tv Squawk Box CNBC September 16, 2024 6:00am-9:00am EDT
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"squawk box" begins right now. ♪ good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. on this monday morning, you will see a mixed picture with the u.s. equities. dow is indicated up 73 points. s&p is up 3.5. the nasdaq down by 10 points. that comes after the best week in 2024 for the s&p 500 and the nasdaq. the s&p was up 4%. it closed less than 1% from its record high that was set back in july. the nasdaq was up 6% after five straight winning sessions. the dow was up 2.6% for the week. tre check out the there's try yields. this is interesting. we have a fed meeting this week.
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at this point, it looks odds are they could raise 50 basis points. that's what the market is hinting. cut by 50 basis points. the ten-year right now is 3.65%. the two-year is slightly lower yield at 3.56. if you are watching bitcoin, let's check things out. the last thing i saw was off 1,200 points. gold prices, right now, are indicated up -- well, $2,613. it is up close to 35%. in the meantime, former president trump is safe after another assassination attempt. we get straight over to eamon javers with the details of what took place over the weekend. >> reporter: good morning, andrew. here's what we know right now. at 2:00 p.m. on sunday, secret service agents were clearing a path at the golf course in florida. they came across a man with a
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long gun hiding in the bushes. they engaged him and fired shots at him and i took off in a car. a witness got a cell phone picture of the vehicle. that allowed the u.s. secret service and palm beach county sheriff's office put out a be on the lookout alert. police flooded i-95 and trapped vehicle and took the driver into custody without incident. officials said he had an emotionless response to the arrest and did not ask why he was detained. officials said the man was 58-year-old ryan wesley routh. he was just 400 to 500 yards away from trump on the golf course at the time he was stopped by secret service. he had an ak-rifle style gun and
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backpack and a gopro camera and intending to take pictures of whatever he was going to do there. the investigation begins into most tough here and the would-be assassin acting alone. andrew, this comes twomonths after the first assassination attempt which led to the dismissal of the secret service director and led to questions of the agency. after this incident, they are praising the quick response and they did engage the suspect and prevent disaster. there are questions as how this suspect got as close as he did. >> do we know as what we've heard from the trump campaign before is there is not enough secret service protecting the president. does that change? >> reporter: well, it may change today. what we saw yesterday was
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officials saying because he is not the current president of the united states, he doesn't get the full presidential security package. when presidents play golf, an andrew, they close the entire golf course down or presidents play at u.s. military bases which have golf courses on base for that extra level of security. trump plays at his own courses. they don't close down the entire course for him because hehe's g that slightly lower stander of security as being a former president and not current president. all of that will have to be up for rediscussion today after the assassination attempts. >> and how does this impact the election in any way after the first attempt on his life and it clearly had a huge impact on his campaign. >> reporter: it had a huge impacts in terms of the iconic image of trump defiant and
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bloody and urging his supporte s to fight, fight, fight. this is still a campaign that is split down the middle. this is a very evenly divffvide country and campaign. there have been few developments in the campaign that have moved the needle on that overall trajectory, andrew. this one, because it doesn't have the visuals and not as dramatic and the president was safe and secure and removed from the golf course without incident, i think political impact here is negligible. we'll see. >> eamon javers, thank you. >> a lot of comments. ro khanna saying we need to talk today. both parties in congress need to talk today. >> political violence has really stepped up. >> if i were him walking around
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right now -- it would be nerve wracking if you think you are in the cross-hairs. 400 to 500 yards is a shot. guys shouldn't have a clear shot from 400 yards. >> the secret service did an incredible job. president trump said he thought they did a great job. >> they were ahead of him on the hole. >> luckily they saw him. >> the place wasn't secure. >> did he used to do that? shut down his golf courses? >> i would assume the secret service would have done it back then. i know that course. i played that course. it's weird. there's a prison right next to the course. you can hear some inmates yelling. it's not very far -- it used to be. i played there 20 years ago. intel shares are rising. wow. you don't hear that often after
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friday's close. c qualifying for $3.5 billion in grants to make chips for the pentagon. the chip maker has reached a binding agreement with officials. the funding could be announced as soon as this week. you know, good news or bad news. 3% move is now 60 cents because it is a low-priced stock. we are continuing to watch shares of boeing after the machinist union went on strike friday. thousands walked off the job rejecting the labor deal struck with union leaders and leadership. the boeing finance chief said the company will work on a second offer. ratings firm fitch says a one or two-week strike probably won't affect the rating, but anything longer than that could. moody's placed the credit rating on review for possible downgrade
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citing possible cash flow concerns. the stock year to date is off 40%. some big questions not just about the amount of the pay raise, but real question s abou what the workers are asking for in terms of having a pension brought back. that is a much bigger question. meantime, directv and disney reached a deal on saturday. we said this was how the movie would end. to bring espn and other channels back to the tv provider customers ahead of the weekend slate of college football games. the channel went dark on september 1st after the two sides failed to reach agreement on fees and bundle structures. both sides the deal calls for market-based terms on pricing. directv will be able to offer disney in the packages and a la carte. an interesting new model we're
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starting to see develop as that product rolls out. when we come back, the fed in focus. we will get you ready for this week's interest rate decision next. and check out shares of nvidia this morning. that stock climbing nearly 16% last week after comments by the ceo jensen huang about the company's new a.i. chip rollout. this morning, it looks off .75% of 1%. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.
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. on this week's planner, the fed takes center stage kicking off a two-day policy meeting tomorrow and concludes on wednesday with the interest rate decision and news conference by jay powell. futures markets for last week priced in a .25 cut, but shifted to .50 cut. this morning, it is more likely we get 50 basis points than 25. joining us right now to talk about that and the market reaction is stephanie link with hightower. stephanie, we are in a different position today than a week ago just looking at the market reaction last week. really strong upside. best week of the year for the s&p 500 and nasdaq. is it justified?
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is it warranted? >> well, september is living up to its reputation of being volatile. to recover last week was really encouraging. i do think it's tied to the fact we had a couple of good inflation prints last week. we had initial claims to me which was most important. it is tame. it is rising, but the four-week moving afverage is contained at 240,000. the four-week moving average. if you look and go back to rece rece recessionary periods, that is 400,000. you have the whisperiswhispers. becky, we don't know if they will go 25 or 50. the point is we are about to embrace a cutting cycle. that is positive for the long term especially for risk assets,
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especially as we are growing at 2% to 2.5%. we are not in a recession. we are in a position of strength. when you lower interest rates, that is going to be very positive for not only risk assets, but also for the housing market. last week, mortgage rates hit the lowest point since february of 2023. we haven't really begun to see that pent-up demand. if you get mortgage rates below 6%, you will. that will be a multiplier effect for the overall economy as well and positive in my sview. >> last week, you had nvidia that really turned things around after the comments from jensen huang. that seems to be a crazy momentum factor that you can l lean one way or the other with the comments. >> last week, we had a lot of comments from companies because it is conference season. that's good news. companies are on the frontline
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of the economy. that's why we care so much. yeah, nvidia certainly helped propel the momentum trade. it was broadcom and lam and oracle. that was really positive. tech is kind of a life and well and helped the overall market. i will tell you the barclays banking conference also was very positive for a lot of companies. bank of america, american express, morgan stanley, truist. even jpmorgan, which was cautious, all of the companies have positive things to say about the consumer. i think that was really great in terms of the confidence. in addition, delinquencies are stabilizing at 2%. they were at 2.5% in 2019. so, people that get nervous about credit card companies and delinquency rates and charge
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offs, they shouldn't be according to the companies which i thought was positive. by the way, basel iii end game, you will see a lot of buybacks in the banking sector. >> stephanie, concerns of chargebacks, they will say what do we know that they don't? is there something larger lurking out there? >> i don't -- i don't think so, becky. i think on the consumer front, as long as the job market is balanced, that's what i would say it is right now. it's not tight, but balanced. we have wage growth of 4.5%. if you have jobs and you have wages, by the way, if you switch the job, you get 7% wage growth. i think the consumer is in okay shape. by the way, u.s. household net worth is fulactually at record
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highs. i think the consumer -- not all of the consumers are doing well, but they are doing okay and hanging in there. we know it is 70% of the economy. that is super important. i don't think the fed going 50 knows anything. i think they can go 50 because it is restrictive. >> if you are feeling pretty positively about things and it sounds like you are, what are you buying in. >> i added to broadcom last week after it fell two fridays ago. on monday, i started adding to it. a.i., obviously, we know it is strong for them. the number two player for them. that will be up threefold this year from last year. vmware. it is a $4 billion revenue run rate. i'm also buying some consumer. i like chipotle. i've never owned it before. it's down 30% since brian niccol
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has left. they have a very deep bench. same-store sales are growing. they are not taking as much price. they are still going to deliver double digit earnings. they have a $1 billion buyback. i started buying crowdstrike when it fell. it is down 30% from its high. this is the number one company and growing 40% earnings. 32% revenue growth. >> you don't worry about lawsuits that are out there from delta and potentially and beyond? >> i don't. their retention rate in their quarter was 98%. so, they also had their recurring revenue was running about 10.9%. net new annualizing. expectations were for 5%. they are doing well. it's not without some risk, of course, but being down so much, the stock has done from 22 times
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ev to sales down to 12 times. i think a lot of bad news is priced in. my point being is i'm not buying so much last week because the market was up. it's on the bad weeks when you want that take advantage of best in class companies that are on sale. >> okay. steph, thank you. >> thank you. coming up, a key hearing in federal court today for tiktok and its efforts to avoid a government ban. details after the break. "squawk box" is coming right back. what i want businesses to know about my community is just how to tap into the passion around the culture and the relationships. the hispanic community is deep in these and by tapping into these, you fd erinthe is dedication and excitement and energy and creativity and innovation which will ultimately lead back to the business lead back to the business success. stylish. powerful. sophisticated. because when you're in a mercedes,
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tiktok on trial. the company's lawyers head to court today to argue before three federal judges that a ban on the social media would violate americans' rights to free speech. they argue that there are restrictive ways to address security concerns without an outright ban. the government's lawyers will argue the app could allow the chinese government to access sensitive information about americans and spread propaganda. the panel of judges is expected to rule on the case as soon as november. then, legal experts expect the supreme court to decide whether to hear the case before a ban would take effect in mid-january. in the next hour, we talk to
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billionaire frank mccourt leading the group to buy tiktok. when we come ack, we're learning more about new approaches to treating cancer. we'lbrg u e tas l inyothdeil about that after the break. later, dig into eye popping valuations or artificial intelligence companies. don't go anywhere. "squawk box" is coming back after this. >> announcer: executive edge is sponsored by at&t business. next level moments need the next next level moments need the next level network. 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 this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?!
