ibm. let's create. good friday morning. i'm carl quintanilla with leslie picker. let's get straight to it. august jobs number is 187,000 while unemployment rose to 3.8%. rick santelli and steve liesman with us on what this is and what this week's economic data does for the fed's thinking as we kick off september and debate a hike pause. guys, thanks for doing this. rick, let's start with you. what do you make of the overall kind of at least what we saw in rates with the volatility given all the incoming data we saw this morning?

>> yeah, i think the best way to summarize the markets from the treasury standpoint is to show a two-day chart of the spread difference between a ten-year rate and a two-year note rate. right now that's around minus 68. yesterday right before the session started in the mornings, before it came in the new york time zone, it was minus 87. this is a huge move, huge move and underscores we're at 4.17 in a ten-year, hovering at 4.07, 4.08 after the number was out today. it closed at 4.24 last week. it's getting very near unchanged where as 4.86 last in twos they close at 5.08 last week with a double top going back to march 1 and we had a close of 5.07. i think the move in interest rate summarizes what's going on. what i hear when i look at that trade is that we have a bit of stagflation in somebody's minds there and real simply before

steve takes over here, 110,000 revisions to two months, let's put a face on that. that means june was 105,000. that sounds pretty small, doesn't it? july 157,000. when i look at wages, some of the smallest gains and up 0.2 in 2022 and 4.3 year over year. that might not sound like a big deal but let's put a reverse on it. when was the last time we had average hourly earnings under 4.3? you have to go back to june of '21. i think there was a lot of softness in this report. >> let's let steve take over. what's your overall headline from this report? do you agree with rick than it is -- >> as you know, i would have interrupted if i disagreed with anything rick said. you know courtesy is not my strong point. in any event, i like what rick is saying. not as far as it goes, though,

i'm not sure there's a stagflation trade in here. it may just be a renormalization because what should be happening is the short end could be cooling relative to the long end in anticipation that the fed is done here. i think the fed had a pretty good week here. i think the inflation numbers are not really to worry about. there was a tick up, but it was really based on one component of that core service sector there. i think the fed's going to look through that. i think it looks at these numbers and says, you know, we're getting the job cooling we had hoped for. those revisions are in the direction of where the fed wanted things to be in terms of looser labor market. you had nice influx of people in the workforce, tick up in inflation rate. the prime age of participation rate is at a ten-year high i recently saw. that's a good sign. and wages are cooling. overall it's a good week for the fed but not a week i think they're going to say, mission accomplished. remember, they were burned

before in a couple different respects. they had back in january, they thought things were going well. they went away and revised improvement in inflation and the inflation numbers went the other way. there could be a couple trying reports at least on the headline basis with unemployment coming. here's what i think is going to happen. i think the fed's going to watch, wait and see in the month of september. and then it's got a couple more inflation reports, another jobs report, come back at the end of october and make a decision as to whether or not they're done there. if they had to decide now, which they don't, i think they'd say they were done. >> so, you think -- >> steve, what i find interesting, steve, is that the two-year note yield you referred to versus the ten. you said, and i don't disagree, that the twos were in the last innings. i completely agree with that. i don't understand why the soft data and fed in the late innings doesn't do the same thing to ten-year. it's an incongruent relationship

based on data and fed. i'm not saying it means stagflation, but at this point i had to put a name on it, that's about the only name i could put on it. >> rick, when people try to tell me about the economic data, i get -- i don't think i'm that smart but i do know the data. i say don't tell a blind man where the furniture is in his house because if he knows one thing, he knows that. and the only thing i would say to you, which is to say i argue with you about the bond market with great respect and caution, is i think there are some issuance issues for the market to deal with that could be creating some pressure -- >> i agree with that. >> -- on the top end. once we get through this massive bill issuance by the treasury, and also in the belly of the curve at the 3 to 7 range, then i think we'll get a clearer idea of how the market feels. i do think their scope for the long end rates to come down, especially when i look at the mortgage market, rick, and i see

the spread over 10s or 30s, however you want to look at it, that money is expensive. i could see a situation where in several months' time those mortgage rates could come down in normalization. there is quite a bit -- >> it's so expensive, steve. it's making mortgage securities look cheap. that's how expensive. i'm serious. there are big firms like pimco that are starting to put their toe in the water buying mortgage securities. it's for exactly the dynamic you depicted. i agree with you. i asked for a reason why long rates would be going up. one of those channels definitely is supply. >> we should have an option where we move on but you guys keep going online or something. >> you guys go away. rick, i'm going to give you a call, okay, rick? we'll finish this out. >> sounds good. >> we'll put it online afterwards. >> thanks for the time. we'll get a closer look at the august numbers for the next fed's meeting. our next guest predicts a recession on the horizon with rates staying high for the foreseeable future.

