earnings-related moves in some of the individual components like united health and jpmorgan, lots of banks today, always glad to get those out of the way. they always lead off earnings, but that means there's a lot more other companies next week >> tech. >> thanks for being here >> always a pleasure >> spent a lot of time together this week. >> it's been special >> be sure you join us next week "squawk on the street" is next ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer david faber is back at post nine of the new york stock exchange bulls looking to wrap up the biggest weekly rally for stocks and the banks will head up today. return on equity, import prices down six year on year. that's adding to this week's disinflation theme our road map begins with the

banks. and we're also going to have an exclusive interview with larry fink blackrock is the world's largest asset manager and it posted a jump in earnings and net inflows. plus, united health is among the top gainers on the s&p 500, this after the company raised guidance, reported results over most analyst forecasts it was helped by higher premiums and a smaller than expected increase in medical costs. let's begin with the big banks kicking off earnings season, jim. we made note of their historic underperformance coming into this period. >> except for the majors jpmorgan was at its 52-week high yesterday and turns out to be justifying that. jpmorgan is a growth stock, and i'm -- what i'm talking about, they're doing everything right, david. efficiency's right their credit card loans, up 18%. these are just growth numbers. it's like a small cap stock. so, i just think you have to take notice of them and just say, they are in a class by themselves >> you think so? >> yeah, i really do

>> class by themselves >> all right go through more numbers that would show that or give me a sense as to why you say that >> when you look at what i would say is their -- some -- the money that they took in, it's just extraordinary the average money that they had, $3 $3.2 trillion, see it up 16% david, you can't do that how about i-banking? $1.49 billion? >> they actually had -- >> where did they get this where did they get these i mean, i -- i'm not saying that they're, you know, that they're fanciful i'm just saying this is -- the return on common equity, you see that >> yeah, i did see the return on common equity was 23% after excluding net after-tax gain of $1.8 billion there was some movement here about first republic, as you know, gains and losses, but the

analysts had that this mind. >> i want people to understand at home. i just gave you a series of numbers that i'm sure are just gobbledygook, but you have to compare apples to apples, and you just realize that all those categories i just gave you, these are substantially in excess of everybody else's so, you could just say, what is this average unit whatever it's the amount of money they have under management. >> listen, wells fargo in their piece, their quick update on the earnings, goliath is so, so winning. >> that's what it is carl, one of the things that's so hard about today is you'll have all the major banks reporting, and they're really difficult because there's a lot of lines, like the return on common equity that people say, what the heck is that? i want people to realize, let's say these were semiconductors. this is nvidia this is faster than nvidia >> we're not getting guidance changes like that, but -- >> i'm just -- i want to say that there's nvidia and then

there's everybody else i have to say that when i look at jpmorgan, there's jpmorgan, and then there's everybody else. >> chargeoffs, obviously, we were going to look for it going in up 34 basis points, quarter on quarter. still better than we were this quarter in '19 >> right right. but you know, look, i think this first republic's already a winner net interest income, $21.98 billion i know it's only up five versus wells, and wells had a better number >> isn't that interesting in wells was better in terms of the increase >> much, much better but i just think that you take a look at this, and you say, all right, let's say you didn't have intense regulation of the banks. and let's say you had banking like you have in the united kingdom. jpmorgan, that would be one of, like, four banks, and they would be the big bank. this is, if you go back, go back to 1906 to 1932, jpmorgan.

and then everybody else. here we are, back in that period and what did they call jpmorgan, which is now a series of places that you can get three yankees shirts for $10 the corner >> right here. right across the street. >> president coolidge, they would say, where do you want to go the cooler >> to be fair, it is a name now. back then, it was associated with a man and a family. jpmorgan is now jpmorgan every so often, i started as aba banking reporter in 1987, and these were all the banks jpmorgan, chase, manny hanning, chemical, first chicago, and i'm sure i'm missing a few >> bank one. >> that is all jpmorgan. >> and in some cases, dimon himself. >> yes >> went back to chicago for sure >> but it's back to where jay

pierpont morgan had a bank and everybody had to listen to what they did all these banks. united states bank failed. this is them, this is the closest i've seen to them being the jpmorgan that you just said, well, wait a second, let's understand the corner >> do we want to, carl, talk a little bit about dimon's comments lot of macro consumer balance sheets still healthy, still spending, albeit a little bit more slowly labor market softened somewhat, but job growth remained strong salient risk in the immediate view he's already talked about these many times >> yeah. yeah >> consumer slowly using up their cash buffers and core inflation has been stubbornly high, many of the things we know, but certainly hits them. >> you forgot ukraine. >> yeah, ukraine >> war in ukraine. >> i didn't see any references to hurricanes this quarter >> no, no. there was no hurricane, no

it was not as bad it's going to be out this morning. >> not as bad as what? >> it's a storm out here >> it was very stormy this morning walking from the subway, yes. >> look, i want to -- this is what i thought was best. i want to welcome our new first republic colleagues and thank them for all their employees, extraordinary job serving our new first republic clients this is the kind of thing where he comes in, takes over first republic, and next quarter, it's going to be just fantastic they're rebuilding, david. >> all right >> you're not buying into any of my jpmorgan 1906 to -- >> i'm reading a novel right now sort of based in that time it's interesting >> the guilded age? >> it's called "trust. >> that's hard to come by. >> you've been in the market for books. >> i didn't think imd would go fiction. i got to buy, i think, neil ferguson wrote a thing on the roth rothchilds that i got to read.

wells fargo and citi >> i thought wells fargo was sensational. >> why >> why because -- let me get my little memo out >> get your memo >> wells fargo had 20.5, we were looking for 21.3 that's a 55% increase in what people thought net interest income chargeoffs were high net income is good but here's the line that i wanted, david. charlie, lot of these guys -- >> by the way, he's talking about -- >> talking about beyonce when it comes to banking it's jamie and charlie charlie bought a hundred million shares he was in the market charlie has belief >> he bought some stocks >> charlie's back, david >> he's back >> remember? remember when he came in and he took wells fargo, and he said, this is fine, and then five years later, like, what the heck did i get myself into? charlie is back.

>> he's back >> back in remsenburg, i think >> is that where he has a house or something send people there now to protest? what are you doing >> no, he's in quag. i don't know >> higher losses in commercial real estate. $949 million increase in the allowance for credit losses, primarily for commercial real estate office loans, as well as for higher credit card loan balances have not seen significant losses in their office portfolio to date, but they are reserving for the weakness they expect to play out in the market over time. >> that net interest income, david, of 14 versus 10, it's unbelievable it's almost amazing. much better than everybody else's >> what accounts for that? >> i don't know how he did it. he's a magician. he's the old charlie >> you don't want to say somebody who runs a bank is a magician >> yeah, that does imply a level of alchemy that i didn't mean.

charlie is working his old -- i can't say magic is what you're saying >> no, no. he's executing how about that >> he's executing like there's never been >> magic sort of implies distraction and -- yeah. >> yes >> how about, just, his blocking and tackling is better than it's been in a long time? >> how's jane fraser's blocking and tackling these days? >> they went right past her. that was like a 60-yard touchdown run. >> thanks to our friends at jpmorgan, i can add to the list, washington mutual, bear stearns, texas commerce, first republic, fleming, all jpmorgan now. and the list goes on we should have a drinking game name the things that make up jpmorgan now >> no. >> no? >> i will not do that because i remember jpmorgan, the senate banking committee, and the circus dwarf do you remember that she was 27 inches. they put her on the -- during

the court hearings, when people were investigating there were hearings that we held in this country about how jpmorgan could be so much stronger than every other bank i'm not predicting this will happen again >> what about a 27 -- >> it was a circus thing someone put a -- you can just -- look, just go -- i want you to google jpmorgan senate bank committee and circus dwarf they put a circus dwarf on his lap during the hearings where he was shredded by the senate >> thanks for sharing that did you finish your thoughts on citi >> no, i -- >> before i interrupted you. >> i'm just trying to put this all into context jpmorgan is back being the predominant bank in this country like it hasn't been since 1932 >> look, i mean, the rotce, return on common equity for citi, 6.4% >> that was why it has book value -- see the changeable book value? still double what it is.

