% range, and it doesn't pay to wait any longer for them to come down. so, yeah, i think that's -- it's possible for that to happen if parts of the economy that are hot let off steam and then other

parts of the economy were to have a downturn, you could bring inflation down, slowly over that time and let off steam in the jobs market at the time. carl >> steve, appreciate that. that was exciting you. watching you break the housing news this morning at 8:30. thanks. >> hopefully not embarrassing. >> it was all good tech coming off a big week and apple sitting around all-time highs getting closer to a $3 trillion market cap. our next guest warns if apple growth slows or inflation rises, valuation could wind up being a head wind. mark is with us a buy target at 198. good to have you back. welcome. >> thank you. >> we have seen downgrades from your peers on the street last few days, looking at like iphone purchasing and tent. is that something you're watching seriously >> certainly we're keenly interested in the iphone i think the thing they have in their back pocket is an easy comparison, right. we all remember the supply interruptions in the december

quarter. we also know on the services side a lot of that exposure is ad driven, where the comparison get much easier for people that would be comparables like google and the ad market. so, you know, i think it's a bit early to call that you need to be overly concerned about the growth returning to apple and the share gains i think are sticky, and i think have been under appreciated for a long time i'm loathed to lean against that today. but i think you need to be careful. valuation is on an absolute basis, not at a peak for apple, but relative basis is. so certainly at a tricky juncture. >> right how does inflation play into this inflation for them or inflation as a competing asset class versus the equity here or what >> you know, i worry about inflation in terms of the consumer's pocketbook, right how much are they able to spend on this, you know, the luxuries. now, iphone is not really a luxury, it's a necessity, and the most important device of this economy, which is part of why the market has been so quick

to embrace apple, plus there's the call option on disruptive innovation and we're beginning to see some of that potential with vision pro as people diest guest what could this mean and what could it be i think mort we look at it, the more interesting it becomes. >> where are the wall street expectations on that, on vision pro versus where reality lies for you? >> well, our model has nothing meaningful in it for vision pro today. this is really something where i think expectations were low heading into the event in terms of what it would do for the business, but i think the opportunity is that we get more excited about it and that there is more to put into the model around this. you know - >> you also don't like the power cord hanging from the side. >> i don't like the power cord hanging from the side. i'm doing traveling this week is the opportunity for this to be your new computer screen, right. so, you know, as a road warrior, we're all tethered to our laptop screens. what if this becomes your computer screen that fills up your entire room you know, i could easily see

then buying that to make me more productive when i'm traveling which i wouldn't be alone. there could be an interesting use case there. >> that's interesting. watching them roll out vision pro, you think about here's a company that oh, we wanted to get into financial services, but we want to start a media company, boom. we want to displace all of our chip suppliers in the mach boom doesn't that make you think they can do certain things at will and how do you avoid getting too bullish about them in that case? >> well, i think that it does warrant a premium multiple the call option opportunity. their execution in things like media has been excellent, right. look at them, they've got major league soccer and look who is coming to mls, lionel mess si. i don't know that models anticipate things like major league soccer. so a lot to like about apple a lot of reason to give it the benefit of the doubt, valuation

wise, even in this environment. >> is there an a.i. play here? i hear less about a.i. as it relates to apple than all the other mega cap tech players. >> i think the question about where are your a.i. plays today is interesting my colleagues that cover the semiconductors have had a great call on nvidia, and certainly, you know, the picks and shovels kind of plays, as people build these large language models and do the hardware investment is here today, meaningful today the services representation of that, though, is not so present, right. so, you know, we're all waiting for the transformative kind of opportunity to hit the numbers at microsoft, which is covered by one of my other colleagues and also at alphabet, which i cover. you know, we think it will happen, but i think, you know, it's easy to get ahead of your skis in terms of apple, nobody is buying apple for a.i. today. and, you know, i do think that it is, you know, the device upon which a.i. will be accessed but it is not discreetly an opportunity for them. >> he yeah

for our earlier discussion about timing on some of the benefits on a.i thank you. pretty fascinating. >> thank you. >> on apple today. >> thanks, barton. as we head to break our road map for the rest of the hour we'll kick off our week long series, hunting for yield. the best dividend stock picks in the market right now plus big orders are back as the airlines lock -- race to lock in new planes we're going to go live to the paris air show for more on the big winners. >> and why the a.i. wealth boom may not be broad as promised. dow continuing to lose steam, down 232. , and on main streets across the us, you'll find pnc bank. helping businesses both large and small, communities and the people who live and work there grow and thrive. we're proud to call these places home too. they're where we put down roots, and where together, we work to help move everyone's financial goals forward. pnc bank.