it's great to have you, peter. do you think this is about supply in the short term? >> i'm going to add to that because i think a lot of it is. if the economy starts to slow, tax receipts start to slow. we're entering -- we have an 8.5% budget deficit with regard to gdp. at the depths of the '08 recession it got to 10%. you have this -- so, if you go into recession you'll see a double digit budget deficit. for 40 years budget deficits didn't matter. they kept rising. people in the mid-'80s were complaining about government spending and it doesn't matter. maybe this time it does matter because of the supply, of the potential reduction in tax receipts, you have qt not just in the u.s. but globally, boj move, foreign central banks not buying. there is the potential for a clearing price in the ten-year higher than it is today. and rick talked about the incongruent nature of today's move where you had this weak

payroll number in some analysis and you have this jump in the ten-year. that to me is telling that there's something going on here. just as we're getting comfortable that the fed done raising short-term interest rates we get this rise in long-term interest rates. >> of course, if the rates go higher from here, what does that mean for the overall interest payment for the government and the -- it becomes more of a self-fulfilling prophecy. >> exactly. interest expense at the government level heads to $1 trillion, starts crowding out other things. that's the risk to the economy right now, is the government crowds out private sector finance. you talk to friends, hey, i'm going to buy the two-year. that's money going to the government as opposed to going to the private sector. so, there is that risk that also is a self-fulfilling prophecy as well. >> that kind of -- when rick says a sniff of stagflation, it doesn't sound like it collides with that point of view, right? >> good thing is inflation definitely moderating. oil prices are at a one-year

high, $85. that complicates the job of the fed, keeps inflation potentially higher for longer. and with inflation there's one thing to see a deceleration in inflation, to get to that 1% to 2% goal of the fed. there's another thing to keep it there. i don't think it stays there. >> because of energy? >> well, no. i mean, that's just one piece. but goods prices are not going back to its trend pre-covid. we may see a two-handle in inflation, but that's not achieving the fed's goal. it's keeping it there that does. and i think 3% to 4% is the new inflation normal in the next couple of years. >> i want to ask you about hedge fund positioning not to get too wonky but the fed put out a paper on basis trade which means there's a significant trade out there short treasury futures, long treasury cash and borrowing in the repo market to leverage. the fed says it presents a

financial instability because it's highly leveraged in exchangeses and future markets and exchanges and repo spreads. given the volatility in the rates market, how concerned are you this risk of leverage is getting to the point where it becomes more dangerous and reach more of a critical threshold? >> whenever i hear about that i remember 1998, long-term capital management, they had these basis trades, they were trying different interest rate positions and with a lot of leverage, and, yeah, you have to wonder when that has to unwind. >> it happened in march 2020 as well. >> when foreigners were massive sellers of u.s. treasuries to get u.s. dollars in what was a panic situation that brought the fed in. so, the thing about the treasury market, on certain days it trades like a meme stock, which is a scary situation. >> it's supposed to be risk-free. >> and the most deep liquid market there is. also you have the banks that are not making markets like they did

pre-v pre-volcker. it does -- >> do you think equities can make any forward progress unless rate volatility comes in? >> the trouble with the equity market is its valuation. if the s&p 500 was trading 13, 14, 15 times earnings, it would be able to absorb this rise in interest rates. at 20 times there's no margin of safety. there's no room for error here. and at the same time when i think the trajectory of growth is moderating, job growth is moderating and we're in an earnings recession. maybe we come out in q3 but the value story does not create a level of safety, i believe. >> sort of explains your picks on the wall, energy, uranium, some metal -- >> those are the cheaper areas. >> good to see you. let's turn to housing new all-time highs. die an no olick joins us with new numbers. >> we just got the latest read on home prices in july. and while they did hit that new all-time high, there's another

