na nasdaq, up 5 now oil is finally making a stand. oh says the prompter i don't need to be urged "squawk on the street" is next good monday morning. i'm carl quintanilla with jim cramer, david faber. features are soft to start the week as this china data disappoints. a lot of news headed our way this week. retail sales and earnings coming off the best week since march futures pointing to a bit of a

rally pause. ford in focus. it's slashing its prices on the f-150 lightning. at&t is downgraded it's now on pace for its ninth day in the red, trading at lows it has not seen since 2003 let's begin with the markets including that busy week ahead on the earnings front. jim, 11% of the s&p in so far. tracking at 6% beat. b of a thinks they'll finish the quarter up 3 >> i think a lot of companies are doing much better than expected i love the wells fargo net interest income, up 10 to 14 jpmorgan's quarter, 20% growth david, pepsico and conagra downgraded today they don't have the growth that the banks have >> really? >> they don't. kind of amazing. jpmorgan, it's in a class by itself it's almost as if it's the

nvidia of the bank >> you know, interestingly on a macro level, the commentary we got, we went through it on friday, it's -- >> i was here. >> we were all here. you were here on friday. >> yeah, but i was -- >> you weren't here late in the day. >> i wasn't here for "mad money. >> for us, you were here coming back to the consumer, just trying to get a sense of things, jpmorgan, consumer in good shape citi, not hearing any alarm bells ringing. the u.s. consumer is resilient wells fargo, credit quality strong, balance sheets remain healthy. >> yeah. >> you do see this -- >> ferragamo was down, lvmh. >> on china and the weakness there. it's on u.s. also not looking great towards the end of the reported quarter

>> it's vacation just about vacation. that's what people are doing they're not buying it's not a -- it's not an era when retail is doing anything other than -- carl, i'm not getting anything bad about amazon prime everyone else seems to be -- well, let's just say, second rate >> yeah. we do know that the biggest sales day ever according to amazon last week today, goldman makes it still their top econ pick even though they upgraded yelp and chewy >> yes i can sit through here and say i have a rebalancing coming for mdx. i have notes of every single company that is being rebalanced is also being price target increase i don't know what will happen. look i think some of these price increases are just following like an alphabet, and -- or even

morgan stanley on apple. at the same time, these are winners. you find yourself hard-pressed to sell them >> meta is a good example. b of a to 3.50 even kostin last night talking about the rebalance said historically it doesn't ding the names getting de-weighted. >> he spends a huge amount of time talking about the rebalance and then says it doesn't mean anything i read it i read it and i watched episode six and seven of "the bear. >> you did. >> you got the seven fishes -- >> whoa. whoa whoa i don't want to know i only watched one and two >> of the things people are doing, they're reading kostin on a sunday and watching that >> anybody reading david kostin on a sunday night, that's a sad, sad thought. >> i told you i was a pathetic parody of the human mind kostin is the best reading i've

got. >> we have some bulls finding some legs. 4,800 to 5,800 in the next three months >> ed has been on a bunch of times, sometimes you feel like when they're on a lot, they're not that rigorous. what he's been on about is, look, get on board he's not been fighting the magnificent seven. >> should he be? >> you can't yul brynner is nvidia and then we have tesla. >> cybertruck, they got one off the production line. >> i know. >> a couple years late, but better late than never >> some people say look, i want to have something connected with musk they don't seem to be the

advertisers for -- >> you're referring to his comments about twitter as for tesla, there it is. as carl said, two years of delays i talked about that with musk a bit when we sat down on may 16th a while back already i did get to see it in the plant. there are all the workers. they shield you a bit when you're walking through from being able to see the production line, the same way you couldn't see the production of the other vehicles in the plant clearly. it was a bit harder, they had walls up there it is. what will it mean for the f-150 lightning? there i am >> yeah. >> i like -- >> took my little picture. >> let's have a picture of you and bob iger >> i can give you any number of those. i have lots of different bob iger pictures through the years.

would you like -- we could do a slide show >> i have an eddie q piece to run. >> eddie q by the way, messi. that deal has happened that was thanks in part to apple and eddie q. >> i know. >> making a huge commitment to mls. >> don't you think it was big you have some players that are coming in, but also what you have is division pro where i felt i had to dodge a soccer ball before hitting the net, i thought it was coming right at the net i don't want concussion protocol >> you better believe there will be applications from sports paramount for the division pro -- >> right >> espn,iger made clear they are looking for a partner. might be apple because of the

applications of vision pro >> i turned down a $30,000 courtside seat i would just watch it on my vision >> $30,000 >> that's how much the last game was going for. >> the final of the final? >> no, of the knicks the knicks playoff games >> really? >> yeah. i would much prefer that than courtside. you can get hurt on courtside. a lot of sweat, too. >> but you feel the crowd around you. >> yeah. you can manufacture it >> you did definitely hear the smack talk >> david doesn't understand. frankly, those seats, you could be at a taylor swift concert and in the front row with vision pro, versus the seats you would get, which would probably be in the 700 section -- >> that's probably true. i didn't even go i did have close family that did go i don't know what they paid. i never want to know >> they paid a lot more than the

vision pro >> wait. wait you think my 17-year-old daughter, i could have been here, put these on >> it's the same >> the sound quality is better >> david does mention these price cuts of the f-150 lightning which phil lebeau brought you a couple minutes ago. it kind of ties in with the wells note on tesla where they raised the target to 2.65, but they see auto gross margin falling to 17. >> when you read the ford notes, they're not alluding to anything about demand they're saying demand is strong. i think phil lebeau made this great point. if demand is so strong, why are you cutting price? i've been going back and forth with ford. >> that's a big price cut. $10,000. >> it's very big they claim they can make it much less, the new iteration. at the same time, if you can make it much less and you keep the price up, then the gross margins go up. when i drove it -- there's probably footage of when i drove

it versus you with -- in front of the cybertruck. i'm actually in the f-150. what's interesting about it, you would think they wouldn't have to cut it because it's that great of a ride. also with your house -- like, this weekend, a lot of houses didn't have power. with the f-150, no problem >> that 10,000 is about 16% of the purchase price in terms of a reduction. >> phil lebeau pointed that out. good that you repeated what he said >> we never repeat anything on this network never. >> can't you just credit him i credited you on disney with iger repeatedly. even to my wife. >> it's been in the press already. >> maybe you're right. >> that, thankfully, was not, with iger. that was in the moment only one place you could get it in that moment >> i accept that >> i think you should.

