would be 11 straight days for the dow. it's been quite a run, the biggest run since 2017 the nasdaq and the s&p both indicated higher as well as far as the yield curve, maybe a little bit higher yield. no, actually, lower. 3.8% and then 4.8%, and then bitcoin is down about 4% at 29 and change join us tomorrow "squawk on the street" is coming up right now ♪ good monday morning, everybody, welcome to "squawk on the street," i'm david faber with jim cramer live from most nine at the new york stock exchange carl has the morning off let's give you a look at futures. we get ready to begin trading one half hour from now and it appears we're going to have a higher open. doesn't mean much, of course, as our viewers well know. it can change quickly. road map starts with a big name

ahead. mega cap names will be reporting results such as meta and microsoft. key central bank decisions on deck plus, bye-bye birdie, twitter officially rebranding as "x." x. and chevron preannouncing quarterly results, also announces some changes in its c-suite, cfo, namely, departing. we're going to talk exclusively with mike wirth later in the hour but let's start with the markets ahead of what is a busy week of trading for investors, given we're getting a lot of the s&p reporting numbers, including a lot of the bellwethers, jim. i just mentioned microsoft and meta we can also talk mcdonald's or coke we can go a lot of different places >> alphabet. >> yeah, alphabet. >> i think, david, there's been two tracks of discussion among people there's the irrelevant track, which is the fed, and then there's the relevant track, which is the earnings. i know that's antithetical to everything we say, but there's just empirically, you have to start doubting the idea that if you had followed the fed, each

rate increase, you would have sold, sold, sold that was the bear dichotomy. with the bulls being the other side saying, look, if you just focus on earnings, you don't mind paying for them, particularly because worldwide, there's problems, and i come back and i say, i'm definitively in the b-camp, the bull camp, because all discussion around 11 rate increases has been a dodge. it's not supposed to be. it's supposed to be what we're ri riveted by, but the american companies have transcended the short rates because of, i think, sheer brain power. there's been a lot of good companies, whether it be mega cap, industrials -- >> you're already passing judgment on an earnings season that really is -- we're not even a quarter through it >> i am. >> why by the way, it's not clear to me that we've outperformed that much versus expectations >> okay, i'm concerned about how the fed did not mess with the earnings cycle the earnings cycle is -- the

industrials, which should be turning down, have been a very strong group last week, we saw the banks and the health care stocks begin to get some traction. mega cap has been amazing. now, look, every bet could be off if apple and alphabet and meta are all wrong i just doubt that they will be, even though their multiples are inflated but i'm just calling for the idea that it's very easy -- there have been many years where if we knew the fed was going to take action, we would sell stocks ahead, or we would be very concerned because we were fighting the fed >> although we are at the end, to be fair >> well, no, but okay. >> that continues to be one of the key questions, how close are we >> if we are at the end, you do want to buy a lot of stocks, but i think that there's a sense that other than housing, which could be after horton had a little bit lower but not a lot, auto, which has now come down, particularly because it seems like the evs are not selling as much as we thought and the i.c.e. are down.

rentals come down. used cars come down. that means there's not been a lot of layoffs people only had a few closings in retail. not a lot of layoffs in general, which has made people feel insecure because they expected them to happen this is one of those times where if you look under the hood of the s&p, you made a lot more money than just a hedge fund, which is, oh, rates going up, we got to sell. it didn't happen, and i think it didn't happen in part because the companies are a little more attuned than we thought and smarter than we thought. it's not -- i mean, we have mike wirth on today, the extended ceo of chevron, and when you look at what he has done versus what should have happened at this point, it's rather remarkable. the numbers are amazing. the buybacks are incredible. >> they preannounced, although we didn't get a full earnings report, but they did because their cfo is stepping down, so they're replacing that and oftentimes you'll get companies that do preannounce, make sure everybody knows it has nothing to do with our numbers or anything like that

but when you talk about what the expectations were over the longer term and what they've delivered, what do you mean? >> i think that chevron had been an also ran until mike i think that mike made it so that chevron was the leader in both earnings in terms of making a lot of very good moves but also in terms of esg until the incredible exxon buy of denver, which made it so that these companies have really been at the forefront of trying to figure out what to do after fossil runs out. >> fossil's not going to run out for quite some time. >> for many years. if you ask mike -- >> that said, carbon capture and sequestration is of growing importance, certainly at exxon, and i think chevron would say the same >> right >> more knowledgeable about exxon, given the time i spent studying that company for that documentary of a year or so ago. >> i hope you'll bring that to bear here. amazon's good. >> hold on on chevron, since we're talking about it and we're going to have

him joining us in a half hour or so, earnings did top estimates we should point out, right >> yeah. bought back a lot of stock >> they are, as you said, announcing that he's going to be extended beyond the potentially mandatory retirement age, which had been 65. >> mike wirth is the leader of this industry. he's the leader. he's both the global leader and domestic he's made many right moves and as much as i respect darren woods, fantastic for what he's been doing, mike is, for better or worse, the spokesperson worldwide for this industry. >> stock hasn't done much of anything good so far this year >> that's not a long enough picture. >> that's just this year >> oil's come down a great deal and he's still making a lot of money. >> obviously, if you go back any period of time beyond that, the stock is up. >> chevron's a big company >> that gives a better idea. we are going to talk amc not right now. you were moving on to other earnings that we are looking forward to >> i think the megacaps -- >> i am curious to get your

thoughts we don't know what the numbers are going to look like we're going to pore over the conference calls a lot of it is going to be a.i.-focused, whether it's alphabet or meta or microsoft. certainly, we're going to be very much focused on what they have to say about that important business for all three >> right, and we know -- people -- because taiwan semiis not an american company and earnings come out in the middle of the night, a lot of people don't look deep down at what they're saying, and what they're cig saying was very down beat. there's been no come back in d-rams there's no ability to ramp up in the united states because we don't have the facilities to make the big foundries and they say cell phones are terrible >> cell phones are terrible, right. >> but it could be they didn't distinguish apple because nobody does and then, david, i mean, they're basically saying that they used a word that was so damning

they said that it's a frenzy for a.i. and i think that when you have the number one producer and they call it a frenzy, that makes me think that maybe we're overdoing excitement for a.i >> you do? >> yeah, because we have service now. >> those nvidia chips that they do manufacture at tsmc for nvidia does anybody else manufacture for them too is it all tsmc >> tsm against the frenzy, we had some amazing comments about elon musk saying that nvidia, unfortunately, is the place you have to go now, they had had a spat, but look, i think nvidia's real. i think a.i. is real i think that other than adobe and i think service now this week, we'll talk about it, and i also think that benioff's talked about it, we don't have the use cases that people expected there's -- >> it's pretty early it's pretty darn early yeah, right now, the only thing we seem to know is these companies are going to be buying an awful lot of nvidia chips, because it's the only one that

can actually power these generative large language models >> but remember, all those things, the shorthand of that is, you can say, please design -- talk to pc please design me a brand-new way to be able to push "barbie" this week different colors what would work based on what we saw this week in terms of "barbie" box office chatgpt can do it. i have aninterview tonight wit jonathan kanter. >> the doj >> yeah, doj >> he came on last week. >> i always just run it by him >> you're bringing him back again? >> there's a lot of things that have happened. >> really? in the intervening four days >> i think that the -- it's the -- the guidelines are seminal. >> the merger guidelines, we spent time on with "squawk" team had him and then we had lina khan from the ftc. dpl guidelines are important but wait, you were making the

