we got a lot more coming up tomorrow. make sure to join us. "squawk on the street" begins right now. ♪ 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 has the morning off. stocks do look to add to tuesday's losses, worst day for the nasdaq since july, second worst day of the year. nvidia's down another percent. the two-year yield at a 16-month low. our road map begins with this tech-fueled selloff. s&p clocks its worst day since early august but there are areas of opportunity, some say, to buy the dip. nvidia is under pressure again after the biggest one-day market cap wipeout for any u.s. stock in history.

the chip maker now reportedly facing that escalated doj probe. let's begin, though, with the markets after the selloff yesterday, jim, looking at what you wrote this morning. it doesn't sound like you think this is a growth scare in the classic sense. >> exactly correct. i feel like there are many situations that are individual in each sector. for instance, just take last night, zscaler. jay is going to be on later tomorrow afternoon. saying he's very cautious on billings. yesterday, we have a lot of people saying super micro is really in trouble. intel, obviously, very, very troubled, so it was not just nvidia. we make it sound like nvidia is the sun and everything revolves around it, but there were a lot of negatives yesterday. nvidia, i've been saying, let it come down. i love nvidia, everybody knows that. i hate to love, i shouldn't say that, it's just a stock. i have been saying ever six

since the quarter, you got to let it come down. don't be a hero. i tried to compare last night to the cowardly lion because counting on you guys to stop me before we go into it and i feel that's the way it is, i really do. >> we talked about the michael semiblis note out of jpmorgan, not just the argument that competition is coming for nvidia and their historic margins and market share, but it sounds like he thinks there should be more progress by now on some of these use cases. >> i think that's really great because there are a lot of people who told me why it was down yesterday, and they were all wrong. it's down because michael is one of the most powerful strategic thinkers right now on wall street. at th he is a friend, but so what? his son's a great fisherman just like his dad. he does say there's competition, and he signals it's amd. i think lisa su is doing a remarkable job.

i don't think she would admit they're competition right now to nvidia. i think intel, let's take them off the table. we've got to stop considering intel as a competitor to anyone other than itself. but there was that notion that mainframe spend was all wrong, and there was the 2,000 -- oh, my god, the 1990 to 2000 fiber connection, he compared it to that. i wanted to vomit when i saw it. you know, i think that michael is terrific, but let's just understand, these are going down because there are real thinkers, big thinkers who read michael, and they just changed their mind. one of the few people who makes you change your mind. >> jim's referring to this chart that i think the booth has where he looks at datacenter revenue for nvidia versus ibm peak revenue in '69 and cisco nortel lucen peak spend in 2000. >> nortel collapsed. lucen collapsed.

both of them had accounting issues, so it made it even worse. cisco got to some outrageous multiple that was undeserved. i'd never attack michael, but i did say, listen, all these companies, give me a break. the companies that are customers that are nation states. they can print money. nvidia itself -- jensen huang has said over and over, if you buy our stuff, you get amazing return. can we have no doubt about it, the idea is so chilling that it might be mainframe or fiber that it made you think, let's step back. i believe this was going to be the case because this was the quarter where you should have seen that there are a lot of companies buying blackwell because they believe they can make a lot of money on blackwell. instead, we got not enough blackwell, and we started thinking, wait a second, maybe all these hyperscalers, tech titans, are dreamers. in return, i would say, is mark zuckerberg a dreamer? meta a.i. runs a little bit slower than the others. the only way to speed up

anything is with nvidia. the only people who seem to realize and went from hold to buy yesterday in terms of the power of nvidia was the justice department. >> yes. so, we're left with these bloomberg headlines for now about these subpoenas, jim, the notion is, do they penalize customers for not being exclusive? do they make it hard to switch out? >> okay, so, let's first deal with a subpoena. when i saw that story -- look, bloomberg is doing some great reporting, there's no denying, but the justice department already signalled that they're interested. do people think they pick up the phone and say, jensen, can you send us some documents? it doesn't work like that. when we see subpoena, we think, whoa. you can't just call the cfo, colette kress, and say, hey, can you send me 15 million pages of what you've done? the other problem is you're nvidia and you're trying to allocate. everything. everything's a short supply. are you supposed to give the

customers who have not put in big orders the next round? i mean, what are they supposed to do, nvidia? are they supposed to say, we're going to sabotage our business because we're worried about the justice department. if you go back to -- let's enjoy ourselves with a little semiblast nostalgia. if you go back to 2000, one of the principal worries of intel was this. just this. the idea they were monopolists, but they got lucky because they had amd. they could say, listen, we have 90, amd has 10%. it's too bad nvidia can't find somebody who has 10%. i think the cure for any antitrust is that lisa su picks up and does it again and gets nvidia out the way they were able to bail intel out from investigation. this idea of a subpoena, they can't just send a letter. they have to do that. one of the things nvidia has to deal with is, what do you do

when everything's in sport supply? who do you give the next round? do you go after big customers or give this to your small customers? if that's what they want, that's the equivalent of, like, almost socialism of orders. >> you think they have ready answers for whatever doj has questions -- >> i love the quick statement that nvidia has, which is, we worked really hard and we have this position. we know from google, to find them as a monopolist, it's how they abuse the monopoly. you have to go back to why this all happened. standard oil had 100% of the market and every time someone new opened up, they came in and directly underpriced them and wiped out that competitor. that is not happening here. they don't have any competitors. what do you do if you're the justice department and you go after a company that has no competitors? they seem to think that it doesn't matter. like, apple's really great so maybe we should look at that. that seems like -- is that really the point? i mean, jonathan kanter, he has to deal with why intel didn't do

great a.i. chips. it was not because this company, nvidia, is a monopolist in behavior. google, they claimed, was a monopolist in behavior, and they won in court. this is a much tougher case. >> so, the long-time saw has been, one man's margin is another man's opportunity. >> exactly right. >> it's not 100% share, but it's 90% share with this company. >> we always remember u.s. surgical, because they had gigantic margins. margins in the 30s and 40s, and then suddenly j&j went into the stapling business and they came in with 18% margins and that was higher than a normal business. they're going to come in and have margins that are much higher than they are currently, but much lower than nvidia. that would be what michael semiblast is predicting for jpmorgan. find me that competitor. if we had lisa su on right now, and i think that amd is fabulous, i think she would admit, we're not where we have

to be, and nvidia is, particularly with training. michael said they have to lean on inference, because they've done a lot of training. training doesn't make any money. inference makes you money. but that's not the case with nvidia and the customers. they spend more money and time on training because they want to win in terms of data. marc benioff, data analysis. so, i think that -- oh, i know. i take my life in my own hands when i disagree with michael, but i felt that his piece was incredibly powerful and got people skarld. >> you mentioned amd. there is a story that they are hiring a former vp of a.i. initiatives for nvidia. >> that was a coup. look, let's understand, these companies are competitors. i mean, maybe more competitive than people realize. amd doesn't have the horses yet. amd had to buy all those engineers in that deal they made with a private company, but i think that amd is doing great, or else we wouldn't own it for the travel trust, but is it

great enough? yes, when it comes to personal computing and servers. people have to realize, those are good businesses and intel, i mean, look, i have said enough negative about pat gelsinger, so why not say more? i think that he is -- he gave a fireside chat this week which was incomprehensible. >> it's not just intel. ubs today cuts asml. barclay's cuts smci, as you point out. >> well, smci has both accounting problems and margin problems. that's a suboptimal situation, clearly. particularly accounting problems. one of the things i've learned, if you claim you have accounting problems, you cannot then put out a release that says, we looked into it. you know who else wants to look into it? the s.e.c. you don't determine that you don't have problems. when you flag them, the s.e.c. comes in. and you got to bring in lawyers, and you got to spend a fortune, and super micro really has to get its act together. asml was a little bit of a surprise, because asml's stuff is true demand. by the way, the real carnage yesterday was in applied materials. it was in kla.

