let's take a quick final check of what's happening in the broad markets, the dow futures off by 71. s&p futures down by 14. of course, this comes after three days in a row of gains for the dow. folks, that does it for us. make sure to join us tomorrow. right now it's time for "squawk on the street." good tuesday morning, welcome to "squawk on the street." i'm carl quintanilla. cramer is there. back-to-back gains. oil near 88 1/2. is the highest of the year as becky says the apple event is the headliner. our road map begins with storm clouds for oracle. revenue and guidance coming in lighter than expected. >> plus, it is apple's biggest event of the year expected to

unveil, of course, the iphone 15 hoping to give the company somewhat lagging sales a boost. and the ufc, wwe, tko holdings will begin trading and we'll speak with the group's ceo, ariel maemanuel. it does post a revenue miss and issued sales guidance slightly below consensus. they have twice the amount booked at the end of the previous quarter. jim, set to be the biggest gap down on earnings in a couple of year. >> yeah, look, i would be a buyer especially if it was 113. i have a small position. the real issue is not what people are talking about. it's the acquisition they made, $28 billion.

they don't like it because they already guided down for it. the mentions were how we would have done better if it weren't for serner. revenue recognition to go another way that will be a lot less, let's say -- it's going to a subscription much harder to understand. that's what people were thrown off by last night. it is not about the slowing cloud even though people said it was. david, sometimes you get situations where you have brokers that push a stock right before it reports aggressively and the stock goes up $6, $7 and people are disappointed no matter what is said but serner was a surprise. >> jim, you know, if you can explain it, please do so. the license is transitioner from cer serner from the cloud model. >> people didn't understand that but it was not a great quarter for them. i did not think it was a good

acquisition. >> i don't remember you being -- well, actually i don't remember one way or the other whether you were particularly positive on the deal or not when it was announced back in 2021. >> never. epic is so much stronger than them when you go to your health care provider. almost always epic. sernor has always been a sloppy number two challenged a couple time by activists. i like what oracle really is, transitioning in the cloud. i didn't like the health care. david, that may have been done before we realized how big a.i. is. december '21, focus on what a.i. can be and now it's huge and kind of like sernor is an afterthought. >> no capacity challenge, capex at the higher end of the range so you don't think 10% is justified based on the news. >> well, i just think that if you have half of that was tacked on at the last minute which should have been by brokers who

were doing the same thing as they're doing to adobe, recommending, inexpensive, look, it's got a lower multiple, cloud infrastructure was 64%. i do not think it's that bad and larry ellison, frank told me yesterday from snowflake, is getting incredibly involved. i'm a big believer in ellison. it wouldn't matter as much, carl, we see this all the time. if research guys got behind it, huge gigantic quarter and not sustainable. as we saw, by the way, with broadcom. same thing happened with that. right before it reported, people bulled it then a lot got hurt. >> i think the transition is interesting but what was more interesting last night was what slootman told you how we'll embrace a.i. let's take a listen. >> we're going to take to this

like a fish to water and co-pilots and as u quick which to us as search has been in our lives very, very quickly. >> he's been waiting his whole life for a moment like this. >> this was an amazing interview because he's the toughest guy in the world, from erasmus in holland. he never goes all in on anything. i interviewed him many times. i never heard anything -- this was like a different slootman. this was not the guy i've ever seen come on and excited and thinking this is the greatest part of his life because of a.i. he's business-to-business and said the chatgpt -- that's just a parlor game. what he's talking about, and, david, i think we have done -- we got to spend more time on this business to business and enterprise helper that helps auto insurance, that helps banks, that helps medical records, these are things that are very boring and all the stuff that frank likes, things that are not exciting but, boy,

are they ever working. >> potentially great ads to productivity and their products, i guess, jim, we'll start to see what introduced towards the end of this year, next year, middle of next year. >> exactly. >> you know, a lot of companies are debating from what i've heard, how much do we expose of our a.i. of what we're working on? so much is being done internally by company, not just to produce products for others to use, but internally by the institutions themselves and by the corporations themselves and many are debating how much do i show my hand and how much don't i? will i get credit in the marketplace or will i get dinged for being too promotional? in that regard. >> yeah, what you get is progressive is the -- you see them, the auto insurance company. they're able to price insurance instantly where it should be. remember, this is something that frank discussed i think again people at home have to understand. it's about, david, picking up a

couple of bases points millions of times whether you're a bank, whether rout to insurer, whether you're financing autos, that's another big business, where insurance for flood areas, these are things -- these are cases where you have to be so right that nobody is smart enough as a machine and boring but for a guy like slootman who can say, listen, you can make -- say, $10 million a week, just by doing nothing except give you go us a little money. it's a great use case, david, it really is. >> how about ellison's comments about the people are -- i guess not the people who are going to rewrite the base. it's not armies of programmers rewriting this. >> it's i think -- ellison was -- ellison made it sound, you go to one of our data centers, there's nobody there. you make a mistake with a.i., you press a button, the mistake

is changed everywhere. larry is chasing out a vision of productivity that was similar to what jeff lawson from twilio traced out. you get ten times the productivity, ten times the gain for one-tenth the cost. that's pretty much what ellison is saying. go to our data centers, there's nobody there and therefore can be no mistakes. very futuristic vision. i hope there's a job for people because, boy, when he's done you don't need people. >> to your point is that, you can hire a programmer who may not be the best because they can use chatgpt to fill in an awful lot of blanks in terms of writing code that will take them to that level and obviously you don't have to pay quite as much. that's something else when it comes to productivity that certainly is worth keaching an eye on. >> frank slootman said you don't have to be that literate. can you imagine when he says it like that, what that means is the age of when we have to hire

people from nowhere about stanford, it's over. >> all right. i'm not even sure what that is going to look like but, yeah, it may be. >> it would be great. great for the rest of us who didn't go to science -- not computer science majors at stanford. everybody else does well. >> everybody. >> well, everybody except those you're paying $2 million right out of college. come on. this is -- what larry is tracing out, carl, that i love is he's just saying that you can -- this is what slootman said too, you don't have to be a genius to work in the computer portion of the company anymore. >> right. you can just be a worker bee now. >> yeah, that's what he's saying. >> write code and it fills in the most. >> that's what he said. that's exactly what he said. >> when i interviewed massa, he

talked about it's going to be like and comment rome, everybody will sit around getting fanned. >> yes. >> eating grapes. >> guy, markets are on track for a lower open. dow is in the midst of a three session win streak along with back-to-back gains for s&p and nasdaq as investors await cpi tomorrow and in the meantime, kicking around some comments from bank ceos, dimon of jpmorgan weighing in on the strength of the consumer and economy warning not to overlook the risks. this is what he said yesterday at this conference in new york. >> i just think people are making a mistake to look at realtime numbers and not look at the future and the future has quantity tative tightening. we've been spending money like drunken sailors around the world. the war in ukraine are still going on. those are big bucks and the state of consumer is strong today meaning you'll have a

booming years to date is wrong. >> wage is up, balance sheet is clean. everybody is working but -- >> yeah, why does he keep doing that? jim, why is he so insistent -- he's debbie downer every time. >> he is and has to pick on some regulator nobody knows. jamie said something to me, he says it could go to 6% and i think he should stick to those kinds of things but you got the rate trajectory correctly and not do so much complaining. david, remember when he used to be -- is he a complainer about -- is he just a complainer in general? >> no. he's a decent alum. >> why doesn't he get more excited -- >> generous and kind of him to do that. >> why? >> what's the problem? listen -- >> i'm saying he seems like he's unhappy all the time. >> he could be right. he's not unhappy. he's just trying to take

everybody's expectations down a little bit. it's kind of like what i do on this show sometimes with you. >> yeah. >> then i get blamed, of course. >> who am i going to blame? >> it's my fault. >> you're jamie dimon-like. carl, they went to the same college. >> it might be a tufts thing. >> well, at the same time pretty constructive comments out of wells talking about the consumer and moynihan, consumer still has two to three times more cash than before covid especially at the low end. >> carl, i know you keep an eye on b of a's credit card research. expect soft retail sales for august, keep calm and carry on, not a hurricane story. that has to be about hurricane hilary, as well reminiscent of comments from dimon sometime back, a return to trend-like spending.

