congratulations on the success of this to this point. we look forward to seeing what comes next ynon kreiz >> thank you, becky. meantime, we've got about ten seconds to show you that the dow looks like it will open up about 100 points higher. nasdaq up 218. s&p 500 up about 35. it will make it a big win streak we'll talk about it tomorrow make sure you join us then "squawk on the street" begins right now. ♪ good thursday morning, everybody, welcome to "squawk on the street," i'm david faber he is jim cramer we are live from post nine at the new york stock exchange. carl has the morning off you just saw futures take another look at them, will you? look at that nasdaq number >> well, david, there's a company that's on the nasdaq that we're going to have to discuss. >> okay. i bet you that's where our road map starts the name is meta and it was a -- well, it was a monster quarter. shares are going to be higher.

>> i haven't used that term in a long time. >> double-digit revenue growth for the first time since 2021. and overall, of course, you just saw what we're setting up for in terms of the market. it's bullish momentum. this after the fed does raise rates to the highest level in more than 22 years. fresh data also adding to the rally. service now unveiling new generative a.i. tools after the company beat on the top and bottom lines its ceo will join us in a first on cnbc interview this hour. we're going to start with meta and that big earnings beat, issuing optimistic sales guidance for the third quarter, showing an 11% uptick in revenue. here's ceo mark zuckerberg on the call last night. he was discussing the company's outlook during what is still the year of efficiency >> the year of efficiency was always about two different goals. becoming an even stronger technology company and improving our financial results so we can

invest aggressively in our ambitious long-term road map now that we've gotten through the major layoffs, the rest of 2023 will be about creating stability for employees, removing barriers that slow us down, introducing new a.i.-powered tools to speed us up and so on >> all right what do you think? >> reels was fabulous. instagram's great. i wouldn't even forget whatsapp is maybe worth the price of a lot of different companies that we follow. you can lose $10 billion on labs and it doesn't impact the company, shows you what a good business person he is. >> and i want to talk more about him, but i do want to stop for a moment and just consider the amount of losses so far that they have amassed on reality labs it's not -- it's $10 billion repeatedly it's $38 billion and counting. i don't know of any other company that's lost $38 billion with nothing, by the way, no -- generating virtually no revenue.

and yet -- >> versus vision pro he figured out how to offer -- two companies are standout here. both alphabet and facebook, meta, figured out what advertisers want, and so the run from linear to these two companies is extraordinary, and it's so targeted that you have to say to yourself, i can't believe if i'm an advertiser, i can go to meta and reach everybody in the world that's what's doing it now, reality labs, candidly, having worn the headset, the new one is a little bit lighter, and having worn the apple, i mean, you know, tim cook's the winner here >> although the price differential is enormous >> i think that one of these pathetic telco companies will give it away >> $3,500 for the apple vision pro? >> they'll do a buy now, pay later. they ought to do it. have you seen the value subtracted of a company like at&t over the course of many years? >> yes >> well, they got to offer you

something. >> they may need to. but back to -- $38 billion of losses, and by the time he's done, it could be $60 billion. >> why are you focused on something he's not doing right >> i'm not i'm not. i'm just pointing it out as somebody who's been covering business for 37 years. i don't think i've ever quite seen anything like that. that's all it's worth mentioning because of that >> it is -- yes, because if you had a bonfire -- >> i've seen terrible deals. i've seen companies get ruined by many different things my point is -- >> jack london can build a fire. >> this company still powers on. revenue is accelerating now. few people expected at the beginning of the year that we would be talking about high teens revenue growth for meta as it ended the year. >> well, he's -- people love the product. that's it. and we haven't seen the real reality labs let's give him that. what i've seen when i was with him was child's play i mean, there could be something here that could be dramatic. it's just that apple's married

it with amazing content, including major league soccer, which, i mean, messi was worth about $5 >> and to be fair, he continues to believe that the metaverse will be a thing. >> he's not an idiot >> far from it he's an app on top of these platforms. he's still relying on them we saw what happened when apple changed the operating system and what that meant for their business so, you can imagine he wants -- if he believes this is the next platform opportunity, he wants to control that and the hardware as opposed to being the guy riding on top. >> i think this was a reels quarter. reels -- >> you mentioned reels so many times over the last year and a half >> i like to be right. >> give me the numbers, then go ahead >> he's just saying, reels is catching up. it's actually dramatic it's a big step function for what he thought. he was talking about not making as much money for this whole year, and the numbers are extraordinary. picked up a huge -- billions of dollars in revenue >> yes >> and we know that tiktok -- >> $10 billion run rate.

>> wasn't supposed to happen until next year at this time remember how nvidia did that step function where they had 4 billion more than people thought. reels is like that the thing i think we're all mystified is what we're seeing in reality labs seems very view it viewmaster-like, and the headset -- there's got to be more to it it's got to be flat on your screen in order to be amazing. maybe he has that. i do not want to rule him out. i think he's too good to show what we've seen yet. >> there's many, many billions yet to come, and capex is going to go up next year, despite a year of efficiency that's been going on this year >> reality labs, i think he doesn't -- he gets a pass. he doesn't have to talk about it >> he doesn't. >> he's doing so well in other things but i think there will come a certain point where we'll say, listen, are you going to give us a $40 billion writeoff if you're going to do that, i got to rethink my game plan. he's listening right now because he's a good fan of our show. >> is he really?

>> yes >> that's very nice. i hope he is >> it's not very nice. you have to watch the show >> do you want to talk about the stock itself for a moment? let's do that. >> i want to get you pumped up a little, because this stock is flying and it's flying, and it's -- it's because -- >> one reason may bebecause they could do as much as $20 a share in eps next year and it trades below the market multiple >> look, the guy -- he bought back stock at the right time, not the wrong time the man laid off the people that we want amazon to do he did what we want alphabet to do he demonstrated ability to be able to get rid of people who are not -- who are not producing the way they should, and at the same time, he's managed to -- the reality labs, i want you to view it as a skunk lab there's something going on there that we don't know kind of like, you know, a lockheed skunk lab it's going to come out, and there's going to be a plane that's just going to dazzle you. like the boeing 737. >> point is, if even if it just continues and amounts to

nothing, the stock is still poised to go higher if they can end the year with this big revenue growth that seems likely now. >> let's say you can have the virtual mall that we've all been waiting for, try on a ralph lauren suit, take it back, maybe you've lost weight, you have to take it in that's all going to be done in the mall and at the same time, he's revolutionized the way we are going to be educated in this country and what he's going to be known for is like how rockefeller, who was initially viewed as being this terrible monopolist, who ultimately came up with the rockefeller institute. >> the metaverse is a call option that's all i'll take it as that >> the metaverse is a call option >> but meanwhile, you got revenue growth accelerating. they're using a.i., obviously. reels usage is up sharply. employees are down 71,0 71,400 and that didn't account for the 10,000 or so that had been recently -- >> by the way, amazon employees are down >> all of which means what, jim, for the stock? >> all that means that you -- it

has to be -- you have to keep coming back to linear tv you can target three billion people with instagram, facebook. three billion peer not, david, 300 million. three billion. think about the super bowl i mean, it's so much biggerer than the super bowl, and it's targeted this is what sheryl sandberg first started talking about when she was working with mark, which is that if you want your ad, you want to get customers, you go to google or you go to facebook that's it. >> 3.07 billion people on average. >> google or facebook. by the way, you know what the secret is with google, yesterday? it's going to be the nfl ticket. >> i did note both companies had 29% operating margins. same operating margin. interesting, isn't it? selling ads is a great business when you can do it at a scale like these guys can. >> if there's two companies that you want to advertise on, just two, that's a pretty good business >> one final point, we listened

to the call, and i know you do and read it. a couple of people remarked on this zuckerberg, you know, so many ceos, we, we, we he uses "i" a lot. >> yeah, he does >> i'm going to do that. you know what? i know investors actually embrace that because they're like, he's fully engaged he's fully responsible >> can we just say -- >> he's not backing off in any way. >> when it was doing badly, he was not saying we. he was saying i. i've been a huge believer, which has been not easy, right >> well, there was a moment where you were unhappy, pretty upset. >> i got bagged but it wasn't his fault. sometimes you just get had >> i don't think you said to sell the stock then nov >> no, i didn't. >> you were fairly emotional at the time >> fairly emotional? my wife who doesn't know i have a morning show heard from people that i was very upset. not since our dog died >> i would note that ever since then, it's been straight up.

