acle ear at 1-800-miracle and schedule your free, no obligation hearing evaluation today. good wednesday morning. i'm carl quintanilla with courtney reagan live on the floor of the new york stock exchange. is bad news finally good news? what this week's ecodata means for investors and the fed as we close out a rocky august. >> plus, hpe disappointing investors with its revenue outlook, but emphasizing the important role ai will play. the ceo joins us with those results this hour. >> later on, the ceo of novo nordisk, reaction to the white house's medicare price negotiation with two drugs on that list. >> topping the tape for us this

morning is that economic data. weaker jobs, weaker inflation, and weaker gdp, helping the fed's crew said to cool the economy. the initial reaction on wall street was bullish, but sentiment has shifted, two hours into trading. senior economics reporter steve liesman and senior markets commentator, mike santoli are with us. steve, i guess the big question is, is the fed finally getting what it's been hoping for, what it's been working for all this time? >> yeah, incrementally, courtney, is the way i would put it. this data is not weak, per se, in the sense that the 2.1% gdp growth down from 2.4 is still above trend growth. and you'll remember both in jackson hole a year ago and this time around again, fed chair jay powell said low potential growth is needed to bring down inflation. but it's going in the right direction in terms of being weaker, but not necessarily weak. same thing with the adp report. 177,000 would be a good number in any normal onth, but it's a downshift from where we are

before, the adp numbers have been unusually strong and a bit out of sync with the bls numbers. the thing that captured my attention the most was wage numbers, up 5.9% year over year. that to me spoke of an easing in the labor market, where things are not so tight here. and it went along nicely with the jolts data yesterday, showing the quit rate had declined. >> i was thinking what mark zandi said about the jolts number, near perfect, meaning resilient, but cooling off. >> without a doubt. and it does kind of validate the hoped for scenario, where you just kind of attack a very tight job market by having it loosen up, by having just fewer unfilled jobs per unemployed worker. i think that the question is is where does the pendulum stop swinging? if we were going to have eventually a weak job market, presumably, the first thing to happen would be people would stop listing as many jobs, people would stop quitting their jobs as quickly. and we might be on our way to something weaker. for now in market terms, it's

all very comfortable, and it's all because of the initial condition. coming into this space, we're worried about runaway upside moves in the bond yields, because the economy would seemingly running very hot in july, and maybe august. and so once you have that set up as your biggest fear, anything that looks like moderation is welcome. you can't have too much of it. you can't have too much bad news and still have it be good news. >> still that gold rush scenario. what's going on with the markets here, mike? >> yeah, i would just view it as three days, off a few percent. we've definitely gotten a little bit of our legs back under us. it seemed like it was a pretty routine pullback. nothing really alarming happened in terms of earnings estimates. you don't see too much of a routine pullback, however we do have a jobs number on friday. i don't think you'll get any big swings outside the range before that. >> mike, i was going to remark that the pendulum doesn't stop

swinging. what we're talking about is a $21 trillion u.s. economy and whether things move by a few cents either way. i think what we're learning here is that there's no straight line to, you know, goldilocks here. so the golden path, chicago fed president, austan goolsbee likes to talk about. we're getting those pce numbers tomorrow. that headline. could be a bit evaluated. i think the market is going to react to the core number and that super core number, which is the one that powell has here. and you could have a setback on the way to getting inflation down. i think that this is going to be a process of bringing it down. it's not in a straight line. so we're not going to have -- i think we could be back here tomorrow, talking about the market going the other way. >> yesterday, over at pantion gave the fed chair a hard time more what he called his obsession about the joelts numbr which he said was overstated wage growth.