you know, you take a look at some of these companies, and you just say to yourself, well, lam research? isn't that a buy? and then you look at the chart -- one of the -- we don't talk about the fact, there was a piece yesterday on twitter, i love her, i've known her for 30 years and it's the great head and shoulders, textbook. >> on what, the smh? >> yes, and all the players within. they're all merely players at this point, and i feel like that's, again, september, head and shoulders patterns, some weakness in some places. we're worried about china. but i think you come back and say, intel, we still have the halo that intel's great, but it isn't. but it's bad for the semiconductor business if they get in big trouble. >> the story today is about intel's manufacturing business and this reuters piece about a broadcom test that did not

satisfy. >> well, look, i mean, intel is just a shadow of its former self, but you have a ceo who's a proselytizer, and all he does is say, look, we've done phase one of the restructuring. really? how about this bloomberg piece about the idea that perhaps they're going to be in big trouble when it comes to the chips act and maybe the government screwed up? i don't know, but i would say that intel's balance sheet, if you take a look at intel's balance sheet, people don't understand. i tried to get some numbers for intel's balance sheet. i know we're going on too long about intel. >> we talked about this yesterday. >> so, they have free cash flow minus $12 billion. now, minus. i want people to know that's not positive. minus 12.5 capex, and then they have -- they've got a gigantic just regular burn, so you got 12.5 capex. you got $24 million in negative free cash flow.

oh, here. free cash flow projected to be $12.5 billion, expects $24 billion in capital expenditures, so suddenly, what you have, they have $53 billion in debt coming in. they haven't had $35 billion in cash on the balance sheet, but they have $37 billion that's going to be out this year. so, $37 billion out, $35 billion in the bank, well, that's no good. >> right. >> so, then, the question is, do they meet the conditions to get the actual money from the government? which is -- condition's a little opaque, but i thought the bloomberg piece was distinctly bad. >> right. that kind of fits with the other element that semblest raised yesterday was geopolitics, the reliance of taiwan semi on nvidia. >> both amd and nvidia are not -- amd is not particularly worried about taiwan as much. obviously, intel can't compete

if they have free cash flow minus 12.5 and capex minus 24. they're not going to be able to build all the foundries to be competitive. i was very worried and remain worried that china might want to do a takeover of taiwan semi and taiwan. they can do both, by the way. they can do one and not the other. but i just -- i don't want to take it off the table. it's just another woe. and look, it was a list of woes. i mean, it's like, i read it and i said, oh, come on, michael. michael, stop it. michael -- or, not unlike tom haggen, michael, why do you hurt me? >> yes, well, it gets folded into everything about this time of year, september, the election, buybacks are running light. >> why don't you just dollar tree me? you see the dollar tree? not only that but no one has any money? let's just look at it. here's what you do when you're dollar tree. you calculate -- younger people -- we don't know anything. younger people go in and say,

there's 18 fewer milk duds in this box. 18. that kind of thing. versus, say, walmart is the reason. they want -- you want the reason why that's down ten and why dollar general fell apart? it's walmart. walmart decided to not wipe them out, because, boy, that's just jonathan kanter sends you a subpoena. he subpoenas people like it's toilet paper. >> you're saying walmart hurts them just enough? >> yes, but no one's -- it's like, we looked at our booking. the reason why we didn't have a good quarter is because walmart came in underneath it. no, you say, the macro. how come there's no macro problem at walmart? >> this is the way we used to talk about the weather. it wasn't raining on your side of the street. >> the only same-store sales that were worthy on the supply side was nordstrom. i think that rack is worth the price of the stock and that's why they want the company. periodically, they want the company and they're deathly -- they're, like, to buy or not to buy, that is the question.

they ought to brush up on their shak shakespeare. >> does the ticker go away? no more jwn? >> good. i'm very concerned about everything but retail, except for at the low end. i'll give you an example. dick's reports and before you can even read the statement, the stock is down. if they read the statement, the quarter was great, and then the outlook is great. enough. let's get out of the -- we have to -- we got to get out of the gloom of rooney mcfadden. >> dick's did raise the guide. we'll talk some hormel. we'll talk oil. and president harris with a speech in new hampshire today talking about tax deductions for all business. futures remain weak, though. we're back after a short break. . with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills,

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time for cramer's "mad dash" as we count down to the bell. >> people are going to be focused today on zscaler. let's go, a little bit to your point, i said at the top of the show, the biggest you hear is billings. people think that the billings were a rapid deceleration, and therefore, you should sell it. now, the billings growth was only 13% and that would be bad. that would be lower. but they do claim their going to accelerate to 23% growth and i would say, in the conference call, what really got you down was that everyone was asking about it. they got to the point that someone used the fabled "i don't to beat a dead horse." often, that means, you're overdoing it, so i saw -- there should be, like, upside, downside forecasts, beat a dead horse. the beat a dead horse quotient was way too high on this. i'm not a buyer of the big sale of zscaler.

i think jay was being conservative. he mentioned macro. that's another thing you can't do anymore. people say, that's a dodge. but i think we'll listen to jay this evening. i think he's going to tell a much more bullish story, and billings have not been a good measure of cybersecurity of late. we learned that from palo alto and george kurtz over at crowdstrike. i think the idea that zscaler is bad has a lot to do with the beat a dead horse. >> we're going to hear from the ceo on "overtime." do you think the benchmark in general is still valid? >> yeah, you got to do it in order to have your stock go up a lot, but i think the fact is that because they guided for the rest of the year well, i just think there could be a glitch here. but obviously, you can't tolerate a glitch when you have a high-multiple stock. let's listen to jay. let people sell it, but i'm going to listen to jay chaudhry just in case the ceo has some significance. i know that jay was considered

one of the kings and now he's a pawn. i don't know. king isn't that good. you want to be the queen, the bishop, anything, but right now, he's just like one guy, you know, and he's surrounded, and he doesn't know what to do. he's playing stratego, and they're playing chess. >> look forward to that later on this afternoon. opening bell is coming up in a moment. don't forget, you can catch us any time anywhere, just listen to and follow the "squawk on the stetopinbe" dct.re: eng llpoas