>> well, i had kind of a conversation about, like, you can't do this again. >> do we have time to turn to the broader markets here you guys want to do that >> i think so. i was having so much fun a lot of companies >> we got the fed yesterday. so many earnings to get to we obviously dealt to a certain extent with meta >> global goods. >> take a look at futures. yeah look at that nasdaq. >> david, i mean -- >> anything from the fed yesterday, jim, that sort of turned your head >> i think the fed is saying, remember, i don't believe in soft landing/hard lansiding i think that's all nonsense. i think the fed is saying, the plane is doing well. why should the plane come down at all that's a stupid dichotomous thing that we have to hear because people are trying to come up with analogies that don't fit anymore in an a.i. world, you know? >> yeah. >> david, i like to -- we smashed them here. >> we did?

>> we smashed the sibilance. hard landing jay powell yesterday was cool as a cucumber, even when the 40th reporter asked him, when did you stop beating your wife, he was right there. he was right there with them we're data dependent on that question >> all right after the break -- >> i love jay. hey, i've been with jay the whole way except for that time when he went on, i don't know -- >> you have been with him the whole way here you were a little late on recognizing inflation. i remember you and i arguing about that >> i am a jay backer the whole time i'm a jay hawk >> after the break, we're going to talk with the ceo of servicenow you can see that stock take a look at futures, though, and look at the bottom of the board here those nasdaq futures >> don't you have to have reverse? >> a what? >> a reversal. >> yeah. we'll see about a reversal but you can see that we are poised for a higher market

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comcast business, powering possibilities. servicenow reported second quarter results that beat on the top and bottom line. we're getting used to that, but sometimes you get a level of excitement that just shows you, do not be complacent about a company that delivers a great quarter. let's bring in chairman and ceo bill mcdermott always great to see you. >> great to see you too, jim thank you. >> so, bill, we've all, what i

say, almost suffered through ennui about a.i. because everybody is talking about how great it's going to be no one's talking about what it does for the customers, and i realized there's one company that's been able to do it. it's your company. please explain why you're able to make money for customers right now and make money for shareholders right now with a.i. >> absolutely. well, this is the platform for intelligent end-to-end digital transformation, jim, and we have had a.i. built into our platform for years now. we were a first mover in building the a.i. features into the platform, and now, you're looking at generated a.i.-infused pro sku, which essentially enables companies to have a digital assistant across the entire enterprise to radically simplify the life of the employee and the customers they serve also, the engineers. just think about an engineer texting to code or texting to

build a work flow or texting to develop a new application. and these business cases, because they are so transformative, in every industry, they have big paybacks for the customer, so obviously, from a pricing perspective, you can have a pro price for this and catch an uplift tailwind for servicenow it's as simple as that >> well, bill, i think that, while i appreciate what you said, you were really fired up last night, and i got to get you a little more fired up, because one of the things that you did say was you are making so much money for your customers, some of the analysts are saying, when are you going to start charging more that's not your style, i know, but the possibility of a company being 50% to 60% more productive says that you should get more than 10% of it salesforce does that kind of thing. i want to see it from servicenow i want to see bigger percentages. >> well, the most important thing to servicenow, and i think

that's why we're the fastest growing saas company in the cloud in the world and i think it's why we have the highest retention rate more than 90% of our customers stay with us now we're going to take it to a new level, jim let's reinvent insurance let's take a.i.-based decision making for underwriting processes. let's go to health care and bring natural language, knowledge, support for the clinicians to better serve the patients let's go to manufacturing and automate supplier on-boarding, the supply chain, and the shop floor. all these things have massive paybacks for the customer, so one thing we announced yesterday was the servicenow a.i. lighthouse customer program, and as you know, we're codeveloping this with this nvidia, my great friend, jens en, and of course accenture to fast track generative a.i. industry transformation, so we're building a blueprint to completely transform entire industries and the payback for that for our customers is

breathtaking and servicenow is out in front, and that's why we're growing faster than everybody else in the space. >> hi, bill, it's david. how long does that transformation, which is significant, and which a lot of people have been looking for in terms of the benefits from generative a.i., how long does that take? >> that's the great point. we're already doing it we're announcing, in our vancouver release, we always name it after a city or a country or a state, our vancouver release on september 20th, all these a.i. features that i'm talking about digital assistants for everybody and every company across every function is in the platform. now, when you take on these large transformative cases, we already have more than 125 of the world's largest companies lined up at the door to do this with servicenow, nvidia, and accenture. how long will that take? we're talking a few months, and it's going to go extremely fast, david, and a lot of people say,

well, is that in the guide and i said, no, because that's the upside case. the faster we can get the customer to realize the true generative benefits of a.i., the faster we canrealize that in the guide and ultimately the overachievement of the servicenow performance >> so, we're going to see productivity increases that soon, bill, from all this stuff that you're talking about? >> you're already seeing it, david. we have something we call servicenow pro in the servicenow platform, and we're seeing 30, 40, 50% year over year improvements in productivity, and we're also seeing our customers buy the pro version of our platform at a record clip. now, with generative a.i., they're going to get the benefit of pro and pro plus for these generative a.i. use cases that are transformative now is the time to see it. >> all right, so, bill, when i hear you and i look at the percentages and a calculate the percentage, what it says to me is you could drive a 60 to 100%

increase in contract value among some customers this potential upside, i have to believe, is not reflected in the current guide you gave us. >> that's correct, jim i mean, that's because you got to do it, right? you have to prove it you have to do it, but it's not in the current guide we do see a bull case for a.i. at servicenow because we already have early evidence over the last four years how fantastic the platform's performing and the a.i. functions that are already built into it. this is net new innovation, the flywheel of innovation at servicenow is really smoking hot, and now, all of our partners are joining the party they all want in so, it's a super exciting time, and yes, jim, you now see servicenow, think about this, in 19 of our top 20 deals this quarter, we had five or more products built into the building materials for our customer and ten of those deals, we had ten or more products on this one

platform so, what you're seeing us do now is turn into a masterpiece, a masterpiece in enterprise software where, across all functions of a company, we are now driving business outcomes, cost takeout, productivity improvement, and growth on and that's why i'd like to thank all the c-level executives that are watching your show for believing in servicenow, and we're coming to work for you >> one flawless thank you very much. bill mcdermott, servicenow good to see you. >> thank you >> nobody promotes like that man. nobody coming up, it is cramer's "mad dash," we'll count you down to an opening bell, and as you can see from taking a look at futures, we're going to have a nicely higher open good day for the bulls at least early going. more "squawk on the street" straight ahead ♪ to help you see untapped possibilities and relentlessly work with you to make them real.

