it is friday, july 21st. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc losing my voice. we are live from the nasdaq market site in tiemes square i'm becky quick with joe kernen and andrew ross sorkin it is friday a bit of relief. green arrows across the board. dow up 51 points s&p up 11. nasdaq up close to 60. nasdaq was down yesterday. the s&p closed lower, but basically flat the dow was the winner again it notched another day of gains bringing the winning streak to nine days. joe mentioned the longest since september of 2017.

up 14 points, but these are slow and steady gains continuing to climb. if you look at what is happening with treasury yields 10-year treasury at 3.8. 2-year treasury is slightly higher at 4.8. let's talk about the s.e.c halting the trial to block microsoft and activision merger. it is suspending the $69 billion deal which was scheduled to go on trial on august 2nd earlier this week, microsoft and activision announced an extension of the merger agreement to go to october 18th to allow more time for north carolina with the uk regulators -- time for uk regulators for more time for the deal good news or expected news for microsoft and activision the shares of csx falling following the mixed second quarter earnings and they were in line, but revenue missed.

the ceo said it is challenging and tumbled 10% year over year the index is on pace for the longest winning streak in nine months and ftx is suing its founder sam bankman-fried and three others including caroline el ellison over misappropriations of funds the lawsuit was filed under restructuring expert john wray it takes aim at the awards and real estate purchasing and other transactions that the company said should be reversed under bankruptcy law. we have breaking news at the white house. its efforts to safeguard a.i

we have eamon javers with that story. >> good morning, guys. the white house says president biden will convene seven a.i. companies at the white house today including amyloiazon and and open a.i. to secure voluntary kmcommitments to what they are calling safe and transparent development of a.i things like internal and external security of testing systems before released and sharing information across industry and with governments and civil society and academia investing to protect unreleased model weights and third party discovery and reporting of vulnerabilities in the a.i. systems. developing robust technical mechanisms to ensure when users know content is a.i. generated

with a watermark system which is in use in some companies across the industry the attention is the white house wants to assure the safety of a.i. technology and assure the innovations with made within the united states which requires delicate balancing of priorities here expected at the meeting is brad smith and kent walker and nick clegg. nick brockman and adam selipsky. we also expect to see president biden making remarks on a.i. to outline this agreement that is expected to take place that roosevelt room at 1:30 this afternoon at the white house. >> it is fascinating eamon, thank you let's bring up the dow i screwed this up. take a look. you will see where the dow has come for the week to date. if you can call that up.

yesterday, the dow was up not 14 points, but 163 points >> the day before. >> week to date is up 2% 35,225 over the last four days. friday was up as well. >> averaging 200 you know, i don't know who we have left to have on to talk about markets. >> amy wu silverman. >> she set it up a montonth ago i just can't keep saying to people, do you wish you had not been calling for a retest of the lows >> everybody would with. >> -- would. >> a lot are saying take profits now or don't get caught up in it none of their clients have profits. they were not telling people sdppeople >> it is scary to chase after that >> you say you retest the lows

and you don't like the market, you are not zero invested. you don't tell people like tom lee or the guy at stifel you have to buy at 4,000 mike wilson, somewhere in hiding, or the guy from piper that was on. piper sandler who was on here. he was talking about it. don't we know? most of them were saying the recession is the reason. where is the recession maybe is it still coming >> we started talking about that yesterday. inverted yield curve is signaling for recession. it hasn't shown up amy wu silverman is talking about the best option strategy none you are better off owning the s&p or the averages. >> the housing recession is already over >> i saw that rticle, too. all of the home builders did great and reporting very strong

numbers. >> supply. >> supply is the issue no supply. nobody wants to sell their house if you have a sub 3% mortgage and trade to 7%. >> right think about what you said. you had a sub 3% now 7 used to be a good mortgage of the. >> it will take -- mortgage. >> it will take a while. consumers will get used to it. it froze businesses. >> it is not like companies cannot operate. >> it is sticker shock >> it is from where we came from after 10, 12, 15 years of even lower rates. if you have a decent business and you get a return on equity, you can borrow money at 5%. >> there were companies that set up that did not have operating models to allow for it they were set up based on that >> i feel the same way about homeowners homeowners got a monthly --

>> mine will readjust and it's like what? >> there is an example people who planned for a specific monthly check they pay and now pay a bigger check and they don't have the money. >> if you have a certain amount to spend on a house, you buy less house and prices come down. we have been talking about a.i. a lot sergei brin has been visiting alp alphabet's headquarters four times a week he is developing to push the a.i. offering of the company brin is also is taking a lead role in the new hires for the project. he is very motivated and interested and involved like he hasn't been pin years. >> larry hasn't been involved in

years. he has been closer by physically >> energized because he is so into the project. >> that is cool. they are both amazing. >> yeah. >> if i went back to a place to help them with a.i. efforts. >> yeah. we're so glad to see you >> i would not have a lot of input, probably. about the algorithms and code and stuff. i might adjust a little code here and there around the edges tweaks coming up, what to watch ahead of the opening bell. and amc theaters dropping a plan to increase the seat prices they will not do it. more on that story you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist wealth.

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woelcome back. the nasdaq 100 is going after a special rebalance which will impact the opening bell on monday it is designed to reconcentrate the seven stocks that made up the first half rally seven stocks with 55% of the index. after the rebalance, it accounts

for under 45% of the index in another shift, apple will become the heavily weighted tech stock in the nasdaq 100 moving microsoft to second place. microsoft and nvidia will see their weightings fall by 3% and google drops 2%. according to the nasdaq, names like starbucks and mondelez and booking and gilead could see weightings increase. t amy wu silverman is with us. amy, it has been a painful year if you are trading options throughout the first half. >> yeah, that's right, becky one of the stats i like to share is year to date when you look at every option sdtrategy availabl to you overweighting. you have been better off owning the s&p coming in at 15% relative the other option

strategies which managed to un underperform this year >> that is disheartening if you research this and if you had done nothing and indexed it, i would have made more do you think that continues in the second half or are things shifting here? >> yeah, i would say two things about that that is interesting. the first is it hasn't stopped people from continuing to sell volatility to harvest that premium. second, this is a year-to-date number however, last year, there was out performance in option strategy i think it really is coming to a point where we don't know where the second half looks like especially with the outperformance year to date. >> you point to murphy's law murphy's law is whatever can go wrong will do wrong. what is murphy's law look like for investors in the second half >> interesting question. i always think of murphy's law

is a joke, but sort of not, if you think of the trade was for investors the year it has been the rip up we were not positioned for it. i heard you talking earlier about the impending recession which has yet to happen. that is on everyone's mind everyone was bearish i saw that in my conversations with investors murphy's law from here is just a rapid and hard selloff in tech and overall rapid rise in volatility we are not positioned for that we realized volatility level with the s&p going back 15 years with historical low. >> do you think that is likely >> this is the question that we struggle with which is when option prices get this low, it doesn't necessarily mean it is time to buy. it is simply time to buy we're at bargain basement prices another stat i like to look at

is it costs 40% of what it cost a year ago on the low quality basket carvana or peloton they are highly levered. the costs have sunk. what is the catalyst that gets it going that's what we need in the options market it could be a sale or black swan or earnings. there are catalysts coming up. there is nothing priced as of now that takes us lower from here. >> we are starting earnings season and mostly seen financials and insurance companies. you think it could get more interesting as we get to the tech companies >> i think it can, becky i think part of that just comes from simply the weight we are going through the rebalance. the reality is these are still ultimately still heavyweights. if these stocks go, so the market goes. you saw that with netflix and tesla and part of the

magnificent seven. the large heavy weights have yet to come. it impacts the index level which feeds into the price of options. >> amy, thank you. have a great weekend. >> thank you you, too coming up, can "barbie" save the box office two hot releases out what it means for the strike and othesuer mier mmov sos so far we will talk all about it when "squawk box" comes back.

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( ♪♪ ) ( sfx: people cheering ) ( sfx: stock exchange bell ringing ) ( ♪♪ ) ( ♪♪ ) ( sfx: people celebrating ) ( ♪♪ ) ( sfx: people celebrating ) ( sfx: stock exchange bell ringing ) amc dropping its plan to charge more for better seats the company announced the

statement in february with better sight lines and reducing the price of less attractive seats. it tested the program in three u.s. markets, but found movie goers had no interest in the seats which includes the front row and as we are entering "barbiheimer" and they didn't want to price out of the seats consumers wants. and today marks the most anticipated opening weekend of the year for hollywood "barbie" and "oppenheimer" is known as "barbiheimer. >> "barbenheimer." >> it gives more weight to "barbie. >> "barbenheimer." >> it should okay all right.

