minute effort by new jersey officials. new jersey officials are trying to stop it it is tuesday, june 27th all right? it's 2023. it is almost july. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick with joe kernen. andrew will join us live from the aspen ideas festival later in the show in a couple of hours because it is really early there. we have been watching what is happening with the u.s. equities you are going to see modest advances check it out green arrows slightly. dow futures up 17. the dow was down yesterday just

barely down for the sixth day in a row. s&p is indicated up close to 10 points nasdaq indicated up 66 s&p and nasdaq were down yesterday. that is the fifth of sixth sec sessions they have been lower. you see it that is what we are looking at over the course of the last few days treasury market with 10-year treasury at 3.37 the 2-year treasury is 4.7%. it is tuesday and almost the end of june. >> nasdaq got hit hard. >> it was off. >> a lot the dow was unch that's had been leading. we will talk to a guy who was actually bullish now i'm not sure he is so bullish. barry bannister. we will see.

our guests can count on one hand who are bullish from the beginning of the year. we will talk to him. they have a right now to be less bullish. >> we will talk to seth klarman. >> how has he been >> he is buying the big tech stocks before things started running up we will talk to him about that seth is somebody who almost never talks. we have been trying to get him on for years. >> he is in studio >> he is in studio with us that is exciting treasury secretary janet yellen plans to visit beijing in july according to a bloomberg report yellen said the trip had been planned, but put off until an appropriate time the biden administration is close to finishing work on the executive order that would regulate and potentially cut off certain u.s. investment in that

country. the saudi public investment fund bought more than 265 million shares of lucid worth $1.8 billion the placement of common stock is 15% of the total stock outstanding. the saudi fund owns 66% of lucid. you can see the stock is up 7% lordstown motors is filing for bankruptcy and putting it up for sale after pausing the production of the pickup truck it resumed in april, but at a slower pace. lordstown filing a lawsuit against foxconn. accusing the company of fraudulent conduct and series of broken promises and failing to invest in $170 billion in the ev maker. meta announcing a tool and other tools to help families and teens manage the amount of time

spent on its apps. including a nudge on innstagram to suggest they close the reels app at night teens get notified after 20 minutes of scrolling and adds additional parental supervision and features on instagram and messenger. >> they try to make it as addicting as possible and build around it like the casinos with no windows and stay as long as possible we will dbeep you and say shut t off. >> they advertise liquor or alcohol. >> bud >> at the very end, it says drink responsibly after it shows how much fun people are having >> by the way, if you are an adult, you are making your own

decisions. these are products targeted at teens. >> go away >> okay. i saw it i'll stay on separately, mark zuckerberg, the cage match, with elon, is not going to happen. >> it is not >> elon's mother said no >> yeah. >> hopefully she can tell him. >> somebody should be telling them >> mark zuckerberg announced that whatsapp supports more users over 2020. it will allow you to create facebook accounts and ads within the whatapp platform. and labor market news. ford confirming it will layoff this week engineering jobs in

u.s. and dcanada the company did not say how many employees would be affected by this you can see the stock up by 2 cents. trading platform robinhood said it would layoff 7% of full-time employees or 150 people the third round of layoffs in over a year. blackstone is fielding offers for half of the interest in the real estate of the bellagio in vegvegas the firm is considering its options and hasn't committed to a sale blackstone bought the property four years ago for $4.5 billion. it operated under a long-term lease with mgm blackstone has been looking to cash out on the real estate positions. yesterday, it announced plans to sell the portfolio of warehouses and industrial properties to

-- $3.1 billion. and vladimir putin spoke last night vowing the organizers over the mutiny would be brought to justice they were putin's first comments since the wagner group marched to moscow. putin thanked those involved in the mutiny calling it the right decision to stop at the last line the soldiers would be permitted to join the russian army or return to belarus or return to their friends. shares of carnival tumbled 7% yesterday after the second quarter loss revenue beat estimates ceo josh weinstein siaid bookins hit all-time highs the report appeared profit taking although the decline.

the stock is up 30% for the month and 80% for the year still not thinking about it. >> a cruise? >> yeah. >> no. still to come, as i said, i talked about this. stifel's barry bannister reiterating the call by the third quarter. we hit it. came close what do you think? later, house speaker kevin mccarthy will join us on the set at 7:45 a.m. big speech coming from president biden tomorrow night we heard a preview of that from jared bernstein yesterday. we will see what speaker mccarthy thinks. we'll be right back. - [soldier] take a look at this! - they've left us a gift. - [soldier] i think we misjudged them. - i love horses. (birds chirping) - [soldier] we should open the gate.

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nasdaq on track for the forth po fourth positive month in a row we have barry bannister with us from stifel to talk about it at the gaining of the year, your target was 4,400 >> yeah. from october of 2022 to june of

2023, we participated in the rally. i think we end the year at 4,400. that be llies an lot the volatility investors will get chopped up. we are treating the third and fourth quarters as heevent. we will have a selloff in september or october and maybe the fed will cut in november or december and get a year-end santa claus rally. >> it's funny because a lot of the people that really weren't looking for much of a year are now pointing out you get a good first half and a double digit addition to that strong first half some people talk about additional 10% in the second half of 2023 you think the lion shares is too

much >> i try not to look at the entire period. the gdp is fine for now. with the market in terms of the cyclicals, you know, it was the avoidance of the classical recession with the massive money dump in covid in the first half which saved us as we go into the third quarter, it is the avoidance of the outright recession in industrial production and pmi indices that avoidance that gives you the cyclical bounce. as you get into the year end, the fed catches up gdp will fade and unemployment will rise and reaction is too slow. >> you think the fed will overshoot? if it is not happening until then, they will think they still need to keep tightening.

you think they go another 50 basis points >> well, if you look at the fed funds rate minus core pce inflation, you can use three-month annualized or year over year, whatever. what will happen as we go through the year is the inflation will slow and they will stay at the same rate the real interest rate, rate after inflation will rise. passive tightening that level myay be restrictive y the fourth quarter you know, they are dogmatic now. the reaction function will be slow they will let things worsen first and the market will see that and sell off in october and november. >> the seven horsemen of technology those are not cyclical >> big tech is cyclical growth

semiconductors -- they are not value. when you think about big tech, what they are is very short cycle capital goods. that's a semiconductor capital item even expensed for corporation will be software there is a cyclicality to big tech that was part of the rally the other part was obviously a.i. >> do you have -- can you look further than 2023? when do you think the s&p finally eclipses its old all-time high? >> not until 2027 at the early -- earliest we had a secular market since 2021 real terms adjusted for inflation is 5,250 on the s&p

500. i doubt we see that level again for many years as a consequence of pe compression offset by nominal earnings growth and the environment is going to be a aggravated by the impulse particularly for commodities we are not done with commodities. i would add to the list with energy be an energiy service. >> that would be a five-year secular market which we have not had in a while a lot of people said regression or meme. that is in the cards you are not talking about why it happened, but staying at zero for so long has consequences with the fed of that might be healthy to have a

five-year period where you did not make headway that may set you up for the bull market that is a five-year market that you described. 21 to 26. >> that has been or call beyond the seven years at ezero rates that mr. druckenmiller talked about, when you dump that much money in the economy with covid as they spent on world war ii in the united states and adjusted for inflation, not only do you buy off some of the signs of the tradition recession which is our call for 4,400 rally, but you distort every single aspect of financial assets and economic behavior, including the labor markets now. so, you know, it was bad policy. you know, private investment and

work don't as a consequence of that, we are in a difficult period, i think, for investors in the coming years as we wean off the impulse to spend just unbelievable amounts of money 5.5 or $5.8 trillion >> the fed can make things look better, but not make things better when you got no price discovery, you don't know what bonds are worth or what anything is worth when there is that much money. no price discovery we got to go you think inflation is headed down as we get further from the pandemic you think the labor market stuff is normalizing and other things normalize. although commodities are heading back up? >> the core pce deflator, that was about 1.5% to 2% in the

prior decade of 2010s of it will be closer to 3% this decade essentially a double that is not drastic. commodities will out perform consumer prices and that is one of the hallmarks of the secular bear market. >> all right they think i'm interviewing the gipper you are a handsome man and gravitas almost like ronnie. a young -- well -- a young ronald reagan. >> there you go again. >> i'm not going to mention it >> that was good well done, barry you heard it before. you have the actor name going already. >> sure. sure happy to be back on the show i love to come to new york.