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what's the out look for the second half? plus threads metrics well, check out the nasdaq 100 gainers in the premarket you can see align technology leads the list of course, right behind that, adding a lot more market value, of course, given its size, is meta, which could be up as much as 9%. micron at the bottom of that list

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the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. let's get to a "mad dash" and the opening bell >> there are two people that no one knows. w won is tim archer. one is doug bettinger. they are putting out numbers that are just extraordinary. they are very large

semiconductor capital equipment company and they're making the chips that everybody needs to go in conjunction with a.i., and david, they were -- >> they're making the equipment that makes the chips >> and they did numbers last night that i just never thought they could possibly do, simply because they were blocked momentarily from china now, they were able to get in on some chips for china they have 26% growth, but when you think about how to make chips, you must think about lam research, not just applied materials. this is a monster good quarter they are nonpromotional. i've tried to get them to promote. i feel like i have to do it for them wonderful quarter. wonderful >> any read through or really more specific? >> well, i tell you, the read-through, i would say, is that the demand for chips, even though samsung is saying, listen, the drams, still not coming back, the demand longer term for chips is so unqualified in nature. companies that will not stop producing great numbers over the next decade.

decade decade >> opening bell. few seconds away here. let's take a look at the realtime exchange back at our headquarters lot more green here at the big board, surfair over at the nasdaq, prospect capital, a development company sometimes it's very hard to hear >> yeah. and i have expressed some -- i work for the players at home, our people at home, not for people here, so it's sometimes very difficult so, i apologize to everyone who is watching at home that i can not do my job as well as i would like >> yeah. well, we'll try and forge ahead. and now things have quieted

down >> we have a line we imagine lam, we covered that david, i don't think we've given enough credit to the number five best performer in the s&p, which is a company called comcast. >> okay. >> and i thinkn e company that we work for because it was a rather amazing quarter. >> it was an interesting quarter for comcast, and the bottom line is the bottom line take a look at the shares up more than 6% right now it was the financial performance of the company that was better than anticipated pretty straightforward stuff such as ebitda $10.2 billion. that's adjusted. but it was up 4.2% earnings per share, of some importance as well revenue number up 1.7% but net income was higher. margins were higher.

they returned capital to shareholders as well and a dividend, of course, as well but you know, jim, i do like to read a little deeper in, in many ways as well, to get a read on some of the themes we talk so often about. broadband customer still went down, domestically only 19,000. you know, yesterday, i had greg miffei on. liberty owns a very large stake in charter, one of the other largest cable companies in the country. i asked him whether he he thought that inflection might be coming because there has been an expectation, perhaps, you would start to see growth again. not quite there for comcast. wireless, we talk a lot about this when we talk about at&t and verizon and t-mobile the competition from comcast and spectrum, look at that number. 316,000 wireless lines added and then the other big theme that, of course, was a focus of my interview a couple of weeks bag now with bob iger from disney, and continues to be one when we talk about nbc universal, and paramount, warner

bros. discovery, disney, namely, the ecosystem on which we rely is going away fast 543,000 video customers lost in a quarter, and that did increase from the last quarter from the year ago so, as we have been saying, cord-cutting is accelerating there had been an expectation that things would start to level off. it hasn't happened yet that's one company it is the largest, but nonetheless, you're losing, what, over a run rate of over 2 million customers a year who are watching video >> and can still -- >> it's a broadband company. >> and the clauses are diminishing, which is very important. >> top losses are -- you would hope, diminishing. that's been seen as a headwind for comcast. you've got their negotiation that will be coming. we know it's been telegraphed with disney for hulu that's going bring money comcast's way.

just how much after taxes, we can still debate but that will take place but a very positive quarter on the basics, which is delivering on executing and getting an operating margin that was perhaps higher than had been anticipated in the face of what is stilllackluster growth for broadband. there isn't any. wireless is becoming a real business and then, obviously, the loss of video customers. they say we're not chasing unprofitable video it's not never -- the margin there has always been much smaller than broadband, and that's where things stand. we'll see what we get from charter. >> do we ever have to talk about theme parks? >> we should we should. >> i know that i've proposed to disney that they put up new theme parks. they do not have the capital to do so. however, comcast has all the capital in the world, and to me, they've got great characters they've got the possibility of an extension into many parts of the country and the world they could do it. i'm saying this is a company that is doing far better than people say i work for them, but it was a

remarkable quarter, and if you're going to start cutting back the losses and calling peacock, you can increase the money on other sbentertainment. >> we have sound from mike cavanagh talking about cord-cutting take a listen. >> consumer trends such as cord-cutting and new competitors, particularly from the technology sector, present challenges for us. and we are facing an uncertain macro environment which continues to pressure linear advertising, but i firmly believe that we have the business strategy, management depth, and financial strength to emerge as long-term winners and value creators as the landscape evolves at nbc universal and across the company >> there you go. reading from a script there, clearly. >> it's a great number and i know that cavanagh cares passionately about losses and curtailing them. he cares passionately about us >> yeah. >> which i really enjoy. he really thinks that we're important, and it means the world to me as someone who does

not play for dinner, but wants some day to be recognized and we're beginning to do that as value add. >> we're not going to get sold, you don't think, cnbc? spun off split off? no >> i like an owner who likes me. okay because it makes me feel like we're playing -- >> they've always liked us jack welch liked us too a lot. >> i feel like andy reid when i listen to him. >> all right, can we move on now? chipotle, you had the ceo on last night >> let's talk about that >> let's get to some other earnings movers this morning >> he'sre's the problem with chipotle the stock has been up giantly. there was a belief they were going to be able to raise numbers gigantically, they didn't do it because brian a nichol doesn't play that way i just thought, in the end, it was just the business as usual, great number from chipotle, with the addition of making franchise -- >> what do you mean, great number stock is down 8% what are you talking about >> what am i talking about i'm talking about people don't

know what they're doing. i've been behind this stock since it was $300. what are these clowns who are selling given you? >> you're not worried at all no concern >> i said at $300, you should buy the stock and it's going to go to $2,000 i've got to tell you, if they bothered to listen to the interview, they would know as business as usual at chipotle. at one point, jack hartung is saying, will be, we can't make enough of these. middle east franchise, i'm not that good. france is good british is good. chipotles are opening everywhere david, this story is about speed and throughput and why people don't understand throughput is because they've never owned a restaurant if you can make chicken al pastor, which is going away, and make that in two minutes instead of 15 minutes, think about the -- your throughput >> "the bear," every second counts

