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 outside the

so-called magnificent seven will start making a big contribution. wolfe calls the top for both the smh semiconductor index and the nasdaq 100, meaning nvidia's ridiculous run could be coming to an end. goldman sachs' trading desk saying there could be bad news for tech senior markets commentator mike santoli joins us now to discuss all of this. >> i usually know who i am i don't think you can deny after yesterday that reversal to the downside led by the nasdaq has tech sputtering a little bit you look at today, nvidia down, as you mentioned, amazon is weak this morning, the equal weighted s&p is up 1% if i look at quarter-to-date winners in the s&p it's a lot of energy, a fair bit of health care in other words, there are answers for big tech being a little stuck for a while if that's what it is. so, i think it's kind of an eye of the beholder thing. it doesn't get us out of this

notion we feel like we're in bounceback, but you get 1% higher in the s&p and people now saying the chart is broken are likely to say, well, maybe we broke a little downside to the upside and we have a shot here being a 5% pullback. >> morgan mentions this note, callahan saying those graduating out of big tech are facing worries in china, worries in specialty retail, that may be the return to big tech in the future. >> yeah, in other words, if the rest of the market becomes more complicated, a lot of times you go back to the reliable comfort. i would point out that the forward earnings forecast for the nasdaq 100 type stocks is steeply on the uptrend that's been pulling the s&p 500 consensus higher so it's not just about, oh, it's a safe haven, we can rely on it and not going to be that cyclical or rates aren't going to the moon it can be also we are having

upside earnings revisions because of the latest round of reports and how it plays through to the next few quarters. >> how does that set us up for september, which we know is historically the worst month for stocks and seasonally very weak? >> i think it's still kind of a show-me market you have to prove you can buck the seasonal trend, you have to prove that bond yields are not immediately going to pinch off the economic growth. we don't know any of that. it's a wait and see. i thought the issue with higher yields isn't just a straight valuation calculus >> well, mike, thanks for kicking off the hour for us. turning to the fed, chair powell leaving the door open to further rate hikes in his jackson hole speech on friday and this economic data could help tilt the scale on whether one or two hikes are ahead for the rest of the year joining us former kansas city

fed president thomas hoenig. great to have you on the show. i want to get your thoughts on the comments from chair powell on friday. the takeaway is not how much higher we go, whether we get 25 basis points or not, but for how long they stay at these elevated levels. >> first of all, yes, the chairman was careful, as you would expect he didn't tip his hand at all. i would say he's cautious and i think he's cautious about the economy. number one, while it has slowed, it's stronger than people expected it's stronger than people thought. that gives them some pause they're committed -- he did reaffirm the 2% inflation target that raises the issue of whether there will be additional rate increases. my own view is listening to him and the chatter around it, there will be -- unless there's a

surprise, inflation surprise in september, it's just as likely they will pause as go forward and wait and see what might happen before their lake october meeting. and then decide, but if they have upward move inflation, i think likely they will move. the other thing is, people are more concerned for the longer run, that's getting more play at these kind of meetings in terms of national debt and a servicing debt and so forth and what that effect will be on interest rates. those are the combinations that are going to be affecting the discussions going forward, i think. >> we get a lot of data, and the pce, we get jolts, jobs report on friday as well. if we continue to see resilient economic data here, does that signal that structurally the impact that these interest rate increases have had over the last 18 months is different than what we've seen in the past or is that -- we're still operating on

long and variable lags and we haven't seen the full impacts yet? >> we've not seen the full impact yet that is not unusual for this stage of a tightening cycle. i would say that number one. number two, i think part that has not been as much attention paid to the fact, the fiscal policy for the last three years has been enormously expansionary you have not only the c.a.r.e.s. act the science and c.h.i.p.s. act, all these subsidy programs feeding the economy. that's an offsetting factor keeping the economy stronger than what people thought it might be >> dallas is also notoriously nervous, but one reads, the phone is not ringing our sales team is working harder with less results. projects are being postponed and, perhaps, even more telling, payments are increasingly