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welcome back to "squawk on the street." we're kicking off a week long series focusing on where to find yield in this market our guest manages a fund targeting companies that pay 2.5% or greater dividend yields. we'll dive into our top picks including pnc, lamar advertising and crh. sandy, senior portfolio manager joins us now it's good to have you. >> thank you nice to be here. >> our dividend strategies outperforming in this market >> no. >> why not >> they are, you know -- they're the anti-tech trade actually what we've noticed back in 2000 when tech was roaring back in 2000, dividend stocks did poorly, but went on to have a great 10-year period, longer 12 years. you're setting up for the next

move like that, because you've had these dividend paying stocks under perform for the last almost 15 years and they are as cheap as they were back in 2000. so we think this is presenting a very good opportunity for investors looking for income and particularly for the valuation gap that we think is likely to close. >> you think it switches from the market just wanting growth to value and dividend? >> yes. >> where do you want to be you like the banks, some of the banks? >> the banks, we're okay in the banks. we have a decent amount of exposure there you mentioned pnc which has a 4% yield. i was tasked with giving you stocks that yield over 4%. and so yes, that would be our top pick there but actually, i like two other stocks i wanted to mention the first is hemar advertising it is -- you said also nonreit but this is a rhino. reit in name only. it is a company that does billboard advertising. you notice it when you're on the

highway and getting hungry and see a mcdonald's billboard sign and you go in and like mcdonald's, three exits ahead. they know, they track you. they know when the car is passing and you go in there. they can measure the success of their ads and they are one of the largest billboard advertising companies in the country and they have over a 4% dividend yield and we think it's very cheap. >> wow 5.25 are we in general in an environment of rising dividend yields or do you worry about a period where they start to trim them >> yeah. so we -- we focus 100% on companies that can grow their dividends because if you don't have a company that grows its dividends you have a fixed income security which we do not want so we are focused on companies that have the capacity to grow their dividends for two reasons. either because they're growing their revenues, growing their margin, growing profitability, or maybe they're under paying relative to what they're capable of paying out. so if the percentage of free cash flow they're pointsbets out

is very, very low we like finding those companies too. >> where does energy fit in that spectrum >> energy, they have amazing yields now because they're coming off what was very good oil prices a year ago. we happen to think oil prices will stay high here. we're not expecting oil prices to trade down to 55 or $50 we think the yields in energy are sustainable. they're not the 10, 12% they were last year but mostly they have 5 to 6% dividends which we think are sustainble >> crh one we don't talk about every day but has apparently a high dividend yield. >> it's a little bit under the radar kind of name it's actually an irish listed name which is about ready to list in the u.s. so it's going to become a u.s. listed company, but they are one of the largest suppliers of cement in the u.s. they also have a big cement

business in europe cement is actually a great business to be in right now because of all the infrastructure spending we're doing. capacity utilization in the cement industry in the united states is highs almost 100%, so we have to import cement there's a pricing umbrella all these cement companies get to operate under which means they're actually very, very profitable and they can continue to pay that dividend and grow it. >> which is hotter dividends or buybacks for use of cash >> well, we're only focusing on companies that really want to grow their dividend. that's our priority. >> there was a hope that would become more in vogue because of the buyback tax and political environment. >> i think with the buyback tax still being low, you know, the company is probably still, you know,p can favor that if they feel the stock is under valued we're focused on companies that want to make capital allocation priorities on paying dividends and growing the dividends. that's what our fund is all about. >> we appreciate you sharing some of the names with us today.

sandy from newburger. >> meantime a slew of headlines out of the paris air show. we'll take you there live for the latest in a moment we're back in two minute s. ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ this is cynthia suarez, cfo of go-go foodco., an online food delivery service. business was steady, until... gogo-foodco. go check it out. whaatt?! overnight, users tripled. which meant hiring 20 new employees - and buying 20 new laptops. so she used her american express business card, which gives her more membership rewards points