and a bloomberg opinion piece saying that they're happy that data set has had their day in the sun and is now over. are we done talking about it as much? >> i don't think so. and i don't think it's right to say that powell has pinned all of his views on the job market on the jolts number. that number is flawed in maybe a lot of ways. but it's one indication that things were tight. it was backed up by the payroll numbers. it was backed up, obviously, by the unemployment number. and obviously, the wage numbers, as well. and so, the idea that the labor market has been tight is not something that comes only from a single data point. what i think you could give powell a hard time for, but also in doing so, the entire economics community is the extent to which higher wages and a tight jobs market is pushing up inflation. that's the real question to me. i would be very interested to see if we can bring down inflation, you know, to a two-handle and still have a three-handle or a low four-handle on the unemployment

rate. what's been happening or what's been vexing or interesting in the economics world is this idea of stronger gdp potential, a low unemployment rate, and yet a declining inflation rate. if we can stay on that track, that will be -- that will be, by definition a soft landing. but also raise questions for congress about the relationship between unemployment and inflation that's the bedrock of economic policy with the fed. >> and that's the goal. >> i keep going back over single big megacycle we have to rethink the relationship. in the '90s, people didn't think unemployment could get below 5% without stoking inflation. in the 2010s, it was, why can't we create inflation even though jobs are -- you always have to assume that these are kind of moving targets. >> interesting stuff. we're going to continue this discussion here and dig a little bit into what this economic data means, what's next for the fed, and all of it put together, what it means for the investors and your money. joining us now, northwestern mutual wealth management cio,

brett schuette. thank you so much for being here with us. what do you make of all of this data? some you could look at glass half full, glass half mpt. pending home sales data much stronger than expected. we're still waiting for pci. put it all together for us. what does the picture tell you? >> yeah, i think you've had certainly a addition infl inflationary goal for the past 10 to 11 months. that was largely driven because inflation was caused by the disequilibrium in covid. as you move further past that, an inflation has come down and that has been the positive backdrop we thought that would be for the market. >> go ahead. >> tying into your previous conversation, i think the final frontier of inflation is wages. and haas why i think the fed kind of in your prior commentator's message here, i don't think the fed stops tightening until they see wages drop sustainably, which i don't think happens, at least it hasn't in the last few cycles until we have a recession.

that's why right now i think the times will get tougher because the fed isn't taking that market off, until they see wages fall. and that's only occurred through the second period. >> we often look at things like a recession through a negative viewpoint, but is the recession kind of a natural part of the economic cycle. is it a little healthy, or is that a controversial take to say that? >> i'm not sure it's a controversial take. a lot of people think back and think about recessions, which many don't get that adjective. the normal recession goes six to eight months. the thing is that it does cause job losses and typically causes earnings to fall, which causes the stock market to have some trouble. and that's where we think you're headed in the not-too-distant future, where you're going to see the stock market have a bit of trouble, which is why we're tilting portfolios more towards fixed income, which at 5% of investment grade bonds offers a real alternative to equities over the next 6 to 12 months.

>> you're also overweighting value. what successor does that lead you to? >> kind of staying away from those top seven a bit more. overweighting value in small-cap and mid-cap, which seems a bit ironic. if you think about small and mid-caps for example, we'll focus on small caps. the s&p 600. they traded about 13 times earnings, to 14 times, that have already been marked down by 15%. and so i think, if it's a short, shallow recession, i think the other side of this will be very good for those, especially given how cheap they are relative to large-cap counterparts. and that's what i want investors to think about adding as you go through this tougher period of time in the market. >> can i ask you, brent, if you have any thoughts right now on energy. it is the sector leading the way right now, obviously in focus with the hurricane here, hittinging the quarter right now. >> yeah, i think given the outlooks for the globe, which is weaker economic growth, i have an idea that energy stocks will outperform in the coming few

months. that being said, tying back into my comments about thinking about the side, i think there will be opportunity there. and so right now, it's more of a -- focused more on the fixed income side, make sure your portfolio has a high amount of fixed income or a corporate amount of fixed income. don't hide in front of the yield curve. there's value out further in the yield curve. and think about adding to sectors such as value, small and mid-cap, as you go through what i think will be tougher times in the not-too-distant future in the equity markets. >> if rates do roll over in a way that maybe we don't expect, where do you think the pain threshold is, meaning, when do money market attacks get less enticing. when does the stock market stop facing as much activity? >> when the fed starts easing policy, i think that's where you actually see this kind of shift towards equities. think about it right now. it's 5% in the front end of the curve, to sit there and wait. there's not much of a cost of actually waiting right now. until those rates start pushing lower, i think the equity

