they're envious of us right now. >> good. >> we have to maintain that. >> because it's the best place for everything. except maybe rich, creamy sauces. that might be france. >> thank you for having me. >> make sure -- thank you guys. >> thank you. >> let's do it again some time. not tomorrow. make sure you join us, "squawk on the street" is next. good monday morning. welcome to "squawk on the street." i'll carl quintanilla with david faber. cramer has the morning off. futures steady as the bulls put together a winning week on the s&p. eco data is going to dominate this week. jobs number on friday. two-year does hit 5.1, almost a two-month high. our road map begins with the congress secretary telling thegyne ease it is profoundly

important for the two countries to have a stable economic relationship. >> plus, 3m is one of the biggest gainers on the s&p this morning. it would settle the cases over defective ear plugs sold to the u.s. military. and we'll have the latest around m&a as the ftc suspends that challenge to block amgen's $27 billion deal for horizon therapeutics. a lot more on that and what it means in a moment. >> let's kick off the markets with a new week. action on friday actually coming out of powell's speech, not too terrible. a lot of discussion on friday, david, about optionality, balance, something for everyone. but on the dovish side, talking about some of the lag effects of prior hikes that maybe haven't hit the economy yet. >> yeah, i mean, reading all the commentary, i'm not sure i understand more than i did before jackson hole in some way in terms of what it truly means for the movement of interest rates, but you can see a positive response this morning

thus far before we get started with trading about 29 minutes from now. in my world, a lot of talk about the lack of response of that nvidia quarter. not necessarily jackson hole in terms of market action. what does it mean when it not just exceeds but greatly exceeds the already dramatically improved expectations and guidance and yet the stock did not really respond in a positive way. >> yeah, mike wilson gave an interview on friday, morgan stanley, who has not been constructive of the market said the markets top on good news. i can't think of any better news than what we got from that company today, goldman's desk note kind of points out, stocks not going up on good news might be troublesome for bulls. on the other hand, there's enough hand wringing about china, about payments, about specialty retail that maybe the tina effect, there is no alternative effect, kind of returns for tech. we'll see. >> we will see.

when you have over 5% on the two-year, you also wonder, although again, we have been dealing with the higher rate regime for some time. when the risk free rate is available at that level, it is that debate yet again in terms of how much of a bid there will continue to be for equities. as for, again, the response of the treasury market, we can see right here in terms of after jackson hole, one-year yield hit a high of 5.5%. two-year, 5.106%, the highest level since july 6th. ten-year, though, come down a bit, carl. so the longer end calming down after hitting recent highs last week. >> jpmorgan note this morning, with jackson hole behind us, where do yields go from here. over the next month, we see yields moving lower. this is driven by a series of data prints that are disinflationary from the labor markets and official inflation data. we'll see. the jobs number on friday,

estimates are in the 170 range, which would put the three-month average at about a two-year low going back to the beginning of 2021. that's kind of -- those are the incremental steps you would imagine the fomc is going to want to see. >> right. and i'm sitting in jim's chair so i can play him. are we going to see slackening in terms of wage inflation? and/or as a result of weaker employment numbers, will we start to see that truly calm down. there had been a bit of a trend. you follow it more closely than i did, but we come back to the wageflation and how much that matters and how much it figures into what the fed is thinking about. >> cramer was very much hawkish on job hopping and what that was doing to incremental wages on the new hire front. we certainly had data in the last couple weeks from zip recruiter and the journal pointing out new jobs are paying less than they were a year ago.

interesting piece on bloomberg this morning looking at the prospect of discounts at retail going into back-to-school and the holiday. commentary out of whirlpool, foot locker, certainly, and you had the fed chair who did talk about some of the progress that's been made so far on friday. take a listen. >> although inflation has moved down from its peak, a welcome development, it remains too high. we are prepared to raise rates further if appropriate. and intend to hold policy at a restrictive level until we're confident that inflation is moving sustainably down toward our objective. >> and then of course, you had the ancillary commentary from mester, for example, who is still a little bit hawkish. but then bullard and parker talking about maybe we have done enough. maybe it's time to let the prior hikes work their way into the economy. >> and where are we right now in terms of view of consumer spending.

we got our last sort of batch of retail earnings reports last week. mixed bag to say the least. did not show great strength in terms of consumer spending on goods. but services continues to be quite strong. and you also get the credit card data, which i know you follow closely as well, which has shown at least a rise in some delinquencies and overall concern about consumer balance sheets, although on the other side, we continue to hear we still have excess savings. >> more pieces on the tape this morning about the consumer having fire power, even though i think it's diamond who suggested maybe the excess savings run out around christmas time, but you haven't even begun to move into a period where people are tapping equity on their homes or that kind of thing, which would sort of move you into a different chapter in the consumer mind set. >> it would. speaking of people's homes, of course, perhaps no country where it's more important in terms of real estate ownership and overall net worth than china. gina rumondo has been in the

country. she's in the midst of a four-day visit to china, aiming to improve relations between the u.s. and the world's second largest economy. eunice yoon is bring up us to date on the latest. good morning from here, at least, eunice. >> thanks so much. well, secretary raymondo capped her first day here in china with what she's framed as deliverables. she said that the overwhelming message that she's received from the american business community is that there needs to be more channels of communication. so she said today that she was announcing the two sides after discussions with her chinese counterpart for hours would establish a commercial issues working group, an export control enforcement information exchange, the first of which is going to be held in beijing tomorrow. technical discussions on protecting ip and trade secrets, and then an agreement to meet at the secretary and ministerial

level at least once a year. now, the danger is that potentially one of the big complaints that the business community has had over years is that sometimes the chinese from their perspective end up using talks as a concession. so the chinese, they say, say they're going to talk about something, and appears that they're cooperating, but actually not making any changes. so that's one potential issue. otherwise, though, her overall message has been that the u.s. and china can have a very strong trading relationship despite the tensions and despite her department's export controls. so even before she arrived in china, she had briefed reporters saying that narrow and targeted, as she describes them, u.s. export controls impact only 1% of trade. and today, to the commerce minister, she stressed that

strong relationship between the u.s. and china, as well as the $700 billion she says of trade between the two are profoundly important. and she also attended a showcase of u.s. companies, especially small and medium sized ones, that do benefit from the chinese market. now, the commerce minister for his part had said that his country is ready to work to foster a more favorable policy environment, but as you guys well know, one of the big issues here has been that despite the pleasantries it doesn't seem as though the two sides are really hitting the core issues that have been irritating both sides. and what i'm talking about from the chinese perspective is they want to make sure that those export controls don't hold back china's advanced i.t. ambitions, and then on the u.s. side, raymondo directly addressed the

national security issue, saying to the minister this morning, in matters of national security, there is no room to compromise or negotiate. guys. >> meantime, eunice, for the second day in a row now, we had a pretty good rally in shanghai on the back of incremental stickulous, only to have that lost by the end of the day. >> yeah, absolutely. i mean, the government has been making these incremental steps, announcements saying we're going to make it easier for you to invest in the stock market, putting in lower stamp duty, for example, or saying they're going to firm up the ipo process. but at the same time, evergrande, the massive real estate company, you know, went back and started trading again in hong kong. that affected sentiment. the stock price dropped at one point to 87% down and the company has said that for its first half of the year, even