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welcome back to "squawk on the street." big orders back at paris air show phil lebeau has been tracking that and joins us with more from paris. hi, phil. >> the largest airplane order ever was placed by indigo air with air bus five a-320s book value, a massive order. one of three stories that really has dominated the paris air show there's indigo's massive order, also a lot of discussion about the fact that as airlines are looking out to the future, increasingly they're realizing it's going to be tough to hit the emissions targets that have been set in europe, going to be expected in the u.s., over in asia as well, and finally there's a question of whether or not there's order over exuberance as you take a look at boeing and air bus, these guys are looking at backlog that extend beyond 2030 added to that for boeing, they

logged an orderer for eight dreamliners based out of taiwan. the country of china is a critical market for boeing which some believe may be opening up as you have a thawing of the tension between the u.s. and china. here's ge's larry culp talking about the importance of boeing for china and ge as well. >> we've been there 40 years, serve 60 airlines in china and begun to see that recovery take hold and we would really like to see our friends at boeing be able to resume shipments into china. so the blinkenen visit is the beginning of that transition, we would be fully supportive. >> got to take a look at shares of ge. they've more than doubled in the last year. larry culp yesterday telling analysts they expect to be on target 20% profit margins in 2025 a big story here are the

suppliers. ge front and center on -- at a show, guys, getting a lot of attention for sjust how many ors have been placed and the expectation of growth throughout this decade. >> what you're hearing about demand, because travel has been strong but at the same time it's some of the manufactures and they have been so weak. >> they're not going to be able to meet these targets in terms of the deliveries that are expected yes, they're increasing production and both boeing and air bus are optimistic they will hit the production targets they have set out there when you look at these backlogs they're close to a record high they're only within a couple hundred airplanes of hitting where they were prepandemic. they're going to blow past that. but the airlines feel pressured to put in an order right now even if they're not taking delivery until later this decade or after 2030. it's an interesting situation. we've seen it similar like after deregulation, curious how this plays out over the next couple

years. >> thank you phil lebeau at the paris air show. still ahead, another big bank cutting its growth forecast for china. find out who and why after the break. as we head to break june is pride month. cnbc has been celebrating all month long sharing stories of corporate leaders. here is google's head of brand accessibility. >> my advice is to tap into the power and uniqueness of your i tent incidenty that is the undeniable view and will, in fact, help build your career growth. early in my career i hid who i was at work. a kwooer disabled who m in tech. it wasn't until i started bringing all aspects of who i was into the work i did that i hit my stride. don't shy away from bringing your whole self to work. stand confidently into who you are and how you approach work will propel you toreer igs. gat

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welcome back to "squawk on the street." i'm bertha coombs with your news update hunter biden is expected to plead guilty today to two federal misdemeanor counts of failing to pay his taxes as part of a plea deal in delaware the court documents filed today showed a separate gun possession charge against the president's son will likely be dismissed if he meets certain conditions. legal sources tell nbc news the charges will likely not result in any jail time. the trial over donald trump's alleged mishandling of classified documents is expected to start august 14th court documents unsealed shows the legal prothe proceedings co last two weeks the search continues for a third day for a missing tourist

submersible that vanished on a mission to explore the wreckage of the titanic the u.s. coast guard says the ship went down sunday with four days worth of oxygen three of the five people on board have been identified as british billion hair hamish harding, and pakistani businessman shahzada dawood and his son. sara, back over to you. >> thank you a little over an hour into trading here stligs deteriorated. the s&p is down -- things have deteriorated the s&p down over a percent. dom chu. >> the stock pulling back broadly as you point out we are kind of just at session lows here. nearly every sector of the s&p 500 is down in negative territory right now. consumer discretionary is one of those notable outperformers, swinging between gains and losses positive headlines are driving the recent action. the biggest upside influence from mega caps like amazon and tesla. amazon sinking just into negative territory but it was