point that you now talk to chatgpt if they have any good questions for your upcoming guests on "mad money." >> yeah, because i don't want to lose -- sometimes they'll say, listen -- >> do you get anything interest something >> yes yes. there's usually -- if you ask for 12 questions on various issues, there's usually one or two that you haven't thought of. remember, it's a yes man >> on one side, you're saying that we haven't seen the use cases. on the other, you're giving me one right here >> i don't think people are being creative enough. >> i think an awful lot of corporations right now are in the tinkering phase of figuring out how this is going to be useful, but there seems to be little doubt that it's going to be an enormous enhancement of productivity over time >> s.a.p. told me there's like 400 uses of chatgpt. >> the dollars spent on data scientists by hedge funds right now are extraordinary, for example. >> yes >> trying to figure this stuff out. and of course, how many people can you actually replace at an investment bank with a.i.? junior bankers i keep hearing that kind of stuff. not to mention lawyers >> but i would like to know what

the hiring was this summer, because theoretically, you should be in with hr and saying, do we really need all these people we're at the crux of when it's either going to be a frenzy fad or whether there's really something there. >> can't it be both? i mean, you know, we had netscape and the browser we had the dot com boom. it was a frenzy. you could argue it was a -- and then it became justified but it took a while. it took a while. >> right, and this is being shotgunned by the fact that you have -- it takes a tremendous amount of money to be able to buy all these whatever, i mean, look, you know that from musk. >> the computing power needed to fuel these large language models that are behind the likes of these chat bots, whether it's bard, chatgpt, whether it's claude from anthropic -- i think i said that right. yeah >> well, look, i just -- nvidia

became a trillion dollar company this year. that's probably, when you look at what's happened, you can say, okay, well, look, we have to keep the two tracks. we have to have the track that was totally separate from the fed, which is mega cap tech, which started, by the way, at the downfall of silicon valley bank, and then we have to look at the broader term, which is we started with the industrials and went to consumer packaged goods, believe it or not. and then, the last few weeks, we have had health care and banks so, we've gotten the broader transports have done well. we have a large market that should be in reverse, given the fact that we're fighting the fed, unless the fed's stopped. >> all right speaking of a.i., after the break, we're going to talk a bit about twitter, of course, it has rebranded, if you haven't heard, to the letter "x" and a lot of discussion by elon musk, of course, about a.i. for that company's future first, though, let's give you a look at futures. we get ready to start trading here a little more than 17 icwi us from now stk ths. a lot more "squawk on the

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we communicate now, x will go further, transforming the global town square." she had more comments beyond that, jim, that indicate, as has been an aspiration for mr. musk for some time, that you'll be doing a lot of things on the x platform at least that's the hope not just communicating but a key one being financial transactions, for example, that he seems to think will be something that they can start to take advantage of, similar to what we see in china with some of the apps there that really go across unlimited interactivity there it is. "audio, video, payments, ideas, goods, services. i'm not quite sure what all that means, but that's the plan >> look, i think that one of the things i proposed to marc benioff when he was debating buying twitter, i happened to be in mexico, my american express was turned off, i would like to direct message american express, or actually chase, and tell them i'm me he said, that's one of the principal uses the people who ran twitter

didn't think that direct message was anything it was an afterthought i don't think that musk thinks it's an afterthought i also think that there are things like what happened this weekend in movies where i pick up -- and it's like, no one's making any money i don't get why they should. >> no one's getting -- i'm sorry, no one's making money off what oh, twitter? >> yeah. nothing. where's the mattel toy ads where's the nolan? >> i think there was a sense that for many years, twitter did not take advantage of its central place in some way, at least the way people communicate. and that it never brought -- so few new features and things like that there had been a hope that musk, obviously, would change that lot of people have taken issue with sort of his very brusk approach to communicating. >> look, i think that he does -- it would be great to have him make a line in the sand, which

is, look, we're not twitter. we're now a fully functioned payment plan -- i mean, look, if i were him -- >> they don't have that, but i guess they're on the way to rebranding, to your point. >> why don't they become the stablecoin i have tim masten on tonight why doesn't elon musk become the stablecoin don't laugh. remember, mark zuckerberg wanted to be the stablecoin >> we talk about public companies more often than not. it's not clear to me where he will compete but the hope is one day to be able to take this thing public yet again. obviously, he overpaid by at least double in other words, it's probably worth 20 when he paid 44 >> yeah. >> it's been not able to generate real cash he obviously cut three quarters of the staff or more >> but he under -- >> he thinks he's got to add he's got to add people now >> i think they just keep doubling down on editorial editorial is a sucker bet.

you've got this great financial mechanism. like, why the hell have they never been able to go to advertisers and say, look, we think you can reach the 18 to 22 why didn't he go to zuckerberg and say, listen, we want you to be the home for reels? like, why didn't anybody do anything >> i don't know. meanwhile, you speak of zuckerberg we're going to hear from meta, of course, earnings this week. what about threads, though has that died down a bit >> yeah. yeah look, he's got to blow it up, and he's capable of blowing it up, because he doesn't have any -- anything vested >> wait, who's got to blow what up >> i'm saying, zuckerberg has to keep his model >> yeah. >> but musk could go to any of these guys, including zuckerberg, and create alliances that would be fabulous >> musk and zuckerberg are not going to be creating any alliances. as best i'm still aware, they're still planning on having a caged fight. >> what was musk's relationship with jensen huang until this last conference call >> i do not know >> there was no love lost.

there was no love lost >> i don't remember threats of physical harm to each other. >> well, no, because -- no because jensen comes in peace. he's like in "the outlaw josey wales. >> let's get started talking stocks here. >> we've been talking stocks the whole time >> we have, we have. >> i'm happy to talk about some person -- >> it's a difficult situation. >> i got something from the fed. >> you got a what from the who >> gasbag. we're at the denouement of the importance of fed execs. >> denouement. >> we're going back to the jpmorgan days when the new york fed had a bigger role and no one even knew who these people were because they were babbitt. remember babbitt >> i do remember babbitt still to come, we're going to have an exclusive with chevron's chairman and ceo, mike

wirth. >> extended ceo contract >> after the break, we're going to get jim's "mad dash," countdown to the opening bell and start to cover a lot more stocks (vo) it's time to switch to verizon. sadie did. and now she has myplan. the first unlimited plan that lets her choose exactly what goes in it. now she gets to pick only the perks she wants and saves on every one. and with an incredible new iphone on us, no wonder sadie is celebrating. introducing myplan. get exactly what you want. only pay for what you need. act now and get iphone 14 pro on us when you switch. it's your verizon. we earn your trust. maintain our financial strength and stability. and deliver solutions that meet complex needs.

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let's get to that aforementioned "mad dash," start talking apple, which of course market cap of over $3 trillion >> did you watch messi and the soccer game? mls. >> i didn't. free kick, right it was a good start. >> we got this very ancillary adq property that we talked about at the ceo council, and it's another thing that looks like it's going to be right.

i bring it up because if apple wants to be in sports, they can be in sports in a big way. if they think it works because the services are doing well this morning, wells fargo comes out and says services growth re-acceleration. that had been something people worried about, and deutsche bank comes out and says, listen, everything's tracking ahead, raising price target 210 this is the one that shocks most people because it has its own a.i. that's developing people thought china was going to hurt it but they're doing for china, by china. it's working india's up there as being a country that they could really be tremendous, tremendous growth brazil, indonesia. this stock has become one of those, let's just say, the bears have been wrong. how about that >> they certainly have been dead wrong. but you think it just keeps going? >> i think that it has more in the pipe than most of the mega cap stocks that we talk about. i think microsoft's got a.i. that's absolutely terrific i think meta was underestimated. alphabet is not clear. i don't see what alphabet -- my

travel trust owns it but i don't see any acceleration amazon's up to jassy, because if they don't start getting a return in growth to amazon web services, then the stock is too high these guys, doing their own thing, doing it well >> they certainly are. >> services -- adq has done some remarkable things here >> they added a quarter of its market value over the last year. we got an opening bell five minutes from now stay with us