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welcome back to "squawk box." good morning. live from the nasdaq market same in times square. we have green on the screen. the nasdaq up. the s&p 500 off two points. here sis a look right now of stocks dragging down the nasdaq. apple down 2%. micron down 2.5%. arm holdings down 1.5%. warner bros. discovery which has been moving around a lot is down 1.5%. little bit less than that. over the weekend, pfizer saying the drug for the life threatening condition to cause cancer patients to lose their
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appetite is showing i hmproveme in quality of life. if approved, it would be the first treatment in the u.s. for the condition. >> it increases your appetite. >> yeah. >> an anti- -- the opposite of the other drugs. sticking with cancer treatment news. some companies are betting that a complex technology is the next cancer break through. anjelica peebles joins us. >> good morning, joe. astrazeneca and eli lilly are some of the companies that spent $10 billion over the last year to get hooands on drugs to defe cancer cells. g g right now, novartis has two
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pharmaceuticals for some tumors. the drugs contain radioactive material that is good for a few days. you need to get them into patients asap. one requires extra work, but it is paying off and he sees a brighter future ahead. >> the platform is there and as, you know, drug development can create a new molecule combined to the cancer cell, i think there will be more drugs that may be used for more condition, you know, certainly coming in the future. >> a lot of the drugs are in the early stages of development. it could be a while before we know the true potential. astrazeneca representatives say this could be important for cancer care into the 2030s. >> this is a long time. a lot of times they try to put the radio isotope with the
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monoclonal. do you know what the mechanism is in this case? >> what is happening here is you have the drugs that look for a marker. the drug goes there and delivers the radiation to the different isotopes. what is important here is you are taking the cancer and bringing the radiation to the cells and sparing the healthy cells. >> i wonder how they find the marker. we have -- when we talked to stephane. >> stephane bancel. >> yeah. because your cancer is so specific, they go and find your individual marker, if you will, for the cancer that you have. those weird sequences in the dna that they talk about. i don't know what universal marker with the prostate and
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they're looking for the antigen. they are looking for that when you get a test. i don't know how you direct the cancer to that particular marker. probably monoclonal. >> to see those companies spending billions in the last year. it has the potential of ozempic or monjauro. >> it is interesting because this has been an area that we have been hearing people talk about. there was a lot of early stage research and all of a sudden, last fall, you saw eli lilly making an acquisition and after that, the steady drum beat of acquisitions and deals and just last week with sanofi getting in on this and the analyst i spoke to says he sees every major pharma pharmaceutical company will have to have exposure. >> they all? >> it has been acquisitions and
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partnerships or licensing deals. if they are not buying the company, but getting their hands on the technology. they have been going out to other companies to get that. mostly public companies. there are still some private companies out there. you are seeing more investment in this space. much more to come. >> all right. thank you. coming up, former fed vice chair roger ferguson joins us next on what to expect on isth week's interest rate decision. reminder, get the best of squawk pod on your favorite podcast apps and listen anytime. apps and listen anytime. we'll be right back. no. nothing comes even close to laser measured weathertech floorliners. they offer the ultimate protection. front, back and even up the sides. order at wt.com nothing protects like weathertech.
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contributor. it was just last week, roger, we had seen fed futures at least move up a little bit on the possibility of a 50-basis point cut. what do you think's behind that thinking? maybe it would do no harm? 25's not enough? maybe there is a little weakness that we're seeing? might as well get started a little more quickly. >> look, i think there are a number of things behind the thinking. first, the movement to 50/50 on friday was driven by newspaper reporting. there's sort of information out there. one thinks about the underlining rationalefor it. i heard people say they will have to cut several times. why not front load it and get started earlier. there is also something that worries me a little bit that the economy is weaker than it
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appears and this is an insurance polic policy. the last time we talked, we had a discussion if the economy is weaker than it appears. i fear if they move 50 basis points, the notion of they know something we don't know, ie, the market is weaker than we think will take hold and that is not an accurate narrative. it is 50/50 right now. we will see what happens. >> you don't think the stock market response factors into jay powell's thinking whatsoever? i would think if it's 25, that might be disappointing to people. wow, we really like 50. if it was 50, that also might be taken negatively because of what you just mentioned. if they're thinking or if they're worried about the market reaction, i don't think they can win here. >> i agree with you completely. i absolutely am sure i would acknowledge they would prefer to
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see the initial move being neutral to slightly positive in the market. right now, i think they're set up as you articulated as well that someone would be disappointed in the market and possibility of a selloff. i don't think this 50/50 odds for either 25 or 50 is in the positive. it gives them room to move 50 if they want to, but creates a communication challenge to explain why that 50 move was not a sign of increased concern or to the other side if they go 25, why should people be disappointed? >> wasn't the inflation data pretty friendly? it gives them room to go 50, doesn't it? >> i think some of the inflation data and headline cpi number and ppi number were friendly. not consistently so, but
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narrative. what worried me and we talked about this last week is the so-called core that includes housing and two different measures, was still above 3%. if one is focused on the core numbers, because it strips out volatile food and energy, it moves in the right direction. i can't say because it is not at a two handle it is not an all clear. either way, it would not surprise me at 25 or 50 basis points. i think 25 basis points is a bit more prudent to make sure the core numbers with the housing coming down to the 2% number. >> i guess we're getting used to cross currents in the economy, roger. another notable one i saw in the ju journal today. the strong performance of the economy puts the fed in an unusual territory of actually orchestrating a soft landing similar to 1995. that's the first one.
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two stories down. warning from bank executives that americans are struggling to keep up with their bills has setoff alarms on wall street. a strong economy. are people just overextending? is it strong? why are people struggling to keep up with their bills? how do you explain that?% strong economy -- go ahead. >> look, first, it's a very large and complicated economy, right? if you zero in on any one part of it, you could mix in on both stories. the gdp forecasts come from the atlanta fed and new york fed and few others show the economy growing at roughly potential. the most recent, if you look at initial claims continuing on a four-month rolling average of 200,000 which is in the state of
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normal growth and, yes, there are pockets of the economy that are more vulnerable. partially because interest rates are higher and partially because lower-income individuals don't have as much exposure to equities and may not have exposure to other assets that have been helpful to the rest of the economy. we should always expect contradictory messages in an economy that is complicated. the fed shouldn't take its eye off the on tension. inflation is coming down the 2% target. yes, it is time to move out of restrictive territory. the final point i make, the market would get excited about 25 or 50 basis minpoints in the scheme where the fed is moving 1.75 or 2% when they get started at 25 or 50 doesn't change the strategic narrative.
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while we are having this discussion, the odds of the soft landing going up which is to be recognized and fingers crossed whatever they do that they achieve the soft landing which has become, at this stage, hopefully more likely than not. >> it's always 50/50, roger. tell me what it's going to be. go out on a limb. 25 or 50? >> let me be clear. i would not be surprised either way. if i were voting, i would vote 25 basis points because i think the economy is in pretty solid shape. i don't want to create the narrative that the fed knows something that the rest of the economy and market doesn't know. if it turns out that they feel a little pressure later because markets are weakening, they can go 50 when that becomes clearer. for me, i won't be surprised
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either way. personally, wisdom is on the side of 25 basis points. they're smart, credible people who will argue the other side as well. >> okay. >> i like that. you know, they could go either way, but if they are wise, they would do what i would do. >> exactly. >> i'm with you, roger. i agree. >> i'm trying to be diplomatic here. >> it reminds me of what charlie munger would say to warren buffett. i'm right and you will go along with me because you're smart. >> the market created a little bit of a dilemma as joe pointed out. we'll get through this. the main thing say soft landing and moving out of restrictive territory at a prudent pace. >> they have no reason to complain with a pretty strong labor market. it is usually not like that when
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you go into the easing cycle. roger, thanks. we'll see you again, maybe thursday, to talk about if they were smart or stupid. >> wise or stupid. >> thank you. when we come back, four spacex astronauts return to earth after a history-making mission. we have the details next. we have the details next. "squawk box" will be right backl advisor gets to know you, your purpose and the way you give back. that's life well p
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lock. the capsule was epressurized. >> that's funny to think of it as a little bit hotter. like it matters. >> once you're at ten feet. >> and no way. no way. in an unpressurized. >> i didn't realize it until they were up there. >> the suits. >> the engineering is better. >> i like the sta-puff. they were able to move more easily. if you are all stuck in the suits and all subject to space, let me out of my seatbelt. >> i'm good.
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i'd keep that thing on takeoff and landing. >> at all times? >> yup. checking shares of trump media. soared on friday after the former president said he would not sell his stake when the lockup period expires on september 20th. >> a lot of people think that i'll sell my shares. you know, they are worth billions of dollars, but i don't want to sell my shares. i'm not going to sell my shares. i don't need money. >> it's higher this morning, up about 3%. the top of the hour we'll talk more about the assassination attempt on trump's life yesterday. >> the one thing i will point out is that president trump did lash out at the nasdaq after they halted traded of djt on friday. >> yeah. >> i did see that. >> kind of a routine trading halt, suggesting that they should be maybe taking orders from the s.e.c. on this. that was a little weird. >> coming up on the other side,
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valuations to have a.i. companies soaring. we'll look at that next. and a key hearing in a tiktok hearing happens today. we'll talk to frank mccourt who is making a bid to buy the social platform from bytedance. we'll bring you that after this. study results are arriving monthly. from lexarias, patented oral delivery technology trials. lexaria bioscience, transforming the future of glp-1 drug delivery.