>> that was a special request. i couldn't remember who it was the young whipper snapper wrong about the market i wonder if it was stifel. >> it wasn't barry >> thanks, barry >> thank you when we come back, chevron ceo mike wirth spoke to andrew at the aspen ideas festival. we have the highlights next. later, an interview with seth klarman you probably have never seen an interview with him today is your chance he doesn't disclose how he has done, but people believe that he's got returns north of 20% going all the way back to the 1980s. phenomenal record. a new security analysis seventh edition. he will join us to talk about it we'll talk to him about what he sees in the market he is joining us on set at 8:00

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at the aspen ideas festival, andrew spoke with mike wirth about the automaker's demand for the future >> not just gm, but everybody was electricfied immediately, yo would have 75% of oil demand untouched. it goes into ships and off-road mining and agriculture and long-haul trucking and aviation and petrol chemicals the demand for our products is likely to continue to grow even as we see great progress on evs and as we see great progress on renewables because of the population of the planet grows and number of people living a middle class lifestyle continues to grow. that is driving energy demand higher. >> andrew asked wirth about the comments from larry fink who

said the term esg is being we we weaponized here is what wirth said about that >> i still use the term esg. the issue is weaponized by both sides. you are referring to a pushback from the right the left had been vocal for a number of years. you are seeing the pendulum swing back we saw it in the annual meeting. we had a number of proposals which garnered more support than this year. investors the calibrating on this this is a discussion evolving. >> more from the aspen ideas festival ahead and including andrew's inter you hview with m -- mary barra >> i think that is hill agh hils

the arsonist starting the fire hilarious. when we withcome back, new weight loss treatments from ozempic. and new york city moving ahead with congestion pricing for heavily trafficked areas good idea. give more people reasons to work from home. we will explain the new tolling system and when it takes effect. right now, as we head to break, let's look at yesterday's s&p 500 winners and losers

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. we have early green on the screen high for the dow nasdaq is rebounding a little. not a lot of action in the last week and a half or so. it was a pretty good month and good first half for the equity markets. >> the dow has been down six sessions in a row. >> after being up. the nasdaq just confounding everyone since january 1st >> yeah. new developments in weight loss drugs the manufacturer of the injectable wegovy said pill version helped people lose 15% the body weight. pfizer advanced a pill candidate to a phase 2b study and eli

lilly is reciruiting patients after the clinical trial helped patients lose 24% of their body weight in a year we have angela fitch with us dr. fitch, thank you for being with us today. do you say obesity is an epidemic in america? >> it is up to 40% of americans have obesity. that is expected to grow to 50% by 2030. that was fromprojected prior to covid. >> what do the new drugs mean? >> it is exciting forus. president of the association of

dec clinicians have helped patients with the disease now more than ever we have more treatments to help them reach their health goals and wellness goals. >> i think back to prior drugs and different regimens we thought were effective like fen-fen from 20 years ago. anything too good to be true probably is. is there anything different with the class of drugs >> a lot of these medications are in the startup to this have been around for 20 years we have an lot of data on the medication including data to show people with diabetes who also take the medications and that they can prevent cardio disease they have anti-inflammatory benefits and reduce infl inflammation

noro is studying this drug in alzheime alzheimer's. they have a number of effects. if it sounds too good to be true, but it is the advancement of science and understanding of the disease of obesity >> what are the risks associated there could be cancer risks potentially with some of them and the other issue is do you have to stay on these drugs forever to maintain the weight loss >> that is a second -- i'll push that back and say we don't ask that about other chronic disease. part is the disease is a moral failure of patients and not something that is related to disease like hypertension or diabetes we have diseases where we are on medication for the rest of our lives to live a longer life

throughout the life span we don't ask that question are we going to go off these medications. nobody wants to be on medication or have surgery. not wants to have a disease. if we can advance science and treat the diseases to live longer lives, that is the biggest issue. >> you can finish that point, but i was thinking it is hard to find any drug that doesn't have a side effect profile. obviously, the benefits of dealing with obesity is just huge and such an advance it wasn't designed for that. it was a diabetes drug it makes me think of monoxodil for high blood pressure and my hair is not falling out. and viagra, too. it is weird. it is serendipitious

it makes me uncomfortable there are side effects we don't know about. the benefits seem significant and it is never perfect. >> exactly there is always side effects that is what we do in the evidence based treatment of obesity. we manage that with the patient. we have a shared decision making discussion about the risks and benefits to the question of cancer risk at this point in time, we don't have any clear increase risk of cancer of any sort with the class of medications there has about a lot of speculation of that, but also a lot of look at the data of patients on these drugs for 20 years. like other issues, we know obesity increases your risk of cancer in treating obesity, you treat the risk as well there is a plus/minus issue that goes on that we weigh.

>> what about off-label usage for those who don't have diabetes you hear ozempic face. where does the risk/reward drop off? >> that is where we think they should be used drugs should be used responsibly in a chronic disease pathway with your doctor who is helping with the diseases to treat the important things in our lives. i think the focus should be on ozempic face is not specific to ozempic. it is a side effect of weight loss if you lose a substantial amount of weight, with 100 pounds to lose, you will look different. the skin looks different that is the side effect people have to manage >> is it dangerous if somebody is 5 or 15 pounds overweight or

wants to take this to fit in a dress or suit -- >> again, we have clear guidelines that we use in the metabolic syndrome some patients may have a smaller bmi or lower bmi and have the disease of obesity that is what the ama announced the look of the number on the scale and the metabolic health >> the upper side. everybody is embracing >> the doctor said i don't have to exercise. i have to take the pill. i used to be on the treadmill. now i take ozempic what is your bmi 30 for obesity i have a friend at 26. what would that -- >> asking for a friend. >> as far as a fat person. is that fat at 26 bmi?

>> we use different criteria we add waist circumference if there are racial or ethnic issues, that could increase the risk adiposity. the fancy word for having excess tissue that increases your i inflammation and risk of diabetes and heart disease. >> got it. >> i would like to hook up electrodes to my muscles and watch tv instead of working out. a lot of these things you need to -- the shortcut are not as good as the old fashion way of burning calories after you eat i don't want to hurt my appetite all of a sudden not want to eat? it is too good to be true, doctor for people who really are obese,

it could be good just the frivolous off-liabel use. >> you have to remember 70% of people in the country have normal metabolic health and adiposity. that is an issue for people who want that treatment. you have to recognize not everybody wants treatment. that is where -- we don't condone, as you mention, use these medications for that ten-pound weight loss to wear a different size or dress. >> fit back into a size is what you are saying >> doctor, the idea of the pill instead of an injection. what does that mean? is that broader use for people more willing to take it? >> exactly

it gets it out to people easier. it is not an injection and transported in a cold environment. there are issues with giving injection and now we have a pill, it is just going to really increase our access to care. >> dr. fitch, thank you for joining us >> thank you for having me >> i look better fat. >> what? >> i look better a little bit p f -- bit fat. ozempic face is not good fill in your wrinkles. >> with age. yeah. coming up, perfect right now. new york city moving ahead with congestion tolls with heavily trafficked areas. and don't miss our interview with speaker of the house kevin mccarthy to talk about the biden economic plan and his travels around the country to talk about a different way of doing things. not surprising

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barclays corporate and investment bank powering possible. new york city's metro authority is moving forward with congestion pricing

drivers will face a toll and the price hasn't been set but estimates from $9 to $23 politicians in new jersey had been pushing back arguing that drivers pay $17 to cross a bridge or tunnel would be squeezed by the added toll new york officials call it a quality of life enhancer yeah reducing traffic, improving air quality and providing resources for the transit system it improves because more people won't come back to work. why would you add this and have another reason not to come back to work when you say you want them here to eat in restaurants and shop downtown. the mta says it hopes the tolling system would operate by next spring. tolls will be enforced by systems to scan license plates south of 60th street drivers along the east river can avoid the fee. low-income residents of the zone

will receive an offsetting reb rebate we are in the heart of the area. we can help. we can move the show back to angle cliffs >> i don't get sick in the car >> you are not paying the tolls. >> i can prepare >> at home travel over the fourth of july holiday is expected to beat 2019 numbers aaa says more than 50 million americans are expected to travel 50 or more miles from their homes. how far is your home >> more than 50 miles. >> 100 and something 125 each way >> i don't know how you do that. i drove 110 miles today and it was nutty. that is all i could think about. >> it makes his hair stand

straight up. >> it takes a toll as we talk about the mta. >> that could break the 2019 record of 49 million aaa says 43 million will travel by car more than 4 million will travel by plane when we come back, we will meet our new neighbor here in times square fast food chain raising cane will open a store in new york city and you can watch or listen to us live any time on the cnbc app.

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raising canes opening its

first new york city location, and it will reside in the paramount building and joining us, raising cane's coo. my kids only order chicken fingers half the time, and that's what you make, chicken fingers and fries -- >> yeah, and our secret sauce -- >> no burgers or desserts? >> no, we stick to what we really know well, and that's all we do. >> the sauce is -- cane was a golden retriever, and so it's not about hot sauce, it's a sweet secret sauce can you tell me anything about it >> it's a secret only the managers make it fresh, so it's not packaged or anything like that, and it's made

multiple times >> the managers that make $19.50 an hour, or at least $18.50. >> that would be the restaurant leaders and partners, and they are way up there >> the average wage is $18 >> the average wage is right at 19 right now we have seen crazy inflation in the last few years >> you are no small outfit either how many restaurants >> 750 >> in 36 states? >> 36 states and four other countries across the middle east all company owned, though. we don'tfranchise and we try t operate our business ourselves >> how did it come about >> the first restaurant opened in baton rouge, and todd graves was the founder, and we have been growing and this year we

opened about 100 new restaurants in the united states >> $10 billion in annual sales 150,000 employees. >> yeah, that's our goal that we just announced >> okay, outlook this is what you are looking for, by when >> before we close out the decade, we will be -- >> this is by the end of the decade >> yes, sir. >> current rate is what? >> 2027. >> where are you now >> we are at $4 billion. >> still really big for something i have never had how breaded are the chicken fingers, and why are they better >> they are fresh and never frozen, and we bread and fry and

serve them to order so it's good to order every single time that's what we have been doing for a long time. very focused i would call it we get to train our crew members to do that one thing over and over again so it makes for a better product >> i think of a chick-fil-a where they basically did one thing, and you go in now and they have salad and fruits and everything else, and -- >> well, it takes away from the focus, and then we can't do what we do really well. >> what would it cost me >> a box combo, comes from french fries, toast, and coleslaw or something else -- >> people don't love coleslaw?