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, welcome back. we get an opening bell in two minutes. sometimes we like to do something called key to the market goes way back to our time together on "squawk box. >> 24 years. >> 24 years ago. >> 24 years, we've done it what is the key this morning >> basically american express. i'll tell you why. american express report a quarter that really crushes the dow. the dow still finished up for the tenth straight session and it was regarded as being a major miss now, what i think really happened was that expectations

got so high here because people felt, you know what? we're in a travel economy. and the way to play travel is american express the analysts today are debating whether it's because of the problem with student loans, people have to repay they don't spend enough time on how corporate's not come back to any great deal, but i think people just sometimes get ahead of a company, and i think that there was a discussion among hedge funds saying, look, if you want to have the travel economy, don't go royal caribbean and don't go delta go american express. and it failed to fulfill -- >> the commentary on the call was quite positive >> that's why i want to talk about it >> they did have a provision but nothing seemed to be completely awry, and yet, to your point, the stock was down sharply. >> that's why the stock is now looking badly down and i happened to question whether it deserves that discount, given the fact there really was an okay quarter >> it was. >> it was. and it's the key to this market in the sense of what, then >> people are saying -- well, people are saying that he can't

do -- that steve can't do the 10% growth and the 15% sales that have been their algorithm i think that he can do a lot of levers, and i think that american express, which just became a victim of what people felt was the greatest story of all time, which is no more buy of services, lot of buy of travel lot of going out to dinner you know, let's watch it if it's down again today, then people are going to start questioning the travel and leisure thesis that has propelled so much of the market. >> that was the opening bell you can look back at our realtime exchange at our headquarters here at the big board, "back to the future," the musical it is opening on broadway. they're celebrating that best of luck to them over at the nasdaq, bitcoin depot. that provides bitcoin conversion to cash. >> that's why we're discussing tim maston, because i believe there is, among younger people, a kind of just overall

skepticism about any institution, and they would prefer to be in anything crypto, which means you have to have some secure way to go back and forth. and i want to focus on that. i want to focusen on it, becaus want to focus where young people are thinking about, because they are not thinking about the fed they don't care about the fed, and we run the risk outmoding our own selves if we focus too much on the fed, because that's not -- people are more focused on the litigation. >> bitcoin being treated as a security, going to court have any thoughts on that? >> i think it's time we're being overrun by europe, which has been embracing it very radically. we have a split in our own government between treasury and s.e.c. what does congress want? and if republicans take congress, then we're just going to be all bitcoin. we got to start realizing that >> you think that the s.e.c.'s at risk here in court isn >> yes, and i didn't want that to be because i felt the s.e.c. had a valid case, that these are

securities but they're losing there they're coming out as currencies if they're currencies, you would still need some sort of s.e.c. ruling but we're clearly in disarray they're not in europe. they're going full bore when it comes to crypto. and i know that tim massad doesn't want us to lose any leadership, but in this, we already have >> got it. >> we want it to be done by the fed. but our fed has no inkplings to do it. i think other countries, if we were cnbc spain, we would be discussing the turn to the right. crypto >> yeah. >> we should be a little more cognizant that crypto swept the world and that we have been the one that is now lagging. >> all right let's get to some stocks this morning, jim i don't know, you know, specifically what -- i mean, i'm keeping an eye on amc shares, of course that judge saying that potential conversion of the apes to amc

common, which was a capital-raising event for the company. not going to happen, at least not in the near term that means amc shares are up a lot and the a.p.e. shares are down a lot >> but the way to be able to grow amc was to get -- >> well, i mean, adam aron is coming out and saying, we got to raise capital. >> what's interesting is that the people, the meme people who love this thing, they thought if they went to court, the court would respond to their entreaties, but david, that turns out to be a false world. that's not the way a court works. they don't look and say, look at this, there's 3,000 people in favor of the deal. they actually talk about equity. >> yep well, if they're unable to raise equity capital, the risk materially increases of amc conceivably running out of cash in 2024 or '25, says adam aron he points out that he does have an economic interest in more than 8.3 million amc shares,

although he did benefit from the meme craze enormously. increased his net worth dramatically as a result of having sold, but he says he hasn't sold in more than a year and a half, any additional shares, amc or a.p.e. or otherwise. stock had hit as high as eight bucks, i believe >> that's a very long ruling >> we went over the ruling this morning. we went over it with ben in our back and forth for "mad money," and we found it incredibly complicating, but there were hedge funds who bought this preferred, and there were plaintiffs who really kind of just, i think, didn't get the way the court works. >> yeah. >> and then there are other people who said, look, we can't be in a situation where these people lose the deferred, even though the deferred people voted for it they threw out something everyone agreed on >> the judge focused on the settlement scope, and she characterized that as overbroad. >> right >> again, we'll keep an eye on

it, but for now, they're not going to be able to do that. >> are you keeping an eye on domino's >> speaking of movies, i want to get to domino's, but barbie and oppenheimer did do extremely well "barbie", as much as $155 million that's a big number right there. mattel a beneficiary of barbie's success. >> mostly the ancillary. >> they're not making from box office >> i had cross on last week, up with of the great executives in terms of taking what is basically a toy company and turning it into an entertainment company. >> he's talking about ip like everybody else in the entertainment business that's what he talks about now ip >> well, he's delivering >> yeah. he is. >> and he is from the entertainment world and when the stock was at $13, he said, don't recommend. he fixed the balance sheet first, which is the way you have to approach these turns and then he identified there are certain franchises that are completely undermanned or underpersoned, and then decided to put the

money on there are many more if this works. i think he's -- it could be game, set, match for the toy business versus hasbro >> interesting yeah, haven't seen "barbie." did see "oppenheim r." certainly can highly recommend it >> chris nolan is a genius, of course >> yeah. >> disney is not a beneficiary of anything, and it is incredible to me they put out these things about maybe someone would want to partner with them. it's almost as if they really believe that within the organization, there is so much value not to worry, but outside the organization, we want earnings power >> you're talking disney now >> yeah. and then in the meantime, parent company of our network, comcast, is chatter is just like, hey, look at the stock breakout >> the chatter around comcast has been around broadband net adds there have been some third-party data providers that have said things are looking pretty good i think that's the key reason the stock has been up. "oppenheimer" is a universal movie, right >> right, but i think what

matters is that people have decided they're better than verizon and at&t >> well, it's not hard to be better an at&t and verizon >> no, it's not. >> it is really not hard to be better than them, although both are up today after what were a really difficult period there in part because of the concern about lead-wrapped cables and then just, as we've talked about so often, continued competition. not just amongst the three majors in terms of wireless, but also our parent and charter as well and spectrum brand. >> don't they have the money coming from hulu >> comcast >> yeah. >> from disney the most likely will be the case >> that's another reason to like it >> that will help. that can help fund peacock losses >> i've made my comments internally to what i think they should do. >> well, i'm trying to get a new desk here, new set peacock losses >> i think that i've made it clear that if it was a lightning round call about comcast, i would say that it's very hard to

recommend, given the fact that they spend so much on peacock. that's what i have to do i have to be honest. i'm a contract player. >> it's the only stock we can own, by the way. we should point that out and i do own it. >> if you called me and said, jim, what do you think hey, jim, jimbo, jimmy, what do i think of comcast well, you cut that loss of peacock, the stock goes to $55 >> before we get to mike wirth, we got domino's. >> this is the last quarter before they start benefitting from what i think is going to be an exceptional deal with uber. one-third of all pizza is theirs, and if they go to uber, you're going see this thing explode higher russell has done an incredible job but he's not a self-promoter, and i think this is the last quarter of the slower growth, and you got to get ahead of it and congratulations to him for seeing the legitimacy of having another app that be able to makes it so that you get pizza

and if they get the portion of pizza that they think, then the stock is going to go up. >> i get my pizza still. i call i still do it the old-fashioned way. the guy actually shows up and i give him 25 bucks. >> you live in a world -- you're living dangerously, because it could be their fault if you do what i do, which is do it online, even with my apple watch, it's never wrong because the onus is on you >> pizza pete's doesn't usually get it wrong how about that mike wirth? you want to take a little chevron with the man himself let's bring him in shall we do that going to be in the job for longer, perhaps, than had been originally anticipated chevron is out with a second quarter highlights although not full earnings, but it did report overall earnings, $6 billion, record oil production in the permian basin during the quarter the preview of those results did coincide with the announced retirement of its long-time cfo, and it did waive the mandatory retirement age for its ceo, joining us now in a cnbc exclusive, mike wirth, chevron's

chairman and ceo mike, good to have you and we'll be good to have you joining us for many years in the future as well so, what do those years hold what is it that when you look ahead and say, hey, i'm glad i have a few more years from this board of directors to lead this company on its current trajectory, what does that trajectory look like >> well, david and jim, it's good to be with you. we've got good business momentum, and we're delivering strong results in what's been a turbulent world. go back to the pandemic and oil prices below zero, the war and prices above $100. we've acquired three companies over the last three years, and we still have the constant discussion about climate and esg. so, it's a challenging environment. we've made tremendous progress we just announced a very strong second quarter and i'm excited to continue to lead our company to deliver higher returns for our shareholders and a lower carbon energy system for the world.