protracted does that sound like the kind of commentary we should be getting at this point in the cycle >> yes, i think so we've been in this a year and a half that's not dissimilar from past cycles now the slowing again. we're seeing pressure on long-term interest rates and concerns about the debt so people are -- uncertainty is growing, quite frankly that's part of the reason, depending on inflation numbers, the fed is likely to pause as go forward. the economy is slowing yes, we've had this pullback, we've had this upward push from strong consumer demand but i think that's from past fiscal policy yes, we're going to be cautious, and i think we're right where we have been in the past. i think showing slowdown in activity and concerns for the future >> i'm going to ask you the same question i asked our best last

hour, esther george. as former kansas city fed president, someone who used to host these jackson hole symp symposiums, key insights in terms of the dialogues, the debates, the data that's shared, how it helps to shape future economic and monetary policy, even if it is unofficial >> well, i think it's a great opportunity because -- these policymakers, they're not going to play their hand but they are going to listen to some established and respected academics. they're also listening to the central bankers from around the world. not just major central banks not just the ecb, but south america, asia. we know japan is in a transition as well, south america all these conversations coming in you pick up the nuances of your world economy. not just the official and not just the statistics, but the real sense of things

and i think it has important influence, not only on u.s. policymakers but on policymakers around the world i hope it's a valuable experience for the policymaker as well as those academics and others who are there, giving their views unofficially but performed. >> thomas hoenig, thanks for joining us. >> thanks for having me. good to be with you. still to come this morning, u.s. commerce secretary raimondo meets in beijing we'll talk with jessica lesson on the ground with the commerce secretary. one china focused portfolio manager on how to be positioned. ston sr e eng on pace foth la mthince october last year

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secretary in beijing our thanks to both of you.

great to see you jessica, the fact you're on the ground says a lot about what the nature of these talks are hopefully going to bring are you sensing the dialogue is real >> i think so. and i know the commerce department is upbeat about how today went, the first day in beijing. secretary raimondo came after five years of commerce not visiting china and really feels like she wants to promote u.s. business interests here. i think so it's notable there was not as much discussion about an area of much more sensitivity in trade, the u.s.'s semiconductor exports. so, there's much tension to be had. she acknowledged at a high level it's a very tense relationship, but i think everyone is feeling optimistic about how today went. >> are you getting the sense they're getting to the sweet spot, that is, dealing with

trade issues and national security issues? really it boils down to chips, i suppose. are you sensing that dialogue is getting more robust? >> well, i think what the secretary would like is everyone to just separate those she wants to promote u.s. business, grow trade, but around issues that she says don't affect national security we saw demonstration of beauty products today as an example of the kind of trade that the u.s. government would like to promote. commerce claims that last year there was $700 billion in this kind of trade, in goods and services and that's what they would like us to focus on what china is going to focus on in the conversations is a little different and i think that's a question whose answer is still to come. >> got ya. hal, i hear you. know you have some thoughts. want to get your insights on this visit the impact and the importance of

it and whether and how it actually changes the relationship between the two countries. >> yeah, well, i think this is the first time in a long time that, you know, the department of commerce is in china. she's going to spend a couple of days here. i think today is one of the first initial rounds of discussion with the chinese officials. already we're seeing initiative from the chinese initiate a communication group with both sides to work on the issues going forward. so, i think once that is established, it could help re-establish the communication channel, one of the most important relationships of the world. so, i would say that, you know, we're making good progress but we're still in the early days. this is only the first day. >> so, how does this factor in, from the chinese perspective, how does this factor into an economy that's reopened from covid and has not met, at least

on the world stage, economic expectations, how does it factor into some of the stimulus efforts or even some of the regulatory changes, for example, the slashing of the stamp duty on stock trading that was confirmed by the government today, how do all of these fit together i guess what i'm trying to get to is how much -- how much leverage does china have how much do they need an easing of the relationship between the two countries from a trade perspective right now? >> yeah, well, i think on the negotiation table, especially when it comes to high-tech chips, there's not much negotiating chips china is holding. china really needs to rely on u.s. imports for chips and this year, as you can see from the input data, china has been inputting a lot of medium and low entry chips from the u.s. so, you know, i think now you want to develop a.i. and cloud technology, you really need high-end chips in the u.s.