"barbenheimer. some people are seeing both. they will be there for a while better get plenty of popcorn it will hit theaters across the country. warner bros. "barbie" is expectedexpect ed gross $100 million this weekend. and "oppenheimer" is expected to gross between $40 million and $60 million. joining us is our media analyst. paul, if you do this for a living -- are you excited, too >> it is 3:20 in the morning here on the west coast i'm up and ready to go see "barbie" and "oppenheimer. the "barbenheimer o" is giving shot in the arm to the movie theater business with the turmoil going on according to the numbers, the summer movie season heading into the weekend is $2.4 billion down

or 7% from "top gun:maverick." the fact we are talking about the mash up about the movies is excitement for "barbie" to take the weekend, but "oppenheimer" is awards projection. no less interesting and fun, by the way, this is really a positive hollywood story right now. >> it is it has been rough. it has been rough. look at 2020 pandemic totals were staggeringly 6.9 billion fell to 1.4 in 2021. that is a famine for the movie

industry >> march of 2020 is when the theaters essentially shutdown. the box office of 2020 was $2.5 billion domestically going down from $11.4 billion the year before. we areexpecting to get over $9 billion this year. with the writers and actors strike, that may provide headwinds for the production pipeline and ability of actors to go out and promote their movies this hasn't hurt "mission impossible" or "barbenheimer" because they had marketing well in place this is a freight train, the "barbenheimer" thing audiences are loving it. the big screens for "oppenheimer" for the large formats and imax and 70 millimeter film experience is wonderful. and going out in groups and

seeing the movie together and a double feature where amc reported they are selling a lot of double feature "barbie" and "oppenheimer" tickets. this is great news for the box office and studios we still have many weeks to go in the year and the summer movie season which ends on labor day monday a lot of big movies coming out in august. had this is a really dynamic time, to say the movies >> double feature. i haven't heard that term. >> it's been a while >> "mission impossible." i heard of that one. "indiana jones." he's around. he's 80. some are long in the tooth "spider-man. how many of those can you make the article in the journal is they are not buying it any more.

some of it is insipid and boring harrison ford cannot make another one, can he? >> i don't think it is a problem if it is a fourth or fifth installment or whatever you want to call it the thing going back to your point, joe, these two movies are originals. we all know "barbie" brand this is not part of the franchise. it is not the seqqsequel "oppenheimer" is an incredible story, but not part of the franchise. it is really cool for these two studios to go all in on the tour driven non-superhero and non-known ip now we are seeing this in the

middle of summer this is, i think, good news for the industry moving forward. you have to create exciting new movies and we are seeing that this weekend. >> we don't want an "oppenheimer" sequel that's not about -- it is christopher nolan. an nmazing when the director lie james cameron or something like that >> he is a brand unto himself. he is in the mt. rushmore of directors. christopher nolan. he makes you think his movies are complex he has a way of shepherding you through something likes "the manhattan project. and killian murray looks like oppenheimer and then margot

robbie as "barbie. this is the haley's comet of movie weekend because it is unique with the marketing has combined these films >> paul, you are doing what you should be doing. do you go to the film festivals? you are at teluluride i have to remember who you are i'll look closely. don't shave sdplchlt ishave. >> i have a long last name like oppenheimer. >> thank you, paul. coming up, a.i. anxiety. data on how americans think a.i. could impact or, yes, replace their jobs more on that when we come back here on "squawk box" here on cnbc on a friday morning

welcomecome back. new data shows americans have a.i. anxiety we have steve liesman here >> becky, the tech industry and

stock market welcome artificial intelligence with open arms and enthusiasm, but the all american economic survey shows america has anxiety over a.i 37% were comfortable and 59% were uncomfortable for minus rating of 23 it has grown to 27 comfortable and 69% uncomfortable. a.i. is more and more in the daily lives and the negative rating has risen to 42%. for any question we ask, majorities of every demographic group say they are uncomfortable with a.i here it is by age group. the young, 42% comfortable as the age groups get older, you see that it gets more and more uncomfortable. up to age 65 78% say they don't like this very much. moving on when we ask about public faces of a.i. no acceptance of

customer service and diagnosing and they hate driving vehicles you look at the same groups which changed since 2016 they were even with it ran now negative in professionals. blue p collar workers doubled now negative even income levels what will happen 21% thinks it makes their job easier 18% think it will replace their job. 49% think it will have no effect they may not be aware of what will happen here i don't know one question raised by the numbers. does the public discomfort make it easier to regulate the industry and uses and the question of where the public is right to be uncomfortable or matter of education about the potential benefits. >> a little bit of all of that when you ask this time around

and 27% felt comfortable with it and 69% said they didn't 96%. you add up from a few years ago. 95%. the other people never heard of it >> i'm glad you pointed that out. becky, what you just did with the 96%. 4% unsure. >> they don't know. >> that's a low number we asked questions of the federal reserve about this company and that company things that we're doing all the time 20% or 30% don't know about it i'm telling you right away. >> a lot of people have an opinion on this than know who the vice president is? >> exactly >> probably as informed opinion -- opinion. you know how doctoring is an art and not a science. we already miss the bedside manner of the country doctor it already has gotten more

can you imagine with a.i.? can you imagine? if there is a costly procedure and you are at a point where a machine is like, i'm sorry you are not getting this or eligible it gets scary if you cannot appeal to the humanity of your physician. >> you are arguing people have a right to be uncomfortable. joe, do you know the pun i was making with a.i. anxiety what mel brooks movie? >> "high anxiety." >> it was a spoof of >> hitchcock >> "vertigo. >> i took a test yesterday i have a boomer on movies. >> you know. >> will you stay with us we will continue the conversation joining us right now to talk about the impact on the white

collar work force is the founder of heroics michael, i don't know if you had the opportunity to hear what steve was just saying. i'm curious how much anxiety we should have. >> i did hear it i admire steve i have never been able to be on with a segment with him. hi, steve. a.i. is coming for the jobs. it is definitely coming for your job, whoever you are one of the big changes about this revolution in technology is not unique to the revolution it is certainly more pronounced than this one than in a long time it is coming for blue collar jobs and manual labor jobs and entry level jobs and also white collar jobs. we will see a.i. taking on 80% or 90% of what lawyers do or

doctors do consider radiology patients would be well advised to prefer a machine with machine vision with a.i. to identify tumors or other problems on film than human eyes. marginal exceptions. computers are better at it than humans >> michael, when you hear microsoft or google and i remember interviewing naydella a month and a half ago their service called co-pilot. the idea that a.i. will help you. it will be a helper. an assistant you will be the -- the human in control. it will make people more productive you are saying that is not right. >> certainly true for a while and some things, it will be true forever. when a computer can do something a human can do 100% better -- i'm rooting for a.i. to

takeotak take overall america, they will have no accidentsmaturation. setting that significant risk aside, a.i. will do it better than almost every human. this is part of the future by the way, i'm bullish on it. i'm not a techno pessimist we should embrace it we should win this war it is a global war the spoils will go to the winner america should get behind it we should be aware it will come at a cost of a lot of important things including the welfare and work-fare of americans the thing we know about the internet is the spoils almost all go to the winner a power law curve in the spoils and gains of the internet versus the normal distribution or

natural law curve in nature. as a result, you have gazillionaires like musk and gates. in nature, we don't have someone who is 100 feet tall the tallest is 8' or 9' tall of t the -- tall. >> my question is do we need to set boundaries do i have a right to know i'm informed by or serviced by artificial intelligence? i know they do it with the voices you will never nknow if it is a non-human. do we have a right to regulate and limit how much a.i. is in our lives if we don't want it? >> i like what you started not where you ended. we should have transparency into

the algorithm or what informs the machine. the machine is only as smart or dumb as what we teach. if the machine is taught on the tumor today, it may not understand it tomorrow and the road conditions. we need that sunlight and transparency consumers should not only know where the data comes from or their data i think that's a good start. limiting the application of a.i. could get america behind in the race >> isn't the dream some day we don't need to teach it and that's where the singularity comes where the machines know so much that they're able to make advances on their own before we teach it that gets dangerous. >> exciting and dangerous. the scary investiand dangerous.

on whom to fire and when and makes the decision by itself or when we are doing something responsibly politically and decides to siphon the votes. we're a long way away from that. if we get ahead of this, i don't mean minimum billable hours for lawyers, but actually get ahead of it. >> is anyone safe, michael i would think surgeons would be safe would it be possible with what you said about radiology and we do have machines that perform surgery now. >> sure. >> aren't there things that happen when you need a human there? >> there will always be something. new jobs we shouldn't be afraid of jobs the top 1% or 2% or 3% of performers in any field will be safe what about the rest of them? the student debt from graduate school and law school who can

never pay it off what about the future doctors in the same situation a long time ago, monks were the most educated and it took a lifetime to copy one bible the guttenber gourkg press cameg we have more white collar workers and blue collar workers now. social disruption is coming. >> you should get a.i. to redesign those beams that is a rubik's -- >> i'm in an airbnb in copenhagen >> that looks cool >> this is super danish. the danish airbnb team assembled this a few minutes ago it was all steel

>> thank you, michael. save us all. thanks. >> sorry, i can't do that, dave. >> yeah. open the pod bay doors. coming up, materials lagging the broader market a closer look at that sector then, later, messi playing his first game for miami tonight. that's notha tt guy. that is don garber the major league soccer commissioner we'll be right back.

welcome back to "squawk box. look at u.s. equity futures. green on the green after a big green week dow up 53. nasdaq up 75 nasdaq looking to open 13 points higher. the biggest laggard this year and we have dom chu with the sectornomics >> it is 2.5% of the s&p it doesn't have a huge effect with the overall picture for the markets. if you take a look at the performance so far over last five years or so, we have seen handily out performance from the index against the sector which is the orange line right there 69 versus 38 if you look at where we have seen the most and least volatility within stocks within that sector, we look at the beta, a mesasure of the broader

market the stocks have tended to be in the last five years the most volatile freeport nucor on steel and albemarle lithium. all three of the stocks are the most volatile in the last five years. as for which ones have been least volatile, look at the names like newmont and vulcan with gravel and concrete and then fmc on the sciences and crop side of things. these are the least volatile stocks in the last five years according to data from wise charts the materials sector is not a huge influence on the market, but comes up every once and a while with the volatility trade. we will see if it plays out in the second half. joe, back to you >> dom, let's talk monday when we know it is all said and done.