>> i don't either. it's about $11 >> what percentage of people take the coleslaw? >> 60% of the people substitute the coleslaw >> for what? >> toast or more sauce, and i always get more fries. >> the fries, what are they called >> crinkle cut fries again, they are just idaho potatoes cut into crinkle cut and fried. >> when you raised prices it didn't hurt your margins, or when you raised wages it didn't hurt your margins? >> yeah, inflation, and we had to raise our prices. we invested about $200 million in the last two years into just wage increases we did about a 10% price increase this year and have not

taken anything this year yet >> when will this place open >> at 9:30 -- >> would it be open to get something over here. >> we will make that happen, sure >> just a thought. >> it's in the neighborhood. >> we will talk about it again >> very excited to be here >> it's got to be here before 9:00, though >> we will make it happen. >> thank you when we come back, earnings alert for you. walgreens is set to report we have those numbers after the break. and then don't miss the rera interview with seth klarman. we'll be right back. with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com

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i'm joe kernen with becky quick. >> who is buried in grant's tomb >> uh -- >> granted and his wife. >> that's a trick question if a rooster lies an egg -- >> roosters don't lay eggs, hens do gotcha >> not that much going on in the futures or treasuries, and we can get to our guests. >> bertha coombs joins us. >> walgreens earnings for the first time in three years, and they were 7 cents below estimates and the top line is the revenues did beat the company lowering guidance citing

lower covid sales margins. a big drop in testament made for flattery tail comps, but the ceo also calling out a more cautious and valued consumer cutting back in the skdiscretionary spending spending on expansion made for wider operating loss and estimates for fiscal 2023 walgreens now sees earnings of $4.05 per share, well below the consensus. >> the stock is now down by 7.7% bertha, thank you. we will see you later today. our next guest says the market has been driven by eight stocks and that concerns her she calls it the elite april, apple, amazon, nvidia, microsoft, netflix, tesla and

alphabet, and joining us is a cnbc contributor, and you have not said we are going to continue to see the gains in the market feel lonely right now? >> well, the stocks are up so significantly, if you look at the dow and the equal weight, those are up 3% or 4% on the year, and if you look at it, those eight -- i don't know why everybody leaves out netflix, and what is the hate on netflix? >> they just told me to do this, and i apologize to interrupt, and breaking news from phil. >> we have an ak for delta, and

the company is now expecting to earn between 2.25 and 2.50 a share, and the street was at 2.16, so that's why you are seeing the stock move higher right now. the revenue, the guidance is up 17 to 18% versus last year, and previous was 15 to 17%, so there's an increase there. and the per seat revenue per mile is expected to be flat to positive 1%. for pr2023, the guidance, they expect to be near the top guidance of 5 to $6 a share. previously they said 15 to 20% increase versus last year, or versus 2022, and an operating margin towards the top previous guidance being 10 to 12%, and they are also raising their 2023

free cash flow guidance and expect it to be $3 billion, and the previous was $2 billion. all of this also means they will lower their leverage and reiterate their guidance for 2 sz lots to discuss with the delta ceo. you won't want to miss what he has to say, not just about the economy, but his vision for transforming delta three or four years down the road. back to you. >> thank you, and we will see you in a bit >> let's get back to victoria green and what she says in the markets. anybody that thinks the market has more room to run probably thinks the other 492 s&p 500 components will catch up >> you have to tesla has been downgraded four times and is showing cracks, and

you had walgreens miss and delta raise and beat, and that's the fundamental question, how healthy is the consumer. i feel like every retail stock right now is saying the consumer is stressed, and dollar general saying our consumers are stressed and home depot saying the remodeling binge is over, and costco is saying they are not buying steaks but chicken. >> they are taking away from the retailers when they couldn't go anywhere, and now they are spending it services and travel. >> yeah, if you have been in an airport, everybody is at the airport. if they are spending more on services, they still have to pay rent and food and student loans are coming back into play for october, and how much more pressure can the consumer take

my opinion is the rally is built on sand and we are swimming in shark-infested waters, and in the bottom, have we troughed or is there more to come? we almost forgot about the lag the reason there was a pause is because we had the lag affect coming and the expected slowdown on the consumer side and at some point i think the consumer will break under the burden of spending and don't have the savings to continue to stimulate the economy. >> i guess the question becomes how hard of a break? the consumer slows down or the consumer starts to look like normalized spending or does the consumer crack and break, because that's going to determine what the reaction in the market and economy is? >> absolutely. hard, soft or immemediocre land and six months ago the word was

lag affect, and now i know the recession was a pocahontas poke, just around the river bend 30 about the '70s and the '90s, we had similar situations where we had stimulated stock rallies, and the history repeats itself and rhymes at the very least if you have this concentrated valley and we get a little stress that typically doesn't bode well for markets. >> what would you tell people to do at this point >> watch your phone. anytime you start thinking the stock just can't miss you have to step back and say fundamentally after stocks run up 140% this year, is it worth the multiple you will pay? you want to look around at

value. look at equal weight and don't just concentrate in the last six months, and can their earnings justify their multiples? is the a.i. affect going to happen enough in q2 and q3 >> are you convinced the consumer petering out and the consumer dropping off and the market downturn, that happens in the second half of this year >> i think it does, because i think the rate hikes as well as what the banks are doing is sucking the liquidity out of the system, and we had a hidden stimulus in march when the fed bailed out the banks that added liquidity to the system, and i am interested to see what the banks have to say, what they are saying about lending and god forbid we talk about commercial real estate, how much stress is that

i get it coming down the pipe has not happened in the first half, but it's something you cannot miss, how long and sustainable is the rally and if you are getting in at this point be careful a.i. may not help in q2 and q3, and it has to drive earnings somehow and an increase in earnings for you to justify the multiples. you need to be doing your due diligence. this is not a rising tide that lifts all boats. >> thank you and then a wide ranging interview, gm's barra with andrew that's coming up next. "squawk box" will be right back. n to connect data across clouds, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time... check. ...to make quick decisions?

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wide ranging interview with gm ceo, barra. >> bank of america put out a statement, and this was cars and not just gm, and there's greater uncertainty around uncertain and

volatile for product strategy ever do you agree with that >> when you look at general motors, it was back in '18, when we were working on our platform and we know the portfolio. we keep looking and i will say adjusting and tuning it until we see what is successful, and building on the bold ev, and the hummer and bolt and the chevrolet blazer and -- i mean, we have been working on a very thoughtful portfolio to cover the main segments. we are not trying to re-create our internal combustion portfolio, and we are looking at the consumer and what they want and i think we will have a very robust portfolio >> you talked about 2035 >> uh-huh. >> zero combustion engines,

really do you think you are sitting there saying i believe her and i have to change my plans completely or this could actually take a lot longer >> i think first you have to remember the car park in the united states alone is 250 million vehicles, and so when we say in 2035 we are selling all light-duty vehicles and will be electric, it will take time after that and i know mike worth and i think he believes me, and that's what gm is going to do. from a full line manufacturer that is internal combustion and evs, we are the only ones that have said that about all our brands >> 30,000 to $40,000 vehicles and doing that profitably. that will take until when? >> a lot of the vehicles we put out now are put to scale, and i don't talk about individual

profit line profitability, but we are on track for 2025 to be in the low and mid single digits, and that's before the low ira, and later in the decade, a lot of it will rely on getting costs out of the battery and that's where the cost opportunity is >> is there an idea that there will be vehicles that you will sell unprofitably to seed the market, if you will? >> i would say, you know, we are going to where we know the consumer has to be to get to the volume and we are going to drive to profitability as quick as possible, and then the ira on top of it and the software services i think we will see the profit profitability, affordability with tesla, what was important there, general motor customers had access to 13,000 chargers in the u.s., and that doubled it.

>> was there a moment when you were, like, we're doing this it might be the right decision but it is hard >> i think what the industry could do is partner, and we have a partner on many things with honda and i think our industry could be more efficient, and with general motors, we were able to save >> does elon musk call you up -- >> we have a texting relationship we have met before on a handful of occasions and we text each other. >> no dm'ing on twitter now? >> i text him. >> let me ask you about autonomous corrects and the cruz, and you are adding a couple cities, including houston. you talked about this being a $50 million business, and that's seven years from now this is about a billion-dollar

business today, not even -- i'm sorry -- >> well, we said by 2025 >> uber is basically a $30 billion business annually, and just help us with the numbers. >> when you look at -- when you open up the addressable market when you get the cost down, and in today's rideshare what the most expensive component is is the driver, and when you replace the driver with technology and cruz has all the technology roadmaps to get the cost out of what that vehicle would be, and we will get the cost to a reasonable point which will open it up. when people see the quality of the ride and get in an origin and you can share rides but really have your own space, or it could be space for yourself and then you look at the personal autonomous vehicles, and it opens it wide up. having taken several rides and tphoeg the plknowing the plans,i

couldn't be more excited for us. >> let's talk about china, and there are a lot of concerns about doing business in china, less so maybe from how the chinese may be treating u.s. companies, and more about how u.s. companies are doing business in china or relying on china for parts, supply chain and et cetera. how are you thinking about that? >> i think we learned a lot in the pandemic that i think every industry looked and said we have to have a more robust supply chain, and we are looking to develop more supply chain resiliency and that's across every region of the globe and i think everybody realizes you need more supply chain resiliency than we have right now. in china we have a strong business we have seen share loss, and there's more than 100 domestic competitors right now, and there's less than handful that

are profitable right now there's lot of change happening in the chinese market and we have strong brands and are launching evs that are right for the market, and we hope the two countries can find a level playing field. >> how concerned are you about chinese vehicles being sold in the u.s. >> we need to make sure we have the same rule set, and if we export to china, you know, the lowest tariff is 25% i think we need from a business perspective, and we will compete, but we need to make sure we have a level playing field. >> now that you are a texting buddy of elon musk, in the cage match that is supposed to happen between mark zuckerberg and elon musk, who are you rooting for? >> you know, i have no comment on that whole situation. >> will you go >> that's not my thing >> if it was in detroit -- >> no, i wouldn't. it's not my thing.