>> it's fact >> as for iger and disney, a lot of interesting commentary today about the strike effect on a company like netflix, which doesn't have as much reality programming, but does produce more overseas with workers who are now beholden to this contract >> of course we're getting -- as it always, there's someone every day who raises the price target of netflix today, deutsche bank, 4.10 to $4.75. one thing i want to point out is something that jim stewart said. i would like to repeat that. you would think that for short-term, these companies that were spending a fortune maybe they might not have to on streaming. but, david, can you tell us what's going on with national news >> there was a story late friday, i think reported by the "journal" in terms of them potentially have to restart. national amusements, they

control paramount and shari redstone controls national amusements they're under pressure because of the back to the movie business that's their main business in terms of generating cash for national amusements. the main operating business is -- >> is it timing connected to a movie that i know panned >> "mission impossible?" >> it missed >> it did miss >> it missed some expectations have you seen it >> no, but i'm going to "barbie" on wednesday >> you should see it >> for work? >> no, go and enjoy tom cruise and the entire cast. >> i was busy reading the wells fargo transcription. >> and kostin. >> i'm sorry, i focus on homework >> get a life. >> why

i made a decision. as ryan reynolds told me, i have family, i have work. i decided to sacrifice the family for work. that's rational. when we come back, at&t extending that slump today stock now trading at a two-decade low wheel talk about why in the next hour, the ceos of mgm resort and marriott on their partnership. nasdaq has gone green. more "squawk on the street" in a moment is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

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at&t is on track for what would be a ninth straight day of declines city downgrading that stock to neutral citing risk from legacy led cable exposure at&t and verizon among the month's worst performers on the s&p 500. you can see the year performance has been dreadful. now, that, in part, is due to what we talked about here so afternoon, continuing competition between those two and, of course, t-mobile and charter as well which have active interests in wireless carl, the story last week in the "wall street journal" about a potential negative impact of long buried lead-wrapped cables.

of course a lot of them are related to phone lines under ground many of those are owned or were at one point owned by at&t and verizon, back to the days of the baby bells, back to mama bell, if you want to go that far, frontier also caught up in this as well. very much unclear, what, if any, liable we're talking about i'm sure the plaintiffs lawyers may be able to come up with many even the harm is not exactly clear. that's not making investors less concerned and therefore willing to potentially sell now. >> sherwin-williams had to m make -- had to pay on lead >> that was paint. >> that was paint. i had alex corski on about talc

and asbestos he said we never found asbestos. it didn't matter the plaintiffs went after them because they said they were finished with the asbestos cases from the mesothelioma. we go to the forever chemicals, you go to the j&j, corporations are saying none of this happened but the juries are saying it doesn't matter if you were a plaintiffs guy and you went on chemicals and 3m, time to shift over to lead >> you're seeing a potential payday when the "journal" has done all the work for you. >> until one of these cases goes to the supreme court, and there is a distinguishment between some of the districts. it's possible to go to the supreme court and they would be against jackpot justice, which is what the defense calls it

david, this is just the plaintiffs -- they need to find some plaintiff who feels aggrieved -- >> how do you do that? >> how do you do that? are you kidding me david, it's -- david is so non-cynical about this >> the only thing i would add is it's on top of what is already becoming a fiber slowdown, which the argument is favors cable getting some share back. >> it could. i think that we have to get -- i don't want to be too cynical, even the j&j case going on right now in california, i think j&j will lose that, a 24-year-old young man who is dying right now of something that he says -- >> caused by exposure to talc. >> there's no evidence that he necessarily was, but the juries don't see at&t as being a weak company. the juries say at&t has the money to pay >> you're saying -- figuring out who was actually affected by it, whether water was polluted by

it, what the health effects of this are, doesn't matter >> not really. >> we'll have -- craig moffett will join us in the next hour to talk about this as well. he's written a report on it. a lot of questions, no answers when it comes to this. again, investors are just selling now. >> remember, i don't think -- there could be people hurt by lead lead is terrible >> of course >> groundwater and lead is a disaster >> we'll get cramer's mad dash we'll talk airlines today, some semis, that downgrade of some of the consumer packaged odgo companies. more "squawk on the street" when we come backyou've b billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory.

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about seven minutes before we get started with trading for the week let's get to our first mad dash. >> the endless price target increases. what bothers me about this, as you know, a lot of these people are trend followers. this morning we have price target increases from meta from goldman, credit suisse and jpmorgan a lot of it is because reels is real versus tiktok this is what i want to get at. a lot of it is because people feel advertising has gone into overdrive on the web you can see it on google and amazon what i want to ask you, when you were out with iger, didn't you find something that i asked pepsico about? linear is still the best way to advertise, or is that just a consumer package good anomaly? >> it may be a bit of an

anomaly. i think you're right there's still strength in terms of the audience that can be aggregated for live sports >> right >> which is one reason why disney is not interested in selling espn, though partnering or doing a joint venture is something that mr. iger raised as a possibility different than some of the general entertainment cable networks, which have a harder time -- >> this is that warner brothers -- >> i think it's fair to say the advertising market for traditional media, if we can still call it that, has been somewhat challenged. it hasn't been horrible but it hasn't been good >> it's different than the likes of meta. >> how much is that a shift to meta and how much of that is not bothering to do it how much, if any, is done by ai? it's easy to do ai on the web. >> does this thing keep going? look at that >> this is when you -- you have to follow it like this this is when zuckerberg is mean.

zuckerberg turns nice. >> turns nice. >> yeah. >> this is also the effi deficiency -- >> no. this is nasty, this is sweet >> this week when he beats musk up right here? is that right -- >> that's all in fun >> sad very sad elon musk >> no. i mean, honestly, this is when the -- let's be a little less to the people at home insular this is when the discussion of musk went from meta to realization that reels is doing well and off the front pages of behavior that was considered to be suspect >> we'll see speaking of behavior, that cage match, i don't know

fight happens? >> i think it won't happen because musk is afraid >> opening bell a few minutes from here. catch us any time anywhere listen to and follow the "squawk on the street" opening bell podcast. we're back after this.

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the market is starting to look to the other side of the interest rate increase and they're starting to look at inflation which is crumbling inflation is crumbling >> that's cathie wood talking to us on friday night she was offering her take on inflation. the other question this morning is whether we're crossing a line when deflation will crimp corporate earnings and results >> i think the part of deflation that's getting impassable is rent you have to look at the comments that wells fargo and jpmorgan make there's nothing in any of those numbers that indicate deflation in any earnings, even if it's

some commercial real estate. so i'm not buying it the imperial data from those two companies says no, it's fine >> pepsi would say lower costs means -- >> what he says is that you know what let's take share carbonated. let's move in big europe let's take share in salty snacks you can look at that piece and say, it's a big macro piece. why doesn't he talk to ramon it's harder for conagra they've been raising dividends nicely. >> you like pepsi here >> this is not the old pepsi this has growth of 10% you want to go down to 8%. probably going to accelerate to 11%. i don't think people realize what he's doing.