hint at a potential downturn. prices rose 2.3% in july year over year acourting to black knight. that's bigger than the roughly 1% annual gain in june and august comparison will likely be even bigger because prices began falling hard last august. but here's the hitch, prices month to month weakened. while still gaining, which they usually do this time of year, you can see here in this chart that the gains fell below their 25-year average. this after significantly outpacing their historical averages from february through june. it's a signal that a slowdown in prices may be under way again. why? mortgage rates. that's all we talk about, right? they rose sharply last summer and fall causing prices to drop. they came down for much of the winter, the spring, causing home prices to turn back higher again. we know rates are back over 7% again, hitting 20-year plus highs in august. add to that that while the

supply of homes for sale is still historically low, new listings finally rose in july as home sellers might be trying to cash in on these historically high prices. but in turn, that changes the de demand/supply situation. >> that's interesting. one of the things that got lost in the shuffle this week was apartment list new rents down year on year. a lot of the doves are waiting for shelter to play on cpi. i wonder if that's a dynamic we'll see in the next few months? >> we've been seeing apartment rents come down over the last several months because there's a serious amount of supply hitting the market. so, not as much demand, more supply lowers rents. one thing we're not seeing is single family rents come down. that's a big part of the market as well. apartments definitely a possibility for cpi. >> all right, diana, thank you. the ceo of cyber security company sentinelone is fighting off buzz about a buyout. he joins us next on results and the possibility of a sale.

and morgan stanley naming its top i.t. hardware pick replacing apple. it's on the boarthe.d er we'll tell you which one it is when "squawk on the street" comes back. the people who live and work there. because you call these communities home, and we do too. pnc bank.

let's get to sentinelone, rumors are swirling that the company is for sale, but the ceo saying on the earnings call the company is focused on driving innovation and growth and the best way is as, quote, a public, independent transparent company. he added, sentinelone ended an

agreement with startup wiz but continuing their partnership. the stock up 5% after the company beat q2 estimates and raised full-year guidance but still down more than 70% in the past two years. joining us, sentinelone ceo tomer weingarten. thanks for being here. i want to follow up on where you're at in your strategic thinking about the company. because the reports have basically suggested you were looking into strategic options, then valuation was a key concern but you've hired catalyst to advise you on some of these options. is just a sale at this point in time not going to happen? >> look, we are not commenting on rumors and speculation and the market is definitely filled with them. you know, we're very focused on our independent path. as you can understand, you know, obviously our valuation is a bit, you know depressed. we are an undervalued asset. we're a great asset and that is something that i think doesn't elude many people out there.

you know, we have a number of financial advisers all the time. none of that implies we're for sale. so, once again, we're laser focused on just continuing to dlir growth, deliver the best margin improvement on the public market, the highest growth on the public market. we're a great asset. steadily marching towards perfect availability. the future is fairly bright for us. >> are there other strategic alternatives you're considering, whether divestitures or equity infusion or something of that nature? i ask because you have some significant investors here, i believe, tiger global was a pre-ipo investor as well as some other pe firms that are probably looking at the stock price and not too thrilled with what it's done recently. >> yeah, we're not too thrilled either, but at the same time, i think everybody is a big believer in the future of the company. that's at least what i believe. if you kind of look at operating profile, we last quarter burned

less than $2 million of cash for the entire quarter. less than $5 million for the entire first half of the year. and with that we have $1 billion of cash on our balance sheet. so, i would say that puts us in a very sustainable place for the future. as these margin improvements also continue, you know, it's very clear to see that at some point we will inflict into free cash flow. >> you have taken some head count moves. is the margin guidance, is there more gas in that tank or would you have to do more on the efficiency front or is that all done for now? >> we're constantly improving. it's not going to result in any other big transformation. at the same time, we definitely see more and more operational efficiency opportunities. we're streamlining operations, improving our go-to market, leveraging a.i. within our operations also helps. we're scaling our support. we're scaling our services. all of that will eventually make

its way to the bottom line. >> we've had a lot of discussion today about just the mindset at the enterprise right now, if we're heading into a more uncertain year in '24. do you think the discussion around budgets or bookings or signings or sales cycles is going to get more treacherous come year end? >> possibly, possibly. what we've seen now is stabilization. i think it's kind of the same type of behavior that we've seen in the beginning of the year, so it's not getting worse, at least true to last quarter, but there is the possibility that things will take a turn for the worse. we're taking a very conservative view as to how the economy is going to be in these coming quarters. we're not expecting any improvement. we believe customers are still very much focused on conserving cash, conserving their budget, investing where they need. generative a.i. opens up some opportunity. i would also caution investors from flocking into generative a.i. applications.