>> when cuz came back after working at the three-star michelin, he went right back >> every second counts >> i had brian nichol on last night. >> inflation is still showing up in both labor, kind of in the mid-single digit range, and if you exclude the great pullback in costs on avocados, you are still seeing mid-single-digit inflation. we've got tremendous pricing power, so if we need to pull that, we can pull that lever >> see, you hear what he said? there's two ways that these companies make money jacking up prices, and then accepting that traffic's going to go down or you have traffic going up, which is natural, organic growth that man has traffic growing up. avocados, not getting away from the mexico market and they're getting people to start working that's not as hard to find people to work this is just the classic overreaction from people who do not know what they're doing, and i respect that

i respect people who do the wrong thing. that's how you get to make money. >> what company started chipotle >> mcdonald's. >> correct let's talk about mcdonald's, because that company also out with numbers >> well, that was clockwork. >> i wanted to hit mcdonald's. we didn't do coke yesterday because we were just so busy >> i spent so much time on coke. >> we never even got to it there's our mcdonald's by the way, ceo also on the call talking about the consumer certainly some concern with the u.s. consumer that shows up in their sentiment, but our business and particularly, i think, our value positioning in the market has put us into a good position to be able to weather and continue to drive share gains that they say are being seen in the numbers. >> look, i think that mcdonald's is one of those companies that you just are consistently impressed they do double-digit comp store sales this is just an incredibly well run company. it is doing everything right

and you can buy it, and you can -- i don't want to say forget about it, but this management team is -- the old management teams have been erratic. there's nothing erratic about these. these are pros >> did indicate that pricing may start to come down as a result of inflation abating >> they're doing it right. >> you wouldn't know that from the nestle quarter and the way they raised price, for example >> the one you're going to really have to focus on is procter because if it's like what unilever had, procter reports tomorrow, you're going to see that pricing did not come down, but the margins gigantically expansion because they have the scale. unlike kimberly clark, which did not have the scale to tell its suppliers, here's our new pricing. the only people who can stop procter are costco and walmart last night, i talked about -- >> the ceo of kroger in the midst of trying to buy albertson's. that has gotten a lot of opposition, as you might imagine. that one, i get a lot fewer

people questioning the ftc's judgment >> right because you know, the law of our country is that -- is the p&b bank standard, which is when p&b bank tried to buy number one and two in philadelphia, this is according to jonathan kanter, who's really rigorous, this company is combining the number four and number five, so theoretically, they should be blessed, but lina khan is so anti-merger that even though it's created a hundred thousand union jobs in the last dozen years, it might be blocked but they need to do it just to keep up with costco and walmart and amazon, although amazon -- >> i mean, i know he's positive on the prospects for the deal, but he seems to be alone in that, jim. >> yes >> okay. you agree. >> yes i happen to like him very much because i think if they walk away from the deal, the stock goes up, or if they get the deal, the stock goes up. i think that's not bad but activision-blizzard changed my mind about a lot of things because the courts used the p&b standard that's the one you have to focus

on >> and we -- it's true, it's, you know, you can't predict anything in this environment, it seems. >> but i detect a level of some optimism by you that there could be a return after -- >> i am in constant acquisition and merger activity. i'm hearing a much higher level of conversation, which could translate into potentially, at least, some transactions being announced, let's call it, fall, end of the year. that said -- >> it's very important if you're goldman-sachs. >> -- i talk to people, just because they're talking, doesn't mean they're going to decide to pull the trigger we should pause for a moment and just look at the performance of the nasdaq in particular this morning. it is up over 1.5% that's bringing its gains for the year, by the way, to 37% plus >> extraordinary >> obviously driven in part by meta shares, which are up 8.5% but not alone. we've got apple up 1%. amazon, up 3%. alphabet, adding to the gains we saw yesterday after earnings

up another 2%-plus, and nvidia, which we talk about so often as being the beneficiary of so many trends >> did you notice, by the way, how bill mcdermott immediately tried to work in jensen huang because of the partnership with them at accenture. the theme of this -- jensen's not talking right now, but jensen had -- it's really incredible, he showed me a year and a half ago he was astonished that people weren't picking up on it, and then chatgpt and he was friends with sam a long time. he is the genius behind all of this, and there are people right now in this country who are so good at business that if i were in the people's republic of china, i would say, wow. we misjudged them. we thought that we were beating them, but we're not. >> you can't keep capitalism down not for long, jim. >> three cheers for capitalism >> there you go. >> do you have to do that? >> i can't be positive on the business community

>> i want to point out, point-blank, you could spend $40 billion on reality labs. the vision pro, apple, is going to crush mark zuckerberg it's so good >> it's going to crush what? >> meta quest. >> that's an interesting comment you're making here >> i think that apple is sneaking up because the vision pro is so great. think about what they did. they got messi >> that is going to spend, what? >> have you seen hijacked? >> i'm not going to watch "hijacked. i like idris elba, but i'm not >> i -- >> it's so funny that you come back to this tiny little business every time you talk about apple, namely, like, the stuff that literally means nothing for them we shouldn't spend time on it. apple is up, why it's up because of, i don't know, a.i. and because they're going to sell more phones. >> vision pro is much better because 15 is looking good >> nobody cares about the vision pro. >> okay, because the -- >> it's not going to move the needle >> the greatest technology

company with the greatest consumer ratings, and i want to make a statement right now eddie cue getting messi for mls, that is a coup the likes of which if he had any linear tv company talking about it, it is all we'd talk about. "hijacked. you know who stars in that >> they all have tiny market values >> you like idris more than anybody else in the world. >> stringer bell in "the wire. my son is watching the wire now. >> so are my kids. eddie cue is doing things that are just -- they're existentially fabulous >> let's move on to some of the names we haven't gotten to is this morning on the negative side, love, southwest airlines >> yeah, but against that, royal caribbean. you and i are going to take a cruise, it's going to be fabulous you're going to be on deck 14. i of course, will be in the haven up at the top. my daughter was on the 12th

floor when she did a norwegian cruiseline said portholes weren't as important >> gary kelly, no longer in charge there >> yeah. okay >> tough you have nothing to say on that one, do you? >> not right now >> all right move on. >> david, you hear about amazon and the idea that jassy's getting religion and they don't want to spend a fortune on food there was an amazon conference that i did not get invited to. >> i don't get invited to anything i literally get invited to nothing. you know that. >> you really do >> i had to fly to sun valley. i couldn't even get in apple has things -- they have things where they give you the vision pro and let you try it on i never get invited to that stuff. >> i don't get invited >> i didn't know about the amazon thing that i wasn't invited to >> let's talk about honeywell down eight this quarter was quite good, but it's the first quarter people did not like the fact he kept the numbers the same. travel trust owned it for a long time

when the stock is at $195, you're going to start buying it. pretty simple. it wasn't that bad a quarter, and yet, people are just freaking out, because people don't understand how to trade. >> every quarter that's -- every time the stock is down, and it's -- you say it's not a bad quarter. you're like, you got anything bad to say about anything? give me something. >> estee lauder. >> give me something >> estee lauder has been horrendous >> okay. >> disney has been horrible. just amazing microsoft, yesterday, was down 15 i told people in the trust, buy it right now, it's coming right back people forget what amy hood said honeywell, it's a new ceo. people understand, i actually do work i know the people who are selling it their kind of -- i don't know what kind of work they do, but here's what it is. they beat earnings per share they had higher segment margins. the revenues were on target. they raised earnings per share one weakest division which is warehouse automation

ar arrows cooking on all cylinders. go knock yourself out. go do it i don't care >> it does remind me of earlier in the week, and the drubbing that rtx -- >> but the problem is rtx, you know, the powdered metal, they're pulling things >> we know what the problem is greg hayes was thankfully with us to explain it to us >> but you know, i'm saying, i want these people to sell honeywell. i don't want them in my honeywell. they should hit the road >> it's our fourth day together this week. let's see. >> it's been great >> we have had earnings. >> we haven't talked about meta in the last five minutes >> generally, what do you think? >> okay, so, i'm going to give you something that is -- >> i'm just asking your broad interpretation of earnings season >> i was about to give you a bristol myers take >> i asked that question and you think of bristol myers >> yes, because brissetol myerss revealing itself as what people used to like people are liking industrials that can shoot the lights out.

they're liking tech that is software enterprise that is no longer spending like a, you know, crazy sailors. they like oils that are not spending like crazy sailors. they like financials now that they have been brought down to a level where they can be bought they like costco because it's a group for the consumer and basically, what they like is anything in the nas. >> yeah. 37% is the gain on the nasdaq. >> buy microsoft amy hood has been -- >> 20% gain. it's been a good year, to say the least, for our broad markets >> abvi had a good quarter so far. >> that's good to know, jim. thank you. before we head to break, let's give you a look at the bond market as well we're a day out from the fed raising rates by 25 basis points key question, of course, continues to be, what's next higher for longer? is that possible if you see the two-year at 4.891% and the ten, 3.905% we're back eiright after this

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the laggards this morning. we talked about a few. not to worry on chipotle southwest is down. ebay also guidance there. >> chipotle right here >> almost all of these earnings related and down on the session so far we're back after this.