we know there's something wrong there, david >> jim, we've been talking about, we know there's something wrong there -- >> they don't make a lot of money. >> it is obviously a global bank they do make money from all the relationships they have around the world. >> jpmorgan did that analysis. >> cash management and everything else. >> cash business i'm just saying, i still find it quizzical. i find -- the tangleible book value is quizzical, and i think it needs to be looked into we used to have -- during the so-called heyday of wells fargo where there was alchemy, we listened to wells fargo, say, much better bank than jpmorgan >> i want them to put up citi. thank you. no, it went away i like it when they have the chart up of what you're talking about. >> they're doing the best they can. >> silence now you're silent? first you're talking about circus dwarves and jpmorgan. >> i had all this analysis about jpmorgan comparison and corner,

and david didn't care at all about it he's just still talking about his sun valley high. >> i didn't say a word about that >> valley high >> did not say a word. >> no. it's that short-sleeve shirt >> no, it's a long-sleeve shirt. i rushed back. no travel day. i came back. you don't seem happy about it. >> david, i have come back so many times in the same suit that i left, i don't want to hear about it >> it's true nobody would argue that point. >> thank you very much >> but i thought maybe you'd show me a nicer reception for coming back. >> it's the most dominant jpmorgan's been since 1932 i rest my case >> goliath is winning, as mayo said we're going to dig further into the banks. we'll get an exclusive with blackrock's larry fink we'll get to some of the comments about investment banking, particularly at jpm got a bunch of calls today on microsoft, amad, las vegas sands, at&t. take a look at the premarket "squawk on the street" is back in mut aine. ♪ opportunity is using data to create a competitive advantage.

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welcome back keeping an eye on shares of disney a lot of business commentary based on many things bob iger was saying yesterday during our interview. any number of things for analysts to grab ahold of, whether it is potential sale of some of the linear networks. >> for how much? did you see the number they're saying ten bucks a share. wells fargo says ten bucks if

they go with what your plan is >> it's not my plan. >> his plan. >> another part, of course, and we did discuss this yesterday, jim, was the future of espn, iger making it clear, it seems, that they're having some initial conversations about partnering, probably at the same time that they flipped to having it as a streaming service. s bringing in a distribution partner. jim has a strong idea of who that will be >> we have a great brand, we've had a good business, and we want to stay in that business that said, we're going to be open minded there, too, not necessarily about spinning espn off but about looking for strategic partners that could either help us with distribution or content, but we want to stay in the sports business >> you took that yesterday during our conversation to mean most likely apple. now, by the way, always important to point out he was on the board of apple for quite some period of time. only stepped off in, i think,

2019 >> vision pro, he was at the presentation >> and he was at the vision pro presentation or actually, he zoomed it was a video but it wasn't -- >> but this morning, i know, david, you and i have gone back and forth, but the new"new york post" talked about adam silver, commissioner of the nba, doing a deal with vision pro about being on the front row those are $30,000 tickets, but these are better, to watch a game and -- >> so you put your vision pro on and it's as though you're in the front row. >> right i don't know who adam silver -- whether he thinks he has those rights but how about the combination of espn and you're at the front row, you're in the end zone when i had the vision pro on, i don't know about you -- >> i've never had it on. i wouldn't know. >> buzzkill. i don't know about you, carl, but i felt that when the ball was coming at me that it was going to smack my head and i was thinking, it's going to be concussion, and i'm going to go have to do con vcussion protocol

>> courtside in vr has long been talked about in the nba. >> mls, i mean, the thing's coming right at you. you go like this twice, i dodged it because i thought for sure it was going to -- that it would snap my neck back and that would be the end of things. >> there may be a significant opportunity for them there >> may be an opportunity >> hersch does own 20% of espn >> steve schwartz? >> ni don't know i didn't see him but carl, the nba, to jim's point, the nba re-up is going to be very important. iger's made it clear, they're going to be playing at espn. the questions, i think, are more on the lines of warner bros. discovery, what happens to a tnt if you don't have the nba? is it worth anything >> wow >> right well, you tell me. is it? >> no. >> no. so, that becomes very important. it's going to most likely double the cost of what the nba is. >> nba is a great property, but

i come back to, if you have those courtside seats, it is worth it anybody who's ever been there courtside, i've been there once for the 76ers, and if i can get up with the vision pro and don't have to go there and spend $30,000 per ticket or be given one, this happened to be a previous era for me, i feel like i'm in better shape watching at home in the vision pro that's why i'm such a proselytizer for this. meanwhile, there are optics behind the strike commentary the average hollywood writer makes less in a year than iger makes in a day that's circulating a lot today >> people on the picket line are very articulate. >> they are. they are i know no more premiers >> well, we'll be talking more about the strike, especially as it pertains to the jobs number the next couple months, if it doesn't get resolved futures holding in there, ex-tech. coming up, an exclusive with

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blackrock out with, of course, great quarterly results this morning earnings beating wall street's estimates consensus, all just -- i don't even have to go into that because it's been a great quarter and a great time, why? because of the man we're sitting with larry fink joins us exclusively at post nine it's so great to have you. >> good morning, everyone. happy summer >> you are a man of the world. people know you, of course, as running blackrock, but you're around the world constantly. i want to posit something. is the united states in the strongest position you've ever seen it versus all the other countries you go to? >> relative to the world, we are in an incredible position. our innovation, our technology, our entrepreneurialism has really fueled an incredible growth period for the united states, and i think it's showing up now in the development of a.i. we are the ones. it showed up in mrna, shows up in many other technologies, and i think we're just more

resilient. we're a very emotional country, and when we have problems, we're more cathartic we actually are, you know, because of the democracy and the conversations we have in our country, we're more resilient in terms of identifying problems as a country, and as a country, we cauterize our problems faster than other ones. in many, we saw after the financial crisis, how long it took europe to admit their structural issues. so i think that resiliency and that openness. we all know that democracies are messy, but through that debate, we solve problems faster than most places. there are times we're all frustrated and all concerned, but the reality, the resiliency of our economy i know change is hard for some, but our economy is based on change and evolution and

re-creation, and i think about that all the time, and you know, we position blackrock for that type of structure, that we're constantly trying to evolve and stay in front of our clients, and we believe the companies, the industries that are constantly evolving and changing, adapting, and helping their clients as they evolve are the net winners and if you look at almost every industry, we have more leaders and more industries than any other place in the world now, if you also add the fiscal stimulus of the infrastructure act, we have really bad infrastructure, so we needed to do that. chips act, the i.r.a., that's all starting to come into the economy, so actually, i think our economy is going to -- is going to accelerate. >> is it going to accelerate fast enough to generate more revenue? our interest payments are soon going to be the largest single component of the budget, so it's great to be positive on the country, but there are plenty of

issues, including that one >> david, i totally agree. our deficits are out of control. and now with higher interest rates, yes, interest payments are going to be a major component, and that's going to put a lot more pressure on our programs, our defense budgets. all these programs are going to be really at risk. the only answer to that is growth >> right, right. >> if we have 3% growth, we're going to be able to solve some of that. if we have under 3% growth for a long period of time, the interest payments, as a part of our budget, is going to overwhelm us but that being said, the dynamicism of this economy is stronger than anywhere in the world. >> when we look the a what we do, and we talk about business every day, we don't celebrate the greatness. i look at the people you deal with i look at the business people you deal with. they have a level of optimism that transcends and trumps both the politicians of our country and the world, but even our people now, i look at how much money you're taking in, and it makes

