on, right? >> i followed it very closely. >> i was watching intently, very curious to see what tom brady was going to do with regard to his leadership consultant role at delta airlines. >> oh my god, we only have 13 seconds until the show is over. thanks, dom. there's the dow. we're down. oil is like $86. that's what we have been talking about all morning. probably talk about it tomorrow if you join us. "squawk on the street" is next. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber is out west live from goldman's communicopia conference. concerns of slowing growth, higher rates, higher oil, getting a slight reprieve on those fronts today. ten-year, still 4.25%, brent back below $90. our road map begins with the fed.

expectations after a slew of data. boston's fed president, the latest to call for patience while warning further hikes may be necessary. more regulatory headwinds for big tech with the ftc set to sue amazon, doj versus google and the eu cracking down on these so-called gatekeepers. amd's lisa su says the a.i. market is skyrocketing. who is set to benefit the most? speaking of which, david, sounds like that's a heck of a way to kick off the conference. >> lisa su, we'll get to her comments. we're going to be able to sit down with john stankey, the man who runs at&t, talk about the environment for wireless right now. bob bakish from paramount, plenty of things to discuss there, including the writers' and actors' strike, not to mention the dispute between disney and charter. mike seifert later today from t-mobile and then tomorrow, david solomon. of course, it is a goldman conference, and he will be my guest as well following a spate

of somewhat negative stories about mr. solomon a couple of weeks back, as you guys know. also be monitoring what's going on at the conference, carl. brian rockets, of course, the man who runs comcast, will be one of the first presenters here this morning at 7:30. certainly want to see what he has to say as well about any number of different issues facing that company and the broader landscape. >> wow. geez, david, i mean, we should all be out there. what are we doing here? i mean, doing our fantasy drafts? that's unbelievable, what he's got going. you are going to have some unbelievable interviews, and i can't wait, especially because david, when you say that the dispute between disney and charter is somewhat existential? >> it does feel significant. there's no doubt about it, jim. and i think it's funny because it sort of broke last week, and it may not have gotten quite as much attention as you otherwise would have expected, but it's starting to pick up. i know as a jets fan, for example, it just occurred to me that monday night football is not going to be available to me,

and that's going to be a problem. so, i do think that, you know, you're going to -- they're going to -- chris winfrey, relatively new ceo at charter, is going to have a big decision to make, but the question that you raise, saying that word, existential, the video business barely makes any money. it makes some, but it doesn't make a lot, and this may be that jumping off point. that's the question we're asking. then, of course, that would be bad news for the overall bundle yet again, one reason why warner bros. discovery stock, paramount stock and comcast stock, by the way, even though we're on both sides of this, have been down in recent sessions. >> everybody has to balance it. phillies game on comcast, but you have to pay extra for peacock. there's big ten, michigan game. we just saw a walk-on from michigan who was vetted by delta. now, i think, david, one of the things you got to look at, besides the fact that the bills have an unbelievable defense, is texas-alabama. u.s. open finals versus what i'm

hearing, which is that charter was saying, listen, fine, we'll do a deal but we want espn+ and disney+ and want it for free. that could be like $4 billion in spend. this thing is -- i know you're not directly involved in this, but i think everyone and the people that you're speaking to has to know that ifthis is where we're going, is the customer going to be angry at disney or at charter? >> right. i think they're going to be angry at charter. their distributor at this point. the question, though, becomes, do you really drop your entire service? is it an opportunity for at&t if they've got fiber in your area or f ios, verizon, to come in and take a customer from you entirely, or do you drop video and go to youtube tv? we'll see. but it is an important question. it's one we got to watch closely. brian roberts may speak to it a bit this morning in his remarks as well. but again, it goes back to this

story we've been watching for years now, which is the slow and now not nearly so slow disassemblage of the bundle, and this could be an important moment. we'll see. i don't know where i'll be watching that game on monday, but i'm going to watch it no matter what. >> yes. and we'll talk about some of the price cuts at disney+. some of these prices, at least on a short-term basis, are pretty cheap. we'll talk about that in a bit. let's get to the broader market. s&p is coming off the worst daily performance in a couple weeks. russell down two, jim. there was a lot of corporate supply, which sort of got discussed in the realm of treasury discussions yesterday. >> yeah, look, i tweeted something this morning which is you've got to see oil go back down, and you have to see rates go back down. rates are tame today. oil is tame today, but not tame enough. you really need to see a real pullback, especially in rates, because what people are saying, listen, there's too much supply, the numbers are still too high. we had the great statements from collins this morning, and steve

liesman got. you know what, carl, the beginning of september's playing to form. the industrials really rolled over yesterday. you saw mega cap tech do well. i mean, you know, that's that period we have right now. >> dollar strength. >> are you kidding me? it's like meta goes up. we had no reason for meta to be going up, other than perhaps that there's some tiktok criticism because of how much we dislike china right now. but i do not think that you can mount a significant rally unless you get both interest rates down and oil down. >> meantime, david is at communicopia, but we got two companies this morning, southwest -- >> that was terrible numbers. >> talking about higher fuel costs, cutting rasm guide. august leisure bookings at the low end of the target. >> there wasn't anything good in that one. >> and then general mills cutting pet revenue guide.

>> what a fantastic downgrade we had yesterday of general mills. general mills, that was -- that was a bloop off home run. initially, when they bought it, the stock went down. they had to issue shares. but pet food has been the savior of a lot of companies. even when i looked at smuckers, i thought pet food was okay. by the way, they had a win but that's just animal health. no. pet food's gotten too expensive. and one of the things that you often think about when you're someone who's a stray dog lover, i'll look in the refrigerator, and my wife will have stuff for me that's like $2.99 and then the dog stuff, $4.99. we're switching that, because the dogs don't know the difference. if you write new, improved on a can of food for a dog, she's not impressed. i'm just saying. >> it does sort of raise the question about at least what the color of corporate presentations are going to be at all these

conferences this week. >> yeah, without a doubt. and obviously, a lot of questions around sort of the broader economy at certain -- for certain ceos and a.i. i mean, as you know -- guys know, would note, lisa su yesterday speaking very positively. of course, a frequent guest of ours and of jim's at amd. take a listen to what she had to say in terms of sort of around a.i., especially given the planned introduction of a chip that they say will compete with nvidia in the not too distant future. >> our first, second, and third priority are around a.i., a.i., and a.i. i think we have the confluence of events right now where you have a market that is skyrocketing, and then you also have our technology that is very, very well positioned, particularly around these largest language models and what you need for a.i. in this space. even since our last earnings call, i would say over the last 30 days, what we've seen is a

continued acceleration of those engagements and a number of those engagements have now turned into customer commitments, which we're really excited about. >> you know, jim, there's obviously the enthusiasm around a.i. broadly speaking has certainly been one of the building blocks for this market. i'm curious, both specific to your thoughts about amd and then more broadly speaking as well in terms of whether and if it's still sustainable, that some of that enthusiasm that we talked about, obviously, for many, many months. >> there's a fantastic road show, half hour video, about -- doesn't mention amd. it's about a.r.m., and it's talking about the significance of how far ahead a.r.m. is when it comes to being partners with nvidia, which is obviously the leader. they've got the cpu that burns much less hot and is much faster

than what lisa su has. i have tremendous respect for l lisa su. she does talk about how strong the pc market is. she talked that the deal is good. she may be speaking a.i., a.i., a.i., but arm is doing a.i., a.i., a.i. and i think that arm is the undervalued one in this -- and it's very important, david, that people focus on what renee haas has to say, because it's backed up by jensen huang, and when you have jensen huang saying twice in your video that he likes this company, i think that arm trumps amd right now. >> really? really? i'm somewhat surprised to hear that. >> it burns lighter, it's much faster. >> when you look at it, and obviously, they did have -- their year over year comparisons are not necessarily applicable, but nonetheless, and they are talking about significant growth, i understand that, but where do you get to a number that gets you comfortable beyond

let's call it a 50-plus billion dollar for arm? >> it may not pop, but that's renee haas being very conservative. i think people have to realize, wills the holy grail, which is grace hopper, which is the code name for what people are putting together for super computer. it's what elon musk says is the great challenge that nobody can equal that jensen's done. jensen chose arm. he did not choose amd, and you know i have tremendous respect for amd, but i think that when you listen to what jensen says about arm, you're going to say, wait a second. i can't continue to back the horse of amd the way i was when i hear how much faster arm is and how much the burn is so much slower. and jensen can -- jensen has always been about waste. he's always been about burn, and he is saying that arm is better and is significant to me, even as a big amd backer, david.