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welcome back to "squawk box." more depocketed investors lining up to get in on the latest open a.i. funding round which valued the company chantgpt, of course, the maker of, for $150 billion. joining us right now to talk more about it is the altimeter capital party and leads investments in private a.i. companies. you look at a $150 billion
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valuation. you look at the losses on the other side. you look at the revenue potential, and you say this makes a lot of sense this. makes no sense. what do you think? >> thanks for having me, andrew. it's good to be here. look, the fast technology supercycles have produced large outcomes. the internet supercycle produced a $2 trillion monopoly in google and the mobile technology produced a billion. do you think the supercycle will produce a business that's worth more than $100 billion, $150 billion? we think so, and the second question is openai the winner that have supercycle and that's where there's a lot of debate, a lot of competition and a lot of burn, expensive valuations, and we might be in the minority of believers who think that openai is the indisputable leader and i would be happy to walk you through my thesis. >> i don't think you're in the minority. i think chatgpt from a product perspective is clearly ahead of the rest. the question that i would ask,
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and maybe it's an unfair company, but long term do we believe that these models become commoditized, and how much money is an openai going to be able to capture relative to a google or an amazon or a facebook who is obviously with llama is an open model and free. you know, what happens long term in that regard? >> definitely. look, i'll be the first to tell you, andrew, i don't think it's the model there at which the value acrews. it's the application layer above the model, the consumer models like chatgpt and the enterprise locations that increase the value. if you look at those two. on the consumer leaderboard chatgpt today is clearly the leader. they have got 200 million weekly active users, 3, 4 billion of run rate and two years ago there was none of this. there was no chatgpt.
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most people had not heard of openai and got here in less than two years despite all the noise. sam altman being led go, a lot of management competition and turnover, as you said, so all of this has happened agence turmoil which gives us a lot more faith in this leadership steam to execute. on enterprise side, at jensen said in the earnings call last week, the first company to get into the next frontier of openai gets to introduce. they can be the leader. openai can systematically delivered both leadership in terms of performance who you saw with the model last week, and price. every couple of weeks they have dropped the price of their models, and so look, you know, huge kudos to the team there, sam altman, norm brown who led the research here, and while there's a lot of competition, we believe that openai is delivering. >> do you think that leadership long term is going to have to fundamentally change the
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company's structure? obviously there's a not-for-profit entity and a for-profit part that has the valuation, but ultimately it has to get wrapped together, and does that then create any liability for the company as well in terms of some of the early folks who either funded it, we can call them funders or we can call them investors, i'm talking about elon musk and others, how that changes things? >> well, i think they will get to a point where the company structure is aligned with investors. i don't-i can't speak to that right this moment, but i think it's an important one. what i can say is that there have been companies that got into a structure such that they allow liquidity for early investors and early funders, as you said. we've seen that model at spacex every year, andrew. we can expect some kind of that structure going forward with openai which decide to stay private longer. >> what is your sense about vesting in some of those other companies, an amazon, an alphabet, a meta, for example? >> right.
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look, i think competition for openai is at those levels, right? one is the big tech as you mentioned and startups. i would say on the startup layer, if you combine the revenue of all these startups together, it's -- it's less than a tenth of openai's revenue so i think openai has emerged as a winner there. in big tech they have formidable competition, mark berk at the top of his game, google is underdeploying their amazing resources but we think the age is over, people are looking for answers, not search and apple, one of the major consumer brands. not a total layup for openai but from our perspective openai has threaded that immediately well and in competing with others who are formidable. >> does that mean that apple wins or loses at $218 a share? >> you know, we are very optimistic about apple, you know. there's a lot of great products coming down the road with apple, and we're excited to use them. >> okay. we'll leave the conversation there. thank you very, very much.
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>> thanks, andrew. it is just coming up, 30 seconds, to 7:00 a.m. on the east coast. you're watching "squawk box" right here on nbc. i'm andrew ross sorkin along with joe kernen and becky quick. our top story, a very big week for investors as we get you ready for wednesday's fed rate decision. all eyes will be on 2:00 p.m. wednesday. we'll likely get the first rate cut in four years. will it be 25 basis points, 50 basis points? doesn't matter. maybe it's just the beginning of a long cycle of cuts. meanwhile, the s&p and the nasdaq are coming off their best weeks since november of last year, and then disney and directv reaching an agreement over the weekend that brings disney's espn and abc and other channels backed to the tv provider. the dispute leaving directed-tv's 11 million customers without access to big events including the u.s. open and "monday night football." and bloomberg has said that the company has qualified pore more than $3.5 billion in federal
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grants to make suggesters for the pentagon. intel had been the front-runner for the award, but the chip-maker has now reached a binding agreement with u.s. officials. a look at the stock up 1.5% on the news. the futures are painting a mixed picture. dow futures up another 90 points, but the nasdaq indicated down by about 36. s&p is basically flatlined up by less than two points. let's get over to frank howland who has a look at this morning's movers. >> we'll still with barclay g o'vernova. in a note the analysts said they believe the company, it has a strong growth prospects and a lot of cash flow prospects coming up in the future. a price target of 250 for ge vernova, guard up 1% since jackson hole, up 20% since their spinoff all the way back in april, so you can see stock moving higher right now. we also want to move over to a
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chip-maker micron getting a bearish note from morgan stanley lowering their price targets down. shares down more than 2%. the bank says there's some questions around growth for the chip-maker's fourth and first quarters. just last week it received a bearish call essentially cutting its price target in half. this it can is has been an underperformer in the chip space for years. chips up just 4%. boeing shares, they are rebounding very slightly in the pre-markets up a quarter of a% but still near multi-year lows as the strike by the company's machinist union enters its fourth day. talks with federal mediators, those continue today, but over the weekend a leader for the union says he expects this strike to last quite a while. we had an analyst on "world wide exchange" who forecast the 30-day strike would cost boeing $3 billion and added the impact to operations including plane deliveries for the foreseeable future will be quite negative. shares of boeing, as you can see, rebounding a quarter
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percent but still hitting multi-year lows. back over to you. >> and, again, moody's saying if it lasted more than a week or two it would have a really big impact in terms of their debt ratings. >> the price target was 15. the rest of the street is 213 and a buy rating. we asked him. he said a lot aren't learning on the fundamentals, believing it's a duopoly but believes that could break down in the next couple of years. >> thank you. the fbi is investigating what it's calling an assassination attempt against former president trump, this time outside his golf course in west palm beach, florida. eamon javers joins us with more. >> reporter: about 2:00 p.m. on sunday secret service agents clearing a path for former president trump as he played a round of golf near his mar-a-lago home came across a man with a long gun who was hiding in the bushes just
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outside the fence line. they engaged that person and fired shots at him. he fled on foot and made his way to a nearby vehicle and took off at a high rate of speed. nearby martin county police flooded i-95, spotted the vehicle, trapped it in a pincher maneuver and took the driver into custody without incident. officials said he had an emotionless response to the arrest. he didn't ask why he was being detained, and he today little at that time. officials said the man was 58-year-old ryan wesley routh, and he was just 400 to a hundred yards away from trump on the golf course at the time he was stopped by the secret service. his motive is unclear. routh has told news outlets in the past he had gone to ukraine to help its war effort there, and he's spoken publicly about ukraine admitted foreign soldiers. he's also said in the past that he was working to recruit people for the war effort. not yet clear whether any of that is true. officials will need to confirm his travel history and involve
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there. officials said that at the time he was stopped an had an ak-47-style ri68 with the scope, two backpacks which was hung on a fence which had ceramic tile in there for bulletproof protection and a goprocamera where he was going to take pictures of whatever he wanted to do there. now the investigation has to move into motive and whether there attempted assassin acted alone. all of this coming, joe, just two monies after the first assassination attempt against former president trump. that was an attack that nearly killed the former president. it led to the resignation of the secret service director and, of course, raised questions about the quality of leadership at the protective agency. all of those questions back on the front burner today, joe. back over to you. >> it's not a main part of the story, but a gopro, eamon, everything has to now be on -- put it on your social media right. the rho canna treat that i was talking about, he said two assassination attempts in 60
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days on a former president and the republican nominee is unacceptable. the secret service must come to congress tomorrow, he said this -- tweeted this yesterday, tell us what resources are needed to expand the protective perimeter and let's allocate it in a bipartisan vote on the same day. >> yeah. >> and i don't know, you know, it's early still, 7:00, maybe something -- maybe that does go forward. i mean. >> yeah. >> clearly have to ratchet up security. >> can't be a third times. one of these times it's not going to be attempted. >> yeah. now, look, i mean, can you say that the secret service did everything right here, right? they were moving forward. they were ahead of the former president on the golf course by a couple of holes. they were looking at all the bushes, looking at all the fairway, making sure the area was safe for the former president to play through, and they did, you know, scare this guy out of his position, and they were able to get some shots off at him, but you can also say there was a man with a long gun
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awfully close to the former president of the united states, and how was that allowed to happen? >> they did everything right with the resources that were a lotted. >> with the resources allotted, but if there's a -- if there is sort of a -- a priority list of where you fall and who should be protected, i can understand how an individual who is president would be above someone who is running for president, but given what we know about the guy who is running for president and, you know, the motivation by from wherever it's coming, from i would think that that would elevate where you would want to -- how much are we talking about money? with the money we spend on stuff in this country. >> yeah. >> how much are we talking about to get the entire perimeter? >> i mean, it's millions of dollars, right? >> yeah. >> it's millions of dollars over time, and that's -- that's not really the issue. you think about millions of dollars against, you know, continuing american democracy, that's a no-brainer to spend that money >> exactly. >> one of the things that is
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going to be a constraint here though is the former president himself and how much restriction he's willing to take on his travel. >> well -- >> is he willing to shut down his golf course? >> will he agree to only play golf, for example, at military bases maybe. >> right. >> where he would have a much more secure perimeter. would he agree to do the outdoor rallies? already put up that bulletproof glass around the former president with he speaks outdoors now. anything out of doors is just dangerous. >> must be very unsettling to be him if you don't -- if -- if you don't know whether you're in someone's sights. >> former presidents complain all the time about the constraints on them, the constraints on their travel. they feel very pinned in in the white house because the secret service likes to keep them indoors and away from large crowds. >> we saw the secret service last week for j.d. vance here in studio, too. i mean, there's -- there's no shortage of things that they are trying to do. it's not an easy task. there's a lot of people they are protecting right now, but i think clearly two attempts in
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two months is insane. >> you have a very public area times square right behind you, so that's the kind of thing that gives the secret service, you know, worries, when they look at the location where the former president is going to go or even a vice presidential candidate is going to go. >> right. >> okay. thanks, eamon. >> you bet. >> all right. still to come this morning, investors are waiting a highly anticipated fed policy decision on wednesday. we will talk about their options and what they are likely to do after the break, and later the boeing strike entering day four. we'll talk about what ceo kelly orford needs to do to turn things around with the company. "squawk box" will be right back. e types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does.
