>> the estimate revisions keep going up they came out with second quarter sales, and they're pretty darn good take a look. >> one last look at the markets right now as we toss it over to "the exchange. down across the board. the russell still the hardest hit, down 1% the dow down about a third of a percent. that does it for us. "the exchange" starts right now. thanks so much i'm here in for kelly evans. here is what is ahead. treasury secretary janet yellen is headed to beijing, as the biden administration is readying new technology curves on china we'll look at what is at stake plus, a federal judge just blocked white house agencies from communicating with social media companies. we'll explain what that may mean and have a look at meta's move to launch a rival to twitter

ai is changing the cybersecurity landscape. the ceo of checkpoint software joins us to show how bad actors may use chatgbt to wreak havoc it looks like things are soft, dom. >> soft but it is a day where we could snap a two-day winning streak for the s&p and dow overall. if you look at the markets, the s&p is still above that 4400 mark, off about one quarter of 1% we're down eight points at the lows of the session. we were down 19 points at the highs. still down about one handle there. the dow industrials off 1/3 of 1% 34,297, the last trade there and the nasdaq down 1/10th of 1% on the macro front, still a lot of push and pull in the oil

markets, but we got the news on monday about the supply cuts from russia and saudi arabia part oh of that opec plus agreement. crude is about 3% higher $71.82 some traders are watching this line, the 50-day average price sits around $71.65 the last time that we were marketedly above that 50-day moving average was back in april. so if there is a sustained move above this white line, could that be more bullish for u.s. based crude prices and then technology and communication services very much a focus. this after "the wall street journal" reporting the biden administration may be looking at cloud computing restrictions for certain chinese customers. that has some of the amazon, microsoft and alphabets of the world moving on some headlines they were lower earlier on, and now we are higher on the session. amazon up 1/10th of 1%

alphabet up nearly 2%. keep an eye on those mega cloud computing services i'll send it back to you >> dom, thanks there the potential curb is just one of many sources of tension between the u.s. and china, adding to the complexity of janet yellen's trip to china tomorrow, her first since taking off. speaking of the economy, here at home, we'll get another big read on it with the jobs report on friday before that, though, investors are hoping to get a read on the fed's next move with the june minutes, that's at 2:00 p.m. today. a and the former fed governor with what it means for the fed's fight against inflation. but we begin live in beijing hey, eunice.

>> reporter: secretary yellen lands in beijing on thursday and over four days, she will meet with chinese officials, including her counterpart and members of the u.s. business community. there's no expectation at this time for her to meet with president xi jinping her visit comes only weeks after secretary of state antony blinken was here this is all part of a greater effort by the biden administration to restore constructive and functional dialogue between the two sides the two sides have seen very little communication over the course of the past year kicked off especially after then house speaker nancy pelosi visited taiwan, angering beijing the indications so far are that the chinese are welcoming secretary yellen here, and focusing the talks -- and the idea of focusing the talks on the economy. david, that highlighted some of the problems that we're seeing the services numbers for june

that showed there was the worst kind of slowdown since january for services from this private survey, which really highlights the problems that they're having, even though covid curves have been lifted now, secretary yellen is likely to be speaking about some of these covid -- not covid curves, sorry, but the expert controls, because on monday, the chinese imposed export controls on two types of metals, gallium, as well as germanium, which are used in electric vehicles, as well as other electronics. so this is likely to be a very, very disconcerting for both sides. especially as china is still trying to convince secretary yellen, as well as the u.s., that they shouldn't be

de-risking, in other words, weaning themselves off of china, since what they are doing with these export controls seem to play right into the hands of many in the u.s., as well as other countries who are worried about being too reliant on the chinese economy. >> you mentioned that visit we saw from the secretary of state a couple weeks back. this is a full-court diplomatic press by the biden administration but do we think that this yellen visit is going to be able to deescalate these tensions? we saw one visit, now the second what do you think the result is going to be? >> well, i think it depends on what you mean by "de-escalation." the fact that they are talking is in and of itself a way of easing tensions. but it just doesn't seem as there are any people who really think we're going to see a whole scale change in terms of the policies of the chinese or the americans. in fact, while the americans on