>> yeah. yeah, i know you are. that's interesting to hear. carl, we should remind everyone, this is going to be the biggest ipo of the year. softbank obviously will still control arm but it's going to be priced next on the 13th and will begin trading on the 14th. and obviously, we'll be following it quite closely. >> yeah. >> and unfortunately, carl -- i shouldn't say unfortunately, but it's the date of the strike deadline for the autos, so you've got, i think, you'll see tech in strupreme mode, but you may see some really bad news about what the president has said is something to the to worry about, which is what i think is going to be the strike that is like the 1950s-like strike with this shawn fain saying things about capitalism that we are not used to hearing. fat cats. billionaires. people who own stock. they've made too much. it's time for the workers to make money. you know what? i remember this period. it was the period when it was --

it was trotzky time. the language i'm hearing from fain is remarkable. >> you've not made a call as to whether or not they go after stellantis. >> meanwhile, you're watching sports, not the michigan game, because it didn't have the relevant programming, but when you're watching sports, you're watching how much it embraces the workers. it's not about how great the bronco is. i'm not getting the bronco because of the workers. >> good point. still to come from morning, we'll talk more about the latest in big tech regulation as the ftc setting its sights on amazon. take a look at the premarket here. we'll get to moderna, z scaler, roku, amz, calls on chewy and starz.

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lot of news in the world of regulation this morning, according "the journal" now reporting the ftc could file an antitrust suit against amazon at the end of this month after amazon officials did not offer concessions to the ftc to pursue a settlement over antitrust claims. meanwhile, jim, we got the eu declaring, what, six, seven companies as gatekeepers? a bunch of tech giants, including bytedance. >> i have always felt the europeans are about getting a

check written. i think the fatuous nature of what the ftc has done flies in the face of what i thought they were beginning to do. i've read through what the ftc chair wrote about amazon a few years ago, and it was immature. it lacked any rigor whatsoever. and by the way, when we think about antitrust, what we should be thinking about is the consumer and whether the consumer pays more or less, and i always find this kind of analysis to be so lacking, given the fact that amazon's been perhaps the greatest press cutter in history. there's issues of tying. i think it's funny because in the interim, harvey finkelstein at shopify doesn't deal with amazon, the opposite of tie. i worry about the justice department's case against google because they too have newfound competition since that was filed. so, the ftc can do what it wants. i know probably people feel if you break it up, it's worth a lot more. when you order something in the morning and it comes in the

evening, you don't think of the ftc as your friend. you think of the ftc as a british regulator just trying to get a check, and that isn't what she wants. lina khan had some lacking in rigor thoughts, very ill advised. i thought she was beginning to make more of an in sync with her staff, but it's pathetic. >> david, i don't know if we have had the chance to kick around with you the notion of peak khan after amgen news on thursday or friday. >> yeah. obviously, listen, i think we did a good job of reporting on the likelihood of a settlement there for quite some time, and strangely, they chose to issue it on the friday before labor day weekend. or maybe not. maybe they wanted it to be somewhat quiet. but yeah. there was no real case there. i said that so many times, and

amgen was just waiting for the opportunity, obviously, to settle it, at least say they wouldn't bundle, of course, which is something they said numerous times. when it comes to amazon, though, jim, i do wonder. you mentioned this briefly. stock would go up if they split this company. >> absolutely. >> there seems to be -- we can't say it with 100% certainty but there does seem to be a consensus that it would be a value-rewarding transaction were you to split aws and the retail business. >> oh, yeah, because it would be -- by the way, costs would go up to the consumer, thank you, lina khan. it would be terrific. it's exactly the opposite of what sherman and clayton wanted but a lot of her so-called reasoning flies in the face of what the consumer wants. more interesting to me is the css, also known as the piggly wiggly deal, now, the ftc has specifically said that they would fight anything like that

because of what happened when safeway merged some stores with hagway and wanted to get the albertson's deal done, which then caused a tremendous uproar when you had a situation where hagway went under in a lot of places. >> right. the idea being that the divestitures in no way represent a real competitor and therefore failed. and you and i both argued this is a tough deal to do. the stock in question here is albertson's. i'm curious to see what it's looking like right now. >> it's up. >> no, that's amazon. but i would assume it's up. listen, jim, this may be a real competitor, and that's going to be the key question. >> backed by softbank. >> and does it give -- right. backed by softbank, financed by softbank, does it give enough credence to their argument that this would not be -- that this would not be anti-competitive? we'll have to wait and see. i still come back to amazon, though, and do wonder, if you're

the company, you have to be considering it in some way, at least. you have to understand what that would look like to split the company, what the respective multiples might be, how you would do it, over what period of time. it's got to be something you're thinking about regardless of whether the ftc is coming after you or not. >> well, they have spent a lot of time thinking about the many projects that they've killed. i mean, ayesterday, it was a hundred degrees at home. thank you for telling me what the temperature is and that i like tchaikovsky. no kidding. it's actually braums. one of the things i find to be unbelievable is what she focuses on, what lina khan focuses on. she almost sits there and thinks, you know what? today, i'm going to say something really stupid and let those guys at "squawk on the street" say whatever they want. i am entitled to my stupid positions. now, usually, you don't say things like that. you should show a lot more deference. i'm out of the deference game. the deference game is something

i played. by the way, tell stankey, i'm out of the deference game. >> yeah, you've been out of that for some time with him. i'm not going to relay that message, jim. >> back in the '90s? >> listen, man, the jeffersonian thing lasted about 48 hours. >> new tough guy over there, i know. carl, amd. he's even -- >> "the eiger sanction" is what they say about me. >> he's moving away from lisa su a little bit. i don't know. >> you get a triple hernia, you start getting triple schizophrenic. >> they're focused on a new antitrust regime that cracks down on these large platforms that have unusual amounts of power in our economy. whether they can get judges to agree with them, obvious, continues to be a real problem. >> judges have rigor. i like kanter. a lot of judges, they got to deal with doctrine. it gets in the way.

doctrine. >> that seems to be the way it's been going. >> i didn't go to law school to get stupid. >> yes. coming up, we'll get cramer's "mad dash," countdown to the opening bell. more "squawk on the street" in a moment.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. time for cramer's "mad dash" as we count down to the opening bell. >> a lot of people felt that one

of the winners in all these spats is roku, but people are reluctant to buy roku because they were losing money hand over fist, and they didn't make the so-called pivot where you had these enterprise software companies realize, wow, we got to start making money. they did it last night. they announced a very big head cut reduction. they're not going to do any more hiring. people thought they were going to lose $4.4 million. they are not going to lose anything is my prediction. and when you do that, when you make that sudden pivot where you were going to earn -- let's get the right numbers. you were going to earn not until maybe 2026, money, well, they're going to lose $4.40. that's going to go down big. roku joins the ranks of companies that have said, we are going to pivot and maybe we even get positive in 2024. this is very good. now, the ceo is usually not that promotional when it comes to america. this is a good number. i'll promote him. >> 10% cut and revenue guidance