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. maybe some traders have got out, but the degree to which the market went down didn't really give too many individual investors any time to think about it and conclude, let's get out. rather than thinking about getting back in, i'm just staying in. i've been bullish on the market, and i don't see any reason to jump out of it. >> that's ed yardeni earlier on "squawk." he says the economy is doing fine but things like yesterday's

pmi gave people room to squawk. >> by no means was ed meant to reassure us. except for the last thing he said, which is, look, i'm going to stay in because things are good. september's weak. i found, look, i know ed for years and years, and he's true north on a lot of these things, but the one thing i would say is that you got to take into account his last comments more than his first comments. he wants to stay in. if it was really, really bad, believe me, ed would be -- he would have no problem saying, listen, you got to get out. there will be a better time. and he didn't say that. so, let's give him that, which is that we feel there's turmoil, but you might want to buy it at a certain poichnt. i just didn't get the sense that he wanted to buy it now. >> he did say that he expected chop through the election and then a resumption to record highs. >> you look at what goldman had to say about either one, president trump or harris, and you come away and say, all

right, that's a little unsettling. if we have a suite, it's totally unsettling. but if we don't have a sweep, it's not. that, i think, is some of the gist of the goldman note. i think that september's awful. we know october can be awful. but at the same time, i don't want to bet against the federal reserve cut. i don't. that's stimulus growth, and it throws money into the market. look at the two-year. people have to recognize there are other forces besides the sun of nvidia, s-u-n. >> let's get the opening bell here. at the big board, it's chemical company eastman. at the nasdaq, it's biotech biomarin doing the honors >> always does a good job. here's the shocker. we have all this negativity. what stock is doing well in gitlabs. what do they do? they are actually a devsecops,

development, security and operations company. development, security, and operations is the highest-risk part of enterprise software, and they're doing it for a.i., and they have -- they think they have the best a.i. suite. now, if they report a great quarter and the stock is up and it's for all the things people are worried about, a.i., datacenter, it's because, look, devsecops, a la servicenow, there are companies that are anti-cembalest, and i just think that the idea that gitlabs could be up, something's wrong. either everything is bad in a.i. and datacenter, or we have a gitlab, and then perhaps we have the smartest acquirer of the pe companies, blackstone this morning, buying a datacenter center company in australia that is -- it helps australia, japan, malaysia, hong kong, $7 billion

development, also joint venture with digital realty. $55 billion of datacenter investments prior to this. they expect $1 trillion in the u.s. over the next five years. i thought the datacenter was dead. >> that was yesterday. >> you said we would be safe in the datacenter. well, i was wrong. i mean, come on. it's not about john book here. >> there are some other, for example, wells, adds both microsoft and adobe to their signature picks. >> how dare they? two positive pieces about adobe. adobe is heart -- heart and soul a.i. now, because of firefly. adobe is an amazing company. people haven't liked adobe that much ever since they weren't able to buy a small business that justice department wouldn't let them. i thought adobe with two positives today was a sign that, again, if you write off software, enterprise and individual, that's a mistake. servicenow can be bought. adobe can be bought. it's hardware without a

recognition that nvidia has a growing software business. i keep going back to nvidia, because when i walk out on the street, people -- just memo to everyone who's negative on it, it's not like nivea cream which you get at the -- get that at walgreens. you don't get nvidia at walgreens. you get nivea at walgreens. >> it's jensen, not jergens. >> people are worried about nvidia, it looks like it could go the way of nivea. no. let's get a pronouncer. i always ask for that. people should learn to pronounce nvidia before they savage nvidia on tv. >> industrials are playing. >> thank heavens. they were so bad. >> dow is the best dow name. i know you saw the upgrade of

freeport and alcoa today. >> but at the same time, gina showed you that copper, fresh lows there. and remember, goldman backed away from the super cycle yesterday. that's a curse. fracking, coal, copper, these are curses. never say super cycle. is dan ives around? dan, stop it with the super cycle. i figure he's over there somewhere. >> wolf upgrades alcoa. >> you need china to come back for aluminum, and there's lightweighting of cars but i don't think the auto group is that good today. by the way, another nippon steel, remember, u.s. steel makes a lot of auto stuff, another nippon steel appeal. guys, wake up and smell the java. it ain't working. >> you saw the comments by the u.s. steel ceo to the journal kwoez. "we will move our headquarters out of pittsburgh, close mills if this deal collapses." >> yeah, okay. >> you think it smells of desperation? >> like the pittsburgh steelers

of late last year, look, i got to tell you, i think that people have to recognize that there are certain people who could be important. next week on the debate, which is going to be, like, who knows, there's -- someone could say, look, can we all just get along by agreeing that nippon steel cannot buy u.s. steel? it would be con convivial becau that's the one thing they agree on, trump and harris. presidential -- president does play a role. you can argue, well, wait a second, they could go to court. by but i just think they ought to realize there isn't anyone in either party that's in favor of this. vance, if you read the book, "hillbilly elegy," you'll know at the heart of it is a japanese steel company came in and wrecked his town. i mean, come on. there's a book about it. >> yeah, yeah. >> mama, papa, whatever. >> jim mentions autos. >> good book.

i like the book. >> german auto sales, jim, last month, down 28. ev sales, down 60%. >> that's why, i mean, look at eastern germany. i mean, i think they're voting -- the conservative -- remember, the conservatives and the liberals won. it wasn't just the right wing. and i think they're all worried a about precisely this. i think that this is why you can't own this industry, because of what they're saying. and i think that other than ferrari, i mean, now, what i learned a new term today. >> jonas? >> yeah. honey juice, a drink at the u.s. open, that they can raise prices with impunity and same thing with ferrari. at a dark moment, jonas comes in, he's a bright light. >> that's true. volkswagen, by the way, is appealing to unions, saying, we've got to change our ways or we won't survive this transition. volv

volvo abandoning plans to go full electric by 2030. >> what's happened is that the oil companies are winning a battle because we -- the first sign that it wasn't working was when hertz bought all those teslas and people were crashing the teslas. and he was saying, people put it in reverse and it backs into walls. that doesn't -- when you put it in reverse, it does have a habit of going backwards. i don't know why that was such a shock. but you've got a situation where everyone's backing away from ev. don't forget ford. but they all committed a huge amount of money to ev. it's a giant sucking, you know, chest wound, and i just think we don't have an answer about how to turn the clock back to when we were going all electric, other than many more charging stations, because that's what people are worried about. >> you mentioned chevron. certainly, oil is the story. got below $70 earlier this morning and then these headlines hit that opec might rethink any

kind of production cut or hike. >> i had that nice company, vista, on last night, that rang the bell, and they're not -- they're not thinking that. they're thinking things are just okay. they don't like it. i mean, maybe they're -- they took all their cash and put it in nvidia, 120. by the way, nvidia is just now in -- remember, it's approaching the vacuum of $100. i'm not -- i'm all in nvidia because that's all anybody wants to talk about. i will pivot out of nvidia the moment you tell me, listen, jim, you should really be focused on boston scientific. best acting stock in the entire book, other than unh. >> interesting. >> oh. that's boston scientific spelled backwards. >> i mean, you can't talk about nvidia and tech without talking about, say, for example, the way staples have asserted themselves against tech the last few days. >> yesterday, i mean, if you go back to procter, procter had a bad quarter. they did it because john mullen said, we were surprised by

china, it's worse than we thought. and then we have this rotation, and you start thinking that procter is great, that they had a great quarter. pepsico did not have a quality quarter. look at how that stock has moved up. we're talking about companies that people have totally forgotten. if hormel is up today, it's time to rethink, because hormel's quarter was not good, by their own admission. >> hormel, down, that's going to take you back to february on this price. >> when did i drink the spam juice? >> that would have been two years ago. >> that was the all-time high, when i trdrank the pumpkin spic. it was time for people to realize there ain't nothing like spam in the event of a nuclear war. >> that was memorable television. >> my wife didn't talk to me for years because of that and also because of the baconator comments. just because she still eats

them, does not mean we have to talk about them. >> there is this upgrade of sweet green. >> i like that. these three have really developed something that is lasting. i think sweetgreen and cava are for real because that's what younger people want. >> the thesis out of cowen is that thousand stores, the t.a.m. could be much bigger than that. >> both sweet green and cava could put up that amount of stores because they represent the next generation of chipotle, not that the current chipotle is bad, but these are the ones, the hopes are sweetgreen and cava, as the next chipotle and that has some traction for people who are just classic growth buyers. classic. >> travel's getting some discussion today, jim. there was -- we got an upgrade of boyd gaming out of morgan stanley, but then booking, jeffries, model on hotel nights and says growth is going to slow. >> then we have an airbnb downgrade. travel taking it on the chin a little bit. i do think that a lot of these