>> yeah, when it comes to challenges, and again, the years ahead that you now have as ceo, sort of how do you see it, mike? what is your biggest, perhaps, challenge, so to speak >> well, we have to meet this great challenge, which is a world that's growing, that demands more energy, and wants to see that energy with a lower carbon footprint coming with it. we can't change the system overnight. we've got what we've got, and it's growing we have to reduce the impact of the energy that the world uses today, and at the same time, build these new energy systems that can grow and help create a different energy system into the future so, we're decarbonizing our oil and gas business, reducing the carbon intensity of every barrel that we move through our system, and at the same time, investing in carbon capture and storage, hydrogen, renewable fuels and other technologies that we want to scale and make them a bigger part of the system in the future as we need all solutions to meet this challenge >> mike, there are a lot of

people who feel that one day we will run out of, in this country, of the ability to be able to place our energy, obviously, in the 2000 period, we were -- looked like a disaster with fossil fuels and then because of shale, we became something big. now, you recently said 100% reserve replacement is a number that you ought to expect to see. that or greater over time. what that tells me is you think that we're not running out of oil any time soon. >> 80% of the energy system today, globally, are fossil fuels. oil, gas, and coal 20 years ago, that number was about 84%. you can't move this number quickly. and so, we need to reinvest in the energy that the world yies unive uses today we should want responsible producers to do that and more of that companies that are committed to safety and reducing emissions, we are one of those companies and we intend to replace our reserves through production, through technology, through

business acquisitions, and we intend to grow our oil and gas business at the same time as we grow these new energy businesses >> mike, you've become very much the spokesperson for an industry in a way that i haven't seen, frankly, since john d. rockefeller. and one of the things that intrigues me is that we'll see articles about how russia's now producing a certain level, and we were supposed to starve russia, and clearly failed in any effort to do that. when the president brings you in, what does he ask you about the notion of what's going to happen with russian production and the war in ukraine >> well, jim, we have discussions with a number of people in the administration i've not actually had that conversation with the president, but we talk about the realities of the energy system we talk about the importance of american energy, and the tremendous resource base in this country that can be developed by american companies in a way that's responsible, that helps support our economy with affordable and reliable energy, that allows us to export energy

to our allies, especially allies that are in particular need, as we've seen with europe here recently we can do this for many decades to come as we invest in these other energy products as well. and so, the discussion we have with the administration is really about, how do we do both? how do we find balance in the conversation so that we don't focus so much on just one aspect of the equation, be it affordability, reliability, or the environment that we lose the plot on the others we need to keep all three of those in sight and part of the dialogue as we talk about policy, as we talk about how companies invest >> wow okay i'm glad they do that. that's much more thoughtful than i thought. now, you yourself have recently diversified away from the permian, although there is some permian in this acquisition that you did for pdc energy are you yourself beginning to believe that the permian's become too expensive and that maybe it's better to look around the country for better oil >> first of all, no, the permian has not become too expensive

it is the best place for us to be investing our dollars it's the largest single destination for investment, and we just finished a tremendous quarter. we produced more oil out of the permian basin in the last quarter than we ever have in our history. it's up 10% over the same quarter last year, over 770,000 barrels a day. our well performance is on track. we're going to glow this to over a million barrels a day by the end of this decade we're continuing to find capital efficiency and ways to get more done for every dollar that we spend. so, the permian is a tremendous asset for our country and for our company. we have increased our exposure to the dj basin in colorado. the pdc acquisition will add 10% to our worldwide reserve base for just 2% of our shares. it adds a billion dollars in free cash flow at $70 brents and makes us a very strong produce ner colorado, as well as in

texas, which is good for our company and good for the country. there are places outside the permian you can expect to see us invest, absolutely, but it doesn't mean that the permian is not still a premier asset. >> to that point, i'm looking at a note here. a development hiatus to address well completion issues saw growth fall to 4% in the first quarter. it's up as much as 11% in q2 do you expect it's going to go even higher? i see some analysts estimate growth rates of 15 to 20% in the second half of this year is that possible >> we've got a steady program. we've got 14 rigs that will be running there by the end of this year the production growth can come in surges and then plateaus as we move rigs around, as activity cycles, but we laid out a plan this year at our investor day earlier this year, and we're right on that plan wells are performing as we indicated. drilling and completions, the wells that are being brought on production, all are tracking very consistent with what we've

indicated. we'll share more friday on our conference call, and show more detail on that but i'll just say that we are -- we're delivering exactly what we said we would driveeliver >> permitting reform is something people may have heard about but it's not clear where things stand we're not just talking about new oil and gas. we're also talking about permits to store carbon. are you seeing anything that indicates progress on that front? >> we saw a little bit of progress in the recent spending bill that was enacted just a few weeks ago. with modest reforms but meaningful reforms and a step in the right direction. there's a lot of talk in washington about more permitting reform we're engaged with discussions on both sides of the aisle i think the white house is supportive of this what's important is that it's comprehensive reform, not narrowly targeted reform we need to be able to build all

kinds of infrastructure in this country, whether it's roads and ports, grids and solar and wind, or pipelines and the energy systems that keep today's energy flowing to market. so, we need to see expedient processes, appropriate review, appropriate limits on legal challenges, so this country can get back to building things, which is what's made us what we are. >> mike, we're beginning to see -- we may be at the early end of what is ev regret, that there are a lot of people who have bought evs and they're realizing that they're having anxiety upon change -- about charging stations. looks like it may be slowing in this country i know that's antithetical to what most people think but when you deal with the companies one by one, you get the sense that they're too expensive and that people are turning against them. is it possible that you have to revise down the challenge from evs for your company in this country? >> well, we watch that j, jim. the pattern is not dissimilar to when we first saw the prius and

hybrids come in, where there's a surge of purchases, and then you have a kind of a period of time where most people who want that type of vehicle have one and you're trying to sell to a different part of the market i think these kinds of patterns can repeat consumers buy vehicles to meet their needs, and their needs are varied, and so we still expect evs to continue to improve from a technology standpoint, from a cost standpoint. our expectation is we'll see them continue to come into the fleet here in the u.s. and worldwide, but that doesn't mean that we also won't see growing demand for our products, because our products are used in much more than light-duty transportation, and our forecast is that demand for oil will continue to grow through this decade and through the next. >> yeah. well, we'll be talking to you about it in weeks, months, and years to come, mike, so appreciate that. appreciate your joining us thank you. >> thank you >> you're welcome. >> thank you, michael.

we have to understand one thing. they thought that they'd be outmoded much quicker than they will be outmoded >> i think there's been a -- there's a hope that you would make the transition quickly, but -- >> but you need the government to be able to -- >> that transition, by the way, as we deal with the hottest days ever on record in hottest days in the planet's history, it isn't as though it's not foremost in many people's thinking >> very good. >> the transition will take time. >> all right before we head to break, a look at the bond market how are treasuries faring this morning. well, there it is. 4.83 on the 2-year global pmi hit the tape, 49. that's better than estimates they had been 46.7 services side, pmi in at 52.4. estimates there had been 54. we'll be right back.