tweaking a little bit higher here for the quarter. >> i know. i mean, i think that they have a product that is in demand in an era where we're trying to put together $1,600 to be able to watch every nfl game. nfl is the battleground, and that's why i think that disney may have the upper hand. we talk about it, we joke about it, but it is -- my friend adam schefter would say it is the golden age of football. and no, i will not be using adam schefter to draft in the "mad money" lake tonight because he's drafting at the exact same time i'm drafting. so, i don't know if i can threepeat. >> hopefully adam's listening. let's get the bell here. cnbc realtime exchange, at the big board, it's ormat technologies. at the nasdaq, ss&c, celebrating the launch of its large cap etf as we drift a little bit further here, jim, from 4,500, and you're wary of september. >> i am. i mean, i just think -- i think

we just got to get through this period where interest rates are backing up and we have to find some level where saudi arabia says, you know what? we like biden more than x, so we don't want to cause too much of a problem. i don't know who that is. you never understand the -- the saudis are very cryptic. of course, the russians, it's really difficult to figure out too. some republicans have been saying that the war should end, but i do know it's in the saudis' interest, i believe, to say, okay, let's not take this too high. >> brent, first settle above $90 so far this year. we do have tropical storm, more of an atlantic storm than a gulf storm. you had 2.9 million barrels added to the spr in august, most in three years. >> right? it's time to go back, i guess, the other way. look, by no means do i think that it's a lost cause here. but i just don't they that you're going to get -- you're not going to get rate cuts.

you have oil going up, which is going to worry people, and it really crushed the industrials yesterday, which means that a lot of people feel like we're not going to be able to bridge it to the big infrastructure spend, which is still 90% bottled up at the states, not out there yet. watch volker materials. those are companies that make aggregates, which are rocks. rocks are not dumb. they are smart. they work in a housing development and on interstates, and those have been the lifeblood of the economy when things have gotten tough. this market just drifts down. it's really kind of discouraging. >> david, i don't know if you heard jim a second ago saying he thought disney may have the upper hand here in this dispute. they are cutting the price of ad-supported disney+ to $1.99 a month for three months. that might be a card being played here in this back-and-forth. >> you know, it's hard to know who exactly has the upper hand. you would expect that the

content provider does. they almost always have in battles like this. everyone we followed for all those years, ultimately the distributor capitulated and that's what makes this interesting. it does appear, perhaps, that charter and -- and i don't know, and i haven't spoken to ceo chris winfrey. i would love to. he does appear, i believe, tomorrow. that, you know, that maybe they're willing to just say, we'll take the chances that our broadband business is what is key for us and ultimately, you go to youtube tv, we still are okay because you're still going to be using us as broadband, a product we can continue to increase price on, instead of not making our customer happy by having increased price on our video side where we benefit not at all from that. as jim made clear, though, carl, a lot of this does center around allowing charter customers, spectrum customers, to access the espn+, the new or the streaming apps that are available and will be for free. the idea being that, well, if

charter has to pay for 80% of its sub base, pay those fees, why shouldn't they be able to get it when they go outside of the cable bundle? so, it's a key dispute here. we're going to follow it very closely and try and sort of update people, but yeah, i think always -- the question always is, is content still king? as the late sumner redstone liked to stay over and over again. we'll see if it prevails again here. >> spot on, david. i think it is somewhat incredible that charter would say to bob iger, okay, look, you got to give us espn+, as someone who uses it aggressively during football season, it is just a total addition. it has nothing to do with regular programming. is it really just worth throwing it in? it's a great intellectual piece of property, and i hope -- look, it's different from giving -- from saying to comcast subscribers, okay, listen, if you want the michigan game, you got to have peacock.

david, this is actual intellectual property that takes a huge amount of money to create that charter's just saying, hey, listen, we got to give it to people, and i don't know about what espn's worth, but a lot of it is espn+. >> yeah. but i mean, also, jim, if you know that there's going to be a competing espn product on the market that is going to be all of it, right, all of the espn programming available over the top in a streaming fashion, and you're charter, and that's coming in the next, let's call it, i don't know, year and a half, maybe even less than that, two years, you know, i haven't gotten updated as nobody else has, i guess, from bob iger in terms of what he's thinking about where that will be. i wonder what the value proposition is. i can't stress enough, yes, they make some money. our parent company, comcast, but it's a small, small margin on the video business versus, of course, broadband, which is the key product. >> well, i got to tell you, if you want to watch the u.s. open,

david, i don't think you're going to say, that darn bob iger, he's keeping me out of the finals. i don't know if you know who bob iger is. i think you know that you write a check for a big company, and that company does not say "disney." >> no, you're right. i mean, listen, i got to figure out if i'm going to get youtube tv, right, by this weekend. >> you don't have it yet? you've got to be kidding. >> i had it during the pandemic when i needed it, but i don't have youtube tv. i'm a charter subscriber across the board, by the way. >> you have to get youtube. you have to do it. >> i got the whole cable package, i got wireless. i'm paying that company a fortune, but i want to watch the jets on monday night football. >> you have to. >> i'm going to figure out a way. >> your defense may be as good as the '85 bears. >> we have -- >> and you saw what brady said about aaron rodgers. >> you may have the best wide receiver. so, yes, david, i know you can't watch your son's football right now, i'm sorry, and i hope he's

okay, but you can watch the bill game if you pay a little extra. >> yeah. well, i may have to. so, that's your point. i mean, this is going to be the -- if this goes past monday night football, then we know that they're kind of -- it's a different kind of a fight, jim. >> exactly. that's why what you're saying -- i would love to hear what brian roberts, whom we work for, says about at what level do you say i can do this game but not that game? at what level does say, wait a second, i'm paying comcast to watch the phillies. the phillies make the playoffs, but i got to pay again? i think that's really what you got to try to figure out. i think it's a tight rope. but this is not a tight rope, what's going on with disney. this is like, okay, disney, you're out $4 billion. and i don't know what's going to happen here, and it's amazing how much the golden age of football is going to be the determinant here. >> speaking of others in the media space -- sorry, david, go ahead. >> carl, on the media space, the largest loser so far here has

been warner bros. discovery, a company we talk about a lot. its market cap is very small. its debt load is very large. that stock is down another 2% because of this continued fear, what is the value of these cable networks at this point in a world where you have one of the major distributors, the major providers of video, saying, we don't know anymore? and i mean, just take a look at what's happened since this dispute became public a few days back. that stock has gotten whacked, jim, hasn't it? >> oh, no, look, the profiles just keep coming, "the new yorker." one of the things, david, this strike, we don't talk enough about the strike, and we're going to have a ford, stellantis, gm strike, but the ugliness of this strike, david, there's not a lot of comedy, and i'm talking about the comity kind. it's pretty ugly. >> it is pretty ugly. speaking of ugly, by the way,

you see shares of amc, guys, with all those shares that they're going to have to issue? i know you have. >> it's a split there. >> what do we got the stock down now? yeah. only 16%. i guess not that bad. >> you know, adam aron did some -- he did some very public estate planning when the stock was in the presplit 50s. i'll tell you, i never mind a ceo who comes on and says he's going to do it. but the people who stuck with him after he did it, i think that they -- they may have jobs in the ftc. they could be the ftc people. you know? home schooled. >> 40 million shares is what they were going to sell. we knew they were once they resolved the dispute. >> taylor swift, david. the taylor swift documentary. no? geez. yeah. >> if you tell me, i know.