the chinese side were celebrating independence day, the chinese president was hailing iran for its inclusion in chinese backed conference, which was also attended by russian president vladamir putin. so really tightening ties with some of america's adversaries. >> youeunice, thanks for that report at home, we'll get another big read with the jobs report on friday investors are hoping to get a good read on what the fed might due next with the june minutes out in less than an hour steve leaseman has more. >> reporter: markets are hoping some light will be shed here also bracing for that jobs report friday, it will keep people believing that the jobs will eventually slow, but it keeps defying expectations futures markets, almost fully

priced in. still some skepticism out there, but 2/3 of the fomc members forecast two hikes here's some of the things we're looking for. is the fed data dependant? in other words, they're going to make decisions based on the data, or are they going to follow that forecast for two more hikes you've had good rising stock prices, but concerns about credit tightening from the banks. inflation has been slowing but is it enough to slow down the strong jobs market payroll gains declining to a still high 240,000 from 3339,00 in may dave writes, the longer we see continued strength of activity and continued tightness in

hiring, the more we would expect the next surprise to include wage inflation creeping back up this year and next year. maybe june is the month the job market weakens, but the fed's forecast for two more hikes means they didn't necessarily believe it >> it's a little ghoulish to root for the job market to be softening. but steve, stay right there. for more, let's bring in the former federal reserve governor and economics professor at the university of chicago booth school of business you heard steve's preview there. what are you going to be looking for in the minutes >> these are the key issues. i think the fed is not going to quit until the labor market quits. so you'll have a lot of discussion about why have these lags been so long? why aren't we seeing the job in fact turn down yet what is the potential for high

wage demands to keep the core prices up, because it's core price indexes that are much better predictors. there's a lot of movement in nrm and food prices. but if you look at the core numbers, those haven't been coming down. i think that's going to be a key motivator, saying yes, we need to keep going ahead and i think the markets are going to go ahead, unless there's something cataclysmic with the job numbers. >> but there's sort of a cognit cognitive did disnance with the fed. how can the fed get both of the things that it wants when they seem to be at odds with each other? >> that's always the tough question to get that balance

right. right now, the unemployment rate is below where they think the long-run average is. they have that in the low 4s and the unemployment rate is in the 3s so they could have the unemployment rate move up, and it's still consistent with the mandate to maximize employment growth but consistent with low inflation. inflation has not been low or stable so they're really missing so much on one of the two goals that they need to make that the priority that's why they have brought interest rates up at near record pace >> steve >> i just want to remember the paper we talked about from foform former chair fed we are bernanke i was wondering your response, which is very important, that we

haven't experienced wage push inflation, but it's the fear of it that i think is as other factors in inflation receive, it maybe that we're left with some form of wage push inflation, and it's hard to divorce this conversation from some of the tension going on in the -- with unions and with employers right now. the unions act like they have a tight labor market behind them, and that the employers have to negotiate here so that's another sign of how tight the labor market is. we could be headed for a strong jobs report on friday. >> randy, react to that. you've been in room where these things are discussed is the fear of high wages still out there, or is that a psychological thing that doesn't exist in the real world? >> oh, no, i mean, the wage demands come from people's

expectations those are their beliefs about where things are and where it's going. part of it is, the real weight that is the inflation adjustable wages have been terrible over the last year or so. nonreal wage growth has been high compared to where it used to be. but inflation has been three, four, five times what it used to be so what may be happening is that people say well, you know, i didn't quite get enough last year, and sure, inflation is coming down. so even if inflation comes down from the 4%, 5% range that we are in, down to say let's say 2%, 3%, they still may be asking for 4% wage increases. that's going to be really difficult to get down to those 2%, 3% levels. you're going to be persisting in the 3%, 4% range because labor costs are such a large and important factor in overall costs, even in manufacturing. >> steve, i know we have these minutes coming up at 2:00