so, i think the export from the u.s. government doesn't help i think going forward, china has sort of initiated its own ban on some technological exports to the u.s., including some key ingredients that go into chip production that way, you know, there's a tit for tat going on between the two countries. and most of us in china just basically not being too optimistic about technology cooperation between the two countries. having said that, the chinese government is trying to shore up confidence in the domestic market today we're seeing the companies refusing -- by half and it was the first time since 2008. so i think going forward, china really needs to attract foreign business interest back to the

country. this year, as you can see, together with other enterprises still operating in china n july the scope of products is down more than 10% year-on-year and deceleration from the last months as well this sort of a downtrend -- by some of the policy measures already in place but i think we're expecting more and more policies coming, but many policies announced have so far failed to lift the economy and the market. >> it does make you wonder, jessica, what's easier for the government there, restoring confidence among domestic entrepreneurs in the private sector or getting trade or some foreign investment flows to come back in. i'm not sure which is the quicker fix. >> i think there's certainly opportunity for more foreign investment to come in. it's just a complicated picture. we have to remember the u.s. government is also restricting some of that itself when it

comes to venture capital and private equity in certain industries i think the whole thing is complicated but the message from commerce today is definitely there are a lot of u.s. businesses that want more access to the china market. so, you know, let's see what happens. but that's what they're saying >> yeah, yeah, fourth senior official to visit in the past three months, the secretary. hao hong, jessica lessin, safe travels, good to see you. u.s. warning chinese hackers are positioning themselves to attack critical u.s. infrastructure eamon javers joins us from d.c. with exclusive reporting >> that's right. american officials are scrambling to make sure potential weaknesses in the software used to operate american infrastructure have not been penetrated by chinese and russian hostile actors they're focusing on the threat to so-called open source software which is developed by

hobieists and others and put into the public domain the fear is that hackers could be developing this code, releasing it to the public and ceding vulnerabilities intentionally. they asked the open source community for ideas on how to secure the code. a government official tells cnbc that cisa plans to release a draft national strategy for open source security in the coming months meanwhile, a new report from a cyber security firm highlights the potential threat researchers at fortress information security discovered 90% of products used to manage america's electric grid contained contributions from developers who said they were working in russia or china and they say russian and chinese open source code is three times more likely to have vulnerabilities than code produced in other regions. fortress estimates that the cost to replace all that code would be a staggering $40 billion.

given those huge costs it's not likely companies are going to pay to replace all that software but cisa is making it clear it believes software companies that consumer open source software should contribute back to the security of that software overall, guys. back over to you >> $40 billion, let that number sink in. i mean - >> it's a big price tag. >> it is we've seen what critical infrastructure, the role it plays in terms of first attack and then throughout a prolonged conflict in ukraine. so, there's a recent case study in terms of the vulnerabilities and why they need to be studied and why they need to be shored up it raises the question, eamon, why, why is there all this open source code in all of this critical infrastructure software >> well, you know, that goes back to the culture of software development going back decades open source has been a big component of the way software companies build these programs it's not as if they're writing every line software is assembled.

you grab packets of code that do one task, packets of code that do another task and assemble them all together. for the common, basic stuff a lot is open source software companies can go out and get that for free and that brings down the cost of producing the software, to everyone's benefit over the years, this sort of system has just been baked into the cake and people hadn't been really focused on the security aspects of it. now, though, people are starting to become aware of it and trying to figure out what to do now that all of this code is embedded in so many systems. >> we talk so much day in and day out about supply chain, software supply chain. eamon javers, thank you. >> you bet. still to come this morning, jpmorgan's asset management on the two pads for the market here neither of which he says involves recession plus, watching 3m, one of the top gainers on the s&p after reports it's close to reaching a settlement over potential faulty earplugs it sold to the military the stock is still yielding