>> andrew will be joining us in the next hour with an interview of the ceo of ralph lauren, and we should mention nbc universal news group is a partner of the aspen ideas festival when we come back, paramount is merging it's subscription today. then we will have speaker kevin mccarthy "squawk box" will be right back. [coughs] good to go. yeah, i think i'll get a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. no. i'm going to get a second opinion. with innovation refunds, there's no upfront cost to find out. so why not check like i did for my small business? take the first step to see if your small business qualifies for the erc.

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welcome back let's take a look at walgreens stock quickly here you can see it's off by about 6.6% this came after the numbers came out, and ubs cut its price target, and that's taking the steam out of the dow futures dow futures down by about 17 points after starting earlier this morning in the green. today paramount is urging its two subscription streaming

apps julia joins us with the latest and what it means for the media landscape. good morning >> good morning, becky this is the great rebundling services that debuted as a la carte alternatives are now being combined after paramount shares plummeted that showed losses in the streaming division, today the company is launching a combined service at $12 a month without showtime this competes with the likes of netflix and disney plus as paramount and others bundle content to minimize users turns, and they indicated $700 million in cost savings from the show time integration the bundle something part of the broader trend. last month warner brothers

launched the streaming content disney announced it will merge hulu content into the disney app, and netflix, which creates a different type of bundle the question is how much this rebundling indicates the potential for more media consolidation. the biggest potential losers from all of this rebundling, the paid tv providers, who, as cord cutting continues, will lose revenue from the larger traditional pay tv bundles you may not be paying for things a la carte, but you may not have to pay for all the channels you

never watched. >> there's so much talk about consolidation and not all of the companies can continue with their streaming services and then you look to washington and the regulators, and what are the odds that anybody could get a deal done? >> well, look, i think what we are seeing now with the rebundling is the step before consolidation. these were all assets owned by the same media company, and if you look at the media space and look at assets such as paramount that owns cbs and movie studio, and the likes of warner brothers discovery and that has cnn and all these other pieces, and i don't think it would be a full blown acquisition if either of those were to come into play, but more likely perhaps a splitting off of those assets. if you look at what paramount has, much of it could be acquired by other players, but

the regulatory environment is a question mark when it comes to consolidation. >> thank you we will see you soon coming up, transportation secretary, pete buttigieg warning of flight delays and cancelations due to a 5g upgrade. plus, president biden is set to deliver a speech defending his economic performance tomorrow. and house speaker kevin mccarthy joins us later this hour and then seth klarman will join us that's very rare you're watching "squawk box" here on cnbc ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf

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delta's ceo joins us >> joe just set us up by saying you raised your guidance for q2 as well as revenue give us perspective on why this summer is stronger than you

expected just a couple months ago? >> first of all, our people are doing a great job and our demand, as you know and anybody traveling knows, it's off the chains whether it's in the u.s. or europe or asia, people are wanting to travel and are prioritizing travel. as a result the demand we are seeing today is stronger and the value is more, and i think the second quarter will be our highest q2 earnings in our history coming just three years after the start of the pandemic, which is pretty incredible the other data point we will be sharing today is we are putting a new marker out there to generate $10 billion of free cash between now and '25, because we think we are in multi-year recovery. >> you think this continues for sometime >> there's no signs of any letup. i will give you a couple data points in our industry, 75% -- we all

talk about the consumer and health of the consumer and worry about cracks in the consumer, and we get that. 75% of our revenues come from consumers that are in the top 40% of earnings, households making $100,000 or more make up 75% of our revenue base as an industry, and delta arguably is higher than that the wealth that cohort has accumulated since 2019 is over $25 trillion they have the wealth we are talking about excess savings in terms of incremental cash savings, that's strong. and the second thing i want to mention quickly is we talked about the shift between goods and services starting to return, and we are still in the middle innings of the shift and i think it will take several years before it eventually starts to normalize. >> which begs to question, yes,

you are at a 52-week high right now, and when does wall street look at the airline sector and give you the same multiple and credit they did prepandemic? >> it will take time we went through a pandemic a lot of people lost money because of the pandemic. there are investors that will want to be confident the all clear sign is given, and you started to see the stock move last month, and i think it will take time. give you a reference point we have been through this before, and we are talking about the prepandemic. in 2009 our stock was $6 a share in 2009. we got to $60 a share in 2019, right before the pandemic hit. a 10-fold increase we have done it before and we will do it even better this time because of the strength of the balance sheet we are focused on, and that will make sure that we have a more durable outcome for the future >> which is a big part of what you will talk with analysts

about, 2025 and '26 and beyond for delta. you see this as an entity and not just an airline. what do you see it looking like years from now >> we talk about being a brand, and transportation is what we do, but experience in brand is what we deliver and that's why people choose delta. we are one of the top brands in the country and people are starting to see that, and we are seeing that in the revenue base we have and the brands seeking us in terms of the affiliations we are seeing, and everybody is talking about a.i. and this is not an a.i. pitch, but this is about our ability to take a.i. -- a.i. will be a piece of it but not only a.i., it will help us to build better, and we

will be done next year with our cloud to aws, and it will give our own employees the ability to get better decisions made in terms of how they run the business reliably and customers' information. we are a massive data organization, and carrying 200 million people at scale, and it will be durable in terms of what it will create >> that vision sounds great. and let me give you a counter point in the industry. congestion issues, reagan national and the parameter rule and are you concerned the investments are not being made as they should be around the country in terms of preparing the industry for the growth expected later this decade >> i think infrastructure is something we have talked about for years, being under vested in and not having the leadership. i am not in the political

office we have given our point of view. i think one thing we have to do is make sure sufficient funds allocated on a long-term basis that are not determined by political types but by actual people that understand, and unfortunately it gets in too much of a political debate, and regardless of that, when i talk about digital -- i will give you another data point we have today, today we have a $40 billion installed capital base, our planes, our airports and everything we do if digital can't deliver three to 5% return back, and that will help on the infrastructure side and loyalty side, and that's billions of dollars a year of return without having to go through the traditional growth measures and putting more planes in the sky >> guys, we will send it back to

you from atlanta >> phil, thank you thank you, ed, too when we come back, house speaker, mike mccarthy will be our special guest. check out the futures this morning. you will see it looks like the nasdaq is still up close to 60 points, and the s&p futures up by 7, and the dow is down by almost 30 points, and you can thank walgreens for that this is real time insights the consumer markets leader, kathy, thank you for joining us.

when it comes to the consumer, we are getting mixed signals right now. >> you are right, consumers are still spending, albeit on credit, and then geopolitical tensions and monetary policy suggesting we should be a lot less enthusiastic. we are saying to our clients, really take advantage of a.i. driven scenario planning and build a set of no regret priorities >> what are some of the priorities >> the top three that come to mind is continue to focus on growth and innovation, and cost containment, and look into the supply chain third, this is the time to look at workforce resiliency. robot robotics have come a long way. >> how are you seeing this play out in the industry? >> this is the time to look at a competitive advantage, and that's around emerging technologies, generative a.i.,

web 3 and social commerce. it's clear in a capital constrained environment those companies that placed their no regret strategies versus the ones that haven't. >> thank you for sharing your expertise. coming up, house speaker kevin mccarthy joins us. at the top of the hour, the 8:00 hour, a rare and exclusive interview with billionaire investor and author, seth klarman. a reminder to get the best of "squawk box" in our daily podcast, and follow squawkpod on your favorite podcast and listen anytime. stay tuned

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we spoke to jared bernstein yesterday about wage growth and job creation >> it's not that i think these numbers are strong but they are strong 13 million jobs is a record since the president got here unemployment below 4% for a year and a half, and that's a record. record numbers of job vacancies and real wages growing over the past year. all of these are on the books. >> house speaker, kevin mccarthy, joins us now i did have a couple comments about that yesterday and i don't know if you saw it it got thrown around all over the place and got a lot of views. i am trying to figure out the real wage growth part of it, because i don't -- you're laughing, but i think in the last month or the last couple of months year over year you finally started seeing wages grow with inflation included >> have not kept up with

inflation. >> prior to that it was 24 straight months where wages fell, and we are not back to where we were prior to the president taking over. you will hear in his speech tomorrow night a lot of figures like that, but on closer inspection there's something happening because the point i was making to jared is the latest pew research poll is 35% approval for the president and his economic policies, and they seem to think that americans just don't know how good they have it. >> they just don't know reality. you sit and look at where america stands today -- i look at competitiveness america is in a composition with the rest of the world, and what is he doing administratively to make sure we are competing with the rest of the world. the regulatory world, he made it more dangerous to be in america, and he made it less competitive for us, and his energy policy,

he picks one form of energy making us weaker, and germany has this problem now, too, and that becomes a challenge is there any new trade policy? no his tax policy will make it harder for -- >> what are the chances that happens? >> it all depends whether he gets re-elected or not, and if we are able to succeed and he not get re-elected, we can kill that and otherwise businesses will be taxed more here or taxed more abroad. we have the 2017 policy, and he has mixed messages there, and some of this goes away, and he will do expensing and we want to be competitive and he's looking at it a whole different way.