sure. okay. what do i need to know about the taylor swift documentary? it's going to be at amc? >> the north american box office needs it, just given how lopsided this year has been. i think 56% of all all box office is the top five films. >> oh my. we don't have -- the industry's -- look, i'll tell you one thing, david. there was a nathanson piece today that said advertising is up on the internet. i thought that was something positive. up 10%. >> well, digital has been all right, hasn't it? it's not -- has it been bad? >> no. >> no. >> and people still talk about shows. they do. i mean, people talk about "hijacked." everybody's still -- there's water cooler talk. david, netflix, which was up again, netflix somehow has become the nvidia of entertainment. does it bother people? is there schadenfreude? is there genuine love and affection? i don't know what the heck is

going on there. >> i don't know either. i don't know either. but i'll ask people here. i guess it's a good day to be at a media conference. >> you got to make some calls. not unlike the august 18th show in 2015 when david said, wait a second, bristol myers is down 25% and i got to leave and make some calls. it's one of those situations. >> speaking of -- >> it always is. >> in the media space, watch apple today. it's riding a win streak, jim, of seven straight. that's the longest since march of last year. interesting piece in the "journal" today that china has told government officials not to bring their iphones into the office. >> that was very strange. >> you talked about china with the commerce secretary on "mad money" last night. take a listen. >> u.s. business leaders are practical and pragmatic. they have been doing business in china for decades. they do business all over the world in some difficult places, but they do need a level playing field. they can't operate and think

that there's going to be a raid on their business and they're not going to be told exactly what they did wrong. >> well, apple's got 7.3 of the business that went up after the huawei sanctions. apple in china is by china, for china, so it's a very ill-advised fight, i think. but i know that chinese government was busy playing with the meme stocks. they had chinese meme stocks run big. ever gram is up big. i'm calling one called "town & country." i'm creating it right now. sounds like a perfect housing development, right? i mean, honestly, all the chinese stocks. david, have you been following what happens when you get a chinese sector comes down and then suddenly they're penny stocks and the government obviously encouraged them, not unlike when the government told people when they were selling in 2015 that that may be a mistake. and they jailed some sellers. that's interesting, right? when you jail sellers. >> yeah, okay. yes. >> we may jail some sellers of

amc. >> that said, there are some fundamental reasons that people could cite, at least, for thinking that chinese stocks are cheap and this may be an opportunity. i mean, "the journal" -- >> david, you taught me that the common stock -- the common stock of evergrande, david, what are you, like, no? >> i'm not saying evergrande. >> maybe some of the over tranches. >> i'm not saying evergrande. the overall market, there may be some opportunities. >> evergrande's the gamestop of apartments, right? it's gamestop. >> meanwhile, more discussion of the huawei kieran so-called chip breakthrough. congressman mccaul today saying it's likely that china did vi violate or snic did violate some sanctions. >> well, you can take the seven all you want. lisa su is talking about the three, and jensen huang is talking about moore's law being dead, and he's got much more powerful chips. i think people have to focus on the idea that a seven nanometer

is yesterday. it's an old chip. it's like listening to yankee highlights, you know what i mean? kind of? yankee highlights? all right. >> you talking about stanton? >> maybe you don't say yankee highlights. i don't know. met highlight? no, you don't say that either. geez. >> as far as sell-side calls, jim, i thought of you. td cowen ups constellation. >> yes. >> outperform to $300. >> that's a very big travel trust name. obviously, that's modelo. that's also an -- that's one of those situations where elliot got involved and got rid of the two classes of stock when they bought out the sands family. they spent a lot of money. it was heightened and people feel that there's going to be a buyback. i want to caution, by the way, that alcohol itself selling is bad. diaggio hit a 52-week low last night because people feel that maunjaro and wegovy make it so that alcohol -- >> is less appealing?

>> it's like, yeah. people aren't drinking it. that's very bad for the real heavy spirits. >> yeah. we mentioned chewy a moment ago. we'll see if it bounces off at 23 for good because argus goes to buy. >> ill timed after the general mills comments. i mean, i would say -- i would sell -- look, i think singh is terrific but you don't buy chewy on a day when general mills says pet food is soft. >> finally, square, block, ubs goes to neutral. they cut the target, 40 bucks, traded in for toast it. >> that was amazing. toast. have they ever run a restaurant, those sons of -- you run a restaurant and someone knocks on the door and says, what kind of point of sale do you use? you say, i use caviar. they say, we'll give you ours free for six months. one of the things that was interesting about toast is they keep signing people up. everybody will come in and tell you, hey, listen, we can do

better than the other guy, so toast is not a buy. block has done -- has been losing steam, not unlike paypal. this is a mastercard/visa moment. it's just like the old days. michael mi back at mastercard, he's the man. he has much more of a presence of what's working. look at that stock. that's where the action is. i like winners, not losers. >> it's your thing. let's get to rick santelli this morning. >> good morning, carl. we have ism coming up at the top of the hour, but these are s&p global pmis. these are final reits and we toss out the mid monday read. in this case, the services pmi was 51.0. it deteriorates a half a point to 50.5. that's the second weakest number of the year, but it is up over 57 out of the eight months thus far. if we look at the composite pmi, it was 50.4 mid month. it now moves to 50.2, and that

is the weakest since february when it was 50.1 and just like services, 7 out of the 8 months have been above 50, although barely as we can see. we're going to continue to monitor these because we all know they have been getting on the weak side and if you look towards europe, theirs have been extremely weak. is there a leading indicator? is this going to add to recession talk? we'll have to wait and see, and "squawk on the street" will return after a short break.

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a bunch of tesla news. you have musk on the coverage of "time," a "journal" piece, and

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your record is not going to be -- do you think it will be done again? >> it will take a lot. i know what i put into it. i think if someone else is willing to put that into it, i have a lot of respect for that. it was a big challenge. >> not luck, but the ball -- you know, things have to happen. >> yeah, a lot of -- >> things that you can't control. it was amazing. but then again it was you that did it. >> it was us. like any great team, it is everybody. >> you said mahomes. >> i think patrick is phenomenal. >> joe burrow. >> joe is an incredible player. aaron rodgers is a great player. >> that will be fun. >> and he's a young guy, aaron rodgers. >> he's younger than i am. he's had a lot of consistent level of success too. he is an amazing player. >> tom brady on squawk today ahead of the start of another nfl season. meanwhile delta is naming the

super bowl mvp quarterback as strategic adviser for the company today. you can imagine if he starts doing -- when he starts doing internal com, rally the troops? >> he is greatest of all-time, so really not that much to it. i know eagles play the patriots and i always remember those games. i cried. 700,000 views of me crying. now, i just want to point out stock trading that is important. there were people who felt that the recurring revenue was not good enough of the future. i think that that was wrong. i think the stock was down dollar and a half when it started, but first reported last night it was up 12. i thought it was a good quarter. not as good as crowd strike's quarter, but -- >> a lot of of the discussion is just how high the bar was given palo alto and crowdstrike. >> yeah, and really he is tom brady. i'm one of those people that i

think tom brady is great and there are a lot of people who are jealous, a lot of people who think that he doesn't carry himself well. i don't know. what is not to like? >> and how about tonight? >> we'll talk to kurtz. i'm trying to figure out if we need to talk to hertz oig. there was a negative piece add. but i'm sassured things are fin. i'm doing a fantasy draft on my show is what player is what. take it is a two quarterback league. and i drew the 11th hole so it make it that -- i went to him and said why me. >> two quarterback league meaning mahomes and -- >> yeah, you have to draft two quarterbacks. that is what it will be. there is schefter right now, he is saying that he likes burrow.