eastern, soy don't want to skip ahead. any early sense of what to expect there is it too early to speculate >> the early sense is that i did some work over the weekend on july fourth, just before the fireworks. >> god wbless you, steve >> crunching data on july fourth, my favorite thing to do other than watching fireworks. commission economists have been so wrong, negative by an average of 111,000 jobs per month i went back two years. economists have underforecast the job market by 2.6 million. so you could take their 240,000 and add 100,000 to it. maybe they get it right this time, maybe it's weakening but they have underestimated the jobs market for a long time now. we'll see if it catches up with them but i would like to correct the record i'm rooting for more jobs and

higher wages completely offset by surging productivity. i think randy will join me in rooting for that >> surging productivity, excluding on the fourth of july. steve, randy, i appreciate your time and experience. as we enter the second half of the year, my next guest is very bullish on the market. he just raised his year-end price target to 4,825, the highest on the street. here is tom lee, co-founder and managing partner at funds global advisers you have the most aggressive forecast out there on the s&p. before we get to the merits of the forecast, ever feel like you're out on a limb when you make those forecasts and you're the most aggressive on the street >> yeah, all the time. it's easier for most people to stick to the middle of the fairway. that's why most forecasts are around consensus but i think this year is an

example of where the common perception was wrong on many things, the idea of a recession starting, and one where earnings -- a lot of people said earnings were 180 and they're track ing 220. many expected the fed to come out swinging every time the market rallied, but the fed is taking a different approach. >> there's this talk of a soft landing. is that sort of missing the point in the sense that what we are really looking for is just a warming economy rather than a landing economy? >> yes >> am i mixing my metaphors too much >> no, i don't think it's mixing i think coming into this year, people had very extreme views because the fed did such rapid hikes and the phis collapsed so there was an expectation we would enter a recession by now >> it should have happened two months ago

>> yes and there should be an expiration date on that view, because we know that inverted curve could reflect inflation falling. so in terms of earnings, companies did a lot of cutting last year, so now estimates are going up >> do you think the fed will see what it's looking for in the jobs market, and how will that guide them through the rest of the year >> the fed's got a tough job as long as the headline cpi year over year has been over 4, they've had to talk tough. i think this is going to be the first time that they can point to real progress i think the market will give them credit that they have accomplished quite a lot in a number of hikes, even if there's two left in the year, and i saw steve's thing, november is iffy that's 50 base it points this

year compared to last year >> so viewers are sitting here watching you, buying this bullish vision that you are selling, how do they trade that? what stocks are you looking at to benefit >> i think you stick with f.a.n.g. and tech. those are true fundamental surprise stories, and'sing financial conditions means they can do well. but cyclicals make a lot of sense. >> which ones? >> things like industrialis or airlines, com equipment. so i think it's what you would do if you think the business cycle is bottoming >> if you are looking at airlines, i flew today and earlier in the week, airlines are packed but at some point, they have to turn that into serious profits >> yeah. airlines have done a good job

managing capacity. fuel has not been a head wind for them there may be customer service issues, but in general, it's fundamentally been proven to be a better business than in the past >> so you like f.a.n.g. and airlines in particular what do you stay away from >> the most common trade to avoid probably is defensive. you know, defense -- i hear a lot of people say they want to overweight defensive stocks. you realize the negative returns owning these things, because they were expensive to start the year they're not necessarily benefiting you if there's disinflation i would rather bet on the groups hit high with inflation. coming up, mark zuckerberg throwing down the gunt let with the launch of threads. a look at the highly anticipated debut tomorrow but first, a new ruling

restricting white house officials from contacting social media companies. we'll look at the implications and the fallout for the firms involved "the exchange" is back after this ♪ ♪ 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? ♪ ♪ ahhh! icy hot pro starts working instantly. with two max-strength pain relievers, so you can rise from pain like a pro.