me feel there is more optimism and belief out there than anybody does really feel that's in the media >> i think the optimism is muted, though. if you use our flows if you look at our flows, the flows are heavily fixed income oriented this is an opportunity that we haven't seen a couple of statistics that i'm really -- i find really interesting. on december 2020, about $18 trillion of bonds had negative interest rates in the world. today, 80% of the market has a 4% interest rate or higher we haven't seen that in so long, and that's what's stimulating very large flows we're seeing that at blackrock, both in index and active fixed income we have now $7 trillion in money market funds i mean, record level now, if that money is put to work, that will be an extraordinary benefit. i mean, when money is being saved in the short end, that actually is a sign of fear,

okay, because you're not putting it as actively in the economy. you're consuming less. and so, the thing that i'm going to be watching for, ultimately, are we going to see some of that money in money market funds move back into equities or move more into fixed income? >> treasury is going to need it, larry, because they're doing a lot of issuance, back to what i just asked you about >> that is one of the concerns i have the treasury's going to be issuing much more in the short end. >> right >> and because of higher interest rates, we're going to see more defeasments of pension funds and so the demand for the long end is going to be large. to normalize our yield curve, it's going to be hard for me to see that to happen any time soon because of the absolute supply of treasury. >> right >> although you were so early, larry, in drawing people's attention to inflation >> yeah. >> and how that would be a stair step function coming out of covid. have any of the downside surprises this week impressed you at all >> not at all.

i mean, i believe -- our inflation numbers that came out this week were an example of lower energy prices. and importantly -- >> this happens every day. >> okay. it's new for me. there we go. lower energy prices, lower car prices if you look at now, like, carvana, their stock increase, are we over the decline in used cars prices? if you look at the homeowner -- home builder stocks, record highs this year, are we stoostoarting to see a renewed activity? as i said with the i.r.a., the chips act, and the infrastructure act, just starting to hit the g-curve, the demand for workers is going to be extraordinary >> well, if we were at 6% unemployment, we would be able

to handle this we're at 3.6%. >> and i think we could go to 3.4%, not 4% and that's why -- >> that's going to keep wages -- >> much higher >> jim says it all the time. >> that's why i think interest rates or inflation is going to be stickier. and i think we saw low because of that. i think the next 5 to $10 in energy prices is going to be up, not down you talk to the executives in energy, that's what they're saying right now and so, i think we've seen a low in inflation, and i think inflation will be sticky, between 3% and 4%, and if i'm right about the job creations and the need for labor and what that's going to elevate wages, you know, we're going to be in a period of 3% though 4% inflation, which will translate into a fed that i think is going to be reluctant to turn off their platform of raising rates. >> so, doesn't sound like you're

counting on a lot of labor displacement from a.i. and sort of rises in unemployment >> ultimately, i do believe that will happen, but i don't believe that's happening any time soon i think that's a year, two, three, four years away i don't see that happening now a.i. has huge potential. it is going to increase productivity it has a lot of potential, but how we adapt it, how we organize ourselves, i don't have the answers yet. i mean, we're all studying it. we're all putting huge teams of people on this, and we all see how we're going to adapt to it we're looking at it quite extensively. we always, you know, we have our platform that use natural language processing already. we look at that. we look at big data analysis, and we're looking at how a.i. can accelerate that. >> i wanted to ask you about energy >> yeah. >> we had a deal this week exxon buying -- >> love it listen, it had been something we had been thinking that might happen in terms of carbon catching >> that's exactly what i've been talking about. we have to be working with our energy companies

they own the geology and what darren was talking about, now he owns the pipelines that put it into their geology i think it was a brilliant transaction. we have, at the moment, one of the largest sequestration projects in southern illinois. navigator co2. this is where i believe we have to be working with energy companies, and this is another example how we have to have -- we have to move aggressively to make sure we have energy security, but at the same time, we have to aggressively move in decarbonization. we are seeing more opportunities in decarbonization, whether it's working in australia, building the biggest battery storage facility we're working with a few other governments on those type of projects we're spending more time working on biofuels to create natural gas. i mean -- >> but you know, larry, when it comes to esg, i know that's a dirty word now, whatever we say it is, i think of exxon, for

example. my friend, jeff, is on the board. he has a fund basically that's supposed to be focused on the new era of energy. >> yes >> he couldn't raise money, in part, because he's an exxon board member in other words, he got crossed off, and that happens all the time, even though exxon is actually trying to forge a new future to a certain extent obviously, it's important from its business perspective for the future, in terms of carbon capture and sequestration. >> so, in the last two years, we saw about $200 billion of added money in our -- in renewables, decarbonization. the money is there we're seeing it. we're investing. >> but are the metrics right is it working properly in terms of the capital flowing to where it can to actually decarbonize our world in the proper way? are certain companies associated with fossil fuels just not on the list >> i think darren said it really

well >> ceo of exxon. >> he also said, we're going to have to create efficiencies to make it really profitable to meet their return on equity without the governmental subsidies. >> but you're the key here in -- one of the keys in deciding where capital should flow in terms of companies that are doing the right thing. >> the risk of not doing the right thing is horrendous. >> that's our clients' money, and they make the determination where it is. we are seeing more interested parties who invest in decarbonization ever remember, two years ago, the conversation was about divestiture, and we always said, even as much as criticism as i got, i always said, never divest divestiture is a bad thing we want to be working with these companies, alongside, and i think we're aware of a couple other big projects with major energy companies they're going to be moving forward on exactly what exxon did. this is just the beginning

that's also a great example of what the i.r.a. is doing to our economy and how it's creating more opportunities and i think we underestimate the power of the i.r.a. and the -- and getting back to what jim asked related to the difference between the u.s. and the world, we're seeing more foreign companies moving into the united states, doing this, whether it's in chemical re-engineering or carbon capture, carbon sequestration. >> i want to ask you about a different i.r.a. i was so glad to hear you were coming on our show when the i.r.a. was passed, it's about the same money it is now, i'm talking about american save, 401(k), i.r.a., $6,500 this is ridiculous you are the keeper of more savings than anyone else we cannot have americans save as much as they should with these ridiculously low limits so people can't put money away. >> i agree >> let's change it >> we have to be relooking at the same time, re-evaluate, how do we make sure we have more resiliency with social security, which i know congress is looking

at we should be looking at ways to incent more people to save more. i had a conversation with somebody who's very connected to high net worth individuals, and the biggest question they were being asked today is, are men and women who are nearing retirement, and they're frightened they don't have enough, and i think this is going to happen more as we are aging our population we're seeing more of that fear and it's our responsibility to make more people or to help people to be more prepared that they can live in retirement with dignity and hope and that they can pass on that hope to their ch children >> i'd love to be involved in that >> you already have been in a lot of ways. >> this is the man who keeps -- he is the keeper of the keys >> it's hard not to listen to your comments about u.s. innovation and the line about cauterizing our differences or

challenges is so brilliant it's hard not to hear that and not think about your stance on bitcoin. can you talk about where crypto fits >> i can't talk about bitcoin because we have a filing with the s.e.c. i'm prohibited i can talk about crypto in general and what we have done. we believe we have a responsibility to democratize investing, and the role of etfs in the world is transforming investing, and i think we're only at the beginning of that. i mean, we believe the fixed income market is going to become multiple trillion dollars in etfs equities will continue more and more, the market will be delivered through an etf platform if you think about what was done 15, 20 -- no, 20 years ago now, with the advent of gold etf, that really democratized gold

