coming down a little after those cooler, i guess, numbers, or as expected numbers, and then the two-year, just under 5%. yep. you may have a weekend, but you can run, but you can't hide. >> i'll be back monday but before that, i'll be here at 5:00 >> yes, you will you always mention that. i'll see you monday. good weekend make sure you join us next week. "squawk on the street" is up right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber, sara eisen at the new york stock exchange. cramer has the morning off we are wrapping up the month, quarter and first half with a strong batch of news headline pces in line. futures strong as yields are down apple, nike, banks, semis and travel today on what could be a messy holiday weekend. our road map begins with stocks,

the nasdaq eyeing its best first half since '83 plus of course deal scrutiny, the ftc and microsoft now awaiting a judge's decision, which could help decide the fate of one of technology's largest ever acquisitions. and nike shares are falling ahead of the opening, delivering what some say is a gloomy forecast, overshadowing a strong recovery in china. let's begin with the markets so far this year all three major indexes are in the green, led by the nasdaq, up almost 30% as we said. best first half since '83. s&p closing in on 15%, which would be the best first half since 2018 confounding a lot of people, who were eyeing more nefarious scenarios at the beginning of the year >> it jives with the biggest surprise of the year, not just that the stock market is up, but that the economy has remained so resilient and so much better than everyone thought, and that inflation remains a little bit stickier now, having said that, today's

news, what we got, the pce, that's the fed's preferred gauge, comes in better better if you're jay powell, better if you're treasury secretary yellen, better if you're an investor, who's hoping for the end of rate hikes. the main number, 3.8%, matches expectations that's on the headline, but it's the lowest level we've seen in two years, so that's good news, better than the 4.3% prior if you look year over year. the core, and if there's one thing i learned from all the central bankers this week, we only should be looking at the core, because they are very focused on the core, it's stripping out more volatile food and energy and everything, and it shows you why they're concerned, because it's higher than the headline, 4.6%. now, it's a little bit moderated from 4.7%, so that's good, but it is still stubbornly high, and then there's the super core, which we always look at because we know powell is looking at it. that is services inflation ex-housing and it did fall to the lowest level since july 2023 good news, about 0.25% higher

than it was last month softer inflation is good news, but it comes in the context of better economy and higher than where they want it >> and conclusions that you have from the time that you spent bringing us that fascinating panel? >> thanks. well, the biggest takeaway, and i think this is the market's takeaway as well, is that the central bankers feel they have more work to do, and they're not satisfied with the moderation of inflation, and they're not worried about recession. so, for investors that are worried about recession, they've really pushed back the european central bank doesn't have it in the forecast. we have this delivering alpha survey, cios and strategists and investors that we just released for cnbc, and the recession gets pushed back. i mean, 32% say it's more than 12 months away 26%, first half of -- remember coming into this year, carl, to your point everyone thought this was the year of recession. those odds have changed a lot.

look at yesterday's data as a proof point where gdp, better than expected, driven by better consumer spending at 2% overall gdp. jobless claims even came down a little bit the numbers don't suggest recession. and perhaps that's why the market's cool with higher yields i mean, overnight, we saw a jump in the two-year yield, 4.93% we're almost getting back to the highs of march >> and that was, i mean, some argue, the highlight of your discussion with chair powell, in particular i know it got written up in several takes when you gave him the opportunity to tell the markets, hey, remember that whole don't fight the fed thing? i represent the fed, and he literally said, that's just not how i'm thinking about it. >> he seems okay with the fighting of the fed. we have that exchange. let's play it. >> is it counterproductive to you that the stock market has rallied, the bond market has rallied? the market is fighting the fed the market thinks you're closer to the end, and i mean, that does make financial conditions easier

you can't fight the fed, but they're fighting the fed is that a problem for you? >> i don't see it that way i don't look at it that way at all. we have different jobs our job is to bring inflation down to 2% we look at the data, and that's what we care about and markets react, different parts of the market react in different ways it's just not something that is a principal focus of our work. >> he could have taken that opportunity and said, look, it's more helpful when financial conditions tighten as we tighten policy, if we're going to fight inflation, but he didn't he blessed it. so, it's kind of a green light to keep on rallying, even in the face of higher treasury yields and potentially pushing out the terminal rate, the peak fed funds rate, to higher places it feels like the market -- the stock market, carl, is really okay with it, as long as the wheels are going up for the right reasons, which is pushing the recession out. better economic data that's the difference between last year and this year.

>> the other amazing thing, and since your panel was a global one, is the split, the way in which, say, the citi economic surprise index for the u.s. and the economic surprise index for europe have just completely split. it's just two different worlds right now. >> europe showing some weaker data, u.s. showing some stronger data, and you think, while they're technically not in recession, they're obviously closer to that, and that is supportive of the u.s. market. now, having said that, we did get some data overnight from europe on inflation, also shows softer on the headline, which is what the ecb wants to see. but the core, and again, i'm always going to lead with the core now, was a little bit firmer than the month before and so, the ecb has been -- she was more, i thought, in the panel, explicit as she has been and blunt about what they have to do, which is keep raising interest rates the problem is the market's been fighting them too. european stock market hasn't had a bad first half either.

>> it's wrong. that's all you get from me that's all i got for you on that >> i think we'll get the revisions to expectations. that's always interesting. consumer sentiment, we'll get that today, and we want to see where consumer inflation expectations are, because they've come down and that's also something good and more progress from what the fed wants to see, and next week, heavy data week. ism, manufacturing on monday, even though it's a half trading day, services later in the week and then jobs. the key for all of this, and fed chair powell said that many times, is that the job market's been humming, even if we're starting to see a little bit of cooling. it's strong. unemployment below 4%. wage growth, still growing >> all right, one thing you will get from me is chat about apple here, because it is going to be trading at a record high, it looks like, when we start trading in about 23 minutes or so on track to open with a more than $3 trillion valuation of course, the price that it would have to exceed is $190.73.

as you can see right there, it would appear we're going to open beyond that, and therefore, it will have more than a $3 trillion market value you also have citi initiating coverage of the stock. i'll give you one guess. what do you think? yeah, it was buy $240 price target, citing continued gross margin expansion. very few out there, guys, who believe or who have negative views of apple's ability to continue to navigate what some would say is a more challenging market, perhaps, for incredibly expensive consumer items of course, a lot of focus also paid on what is the larger and larger component of their revenues that is recurring, namely those service revenues for which the market has been willing, as we said for quite some time years ago, has been willing to pay much higher multiple you are getting close to almost 30 times >> dan ives, who is one of the super bowls we've talked to at wedbush says, "in our opinion,

the street has grossly underestimated the upgrade opportunity around iphone 14 and now the mini-super cycle around iphone 15 when it's released ahead of the 25% of apple's golden base not upgrading their phone in four years. i didn't realize the numbers were that stark. he sees that as the next potential catalyst >> he mentioned the citi initiation today they do open at $240, which would be a nice bounce from here well above -- i think we've talked about this, david they have hit the $3 trillion mark but not on a closing basis. >> right i mean, ives has mentioned it as well there's some issue in terms of whether it really was, because we didn't necessarily have an accurate share count at that point. apple aggressively buys back sf stocks, so while we make an assumption in terms of outstanding shares that gets you to that price or market cap, it may be lower than we're aware of right now, because they don't report that on a daily basis

that said, let's just assume we're passing $3 trillion now, and yes, we may have visited it once before back in late 2022 or, wait, yeah, in 2022. maybe the fall you know, we've all made the comparisons. bob pisani will come on and tell us how many markets it's larger than, how many gdps. >> how many european countries >> i can remember, carl, when we are sitting here and it passed a trillion, and we thought that was a moment, because we had never really seen that kind of a value on a company before. >> and you're also dealing with a name that's up, what, 50 since the beginning of the year, in a period where rates are higher than they were, and they've had to migrate as much of their supply chain as they can out of china for, like, pick your reason, but moving that area, moving that to vietnam, moving to india, huge structural, logistical challenges, and yet the stock hasn't looked back that's a great chart but so is the year-to-date, just a 45-degree line