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welcome back to "the exchange." a federal judge putting limits on the biden administration's

contact with social media companies after ruling efforts to combat false or misleading information is a form of censorship the order comes after the attorneys general of louisiana and missouri sued the federal government in 2022 for going too far in its effort to fight covid-19 disinformation. meta, the parent company of facebook and instagram, and alphabet, the parent company of youtube, were in today's session. joining me now is legal analyst dan yeah savalos good to see you in person. i'm looking at this ruling, i want to understand the logic behind it. can you explain that >> in addition to the plaintiff's claims, there were individuals who allege the federal government, including the white house and cdc and the surgeon general, engaged in a suppression campaign by contacting social media companies like facebook and twitter, and essentially coercing them into taking down the plaintiff's speech, which

included things about covid-19, vaccines, election integrity generally, conservative leaning speech now, immediate wly the thing th jumps out, if anyone had their free speech curtailed, it was the social media companies and not the plaintiffs directly. but the court says because the government engaged in this coercion, that it is a potentially a first amendment violation. >> is the argument here because the government is so powerful, the white house so powerful, that even contacting the social media companies to discuss these things, even if they don't issue an order, just that contact could be sort of bullying on first amendment grounds? >> yes to that contact but in addition, the opinion notes that the government contacted these companies, just like you or i might, to ask them to do something down when the white house calls, people listen. not just social media companies,

but everybody answers that call. so they took meetings, email ex-change. but beyond that, when the white house and other government agencies didn't get what they wanted, according to the opinion, they made some not so subtle threats, like, we're going to have to look at your immunity under section 230 of the communications decency act maybe we'll have an anti-trust meeting. this is something we need to take a look at now, i'm paraphrasing. but what the court concluded is making those statements was a step too far you can expect the white house to contact these companies but to say when we are not getting what we want, we might bring the might of the u.s. government against you. >> and you see some of these social media companies rallying. i'm sure the biden administration will appeal >> these are issues of law that an appeals court might take a fresh look at, particularly the first amendment issues those are always something that

will be interesting to an appellate court, but we might see this make its way up to the supreme court, because of the first amendment issues involved. and in particular, if i were to target one thing, it would be the idea that simply because the white house makes contact with a company, are they coercing that company to suppress speech what if facebook and twitter might have done it on their own? >> if it goes to the sproertd, -- supreme court, how do they handle it? >> i am a betting man, and i will bet that this supreme court will rule consistently, if it gets to the supreme court, with this district court. i think it was 150-page opinion. so it's reasoned, plenty well reasoned >> danny, thank you so much. meantime, meta shares hitting a new high ahead of tomorrow's launch as the company's twitter rival. julia borsen has the details >> meta shares up about 3% on

optimism that it can use instagram's reach to 2 million plus users to scale a new app to draw new users and add dollars to twitter and others. this could create a new growth for the tech giant at a time it's been working to cut cost. so meta is preparing to ralaunca new app called thread. it appears to look a lot like twitter. it's designed to leverage instagram's popularity, enabling users to follow the game pr profiles they follow on instagram and use their same handles. meta's thread launch for twitter comes at a time when twitter is vulnerable this just this past weekend, elon musk set limits to tweets this comes on top of concerns about the platform's content moderation and questions about whether or not there's sufficient demand for its new subscription service, twitter blue elon musk and mark zuckerberg are long-time rivals, but news

of the alternative sparked a challenge of a physical fight. >> julia, there have been so many attempts to replicate this. you have all these different entities out there it seems to me like maybe nobody is going to capture the lightning in the bottle that twitter had. the secret sauce to twitter is everybody is there so everybody wants to be there to spout off their opinions and show all the little things that people do on twitter and if there's nobody home in these new twitter alternatives, there's no reason to be there. so it's hard to get them started, suspeisn't it >> that's why meta has the advantage. over 2 million people with usage on instagram so if they can get a small percentage of that 2 billion number to use this new app and start posting, because they made it so easy for anyone on