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let's get to stop trading. >> you asked me earlier what's working. it's a company like textron. it's a providence based company. put up unbelievable numbers. it has great automotive and airline and defense, great finance division, people don't really -- they love it this is what you have to look at kind of reminds me of eaton, companies forgotten inesteryear. this is the kind of thing that people are missing american industrial companies that are crushing it. >> all right what do you have on the big program this evening >> so here's one that's crushing it otis otis judy marks is doing a remarkable

job. stocks are down today. stock at a 52-week high. and then agco, more feed the world. i like to keep up with it because they understand the problems with ukraine. he's a guy told that 13% of the world's calories are bottled up in grain. once again the reason i think you'll like it, it's a reverse head and shoulders, which happens to be -- >> missed that i have. >> jim, have a great rest of the day. >> thank you you too. >> see you over there a little later at your post for "mad money." >> thank you david, royal caribbean. >> royal caribbean. >> you and i, what do you say? >> never going to happen. >> why not >> you know that it won't happen. >> i know. >> not that i wouldn't want it to we got a lot more after the break on, of course, that big earnings report from meta. stock up 8%. cfo also joining our network later.

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lee. we're live from post nine at the new york stock exchange. karl and sara have the morning off. we're having a rally look at that, nasdaq up over 1.4% right now driven, of course, in part by meta earnings which we'll get to and a lot of other components that are happening very strong days so far. >> yep 30 minutes into the trading session. here are three movers we're watching for you, meta as david mentioned one of the top gainerson s&p 500, beating estimates, raising guidance and adding to gains on the year. we will break down the numbers chipotle headed in the opposite direction and beating system, but rising food costs and inflation warnings taking a bite there. that stock down 9% finally watch nbc universal, parent company comcast today, higher prices oversetting continued slowdown in its broadband business and subscribers for streaming service peacock doubling year on year, shares higher by 8%p. >> we have pending home sales out a few minutes ago.

and diana has the numbers for us. >> pending home sales rose for the first time in june up 0.3% month to month sales were down 15.6% year over year. these numbers are counted by signed contracts not closings. people shopping in june and putting down deposits when mortgage rates were at the higher end of the recent range, shooting 7% at the end of may on the 30-year fixed and holding below 7 for most of june rates are around 7 today supply continues to be the issue with new listings down nearly 26% from a year ago, total inventory at the end of june was down 14% year over year. regionally sales were strongest in the midwest and that's the first time in many years that's happened clearly buyers are looking to this more affordable part of the country. sales down in the south and west where they had been most competitive. the real it tors are predicting total sales 13% lower than last

year but will begin to rise again next year. back to you guys. >> all right thank you very much, diana olick. big piece of the housing puzzle what the feds have been doing with interest rates and higher mortgage rates helping to reinforce the supply-demand dynamic helping to prop up prices relatively strong, even though we may have seen the bottom of that cycle. >> yep. >> very shallow in terms of that pullback. >> yeah. you know, we also got numbers this morning as well, we've got some data, gdp, few other things as well, claims that seem to be generally positive, melissa, helping what is a sig can't move on the markets overall and the nasdaq in particular, but not to take away from the s&p you see initial jobless claims coming in low. >> yeah. the tech rally continues and, of course, that's the highlight we mentioned meta, but helping to lift a lot of others alphabet had reported its own

strong report is getting a nice boost off of the report from meta reinforcing the notion that ad spending is rebounding, those core business advertising driven revenues may have seen the trough it may be really showing the inflection point into the second half of the year for amazon which has yet to report for earnings, its earnings, that's positive news. >> these big platforms in particular, alphabet and meta seem to be taking all the advertising. we know what we call traditional or old media, has still been somewhat challenging comcast having a very strong morning, but mike cavanaugh the company's president talking about it's a challenging environment for ads there. >> yeah. >> not so to your point for meta and not so for alphabet, both of which seem to be interestingly both put up 29% operating margin for their quarter with significant revenue gains for meta, of course. >> that is an extraordinary move for comcast in a single day percentage wise.

>> it is. >> we follow the stock closely. >> for obvious reasons. >> we're shareholders. stakeholders. >> it typically, you come in and then they say something on the call that gets people upset, not the case this time they got through the call and, in fact -- >> more excited. >> real momentum the bottom line in particular, melissa, for comcast that encouraged people. the adjusted ebitda numbers up 4.2% the ability with not a lot of top line growth to deliver significant bottom line growth not to mention continued return of capital to shareholders and free cash flow numbers looking strong. >> let's get to meta shares surging post quarterly results. mark zuckerberg continues his year of efficiency here to discuss the quarter, a buy rating on the stock $385 price target correct me if i'm wrong, gets me back up to -- us back up to the all-time highs for shares of meta that's where you see the stock going in the next 12 months? >> i do. the bottom line, i'm looking at

what you and david, broader advertising environment, look, it's improving i think online is seeing greater gains than more traditional formats of advertising from a meta perspective, not only are we seeing accelerating growth, but 21% growth in advertising in 3q which we haven't seen in a long time but seeing greater profitability too. you've got a compound effect of improving growth rates, better profitability and frankly when we do our work and look to see what's driving the growth rates it's not just advertising, it's the investments they're making it's not a rising tide scenario in our view. it's very specific to those platforms that are investing in their ad tools driving -- attracting advertisers back. >> things in the past that would have really dinged the stock, ronald, that have happened this quarter, capex in 2024 versus

increase operating losses and reality labs will grow things in the past shareholders would have picked apart. what specifically in your view is giving meta the free pass this time? >> yeah, i mean look, i don't disagree if there's anything, it's the unknown around potential increase in on x nepx and we tad about capex. the year of efficiency is not a year, it's a continued mindset at meta going forward. frankly f you're seeing greater growth opportunities and the results with advertising, you should be investing in your business frankly, i think we walked away from the quarter saying all right, 2024, we'll see increase in operating expenses, which makes sense, giving the growth we're seeing an increase in capex. if everything we hear and know and believe about a.i. and what meta is doing with their llama 2 approach, they should be investing in greater capex the opportunities are pretty

great. imagine every smv talking with the person, with the agents or bots there's upside potential here and as long as the numbers are there, profitability, i actually think that's okay. >> you're okay with spending on the metaverse. $38 billion in losses so far i don't know where they end up on this number. >> at the very least we know that they're, in our view, the investments in meta a pretty long-term opportunity and more in the hear and now it's about gen a.i., launching new year apps along those lines the meta verse is a 10-year plus opportunity, very invested in this case it seems as if they're able to do both at this point. >> yeah. you know, let's talk about the stock a bit more i had one investor who is bullish say they could do as much as $20 a share in earnings next year.