>> and as we point out, of course, largest single holder is berkshire hathaway, and interesting, mike santoli pointed out yesterday, the two stocks track somewhat. we can talk all we want about occidental and how they continue to acrete up a bit there at berkshire, but really, apple is by far their largest single holding and in part because the stock has gone up sophomore. it was a great buy for buffett, even though we questioned at the time, a guy who's never really loved technology, he was weighing in. it was a simple thesis, this is an incredible device and i think people want to own it. >> apple's had consumer staple comparisons before the only better performing stock this year is salesforce, up 60%. >> all right, with that, when we comin coming back, we'll get to nike, moving lower after posting the quarterly results last night some argue a big tell on the consumer, particularly china, but may not move the way it has in past earnings

let's look at the premarket print. a lot to get to. we'll be looking for chicago pmi and umich at the top of the hour we're back in a moment you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. [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. ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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marketplace remains highly promotional, and when we step back and look at the actions that we took last year, we're very happy with where we finished the year. in fact, our inventory levels are ahead of our plan, and ahead

of the competition the missed single-digit guide does reflect four points, as i mentioned, of noncomp impacts, which are partially wholesale shipment timing, because you recall last year, there was a lot of late supply from '22 that came into '23 but also a little bit of extra liquidation as we were more aggressive moving inventory both through our own channels and our partner channels >> that was nike's ceo john donahoe explaining some of the factors that are impacting the company right now. stock's under a little pressure here into the open guys, here's the headline on the quarter. it was an earnings miss, a slight miss, but still rare for nike and revenue beat and they're still growing revenues 8% in constant currency if you take out the currency effects 5% in the key north american market 25% in china, which is very important, and bullish they return to couple-digit growth in the quarter, again, without the currency impact. everyone was looking at the guidance here, and potentially

that's why the stock is trading off. they did a next quarter guidance and then the fiscal year guidance for the first time, and it was the next quarter that came in a little bit loigt they say that revenues were going to be flat to up mid single digits. the street was looking for more like 6%. little bit light there look, this wasn't a thesis-changing quarter if you look at all the analyst notes this morning, because they're still seeing underlying strength in the brand, the momentum there was no talk about weakness there, especially in china, which there were some questions about as we've seen the weaker chinese economic data. there's some pressures on margin as donahoe laid out because it's a promotional environment. but they've made some improved on inventory every sort of bull argument, there's a bear argument, and bear argument, there's a bull argument on nike, and i think that's why you're not seeing a ton of movement. >> as someone who comes from a household with a lot of sneaker aficionados about this idea that they're not selling out immediately on some of these new introductions? >> that should always be a concern.

you can always judge brand heat by sellout on new introductions and how much they get on the stock exes and the flight clubs and that sort of thing i'm not sure everybody's really worried about it yet there's a big trend. they've had a lot of releases as well, and jordan, in particular, has done extremely well, got a big callout on the call. >> on pace to be the second biggest shoe brand -- >> in north america. >> amazing >> tand they said it's underpenetrated specially, so there's a big growth opportunity there. the other question investors and analysts were talking about is, are they changing the direct to consumer strategy? that's been the holy grail for nike it's why they've leapt so far ahead of competition, just selling directly in their stores and on their website and app, and they made this decision to go back into dsw and macy's, which they haven't been in a while. they've been trimming the wholesale clients, so people were wondering and i think it was important

that danahoe and the team reaffirmed their commitment to direct to consumer the numbers were good, up 18%. >> did it surprise you that, i mean, we've heard from so many companies who have said freight costs have turned into tailwinds, sg&a up 8% in a year where other companies are doing years of efficiency. >> little bit. it was a little surprising we've seen that helpful, the whole freight cost, and they're still working on it and dealing with it. nike is very global. a lot of more bullish analysts today are saying, look, that's sort of a transitory or temporary headwind into next year the bears will say that nike's not cheap, and they're still dealing with some sort of financial issues, even if the brand is in line and if you look at it compared to lullemon, then

there's a big gap there. >> piper saying macro pressures on consumers, will challenge near-term growth and they're cautious on long-term margin expansion. >> nike still has to prove in the next year, they put out the full-year outlook, and the second half is more optimistic than the first half, so they're going to have to prove it next year >> we came in talking a lot about china, and but it was all right, right >> china was all right, 16% if you factor in the currency growth there maybe the buy side had expected a little bit better, but you're talking about apple and the risk there for the macroeconomy john donahoe on the call was so bullish on china he said one of the highlights of the last 90 days was he got to go back to china and see the marketplace there and it's looking strong and they're seeing brand momentum. they've only been doubling down on their strategy there and seeing good results, despite some of the bigger noise that we have covered around china and the economy there. >> goldman reiterates a buy. bank of america says it has a

he' history of fading intraday >> beware on that, i guess >> we'll watch for some of the action after the bell rings. when we come back, we'll get expectations for tesla's quarterly deliveries,plus a look at the auto maker that has sped past ford and gm in terms of market cap, and we're not talking about tesla in that case one more look at the final premarket in the first half. aonhetrt"s ck iba in moment.

we continue to be on apple $3 trillion watch. looks like it can do it at the open if it stays above $190.73 obviously, premarket indicates that it will do that

we'll see what happens in just a few minutes when the opening bell rings on this final day of moh,he quarter, and the half back in a moment

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to you by nruveen, a leader in income, alternatives, and responsible investing. tesla extending its strong first half gains in the premarket. analysts surveyed estimate the company is set to deliver a record 445,000 vehicles in the second quarter, helped by increased discounts and other incentives of course, we continue to watch. this has been a great first half story too, the race between price and margin and sort of the advantage they have, structurally, against legacy automakers they can afford to take more pain than ford and gm. >> yeah, i mean, it's, in part, rising because nvidia and meta, and you see what the market's appetite is for large cap tech stocks, obviously, but david, there's some fundamental reasons here, the adoption of the charging stations from some of the other big competitors, like a gm and ford, the fact that they haven't announced price cuts in recent weeks and deliveries are supposed to be good.

>> well, deliveries will be keep some analysts will tell you that's not really the main story anymore. it's the move to full self-driving and what that is going to mean in terms of additional revenue to the company that's something that will play out over time, and we've obviously all heard, expect it to come soon, only for it to be delayed. charging it's any number of other thing that you have to take into consideration if you are going to continue to believe that fundamentally, this is worth buying at this level deliveries, sara, i think that's the key. those who are less positive will tell you inventory is built up in a way that it had not been previously whether it's the chinese market or our own i don't know that there's a reason from nike to people's willingness to buy a tesla in china. where there's a lot more competition on the ground as well from the likes of byd, for example, in a market that tesla

had not quite to its own but certainly had a very dominant or certainly significant position in for quite some time >> i feel like the read-through is that the chinese consumer within china is spending on the brands that they were spending on before covid. >> then, why is the economy there so weak? >> it's psychological damage, maybe, from being locked up for so long. they're not traveling as much. the export machine isn't turned off. business profits aren't as high. i mean, i think that is a mystery. >> it is >> we can't assume what happened in the u.s. and europe is happening in china they were locked down for longer they didn't have as much fiscal s stimulus it was a different set of circumstances and they were all sick when they got out because they weren't vaccinated. >> i think there's been a surprise at how lackluster the recovery has been, and in part, there had been an expectation of a broader consumer spend that hasn't yet happened. >> no. and the travel piece hasn't happened either. >> right >> i think that's important, and it's important for names like