sls sls celsius, which you don't drink, you downgrade on pepsico at your own pearl. >> ford has been a favorite of yours. i want a sense if this is a good thing or not >> jim said we raised the price a lot -- >> talking about the f-150 lightning. >> in order to cover the costs i think what a lot of people at home would say why if he has this huge list of people who want it? i know -- i don't want to sound like i'm uninformed, i think there's contrast between what farley is saying and -- >> you believe that to be the case you knew there would be great

demand for that. you've also taken aim at the cybertruck >> 70% of people buying this f-150 are not previous ford people jim farley maintain there's will be decent ksales for the cybertruck, but not traditional pickup people. when i was at ford, i was inundated, and i drove the f-150 lightning, inundated with people who told me it was all sold out. like the bronco is sold out. now i'm confused i'm not going to say jim farley is wrong farley sent me multiple things about how they can finally cut the cost, which is what people want >> what's interesting is that we pay a lot of attention to used car prices used ev prices are falling at a multiple of the industry rate. i'm not sure why that is >> i think that -- there's not a we when it comes to ev i think we're also going to make

it to the charging stations becoming far more available. david, the f-150 is a work truck. the lightning is a work truck. i bought a 350, it's called the super duty you use it for work. it may be more of a sign of small and medium-sized business not buying as many or needing as many therefore offloading i also think there's a great market where you can buy it for a certain price and sell it at a higher price >> also with an ev, you have to get the charger. that's expensive >> it does matter. i'm not sure that the novelty might have worn off. that would be something if there is just novelty. i'm -- i'm just plain out confused about why they're not holding their value, given the

fact that the president, congress has offered you so much to be able to switch to that i guess -- i don't know. >> at under 50 grand, the f-150 lightning, we'll see that's a pretty competitive price. i don't know where the cybertruck is going to be priced tesla is the only of the big autos up this morning. by the way, so far larger. 916 billion is the market value again. not quite at the trillion or so it once had, but not far the increase in musk's net worth in his ownership of tesla has more than made up for what he paid for twitter at this point and/or lost when he paid 44 billion. it was probably worth 22 billion. >> i think what matters is if he can get the cost down for the cybertruck enough team want to own a tesla, they don't care that is looks like kind of a -- i don't

know -- a sherman tank >> yeah. or a lamborghini >> yeah. it's a boutique car. the israeli tanks look similar >> do they >> have you been to the area >> i have. not up close >> okay. you have the teamsters president, sean o'brien, telling the white house to back off, stay out of this if we do end up striking watching the actors and writers. some of the airlines putting together some pilot deals. >> 40% gain. that's the nightmare for jay powell jay powell is saying listen, the one intractable part is that labor is getting there we're not a unionized country anymore. >> no. there's an argument that says that's been one of the key

reasons why we have had such a disparity over the last 40, 50 years between -- >> capital and labor >> correct >> and people feel unions have been more in league with management than not. that's the problem going on in the auto industry with the uaw turning somewhat ugly against the auto -- >> we have the screen writers, the actors, the teamsters, uaw -- is this labor's last stance >> i think everyone feels emboldened by the fact that we have a president that says listen, we're pro labor. you won't have the president easing anything. like the railroad strike the army will not take over. >> biden's economic policy is about strengthening labor, so to speak. and it plays out on the

antitrust front as well. that leads me to of microsoft/activision >> good segue. >> tomorrow midnight is when microsoft has to close the deal or increase its consideration to buy activision from the $95 share cash deal it has in place. that's when the deal expires we're focused on the uk, the cma as we have been for some time. the ftc lost again, they did not get a stay in the 9th circuit. the u.s. is not an issue at all in terms of closing this deal. where it is is the cma it matters -- it won't matter necessarily to what's going on in the uk. jim is referring to the fact

that sony said we'll take the deal you've been offering us for a while. >> some said sony may be the loser. >> right they sign up sony. play station finding treatment keeping call of duty on play station, following the possible merger of activision the cma asked a tribunal to adjourn, they'll hear from the cma, maybe we get some sense as to where they stand in terms of their willingness to allow microsoft to potential ly close this deal, saying we'll divest some things, we won't have them done yet, we'll keep the uk in a separate part from everything else when we sell the assets, then

we'll close in the uk or combine everything will that be allowed will it happen key questions. don't have answers for you i'm afraid nobody seems to if it goes beyond midnight tomorrow night, microsoft -- it's not a question of whether they can close this deal at this point, but almost everyone thinks they will be able to figure it out. they're in position to ask for more and it won't be a higher price for the company, it will be let me use some of the 4 bucks a share in cash that i've amassed in this time that you announced the deal to pay my shareholders a special dividend. maybe 5 bucks. that's money that would be going to microsoft once they complete the deal microsoft has to sign off on it. that's one thing that activision shareholders may ask for a lot of people think microsoft -- i have underestimated their ability to navigate what seems like

unnavigatible situations they manage to do it so you can't count them out. >> don't you think some of it is to say already this lena cannes and the ftc, we have the fire power to beat them we'll keep going and keep going. they only had one expert, and the expert seemed ill-advised in the way it argued. one expert after a million pages of documents and 30produced, on? >> on the ftc front, there's more a deal in which constellation software's persius group is buying blacknight's business it's a deal to get past the ftc.

the ftc filed suit against i.c.e. in march. so the question is will this divestiture of optimal blue provide a feesal path to guarantee the deal with i.c.e. actually happens that's the key there you can see why black knight is up so much because of that deal to sell optimal blue to constellation software for $700 million. >> a lot of people feel it might be a steal >> that was a deal worth $85 a share when announced originally. now cash, stock. that was over a year ago >> that's the way it looks that's why there's been so few -- i know behind the scenes,

the justice department can't figure out how these advisers and lawyers continue to say, listen, don't worry about this deal when there's grave concern that the deal won't pass >> i know. >> just people want to make more money? >> pfizer is the last one, they got a second request, even though they filed. they got the second request from the ftc. they do say they expect to promptly respond to the second request and will work with the ftc in the review of the merger. this the biggest deal of the year, or potentially one of the biggest. i've been told they've been preparing since day one for a second request they will move quickly it's not having an impact at all. >> these need these cancer drugs that seagen has.

amazi amazing how that stock has gone. >> at&t now under pressure because of the concern about lead cables. >> they weren't ahead of the j&j and 3m they said holy cow, we're up against the plaintiffs bar when you talk to the defense on any of these, the plaintiffs bar, they're in disbelief. they seem to forget that the juries think that the truth is an abstraction >> what do they think, the truth is what? >> an abstraction. >> that the companies are better poised to pay penalties than they are >> yeah. the juries don't -- the juries look at the plaintiffs, they feel badly for the plaintiffs. so they award the plaintiffs money. now j&j wins its share of cases.