>> did you see the travis smyth hole in one at the open championship >> is that true? >> in this open championship on the 17th hole the controversial 17th hole. >> you know a lot more i'll get up to speed today >> i'll talk to you on monday. thanks >> still to come this morning, $12 billion merger creating the largest self storage company in the country. we taltohek t ceo exclusively next we'll be right back. >> announcer: sectornomics is sponsored by sector spdr etfs.

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new york mets owner steve cohen revealing a stake in chewy this is according to the regulatory filing. asset management company saying it has taken a 5.8% stake in the company. chewy sales between $11.15 billion and $11.35 billion you have the dog chewy is your place? >> we ran out finally. we got stuff and it was good if you are watching -- we ran out. >> you ran out of stuff? >> of the initial of what we had. it's good. it is nice to get something other than kibble. it is nice when the dogs look at me and say really? we tried freeze dried chicken. >> a delicacy? >> no, bones and organs. >> a dog delicacy. >> you don't have to put much in for them to eat the kibble

>> i never had a dog i had a turtle >> let's not talk about that >> a turtle. we used to have a rabbit the delicacy for the turtle was we used to feed the turtle, i shouldn't say this on the air. live goldfish. >> i thought you were saying people >> you can't say it on air. >> it was a delicacy >> that's like feeding one pet to another that's really bad. >> it wasn't turtles >> i was a child extra space storage merging with life storage in the $12 billion all stock transaction deal according to rifinitiv, it is one of the top five this year. the company is the largest storage facility firm with the number of locations and largest reits

joining us is joseph, the ceo. is there a boom right now in storage space because we have too much junk in america >> we don't have junk. we have valuable possessions that need to be stored safely and securely there was a boom before the pandemic, but higher interest rates and costs have put a slowdown on the delivery of new space. >> let's talk about the deal real estate investment trust, by the way, gets a bad name why does this deal make sense to you and why is the storage space a different arena withreal estate investment trust right now? >> sure. thank you for the question storage is a great asset class because it produces stable and consistent cash flows through all economic cycles. storage is a need-based product and needs that give storage

occurring through good and bad economic times we have high operating margins and low cash flow. our product is highly granular 3,500 stores and 43 states no one tenant or store or market can affect our poerformance because of that, we produced high levels of growing and consistent cash flow this deal is good because in the storage industry, scale matters. it gives us more data to analyze all an of our decisions and pricing. gives us economies of scale. we have synergies to unlock from the transaction. >> you mentioned a boom during covid. what happened? is that the same with other sd industries and people were doing

more and now getting back to normalized trends? >> we saw two things happen during covid increase in demand many people had to work from home or educate their children at home, so they cleared out space, an extra bedroom to have a home office or home school or stuck at home and could clean out the garage and store their things many businesses needed to store excess industries. restaurants operating with half the chairs and tables. we saw an increase in demand people just stopped transacting and stopped moving we had two of the best years that storage as an industry has ever had now we're decelerating back to normal growth rates. >> joseph, thank you for your time today we appreciate seeing you and tell us about the sector we did not know about

thank you. we appreciate it >> thank you coming up, results from dow's american express and then one harvard student putting chatgpt to the test for assignments. does the technology get a pa passing grade? "squawk box" will be right back.

good morning stocks looking to end the week on a high note with the dow riding the longest winning streak since 2017. futures are higher once again this morning at&t and other telecom companies tangled up in the mess we will hear from the ceo of the lead cable problem and earnings expected from american express we will bring you the numbers when they hit and find out what the company is saying about the state of the consumer. the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc live at the nasdaq market site

i'm andrew ross sorkin with becky quick and joe kernen the dow is up 15 nasdaq is up 80 and the s&p looking to open 12 points higher right now. treasuries right now with the 10-year treasury and 2-year treasury this morning. 10-year treasury is 3.841. 2-year treasury at 4.846. >> you are covering a little american express 173 to 174 go ahead, becky. >> american express out with the earnings that was eight cents better than expecting. it comes on the revenue which missed estimates that may account for the shares off 1.75%. also reporting a loss of $1.2 billion. that was up from last year, but stable from the first quarter. american express saw strong travel demand with bookings

through the travel business hitting the highest level since the pandemic the company reaffirming full-year guidance i spoke with jeff campbell about the results. the ceo. he have said they are spending up 8% year over year the biggest demographic with the millennials spending that's up 21% year over year travel and entertainment is strong up 14% year over year. they expect double digit growth for the rest of the year they know these things because they have the largest travel act a -- agency in the united states. that's what we hard from the airlines industry. reservation for restaurants business had the largest record number of restaurant reservations ever. it is larger than the airline spend. that is crazy. the airline spend has always been the biggest people are dining outs and having delivery a lot. that continued from the

pandemic >> talk about credit loss of the revision reflects higher net write offs $327 million in the reserve build. there are some with earnings bracing for defaults in the future because people are debt strapped >> it is much less of an issue with american express of the t - express. they don't think it is a problem for them they have higher credit standards. there is no indication of inflection point of spend with the restaurants or anything. they have not seen any of that they have a new announcement with the long-term partnership hilton is a partner. they are renewing through 2023 this is a partnership that has lasted for seven years with hilton they locked it up for another ten years. the stock is off 2.5% so far

>> it was near the high. >> i asked why you are so competent for the year, why affirming guidance instead of raising guidance if you are so sure he said we don't give out quarterly guidance it is not something they like to do warren buffett owns 20% of the company. they don't like to see guidance coming out on this he said we offer it once a year. unless it is wildly off, we won't readjust the numbers he said it is not an indication of the slowing sector. >> if we don't see it, we will pay a visit. unlike other ones. >> during the pandemic, they canceled a lot of cards. not during the pandemic. the financial crisis in 2008 they canceled a lot of card members because they didn't want to be stuck in a position where people couldn't pay their bills. they are pretty tight.

>> you can get a fancy one you can get a metal one. >> a black one >> platinum. now the store is up 3.25%. the street will have questions and will want to hear more at the conference call. the stock is off this morning. >> i'm a big fan of american express. the best thing about them and platinum american express card has an insurance program which people don't know about which impacted my family ten years ago. a medical thing. they will rescue you in the middle of nowhere. people don't know about it it is an amazing thing by the way, they don't advertise it really, in part, because they won't be happy with me saying this aloud they are worried too many would use it >> you are saying good things about american express >> the best things possible. as a customer. i'm not speaking about the stock. >> if i don't repeat stories or

jokes, i don't know if i could do this any more don't be afraid. >> silence >> the sound of silence. let's get to dom chu with the pre-market movers. tommy fleetwood. he's got game, dom >> he does again, the update for you and the crew there the hot ones out of the gate brian harman min woo lee and rory mcilroy i told you the update. >> good job. >> we will continue on the travel theme planes, trains and automobiles for movers planes here for becky. united airline stock down this morning. .25% after the 3% gain yesterday on the heels of better earnings

and bullish forecast of the travel demand. the positive with the slate of analysts out yesterday with comments and today with the coverage of jpmorgan chase which is upping the target to $93. it was 70. they like better international trends it is the positive effects on the operating metrics. united airlines shares down after the gain yesterday on the train side, csx getting derailed this is the second biggest publicly traded railroad operator by market value down 5% right now. thin pre-market volume earnings came in line with estimates. revenues below estimates with the lower volume with containers shipped with multiple vehicles intermodal transportation and lower pricing dynamics and we end on the automobile side carvana is stable in pre-market

on 80,000 shares after dropping 16% yesterday. the used car retailer has been on fire as of late a debt restructuring and stock sale to raise capital. piper sandler is downgrading it to neutral after the overweight. they bumped the target price up 48 from 39 bucks they need more market share gain carvana is well off the peaks we saw during the pandemic. it has been a very lightning rod stock. joe. >> that's right. quite a chart, dom thanks for more on the markets and earnings, let's bring in keith banks of the pension and benefits plan of bank of america. keith, good to have you on i'll not have to shame you into your callcalls.