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good woednesday morning and welcome to another hour of "squawk on the street." david faber is live in san francisco this morning at goldman sachs' conference. one day again we'll see each other in person. but nice to see in you san fran. tell us about what you have coming up. >> yeah, it has been a long time since we've been next to each other, but it will happen again. we have a good lineup for you. john stankey will join us and get a sense of what is going on at at&t. and also sometimes a good perspective on overall economic

activity, certainly in the enterprise. and also will be speaking with bob bakish who runs paramount, good time given the ongoing dispute between disney and charter. they own a lot of cable networks not to mention cbs. so we'll be talking to him. later in the day mike seibert, tomorrow david solomon. and also going to keep an eye on brian roberts our boss who will be presenting about 30 minutes from now and see if he makes any news at all in terms of comcast or what he has to say about the dispute that we talked about in the last hour again between disney and charter. >> a lot to look forward to. david, thank you. we'll see you in a bit with the ceo of at&t. i was promised a broad question in that serinterview as well. socks are selling off a bit again. s&p down half of 1%.

what is working today? energy again adding to gains for the week up almost 1% in this holiday shortened week. and only other things working right now are defenses like staples and utilities. everybody else is lower. nasdaq down about 0.6 as we watch treasury yields firmer as well as the dollar at six month highs. >> almost the exact same setup as this time yesterday. ism services, let's get back to rick santelli. hey, rick. >> well, there are positive surprises here in the triple header plus the final new order. so that is four in all. let's start out with the index. expecting 52.5. 54.5, that is the best since february. and if we look at prices paid, where lower is always better, unfortunately moved in the wrong direction. 58.9, that is the highest level since april. april when it was at 59.6. and we caution it had been coming down. we had a number in june of 54.1,

lowest since march of 2020. but moving in the wrong direction. on the services employment front, 54.7, best level since november of 2021. so that really popped and it really goes a bit against the grain in the last jobs report we had. and finally on the services new orders front, 57.5. that is also the best since february when it was at 62.6. so all four metrics are higher than expected in the indication of prices paid, not necessarily a good thing. and boy, did it have an immediate effect, carl, sarah and david on interest rates, that pushed that ten year note yield almost immediately much closer to 430 as it is just a whisker shy of 4.29%. you may be two locations but three people, back to you. >> thank you, rick santelli from chicago. and yeah, here is an example

where good news for the economy is not so good news for the markets. right? because the fear in this whole bullish narrative of disinflation and inflation coming down, weakening economy but not too much that we worry so much about a recession, is that we don't see sticky inflation and we know inflation is in the services sector and that is what has been hot. and the fact that we saw a little bit of a firmer number, a better than expected number and expansion for services, could make you worry that services are on such fire that it will be hard to get the continued disin disinflation, that you will see inflation stick around for longer. it helps explain the rise in treasury yields to 4.3 on the ten year which is near the upper ef end of the range. yesterday it was blamed on corporates flooding the market with bonds for sale, all some issuance. one of the record days for that and that sort of sucked the air out of market for treasuries. today maybe it is moving on the data again and that is not helpful for stocks.

>> you see air pocket in equities down to 120. prices paid a 58.9. and as we get more saber rattling on currencies from poland and russia and japan and turkey. >> and china. china and japan were the big headliners on the job owning overnight. although you know what, the currency market takes a lot to threaten and dissuade the currency market when it comes to intervention. we'll see if the authorities follow through especially japan. hasn't worked very well in the past. strong dollar, higher yields, higher oil, it is a bad mix for stocks that are betting on lower inflation and slightly weaker economic conditions. the tricky part for the fed, and this is always the tricky part, is that they have to stay firm when it comes to the fight against inflation, but also watch the economy which is

showing signs that the rate hikes are working, that lags are materializing. did you see the mortgage applications this morning? lowest level since 1996 even though mortgage rates came off the highs a little. we're still firmly in the 7% territory. and they are down 28% from last year. so that is hurting. some of the consumer warnings, i've been talking about what we got on the del llinquency curre you can and thanks to bank of america for putting together this list. nordstrom for instance, last week, here is what they said. they said we have seen delinquencies rising gradually and they are now above pre-pandemic level which is could result in higher credit losses in the second half and into 2024. here is what macy's said. we experienced increased rate of delinquencies within the credit card portfolio across all stages of aged balances. while we had expected delinquencies to rise as part of

a normalizing credit environment, the speed at which the increase occurred for us and broader credit card industry was faster than planned. carter's warned about it especially in people age 18 through 29 years old. harley-davidson warned about it as well. why am i pointing it out? because there are cracks in the consumer spending environment, signs that fed hikes are working. at the same time, they might have this fight to deal with when it comes to the hot services. >> and we mentioned guidance today from southwest, mentioning that leisure bookings in august were at the low end of planned. and general mills saying that pet parents being more cautious in their spending. we do have though this bloomberg piece saying that fed officials are running out of room. going to have on double their projections for the year. >> and that is the exciting part about the fed meeting in september. we get the new s&p projections. last time we got them fed officials expected, what, 1%

growth for 2023? they are definitely going to have to revise that up. the atlanta fed right now is tracking for this quarter still in the 5% range. so what it means in terms of fed policy ultimately is that it will just be hard foeer for the market to price in cuts if we expect economic growth to be so strong. but it is lumpy. parts of the economy working and parts not. interest rates are a blunt tool. >> indeed. as we try to trim some losses on the heels of that print. let's get to our senior markets commentator to break it down. some of the uber bulls reiterating 5k for year end not being deterred. >> not yet. and it seems as if the second half of august really enforced the idea that the trend is higher. it seemed relatively routine in terms of a shakeout seasonally. we usually get a fourth quarter rally pre-election year. all things work together to allow you to believe -- along

with the earnings estimates inching hire. higher. but this is a market up 2.5% last week in parthire. higher. but this is a market up 2.5% last week in part dollar, oil yields seemed not going to break out and maybe not to cause a problem. and this week so far, we've challenged that. we've challenged the upper end of the range. i don't necessarily read it as good news is purely bad news for the market. i think if good news is what will get market yields on the longer end higher and that will restrain the economy more than -- in other words, it is strong then weak is the problem. and so that is what the market seems to be manifesting here with consumer cyclicaling suffering a bit yesterday, home builders getting hit hard. so you see exactly how the anxiety is flowing through the market. that said, you know, we're up 3% from the august lows. today we're testing 50 day moving average again. it doesn't seem like we're off the rails at all.

it shows you that late cycle psychology is there for a reason. because we have unemployment low, we have the fed tightening cycle that is in the latter innings if not already done. and so it keeps you on alert for are we going to tumble into a downturn or is inflation going to remain stubborn and therefore market yields go higher. h higher inflation is the more consistent thing that creates valuation than higher bond yields. >> speaking of which, sarah mentioned the supply. you think there are still ver linings in there? >> ultimately if the market digests it. you have corporate america still being able to tap the markets. they refreshed their balance sheets. you have the buyback story, you trim out the debt. so always a seasonal thing when you will get the rush of issuance in september. unusually big this time. i think in general it feeds into the concern about overall debt supply. so treasury plus private sector, you know, we'll test the

appetite. >> only so many buyers. and we had a lot of investment great deals yesterday. the next few days the junkier stuff ramps up. and also the beige book later today. even if you are looking for confirmation that today's services are problematic for inflation and prices paid, such good color from all the districts. and we know the fed pays close attention to it. >> thanks, mike. mike santoli. let's get back over to david and see what is ahead today. >> yeah, we have a number of big guests ahead. john stankey will join us after the break and later this hour bob bakish. this conference combines technology and media companies. moved it from new york to san francisco. but we won't talk about that. back after this. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪

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conference here in san francisco. we'll be bringing you interviews all morning from some of the top executives including john stankey who runs at&t. good to see you. >> good to see you. >> want to get right into the business. a few weeks ago t-mobile laid off a lot of people and said what it takes to attract and retainuarters ago. are you finding that at at&t,

and if so, with the new more expensive iphone coming, you have to wonder how that will play out as well. >> hook, we've been pretty stable in all the things we've been doing to attraction customers. i can't speak to their circumstances or what they are having do to grow their customer base, but in our situation, we've had a very consistent go to market strategy. we haven't really backed off of it. in fact i think we've gotten better at it and on the margin it has become a little less expensive for us to bring customers in and we've been pretty diligent about making sure that we bring in the right kind of profitable customer. i can't say that that is necessarily a dynamic that we're seeing within our business right now. >> and so more expensive for them but you are seeing -- >> i don't know his business and what they are experiencing, but in our approach, we're not having that issue. >> and what are your expectations for the new iphone? >> i would expect that like any

release, it will have a little bit of an uptick that occurs during that period of time. traditionally what we see seasonally, it slows down the month or so before a release. it comes out and there is a bit of a spike. i think phone will do well, but generally speaking the devices are getting a bit more expensive and i think consumers are being more guarded at how frequently they are upgrading. so i think that it will do well. i don't have any reason to expect that that is the case but i think that consumers right now will be a little selective if they can defer ultimately replacing the device. >> and so you expect lengthening of the product cycle will continue? >> i think what happen, and we see it not just in phone, but the laptop dynamic, et cetera, anytime price goes up on something, it tends to suppress demand a bit. prices have generally been going up on devices so i don't think that it will necessarily reverse the demand cycle. >> you've been bringing prices up a bit as well.