3m didn't win its share of cases. there's a notion of exist existentialism some people thought j&j would have to pay 60 billion they don't have that money we're finally reckoning that the juries are runaway juries and saying give these plaintiffs what they want it started with a missouri decision, the plaintiffs won billions of dollars. this is j&j. i think what's happened in the country and a lot of the corporations are concerned, that once you get in front of a jury, the jury is not sitting there listening to why at&t is not culpable they're saying that plaintiff, i feel so bad for them let's just give them the money that's the toughest part >> remarkable price action this morning. more macro, s&p holding on to

45.05. we got 52-week highs on the industrials and transports dow theory chatter is raising its head again >> we keep hearing about the magnificent seven dominating, but in reality, software has been keeping things going. we have a lot of price target boosts for the rails the industrials are related to the build back better, so to speak, are doing incredibly well anything aerospace is doing well david, we have a broad market. wells fargo and jpmorgan with that we had a broad market as of, say, friday. >> you think so? >> i think so. we'll see this week when more than 10% reports, but other than retail, there's so many companies doing well >> jpm is the leading dow name we have a piece out about goldman and how wide the range

is on their quarter. 33 cents to $5 >> yeah. they have this huge real estate hit they may have to take because they invest in real estate a lot of people think goldman sachs frothed the beast before putting the number out other people think they have fallen on hard times that's the disparity david, i think you could argue either one >> speaking on falling on hard times. a company i used to talk about, altice they bought cable vision, they took on enormous amounts of debt the chairman resigned from the board. he said i'm out of here. altice is now a $1.3 billion company. it's all about the debt for this company. go back a couple of years, just to show -- thank you keep going keep going >> they have a huge cash flow. >> they have a lot of debt and

a -- there it is >> wow >> very competitive market there was a time we talked about it because it had significant market cap, a real player. >> unless you're connected with bed bath & beyond, you have not filed bankruptcy last i looked, they went to christmas tree company, harman -- altice, a lot of dough. >> a lot of debt >> there's been so few bankruptcies of any size, you keep waiting for the fed to say, you know what? there's been enough bankruptcies, but there really hasn't been anything other than bed bath >> yeah. >> private bankruptcy is picking up >> party city? >> david's didn't they go >> the bridal? >> i was trying to come up with it i can't get married again to boost their sales. that's terrible. >> horrible. >> she doesn't watch the show. >> renew your vows >> exactly

>> will you have another one of those parties? >> the 500-person invites? >> like the second time, the third time >> my wife does throw second best day ever third best day ever anniversary parties the band is not allowed to take a break and everyone has the greatest time. i'll insist now we do it again >> why not >> like she ever watched the show she actually one time said i called you, you didn't pick up i said it's 9:15 what's the matter with that? i have a show. a reminder, you can catch jim every morning at 9:00 a.m. and sign up with the cnbc investing club go to cnbc.com/jointheclub to find out more or use the qr code on your screen. we are in a fed blackout, free of fed speak in the next few days yields a bit higher. two-year above 4.75. back in a minute

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. got somep winners on the nasdaq 100 a lot of discussions about the sign-ups they've had on a growth basis. we'll see what it means for earnings later this week don't forget the rebalancep on the ndx happens friday night the magnificent 7 has gone up 12 weeks in a row, 37%,ust jthose seven. we'll get stop trading with jim in a minute. you partner with ibm and red hat, use a hybrid cloud solution to connect data across clouds, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time... check. ...to make quick decisions? check. aaaand check.

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it's time for jim and stop trading. >> i think there's a lot of talk about the ir relevancy of citi that's right of citigroup 89 billion goldman sachs, $113 billion, wells fargo $160 billion of course $442 billion for jpmorgan when i look at citi, there's a book value discrepancy, the book is so much higher than this, i'm beginning to wonder whether we have to include it right now there's a notion that there was a big three that reported big two that reported. citi is becoming an asterisk and they have to do something even

with capital raise there was a big go-around with jpmorgan and citi when it came it to the bond position. citi was able to argue they have other businesses that make it so it contributes to their so-called bond problem, which they rationalize i am talking about how you know what, i spend about 2 minutes reading their conference call. i have to focus on relevance. >> that's -- you're cutting deep, man. >> the first cut is the deepest. >> yeah. >> the cfo was talking a lot friday night about how much they've cut their risk-weighted assets over the last couple years. >> they've also cut their relevance. we have larry fink here. you want relevance, larry fink is relevance i think citi, it's okay, not every bank stays, you know - >> if there was the ability to consolidate the banking industry do you think it would be a part of - >> i would buy state street, which had a terrible quarter, would be a terrific combination,

get assets in there and stickier when you look at market cap, when you figure out the tangible book and what they're saying, frankly, you come back and say why am i focusing on this company? >> we'll get over half of the kre this week. it's going to be busy. >> how about tonight >> tonight i'm looking at a couple things. i'm beginning a series about the relevance of enterprise software and how that's increased while the magnificent seven is so much, 40% of the market that is tech, it's changing and changing and going towards -- you saw we put the list of stocks up doing well, enterprise software is where you have to be and we are detailing the people who don't really understand enterprise software, which are the winners. the magnificent seven use it i'm not disparaging citi it's not as relevant. >> yep. >> that's disparaging -- >> really good in that - >> can't imagine they're going to love that. >> i thought bronson would be like in great escape and make

it. >> we'll see you tonight looking forward to that. >> i want to be coburn so much i was not coburn >> when we return, at&t and verizon extending their slide. we're going to talk with craig moffett of moffett nathanson with the s sad45&ptey 08

. good monday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber live as always from post nine of the new york stock exchange. take a look at stocks. win streak continues here. even just a bit for the s&p 500. up 0.1%. it's led by financials after some good earnings consumer discretionary, technologies and industrial all positive utilities, health care and energy at the bottom of the pack the nasdaq up 0.4% again, building on recent gains. over the last one-week period nasdaq is up almost 4% 30 minutes into the trading session here are some big movers we're watching at&t shares trading at their lowest level since 2003. on pace for nine straight days of losses and now citigroup is the latest to downgrade the stock to neutral we'll discuss this name in just

a moment. ford cut prices on its f-150 electric pick-up truck from 7 to 16%. shares are down on that news and speaking of evs, watch taz. the company rolling out the first version of its long-delayed cyber truck over the weekend. that comes ahead of tesla's earnings this week stock is up 3%, adding to year to date gains of 135%. but guys, the fed is in quiet mode ahead of the meeting next week we're going to be focusing on earnings we have a lot of regional banks to find out if they're okey. in friday's sell-off they sold off hard, turned on the market and other big earnings i'm watching, always watching, but could be a factor for earnings is the dollar because it's made a really big move down lately and that is very helpful remember all those companies complaining about the stronger dollar well now we're at 15-month lows in part driven by u.s. yields which have fallen recently and the view the fed is closer to being done raising rates than

the european central bank and the bank of england and others it's kind of flat today, but the downtrend over the last year or so has been lower after a big run up higher. it's always hard to figure out, david, like when that actually helps earnings because it hits at the lag nike quarter was still subtracting and that was a good tell looking forward is something helpful especially for the mega caps, pharmaceutical companies, industrial, consumer they're all exposed if you do business abroad. >> what are you going to be looking for as we move into earnings season in particular to what you told us >> dollar helpful. that's something. >> there is the idea that margins are starting to be compressed in part because they're no longer the beneficiary of price inflation and the ability to continue to price up. >> the costs are still high in some cases, at least on labor. one thing i'm going to be listening to are what companies are saying about jobs and wages.