are related to the fact that people are a little bit traveled out, but also because people are starting to run out of money. that's the rap. why do we have -- why do we talk about a fed rate cut? because things are going well? this is right at the cusp when you have to deal with the fact that the fed has to take action because these things are happening. you can't expect three rate cuts and also fabulous growth going into the rate cuts. you have to believe, correctly, that we have a soft landing and these are the kind of things. when bookings gets downgraded, airbnb, with marriott comes down, these are all the signs that you need that the fed needs to take action. you can't have them take action at the same time when marriott is going straight up and booking is going straight up. that doesn't happen. so, understand that we can have -- everybody can pile into procter and say we're going to have a hard landing, or we can recognize that, wait a second, when the smoke clears, procter, which i'm very concerned about, because the trust owns it, people will go back to the reality and say that procter was at $160 for a reason. right now, i don't want to sell to protector because it's my

lovey blanket. got to have some lovey blankets. >> it's -- $175, jim. what's that on the year? >> i don't know. look, it's a pe of 25. there's a convergence of nvidia's pe with procter's pe but i got to tell you, right now, procter's in charge. stock is up 20% for the year off of soup. two bad quarters. you can't beat that. the one sector that can come back, i do think housing can come back. mortgage rates going down does help affordability. affordability has not been great. i wish i could say autos but autos are -- because of the electric morass, i just don't want to get behind them. i don't. >> you know what's starting to get some attention too is helocs. there's so much home equity, whatever, 10, $15 trillion of home equity been built over the last couple decades that it's been untapped for the most part. >> i do think that we have a lot of borrowing. people have a lot of borrowing power. lot of borrowing power. the 401(k) millionaires.

i do feel that heloc itself, the rates are very high. it's hard to azec your place, a verb for, you put up this stuff that lasts longer than wood but it is more costly, and i think that company has a 35 pe, which is a little high, but it is really good. >> as far as macro goes, factory orders at the top of the hour, and beigebook, but the games don't get started until -- we get j.o.l.t.s. today too. >> and also we should stop tra trading for a moment. alphabet is actually up. google. i don't know, maybe there's a release about why it shouldn't be. 20 times earnings for alphabet, and you back out the cash, versus the fact that i still don't know a soul who uses gemini. i mean, gemini, to me, is a constellation. >> interesting. that's going to be right off the 200-day on alphabet. >> isn't that something? >> which has been a source of

defense all year long. >> i know, and that's the most challenged, i think, of the giant hyperscalers because i think that they have the seeds of destruction in their own -- in their own house, because gemini could hurt regular search, but everyone's kind of in denial about that, and it's not that expensive a stock. so, i'm looking at that one holding. the one that everybody is crowded in, and you mentioned it earlier, is microsoft. we have guys recommending microsoft as if there's nothing wrong. as if that chart, which is maybe the worst now in the book now that nvidia's broken down, is okay. we own it. 30 times earnings. i think this is a classic ed yardeni story. this is an ed story. can you sell microsoft at $406 and get back in at $375? i dare you to try. that's what you have to do, though. it's very hard to do. >> be aware, by the way, citi cmt conference where we'll hear from microsoft, dell, intel, smci, mongodb and etsy.

>> mongodb had a great quarter, etsy, not really. dell had a terrific quarter, but nobody seemed to care. michael dell did a good job. jeff clark on the call was excellent but people didn't want to hear it because what does dell do? they get the chips from nvidia. and install them. and people just say, oh. now, listen, it's hpe versus sun micro, versus dell. who do you want to bet on? i want to bet on michael dell who sat in the front row of conference and was pointed out by jensen huang, who said that michael dell is the guy that you want to be affiliated with. i wonder right now, do you think right now, at this moment, does jensen huang think he's going to have to go back to denny's as a customer or a waiter? >> should we look up den? >> he's down this, down -- now, he does have a cell program. we act as if that right now jensen huang is deeply depressed over what's happening.

when i spoke to him when he reported the quarter, he actually suggested to me that i should focus more on the business than on his current psyche, and i thought that was compelling. >> well, jensen always says that he likes his staff to be hardened by misery and hardship. >> when you go down, if you get to nvidia headquarters, he goes from table to table, and apparently, it's like the worst thing in the world because he says, what are you working on? if he doesn't like it, he questions it immediately. but it's also the work tables are very long logs and there's a great bar, and it's much more convivial than people think. when you go to nvidia, people ask for selfies with their boss. name me a boss who they want to have a selfie with. right now. do you want to have a selfie with, i don't know, mike wirth at chevron? maybe. he's terrific. but no. let's face it. this guy is still the best. he's so good that jonathan kanter and the government wants to stop him. >> while we're on that, two more names. one is this ftc trial, kroger

albertson's. it's an important week as we get some expert witnesses on. >> rodney mcmullen has the most compelling story in the world, which is that, look, right now, if you want amazon, costco, and walmart to be the only grocers, then block this deal. but nobody's going to listen, because the ftc felt so bad about the safeway-albertson's deal and they said they would never let these deals happen again, even if you weren't able to give the overlap. they gave all the overlap names to haggen and hagen went bankrupt within a year, a supermarket chain that should never have gotten the approval. here, you've got a much more viable company that wants to buy the overlap. but the ftc just feels like, oh, man, we screwed up so badly, we're not going back to that. that's the real analysis, i think. >> the last thing i'll mention is apple. below the 50-day. goldman today does argue, jim, that the next week's event, glow time, should be immaterial to the stock price. >> well, i think there are a lot

of people who are trying to figure out why they still own it and the reason you own it is because unlike the cembalest spend for all the datacenters, they get the chatgpt for nothing. why are they going down just like they were spending on the datacenter? and take a look at t-mobile. take a look -- put up the chart of tmus, okay? this is a sign of companies that are going to give away apple cell phone and get share. you tell me that t-mobile's going up and apple's going down? t-mobile is going to be where you get the apple phone because mike sievert sat right there, right where dan ives sits, and said, listen, we are absolutely going to be competitive first verizon and at&t. by the way, he's -- >> the dan ives commemorative chair. >> who dresses worse, sievert or ives? by the way, he must be so excited. marvin harrison jr., i didn't get him in the draft. >> go ski daddies. as we go to break, let's check bonds. jim mentioned the two-year

briefly, lowest level since the middle of last year. we will get factory orders in a few minutes, and don't forget jo j.o.l.t.s. at the top of the hour. stay with us. hi, my name is damian clark. and if you have both medicare and medicaid, i have some really encouraging news that you'll definitely want to hear. depending on the plans available in your area, you may be eligible to get extra benefits with a humana medicare advantage dual-eligible special needs plan. all these plans include a healthy options allowance. a monthly allowance to help pay for eligible groceries, utilities, rent, and over-the-counter items like vitamins, pain relievers, first-aid supplies and more. the

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keep your eye on nvidia. tuesday's close was 108 on the nose we got within a dime at the open this morning, settling back here still less an 1th% drop. the vix, peaks at 23 this morning back to 21. dow is up almost 40. we'll get to stop trading with jim in a minute.