added to bank of america's list of top ideas for trades. tesla catching a bit as korean car maker hyundai is exploring its use of its charging station in north america the former logitech ceo is the new ceo. dr horton and lennar getting help from bullish data on housing starts and building permits. the consumer a huge focus for investors as they look for what kinds of stocks could hypothetically drive the next leg of the market rally or pullback carl, i'll send it back downtown to you at the stock exchange. >> appreciate that got fresh news this morning regarding bank mergers for that we turn to leslie picker good morning. >> good morning, carl. justice department officials are rethinking the way they evaluate bank mergers from a speech given by jonathan cantor, assistant attorney general for the antitrust division spe speaking at the brookings institution it's time to update the guidelines from 1995 which he says no longer reflect the

current bank industry. the three decade old approach focuses on levels for concentration and believes these are outdated because of the popularity of interstate banking, financial conglomeration and online mobile banking. >> the division is modernizing its approach to investigating and reporting on the full range of competitive factors involve in a bank merger to ensure that we are taking into account today's market realities and the many dimensions of competition in the modern banking sector. >> he says the agency will bring back what's known as competitive factor reports, analysis which pull in data sources to calculate market concentration, not just local deposits and branch overlaps. these would include fees, interest rates, branch locations, product variety, network effects, inoperability and customer service for the timing, cantor pg&eed it to the 60th anniversary of the

doj's role in competition in banking and did note that agency was, quote, coming bank merger policy against the backdrop of an industry that has experienced some recent turmoil but he adds that the reform idea was catalyzed well before march with a comment period dating back actually to 2020 he says the doj will work with fed, fdic and occ on new guidelines, but it could be a while before we see these reforms actually in place. guys >> that timing is interesting, leslie, although does remind us of what yellen said i think last week or the week before, that is she would be looking for some consolidation in banking because of what happened in march. i wonder, is there harmony between what we're hearing and what she said. >> it's a good he question, carl, because behind the scenes it appears the agencies are working together somewhat but there is a little bit of disjointed kind of response about what to do with regard to bank consolidation on one hand there's this political belief that they don't

want the largest banks to get bigger even in times of stress they believe that we should have 5,000 banks that we currently have in this environment because it promotes competition. on the other hand the school of thought why do we need 5,000 banks? what is the true value of having 5,000 banks. we've already cut that in half since 1995, you know, what's the harm in maybe cutting that in half again so i think those two, the bifurcation thinking with regard to how we treat bank mergers is going to be really interesting, especially as we continue to kind of work our way through this current banking situation >> yeah. an naadministration that hasn't been too friendly to deals overall. turning to china, goldman sachs the latest firm to cut their growth forecast for the country as the economic data continues to come in below expectations. let's bring in eunice yoon with more from beijing. we saw more rate cuts today but also more pessimism about the outlook.

>> yeah. absolutely goldman downgraded its outlook for china for the year from 6% to 5.4%. the bank has been arguing beijing is moderate policy isn't enough to offset what bank sees as a real problem and that is, weak sentiment to hsbc cut its forecast today the bank cited the low business as well as consumer confidence again as a major problem and this comes after several financial institutions had cut their outlook for china as well because of the may data which showed a lot of gloominess all the way around the policy cuts that sara mentioned didn't really improve sentiment much either. this was a benchmark lending rate that the central bank had trimmed by 10 basis points the problem, even though it was widely expected, it just wasn't

as aggressive as many people hoped, especially when it came to the benchmark for mortgages this is a five year lpr. that did not help sentiment, and it comes as people are debating what the government is going to do next. on friday a big leadership meeting. officials had suggested that they are very concerned about the economy but there wasn't any detail of any major stimulus plan and that's really what people wanted to see here. >> why didn't they go bigger is it a sign they're not in panic mode they went like a full percent during covid in terms of the rate cuts so maybe it's a good thing or maybe, what, eunice, they don't feel like they are able to fight it >> well, i think that there are a lot of different reasons that there's a huge debt issue here, so that there's a big debt problem and a lot of the authorities here remember what that was like working through it after the past crises, so that's one issue. also, a lot of the authorities