guys, i also wanted to quickly end on sort of the broader market. today is an investor day for brookfield corporation. one of the largest alternative asset managers in the world, $850 billion in assets. we cover the public markets, but the private markets as we pointed out many times are ascendant and bruce flat certainly made that clear in a conversation we had. take a listen. >> i think you need to just step back and think about two big trends happening. first is private markets and the second one is just the growth of capital in the world and the compounding of wealth. sovereign funds institutional wealth funds are getting bigger and bigger and need things to put that into, and more and more private capital is where they want their money to be, so all the alternative products that we

offer them offer because they don't have liquidity, they get a better return but more importantly, i think it's -- there's less distraction in the private markets. >> what does that mean? >> just every day when you're quoting the bond markets are up, the equity markets are down and all those things are happening out there, if you're an investor, it's just a distraction. >> so we're a distraction. thanks, bruce. but we'll be following the company regardless later today -- later this morning they have an important investor day, targets such as 2 trillion, jim, they expect to manage in assets, 2 trillion within the next five years. >> they're everywhere. they, by the way, this is just so much -- they're like prometheus, you know what i mean? they're like lifting the world. they're doing infrastructure but they're doing real estate.

>> renewables. >> yeah, and, david, this is a great score for you because i've always tried to figure out who is brookfield? they've got to be the biggest 2 trillion that nobody knows. >> they're not 2 trillion yet but deserve more attention and seem to want more as well. >> good. and, yeah, you know, the alternative asset managers are enormous and getting bigger, sort of the big four if you want to call it that. >> bank's a little jealous of them. >> yeah. >> very jealous. >> guys, when we come back we'll talk apple. could a new iphone 15 revive a sales slowdown? something that might drive a mini cycle if people upgrade. the plea market and b of a fund manager survey. cvs, the uaw, visa, rtanmox d re when we return. been married for 39 years.ve about three or four years ago, i wasn't feeling as if i was as sharp as i used to be.

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apple's product launch set to get underway in less than four hours expected to debut a new iphone 15 lineup along with new versions of the watch. apple looking to revive sales after three consecutive quarterly revenue declines, jim, a lot of chatter about asps going up 100 bucks at the high end. >> look, i think the phone companies are where i'm going to look to to see where they push this phone, particularly verizon who had a decent quarter and at&t, i felt maybe their balance sheet could support big giveaways. i also feel, this is -- i don't

know about you guys, but i know it's anecdotal but everybody's battery drains so much these days, you feel like it's draining much quicker, i got to 15 and i'm getting the 15 because i can't take the fact that at the end of the day i have no battery life, no matter what. i think it's just spin and i'm not alone. >> no, you're not. it's the old battery, i think that does motivate a lot of upgrades. by the way, not just the phones but of laptops as well. >> totally. i got one that's constantly needing -- >> you're getting the same thing i am. the more you speak, the more realize what happened to my battery? it rabb down -- it runs down too often. i got to get the next generation so i'm ready. >> i think it was webbush yesterday that said a quarter of the installed base has not upgraded in four years and the question is whether or not this is a true offset to the china concerns of what was that, last

week? >> i think it definitely -- oh, what was that? the lines still are long. i find preposterous, if you look at the pie chart, now it's less than 50% for the actual handset. but the revenue stream as a percentage of the regular recurring revenue stream is a percentage of the company's operations is 26%. i think it's about to cross to 30. the service revenue stream is what i'm watching. you have to look out three, four years and not the static seven quarters of no growth. not the way to look at it. >> we will weigh watch it. not constructive for the stock. >> not a reason to buy. >> when we come back this morning we'll get cramer's mad dash count to the opening bell and one more look at futures with that bell coming up in 9 1/2 minutes. don't go anywhere. about what ai will do for business.

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the next 48 hours are intense. thursday, ppi, retail sales, ecb and the expiration of the uaw contract, so buckle up. in the meantime, the opening bell coming up in seven minutes.

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives and responsible investing. all right, let's get to it. a cross-country mad dash as we're counting down the opening bell. want to talk adobe. >> yeah, a little analogy of what happened this morning with oracle. two brokers upgraded and it was up 55% going into the quarter. never great. i think -- by the way, still again adobe, two guys just today

price target bumps, significant price target bumps, well, here we go. their report on thursday, the stock is now up 67% for the year and which is at 550 was three weeks ago at 550. these are the setups. there won't be any wiggle room at all. if adobe doesn't hit it down the middle it will be called a ball and people will sell. if you don't own it by now you might want to wait. it went down last time after a great quarter. it could happen again. >> so for now just steer clear. >> i feel like if you remember the last quarter we talked about it, it opened -- after-hours up about 0 then by the next day it was down 40 from where it went at 6:00 p.m. i just want to toss people there's too much froth when people raise their price targets two days before. you got to just wait now. maybe you miss it. but adobe has been a great performer, up 67%.

that's a nice run. don't feel like you can just come in and say, wow, i just discovered this great company called adobe. >> not far from its 52-week highs and obviously a great rebound from what had been a significantly bad year for the stock last year. >> they have the best a.i. software. they have the best -- makes small to medium-size businesses make your website look exactly like the big guys. firefly, i have used it and stunned at how great it is to become more creative because of what adobe gives you. >> okay. fair enough. >> yeah, that's good. we're good. yeah, we got a few more minutes to the opening bell. >> jim, the price -- the target hikes on adobe fit with this fund manager survey out of b of a where we're overweight u.s. equities for the first time in 17 months. >> there's so much money around

and you got to find a place to put the money. stocks have been a bit ignored. a lot of bond issuance but rates have gone up. i feel like there's this kind of move to say, all right, let's go back to equities. we have so much money let's guy stock and i feel the same way when i listen to the strategist, carl. they're like, all right, i guess things aren't so bad. we lack enthusiasm for what they're doing and it's extraordinary. got to buy a million shares of aadobe, it's fine. there is no enthusiasm. >> more specifically it's about u.s. em in the survey loses 25 points, mostly on china where zero respondents see stronger growth out of china. >> we have these nation state megacaps and, look, people love them and today -- look, this morning, i love brad said buy microsoft. hey, that's a good idea.