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time for jim and stop trading. >> okay. there's a couple of things that have been very negative that we heard this morning. how about a real positive. the nasdaq upgraded from sell to buy at bank of america. you can argue wait a second, what are they doing with a sell given the fact that stock has been up? all the way up. you have an ipo flywheel occurring and you have high modes. do i want to buy the stock at a

52 week high? no. but i point out there are things we remember are working. and that it's not a market wide selloff and it wasn't yesterday either. there's just a lot of people fleeing you can say economic sensitive, which is true. but fleeing what people feel is too crowded. how many times have we written off the hyper scalers? someone came out today and said amazon prime lost its alert. i've done a huge amount of work, they had a monster prime day. these are people who tell me it's less the monster because i have decent sources. that's part of the site. let's find something negative to say about everything. and i think you have to limit it to companies that aren't doing well. >> that upgraded nasdaq, they talk about the mote -- >> made sense. you had adobe with the two pepe

pieces coming out. i have to listen to the conference call of dictk's it look like a disaster but i don't know. >> how about tonight? >> i have aeroenvironment, avrv, i remember when the war began in gaza i talked about what -- i'm sorry, more focused on ukraine, i said these are going to be drone wars, absolutely. his drones are not inexspensive and sprouts farmers market is one of the best stocks out there, they have a growth methodology that makes sense. the old whole food is good taste. >> jim a lot to cover tonight. >> today we covered a lot. >> wwie ll continue to watch nvidia as the selloff eases a

bit, dow is up 100, vix below 21.

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good wednesday morning welcome to another hour of "squawk on the street" i'm sara eisen with carl quintanilla. david has the morning off. looking at stocks, not much of a rebound after yesterday 57s more than 2% selloff for the s&p and 3% selloff for the nasdaq. if you look under the hood, relief in groups like energy that got slammed. it's technology that is selling off again down 1.3% as a sector. that's what's hurting the nasdaq, super micro down, nvidia down again after shedding more than $200 billion of market cap

yesterday. looking at treasuries as well. again today, buying treasuries, yields lower, the 10 year below the recent range of 3.8%, we're at 377. so there has been quite a bit in the last 24 hours or so. we're 30 minutes into the trading session. here are three movers, nvidia falling after -- again, after yesterday's plunge that wiped out nearly $280 billion off the market cap pulled down other semiconductor names and taking a hit after it was reported that it received a subpoena from the justice department. and super micro got a downgrade today following too many

negative catalysts, price cuts clashed from 438 to 693 stocks down around 50% the last two months. >> jolt comes in at 7.67 million. that is lighter than the estimates of 8.1 million, down from 8.2 million last month and factory orders for july up five in line with estimates. that's the lightest opening since january of 2021. i know that's a number you like to watch. >> especially the eight million opening mark on jobs. because back in april we got below the 8 million but since then it's rebounded and hovered around that level. so we are seeing more evidence the labor market is cooling off. we'll dive in a bit and show what's beneath the surface ahead of the jobs report on friday. >> talking nvidia. the stock is down after plunging yesterday. the semiconductor etf coming off

the worst day since march 2020. dom c dom chu is here with more. >> the catalyst is the economic story as you mentioned and the idea you may be the valuation concern really perm nating through some of the artificial intelligence beneficiaries over the course of the last several quarters at this point. but looking at the semiconductor etf, smh, the vaneck, it's modest drop today of .5% compared to yesterday. the level that some traders are watching right now, just above that 200 day which sits at $216 per share and change. so again the vaneck semiconductor etf indicative of the overall tech trade a leader in the move to the down side. off roughly 20% from the highs that we saw just earlier this

summer. so something to keep a close eye on. you mentioned nvidia. one of the biggest market decliners since the record highs that we saw this past summer. shares down 1.5%. just to put it in context, we are down significantly in terms of market cap since the peak that we saw this summer. nv nvidia shares have lost some $507 billion in market value more than broad com itself. and advanced micro trying to bounce back today. qualcomm and texas instruments. these five stocks have represented the biggest point detractors from the nasdaq etf. i want to highlight those. and broad come we have earnings out tomorrow afternoon. those shares are down, just below the 50 day average price and carl to give you an idea of the context, the options market right now is pricing in a plus or minus 6.5% move in broadcom

shares. over the last eight quarters the mov has been plus or minus 5%. so a slightly more volatile report expected by traders. >> thanks, dom. despite the selloff yesterday a number of names and sectors hit new highs. mike santoli is here to talk about that. >> defense, traditionally defined defensive areas. among the things going on, back in the growth scare. the sensitivity to any sign that the economy is slipping more than expected is paramount. look at the low volatility parts of the s&p 500, the blue line there, it's taken flight relative to high beta, the aggressive wherareas, semis par high beta. we have the a.i., the growth can scare at 21.5 times earning which is where the s&p rebuilt to off the august low.

so soft landing has to be reassured at a return. as i always discuss, a soft landing is not a moment of achievement. it's constantly doubting the soft landing is going to happen. that's where we are right now. that jolts number, lost 400,000 listings in a month. that shows there's reason for concern, the bond market is acting as if you have to play defense. you had -- they were down more in the august selloff. they gained less of their losses than the overall market and now they seem like they're suspect as the leadership sector and that's a lot of the 21 times forward earnings is coming for those areas. >> also learning what is defensive and not, gold held up nicely, dollar not so much. sometimes it's a safe haven but the dollar is weaker. bitcoin acting -- >> squirrely.

>> -- like a tech stock and not providing a safe haven. >> you have to wonder if the bond market is far down the path in pricing in outright weakness. obviously the fact that the first fed rate cut is likely to be here in two weeks is crystallizing the debate if it's right on time or how much it has to be or should be. but, you know, s&p is less than 3% from a record high. we should keep some of that in context and you expect there to be some september trouble. >> mike, stick around. and ap is here. great to have you here. >> always good to be here. >> you wrote about september with the lowest average return, right? >> yes. >> you say you don't see signs that it's significantly a bad month. >> i was being geeky and statistical. the worst return with above average volatility. as we've been highlighting the last few weeks conditions have

been deteriorating. not surprised we're talking about -- drar tdollar tree take out the word tree put in general. sea it's not a surprise. consumer is slowing, you've seen it the last few weeks. i think the incongruity that i see that's making me more cautious on equities and risk taking is that earnings estimates have not come down at all, yet everyone expects the fed to start a long eight cut path for the year. so something has to give. the economy is better, it's a soft landing without a growth scare and equities are great or numbers have to come down more than they normally come down. that's where the tensions are lying and the estimates are high. >> i see that and i think it's up for debate whether the stock market at this exact level is based on a premises of 200 basis points of cuts.

it's based on the direction of travel is easing because inflation is taken care of. it's not clear to me if we say stocks price out, 100 basis points of those cuts right now, where we necessarily fall to. >> my reaction to that is that i don't know. >> yeah. nobody does. >> but i know the market is ahead of the fed. that i can say i'm confident in. we knew we were close to done hiking and eventually dream of accommodations some day. the reason it's tricky, the last few times we've gotten tb fed to cut it came with other goodies, fiscal stimulus, balance sheet expansion. and all of us here have learned don't fight the fed you're an it yo idiot if you fight the fed but this time maybe you do.