i don't know where you are you put a multiple, still trading below the market multiple this time, right? >> that's what makes meta our top pick we're close to $17.60 for '24, probably upside there. it's very hard to understand when you go through a one in four folks are no longer there and growing revenue, the opportunity is certainly there to get to higher than where the consensus is for sure. then you have a multiple that's not stretched and so you get to get back to david and melissa where does the stock go, 385 price target, all of a sudden eps is better and revenues improve that's pretty interesting and why meta is, you know, our top pick overall across the internet sector. >> i'm curious, in your model house do you put in a.i., and the impact a.i microsoft, you can say co-pilot is $30 a month and extrapolate,

there aren't hard numbers and, you know, maybe that's the good thing about this there's nothing to disappoint on in terms of the expectations, but how do you think about that in your model? clearly we have increased costs in the investments and infrastructure we got through capex and capex going up next week meta invested in capex last year which sets the stage from where we're going. from a top line perspective, we look at a.i. and the opportunity with online advertising in multiple ways. not only can it create ads at a faster cadence, automatically generating content and copy and pictures, et cetera, you're seeing a.i. examine through potentially the bots and agents and one of the things that struck me yesterday was the commentary about click to message and whatsapp where now it seems as if a barrier is lowered where you're 200 million plus, could potentially target

and converse one on one with every of the three plus close to 4 billion users on meta overall. that's awfully powerful. so when we think about a.i., that's to come and an opportunity but will come through with an advertising product and engagement we're seeing there's a few ways we're seeing a.i. come through in meta engagement, advertising, of course, efficiency and, frankly, when looking at 16, 15% growth next year if a.i. can do what we think it can do you can have sustained growth going forward. >> rojnald, thanks. do not miss meta's cfo on "squawk on the street. in the meantime we have fresh news when it comes to the banking industry and over to leslie picker who has the details. >> hey, david. regulators unveiling proposed rule making that raises capital requirements and expands the scope of banks subject to the strictest rules.

in more than 1,000 pages, the fed, the fdic and the office of the comptroller of the currency are seeking to revise the capital framework, essentially the formula for assessing the riskiness of each firm to determine a new in many cases higher buffer to protect against financial stress this is the highly anticipated bassle 3 end game. these changes would result in aggregate 16% increase in common equity tier 1 capital requirements based on activities and risk profile and regulators say most banks currently have enough capital to meet these new requirements a big change, though, if these rules are implemented would involve the way that riskiness is calculated. regulators are proposing banks scrap internal models in lieu of a standardized one for risk weighted asset and an expanded one, that includes credit risk, market risk, operation risk, and credit value adjustment risk, essentially losses on certain

derivative contracts the proposal also includes several elements in response to the recent turmoil in march and april, expanding the scope of certain regulations to include mid-sized banks with assets as low as 100 billion these changeses would require the smaller firms to include unrealized gains and losses on available for sale securities and regulatory capital this was an issue with silicon valley bank before its failure and led to concerns and confidence issues there. none of this, though, would go into effect immediately. there's a comment period through the end of november. i'm told banks and their lobbies have been gearing up for some time to push back on what they expected would be stricter requirements here. the final version of the rules will not be phased in until july 1st, 2028. we have about five years before we could see this take effect. guys >> that's really the end game then, leslie we're not at the end game yet.

>> not quite not for another five years there's a three-year phase-in period. >> we hear from our banks how well capitalized they are. are they in a position to meet many of these requirements >> well, that's what regulators say, that a lot of banks are already in the position to meet these requirements there's about $118 billion worth of cushion in the banking system, but the question kind of remains that buffer sometimes they tend to, you know, return that in the form of dividends, in the form of buybacks, higher capital requirements could change the dynamic in terms of the amount of capital they return to shareholders it could, this is something that banking lobby will be vocal on, their impact of willingness to end. it could crimp credit availability in our economic system theback perspective on overall holding more capital and those

requirements, and so expect to see a lot more fireworks it's called the end game i think we're just at the beginning. >> thank you, leslie, and david, putting in perspective, 2025 the end game, 2028 is the end game because they have three years to implement it >> like "mission: impossible," never really ends, keeps coming. >> let's get to our road map for the rest of the hour the busiest day of earnings, mcdonald's, southwest, what investors need to know. >> the consumer remaining strong, at least according to hertz. we'll break things down with the company's ceo. shares are down on the quarterly numbers. and finally the fed hiking rates to levels last seen in 2001 could they go higher from here dennis lockhart will join us outh his take later this hr. big show still ahead stay with us

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hertz shares as you see down a little less than 5% as second quarter revenue did fall short of system, despite an increase in utilization rates and demand as summer travel continues to boom the ceo joins us now he's going to break down the quarter and answer a few more questions. good to see you, steven. let's start off on the outlook which seems to be positive on the call you said on rate for the balance of '23 is for year over year comparisons to improve, uptick in rate and

demand into q3 what are you seeing that gives you a more positive outlook for the second half of the year? >> well, good to be with you, david. what we're seeing is just continued strength in the demand and it's not just here in the u.s. it's equally in europe and part of that is a function of greater confidence among the consumer you heard it yesterday, in some of the fed discussion, disinflation and the consumer sort of playing strong and so we continue to see considerable demand, such that this doesn't appear to be kind of a momentary surge or a revenge, if you will coming out of covid. something feels more permanent to it. we're seeing it across the airlines and i think there's more to come we're not back to international travel to prepandemic levels and business is not yet back to where it was and so notwithstanding elevated demand and forward view on demand

there's more to come in the context of what's available to us. >> specific question from your investor base then, i think the expectation is ebitda next year will be lower than this year and correct me if i'm wrong, you seem to be indicating you could see ebitda growth. >> we could see and likely will see ebitda growth into 2024. that's based in some measure on stability in the base business, but equally, we are pursuing a number of areas of growth to take the business up and broader, including as you know renting cars to ride share drivers like uber and lyft, doing that in the u.s. and in europe we're bringing new life to a value brand we've owned for a while called dollar that i think can compete well we'll use lower depressurating cars, less expensive cars and charge an affordable rate for that large addressable market. our european business as i mentioned, that's been in restructuring. we've taken considerable costs

out. all of our countries in europe are proving profitable and, you know, there's considerable business to be had there. >> what is your base case scenario for the economy in order to give these financial f forecasts? >> the base case is we see stability. we're not looking for expansive growth nor are we looking for a reversal in the context of rate cut or the like. stability and increasing confidence, you know, will materialize in increasing demand and business for us. the rental car company is kind of on the tail end of a decision that's being made around travel, meaning, customer is deciding to go on vacation or not not because the rate on the car is 5 or $10 higher or lower there are other input to the decision a business trip is decided not on whether the rental car is expensive or cheap we are riding broader economic

trends and levels of confidence in the economy, much of which we are seeing expressed not just in our company or in the rental car space with very, very high utilization into the mid-80s, meaning, 85%ish of our cars are on rent in any given day but we're seeing that play out in capacity on the airlines and in the hotels >> when it comes to evs in general you talk about having a first mover advantage in terms of fleet management. explain to us, when you talk about being better positioned long term for managing electric fleets for others, what are you talking about? >> think about small and mid sized businesses over the next couple years will likely skew to, you know, trucks or vans that are electric. i'm not talking necessarily about amazon or verizon or the like, but just think about the plumber, the electrician, the baker all who has three or four

or five trucks these needs to be managed. knowing thou manage a fleet, how to move fleet around, charge a fleet, hoy to manage an electric fleet, are essential elements if we're going to find ourselves longer term in place to engage in fleet management. i think that's an important opportunity set afternofor us ae look forward. >> you're also, you know, continuing to cut costs. we talked about 30 million on an annualized basis in attrition and reduction in force some people have asked me, he's cutting costs but came in as number three in terms of overall com. can you explain your comp? so so much of the 182 million is stock, but to those who say this guy is cutting jobsat the same time, that number is staggering for a $5 billion market cap company? >> my compensation is structured such that my interests and those

of our employees and equally those of our shareholders importantly, are all completely aligned. those are very large numbers, but they will come to the extent that we as a company deliver on forward value for the business and for our shareholders and so those numbers are achievable at points at which both shareholders and employees have enjoyed and will enjoy the benefits of a big, bold and growing company. so i know where the headline figures are and how, you know, variou various tables are assembled but my interest and theirs are aligned and i only make that compensation to the extent that we are successful and i believe we will be in the forward path of hertz. >> all right now i can't go to a lot and rent one of those cars behind you, can sni you're not going to let me drive that yellow thing there? >> i'm not sure we would let you into that gold race car which is -- which raced at 24 hours at le mans but we'll put you in other cool cars.