you haven't been on in a while in charge of pension plans -- you need to stick to some rules in terms of asset allocation you need fixed income. you need a stable portfolio for pensions, but need to be invested in stocks as well i can't ask at the beginning of the year what you felt about the markets. you were probably fully invested depending on the assets allocated. >> correct at the beginning of the year, we were not as bullish as the market has played out to be this year, joe. we, to your point, is our recommendation is to be fully invested in equities and fully invested in fixed income and depending on the risk profile,t posture. having that balanced approach helped us. having exposure to value and growth when growth really took off, especially technologies,

being exposed to that was a good thing. >> we wanted more breadth after the magnificent seven. the dow, i don't think of broadening out f nine days in a row is significant in terms of the expectation of recession, is it not? >> it is good. look, the magnificent seven drove 73% of the first half returns which is crazy the stock on average each was up 90%. that is not sustainable from driving the overall market we need to see the breadth broaden. >> does the dow count if it widens to the dow? is that is widening? >> it helps. >> the s&p and russell. >> we fneed the s&p and russell s&p is up 19%. if you look at the equal weighted and cap weighted, it is

a big difference >> you point out the lon awaited recession may be a series of rolling recessions that don't add up to one big back-to-back quarter of negative growth >> that is the interesting thing. we have a $26 trillion economy that is basically made up of different sectors operating at different speeds what we saw in the first half was a rolling recession in manufacturing and energy and you had housing, clearly, as well. that's playing out while the services economy is booming. instead of having the balloon pop, it has been a slow letting out of air we have 2% growth in the first quarter. our economists think we will see 1.5% in the second then it continues deceleration through the rest of the year and mild recession built into the forecast in quarter one and quarter two. negative 1% in quarter one and negative .50% in quarter two and

you start to come out of it. we think the rolling recession has really taken out the big bang risk of the hard landing which a lot of people were worried about at the beginning of the year. >> we need to adjust 2024 earnings estimates or have we seen the low in corporate earnings >> our boa global research is 235 next year sdp >> this is not you this is boa global research. if they are wrong, you can't do anything about that? you are subbing this out >> we rely on our partners. >> you do? >> we have very talented teammates that were able to work closely with they are looking for 235 next year i believe the consensus is $10 higher than that if we get that deceleration of earnings, my guess is you could see the 2024 estimates pulled back joe, if we get to the point where we come out the other end

and earnings plateau and grow again and we get a sustained greater breadth in the market, that could be a catalyst for the next leg of the bull market. at the same time, that allowed the fed if the inflation surprises to the down side, think about it, last june, cpi was 9% this june is 3%. core is higher it is still too high, but that is a heck of a positive delta of the that-- positive deal we are still calling for two the economy he is still strong enough and inflation is sticky enoughlower levels if all we get is 50, that's not so bad that allows you to look over to the other side. >> all right i think your pensioners can feel good >> we hope so. >> keith, thank you. >> thank you, joe. >> nice to see you auto nation reporting.

earnings of the adjusted $6.29 per share was better than $5.91 that the street expected revenue at $6.89 billion that topped estimates. new vehicle revenue increased to $3.3 billion which topped estimates for the quarter. used vehicle revenue dropping 17% to $2.1 billion which was shy of expectations. that stock is moving higher on that news. 2.3% right now we have more coming up, governor hochel talking about the telecom cables we will have more when "squawk box" returns after this. with the widest selection of shoes from the hottest brands

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scrutiny we have the ceo of u.s. telecom, which is a national trade association representing the carriers jonathan, welcome. how big of a problem do you think this is? >> first of all, becky, thanks for having me. it is great to represent the american telecommunication industry there has been speculation the last few days. that is the reason we have been putting out facts. clear facts. the facts we have been offering have really addressed many of the concerns the fundamental fact is that only a small portion of america's infrastructure is actually lead sheathed these cables are placed in parts of the country which are minimizing the opportunity for access from the public you know, we are going to take the environmental protection and health and safety of our

communities very seriously we have and we will and we will continue to do that as we move forward through the process. >> jonathan, let's cut through this a lot of noise is around this. it is not all cablecables at&t said of the two million miles of cable it has, that is 10%. that is 200,000 miles. that's a lot 2/3 of that is not a problem because it is buried deeply and not leaech out. that still is cable that needs to be checked out with the cables in the air or water they don't want to remove the cables including the one in lake tahoe because they don't know what happens if you remove the cables and if it creates more of a problem. you are talking about tens of thousands of miles, at least, of cable that will have to be checked and looked into. some of the cables go back to

the 1880s. we stopped using led in the early 1950s. some are still in use and it is a problem people hadn't thought about. it has had a huge impact earlier this week, at&t had a 30-year low with the share price. verizon with a 13-year low both stocks moved higher when at&t moved out to say here is the surrounding issue. this is a problem we did not realize was out there. the guys who study lead at the environmental defense fund did not think it would be this big what do you do >> i think what we do is do what the companies are doing which is started sight testing in various locations indicated by the wall street journal report. we provide testing to employees, both on the company's time and on the company's expense we are working closely with and

constructively with regulators and policymakers we are making available information thaand moving rapidy to ensure we can emphasize the fact that there really is a small portion of cables that are lead sheathed. we will address these on a case by case and site by site basis. >> we had the scientist on yesterday and he said this was a surprise to him. he did not think it was beyond the lake tahoe situation he was surprised how big of a problem this is across the industry of the were your members surprised by industry. were your members surprised by the level? >> the infrastructure and our cables is well documented. becky, you mentioned the 1880s to the 1950s where they were replaced with plastic and fiber

optics today we are following the science and the facts. we will act accordingly. i would say one of the things we sought from the wall street journal is the data an and recos which they have not made available to us. we want to continue to do site testing. we like the journal to share its information with us. >> jonathan, in terms of the issues of lead poisoning, it is documented lead is a naturally occurring substance. it does occur in other places. even the environmental defense fund said a bigger problem is if you look at peeling paint and water pipes which have been made out of lead as well. how do you get your arms around this with employees worried about what they have been exposed to >> we are providing testing to all employees who seek it on a

voluntary basis. it is really important to emphasize that the existence of lead sheathed cables does not equate to the public health crisis we have seen the evidence and there is no indication it leads to a public health crisis. we will work with policymakers anors to address the issues we will make sure we can drive as quickly as possible to find answers. it is important to reemphasize as the companies are putting facts out to the public that of the overall plant of the telecommunications cable infrastructure, there is a small portion of lead cables >> jonathan, an economic question when you advise and talk to the different telecommunications

companies about how much money they may want to actually put in a rainy day fund, if you will, to deal with this, what is that number in your mind look like? >> first of all, i think we need to not jump to conclusions about these types of matters we have to look at the science we have to continue to do the site testing we also have to make sure that we're assessing this on a cable by cable and site by site basis. there is, as the edf colleague spoke about yesterday, good reason to leave some of the plant in place to minimize risk to public health >> no, no. i appreciate that. as i -- those in the risk business and investors are trying to understand the potential cost and potential liabilities. i recognize there are people who are suing and seeking damages and all sorts of costs that some people say $60 billion and i

have to imagine internally within your space, you have a different view there has to be some number attached to that. >> i can't speculate about those economic models of the what i will say is that, again, our first and foremost opportunity right now is to follow the science and undertake testing as broadly as we can on a site-by-site basis and follow the facts accordingly. that is one of the reasons why we have undertaken the csite testing and working with regulators and policymakers and why we continue to do that as we really focus on the health and safety of workers we employ and communities we operate in. >> jonathan, thank you we appreciate your time. >> thank you >> "squawk box" will be right back >> announcer: time now for the aflac trivia question.

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what was the first company to introduce plastic credit cards the answer american express. before 1959, cards were made of either celluloid or cardboard. some breaking news from the white house this morning eamon javers is joining us with details on how the biden administration plans to ensure that a.i. tools are secure eamon. >> reporter: joe, president bush will convene several companies today including amazon and google and meta and microsoft and open a.i. to announce the administration has secured voluntary commitments from the companies to help more toward what they are calling safe, secure and transparent development of a.i. technology the white house says the commitments will include

internal and external security testing of a.i. systems before release and sharing information across industry and governments and civil society and academia investing to protect and reporting of vulnerabilities in the systems and developing robust mechanisms to ensure users know when content is a.i. generated such as a watermarking system which is in use in the a.i. world right now the tension here is the white house wants to ensure the safety of a.i. technology and made sure the innovations are made inside the united states rather than around the world, particularly china. that requires delicate balancing of priorities. we sexpect to see president bush talking about the a.i. statement in the roosevelt room at the white house at 1:30 this afternoon, joe. >> it should be interesting.

you know what? good eamon, let's think about this before something gets out of hand what a concept we should have done that with bio-tech engineering in different parts of the world >> reporter: everybody knows the terminator hypothesis. a.i. goes rogue and expands and it gets out of control that is one thing they are worried about, but disinformation and bad information in the marketplace and bad information in politics. they are concerned this is all voluntary for now. this is the beginning, maybe, of regulatory scheme. this is the deal with the companies and administration this is not legally enforceable at this point. >> eamon, even after the skin is gone, the metal skeleton can come after you >> reporter: that's the problem. the one that melts and goes under the crack of the door. >> that, too these are things to consider