>> we learned don't fight the fed as a phrase. but in reality people are saying the first fed rate cut maybe you sell look at '08 and 2000. >> right. i don't think the economy is going to deteriorate at the rate that requires eight cuts and not see a growth scare to earnings that's more than we're afraid right now. i think that's why i'm highlighting. so i think the defense stuff makes sense. if i want to get excited about anything. we talked about it a couple of weeks ago when i was on. probably health care. i know it's acting defensive here. but i think it can act as offense in the next upcycle in terms of the ability to prove the health care system through technology. >> we're glued to nvidia it's now up a third of one percent. it's significant because it's large at what 6 trillion market cap or something. >> yes. >> and also indicative of the mood around a.i. and generative

a.i., it's still up year-to-date but has had a sizable correction. i know you're a strategist but do you have to have a view on the stock? >> i covered semiconductors for a long time. >> what is your view on it? >> i think you have to have context. the stock was $14 only 20 months ago. so these -- the way i'm looking at, you know, a.i. semis is, it's a giant party, giant parties have huge hangovers. but the question is, is it still worth going to the party? it is. o okay. it's going to be a hangover but if you bought in the 30, 40, $50 range you're happy it doubled. a great party. is the trend of a.i. semiconductors over? of course not. we'll be way higher on the stock in three to five years than we are now. we're in a cooling off period. every time the company gets too big the doj investigates.

it happens every time. but is the general trend of come pout, all that comes with it, slowing materially? no, it is not. i think you want exposure still and a growth manager you say i'm running your money but i don't believe in a trend, so i have no weight in semis, of course not. >> you may say it's hype and you're overloanblown. >> of course. if you left early, fine. but i think the wrong answer, a few months ago i was on the air and aez was down like 10% and this guy came on your program i never owned amazon. when we got off the air, do you want to say that? you missed the first lap. >> tmi. >> the victory lap depending on your time frame. >> you have to experience the whole thing. nobody really knew about a.i. until the may '23 quarter with

nvidia. they did put up pretty good numbers, raise by the same amount, so like are you negative there's going to be more compute? do you think nvidia is not going to have high market share. the only play book i tell you is gross margins are peaking. if you were lucky enough to be there, trim down to market weight and hope it doesn't incrementally hurt you but you benefitted on the upside. that's the way i'm looking ate. i'm not telling you a.i. is over, though. i'm probably more bullish, i just took the health care course i'm dreamy eyed for the things that could happen. >> yes. >> it's like everything is going to get way better and i think all grizzled health care veterans are like -- they've heard all the exciting sings and angry it hasn't worked in the last ten years and i'm the new analyst super excited as i look at it. i'm more bullish on the health care potential in two through

five. >> we should have a conversation about that. >> awesome. i'll do it. >> thanks, adam. good to see you, and mike santol santoli. as we go to break, oil trading lower. >> the fed's new magic number. the jolts data we got moments ago is a focus for policy makers. and doj taking aim at nvidia, a closer look at the relaryguto risks for that company and investors. got bank of canada cutting rates. "squawk on the street" is back after the break. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo

welcome back to "squawk on the street." we are watching oil prices carefully wti trading below $70, going negative on the year. how much lower can prices go? first on the big sell off we've seen, we knew china was weak and not recovering. i think goldman also took down forecasts. and that put pressure on oil prices and then some weaker economic data in the u.s. as well. what do you make of the market's response, has it overdone it or do you think there's more selling to come? >> certainly the china story is the head wind for oil. we've seen it in terms of lower imports, lower utilization

rates. i think the question is where do prices go next? given we're having the demand concerns in the market does opec proceed with adding barrels into the market. one of the big selling pressures we saw this summer was the announcement from opec in june they would start phasing out their voluntary cuts over the course of five quarters. and there was some in the market that believed like they were locked in, they were on that roller coaster and going to put those barrels on no matter what and others like ourselves that said, look, depending on where the market is, what the data looks like we think they could pause those increases or reverse them. so we think there's room for opec to reverse course or cause the increase in barrels. but i think there's the idea that opec is going to overprovide the market -- >> already the reports are trickling out they're going to delay the easing of production

cuts. remind us what level they need. what are they targeting? 80? >> this is the thing. opec never says they are targeting price. they always say they're targeting market stability. one of the ideas that's always been in the market you look at 2030, saudi, big infrastructure diversification program and that necessitates a higher level of revenue but the saudis have other options besides $90 plus to finance vision 2030, they can tap that market, delay projects. it's not like they have to have that number to go forward with vision 2030. but if oil remains an enabler of that big program. so i don't think this is an optimal price for many members of opec so i think they'll look at where the market is, and i think they're going to be very judicious about adding barrels on the market. but there is a corner of the market that believes that opec is about to break up, go back

for market share and i think that sentiment about opec, combined with what we're seeing on the demand side, is causing problems for prices. >> finally helima, the reports about the push for a cease-fire in gaza reaching some kind of intense stage or some kind of take it or leave it stage, do you buy that? >> the biden administration is very focused on trying to get an off ramp to this war. but we've been here before. i don't think there's any indications right now that we are necessarily going to have an imminent deal. i do think, you know, what has been interesting is that we have not seen, an iranian response to the assassination of the hamas leader in tehran in august so it's an interesting question are countries like iran more willing to fight this as a proxy war as opposed to getting actively involved in the conflict. >> thank you very much for joining us. >> thank you for having me.

>> as we watch more pressure on crude. >> palo alto securing the deal to secure receive from ibm. how this could be the start of m&a in the secretary. >> security has been too fragmented in the past. our customers, every company has 30 to 40 security vendors, more than the technology venn or thes they have for everything else, which is not the right model. you see the amount of ransomware, cyber activity tt ree.s to incas sohamodel is broken. it's not working we need to find a way of putting stuff together. >> you can catch that today at 4:00 p.m. eastern on "closing bell." we'll be right back.

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it can. on the servicenow platform, ai transforms your entire business. because when your people work better, everything works better. so, let's get to work. idris elba works here? mm-hmm. ya, he's super nice. succtocks are swinging betw zb gaines and losses.

here's the jolts report, the number this morning 7.67 million was the lowest level of job openings since january 2021. so labor market continues to cool. that was a surprise. and also follows the thread lately of the weaker economic reports we've been seeing. yesterday's manufacturing number spooked the market more than expected we're 10% of a manufacturing economy but it's a cyclical number so people pay close attention. jobs is in focus this week because we get the big august jobs report on friday, the last big economic report ahead of the fed decision that comes in had less than two weeks. we know the fed is paying closer attention to jobs and that part of their mandate because they're feeling good about the other parts, inflation, as they come in lower than the high levels we've seen. what else did we learn in the jolts reports? i watch the quits number, which is how many americans are

feeling good enough to quit their job in pursuit of higher pay, a better job. and that number as you can see has come down from the post covid highs. the latest was the july number 3.3 million americans quit their jobs, about 2% rate where we were last time but represents cooling. and one more i'll throw at you, which is the hirings rate, about 3.5%. and again it's been ffunky in tt few years coming out of covid. but all of this speaks to a labor market that is softening with be something that the fed has acknowledged and is seeing. we'll get another read tomorrow, thursday, but something that the market is taking note of because the fed is paying more attention to it. and that's kind of the swing factor ahead of the first rate cut, will it be a 50 or 25. >> interesting take, kevin

gordon just now, construction industry job industries, new cycle low that's going to take you back to '20 or '21. >> housing market has been the weaker part of the economy. i want to highlight some small business news we got from the treasury department. this is not necessarily real time data but they looked at small business job contribution. and this was a good chart, i thought, which shows, basically, if you look at the colors from covid recovery, so they're looking back 2019 to now much larger percent of job growth coming from small businesses. they're startups in yellow, for instance or one to 50 employees in blue. the last time we saw this big recovery in jobs after the great recession, it was a smaller share of small businesses. so now, 71% of net private job gains since the prior business cycle peak came from small

business. that was up from 64% which came out of the great recession. all i'm saying is that small business is important perhaps why vice president kamala harris today is set to announce more tax incentives for small businesses and startups. because that's where a lot of the job growth -- we say small business is the life blood of this economy. i thought those new numbers were good context. >> trying to set targets for the first time, millions of new business applications. the good news out of the treasury report we're averaging more than 400,000 business applications per month. >> saw that. >> that's 50% higher than 2019. >> 430,000 new -- yeah, so far in 2024. that's a really strong number. and again, as you say, a big increase. and it jibes with the job growth we are seeing contributed by this sector of the economy. as far as what we're hearing from companies today on the consumer, we had a good one in dick's and not so great in dollar tree.