though it's pared its losses from the previous year by about half, still reporting losses of about $4.5 billion. a lot of issues still weighing on investors' minds. >> eunice, we'll watch that. that's going to give ammo to those talking about potential leman moments in china. eunice yoon, thanks. 3m up sharply. published reports say the company is nearing a $5.5 billion settlement to resolve those lawsuits with more than 300,000 claims it sold defective ear plugs to the military. that could have cost $10 to $15 billion. it's the biggest mass tort in the history of the u.s. >> as you say, 300,000 ear plugs made some time back for the military. they had been contesting the case for a long period of time. there had been an expectation perhaps that the ultimate

settlement would require a higher number. we'll see. but they had been, carl, settling. obviously, the biggest one deals with pfas and water pollution that occurred from the manufacturer of that chemical by 3m. mike roman has been dealing with all of these issues for quite some period of time. there has been question, of course, of the ability of the company to continue to pay a dividend at a certain level, how much cash it can continue to return to shareholders given all of these potential cash needs for various settlements. but if they can put it behind, clearly it could be a positive. >> dow will be buffeted today by 3m here and by boeing last week on some of those manufacturing issues. be curious to see if jim gets more constructive if they can sort of clear this stuff out of the way and get back to talk ugabout operating performance. >> that is kind of the key, and

it does appear they're making a lot of progress on that front. we'll update everybody if we actually get the official news in terms of an actual settlement. coming up, we're also going to update you on the ftc. it paused the challenge to the amgen/horizon deal, a deal i have been reporting on a great deal, and this was an important development. let's give you a look at futures as we get started trading here at the new york stock exchange 17 minutes from now. we have a lot more "squawk on the street" straight ahead. but when your team has to work seamlessly around the world... you need more than technology. you need cdw who can help transform your organization with built for performance lenovo thinkpads. pre-configured for management flexibility and equipped with the intel evo platform. responsive collaboration tools give your team effortless connectivity to stay focused wherever they work. fetch. lenovo makes seamless productivity possible. cdw makes it powerful. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis

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welcome back. an important update to a story we have been following for months essentially. amgen's attempts to acquire horizon therapeutics for $116.50 a share in cash. it's already been month since i reported on the possibility of a settlement there after the unexpetted challenge from the ftc to that deal on antitrust grounds. the idea being at least from the ftc's perspeskt that amgen could bundle the two key products from horizon, amgen for its part in fact ina response that was only filed last week saying, we have no intention of ever bundling. and by the way, even being able to bundle, given the fact these drugs from horizon are not administered by a pharmacy and not given at a pharmacy, they are administered in hospital or by a doctor in a doctor/patient setting, would make bundling impractical if not impossible to

begin with. we have been reporting on all of that. last week on wednesday, i talked about the fact the staff while they were in a position to negotiate a settlement with amgen, felt that they could not fully communicate with the commissioners because of the administrative complaint that was already in place in which the commissioners act as judge and jury, putting the staff in a difficult position. all that is gone now. so what that means is high likelihood this deal will in fact close at $116.50 a share. hence you see the rise in horizon's stock price. how long it takes to get there, unclear, but it could be as soon as let's call it, well, a month until close because you have obviously reach the settlement with the commissioners, and by the way, just for a minute on that, the staff at amgen i have been told essentially have agreed on a deal, would essentially have amgen committing to never bundling.

but the question remains whether the commission will say okay. given the fact that they have withdrawn or paused the administrative process, it would appear that they are likely to say okay, we agree with this settlement you have essentially reached with our staff. so we could see that anytime in the next couple weeks in terms of an official settlement. but it's an irish company, it's going to take a little time in terms of other things that need to go on in ireland as well to get the deal done to the finish line. let's call it, though, within a month, but again, we don't fully know. this is having an impact, by the way, as well on pfizer. remember that $43 billion deal to acquire cgen for $229 a share in cash? that's also up. why? well, the ftc has backed off here. it was clear as we said many times the case they were trying to make in terms of amgen's potential for bundling seemed to be quite weak, and amgen made it

clear they never had any intention of bundling these drugs to begin with, no would they ever. on seagen, there was thoughts it would close without any scrutiny. they haven't reached a timing agreement, but again, the fact they backed off here does seem to auger for a positive outcome there. and then when you come to antitrust and deal making in real time, worth ending on the acquisition of abcam. it's a company that offers what they say the scientific community highly valued antibodies, biomarkers to address targets in biological pathways critical for advancing drug discovery. that deal is done in '24. that's a disappointment. there had been an expectation it might be higher. in fact, it's even possible that thermo fisher had offered prices

that might have been accessible, we'll see whennee get the proxy, but the was a concern about overlap from those two, hence an antitrust concern. a cleaner deal in terms of any concern around antitrust. it still figures into deal making, but this was an important moment, not just for amgen/horizon but perhaps more broudly in terms of the ftc's willingness to consider a settlement given what did not appear to be a strong case, and we point out many times coming off the significant loss in activision. >> we could bundle amgen, microsoft, and dan aher, adding momentum to the field, but maybe your tidbit takes shine off that thesis. >> you still have to be concerned if you're a company considering a deal that might get real scrutiny or even when you don't expect it necessarily, well, certainly from a timing perspective given the possibility you go to court, but

that said, again, that's why this is viewed more broadly than just specific to a particular deal, although obviously, very important for that deal as well. you can see how close that stock is now coming to the actual takeout price given it may be as little as a month away from close. >> cover some m&a, we'll get to ipos in a bit. talk some disney as well. shares experiencing a pretty rough august so far. trading at a nine-year low. we'll talk about what's next for the company and the stock as futures holding up this final week of august. stay with us. (bobby) my store and my design business? we're exploding. but my old internet, was not letting me run the show. so, we switched to verizon business internet. they have business grade internet, nationwide. (vo) make the switch. it's your business. it's your verizon.

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s&p and that dacturn in their first pausetic week in four, and the nasdaq with its best week since mid-july. some earnings, we're not done. we'll get box and hp and salesforce and dell and lulu throughout the course of the eng lln ousi opinbe iabt x minutes.

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a lot of news in the auto space, both last week and more this week. of course, we had the uaw strike authorization votes on friday. got some results where the overwhelming approval of the right to authorize a strike at the big three. we'll watch that closely. meantime, a lot of the other players in the ev space, whether it's byd are signing partnerships by mobility businesses. i know you're interested or at least curious about vfs, up another 20% this morning after their market cap went 4x last week. >> yeah, vietnamese, there's chinese ev startup xpeng shares

soaring, and carl is referring to a company that went public via spac a couple weeks back. the key here with this vietnamese ev maker that has market value that far exceeds that of gm or ford, the key here is there's no flow, none. because the spac itself is very small, the contribution to capital, hence, the number of shares outstanding is tiny. i think, and that's why it basically there's no shares. >> right. >> not an accurate reflection of the fundamentals of that company. doesn't mean it won't go up just in part to the scarcity value. >> we'll watch for the impact on cpi from used cars and particularly used evs, where you're looking at outright declines year on year in the 20%, 30% range, which is feeding sort of disinflation in the used cars which is a big component of cpi, in addition to shelter. >> right, and obviously,

continued focus as we always do on tesla. one has to shine a light on the chinese market, the importance of that market to the automaker. it seems every price cut is reported on quite aggressively. we always talk of course about the ability of a company to have margin far beyond that of any of its competitors. that said, it's not that it won't be a focus. you can see a bit of a bounce more recently. >> interesting, we talked to eunice about overall stress within the chinese consumer mind set. more stories out this morning that president xi really is not a fan of anything resembling direct stimulus to consumers. more of it is on the edges making it easier to buy stocks or buy back shares. industrial profits in china for july down 6.7. not as bad as the prior month, down 8.3%. they have issues, capital flow, unemployment. >> and again, to your point,

perhaps and most importantly is his resistance to any kind of significant direct transfer to consumers to actually get them to be able to spend more money. >> let's get the opening bell. cnbc real time exchange. at the big board, the intrepid museum celebrating the 80th anniversary of the uss intrepid. have you ever been on the west side? the intrepid? >> yes, i have. i haven't been since the space shuttle is there though. i have not seen that. >> at the nasdaq, hunger free america aiming to end hunger in this country. so we'll kick things off here, see if the s&p can hold. jpmorgan's point this morning was support was over the weekend, looking at support around 43.50, but really have to get back near 4500 range to argue that we have reclaims the momentum we lost in august. >> yeah. august is always a tough month.