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time goes so past. a lot of people are talking about america's best as being a way to play travel leisure that turned out, i think you can do the airlines, delta only so long, royal caribbean only so long watch airbnb it's down 4 today and chesky has put up numbers that are extraordinary. this may be the way to play it, and i'm just not backing away with my fascination of how well the company is run. >> all right see you later on mad >> absolutely. ve see you tomorrow. ha a great rest of the day. >> you too. >> stay with us.

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it's your business. it's your verizon. good monday morning. welcome to another hour of "squawk on the street. i'm sara eisen with david faber, live for you as always from post nine of the new york stock exchange carl has the morning off take a look at stocks continuing their win streak for the s&p and dow. s&p up a quarter of 1% what's leading us is energy, better numbers from chevron, financials continue their win streak post earnings up another half a percent today what's falling behind is consumer discretionary stocks, the nasdaq is down 0.1%.

we're going to get a ton of mega cap earnings this week microsoft, amazon, meta and more, and a bunch of central bankers and central bank decisions. we'll talk about that in a moment big week ahead so far moving higher here are three movers we're watching tesla is under pressure as ubs takes the name down to neutral more on that call in a moment. domino's gains momentum, erase preeg market losses as results missed revenue estimates, earnings was a beat. keeping an eye on ups, on the move this morning, ahead of a potential strike by 340,000 teamster workers at the company. negotiations set to resume tomorrow hopefully they can avoid going on strike before august 1st. that's certainly in the mix today, david, but it is all about the central bankers this week fed on wednesday, ecb on thursday, bank of japan on friday less of a mystery as to what they're going to do this week, two hikes and a nothing from bank of japan expected and more

how we game out the rest of the year september, november, market is not expecting a hike from the fed necessarily, but the last message from fed chair powell at the last meeting and subsequently you can pencil in two more hikes and we have more work to do interesting to see if he changes his tone at all in light of what was one big disinflationary numbers. good news on that front. at the same time, core inflation remains 4.8. we're going to get a really important number on friday this week and it's after the fed, but it's worth watching the pce, the fed's preferred measure and that core number has been sticky too, up 4.6 last time market expects it to come down to 4.3 that's still problematic for the fed. is it enough evidence inflation is coming down to anticipate a cause and cuts in march where the market is. i'm not sure. >> i was listening to the discussion i assume you may have been as

well on "squawk box" this morning with robert caplan, former fed member, board member, talking about the inflationary impact of all the government spending that has yet to really occur and how the fed does or really perhaps doesn't completely incorporate it in real time at least. >> you know, they really have dismissed this idea that fed, that fiscal policy is working against them i put that to powell i said, inflationary reduction act and chips act and infrastructure act, all the stuff kaplan has been talking about, doesn't that work against you. powell really said it's about -- he sees it in a construction number but he doesn't see the fiscal impulse overall as harmful to what they're doing. this is the first time we're going to hear from him and get a policy discussion. same with the ecb and bank of japan. we sort of distilled what their messages were a few weeks ago in portugal ahead of the meetings this week. listen

>> don't see us getting to 2% this year or next year i see us getting there the year after. >> 2025. >> yeah. >> core inflation 2% you're going to be restrictive for a long time. >> no. we will be restrictive as long as we need to be, but, you know, if you're -- if rates, inflation is coming down sharply and we're confident it's on a path to 2%, you know, that would be a different situation. you would begin to think about loosening policy, but we're a long way from that that's not something we're thinking about now or in the near future. >> we still have ground to cover, and i think that, as i said earlier on, we are data dependent. we will decide on a meeting by meeting basis, but we know that we have ground to cover and if our baseline stands then we also know that we will very likely hike again in july >> we have a forecast projection of inflation path that looks like it's going to go down for a

while toward the end of this year on declines in input prices. and from there on, we are forecasting some increase in the rate of inflation into '24 but we are less confident about the second part. if we get -- if we become reasonably sure about the second part it's going to happen, that could be a reason for a policy change >> there we go. >> that was interesting. bottom line he's not thinking about changing policy so, bank of japan, so they're the outlier here in the whole situation and what i took away from both powell and lagarde, they're still feeling hawkish and they're not going to declare victory prematurely. the last thing they want is to stop hiking or signal they're turning and the market gets excited about cuts and then what

happens? inflation speed backs up because you know what, the economy is doing okay the growth numbers, we're going to get an advanced look this week r not bad we've seen we're covering earnings, green chutes and i keep hitting this in the banks we heard it from investment banking, deposits have stabilized we've seen it a little bit with the truckers saying that june looks better than april and may and they're starting to see some of the destocking improve. little pieces of that showing that the economy might actually be okay here going into the summer. >> yeah. >> on the other hand, yield curve is minus 100 this year. >> that was an incredible moment, obviously, when you had all those bank heads, but china not there for obvious reasons. they figure prominently into this as well, don't they >> the bearish part. >> they can slow down and what it will mean for the world economy. >> we're going into this important meeting in july and i think the key will be how much

stimulus they do and it's hard to factor in how you put that into your global forecast. on the bear side sure, leading economic indicators, negative for 15 months in a row or something, inversion of the yield curve, the weakness in china, the fact that there are signs that the labor market, for instance, is cooling after here in the u.s the excess savings is coming down. >> how long it takes people for things of that nature. >> we could do a bull argument. >> there's a funny phrase coming up in the research notes, immaculate disinflation, where the market is right now. if you believe that we can get away with bringing inflation all the way back down or the fed can, without ruining the recovery, and the jobs market, that's what market is telling you. a lot of folks will look at that and say that's impossible. inflation is sticky. >> but that's the new soft landing. >> got it. >> you heard it here. >> immaculate reception. probably don't know what that was. >> i do know what that was.

>> the immaculate conception >> reception. >> no. >> frank o'hara -- >> i thought you were going biblical on me. >> not going biblical on this show. >> let's dive deeper into the market outlook ahead of equity strategy, laurie at post nine, has a target of 4250 i thought of you as more on the optimistic camp but now that we've surpassed your target what do you do? >> it's funny, keep getting accused of being bawl because i think we sound more bullish than a lot of other strategists targets are ricky. we have six models and three are conservative and three are pretty optimistic. if you look at the more bullish ones, the valuation can get you to 4700, 4800 easily on the s&p. there's another one more constructive, our sentiment model, that one is starting to flash yellow signals it's not quite flashing red just yet, but i've been telling clients i've been meeting with, i expect it's going to get there

soon i think the cross currents right now are just incredibly complicated. >> what about what we were talking about the outlook for the fed so key in determining how you have to forecast the market these days. do you think the market has it right? >> i think so. i mean, i think the fed doesn't generally want to surprise markets so you have to look at market pricing heading into these meetings if you go back to the debt ceiling, there was all this confusion why the market didn't collapse and i think that market ultimately liked mccarthy trying to push back on spending and in talking to investors, they want the fight with inflation won so at least on the equity side, i think people are like okay, if we have to get another hike, to, you know, sort of show that we are serious about inflation to make sure we're really beating this down, investors are okay with that. >> you're talking about september as well as july? >> september i don't think it's clear. i think that's more data dependent and when i talk to investors, that's sort of the approach they're taking as well. they're not really expecting necessarily two, but one is

baked with the equity folks. >> less time you were on with us, july 5th, you were talking 4600 as the tip top for your bull case. >> we updated our earnings model and we pushed up our earnings number i hink, i think it was around 213, pushed it to 219, updated our valuation model which is dependent on inflation expectation. you had movement on those and the number was like 46 maybe like around 34 or something like that, and it pushed it up to 4740 something it's pushed it up by 100 points. it's the math on thehouse skeepg models >> are you more cautious or not. >> i think through year end, i think that the valuation and the earnings backdrop is supportive of further gains there are two things bothering me i think people are starting to chase this rally a bit too much and we cena in the aaii data you want to sell the market when it hits 30% in favor of the bulls and guess where we were last week.