that hasn't been up in the last couple of days. we're in that mode. like the old days. >> let's get the opening bell and cnbc realtime exchange at the big board. it's newly formed. tko group celebrating its listen. david will talk to endeavor's ceo ariel emanuel and mark shapiro in a few minutes celebrating 25 years of its u.s. publication of "harry potter and the sorcerer's stone." t excited for this. >> wwe was for sale and we talked and followed that and did the deal with endeavor which owns 51% of tko and those two men running the company even though dana white overseeing part. they hope creating synergy and a

lot more power perhaps in terms sports rights when they have to renegotiate for both. >> right to nfl season, your jets last night. and the reaction to disney charter are on some of the sell -- >> i can't talk about aaron and -- >> talk about the catch. the catch was the greatest catch. >> wilson was amazing and it was a great win. our defense is just what we thought it would be and will keep us in the entire year and then there was this. he's getting an mri today but i think we all sadly as jets fans certainly expect the worst and i kind of think he knew. >> only three ever overtime punt returns for a touchdown, all three by rookies. >> undrafted rookie. he was featured in "hard knocks"

so you got a sense for him. very happy obviously with that win. but we got to see the game on charter because i didn't actually change anything. i waited. you know, it ended up being like the old battles where it got done at the last minute even though it felt like 5it was different and everybody weighing in who got the best of it, disney, charter, charter's stock was up more than disney yesterday. you can see a bit of a reversal today offering disney plus to charter subscribers, that's the ad supported tier then you have access to espn+ at a different tier paying more money and access to espn when it does go fully over the top again in a different tier so you could make an argument both sides benefited. charter certainly did get more as it wanted to for its subscribers but disney didn't lose. they did cut back on channels

from what i'm hearing channels they weren't that interested in supporting on the system, so it was funny that it did end, of course, we did tell you about 24 hours we're close to a deal and all the stocks in question to go up at that point but did end, jim, very much like all these battles did at the moment you thought it would even though this one didn't feel like it was going to be affected by a monday night football game. >> i bet maybe u.s. open, big ten, you didn't know. what i tell you, david, i think is so interesting, the moment this was over, okay, immediately i get ten emails saying you got to talk about hulu. now it's hulu. is disney going to be one of these situations where there is an objection made to owning a stock the moment that anyone -- the previous one is solved? >> you know, there are a lot of challenges, i think that is a fair statement and i don't think bob iger would disagree with it. whether those challenges are figuring out the future of espn and whether you want a significant partner in some way to help you with distribution and ownership perhaps.

>> right. >> as you renegotiate certain sports rights, the nba, the one that's coming up i think soonest. you've got direct to consumer figuring that out. you got the writers and actors strike and to your point the negotiation over hulu is going to begin very soon as we learned last week from brian roberts and disney confirming as well, september 30th when they'll begin the process and as you might imagine, they have very different views on the overall value of hulu. and should comcast's value prevail, that would be an awfully big check for disney. we will see as we pointed out, the process is not in the real world. it's sort of this make believe world but for the created for the process itself of determining the value of hulu. saying that you've got to determine it in -- assuming there is an all out auction from all the potential buyers of this thing even if in the real world they couldn't because of

antitrust. in this world they can. assume disney and comcast are providing content in perpetuity even though that might not be the case so they're arguing it will be a much bigger number. on the other side capital costs that may not have been filled by comcast and may have an argument over how much ownership stake, 33% or less so a battle to come but certainly one that disney is going to be -- we have to follow closely. >> well, david, if it's a big number for disney, they obviously have to tap the debt market. would they even tap the equity market? would they possibly issue stock? >> i don't know the answer to that, and i think you can imagine if it ends up as a large number, again, talking 27.5 billion is the floor. could it be twice that? comcast would say yeah under the scenario in which we've described and which it has to be

evaluated we think it could be. i don't know what disney does. you know, do you give comcast stock? do you give them part -- i don't know, jim, but your question is a valid one although there's plenty of time to go between now and then and often just end up as somewhere in between, right? so it's not going to be 27.5 but certainly not going to be at the highest end either. >> look, disney if you're a shareholder, it's not been a great situation. i do feel that if they could announce some strategic partners per espn who have skin in the game, david, that would be a big game changer for those who think et cetera opinion is an albatross. >> yeah, yeah. jim, you have any thoughts on the u.s. government is starting its antitrust trial against alphabet? >> well, as -- look, i think that it's -- search is dominant.

i remember at&t was dominant at one point. we thought they split it up. standard oil was dominant, was good to split it up. i think search is something we like and i think they won but it doesn't matter. google will win this case because they offered a better mousetrap and that's what happened. that's not what the sherman antitrust act says, it says you can't have a monopoly power. the government has a good case, not a great case. google's search is under the most attack it's ever been because of a.i. >> we should point out even this is going to take months, could be appealed and there seems to be very few people who believe that the judge even if the government succeeds in proving its case will say that the -- he finds that the company should be broken up. that seems highly unlikely, doesn't it, jim? >> highly, the second case, the one that jonathan is bringing,

the attorney general right now in charge of, that's much more about them choosing between the buy and sale side and advertising which is a bigger hit for earnings if they have to pick one or the other. carl, back to you but confusing state for google right now. >> yeah, it's been three years since we initially -- i got the doj and that group of states. jim, speaking of negotiations, you were talking about disney charter. uaw, shawn fain said slow progress but moving and sounds like they're now talking about mid-30s as opposed to 40 on wage gain. >> this was the beginning of what i thought was less theater and more reality. and everyone has been kind of thinking, is fain maybe going to strap a bomb to his leg or say, what have i done, an al guinness moment in "bridge over the river qwai." maybe we need to hear it is

pushed back to the 20th. these are the positive things we've been waiting for. he's been such a bomb thrower. maybe he's more of a theatrical type. >> kind of dovetails with what carol told our frank holland about the teamsters deal that did get done and tried to push back on some of the numbers that have been pushed out there by the union. take a listen. >> that's not a $30 billion deal. it's a great deal for our people. it's a great deal for all the stakeholders. when i look at the economics of the teamsters still, compounded annual growth rate of that deal is 3.3%. to put that in perspective, the yield on the five-year treasury today is 4.4% and even if you look at the historical average of the five-year treasury it's 3.7% so came in at a number under a five-year treasury

yield. that's pretty good. >> jim, shares going back to what is this, october of last year. >> yeah, and the thing that i totally understand what carol is saying. great cfo of home depot before there. there was a twist i didn't like. they're going to make it so you're not limited to sell -- to give them packages before the holiday season. in other words, they took the cap off -- the cap was a successful way to make it so they weren't overwhelmed and ended the skein of missed quarters at holiday time by capping how much anybody could use them and got rid of the cap. to me the reason why the stock is down so much today people worry they're going to miss the holiday season and start doing badly again like they did before carol came in. that would be terrible. >> guys, i did want -- jim, your take on this fairly large merger is a merger of equals.

perhaps not anticipated since it was first unveiled as a possibility. west rock and smurfit announcing they're getting together. a giant packaging, $34 billion revenue company. westrock is up but smurfit is down because it was close to 50/50. 5 bucks a share in cash and a share of the new smurfit westrock equivalent to 43.51 and you can see at least that's what they say westrock's stock price up, but it's a big deal. you know, in terms of obviously again, there has been a rolling acquisition going on for some time, hasn't there, jim? >> this industry has been consolidating forever. this is the most basic

commodity. what i thought was really incredible was my first look was they're gutsy, no overlap. so this one should, if they're -- unless, unless ftc comes up with a novel way to challenge it like they did with horizon and amagain, novel they rescinded. this goes through westrock had been the most inquisitive company and crushed them they did so many deals. this is good for westrock shareholders. >> all right. when we come back david will head over and talk to ariel emanuel and mark shapiro as they cover the wwe deal with tko. cpi tomorrow and two-year back above 5 and we mentioned oil. got to 88.40 or so which is the highest intraday mark. we'll be back in a moment.