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the latest cnbc all america survey finds that the public thinks it is inappropriate for companies to take a stand on political and social and cultural issues. steve liesman, you didn't ask me i would have been in the majority there. >> watch the data. tell me. take note. >> worse >> joe, americans like chips and nuts with beer the economic survey they do not want politics with the beer. 32% say it is appropriate for companies to take stand on social and political issues. 58% say it is inappropriate. inside that number, 44% saying it is true most of the time. a measure of the intensity of the people's views here. there are strong differences by party. 43% of democrats think this is inappropriate. there is the republicans 71% do not want companies taking such stands. here is the other side of the

story. the public doesn't think it is right for politicians to criticize companies for taking the stance 63% say it is not appropriate. politicians should not harang companies for doing that maybe governor desantis wants to note that data good agreement by party. 63% of democrats and 71% of independents and 72% of republicans. this is the rise of the activist consumer those willing to take action based on their own political pl beliefs. it is a minefield for companies to be on the wrong side of the issue. 47% have boycotted a company because they disagreed with their political views. that just shows the downside you don't want to be on the

wrong side of the issue when it col comes to party 42% of independents and republicans at 59% boycott side the data suggests keep out of the political fray it is not that easy. especially if there are widespread changes in public opinion and it gets more difficult. it is not easy, joe. >> no, it isn't. and people forget it is a culture war for a reason there has to be two sides of a culture war. you will not satisfy all of the people there are certain people i know, yale professors, that think companies need do the right thing, but every single right thing is on one side of the issue. if the ceo is not willing to weigh in on the correct side of the issues, they get a lot of flack. there are two sides to every

story. >> what if you are not taking a political stand and you end up being seen taking one? >> right. >> budweiser is the example. they were trying to influence the transgender community. it was picked up in social media and made into bud light is promoting transgenderism i don't think they were. i don't think that was the intention. it was a slice of the marketing campaign where they were trying to reach out to a community. maybe the same with target which put a couple of pride shirts in there and they are advocating for the lgbt community >> i think this has been weapon weaponized >> it has been weaponized on both sides let's bring in -- >> looking at pictures that joe put on >> i had a picture of her feet sdplchlfeet >> this is inappropriate i'm boycotting

>> the soap you use. >> clearly >> eric desenhall. how are you, sir >> good morning. >> instead of trying the virtue signal as a company, they should mind their ps and qs and do the best they can for employees and consumers and best they can to keep pcbs out of the hudson and do all that that doesn't come back to haunt you. whatever the virtue signal of the day is and just don't go there. >> for every company that takes a strong position on something like this, there are 30 that do not and do perfectly fine. nobody hears about them because they don't want anybody to be talking about it there is no question that there are marketplace considerations and an times, for exakexample,

company sponsors lgbtq issues and a time when they should do it the time is the myth is driven by the marketplace it is not. a lot of it is driven by the cohort of people who occupy the advertising, marketing and communications and pr and crisis management function which are looking for applause within their tribe and positioning as this is what is best for the company. i think that on the broader cultural level, we are dealing in an age of exhibitionism god forbid everybody doesn't see me and know what i feel. that may be fine if you are kim kardashian it is not fine if you are a large consumer product company it should move within a certain window let's not forget barack obama did not support gay marriage and

then he eventually did the areaction was so visceral ad deep that it fed to the badge customers we don't like you. even if it wasn't their intention. >> we support gay issues here at cnbc i have been wearing a pink tie every single whatever we do. what month is that? bullying whatever it is we never had pushback. eric -- >> you should. >> it is weird when it crosses some type and becomes viral the weaponizing started -- people say the first move is the company becoming woke. that is where they weaponize >> using woke as an epithet.

i say here is a group of people who are inn tolerant of people o are trying, with good intent, to include other people who have been marginalized. that is what we are talking about. marginalized people who have been marginalized and other people who want to marginalize them and we sit here and say it is okay and fine it's not be rationale >> what with e're talking aboutr is power and money companies are going out in some cases and doing this sort of thing in order to increase market share politicians, on the other side, are seeing the possibility of wedge issues to rally the base and gather money it is a fight between companies.

>> do you agree, eric? >> i think there is a difference with culture with tolerance and endorsement. when i was growing up, the term we heard was tolerance we did not hear endorsement. i think what has happened with the woke movement is companies are seeking to become our moral tudor. i may like my iphone, by i don't really care what apple computer cares about the choice issue or the palestinian-israeli conflict i think what is happening when we go beyond tolerance and into endorsement, which is always from a particular political persuasion and i think this is the landmine we're stepping on >> it is not that simple. >> can i ask a question, steve eric, i understand what you are saying by endorsement, is that showing anybody who is different in advertisement? is that endorsement in your view >> i think it depends on what is

happening with the particular issue. years ago, by endorsing lgbtq+ issues, that would have been radioactive. nobody would have done it. in 2023, it is done commonly and it should be done and in many cases, if appropriate to your company. i think we're in a situation where people are going beyond where the sweet spot of the public is and that's what you have to pay attention to here. it is not that simple. it is a mine field >> let me ask about the company nike nike has leaned in to what might be described as social issues for a long time. >> they should >> you can think about the colin kaepernick issue >> the right example >> you could argcould argue rep and democrats all buy nikes. they walked through this why have they been able to do

that >> because of their market people who buy -- >> the market is republicans and democrats. everybody is buying sneakers. >> it is heavily driven by minorities and i think they recognize it these are not stupid people. they recognize by supporting when colin kaepernick takes a knee, that is a good thing with their base it is different. i don't think bud light would have taken that position or p&g would have taken that position i think many of these companies would have taken no position or tread very, very lightly it is a function of degree, not dogmatic right or wrong. >> so what happened with bud light, do you think? was that a decision that was made further down the line top management ceo did not sign off on it and didn't get it? >> i wasn't in the room. what i do see happening is senior management is terrified

of looking unhip they are deal grating power to young people with coastal educations and ivy league educations who feel strongly about these issues which is fine it doesn't mean that they have the pulse on the marketplace i don't know if it was signed off on by the top of anheiser-busch the people endorsing these programs personally feel strongly and are going into management and saying this is what is best for the maskt and people are afraid to say are you wrong? just like years ago and anybody who said the words social media was a genius now you are starting to see companies say i'm not so sure social media is wonderful for us it takes time. that's what is happening. >> eric, thankou y >> thank you >> "squawk box" is coming right back listening more than talking, and a personalized plan

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you guys have no idea how good you've got it. how old are you? like, 80? 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 we have a story for you. our next guest has put chatgpt to the test literally and wrote about it "chatgpt goes to harvard and does better than you might think. she's a student at harvard we're thrilled to have you this is a piece that has completely and utterly gone viral and you seem to have tricked a whole number of people tell us what happened. >> thank you for having me

a.i. is going to change everything, including education. i asked eight harvard professors to grade essays. all of them were written by chatgpt. i told them half were written by me to get good results what happened was fascinating. >> so what happened? >> chatgpt can write at the college level, a gpa of 3.3. that's below the harvard average but it's still passing and it's only nine months old. imagine what happens when it gets to gkindergarten >> i think that homework is never going to be the same ever again. >> what do you mean? >> students are going to use it

whether they're allowed to or not. and a.i. detection is pretty flawed so i don't think that's a good way of professors figuring out whether or not something was written by chatgpt the only way to prevent cheating is going to be to do more in-class writing. >> what prevented chatgpt from getting an a it was dinged. what was the piece of it that didn't work? >> i think writing style was generally pretty well received, but sometimes the facts were pretty empty, which is definitely something that we've been seeing. the response was really interesting. professor furman, who you mentioned in response to my article is getting rid of take-home essays in his classes. i think there's huge implications to the a.i. threat to liberal arts careers as well. it's also coming for the

workpolice workplace? >> does that mean you have to write it out by hand everyone brings your laptop? >> professor is getting rid of the essay component in economics but he is not replacing it with a written in-class exam. in other classes like the political science classes which i focused on the solution would be handwritten exams >> is harvard mad at you >> i haven't heard from administrators i think professors are very interested my political scientist professor was very happy that he managed to give it a b-minus i think they're going to figure out how to adapt >> going into it, what did you think would happen relative to what did happen? >> i kind of had an instinct that it was going to do

relatively well. i'm not surprised it got a straight a-minus or a c. i struggled and i've been on this earth a lot longer than chatgpt. a lot of the stuff that i write for colleges, in economics, it's analyze an economic concept we talked about in class and apply it to a real world phenomenon or pick a president, what are their three accomplishments and three failures >> how worried are you now when you submit a paper that they're going to say, hey, we got to check the work >> i don't mind if they check my work because i would never cheat with chatgpt