estee lauder and some of the other luxury makers that benefit from travel. >> we started the year with forecasts for 7% growth this year obviously, that's been pulled back into the 5s last night, manufacturing pmi in china, three months of contraction at 49. that's a june number services was above 50, but slowed again to 53.2, and the pdoc reiterating that the demand is not sufficient for growth, so the market will be on the lookout for whatever stimulus they're going to come up with. >> is it going to be enough? is it going to be the right stimulus to address what the problems are you know, some people were talking about this study that came out in lancet, the medical journal, back in 2020, looking at the psychological impact of covid in china, and it wasn't good you know, these kids were out of school for a lot longer than the u.s. they were locked down for a lot more people were locked down. that's part of the story >> let's get the opening bell

this morning and the dcnbc realtime exchange at the big board, thrift store operator savers value village. you might remember the successful ipo yesterday one of three that actually closed the nasdaq, it's canada, celebrating canada day we got some numbers out of canada this morning as well. pretty nice breadth here filling in as we're going to zero in on, actually, above 4,422. and of course, apple we do officially now have, for the first time since january of '22, a market cap above $3 trillion. that's a nice 1% gain. >> maybe we'd have a cap for it to mark the case occasion. we've got a $3 trillion stock. haven't seen it before >> no, it's -- looking on your

screen, it's sort of a shocking thing to see, $3 trillion next to one company when you make as much as $100 billion in income a year, then it gets a little easier to imagine how you got there, and that's where apple is. i mean, the numbers themselves, i sort of say, whenever we go through the quarter, the numbers themselves are just staggering the size of these companies, and it's not just apple. microsoft as well. alphabet, amazon, the size of them all, certainly the case with microsoft and alphabet as well in terms of their profit engine it's just staggering and apple leads there. and so, yeah, 30 times $100 billion, there you go 3 tril that will get you there. whether or not it has more to go, you heard carl mention citi at $240 price target we'll see. but there is a belief that there is still growth to come of significant growth >> speaking of large cap tech getting bigger, first half story goes to nvidia, which passed a trillion dollars and is the best-performing stock

year-to-date it's up 185%, and now well over a trillion dollars in market cap as the a.i. story has -- you don't hear apple being talked about as much on the a.i. story. they put out the vr/ar headset and some people see that as an incremental driver towards services revenue, but nvidia takes the cake, followed by meta this year, up 140% year-to-date. unbelievable gains guess what number three? carnival corporation >> that, i wouldn't have guessed. i would have missed that one >> sandwiched in between tesla and meta as the best-performing stock, getting an upgrade today as well, even after the tremendous run-up. jeffries says it's moved from being a good trade to a long-term investment they like the new ceo, josh weinstein, who we spoke with this week on the quarter, some of his marketing moves, how he's flattened the organizational structure, and of course the surge in demand that we've seen for cruising he thinks makes it a good play >> they mentioned oil as well. fuel costs turning into a real tailwind, delivering, what,

quarter of a billion in savings annually in '23. we talk about headline sort of not being as important as core, but some of these declines in fuel, gasoline for the consumer and for companies that are heavy users, is material >> it's helpful for sure i was going to check the airlines as well today guys, traveling this week is brutal i will just say. not just me. thousands of flights have been canceled, and i know the weather was not great, and the thunderstorms are being blamed, but the airlines are all up today. there's some issues with the faa. the united airlines ceo, scott kirby, pointing fingers at the faa, saying, they failed us, u u understaffing there led to delays i took two flights, to and from portugal, and they were delayed for hours, not because of weather, but due to staffing issues >> on the european side or the u.s. side? >> both. it happened in lisbon and the

u.s. >> i thought the labor market was getting a little looser, and they were fully staffed with flight attendants and pilots, but something's going on there, whether it's the faa or the airlines or the weather, and we're going into this fourth of july weekend, and it's not looking pretty >> you mentioned nvidia. what a note today out of daiwa, which finally, after all this time, upgrades nvidia to outperform they say, we got massively wrong how successful and important generative a.i. would be to the world. they were more concerned about sort of legacy enterprise spend, i mean -- >> why not just give up? really what we got wrong was everything everything and we're bowing out i mean, that's the honorable thing to do. i guess you got to keep printing now what, carl what do the legions of people following them think now >> they're going to raise their price targets, probably.

>> of course they are. i mean, nvidia, there it is. yeah it's been staggering to watch that, and over a very short period of time, really it's not even been the full half of the year. it was really these last number of months in particular when, as carl said, we got so enthused with the prospects for generative a.i. and what that's going to mean. and in the second half of this year, we're going to be talking a lot more about it in terms of its use cases, and the companies that are already at the forefront, of course, whether it would be microsoft or alphabet or meta to some extent as well as sara said, apple doesn't come into that conversation as much, but behind it all, the only company that's really able to provide the chips that can power it and the datacenters is nvidia and there you see it a lot of it came after that incredible quarter where they upped their guidance by $4 billion, a number that very few of us have ever seen in terms of a guidance increase >> amd has had a nice run too, though >> yep

>> they're seen as number two behind nvidia on a.i.? >> and now we're talking more about additional curbs on imports into china, reports last night regarding the dutch, and asml may be pairing with the united states to do a one-two punch to restrict the delivery of some high performance chips i did notice today that the head of china's top memory maker, warning about what he called turbulence and disorder in the chip market, because they obviously are behind the 8 ball in supply. and asml did say, like nvidia did earlier in the week, they don't expect material changes to their results because of this. >> guys,i'm also watching constellation brands this is the beer and wine maker, and a lot of people are watching this going in, because we know that it is -- it's modelo especial became the top-selling beer brand in the u.s. during the quarter on some of the weakness in competitor bud light, losing that crown on all the political backlash as a

result of working with the transgender spokesman. there's constellation versus anheuser-busch the company beat estimates, and beer was the bright spot the sales agree 11% from the prior year mo de lo especial, clearly the big winner there because the wine business was weaker than expected >> i'd like to take a little time, delving into antitrust law. hope everybody out there doesn't mind specific to the ftc's efforts to stop two deals, really, from happening. the first is their attempts to get a federal judge to issue an injunction to stop microsoft's ability to buy activision. and i'll also get to some new news that we have on the government's attempts to prevent amgen from buying horizon therapeutics there's a look at those stocks as for the ftc versus microsoft, the trial is over. we may hear from the judge again, i have said this a number of times, as soon as next week

it's possible. those in the courtroom believe, based on indications and if you read the transcript, that she would like to have a ruling out by, let's call it, the 7th of july or something along those lines findings of fact and law due, in part, today. she'd like to get the unredacted versions out there at some point as well. question will be, did the ftc really prove its case, that this deal will be anti-competitive, that it will prevent people who use playstation, for example, from accessing "call of duty"? who knew "call of duty" was such an incredibly important title, but apparently it is and it's very much unclear the ftc was able to make that case again, if you talk to people who are both in the court, who followed this trial very closely. yesterday, there was a good deal of back-and-forth between judge jacqueline scott corley and the government she asked a lot of questions she beat them up here and there, although when it came to certain

other areas, she seemed to sort of be giving it to both sides in terms of streaming and the cloud. she sort of showed a more even approach, i would argue, but you know, again, when you have her saying things like, you got what you wanted, government bobby kotick said, hey, we're going to actually allow this to be on other streamers. got an nvidia contract, contracts with nintendo, isn't that what you wanted the government responding, no, but those may be seen as indicative of where she may end up ruling. we will see. and of course, it's only one component or one part of microsoft's continued efforts to get their deal to the finish line the other, as i've said so many times, will end up in the uk where the competition appeal tribunal will be hearing microsoft's appeal of that cma interim order, saying, no, you