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endeavor announcing the close of ufc and wwe tr transactions creating the tko group and as you can see right there it's starting trading on the new york stock exchange this morning. joining me now is ariel emanuel and mark shapiro discussing in part the new company. it was important to have mark with you. you you're the ceo. why is it important to have you both? >> everybody says how do you run both companies. as i like to say people, i walk, he chews gum so, you know, we do this together. this is a very kind of big cast with two companies as people say but we've now done this for a lot of years. >> how do you split responsibilitys? do you know this is what i handle and this is what i do? >> no, we have kind of -- we know each other very well.

i do certain things really well. he does things really well and we trust each other so there's no kind of nervousness if something happens and you didn't know, like, oh -- >> right. >> no job is too small. we're both granular and hands on and willing to jump in wherever is needed and necessary. >> i'll ask questions. i don't know which one to ask. i'll talk about synergy. maybe that's your area, i don't know. that was one of the reasons why wwe gravitated towards your offer. you talked about 50 to 100 million when you announced the deal, you know, some think it could be 200 million. is that accurate? >> well, i think we had a range of 50 to 100 with regard to back office and costs, we're on our way to kind of doing that. we did that with the ufc. we are on our way here. there's also a savings as it reels to the production side because of their production facility and ours. this is a pure play sports play,

you know, there's nothing more important than sports content and live events. we do 350 live events with production and have a billion in fan base. the global reach of both is incredible and you can't underestimate the value of tv rights domestically and internationally and also the sponsorship for that, and i think the other thing this does in addition to just cost savings, it enables us to have a pure play and people look at edr properly. where, you know, we have actually some data points last week. investing in caa at 13, 15 times. >> right. >> formula 1 bought quint for 15 times which is an experiential company. you know, without ufc inside edr, everything is valued at a little less and i think it will give everybody a pure play there also.

>> right. >> and both companies have about less than three times leverage. >> are you going to get that down? this is a free cash flow generating company. >> both companies will be a juggernaut in that. free cash will be around 61% in tko and endeavor will be strong. remember, when this thing started, we were, what, eight times levered and now we're below a three, so healthy balance sheet, scale, growth, profitability. >> return of capital to endeavor which owns 51%. will you get a significant dividend over time? >> we've already announced capital return initiatives, as you know, stock buyback program to the tune of $300 million on the endeavor side and, of course, our first dividend so look for more of that in the years to come. >> a couple weeks back the saudis announced a $100 million in the pfl, competitor to the ufc in some way. your stock got hit badly on it. is it concern not because it's

100 million because saudi money, you never know. there's always more of it. >> here's what i would say at wwe, we do -- we have a five-year deal, two events a year, over $100 million for those events over the next five years. actually one of the most important things in saudi right now is their soccer league. important things right now is their soccer league. they have called on img media to distribute it globally. we have a very good relationship. the group as our understanding is, that has done this deal with the pfl, and, you know, it's okay to have competitors, is the group that brings events. the $100 million is about, again, which is what they want, bringing events to saudi. so we're okay with competition. we feel good about our position within -- >> even if they start raising price -- sorry raising salaries for the thathletes. >> that's why both stocks took a hit, the market overreacted and the next day it corrected.

the saudis get into this, is it going to go through the roof? here's the answer. fighter pay has grown at a faster clip than overall ufc revenue and more to the point, keep in mind, ufc's overall revenue is driven by high margin revenue streams, which can absorb anticipated or unanticipated increases in fighter pay while still resulting in margin creation. >> you think if it went to the point where the saudis started to pay or help this league pay big numbers you think you can withstand it? >> we can withstand it and have market accretion. >> what about pga? is there a chance for you there in terms of trying to -- if this deal -- funny, i did the interview with these guys in this studio and they haven't said much since. it's still out there. pga. they don't have a definitive agreement. could you get involved? >> and he's a major golfer. >> here's what i would say. we love sports. we love owning sports and being involved in sports that are global and golf is definitely a

global sport. we're involved in dp world, et cetera. that being said, mark and i got a lot of work ahead of us at tko, we have a lot of it, as you said synergies, we have to make revenue, synergies, cost synergies, we're focussed on that right now. i'll walk, he'll' chew gum and we'll get that done and if it's still around at the time we can get that done -- >> doesn't sound like it. sounds like your timeline will not line you. >> we'll see. there's courts and a mess and a lot hanging around the hoop and we're around the hoop talking. >> antitrust too. sports rights another key area. we were following the disney-charter fight in part because of espn. by the way, who do you think won disney or charter? >> we didn't have -- you can start. >> look, there's a little on both sides. i mean, obviously, disney got a deal done without too much kind of blood in the water, if you will, and they did get the increases on espn. on the flip side, charter made a stand, they got rid of channels

they didn't want to carry. ultimately they're going to get to carry disney plus at a wholesale rate. they'll carry espn plus at a good rate. so they'll have access to streaming inside of their bundle. it was a good kind of good old-fashioned shootout at the o.k. corral which is what the arguments are all about and they got it done. >> i know. >> it's what we talked about this morning. >> when we ran into each other. i said, it ended up being like an old-fashioned fight. we thought it was going to be different and then before monday night football, which i don't want to talk about as a jets fan. let's move on from there though. speaking of espn, it's 2025, the ufc's tv deal. what are your expectations for wwe, i guess nbc is october '24, fox is march of '26 there and then ufc espn 2025. >> we have a great relationship with disney and espn. we just had a fight this weekend in sydney which was incredible. we feel very good about where

we're at with the wwe. now as principals in that negotiation. and i think we'll be in line with what the market thinks will happen with those right snooze what does that mean? >> i'm not telling you. >> you're not going to tell you. >> no. >> will you tell me in the future? >> at some point i will call and bug you. >> will you scream at me? >> oh, yes. >> we're in conversations on the wwe because those deals are up in october of next year, both deals, smack down and raw. >> and what are your expectations? i mean -- >> we're cautiously optimistic, having conversations with all the platforms, linear and digital. as ari mentioned we have a lot of product, right, and it's year-round product. everybody wants to to fight churn right now. wwe and ufc are a full calendar year. >> that's a huge point. >> huge point. >> i want to get to 84% of the value of vdr is the ownership of tkoa note that says that's too

lil but the writer strike having an impact. not that long ago mr. iger said the actors and writers are being un unrealistic. >> it's going to hit us $25 million a month in revenues. here's what i would say, if they can't get -- as i said, i think this is months, not days, if in the next three weeks, there's some conversations happening now, if they can't get something done, i'm nervous that this might go to the end of the year. that being said, the one thing about this that is true, this deal on both the writers strike and actors strike will happen and everybody will get back to work. the good thing about us is the diversity of edr, we have theater, we have lectures, we have comedy. >> never heard you talk so much ain't broadway. >> and we have music. so we're comfortable with our diversity. >> you want this to get done as soon as possible? >> of course we do. of course we do.

it's absurd. they have to get in a room and lock the doors and don't come out until it's done. >> how come they haven't been able to do that? >> because they had monday night football. >> they need more pain on both sides until folks get loud. >> speaking of pain. is zuckerberg evergoing to fight musk? >> i don't think that's happening. >> you couldn't? >> no. >> did you. >> i did at the beginning, yes. >> what happened? >> i'm not really sure. >> for a while it looked like ufc sanctioned. >> for sure. >> i think elon had a couple shoulders on his shoulder and he's, remember, had a couple surgeries on his neck. probably best it doesn't happen. >> check collector items the t-shirts that dana had done up. we have a couple soon to be on ebay. >> good luck with tko. very much appreciate you're you taking time. >> thank you. send it back to you, carl. >> thanks. jim, what's on mad tonight?