effectively increasing. how sustainable do you think that is? >> we've been investing an incredible amount in the business as the industry has. just in the three years i've been in this job, we've done $100 billion of capital investment and spectrum investment and ultimately when you make that kind of investment in your asset base, you have to recover and return. and customers have been using the product extensively more. we see growth in data driving up almost 40% a year. and so as a result of that, there does have to be some recovery and that comes in pricing in some regard. we've been doing it in a way that drives great value back to the customer. and so churn has remained relatively stable and we've been giving the customer more value for what they are paying us. more data,more freebies that come along with the service that they use like hot spot data and a lot of other things that we've been doing to try to make sure that as the customer is paying us more, they walk away feeling good about that. >> andit doesn't go without

notice that i think something like half the subs right now are being -- new subs are being captured by cable. and they are pricing obviously a lot lower than you are. is that competitive threat that ultimately will mitigate your ability to continue to raise prices? >> i think if you look at where cable is playing, they are playing in a particular segment of the market. many of our customers are actually part of family plans or multiline accounts. we haven't seen that kind of incursion coming from cable. we've been very good as you see our churn numbers have been really attractive, we've got great combination going of increasing rpu, low churn, improving customer satisfaction. so i do believe cable will have a certain place that they play, but ultimately when demand continues to rise at the level it is and the customer uses 30%, 40% more data a year, and if you are on a variable cost structure for your product, which cable is, that is a hard place to be a low priced leader because, you

know, your input costs are going up just as consumption goes up. >> so you believe at some point this is going to moderate in terms of the growth cable is seeing in wireless subs or the quality of those subs will actually continue to decline? >> our strategy at at&t has been really clear and we think we're in a unique position. we believe that you ultimately need to own and operate both fixed and wireless networks to do what the customer wants to do. which is get on the internet anyplace and anywhere. and so when we own and operate those networks and we can control our cost of service, that gives us an opportunity in the market to get the best customers and most profitable customers and that is the long term strategy we're playing right now. >> you are also actually playing in what has typically been cable's area which is by overbuilding fiber in a lot of areas of the country. why is that viable strategy at this point? you've goatdevoted a great deal capital to it. are you seeing the return you'd expect? >> we've been in the broadband

business for many years and the difference now is that we're in the broadband business with a superior product. >> you have. >> and so we're now in the business with the superior product and it is successful and smart investment because demand in the household continues to increase dramatically and we don't expect that to change. customers get a lot of value out of their fixed broadband service and fiber is one of the best ways to deal with that. and more importantly, we're starting to see patterns change in the household. where not only is there a lot of consumption coming into the house but consumers aresending a lot of data back up to the network as user generating kept starts to occur as we start to see things like vr and ar come on. and with that, fiber is the best technology in order to have that symmetrical bandwidth up and down. >> and where verizon and t-mobile seem to be more aggressive, you guys have not. is that because of what you are

describing? >> ultimately we think that the demand equation outstrips the ability of the wireless network to effectively serve that capacity at an affordable cost. there is a period right now where there is valid capacity in the industry and people are putting it to work with fixed wireless access and there are certainly certain customers that that will be a great technology to support their needs. but for most households, we ultimately believe that if fixed broadband connections in to the home, it will be critical. >> and what does the economy look like right now particularly in the spe enterprise and peopl coming back to the office? >> it is resilient. probably most resilient than most would have given it credit for. i don't see anything in our customer base that suggests to me that anything has changed. >> any delinquency changes? >> no, our customers are still paii paying their bills and certainly buying. i watch all the indicators like anybody else and there is a lot of uncertainty in the global

environment. when one of those things triggers, look, who knows what happens. >> and you've kind of said you've been running the company conservatively perhaps because you anticipated a downturn that has yet to actually come. >> we've been running the company in a way that we can adjust to whatever circumstances are thrown at us and i feel real comfortable that the guidance we've put out there and what we can do between now and the end of the year i see no concerns and nothing there that causes me to step back and take a different posture or different view on that. but the good thing is because we've managed to streamline the business, if things change, we can adjust accordingly. we have a lot of different levers that we can pull. >> and when you talk about streamlining the business, what do you mean? >> our business is focused on connectivity. >> yeah, you don't own those cable networks anymore. >> no, we don't. >> you must be happy about that. >> i'm happy about being in a business where customers need more of the product every day and they are using more of it every day. and they take a lot of value out of the service.

>> on the call specific to sort of your new focus, you said that we know the channels in the consumer market that we can go to to intercept the right kind of traffic. what does that mean? >> well, one of the things that we've managed to do to kind of reverse our growth factor and it is important to understand when you look at our share of nonequipment revenue, the revenues that we bill every month in our wireless business, over the three year period i've been in the job, we're actually growing our share of industry revenues faster than t-mobile. so while we may not be adding the same number of customers, and we're not selling fixed wireless service, we are getting very good yields off the customers that we're bringing in. over 8 million post paid subscribers in that three year period. we've done it by tuning the right distribution channel to where we can get the right customers. so for example, first net, where we have the ability to devote after public safety where we're

underpenetrated. we have an example of that right here. >> you've brought your props. >> back from maui, cell site in a box. and this allows us that the first responders can put capabilities in place there is a disaster. we have a nice service layer of employees that go out on site, make sure that after a hurricane, a fire, anything, that communication is in place. >> and great from a public ser service perspective. does it make money? >> it absolutely does. we've added over 5 million devices since we've gone into the first net business which is a place that we weren't selling successfully. so getting the right channels and right segments where we were under penpenetrated has been a driver and it has allowed us to attract the profitable growth and customers that we really want to get. >> in the brief time we have left, led cables crushed the stock price for a while. some questioning of the reporting around the actual environmental concern or how

significant it should be, you prepared to say anything more than what you've said in terms of where you think the state of play is and what the threat is to the company? >> i'll reemphasize what we've said, which is first of all when somebody makes an allegation like what the "wall street journal" did about public safety, we take it very seriously. and we want to make sure our employees are safe and that the communities we operate in are safe. and i was pretty clear with our employee body and i think i said externally that we felt like the "wall street journal" had overdriven their headlights in krkt characterizing a public safety and public health crisis. since that time, there has been quite a bit of public information that has come back. the state of new york has tested sites and declared had there is no public safety problem that the "wall street journal" cited. and yesterday the epa did the same on another site that was indicated in the article. we've had two locations, lake tahoe including others in michigan that we produced data back to the epa that says there is no public safety crisis

facing america right now. so we believe that we have followed the laws, we've done all the things that our regulators have expected us to do to operate our business effectively to keep our employees safe. we'll continue to look for any indications if there is new science or something that we missed or that the regulators missed that we need to respond to. but thus far, in working with those individuals who are expert, we've come away feeling very strong -- >> so you don't feel like there has to be e2340normous allocati for remediation? >> we're listening to everything and right now we feel pretty good about the position we're in as we did before that article was printed. >> given everything you've discussed, and we've sat down together for a number of years here, what do you say to at&t shareholders in terms of what they should expect? because when i go back and we can show a chart here, it has been pain. i mean, you know that, they know that. there has been a dividend. but what do you tell them in terms of why they should hang on, why they should believe the strategy is going to actually