listen to drarollar tree, it's getting hammered. the coo said this on the call. >> as we have seen demand from the lower income customer remains weak. dollar tree has a broader base that includes more middle and upper income households and beginning this quarter we started to see inflation, interest rates and other mack t macro pressure have impact on these customers. >> i thought that was interesting on the higher and middle income starting to get hit by inflation and high rates. and then there's dick's, which is doing better. listen to the ceo. >> our comps increased 4.5%. this strong comp was driven by growth in average ticket and in transaction. we saw more athletes purchase from us and spent more each trip compared to the prior year. >> and as i make the point a lot of it depends what category

you're in and how you're executing and dick's has been an k example of strong execution. there are other examples, but i think when you listen to the coo of dollar tree saying the low income remains weak that's a statement about where we are and consistent with what we heard from the retailers this season. >> as we go to break, check out the biggest s&p losers. you will find dollar tree at the bottom of the list, % ll14foowed by hormel. the dow hanging onto the some modest gains after yesterday, 130. we're back in three. really use. extra benefits they may be eligible to receive at no extra cost. and if you have medicare and medicaid, you may be able to get extra benefits, too, through a humana medicare advantage dual-eligible special needs plan. call now to see if there's a plan in your area and to see if you qualify. all of these plans include doctor,

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welcome back. i'm silvana henao with your news update. ukraine's foreign minister resigned today ahead of an expected government reshuffle. it came as a russian drone strike killed seven people in a western ukraine city today, one

day after more than 50 people died when missiles hit a military academy and hospital in one of the deadliest russian strikes since the war began. >> a public inquiry into the london tower fire, the disaster blaming the government. the long awaited report comes seven years after 72 people died when the fire ripped through the 23 story social housing block it was britain's deadliest fire since world war ii. and ana sorokin who posed as a wealthy german heiress was named as a contestant on abc's dancing with the stars. former nba start dwight howard will also compete.

>> okay. thank you very much. about an hour into trading. stocks trying to stage a comeback from yesterday's selloff. we've been up and down all morning. bob pisani joins us with a look at what's moving. >> that was a good analysis on jolt moved the market, 20 points on the s&p, the two year and ten year about equal. it's all about the jobs market right now. interest rate sensitive, new highs here on utilities, new highs on real estate, even financials which i like a lot because those are generally economically sensitive sectors. technology there is the laggard so taking down technology, adding to other positions out there. the new high listlittered with utilities and reits, dozens of them it seems like at duke, nextera, edison, essex property,

tanger factory outlet -- i knew them 30 years ago, a factory outlet center, sitting at a new high. berkshire is a new high every day for weeks on end. some of the big insurance companies, like chubb and hartford hig sitting at 52 week highs. so we have financials moving up there, consumer staples, also new highs, talking about this for a long time, coke, kimberly clark, tobacco companies sitting at 52 week highs. oil near 52 week lows, nat gas not doing anything. we have new lows on halliburton, apa, big exploration production company, slb, the old slum erjay here. you don't see many lows but here it is. nvidia my whole point on nvidia is they're taking the multiple

down not the earnings down. we have noted the week after week, here's the current fiscal yeare year estimate, 119% increase. and the next fiscal year, 41. the earnings are going up but they're decelerating, that's not horrible but nobody is taking down the earnings estimate. what they're taking down is the multiple. this is the year ending in february. 37.9 it was 48 in june. so the next fiscal year is only 26. it was 36 back in june. the bottom line here is the number here is coming down rather dramatically here. nvidia is not a value stock. i'm not trying to argue that, but it's more reasonably priced than it was a couple of months ago. take the multiple down, don't take the earnings down. now you have nvidia reasonably priced here. apple is somewhere around this range here. so the important thing is we're doing okay with nvidia in terms

of the multiple right now. as for the s&p 500, i want to point out we have what the bulls call the recession easter crowd. they've done this the last two years, in 2023 we dropped 9% and 2022 dropped 13%, september, october on the same fears. some day they're going to be right. some day the recession crowd is going to be right. and i think sara's coverage of the jolt was impressive this morning. but two years ago, we're going to have an imminent recession, you would have lost a lot of money. so be careful making conclusions here. >> 210 the spread went positive. it was back down and would have to stay there to be a big deal but something we're watching for. >> uninverted that is a big story. >> let's continue to talk about it, thank you, bob. jobs report front and center

next week. our next guest expects a 200,000 increase. it's good to have you. we have the jobs opening report which was not -- pretty weak compared to expectations, lowest number of openings since january of 2021. how does that make you think about what we're going to see for the august jobs report and beyond? >> thank you for having me. this is a soft jolts report as you mentioned job openings were weaker than expectations. and more importantly the longer trend in job openings has been clearly to the down side. so chair powell made the point at jackson hole that the labor market looks cooler than the end of the previous cycle just before the pandemic. you can see this very clearly looking at the ratio of job openings to unemployment workers. it's still elevated by historical standards but lower now than where it was in 2018,

2019. >> in terms of implications for the next print for august, that we'll get on friday, we think it's relatively limited. there were some statistical anomalies in the july data that made it look a little bit worse. so there was a big increase in labor force participation and layoffs. we expect those to help the unemployment rate drop down to 4.2%. and nonfarm payrolls we find it encouraging, the decrease in jobless claims. up at 250,000 earlier in the summer more concerning now at 230, which is more consistent with a healthy labor market. >> i just mentioned the yield curve always debatable. the predictive powers of that, although there's a track record, been there a few years now, and just went positive momentarily this morning. what conclusions do you draw from that and the fact we're

seeing the sharp bond rally with the ten year in 3-7 range? >> we've viewed the inversions of the curve as more correlation in terms of its relationship to a recession rather than caus causation. in terms of the resent uninversion this is typical when the markets are getting ready for the fed to cut or think the fed is gooing to cut more aggressively than they previously thought so that was probably the response to jolts. typically you get the bullish steeping and then the uninverted yield curve. >> thank you for joining us. let's get to steve liesman with breaking news on the fed. hi, steve? >> sarah, philly fed president patrick harker announcing he's retiring june 2025. this was known he was reaching

the mandatory retirement anyone of 65 don't know when the fed will get with the program that people are able to work longer but the mandatory retirement age, 65. the philadelphia fed looking for his replacement now. a little more on the jolts which the fed is increasingly following, the markets also reacting more and more to it. there's a new measure that comes from today's jolt that helps the fed know whether the labor markets are loose or tight or how much of a threat it may be. the measure, vacancies to the unemployed takes the number of job openings for jolts, divides it by the number of people looking for work. a concept from the 1940s. let's see where it is right now after this morning's data, the ratio has come down, it was two in 2022, meaning there were two jobs open for every unemployed person prompting employers to bid up wages to get workers.