>> ceo of pge and then we're going over to dreamforce, spent a lot of time with marc benioff, his day, he does book it as the a.i. festival of the world. and then disrupter, jason citron, our kids know it more, discord. i have to tell you, people are really a believer in a.i. when it comes to business to business and enterprise bonanza. i'm becoming a believer in it too. >> you definitely made it clear. b2b not b2 c. >> not chat. >> we can't wait for tonight. thank you. >> see you at 6:00. off the opening lows, dow down 57. energy definitely leading the way. back in a moment. ♪ explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™.

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good tuesday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber. we are live for you as always at post nine of the new york stock exchange. stocks giving a little back. s&p down 0.25. strength in energies financial and consumer skripgs.

health and technology weakness thanks to amazon, adobe, tesla is higher. 30 minutes in, here are three stocks we are watching. oracle shares slumping after revenue missed estimates. revenue guidance also coming up short. everyone is watching apple to you. the tech giant set it unveil the iphone 15 this afternoon. live to apple's headquarters in just a moment for you. we're also keeping an eye on alphabet today marking day one of the justice department's antitrust case against google. the trial is focused on whether google illegally used its position to limit competition in its search advertising businesses. more on this story coming up. guys, we wait today in terms of the macro world and the markets for the inflation report tomorrow, that's cpi, and retail sales on thursday, and because we're in conference season and all the ceos are back in new york getting all these great interviews, we've got some commentary from some of the

biggest banks on u.s. economy and on the u.s. consumer. here's what barclay's ceo told us yesterday about it. >> what you're seeing there is what you see with the economy, which is a progression to a soft landing, spending continues to be robust in the united states, partly because employment is robust in the united states, and then the delinquency trends are normalizing as the covid stimulus has worn off. it's very much in line with what is otherwise a healing economy with a very low rate of unemployment and good consumer spending growth. >> similar message echoed by the regional banks. we've been talking to the ceos of first horizon also predict a soft landing, don't see a recession among the consumer. and people here on this show. >> i think people are concerned about the trajectory of the economy. my personal view is that we are going to have a soft landing, that the economy is slowing down. i don't think it will be particularly deep or long. >> lot of soft landing talk,

carl, and if you look at the data, so far, there's some weakening and we're watching it and now everyone is wondering, is this a soft landing that's going to lead news a recession or preserve the soft landing and nobody knows, that's why i pulled out the commentary from the bank ceos because they see the spending and deposits and lending and so far it's okay even with some of the stresss around regional banks. >> bofa and wells, the state of the consumer, quote, still really good. you saw the bofa credit card spend up 0.4 year on year and in july only 0.1. we'll talk to david cost wherein a soft landing has been the view at goldman. >> credit card data bank of america if you seasonally adjust it, spending fell 0.2% month over month following a stronger rise in july. what does it mean? retail sales could be soft they're saying and then the other risk we've been talking about and the economists are starting to zero in on the

resumption of student loan payments, the moratorium ends from covid and although that doesn't happen until october 1st we're starting to see money flowing into the treasury from the department of education already. in other words, there's interesting evidence that people are already starting in preparation to repay student loans and that could have an impact on spending. pantheon macro yesterday looked at a bunch of google search trends because we don't have that real-time data yet. they looked at open table reservations and interestingly has seen a big drop in the previous week. this is a key spending cohort, those repaying stloudent loans. is it enough to wreck the economy and sent us in a recession, we don't know. >> jamie dimon lending a cautious tone. he wasn't speaking about a soft landing at the same conference but saying to those who think we'll have a boom, not so sure, given quantitative tightening,

the ukraine war, how much money we're spending like drunken sailors, what was your take? >> he's cautious. he's not hurricane jamie which he was and that turned out not to be happening yet. doesn't mean it can't still happen. he's concerned about qt, an experime experiment of trimming the balance sheet. he's not wrong. usually when you see such great tightening in economic conditions and in interest rates, when you see the kind of signals we're seeing in the yield curve you tend to see a recession, and it might be having your cake and eating it too, thinking you can get away with all of this, fighting inflation, bringing it down to target and not taking us in a recession. that's sort of where the market is right now and where economists like goldman sachs are. it's a hot debate. we don't know. one person who will definitely have a view i'm looking forward to speaking to is ken griffin. we'll have an exclusive interview with him on thursday

on this show. he runs city dell which is the top earning hedge fund in history. >> in history. >> i think it just replaced bridgewater. in 2022 they had a crazy profitable year. >> he alone made some sum of money that was unconceivable. sum of money that is unconceivable. we forget the power of these -- i'm looking forward to that conversation, obviously. citydell in our economy. >> and in terms of the volumes. >> he's a big donor and has been backing desantis, questions whether that's happening. >> he owns a lot of really nice real estate. you can only be -- unless in one place at one time, sara, but -- >> make ate nice place. >> spend years doing it. all right. apple is getting ready to unveil its latest iphone as the tech giant grapples with headwinds, of course.

china that was a story last week. steve covac is live at apple headquarters in cupertino and a has the latest. good morning,steve. >> good morning, david. in about three hours time, the iphone 15 event will kick off in that building behind me, steve jobs theater. you can see the workers getting ready for the guests to come in a couple hours, we'll see people filtering in. this new phone launch is happening at a time where smartphone demand is falling. i was here in cupertino last month and tim cook told me they're seeing demand drop in their most important markets including the united states, and this is their going to be most likely their fourth quarter in a row where sales are down. that means the entire fiscal year of down sales versus the year before. what's going on here and what are we expecting to see? there are two things i want everyone to pay attention to. the first is, all the analyst chatter we've been getting over the last couple weeks about a price increase on the pro line of phones. analysts are expecting a $100

price increase. that may or may not happen or might happen in certain regions. if it does happen, you can read into that as a way to make up for the fall in demand because apple has proven it can raise prices and people will pony up for the more expensive phones. the second thing to watch is big tech regulation in action. the european union passed a law last year saying devices that go on sale in 2024 need to have a standard ubs port. apple is going to switch over from it the proprietary connecter we've a all been using on our iphones for the last 11 years and switch over to the usbc standard, buying more plugs and things like that. as far as what to expect, very similar to last year four new iphone models, two of the regular iphone 15s and two of the pro models and we're expecting to see more advanced features on the pro end, of course, a better processor, more advanced cameras and rumors of a titanium casing replacing the

steel casing. this is going to kick off in a couple hours here and again, there's price increases are the things to really pay attention to, whether or not apple does that. send it back over to you. >> can't wait. see you all day today but especially this afternoon east coast time. turning back to the broader markets our next guest expects upside through the year end because the soft landing narrative has mostly been reflected in equity prices already. goldman sachs chief strategist david kostin is here at post nine who wrote this week we've seen ongoing progress toward a soft landing. >> we have indeed. the economic data is suggesting that and more importantly from an equity investor perspective, the cyclical stocks have out performed defensive stocks by almost 12 percentage po inz in the last three months. that would suggest to us that it's pricing the equity market is pricing a 2% gdp growth environment a soft landing by anyone's definition. >> your point in this period here, there could be some chop

data flow? >> depending on the inflation data to the extend that comes in hotter than expected on a near term basis. broadly speaking inflation has been trending lower and that's a he key part why the fed is likely to remain on hold. the equity market on the cusp of 4 4,500, the target for the end of the year and that's likely to be a path that's sideways if you will, over the next several months. weakness near term. looking out 12 months, looking at maybe 4,700 on the index, maybe that's 5% upside. so basically sort of modest forecast in this environment. >> do you think -- we'll focus on core tomorrow, but headline, people looking for 0.6 or more. is oil the spookiest thing about that? >> oil has been volatile and that was the big area in the second quarter results that came out roughly a month ago and that the earnings for energy companies were down roughly 50%. overall earnings were basically