result in a stock price that goes higher? >> ultimately that is the test of any ceo, right? do you create value for the shareholder. and i think everybody on the management team at at&t understands that. i feel really good about what we've done over the last three years. we've refocused the business. the operating results as you saw last quarter are really solid and the team has done a remarkable job at putting the business in a better position. i'm also responsible for balancing the short term return versus long term return. and to the point i made earlier, we're investing a lot of money in this business to build a sustainable company that generates returns for shareholders for a long time. we're in the early innings of that happening. i think you are starting to see the green shoots oig of -- >> what do you think it will take for the market to recognize that, simply a longer period of time where you are delivering on for example the free cash flow goals? >> when the cash shows up, eventually the market will recognize it and we remove distractions like what you mentioned which is unis earn it

in-certainty created by something like lead. i'm confident we'll work through that. but bottom line saying what we are going to do, delivering the cash. i think that you are seeing the trend start to establish itself. >> at what point do i hold you accountable if that is not the case or even if it is, how many years? >> that is up for the board to decide, not you. >> i don't get to decide? >> i'm accountable every day. >> i meant accountable, not as in firing you, but just simply asking if you succeeded or failed. >> you're doing it right now. obviously every day when i wake up, it is the first thing i think about. and we understand that we have to take the capital we're given and make a return on it. >> always appreciate the time. john stankey, thank you. don't miss by the way bob bakish will join me sholyrt.

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welcome back. this is your cnbc news update. president volodymyr zelenskyy says a nice still strike on a busy market killed at least 16 people. according to official, at least one child is among the dead and 20 others hurt in the attack. deadly strike is hanging over secretary of state antony blinken's visit to kyiv where he pledged more support to ukraine. blinken is expected to announce during his visit a new military package worth more than $1 billion. jenni hermoso has officially accused the spanish president of sexual assault. hermoso filed the complaint today against luis rubiales saying he kissed her on the lips without consent. rubiales denies the claims. and another possible major hurricane is brewing in the atlantic. forecasters expect transparency lee to rapidly intensify into an extremely dangerous hurricane by the weekend.

some top s&p laggards to begin the week. tesla down 4% as well as nvidia down 3, apple down 2.8. helping us understand why the dowis down 127. s&p down 30. we're less than a month away from cnbc delivering alpha investor summit where the street's top investors and business leaders will break down where they see risk and where they see reward. you can scan this qr code or phsit cnbc events.com/delivering ala for more. back after a short be. break. with comcast business... it is. is it possible to use predictive monitoring to address operations issues? we can help with that. can we provide health care virtually anywhere? we can help with that, too. is it possible to survey foot traffic across all of our locations? yeah! absolutely. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening.

here's why you should switch fo to duckduckgo on all your devie duckduckgo comes with a built-n engine like google, but it's pi and doesn't spy on your searchs and duckduckgo lets you browse like chrome, but it blocks cooi and creepy ads that follow youa from google and other companie. and there's no catch. it's fre. we make money from ads, but they don't follow you aroud join the millions of people taking back their privacy by downloading duckduckgo on all your devices today. welcome back. stocks are in the red here about an hour into trading. dow down 130, s&p down a little more than half a percent. our next guest says the strong dollar is making foreign stocks attractive again. so david you are saying the weaker currencies abroad will help exports and make european

and emerging markets exciting again? >> no, what has really happened is the dollar which kind of went into some weakness inflating a little bit international gains at the end of last year beginning of this year, since march now, the dollar has strengthened significantly and just having just the opposite effect actually hurting the returns of foreign investments. and i think as the dollar goes back and forth and eventually begins to weaken because it is very strong against foreign currencies, that will help the returns of those invested in foreign stocks. >> got it. i was going to ask you about some of the data we've gotten lately from europe in particular. today retail sales weaker than expected. are you getting more nervous about a recession there? >> undoubtedly europe is soft especially by the way not all of europe because some places are growing 2% or 3%.

but let's look at the biggest economy of europe which is germany. germany is not only the biggest economy in europe, but the softest. and as a result of this, what we're seeing in german equity markets are a market the dax trades at under ten times next year's earnings. you look at some of the big global companies, these are businesses like mercedes, like others that do business all over the world. and they are based in a whole market which is slow, so their valuations are extremely de depressed which for us means opportunity. these are high quality businesses that i said the market on whole trades at under ten times next year's earnings. a lot of individual names yield 6% and 7% and trade up five or six times earnings. mercedes and bmw in particular. so despite the fact what you say is true, that europe is slow

especially germany, to us this is actually where we're able to find the best value in some of these german companies that do business all over the world that are selling at these really, really low valuations. >> david, i wonder how you think about regulation in the united states. we talk a lot about it as regards tech and increasingly to phrma. and not to say that regulators are any easier to work with in other parts of the world, but is the u.s. reaching a point where it does become a suppressant to corporate activity? >> i do believe that the increase in regulatory initiatives we've seen the last two or three years actually acts to redistrict the supply curve. when you look at inflation, and everyone focuses on, well, if we cut back demand we could cut back inflation, there is another approach and that is called shifting the supply curve to the right. in such things as deregulation

actually helped shift that supply curve to the right. part of the inflation problems we have today is because of the regulatory onslaught which we witnessed over the last two or three years. and i do think that it is beginning to impact prices, it is beginning to impact competitiveness and as owners of capital, as owners of capital, this is actually hurting us and thus it is hurting savers. so it used to be we had this approach if there was going to be new regulations, we should undergo thorough cost/benefit analysis of that regulation and we seem to have abandoned this. and this is not good for dynamic economy, not good for growth, and certainly not good for -- this is not good for inflation either. >> finally, david, what will change now? you've been saying that european financials and european stocks have been overvalued for years. do you see -- >> undervalued. >> undervalued, excuse me.

good deals for years. what changes now? >> it was really changed when you look at the relationship of the government bond yields in europe and germany, they are still below 3%. or in france just over 3%. and if you compare that to earnings, i mentioned that the dax was trading at ten times earnings, so the inverse of that is the earnings yield, 10%, right? and bond rates at or below 3%. and the rielationship is financial assets of what you are paying for equities is really at an outlier position especially with the massive increase in the u.s. ten year as we're still having this 18, 19 times earnings on s&p 500. so this relationship of pairing earnings yield and the ten year bond yield is almost never made the equities more attractive.

what makes it change? i think the fact that europe has abandoned low and negative rates. this has been a big drag i think on european equities because people just think, well, i could invest in growth stocks. who needs to look for companies that have huge free cash flow yields when interest rates are so low? so i think the biggest catalyst of course is the now abandonment of negative rates. but when you add to this that earnings growth for european equities in the next 12 to 18 months it is supposed to be at least mid single digits, is really outgrowing the s&p 500 at half the price. so i think that eventually what happens, that you will see price realization and return to fundamentals. and i do believe it will happen. >> all right. ecb meeting next week. could be the last hike. kind of a toss-up right now.

david, thank you very much. appreciate it. paramount's bob bakish is ckth david next. ba in just two minutes with the dow down 150. with gold bond... you can age on your own terms. retinol overnight means... the smoothing benefits of retinol. are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin. the first time you connected your godaddy website