it's coming to an end though, isn't it? >> this morning, cfra says september, i didn't know this, may be a continuation of digesting the gains. since 1945, the only month where the s&p is down more frequently than it's up. so that would not argue for any kind of repair of positioning or sentiment in the next four weeks. we'll see. at least you'll get volume back. people coming back from vacation. >> conceivably, yeah. right now, a lot of the activity is going on as you note in the hamptons or other places that people are hopefully relaxing on this conceivably last week of the summer. nvidia, which of course, we mentioned at the top of the show, given the lackluster response to those incredible numbers. up ever so slightly. but overall, big tech up a bit more as we see sorpt of the market's first broad response to various comments coming from chair powell and others out of jackson hole. we'll see what we can sustain

here in terms of any significant rally. only name i see, a couple of the drug companies sort of a bit weaker. and netflix, which had rallied a decent amount last week, is also down a bit. overall, as we start trading here on this monday and deep in august, we're seeing a general rally with the s&p up .5% right now. >> you mentioned netflix, i forget which firm it was last week, maybe loop, arguing the strike actually could be a benefit to netflix because the damage is going to be so concentrated in television. of course, next month is when a lot of tv networks roll out whatever fall slate they have to offer. they have to be more creative this year because it does not look like any engagements or meetings resulting in ongoing conversation or momentum. >> at least it doesn't appear near term there's a real hope for a settlement. happen to know a couple of writers who have a hope at least by october, perhaps.

the idea being that you really don't want to enter a new year still on strike. and obviously, it starts to take a significant toll on the pocketbooks of many of those striking, not to mention of course, it will result in a very empty slate at some point soon for many of the streamers. i don't know how deep you're going into the library so far, but we're starting to have to. >> suits is making a comeback. >> i saw that. i saw it on netflix. >> they're pushing it at the top of the feed. we're going to talk disney. but on its own ten-year history, now trading on a revenue multiple at the bottom percentile. not surprising since it's actually trading near nine-year closing lows. today, ubs does reiterate a buy, but 32nd percentile on a forward pe at disney. these are levels you saw right when covid hit and the parks were shut. >> it is rather stunning to see

the decline in the stock price. although in some way said it is reflective of what is a changing earnings picture for the company in terms of and future, we all know that. we talked a great deal about it. i spent a lot of time talking to its current leader bob iger about it. and there's so much uncertainty i guess in terms of the future of espn, in terms of who or what they end up with when it comes to a partnership with either a technology partner of some kind that helps with distribution or even the leagues thelself and with the value of the franchise will be once it does move as it will eventually to streaming platform, more in full. carl. the parks continue, though, to be the cash engine of the company. they will continue to be that, and again, the question both on the advertising front more as a sort of current concern, although perhaps not longer term and the construction of the rest of the company is the key.

direct to consumer, obviously, they continue to cut losses there, but the losses still, i don't know how the strike will impact it, probably positively near term, but you wonder about turnover longer term if they don't have new shows. disney is bouncing ever so slightly this morning. >> watch software. it's been really interesting couple weeks on the software front because results out of workday, splunk, snow, auto desk were all a little better than expected last week. today, dan ives comes out on salesforce, which we'll get on wednesday, reiterates an outperform, 240, says he sees more positive activity in cross selling, slack integration, maybe monetizing some of their a.i. efforts but that's going to key. if jim were here, i'm sure he would be talking about the kinds of things we'll see from the print and dreamforce not too long from now. >> he did point out last week

things have been rather quiet in term of whatever new efforts they're making, for example, in a.i., which again, becomes a key question when it comes to the future for nvidia in terms of all of the needs they're providing for right now, for so many of the companies that are pursuing generative a.i. as part of their business model. the overall question being, will it or will they find products that actually are profitable, and what will that mean. again, sort of quoting those who are trying to explain why the stock did not actually respond more positively to that incredible quarter and the prospect for as much as $16 billion in revenue for the quarter, some would say could reach $100 billion revenue company in the not too distant future, annual. >> the high of last week was around 480 so you're not that far off, but you're right. given the strength of the guidance, again, the inability for the bulls to push higher.

nike today, which we have been talking about on the flip side, that historic loss streak since the ipo 11 days lower, finally turned it around. stood, stifel goes to buy. reiterates a buy, but they cut the target to $135. this has ended up being in large part a china story, but certainly, the foot locker quarter last week didn't help concerns about the americas business either. >> no, that foot locker quarter was horrible. the stock price obviously reflected that as well. you know, when it comes to china, it's so difficult to really be able to ascertain exactly the state of some of the companies that we know so well that do such important business. whether it's tesla or apple or starbucks or nike. because the consumer there seems to be affected in different ways. >> yeah, also, you know, since shrink has been such a topic of discussion on the retail front, a couple pieces this morning arguing it's providing a bit of a cover for companies that either their processes are

faulty or they're dealing with external leakage, so to speak. why they choose these terms in the retail business i have no idea. but we'll see whether it's becoming the new weather. remember how i used to joke about the retailers -- >> it was the weather, whatever the weather might have been, it was the weather. to your point, we talk about shrink a lot for obvious reasons here. it's not solely theft. it includes theft, and theft is by far the largest single category under the overall category of shrinkage. although i also heard shortage. wasn't that used by the macy's ceo last week? i think he used that term. any number of terms to obviously not say which is the largest component, theft. to your point, it also does include damaged goods or supply chain that may not be working as well as it should have and things not getting through the way they should. >> or internal theft. >> yes. >> by the way, speaking of weather, we're going to watch hurricane idalia set to become cat-3 by tuesday night and

looking at landfall on wednesday morning. it's going to hit right in the st. pete area of the gulf coast. we'll see whether that buffets energy at all. we have already been watching that gas on the prospect of strikes in australia, some of these lng efforts. but there's a look at the map. it's going to be -- it's going to be a serious storm when it does land midweek. >> back to m&a for a bit. it is not a merger monday, but we did get a couple deals. we talked about amgen and horizon. abcam, a uk based company that i sl explained earlier is part of the drug discovery chain, if you want to call it that. helping companies with their identified biological pathways critical for advancing drug discovery. it's bought by dana her. a company that we also talked a bit about of late, although only because what had been historically incredibly strong stock performance for such a

long period of time seemed to stall. not just the case for dan aher, but one of its competitors, thermo, as well. tmo. you can see danaher shares are up, perhaps because they're playing a price below what the market anticipated. $24 is the price. as i said earlier, there may have been other bidders, perhaps with a higher price, but with concerns to complete the transaction given there may have been overlaps that brought antitrust regulator concerns. so that may have been why abcam decided to go with danaher in terms of a definitive agreement. the company kind of put in place as well a while back by i think its founder, john milner, who owns about 6%, not to be confused for us mets fans who can go back 50 years with john milner, the hammer. i think he hit 22 home runs. we had such high hopes for him back in the early '70s. >> something if he could make a