and now it's just 1 to 1 this morning. it's a reason why jay powell has expressed less concern about jobs causing inflation and more of a concern about a weakening labor market. a paper that came out from jackson hole has made a case for explaining what happened during have after the pandemic. it explains for example the inflation surge which researchers saw as labor supply shortages. they show five of the past six inflation episodes going back 111 years came along with labor shortages. it helps to explain the soft landing because inflation fell with economy cooling by reducing vacancies not jobs as governor waller and powell predicted. and the labor market stemming from this number because vacancies are down, unemployment

ticking up. researchers aren't sure where you get the magic ratio number here, saying aiming for a rated of one where we are now, for openings for every unemployed worker is a place to start. higher number rips inflation, lower number means further declines in inflation meaning real people losing real jobs. and that's apparently where we are now. >> it's a good analysis, steve, and helps explain how they don't just look at the unemployment rate, jobless claims, just add it to the mix of what we're getting. the tricky thing, though, for the markets and the fed itself is they don't have -- it's not like an inflation target they don't have an employment target. they want maximum employment and it's hard to figure out how much pain and softening and less tightening they're willing to tolerate. because you could argue looking at the data it's less tight and

softening but not collapsing. >> sara, i need to send you a bouquet of flowers or box of candy for bringing that up. that is really the perfect analysis. it helps to buttress this story. as you and i have covered unemployment over the decades, nobody knows where the right unemployment rate is, where it's too low or too high. we hit 3%, we hit 6%, 5%, what this vu number does is help you understand what level of job tightness or job looseness will create or dissipate inflation. i'm sure you also know it was waller relying on this number in a famous speech in 2022 that helped him combat the argument that said we have to go into a major recession and have a major rise in unemployment to bring this down. what waller did in 2022 was

project forward this number these researchers looked back on it and saying in a more detailed and specific way, this idea was right. >> flowers over candy i think for me. steve, thank you. >> whatever works. >> we're going to talk a lot more about the vacancy ratio. steve liesman appreciate it. >> absolutely. >> when we come back, dan niles gives us his favorite mag seven names after e llf.thseof and counting down to the kickoffs. sports books get ready for a record year in gambling. we have some of the staggering numbers after the break. rock s. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

yesterday selling pressure hazlett up a little bit today but that doesn't always mean you should get too comfortable. we'll turn to the chartsor f a technical look at some unexpected spots for possible continued profit taking. tune in to our market navigator segment today on "power lunch"

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we continue to watch nvidia, now in positive territory, almost a full percent, following that historic drop yesterday as we follow the reports of the doj going after the tech giant. >> it was an historic drop. the concerns of a doj probe among broader growth concerns, bringing nvidia down by as much as 9% yet. antitrust officials are reportedly looking into whether nvidia is penalizing buyers that do not exclusively use its artificial intelligence chips. the chipmaker responding, saying, quote, nvidia wins on merit, as reflected in our benchmark results and value to customers who can choose whatever solution is best for them. the question now that the market is trying to answer is whether this report turns into a formal complaint against the company. so bernstein's stacy rascon says it's too early to qualify the potential regulatory risks, and points to past cases and telling amd and ftc taking on qualcomm,

then broadcom. he says none of them had a lasting impact, although he does say it all caused angst at the time. sort of treating it as a headline risk. taking a step back and taking a look at how the upcoming lenox could impact trust. delrahim telling cnbc the elections will likely not change the doj's continued focus on antitrust enforcement in tech, but likely will affect the process for merger reviews, allowing for quicker resolutions where remedies are available. we are looking at nvidia shares rebounding today, guys. >> so, seema, is it -- the analysts that wall street view that this is a buying opportunity overall, including the regulatory risk factor? >> i think right now, sarah, it seems like wall street analysts, including stacy rascon at bernstein, and we received a note from emelius research as

well, they're pegging on it the gross margins that nvidia projected for the future and how that could impact the company's performance, and also counting down to ceo jenison wang's speech at goldman's cornucopia next wednesday. can you sustain gross margins where they're at? what is your response to this reported doj probe? a lot riding on what he has to say then, but for now, sort of treating this as a headline risk, sarah. >> seema, thank you. seema mody. nfl fans gearing up for a new season in just over 24 hours, with sports books also getting ready for another huge year of gambling, like record-setting. our contessa brew is in downtown montana with the latest. contessa, good morning. >> good morning to you, sarah. 30 states in washington, d.c. now allow mobile sports betting. here in new york city, essentially, you've got sports book on any sidewalk. 95% of sports wagers so far this year were made online, fueling

incredible growth. and no season is more significant than pro-football. the american gaming association projects that americans will legally wager $35 billion throughout the nfl season. that would be more than 30% growth year on year. since last year, you have may, north carolina, vermont, launching sports betting. hard rock has relaunched sports betting in florida. and on average, each of the last three years have seen a 71% jump in active sports betting accounts from the summer months. this is a big reason operators strategize to launch their new offering or improve tech by nfl kickoff. if you look at newcomer fanatics, the sports book was only in four sets. now going into football, it has more than 20 stakes. the pressure is on for its more established, publicly traded competitors, though, with shares in the red to date for draft

kings, for cesar's, for mgm and penn entertainment. in fact, penn launched espn after the football season already started last year, but since then, it tell us its grown its customer database to 31 million members. that's 80% growth. fan duel is highlighting to tie up with youtube, in a promotion for three weeks of the nfl sunday ticket. its president told me no season is more important for customer acquisition and parent company is seeing its stock firmly in the green this year. jeffries analyst says that fan dual and flutter are positioned to continue to outpace the rest of the pack this season. to see more, you can check out our new cnbc sport web page, where you'll find more on sports betting and we'll unveil cnbc's first-ever official nfl team valuations list. that happens tomorrow, bright and early. you do not want to miss that, guys. >> hey, contessa. if interest is so extreme and

we're entering the sweet part of the season, does that mean that their customer acquisition costs, the sweeteners they give to get people to onboard will be lessened this year? >> yes. in fact, what we've seen in more established states, where sports betting has been legal longer, say new jersey, you're seeing the promotions much more tailored, much more restrained. also, a lot of these operators have gone on and signed ed an agreement with the american gaming association to be more responsible in terms of their advertising. being aware of when they're advertising potentially to college kids who are underaged. that may be another reason why you're seeing it less in your face this year. but what they're doing is, they're really trying to tailor those promotions to individual customers so they can maximize the return on value. but espn bet, which is trying to say, hey, you're going to see more promotions there. >> my 6-year-old has a fantasy team. start 'em young, i guess. not gambling, but -- >> contessa, thanks.

dow's up 200. not thanks to the help of apple, though. apple down 1.6% here, as we get closer and closer to next week's glow time event. goldman today suggested that the event would likely be irrelevant to the stock price, and ubs upped their target from 190 to 230. a little bit above 230. that is morebelow the 50-day foe first time in almost a month. "money movers" begins after this. it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

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good wednesday morning again. welcome to "money movers." i'm sara eisen from qukarl quintanilla live from post nine of the new york stock exchange. today, tech names to target on the back of yesterday's big sell-off. dan niles gives us his favorite names in the mag seven, plus a reason to believe in the over 493. >> we'll get a technical take on nvidia and why investors may need to adjust their positioning when it comes to the nasdaq. vix close to a one-month high. >> and the ceo of sofi on the consumer, the rate environment, and the state of credit card debt. >> we mentioned the vix, which is back below 20, but peaked at 23 earlier this morning.