that end up paying for the infrastructure or doing all of these large-scale projects are the local authorities and colo currently a lot of local authorities are having major finance issues there are a multitude of reasons why the government authorities here don't want to go bigger, but what people are wondering is how long they will be able to kind of drag their feet on that, because the sentiment here is really, really gloomy. >> speaking of which, it's maybe no mystery, eunice, that they've hosted some big corporate leaders in recent weeks, jamie dimon, bill gates. we talked with cramer this morning about some of the comments about the blinken visit here being reflected through the words of xi that they're making progress, there might be a biden-xi summit maybe in san francisco later this afteyear is that how the readouts are coming there >> what's interesting is that goldman pointed out that now that it looks as though the

bounce from the reopening is starting to fade, that some of these what they described as medium term challenges are going to come to the floor much more and cited geopolitical tensions. you can see a reason why the chinese would want to work out this issue and now it looks like after the blinken visit, that more and more u.s. senior officials are going to come and the ones that maybe the chinese would think are more important or at least they've said before that they welcome them, are on the economic side. they said before that they welcome treasury secretary yellen, they would be open to the commerce secretary gina raimondo coming here because they want to work out these issues and feel as though those avenues when it comes to business are much easier for them to talk to, talk about, and get something out of, as opposed to blinken's visit or, of course, the military issues that blinken had flagged that even though he repeatedly on his tripped mentioned the

military-to-military talks are extremely important, especially direct talks, he said that chinese did not agree to move forward on that. >> pretty fascinating and, obviously, hugely important to global markets thank you. eunice yoon talking from china this morning. coming up a look at who is benefitting from the a.i. stock boom, but first, a quick programming note as we go to break. cnbc has been diving deep into the world of espionage and in an elicit campaign by china's government to steal american trade secrets. it's all for a documentary premiering tomorrow that discusses the risks u.s. companies face when they rely on china for their supply chain and their revenues starbucks, apple, and a certain ev company >> then there's tesla which has a car factory in shanghai, is building a battery plant nearby, and generated revenues of some $18 billion in china in 2022. >> i heard a case where there was a chinese company automaker

that walked into a parts maker in central china and they said, we just want what you've made for tesla. give us the same specifications. >> same exact stuff. >> same exact stuff. so - >> what does that tell you >> that tells you that sometimes copying is better than trying to create it yourself european union -- yourself. >> premiers tomorrow at 10:00 p.m. eastern and pacific don't go away.

. ♪ softbank holding its shareholder meeting overnight where massa sun made his first public appearance when

discussing the outlook, sun said a hoouj revolution is coming softbank won't be deter pid a few short-term losses and we will rule the world in the end and discussed a.i. saying i've made many mistakes in my investments, some of them embarrassing, but among the failures there are a number of buds that will blossom soon. never boring with words masa son. he has been talking about a.i. for many years, back to a cnbc interview in 2019 talking about a.i. and about, you know, just made some wrong bets along the way on that journey, of course, with a vision funds. >> interesting he says he uses chatgpt every day and talks to sam altman of openai every day he is going pedal to the metal. >> i think the question is where he points those investments and are they going to finally start to pay off. >> yeah. >> because there have been

missteps along the way and the confidence is there as ever though >> and rule the world. >> meantime while a.i. fever has pushed tech stocks to fresh highs one key group is seeing their boom further robert frank joins us with those details. >> good morning. the big run up in tech stocks adding over 150 billion dollars in wealth to the top tech billionaires larry ellison passing bill gates to claim the number four spot on the richest. ellison's wealth $138 billion, gained $47 billion this year on that oracle stock rise ga gates up on the microsoft increase steve ballmer adding $32 billion. jensen huang is the largest gainer bong the billionaires his wealth tripling to $38 billion he's at 34 larry paige and sergi written

having one of their best years ever, up $30 billion mark zuckerberg has the largest dollar gain among all the tech billionaires up $57 billion. still about $40 billion from his all-time peak. and then you were talking about sam altman, the ceo and co-founder of openai he does not have an equity stake in the for profit arm of openai. unclear whether he is, in fact, a billionaire at all right now the world's youngest self-made billionaire is alexander wong, the 26-year-old founder of scale a.i. but for the most part, it's the big getting even bigger from the a.i. craze right now. >> i wonder, interesting piece this morning in bloomberg looking at how the tiktok regulation story kind of faded on capitol hill. now all eyes on a.i. dick durbin saying congress has a short attention span, but i wonder to what degree some of these players come under scrutiny given the massive global consequences that will come from this technology.