>> of course i would never do that, that was wrong that was their excuse, the famous one me like i would do that now >> thanks for calling me out >> you have to go back to harvard? you haven't graduated yet? >> no, i just finished my first year >> she's got three more years. real quick or they're going to kill us. do you imagine using it in the next three years do you think teachers will say it's acceptable? >> my takeaway is embracing it is very challenging. right now nine months out i think it's better than the average college student at writing. given that that's true, how can we allow students to use it because at that point it's just short-channgricagi ctil thinking >> thank you for coming in brave. we have a big hour ahead gpt.

good morning going for ten. the dow on its longest winning streak we've got complete market coverage ahead this morning. and big week of earnings is

wrapping up. we have new numbers this morning from american express and more tech results next week and messy mania in miami the soccer superstar ready to make his debut we'll ask about his cultural and business impact. the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc we are live at the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin the u.s. futures are kind of missed at this hour, up in the green but the nasdaq making up some ground after it did not participate in the dow's rally yesterday, the s&p up about 11

points right now this would be ten days for the dow if it were to get that in. and the dow was up more earlier. but i looked at american express, not getting any better. >> no, it may have gotten worse. we'll look in one second >> down about 4% or so treasury yields this morning, it's kind of cool watching the 10-year and 2-year they've been moving like a hundred basis points away from each other inverted. as joe just mentioned, american express beating its second quarter earning results revenue came in a little light there was a $1.2 billion loss provision up from last year but fairly stable sequentially if you're looking quarter over quarter. amex saw solid -- the ceo

sounded very positive on everything they're seeing. spending on travel and entertainment very strong in particular around the globe, up 14% year over year and they expect double-digit growth there for the rest of the year spending overall up by 8%. its biggest demographic, mi millennials spending more year over year. they had over 3 million new accounts, 70% for their premium fee-based products, 60% of them are millennials so they think that gives them a long run rate. they affirmed guidance, they didn't say they have a beat here they said they don't have any inflexion point when it comes to spend and travel they have one of the largest travel agencies in the united states we'll see. something the street sees here it doesn't like. the stock is off by almost 3.9%.

president biden bringing representatives from seven a.i. companies to the white house to announce the administration has secured voluntary commitments to move towards safe, secure and transparent technology and new york mets owner and billionaire investors steve cohen taking a new stake in pet retailer chewy a regulatory filing reveals they own 5.8% of the company. chewy posted a profit last quarter and profit up to 11.3 billion. >> i hope that wasn't the otani money. you know what he might make? >> a lot >> 700

700. >> that's a lot. >> you watch him swing a bat it's like almost poetry. >> people say he's greater than babe ruth was. >> a little less than 90 minutes and from the opening bell on wall street. mike santoli joins us. does it hurt you you're not on in the 6 and the 7, mike do you want us to make that happen if you can make that happen >> you think you can pull that off? >> i can do that >> i wouldn't say it hurts me but sometimes i feel like i'm behind, i need to catch up on a lot of the themes of the morning. >> he's there at 6, just -- >> exactly we can talk about that but, you know, let me first take a glimpse at where we are in the market, joe. you mentioned yesterday's action, the dow up straight nine

days a certain part of the market looking slightly extended. it's a pretty nice trend cru cruising altitude for the s&p. the nasdaq grudging 2% lower we have a big option today i have it against the 50-day average here which it's getting a little bit of air underneath the index relative to that 50 day. the 4320 area, a few percent down from here would be no big deal the last little pullback june into july didn't even get us there. at some point we're going to probably hit some turbulence but it doesn't seem like just right away now, nasdaq 100, we have this big index rebalancing. at the close is when they're going to take some of the weights out of the largest six and seven stocks so it should in theory close the spread between the market cap weighted nasdaq 100 and the

equal weighted you've already seen some of this action take place. the big stuff has gone down relative to the equal weight it's into the tremendous amount of money directly mimicking the nasdaq 100s but it's something to keep an eye on as we do also see a lot of folks just as an active management matter decide that maybe we're a little bit over exposed to the very largest stocks department want to take a look at some of the lagard groups and how they've come someone to life, specifically office real estate trusts and you see people grabbing for the stragglers here this is a six-month chart, still vastly underperforming but you have has to patterns suggesting maybe a little bit of a bottoming action or people got a little too negative. maybe there's short squeeze stuff going on

what's interesting is the real estate sectors of the s&p 500 is really heavily weighted in what we don't think about as traditional real estate, cell tower and data center stocks, about 40% of the sector. when we're thinking about buildings and warehouses and apartment buildings, it a little different than in the xlre, guys >> can it get slower it hasn't been slow. everybody wants to go away because they're all pent-up, right? and we remember what august can be like at times did you know that dog days start july 3rd and go to august 11th, mike, and they're named after sirius >> it's something about the constellations in the sky, right? >> exactly there are some days it's like watching paint dry that hasn't happened yet, has it >> not really.

>> is it responsible for the dow be being up nine straight days because everyone's around? >> i don't think you have to resort to that kind of participation explanation for what's going on. we do have earnings season next week you're going to have a vast chunk of the market cap of the u.s. is going to report results. up ha you have the fed decision next week and even though maybe the news flow slows down, the macro stuff continues to get priced around -- last year we had fireworks in august. i wouldn't say that the absence of participation is really what's happening >> or maybe it's about to happen there's no doubt that there are times in august where it's kind of like a ghost town thank you, mike santoli. let me see what i can do on the -- maybe even "world wide

exchange" has a spot for you >> i'll just stay up all night on my cot. >> mike works so long and so hard and we love him >> we have concerning news from regional banks so far in the second quarter reports we want to talk to leslie picker this morning who has been picking through those reports and there's some news embedded there. >> there is some news embedded there. you heard mike talk about the bounce that's been in the regional bank stocks the market is really encouraged at least take a look at the s&p regional bank index, up more than 15% in the month of july, up more than 9% this week that's helped shave off some of the losses endured by the subsector after three mid-size bank failures in march and april. remember those this week as many of the regionals report their q2 reports, it's clear why investors have grown more confident. deposits largely have stabilized and so far the larger regionals have yet to see demonstrable outflows as investors try to see

if and what that next domino could be but attention is actually turning from the balance sheet to the bottom line because the cost of keeping those deposits is ticking higher and cutting into the margin of profitability while paying out depositors known as net interest margins, nim. customers are actually making more on the cash it's not the case in your average checking and savings accounts but cds have jumped, pretty decent at least in the

last few weeks or so, becky. >> for sure. we had thomas on earlier this week and said at interactive brokers they put on a commercial saying you'd be getting 4.6% versus nothing in a checking account. i guess people are kind of figuring that out slowly >> yeah. deposits are really, really sticky typically customers are pretty hesitant to move their cash out of their checking account and search for a yield with that money. often times it's more discretionary money on top of what people hold in their checking account that they tend to search for yield. that kind of helps the dynamic of the banks and prevent some of that competitive pressure. >> deposits are sticky unless you are a silicon valley bank. leslie, thank you. up next, what's an investor to make of china. an addition an squeeze on its chip sector but at the same time there is talk of enough outreach

to international investors we'll talk about a big week of headlines right after a break. >> and barbie and "the bomb" about to go head to head we'll go out to lanc.a. to findu what's at the box office this weekend. we'll be right back. i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. the two most important things in golf are your swing and your style. dick's sporting goods has everything you need to upgrade both. find top-rated drivers and irons from callaway, taylormade, titleist and ping. tour balls from your favorite brands. and the most dapper styles from travismathew

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welcome back to "squawk box. another big week for u.s.-china tech tensions. they say the country would retaliate in america slaps more restrictions on their chip sector leland miller joins us it's great to see you. we've all been trying to make sense of where things really are in this battle, and specifically how american ceos are making this pilgrimage at the same time that there seems to be pushback, less so it seems from china and more so from the united states >> well, i think the most important thing to understand, it's not intuitive to anyone, is that u.s. chip makers have enormous market shares in china and they don't want to irritate the china government

so they very clearly have to send a message to beijing that they are doing what they can to continue strong u.s.-china relations to make sure these controls don't come into play. the difficult problem here is none of this is unexpected everyone knew we were going in this trajectory. once you make the decision and send the message to the chinese, what doesn't make any sense is to stop, delay indefinitely, narrow immensely all these restrictions going into play because we've already sent the message to the chinese that we're clamping down and they need to react to it. >> back up explain what you mean by that. >> originally when a lot of these export controls came out last year to much fanfare but to the entire administration the talk has been the need for the united states from a bipartisan standpoint to ring fence advanced technology whether it's semi-conductors, artificial intelligence, quantum, biotech, whatever it might be from the

chinese so these technologies couldn't be integrated into the chinese military and ultimately kill american trips that if it's ever a confrontation once you start down this road you're sending a signal to china that they really need to react, they need to bulk up their capabilities so once you start down that road what doesn't make sense is you just stop in the middle like the administration is doing right now and saying we're going to kick something to 2024, this stuff may never come out but if it does, it's going to be very narrow it's a very convoluted message that i don't think helps anyone. >> what are you suggesting they should be doing right now then >> do what they said they were going to do, which was last year and the year before to ring fence the technology that they say they were going to ring fence. put in export controls if it's a small yard, big fence, that's great make sure you figure out what technologies have national security implications for the