investing. it brought down the cost of transaction for gold the cost of transacting physical gold is absurd and now, with crypto, the idea of democratizing that role, the cost right now to transact is quite expensive. we're talking points, not decimal points and so, that's a big point two, over the last five years, more and more, our global investors are asking us about the role of crypto, and as i said, i do believe a lot of crypto is -- has been -- it's an international asset. it's -- it is -- it has a differentiating value versus other asset classes, but more importantly, because it's so international, it's going to transcend any one currency and currency valuation if you just look at the value of our dollar, how it depreciated

the last two months and how much it appreciated over the last five years, i mean, an international crypto product can really transcend that, and that's why we believe there's great opportunities, and that's why we're seeing more and more interest, and that interest is broad-based, worldwide >> it changed the moment you said you were interested in it it made me realize, like the decision yesterday from a federal court judge, it's here to stay. let's try to find a place to do it without worrying. >> we are working with our regulators, because we want, as any new market, if blackrock's name is going to be on it, we're going to make sure that it's safe and sound and protected >> let me talk about a couple things blackrock, number one in terms of the actual technology, letting people -- institutions be able to vote their issues, but you're also number one in terms of the world advisor you're playing the role of what jpmorgan was right at the turn of the century, and i want to

ask you, what does a guy like zelenskyy do when he talks to you? >> we have an enormous responsibility and opportunity when i have conversations with the president, it was about, how do we create a resilient capitalist system post-war how do we incent private capital to come into this country? and if we have more private capital, there's -- the need for public capital is less it's no different than what we're trying to do in infrastructure where because of the deficits that david talked about, if we are going to decarbonize the world, we're going to have to have more private capital. so, in ukraine, in my conversations with the government, it's about, how do we show the world that we're developing a reconstruction fund that is not going to be

corrupted by corruption, by oligarchs? are we able to create a system in which, if we're investing money there as capitalists, we are going to make a fair and just return? that's what we're doing there in ukraine. and i must tell you, the government and its finance team are really smart, focused men and women who are trying to make sure when the war is over, that we have the construct of a fair and just investment pool, and that will attract a lot of foreign capital. >> larry, you mentioned private capital, and i'm curious about that in terms of not private equity as much as private credit, which has just grown enormously do you continue to see it as a growth opportunity for blackrock, and how do you see it evolving over these next couple of years >> i would say private credit and its role in the capital markets has been a blessing. as regulators put more capital

constraints on banks, the beauty of the american system was we had an offset, and that was a capital market, and that was private capital. and more and more, we're witnessing more and more opportunities in private credit. that being said, it's a pretty giant movement, and any time we see a pretty giant movement, are we going to see people oversized? >> or are we going to see more regulation, i wonder, as well? is that a threat >> i mean, obviously, if we're going to have more regulation, is it going to be in the form of the asset owners, the insurance companies, or it's going to be in the form of the asset advisors and that's being asked by the fsoc that's being reviewed right now by regulators of insurance companies. there is no question in my mind that a great economy has a great

banking system and a great capital markets, and no country in the world has both like the united states. not even europe. europe's rapidly growing now, the question is, are we properly maintaining integrity and unfortunately, you don't know how -- what the integrity is until sometimes it's too late but the beauty of the -- the beauty of a private credit market is in most cases, it's nonleveraged but if it's an insurance company, it could be levered, so it depends on where the leverage is typically, if we have a pension fund investing in private credit, well, it's one liability against one asset, and if they lose money on credit, that's no different than anybody else. but if there is a leveraged institution that's doing, that's leveraging 5 to 1, 7 to 1, there lies the issue at blackrock, we are, you know, we don't do this with leverage, and so -- >> i know you have a hard out.

i want to tell -- i want you to tell people how much better people do in life if they're optimistic >> if they're? >> optimistic. >> you know, i think the results of the first six months really shows it i say you have to be in the market you have to be optimistic. when you think about it, we were down 20% in the s&p over 12 months last, and everybody was just cathartically frightened. now we're up 15 to 17% year to date and so most people don't know how to market time, and most market timers don't do a particularly good job, so you have to be optimistic, and you have to believe in our country >> wow and we have to end this is killer i was supposed to have the day off. i heard you were here. i don't take the day off if larry fink is here larry, thank you so much for coming in. blackrock is an amazing company, and you have done an incredible job. >> thanks, guys. >> thanks, larry when we come back, we'll get to more -- we're going to chat some markets here while we got

the chance jim, we should mention health care outperforming this morning. unh, the top dow performer >> well, unh is a company that went down so many points, and it's been crushing -- look, even in the end, people said they were being hurt by pickleball. how crazy is that? but they are able to bump the trend, but i want people to understand that the whole industry is under tremendous pressure, given the fact that there are a lot of people who had delayed surgery through covid that are coming back that's why the hospitals are up. that's why the medical dwevice companies are up and that's why unh was at 558 $558 and is now y at $470. >> did you say it's under pressure because of pickleball because people are playing and getting injured? >> yes >> dates back to the ubs note a few weeks ago. >> sweeping the country, and a lot of people get out there and got to warm up >> can i just switch things for

a second i want people to know who larry fink is. larry fink played a big role in exxon, buying denver now, that's an extenuated thing, but his view on climate risk as an actual risk to our economy has made a lot of people feel like, you know what? i don't know if i want -- i've got to be and pressure everybody, including fossil fuel companies, to please help this earth. and you know something he has a conscience. >> yeah. i still think -- and i tried to get an answer from him -- that the capital doesn't necessarily flow where it would be best used to decarbonize because of these no-go areas that don't make sense. >> it's true >> you don't go to -- you don't invest in a company that you think has a big carbon footprint, even though they may be trying to improve it. >> he does offer the choice for institutions to be able to say how you feel now, it's the first level of democracy i've ever seen in the institutional level because he has funds where you can switch,

not individuals, but i can't encourage people more. they've got to be able to have more ability than to put $6,500 away in an i.r.a that's a trafvesty. social security's not covering it he's going to help >> there will be a wave of retirements. >> i'm worried that people won't have enough money. >> the words, fixed income, fixed is hard to deal with >> sure is >> especially when you're looking at -- >> meanwhile, mega cap tech is having a good day again. >> how's nvidia? >> nvidia's doing very well, jim. up another almost 3% its market value is now $1.16 trillion >> they have a lot of chips. they're 45,000 times faster than the next one >> that's a new high >> he has cars that predicted the hottest day in the sahara desert weeks before it ever happened >> he has chip -- you're saying he has, what -- >> the graphic user cards. >> they predicted -- they can

predict the weather? >> to the -- they can predict the hottest day of the year people don't understand. >> because of what they're processing and how quickly they can do it. >> people don't understand what he's unleashing. and it's him yes, microsoft is terrific, and you use it, and maybe -- we know that alphabet has something. but da vinci has come up with the helicopter in realtime if you go to the great museum in italy, you'll see drawings for the helicopter well, jensen huang is developing the -- he's a hundred years ahead of the rest of us. >> okay. i'm going to have to ask him how it all ends, then. i'm curious. >> don't read ahead. >> geez, it's like the end of the iger interview do you remember billy in the movie, "the predator," what he says on the bridge he has a knife in his mouth, and he says, we're all going to die.

billy "the predator. >> maybe jensen would say, we'r not going to die anymore maybe it's good news >> bulls got us to 4,523 this morning as you heard tech doing pretty well health care playing along. check out bonds. we will get get umish in about ten minutes and markets still reacting to comments from the likes of waller last night we'll be right back. (bobby) my store and my design business? we're exploding. but my old internet, was not letting me run the show. so, we switched to verizon business internet. they have business grade internet, nationwide. (vo) make the switch. it's your business. it's your verizon.