29.9 now i need to see it go to that 30% on a four-week average we've had a bunch of 20% numbers. i feel like we're going to get there before the end of the year we could sit there for a while and have the same conversation in january or see profit taking before that. the other thing that's starting to bother me, we wrote about this in our weekly, is the money flows. coming into the year, everyone said the money will go into bonds, not equities. that lasted for a few months and we started to see all this money going into equities. that's actually starting to fade if you look at the large cap part we had been seeing money going into the u.s., canada, japan, that's all starting to ease up in here. we're starting to lose some of that money flow support as well. >> so you see positioning as a real reason the rally should end? >> i think it's becoming the big risk in here to be honest. i think everyone was really deeply bearish to start the year the aaii data was the best contrarian bull signal we saw. you were down basically at pandemic type lows, financial crisis type lows coming into the

year we perked up before svb, fell back down after, but we don't have that condition in place i wouldn't say people feel great. i think everyone feels pretty lousy because they're under performing frankly, but they are starting to buy in begrudgingly. >> active managers are trailing significantly. >> yeah. we had good charts in our weekly this morning, but if you look at the s&p 500 cohort, after svb when we saw that concentration in the market in the big cap tech names, i think it almost doubled, with the under performance we were seeing from the cohort small cap managers are doing pretty well this year so not everybody is having a lousy year i think that's one more complicated cross current because i'm sitting here, and i'm seeing these managers behind the 8 ball, right, going into the back half of the year, so sure, they could chase it up, but if we start to get any hint they're closing the gap they could be inclined to pull back and lock in profits pretty fast. the psychology is really, really tough in here the next couple months. >> they like to chase. >> they do. >> nobody wants a print --

usually trailing they don't want to be trailing by too much. >> look, you guys know me, right. i'm a data person. but i have been doing this a long time, and it just feels to me like we are in a good old-fashioned recovery trade i know we didn't have a recession, we basically priced one in, we're starting to see low quality out perform small cap stocks better, the extent to which everyone has hated this rally, that is characteristic of recession recovery trades. things can go on longer than they should. you see things go into stupid territory before they peiter out. >> good to get your updated news sounds like a lot has changed with the sentiment stuff. >> we have a big week ahead for bit big tech as well tesla getting a downgrade this morning. to dom chu and get a breakdown >> to the point of the mega cap technology trade, some analysts feel as though the run we've seen in tech and tech related stocks has kind of maybe come to

a head at this point and to david's point that ubs downgrade right now of tesla shares is because of that. they are saying that they are now more neutral on the stock because overall you have tesla haze a huge run on the stock and the exkigs for perfection has been priced into the shares. we know tesla has seen decent moves because of its price cuts and the margin effect has been as severe as some hoped. tesla shares up one quarter of 1% when you put that in the context of the bigger technology mega cap trade going on, there are five stocks in the s&p that have at least doubled in value so far this year to date. three are in tech-related stocks nvidia up 200%, mega platforms up 142% and tesla up 111% as well the other two are cruise line operators, right royal caribbean and carnival, the only five stocks in the s&p

that have doubled so far in a year-to-date basis now we also mentioned a big week ahead for earnings for the s&p 500 companies. roughly a third of the index is reporting some mega cap names to really keep an eye on, alphabet and microsoft reporting their results on tuesday and meta on wednesday. right now in the intraday trade we're seeing out performance in the alphabet but more importantly, sara, take a look at the way things are shaping up for traders, implied options moves on the heels of earnings that could suggest alphabet and microsoft could see swings up or down up around 5 to 5.25%. meta platforms by the way, up or down 9% on the heels of its earnings and believe it or not, at a plus or minus 9% move in the options market, that's less volatile than meta has been over the course of the last two years worth of quarterly earnings report keep an eye on those names i'll send things back over to you. >> or not so fun week depending on where you sit thank you, dom by the way, as tesla just

went positive there, so did the nasdaq nasdaq up 0.1% as we head to break our road map. markets pricing in another rate hike this week from the fed. randy crosser in joins us with more on what's next. >> barbenheimer a box office behemoth stocks such as amc, imax, mattel. >> we've got the big tech playbook ahead of a huge week of results from microsoft, alphabet, meta and more. big show still aad n't go anywhere. dow is up 157. that's what you get from the morgan stanley client experience. you get listening more than talking, and a personalized plan built on insights and innovative technology. you get grit, vision, and the creativity to guide you through a changing world. ♪

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the market is currently pricing in another interest rate increase from the fed this week. some signals indicate there could be more action head. let's get to steve liesman who has more good morning, steve. >> good morning. futures market have the next hike fully priced in, but they're skeptical about the second hike this year which is forecast from the former fed expectations there's a reason to think the second hike could happen if you look at the real or inflation adjusted funds rate as they forecast it. one way to figure it, is to use the one-year inflation expectation, subtract that the 3.9% from the nominal funds rate a real rate of 1.3% a number that only turned positive in february which means the fed has only been restraining the economy about five months. further we look at their forecast and use their outlook for inflation and the funds rate

the average fuds official sees a rate of 2.4% this year using their inflation forecast minus the 5.6% funds rate they forecast declines to 2.1 next year because inflation comes down and they have rate cuts built in but above what you can see there their long run or neutral rate of 0.5% so the fed wants to be way tighter this year and next year when it comes to the real funds rate former richmond fund president tells me they need an incredible rise to get the rate down. so fed officials forecast a real rate that is 100 basis points or 1 percentage point tighter than they are right now to get there, it sees inflation coming down, but also, the funds rate going up by you guessed it, sara, another 50 basis points. >> right and if you put that in historical context, steve, i mean, we're still not that high. >> no. it's not -- it's very high relative to the last ten years

the post gfc period, but not if you go back further. if you look at the long-term chart you can see interesting question, sara, whether or not right now is analogous to the mid-90s, 2%, 3% long running real funds rate and the reason why it might be analogous, you have all the technological innovation happening with the dawn of a.i., whether or not that beggars or begets a higher real funds rate because of the investment, capital investment, involved with that by the way, as well as the domestic production going on. it's an interesting question as to where the real funds rate will be. the fed is aiming for a higher one than they have right now. >> steve, thank you. pleasure. >> steve liesman our next guest says bank stock investors might be upset if the fed isn't close to done hiking rates. the s&p index up 14% that's just over the last month. you can see over 15% right now given that move today. tom is ceo of kpwa it stifel

company, and joins us now. always good to have you. a lot of concern about the regionals, whether it's their ability to actually get a net interest margin given what they're paying to keep deposits. what's your take after we got these earnings are things better than anticipated? >> i think the worst case situation has not been playing out, and look, the group as of this morning was trading at 47 and 49% of market multiples. just a couple weeks ago it was at an all-time low there's a tremendous amount of bad news already in the stocks look at western alliance it was up 25% last week after reporting earnings it just tells you how cautious the market has been about the banks and really, frankly, how heavy the hangover was from the bank failures back in march. back in march, we said that the problems that those banks were

very idiosyncratic to them, what we're learning now that was the case the rest of the industry is pretty stable, it's an earnings question, not a viability question, and i think we're getting that reset right now so the news, while there are headwinds to earnings, we left 75% of the estimates of the banks that have already reported unchanged, and we actually raised system for the biggest banks that reported during the first week of bank earnings. >> right before we get to the biggest banks, just to focus again on these regionals and given that rally, there is this concern about their earnings power over time generating a real net interest income or margin. are you still concerned about that does that loom large the deposits that took such a large amount of time. >> one is when you take our models, we follow over 200 companies who are ripe