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welcome back to "squawk on the street." delinquency rates are rising, pointing out despite the unemployment rate being at the lowest level in 50 years, credit card delinquency rates at small banks are at a record high this really gets my attention, carl we have been hearing delinquency rates were rising but it was more along normalization to pre-pandemic levels. when you look at the small bank impact here, particularly on this chart, it speaks to the weakness we've been seeing, one more aspect of weakness to small and regional banks at a time the kre is looking to close out the month lower with every component or almost every component showing losses for august. >> it's something for everybody in this debate you look at household debt to

gdp, at a 20-year low, median bank balances since 30% above pre-covid levels you can build all types of arguments for the health of the consumer maybe the most important stuff in the last couple of weeks has been the comments about delinquencies of macy's and nordstrom's in the department store space. >> absolutely. the one to watch coming into september is going to be student loan debt repayment because add that to the list of consumers chipping away at the wallet at a time where, i should note, again, that credit card debt is above $1 trillion, which is a record high and seems to be just goinghigher. >> right let's get a news update can silvana. federal authorities are investigating a saturday shooting at dollar general as a hate crime officials say the 21-year-old gunman killed three people with legally purchased guns in jacksonville the jacksonville sheriff confirmed the man left behind racist writings and used racial

slurs before taking his own life a federal judge ruled out the possibility of a 2026 trial in former president donald trump's federal election interference trial trump's legal team asked for an april 2026 trial, which would have pushed the trial to after next year's election prosecutors requested a january start but the judge hinted, that may be too soon. she has not yet set a date four new astronauts are now calling the international space station home the spacex crew 7 dragon capsule docked at the iss on sunday, completing the nearly 30-hour journey and launching a half year mission for the astronauts. the spaceflight marked the 11th manned mission for elon musk's space company since its first crewed launch in 2020. >> it's another huge achievement for spacex >> yeah. fascinating stuff. >> and it's a truly international crew headed to the international space station. you've got an american, a russian and astronauts from

denmark and japan. a fun one to watch. >> it really is, morgan, yeah. >> thank you. up next, with the availability of live sports outside of the traditional cable bundle means for media stocks. and a check on apple's entrance to the space with a messi impact in full effect. stay with us

a couple hours into trading, scraping near session lows.

>> four to one advancing declining stocks all 11 sectors up. utilities on the flat side consumer staples not participating as much, but i like the broadening out story. remember that big story, broadening out in the beginning of the month that's what we were doing. we were seeing energy stocks mo moving, all sorts of stocks is moving forward, not just tech stocks that's what the hope is as we close out the month. we'll see. here's one sector, energy stocks remember what happened earlier oil really moved up a while ago, about a month ago. this helped propel some of the big energy names oil service names had a great run. then we sort of dropped down the problem is oil is very hard to figure out. you've got pricing issues with opec, china slowing down, demand issues it's hard to figure out. the hope is maybe we can get energy stocks back in that broadening out story industrials, there's been a few select industrials some a.i. plays out there. eaton hitting a new high

some other names out there, ingersol-rand, that's been a great story. the tech story broadening out? not necessarily. the stalwarts are holding near ibm is near a new high for the year this has been a great performer. nobody paid any attention to it. slowly but surely it, too, is now named as one of the potential a.i. beneficiaries there's a stock that's held up very well. not really sold off at all there are companies that are not participating in the broadening out story. the airlines, i know everybody is traveling everybody is complaining about the high prices for airline tickets. the airlines have been terrible performers alaska was $55 in july they had their earnings report out in the early part of july. it was terrible. it's been straight down essentially. alaska air -- not just alaska air, american's had a terrible month, down 12%, 13%