this is just the first wave of generative a.i. applications. at some point you realize it's easy to add and infuse generative a.i. to any offering out there and enjoy the buzz, but at the same time there's going to be another wave, a automated wave, other technologies more autonomous in their operation and it might make what people are doing today with generative a.i. quite obsolete. i would also caution that, you know, generative a.i. is the panacea and customers are not just -- don't just have an open book to invest in generative a.i. applications. they are being diligent, they are scrutinizing their spend and i think rightfully so. >> do you see the benefit from a.i. more in the utilization within your own technology or do you think the benefit will be more kind of combating bad actors in the a.i. world and using it, you know be, more as a use case for why someone should purchase more cyber security? >> yeah, absolutely.

the threat landscape is obviously elevated right now. we're seeing more and more usage of a.i. by hackers and bad actors. that is very concerning because defenses never move as fast as the attackers. the ability to utilize large language model algorithms is super simple. i have one installed on my laptop locally. everybody can do it. that creates a very scary balance of power between attackers and defenders so for us as we infuse more and more a.i. into our platform, we're an a.i. native company. we started with a.i. about ten years ago with machine learning. we infused autonomous protection into all of our protection capabilities. with that you have new capabilities today, you can scale it even further. that's what we're doing. but the focus is on building more predictive, more automatic controls that can allow you to scale and really, you know, tailor to those mountains of

data you need to see today on any given enterprise and try to find that signal between all the noise. >> yeah. the a.i. ambitions are real. really appreciate it, tomer, thank you. >> sure thing. thank you. still to come this morning, mark is with us to talk about this morning's jobs number and why he says the fed needs to reconsider that 2% target. plus, watching lululemon after they upped guidance on the back of strong china sales. read more about the quarter on cnbc.com. by jeongpill song) ♪ ( ♪ ♪ ) (camera shutters) ( ♪ ♪ ) (camera shutters) ( ♪ ♪ ) ( ♪ ♪ ) ( ♪ ♪ )

european markets set to close in a few moments, as we head into the close after initially trading up following today's u.s. jobs report and higher than expected unemployment rate. energy stocks leading the way. the stoxx 600 oil etf trading up 2% after a reuters poll thursday indicated brent crude will stay above $80 a barrel for the rest of the year. and that's where we kick off our

story abroad this morning. morgan stanley upgrades european energy sector to overweight noting it offers a total yield of 11%, the highest of any sector. that's not all. they see the continent as the most attractive overall. they note that europe as a whole offers 4.6% total yield, nearly one and a half times the u.s. market. stock buyback is driving the market. they spent $200 billion on repurchases in the past two months and seen a biggest amount of buybacks than any region in the world over the past five years, carl. i kind of wonder if the saudi aramco news is on the heels of this. >> meantime, buybacks in this country are down year on year for the quarter. morgan stanley sees the ecb maybe pausing because the data has deteriorated the last couple of weeks. let's get a news update with pippa stevens.

>> hundreds of acts of duty u.s. troops will continue their deployment at the southern border through the next of next month. the defense department told nbc news the defense secretary approved the extension of 400 personnel through september 30th. in early may 1500 troops were deployed to the border for 90 days to support the department of homeland security as it dealt with the surge of illegal crossings. authorities are investigating a possible link between suspected gilgo beach serial killer rex heuermann and 2017 disappearance of a woman in south carolina. officials in sumpter say they're looking at the angle after receiving a tip. heuermann was arrested in july for the murder of three women on long island. he's the prime suspect in a fourth. in a last-minute move a federal judge temporarily blocked an arkansas law that would have required parents to sign off on minors opening new social media accounts.

they called for the injunction and called the measure unconstitutional. without the ruling the law would have taken effect today. back to you. >> thank you very much. morgan stanley removing apple as its top i.t. hardware pick. we're going to tell you the stock they think can provide better returns next. plus, don't forget to join us for the delivering alpha investor summit on september 28th in new york city. scan the qr code or visit cnbcevents.com/alpha.