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watch at&t today basically pennies away from taking out its october low, which jim would be the lowest price in our data set ever. >> now we got the copper lining. it's going to be a lawsuit in the making. >> jpmorgan cuts to neutral and go to 17 and talk about the copper sheathing. >> not to mention the fine slowdown which they argue will shift share back to cable. dow up 170 back in a moment

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purposefully divergent. time for jim and stop trading. >> what's another day without a mega cap tech going well this time ubs upgrading microsoft saying that the spending could stabilize for their web business and that would be gigantic. there it goes. i also think it's going to get activision blizzard. >> another mea culpa, downgrades figuring azure would slow. didn't happen. >> hard to be an analyst covering these they're other worldly. anyone who hates nvidia let me send you a letter to your funeral.

>> man. >> next week, we'll get some retail sales and housing, blackout window on the fed. >> this day is important because we get black rock. there was an upgrade of the housing stocks and i don't know if you heard what larry said, it's important they start building homes to keep inflation down they haven't yet really put the jets because there's so much demand what an exciting interview. >> interesting good weekend. >> we have to get people to save. >> we'll work on that. >> on the weekend? >> it's a weekend. >> what is that? >> you take your tie off but keep your suit on. >> right in the garden writing a piece for the club today. writing a piece for the club tomorrow it's a seven-day affair. >> it is. >> good to see you back. >> you signed up for it. >> from the existential crisis that is disney. >> no "mad money" tonight, but be sure to watch a special edition of "tech check" 6:00 p.m. featuring arc invest cathie

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back in my day, it was scary stories and flashlights. we don't get scared. oh, really? mom can see your search history. that's what i thought. introducing the next generation 10g network. only from xfinity. welcome back to "squawk on the street." rick santelli here live at

cme hq with the last breaking news of the busy week. university of michigan july preliminary read expecting a number around 66 72.6 that's the best since september. if we look at current conditions, 77.5 that is the best since october of '21 look at expectation what lies ahead, 69.4. that's the best going all the way back to july of '21. these are powerfully strong numbers. now let's see what happens with inflation. also a bit strong. one-year inflation, popped up, to 3.4%. 3.4% now just to confirm, we've been mostly going down. so to hit 3.4%, we only have to go to last month when it was -- excuse me, may when it was 4.2 the point is, we're expecting a number of 3. many whispered that it would be

lower than that. so 5 to 10-year is 3.1 we've had many 3.1s. that isn't as shocking as the one year and we could see that interest rates have moved up a little bit but but do keep in mind we are down huge on the week 379, 380 means we're down 27 basis points on the week on a 10-year even though it's up several on the session sara, back to you. >> very interesting. rick santelli. thank you very much. and good friday morning, everyone welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber, live at post nine of the new york stock exchange. take a look at stocks this morning. we're stronger it's been a nice win streak this week up a quarter of 1% right now on the s&p 500 you have a got strength in technology again today that's why the nasdaq is up 0.3% the weakness from energy, materials, and industries, checking out financial in the

wake of big bank earnings, pretty much unchanged, though mostly good news from the likes of jpmorgan and wells fargo. we're 30 minutes into the trading session. here are three movers we're watching we're going to start with unh beating on earnings, raising its guidance, giving the stock a boost this morning and the dow more on that quarter later this hour coinbase extending yesterday's rally following a federal judge's ruling ripple xrt toke didn't not violatesecurity law coinbase up more than 2% this year at&t, touching a new 52 week low after now jpmorgan downgrades the stock to neutral over increased competition, both in its wireless and cable segments. stocks been week lately. overall markets as i mentioned have been very strong this week. we're up almost 3% on the s&p, and it comes on the back of really the biggest data point of the week which was inflation weaker than expected softer than expected that was backed up by ppi the

day after on wholesale inflation. the story today and just something to be following as we go into the next few weeks, is is it too early to declare victory for the fed and market on this inflationary fight as rick mentioned the data is still coming in strong consumer confidence and inflation expectations and we've heard from now a number of fed presidents just in the last 24, 48 hours, that are not so convinced and willing to say okay, one and done, which is where the market is. listen to mary daly on the show yesterday. >> i'm certainly mindful of the fact that while we've put over 500 basis points of tightening in the system over a rapid period of time, we still have an economy that has a lot of momentum and this is why we continue to say well, we are going to keep working on rate hikes until we are sure that inflation is on a path to calm down to 2% it's one of the reasons, as you mentioned earlier in the

program, that, you know, i said two rate hikes theais year is a reasonable projection. it is a risk that we under tighten, a risk we over tighten and that's why data dependence is so important right now. >> the question guys there was, there is a risk of inflation popping back up? it's what we saw in the '70s it doesn't come down in straight line the market thinking here it might, but i don't know, housing is rebounding. copper and crude oil are rebounding the labor market is still tight. all of those things make it a risk that inflation might pop back up. that's all i'm saying. >> speaking of larry fink, he was going through all of the programs he feels positive about, whether the ira or chip act or infrastructure bill but he also did get to the idea it's going to keep the labor market tight and therefore, pressure on wages. >> right and what corrects that yes, you have all this tightening from the federal reserve but if you have the

drivers like infrastructure, chip, the american rescue plan, still getting dolled out, that does create a lot of employment. when you talk to railroad companies like norfolk southern they see it. they see the infrastructure demand and the labor demand across the pipeline. >> yeah. i mean, consensus is still for negative payrolls in the next two quarters, so we'll see if that happens it was interesting to hear fink say the next 5 to $10 in energy is up. tried to pin him down on deflationary effects of a.i., five years out maybe, two to five years out. >> sticky situation too. >> wrangle with the technology and how it's going to get placed >> he thinks more rate hikes >> i don't think he commented on hikes per se did he >> he did seem to think inflation would be stick stickier and we didn't get to specifics in terms of rate hikes. >> with rage growth now, on a real basis being stronger, that's to your point going to fuel demand.

consumers will have cash to spend. >> the question for the fed, are they going to go a few more times? are they going in the fall because the market doesn't think that are they going to be cutting as soon as the market thinks into next year or have to keep this very restrictive, as they call it, rate or high interest rate, for a lot longer than the market expects if we are seeing these signs of strength in the economy that put upward pressure on inflation. >> another area we hit was just continued rates being as high as they are and continuing to be there. what kind of pressure that's going to put on the u.s. budget. might imagine, mr. fink is positive on the dynamics of the u.s. economy, but he did admit low interest rates mean payments, not necessarily a good thing, take a listen. >> our deficits are out of control, and now with higher interest rates, they are going to be a component and put more pressure on our programs, our

defense budget, all these programs will be really at risk. the only answer to that is growth. >> right. >> we have 3% growth, we're going to be able to solve some of that. under 3% growth for a long period of time, the interest payments as a part of our budget will overwhelm us. that being said, the die na sism of this economy, at this moment, is stronger than any place in the world. >> we're going to get overwhelmed, but that being said, we're going to be okay. >> growth is a good cure all that helps with a deficit problem but his point on strong economy, higher rates, it kind of jives with what jpmorgan said to today, jamie dimon i picked out a quote what he said about the u.s. economy. he said the u.s. economy continues to be resilient. consumer balance sheet reese plain healthy and and consumers are spending, albeit slowly. job growth remains strong. now he warned about the risks

including he's worried about q.t., tightening of the balance sheet and we've never seen anything like that before. that's the description on the economy and all the big banks, wells fargo, jpmorgan, citi, all showed i mean some strength when it comes to the consumer and spending and credit cards. >> none of them particularly concerning when it comes to significant charge wells fargo did have some around commercial real estate and continue to reserve for particularly office but not overly concerned based on the comments. >> credit card growth at least at jpmorgan up 16 i think. not prior 18 so there's a view the consumer is not maxing out on credit cards. we'll watch that closely breaking news regarding the airlines and for that we'll turn to phil lebeau good morning. >> good morning, carl. take a look at shares of jetblue and american both announcing a few minutes ago that they will stop their joint ticket sales, which was part of a northeast