the whole discussion i had with him during the debt ceiling, all he wanted to do was raise more taxes. that's the only thing he had on the table and i would not allow it >> there are plenty of positives in terms of employment levels. wages are starting -- they are growing, and inflation is coming down, finally, at this point it's still too high, obviously >> think about it, they added $6 trillion >> how much did trump add? i think, 8 right >> yeah, started the pandemic there, and they added the inflation. >> the over spending put us -- >> it's global, kevin. inflation, we are seeing it higher in the uk and other parts of the world and so there's something to the post pandemic -- >> yeah, and it's our energy policy at the same time. why don't we use the things god

has blessed america with why wouldn't we think about using our energy policy to make us economically stronger and geopolitically make the world safer, and why would we want china and india dependent on our gas, and that would make us economically stronger and the world safer and environmentally sound. if you replace russian natural gas for one year in europe, you would lower 218 million co2 emissions in one year. >> replace it with -- >> american natural gas. >> the green lobby doesn't really know what to do with natural gas. they understand it's cleaner, but it also comes from drilling, and they don't want drilling they are not sure what they are going to replace it with, because you see the latest figures, we are at 82% fossil

fuels. every year the energy demand globally -- it will go up another percent. with all the trillions we spent on renewables, it has not moved the needle on that one iota. >> california is a good example. we're a large economy, and no matter what we do in the economy we need to double the size of our grid, right? >> right >> we need all of the above. don't pick one form over the others i watched gavin newsom attack crude that is developed in california, and he shrunk it by a 20% production, and that was 80,000 barrels a day, and he replaced that with russian crude. he would buy 50 million barrels from putin, and that would help

fund the ukraine war >> you had comments that putin seems like a different person. do you think something has changed? >> i look at his actions and abilities. prigozhin was very public for the last month or so criticizing putin or so, criticizing putin severely like nobody else has done he threatened many different ways the putin of old, prigozhin would have fallen out a window or something this would have never sustained itself secondly, it seems to me that putin is slow to make decisions. he's making bad decisions, but slower to make to me, it seems like he's isolated himself he doesn't have really information coming in, or the most up to date information. he's allowing to be attacked at no time, putin considers himself a strong man i consider putin to be more like a mafia boss he studies and looks at actions in that way. and to allow prigozhin to move all the way up that he did, he's not the same person and he will

not have the same strength in the country that he does >> does he become more dangerous if he's cornered and has access to nukes >> yeah, but has that been the case all the time since -- does he become more dangerous as he expands out, does he become more dangerous as he continues to invade other countries >> is the threat more real and more, just the existential threat >> i don't think it's a greater threat today than it was a year ago. i think the real action should have been taken, and this is why we should look longer term i remember sitting with then-vice president biden in 2015 in the situationroom, advocating the sale of javelins, a defensive weapons to stop tanks from ukraine this is what we should look around the world that america has an advantage in our technology if we would do some foreign sales to india, to others, i think the world would be a safer place, right when you look at china and taiwan, make sure war doesn't happen you don't want to be making

these decisions right now -- >> what would happen if we sold weapons to taiwan at this point. >> additional weapons coming in. you know, i look at what the back and forth is with xi and with china right now >> what would happen if we actually followed through on the weapons they already paid for? you know what would happen what would happen had ukraine had weapons to defend themselves that war would have never taken place. so what you really want to look at long-term instead of making decisions in the critical masses, that's why geopolitically, energy policy today in america can make us economically stronger, lower the price, lower inflation, lower energy costs but make the world safer >> you said that it depends on, you know, even the global tax depends on what happens in the white house. so let's just talk quickly about that so, on the republican side, we have -- and the reason i think it matters is because our economy depends on who's in

charge, the composition of congress -- >> i think the house matters the most >> but there are plenty that are covering trump and biden and everything that happens. trump's been indicted, his polling numbers are going up, primary voters like him. if he wins the primary, do you think he can win the general and is it good for the republican party if donald trump is the nominee >> look -- >> i don't want to get to biden and his malarkey defense >> can trump beat biden? yeah, he can beat biden. >> is that a good thing for the republican party if -- >> the republicans get to select their nominee. if you want to go for sheer policy to policy, it's not good for republicans, it's good for america. trump's policies -- >> it makes it complicated if he's got all of these trials and all of this stuff overhanging. >> it makes it complicates and also helps him when -- >> but do you think he could win an election? >> can he win that election?

yeah, he can the question is, is he the strongest to win the election? can anybody beat biden yeah, anybody can beat biden can beat biden other people. yes, biden can beat him. >> even "the wall street journal," a lot of places still aren't covering the malarkey defense, is what -- he's gone back to what he said, you ask him any questions about any of this stuff, the whatsapp text that says, my father is sitting right here, you haven't followed through on what you're supposed to do. you've seen the latest, you think that maybe merrick garland has stonewalled or at least slow walked the justice department? >> someone is lying in this situation. and this isn't partisan. you cannot have a u.s. prosecutor, david wise, say one thing and attorney general say another. and the only reason we know this is an irs whistle-blower the whistle-blower actually who took copious notes >> if he's perjuring, he can go to jail. who's he lying to? he's lying to congress and to

america. so just think for one moment, first of all, how far have they gone with it before the election, they took 52 people who had some of the best reputations, former cia directors and others, a soon-to-become secretary of state goes to him and says, will you sign a letter that says a laptop is a russian collusion and lie. even knowing that wasn't true, they did that for political purposes but now we have an irs, whistle-blowers who have come to us, no political basis, and said, the doj got involved with our irs cases, to help hunter biden. they did have inside meetings, they took copious notes, and sent that back after the meeting, this is what was said and david wise say he wanted a special prosecutor and he was denied that. then you have an attorney who says, david wise all all the power and can do anything he wants. somebody is lying to congress in this case. and i think we need to bring everybody in and find out who's lying. is it the six people who talked about it all, that david wise

told him that? or is it the attorney general who's telling -- >> do you think comer at this point has the goods on -- because i can tell you that the tweets i get is that from liberals is, it's all been looked at, there's nothing there, it's republican talking points >> okay. first of all, the fbi wit he would the 1023 document that stim stipulated from a very well informant that they still use today about the former government paying the vice president's family that was never given the irs that would have the ability to look at hunter and go any further. all the information we're getting, there are three different entities we're getting this one comes from comer, oversight. we're now finding that there are foreign countries paying the biden shell companies and moving money from one place to another, going all the way through. nobody knew an that. we got that through investigation. and then you have the jim jordan investigation at the same time, too. the weaponization of government

itself what's very concerning to me, everybody week, we're finding something new, and every week, they're trying to stonewall us i get more concerned with what i read, because each time, it sounds like that there were lies that were not there. whatsapp text, we never would have gotten that, but we found that through ways and means. that contradicts everything the president told us before, that he had no involvement in any of this work. no money from china. now he's questioning that he was in meetings with these companies when he was vice president >> so what do you do >> so we've got president trump indicted on one side, those -- this is our two candidates >> this is all different >> if you're an american looking at the choices for the next election, you would have to say, why can't we -- >> it's frustrating for people but i think as a policy maker, we need to follow the information wherever it takes us and provide it to the american public because to me, this is real

concerning you have people in the highest level of power, somebody's lying about what you're saying or you're lying to them >> they are wrapping us and you have to go to the -- to one of the finest cities in the world with the best baseball team. >> i'm headed to cincinnati to talk about energy, where we produce energy, and we need pipelines to be able to move it. r. speaker, thanks for being with us, on set today. "squawk box" will be right back. ♪ (upbeat music) ♪ ( ♪♪ ) woah. ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel,

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good morning 90 minutes to the opening bell on wall street we're aboutto bring you a rare and exclusive industry withset ca carmen plus, an in-depth look at the consumer as inflation hits americans' wallets the ceo of ralph lauren will join us this morning and news from consumer bellwethers walgreens and delta airlines we'll tell you about the updated dp guidance from each company as the final hour of "squawk box" begins right now

good morning and welcome to "squawk box" here on cnbc. i'm joe kernan along with becky quick and andrew ross sorkin and it's looking very -- i like that, brown -- that's not a sweater of the month, necessarily, but it's a good one. you're at the aspen ideas festival today can viewers buy that exact outfit -- if they do go on to the website, can they get that outfit itself? >> you know, we'll have the ceo of ralph lauren on the program a little bit later >> oh, my god! that's why >> this happens to actually be a little bit of that ralph -- but a little bit of the aspen look i was trying for you all this morning. we'll see whether i succeeded. >> you can't -- if you're not willing to actually use one of the products, you can't endorse the products, andrew and i think -- man, that -- >> as you know, i'm not allowed -- i don't endorse products as a journalist

beautiful shot it's a pretty shade of red or it has been looking specifically at what's happening in the dow, it has to do with walmart or walgreens, the big mover that reported mixed fiscal third quarter results. that's down almost 8%. most importantly, it slashed its full-year earnings guidance. treasury yields, about where they've been recently. done with this quickly, wii get to our great guests here coming up >> seth klarman is here. the legendary investor behind the baupost group.