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dell is really soaring this morning after delivering beats on the top and bottom lines. they also reported an a.i. server backlog of $2 billion. leads us to a note grabbing our attention today. morgan stanley saying the server opportunity could serve as a multiquarter upside for the name and prompted him to name dell his top i.t. hardware pick over apple. steve kovach joins us to break down that call. we talked about relatively cheap valuation on this name. it's almost been a sleeper to some degree. >> that's right. it's not just about a.i., but we'll get to that in a second. it's also demand overall, with stronger than expected. we know the pc market is just collapsing. tab tablets, too, even smartphones. that's apple's bread and butter here. look, it's another a.i. story here. morgan stanley saying this is the first company in their coverage to directly benefit from this generative a.i. boom. just like you said, this is the

$2 billion a.i. server business they have. there's a backlog there with even more demand to come. this little company called nvidia is partnering with dell to help that server business. look, nvidia is also a beneficiary of this as well as dell is going to have to buy up those chips. on the apple front, they're coming off a month of august where they were down better than 4%. still up about 45% year to date. the next catalyst we'll see for apple is in less than two weeks thenew iphone 15, new watches. that's the story we have come to expect and they are facing a full fiscal year of down sales, which we haven't seen in forever from apple, although the next fiscal year might be a little better when you compare them to the struggles they had a year ago. it's really interesting. apple is not selling a direct generative a.i. product but dell is, carl. >> fascinating.

didn't have that on my 2023 bingo card. >> not at all. >> how much do you think this is a pull forward in demand and how long do you think it will actually last? morgan stanley says they think it can be a tailwind for years to come, but do you believe that? >> yeah. very similar story with what we were talking about nvidia's reports last week. people stockpiling chips, people buying the server space from dell. most people are saying, including this, it's going to be a couple years before all this backlog gets worked out. nvidia is selling every chip they can. it sounds like dell is also a beneficiary of that, leslie. >> fascinating. steve, thank you. next up from the desk of walgreens, ros brewer, a resignation letter. is stepping down as ceo and board member after 2 1/2 years on the job. the breakup was reportedly mutual and lead independent director ginger graham will act as interim ceo while a search for new chief is ongoing. the company also said it expects

full-year eps to be at the lower end of the range, which already missed street expectations. brewer took over in march of 2021 just as covid-19 vaccines were being rolled out across the country. it is still underperformed cvs by 40% throughout her tenure and nearly 70% worse than the s&p. of course, the biggest report card for any ceo is that stock price. you can see what it's done and the board took quick and decisive action. it's curious they didn't have someone lined up right way. it all seemed so immediate. sometimes there's a bit more of a game plan there. >> yeah. stock close to a 14-year low. the problems have been well documented. it's easy to forget with how much fanfare she came into the job not that long ago. >> absolutely. it was seen as a big win for walgreens to have her become ceo. it will be interesting to see

what she does next and who they ultimately put in that permanent spot for the long run. whoever it is, they have a job to do. >> it wouldn't be a friday before a long holiday weekend without some tape bombs, that's one of them. let's turn to new data about retail positioning. kate rooney has more on that. >> good morning. individual investors change course a bit in august after a record amount of interest in fixed income. they started ditching treasuries and bond etfs in favor of big neck names. last week marked the first year of net selling in u.s. bonds since december. likely has to do with some uncertainty around yields, the fed's path forward and the economic data we got this week as well as volatility in bond markets. vander research notes a sharp decline for bond etfs as well in the days ahead of jackson hole last week, likely a sign traders were derisking their portfolios ahead of that meeting. not just those bond etfs. etf inflows across the board

have slowed down lately. that was one of the big reasons for overall slowdown in retail trading. etf trading fell dramatically. one area, guys, that has not seen any sort of slowdown in interest, big tech, especially those chip names. it was the only sector with an uptick in retail buying for the month. all other sectors for the most part saw outflows. the most bought stock of that group, no longer apple, it's nvidia, topping the chart of the most bought name followed by tesla, amd and then apple, number four there, amazon and meta among the top buys. back to you. >> kate, i remember when we would talk about a new meme stock every day. there are some that pop up spore atticly but it seems like the risk is muted relative to where we were in 2021. is there a sense that's returning at all? >> well said, leslie, muted is