united is down 10%, 11%. you mightcomplain about the airline prices, i do, but the airline stocks themselves have not been good performers that's not a broadening out story. and the consumer staples names we've been telling you how terrible the food stocks have been general mills was $90 three months ago $90. it's $68 right now campbell's have had problems the only good thing you could say about this is at least they stabilized in the last week. that's what's important. recently seen more stabilization in the market, yields have stabilized the ten-year yield, the stock going up it's down a little bit from where it was a week ago and when you get more stabilization, the market tends to lift as it has in the last several days guys, back to you. >> bob pisani, thank you. from the trading post to inside the post. apple proving once again there's nothing like live sports to win over viewers and shareholders. julia boorstin is with us with more hi, julia. >> hey, morgan, apple's ten-year

$2.5 billion rights deal with major league soccer has been a huge win thanks in no part to lionel messi moving to inter miami. this weekend he scored helping his team beat the new york red bulls. the inter miami's team owner tweeted less than a month after messi joined that mls season subscribers had more than doubled. messi is an ambassador both for the league and for apple's tv plus season pass subscription. $39 a season for apple tv plus subscribers. now, he is invested in this deal he earns a share of mls season pass revenue not only could messi help attract and retain subscribers to apple tv plus, but apple is producing a new messi docuseries which could jump start a sports doc series tim cook saying in the earnings call saying, quote, we are beating our expectations in terms of subscribers and the fact that messi went to inter miami helped us out there a bit.

on the heels of the mls season pass growth, wedbush is projecting the shoe that fits for apple is the golden espn assets, which potentially may be on the table in one form or another as iger and the board strategically and carefully look at disney's core assets over the coming months. so, we'll have to see how long-lasting this messi effect is will all those people who signed up towatch messi score, will they stick around to watch "ted lasso" carl, what do you think? >> i think there's going to be some overlap, that's for sure. we'll have to wait and see how much let's stick with media, when it comes to sports streaming our next guest sees disney and fox as best positioned he notes direct-to-consumer subgrowth did slow dramatically and cuts may not be enough to make every competitor profitable joining us ubs telecom analyst john hudly it sounds like the cash piling up as a result of production

going to near zero, you think is not going to be the answer long term >> yeah, the trends are really going against the traditional media companies. first on the tv side, you have accelerated cord cutting what i would say is a weak spot in the advertising market, which may turn out to be more secular than cyclical. on the dvd streaming side, as you mentioned, we've seen a slowdown in growth, especially in the u.s. and the companies at this point are, frankly, spending too much on content. >> why aren't cost cuts the answer then, at least for a name like disney? >> cost cutting is part of it. like i said, we started out in 2013 spending about $40 billion a year, the industry on entertainment content. that's gone to over $100 billion a year post-covid. just a massive expansion and as you said, given some cutbacks we'll see what i think is a meaningful retrenchment there. that cost savings is nice. you have to go back to where we

were sort of prestreaming from a business model standpoint to get the profitability there. that means cost cutting, higher prices for streaming services, more licensing, sort of broader distribution of the content they do make. >> john, if we know that sports, live sports programming has been the glue keeping the cable bundle together, what happens -- what happens as more of these streaming deals get struck around sports and what does that mean for not only profitability for the streamers but also the traditional providers? >> right so, as you said, what people are watching on the traditional tv bundle right now is sports ratings have been very strong. that's for nfl, for nba. if you look at what we've seen so far this season with hall of fame game, you know, you're looking at some positive trends there. but increasingly, sports is making its way out of the traditional bundle obviously, "thursday night football" on amazon is the big one. you mentioned mls on apple there are other examples the big change is going to be

when espn goes direct probably in 2025. we believe that espn as it stands now the is a little over 30% of ratings points for live sports in the u.s. i mean, that is available direct that could really accelerate change in the living room tv bundle. >> john, so system issues facing the industry good to touch base with you and talk about where we are at the moment thanks for the time. >> sure, carl. after the break, the six stocks that are both favorites of hedge funds and mutual funds. markets right now are in rally mode with the dow up 208 points. the s&p up about 0%. ayith us ross the us, you'll find pnc bank. helping businesses both large and small, communities and the people who live and work there grow and thrive. we're proud to call these places home too.