only 38% of the 215 banks we followed had reported but was mostly the big banks this week it's the regional banks that are reporting we think this current environment is going to take return on equity down 200 basis points so maybe instead of our earning 14 or 15 on equity, they earn 12 or 13 until we re-set. our opinion is, that's not a crisis that's just a little bit lower profitability. so that's the big point. then the question like i said earlier is what is priced in i want to give you one other important point because the buzz coming off of the conference calls last week is that things got better during the quarter. the remixing of deposits was less punishable at the end of the quarter than it was at the beginning. i think that's what happens when the fed pauses that's what happens when we didn't get a rate hike in june so if we get one more rate hike this week, which we have in our models, and then we're near the

end, that's going to be the narrative that things are steadying. i think if you get that, the stocks have a lot of upside. >> what did we learn, tom, about the credit environment and the availability of credit and these banks willingness to lend? that was a fear for the economists and members of the fed. >> it should be a fear because loan growth has essentially halting. it's slowly getting lower and lower with each quarter. we think the industry will be probably low single digits the reason that's happening is two fold one is, it typically happens going into a slowing economy you saw that in the loan officer survey at the end of last year it was already starting. the second thing is, the banking industry is right sizing to the deposits it ought to have. it had a lot of deposits that came in during the covid surge that probably wasn't going to keep we are now right now we're

resizing i look at sanovis, they announced last week they were selling their medical office real estate book high performing but brings no deposits you're watching the banks prioritize clients that can bring deposits and credit. they're kind of getting out of the game where they just gave credit and that's going to be another form of quantitative tightening and it's under way right now. >> always appreciate it. we'll be watching earnings as they come in this week thank you. >> thank you. still ahead a record breaking weekend at the box office what investors need to know. more on what's next with the fed with the former federal reserve governor randy crossner. back in two minutes with the dow hanging on to 150-point rally and the nasdaq turning positive in the last few minutes. buildi se ea 's up 0.2%.

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investor implications here. >> absolutely. well it was an unlikely pairing of a bright pink comedic barbie and christopher nolan's drama piedmont, pie oppenheimer, the highest movie attendance and revenue we've seen since 2019. both films driving the weekend's box office up 22% from the same weekend last year. this weekend brings the summer box office period from down 7% to up 1% according to com score. this is the big win for warner brothers discovery and mattel. "barbie" grossed $155 million, more than heightened expectations that bolster's mattel's plans to produce more than a dozen more films based on the toys and delivers warner brothers the eighth biggest opening weekend ever "oppenheimer," universal is the

sister company, that film grosds $80.5 million, a number considered far out of reach for an r-rated drama that runs three hours long both benefitted not just from rave audience and critic reviews but each other more than 200,000 people bought tickets to both of these movies for a double feature according to the national association of theater owners analysts are bullish this weekend all that exposure to new trailers could reignite interest in movie going b. riley, writing, we believe weekends such as this are key not only demonstrating post-pandemic movie going demand remains robust but the nonsequel titles can drive consumers out to theaters. sara and david, this is certainly the biggest water cooler moment we've seen since long before the pandemic. >> i mean, i'm almost surprised mattel isn't up more it's up 25% in the last three

months julia, my question is on the licensing deals that come out of a movie like barbie, which are, obviously, huge and unique and the marketing department everywhere doing a good job on it everywhere, who benefits? mattel, warner brothers? do they each get pieces of it when we see ba"barbie" or the malibu mansion and airbnb, do you know how the economics of that work? >> i'm not sure on the economics of the specific deals but what's essential here, each of those licensing deals, actually functioned as marketing for the movie. we're talking about hundreds of millions of dollars of marketing for the "barbie" movie that came from those partnerships. so i think that's really key here you have to look at how the movie is going drive toy sales i was in a movie theater last night to see "barbie," it was totally packed mostly with people around my age who grew up with barbies

the interesting thing to see how mattel sells not only toys for kids but also really tries to target that adult audience with more nostalgic products. these things are cyclical and supports the value of the original ipo that mattel has. >> thank you not the most appropriate for kids, young kids. >> it's not. >> the "barbie" movie. stuff in there, sugar daddy, some body parts that are mentioned. thank you. >> just to reiterate you still have all your barbies at home they're in cincinnati. i'm a hoarder for things i'm most sentimental about and barbie was that. don't miss the ceo of imax next hour who will bring us his take on that box office weekend which is helping his stock up more than 4% today. >> they shot "oppenheimer" in imax only 30 movie theaters you can see it in that way. >> oh, wow so maybe that's why they're

getting the bigger boost. >> nolan shot us with imax. >> rich gelfond at 11:00 a.m more "squawk on the street" when we come back ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or

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welcome back to "squawk on the street." i'm constaes brewer. the israeli parliament passed a law it limit judicial power. a last-minute attempt at compromise failed and opposition members left the chamber thousands hit the streets ahead of the vote while banks and businesses closed down in solidarity with the protests. a top u.n. official confirmed talks with north korea have started over the american soldier who ran across the border and into the secretive nation last week u.s. officials say private travis king was supposed to fly home after legal troubles in south korea, but instead, he slipped away from his military escort and joined a guided tour to the joint security area where he bolted.

king's status has been unclear because the u.s. doesn't have direct diplomatic relations with north korea. and a london jury is deliberating in kevin spacey's sexual assault trial spacey has denied multiple charges brought against him by four different men the oscar winner faces jail time if he's convicted. we'll follow that. david? >> thank you we are a little over an hour into the trading day let's get to bob pisani to do that i just have to move to my right. >> great to be here. >> rallying again. >> banks, energy again, health care again this is a whole market broadening out look at the sectors we've been talking about this for a week and a half this is the dream come true for the bulls. tech is not leading and everything else is doing well banks had a great monday energy, metals and mining, your cyclical group doing well. tech is flatish but holding pup the leadership, some of the groups here, boston properties

we have reit stocks, chevron prerelease the earnings, but oil stocks in general over 78 right now. caterpillar has had a great month. some of the industrials. some of the regional banks moving to the upside here. the broadening story, this is the big story as we've been talking about. you can see this in the monthly performance, banks up 13%, energy out performing. the s&p is up close to 2%, by the way. health care out performing the russell 2000, twice the performance of the s&p and there's the equal weight even doing better than the market cap weighted s&p this is what they mean when they talk about broadening out. david and jim were talking about earnings it's too early to draw conclusions. we've only got 18% of the earnings or so that's 90 companies. more this week here. 70% are beating. that's normal what's unusual to the revenue beat is below expectations we can talk about that later on. we are basically flatish on the year up 0.3% and that is not

being reduced any more that's the good news here. nobody is cutting the system in any great way. the issues earnings estimates are flat and prices higher the s&p is higher because the valuation, the multiple as we say is higher. trading at 20 times forward earnings here. we'll have it tech earnings, alphabet, microsoft, of course going to be the big ones meta, sea gait, intel reporting here here's the main issues for tech. simple here, the positives are pretty easy to figure out here a.i. is the big story and how far they can push that cloud has been strong. digital advertising has been stabilizing. really high valuations and we don't know about the state of i.t. spending. we want to hear more about that. here's the big hope, the a.i. revolution broadens out. some of the tech bulls are using the phrase broadening out. the hope here is we get a.i. broadening out into second and third and fourth tier names not just microsoft and not just

alphabet, for example. that's what i think you're going ther about this week and see if we can get that. so far you have to admit, tech valuations are stretched and now we're seeing stuff that nobody has paid attention to that have relatively low valuations like energy, now starting to move up. this is about the most perfect scenario they can look for right now and that's the only way you get the market to extend. >> yeah. perfect i guess in a way, but to your point earnings are fine, but so far they haven't justified the move except with the higher multiple which would seem to be pointing to the expectation of future growth not to mention in the face of higher rates coming. >> one of the arguments the bulls is the rates are stabilizing and one and done camp, the bulls. i think the problem is you're right, you have to say, how can we trade at a 19 or 20 times forward multiple historically it doesn't stay there very long very rare periods do you ever see a 19 or 20 multiple for