we're having all these strikes happening at the moment. all that is pretty inflationary. if you look at inflation adjusted average hourly earnings, which is wages, rising 1.2% in june it was the second month in a row where wages were rising faster than inflation so inflation used to cut into wages and now we have this wage issue and it's great for workers, right, they're getting paid more. it's tough for the fed which has been trying to fight the inflationary issues. so just something to watch and then overall, david, the strength of the economy, right, because it's been pretty resilient and inflation has come down and if the market is banking on this goldilocks scenario that stuff has to continue. >> the commentary from the big banks on friday, at least the ones we heard from earnings wise, most of the big ones, was generally positive in terms of the strength of the consumer and even when it came to commercial real estate, wells fargo, for example, did have charge offs, talked about it, but at the same time, there's not a concern that there is as much for the regionals and

smaller banks that have a smaller concentration, specific to office i should say, because it's not -- you can't paint it with one brush we say commercial real estate, there's plenty of pockets that are great, a lot of it, if you own warehouses, but office. >> right and then we're going to watch deposit flows right because we know the big banks have been beneficiaries but at what cost to the small banks generally, carl, the other thing on the economy which has been okay, some folks are worried, i'm going to be watching this from the consumer companies in particular, about the student loan moratorium ending because that is a factor for retail and for the last three years, it's been a big savings for people. here's a good chart just today that i came across in recent research the largest share of student debt holders are actually higher earners. so 60 to 80% top 20%, that is -- should potentially be a better

sign because their balance sheets have been in better shape, savings are in better shape than the low-income earners. a lot of bears on the economy say it's going to be a headwind and hit discretionary spending our next guest says the risk-reward for stocks looks challenging. daryl kronk, wells fargo for wealth and investment management, s&p target of 4100 daryl, that's downside what is your concern >> yeah. i think so when you look at the environment you're talking about, right, the comps get much more challenging in the back half of the year for inflation, right. so it's entirely likely you could see inflation rise in the back half from the nice 3% goldilocks print the fed can't really control oil prices, can't role the hot housing market and doesn't really control wages all three of which are going to feed into the baseline numbers next year. if you simply look at earnings, though, i think this is what a lot of people miss we know third straight quarter of negative earnings growth,

down in aggregate 11 or 12%, which is the large st actual decline since the global financial crisis margins have declined for six straight quarters in a row that is starting to squeeze on the bomb line. real revenues, inflation adjust them are negative for the second quarter in a row which are consistent with past recessionary periods we think you've got to take what market gave you in the multiple expansion in the first half of the year, raise some cash here and play a little more defense in the second half. >> a lot of people don't agree and think that earnings are troughing here and earnings expectations are getting raised as the economy proves more resilient. inflation comes down. >> yeah. they are in certain pockets, but i still don't think for all the reasons that you're talking about here, that you're going to get the kind of growth resiliency in fact, q3 and q4 are probably going to be more challenging quarters than q1 and q2 were

they were both negative earnings growth as well so it's possible you know, what's interesting is we just saw the big banks on friday report the price action didn't confirm it, right. you're starting to see some rollover intraday you saw techs names, nvidia, amd, rolled 5% on friday from peak to trough, so they're starting to give back a little bit i think people are starting to take back some of the profit realizing 16% year to date gains on all multiple expansion when you've got an all-time high pay ratio, price to earnings ratio, put call ratios saying you should play more defense, extremely low and borderline complacent and you've got multiples at 22 times forward right now. >> it's pretty classic that we're discussing, you know, the liability of a return of inflation when the other discussion this morning is the impact of deflation on earnings. we've got downgrades of pepsi where they can't, you know, what happens to organic if they have to despite lower costs, ford

cutting these evs by 10 grand. i mean it's just a classic bifurcated market picture right now. >> it is that's what, obviously, makes a market, right, which is good, but the inflation story i think is a little bit of be careful what you wish for. earnings and revenues are in nominal growth terms as inflation comes down, growth comes down and inflation comes down, you're going to get pressure, right. think about how companies are holding the line on the labor side and wage inflation going up look at what united airline did with their contract negotiations if revenues come down, and your biggest cost line on your income statement holds firm, right, wages, you're going to get pressure on margins and pressure on earnings, right i just -- it doesn't look like an environment where you see runway type revenue runway type earnings or margin expansion to us. >> and the goods deflation part, the split between ppi, cpi, sara mentioned the dollar, that's not enough to offset the wage part >> it helps. last week was let's call it

utopian, right you had the dollar breaking down to lower levels, you had yields falling, you had about as good of inflation data as you could get. you got really good narrative coming off the big bank earnings to start the earnings season that was good, right we should have gotten a little more lift than we probably did in all candor, right i think a lot of goods deflation story is behind us now, to your point. so now if you lose that as your tailwind going forward what's left services, shelter, wages, right. all that is hard to arrest or has been hard to arrest up to this point. >> what about breadth? you cite it in your note as something that would be a positive we have seen some signs, though, not complete that the equal weighted s&p, for example, is starting to catch up is that not encouraging? >> it is i think it's normal, david, for this part of the cycle we're seeing it in consumer discretionary, quietly industrials are starting to take off and defensives are starting

to fade. it's a belief in the goldilocks soft landing scenario. that has to play through the back half of the year. hope is not a strategy and we have to see it in the actual data and numbers, right. that's where you could call me a little more of a skeptic, right. color me skeptical on this because i'm not sure you're going to see it in the growth data in the back half of the year. >> the other big factor here has been positioning and sentiment, which was so negative that the pain trade was just higher the rally nobody expected in double digits up this year has that corrected i -- itself w that people are jumping in it still feels like the pain trade may be higher. >> i think you're right. i think the pain trade is higher, and there's tons of money in money markets, right. we talk about the bank earnings and big banks being deposit beneficiaries. if you look at the numbers, deposits were down on a lot of big banks. where is it sghg going to money markets and sitting on the sidelines clipping the 5% interest and waiting for some

type of a catalyst to come back in last week there was a lot of catalyst, right. dollar breaking down was significant, right yields falling significant the fact that you got, you know, good or as good of inflation data as you possibly could, all of that is good, good news it doesn't surprise me the markets and some of the bulls want to take flight here. >> thank you appreciate it. daryl, color me skeptical kronk. as we head to break here's our road map for the rest of the hour at&t on pace for nine straight days of losses, trading at levels we haven't seen since back in 2003 how to view the stock from here. >> shares of one of the biggest luxury flames are down today what that may be saying about the high-end consumer. and the view from the c-suite, ceos of marriott and mgm join us this hour. big show ahead stay with us