down about 3%. so that's an issue. as i said the commodity prices are higher, that would be a tailwind from earnings perspective in the third quarter results that will come out in october or early part of november. >> so is jamie dimon wrong when he says that it would be a huge mistake to assume that it will last for years, the strong economy and strong consumer? >> well, far be it for me to disagr disagree with jamie dimon, but expectations we're not -- the probability of a recession is quite low. relative to history is probably on average, nothing elevated in that regard. the idea of the job market continues to be relatively strong. unemployment remains relatively low. the consumer is in a pretty strong position and sara, that is 68% of the u.s. economy. when we look at the drivers of the equity market the single biggest important contributor to earnings growth is the gdp growth and we're expecting the economy to continue to expand

the next year as we look out at least a year and beyond that. >> interesting piece on the tape looking at how housing values are affecting consumer psychology meaning people feel like they have a backdrop, a mattress in their home and that might keep the savings rate from spiking in the way it might have in prior cycles. >> you have earnings and valuation and then money flow, and we've seen $1 trillion, $1 trillion, move in to cash, match-up market mutual funds this year. almost no money come into the equity market. we think about the idea of 5.5%, almost 5.5%, you know, earnings or income you get on the cash position that's a pretty attractive alternative to equities, equities have moved up this year, so the relative attractiveness of cash is

actually pretty strong in this environment. that is where a lot of money has gone on the margin. households have roughly 43% of their assets in equities. that's towards the top end of where they've been over the last 50, 60 years. so close to, you know, mid 40% kind of allocation to equities. 16% in bonds, 16% in cash. those are three major buckets of allocation, stocks, bonds, cash and the likelihood is you have money that goes from equities, more into cash. now think about allocation, it's a combination of both the change in the asset value, so equity values are up a lot, but on the margin, cash is money moving from equities into cash. >> your target for year end was 4500. >> remains that way, sara. >> that's really close to where we are right now. it's september. so do you raise it? do you think we're a going to have another up year? will we march in place? >> the risk to our forecast would be to the upside and the upside potentially would be that

rates fall a little bit. that would be one contributing factor of why you could get or argue or rationalize why the p/e multiple would be higher. market trades 19 times earnings. you have seven stocks. they trade at 30 times earnings. the rest of the market 493 stocks, trade at 17 times which is in line with the long last 10-year average. the point is, can you get a higher valuation, could you catch up if you will? some of the lower multiple stocks creep up a little bit? >> you need to see rates fall. >> a little bit higher return. >> you need to see yields come down. >> rates have to come down a little bit or if it's not a valuation expansion it has to be earnings. are earnings likely to be better than we're expecting? probably not. the trough in earnings this cycle in the second quarter results that came out about a month ago. earnings are likely to be slightly positive as you go into the third quarter, fourth quarter, things are getting better from a year over year comparison point of view. earnings or valuation that would have to take the --

>> you continue to see the money staying in or moving too money markets as much as into the market. that's not part of your forecast at all that it would sort of move into equities? >> correct. it's not a rebalancing. when we look at the majorers on of equities, you've got households, mutual funds, pension funds, foreign investors. those three categories, those four categories, comprise 90% of ownership in the u.s. stock market. you look at the relative movement across those assets how they're allocating their assets, they're at the 97th% allocation to equities and on the margin more likely to be in cash. >> is the softest in buybacks a cautionary tale or is it because there's too much else to spend money on right now at corporates? >> there was a concern. remains a number of people, the concern about the potential for economic softness. so the concern about companies wanting to maintain stronger

balance sheets is one of the variables. what we find in a slowing economic environment, which would certainly characterize right now the environment, still growing but slowing at a slower pace. that would suggest that companies that are prioritizing stronger balance sheets tend to outperform and that's sort of an environment. you are correct, the year over year growth in buybacks down almost 20% in the last, you know, last quarter so that's a concern, but the -- a lot of ipo happening. >> that's true. this week will attest. david, good to see you. talk soon. >> david kostin. >> as we head to breaks here our road map for the hour, speaking of arm gearing up for its ipo debut this week. it is facing risks in china. >> more from my interview with brookfield asset management bruce flat. we'll talk where he sees opportunity. one of the biggest antitrust trials in decades what's at stake for google in its battle 'rba in o.. wee cktw [due at target in 5!] copy that.

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brookfield asset management brookfield holding an investor day today. this is one of the enormous alternative asset managers we don't talk about as often as we should given their influence in the private markets perhaps more than the public markets, although they do their share of buyouts and financing things as well. bruce flatt has run the firm for a long time since 2002, continues to do that as well. they are big in renewable,

infrastructure, private equity, real estate, private credit and i asked him n terms of where the opportunity is, take a listen. where do you think to the extent there is more of an opportunity, aum, you're, obviously, the smallest aum is renewable power and transition, is that one that you think will grow the most? >> look, it was part of our infrastructure business before. we split it apart because there's three things going on in the world today. i'll call them mega trends. the degcarbonization of the world, taking carbon out of the system deeshgs globalization and the biggest one that is out there is the decarbonization of the world. we took our renewables business, separated it from infrastructure, created a fund, raised a fund last year or two years ago with mark carney as the head of it, and it's for decarbonization and what we're

doing, it's a $15 billion fund and we're raising a second one now. what we're essentially doing is providing money to companies or assisting them, have less carbon within their system. that's all. >> how are you doing? >> it's not good. we're not making decisions whether things are good or bad or black or green. we're providing money -- >> not an esg -- >> look, it sort of is. but remember, all we're -- we're not making any judgements. what we're trying to do is help companies have less carbon. an example a, many of the technology businesses in the world have committed to net zero very quickly. what they need is renewable power. we are building them renewable power in many countries in the world. we're one of the largest builders, we're one of the largest owners of renewable power and building solar and wind in 15 countries in the world. we're providing that to them, and before used to sell power into the grid, today we're

actually selling it to the corporate customers and they're using it within their systems. >> how are you structuring the deals? are they different based on the borrower or do he they share something similar? >> i would say they're all bespoke transactions and i guess the increasingbly what these large institutions and why companies come to us, we can provide a buyout, we can provide a partnership, we can lend money. so we have all of those activities that we can provide on a scale basis. not many people can provide 5 a $00 million or $2 billion, $5 billion, $10 billion. with intel we committed to half of a $32 billion facility in arizona, you may recall. >> i do. i want to discuss that a bit as well because i'm not sure people realize how instrument nall their plan to build all these fabs. >> look. it's just people need so our

goal is be a solutions provider on a global basis in the industries we participate in, and if people need debt we'll do it. >> how did the passage of what is still called the inflation reduction act impact, if at all, the way you think about allocating capital in this area? >> we bought and own a lot of things and bought a lot of them prior to that, not because it was -- we knew it was coming, but we benefitted from that a lot. what it essentially means is that if somebody had a bunch of projects and they expected 50% of them would get built out, because of the inflation reduction act, 75% will get built out, which just means we're going to compress more projects into less time and that's good for business. >> right. >> it's going to get more renewables built out in america. >> what kind of returns are you typically targeting, particularly in the interest rate environment which we live

now? >> on the low end of debt products, the lowest type of returns we get, are in the circa 9, 10% return, and our equity investments which we target higher returns are close to 20. our real estate strategies have earned 20% compound for 20 years. our private equity business 28% compound for 20 years. infrastructure close to 15. these are high returns. and on transition, we're going to do good and also do well. we don't have to compromise returns to get returns out of this business. >> is it a lower return business than some of the others you just -- >> look. it's over time has been slightly lower. i think it's going to -- i think our returns will get better over time. >> why? >> just because of the build out and the need for capital out there. so i think that the returns are going to get better from here. >> speaking overall, you know,