instagram to get on this platform, that they have an advantage. very difficult to go from zero to 60, as they say so perhaps they can get a percentage to switch over. there are all these other questions about whether twitter's existing users want to pay for some of these premium services and this is perhaps an alternative for them if you're frustrated with twitter, switch of and try this new thing. so it will be interesting to see how much they can on board that instagram user base and i would be curious to know how many twitter users are on instagram that intersection will show you which people are going to be using this platform first. >> so maybe this is the one that can succeed where all the others have failed. >> yeah. they certainly have a letter shot at anyone starting from scratch. >> and there is an article on cnbc.com how to sign up for this

new thread service each i can do it julia, thank you coming up, we'll bing into that report of the white house restricting cloud computing access to china. the fallout for some of the biggest companies here at home "the exchange" is coming right back after this. together, we built something truly beautiful in the true iconic notion of what america is all about. ( ♪♪ ) this is our task. this is our mission. we have a clear focus, and we have the ability to be agile and innovate. it takes years of dedication to get us to this milestone. it is all because of you. never doubt that a small group of thoughtful, committed citizens can change the world. it is the only thing that ever has. ( ♪♪ ) to be a woman leader, it's not so easy. but it's easy if the passion and the love is coming from your heart. the new york stock exchange is the symbol of what america is all about.

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good amp welcome back to "the exchange. the u.s. navy says it stopped iran from seizing two oil tankers in international waters today. military officials say they believe the iranians planned to board the ships and seize the oil, which was headed to the u.s. in the second case, the navy says iran fired small arms

rounds at the tanker, but no one was hurt joe biden to host sweden's prime minister at the white house today. a show of solidarity as the u.s. presses for the countries entering into nato both sweden and finland applied for nato membership after they ended their policy of military nonalignment when russia invaded ukraine. and the suspended texas attorney general ken paxton is not planning to testify at his impeachment trial. he went on to call the articles of impeachment meritless the gop controlled texas house impeached paxton, a republican, on charges of breaking the law and abusing his office and obstructing justice. that's a lot of counts >> it is thanks, tyler. a new report highlights the historic underinvestment in black colleges and universities.

but could last week's supreme court decision to end affirmative action turn the tide that's cinupexomg nt. mself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

welcome back to "the exchange." the racial wage gap in america is finally starting to shrink, but the difference is still enormous according to the economic policy institute, black workers still make 21% less than white workers. this comes as the supreme court

strikes down affirmative action saying college and universities can no longer make race a key factor in admissions decisions and goldman sachs just out with a new report highlighting the under investment in black colleges and universities. so for more on how to close the wage gap, let's bring in the author of that report. she's chief operating officer of the global investment research division at goldman, with our sharon efferson. tell me what you found in this report >> thank you for having me, first of all so we decided that we wanted to deep defensive into just the importance, the historical importance of historically black colleges and universities in the united states of america what we found were three really important takeaways. one, we found that black schools really advance social mobility black students at almost twice

the rate as non-minority institutions, which is phenomenal obviously, we have seen a lot of progress over time in the education of black americans, especially black women but the gap between white americans and black americans is still pretty broad so that is really essential. number two, and really important, hbcus were created prior to 1964 as a designation of what an hbcu is there's a long history and have been very diligent in educating black americans. we can go as far back to thurgood marshall, martin luther king, jr., or the current vanderbilt there's a long history of hbcus focused on empowering and equalizing the positions of black americans. number three, which is pretty significant. it is that hbcus create a safe

environment for black students, and for low-income americans to be able to go to school. if you look back to 2019, we look at the data around sort of race-based or hate-based crime on campus. 60% of that is driven by race, which is phenomenal in this day and age. so creating an environment where black americans and low-income kids can go to a school and feel safe is really important one other stat i want to highlight, hbcus make up 2.5% of the schools in u.s. and educate over 9% of black americans 13% of the actual undergraduate degrees come from hbcus. over 20% of s.t.e.m. degrees come from hbcus, from black americans every year and importantly, hbcus continue to provide a lot of pipeline through medical schools. that's important, because you