>> yeah. a long-time customer. >> steven, thank you for the update always appreciate it nice to see you. >> great to be with you. >> still ahead, mcdonald's in the green while chipotle slumps. find out why after the break "squawk on the street" returns after this ( ♪♪ ) ( sfx: people cheering ) ( sfx: stock exchange bell ringing ) ( ♪♪ ) ( ♪♪ ) ( sfx: people celebrating ) ( ♪♪ ) ( sfx: people celebrating ) ( sfx: stock exchange bell ringing )

mcdonald's and chipotle on the move after results from both names. let's get to kate rodgers who has all the numbers. >> chipotle down around 9% this morning after reporting a beat on earnings but a miss on revenue which has been a trend over the last few quarters same-store sales a slight miss for the quarter. the ceo calling out the resilience of the consumer once again on both the high and low income ends and says traffic has continued to grow and there's more room to run on that as the company seeks to improve through put with tweaks to staffing for in restaurant and digital orders during peak times. the company installed the double-sided grills in locations that speed up steak and chicken prep for workers and testing out

automation to relieve tasks for employees. mcdonald's out with a beat on the top and bottom lines and a beat across the board on same-store sales its international same-store sales showing more strength than the u.s. with a bigger beat. u.s. comps up 10.3% thanks to menu price hikes and the viral success of bringing back the meal which the ceo garnered 3 million views on tiktok. he added that sentiment has been improving for the u.s. consumer but added things are far off from where they were in 2019 mcdonald's says it's gaining share at incomes under $100,000 a year, getting benefit from trade down from full service and casual dining, and for those under $45,000 annually and less, they're seeing a decrease in order size but that's also offset by strength in traffic. perhaps people are ordering less by continuing to come into his restaurants which is good news for mcdonald's. >> kate, the theme for both of these declining costs, chicken,

pork, cheese, avocado prices coming down and that's helping and yet, price hikes are still not off the table at least at chipotle it sounded like nickel didn't want go there, but it is still an option because they have room to hike prices what is -- what are the costs remaining high or going higher >> so chipotle talked about some low-grade inflation, particularly in wages and again, remember, it has a very high ticket tim in steak on its menu. they had offset this quarter with the chicken nickel said that showed up in one in every five transactions chicken is a bit lower cost but chipotle will end around 5% pricing in this quarter and expect that low-grade inflation to continue through the back half of the year nickel said if they have to dial back pricing, they can they're not ready to do it yet mcdonald's did talk about inflation coming down in the back half of the year. two similar but slightly

different forecasts from the companies but neither moving on pricing and saying there's weakness in the consumer this quarter. >> kate rodgers, thanks. the fed hiking interests, highest levels since 2001. not stopping the markets as the dow tries to notch what would be the longest win streak since 1897. >> dom said that yesterday and i was shocked. >> 1897. even jim cramer doesn't remember that far back. former atlanta fed president dennis lkht ocarjoins us to break things down. we're back in 2. is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever.

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the street." members of the federal grand jury hearing evidence and testimony into the january 6th riot at the capitol and efforts to overturn the 2020 election convened this morning at a d.c. courthouse three sources in trump's inner circle told nbc news his legal and political teams are preparing for the possibility that the grand jury will vote on charges against the former president as early as today. london police said today that irish singer sinead o'connor's death is not being treated as suspicious. according to police, officers were called to a home wednesday morning where they found the 56-year-old had died. more than 40% of americans are dealing with extreme heat today. 140 million americans are under heat alerts from coast to coast. the biggest electrical grid operator in the country, pjm issued its own level 1 alert today because demand for power

is expected to soar as people crank up their air conditioners trying to stay cool. guys, david, i have to imagine it's a good reason to go to the movies, even to sit through a three-hour film like "oppenheimer" to stay school. >> i've already seen it once, i might go back. not a bad idea yeah it's very warm today here in downtown manhattan thank you. if you haven't heard, the fed hiked rates yesterday, 25 basis points that takes them to the highest level they've seen in 22 years data this morning showing resilience to the rate hikes let's get to steve liesman who can explain for us steve? >> yeah. david, after a historic 525 basis points of rate hikes from the fed the u.s. economy shrugs and says, is that all you got? the government reporting strong gdp, jobs and business investment numbers that but tress the soft landing outlook

but should the fed maybe need to have to do more here gdp up 2%, claims 221, down from 228, lower than the estimate continuing claims, won't go up which means people who are losing their jobs, filing claims, seem to be getting work on the other side. durable goods shows business investment is higher 4.7 up from a revised upward of 2% over capital economics riding 29.4% annualized gain in second quarter. real gdp growth which means the economy expanded at close to its potential pace over the first half of the year, suggests higher interests are having remarkably little impact as fed chair, jay powell, said yesterday, the fed staff no longer forecasting recession with concerns reseeding about bank credit tightening powell came out in the middle on future hikes not it tipping his hand from what i could gain about what fed's next move would be here are the probabilities in the market after the numbers today.

probability of rate hike in september 24%, 40% in november still undecided the market is. may '24, 61% of a probability of a rate cut built in. ticking down, so it does seem if there's impact to the higher rates and the economy can grow at trend and inflation can thaw. nice mix there the fed will watch and react to reports. third quarter gdp seen weaker, so is the second quarter, before this big upsize surprise we got today. >> i don't know. i guess for me i want to get your take on yesterday and what we heard it didn't seem as though there was anything particularly unexpected, but i want to make sure >> i thought the part about the fed backing off the recession, you can dmapts given that we have not seen the worst outcomes

that were expected or feared from the bank issues we had in march. i thought that powell also leaning a little bit more heavily into the slow or the soft landing idea, that was interesting to me. what was interesting to me also this morning was that lagarde and powell sound similar all in the data dependence out of a forward guidance mode not telling us what's going to happen and the market is going to have to take each piece of incoming data, put it into the model, and whatever it spits out that way i don't think it's -- i don't think you should write off a quarter and i don't think you should write it in we need to wait for the data if powell had a leaning or a sense of what exactly he would do, he would tell us the only difference here is that we know he has a fairly hawkish committee, nine of whatever it is, two-thirds them had built in that second hike this year and then we get to talk to a lot of them in jackson hole and ask them, is the second hike still

on. >> all right steve, thank you steve liesman. let's continue the conversation with former atlanta fed president dennis lockhart. always good to see you and get your take on the fed here and what they are telegraphing what do you think they are telegraphing anything below the surface or is it really the message that each meeting is live and we're just going to see what data tells us? >> i think that's the message. i don't think they're telegraphing much at all because they don't know what data are going to arrive. i thought steve's summary was really excellent and i agree with basically everything steve said a second ago. powell repeated his mantra, which is we're getting used to now, meeting by meeting, data dependent, no predetermined path all of those comments he said before, but he repeated them

yesterday, and really kept his options open an disclosed very little about anybody's thinking on the committee as to where this is going to go. >> when we think about the markets and pricing in a rate cut in may, 60% chance of a 25 basis points cut next may, how should we think about that should we think about the economy turning south, therefore needing some easing, or do we think about that in terms of the inflation target is close and we're going to go less restrictive. >> i don't know what to take from pricing in the cut may of next year. what i heard from powell is some patience, if you will, or at least a recognition that getting inflation down to 2% is likely to take some time.