it's one of the world's most admired money market managing firms. klarman is the editor of the seventh edition of benjamin graham and david dodd's landmarking investing bible called "security analysis. the seventh edition is out today and seth klarman joins us right now in a "squawk box" exclusive interview. seth, first of all, welcome. >> thank you for having me it's great to be here. >> you are somebody who shies away from publicity. i've been trying to get you to come on the show today we are thrilled to have you here today. let's talk about the book that brought you here this was first published back in 1934 bad time for investing for a lot of people as you headed into what was the depths of the recession or great depression. a lot has changed since that time and i guess the first question is, why -- what brought you to come and revise this and bring this version up to date? what made you do this? >> so, first of all, it was, i

had a good experience working on the sixth edition, where i was co-editor. and a lot had changed in the last 15 years, and i felt strongly that there were things that needed to be talked about and finally, i thought i could pull together a great team >> which you did there are some pretty impressive contributions that came in you have roger allowenstein what changed so drastically that you felt needed to be addressed over the last 15 years >> the first thing is, we've been in an everything bubble, i think. that a lot of money has flowed into virtually everything. historically low interest rates, even zero rates have precipitated that bubble you've also had a lot of changes in the business world, technology has accelerated, if anything and you've seen disruption of all kinds of businesses, which creates challenges and opportunities for investors. so that's another thing. some asset classes have become

increasingly popular, private credit has had a day in the sun. you've had speculation during that bubble in all kinds of things, from crypto to meme stocks to spacs, in a way that i think -- and the book has some important reminders for people about the dangers of speculation and the importance of remembering what kind of environment you're in. >> when graham and dodd first wrote this book, you were talking about a nation where the economy was really dominated by factories and railroads. you talk about things like spacs, like cryptocurrency, it seems like a pretty different world. what is the common thread that kind of ties all of this together and how you look at the markets. >> one of the things i really admire about graham and dodd writing almost 90 years ago, is they knew they were in an unusual environment being enmeshed in the great depression and yet they tried to write something for the ages they said, we know this won't be

the permanent condition, but we don't know what conditions we will experience. so i think every investor has that challenge, that you have to look at the moment you're in and say, which part of this is real, which part of this may be enduring, and which part of this may look completely different as soon as tomorrow, and how do i position myself maintaining somewhat of a longer-term perspective, because i think trying to trade day-to-day is not a game anybody is equipped to win >> you're a value investor what does that mean and what did you learn from graham & dodd >> the academic definition of value is by the stock that's cheapest by the numbers. but i don't think that's what graham & dodd wanted in fact, it's clear that they were talking about earnings power and the growth possibilities in a business, even if they're hard to determine. and so i think value has to be determined for every company the way i think about the market is, not that there are growth stocks and value stocks, but rather, that all stocks may hold

value, but that all stocks also could potentially be overvalued. you have to have a mechanism, a rubric for figuring out the value of different kinds of assets, different kinds of businesses, and figure out which ones are trading particularly mispriced. >> i always thought of -- or i used to think of value investors as being people who would steer away from growth stocks. that that was a dangerous spot that would be hard to kind of figure out that was pretty interesting, that one of your big positions you've taken is in coinbase. how'd you figure out what the forward earnings are for that, and especially when you start thinking about things that are hard to value. how do you get into that how do you look at that and say, this is a place where i definitely see value >> in a world that's changing as fast as this one, it's really important to think about not just what are the earnings today. the earnings today may not be here tomorrow. they may be disrupted, the business may be gone, or they may be 50 to 100% more so i think investors need to take into account what are the longer-term prospects for a

business i think investors have become vastly more sophisticated these days than graham and dodd's era, in terms of thinking about what causes a business to be resilient to competitive threats. also, warren buffet has showed all of us the value of growth, that he thinks hard about some of the highest quality businesses in the world, but only buys them when they're at attractive prices. so i think that's an important element of it, as well >> what's gotten more complicated with the markets in the 40-plus years that you've been doing by the way, i should say, when i asked warren buffett at one point, like, people who could beat the market. he's long talked about indexing, always thought that indexing is the way to go. there's only about five people that could actually beat the markets over time, and you're one of the names he listed on that which is huge praise from one of the best investor ever, but what's changed for you over time, as the markets have gotten more complicated, as there's been more competition. how has your style evolved

>> i think you have to almost run harder to stay in place. you have more competitors, smarter competitors, more information is available at everybody's fingertips investors need edge to be successful they need to think about, what is it they know or how are they structured that will allow them to outperform, to create alpha for their clients in a way that buying the average stock won't do so we've become a little bit more focused on investments. we think there's more inefficiencies in some private markets than public markets. we've become more global over time when we started, we were a couple of people and 27 million people and today, we're almost 25 to $26 billion. it's really, but i think you can continue to find edge in how you structure yourself, how you incentivize your team, how you

lead your team, you can find opportunities around the edges of what other people are doing finding situations that other people are throwing out, like the baby with the bath water and they exist you have to be patient they're not always there but when they're there, they can be particularly attractive, because the markets can become quite frenetic these days. >> you're always somebody who is bottoms up, not top down you're always looking at value from the company level up. are there places that you see more opportunities today? >> i think that there are hunting grounds that one would want to look we think real estate is an area that is full of so many fundamental challenges, but the fundamental challenges have caused urgent selling, you can see a pullback in lending. you can see the vacancies in office, troubles in retail for years and years. and so that doesn't automatically make it interesting. but it may mean that as other people abandon it, as other

people face urgent pressure, we have the opportunities to buy, to inject capital, to make some rescue loans, and we hover around looking for opportunity, trying to meet counterparties that are eager to transact we think that we are a great counterparty for them, because we can move quickly. we can write any-sized check we can hold assets of any form, we can flex to meet the needs of our counterpart. >> in terms of the number of opportunities, more than you've seen in the past, or no? >> i would say on the whole, this environment feels like a four in terms of opportunity >> with a 10 being the best? >> 10 being the best it's nowhere near where it was we've had such extended valuations, such little volatility for the last decade or more, and 2021 was a blowoff.

2022 began the construction. now you're starting to rohr from that correction, but i'm not sure whether that's going to continue or not. but the nature of opportunity that we see on a bottom-up basis is better than it was, but still not at peak. on the other hand, that means that you should be wading in, because you don't know how low it might get or how large the opportunities might get. and we've learned over 40 years that when you see something that's worth buying, something that provides attractive return for the risk, you go ahead and buy some >> seth klarman will be with us for the half hour. we'll talk more after the break, but one point you did wanted to make, all the proceeds from the book are going where >> any royalties i get are going to organizations that increase diversity on wall street, also invest, which is a wonderful summer program for young college women, sco and lighted pathways, all of whom have internship programs that bring people into the business, make them aware of the business, who maybe not have

become aware of it any other way. and we are ourselves have about a dozen interns this summer, and it's wonderful, because people are getting their first experience on wall street. they won't all love it, they won't all stay, but a surprising number want to build careers and so we actually have several full-time employees that came out of these internship programs so the proceeds are going into that >> that's great. seth klarman is going to be with us for the rest of the half hour we'll have more right after the break. by the way, stay tuned for an interview with the ceo of ralph lauren, that's later this hour "squawk box" will be right back. earn and keep trust. build and maintain financial strength and stability. deliver solutions that meet complex needs. do right by customers, clients, and policyholders, always. repeat daily for over one hundred and seventy years. massmutual. partnering with financial professionals, benefits brokers, and institutions. ♪

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welcome back to "squawk box. our special guest is baupost ceo portfolio manager, seth klarman. he runs the boston-based hedge fund since it gab 40 years ago, with about $30 billion in assets under management, baupost is one of the largest hedge funds around the world seth, it's so great to see you it was so fascinating just to listen to you talking to becky just now the question i was going to ask, if you could put yourself back now, you were talking about investing and how it's shifted over time, and you were also talking about the private markets, how there's a lot more opportunity there. but if you were a kid coming out of college and we're both alma mater cornell, but you graduated in 1979. if you were graduating today and you had to actually play the public markets, do you think that opportunity that you had in 1979 still exists in 2023?

>> you know, andrew, it's such a great question i think that markets can become more efficient, and there's a question in my mind about once a market becomes more efficient, whether it actually does have the likelihood of becoming less efficient afterwards so for sure, there's more money in markets to become somewhat more efficient but i also see a short-term orientation that tells me that it's probable some pricing becomes less efficient i think when you look at meta, the stock has been all over the place in a reasonably short period of time, falling to under 100 and rising back up to 300, literally, months apart, for a large well-established company, that i think everybody can analyze. so i think that there are opportunities. now, if a kid came to me and said, where do you think i should potentially make my career, i would encourage them to look for the most inefficient

pockets in the world i also think it's important that they get mentored. that most people aren't ready to just jump right into this business right out of school so, i do think that there are opportunities. but people should ask themselves, what are my interests? what kind of edge might i have, if you're from a different country, maybe you have great contacts in that country maybe you know a lot about the business culture in that company. and so my advice would be to go where you're naturally inclined and think where there may be interesting opportunities. obviously, a market that's setting all-time highs may not be the best place to focus a career >> this may not be about edge, but warren buffett has often talked about index funds becky was mentioning index funds before, which has changed the business, which has made them more efficient to a degree, but do you also subscribe to the philosophy that if you can invest with seth klarman, you

should be investing in index funds and that's the safer and best path? >> you know, the argument fo index funds is that you're going to have low transaction costs near zero and you're going to have exposure to the market. you're not going to underperform the market, neither will you outperform the market. i think for the average person out there who isn't terribly sophisticated and is able to take a long-term view, i don't see anything wrong with index funds, but i think one of the critical things about the long-term return from investing is it depends on the entry price. if you enter when the market is very expensive at a high valuation, you may be disappointed, because you might match the index, but the index may not do very well from there. so you don't want to go into index funds, experience a bad market and bail out. that's what investors tend to do they get in at the wrong time and get out at the wrong time. so investors who go into index

funds should go in with the idea that they're going to stay through thick and thin >> and we were talking also with becky about technology i want to understand how you think about the inflection point with a technology point. there was a point where amazon might have seemed like a speculation. today in retrospect, you wouldn't think that. you might even look at tesla that way there are some people in the public right now who think that bitcoin and various cryptocurrencies are complete and utter speculation. there are others who say, ten years from now, we're going to look back and say, that wasn't one. how do you think about that distinction? >> you know, andrew, one of the things that's really important, there's an enormous amount of fire host of information coming at all of us, all the time and as an investor, i've learned to try to be focused on things that actually are going to move the needle for me and my portfolio. so i try to focus on bottom-up, individual situations, stocks, bonds, real estate transactions