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market ahead of the fed rate meeting like bring in portfolio manager at jpmorgan asset management. we were scratching our heads on why the -- the possibility of 50 basis points increased significantly in the last couple of days. what in the bond market do you think -- is there anything, signs there, that indicate it might be -- 50 might be the way that the fed decides to move at this point, kelsey? >> yeah. so the market right now is pricing in about a 50/50 odds that they cut 50 basis points instead of 25, and we think that chair powell is probably sympathetic to the 50 basis point rate cut. we don't think that the fed wants to disappoint the market, particularly on their first
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policy move in 14 months. it would be quite counterproductive for the fed when they are looking to support the economy to disappoint and tighten financial conditions, so i think if market pricing stays around here at the 50/50, the fed is going to have to deliver on that 50 basis point rate cut, and i'm not too concerned about the concept that what does the fed know that we don't know? i really think you have to take a step back and think about where policy rates are right now. they are at least 100 to 150 basis points too restrictive, so just doing 50 basis points to start, you know, it's just getting us on the right path back to neutral. i don't think that we're at risk of easing too soon. inflation break evens, for example, are falling, which is an indication that the market is seeing downside risk to both growth and inflation here. >> so you can make a case in terms of how restrictive the fed
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is, you put it at least 100 basis points or even 150. >> that's correct. >> so that would make doing 25, you know, why do it. if you need to try to get to -- is that the stated goal, to get to neutral? >> i think that's what they are looking to do right now because if you look at any kind of standard policy rule, it suggests that the progress we've made on the inflation mandate alone justifies probably 100 to 150 basis points of easing. now, where i think the market is still very undecided is about the risk that the fed needs to cut below neutral. right now the market is pricing in sharp rate cuts, but then a stabilization around 3%, to see a material leg lower in treasury yields from year which have already moved fairly significantly. you're going to need to see the
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markets start to reassess the probability that the fed actually needs to not just move back to neutral but actually move into a significant easing territory below 2.5% which is not something that the market is currently pricing in. >> we never know what we don't know, and i think you're right, that maybe this time if the fed did go 50, i don't think that the knee-jerk reaction would be uh-oh, what do they know? there's been too many data points recently that i would imagine lend credence to the notion that the economy is in pretty good shape. is there any way there's something looming like, you know, the "titanic" where we all -- all we see is the top of the ice or something? is there anything that could be out there that could cause people concern, or would they say, okay, they are doing 50 because they want to get to neutral? i think they could do it and not really raise those fears, like you said. >> yeah. i agree.
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i mean, you look at the data, and it's mixed. it's not, you know, all clear in one way, but i think what they see is they see a labor market that's cooling. they see payroll growth that has slowed. the three-month moving average for non-farm payrolls is 116,000. that's right on top of the levels of payroll growth where historically the fed has eased in the last seven cycles, so the job growth has slowed, but, you know, the reason i think the market continues to be able to remain sanguine around the prospects for the economy is because layoffs remain low, and as a number of your guests have pointed out this morning, gdp tracking in the u.s. continues to remain robust, and what you hear from companies is, you know, things may be slowing, but nothing is falling off, not off a cliff here. you know, the prospects of a soft landing we can still hold on to them for now. >> hey kelsey, i want to bring
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up a quote from stan drukenmuller, reaching out to joe and i this morning and said this was something we could go ahead and use. he said i don't care if they go 25 or 50, i really don't, but i can't help but point out right after inflation was 9% was rates at 0, they went 25 basis points, meaning up 25 basis points. where were all the wall street cheerleaders who were calling for 50 because real rates are too high? the asymmetry in their narrative is striking, and that just gets into the idea of do it because they can or dole it out slowly? >> well, maybe they learned something from the experience that they had on the way up. they started slow, and then they had to accelerate and ultimately had to do 75-basis point hikes and that was very jarring. >> so maybe at this point they want to be look at front-loading, and it's not just
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something that market participants are talking about. even ian waterloo's last speech that he did following the jobs report, he did discuss the concept of front-loading rate cuts, similar to what they did on the way up and maybe even we can do it a bit more efficiently than we did on -- when inflation was viewed as transitory, move a little bit more proactively this time knowing that inflation has come back down, and the risks are now more skewed towards not the inflation upside risks but the downside risks to employment. >> how long do you think it takes for rate cuts to work their way into the economy? on the one hand it generally takes a while. on the other hand, we're already seeing interest rates move just on the expectations that they will cut rates. >> that's a fair point, and there isn't a precise way to measure this, but i do think that when we're thinking about the rate cuts that the fed is
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going to deliver in 2024 in the last three meetings of the year, those are really going to be impacting the outlook for 2025. so it does take some time for them to pass through. the places where we'll see the pass-through happen most quickly is, of course, in financial markets, in mortgage rates, and i suspect another area that we'll get a nice boost is commercial real estate where there's a lot of risk around reinvestment and just seeing those rates move lower is a sign to help them kind of extend the lives of some of the more troubled situations. >> right. all right. kelsey, thank you. you're saying 50. how sure are you? you 50%, or are you 70% or 80%? >> i -- i think that the fed needs to follow through if the market is pricing here or more, so 50 basis points. >> okay.
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very good. thank you. all right. up next, the latest on the strike at boeing. talks are set to resume this week. meantime, the stock is sitting at multi-year lows. we're going to find out how long the strike may last and what that might mean. and later, tiktok getting its day in court over a lawsuit orin could ban the platfm the united states. we'll hear from project liberty founder frank mccourt who is pursuing a purchase of its u.s. operations. when you need to prepare for unpredictable adventures... (gasp) you need weathertech. [hot dog splat.] laser measured floorliners front and rear.
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boeing is set to resume contract negotiations with the 30,000 union workers on strike this week. a prolonged strike could push the company's debt into junk territory. joining us now with more on this is eric dessenhall, research and chairman. you've seen a lot of messes, and this one has to be at top of the bunch. it's kind of mind-blowing to think of this great pride that we take in boeing and this american manufacturing to see what has happened to this company. what do you do if you're the brand-new ceo who is maybe a month into the job on this? >> well, they are fighting for the viability of the company. no workforce, no company. and the cfo has said as much
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that the settling of the strike has to be the top priority, but that doesn't mean it's the whole priority. you're dealing with cascading failures, safety, cost of living, regulatory challenges, but the first has to be labor, but i can't imagine that at a higher strategic level they are not having discussions about do they merge? do they sell? do they declare bankruptcy? because no single resolving one of these problems sol of the the broader cluster. >> if that's the case, if there are actual conversations, and we don't know this, we're on the outside, but if there are actual conversations which are not unreasonable conversations given what we see is the situation there, is this a company that's too big to fail? i can't imagine america without a boeing. >> i think that that's right. i mean, if we have seen anything in the last decade and a half or
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so, we have seen the good -- the too big to fail phenomenon. it's hard for me to imagine symbolically that this administration or any administration is going to let them vanish from the planet, especially to be acquired by a foreign manufacturer. there's a lot of problems there. so, again, i have no evidence. i'm not on the inside, but i can't believe those talks are not being held at different levels, but, again, if you don't have a workforce, how do you convince anybody you have a company worth saving? >> okay. but if you have a workforce that wants its pension brought back and clearly is looking for higher wages. i don't know how the original package went through. 25% over four years, why the union leadership would agree when 90% of its board members were not on board with that idea. washington being involved at this stake at this point would
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seem like a pretty easy answer, too, that there would be questions that would be asked because, again, i can't imagine we allow boeing to go away. >> well, that's right. i mean, the thing about crisis management is there's things that the world sees, and there's things that the world doesn't see. i have found when i am on the inside of something like this, and i'm not on this one, you have this iceberg where the things that really matter are happening where nobody can see. discussions with bank, discussions with regulators, discussions with unions, and we're all sitting here on the outside reading statements as if the external communications are what is pivotal in this situation, and, look, it's not unimportant, but these crises are not resolved by external communications. they are resolved by something more fundamental and happening internal at a very high level. >> these problems were not just years in the making. i would say over a decade in the making. you go back the last couple of ceos and maybe point some fingers with some of these
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things. what's the solution? what would you be telling people inside the room right now? how do you fix things? how do you get things back on target starting with the union? >> well, it's a one at a time thing. it is not that there is a central narrative that solves everything. again, you are looking at failures on a constant level. i mean, if you talk to people inside the industry, they will tell you that a lot of this comes down to -- rather than becoming a plane company, an airplane company, becoming a financial quarterly company, and, you know, whenever i do one of these interviews, i'm inundated of questions of what really caused all of this. a lot of people know what they are talking about, but it's not the kind of thing that you have a hearing and say, okay, here is the one central strategy when you have all of these variables coming at you in realtime.
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it's not unlike a military situation where you could talk strategy all you want, but if you have the visigofs at the gate, have you to deal with them. >> thanks. coming up next, spacex and what's next for tiktok as they head to court today for a fight on a possible ban of the platform in the united states. we'll talk about it all when "squawk box" returns after this. at aes, our energy solutions have powered the world forward for more than 40 years. and as demand continues to scale, so do our solutions. introducing maximo - our new ai-enabled solar robot.