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take a look at shares of at&t and verizon both extending their losses for the month that follows a report from "the wall street journal" last week investigating the presence of toxic lead in essentially the cables that many of these telecom companies put in the ground a long time ago. our next guest says that while the revenue impact of this not significant, to either of the companies, he does add the risk to the running list of challenges the two face and that could lead to potentially a buyer strike in some of the names. joining us craig moffett, of moffettnathanson, founder and

senior managing director i know you probably didn't expect a week ago you would have to become an expert in lead-wrapped cables, bit just give me the quick, i read your note on it, more questions than answers, but just tell me sort of how you're communicating about this and the risks to clients? >> well, thanks, david good to see you again. look, it's -- this is a question of unknown unknowns, right "the wall street journal" -- by the way, kudos to the team at the "wall street journal" with tom and everyone there doing a really remarkable piece of journalism i've been doing this for, boy, 35 years or something, dealing with telecoms and it was not an issue that i was aware of. i think that's part of the problem, right "the wall street journal" cited four ftc commissioners that never heard of lead being in cables it's not something that people have a lot of familiarity with

"the wall street journal" was quick to admit they know of 2,000 cables, but it could be in order of magnitude greater than that or not that much greater than that. we don't know. we don't know the size we don't know what it would cost to remediate them. we don't know if it's the right idea to remediate them or it may be safer to leave some or a lot of them in place we don't know what verizon and at&t and their many, many predecessor companies knew and when they knew it and whether they were putting workers knowingly at risk or not, whether they were putting the public knowingly at risk or not. we don't know statute of limitations issues and that sort of thing at this point there's really no way to quantify this risk. the challenge is, there's not a lot of good reasons for people that want to own these stocks anyway, and if you throw this one more log on the fire, the danger is that people say, what do i need to be involved for

that i think is why you're seeing this incremental selling over the past few days. >> yeah. i want to come back to the fundamental challenges in a moment, but one thing we do probably know is there's a bunch of plaintiffs attorneys out there right now looking for somebody who can help them file a case, you know, that has to be something that you expect, right, craig >> absolutely. and by the way, i figured that was going to happen right away i probably, silly me, should have realized that within five minutes, you would have umpteen members of congress grandstanding about what a travesty this is and how horrible it is that they haven't done something about it yet and that they're going to hold their feet to the fire and that sort of thing you'll also have this kind of wild card of political pressure. >> right i mean, but we're talking here, again, about cables that perhaps were put in place by the old ma bell, the old at&t, not the new

one which really as you know, of course, the old sbc -- >> 100 years - >> yeah. 100 years. again, it goes to your point well, no idea what we don't even know here. >> that's right. that's right. >> what we do know there's a lot of competition overall and let's go back to the fundamentals here you mentioned it's just one more reason not to own them are there any reasons to own these stocks in part i would think the dividends look fairly attractive right now. >> fairly, but look, i mean, when they had 5% dividends and the 10-year was at 0, if you wanted yield, there weren't that many places, other than the telcos, to go get it today you can get 7% yields but you can make 5 in a money market the dividend yield is no longer as compelling as it was. that's probably also why i've heard in the intro you said that the stock is trading back where

at&t specifically is trading back where it was in 2003. it's actually trading back to where it was in 1993 verizon is trading where it was in 1997. and it's not like they ran up and suddenly fell off. they've been grinding lower for 30 years 30 years and so these are really, really tough stocks to own and the dividend was always the one thing that you could count on to attract at least some buyers but with substitutes for the dividend now much more readily available for yield, and frankly, obvious questions about the sustainability of the dividend, particularly at at&t, which, you know, they cut the dividend back when they sold off time warner to discovery, what they called warner media to discovery a few years back, but already their free cash flow is -- they missed by a couple

billion dollars last year and let's throw one more piece on to this, that's the "financial times" had an interesting story the other day about at&t's aggressive use of vendor financing which almost certainly extended their cables and helped working capital last year to help them make an even lower free cash flow number, which just plays to questions that people always have about their free cash flow and whether the free cash flow is sufficient to sustain the dividend and so boy oh, boy you're just left with, again, lots of reasons not to own these stocks and not -- and compelling reasons for why you want to own them. >> real quickly, what do you want to own? is there anything in your coverage universe that screams buy right now? >> you know, i really like charter here, and i like comcast as well, your parent company i think comcast is not quite as cheap as charter, and there was so much negativity about charter and the broadband business,

competition coming from the telcos actually, but also from fixed wireless on the wireless side, that i think people forget not only the pricing power of the broadband business, but more importantly just how successful the cable operators have been and will continue to be in the wireless segment where they're taking a lot of share from you guessed it, at&t and verizon. >> yeah. amazing. 30 years of grinding lower is stunning craig, thank you always appreciate it. >> my pleasure, david. good to talk to you. up next, fresh clues on the health of the luxury consumer. first, as we head to break check out some of the biggest laggards on the s&p at&t is right there at the bottom of the list, down 4.25, ford on price cuts down as well, we'll be right back.

luxury group richmont getting a boost from china, but shares are trading lower due to a downturn at home robert frank with more

what do they say, robert spooking the market. >> yes spooking the market and richmonth reporting a 19% growth in organic sales, just a little shy of expectations. the big problem that investors saw here in this report was the u.s. sales there falling 4%, especially on weakness in the hard goods sector. that's jewelry and watches remember, richmonth owns carty er and high-end watch brands like iwc those specific categories are the most vulnerable to the upper middle class shoppers cutting back on the purely discretionary spending bur bury highlighting weakness in its business on friday, all that taking the shine off luxury stocks this morning. lvmh and hermes also down. china, the luxury stocks late last year and early this year is

a bet on the china reopening richmonth reported 40% growth in asia-pacific in the quarter. that was strong. analysts are still expecting growth in china to pick up throughout the year, but with that big gdp miss in china overnight, luxury stocks could face some more price cuts. of course, the big one, lvmh they report on tuesday we'll get a better read on the broad sector on tuesday with lvmh guys. >> go ahead. >> i was going to say, robert, as you know, following these stocks, the pricing power has been pretty unbelievable, like there was no ceiling at one point for what they could chart for carty yeah watches or vanchief jewelry have they found that has that stopped >> i think that's a great point. to me that is the big question you look at the chanel flat bag, a bag that nearly doubled in price during the pandemic. it's now $10,000 you know, all these companies, with the exception of lvmh,

limited price increases to around 6 to 8%, they all kept raising because there was no pushback and i think at some point, we may have reached it, the consumer with inflation going the way it is and job growth and wage growth not being where it is, consumers might be saying look, $10,000, i was willing to splurge at $6,000 or $7,000 but not $10,000 as money gets more tight. >> but robert, was it a surprise at all coming in that the u.s. would be, you know, an issue in terms of -- given the strength, potentially, of the consumer, that u.s. would be an issue for these companies? we all have known about the slowing economy in china. >> yeah. it was a bit of a surprise, david. lvmh in its first quarter pointed to slower growth in the u.s., but we haven't been looking for a decline, an actual decline in sales it was the 4% drop remember, the u.s. has been the engine of growth as china has sort of been on a hold in the

past couple years. if both those engines drop out, that's going to be a big problem for these stocks >> yeah. china, europe, too not faring nearly as well as the u.s. at the moment interesting. good macro-micro combination robert frank. after the break, "squawk on the street" heads to the strip for a first on cnbc with the ceos of marriott and mgm, the two companies signing a new partnership and what it means for them and for consumers. when we're back in 2 (swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