market, especially if earnings don't grow and p\e multiples have driven it over the last six months, if earnings don't grow, people will set and wait for that multiple to come down. >> interesting conversation. brent, thank you for joining us here this morning. >> thank you. >> still to come this morning, shares of hpe in the red today. the company did beat estimates for the quarter, but issues some light revenue guidance. we'll break down the numbers with the ceo in a moment. >> later, the ceo of novo nordisk is with us on the success of its weight loss drug and the potential price negotiations with medicare over its insulin drugs. that stock up 40% on the year. we'll be right back.

a quick check on hp inc. getting hit hard. management blaming weaker pc demand for the cautious outlook. you can see shares down more than 8% at this moment. >> move from hpq to hpe, investors know that it, too, now is an ai company. in june, announced that it had entered the ai cloud market. and on the call last night, management said the momentum in the business is significant and even touted its relationship with nvidia. despite the hype, the stock trading gains and losses this morning after the midpoint of q4 revenue guidance came in below estimates. joining us first this morning on cnbc is hp's president, antonio neri. maybe it just strained zpai and

what it's doing. >> we are very pleased with the progress we have made as a company to structurally shift the portfolio of our revenue margin. we continue to grow revenue and expand gross margin. and that's the momentum we have in intelligent edge, which now represents 20% of the total company revenue in almost 50% of the company profit. and also hp, as you know, we have spoken about this, which is our flagship product, the cloud product. and obviously, ai now is in the mind of everyone, when i talk to customers, everybody wants to embed ai in everything they do, and we saw a wave of demand in q3, which transitlated into some significant wins. and we have not even started recognizing the revenue of those wins. that's along the rest of the journey. the customers all very anxious to adopt this technology and look to a company like us,

because they allow them to train and tune and put these models to productions. >> so intelligent edge is up 50 year on year, about 20% of total company revenue. how high does that number get? >> well, remember, we have been on a journey here for the last five years. in 2018, i said that the enterprise of the future will be edg edg edgecentric, cloud driven. we have more than doubled the revenues in five years. and if you go back to the acquisition of aruba in 2015, that was tripled and is now very clearly, you know, isolated numbers with 20% of the revenue. now, we keep adding new capabilities to the platform and expanding. obviously, don't expect to go up 52% every single quarter. we grew five consecutive quarters in high, high double digits, but we expect that business to contribute a very sizable part of revenue and profit growth as we go forward. >> antonio, a lot of the sell side this mornings are fairly

positive about the backlog continuing to release. what are your expectations for that going forward? >> yeah, courtney, when we entered q3, we had a book that was one and a half times pre-pandemic level, and because of the momentum, we saw the edge and improvement in computing storage, which improves sequentially, but obviously, driven by the ai and momentum we have, the exit is sitting at three times pre-pandemic levels. so that's a huge momentum for us, because that allows us to deliver on our commitment, which we provide very strong items, which obviously are raising the mid-point of the gap and earnings per share another three pennies. and give us the momentum in 2024, which i expect demand to continue to improve and also think about aups will continue

to improve, as we think about the improvement to ai. >> it doesn't really sound like your view of the macro is changing all that much. are you seeing inflections in any anything regarding the pipeline, for example? >> i think the micro continues to be uncertain in some aspects of the market. but we have very pleased with the signs of compute, we saw sequential improvement. that was double-digit growth in our operational services. we saw for the second consecutive quarter, improvement in storage, and which obviously drew double digits, all delivered the service to us. we see the momentum, and we have a unique portfolio. the cloud grew 122%, but is now

happening in our community, almost $12 billion of business. and that improved $1.5 billion for the other quarter. so there is microand and there is us. i'm focused on us and continuing to win share and continue to capture new logos through our different offerings. >> that all makes a lot of sense, and you can only control what you can control. but if we do face a recession, even if it's mild, you may have some recurring revenues, but the ability to capture more of that share as you're talking about becomes difficult. what is the eximpact on your business if we're facing a mild recession and do you think that is possible in your term? >> i think, you know, my view is that i.t. will continue to be an important exercise for companies. and uh yo probably want to invest in i.t. to modernize and accelerate your business's ability. so my lessons in leadership is that when there is a crisis, there is an opportunity.