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bring on the good stuff. significantly lower. it's only 2.34%. i don't know. maybe it's this. there's a company called tf securities. i think it's a chinese company, and there is a report saying that apple expects weaker sales for the 16 pro. the iphone 16 pro based on first weekend pre-orders. >> right. >> i don't know. we'll talk to gene muenster in the 8:00 hour. >> and they have been saying
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even last week that the -- a lot of a.i. features we've been hearing about are not rolled out in this verge, at least this ios that's going to run on the phone, so the sort of urgency to buy the phone is less. i was actually -- >> i want it for the new camera and the battery is there but, you know, my son and i were talking about the phone. does he need it? what does he need it? you know, all of the functionality that we've seen in terms of some of the presentations you're not going to actually be able to use in reality until later this fall or even the spring. >> is this the son that likes new. >> this is the son that likes you. >> if you are not going to do that, you tell him -- >> to call you. >> from what i understand he has his own money for this. >> is it important to him? how many does he -- how many times are you going to be able to -- to do things for your kids? >> i think a lot, right? >> you tell max, tell -- i think
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he knows how to get in touch with me. >> yeah, he does. >> okay. >> and you'll let him, won't you? >> absolutely. >> all right. when we come back, the tariff strategy for both campaigns and what it means for voters. we're going to compare the trump and harris economic agendas next. let's take a look at the futures, ahead of that. >> the bengals. >> the bengals. they will not win. >> up 100 points for the dow, down 70 for the nasdaq and 2 for the s&p. >> they will not learn until jim nantz learns how to pronounce the bengals. the bengals. >> the bengals don't deserve to win if it ryans with jingle. jim nantz, i knew they were going to lose because of jim nantz. thanks, jim. (♪♪)
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stay sharp and improve your memory with prevagen. prevagen. in stores everywhere without a prescription. welcome back to "squawk box." last week we had vice presidential candidate j.d. vance on the program, and we asked about tariffs. here's what he had to say about that. >> classic examples that economists use to to attack or % use to attack donald trump's economic policies are the tariffs he imposed on working machines and dishwashers. so they show a chart that says,
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well, look, a few months after this tariff the price of dishwashers went up a little bit, but if you look at over two years the price went down. induced a lot of american factories to invest in american workers and american-made products, and the price of dishwashers has lagged behind the price of a lot of other home appliances, so sometimes when you induce investment in capital formation in the united states of america, it does lower prices on american workers. >> joinching us right now is justin williford, the university of public policy in economics. you listened to that explanation by j.d. vance. does it make sense to you? >> i'm an economists professor, mate. if that was one of my students that would be a d-mine us and that's pause we don't fail students anymore. look, the problem is -- i want to talk about the case study, because it's a case study that matters not just for the tariff to buy but also speaks to how j.d. vance is conducting his campaign. there's been very careful studies by economists that showed when you implemented a
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tariff under trump on washing machines, that dollar for dollar, every dollar of the tariff went through to higher prices for washing machines, is there criticizing a graph of mine? fair enough. let's extend the sample. let's make sure that this effect persists and in fact it does, two, three, four years later. you see that higher washing machine prices followed the trump tavis, and it's not just washing machines and you put a tariff on washing machines and sneaky corporations decide what they will do is raise the price of dryers. it's an interesting case study and in different ways in which tariffs can lead to all sorts of distortions. >> right. >> justin, is there any argument to be made about inducing manufacturing in the united states as a function of tariffs? are there any examples where in fact prices perhaps they don't
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go down but they stay the same? >> there's the possibility, right, so j.d. can tell a story. there's the possibility that you get production in the u.s. and those factories grow up and become productive and join the world economy, but we have case study after case study. this has been tried all around the world, not just in the united states, india and brazil, for instance, tried to become pc manufacturers and spend millions, probably billions of dollars subsidizing the industries, and it turns out that if you've got a company that can only be competitive if it's getting a leg up from tariffs, the moment you take those tariffs away what you discover is you've -- you've got yourself an unproductive local company. look, i also want to go back which is j.d. didn't just promise that he'd get something that didn't happen, manufacturing capacity in the u.s., he's lying to the american public. he's saying if we implement tariffs, you'll get lower prices. that's absurd. that's crazy.
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we have no examples of that occurring. let's have a mature economic debate, one in which we tell the truth and one in which we admit and recognize there are real trade-offs to all of these issues. >> justin, let me ask you a different issue. if i were to ask you as one who can make policy, if you could, to try to induce more manufacturing into the united states, how would you do it? >> andrew, would i start by asking why do you want to do that? did you know that -- for many years the argument has been we want manufacturing jobs in america because manufacturing jobs are high-paying jobs. >> right. >> they are now below the average for the united states, so anyone who says they want to -- i understand the romance of manufacturing, but, remember, these are now -- >> justin, hold on though. i'm going to -- there is an argument around supply chains, national security, the idea of being reliant on your own country and nothing having to rely on even folks that appear to be allies that may ultimately not be.
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i mean, i think there are some arguments. they may cost more to -- to manufacture here, but there are arguments to do it, no? >> absolutely, but they are not necessarily around manufacturing. you are know what. if we don't have washing machines because china wouldn't export them to us, i'm sure we'd find a way of getting by. you know the things we really need for national security, we need the ability to come up with the idea and invent vaccines. we need the ability to lead the world in cryptography. we need, you know -- it's the -- it's not necessarily guys and gals in overall factories who are keeping us safe. it's also nerds in labs and lab coats who win venting the next products that are really are the source of our economic growth. >> when you think about the tariffs that were put on, one of the things you heard former president trump say to vice president harris, look, this administration, the current
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administration, kept a lot of these tariffs on. was that a bad idea? >> if they had asked me i would have said yes. i don't like the trump tariffs, and i don't like the biden continuation, but also there's bad ideas and there's terrible ideas, so sometimes we do use tariffs as part of statecraft. we try to knock around and bully other countries for international reasons, and there are really some important international relations issues with respect to china. the problem, of course, is if you have a 10% across-the-board tariff which is what president trump is proposing, that's not strategic. that doesn't provide an incentive for our trading partners to say -- fix things like protection of american intellectual property and the like, so, yes, maybe international relations folks can make a case that we ought to use our trade powers sometimes for -- to help us on the world
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stage, but an across-the-board tariff is blunt, sends no message and gives us no strategic leverage. >> justin, let me ask you maybe a strategic question. elon musk has said that the united states is going to have to keep tariffs on electric vehicles from china. otherwise they would, quote, unquote, eat our lunch. he believes that the cars that are coming out of china are better, at least, that all the manufacturers, except for tesla, that's what he says. i don't know if that's true, but would you want to -- you know, to the extent that you would want to protect manufacturing of automobiles in the united states and maybe you would say, no, let's outsource that to china. i'm just asking the question. what would you do? >> well, you know, when elon musk is worried about someone eating our lunch on electric vehicles, it's important to think about who our is. you and i have very different interests when it comes to electric vehicles than elon musk does. you and i want a vehicle that's safe, transports our kids that doesn't destroy the environment and comes at a reasonable
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reason. elon wants some of those things, but he's pretty happy if the price stays high and doesn't have too many competitors out there. look, andrew, let me ask you a different question. >> yeah. what if the chinese government as its form of tariff protection says every american who buys a chinese car we will write you a $10,000 check. do you think it's a good idea for americans to accept $10,000 checks because, i don't know about you, i like $10,000? >> you know, i think a lot of americans would like the $10,000. i think the question becomes do you become so dependent on some other country that then not says we're not going to write you the $10,000 check, but we'll actually require you to write us a $20,000 check later. that's part of the push-pull of the geopolitics of this, right? >> absolutely, and so this is where when you get into the geopolitics you might want to move beyond -- i'm just going to fess up. i'm giving a relatively
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simplistic economic analysis. do we want a healthy global market in electric vehicles? the answer is unquestionably yes. whether anyone like tesla would monopolize -- >> before you go, speak to one things because it doesn't get enough air time, i don't think, which is the retribution issue. not only when tariffs get put on it sometimes costs the american taxpayer more money itself, buff i've been saying last week i've within getting e-mails from farmers oddly enough who have been making the argument when it comes to exports that there's a cost on the other end as well. as an economist, can you speak to that? >> yeah, andrew, 200% you've got the right issue, and that's what we should all be leading with. we ear having the debate should america put on tariffs while the rest of the world does nothing in the reality is america puts on tariffs at trading partners and we end up not trading with each other and no one gains everything. that's what happened in the first trump term.
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i'm sure that is what will happen the next time. so the real question is should the united states engage in a trade war in which earn loses, or should we stay out of a trade war and maintain the current situation in which we and our trading partners all have relatively stable economies? >> justin, i wish we could continue this conversation in part because i wanted to ask you about tiktok and so much more. that case actually happening today relates to all of us in its own unusual way. justin, appreciate your time this morning. >> take care. thanks, andrew. coming up, a check on the markets, and later in the program cantor fitzgerald ceo and chairman and howard lutnick. he's the trump/vance 2025 team transition co-chair. we'll be right back.
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line. look at the nasdaq. see what the biggest laggards are this morning. micron, apple and are aed holdings, biggest weights on the dow or s&p 500. apple off by 2 1/3. coming up, tiktok heading to court today over a law that could possibly lead to a ban. we speak to project liberty founder frank mccourt who wants to buy tiktok. later, a second assassination attempt against former president trump just outside his golf course. the latest on that developing story. do not go anywhere. we're coming right back. s all across america. millions of americans who have medicare and medicaid but may be missing
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welcome back. bytedance. tiktok's parent company, facing a key court hearing to stop a possible ban or sale of the app in the united states by january 19th. a potential buyer hopes to change the app's experience for its 170 million u.s. users and joining us now is that potential buyer, frank mccourt from project liberty. founder there. frank, talk about this. starting with what this case is
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setting up for today. the united states, the government is saying that this is a national security issue, because the owners are chinese, have access to 170 million americans' private information, and browsing activities. the company has pushed back saying, no, no. this is about the first amendment ringhts. where do you come down? >> first amendment, a big decoy, a smoke screen. hear that a lot from big tech. the first amendment and so forth. these are scraping data from millions of americans and using that data in ways way beyond making money. in this particular case because it's in the hands of the chinese communist country, they're using that information to manipulate us and affect our viewpoint on this. >> you've seen ed evidence.