they're where we put down roots, and where together, we work to help move everyone's financial goals forward. pnc bank.

goldman sachs breaking down number to find common ground between hedge funds and mutual funds. while financials was one area of disagreement, mutual funds overweight, both benefiting from cyclical names like energy in terms of individual names, only six were both favorites in hedge funds and mutual fund basks. the lowest number in nine quarters some names, signicigna, uber, wy and bullish weremaster day and fiserv mastercard today another all-time high, going back to the ipo, as we were talking about the consumer and how they're parting with their money. to the broader market, while

jackson hole is behind us as we wrap up a rocky month of august. we're continuing to see weakness out of china how should investors navigate the volatility joining us now, portfolio manager at jpmorgan asset management, phil great to have you with us. how do investors navigate this >> i think what we got friday morgan is a sigh of relief i'm a multi-asset investor the relationship between stocks and bonds means a lot to us. in august the 3% pullback in the market was not because of growth concerns it's like a high class problem growth is fine, but is it too good i think on friday what we got from chair powell was at least a nod to the fact that they have to be really careful when they're so restrictive too much tightening would risk growth, but, morgan, on a scale of a hawked up scale, ten being

most hawkish, they're still at about a seven because the base case should be they're going to be on hold but the risk is that a combination of either very strong housing or employment data rekindles an inflation concern they want to get in front of. >> you mentioned you're multi-year strategy. how compelling is the bond market right now, especially with the ten-year back at 15-year highs? >> yeah. what we need to see, morgan, is stabilization in rates we're overweight interest rate sensitivity which means we're overweight duration and portfolios we have a new recession view our recession probability is only 20% if there's three scenarios, no landing, hard landing, soft landing we're firmly in the middle of soft landing camp which means things like high quality, high yield where i can get 8%, which is long-term capital assumption for equities in the near term make a lot of sense. my biggest competitor is with

the three-month t-bill that everyone thinks is this great story. we would rather get more yield in credit than cash. if i think we're not going to be in recession and we think the fed is just about done with their tightening cycle, this broadening out story that bob talked about, i think, makes a lot of sense as well that keeps equities marching higher. >> when do you think equity fomo begins is this a year-end dynamic or -- >> yeah, i think we get really big pieces of information this week on core pce, which is the fed's favorite inflation measure and payroll. the payroll number this friday, i think, just to throw a number out there, 200,000 is probably the line below 200,000 like last month when we got in the high 170s, that's okay. but above 200, the chair just said it, right, that will keep the super core measure of inflation pretty sticky. and i think that kind of keeps

these interest rate environments alive. if they go one more, they're at 575. two more gets you to 6%. these are really high federal fund rate levels that a lot of people didn't price in this is a high class problem different from last year jackson hole was talking about imposing pain on the economy now it's different now we have a growth story but they're towards the end of their cycle. i think that should be a good thing for multi-asseted investors. >> to go from economic growth to growth in the equity market, the fact nvidia is under pressure despite blowout earnings last week t speaks to the fade the rally instead of buy the dips. when does that change, if it changes? >> i think that's a pretty unique story with nvidia because of how much of a public story that was and how much people really wanted to get ahead of that earnings story. we think the a.i. story is real,

being adopted by large companies, that's good for productivity when inflation is moving lower if this is a rally based, again, on the fact that the u.s. economy can grow at about trend and the federal reserve can pause, not ease. i don't want them to ease. if they're easing, we're in recession. but if we're in the soft landing environment where fed can pause and keep rates at these levels, that's going to be lower vix, lower rate volatility, good for the equity market. right now while we're waiting for the data, i would rather pick up the yield in the portfolio than the equity risk that's the story >> all right phil, thanks for joining us on set. still to come this morning, is the ipo window really back open one of the most highly valued private software companies reportedly once again turning to the private markets for its next round. details on that in a moment.