and i don't spend a lot of time thinking about things where i think the answer is pretty impon imponderable but i do think about a lot of time thinking about technology and part of that is to avoid being on the wrong side. i think something like crypto, which i've tried hard to understand the arguments and figure pout why people are so excited about. and i can't find value there so i'm not making a judgment that it might not go up. i have no idea but we focus our time where we think we might spend it productively >> but what about coin base, seth >> we don't own coinbase stock our team is focused in the sector, because there's been so much trouble in the sector so we actually are invested in convertible bonds in con base, and the convert speech is way out of the money but the bonds are quite well protected, we believe. >> if you were convinced it

truly was tulip mania, would you still have the converts? >> there's more asset value in the company. the company is sitting -- >> than possibly bitcoin itself? >> the company is sitting on $5 billion of cash and has less than that in debt. we believe our bonds are covered by cash, so we think companies are doing some smart things and the business is actually cash flow positive, but it is not a bullish bet on coin base >> would it absolutely shock you if the nature of money going back thousands of years, that's what the bitcoin advocates tie it to, something similar to goal, since it's got six characteristics that are very similar to gold, six or seven that are similar, would it absolutely shock you if it became the internet of money and had a future like that for the unbank around the world? >> so i hear you, joe. and i think there are characteristics. it's convenient that there's a limited supply based on solving

mathematical problems, but i wonder if that's important, or if it's just intentional to make it look like gold in that respect. gold has thousands of years of history. humans in many countries will go to gold during times of crisis or just to accumulate wealth, but i wouldn't say it's impossible the thing that i think is quite different is there are hundreds, maybe a thousand different cryptocurrencies, and you don't have a thousand paper currencies in your wallet, and i don't either i have one and i'm sure you do, too and so i worry that it's a seductive idea i called it once, catnip for techies. it's exciting, and you can imagine you're getting on the ground floor of technological gold, i'm a skeptic, but i would never say something can't happen >> seth, i'm out here in aspen at this ideas festival larry fink and a whole bunch of ceos and others are here

lots talking about whether we are going to be entering a recession. of what the next 12 months really looks like, how much the fed is going to raise or not and just as importantly, there's a huge conversation here, frankly, about something that you've written a lot about, which is democracy, and the politics of our country and what's happening throughout the u.s. and what's going to happen over the next year so i don't know if you want to take a crack at potaboth and how connected they very well may be. >> andrew, i think that my forecasts about the economy are kind of like sports talk radio, that i have an opinion, but i'm not sure that i would let myself run that team. i think that we probably will have a downturn. the economy is slowing in sides of the inflation equation are coming under better control. but the goal of the fed is to reduce the heat in the economy and one way to do that is to trigger some kind of recession it's been slow developing.

some people think that the excess cash in people's pockets will start to run out around year end, to maybe it's an early 2024 event maybe it isn't but my investing style doesn't require me to have a view. and i think in a way, it's dangerous to have a view, because you can get distracted from the actual values that are out there. in terms of democracy, i think what's happening is sad for our country and deeply worrisome i think americans need to find a way to pull together, to support candidates who will work with the other side, candidates who will pledge to put their faith in democracy, not suppress votes and not change outcomes of elections. and that this is not just a u.s. phenomenon, it actually, you know, a rise in authoritarianism seems to be a worldwide phenomenon, but democracy is under threat and every single person should take that as a serious problem that -- i want

to get to a point where both candidates are so good -- >> instead of neither, right >> seth klarman, as becky said at the top, we really appreciate the opportunity to speak with you. the book, "the seventh edition of security analysis" is out for you today. anyone invested in the world of investing should read it and seth has a new master class out today, part of a new series called, "mastering the markets." we appreciate it, seth, and look forward to seeing you again very soon stay tuned we've got more coming up right after this

welcome back to "squawk box" on cnbc. we're just seconds away from may

durable goods. futures are down right now in the dow because of walgreens you can see the nasdaq rebounding a little bit from yesterday. s&p up about six points or so. 372, rick santelli is standing by at the cme in chicago with the numbers that you have for us if you've got them, please >> yes, we're looking for the may preliminary read on durable good orders. we'll fine tune those. preliminary read expected to be up nine -- excuse me, down 0.9 it's a strong reversal, up 1.7%, up 1.7%. that's the second best number of the year outside of up 3.3 in the rearview mirror, which was a final read for march so this is a big deal on our preliminary look and if you strip out transportation, well, we do cut it down to up 0.6, but still a

much better read than expected, which was unchanged. they goose egged, up 0.6 is the best read of the year. as a matter of fact, that's the best read going all the way back to may of last year. may of last year and like i said, it is preliminary. now, let's look at capital orders non-defense, ex-aircraft, a proxy for capital spending by businesses and that is up 0.7 that is a solid read, much stronger than we were expecting. and the rearview mirror is up 1.3. and now that gets downgraded to down 0.6 and that is a big deal, that downgrade. 1.3 at the time was the best level going all the way back to the end of 2021. by downgrading to0.6, that really does take some of the pop out of it, and if you look at shipments versus orders, up 0.2, exactly as expected, in the rearview mirror, up 0.4. if you look at with the market is doing, joe, interest rates have popped just a little bit, about a basis point or so on the

ten-year and most likely, that is due to the stronger-than-expected headline and when you strip out transportation, pre-opening equities are still under a little bit of pressure and of course, we continue to monitor everything that is -- has to do with the fed we are still hooking into a quarter-point hike with respect to the next meeting, but when we move towards september, that's where all the question marks begin. joe, back to you >> thank you, rick joining us now to talk more about the latest economic data and what the fed is paying attention to, michael gapin. what's your base case, michael another -- >> our base is two >> it is >> i would say, i would go for another 25, because i've got like the fed futures on my side. but you think, eventually, the other ones come in line and we see a second one back-to-back at the next two meetings >> we do visit back-to-back. i think powell's guidance last week about it being a slower

pace puts the risk that the risk that the second one could be at the november meeting and i think you have to discount that second one more, given that the trend in inflation is lower, and maybe it dissipates more quickly. but we're on two in july and september. >> the inflation numbers that we see ahead of us, what's going to dictate whether those are hot or cold services the labor picture? what is it used car sales used car prices? >> the two key categories that we're fixated are on nudes car prices do they come out of their little surge and start falling again like the whole ssale price data suggests and the rental inflation story has legs in terms of, shelter should continue to diminish, and in our forecast, there's probably some downside risk as we get into q4, q1, maybe that shows up sooner. >> then why should they hike >> because i think it's not decelerating quickly enough for

them, that there's stickiness enough the downside risk comes from these two categories but in the bigger picture, core goods haven't started falling yet, and most of us thought that they would be by now, more on a p broad-based basis. do you want to make monetary policy on used car prices alone? probably not the general stickiness, the durable of the recovery itself, strength in the labor market errs you on the side of doing a little more. >> so is that going to be just right for inflation and we avoid a recession next year or do we have one next year >> we have one next year in the forecast in 200q1 and q2, but i pretty mild. it's flat for the year >> not enough to make the fed actually cut rates in the first half of the year >> we have the cuts coming in may. enough where they would have enough confidence that inflation is coming down you could switch to cuts in the first half of the year >> that's a quick turn from continuing to hike

>> and it sounds pretty market friendly to me for stocks. depending on how you look at h forecast, one foot in this growth recession camp. that's kind of where the data is coming and the favorable news for that outcome, joe, and the rebound in labor supply has been drama, for most of last year, the shortfall in labor supply was running about 2 million, constant, for the whole year, which made us worried that your correction in the labor market had to be bigger, your downturn risk was more severe. but we're now maybe 400,000 short. and so the rebound on immigration, the rebound on participation, right, it means your gab between labor demand and labor supply is smaller. it's closer to a goldilocks out outcome. >> companies for years have made "x" amount per year in terms of growth and it always had to do with the cost of money. and i remember the cost of money and companies doing really well.

why should we be afraid of 5.5%? >> we shouldn't, in the sense, can they get it right? the fed is trying to blend two messages one is, ultimately, we'll do whatever it takes to get it to two. >> it doesn't seem that draconian to get back to 5.5%. >> that's the volcker side of the fed's credibility. the greenspan side is, we want to do this without injecting undo harm, so let's try to moderate this. >> right all right. michael, in may they're cutting, first and second quarter, you said, way too much for most of our guests i would be a lot more nebulous next time, if i were you >> thank you >> thank you when we come back, we're going to speak with the ceo of nserndheigst on the state of the coum a t bge trends he's seeing right now in the stock market stay tuned, you're watching "squawk box" and this is cnbc.

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coming up right here live in aspen, we'll talk more about the markets, including a look at today's top stock movers but next, a new read on the consumer for someone plugged into the spending habits of millions the ceo of ralph lauren will join us right after thbre eak. stay tuned you're watching "squawk box" and this is cnbc

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. welcome back to cnbc i'm here at the aspen ideas festival in colorado here to talk retail, the consumer luxury, and so much more, ralph lauren ceo, latrice louvet it is so good to see you i had a very basic question. i said to somebody yesterday that i was going to be interviewing the ceo of ralph lauren and they said, no, no, no, it's

ralph laur-en. which is it? >> it's the first, ralph lauren. >> when i took the job six years ago, people said, are you going to move back to paris and i said, why, and they said, isn't ralph laur-en french >> this is where i was going talk about where you see the consumer, the market, the economy. what you're doing is not just luxury anymore you really span the gamut. >> what i can tell you from our vantage point, our core consumer, a luxury value, is quite resilient. if you look at the u.s. market, international markets, we're seeing this resilience what's really interesting in terms of behavior changes is that consumer is pivoting to your style, more evaluated, more put-together styles, polo shirts, oxford shirts, jackets,

blazers and we're excited at that, because that's at the very core of our brand. >> in a post-pandemic world, everyone thought we were going to go this casual or semi-casual thing, and there was this other view that everyone was going to go peacocking. which is it? >> both. consumers are in hybrid mode, where they are flexing from athleisure to very dressed up, and that serves us very well you know our friend well we range and we have the ability to flex based on where the consumer is. >> speaking about the flex, we were talking to andy jassy about two months ago and he was talking about how people were stepping down. somebody who might have bought, you know, an 85-inch television now might say, you know what, i'm going to buy the 75-inch tv or the 65-inch tv. has that happened in the fashion world? do they say, you know what, i'm not going to buy the purple label, you know, blazer or the purple label this, i'm going to buy the polo this?