can't do the deal. we're worried about the cloud market yesterday, we did get a ruling from the competition appeal tribunal that was pretty heated in its -- that may be the wrong word pretty strong in its language against the cma, saying, hey, you wanted us to delay the hearing. we're not going to do it and it may be refereed if anybody has any interest what has gotten the attention of a number of people, though, specifically, was on page 12 let me read it to you, because it goes to something else that we're trying to understand here in terms of what is going on between microsoft and the cma. it suggested the cma has much other work to do a great deal of time is being spent by the cma preparing for the final order consequent on the decision what does that mean? why is that important? you had an interim order saying, in one sentence, we're not going to let you do this deal, and

there had been an expectation the final order would say the same thing that appears not to be the case, the cma saying to the tribunal, hey, we need to delay because, in part, we're spending so much time on preparing a final order. why would that be? some people wonder is it possible that there were additional offerings made by microsoft in their comment period, for example, that ended, let's call it, middle of june? is it possible that the interim order will not be -- or the final order will not be the same, that it might allow, somehow, for certain leeway from microsoft to even close the deal, licensing? you know, you can come up with a the lot of different things, but that has been noted by people who parse every single word of these document as something worth being aware of, because it may point to some difference between the interim order and the final order and microsoft's efforts to get it changed. giving it the leeway, perhaps, even close the transaction while they still await word from the

competition appeal tribunal or wait for the hearing all right. quickly on to amgen and horizon. i'm happy to go somewhere else if you're getting tired of hearing me talk. is that all right? can we do this quickly >> never >> never, right? this has been another important case remember, this is all against the backdrop of the ftc being so aggressive in its pursuit of potential deals that it sees as anti-competitive, and many saying, what are you doing well, amgen responded to the alj. they came back with their complaints or what they -- their response to the complaints, and here's the quick things that are important. amgen continues to stand ready to enter into a binding commitment, which would fully resolve the ftc's hypothesized concerns with amgen bundling its products with these two drugs, so they say, hey, we're willing to enter a consent decree right now, because we have no intent of actually doing this

it's your concern. we're happy to meet it no word on that, but that's important. and then they also, guys, go after the fact that the ftc failed to redact a lot of things in these documents, and that states signed on, even without realizing certain things had been unredacted, and they just sort of called the ftc out for being, frankly, sloppy in terms of allowing people to see things that were thought to have been privileged and/or confidential at the state level so, that's where we are on those two important antitrust cases, one has been heard by a federal judge t other still awaiting a hearing. >> i was wondering why you weren't engaging with me on powell, because uyou had a lot f antitrust stuff in your head >> it is tough, sara >> activision is creeping back up >> microsoft is around $129. oh, i hope i remembered that properly but yeah, activision's, you

know, little less than ten bucks away there is this belief that won't go away that it was aided by that paragraph that i shared that somehow microsoft is going to figure out a way to close this thing again, that will depend on, of course, getting this judge as many think going to be the case to say, no way, i'm not issuing an injunction. i don't think this is an anti-competitive deal. >> interesting too on the amazon deal the amazon, month to date, is ahead of the s&p 7% gain. markets looking past whatever they have in store over at the ftc, right i wonder, is the market considered khan toothless? >> you know, that -- i mean, the ftc's complaints, again, amazon will play out over such a long period of time, it's similar in the sense of the doj going after alphabet it doesn't seem to have near-term impact on these stock prices, carl, because it's such a long period. that said, i think, you know, if they lose, microsoft, if they lose, if they go to trial on amgen horizon and don't settle and lose that too, there's no

doubt that will have an impact and perhaps be seen as a positive by the m&a market as, hey, you know, it's going to be harder for them to keep coming with these cases when they keep losing >> losing in court i'm just looking at the market every sector is higher right now. we're adding to gains on this final day of the month, quarter, half s&p is now up more than 6% for the month to date. 6.2% every sector, higher >> yeah. you know, it's a -- you know breadth is strong when oil is catching a bit above 70. let's get some pmi with rick >> our june read on chicago pmi. we always like to mornitor this particular data point. it gives us some idea what national numbers may turn out to be this is a bit of a disappointment we were expecting 43.7 we got 41.5. and if you look at the rear view mirror, it's still better than our final read last month, which was 40.4, and that was the

lowest read since november, when it was at 37.9 so, it's a mixed blessing. it's definitely better than last month, sequentially, but a disappointment the market not moving a lot on this, and of course, the rest of the important national numbers will be coming out on the 3rd, so we'll be, of course, looking to see if the similar trends, meaning it's better but not as good as expected pretty much a lot like inflation numbers today as well. now, don't change the remote on this channel, because "squawk on the street" will return after a short break. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing!

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get you a live shot of the u.s. supreme court, where we are awaiting some key decisions this morning, particularly on the fate of the president's student loan forgiveness plan, and we do expect to hear more from the court in about ten minutes big implications if we get it on

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ferrari is trading at an

all-time high, surpassing ford and gm in terms of market valuation. robert frank joins us with more on what some analysts didn't see coming. >> living up to that ticker symbol race, hitting an all-time high, up more than 50% for the year, market cap over $60 billion, making it worth more than ford and gm ford and gm sell 4 million cars a year, ferrari only 13,000. the reason for that valuation, faster growth and bigger profits. the gross margin on a ferrari is over 50%, more than twice of tesla, more like louis vuitton or gucci than a car company. earnings grew 15% last year and analysts expecting strong are growth this year with the launch of several new models. yesterday, they announced the 1,000 horsepower hybrid ss 90 xx 0 to 60 in under 2 seconds and price tag over $800,000 and

they're sold out you can't get one. if you walk into a ferrari dealer today and try to buy a car they start at $230,000 and go into the millions you're looking at a 3 1/2 year wait a bridge for any slowdown. try ordering the new suv, you can't get one until after 2026 unlike most cars, ferrari has gained value over time because of the demand far exceeding supply and one of the few brands rolling slowly into the ev transition their first ev not expected until 2026 so it's not the ev craze, or certainly the a.i. craze, driving this stock, it's the margins on luxury and the fact that high-end consumer is not showing signs of slowing down. >> it's interesting you made the comparison to gucci or high-end brands in terms of their margins. that says it all. >> that was the premise went they went public at the new york stock exchange and i was skeptical because this is a car

company and i thought the growth imperatives of wall street would cause a reduction in quality and sky rocket productions where it's not a great car. they are producing twice the amount than when they posted but the demand is still there. >> where is the demand from? >> the u.s. by far the largest market, especially for the suv the suv they could sell three times the number they're selling and that's true across their brand. they could probably sell between 40 and 60,000 cars they're only going to make maybe 13, 14,000 this year that's if there is a slowdown, they've got a 3 1/2 year backlog that will take them through whatever happens with the economy. that's why to your point, carl, the analysts say when you look at the auto sector you're looking for safety and any insurance policy ferrari is at the list. >> this was morgan stanley's top pick last year marketing wise, is it a challenge to convince a performance oriented driver to

graduate to ev or not? they go fast. >> it's going to be a huge challenge. what is an ev ferre regardry l - ferrari look like and is it that much better that you're going to spend twice or three times as much ferrari is slowing that process trying to lobby the eu to get biofuels approved. if and when that day comes that's what they're working to try to tune the sound of an ev, to sound like a ferrari. how will that go that's going to be the existential question going forward. >> ownership is who? the key ownership? >> it's exor and the family heirs the largest controlling and then publicly traded as investors have enjoyed. >> it's great story. we'll see you in a bit. >> thank you. >> robert frank. close to session highs here as we're back in the hunt or the bulls are for 4450 don't go away.