given your view and to so many different businesses in the economy, how are you feeling about things right now? we seem to have reached potentially a stasis in rates, but doesn't mean they're coming down any time soon. what are you sort of seeing and expecting as this year ends and next year begins? >> look, david, i think the interest rate stabilizing is what is what was needed. what worried most investors was that interest rates were going to go like this. for some unforeseen reason, nobody thought it was going to happen but people worried it might. stabilized rates is bringing over the last three months you've seen the capital markets everywhere in the world start to open back up, banks are opening back up, and that's a big positive for our business transactions and for business overall and that certainly is happening. >> you mentioned the intel deal and i wanted to talk about it a bit because it got some attention, perhaps not as much as deserved, and it's

interesting because it's still connected as well, to another bill that came out of the u.s. congress and the president's signature which is the chips act. why stu did you do the intel, you're 49% of equity in the fabs they're planning on building? >> going back, you asked me are we in control, do we buy control? we only buy control. our goal is to amass large sums of money on a global basis and provide it to entities that require it on a cost to capital basis that's good for them and achieves our goals. and with intel they had a specific situation where they were building a plant and they wanted our money, but they wanted to control it and they wanted to be in control of what they're a doing, and our capital facilitates that. so every situation is different. and we're just here to facilitate assisting global corporations do things that they

can't otherwise achieve without the capital that we bring from our own balance sheet and our institutional friends. >> well to your point, though, intel conceivably could have tried to go to the banks or to the public markets in some way, but the cost of capital might have been higher? >> look it's -- given the structure that we created for them, it allows them to do more with our capital beside them than if they just built it themselves. said differently, they could do that with one or two fabs, but if their plan is to build much more, we bring extra capital to them. you know, so we continued to do that with -- we just did a transaction in germany with deutsch telecom and we bought part of their towers in the country. it's not that they want to get rid of their towers, but they plan on growing that business and, therefore, our capital helps facilitate them, beside them as a partner.

sometimes we run businesses ourselves. sometimes we become a capital provider to other intel deals. >> this is a long-term -- it's going to be years before we actually see any chips being produced by these facilities, correct? >> look, it's not that long. it's four years. i think we're up in four years. that may be long in some people's views. i think we're up in four years, the plant will last 20, 25 a. these are, remember, the things we do, we're a business builder and we build and we help people build things that are the backbone of the global economy. as long as we can get the economics to work with our capital, then we're happy. >> let's talk about the go private market. leverage buyout market if you want. we all hear about the dry powder. it's been endless talking about it. what are your expectations given the liar higher cost of capital

are sellers adjusting to the new reality in terms of where they may be able to get -- >> so just for context, for your viewers, we put $50 billion to work, maybe more than that now, over $50 billion to work in buyouts in the last 12 months. very few people were able to do that and we were able to do that because we have lots of dry powder. >> a lot more coming behind that. they're talking about a $2 trillion asset under management target in the next five years as they present their case to investors. i know you have spoken with mr. flatt a number of times. under appreciated the power of these platform in terms of their ability to invest across such a wide variety of businesses and raise so much money. >> this isn't like an office reit. people think brookfield and the malls and the properties, but they have such a big structure

and renewable business. they have done a lot of deals both on the retail, bought retailers, and a others, and actually their stock has done well this year. i'm curious the investorday, with some of the tough questions were around investor day there? >> it hasn't happened yet. that's under way. over time this has performed extremely well. we have seen some of the stocks of the alternative asset managers not perform nearly as well as their investments that they do on behalf of their lps. worth sort of focussing a bit more on brookfield. of course they do get the press, to your point, for when they're walking away from a number of mortgages they've been doing and giving it back to the lenders. >> the defaults. >> in certain properties. office space represents a relatively small percentage of their overall commercial real estate portfolio, a lot of data centers as you might imagine, and, so i know you've spoken with flatt about it in the past. >> what he told you about the

stabilization in interest rates is notable, we needed to see it stabilize and not see another spike up to start to see some activity in the capital markets, which he confirmed he's expecting. >> totally. he went from there on. people want to see the remainder of the interview, it was about 27 minutes or so it's on cnbc pro. is that what we call it? >> cnbc pro. get to it from cnbc.com. still ahead, look at oracle having a rough day. in fact, on pace for its worst day since going back to march 2002. how the stock is impacting the entire tech space when "squawk on the street" comes right back. down 71 points or so on the dow.

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i'm bertha coombs with your cnbc news update at this hour. as many as 10,000 people are feared dead following devastating flooding in libya's eastern coast. local officials say a huge mediterranean storm burst dams, swept away entire neighbors, and wiped out as much as a quarter of the city of derna where 2300

people are confirmed dead. authorities say a homeowner fired shots last night at the convicted killer who escaped from prison nearly two weeks ago. they don't think that danelo cavalcante was injured. they say he's now armed and they are warning people who live near this latest sight northwest of philadelphia to stay inside and keep their windows and doors locked. and north korea's kim jong-un arrived in russia overnight for an expected meeting with president vladimir putin. the kremlin says kim and putin will discuss trade and economic issues. the u.s. officials say arms talks between the countries are actively advancing and are likely to continue during that visit. back over to you, sara. >> bertha, thank you. about an hour into trading here and stocks are weaker. nothing extreme, but we're coming off back-to-back gains. only energy and financials are higher. more on what's moving with dom

chu. hi. >> so stocks like you said fractionally lower in early action. the s&p just about a half percent to the downside here. the biggest sector in the index is understands performing with technology down by just almost a full percent. a big part of that story is the drop in shares of business software a services cloud computing giant oracle after it reported disappointing revenues and offered tepid growth forecast in expected. now oracle's fast growing cloud infrastructure unit or oci as it's known posted a massive 66% surge in revenues, but that was lower than the 76% growth it saw year over year just a quarter ago, leaving some traders and investors to ponder what a it says about artificial intelligence related cloud computing demand. watch that. some of the bigger etfs with exposure to oracle, check out the ticker igb, first cloud computing fund, skyy, both down nearly 1.25 to 2%.

carl, back down to you. >> thanks so much. we are counting down to apple's big event this afternoon. more with one analyst who says the stock is set to rally even more from here, although we're ckading at the lowest intray ti of the week so far. back in 2. this is dr. arnold t. petsworth, he's the owner of petsworth vetworld. business was steady, but then an influx of new four-legged friends changed everything.

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ads that follow you around fro and other companies. and it's free. download duckduk we are a few hours away now from apple's big event. the biggest event of the year for the company expected to unveil the iphone 15 as well as some other gadgets. let's find out what street is focused on. joining us is martin yang, oppenheimer emerging technology analyst has a buy rating on apple and price target of 220. so given some of the concerns around china, the geopolitics, potential revenue hit in the growth area, what do you think they can announce today to get the street excited?