and we did that actually on the covid -- in the covid times, we invested and we have become stronger on the other end. and i believe customers will do the same. that said, more than 40% of our revenue is deferred today. and a lot of our profit comes with it. so we think we are very well positioned in that. and as a company, we continue to operate with incredible discipline to drive the operating leverage so we continue to grow terms of shareholders. >> antonio, pretty interesting, especially, given the contrast between your company and hpq. it's good to talk to you, as always. see you soon. antonio neri. >> thank you, carl. >> coming up, weak economic data in the eurozone, turning stocks around overseas. the european close is coming up next. >> also, a quick programming note. tonight, democratic presidential candidate robert f. kennedy jr. on "last cl"t 00.mal a7: p. eastern time. we'll be right back small towns, and on main streets across the us, you'll find pnc bank.

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. european markets are going

to close in just a moment, losing some early gains after some disappointing ecodata out of germany. july saw a 13% drop in imports with the year to july, as the sharpest drop since january of '87. no doubt has some relation to what's happened to the chinese economy. of course, germany, china, huge trade partners. cpi in germany for august, up 6-3, estimate was 6-4. they have had no relief even as the trade has basically collapsed. >> and i also think it's interesting, those headlines coming out of europe, counter to what the united states is saying about china, saying, i don't know, we don't think china is not investable. to your point, very important trading partner. >> we're left with u.s. exceptionalism, which continues to get tossed around in note after note, given the hand that the u.s. has to play. >> it is absolutely something that we need to keep our eye on, and i don't know what's going to happen there. but raimondo seems like maybe she made some progress. >> times with an interesting piece on how tiktok was like the

whole of the donut that did not get discussed. >> sure. >> left this huge national security issue unresolved. >> absolutely. >> yeah, that's a wonderful point. that's fascinating. we're going to pribring it back home. hurricane idalia making landfall as a category 3 stormy. maggie vespa has the latest. hope you're staying safe. >> we are definitely, we're in tallahassee, the storm has lessened here in the last hour or so. i'll let some cars go through and hop up on the curb here. people are out and about driving, which is a good thing, signs are calming down in the tallahassee area. this made landfall as a category 4. it's since been downgraded to a category 1, it's like tallahassee is kind of a big metaphor for that downgrade again. things have calmed down. at their peak, wind gusts topping out around 46, close to 150 miles per hour 50 miles per hour. power outages, a huge problem in this area. thousands of people across the region without power. some miraculously, emergency

crews and power company crews, utility crews are out already assessing damage, storing power, helping everyone that they can. that being said, people in tallahassee know that this is a hugely populated region, not a region that tends to get hurricanes historically, and they know in this case, once again, they kind of lucked out, especially compared to other floridians across the state. we've already gotten confirmation that this storm has turned deadly near tampa, this morning. authorities confirmed that a car crash turned fatal. there was a man driving, they said, in the inclement weather, basically crashed into a tree. and he said, it was, indeed, due to the storms. >> across parts of the stay, especially in tampa, where the storm surge is a major factor, there are far more kind of extreme examples of the damage and the repercussions that have followed this storm, that were basically predicted by forecasters, those worst fears are coming to fruition. thankfully in tallahassee, a college town, a college state, florida a&m, things seem to have

had remained -- it seems like the worst is behind us and those worst fears thankfully didn't come to fruition here, but again, this storm is by no means over, especially elsewhere across the state. >> thanks, maggie. we'll pay close attention to georgia and the carolinas in the next 48 hours. maggie vespa, thanks. coming up after the break, the ceo of novo nordisk sis wit us, as the biden administration puts two of its insulin drugs on that price negotiations list 'ldiusth and the surge of popularity in the company's weight loss drug, in a minute. rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. power e*trade's easy-to-use tools,