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what evidence have you seen? >> if you see what's going on, comparing tiktok to, for instance, youtube or instagram, there is a -- they turn the volume up on information favorable to china. whether it's the uighurs, tibet, or hong kong. tiananmen, more recently the middle east. the amplification of messages favorable to china are increased by 50, 100, 200 even 800 times. >> based on what? >> based on comparison to youtube and instagram. it's just side by side. and likewise, the volume can is turned down on information unfavorable. >> let me ask you a question about this? >> sure. >> that may be -- statistically you may be right, may be wrong, i don't know, but do you have any evidence, because i have not seen it thus far, of actual
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either whistle-blowers, somebody coming forward with any kind of documentations there been any move afoot inside tiktok, inside the united states, or inside of china changed algorithm, move it, adjust it, do something to the algorithm that has anything to do with these topics what sow ever? any piece of material, physical, anything, that actually shows that. >> i do, actually. andrew -- >> you do? >> shift your focus a bit. >> no. go straight to that question. you said you do. so what is it? >> we see big tech operating on the same set of principles. scraping individuals' data, aggregating it and applying algorithms to it and we have evidence every day of the influence and power that has. >> i get that. i'm asking whether there was actual a material human being
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inside one of these companies that, where there's actual documentation that shows, not what the outcome was. i recognize the outcome issue, but i think there's an interesting question about that given actually what people find unfortunately more engaging and i think there's a largerssue about how that engagement works. it may very well be, by the way, youtube and instagram are being much more, let's say, responsible, frankly, with their algorithms insofar as-- depressing the kinds of materials you're talking about? >> not sure they are. i think we're on the right issue now. which is the way this technology -- >> hold on. go back. you said you had documentation of what i said. >> no. >> which was there's actually documentation of people who are pressing the buttons physically? >> sorry. i didn't say that. what i said is that, there is evidence. look around us every day. we are falling apart,
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societally, kids are being harmed. this is not limited to tiktok. be very, very clear on that. the difference with tiktok is that this information is in the hands of, let's call it, and adversary, at least when it comes to political ideology. they don't want to see democracy thrive. they want their form of government to our vive. surveilling us, and knows everybody about each of us is incredibly powerful weapon. >> i'm not here to defend tiktok or the chinese. my goal is get to the bottom what we actually think this it company has done or hasn't done and whether you say they're surveilling us. i have yet to also see documentation of true surveillance. personal information commuted to the chinese and some come out in napes and firewalls put up.
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maybe you don't believe that, firewalls put up since then. >> the technology is inherent in the technology. i'm hoping we were absorb the technology that we're now using. talking about internet technology and the platforms that scrape data and use that personal information to make money, influence, manipulate and so forth. that is inherent in the technology. not just tiktok. the difference with tiktok is that that influence machinery is in the hands of an adversary. there is more evidence than we could possibly need in -- out there every day we see it. this is a very, very serious, serious issue. now, no. have i seen a piece of paper or something that shows, there's an individual in china that is dialing -- you know, playing
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with the -- of course not. but that's not the point here. the point is that the technology is all surveillance based. it is you a-ish did it's manipulating you and me and, again, the difference, it's in the hands of the chinese communist party. >> we don't know how the courts will rule in this situation. if it comes up for sale my guess you are not the only bidder interested in taking this on. what backing do you have? what money do you -- >> i would assume there would be others as well. we call our bid the people's bid. to bring lots of people together to buy the platform. not because i want to be the ceo of a social media platform. i'd like to see 170 million americans move over to an alternative to the current internet we have. one that is not surveilling them, is not scraping their data, not ma minlating them. it's a permission base. we offer up our data on, and we have agency and control. and receive some of the value
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for that. we're now in conversations with institutions that have trillions of dollars on balance sheets and very interested in this project and the outcome. >> if it's not tiktok that you're able to buy, will you start something like that on your own? >> yes. and we're doing that anyway. we can't rely on the fact we're going to be successful buying tiktok. we now have over a million people on this alternative internet and know the technology works. which was, fairly daunting to start with. now adoption and migration is key and why we're looking for the 170 million users. it's fortuitous. >> a practical question. there is a demonstrable question whether, if the product, when it's sold to somebody, if the government were to force its sale, were to quote/unquote come with the algorithm. nobody believes that. effect lively build your own
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algorithm, meaning a period of time, maybe months to a year, in which the product either doesn't exist or doesn't work the way were it's supposed to work or whatever. i don't know. therefore, then the question is, what value is in this product at all if the product is so degraded over a period of six months? it's a fast-moving world. using chatgpt now. weren't doing that two years ago. people have already moved on to other social media -- >> tech does move fast. doesn't it? the point here is that the company is worth less without the algorithm. we don't want the algorithm. we don't need the algorithm. we have put forward into the world a new protocol, which allows you and i to control our identity and our data. what it needs is scale, and you have to step back, i think, and realize the internet works the way it works just because of a
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few simple proceedtocols. it did operate differently not sitting here having these conversations whether the chinese government is influencing american citizens or not. or whether these other large platforms are harming kids. >> you're not a fan of big tech in general? >> as designed. i'm a huge fan of big tech and technology. of capitalist and so forth. >> not the things happening right now. >> absolutely. who is. >> frank, thanks for coming in. frank mccourt. just after 8:00 a.m. on the east coast. you are watching "squawk box"cn >> i'm becky quick and with joe kernen and andrew ross sorkin. fed week. investors are looking ahead to wednesday's interest rate decision by the u.s. central bank. inflation is cooling, centering winter the fed will cut by a quarter or half a percentage point. apple shares taking a leg
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lower. analysis by j.pmorgan and pointing to iphone 16 pro models, stock off by about 2.5%. and day four of boeing machineists striking for better pay. 30,000 workers walking off the job last week. negotiators due to resume talks tomorrow. futures now. weakness in the nasdaq. apple's down. get to mike santoli with more on the markets. trying to figure that out, mike. maybe angst about the new iphone? >> yeah. looks like it. i know people were tracking a sort of wait time for the new phones and things like that over the weekend. a general hesitation here in indexes after a really strong week. more than 4% gain in s&p 500 brought in insight of old highs dating to mid-july. answers a week ago map the experience of august into september. a nasty down first week associated with a somewhat troublesome late labor market
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indicators, monthly jobs report and reprieve in the rest of the data in terms of consumer, a.i. almost back to highs. three months have gone equal weighted s&p 500 far outpacing regular s&p market cape weighted as well as nasdaq 100. a broadens market in the context of a trading range. fedex expect aces a huge part of the rebound. 50 basis points. 25. who knows? rhetoric, two-year note yield, market saying, get on with it. seemingly making investorsers psychology safe for a half percent cut mean it's happening because inflation is down and neutral rate lower not because the economy is sliding. go much lower, 3 1/4, indicating more trouble in the economy at least in the bond market's estimation, joe. >> very good. thanks, mike. excited at -- you in the 50 camp now? >> i never thought it mattered that much but definitely see the
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rationale, and at this point the way the market's positioned and the fact probably not seen as some worrisome sign, kind of like, why not? >> okay. thank you. see ya. coming up, an interview with cantor fitzgerald chairman and ceo, co-chair of the white house transition people preparing for a possible trump win in november. we'll we're gawk to talk to him, right after this.
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attempted assassination of trump at a rally in pennsylvania just 50 days before the election. joining us now, co-chair of the former president's white house transition team howard lutnick. ceo and chairman of cantor fitzgerald, gbc group. we saw you last week as we could every year. as we do every year. september 11th and proceeds -- >> located top of the world trade center lost 658 of our 916 employees and still close to us. still hold the memorial together and keep their families really, really tight with us. >> when did you become the co-chair of the transition? >> just about three months ago. >> oh. you've been in that position for three months? >> about slee months. which is good. the plan, you know? the idea is not to do transition on election day. sort of to get ready so you have good plans and you have great
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people in place who want to serve. so then you can show -- my objective show the president a mosaic. opportunity of all of these people who want to serve. already vetted, and let's go. let's go select the greatest government we've ever had. have smart people do it. really get great people to commit to serving the government, which i have every day, everywhere i go, people say i want to serve. if he wins i want to serve. >> are you in position to tell us who's going to fill out all the different cabinet positions? >> i'm in a position to tell you i'm building a mosaic of the greatest people. who selects the people to serve? the president of the united states just elected by everybody. >> you can't even wish, tell us a wish list at this point. talk and eventually we'll talk tariffs, but all the different moving parts of the opposing economic plan, from vice president harris versus president trump. how do you characterize the big
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picture? the difference? >> partisan politics. it's amazing. it's like, you remember that 51 intelligence officers who said the biden laptop was a russian disinformation, and it was just -- hunter biden's laptop, which the fbi must have known in about what? ten seconds knew it was real. like saying 15 nobel laureates including janet yellen's husband writing and signs a paper this -- it's partisan nonsense. >> i hear you. saw david solomon saying -- totally -- >> no one's read the goldman report. it is nonsense. let's assume that it was the worst set of circumstances. we put in tariffs, right, and every other country in the world matches the tariffs. then go see what happens. i mean, kind of nonsense r.
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>> also had to do with open borders. >> right. our prices for labor are going to come down because we'll have employed 30,000 in immigrants -- >> what is kamala harris proposing and what is former president trump proposing for example to fight inflation? engender growth, to pay off the debt? to deal with, try and narrow the deficit? the differences? >> one way to break inflation. okay? to bring down energy costs. the only tool that you really have to break inflation is to -- stop printing money. god knows, stop printing money. we all know where inflation comes from. right? inflation comes from the american rescue plan, which was passed in 2021, which created $2 trillion of new cash being produced. right? that came into the economy. everyone said it's going to create inflation. it created inflation middle of
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2022. we all know where it came from. it's called the american rescue plan. $2 trillion of spending. look, you can't produce inflation without printing money. you don't print money, you can't produce inflation. >> i have a question for you. >> sure. >> i don't disagree that that bill produced some inflation. >> i said it then, by the way. >> the question is, whether having, on a relative basis, how much do you blame the fed? you can go, look around the world as supply chain issues. other reasons there was inflation in the system. >> okay. let's be -- >> exacerbated it -- >> no, no. you can't produce inflation without printing money. i'm telling you. >> so what do you think the federal reserve was doing during the pandemic? supply chain didn't -- >> you can't inflate without money. milton freeman. remember him? >> yes. >> crystal clear. the only entity that can produce inflation in the world is the government by printing money. >> yes! >> and there is no other.