alliance which a judge said look, you have to unwind this. they will stop those joint ticket sales next friday so through next thursday the end date for doing those joint ticket sales the northeast alliance has been in place since the beginning or early 2021 a judge a few months ago said nope, you've got to unwind it, and since then, jetblue has said we're not going to appeal this decision apds concentrate with the proposed merger with spirit while american will continue with its appeal. the focus for jetblue and spirit, it's what happens with that proposed merger the doj is already on the record and fighting this. that will play out in court over the next several months. back to you. >> phil, watch that. thank you very much. phil lebeau. let's get back to financials to today. jpmorgan, wells, citi out with results. joining us to discuss, ubs

analyst erica najarian i was looking at your preview note that jpm and wells likely the best of the lot. is that what came to pass? >> yes, absolutely and i think that, you know, what's really going on here is, jpmorgan and wells have among the best deposit basis in banks, and thus, they're earning a lot more net interest income i wouldn't extrapolate these results into next week as we get into regional bank earnings. >> yeah. that and also the investment banks, sort of the color commentary around m&a was, green chutes but also headwinds. i wonder how you think that's going to play out? >> similar to how investors are thinking about banks, saying gosh, there's still so much uncertainty in the outcome, you talked about this at the top of your show and i think that precludes corporates from making decisions on whether or not to partner with other corporates. i think that's why, you know, a

lot of these banks are hesitant to be more bullish about those green chutes in m&a activity. >> is your concern about the regionals centered around real estate or the rate environment right now? >> great question. so carl, underneath the surface of these great results, we're really a little bit of a deterioration in commercial real estate for jpmorgan and wells fargo. so for those balance sheets, you know, with those that earnings power it's not that consequential, but as we get smaller, and if we extrapolate those results, the cre deterioration, a lot of the smaller regional banks may not have as much earnings power to absorb that. the other thing i would say is, we're not quite out of the woods in terms of deposit reprising for the regional banks now i think that's fully reflected into the stocks, but i think these are going to be the best in class with regard to net

income outcomes because of the fact that jpmorgan and wells have better deposit basis that have higher levels of transaction accounts that don't demand a lot of yield. >> erica, is this earnings season in awa way widen the gap between the biggest banks and their performance and how they're rewarded in the marketplace versus the regional and smaller banks? >> i think potentially, right, because i think at the end of the day, the issue with the banks right now is that the sponsorship of banks from long only investors is very limited to the largest of market cap you know, there's still a lot of ptsd from what happened in march and april with regards to the bank failures, and given the uncertainty on the economic outlook r we going to have a soft or hard landing, how much more does the fed go that precludes from saying

regional banks are bargains at this point while we think the net income headwinds and challenges are priced into regional bank stocks, what's missing is the sponsorship from the long only community that wants to buy regional banks ahead potentially of a recession and a credit cycle. >> i want to ask about wells fargo in particular, because we're going to talk to the cfo next hour. this was always considered by analysts like you that inexpensive one because it had the fed cap and had been punished so much from a regulatory perspective is it still looking that way inexpensive? >> look, wells fargo is trading around 9 times this year's earnings, and i really like the story because it's a transformational story in which they're remediating the regulatory issues, but there's also a really good franchise underneath at the end of the day, the funding base, the core funding base, is going to be a big difference maker for wells fargo and i like that they're now in

the stage of their transformation where they're investing back into the company. because the better way to, you know, really fix your earnings power is to invest back into the business and improve your revenue power. like they're doing that. >> finally, erica, is the line filling in on expense growth control? how did that look this morning >> look, none of the banks that reported this morning revised their numbers higher so that's good news. they're not necessarily spending, you know, the top line, the top line beats at this point. that being said, you know, keep in mind there's still a little bit of inflationary pressure to costs and additionally what you might see over time with the regional banks is you think about the cost of compliance on the new rules, and tighter supervision, i would expect some expense creep higher from the factors. >> definitely christmas in july for a bank analyst i don't know how you guys process so much so fast.

thanks good to see you. erica najarian. as we go to break, take a look at the road map including more on the market rally as the bulls got us back to 4525. stocks aiming for their fifth straight day of gains trading at their highest level of the year. jeremy siegel where he might go from here. >> latest round, microsoft and activision, uk regulators extended the deadline to review the deal we'll give you the details. >> the actors union joining the writers strike shutting down hollywood. we'll talk autbo financial implications lot more "squawk on the street" still ahead.

is anyone ever going to tell the truth... about what's happening here. 3... -are we saying there's a chance... 2... -we destroy the world? 1... welcome back to "squawk on the street." stocks are continuing their week long rally up 0.3% on the s&p. our next guest says positive momentum is still strong and the fed should stop raising rates. wharton school professor jeremy siegel has been saying this for a while. doesn't feel like they're listen to you we get more hawkish fed speak and there's an idea i talked about this morning that they're talking about which is that we can't necessarily assume we've seen the last of inflation

it could bubble back up. our economy is still doing okay. why is that wrong? >> i mean, it is a goldilocks economy. strong economic growth, inflowing inflation. you said it yesterday. i looked at the jobless claims dropping so that temporary weakness we saw this month, looks like it's disappearing however, i don't see any reappearance of inflationary trends i see stability. oil has got its footing. commodity index has stabilized the housing market has stabilized i don't see anything that big inflationary uptick. i'm not concerned about today's university of michigan it was taken before the news came out on the cpi and the ppi, and when we had cpi year over year down to 3% and core under 5 we got headlines in all the major newspapers and that's what

affects that consumer expectations. >> brent crude is back up to 80, rallied even in the face of weaker chinese data. some other metals have rallied as well. housing is on the rebound and we know that's an important one for the fed. the consumer is in decent shape we're told by the bankers this morning. wages and the fact that there's a lot of demand for labor that even if it's softening it's still showing 9 million job openings, doesn't all of that, wouldn't that make you on guard for inflation coming back up >> you're right on the commodities. the housing has hooked up. there's still not a lot of transactional. we know that the 30-year mortgage has gone up to 7.3 and that's a problem for those that have to finance their home yeah those things, you know, devlgs

have to be considered. i think it's wrong to target wages. wages have fallen behind inflation since the pandemic they're in catch-up mode we need to bring people into the labor force. i don't think they've been the source of the inflation, so i think it's wrong to say we're going to -- it's almost like they're targeting real growth and against the wage growth that is necessary but i agree with you you have to look at the commodity markets. they've stabilized if they start going up again, then clearly the fed has to stay on guard listen, i think, you know, in a week and a half we're going to have the -- another quarter point. that's baked in. what happens in september depends certainly on the evolution of the data over the next six weeks after that. >> we also have to take into account that the board surprised

retirement, one of the most hawkish members, the counterpart at the federal reserve waller -- >> pretty hawkish. >> is hawkish as well as several others that can certainly take his place on the committee. >> and they've been right. the hawks have been empowered by the data because the economy is not falling apart and yes, maybe we haven't felt the lags, and clearly everybody is a little bit worried about that. >> i still say the lags you can't ignore them. several fed officials said, we don't have lags anymore. hey, take look tharts decision on tightening for inflation. you know, between that surge of money on the pandemic and continuing next year we didn't get a surge of inflation until 2021 i don't think lags are dead and gone the way some fed officials have said and that's what worries me i still see those downside risks.