career in professional sports and then manufacturing. >> yeah, it would have been. i don't believe it was the same john milner, but i remember the hammer. >> alphabet is going to be a story this week. interesting note, i think it was out of the goldman desk last week. just asking, b of a, asking why alphabet seems to outperform amazon day after day after day. this week is going to bring us google next, where the topic will be ai initiatives and probably or at least hopefully a steady diet of some good use cases. there's going to be presentations by wayfair, wendy's, accenture. you can see what google has done. in the face of a fairly challenging take for overall equities and certainly tech, given what rates are doing. >> not to mention, we were really questioning their ability to lead when it came to a.i. given we had always expected they were the leader and then chatgpt came along, microsoft's alliance with that company, the ability to include features of

chatgpt in bing, for example, its search engine. but carl, you know, ultimately, at least at this point, we have not seen that incredible monopoly, if you want to call it that, essentially, that stranglehold on search be really challenged in any significant way. and obviously, alphabet does have its own product offering. although the $30 a month from microsoft is one of the early use cases for generative a.i. in terms of the enterprise. >> i'm trying to read the moment on the chart where the bing phenomenon really took off. and the thinking was that google was truly behind the eight ball. that's been reversed. >> it seems to have calmed down. i remember speaking about it, there were plenty of people telling me they thought it was a real issue. perhaps it will become one over time given there seems to be more competition. at this point, again, we went from believing they had a serious lead when it came to a.i. given all of the developments that google had, deep mind and things of that nature, to wondering what

happened there. and now the market seems to have backed off in terms of real concerns. speaking of overall technology, it is worth reprising some comments from brad smith. he's led the litigation effort, for example, at microsoft in terms of getting that deal with activision done. a deal we reported on for a very long period of time. still remaining is getting the final approval from the antitrust regulator in the uk. they reached a new divestiture deal that is now being reviewed by the cma in the uk. here's what mr. smith had to say about it. >> i think hope is on the horizon. we have worked very hard, most recently, to address the concerns of the uk, the competition and markets authority. that's what led us to make a big decision a week ago to spin out the cloud streaming rights to hubi soft, an important french games publixer. we prevailed in courts in the united states.

we insured we comply even as we spun spin out these rights with our commitments in the european union. as the cmi in the uk has said, there is no green light, but they will review our proposal, and i'm hopeful that by the middle of october, we may just see this come together. >> we may see a fleury of deals that had a variety of antitrust concerns closed. and so if you're building a portfolio around some of those names at their lows, you're quite happy now. >> an argument for standing by your guns. >> you have a strong case, yes. >> dow is up 283. bob, best day for 3m since june or so. >> all 11 sectors to the upside, and most importantly, the sectors that had a tough time of it this month are the leadership groups. bank stocks turning around a little bit. a tough month for the bank

stocks. we have seen communication services do a little better. semi-conductor, another group under a little pressure this month. also bouncing back. the important thing is looking at big cap tech, again, this a.i. play, modest pullback for the month, but all of big cap tech stocks trading to the upside. nvidia, amazon, apple, alphabet, microsoft, all of them are modestly to the upside. the big question over the weekend is what happens after powell? the good news if you look at what's going on this week, it's going to be the information that powell needs, all the inflation data that we're going to be getting here. there you see what's moving here. banks, communication services, all moving nicely here. so we're going to get the jolts report on tuesday, the pce deflator on thursday, and non-farm payrolls. this will go a long way toward figuring out the inflation data. we're data dependent. powell emphasized that over and over again. the good news is the markets anticipated what powell was saying. if you look in august, what's

happened, we indeed had stronger economic reports and higher rates as a result of that, and despite all that, it's been a pretty normal seasonal pullback of about 4% or 5% so far. tech down 5%. banks a little more, down 9% there, but generally, the volume has been seasonably light. volatility has been tame, vix has been around 15, 16, or 17. no big heavy selling pressure on the markets. as for the a.i. play, a lot of investors have been speculating the demand for a.i. chips has been pulled forward. certainly, the demand for a.i. stocks has been pulled forward. nvidia up 200%, amazon, 60%, these are extraordinary numbers and this is the reason the s&p is so strong this year. yet the pullback in the a.i. groups among the leadership stocks, extremely modest. you would think people would be taking some profit, but look, this is the month to date, the debacle in a.i. stocks. nvidia down 1.5%, alphabet. amd down 10%.

this is a pretty modest pullback given the gains we have seen here. the question is now, september, so remember, the market is positioned for a soft landing. so you always want to play the pain trade. what would cause the most discomfort? the most discomfort to the greatest number of participants, the opposite side of the soft landing, is we continue to get strong growth numbers and then as a result, carl, the rates creep higher. china looks a little weaker. and stocks are expensive and vulnerable to another pullback like we're seeing in the middle of august. remember, we have got, carl, a modest pullback already. that's going to help mitigate the pain trade. but you know, job creation is cooling a little bit. we're going to get the student loans back very soon. there's good reason to think the economy is going to cool off a little bit in the next couple months. carl, back to you. >> we'll see what the data says, especially this week. bob, thanks. >> as we go to break, let's check bonds. we're off the highs of the session. two-year did get to 5.10, back to 5.05 now.

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pretty solid start to the week. most dow stocks are up. the only exception j&j and merck. all sectors higher led by materials and energy. 4430 on a monday morning. n'goway.

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welcome back to "squawk on the street." shares of disney, that's right near a nine-year low, although again, up a bit today. our next guest believes, quote, everything is on the table and this could be the turning point. steve kayhill is wells fargo security analyst hand a buy on the stock. your price target a bit of a ways from here you know, just talk to me about the action in the stock of late, what you've been hearing from clients and you think in terms of what it reflects? >> sure. good morning, david. thanks for having me on. i think in order to like disney here, which we do, you need conviction in three things the first is that dtc is s

significantly under earning. they announced a price increase, a lot of cost cutting going on there. the second is that espn can make the transition to direct to consumer, and i think that's a big unknown for investors. and the third thing you have to believe is that it's great business and cyclical business and a little bit of weakness you're seeing in orlando is temporary and not structural so i think the answer to the question is, all three of those things leave a great amount of room for debate and given this period of significant transition, investors have hardly kind of thrown in the towel and said wake me up when we're further along on these three issues. >> yeah. i get it you know, as for debate, listen, there's not that much debate about the ability of those parks over a long period of time to always be earning significant amounts of cash, but to your point, when it comes to direct to consumer, what gives you a more positivesense there in terms of the ability of the company to ultimately earn or generate real returns that investors are going to want to

see? >> yeah. to me this really comes down to what disney is as a company, which isit's much more of a library of intellectual property that goes back almost 100 years, rather than a streaming service of originals like a lot of its competitors are. a lot of its competitors, have been successful providing new and original content i think if we had all the data on what disney plus consumers watch there is a lot of library engagement in there by kids and family, and so the way we think about disney direct to consumer they have a ton of pricing power on the relatively inelastic base the price increases they've been taking we think are going to drop through to the bottom line over the next 12 to 18 months, and as you remember, when they had the proxy battle earlier this year, bob iger, one of his first announcements was a cost-cutting initiative, you're going to start to see those in

the back half of the year. the combination of higher prices on revenue and lower costs are going to be an upside surprise on dtc earnings as we get into next year. >> the stock looking for a bottom perhaps this is it thanks for your insights appreciate it. >> thank you watch the markets here on this monday and see if the s&p can put it together two winning days in a row for the first time this month you got financials, energy, industrials, all up about 1% don't go anywhere. you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses

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good monday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with david faber and morgan brennan live at post nine of the new york stock exchange sara eisen has the morning off bulls going for two in a row on the upside haven't done that so far this month. data and earnings headed our way, all sectors green with jackson hole under our belt. >> 30 minutes into the trading session. three movers we are watching this morning 3m on pace for its best day having the most positive impact on the dow reports of a $5.5 billion plus deal to resolve more than

330,000 lawsuits related to 3m's combat ear plugs, more on that later this hour. boston scientific gaining after positive results for the treatment for patients with atrial fibrillation or abnormal heartbeats you can see those shares are also up 5% keep an eye on chinese tech stocks today regulators in beijing taking multiple measures to boost confidence in its stock market as commerce secretary raimondo kicks off a four-day trip with key leaders in that country. we're going to break it all down in just a moment you can see right there, names like ba ba and jd.com both up 2% carl, you mentioned the fact that we have such a busy week for economic data, despite the fact that we're in the summer doldrums here. >> yeah. the calendar doesn't watch vacations. >> no. >> we're definitely going to get a lot, whether jolts tomorrow, obviously, a key indicator for the fed chair, china pmis, eucpi

and jobs friday and david and were talking in the last hour how modest on a relative basis expectations are for the jobs number south of 200 k, around 170, put the three-month average at a two-year low and see if that brings wages and nongoods inflation downto earth >> yeah. it's going to be key to watch, given the fact that you've had some noisy movements in the month as well, whether it's the yellow bankruptcy and the layoffs you've seen there, whether it's things like strikes and aversions of strikes with ups and return to school and some of the other things that could make that data interesting to watch, david, but, of course, it goes back to the powell comments last week and also just the focus on inflation or disinflation and the fact that what's going to be key to getting back to that 2% rate or the fed is watching and targeting closely is going to be this continued loosening or we'll say not so tight jobs market. >> right and what that will mean for wage

inflation, which, obviously, is a very important component of the overall cpi or at least we believe from the fed's view is also an important component in terms of what is contributing to overall inflation, which by the way, was down to 3.2% year over year in the last read. and we've gotten 0.2 the last couple months june and july i believe. trending in the right way, but coming out of jackson hole, i don't know where people are. i guess we'll hear from zerboss momentarily when we get another 25 or if we get another 25. >> street said 65% odds by november we get at least one more, although there's plenty in the camp that say we've done enough and the debate about whether or not cuts come in the first half of next year. >> which is interesting. not so much with rates, not so much whether we're -- how much farther. it's for how much longer in staying at the elevated levels if you see inflation continue to come down, the fact that fed is

doing its work without even having to necessarily make more moves, even if we get one more hike in november after that, i mean we're going to talk more about that heading into the final trading week of a volatile august. the s&p down 4% for the month, the nasdaq down 5% what's ahead jefferies chief market strategist joins us now. david, want to get your thoughts on all of this as somebody who is a key fed watcher and always shares key insights on this topic and how it intersects with the markets. >> thanks, morgan. i think you're actually, you know, you guys are all on the right thing. it's a lot less about are they doing another 25 and more about what's priced into next year and when that happens. i think we're still looking at over 100 basis points cuts in next year and that's starting mid-year, that's the expectation. some people, obviously, are lower and some people are higher the market expectation is coming out mid-year that's more important than do they go in november or after another bad cpi number or not.

i do think there's a chance. we still could get a 0.3 on the next cpi that's probably enough to tip the scales but a 0.2 or less and i think they're standing pat for sure, and i think they're generally speaking pretty happy with everything going on. that's how i read jackson hole i read jackson hole as very much not a victory lap, but just a fed that's very kind of, you know, happy with how everything has gone relatively speaking in the last year coming off a very difficult year before that and a lot of inflation fighting that needed to take place and a lot of i guess pain for lack of a better word. jay used that a lot at the last jackson hole and this year we didn't hear so much about pain. >> yeah. so in light of that, i want to get your take on the bond market and what do you think is driving long-term rates higher >> we talked about this on a few of the programs after the japanese moves on yield curve control. i think the japanese moves on yield curve control did unhinge

global long-term yields slightly i think that was worth at least 10 to 15 basis points on the 10-year, maybe more. i don't think it was expectations on inflation. if you look at break evens they haven't moved much they had a pop up, they've come back this is really premium a little bit of risk premium, and maybe people thinking there's not as many buyers out there on the long end if the japanese are moving back home in the next few quarters i think it's more of that. i will say it this is important, i do think that more the long end kind of stays here above 4% or goes up to 4.25, it takes a little bit of pressure off the fed. they don't need to do another 25 if the long end starts working for them one of the things that's been frustrating is how inverted the curve was, and it wasn't producing the tightening they wanted this was probably helpful in their eyes and takes them into a place where they can be a little bit more complacent with rates

or not to have to move as much. >> he yeah sort of this idea of doing nothing is something for the fed. maybe it's helpful for them, but what about investors, especially investors that maybe have gotten to ride or were looking to ride the rally we saw the first half of the year in equities? is there still a move to the upside there, or do you shift and put more investments to work in something like the bond market or other areas of fixed income right now >> well, morgan, at jefferies we've been pushing hard on the high yield bond market, the loan market, the high yield bond markets, structured credit markets. you have a single b, double b portfolio out there that we could make for any client yielding 9, 10%, very easily this is not investment grade, but just below investment grade bonds and for companies like this in a long time, we think that's really a sweet spot that's been a laggard to equities, probably up 7, 8%

around there total return for the year, still nothing to sneeze at, but certainly on a risk adjusted basis, i think a much better return than what you've gotten out of equities an i've been surprised, i think, like many, at how well the equity market has responded to these higher yields, and i think this was a nice -- like what happened in the last month, 4 to 5% correction of yields. a lot more healthy on a multiple basis and every other basis i look at risk assets. with the higher risk rates and the high yield bond levels in terms of yields, i just think it's really a hard hill to climb for equities to keep going so we've been pushing the high yield bond markets it's not a risk off trade. it's not a negative trade because, you know, we thought there was going to be a big recession or something coming we wouldn't be pushing high yield debt we see it higher for longer, economy is okay but the fed has to do some heavy lifting for a while to make sure inflation does get back to the 2% target and sticks it.

that's not something that's going to happen in the next quarter or two it's a time where we have to kind of -- i don't want to say pain, but maybe a little bit of -- whatever is a little bit less than pain >> okay. so in light of that then, i guess how are you thinking about seasonality as we come into september? maybe not pain, maybe a little discomfort. >> there you go. i like that. excellent. discomfort. >> does the discomfort persist i ask that because what we've seen, we saw it in the u.s. market last week, with nvidia, the blowout earnings, and then it was a fade the rally situation, right does that -- and it's not just there, also in china and asian markets with good news there, initial pop and fade the rally is that still the dynamic? is that going to persist into september and beyond >> that's how i'm thinking i do think we've had a heck of a

run, given what we've learned on rates this year, given that we started the year with people forecasting cuts by the end of year and forecasting recession right now. if you looked at the survey of professional forecasters of the united states the beginning of this year or end of last year, it was largely dominated by folks who were predicting a recession and fed rate cuts. they've had to push those out. we have the atlanta fed forecast for q3 i think still in the 5% region, so all of that is kind of, you know, to me, it's a signal here that the market got too excited about a recession, there was an initial run back up in equities because the recession got pushed out, but people kind of forget that that was also going to drive real rates higher for longer, and risk free rates higher for longer and pressure multiples back down. august was about going the economy not in a bad place, but

the rates are here for longer. what was priced in was good for equities priced in now not so good for equities, at 5% through the middle of next year or possibly longer. >> all right david, great to kick off the hour with you. thanks for being with us >> always a pleasure. >> all the major averages are higher as we head to break, here's a road map for the rest of the hour more on what's next for the fed with former kansas fed president esther george later this hour. >> live to beijing as congress secretary raimondo begins meeting with key leaders in that country. >> and a misinformation attack facing one of the biggest private investors in tech. a bishg ow is still ahead. don't go away. the us, 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. ♪"please don't go" by harry casey, richard raymond finch♪ (sfx: ping)