>> it's great one because it's all about scale and these big already existing large companies that have the databases they have the scale, for large language models and generative a.i., they're the ones that are going to dominate and they're under scrutiny that will be a big issue. >> all right robert, thank you. robert frank. when we come back, the ad business top of mind for those thatan t chis week we'll take you there live. stay with us ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪

advertising a marketing festival in full swing and julia boorstin is live on the scene. julia, what are your takeaways >> reporter: i just sat down with kevin hart along with ty randolph, the ceo of his media company, hartbeat entertainment. they raised $100 million for expansion of the company with all of the buzz about ai

here at the cannes lion, hart tells me he sees ai as a tool and not a threat >> a new technology that presents itself, you have to embrace the space of new at all times. you know, i think seeing it through the test of time, we all will learn more about it, discover its durability and possible longevity for us, it's about finding the proper ways to align ourselves with it. if it fits the need or the want for us as a brand, then we'll embark on the space and place when it presents itself. right now it's just looking for the right discovery and placement for that to happen >> reporter: now, hart is looking at these ai tools across his multiplatform media business, which includes a studio for making tv and movies and media company that invests in music publishing, gaming and live events as well as a branded entertainment studio and

consulting which is behind shows such as the old spice "cold as balls," take a listen to how randolph explained their partnership strategy. >> we've been really, really fortunate to partner with some of the biggest names in entertainment and advertising in general to create some compelling stories, to create really good value to consumers for us it's been about value creation we found no shortage of opportunities there. we approach every partnership like it's a new one and a fresh one and a unique one >> reporter: another big topic here in 'ccannes is the writers streak kevin hart saying with the strike shutting down much of hollywood production, they are diversified and prepared. >> the idea of a strike is not something that's new these things come in a timely manner ultimately as a guy who is in all aspects of the business, you

want people to be treated fairly you want people to feel valued, and sometimes a conversation at a table to get there takes time. so, in doing that as a company, we need to be prepared for the spaces when they do present themselves and call audibles >> reporter: and in the meantime, hart continues to invest in and build businesses that are outside the entertainment industry he has hart house, his vegan fast food chain, which has been expanding, as well as hydrorow, a fitness company and even an investor in aura ring and many other tech companies hart telling me with all of these companies, the key thing that lets him know if he wants to invest is if it's part of his lifestyle. >> julia, you've done enough of these to know what the mood says about the overall environment. how does it feel right now >> reporter: you know what, it feels a lot more bullish than i anticipated. you know, last year we were already starting to see contraction, a lot of people

were speculating that maybe last year was peak cannes with all the yachts out there in fact, the attitude is pretty bullish. a lot of people telling me they expect a lslowdown in ad investment and they expect things to pick up in the end of the year and ai measuring ad's impact and seeing that as a driver growth potential. >> any disruption of ai in the marketing and advertising world? >> reporter: yeah, certainly there's going to be disruption there's a lot of conversation about which jobs will be lost or how jobs will be lost and also which types of new jobs will be created as people figure out how to leverage these tools. so far people seem to think true creativity is something ai cannot replace yet ai is more derivative than originating any new ideas. we'll see what this next generation of chatgpt looks like. >> certainly a tell in terms of overall marketing sentiment,

julia. julia boorstin joining us from cannes "squawk on the street" continues with the markets trying to repair itself after some opening losses. dow's down 340 we're back to about 4375 on the s&p. don't go away. good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back. every shot is an opportunity. and success requires drive, resilience, - wow. - get it there. and sometimes luck. but what if luck had less to do with it? what if we had the tools to help us practice smarter, the insights to gain an edge,

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good tuesday morning i'm carl quintanilla with sara eisen. setting the agenda, the most accurate strategist is calling for 4000 on the s&p. barry bannister will break down why he's been so bullish and the sectors he says set to take over. a diplomatic progress between the u.s. and china not enough to calm wall street concerns about the outlook goldman sachs the latest to cut gdp forecast leland miller of the china beige book will join us. just a skip or the beginning of an extended pause krishna guha weighs in as key testimony from the fed chair begins tomorrow. let's take a look at where we stand in the market the s&p is down 0.75%. it's still declines across the board.