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box today. the stock falling after the company lowered its revenue guidance. it's the worst day for the stock since march, down more than 9% at this moment. >> a couple hours into trading with the s&p still above 4500. let's get back to bob pisani and see what's moving, bob. >> meet the new boss, as same as the old boss. the leaders this week, it's back, nvidia, tesla, micron leading. the fact that we've had this goldilocks economic data has meant treasury yields have calmed down. and that's helped a lot of sectors, including the home builders. they're in a little bit of a mini rally right now. here's pulte, big stalwart. we saw -- pulte was 75 on friday, look at this, 81. you can see these factors, rates calmed down, a whole bunch of different sectors start acting a little bit better. its brethren, lennar, same situation. lennar, a couple of days ago was

112 on friday. look at this, 119. that's a nice mini rally for these hopeful building stocks. another sector that's really been helped by rates calming down a little bit are reits. overall, it's been a tough month for them. here's a real -- digital realty. i love digital realty, because this is one of the big data centers, essentially, that people have. really important sub-area of the reitst. 131. that's the new high. that's been moving up for really the whole second half of august, has been doing well. and then you have the outlier, not a lot of new highs, you notice the credit card companies in here, new highs. you heard everybody, you heard what's been going on here. this is a new high. you know, merchants charging fees for using credit cards these days. mastercard and visa didn't get the message. they're reportedly raising fees, two stages, october and april, raising fees, really? $93 billion in credit card fees paid out last year, to visa and

mastercard. that's a nielsen report. and now they're raising them again. it's amazing, but if you're an owner of mastercard and visa, you're very happy. both of them, new 52-week highs. back to you. >> meanwhile, bob, i'm looking at some 52-week highs in the industrial space, edens, ingersoll, rand, there continues to be this belief that there's a big tailwind of capital rushing into the economy that's going to support a lot of these old-school industrial names. >> and some of them are a little bit of plays on that are on ai, industrial automation, for example. that's what's going on, for example, with eatton. and they get sort of put into that category. there's a whole group of people looking to broaden out the ai play here. to the extent you have companies involved in making industries more efficient, more automated, ai plays into that. companies on the leading edge of that has a little bit of a beneficiary. that's what's going on with eaton and ingersoll rand.

they've been up every single day recently, new highs for both of them. >> we'll see what we can pull out for the end of this trading session. the precipitation weight loss business has seen a major surge in popularity, and today novo nordisk bought its second appetite suppressant company this month, but the gravy train could dry up if regulators crack down. bloomberg reporting that ozempic could be part of the new round of price negotiations in 2025. the company had two of its diabetic products named in the first round of the negotiations kicking off later this year. joining us now is novo nordisk ceo, lawyeura jorgeson. let's start with what we know right now what the white house is negotiating for some of these medications and what that means for the two insulin drugs that you have on the list. >> thank you for having me. it was announced yet that some

of our insulin will be on the list of products to be negotiated we welcome support of patients. the unfortunate situation is that while we face declining internet pricing, those benefits are not always for the patients. so now we see that some of our products are part of the products to be negotiated with the government, and we'll see how that will play out. that's not perfectly clear to us yet. >> so you don't yet know exactly how that will impact the financials? >> well, the list of products shown show the cost, we give significant already to the government. which means that from a financial point of view, the value of those are actually quite modest to us, so it's not something that affects our business, because we're already rebate and significantly. and we also announced that we're reducing our list price by 75%, to help patients who pay out of