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commerce secretary raimondo this week holding meetings with key officials in beijing meetings as china rolls out new initiatives to boost investor confident in the stock market at least. eunice yoon is on the ground covering that and joins us with the latest hi again. >> hey, carl secretary raimondo capped her first day of meet hearings with what she's been framing as deliverables she says that overwhelming message that she's been getting from the american business community is that there needs to be more engagement and channels of communication, so after four hours of discussion with her chinese counterpart she said she was ready to announce four

different ways in which the u.s. would be engaging further with china. commercial issues working group, export control enforcement information exchange, the first of which would take place tuesday in beijing, technical discussions on protecting ip and trade secrets, and an agreement to meet at the secretary and min sterile level at least annually. since she's arrived her main message has been that u.s. and china can have a strong trading relationship, even though there are tensions and even with her department export controls, so in this way, these working groups would be able to address that she told her counterpart that $700 billion of trade and stable ties are profoundly important. at the same time she told reporters that there were some stickier issues that came up in the conversation she said the ban on some sales for micron, scrapped merger for intel and also two key metals

that the chinese have been putting restrictions on that are very important for the global semiconductor industry the commerce ministry on his part said that his country is ready to work to, quote, foster a more favorable policy environment, but it still is unclear whether or not china or even the united states is really willing to make any significant changes on their core policies that irritate the other country. guys >> eunice, thank you eunice yoon in beijing we should mention the shanghai compass sit hang seng and 300 in the green let's continue the conversation about china's markets and economy at post nine, brennan hearn and former head of the imf china division, a professor at cornell university thanks to you both brennan, you're here at post nine, thank you for coming down. you run china etfs one would expect you have to be positive what do you say to those who

point to the economy, see it slowing, consumer under pressure, real estate clearly, entrepreneurs feeling attacked by the government, what's positive about that? >> those are all the known knowns all this negativity is baked into the stocks. a lot of investors have vacated the space, and therefore f we just have some incremental small positives, can that draw some of these investors back in? soar with constructive at the same time we want to see more significant policy measures implemented by the chinese government their a doing little things around the edges on real estate, on domestic consumption, but just as we saw today where you had a lot of market reforms, market opened up 5% and faded, it just shows the level of skepticism people want to see meaningful change, and i think policymakers seem to be attune to that. >> yeah. i'll come to you in terms of policymakers, because, you know, there is this hope, i guess, that there will be something done to really stimulate

consumer spending, and yet, many of the academics you read say that is not likely xi is simply against that. where do you come down >> it's possible, in fact, that we will see some stimulus, monetary stimulus, has already been put in place, but those are modest interest rate cuts. we haven't seen much in the way of fiscal stimulus the real issue is not about stimulus at this stage it's about what we spoke about, how to re-instill confidence in the private sector private investment has essentially collapsed over the past year. household consumption is weak, because there isn't a clear sense of policy direction from the government, and the crackdown on the private sectors in 2021 and 2022 has really dented private sector confidence what's really key is not just to get words from beijing, but actions to show that they're willing to support private enterprises, which they really need for both domestic innovation, productivity growth and additional employment growth they need to send that message

in a way that resonates with the private sector they've seen word, no real actions. >> you talk about the cognitive disedy dense in a note between the government and entrepreneurs. what's going to bridge that divide in your opinion >> we saw very significant crackdowns on the tech sector, the medical sector, and many of the parts of the economy at the private enterprises. what beijing has said that it wants the private entrepreneur prize to play an important role, but this is going to mean that the encourage rts banking system to start making loans to small and medium enterprises which are important for productivity and growth, but in addition, if you want innovation, that's been coming from the larger private enterprises, so for beijing to send a signal that, in fact, it is willing to not just tolerate, but encourage private enterprises and not try to cut them down to size if they grow larger, more successful. that i think is the real message, and so far,

entrepreneurs don't seem to be getting that message what they're getting is a sense that beijing favors the state enterprise sector and will only pay lip service to the private sector that needs to change. >> your thoughts on that, whether it's domestically these crackdowns we have seen over the last couple years in china, what it's meant, but also, internationally, whether there is a geopolitical risk premium now priced in by investors international investors, that are looking at the chinese market or pulling back from it >> yeah. i think in general, investors, you know, have really gravitated globally to u.s. equities. i just was in asia for work and every investor, institutional investor i met with, overweight u.s. stocks. that's very aligned with my travels to the middle east, to europe, to the south america. you have this huge overweight to u.s. equities and some of that is because of what the chinese government has done in terms of investor confidence, that these crackdowns have really weighed, investors have gravitated out of

china in a very big way. chinese equities are down to 3% of all country world index versus the u.s. at 60% it's really about, you know, a, addressing fundamental issues with the economy, raising domestic consumption that would bring investors back in you know, we had the q2 earnings season for the internet companies and they were some good numbers it just shows some nonfundamental factors like the geopolitical have weighed on the space and gina raimondo following yellen an blinken's travels shows some of the green chutes on the diplomatic side. it's about re-instilling investor confidence in the space and we think that can be a catalyst, incre mental small positives, can have a positive effect. >> are there certain sectors or industries in china, in the midst of this commerce secretary meeting or just looking at some of the pain that's happened with companies like ant, for example, in recent years, are there certain places where the crackedowns have happened and it's much more investable,

versus others you should steer clear because it's coming? >> investors want the alibabas and tencents they don't want petro china or some chinese bank. they want the growth names, the names that are delivering on the opportunity set in china in terms of the urban middle class. what you're seeing, though, is domestic consumption being very it tepid due to real estate concerns, the scar tissue from zero covid, and that's incrementally going to improve over time. we like to seat policymakers step on that gas pedal you're seeing consumption vouchers being given in select chinese cities this is their version of free checks, the proverbial helicopter money you see an expansion of that, it raises domestic confidence, gets domestic consumption going and that's what investors want to see in terms of opening some of the k-web names, alibabas and tencent. >> i'm wondering whether or not you think the economic stress they're under makes them more

open to cooperation and receptive to messages like raimondo's, or more defiant and belligerent, especially with taiwan elections coming up >> that could cut either way they can either become more defensive or react increasingly. the signs are promising that we've seen the janet yellen visit go well, the raimondo visit seems to be going quite well in terms of setting up channels of communication and making clear what the two sides are after. i think both sides really recognize that there is benefit to be had from mutual engagement, but the issue seems to be that both sides view how to play the game by the rule and interpret the rules very differently. now certainly the u.s.-china trade and economic hostilities are not very good for beijing at a time when domestic confidence is faltering i think there's a willingness to engage from the u.s. side, i think it's good that secretary blinken, yellen and raimondo are there talking to the chinese, because

i think that's really the way, together with some of these tensions that are inevitably going to fester. i'm hopeful there will be no further escalation of tensions, but i think the harsh reality that any deescalation is probably not quite in the cards any time soon. >> and finally, when was the last time you were there have you been there recently >> i was in taiwan i've been to asia several times, but not to china i mean, from the east coast, it's very difficult to get to china because u.s. airlines aren't allowed to fly over russia, which means that you're flying to san francisco and then one of the things that i think will come out of the raimondo visit is, an increase in the number of flights that you -- went from about 150 flights a week, down to a dozen. i think the more that the people -- the two sides are talking meeshgts with one another, the more that you'll see things stabilize. >> hard for you to get on the ground in china? >> very difficult. >> thank you appreciate it. as we head to break, check