also see a huge health year gap with the black american population, and we know from the data that minority positions tend to serve as low income neighborhoods more >> that sets up the importance of the hbcus sharon, walk us through the context here in the wake of the supreme court decision we saw them strike down affirmative action what does that mean for this group of colleges? >> i think it means a lot for all colleges and universities and the impact on diversity will be significant if you look at what howard university said, the decision will not only have a devastating impact on the diversity of colleges and universities across the country, but will decrease access to higher education for students but that said, because of the statistics that were just outlined in terms of the small number of colleges that are hbcus in this country, but the disproportionate number of people getting s.t.e.m. and medical degrees, there may be more of a focus on hbcus for

talented students looking to where they want to go for higher education. so the point was made, more students of clo who might have chosen to amy to a predominantly white inls stitution will now attend an hbcu instead >> is that the unintended consequence, where they'll have a higher skilled applicant pool? >> it could be, but many students are going for further education. as they look to graduate programs, again, this decision is going to have an adverse effect on black students pursuing those advanced degrees. so there are others making that point. >> so if you can -- maybe it's too early, we're sorting through the implications of this decision but if you can sort of filter through what happens as we go through the undergraduate level and out into the workforce, how do you see the echoes of this decision praying out in the

years to come? >> one of the key tenants is that if we are able to address some of the racial disparities that we see in the economy, that is not just the fair thing to do or just the right thing to do, but it's good for business and it's good for the economy. we want that equity. we should want that equality at goldman, we say we want an economy that's looking for everybody. so that, i think, is one of the focused areas of the research is just the importance of the investment in these organizations, in these institutions that we see the research has been historically underfunded for many years what is is your advice to employers who are going to be looking at very shifting land scapes in terms of who is graduating from these schools what should employers do >> three things. one, you want to make aspirational goals for hiring

from these inls stitutions so make it public. number two is really focus in on creating pathways. so at goldman, and we were just talking about this, we have a program called hbcu possibilities, market madness. every year we study at this and look at post george floyd, the rise of the black lives matter movement, the pandemic, we have had more focus on these institutions than we have had in the past at goldman, we bring in these students, 150 students from 12 hbcus and team them financial concepts we teach them the full scope, and then at the end, all of this takes a stake in helping to ejs

kate, familiarize this population >> great to see the people get involved >> and them it's similar to what we have at comcast universal and nbc news group, we have 45 academic partners and hbcus providing a pipeline on campus education and training and getting to meet you and other people in the organization to find out how to do the job >> more importantly, the senior people >> well, everybody, you know so the people understand what jobs it takes to get there and also hear from the leaders but it takes investment in the top to really make sure things happen >> fascinating conversation. thank you both for being here. still ahead, more on the president's reported plan to limit china's access to cloud services and the potential impact on two of the biggest players. that's coming up next.

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block cloud companies from servicing chinese companies. you saw the graphic of today's check trek with diedra hey there. >> the export ban on chips just hasn't been all that successful, because chinese companies have found loopholes like using unlisted subsidiaries or remitting access so now the biden administration will restrict chinese access to cloud providers. this is a way to block access, again, to advanced ai chips. big cloud players like amazon, microsoft, google, they buy high-end ai chips for their own infrastructure to perform the performance and efficiency for their customer's ai workload, which is increasing in this era of generative ai customers get the benefit that can compute power by renting space on the cloud so you eliminate another access path to advanced chips for chinese players. that could, however, hurt u.s. cloud companies like amazon that has a ton of chinese customers

and manufacturing. retail, gaming and beyond. microsoft azure could also be hurt chinese companies, if they can't go to amazon, microsoft or google, they may look to players like ali baba, which is a huge player globally. they don't have the same access to ai chips, but again, they can find work arounds, which is what many chinese companies have been doing. so you know this well, starting to look a lot like whack-a-mole. they find loopholes, the government puts another restriction in place, they find a way around it. so it raises the question, where does this end? >> in the short term, you wonder whether the chinese cloud firms can figure it out, given their lack of access to some of the key infrastructure components they need. still ahead, we have entered