the right word. it's slowed down significantly. there are still some of those pockets. one area interesting, i talked to someone from piper sandler. talked about this being one of the biggest years and quarters, the second quarter at least in terms of equity options and contracts being traded. talked about an uptick in things like out of the money call options which definitely signals some risk taking, some more derivatives. that's been helped by the proliferation of outbased trading that offers that. you are seeing certain pockets wanting that leverage. he called it the g word, gambling. that is a small sector of the market. overall it's slowed down and there are meme stock names you see, the flavor of the week. this week we have vietnamese carmaker, vinfast. that stock surged. there's always something going on, but it has been a bit muted. >> when you see g word, i

thought you were going to say gamma squeeze. kate, have a nice weekend. markets trying to start september off on the right foot after the s&p and nasdaq turned in their first down month since february in august, but today we have seen the nasdaq turn negative, down about 0.1%. the s&p and dow still holding on. much more on the jobs report coming up next with marc morial. we'll get his call for the fed to reconsider its inflation target. stay with us.

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welcome back. let's dig back into the august jobs report. our next guest says now is the time for the fed to stop raising rates, calling on the central bank to re-evaluate its 2% inflation target. joining us at post 9, marc morial, president and ceo of the national urban league and former mayor of new orleans. marc, thanks for being here. >> thanks for having me. good to see both of you. >> so you're saying this jobs report is basically the end of the line, no more rate hikes from here, it's showing the slowdown that the fed has been trying to engineer and basically their work is done. >> it's important to understand the fed's dual mandate. one, price stability, two, full employment. i think inflation is now easing. i think while we've had consistent job growth, now job growth seems to be easing a bit. with the fed cannot do is make

unemployment the weapon in fighting inflation. they've done a good job navigating thus far. i say, hold on rate increases and you can resume it if need be. because the high interest rates are now beginning to affect the housing market. could begin to affect business investment and, therefore, job creation. so i think it's time for them to sort of hold off with any more rate increases. secondly, i think it's also time for them to re-evaluate, carl, whether the 2% benchmark is the right benchmark for today's economy. that's an old benchmark. probably envisioned in the 20th century. the economy is much more dynamic. we have technology, we have globalization, supply chain effects. it's time to re-evaluate, what's the best, if you will, benchmark inflation rate for the fed. >> we've been kicking that around for a while now and the answer is always, what would

happen to the dollar, what happens to the fed's credibility. you would have to be gentle, right? >> you would have to be careful but it's time to evaluate it. it's time for there to be a discussion about that. the economy's changed. for a long time when we had low inflation, we also had wage stagnation. of course, wages and, therefore, consumer spending drive the economy. and, therefore, as we've seen this inflation, one important thing is the increase in wages across the board. a little wage inflation that is consistent with price inflation means that workers can keep up with the changes in the economy. so, i think that ratio is really as important as basically what the inflation rate is on an overall basis. i think it's time to re-evaluate it. i give the fed credit thus far for navigating and balancing. >> after a couple of early stumbles? >> yeah, absolutely. so now let's not, i think,

continue to raise rates and risk slowing the economy and raising the unemployment rate or slowing down job creation. you can return to that if need be. >> are you of the mindset they need to be cutting from here? have things deraided to the point where it would make sense to be turning dovish again? >> i think it's time to hold. cuts can come in the future if needed and necessary, but they've been very aggressive. we haven't seen spikes in unemployment. we now see a little easing in job creation. i just feel that the fed's dual mandate, everyone needs to understand, they've got a dual mandate, full employment on one hand, price stability on the other. you've done an admirable job so far. now let's not create a scenario where they're going to be, if you will, whiplashed into rate cuts in order to restimulate the economy. >> really quick, the way in which inflation has been

political sized as a weapon has been interesting to watch. i wonder if you think it flips to where unemployment is as potent a weapon going -- >> i think what happens, quite candidly, is the party out of power will always criticize the economic policies of the president. i think it's been standard operating procedure. if, quote, unquote, the recovery is too fast and there's inflation, that gets criticized. if the recovery is slow, that gets criticized. i think right now we are in a positive position but the question is, what does the future hold? we need continued economic growth. we need continued, if you will, job creation, and we need a stable inflationary environment. so, you know, it's -- economic policy is highly political sized. that's the world in which we live. >> yeah, as long as people get used to paying whatever it is, $6 for a coffee, then, you know -- >> and sometimes they gladly do

it, right? >> yes. >> some of us. >> there's always making it at home. >> it tastes better when someone else makes it. >> that's for sure. >> marc, appreciate it. >> thanks. when we come back, software, semis and the post-summer setup for stocks as broadcom has given up early gains, down 6%, and with equities as welling in negative on the s&p. the people who live and work there. because you call these communities home, and we do too. pnc bank.