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good friday morning. welcome to another hour of

"squawk on the street. i'm sara eisen with carl quintanilla and david faber live as always from post nine of the new york stock exchange. we are awaiting a decision from the supreme court this hour on president biden's student debt relief plan. big economic implications for this one we'll break down the news. take a look at stocks this morning, final day of the month, quarter and half year and looks like we're going to end up 1% right now on the s&p 500 the nasdaq up 1.34%. year to date, the nasdaq is now up 31.6% s&p is up 15.6%. defying a lot of expectations of recession and weaker stocks. we're 30 minutes into the trading session. here are three movers we're watching nike, under pressure, reporting its first quarterly profit miss in three years, decline in gross profit margins as higher costs and markdowns weigh. carnival cruise lines in the opposite direction adding to big gains on the year as jefferies

upgrades the name to buy, writing, quote, we cannot direct the wind but adjust the sails. and apple hitting a huge milestone to end the week and quarter, officially crossing $33 -- $3 trillion. >> got pmi, let's get umish as well rick santelli. >> yes here's our june finals, carl we take the mid-month 3 and toss them 63.3 mid month read, 64.4 becomes the new read, the second best read of the year for our june final, only second to 64.9, which was the first month of the year. that's the headline. current condition improve from 68 to 69, also the second best read in a year outside of february when it was 70.0. 61.5 on what lies. that's 0.2 better than the mid month at 61.3.

that still remains the best level since february when it was 64.7 and here we go with the inflation numbers. one-year inflation 3.3 it remains it was 3.3 in the mid month read and 3.3 is the lowest level since march of '21 if we look at 3.0, five to ten-year inflation rate that remained mid-month read was 3%. 3% the lowest since march when it was 2.9 and that was the lowest since september of last year when it was 2.7 we're hovering around 487 in a two-year note yield about where it was before the data that's up one on the day up 13 on the week. 384 in 10s is unchanged on the day up 10 on the week. back to the panel. >> all right thank you, rick santelli market likes it certainly stocks holding the gains up more than 1% on the s&p and it's been the story of the data lately, which

you could call it goldilocks for the markets, carl, which is better economic data and moderating inflation data. yes, inflation is too high still, but it's come down a lot and important to see those consumer expectations as risks played out still at the lowest level from 2021. add that to the pce deflator which showed moderating inflation 3.8% on the headline, year over year, weakest in two years and then the core, more elevated, 4.6% but a little bit of a step down. it's decent news. >> yeah. and an echo of what we've gotten around the world, right. inflation rates in australia and italy and now here and certainly the expectations number, which we know, the fed is watching closely. >> so the question is how much work does the fed have to do they made it clear on the panel they're not done and they have more on one hand you have inflation at the whackest levels we've seen since in some case -- weakest levels since we've seen since 2022 and 2021 and in many

cases it's double where the target needs to be interesting to hear powell this week say there is still a risk of under doing it on fighting inflation than over doing it and hurting the economy. listen to what he said >> the risks do -- the risks of doing too much versus doing too little become more in balance. i wouldn't say they're in balance yet but becoming closer to balance i believe they're in like -- clearly believes there's more work to do and rate hikes likely to be appropriate. >> that is one of the most hawkish things he said, even though the risks are more in balance because they've done a lot and the economy starting to feel it, it's more risky they don't do enough on inflation tells you what you need to know. >> the lessons of arthur burns decades later fresh in central bankers minds. getting scotus decisions in washington to emily wilkins. >> the supreme court out with

one of a couple major cases we're expecting to hear from today. they have ruled on the case involving a website designer who does not want to create sites for same-sex couples, the court ruled in her favor saying designing those websites would be a violation of her free speech i think it's a question of how broad this goes. designing a website is different the court is saying from say selling a pair of mass produced sneakers so this might not actually apply to all business owners also, a question as to how this is going to impact about two dozen states who have anti-discriminatory laws on their books saying that businesses do have to accommodate same-sex couples as well as lbgtq persons. >> emily, thanks emily wilkins in washington, we'll be on the lookout for more it decisions the latest ndelivering ill fa, some of the country's top

strategists and our own cnbc contributors we asked for outlooks for q3 and beyond here are some results. 61% believe we have entered a new bull market, 39% believe this is a bear market rally. chief investment strategist brian belski has a target of 4950 talk about what you see for the second half. >> thanks so much. it's wonderful to be back on the show thank you so much for having us. you know, we raised our target to 4550 right after memorial day, and when we came in to 2023, we said that the october lows were in place and that a new cyclical bull market was beginning, part of our 25-year secular bull market call a lot of people didn't believe us i think the market has shown the worse case scenario has not occ occurred with respect to spiking inflation and a fed that was

late given the resilience of the market and stocks in particular being able to take on this 500 basis points increase in interest rates and now with what's happening with treasuries, we still are very positive, but, you know, given that we're at 4550, that's a tepid return from here, and i'm here to tell you, carl, i hope i'm wrong, i hope i'm wrong at 4550 and, in fact, our bull case, our bull case is 50-50 meaning brand new price over 5,000 on the s&p 500 and what we believe could drive that is surprising earnings growth, especially in the fourth quarter and we think it's going to come from our three overweight sectors, that being technology, communication services and yes, financials. >> right do you think if to the degree there is a fomo positioning chase in the next six months is it a feeling you missed out on

equities or on great returns and fixed income >> that's a great question i think it's kind of both because if you just -- everyone is so focused on tech, carl, and we know that i think you have to kind of take two steps back and look at what's happened to tech this year three distinctly different tech rallies. number one was the january effect rally, meaning january the majority of stocks that out performed the market were those that massively underperformed in 2022 the second tech market was in march when a lot of investors wanted to maintain their positions in the overall stock market, sold financials and bought big market cap tech we know what they are. number three, the a.i. move and that's when we started to see earnings expectations for the tech sector begin to move in march, april, may to the point where tech sector oorngs are

outpacing the s&p 500. with respect to bonds given the fact that no one is really talking about this whole pace and path to normalization, we actually think that this is all part of the normalization phase where you have 10-year treasuries in the 3 to 4% range, earnings growth in a high single digit it range, market performance in high single digit it, low double digit range, that's a great position to have in both bonds and stocks going forward for at least the next three to five years. >> brian, help me understand some the better economic data, and we've had a string of it even just this week including we just got out of the university of michigan gdp yesterday, is it bullish or bearish for the markets? is it bullish because it pushes out potential recession and helps with earnings troughs or bearish because it means the fed is going to go harder and do more >> i think it's bullish. i think what we've learned, sara, we've learned it last year given the stock market was down 27% peak to trough and now we've

learned with the market up over 15% that we have to start believing again that market is the leading indicator. the stock market has been discounted and disrespected and talking about bubbles and all this kind of stuff i think we're getting back to the notion of the 80s and 90s market type environment where good news is good news so much of the last 10 or 15 years, sara, has been bad news is good news for the market and we have reared an entire generation of investors that believe the stock market can only go up if interest rates go down i think we're going to come back into good old-fashioned bare bones bottom up stock picking. you talked about before we came on air with respect to goldilocks, i think we're heading into a 95, 96 environment where stock picking reigned supreme, same too when we look at 83, 84, 85 stock picking. good news is going to be rewarded but we're not going to see a heavy momentum in either direction, meaning up and down i think you have to be moderate in your positions across the board, growth versus value,

small versus large, vand that moderation with respect to how you're investing. >> on the menu of bear concerns, brian, we could list them student loans, contested elections maybe in this country, is there one you nod your head and go, i get that >> i think it's inflation, carl. if inflation surprises us and starts to spike for more than two or three months, i think that's the one to worry about. you have tocontrol what you ca control. you can't control contested elections or the geopolitical stuff and i think this obsession with calling the recession has created missed opportunities people are too focused on the macro and they're not focused on the micro, meaning the stock market is a market of stocks and i think we have to get back into believing in that it's a leading indicator and be an owner of equities and bonds. >> pretty fascinating. it's going to be exciting to kick off the second half

have a great fourth. see you next time. >> thank you >> still awaiting the security decision on student loan forgiveness. as we head to break, here's our road map for the rest of the hour apple hitting the $3 trillion market cap can the first half gains continue we'll discuss. nike shares are under a bit of pressure, this after its earnings and outlook what investors need to do with the stock from here. watching crypto's run as w enutional names file stay with us