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and welcome back to "the

exchange." the surge in new a.i. technology driving a big market this year as investors watch the new technologies a potential serious threat ransomware attacks are up 20% from last year as companies contend with more sophisticated threat actors using a.i. in nefarious ways for more on this i'm joined by checkpoint software ceo. i'm surprised by this 20% number because the narrative on cyber last year the invasion by russia of ukraine last year they were not going to be able to participate in the ransomware economy, but you have said they bounced back >> absolutely. first they bounced back and we have actors from all over the world. it's not just russia >> when you look at that 20%

increase what's drive tg is it a.i. technology or something else out there motivating these folks >> i think the fact the attacks are becoming more sophisticated and becoming bigger and even the financial stakes are much, much bigger five years ago ransomware was a few hundred dollars, today we see a ransomware attack of $4 million and $14 million. and that's the norm not even against national infrastructure but against mid-sized companies. >> and we can't stop companies from paying it, can we there's a debate over and over in ransomware if you stop paying the ransom, you're going to stop the financial incentive for people to do this, but again and again companies make the decision that they have to pay >> first, not everybody pays a big majority of companies don't pay. second, i think sometimes when your business is down and kind of between you and running a business, i'm not here to judge, let me put it that way

we're here to explain how to avoid that and how to deal with the damages. >> well, let's talk about the way a.i. can impact this kind of problem because you look at ransomware, and you don't have to be super sophisticated to conduct a ransomware attack, but you do have to wonder what you're doing a little bit. i wonder if a.i. and chatgpt and gpt 4 open up the world for even less sophisticated attackers to get in and they can launch it with a push of a button. >> you're absolutely right a.i. lowers the bar to creating the ransomware or malware in general who are basic skills open a.i. do put filters that prevent it from creating malware, but researchers have shown how you can overcome these limitations and still trick it to give you some malware, and

that makes it easier to participate -- >> are you seeing a.i. written malware out in the real world or is this theoretical? >> we've seen written a.i. that created some sophisticated attack and some even used unknown risksch. >> when you look at a.i. the potential is there for attackers but also presumably defenders can do something with a.i. to benefit themselves how does that work >> we are today 75 engines on our cloud to prevent attacks over half of them, over 40 of them are already based on a.i. so a.i. allows the defenders to come up with more sophisticated technologies and much, much faster so that works for our benefit as well >> on either the offensive side or defensive side have you seen a.i. doing something that surprised you, coming to a

solution that a human programmer or someone that you know necessarily wouldn't have come to >> i think it's still in the early days, but you are seeing the a.i. quite sophisticated and i think the threat is there. we have a very interesting research that shows the way to create the a.i. engine to write malware is actually talk to its ego. >> talk to its ego >> yes kind of trick them like you're tricking a kid, well you can't do that, and they'll do it for you. >> i can't believe a.i. machines have egos. alarming stuff on cyber security that does it for the exchange. power lunch and the release of those fed minutes is coming up next ”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic

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we're about to get the minutes from the fed's rather eventful last minute on interest rates, and that was when the fed chose to pause but hint at the possibility of more hikes to come we'll see about that as the end of july, of course >> first we want to get a check on the markets here as stocks are lower across the board dow industrials off. and nasdaq composite down about the same las is not too big, less than 0.5% let's get to steve liesman for the minutes. >> minutes to the fed meeting almost all saw future rate hikes as being appropriate and some even wanted to hike by 25 basis points at the june meeting we don't know how many some is we know it's less than many and more than a few. the reason they wanted to hike is because they saw the labor market as tight and saw a few clear signs inflation was returning to the 2% target most sai