technology largely took a breather in august with the nasdaq down 1.5%. could the '23 rally pick back up come fall? deirdre bosa with the setup. >> good morning, carl. chips have had their time inmor. investors may now be looking to another area for re-acceleration and that might be soft we're. a couple of earnings last night underscoring a theme we have seen emerge over the last month or so. the latter is up nearly 6%. among results in consu consumption-based models bodes well for peers like datadog, snowflake and confluent. you add expectations the rate tightening cycle is over and the

rotation of growth and software could have legs that continue. the bar for semis seems to have gotten higher. a more muted effect on the stock and look at broadcom today wasn't enough for wall street. that could suggest a shift also in the ai hype cycle at-large, the upside for chips may now be largely priced in and investors could be looking for leaders in new ai products and apps through the software names. this is when chips were getting all of the attention. investors piled into semifirst and then infrastructure and services. guys, maybe our audience wants to look at software and services, the likes of snowflake

for where the hype cycle is going. >> that's really interesting, deirdre. where do you think the software services is on the demand side of things in that cycle? is it part of the upswing, at the top of the upswing? >> that's why they're so interesting because these are consumption-based models, right? if their customers have more money to spend, that tells us something about the space, it kind of quietly prices are going higher on the software side from sho shopify, they've been raising prices. you have to look deeper at the top-line growth. investors are buying it on this growth rate promise. how much that have is due to them raising prices and how much

of that is due to new customer acquisitions and maybe tells you about how sustain thbl is going to be. >> i think it was over at bofa this week said the q2 quarter at-large was about margin and now will be about demand if, in fact, we work our way out of the earnings trough. >> exactly. and how much of that demand is organic or looking at revenue where you may be seeing the price hikes. the whole setup for the rest of the year is an interesting one. i don't think anyone doubts this ia shift, is that shifting to another part of that ai promise? less chatbots and products going forward. >> that's what we heard earlier in the hour. deirdre, thank you. are hollywood execs about to join the list of fans singing praise to taylor swift? the artist is looking to get

people to sit down in their seats or maybe stand up or maybe dance lileiti n' ow. tt b, dot stay with us.

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studios and theaters begin a future that could have a lot less scripted content, taylor swift is helping theaters shake it off. julia boorstin explains. >> reporter: a concert documentary is a twist, a potential bright spot for the fall and a summer that was better but not as good as many hopes it would be. now the less good news is this summer is still down nearly 6% from 2019 which was packed with major blockbusters. before taylor swift announced her "era's" tour movie, the annual box office 2023 would finish with about $9 billion in ticket sales, about a billion less than analysts were hoping for earlier in the year. the studios moved several

high-budget movies to next year and that's because actors aren't around to help with promotion because of the screen actors guild strike. now amc is reporting that the taylor swift "era's tour concert" film has sold, the highest advanced ticket sales in amc's century plus history. f fandafgo reports it's in the bestsellers and imax has sold out 250 screenings. it will be interesting to see how it impacts the rest of the box office. maybe it will get people more excited than barbie-heimer did. >> what happens if it surpasses a "barbie" for the season. that's remarkable, julia.

the writers' strike going on for four months and with the aiw filing unfair practices after the two companies did not respond in a timely manner, bofa reports 07s net of americans now support labor unions, the highest since 1972. morgan stanley did a survey about the likelihood of a strike. 50% say extremely likely the uaw does strike and a third see it lasting four weeks or longer which is one of cramer's big concerns. jonas thinks a lot is already priced into ford and gm oop. >> economists are excluding them, adjusting the jums but it is having an impact.

>> imagine all the suppliers and services that go along with selling cars in this country, the financing would have unbelievable effects. an echo of yesterday. we saw what happened with the two year. still above 4,500. >> with that said, happy labor day. >> to courtney reagan in for the judge. welcome to "the halftime report." i am courtney reagan in for scott wapner. front and center your september playbook. the unemployment rate jumping to its highest level in more than a year. will the fed hold rates steady. the best place to be right now. joining me stephanie link, jim lebenthal, and rob sechan. a quick check on the markets. i would say modestly mixed, down by a third of a percent. also