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we are live at the conference here in san francisco. and joining me now is paramount global ceo bob bakish. good to see you. a lot of things to talk about with paramount, but i'd also love to get your take on broader issues beginning with the dispute between disney and charter. might be who wants to watch the u.s. open in charter territory right now and/or monday night football coming up is starting to think, whoa, i got a problem. give me your take here. what do you think? obviously on the content side somebody who also owns a lot of cable networks, i have to believe that you have a certain view. but what is this about and how

worried are you? >> yeah, so look, it certainly impacted markets on friday. and, you know, for us, frankly, it wasn't a surprise. exact timing was. but it was inevitable something like this would happen. and i would point out that because we thought about this, we've actually involved our portfolio, our strategy and our relationships really over the last seven years as we continue to modernize our business. and i'd point to a couple things. one is we have co-marketing agreements with virtually every mpvd, vmvpd, distributor, in the u.s. for our streaming services. so they very much have an interest in the broondadband si and as well as the linear business. and second thing is if you look outside the u.s., we've taken it a step further where there are multiple customers, sky, canal,

some others where actually they provide our streaming product, paramount plus in this case, as a tier offering for their box consumers, again investing in our streaming service, getting access to our product. add to that when we look at skinny bundles, charter/spectrum essentials is an example. we're in that too. but. >> but you don't have a sports focused network. >> that is true. we don't have 100% sports. and frankly i think that is a plus, not a minus. but we don't have that issue. and lastly, if you look at again the streaming partnership, we are now in the place with paramount plus with showtime that we have a true multiplatform product which i really think is the future. that product is a sumlinier, that product exists on streaming obviously. and if you are a previous showtime linear subscriber, we have deals in place with

multiple mvdpds including some of the biggest in the country where they will get credentials to log into the app. which is along the lines of what charter was talking about. >> but you said this was inev inevitable. why? >> because what we're dealing with is a transforming media ecosystem. we actually believe in multiplatform which means that we believe in the linear and streaming ecosystems. and we're focused on providing our partners solutions for both as consumer behavior continues to migrate. so, yes, inevitably you have to modernize these relationships. you have to do things like again streaming co-marketing partnerships. >> so is the market getting this wrong? your stock has gotten crushed on this in the last few days because you own cable networks and even is saying if it go for a while charter is saying we don't care. >> that is why i say all companies are not executing quq

equal. go back to tom rutledge. when we last did our deal with them, he was quoted on his earnings call that said the new what was call viacom cbs at the time, now paramount, that deal was done a modernization of the relationship. it includes charter spectrum essentials, includes streaming for pluto and paramount plus. so you have to modernize the relationships. we're doing it. and we're very pleased by the way with the financial expression of paramount plus with showtime on a multiplatform basis. and frankly, i think that we're ahead of the curve and yeah, we got dragged down friday with the rest of them. >> and down again today another 2%. >> market didn't look like it opened that great today. >> yeah, overall. fine. we'll give you that one. the other thing i wantto talk about as well before we get to sort of the pair mounts plus pa the strike, what are your expectations?

it is september -- i don't need to tell you. but we're barreling close to obt and then perhaps toward the end of the year. is this thing going to get resolved? >> ultimately it will get resolved. it is extremely unfortunate that we're in this place as an industry. we would have hoped we could overt avert the duality of the strikes we have with the writers and the actors. that obviously didn't come to pass. the partnership between the creatives and the studios is integrative to the industry, and we would like to get the back on track. but it's a complicated negotiation, a multi-faceted negotiation, many players involved. so we're focused on it -- >> bob iger said not that long ago, in perhaps comments that he regrets, that they weren't being realistic, do you agree? >> there are a lot of issues on the table. it's complicated.

i think there is -- we will ultimately get this sorted. and beyond that, it's a public negotiation, it's not really worth commenting. >> what's it mean for the business? short-term, obviously, it has a positive impact in some ways given expenses. but longer term, in emergency rooms terms of the robustness of the most important product at your company, paramount plus, what's the impact? >> in the short-term, as we said on our second quarter earnings call, we're in pretty good shape. we have mounted an alternate cbs fall schedule, which pulls from international, pulls from streaming, adds additional reality weight, and of course, includes sports and thankfully more sports, because we've added the big ten to our lineup. we're in good shape there. obviously, over time, we will begin to feel more impact and that's why we're focused on getting some resolution here. while simultaneously continuing

to do what we can to support important constituencies, whether they're consumers, distributors, or advertisers. which is what we're focused on. >> is there anything you've heard from the conversations that gives you some sense that something will get resolved sooner rather than later? >> i think the good news is, there's conversation. there was a time when there wasn't conversation, aisle referring to the writers, not the actors. and so that's what's important. people have to get to the table to figure something out. and that's -- that would be what would make me optimistic at this point in time. but again, the duration of this thing is unknown, because there are material issues that people are working to resolve. >> yeah. all right, let's talk a bit about paramount plus, which we've done in many previous interviews. we'll sort of go along the same lines. getting to profitability, this being the key, big expense year, and then things starting to really moderate. you still feel confident about that? >> 100%. we said, going back two years ago, when we launched paramount

plus, that 2023 would be our peak investment year. we updated that a year ago. we updated that as recently as our second quarter call. so, yes, 100%, and we look at '24 as a year where there will be significant reduction in streaming operating losses. and importantly, that will drive a return to total company earnings growth for paramount global. and that's obviously a very good thing. and look, when you look at paramount plus, ber we are scal the service. we are north of 60 million subscribers. we are significantly growing revenue. second quarter, we posted 50% streaming revenue growth. and that's on the back of subscriber growth, churn reduction, arpu growth, driven both by price increases and driven by add arpu growth. so fundamentally, the topline side is working. and on the expense side, we continue to, every day, take advantage of what we learned, honing the content slate.

and by the way, the integration of paramount plus with showtime is the latest example of that. >> and i've read a lot of the metrics in terms of knowing that you can keep a subscriber if they watch more than two shows or -- >> yeah, yeah. >> but there's still this bigger question, which is, do you have the scale to actually make this thing truly profitable and sustainable for a long period of time. and you have so many -- there are so many doubters that ultimately paramount plus can do that. >> what i would say to that is, everything we've said we would do, we have done. when we announced the pluto acquisition, people said, what's that? turned out to be a $1 billion plus business and a huge category. when we launched paramount plus, they said, litoo little, too la. turns out to be over 60 million subscribers, growing very robustly, for news, sports. so we are tracking on our plan, we will get there. we will continue to prove the doubters wrong. >> real quickly, because i did want to hit the studio briefly.

it hasn't been the greatest run. the "mission: impossible" -- i watched, thought it was great. didn't do as well. "barbie" and "oppenheimer" seemed to swamp it. you had a "transformers" and "dungeons and dragons" movie that didn't do as well as they thought. >> we continue to view paramount pictures as a crowned jewel asset. the irreplaceable library that dates back over a hundred years is a tremendous asset for our company. we continue to believe in theatrical exploitation and franchises, as an extension, arterials movie is the most recent example of that. we're very pleased with that. and we would add, films are not just about theatrical. it is about driving total company performance. that includes streaming where paramount pictures, particularly the pay one product, is very effective at driving subscriber and engagement and things like

consumer product. if you looked at "turtles" that's a nice incremental business tied back to -- >> you're not concerned about this failure at the box office with some of these names? >> we will continue to execute. i'm not concerned that the franchise strategy is not delivering. some films do well, some films -- >> speaking of films with, taylor swift -- >> i don't know where that came from, the 25 comment. that is categorically untrue. i saw that piece on cnbc. >> you don't know anything about it? >> i don't know about 2025. >> bob, thank. >> great to see you, david. we'll continue to swap stories in this evolving consumer landscape. and importantly, you will see, we'll continue to drive paramount forward. very excited about what we're

doing elongating the tv media ecosystem. very excited about streaming. you will see significant earnings growth in '24 and a path to delevering the company. >> and we will follow it. i promise. you will get plenty of time to talkbo tt. b backish from comemunicopia. "squawk on the street" continues right after this. the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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welcome back to "squawk on the street." i'm sara eisen along with carl quintanilla. ahead this hour, one of barrons top financial advisering ayears run, holly newman kroft is with us. why she's still favoring fixed income. >> lazard peter orszag is with us. is m&a ready to make a comeback and where might the deals eventually happen? >> and game on. microsoft has billions riding on the success of its new xbox game which launches today. we'll talk to the company's gaming ceo about what's at stake and the latest on its quest to acquire activision. meantime, markets this morning, kind of an inverse, almost, of yesterday, where large-cap took a step ahead of small cap. today, you have some of the big naples, te