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number one. number two go to energy. you bring down energy costs. >> the government was printing money during the trump administration. >> no inflation. not printing too much. they did not print too much. >> you don't think the -- why inflation in the rest of the world? >> why did i go on television and say that inflation was going to begin after the american rescue plan, the $2 trillion, which was unnecessary. after we were coming out. 2021. you remember we were rocking, right? second half of 2020. >> no doubt that it was supply chain, cause youed a supply problem and dump -- people say the stimulus during trump needed it because of the pandemic. then over, done and didn't need it. >> the question i have -- >> talking about drill, baby, drill, and we had j.d. vance on last week and a lot of people said, drill, baby, we're already leading the world in production and -- if you were to drill a lot more, prices would probably come down, which would be good, but the oil companies at that
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point, we know how supply and demand works. they pull in their horns when prices don't warrant a lot of excess, a lot more drilling. right? >> we have the same or more, we have more oil and more capacity than saudi arabia. you would in ever know it. we constrain our drilling. >> even though it's up at record levels? >> just won't drill on it because we don't want to. we want to break the -- the democratic party does not want you in a fossil fuel car. they want to break the fossil fuel car. they want to break mobility. okay? and you break mobility, you break rural america. we can't have electric cars operating in rural america. doesn't work. that breaks the rule, and go to suburban. how do i commute to work to and from in an electric car? we need fossil fuels the next 30, 40 years. some day we'll get good enough in batteries. my goal, release american ingenuity to build batteries
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before we go to electric cars, which are produced in china. batteries all produced in china. let's create batteries in america. use american ingenuity to create batteries in america. don'ts change the iron range in minnesota because they said it could pollute. right? we need rare earth there to build batteries. we need to drill and drive down energy costs that will break the back of inflation. we need to break the back of inflation. then we need to figure out how to build batteries for the long term. not the short term. we can't be in electric cars by 2030. trucks would be too heavy. can't even go over bridges in america! i need business practicality. >> you talk to the former president about tariffs, do you see it oas a bargaining tip or ddo you think we'll see tariffs
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akro across the board. i think tariffs on products we make not on products we don't make. we can't sell a ford or gm in europe. go to europe. you can't sell a ford or gm. why? because 100% tariffs. how about in japan? 100% tariffs. do you think if we said we're going to tariff you, the way you tariff us, do you think they're going to allow mercedes and japanese companies and porsches and bmws to all of a sudden have 100% tariffs in america? of course not. they're come in, negotiate. their tariffs will come down and finally ford and general motors will be able to sell in these places. >> how does that sound, andrew? >> of course they're coming down. this is negotiating. >> absolutely makes sense. if you do it strategically across the board creates a problem. the question, will the president do it strategically or across
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the board. he ep keeps saying across the board. >> you make broads when running for office so people understand you. tariffs are an amazing tool for the president to use, but he understands don't tariff stuff we don't make. if we don't make it and you want to buy it. i don't want to put a price up there. pointless. we want to make it in america, tariff it. competing with a tariff. but we need to protect the american worker, finally someone's going to protect the american worker and donald trump is here to protect the american worker. >> make a lot of money in tariffs or used as negotiating tactics, look, tariffs come down there. we're not going to have super high tariffs here either. not a big pot of money. >> which is it? make a lot of money on tariffs or bring productivity here and drive up our workers here? it's a win-win scenario. i like both of them. i think what's going to happen is we'll make a bunch of money on the tariffs but mostly
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everybody else is going to negotiate with us and we will be more fair. in 1948, right, we cake up with the marshall plan. germany and japan were destroyed after world war ii and we wanted to export our economy to them. so we made a rule. they could tariff us and the we won't tariff them. so they can rebuild -- >> an explanation i heard -- >> we rebuilt their economy using something called the marshall plan. our economy is so awesome we'll use it to help you rebuild. when should that have ended? what do you think? 1980? right? 1985? i mean, why 40 years are japan and germany and all of europe still teariffing the heck of yo out of our auto industry and furniture industry. seems crazy, why? because they tariff us and we don't tariff them.
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it's so obvious. >> before you go, i want to ask you this it since you're running the transition team. former president trump disavowed project 2025. >> he's disavowed it to me for sure. >> have you read product 2025? >> i did. >> you did? okay. have you met with either paul danse or anybody involved in product 2025. >> the best answer i can give you, absolutely zero. how about that? about zosolutely zero. no -- between transition and -- >> it's all about the transition. saying you've never met with these people -- >> i won't take a list from them, a topic from them. i won't touch them. they made themselves nuclear. you know what nuclear means? touch them, gets on your hands opinion the transition team of donald trump has not touched it, has not gone near it and anybody who says it's got anything to do
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with us is just not telling the truth on purpose. clear, clear, clear. zero. >> you are finding the best and brightest open to serving in the next trump administration? >> it's so amazing. walking in here, the people here say, i'll serve. as i walk around, they say, i'll serve. you know, in new york, you wouldn't think, okay. it's a big democratic city. >> right. >> all over me. i'll serve. i'll serve. i give you people who will serve. they want to serve. once upon time picked on you in 2016 if you were a trump supporter. now people call me, how could you support him? i say something like, how could you support her? know what it is? politics now. it's just good old-fashioned politics. everybody who's a rb republican wants to serve and help. everybody's who a democrat wants to serve and wants to help. it's just good, old-fashioned politics. nonsense and rhetoric needs to come occupy out. the goldman report is absurd.
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everybody in the world, tariffs everybody in the world? that's not reality. reality is, his economic plan will help america. it's going to bring us back, 3% growth rate. it's going to work. >> thank you for being in studio with us. >> my pleasure. >> thank you. >> thanks. > ene meac>>wh wco bk, what disney and directv goaded towards them a new deal after a blackout. julia boorstin will tell us right after this break. we'll be right back.
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directv and disney ending their two-week-long blackout saturday just in time for college football. julia boorstin joins us to break down what the deal says about the future of the media industry. good morning. >> andrew, two weeks after the blackout began the fact access to disney's channel was restored to drect-tv customers just in time for college the football
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games speaks to the importance of sports, which is the highest rated live content. also highlights the growing importance of streaming services to both the media giants and the tv distributors amid the decline of the paid-tv ecosystem. how the two companies compromised. in addition to directv paying for linear channels directv can offer genre specific. disney streaming services, disney+ and hulu, packages under wholesale agreement or sold a la carte. next year directv able to says the flagship app, this big deal for disney, at no additional cost. directv, offers customers a $30 credit during the blackout said amount of customers lost wasn't material. the final deal echoes one made
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with charter and disney last year. they did drop distribution of smaller channels in exchange for integration of disney+, hulu pluss and espn+ and last week warner b er brothers discovery k a deal with apps into the charter's bundle. with the rise of netflix and cord cutting paid-tv distributors like charter and directv increasingly are focused how to benefit from growing demand for streaming services. the other media giants are eager to grow the distribution of their streami ing apps. not just for subscription fees. more important, grow the audience for ad-supported services. andrew, all about growing eyeballs on these ad-supported apps. >> fascinating stuff. what do you think it means to the future deals we'll see? >> for future deal, s, seeing
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streaming included in the deals. companies like disney got paid a certainly amount before. in the future access to apps a part of it. really interesting is to see how the media companies, which want to be profiting from the d to c advantage of their apps rather than wholesaling them. >> i was going to say. what will it do to margins long term if having to offer apps effectively as wholesale prices? >> a question i think fundamentally how many paid tv subscribers there will be in the u.s. there's been a decline. hovering around 50 million paid-tv subscribers. seeing a lot of subscribers shift over to skinnier bundles. also the say of the world. if disney can get more to sub describing to this flagship app a year from now, benefits from incremental advertising revenue
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that's more valuable because it can be targeted because it's via streaming. >> thank you. appreciate it. rick santelli is standing by at the cme in chicago with breaking manufacturing data. rick, the numbers, please. >> yes. and this is september read, becky, which means, realtime as we get in terms of data. this september read on empire manufacturing, manufacturing in and around, around 11.5. this is an extremely out of whack number considering we haven't had a positive number since november of last year. so this is the first, but it doesn't comp to november of last year, because that was only 9.1. we have to go all the way back to april of '22 to find a higher number. so this is a very significant read and it does underscore how intense the fed's mission will be to decide on the size and scope of the rate cut cycle,
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because there's certainly pockets of growth in the economy and still pockets of strength within the labor market. this doesn't make their job any easier, and gives us even more insight that potentially we're starting to see some of these really horrible manufacturing numbers, potentially turn around. now, look at interest rates as we sit right now at 3.52 on a two year that is down, what? six basis points right now. close here, 20 year ye close. 10s, 3.62'sdown three basis points. close here a 15-month low yield close. see twos to tens remaining in positive territory around that level of 10. we see all the other spreads 3s to 30s, prices up, and the curve steepening. play be good for banks. may be good for a lot of various aspects of the economy, but in
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the end, it's the dynamics why long dated treasury yields are more stubbornly coming down slower. that's going to be the important aspect. because of debt and deficit? because there's a perception that the economy is better off than some of those we see? hard to answer now. get a lot more information with regard to the yield curve and markets once we see what the fed does on wednesday and how the markets react. not only in the heat of the moment of when we see whether it's 25 or 50, but how it looks over the next several sessions after that first rate cut. back to you. >> all right, rick. thank you very much. now turn to our own steve liesman on this. steve, what are you thinking? >> you know, becky, following these fed fund futures's made a strong move this morning towards pricing in a 50. as the fed goes into this meeting with an unusual amount of debate over its decision here, trading up 65% a chance of
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a 50 now. i think i went to, hit the weekend, it was around 45. just a 35% chance of a 25. that's a sharp turnaround from last week. after the cpi report trading at 85% probability of a 25. usually go into these meetings 85 to 90% decided. unclear what's changed all this. several articles in the "journal." several former fed officials suggesting they could make a case for 50, even if they did not all explicitly advocate for one. some comments former cleveland fed president said on cnbc. you can make the case for 50 though tough to communicate and head of the kansas city fed, and ex of new york fed, advocated for 50. and fisher from dallas, supporting a 25 to start for economic and political reasons.
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here are reasons for 25. fed goes to 25, default move by the fed. default is what you would do. gradual unless the data is screaming for you to go not into default. 50 is conservative. panic signaling the economy and politics internally at the fed getting everybody onboard and the presidential elections. dallas, richard fisher says on air. >> i argue for 25. first of all you don't want to send a signal of worry. the fed doesn't worry about politics. you know darn well did 50, one of the candidates, you know ooh i'm talking about, would be screaming about the fed. >> fed chair powell rejected 9 notion politics played a role in the fed's deliberations. why you might go 50. where the fed is going anyway, might as well get there now. fed behind the curve for a cut in july and no harm since the fed is said to be restrictive.