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. welcome back i'm pippa stevens with your cnbc news update. the kremlin claiming ukraine was behind a drone attack on a key bridge connecting russia to the ukrainian peninsula that moscow

annexed in 2014. this is the second time russia has said kyiv targeted the bridge, this time killing a couple and injuring their teenage daughter ukrainian media reporting the attack was a special operation of the country's navy but nbc has not been able to verify those reports. a nor folk southern train derailed 16 miles north of philadelphia this morning sending more than a dozen cars off the tracks and leading to evacuations in nearby neighborhoods. the train's operator says one car transporting hazardous material was involved in the crash, but there do not appear to be any leaks or spills right now. none of the crew on board the train were hurt. actor and singer jane birkin passed away in paris the french cultural ministry said the country lost a timeless icon birkin, who inspired the famed hermes bag, was 76 years old back over to you. >> that's quite a loss thank you. mgm resorts and marriott

inking a new partnership, adding 40,000 mgm rooms to marriott's program alongside some other perks. our contessa brewer is out west with the ceos of both companies. hi, contessa. >> frequent travelers become so loyal. well, it turns out in las vegas that has been a boost for the cosmopolitan and, therefore, that's what sort of sparked the deal with me now is anthony capuano, good to see you, from marriott, and mgm's -- >> we'll take it back while they sort out the av issues out west. one thing for sure, travel names not perform too long badly today. there's been a great journal piece about international travel really the way in which americans are going to europe, sort of the last stand of consumer resilience, they argue, but there's a lot of demand this summer for outward bound travel. >> it feels that way it's been a disaster to fly this summer between the weather and the capacity problems and the staff shortages.

anybody that's tried to take a trip even yesterday, it was a problem. but we're all -- the -- watching for signs the consumer is slowing down, that maybe the travel demand is fading a little bit. you got a little bit of that in the beige book and some of the regional areas last week something to watch. >> we'll see if it lasts with, as you said, real wage growth, positive contessa, i'm told the shot is better let's try it again. >> thank you, carl, for that listen, 40,000 rooms, added to the bon voy program. why does it many, tony, you are bringing the rooms to the las vegas strip and matter to have more presence here for marriott? >> thanks. it matters for a few reasons number one, when you think about our strategy, we want to make sure we have the right product in every destination our guests go, for every trip purpose this is one of the most compelling destinations, not only in the country, but in the world. we've had a great start to our relationship with bill and mgm as you pointed out, at cos mow

toll policy tan. now we can -- cosmopolitan now we can offer the entire breadth of the portfolio to the customer. >> not just las vegas but -- >> five other destinations as well. >> bill, for mgm resorts what do you get out of a partnership >> think about it, it's historic for us, bon voy has over 180 million members and has a breadth of product, ritz-carlton can match in the luxury collection with bellagio, behind me, new york, new york, match up with the balance of that portfolio inside the mgm collection the scale, the breadth, exposure to marketing to us is going to be something special we've seen it manifest itself in the cosmopolitan. >> if bon voy members were only able to earn points at the cosmopolitan, what made you think this is worth exploring? >> the value and the quantity and quality of the customer was pretty special and unique. above and beyond, obviously, tony is in the meetings and

convention business, we're in the midst of, so the partnership with them and teaming up with them on both aspects is compelling >> sara, want to jump in >> a question for tony sara eisen in the studio should we read into this - >> hi, sara. >> hi. you've been talking about unit growth is zero, lending problems, new construction is this a sign of that, that you're sort of looking for growth in new innovative ways and how do the economics compare to traditional growth and units you would get from franchises? >> sara, our unit growth gobble globally as we indicated is about 4, 4.5%. thankfully better than 0 as you point out, particularly in markets like the u.s. and europe, there is some constriction in the debt markets for new construction conversions have been a big focus area for us. but the real catalyst for this

deal is not growth for growth sake it's expanding the offerings that are available for our guests and bon voy members as you and i have talked about on multiple occasions, you've seen this fundamental shift away from spending on tangible goods towards experiences and one of the things that was most compelling about this deal for us, when you look at the wealth of intellectual property that mgm controls, in terms of entertainment option, culinary option, experiences, and what we can offer to our bon voy members, it's really an exciting opportunity for our membership. >> group business for both of you is going to be really key in the second half of this year do you think that having the bon voy program on the strip at marriott, mgm properties through marriott, gives you a competitive advantage against caesars, especially where group business goes? >> over time the answer is absolutely unequivocally yes the second half is big this program is going to roll

out, announcing it in october or november i think as we see a year from now and reflect back, his associates get familiar with our products an we get familiar with their system and how the environment will work, it's a huge advantage. >> really key here is that bet mgm will have a marketing deal with bon voy and some of the players will be able to earn bop voy points on some transactions. this is a real shift i think it might be worth exploring a little bit how you came to the decision to make the marketing deal with a sports gambling partner >> yeah. i mean, i think for us, it's another opportunity for our bon voy members to earn points for the bet mgm members to have opportunity to deploy those points across a portfolio that includes 8500 hotels in 138 countries. >> okay. let's talk about the consumer a little bit and what we are seeing this year as we look at inflation and, again, the real

questions over are we in a recession, is it a soft landing, how will we emerge what are where you seeing? >> we've had seven quarters in a row of record earnings we continue to see value growth here in las vegas, particularly the luxury segment, so las vegas continues to boom. the programming is unprecedented. the things we have coming up with formula 1 and super bowl is just amazing we continue to grow here inside this community regionally it's a little different. i think we see a little value degradation there. but in real context and terms when you talk about las vegas and how america feels about travel and experiences we're spot on. >> for us, similarly, first quarter all-time record earnings for the company, coming into april, we saw 16% rev growth globally and 50% improvement in rev international markets. >> sara. >> but tony, what are you seeing in asia and china in particular? we just got some weaker gdp

numbers there as well. we were expecting this to be the big recovery, especially in travel there what does it look like >> so, we've got second quarter earnings the first week of august and we'll go into a little more detail what i can tell you, into april, in mainland china, rev par was more than fully recovered to where we were in 2019. and in greater china, so inclusive of markets like hong kong and macao we were within just a couple percentage points of prepandemic revenue par. >> and macao, are you still seeing strength? >> absolutely. you all see the monthly numbers. june was a really strong month we continue to out share market and we see a lot of strength in macao right now. >> we -- when we're looking at the labor issues that are facing the nation, we've moved past the crunch and looking at unions bill, for instance, you're in talks as we speak with the culinary union in las vegas. can you give me a sense of

what's driving the demands of the unions that you're dealing with and what you think are significant concerns >> let's start out, we've had a really long relationship, most notably, with the culinary union that goes back decades and successfully negotiated all those agreements i have no concern with the existing environment we sit in what is unique is demand on labor. demand particularly for front line service personnel when you think about housekeeping and guest room attendants and the demand on them, change in the environment brought on by covid. 40% of our guests don't want attendants in their rooms and it's changed the working dynamics i think we're going to be in great shape. >> has the pandemic changed the way that you're dealing with labor issues >> i think we're facing the same operating dynamic changes that bill described but we operate in union hotels and many markets across the country. we go through these negotiations we ultimately reach acceptable

resolutions an i think that will continue to be the case. >> anthony capuano and william hornbuckle, thank you very much for being here today. >> thank you. >> guys? >> contessa, thank you for bringing that us to. still ahead, microsoft, well, it has until midnight tomorrow to close the purchase of activision unless it wants to potentially pay more this, of course, after a judge did reject the ftc's latest attempts to stop the deal or get a stay talks with uk regulators are the focus. wel veou t'lgi yhe state of play this hour after the break. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