months at a time they can argue this time is different, you and i know that's usually wrong to argue that. >> yes. >> that could be the main argument right now if you get can get some way to extend the a.i. revolution story and broaden out the tech rally. >> yeah. that's a problem. >> you may get over time, but it's not clear you're going to hear things on conference calls about new applications for chatgpt and industrial companies that are going to get enthusiastic investors. >> i think you will. i think they're going to make that argument. whether everyone will buy that and give them a higher multiple is the question. >> may be early for that. >> coke last quarter announced a partnership we'll hear from them on wednesday, but i guess the question, bob, is it enough to offset some of the near term headwinds. a group like semiconductors last week, tsmc sold off hard when they said the a.i. revolution will not offset the fact that we're going through an electronic slowdown in our end markets. >> anyone who tries to push against that, is going to have a

problem right now because the markets are betting on that actually happening so if we get that, yes, i think it's going to slow down a little bit. right now, look, we're going into -- the biggest problem i have, this is the seasonally weak period. second week of july to the end of october is the weakest 2 1/2 months of the entire year. actually 3 1/2 months. august, september, october 3 1/2 months for the year. that's going to be a headwind for the markets. >> all right thank you. we've been warned. bob pisani. check out the biggest gainers on the nasdaq 100 this morning. some of the chinese internet stocks in there, jd.com and then the mega cap names in the u.s. that will be reporting this week like alphabet, strong showing. apple, nvidia, microsoft, lygher on amazon is lagging "squawk on the street" returns after a quick break. ♪ the biggest ideas inspire new ones.

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it is a big week and one of the hallmarks of the week the fed meeting on wednesday let's dive into the outlook here ahead of a potential hike later

this week which is fully baked in by the markets. former fed governor randy cross ner joins us now, professor at school of business, external member of the bank fiscal policy committee. i don't understand why fed chair powell would signal anything different at this meeting because he has two jobs report, two inflation reports and a jackson hole meeting between this week and september. so he doesn't have to know what's going on for september. what do you expect >> i think as you said it's pretty much baked in the cake for a quarter point rise, but i think the atmosphere is going to be fairly hawkish and say the job is not yet done, reminded that headline inflation has come down, say certainly for their favorite measure, the index, and the core version of that, that strips out the volatile food and

energy sectors, that's still very far above their goal, so i think they're going to remain vigilant and going to go fairly hawkish message. >> so how do we square the disconnect between the market thinking they're done after this week and the market thinking they have more to do >> the fed wants to keep their options open and i don't think they wants the markets to become too sanquine if they think they're done equity prices explode and asset prices go up that's more difficult because it's more difficult to reign in the wage pressures and other price pressures. >> so what is your expectation at this point? do you think they raise again in september and then they're done and then stay restrictive for a long time? >> i think as you said there's an enormous amount of data that comes in, more than unusual. always between this meeting and the september meeting where they get multiple reports on all the

relevant variables i think whether they go or not will depend on the data. but i think 25 basis points will not make or break the economy. what could make a difference how long they keep rates up even as inflation starts to fall. >> do you think it's going to be longer than the market thinks at this point which is march? >> i think they're going to keep rates elevated for some time i know the markets think that whenever we see the unemployment rate go up the fed has helped out and realized they need to risk a restcession to make sure they stomp out inflation, they don't want to stop too early, cut, inflation took off and raise rates to double digit levels >> agree i wonder how much they're watching this ups strike as well 340,000 employees potentially on strike supply chain issues. inflation issues that's no joke. >> for sure not.

i think the largely look through that and think that's short-term impact rat he than a long-term impact i think if you go back to high inflation times, those are times when there's a lot more labor unrest so i think that's one of the broader issues they have to think about. high inflation means a lot of disputes between firms. >> bottom line, randy, do you think that the -- so the fed is going to keep on this message that they haven't seen enough evidence that inflation is sustainably on a path to their 2% target, nightright if that's been the message. is it more disinflationary reports or we have to see weaker economic data from gdp, housing, jobs does all of that have to add into their evidence or is it just enough to continue to see these lower inflation ratings? >> no. i think in order for it to be sustainable they want to seat cause and i think that the main

cause is this really strong labor market so we saw a little more mixed report that came out most recently if we start to see lower wage growth and somewhat weaker job market along with inflation, i think they think we potentially could be on a sustainable path but until they see both inflation coming down and what they see as the key cause right now, which is high wage growth coming down, they're going to come at it. >> all right, randy, thank you really valuable to hear from you on this fed week randy kroszner, former fed governor. let's go to dom chu with a sector sort as we look at most sectors in the green this morning. >> it's certainly positive right now as we track notable gains, to your point. across the board but specifically in the energy sector you have names like valero, halliburton and hes among some of the leaders so far in that sector as crude oil prices

continue to march higher, as you can see there. chevron also in focus after announcing that big upcoming cfo transition, allowing ceo and chairman mike werth to stay on as the company's chief executive past retirement age that's mandatory. the oil giant reporting preliminary second quarter results saying it dolled out over $7 billion worth of returns to shareholders through things like buybacks and dividends during the quarter chevron will post its full numbers this coming friday alongside oil giant and competitor exxonmobil. keep an eye on mega cap oil and rising oil prices. we'll see if that momentum sticks around. stick around, we he reavmo "squawk on the street" returning after this commercial break.

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33 years after the americans with disabilities act became law, the vast majority of businesses encouraged employees to voluntarily disclose disabilities a new study shows only a tiny fraction does so sharon epperson with that story. >> a new report by the nonprofit disability inn surveyed 485

companies and found 93% of them encourage employees to confidentially self-identify as having a disability. but only 4.6% of employees at those companies are doing it meanwhile, the prevalence of people with disabilities in the workplace is closer to 25% though many employees may stay silent, disability rights advocate and author who i met with recently says that can change >> when we shift that narrative and we begin to say, you can identify as having a disability, that is something you can be proud of that makes you who you are. that number of people who are identifying in the workplace as disabled is going to grow. >> after the energy company psge launched a campaign to bring awareness to disabilities, the percentage of employees who

self-reported a disability tripled, helping to foster more engagement and better retention. >> including a huge pool of potential employees if we weren't focused on that population and not just bringing them in the door, but making sure they have the resources and the comfort they need to feel included and want to stay. >> and that may include providing reasonable accommodations like equipment and software, flexible work arrangements or adjustment to the physical setting to help ensure that employees with disabilities can continue to thrive david? sara. >> sharon, thank you sharon epperson with an important story. just want to bring you the latest here on twitter, or x, because now the little blue birdie is going away, which was the news over the weekend. i just got my hands on an email that the ceo of twitter sent out to the entire team echoing some of what she and elontweeted over the weekend about how they're transforming the global town square. here's some specifics i pulled

out from this email. with x we serve our entire community of users and customers by working tirelessly to preserve free expression and choice, create limitless ip ter activity and create a marketplace that enables the economic success of all of its participants so, a little more there on the vision there she says the best news is we are well under way everyone should be proud of the pace of innovation over the last nine months from long-form content, monetization and advancement in brand protections. she also reiterated something we've seen on twitter from elon. our usage, she says, is at an all-time high and we will have new experiences in audio, video, messages, payment, banking, she includes in this email, creating a global marketplace for ideas, goods, services and opportunities. a little more specifics on what x is, the everything app, as we've heard him talking about it. >> he's been talking about it

for quite some time. it goes back to when he helped start paypal, which he wanted to call x.com at that point, and financial services was at the heart, sara, of what musk saw as a real opportunity that continues to be seemingly the case. >> also interesting to hear from linda, as the ceo of the organization she says elon and i will work across every team to bring x the same page and they have big ambitions and giving their employees a pep talk and a rallying cry isn't his son's name x also? >> i think so. >> he calls him that. >> at least he calls him that. one of them. he has nine kids "squawk on the street" right after this

good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.