i think he projected 2025 in his comments and also certainly did not give any indication that they will move before they're pretty convinced they're on track to that 2025 achievement of their goal and then, another aspect of this, i think, is that he in so many words acknowledged the last mile, the term being used these days, the last mile is going to be more difficult than the progress made on inflation to date. when i add all of that up, it seems to me, a may cut is wishful thinking to some extent. >> you know, dennis, i'm curious what the last mile looks like and why it's perhaps more difficult? can you explain to our viewers what the challenges are? >> well, in numbers terms, i would think of as getting from a 3% run rate down to a 2% run

rate, given the variety of indicators they're looking at. they're looking at a dashboard of inflation indicators. what they take from that synthesis is, essentially what's the underlying pace of inflation and if that's around 3% and they want to get to 2%, that's the challenge. now, why is that difficult well, it could be because we have some structural elements at work in our economy that, for example, chronic mismatch of labor demand and supply, which is going to continue to put some pressure on wages and cost of employees. that's an example. there's discussion i think in monetary policy circles of whether we are in a period of supply constraint as opposed to an era of plenty precovid.

there could be a number of reasons that just make that last mile harder. >> part of that last mile was wage pressures i'm wondering if we think see that ease, if the labor market remains firm if 3.6% unemployment, if that's sticky and hard to budge, are we going to be faced with wage pressures? >> well, there are indications of softening and, so i think you can go too far in describing this mismatch of demand and supply in the labor markets, so it looks like it's beginning to settle down, but i just raised the point that for a variety of reasons, including demographics, some maybe swings in participation, it could be that we continue to see wage pressures. you're correct that, you know, as of now, it does appear to be rebalancing, the situation appears to be rebalancing, so i

think there's hope there but getting from 3 to 2%, again, i am sympathetic to the views that that's not going to be nearly as easy as getting from 9% to whatever is today's run rate of 4.5. >> dennis, thank you always nice to see you dennis lockhart. as we head to a break, check out the biggest gainers on the s&p this morning led by align technology these are earnings related we heard jim in the last hour talk about textron and lamb research having strong gains ta still well up 7%. we're back right after this. and advice nins can help you prepare for today's longer retirement. hi mom. that's the value of ownership.

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where our focus is to always support the people who live and work there. because you call these communities home, and we do too. pnc bank. laggards on the s&p after warning of higher cost and softer pricing, phil lebeau has been tracking the action and joins us with more on the quarter. phil >> investors are really taking

shares of love out to the woodshed, less about the second quarter which was largely in line with expectations yes, they missed the bottom line by a penny but the revenue better than expected this is about what the guidance was for the third quarter and next year. for the third quarter, two things stand out revenue per available seat mile is expected to be down 3 to 7% the street said 1.5, 2% the expectation for a decline. worsen that the street was expecting. cost per seat mile up 3.5 to 6.5% some of that is fleet maintenance and labor cost here is bob jordan talking about the pressure they're going to be feeling in the third quarter. >> a lot of it as we restore our network and get all of our aircraft flying i'm proud to say we'll get that done in the third quarter. that extra capacity is atypical from second to third, so it's the extra capacity putting pressure on the third quarter. >> it may be atypical but not

what the investors are expecting in terms of the capacity coming back the bottom line, the revenue per available seat mile is softer than what investors were expecting. the difference between southwest and the airline index and you see that southwest has been struggling over the last year. we know about issues at the end of last year bottom line is this, this conference call when it comes up with analysts later this morning there's going to be more detailed questions about the revenue and softsdsness. bob jordan told us they see strong demand for the third quarter. if they're seeing strong demand the issue becomes one of okay, how is the network set up and why is it not being optimized. >> thank you phil lebeau. still ahead, honeywell, the biggest laggard on the dow despite beating estimates and raising guidance, we'll break down the numbers with the new ceo, his first broadcast interview since taking the helm. stay with us not spreadsheets. you need to hire. i need indeed. indeed you do.

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let's check in on the markets as we close out. about half a percent. the dow is phone focus today. and the dow is on pace for its longest winning streak since 1918 97, 14 straight days of

wins. that is extraordinary. i'm sure you don't remember 1897 either. >> ge was the only one there at the time in 1897. that was the year we started the big mergers that were happening, the consolidation, standard oil and all those things started happening the next few years. we don't want to hear about all this. we want to hear about what's going on right now. you would not know that today because it's all the old stalwarts. you remembered the old communication group, communication services, meta of alphabet, dragon. tech is great. lan research had great numbers, raised guidance. consumer destruction did you see royal caribbean? they just killed it with new highs at 6%, great bookings get energy was the new leadership group, energy materials. that's also moving ahead a little bit here comes the people keep

messaging me, why are we up 13 days ago and the dow jones industrial hours? it's kind of silly. we had better than expected earnings. a soft landing has become the consensus but have you seen the economic numbers? storable goods were great. the jobless claims numbers were strong. fomo is still out here, at this broadening out story we are talking about is finally working . a simple way to look at it is the s&p 500, the rsp is finally barely outperforming the market capital snp this month, only this month. not on the year. it's only have as good in the year, but it's finally actually working. the headwinds are there. we keep talking about the high valuations that's not preventing the market going oversold. seasonal weakness, yes did not preventing the market from going forward. earnings people kept say you're not going to be able to move

before because it will be hard with prices these high to get things. they are 40%. this includes numbers this morning, 80% are beads. he is what impresses me. the average beat is almost 6% pdf to go prior to covid. normally the beats were 3% or 4% . if we go to the old numbers, this was much better than normal on the beats. revenues were a little light because they were having trouble raising prices, but if you look at the new high list, heavens. it looks kind of like the companies i reply to me. there you go come on the new high list. i wanted to mention something directly to that. this is a regional aircraft mobility platform, electrified with the reference price of $20,000. there is no shares created. essentially, the shareholders are putting their shares on the market. there will be a certain

number available first people to trade, and we'll be waiting for that to open in a while. >> it's not a capital raising exercise. it is capitalism. >> existing shareholders are putting their rockets on marke . i don't anticipate that will open still and i were so. >> you're talking about a performance. today, nasdaq is up twice. they comment on the let's half hour or so, we came into the highs. we had it driven by all the big names,. broadening out stories is based on the ident that is push. on technology socks we have this year. it is now happening that we're not getting only broadening out, but the tension continues to move higher. just because the valuations are hard doesn't mean that they can't go higher.

mcdonald's is a higher power word then two of them. let's year to meta. it is still year again, it's still 70 supper patdown for what it had been, but usually they had a good. >> the most important thing is the idea that you can't go higher anymore because of this is the price the. >> not in an upmarket. >> don't go anywhere. we've got another big hour, coming your way. (vo) make the switch. it's your business. it's your verizon.

live from the new york stock exchange. a triple play. first, the ceo of honeywell joins us with reputation lifting its forecast as its aerospace business continues to soar. meta's chief commanding officer her frisco since taking on the wall. he said stop searches on the walls, and sto