united states and ring fence those technologies from the chinese. it doesn't make sense to delay it and allow the chinese to build up counter capabilities. you have a strategy but no implementation >> the u.s. may not be selling certain chips directly to the chinese but they're selling them to other countries who may have folks who are less good actors and some of those chips are still ending up and making their way to china >> i get this question on the hill virtually every week. my response to that is these companies are profit-seeking entities if you allow them to do whatever they want, they're going to do whatever they want so it's the responsibility of both parties in congress and particularly the administration to lay down the rules, say here are the national security imperatives we have to follow

and then the companies have the ruse and they can operate under those rules. it's not whether these companies are good or bad, it's that they're allowed to do things so they do them it's congress's job to ring fence them in and to tell them what the rules are and tell them how to safeguard national security so they don't do things they shouldn't be doing. >> thank you very much i'm very sure this is a topic that is not going away >> ready for some alliteration messy mania in miami soccer superstar about to make his u.s. debut we'll talk with the commissioner of major league soccer right after this break

soccer superstar lionel messi makes his debut with his many new team. joining us for more on the messi mania is don garber, commissioner of major league soccer when it happened did you say thank you god? this could push soccer -- >> the inflexion point >> yes, this could do it >> you know, when you have the best player who has ever played the game and it's kind of indisputable, come to our league and say this is the league that is my choice, it's not barcelona

in spain, it's not saudi arabia, it sort of speaks to where our league is, ouraspiration is have been soaring. >> there's been some multiple growth over the years. >> that's incredible >> and you also used to be maybe the crowd weren't like football? i'm sorry, like american football sorry. now you've had 80,000 people >> we had the largest gate we ever had for a game, 82,000 people at the rose bowl. we had 10 million fans come

through our gates last year. mls is the eighth highest attended league in the entire world, averaging over 20,000 fans a game. that's more than here in the united states. the league has great owners, enormous stability, a new deal with apple, we were here talking about our new deal with adidas we have the world cup coming up in a couple years. that will be the rocket fuel to take soccer to that level that people are talking about >> above stall speed you've made it now you've escaped the bounds of earth. there's a beautiful expression and i think you made it at this point. we also decided streaming isn't working or cord cutting but sports, live sports. and this is the perfect

convergence of soccer coming to its own in the united states and any type of content, the people that are craving things that you can't -- >> we're the only league that's got a global streaming deal. do it with apple, apple that just is getting into live sports for the first time, they're doing it in major league soccer. tonight's game will be the debut of a player renowned around the world. you could be in any city in the world and open your phone and press a button and you could watch a soccer game and the debut of this world famous player >> what kind of marketing is apple doing or not to support you? am i going to get a notification tonight on my phone, i don't know if i have to turn them on or not to actually hit the thing to tell you. that would be the ultimate version of marketing >> i get them all the time, andrew if you have apple tv, my guess is do you because you have an

iphone there, you're getting an alert on goals be scored and it is unblocked, an incredibly accessible opportunity apple has apple music, beats behind this program, every team has a tie-in with apple maps the apple stores have all sorts of opportunities to promote the relationship with mls season pass they're an unbelievable partner. when they decide they're going to do something, a subscription service with major league soccer, it's delivered in six months, more than we really ever imagined >> i guess world cup doesn't hurt and all the other things just add into the interest for mls. when had you going to get to 5 billion? >> we'll get there it's going to take some time but we'll get there. >> um, tickets can i get some >> you're going to have to hop on the plane to get to the debut tonight in miami

>> where is the stadium? in fort lauderdale, right? >> the stadium is in fort lauderdale they're building miami freedom park that was will a 25,000 seat stadium. we were talking about the new stadium in queens. that will be nearly a billion dollar investment right next to citi field that already our 26th specific sock are stadium talking about the $5 billion expansion early on there were no soccer stadiums. red bulls are right here in new jersey the league, we're in a spot where i think we're going to drive the momentum for this sport to continue to grow. the women's world cup, as up knoyo know is going on right now it's a good time to be in the soccer business. >> 8 p.m. apple tv there's a lot of baseball on never say never, don thanks >> you're not exactly our

demographic. it's the youngest fan base and the most diverse but that's okay >> i know, you're right. >> is there some good bets he can make on the game >> i made a game bet and it was a tie. and the team that i bet on won but i didn't get anything because it a tie and then they won with the stupid penalty kicks. so i tried it. you still can't use your hands, right? >> no, you can't use your hands. >> don, i want to thank you. and a programming note for everybody watching, next tuesday in los angeles, nbc and board room are bringing together the most influential leaders in the united states. you can scan the code on the you can scan the code on the screen to learn more or visit

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welcome back to "squawk box" on cnbc. picked up a little bit here. the dow futures now up 70 points, nasdaq strong. it lagged yesterday but better today. the dow would be up a little bit more if american express wasn't down $7 or so. so you can just take that -- add that back into the dow that's where we'd be this morning. 170 now on axp >> meantime the fed set to decide on interest rates next week i want to chat with economic reporter steve liesman >> i have a theory >> a theory. >> i can knock it down whatever, but i think a lot of this buoyant market has to do with expectations of federal reserve rate cuts. and not nonsense cuts. it was cuts against the fed. these are cuts that are expected with the fed in the sense that the federal reserve itself has -- is already counting on cuts next year and we had mary

dalai on a week ago yesterday and she started talking about, well, we're going to be coming down now don't get too excited about this because the cuts come because inflation comes down and the fed doesn't have to be on a nominal basis quite so high as it was before, it can be as restrictive, if inflation comes down at 3%, but if the inflation falls to 2, then the fed is at 3. anyway, if you look at the forward curve, what you see in march and june of next year are rate cuts and these are more believable than the rate cuts that have been there before. so i don't know that's the reason that the earnings have been what the earnings but there's definitely a bit of a tail wind to this because at some point, andrew, next year is not that far away. >> you think this is going to get signalled next week as well? >> no, i don't think it's signalled next week. i think it's there and the fed's

not ready to signal it but it's there and it's pretty real >> you think that is something they will say from jackson hole. will powell say that next month? >> no. no he's not going to say it but it's there >> where are you real quick on the rest of this year? >> i think that one rate hike is a good bet next week and we'll have the fed survey next week. that will either confirm that or against it and the other is a toss up. if you look at the probabilities, we're at 96% on the hike next week and nen at 35%. >> let me throw one little wrinkle in we've had this streak. does that likely increase the likelihood of an increase -- a second increase by the end of the year >> i don't think so. you was recently backed up by a federal reserve data set the fed doesn't care as much

about the stock market as the stock market thinks the fed cares about it >> okay. >> it's there but i don't think it's that big a deal >> that's interesting. >> i think we think they think about us more than they do >> more than they actually do. >> yeah. at some point it's an issue but i don't think it's an issue here >> forgotten children. stay with us we're going to continue this conversation with julia coronada what do you think about what steve just laid out? >> they're going to go next week and raise rates 25 basis points. because it's fully price, to not do it would be to ease policy and they're not going do that. i agree with steve, he's not going to tip his hand about the next move. it's meeting by meeting, it's data dependent he'll still probably under kate that the bias is to do more. but we think it's the last hike

because the next two inflation prints we expect to be in the same zone as the one we just got for similar reasons. and that's going to be an accumulation of evidence that kind of confirmed, you know, why are you hiking rates if inflation is on a monthly basis essentially very close to your target >> even if they do what people are anticipating eventually, a hawkish hike later this month, you're not buying it you think this is one and done >> yes because they're data dependent, this is how we think it will play out but september they'll have enough data that they're going to have to lower their inflation forecast they have a very well above inflation consensus forecast for this year. 3.9% on core pce the way inflation is running, there's no way we're going to get that so at the september meeting when they refresh their forecast, they can lower that forecast that will be the first downward revision in a long time.

and then that will be the motivation for taking that next hike out of their base line. they'll still say they can do more, right. they can say if inflation resurges or if the data don't continue on this track, they can do more. but i think we see the dynamics of inflation as, you know, sustainably moderating from here >> steve, you look like you agree. >> i wanted to give you some numbers. i should have had these earlier. the fed itself, the market for next year is 4.6 just be careful. the pce forecast is 2.6 so the real rate they forecast is 2%, which is actually a little bit higher than they have this year. but i think there's an interesting dynamic that could be at play money now is not just more expensive but more expensive than it ought to be.