pocket. so there are many, many complexities and elements, but it's not something that's going to significantly exact our financials. >> longer term, lars, there are those who do worry that it will suppress r&d activity, among at least u.s. pharma giants. is that misguided? >> i think it's a good point that i think for the benefit of patients, it has to be attractive to do development of internal medicines for the u.s. market. and why it's okay to negotiate pricing if this turns into a pricing mandate by the government. i think it's going to limit access of innovation to patients. and i think that's not what we should be doing. we need to have a free market where we can compete on clinical benefits of products and the best products win in that game, and not be determined by price

mandate or price fixing by the government. >> lars, i would love to talk to you about the acquisition that was announced this morning of intech biotech for this appetite suppressant. what is the opportunity? this seems like an area of the market that almost has no limits. war you forecasting? >> it's a good point. we know that in the u.s. alone, there's more than 100 million people living with obesity. and now we are launching attractive products into that category. we know that the conflict, and we are committed to bring different mechanisms in play to rehabilitate patients. and we believe for the individual, but also for the health care systems, there is tremendous benefit, for obesity, which is a gateway to more than 200 other diseases. i think we have introducing what can be a define ing medical benefit and bring it to

americans and society at large. >> it's pretty amazing what the opportunity here could be. and as you mentioned, it's the co-morbidities, which is really important to understand about all of this as well. i am interested in what it means for the long-term revenue stream. from what i understand, you really cannot stop taking ozempic, if you're using it for a weight loss situation if you want to maintain that weight loss. you must continue to take it. >> i think it's important to underline that ozempic is approved for type ii diabetes and wegovy is for obesity. and when you look at obesity, you have to acknowledge that when you live with obesity, you live with a chronic disease and it can lead to other diseases that lead to chronic treatments. so these days, we are establishing, what is obesity? and we just introduced some interesting data from the last trial showing to reduce the risks by 20% by being on wegovy.

i think it is about just to be understood what is the importance of reducing obesity, it's not just about losing weight, but preventing serious health outcomes. >> if you can frame what those drugs have done for the company at large. you're vying to become europe's most valuable company. how is that playing out in terms of your ability to access capital and recruit? i imagine working at novo is -- it comes with a stellar premium that you probably haven't seen in your decades of the company. >> yeah, it's really exciting. and i feel so proud for all of the colleagues who have been working on this. i have been with the company for 32 years and for 25 of those years, we actually did research in obesity. for us, we have had a conviction that we should be helping people living with obesity and who have been struggling their whole life, typically, in dealing with weight issues. and our commitment to that life

and actually having the diabetes, we believe we can prevent type ii diabetes. and now a number of other diseases, also being explored. so it's a 25-year, quarter of a century year that is now coming into fruition. and of course, that takes in the share price. but for us, it's really a long-term focus and we have all along felt that this was a meani meaningful and really excited for the employees and the shareholders that believe in that mission years back. >> it really is fascinating and with it seems like a very big momentum shift and hopefully helping a lot of people's health conditions now and going forward. lars jorgensen, ceo of novo nordisk. >> thank you. >> coming up after the break, two street calls in focus. one is a guggenheim rigorous of

a sell on tesla. the stock is moving a little bit higher today. and fedex one of the top picks in transports, up 50% stju this year. pretty interesting. we'll talk about it when we come back.

welcome back. a note that caught our attention this morning is guggenheim standing by its sell on tesla, expressing some concerns about u.s. inventory levels and the potential for more price cuts. our own phil lebeau joins us for

a closer look. their concerns really are that demand is lagging production output. >> right, and if you look at the numbers, it appears there is greater production than there is demand. but keep a couple of things in mind. we were told to expect that potentially we could see greater production than demand in the third quarter. a number of analysts looked at the data and said that wouldn't be surprising at all. however, guggenheim points out you look at the percentage of inventory that is the model "y," the best-selling vehicle that tesla makes, that percentage has never been higher. so in the opinion of guggenheim, this sets up for more price cuts, as eli tries to clear out inventory before it builds up too much. >> phil, what would be the catalyst to spur demand again or the most likely catalyst? >> price cuts clearly would have an impact. and the model "y" being as popular as it is, and being the one model that really, along with the model 3, that they can