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welcome back take a look at shares of activision $95 a share, that's what microsoft is paying. the question is, really right now, whether or not microsoft will be able to close the transaction by midnight tomorrow in order to avoid perhaps having to increase the consideration in some fashion by extending the merger agreement because the review by the uk antitrust

regulator, the cma, continues beyond that. let's give you some right up to the date information involving the cma because they and microsoft are in front of the tribunal right now having a back and forth in front of a judge, essentially, talking about why they wanted the tribunal to adjourn its own adjudication, so to speak, of the deal. remember, because microsoft had been appealing the original cma ruling during that, we heard from the cma lawyer saying essentially that based on microsoft's new submissions and discussions, remember we reported on microsoft offering what i've been told is a relatively small and discreet sale of some kind or -- that they would be willing to enter into, based on that, the cma itself has said -- this is their own lawyer -- they have real doubts whether the merger should be stopped. i'm paraphrasing a bit based on

what we've heard that's essentially what's been said the question, though, continues to be, all right, well how long is it going to take you to get to some sort of agreement with microsoft? can that happen in the next 24 hours in which that diverse tour of a small and discreet asset of some kind will be enough to meet their objections or take longer? that's kind of the state of play right now. you can see, of course, what's beg reflected is investors perhaps hope that not just the deal will get done, but that it will get done as soon as before tomorrow at midnight. >> it can still be blocked or can it >> it seems highly unlikely, based on what we're hearing out of this hearing, that cma is thinking about blocking the deal it seems they're focused on reaching this agreement, essentially. the question will be, is there a derrygation, say close, keep the deal separate from now, get the

diverse tour done, when that's done you can close in the uk so to speak included in the overall company. that's one question. but no, there doesn't seem to be that much question any longer. the ftc losing over the weekend. ninth circuit attempt to get a stay on appeal of the loss that they suffered last week. they didn't get it so all signs point to as unlikely as it would have seemed and, of course, you know, i have to say, looking back on my own reporting, i had this thing mostly dead, and now it's, you know, as we said last week, the only real question seem to be, will they be able to close before having an increase of consideration. >> for a while we were talking about activision as a buyer, not a seller what's interesting is that a lot of curtain razors on the earnings print in the next week or two don't really mention this they talk about azure, whether that's a beat or not you know, what happens to capex regarding a.i. i seen morgan stanley goes to 415. so i mean, is it nice to have

kind of at this point? >> for 2.5 trillion market cap company that added more in market value than they seem to be spending on activision, even though it is one of the largest deals out there, they added way more on their promise of a.i., i think that's probably fair to say. what it is important for, as we pointed out, antitrust law, loss by the ftc was not a significant moment as we know, and the future of activision blizzard itself. >> and the video game industry. >> video game industry by the way, bobby kotick will stay on. he doesn't just disappear if this deal does close as soon as tomorrow. >> after the break, yet another day in the green for speaking of a.i., nvidia, as wall street continues to raise the price target on that name. xtesrseetonod kw, ne

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check hour out shares of apellis pharma down after a safety report on the new eye drug showed inflation in six patients. nvidia today, two big firms raising their tarts.

raising their targets. we turn to dominic chu. >> they're raising the prices for maybe different reasons. one is making catch up calls after the stock is missing out and some others are getting more bullish. the two we're focused on today, which is citi group, raising their price to $520 and keep a buy rating on the stock. so they see more momentum for a stock already the best perform e in the s&p 500 you have deutsch bank raising their price to 440 from 390 maintaining the hold rating in the catch up trade even though it's going up and getting away from some of the analysts they feel as though the valuations are not justified. if you look at the consensus building around the stock, no doubt with an 86% buy rating the entire street thinks this is one of the most high profile and momentous stocks out there

only 1% have a hold rating and $460.67 that's the mean price right now. the momentum trade on the stock, best performer on the s&p and the nasdaq 100 where nvidia stands, from a momentum standpoint we are from a gap perspective some of the widest areas we've seen over the course of the year so nvidia remains a big story, and by the way, earnings aren't until august 23rd so who knows what happens between now and then back to you. >> thank you i want to bring in kristina partsinevelos with more on the chip she covers the sector. some strong positioning here into earnings. >> and actually news this week, because reportedly intel qualcomm as well as nvidia headed to d.c. to lobby washington against further export control

beijing eggregulators they're holding up the acquisition of semiconductors, intel's ceo came back from his second trip in china in three months. qualcomm is exposed to several chinese firms and nvidia said there would be no immediate impact to revenue from the export controllis but long-term they say restrictions would be a disadvantage since china is 20, 25% of the revenue in gaming i was chatting about the timing of a meeting and he said the tough on china is one of the few policies gaining incentive across both sides of the aisle so chip makers need to drum up support as soon as possible. this is coming from nvidia ceo but despite these concerns you had dom go through it. it's tough not to find an analyst that isn't throwing out

a price target the next big player is amd but the next ai chip is expected out later this year. the names don't offer a full stack with software included so it was really difficult to find any negativity around nvidia stock except the more general take that the stocks index has prized in the demand with deutsch bank arguing the sector may have difficulty delivering especially in names like broad com, amd, and marvell. the premium is about 40% higher, we haven't seen such a premium in the last decade. >> it's interesting with the a.i. hype it makes it hard to view semiconductors as you do which is cyclical end markets. >> especially when you use a.i.

and software interchangeably you had krogers mention it how many times, marvell, yes, some f of them can benefit from the increase in demand, especially for the gpus but how much are we seeing within the stocks within this six month period. >> thank you with the nasdaq up, almost half a percent and nvidia helping a little bit, not much else, a little bit there you can see the markets -- we'll take a quick break here on "squawk on the street. we have another big hour coming your way don't go anywhere.

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good monday morning i'm carl quintanilla with sara eisen live at post nine of the new york stock exchange setting the agenda today, a vacation on dove island. why two more hikes are ahead and the number that will be the ultimate test in deciding whether we get to 2%. ian bremmer is with us russia axing the ukraine deal on grain. a bunch of agriculture prices are on the move. follow the money with 80 etfs under t