i would much prefer to let a couple of these pass and see what happens before i start hiking again nonetheless, you know, this -- hey, the fed might stick the landing here against all expectations to use that olympic term. >> professor, as for the market action this week, i noticed the goldman most short index up 11 in five days some of the trash here so to speak is getting bought. does that worry you? >> well, i mean, it's still a market the magnificent 7 are still moving you know, nasdaq is 30 times earnings and value stocks are 15 times earnings and that's one of the biggest gaps we've ever seen value stocks are still positioned for a mild recession actually while the growth stocks say, you know, what me worry, a.i. and everything else, is far more important than a dip in the economy. that psychology can drive us much further

history has said that. i think i've said that on your program once momentum starts with a certain group of stocks it can continue further than the fundamental value. i'm not going to -- we're nowhere near internet levels we're way below that but can this trend go further? yes. absolutely. >> no matter what happens with the fed? even if they keep hiking into the fall or keep their interest rates restrictive for longer that is an interesting question, how strong the market has been. >> it has been very, very strong it's almost like me worry the fed. that's what the tech stocks have said listen, we know a quarter point is baked in for july there's going to be six weeks of more data, you know, until we have to see what they're going to do in september there's a lot of speculation, but they are totally data driven on that.

yeah, so i don't think anything that's going to happen with the fed -- they're going to remain open there may be adissent because do know some voting members that do think we've gone high enough. we'll see whether that happens strong data might bring them in line with the consensus over here but they're going to not say we're more worried they're going to say we think it's going to hike and it's an open meeting for september just like it was an opening meeting for july in that case, i think, you know, the trends can still continue until then >> it's good to talk it out with you, professor siegel. thank you. >> thank you, sara. >> jeremy siegel. >> still to come, regulators in the uk extending their deadline to review microsoft's deal to buy activision the latest in big tech m&a after the break. eans new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria.

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wanted to come back to microsoft and activision after a few days of not discussing what is going on there. of course, this week included the victory by microsoft over the ftc in federal court on the west coast where they were -- the ftc was unable to get an injunction to stop the deal. it has gone to the ninth circuit to trial try to appeal the decision and get a stay as well that would prevent microsoft from closing the transaction as we've been saying for so

long, so much of the focus continues to be, as it should, on the regulatory process in the uk namely the cma, regulator there. the news this morning is that they extend their review of, essentially, the transaction for another six weeks. it doesn't mean that they won't actually issue a decision far prior to that. they, in fact, say they aim to discharge their duty as soon as possible and in advance of the new date, but the undertakingings made and everything else, was supposed to end on july 18th and now it's been extended as you see there to august 29th there is still this question, of course, as to whether or not microsoft is going to be able to move the transaction to earlier in the week. there has been enthusiasm or hope for people close to the situation that that, in fact,

might take place based on the new offerings that microsoft has made to the cm nation terms of the divestiture of parts of its cloud licensing business in the uk something i've reported on small, discreet divestitures that conversation continues. i'm told there was a meeting on wednesday with the cma, however no real discussions in person is my understanding yesterday there may be continued communication via e-mail and the like and phone calls, but no in person meetings. and one question here is whether or not there will be something called a der regation available to microsoft that would be an exemption or relaxation of a rule or law, that's what word means, and it's something the cma has granted in the past in the case of specific to -- back in 2016 where they allowed deibold to close its acquisition of win core, but had

to ring fence its business in the uk there was that could that be possible for microsoft? unclear at this point. if in fact we go beyond the 18th, they will have to renegotiate with bobby kotick and activision to extend the merger agreement as it stands given it will expire then. what's that going to cost microsoft? very little question here as to whether that man mr. kotek will be willing to extend, he will, but he's not going to walk away from the deal. what will he ask for it won't be a higher price consideration because then you have to refile and get a new merger agreement and all that stuff. what you probably have microsoft do is say we'll let you pay a dividend to your shareholders of some significant as much as $5, who knows, that's the expectation or hope of shareholders if we go beyond that date of july 18th so watching it closely, of course big victories for microsoft earlier in the week but still the cma stands out there

frankly hard to fully understand what the state of play is between the cma and microsoft. >> you almost sounded like a lawyer there that was good. >> thank you. >> but also, i feel -- >> i'm not one but play one on tv. >> do you think you're going to be as an m&a reporter, which you are, busier now? is that for real, that this is going to trigger some excitement that we can fight the ftc and win? >> i think it's too early. unless the ftc really shows it's willing to back down and not actually engage on some of these questionable deals, questionable in the sense of it intervene, until we really see that, i don't know even if they keep losing in court the prospect of having to take them on in court is enough to stop many companies from saying, forget it. >> yeah. we thought she might eat crow yesterday and didn't happen. >> no. >> and they're fully moving on the appeals process. as unlikely as it may be they'll get the stay we'll have to wait and see

>> never ending saga. >> more on our interview with black rock's larry fink where he sees inflation and his view on a.i. also check out some of the top gainers on the dow right now united health is leading the way, rallying ability 111 points tethbrk.uaerto the unh qrt afr e ea

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welcome back to "squawk on the street." i'm pippa stevens. the biden administration is forgiving $39 billion in student debt for more than 800,000 borrowers. it's not a new program but comes from a fixed issues in the income driven repayment plans. the announcement weeks after the supreme court struck down president biden's plan to cancel debt for more than 40 million people. >> a suspect in custody in a string of serial killings on long island. the murders captured national attention in 2010 and 2011 when 11 sets of human remains were discovered on a stretch of highway on long island police say the suspect in custody lives in a neighboring county

a medical examiner found lisa marie presley died from small bowel obstruction. her autopsy report says it was likely a complication from previous surgery for weight loss the only child of rock and roll icon elvis presley, she died in january at the age of 54 david, back to you. >> thank you. health care and under performer this year but one of the top sectors this morning follows united health's quarter. over to bertha coombs for a breakdown of that quarter. >> yeah. david, it was a strong quarter they beat on both the top and the bottom line with earnings of $6.14 a share well ahead of expectations nearly $93 billion in revenues also well ahead as well. big focus on the earnings call was the medical cost trend recall that last month they warned that they were seeing much more pent up demand, people getting back to having knee and hip replacement surgeries, particularly in the medicare sector, so they did see that

nonetheless, revenues on the insurance side, the unite the health care, uhc, up about 13% margins there were pretty good even as medical costs were in line on the high side. we did continue to see those same trends. they're also seeing, they say, across the board in commercial, medicaid and some in medicare, a lot of demand for behavioral health not just young people, they say, but people older those of us older in our 50s and even 60s are looking for that these days on the optimum side they saw overall growth of 25% when it came to revenues the ontum health they have surgical care and primary care physicians was up 33%. one of the things that concerned people is margins have slipped at 6.6%. that's down from 6.9% in the first quarter and it's 7.3% a

year ago part of the reason the doctors on those what they call value-based care are offering a lot more services. ceo andrew witty on the call said he will take the short-term headwinds in terms of long-term growth >> i think, you know, if i had the choice on a slightly suppressed margin in q2 or the significant growth that we've taken in, i will take growth all day long and take that growth because it's going to underpin years of growth going forward. >> and we are seeing the rest of the group today higher on that news, the fact that they're able to manage that medical cost demand carl, back over to you. >> interesting huge mover today thank you. bertha coombs. last hour on "squawk on the street" black rock's larry fink joined us, and we had a wide-ranging interview talking about his outlook for inflation and a.i. take a listen. >> i think we've seen a low in

inflation and i think inflation to be sticky between 3 and 4%. if i'm right about the job creations and the need for labor and what that's going to elevate wages, you know, we're going to be in a period of 3 to 4% inflation, which will translate into a fed that i think is going to be reluctant to turn off their platform of raising rates. >> doesn't sound like you're counting on labor displacement from a.i. and rises in unemployment - >> i do believe that will happen, but i don't believe that's happening any time soon i think that's a year, two, three four years away. i don't see that happening now a.i. has huge potential. it is going to increase productivity it has potential and how we adapt and organize ourselves, i don't have the answers yet we're all studying it and putting huge teams of people on it and we are all seeing how we're going to adapt to it we're looking at it extensively. we have our platform that use

natural language processing already. we look at that. we look at big data and we're looking at how a.i. can accelerate that. >> let's bring in mike santoli to help us react here at post nine fink comes with some credibility on the inflation front for sure. >> last couple years $9 trillion in assets to oversee, and he was talking in the conversation about all of this novelty of having all this fixed income yield available to people. 4% plus. that's because we are in a different spot because of inflation and central banks' response to it i think it's in tune with where policy makers are thinking nobody is declaring victory, but the markets all year have been holding up okay, i think, mostly because the pace of whatever the fed is going to do is slower and smaller increments we're still in that spot you can't expect fed officials to say we did it and they're not going to do that for a while.