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3m headed higher today best day in a couple months on reports it's close to a deal to settle hundreds of thousands of lawsuits over allegedly defective combat earplugs. seema moody knows that story well and has details hey, seema. >> carl, i'm hearing from a source close to settlement talks that 3m's board is soon scheduled to meet, but guys, we knew a settlement was near when 3m's ceo mike roman was ordered to attend mediation talks in may by the district judge. the reported $5.5 billion settlement is lower than what wall street forecasted between 5 and $20 billion, but it is five times larger than 3m's initial attempt to resolve these liabilities by bankruptcy -- bankrupting its subsidiary aero technologies that bankruptcy attempt was thrown out by the courts this year

3m's stock sharply higher as a potential settlement would take one big legal overhang off 3m's plate. subject to board approval. the other being its role in producing toxic chemicals, p fas. a number of states have sued alleging water contamination a 10.3 settlement was announced in june but that does not include personal injuries. 3m did appoint brian hanson as ceo of its health care division, head of its anticipated spinoff, later this year. jpmorgan estimates that this spinoff will bring in about 7 to $9 billion to 3m which analysts say will be used to resolve these lawsuits guys >> going to have to look back and wonder on whether 2023 is the inflection year for 3m given the fact that this is a name that struggled with so many issues over the last couple years and it's been witnessed in the stock. any sense on what this deal -- i

realize you said that board is getting ready to meet -- on what this earplug litigation deal could mean in terms of payouts, i've seen notes over a five-year period, but take that and factor it in with pfas settlements, it's a huge chunk of change. >> you're right. it was a surprise according to what we've learned through this report it would be a five-year settlement versus a lump sum that was seen as a surprise to the upside and one of the other reasons shares are higher today. but we still need more comprehensive details as to whether the settlement that is currently in review potentially, whether it covers all 300,000 plaintiffs or a subset you look back to june when that pfas announcement came out, that pfas settlement only includes a subset of the liabilities. we still are awaiting more information on the states that have sued on water contom nation, personal injuries and property damages, not to mention what the 3m is facing overseas

in europe as well. still some question marks there. >> thank you seema moody. coming up, former kansas city it fed president esther george, we'll get her take on inflation, rate, powell's remarks at jackson hole. joins us next. we're back in two. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

welcome back with your cnbc news update, we learned in the last hour that former president donald trump is set to enter a plea in his georgia election interference case next wednesday and later this morning, a federal judge is expected to set a trial date in his federal election case. special counsel jack smith has proposed a january start, but the former president's team says it it should be pushed to april 2026 after next year's presidential election. tropical storm idalia is

expected to become a hurricane today. idalia could intensify to a category 3 storm and deliver life-threatening storm surge and dangerous winds to parts of florida as early as tuesday. and hundreds of people took part this weekend in what's called the largest hunt for the loch ness monster in half a century. the hunters came equipped with bones and high-tech drones to search for the beast in the scottish highlands this weekend's hunt had the lure to revive the lure of the loch ness monster for a new generation back to you. >> i'm sure they're going to find him this time no doubt. >> no doubt about it. >> all right you can see there we're just hoefr an hour into trading having a nice rally here with the nasdaq leading, despite nvidia down again. over to dom chu who has more on what's moving this morning. >> that's the focus of our sector sort. if you look right now what's happening with the markets

overall, just about every sector, in fact every sector right now on the s&p, is higher led by energy. energy, communication services and consumer discretionary some of those are lagging right now. the technology sector spider lagging as well. energy and turls the ones leading the way hire if you break down the technology trade more, you take a look at the chips stocks overall and that move has seen a little bit of a convergence right now chips have been leading the way higher for the most part in the technology trade we're starting to see a little bit of a convergens here shorter term between technology and those chip stocks within that sector overall check out some of the slowing momentum on the one-week side of things with some of the high flying chip stocks out there over the last week we've seen broadcom, nvidia and advance micro micro devices. we'll see if that slowing can transfer into something more nefarious down the line. it remains to be seen.

back over to you. >> thanks very much. the hawkish comment from the fed chair at jackson hole on friday take a listen. >> we are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level untiler with confident that inflation is moving down toward our objective. >> cleveland fed president mester speaking, saying beating inflation will probably require one more hike and holding for a while. joining us today former kansas city fed president esther george esther, great to have you. what a remarkable symposium over the weekend. great debate i wonder if you had a view on the chair's speech we heard optionality and balance a lot. i wonder if you thought it tipped one way or the other? >> good morning. i thought the chairman hit the tone and substance of the speech pretty much as he needed to and

consistent with where that committee has been, and that is a very strong commitment to getting back to the 2% target and setting the expectations that they will respond as the data comes in to what that next step is going to be. >> sounds like you yourself would probably be patient watching the data in september, that is right? >> yeah. i think if i were looking at this there's a good reason to be patient. you are following on the heels of one of the most aggressive tightening cycles, and, of course, watching for the data to come in. some of that has been very positive, as you look at inflation coming down, you see supply constraints beginning to ease, and i think the committee will want to look for the next set of data at least to give them a sense of where they should direct their attention by the time we get to [ inaudible ]. >> it's morgan why do you think these aggressive right hikes of the

past 18 months have not had a bigger impact on the economy is it time to rethink the economic models? is this time different >> well, we'll see if this time is different you have to be careful suggesting that it is. i think one of the things that came out of this jackson hole conference was a reminder to central bankers that there are also long-term, structural shifts going on in the economy that could affect the understanding of historical relationships, could put in motion changes that will have impacts for them down the road for sure, the long and variable lag has not gone out of the conversation with central bankers and i suspect they are aware that there could still be some effects to come in their policy actions to date. >> so does that mean soft landings hopes are premature >> you know, for me, i think it's too soon to say soft

landing. it things have held up pretty well the consumer has been resilient. we've seen the job market remain tight, and so so far i think people are pleased to see how the economy has performed. as the chairman reminded us in that speech, they have not achieved the target. they are carefully watching to make sure that they arrive at that destination. >> esther, it's david. i'm curious to your thought about the banking industry, particularly smaller community or regional banks with the move up in the long end particularly -- it's down a bit today -- but the asset value there is coming down and the capital commitments needed for it, any concerns on your part and overall just what the willingness is going to be in terms of their ability to actually lend? >> yeah. the banking system, of course, obviously, is affected directly by the transmission of this

policy and how aggressive that is i think the good news is, bankers generally understand that they have to manage that asset liability mix on the balance sheet, they have to remain well capitalized and well managed throughout the cycles that come at them. but, of course, the reality is, when you have such a dramatic hike in interests, there are sectors that are going to feel that watching community bank portfolios, regional bank portfolios around commercial real estate and asset class that feels the effects of higher rates, how customers credit quality is sustained through the cycle, is very much going to be not only on the minds of bankers, but those that are monitoring the banking situation. again, just as the soft landing narrative, so far so good, i think with the banking system. but i think it too soon, not to think that some of these adjustments will have an impact. >> jackson hole is the event