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cap milestone this morning dating back to the ipo in december of 1980 oppenheimer senior analyst joins us now and has a buy on the price target 195 it's a long way from the $3 million the company was worth prior to going public some time back can it keep going is the question that everybody has, martin what do you think? >> i think it can. when you do when you compare apple's earnings power and how the power can grow consistentl even let's say three to five years, i think this still remains a buy. the calculations that, you know, you factor in price increase,

buyback, and new products, services, higher, you know, high operative leverage from a high margin service revenues, pretty easy to come up with maybe a very sustained 15 to 20% earnings growth in the longer term i think that justifies a buy. >> all right well your price target, though, is right around here, so are you going to have to adjust for that for what you told us >> we can't disclose any further changes on our price target but, you know, i'm very confident that apple remains a buy >> service revenue has been an important component of the higher multiple the stock has received we are talking getting up in the high 20s, almost 30. does that give you any pause >> no. i think service revenues will see a revival. in the past two years service revenues had challenges coming from both macro factors as well as apple's own self-inflicted

wounds from the idfa but apple is expending very aggressively services, payment, music, multimedia services. those can more than offset the headwinds they have inflicted on the apple app store. >> what's the risk is it macro economics they don't sell as many iphones in places like china >> i think, you know, near term you will see definitely risks. apple slowing down we haven't seen that yet i phones still outperform android markets significantly on a year-over-year basis and i think maybe the risk for any expectations you will see a slow growth, emerging markets like india and other southeast asia, middle eastern countries who have delivered very strong year over year performance and if we see, you know, sooner than expected slowdown in those emerging markets, that will change the long term high firm growth and install base outlook.

>> finally the vision pro, i'm curious, i mean, they introduced the watch, it took a while, but now it has a decent revenue number do you have expectations over time this could become a product that means something to apple? >> maybe it will take longer than the watch because i think it's a very, very challenging form factor, you know, you're not -- not everyone is used to dealing with 200, 300 and then keep that device on your head for more than 30 minutes. watch is a natural fit on your wrist and most average consumers are used to the form factor. apple is dealing with multiple challenges in addition to a very high price i think it will take much longer than the watch. >> it's been remarkable, martin, to watch them be so disciplined on two things. one is sort of second strike advantage, watch is a great example, and then sort of discipline and growing organically. is there any reason to think

their m&a strategy would go bigger in the next three to five years? >> i don't think so. because right now, they are not seriously challenged in the key markets they're in they are gaining share if anything, i think the share gain will accelerate in a tougher market and on the software services side, platform remains very stable still the go to app distribution platforms and they're expanding services gaining share of music and media and payments i don't think it's imperative for apple to do large deals. there's no reason for it. >> martin, appreciate your time. thank you. >> my pleasure. >> bitcoin, on pace for its best first half since 2019. more on what's driving ackman shun especially -- action.

we're up 270 on the dow. we're continuing to build momentum here.

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keep your eye on bitcoin, turning lower this morning on new headlines but on pace for the best first half since 2019 ether seeing the best first half since 2021 as fidelity joins the race for the first spot bitcoin in the u.s fidelity was rejected last year. while the s.e.c. has approved several in the past, the agency has yet to approve a spot fund proposal by blackrock, invesco, wisdom tree, bit wise. the journal says regulators informed nasdaq and the cboe which filed the applications on asset managers like blackrock and fidelity the filings are not sufficiently clear and comprehensive. it is interesting to see the institutional interest in the face of what appears to be a war path by gensler to some degree. >> retail interest these etfs catering to retail and we've seen the retail flow more impressive than the

institutional flows into bitcoin despite all the failures and frauds and regulatory crackedowns. i think it just shows that bitcoin as we've seen before and these cycles trades like a nasdaq stock the nasdaq has rebounded this year, more than 30% and so is bitcoin. it's not correlated with inflation or dollars or anything like that. it's the risk appetite trades like a tech stock. >> even better than some, i have it up 83% year to date that's not bad. >> it's labor ittle bit higher. >> doesn't match nvidia's performance but yeah. >> it's also outperformed some of the other cryptos as well bitcoin that is. the nasdaq looking to close out its best first half since 1983 can the gains continue market veteran art cashin joins us with his take next. st wh ayitus

welcome back to "squawk on the street." i'm dominic chu with your cnbc news update. french authorities say more than 800 people have been arrested during three nights of violent riots in the country they broke out over the deadly police shooting of a teenager during a traffic stop. the officer involved in the killing is facing homicide charges. french president emmanuel macron calls the unrest unacceptable but stopped short of issuing a state of emergency. prosecutors claim a weapons expert on the set of the film "rust" handed off a bag of cocaine to another person after the police interviewed her hannah gutierrez-reed is facing evidence tampering and

involuntary manslaughter charges for loading a live round into alec baldwin's gun prosecutors say she was likely hung over when it happened her legal team denied those claims. a southwest plane's nose was dented thursday when it hit a bird during landing at hollywood burbank airport. in a statement southwest reports no one was hurt, and airport operations were not affected. david, i'll send things back to you. >> thank you we are under an hour into the trading session and having a rally here the s&p up over 1% and the nasdaq continuing to power ahead to those amazing first half gains. bob pisani, what do you make of it all this morning? >> this is very powerful this morning. and on the heels of a slightly better than expected pce report. we opened almost 10 to 1 advancing to declining stocks. that's very powerful s&p at a new high. if we close here this would be a new 52-week high it would be a 14 month high.

we're closing the first six months out exactly the way the first six months looked. the leadership is the same it's technology, it's communication services, and it's consumer discretionary on the heels of just great moves up in auto stocks, home buying stocks, travel stocks. that's consumer discretionary essentially. there's your leadership of today. that's the leadership group for the first six months of the year here i know everybody is talking about apple, a little obsessed with the 3 trillion, but the high list is expanding a little bit. guess what we have a bank at a new high jpmorgan is there at a new high we've had industrials at new highs for a while now. eaton shows up, otis shows up a lot, general electric and some of the travel names like carnival also show up a lot on the new high list. let's see if we can get this to expand a little bit more we have almost 200 at the new york stock exchange today. the leaders for the first half it's technology, communication services and consumer discretionary stocks

it's amazing moves up here, 41%. look at that in technology stocks we're waiting for the market to broaden out. it's been a little bit half hearted frankly and a little disappointing because everyone issing with a for the cyclical and defensive names to move forward. metal and mining stocks flatish, energy stocks, and your defensive groups like health care and consumer staples, remember the s&p is up 15% these are, you know, large sectors here that are essentially not doing much and the bulls keep waiting for this to broaden out and it's been, frankly, a little bit half-hearted we had references to the first half and how we're doing 15%, up for the s&p 500 in the first half and david mentioned nasdaq up 30% in the first half of the year. the best year since 1983 put up the major indices in the first half there and you can see that it's been a technology driven rally we've been seeing here with the small cap russell 2000