>> i think one thing we're focused on is the a-16 and that is reportedly will have a very meaningful performance for improvement over last year's a-16. and the last year and the year before the last, we also see single digit it performance upgrades, but this year will have 20 to 30% upgrades. that a-16 chip performance can aleve concerns of longer term competition apple could face from huawei because huawei is three to four years behind apple going forward. it just can't compete beyond the product cycle in terms of power efficiency and performance. >> you want to hear updates and innovation around the clips in direct response to the investor concerns around huawei in china? >> i don't think this performance upgrade is going to only serve to alleviate concerns

of competition, but also lay the road map for apple to do bigger things of machine learning and a.i. on the device. >> how does that fit into just the iphone release today and where we are in the sales cycle and the upgrade cycle? >> sure. so i think, you know, much bigger performance upgrade will push consumers to purchase a pro and pro max model and overall, continue to raise the average price for apple into the apple 15 cycle. >> so you're at 220. you think these fears are overblown around china? is that what a it's about lately? or do you think something else is going on? >> in the near term we see very material pressure on sales for iphone 15 in china due to huawei may 60 launch, but longer term, i don't think that fear or that competition can list so longer term we're constructive.

in the near term we're cautious to see how china sales will pan out and how, you know, how the china government ban on the iphone gets executed in the next couple quarters. >> how do you put that into a model? >> sure. so when we think about the lifetime sales, it's likely in the range of 10 to 15 million from now to 2024 and expect how may 16 can on both android and iphone sales we think that will be a one to two split upwards towards 5 million iphones in china, upgraders gets replaced by buyers. >> all right. martin, appreciate you coming on to help preview the event. we'll be very interested to see if they talk about the chip. thank you. from oppenheimer. still ahead, just a couple days away from what might be the biggest debut of the year.

chipmaker arm, some raising questions about its risks in china. we'll discuss that after a short break.

welcome back to "squawk on the street." overnight arm's more than $54 billion offering, or that's what it's going to value the company at, is over subscribed by as much as ten times. bankers are planning to stop taking orders this afternoon a day ahead of schedule. sources telling cnbc there continues to be investor concern about governance, particularly in china, and eunice yoon joins us now with that part of the story. >> thanks, david. china accounts for about a quarter of arm's sales but the uk chip designer depends on an entity with which it has a fractured relationship. that entity is called arm technology. it is independent of arm, though it depends on arm for its ip. it generates sales via licenses

as well as royalties. now for investors, a big risk is that arm doesn't have much control over its china business. softbank owns about 48%, but most is held by china investors. so people have been telling me here there is no majority shareholder, which is an issue for arm or anybody who wants to invest in it, and moreover, it's run by two co-ceos and the former ceo who was fired because of a conflict of interest drama, that former ceo still remains investments. now a second risk is the market, the funding in particular, because people here have been telling me that despite the big headlines, that there's a lot of money going into chip investment. there's a big question as to just how much that money would be going to potential new customers or startups that would

use arm. so that's one big question mark. secondly, the consumer electronics demand is not looking particularly healthy, and then the macro environment here is also a factor. now the third risk for investors is the geopolitics. one, people here are worried about what they see as a deteriorating environment for foreign business as well as private business. the second part is that there's just a lot of pressure and -- on chinese companies to go a little bit more nationalistic. people are wondering whether or not that's going to mean arm's chinese partner could become a rival one day. finally, the risk is there of the u.s. export controls and whether or not that's going to become a threat to arm. guys? >> eunice, any way to sort of categorize what the most important of all those concerns might be? or do you have to take them all together and say it's china, things are given here, and, obviously, the risk is higher?

>> i think a lot of people were focused on the fact that arm didn't have a whole lot of control over its china business. that was what was coming up quite a few times in conversations. that was a big factor. and just generally worried that arm could potentially lose its china business. what people have been saying to me, if they were to advise anybody about investing in the arm ipo, they would say you should think about arm's business outside of china, and if you still think arm would be a good investment, even if it lost the china business, at least you could feel good about the decision. >> it seems very complicated, the arm-china ownership structure. there is no direct management from arm or from softbank in this part of the business? >> o.

>> eunice, are you there? >> sorry. yeah, yeah. you just -- sorry. you cut out. >> just on the complexity around arm-china, who manages it and owns it? it seems like a pretty big risk and kind of tough to figure out? >> absolutely. i think the risk itself is there for arm because even if you kind of look at the shareholders are, it's not particularly clear. and also the way it's run, not particularly clear. on the outside you do have these external factors, such as the fact that consumer -- the demand for consumer electronics isn't necessarily, you know, growing. people have been talking about how the boom for the established company is over. there are all these other factors the company faces which makes it harder to think about whether or not it's a good place to put your money. >> indeed. the macro picture there, be obviously, a topic all around the world.

eunice yoon joining us from china. the ceo of airbus will join us live from the chamber of commerce aviation summit in an sstorview you do not want mi. meanwhile, we're back in to. hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. rock stars. please! do you know what it takes to be a rock star? i've trashed hotel rooms in 43 countries. i was on the road since i was 16. i've done my share of bad things. also your share of bad things. we know that using workday for finance and hr makes you great at your job. but that don't make you a rock star. ted! ted! ted! oh ted in finance. you're a rock star! hey liz in hr? can you do this? unless you work with an actual rock star. you are a rock star! thank you! who's the new guy? hi, i'm ozwald. hello ozwald.

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the doj's antitrust trial over google getting under way. marking one of the biggest challenges to tech in decades. our eamon javers is live in washington with more. >> that's right. we haven't seen a heavyweight antitrust battle since the u.s. department of justice took on microsoft back in the late 1990s. right now the department of justice's legal team is delivering its opening statement. you can see their team arriving outside the court earlier this morning here in washington, d.c. the doj is arguing that google built its 90% market share by violating the law, spending many billions of year to become the default search engine on a lot of devices and squashing google's competition. later today we'll hear from google, its chief legal officer, cons kent walker, arriving at the court by himself. lawyers for google will argue instead the company built its dominance by making a better

product that customers and business partners chose on their own. they'll say the government is defining competition too narrowly. google doesn't just compete with smaller search engines it also competes against any company out there where people are searching for information on their platform. think about amazon search for products or twitter, now x, search for news items you might be interested in. we do expect google ceo to testify at some point, but we haven't seen the official witness list yet, so that is not official yet. but expected. we also expect apple executives to be among the witnesses brought in here to explain their side of the business arrangement. likely, though, not ceo tim cook involved in that. the trial overall not expected to be over until some time in 2024. remember, this is just the first phase to establish whether google has liability under antitrust law. if the court finds that it does, then they go to this second phase to figure out what the remedy might be. that's where you get into all

these fixes that might change the way google does business, carl. >> eamon, so many different questions. any sense in terms of the strength of the government's argument at this point? i don't know there's a lot of precedent. we have to go a long way back, i guess, to find it. >> yeah. it's hard to really gauge at this early stage. the opening statements have really just begun. they're going on in court right now as we speak. but, look, what the government is going to allege here is that because of its market dominance, google has not innovated. google has not really improved the search product in years, they will say. that's because with a 90% market share, you don't really need to innovate. and they postulate this sort of alternate history where if google had faced competition for all these decades, maybe search would be much, much better than it is now. maybe we're living in a stunted growth universe as a result of that lack of competition. google, by the way, says, of

course, that's not true. we have all these new products. take a look at our product where you can take pictures in the real world and google things by images. they say they are innovating. >> interesting, eamon. thank you. that argument in some ways also sort of is a part of the structure for leina khan's approach at the ftc. the power of the platforms, the power they've had to stifle innovation but what has happened so far is they have not been able to convince judges, at least in certain high-profile cases, that that's the way to view the law. "squawk on the street" will continue right after this. (sfx:) ♪ 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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good tuesday morning. i'm carl quintanilla with sara eisen on the new york stock exchange. is the only solution to the u.s. debt crisis inflation? plus, airbus ramping up production as demand for planes skyrocket. the ceo is coming up at the bottom of the hour. later, a pulse check on the consumer, the ceo of casey's general stores with us on the back of strong earnings. stock is up 10%. topping the tape is some