and what i mean by that is the credit spread, for example, of mortgages over the 10-year is like a percentage point higher why is that? i think it's because the mortgagers are protecting themselves against further up side if the fed starts a down side trajectory, even if it's remaining 2% tight on real, you could take off that expebsiveness in money, the extra percentage point that's there to protect lending other lending could come in -- >> once things stabilize everybody can settle out and figure out what's going on >> and qt is still a big part of that, they are still selling treasuries and mortgages >> we don't talk about that enough, julia. how much of an is it having do you think? >> on the mortgage mart it's a pretty big effect. if or when they stop or taper

that process of letting mortgages roll down -- now they want to get to a treasury dominant portfolio so they may continue the mortgage roll down for a while. whenever that decision is made, the come bunation of the rend of the rate hikes and the end of qt could bring mortgage spreads in. >> if you think all this is happening, that rahal sound like a scenario where we can get rid of inflation and not have the job markets weaken significantly? >> well, yes i think we're seeing the supply side is finally lending a helping hand so areas that were very soft and actually showed price declines in june are areas where consumer demand is just fine, airfares, cars but they're more price sensitive and there's more supply. airlines are stully back up, and

there as inventory on the lot. so now it's back to sort of a more prepandemic style dynamic where you can bargain with your car dealer and they have to cut you a deal >> i'm so superstitious by this. >> which saying you're jinxing it. >> >> i think that's -- >> bite your tong. >> i've been really good thinking we can avoid the recession, but it's like saying the plane is going to be on time >> well, we are in a time of high real rates. right now we're in a good streak of data but money is tighter it's more expensive. that's going to probably mean growth is more uneven. >> we've come a long way from one person on the set. can we do six or is five the limit? no, seriously. we have five this is unusual since the

pandemic have we done six >> are you done go. >> i don't know if we have lighting >> i could go to the kid's place, i don't care. >> we used to have one person upstairs >> oh really >> yeah. i would be up there and she would be down here waiter can we get another round >> anyway, julia, thanks for coming in. >> my pleasure >> a great weekend >> you, too. >> it is the weekend, isn't it >> yes, it is, tomorrow morning and also sunday morning and i'm playing tomorrow night >> are the mud rakers -- >> still a blues band. i'm going to be playing in jersey >> are the m muck --

>> and then we'll be at the cutting room for -- >> you don't have the mud rakers anymore. >> my original stuff >>. republicans have raised a lot of concern about esg, but there is a serious effort to try and reform proxy voting. emily wilkins joins us for more. >> reporter: republican lawmakers have rallied against esg for a while. but the substance would make some of the biggest changes to proxy advisory congressman big hiezinga told me

more transparency and oversight are needed >> what we're really trying to make sure is whether it's a passive fund, they act like a passive fund and asset managers act like passive investors, that there's transparency, that there's really a process that the sec is going through, not just this throw the doors wide open, anybody can do anything that they want >> republicans are expected to vote next week on a pact of bills targeting esg and a number of those bills include proxy advisers the the house committee is facing multiple issues top proxy firms have of course pushed back against these claims -- against claims saying they've become politicized

saying it's their clients that ultimately control the investments. >> we'll see the clients can protect their investments when they can actually vote on these things. >> the truth is most retail investors do not vote. >> it's one thing to choose not to vote and it's another for somebody to talk my vote and say it's theirs. >> oh, sure. i would argue that nobody votes, nobody takes the time to learn what's going on. and you have this strange version of democracy, not unlike the democracy of our country >> it's one thing for me to decide not to use my vote and another thing for someone to say because of where it resides, i get to do that >> and as opposed to technology -- >> if you're an etf. what percentage? >> we have sad news this

morning. legendary singer tony bennett has died at the age of 96 years old. he died in his hometown. he had been diagnosed with alzheimer's disease in 2016. in his career he released over 70 albums and won 19 grammys "squawk box" comes back after this

calling it a hollywood

battle royale this weekend, barbie versus hoppenheimer. they're kind of frenemies. the double feature might be back >> there's barbenheimer double feature expectations have continued to rise going into the weekend. the film is projected to bring in as much as $100 million from domestic theaters this weekend that's more than double the expected deputybut of the christopher nolan film with the actors strike under way, barbie has the advantage of the fact that its big stars promoted the film for quite a while before the shutdown, plus there's been all this marketing buzz

and if "barbie" lives up to expectations, it could be the beginning of a wave of films based on mattel toys, which has more than a dozen other mattel-based movies in development, including a hot wheels movie that's set to be produced by j.j. abrams. morgan stanley with a positive outlook on the box office, saying, "we believe that ramping film supply combined with still healthy theatrical demand can drive the box office toward pre-pandemic levels over time. if this movie works, it's not just theater chains, but warner bros. discovery should also benefit, along with mattel mattel reports its earnings on wednesday, the 26th. warner brothers reports on august 3rd and we wonder if they'll have good news to talk about. joe, are you going to see one of these movies both of them >> i will see "oppenheimer" at some point, and i want to see it in a theater not necessarily just because -- >> i want to see both in the theater.

>> because of the popcorn. >> i don't think i could handle back-to-back movies. that's too much. >> have you been to a film festival, julie? you see like nine films in three days >> sounds like "clockwork orange." >> you get used to it. nothing is expected of you, except to stay awake i kind of like that. julia, thank you that's all we ask for viewers, of our viewers, really >> it's a big ask. >> it's a big ask, yeah. just stay awake. a big ass? >> that would be you >> no, i don't i'm pretty lame. i need to do some squats >> getting a little punchy we're almost at the weekend. when we come back, we're going to talk markets and get you ready for the friday morning opening bell with a slew of earnings on their way next week. stay tedun you're watching "squawk box. this is cnbc wake up! c reamy, it tastes totally off-limits. but with only 4 grams of net carbs in every delicious serving,

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welcome back to "squawk. i want to talk markets now earnings season so far and expectations for big tech earnings next week for that, we've got greg branch. julie biel, portfolio manager and senior research analyst at

kayne kayne anderson rudnik. i think we're all trying to make sense of what's been a hot streak and whether the streak continues, whether you take your profits now, whether this is just the beginning ofa run, where are we, greg >> so, it depends on what you're talking about in terms of hot streak, an drew, because the actual results have come in around consensus the equities have traded much differently than that, particularly since we've gotten the normal beat on the lowered expectations, but what i expect is that we'll probably see the highs for the year this july remember, i've always said that the second quarter is going to come in better than expected, and i expect it to come in the negative 5 to 6% range and i think that will be a source of optimism for this month. until we hear from the fed later this month and until they reset the narrative that they want the market to digest >> julie, you in the same place? >> yeah, i think second quarter

looks like it's going to be a continuation of first quarter where lowered expectations are easier to meet, but you're starting to see already that indications from guidance continues to be pretty soft, and it really depends what sector you're talking about, so certain sectors are already clearly in their own earnings recession what i think is worth noting is we all know that people have been overpaying a lot for tech, but you're seeing it in industrials too where there's been lots of multiple expansion. if we get major deflation in that sector, you could see margins really contract a lot. >> greg, for the last week or two, there's been a whole group of people who have come on our air and said, very likely chance of a soft landing. no recession in the offing these numbers are great. the magnificent seven won't just be the seven it's going to be everything. the russell 2000 go rotate out and buy the russell 2000, because this is just an expanding bull market. it sounds like you have some anxiety about that view. >> i have some differing -- i have a differing opinion to that

view i don't know if i would call it anxiety. the magnificent seven was just a catchy phrase for companies that are going to give us continued earnings growth even through a contraction, that are going to give us margin expansion, that have secular tailwinds behind them, and so there are lots of companies outside -- well, i shouldn't say lots there are other companies outside of those magnificent seven that probably share those characteristics, and i think that we'll see breadth renarrow around those types of companies as we get into a macro environment that becomes more challenging and that is more evident that it's going to become more challenging. we saw breadth narrow, i think, partly as a relief rally from the debt ceiling, partly as a relief rally because the cry has been the fed's only going to raise one more time, which i disagree with. but i think much of the spreading of breadth has been a relief reaction, and i think that that will soon come to all. >> julie, it sounds like you guys are in somewhat of a lock

step agreement i don't know where do you think the fed comes out ultimately, and how does that factor into your thinking >> i think the fed is the real question we all agree is it's going to be from 4 to 2% than it was to get from 10 to 4% and the question is, is the fed going to be patient and able to sit on its hand, or does it feel like it needs to continue raising in order to keep pushing inflation down and i think that's the part where there's a little bit of disagreement what i'm happy to see in the rates market is that there seems to be agreement that we will be higher and we're not cutting right away i think a lot of us are confused why we have to raise so much and let's see how this filters through. this sort of, like, when your girlfriend is dating this guy that's not your favorite, you just kind of eventually give up and you don't want to sit next to him or anything, but you let him be, and i feel like the rates market is a little bit like, suit yourself, fed go ahead >> julie, you have an invitation to come back any morning you

like to provide relationship advice in the context of the market >> blah. >> i like it greg and julie, i want to thank you both have a great weekend hope you don't get stuck sitting next to the one person >> all right, folks, that does it for us today. one thing i want to tell you is read the story about cocaine sharks shark week never fails to disappoint check it out >> even sharks >> right now it's time for "squawk on the street. ♪ good friday morning, everybody, welcome to "squawk on the street," i'm david faber along with sara eisen and mike santoli. we're live from post nine at the new york stock exchange. let's give you a look at futures as we get ready to start trading for the final day of this week you can see set-up for yet again a move higher, and our road map does start with well, overall, technology stocks bouncing back. this after the nasdaq di