lagging behind that's heavy financials in the russell 2000 and banks have been under performing so that's why we're getting the under performance. it's amazing how wrong the consensus has been most people had 4100 to 4200, earnings down 10%. all wrongp the economy has been a lot stronger than expected turn this on its head, on the second half, s&p 500 up 50%. what would it take to go to zero you would have to believe the soft landing is completely wrong, that employment will drop big, earnings will crater and drop 10% or more in the second half and interest rates are going to be higher than expected and more certainly than 50 basis points than people are talking about. that's pretty tough to make that kind of argument right now remember, when the s&p is up 15% in the year, there are very powerful headwinds that would prevent it going back down to zero here are the stats the s&p 500 has been up 15% in the first half ten times in the

last 40 years. it's closed up at the end of the year, 10 out of 10 years and the average gain is 23%. so you have 15 and the average gain is another 8 percentage points if history holds now, obviously, something could change and we don't know what future is going to look like, but these are pretty powerful tailwinds for the overall market here and the bears have got -- are very much on the defensive right now. guys, back to you. >> can i point out one thing real quick before we go back i just want to point out we have another ipo today, we had a mexican real estate deal, a dual listing, but floating new shares the ipo market keeps opening up. it opened a little bit, i think priced at 32, a little bit above here the ipo market keeps movinger. >> i want to say i think yuou cn make a more simple bear case, the market is expensive at these

levels, 20 times earnings, that the consumer is losing steam and we got some new spending numbers today. they were flat we're hoping this hour that we're going to expect to hear from the supreme court on the student loan on the biden policy, could be a headwind for consumer spending. we're starting to see a turn there as the job market coalcools a little bit it doesn't take much to send the economy lower at a time where the fed is committed to fighting inflation and doing more of that that's the bear case, right? >> right but that is not going to get the s&p 500 to flat on the year. none of that that means you might see a modest dip in earnings, so we're expecting 220 for the year, 232 on the s&p forward for the next four quarters. your argument that you're making here would be very, very modest declines you would have to see the consumer crater. you would have to see a really serious decline in the job market and slashing earnings

system to get the market down to where it started on the year look, we're going to get a 5% correction you know that. that always happens in the summer, maybe close to a 10% i'm trying to argue what's the argument to a -- for a really deep decline in the market right now and it's tough to make it's easy to make a summer correction argument, but tougher to make a serious decline argument >> bob, thanks for that. bob pisani joining us talking about the market and what second half may hold. want to check in with art cashin as well as we're watching some of the session highs, almost to 4450 of course ubs director of floor operations i'm glad we got a chance to check in with you. how are you feeling, given all of the worries we've spent a lot of time thinking about over the last six months? >> i'm quite impressed you can't underestimate the importance of sentiment in this

market this is, you know, the feeling shifted, the fear of missing out routine, coming into the second half of the year, you heard bob and sara go over how strong the performance has been, and i can't state how strongly i believe sentiment has taken over it is the fallout, used to write, you can take a crowd and turn it into a mob, when sentiment begins to boil over. i think short of going absolutely parabolic, this has been some dramatic pyrotechnic run on this rally. >> do you think about years like 87 where there's some unknown in the back half that can spoil what was overall a really strong environment? >> certainly

that's always a potential and there are certain aspects of this, as i say, because the sentiment is so great, that a bump in the road could turn out to be a land mine. that could possibly happen the rates are not always the fastest in the fight to the strongest, but that's the way to bet, they say. so far the trend is going. am i skeptical yes. if they, you know, get any stronger they'll turn parabolic. that's always a fatal sign but i think sentiment has taken over people feel the train is leaving the station. and they're buying wildly. so i'm just anticipating we'll see what happens when we get that out of the way. >> the stock market is strong in

the rise of bond yields. it's reversed. we're not at the highs we got overnight, 493, almost with a 5 in front of it for the first time since march, that used to stand in the way of the market rallies, at least last year that was the story. why is it different? >> sentiment as i was saying, they are not, again, getting back to the crowd and mob analogy. if you have a logical, calm group of people, you can try to persuade them as mark anthony, one of the great sales pitches of all time, but if it turns too a mob they don't want to listen. you're getting to that edge of sentiment. i agree with you, we're not getting the right signs from yields there's a very good chance that after your excellent interview with the central bankers, we're going to see them remain higher

for longer and maybe even tick a little bit higher. to bob's point of what could change things, it would be that land mine. if suddenly we realize rates will move higher and that is not really in anybody's plan and if they're going to move significantly higher, everything could change you could go to negative payrolls and whatever. but for now, the sun is shining, the roman candles are bursting and everybody is happy. >> we'll see how long it lasts have a great fourth. art cashin joining us this morning. we are getting news from scotus on student loan. >> hey, carl, we have gotten the supreme court ruling when it does come to student loans the court has struck down a biden administration program that would have offered individual borrowers up to $20,000 of student loan forgiveness and found that biden

did not have the standing under a 2020 covid era law to give that sort of forgiveness this, obviously, is going have a huge impact on retail. we're talking about 40 million borrowers who would have seen some sort of forgiveness from this, partial or full, and they're going have to take another look at their budget this means less money for clothes, electronics, eating out. jpmorgan estimates that this could have about $10 billion of headwinds on retail. remember, too, it's not just this supreme court case that borrowers have to look at. they haven't had to make any sort of payments on their student loans since march of 2020 because of covid. those payments are going to begin again now in october and that means another hit for borrowers and then subsequently another hit for retail now the biden administration is trying to provide some sort of relief to borrowers. they've talked about a three-month grace period and they have proposed a plan that would basically tie student borrowers repayments to their income borrowers wouldn't pay more than

5% of their discretionary income under this proposed plan but definitely a big ruling from scotus, a big lit to the biden administration, to student borrowers and to retail. >> emily do we know if there's any grace period in here that is allowed for these payments >> so for this, it really just deals with the forgiveness of the loans. the repayments is a bit of a different track, but it's very much related to the retail market and the impact it's going to have. student borrowers still have a couple months where they do not have to make payments on their loans, but when they do in october they're not going to see their loans shrink any that's what the plan would have done and the supreme court has now effectively ended it. >> all right thank you very much. for bringing us breaking news this is the big one that economists were watching and the retail analysts were watching because it has implications for the consumer just to underscore, if it had held up, $400 billion in debt

would be canceled. 40 million borrowers and fully extinguished debt for 40% of student loan borrowers this is a hit to discretionary income and all the retail analysts have been gaming out which clothing stores, retailers are going to be most affected. i pulled up a chart from jefferies, for instance, they look at the demographic, right, and how much a percent of consumer discretionary spending spent. they say amazon is at risk, walmart, target, costco and tj maxx just in terms of the exposure of consumers on the amount of discretionary spending ubs analysts say they're likely to disproportionately dries spending on goods. >> it's not necessarily targeting the low end of the consumer, right? i mean, those who are say non-college educated have no student loans. >> looking at the age of people paying student loans and the bulk of where their spending

goes to. a lot of people, you know, they put companies like american eagle outfitters and urban outfitters because of the age group and where we see that spending are most at risk. crocs, gap, nike, the names that come up over and over. >> any beneficiaries in terms of i guess those companies that offer credit somehow to this >> sofi. >> i'm looking at it now trading actively sofi, up 3%, i guess it would open the market for them in terms of helping people in need. >> remember, it's been a one-two punch. first it was the debt ceiling bill which resumed student loan payments after the moratorium and that's the sort of period they have a few months before they have to start paying and then this cancels the whole notion of the cancellation of that debt. want to bring in senior personal correspondent sharon epperson

and how big a deal it is. >> it is a tremendous deal for 40 million student loan borrowers. as you were talking about income not only the student loan borrowers. there are parents that are financing their children's education as well and so those parent borrowers are also going to be impacted by this the consumer financial protection board has already said that one in five borrowers are at risk for being able to make these payments when they resume because of the amount of debt that the student loan debt they owe and car loans and credit cards it's going to have a tremendous impact it's time for borrowers to get ready for october 1st when the payments are going to be due and understand that the interest is going to start to accrue on september 1st. and prepare themselves for that. and there are several ways they can look at it right now in terms of what they need to do. we're talking about parent borrowers have student loans as well as student loan borrowers important to go to the department of education website