i also think that we're okay with it. by the way, we've taken the projected rate cuts out of the forward curve. larry says you're not going to be cutting i agree with that and shows you the market wasn't holding up it was banking specifically on rate cuts. >> not only not hearing from the fed on a victory lap on inflation, in many ways they're not convinced yet. i've been waiting all morning to play governor waller's remarks we got yesterday. >> my outlook for monetary policy that inflation will get near the fomc's 2% target is consistent with economic projections in june. i see two more 25 basis points hikes in the target range over the four remaining meetings this year, as necessary, to keep inflation moving down towards our target. >> it got more hawkish from there. he blatantly said two more he didn't say we're going to see

what happens data dependent. i see two more rate hikes. if you want to know who was against the pause it's certainly i think waller made it clear they're not rejoicing over the 3% number. they're looking at 4.8% core inflation, a big improvement but double their target. >> again, i think that when they say the expected thing, given where the data are, the market can say okay, of course, they're going to say that. there's not an element of surprise there i think the pace matters we have a precedent for them skipping a meeting without hiking rates with inflation well above their target so that can happen down the road again. if they go two more times, july and september, it just shouldn't matter given all the fed's already done my view is, if they've done too much, it's already happened. it's not, you know, from here on out if they do 50 more basis points over the course of three or four months. >> what else is inflationary. >> what? >> taylor swift. >> for sure.

>> beige book mention. i love a beige book. >> i do. >> this is why, fed bank of philadelphia quoted so here's what they say, despite the slowing recovery in tourism in the region overall one contact highlighted in may the strongest hotel revenue due to an influx of guests for the taylor swift concert in the city and this is happening across the country i don't have to tell you how much people are spending >> i believe in the fed district of philadelphia is pittsburgh and if i tell you what i paid for a doubletree suite room in pittsburgh in june. >> yeah. >> for them to go to the taylor swift concert, yes, it could have been an anecdote. >> paid up for metlife, didn't have to pay for a hotel room i wasn't there have you been? >> i haven't been. because i wasn't willing to pay thousands for tickets. >> nobody in the family would tell me. >> mine came at face value. >> i didn't win them. >> mine, i'm thing >> i'm trying to get the face value in europe in paris and

woke up at 4:00 in the morning this week and guess what 879,000 in line and then crashed. >> i'm sorry to hear that. >> before we go, and i don't want to get into the discussion of taylor swift, of course >> of course. >> or cut into it. nvidia and amd, your take here they're up almost 4% new highs for nvidia. >> it's like this amp goes 11 on these. you see the daily push higher. the old game from 2021 where we just gun the call options and send them higher it's gotten to a point of the nasdaq 100 to a point of instability. how far it is above its moving afrmgs you see the russ2,000 down 1% today. it's starting to shake i think it's more just a short-term overheating for the overall market what are you going to say about nvidia people haven't said in terms of the market cap, the fundamental momentum and all the rest of it so the stock can go wherever it wants but the influence in the market is what i'm more interested in. it's creating a -- stretched

pretty tight at this point in terms of how far ahead of things the handful of stocks. we've broadened out over the last month or so since june the economic numbers have gotten better it hasn't come at the expense of those stocks final point that nasdaq 100 rebalancing we talked about, at the close today after the close, they're going to base the detail exactly how much money in the weighting is going to come out in those top five or six stocks. >> s&p unchanged right now still nice gains for the week. mike santoli we have a big interview in the next hour of "squawk on the street." the cfo of wells fargo which reported results this morning. the stock is doing well. we'll break it down in the next hour. the bank stocks in general, they were kind of -- actually wells fargo has given up some of its gains as you can see as the overall market has jpmorgan still holds more than half a percent gain. citigroup the otherertr poer down 2.25% we'll be right back. s on a turk!

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a quick programming note as we go to break, tonight don't miss a special edition of "tech check" 6:00 p.m. eastern time where deirdre bosa will interview cathy wood, talk tesla invest cathie wood the s&p back to flat at 4509 stay with us

there's a level of expectation they have that is not realistic. they are adding to a set of challenges that this business is already facing that is, quite frankly, very disruptive >> bob iger being rather combative in reaction to his

decision to the screen actors guild going on strike and joining the writers who have been on strike for, i think, 70 days at this point it's going to bring production to a halt across the board premieres, the movies where actors are not showing up, have walked away. you can see the impact, i would assume, on some of the stocks here is certainly due to concern about the strike credit suisse lowering price target on a number of the stocks as well. as you said, he came in for criticism on some of those comments didn't really get -- we all know it's going to have an impact on disney's ability to fill its content hole, as it will for all these other names. >> big journal piece today about him showing his models of his yacht in his office, talking about building a new yacht maybe the bigger story is going to be what happens if u.p.s. teamsters goes, what if uaw big

three go out there's a paper out today that u.p.s. strikes could be one of the costliest strikes in the century. even though the percentage of labor that is on strike right now is nowhere near where it was in, say, the '60s or the '50s, you know, you get to 2%, 3% of labor on strike, you'll start to feel it. >> a lot of people think that's another inflationary force in our economy, if they're forced to negotiate bigger wages at these grand scales and the question is, why labor has so much power? it was always tight labor market there are more openings than people, workers. they're enabled, they're empowered. we're still seeing that across the economy. it's clear as we continue to see groups of people go on strike. >> something else we discussed, iger and i, of course, was the relationship between the state of florida and disney. such an important part of the state, essentially, and certainly its economy, to a

certain extent today there's a hearing in the case against disney by that governor, desantis, the special tax district here's what ig her to say about the impact on park attendance. >> it's concerning to me that anyone would encourage a level of intolerance or even hate that, frankly, could even become danger y dangerous action that could be turned into a dangerous act of some sort, so it's concerning to me but i don't want to engage in the specifics except to say it's not our goal to be involved in a culture war. our goal is to continue to tell wonderful stories and have a positive impact on the world you know, we are a preeminent entertainer in the world and we are proud of our track record there. >> should point out, he dismissed any impact on park attendance from the continued discussion of disney by desan

t desantis on the campaign trail. >> desantis' campaign has to shift tactics because it's not picking up the traction it wants. maybe he'll cool it on disney? probably not >> probably not. we'll see what comes out of this hearing today. of course, they're talking really about their free speech rights sort of being at stake here and the ability of the company to obviously exercise those free speech rights again, all of those stocks down. not because of that feud but because of potentially the implications of this strike on writers and actors a lot more "squawk on the street" on this friday you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence.

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good morning i'm sara eisen with carl quintanilla live from the new york stock exchange. bank earnings, jpmorgan, citigroup and wells fargo kicking off the season downside risks are receding but we're not out of the woods yet. that is the thesis for ubs and alli mccartney she'll join us next. graycroft founding partner dana settle on the firm's new partnership with