go to the more mass market, the consumer who's looking for something potentially under $50,000 and to say this, you take this along with the federal tax credit, likely $4,000 to $5,000 in state tax credits, depending on where you live. you can make this an affordable option for you, if you're ready to go electric. i think that's the most likely option, but it's a little unclear whether or not we're going to see that at this point. >> we forget, stock was a hundred bucks back in january. so $125, i guess, if you look at the year as a whole, may not be that bearish. i want to ask you while i've got you, phil, the jonas note this week about ford and gm, we would be buyers even in the face of a pretty difficult uaw showdown. his argument remains that the changes that are going to come in in next big labor cycle are going to be much more long-lasting than any kind of union rhetoric we get in the short-term. >> and he's right about that. and having covered these negotiations over the last 20 years, 25 years, carl, you see

this all the time. investors become paralyzed before the contract negotiations and a potential strike. i don't want to go anywhere near the big three stocks. but afterwards, when the analysis is done of the contract, people sit there and they say, it's really not as bad as we feared it would be. that's essentially what adam jonas saying here. evenif there are potentially big pay raises, and i'm talking about something like 20 to 25%. i don't think we're going to see close to 40%, which is what the uaw is asking for. big pay raises relative to past contracts, look at that in the context of the overall revenue that each of the automakers brings in on an annual basis. it's not a huge increase. it sounds like a lot, but relative to where they are with their revenue right now, they're not going to be massive. >> yeah. auto business continues to be fascinating, phil. we'll watch you with your help in the days to come. phil lebeau, thanks.

speaking of industries where there has opinion some labor strife, another note on our radar today, some upbeat commentary on fedex. citi calls the stock one of its top picks in the transports, bullish on the company's pricing powers and tailwinds stemming from the u.p.s. contract negotiations and the closure of yellow. our frank collins is watching this. frank, i heard you talking about it with the guys on "squawk" today. really looking at sort of the fee increases and what's usual and what's not usual. >> fedex moving higher right now, carl, on the back of that note from citi, where citi, those analysts basically spell out how fedex is a direct beneficiary of a lot of turmoil in the transport space, you hit on one of the big ones right there, that uncertainty around the u.p.s. team pushed a lot of business away from u.p.s., possibly temporarily, but fedex was a direct ben fishefbenefici. 5.9% for the second straight year. that's proof that demand for capacity, when it comes to ecommerce is very strong.

in prior years, that increase was about 5%, 4.9%. so retail sales have been a bit soft so far this year, but the consensus is we still see growth for ecommerce this holiday season. just a short time ago, we were showing you the general increases that started on january 1st. you saw the same increase for expressing grand, but a half a percent increase when it came to freight. yellow corp. was a company in the less than truckload space. fedex is the biggest less than truckload carrier in the entire u.s., and that pushed about $5 billion worth of volume out into the open market. fedex direfinitely a direct beneficiary of that. the ceos of old dominion and sighio said they were able to raise rates and fedex was able to do the same. broad benefit for fedex as it goes through its own transformation process, benefiting from turmoil and uncertainty. there's a saying when it comes to transports that mystery equals margin and i believe we might be seeing that with fedex right now. >> interesting.

transports, a lot of discussion, court -- by the way, frank, thanks -- discussion that retailers are done d stocking and that freight benefits as we get into tend of the year. >> i'm watching those inventory levels tick down for almost everyone. a couple of outliers, i guess, in some of the companies because the demand has been so high in that space, too. very interesting dynamics. coming up, we'll break down what to expect in salesforce when it reports and what's in those results what that could mean for the ai space. >> the chipmaker did stumble after forecasting sales for the current quarter below the guide. ceo says the near term very challenging, was down 21 premarket, currently down 18. we're back in a moment. let innovation refunds help with your erc tax refund so you can improve your business however you see fit. rosie used part of her refund to build an outdoor patio. clink! dr. marshall used part of his refund to give his practice a facelift. emily used part of her refund to buy...