that you yourself used to host i'm just curious, given the fact that it is an economic obsession of the markets and investors in the dog days of summer each year, how meaningful is this symposium in terms of officially or unofficially in terms of sort of setting the stage for where monetary policy is headed for the fall >> well the symposium, of course, is focused on economic issues, other issues that are so important to central banks it is not a policy forum by any means. but its tradition is one where central bankers interact with the academic community to really talk about what's happening, and as you know, this particular symposium in the structural shifts in our economy, how should central banks take in what's happening and understand what it means for the policy decision they have to make in the near term. as you heard from both chairman

powell and president lagarde, those particularly challenging right now and the uncertainty is high, which signals to them some of the challenges they face. >> it definitely gives a good long-term framework, especially lagarde's comments about structural challenges to inflation in the future. esther, congratulations, i guess, on kansas city and jackson hole and we'll see you soon esther george joining us still ahead today, nike breaking its longest losing streak ever as shares come off three weeks of losses, bounced off 96.5 worst performance since may. we'll talk to one analyst who calls it a buy here. a quick programming note, all week long "mad money" is getting you ready for school with a special series dedicated to jim's rules of investing the most important market lessons kicks off tonight at 00.m6: p. eastern time look forward to that stay with us

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welcome back to "squawk on the street." shares of nike snapping an 11-day losing streak on friday the longest on record for the company. our next guest is bullish on the stock confident in the brand strength opportunity shares are higher this morning as well. let's bring in robert, guggenheim retail security analyst, has a buy rating on nike and price target of 135 good to have you on set. why are you sticking with that rating, despite the weakness you've seen this year? >> i think it's a great portfolio brand in addition to nike, the jordan brand and converse as well from a global opportunity, i don't think there's a better company that operates brand equity and connects with the consumer ber than nike does. >> the fact that we have seen selling in the name until the last two trading sessions, why why the weakness >> i think there's a couple concerns china has been a big focus for

investors and for nike specifically it hasn't been linear, but i do think they're in pretty good shape now. the inventory situation has gotten much cleaner. i think they're probably in the best situation on the inventories within the industry. i feel like there's some concerns on brand jordan slowing and i don't really share those concerns i think that business has some significant growth opportunities internationally women's and even in kids. i think the financial strength of this company, i'm never one to bet against nike on the future of this business. >> china at least in the last earnings was a bright spot it was much stronger than expected it seems like we've seen this with a number of retailers, international apparel and retail names, global i should say, has been some softening or some weakening in the north american market >> north america, i think, they're working through a lot of issues i think athletic generally continues to be a great growth

category, you know, but there's a lot of movement going on between footwear apparel, men's brands, women's brands and ultimately i feel like we're still working through the last few years of some of the supply chain challenges that industry has faced. i think nike has taken big steps to continue their strength and cloon themselves up and the industry up and i feel they're in a good spot as we look forward to the next year or so. >> the declines that took place, is that over or do you expect that toen. >> >> i think that's largely over the inventories they've taken significant clearance and markdowns on the inventory side. they were facing, you know, supply chain contracts that were a few years old and now you're start to roll out of those into next year. we should start to see easing of those, you know, gross margin pressures into the next few quarters >> foot locker, that stock has been a disaster, hammered this year how much of a read through to nike is that name still.

>> i mean, i think part of foot locker's challenges are the relationship and situation with nike, where nike is pulling back on its, you know, strength in -- the nike distribution platform foot locker is becoming less a critical part to it. nike has been focused more on the dtc. part of the challenge with foot locker, the nike business, but it's also the lack of the nonnike brand strength and i feel like the industry is definitely weakened a bit. it's gotten more promotional i think foot locker has gone in with heavier inventories than they anticipated as well. >> thanks for joining us. >> still ahead, china's ministry of finance cutting tax and levies on all stock trade business half, first time in about 15 years is now the time to dive into chinese tech we'll discuss thatn e xt ur ithne we're back in a moment but if it's using unverified data, it could generate problems. your business doesn't just need ai, it needs the right ai for your business. introducing watsonx:

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welcome back to "squawk on the street." the investment firm tiger global, apparently the target of an alleged misinformation campaign in recent days. leslie picker joins us with the details. i'm interested in hearing about this because i obviously read that article, so to speak, in question as well >> yeah, it's a pretty wild story.

according to tiger global this all is from a disgruntled former employee it's been going on for months. it was a nine-page, single spaced anonymously written, a pdf has been circling the rumor mill for months and it caught fire in the hedge fund community. you got it i got it it's been sharing virally across the community. the piece alleges everything from internal strife within tiger to limited partner rebellion to regulatory issues tiger calls all of this, quote, a pack of lies in a letter to its investors obtained by cnbc and confirmed by the firm, who declined to comment beyond the contents of that correspondence. tiger says it's been, quote, engaged with experts to assist with response to these malicious attacks. they go on to say, unlike the anonymous coward, you know who we are, we are here and ready to

answer your questions. it's worth noting the firm has rebounded from a tough 2022 after last year's losses of 56%. a person familiar with the matter tells me, tiger's public portfolio is up 20% through july the firm's biggest positions are meta, microsoft and apollo each is up more than 30% year to date the firm is a microcosm of being levered to tech and growth they've been able to ride that to the upside this year. >> leslie, i read it it was sent to me by a couple of hedge fund friends i don't know if this is lack of literacy or they don't read "the new yorker," and i was like immediately, this is nothing >> i said the same thing. >> your reporting is spot on to what i think -- i expected a former employee, perhaps the quotes were clearly manufactured the idea that this -- it was

absurd these hedge fund guys, maybe they're good at picking stocks but they clearly have no idea what it is to read a "new yorker" piece, i guess. >> that was my take. in the hedge fund space you would expect for the "new yorker" to start with anecdotally lead but if you're going to pitch about a hedge fund, you'll have on the record quotes and because you're speaking to a broader audience my instinct was this was disgruntled lp or employee tiger believes it's a disgruntled former employee who has been circulating this. in some circles they say it's as much as six months it's been going around but i just got ahold of it last week. >> i did, too. i guess it made it to people who sent it our way. you talk about the struggles tiger's had.

they've been real despite a bit of a rebound this year certainly they're not without some criticism, fair criticism for -- especially on the venture side of their portfolio. >> yeah. i was trying to get a sense of what those markings look like right now. i was talking to sources about that they don't mark them all the time so the latest reading that's been communicated to lps is down about 33% in 2022. down about a third based on the private 345shg9s that's kind of an art and science how you mark your private positions. that's notable on the flip side they have been able to close $2 billion venture fund, which is smaller than their previous favors but given the market dynamics it's not nothing just given how closed off the private markets have been in the last 18 months or so. >> yeah. of course, again, key is the marks on those private investments. we talked about it a lot we will continue to talk about it as well it's been a difficult

environment for them not even a good read no artistry at all in that letter leslie, thank you. >> thank you >> leslie picker on tiger global. as for our markets, the s&p is giving up some gains we've seen so far earlier in the session. still up about 0.36% nasdaq also similar gain would point out, nvidia shares, stubbornly lower another 1.3% decline that has gotten a number of market participants' attention given the strong financial performance of that company. "squawk on the street" will be back after this.

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good monday morning. coming up this hour, the commerce secretary in beijing with the economy there stalling and tensions with the u.s. growing. will her visit help stabilize relations? plus, lessons from jackson hole former kansas city fed president tom hoenig joins us as wall street prices in one more rate hike this year. later on, apple tv's big messi win and the implications for espn as disney stock continues to struggle. we'll start with the market and whether anyone