pretty business yea month coming up from ipo, and we dig into whether or not the window in the ipo market is really opening back up. >> i wanted to offer a few reasons einvestors might want t curb that. second, we have the potential

data works funding round it's a data analytics firm and it's widely seen as a ipo candidate. it's in early discussions about a new private funding round, if that does happen it suggests this startup is not planning an ipo anytime soon, and the last valuation was $38 billion a few years ago, and that's known as an up-round which has been elusive. ore source adds these discussions are preliminary and could still fall apart either way, that will send a very important message to other startups in the ipo lineup in the state of private versus public market sentiment and where is the best place to raise money. and then it was said, quote, the markets are closed and if the markets were not closed we

already would have been public he said that last thursday he could be proved wrong or validated in the last few weeks. he reiterated what he always said, he wants to be a public company but the conditions have to be right to go out. he doesn't need to raise money like perhaps some others, so he will be watching markets closely as are other ipo pipeline companies. and they are unique. they have been waiting and waiting for the window to open if they see the smallest crack, they will go others like data bricks, they can afford to wait longer. >> yeah, that got my attention, too. they have been possible ipo with an dates if things go well here in the coming weeks, and batting down the possibility of going public now and turning to the private markets instead, it's very significant i am curious, a name you covered

for a long time, instacart, it has five quarters of profitability, how key is that going to be for the first names that come out into the public markets with the ipo markings. >> the s1 looks good, and that profitability looks good when you put it beside uber or doordash, and remember they went public with losses in their past, and still are not profitable on a gap basis, and it's in a unique spot where if the economy is a good investment over all, and you have the arm and the data breaks, and the ones you just mentioned, these may be more compelling investors and may see better profitability

because of business model works different and the margins look better i think that will be key a name that we talked about last week but dependant cover in depth because our audience doesn't know it very well, clavio that could be more important down the pipeline. >> yeah, we got some restaurants and that doesn't really scratch the itch the way some of the larger tech names will do. >> thanks. coming up next, a tax vemehole that costs the gornnt $20 billion in lost revenue. details after the break. my name is caron and i'm from brooklyn. i work for the city of new york as a police administrator. i oversee approximately 20 people and my memory just has to be sharp. i always hear people say, you know, when you get older, you know, people lose memory.

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your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire welcome back loopholes has cost the government billions, and robert has more details >> the $10,000 cap on local state and tax deductions was supposed to raise around $100 billion in tax revenue instead, a new study found

loopholes are costing the federal government about $20 billion a year in lost revenue, meaning that cap generates between 80 to 85% of its total expected collections all that is because 36 of the 41 states that have income taxes now allow owners of past throughs and partnerships to avoid the cap on their state taxes. the pass through or company pays an elective tax and gets the full deduction and passes that deduction on to the owner, and as a result of the wealthiest business owners are avoiding the cap while us property owners are footing the bill what to do when the cap expires in 2025? republicans want it preserves and democrats want it totally removed. congress will have to make the work arounds totally illegal or

find other sources of revenue. >> it's fascinating, and it sort of speaks to income inequality aspects here, right? to your point, property owners and regular wage earners will feel the impact in the high-tax states, and what i am curious about is how does this factor in the lost revenue you have loopholes and also folks have been leaving some of the states as well, and you had the migration that i would imagine also has impacted revenues >> no question that the migration started precovid because of the salt deduction, and that's not going to change perhaps even if they remove it in 2025 because so many people left this points to the whole challenge of how do you fix this now that it has become part of the tax code and it's so complicated to pull out one piece without having to change so many other parts. that's the big fight we will have after the election when it comes to taxes >> yeah, and even enforcements

have been politicized and the size of the agencies a very difficult problem. morgan, busy night on clo "closing bell. >> good day to have him to talk about a new partnership with open a.i >> yeah, let's get to the judge. thank you. welcome to the "halftime report." looking now what the tprapblg fragile fall will have take a look at the markets we are green across the board. yields a