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salesforce reporting after the bell and although the cloud giant has backed off those billion dollar deals, investors will be looking to see if more recent bates are in ai and if they're paying off. that's the focus of today's "tech check" with deirdre bosa. >> investments are ramping up. sales force has grown through big acquisitions. tableau for nearly $16 billion a year later and slack, the one that may have broke the camp's back benioff bought for nearly

$28 billion. investors piled in and called for more of a focus. benioff responded with more share buybacks and dismantling its m&a committee altogether. gone are the big, flashy purchases of companies but sales force is still splashing out. this is a list of investments just this year. there are seven names here, and the latest was more than $200 million funding round that doubled the company's valuation and is reportedly more than 100 times hugging face's annual revenue. benioff, guys, seems emboldened despite overspending. a journal report said matthew mcconaughey was getting paid more than $10 million to be salesforce's creative designer. instead of backing off,

salesforce has doubled down. benioff's x is a promo, the one you're watching, features maft you mcconaughey asking if it's the wild west who is next in town. investors are seeing that as him. i could give him more room to run and spend or it could once again bring back some of that pressure on spending. we'll have to see. >> all right, all right, all right. we'll see if he can be the big sheriff in town. what are the ex supectationexpe? it seems you got a mention on your call, the more times you mention it, the more maybe you have a chance for your stock to go up. what's the forecast for how big of an opportunity this could be for salesforce? >> i had thought we moved into a different phase of this. the second half of the year has been more investors asking show me. i don't want to hear about cha

chatbots, i want to see it come through in revenue. you think back to yesterday when google held its next event and that stock really moved up on the news. they announced pricing for g mail and it pushed the stock up. i think what that shows us is perhaps there is still quite a bit of hype in here that investors are willing to forgive a salesforce for spending on ai. if they were spending on something else, i don't know the activist investors or investors at-large would be pleased. any company has a free pass to spend on generative ai, the mega cap spending on capex to update their cloud infrastructure or ai startups. a lot of talk here we could be seeing a bubble -- what did i say, valued at more than 100 times annualized revenue. if you're not in nvidia, i don't know how you get there. >> that is expensive. maybe we'll be talking about the

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inflation picking up in the entertainment space on some of these sub fee hikes. the question is, will consumers start to cut back, and who could impact the most? julia boorstin has the story. call it entertain-flation or fun-flation but it's higher than in july. concert prices have seen the biggest leap. the resell price jumped 27% from last year, and up 95% from prepandemic levels according to seat geek. thanks to taylor swift and beyonce, people are still paying up and turning out in droves. live nation reporting that ticket sales are on tract to surge 20% to 90 million sold this year, that would be a record. while disney fans may feel pinched by a $30 increase in

walt disneyworld single day ticket prices, disney notes that that's a 4.5% compound interest rate,line with inflation, their lowest ticket price has actually stayed the same since 2019. shifting over to the movies, ticket prices have increased 4% and 18% from prepandemic levels. streaming is getting a lot more expensive. all of the major streaming services have raised prices by between $1 and $3 a month. so ad-free disney plus is increasing prices by 27% in october. a variety survey found a quarter of adults say they have already made changes to their entertainment subscriptions as a result of rising inflation. and subscribers could drop even more if the strikes mean there's less new content on these streamers in the fall. carl? >> that is going to be the question, what does churn pick

up? we've watched everything they have to offer. going to be a pretty interesting after the market tonight with crm but also crowd strike and octa and chewy before we get more ekoda at that tomorrow. we'll see if it's as constructive as today. tends to do pretty well after the print according to bofa. welcome to "the halftime report." i'm scott wapner. streaking stocks, the major averages continuing to erase their august losses. the investment committee on what all of this means as the calendar turns to september. joining me steve weiss, bryn talkington, joe terranova, kari firestone. we've been all around the way a little bit today but we are green now and we're at the highest levels since august 10. the s&p 500 was down 5.5%. we're only down