at student aid.gov and make sure that all of your contact information is correct you have not made payments in three months -- sorry three years, and so a lot of things have changed perhaps where you are, where your contact information is and all of that, but also, a lot of changes may have been made to who is servicing the loan it's important to make sure you know who the loan servicer is at this point and contact the loan servicer so that all of your information is up to date and then applying for the income driven repayment plan as emily mentioned there are some new proposals throughout on what that will be if you know that you're going to be struggling to make the payment, you understand what that payment will likely be on average is going to be about $250 a month for many student loan borrowers you are able to look into the income driven repayment plans to reduce those payments. that could be very helpful but, you know, i'm always talking about saving and people are like i'm trying to make ends meet but this is the time to make sure you're adding to or opened that high yield savings

account and starting to make those payments into that account even before october 1st. pretend to make those payments now so that you will be able to make them later because there's extreme concern about people being delinquent late on their payments as well as going into default because they're not going to be able to make it and not used to doing it and may not be thinking about it in terms of the way that they've structured their budgets at this time. >> you might imagine an environment, sharon, where consumers who, obviously, are now having to resume payments, are going to be offered other types of credit, maybe home equity loans, offers start coming in, what would be your advice in terms of how to receive some of those offers, trying to help your balance sheet in other ways? >> well, number one, if someone is telling you they can help you by you paying them, that is a scam that is a red flag do not do that again, go through student aid.gov. in terms of looking into things like getting out a home equity

loan, anything that brings you into further debt is something to look at very carefully. and i would urge people to try to go to places that are prepared to help you and answer some of these questions right away like the national foundation for credit counseling and get advice for free from a -- from a nonprofit credit counselor who can offer that advice and the financial planning association those advisors who say they are willing to do pro bono work are poised to help you figure out how to make this happen. so before taking out more debt, absolutely talk to an expert. >> this is why bank of america said recently that consumers are in good shape balance sheet wise, but we expect to see more delinquencies if the decision goes through getting a first response from the white house, while we disagree with the court we're prepared for this scenario and the president will have more to say today and adds the president will make clear he's not done

fighting it and will announce new actions to protect student loan borrowers i'm curious what you've been hearing, if anything the president can do next to hear that >> i think the new actions will be revisions to the income driven repayment plan. caps on that plan to make it even better for consumers or for borrowers and get more able to do it. i mean, the proposal of capping monthly payments at 5% of borrower's income is going to be great, but there are still some places where some people are left out and again, i turn to the 3.7 million parents that are carrying, as a parent, $108 billion of their children's student debt with two kids in college. this is very important there are a lot of our viewers thinking i thought i was doing the right thing by helping my kids and i needed to do that and now i'm not going to be eligible parent loans are not eligible for income driven repayment plans. they have to figure it out.

>> sharon, thank you sharon epperson, filling us in on so many different important provisions here, given this change for those who are borrowing under the student loans. some on the street are arguing about this loan decision and whether it could prove a tailwind we mentioned the name a moment ago, for example, sofi kristina partsinevelos joins us now and has names we may want to keep an eye on. >> i'm going to start with what you were talking about sofi is considered a winner given its refinance of student loans. the stock was negative because people initially have to divert discretionary money towards payments means not using buy now pay later. the stock turned positive because many of these student loan borrowers will have to refinance once payments resume after three-year pause the stock is more than doubled this year but btig analysts say it still is 45% more room to grow driven by the resumption of student loan payments. bank of america warns investors

to remain cautious to sara's point and keep an eye on sofi's personal loan portfolio growing on the balance sheet just over the last few quarters raising concerns for delinquencies speaking of delinquencies, although mizuho points out delinquencies have ticked up for a buy now pay later player popular with younger spenders they maintain a buy with a price target of $17. then payment processer naviant which will benefit from increase in student lone refy volumes but may not be the same for sallie may. it provides loans to undergraduate students, those who have obtained student loans and an end to the moratorium, less cash towards sallie may's loans. bank of america likes discover as it has a strong presence in the student credit card market there could be a high overlap between discover credit card holders and student loan borrowers. with over 43 million recipients

of federal student loans that's 17% of the american adult population repayments will be a big boon for several of these names. >> thank you for running through that kristina partsinevelos by the way, guys, looking at xrt the retail etf and retail names not seeing a huge hit partly this wa telegraphed. the street was expecting -- we were expecting this decision to come down in this way, so while still could be a headwind for retail and for consumer discretionary spending, a lot of it might have been factored in already. the only thing i'll say macro economically, it does help on the disinflationary side not to have that extra spending money out there. it hurts spending and demand, but goal number one is to fight inflation, it could have had inflationary impacts if it went the other way. that's all i'll say. still ahead, speaking of retail, nike posting its first profit miss in three years its outlook disappointing the street the next guest still says keni may be a buy he'll explain why.

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we're watching shares of nike today the company reporting its first earnings miss in three years while revenue topped expectations, lower margins weighed on margins promotions a big story there let's bring in guggenheim's bob. bob, anything in the quarter or in the guidance concern you about that bullish view? >> look, i just think the macro uns uncertainties, sara, are very topical right now. from a business standpoint, the business demand for brand nike is very strong their inventory situation was much better than anyone anticipated. the margin expectations have been set now so, i feel very comfortable with the next 12 months for this stock. >> so, will they get to the long-term targets? if so, how long does it take >> well, it may take a little bit longer, but from that long-term algorithm in terms of

the long-term growth and mid to high teens eps, we still believe in it. we believe this company can generate earnings. >> how much is predicated on the direct-to-consumer business, which has been the bright spot for nike and has raised some questions lately with renewed partnerships with dsw and macy's and others >> well, i think the biggest part of the growth is going to continue to come from dtc and what they're doing from the business standpoint. i think the inventory reduction you saw is for more modest growth in wholesale. they have reconsidered some of their partnerships and bringing some of those guys back in terms of business wise you know, i think they're going to move very slowly and very gradually. but i think they're trying to reach a consumer segment they probably weren't reaching with some of their initiatives in their dtc piece. >> i thought it was notable on the call how they they wanted to prioritize higher price or full

price merchandise into next year that should be positive. what are the conversations you're having with investors like today, what are they concerned about? >> i do think the overall long-term algorithm, people want to see the numbers be achieved and i feel like the demand piece isn't an issue for the nike brand. i think the competitive position remains very strong overall, i feel like it's just -- there is some concern around the macro and the ability for consumer spending in this category to continue at a very high level. so, when you think that 5 percentage point, mid-teens -- i'm sorry, mid/single digit eps -- i'm sorry, top line perspective for the business is below their algorithm but i feel like they're trying to tread lightly and they're going to set the stage for the entire category they're getting healthier, i think the industry is getting healthier and i think they'll lead the way in terms of recovery and what we expect with shares. >> thanks, bob, for that nike.

>> we've didn't see any signs of consumer slowdown or they didn't talk about that last night maybe that's the reason the market is down on general, consumer. >> yeah. speaking of the market, of course, the names that have powered us higher on the nasdaq in particular in the first half of the year continue to outperform with some names such as nvidia, up almost 4%. meta up 2.2% netflix also up some 3-plus percent. stay with us ghafr ismaetlowing this rk rit teth

welcome back to another hour of "squawk on the street." i'm carl quintanilla with sara eisen who's back on the agenda today. bespoke's paul hickey is with us with the nasdaq having the best first half in history. will tech continue to dominate in the second half breaking in the last half hour, the supreme court decision on student loans we'll look at what retailers are mostly at risk. ai meets some investing advice we'l