>> we're not seeing that if anything, we're seeing consumers gravitating towards higher-price, higher-value items. china is a really good example our most successful categories right now are the categories with the highest price points. >> so what do you think that is about? >> i think consumers are attracted to quality i think consumers are attracted to brands and categoriesthey trust. and at a time of uncertainty, and we know we're living in a bit of a buku world right now, consumers will gravitate towards that >> comman we talk about the prie issue, some of us -- i call myselves a little cheap sometimes, you look at the price tag of some of these items, and they are very high people talk about quiet luxury some of these things are super high, and is that supposed to -- is it because the materials now cost more and inflation is creating this or is this almost a sign and a signal to the consumer that what you're about

to buy is some kind of super quality, luxury item >> for us, we think of it through the lens of value, rate? and value perception and what we are focused on is indeed quality, so what you're wearing now, and you can wear for many years and pass it on to the next generation, think of it more of an investment than an expense. and we know consumers who see that are ready to go for that higher price one of the things i'm particularly excited about in the way that the brand has developed through covid and more recently, is our value perception has never been higher our average unit retail is up 77% over the past five years so consumers are seeing this increase in value. how do we get there? we get there by enhancing story telling, through a wider range of marketing activities, more evaluated marketing activities we get there through enhancing product, quality, and style. and get there by enhancing how the product shows up >> how much harder is it to

market today and the reason i think about it, in the '80s and the '90s, maybe even into the oughts, you would see these gorgeous billboards, double truck, triple-truck advertisements that would fold out of a magazine that would be these gorgeous things and a shared experience that women would have reading "vogue" or men reading esquire and you would see these ralph lauren ads and the imagery. today we live in such a fractured media environment, social media and the like, can you break through in the same way? >> it's certainly gotten a lot more complicated than the period you're referring to, especially for a brand that appeals to multiple generations we take care of babies and the silent generation and have offerings all across the board i think for us, the key is to understand where the consumer is at, what resonates with them for example, you've seen us pivot into the metaverse used to be -- the headlines were

all -- >> you're doing "fortnite," roblox, yes, work with emoji why are we doing that? we want to appeal to the next generation we want this company to be vibrant 50 years ago so we need to constantly rejuvenate our customer base where are they they're not reading "vogue," necessarily. they're not necessarily reading "the new york times" every day they're in the metaverse they're in gaming. so we are present there. so we have now a very targeted approach, by generation, so that we can reach -- it's more complicated -- >> is that a marketing view? is that a marketing approach or do you say to yourself, there are people were going to buy digital polo shirts with ponies in the corner and you will make a serious -- that will become a meaningful part of your business >> that is a very -- that's an excellent question and the answer is both first of all, it is a marketing vehicle. we are going where the consumer is and where they want to engage with brands and seeing that very clearly. secondly, and this is stoil to be completely defined is, we believe that there is a revenue stream to be generated there now, we've seen that through our roblox activities or "fortnite,"

where we're actually selling digital goods, and some of them are being resold three times the original price, which means the consumer is seeing value in it how big would that be, i don't know yet, but we owe it to ourselves to experiment. >> we all know ralph lauren for clothes. restaurants, you're now doing coffee and you're now selling coffee. i mean, do you plan to compete with starbucks where is this going to go? >> if qgo back to what ralph created, ralph and i had a really interesting conversation, not far from here in colorado six years ago to define what business are we in a lot of people think, you guys are in the apparel business. we disagree with that, actually. we believe we're in the dreams business we create world and invite you into these worlds. a little akin to the way disney operates we're a lifestyle brand, a true definition of the term and hospitality is an important element of experience that we can provide consumers through

our five restaurants and through our now 25 coffee shops. >> i still think that you should build a hotel. what do you think? >> duly noted. >> patrice, thank you very, very much >> take care >> joe, back to you. >> thanks, andrew. coming up, what to watch ahead of the opening bell on on wall street. futures right now indicad wntedo on the dow but up on the nasdaq. we're coming right back. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.]

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delta air lines raising all sorts of guidance this morning it says it now expects second quarter earnings per share to be up from $2.00 to 2.25. revenue up 17-18%. last year delta ceo ed bastian said it will take some time for wall street to see his industry the same way it did prepandemic. he did sound an optimistic note. >> our stock was $6.00 a share in 20 ot we got to $60 a share in 2019 before the pandemic hit, a tenfold increase we've done it before we'll do it even better this time because of the strength of the balance sheet we're focused

on, the quality of the brands, the investments we're making digital. that's going to make sure we have a more durable outcome for the future. >> for 2023 delta sees its operating margin coming in at the previously guided range of 10-12% the company raised 2023 free cash flow guidance and reiterated its 2024 outlook. just a little more than a half hour from the opening bell on wall street frank holland joining us with the market movers. >> walgreens boots alliance, shares company falling after a miss on epps shares down more than guidance the ceo said lower demand and what she called a value driven consumer hurt results. it raised the target from the cost cutting program from 3.5 billion to $4.1 billion. shares down 8% also looking at keg logs after

goldman sachs upgraded to buy, raising the cereal and snack maker's price target to $83, a roughly 25% upside analysts says the stock is miss priced concerns to spin off the north american cereal business created a buying opportunity you can see it's been a choppy month, but shares up 2.5% right now. to the ai trade. snowflake and nvidia higher. they both announced a partnership that will allow businesses to create custom generative ai applications snowflake ceo and nvidia ceo will speak this afternoon. snowflake committed to spend more with azure. becky, back over to you. >> frank, thank you. joining us to talk about the broader markets is a.j. oden welcome. >> thanks for having me. >> there are two camps of

people, people who think you're going to watch this market rally continue because they think it will broaden out from the seven or eight stocks that have led the way so far, or those who think you're in for a downturn because the market is not going to broaden out and those stocks come back to earth which camp are you in? >> i think seeing broadening but expecting potential for downside as well. the market does seem a little frothy ai sort of pushing up the tech side we think you can probably get better value maybe looking in international equities we like european as well as chinese equities for our investors, they're a little too close to home we're looking for them to get exposure elsewhere price-to-earnings ratios a built frothy in the u.s. more attractive overseas. >> just because valuation levels from overseas or because you think there's something specific to those markets that will help spur stocks? >> a little bit of both. when you look at the s&p 500,

there's a strong discount, almost every secity for the european equities, almost all of them are discounted. pricing in i guess a better entry point relative to the u.s. we think that in the next cycle there's going to be a relative out performance for european equities if we look at chien in in particular, all the major central banks, we're in a restrictive policy stance over here we had the hawkish stance from the fed. china trying to boost up their economy. when you think about rates and restrictive territory relative to the pboc trying to reinvigorate their economy, we still there there's a lot more room to run with those equities opposed to the u.s., a bit frothy, around 4,300. >> one thing that struck me, you said half of your clients have a lower allocation to equities

than a year ago. did they miss out on this run? did they sell out beforehand, or did they start to sell out as prices ran up? >> i think they sold out a lot in last year we see markets drop. we saw the lows of october it made sense at the time. but now i feel like clients are hesitant to step into this rally. >> if you haven't been in it, you've missed out. >> exactly we're noticing clients having a high allocation of cash. we tell them, we understand rolling t-bill trade made sense, but now it's time to lean into duration the last hike, 4 months after, investment grade bonds out performed rolling t bills by about 14%. it's tough to tell clients exactly when to lean in, but we think now makes more sense trying to time the market is very tough. >> you're not talking longer-term maturities for -- you're talking corporate >> exactly quality bonds. high yield isn't attractive for us right now, especially if

you're heading into an economic slowdown and potential recession. that cyclical allocation, potentially not getting compensated well for the risks we take. for investment grade, we like quality in investment-grade bonds. >> anything else you're keeping an eye on, other opportunities at home? >> health care is a very good defensive play some of the other sectors seem to price a bit frothy, but health care seems attractive. >> a.j., thank you for coming in today. >> thanks for having me. you'll see the futures are still down for the dow again that's walgreens that really cut into that. we've seen the dow futures higher, too, before walgreens earnings came out. s&p indicated up by 8, the nasdaq up by 61. the ten-year, you'll see the yield right now on the ten-year is sitting just at 3.7%, just above that two-year sitting at 4.68%.

if you're been watching what's been happening with oil, it had been below 70 for quite a while. wti still at 68.57 ice brent sitting at 73.38. >> we learned a lot today, didn't we? >> we did. a lot of different guests from all different walks. >> i know i have to work on my at posity. >> learned that one today. >> my fatness. >> andrew thank you. we'll see you back here tomorrow right now it's time for "squawk on the street. ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with david faber, mike santoli at the new york stock exchange. cramer has the morning off the s&p still on pace for the best month since january a lot of corporate news out of delta, snowflake, walgreens, microsoft. durable goods impressed with a beat the market rally detour, whether or not it's a sign of things to come