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can bring it down without really stimulating the economy can and insurance against weakness since weakness in the economy is the biggest risk. and jpmorgan writing, policy is currently a full percentage point or more too restrictive. quote/unquote. bullard expecting 25 and dovish outlook in the projections as much as 125 to 150 points lower within a year's time. whatever the fed does, some part of the market's got to be offsized and disappointed. longer run, the question, how much does it matter, long as the fed telegraphs this dovish path ahead, does the market get what it's wants either way, becky? >> all fair points and all things to think about. add, former vice chairman of the fed roger ferguson with us a this morning suggested they could go either way. neither would surprise him, but if they are wise, he said, they'd go 25 basis points. >> let's just do 150, steve.
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just get there. >> well, you know, the reason why you go gradually is because you could be wrong. nobody's ever right about the future. >> you can't do it. yeah. >> maybe we can have a 150. >> here theoretically, knew wano get to neutral maybe beyond are, then just do it. no. that would be -- >> that's why i've been reporting with every fed official and asked what's the easy move? how much could you do without worrying? debate is 100 to 150 is the easy part. i will point out and give you a fresh quote while talking here, the market has 250 baked in by this time next year. looking at a september fed fund futures here, and it's now 288. hang on. double check that. yes. 288, exactly the number that it is. do the math.
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250 basis points already baked in. the fed may project 150. so that's a reason for the fed to do 25. to keep the market from going crazy and projecting more by this time next year. >> thanks, steve. i want to say one thing. i just said what howard lutnick made the most sense in terms of tariffs. i was wrong. what he said is not right. there are not 100% tariffs coming tr japan or germany. makes sense to negotiate. right now japan has no tariffs on cars coming in. when i said it, it made sense to me. it is not. tariffs comingin from this. 10%. part of the reason american cars don't sell well in japan an out-dated image of quality and a lot bigger and don't fit in the streets there. >> there's other. really strict safety protocols they don't -- and i mean, stuff
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that goes on, but those numbers weren't right. coming up, a take on iphone 16 sales over the next couple years, and what's happening right now. a new noteut o this morning. next, though, take a deeper look at financials coming off a volatile week for some big banks. stay tuned. you're watching "squawk box" on cnbc. but no one loves logistics as much as they do. you need tamra, izzy and emma. they need a retirement plan. work with principal so we can help you with a retirement and benefits plan that's right for your team. let our expertise round out yours.
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welcome back, everybody. joining us now onset to weigh in on this week's fed decision rates and recent volatility seen in bank stocks is president and ceo of kbw. thanks for being here today. >> thank you. >> and where do you want to start? we have a fed decision this week. get that of you 0 the way first? >> yeah. >> what does it mean for the banks? >> lower rates will help banks. earlier this month we ended the longest period of yields curve inversion in our careers. that is a tough environment for banks. so banks no longer having inverted yield curve is going to help, and we think the fed policy change will help. so we think that the banks have been sailing into a headwind. little revenue growth. that is changing as we speak and
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we think you'll see very slow revenue growth improvement back half of the year. >> usually when a yield curve uninverts is signal as recession is around the corner. this time around? >> gets us to the soft landing, hard landing. listened to so many other speakers. if i had that answer, had a crystal ball, the answer we would want. our lens through the banking system it's hard to see evidence of a hard landing's we're still in the soft landing camp. the other thing i'd say, we need orderly. you start having surprise 50 basis points changes up or down the banking industry was not built to respond to that. it can. nor the markets. >> what does it do? not 25 basis, margin -- >> if it's 50, the industry will adapt and be fine. the industry like orderly. remember, a little duration that happens in a bank balance sheet. so typically where they're
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borrowing deposits making loans there's a little bit of a time difference. see when the yield curve is inverted and rates are swinging around, just makes it a little bit more difficult to manage. >> forget investors madenervous by a 50 point cut. what matters, bankers, who they're loaning to how and why? >> exactly. the story of the industry is that the economy is slowing. the fed's accesses are working. you're seeing it. there's no loan growth in america. we need lower rates to get loan growth. you want heat to come off the commercial real estate sector? great if rates were 100 basis points lower. >> but not overnight. >> not overnight. disorderly is never good for the banks industry. the banking industry likes orderly. i think 25 basis points is orderly and what i think they should do. commercial rates are better than average in america. seeing cracks are in the consumer and last weeking there were a couple new data points that made investors cautious,
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but just this morning, capital one came out with their august data and it showed things are pretty stable. it's not clear. if you're a non-prime consumer inflation caught up with you and in all my channel checks employment shifted. i'm hearing employers can now find people more easily than a year can ago. >> talking lets up on the brakes slightly? >> that's right. my opinion is, investors at least in financials will see if they see 50 basis points, they're probably going to say, what is the fed seeing in the economy? because the investors will be more nervous of a hard landing than a soft landing and want to know if that's a key data point that suggesting that's going to happen. >> okay. that's an interesting perspective we probably don't spend enough time focusing on. what about the basel three new requirements out there? >> yes. >> a lot lighter than the original? >> we were expecting there to be an adjustment, and got the adjustment, and so we didn't change earnings estimates after
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the new proposal, which suggested -- basically baked in our expectation. i think the bigger picture here, becky, is, regulations has been pounding on the banks for several years. they're only half of financial services today. look no further than mortgages. mortgage origination. pre-global financial crisis seven of the top ten mortgage originators were banks. today it's three. what changed? forget how to do mortgages? no. more expensive because of regulation. backing off from the regulation. banks, in my opinion, still will be safe are and sound, which is the primary goal, but it's going to allow them to be competitive. >> who are lenders now if only three of the ten are the top mortgage ones? who fills up rest of the top ten. >> maybe rocket mortgage. >> small guys. >> guys who don't have the same oversight? >> one regulator. if you're a bank you have honor of having three or four. also, mortgage servicing where you make a lot of the money, they put such a high capital
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charge on it banks just don't do it. >> set us up for potential problem in all of that is happening in the quieter 145d oh of places of banking -- >> my opinion, we do need a broad overview of the entire financial services sector. because a lot of competitors get a lighter touch. they should level the playing field. in my opinion. i think we will be happier five to ten years from now if that happens, but, yes. i mean, look. i think the most spectacular failure of last year was ftx. they were doing activities that had been illegal in the united states since the 1930s yet we get no regulation but plenty of capital charges on the banks. there were a couple of bank failures due to interest rate risk not credit risk. stil still, plenty focus what happened in the banks but not a lot. a lot of really good companies non-banks. not shaking a shot. >> we don't know what we don't
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know. >> take a step back and a bick-picture look. my take. >> thank you. when we come back, countdown back to the release of apple's a pone 16. rert out this morning why he's bullish on iphone revenue growth. we'll talk to him after this. "squawk box" rolls on. ready fr whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free. at t. rowe price, we help advisors move forward by building agile
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welcome back to "squawk box." the iphone 16 going on sale this friday. our next guest has a new apple note out. he expects iphone revenue to grow 15% in fiscal 2025 and 17% in 2026. both those numbers are well above street consensus. joining us right now, deepwater asset managing partner, gene. good morning to you. do you think a super cycle is upon us? we have been having a debate in the sorkin family household about whether everybody needs these new phones. i want it for the battery and i just like the new stuff, but it's unclear to me whether all the new a.i. features are -- when they get rolled out and how
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quickly and which phones you need to have them and what that does to the super cycle if there is one. >> the timing on these a.i. features are going to impact how investors think about the growth rates and they are going to take six months to roll out. the shares of apple are down 2.5% in the premarket today on commentary that the rollout for the first few days is muted. and i have been following a lot of these iphone upgrade releases, these upgrade weekends, and typically, you can use a box office approach to an iphone upgrade cycle, basically looking at lead times of the first few times can generally get you a sense in terms of what that cycle is going to look like. this time, it's different, given some of the comments that you had, the timing on when these a.i. features come into play. at the end of the day, there is a lot of talk around a.i. there's actually not a lot of usage of it, and ultimately, consumers need to use these features to get excited. i think that's going to happen. i just want to put a finer point on this. a lot of talk and not a lot of
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usage. openai has now given the number of their weekly subscribers, their users, is 200 million. that puts the dailies, probably somewhere around 75 to 100 million. facebook, google have 3 billion-plus dailies across their properties. there's a lot of talk of a.i. i think when consumers get ahold of these features, you're going to see a significant increase in that and just want to quickly -- you gave some pretty -- you pointed out my aggressive numbers in terms of what iphone is going to grow. it doesn't take much to get there, we can walk through what those are, but i think that 15% versus the street at 7% is most achievable. >> here, i think the question is, you know, talking about a movie box office kind of weekend opening, whether we could have a muted opening this weekend, if you will, coming up when it does physically get released and then whether there's almost a second
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bite at the apple come christmastime or maybe even to sometime in 2025 when more of the a.i. features get effectively released into the operating system and more people start talking about how they're able to actually do things that they can't do right now. >> yeah. undoubtedly, this is a different cycle than they've ever had because the software is the lead feature. typically, of course, it's hardware. hardware is something that people can see, they can understand before they even own the phone, and in the case of these features, it's conceptual for most people. and so, i think that reality -- this is the most important feature is this software and it's still conceptual, i think, underlines why this is going to take some time to move forward and i would think of these features, the rollout, just beyond the six-month timing, there will be some basic generative features initially, easier to use your phone, and ultimately, we're going to move to more visual a.i. with a camera and then agentic a.i. and
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then that's the 6, 12-month window, ultimately. >> how far behind do you think that apple is as it relates to alphabet and google given the pixel phone and some of the a.i. that's already incorporated into android? >> on a feature-to-feature basis, they're probably about six months to a year behind. when it comes to doing something unique, being able to take their data, consumers' data, and get insights around it, i would say they have the lead. but if you're looking at kind of just the bits and bytes of it, they're behind. apple's been behind on a.i. and this is part of their catch-up. >> gene, thank you for joining us this morning. we will see how that box office looks later this week. looks later this week. coming right back after this (aflac duck) hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent. it really helped close that gap. (whisper) go, go, go! (group) yay! go aflac! go duck! get help with expenses health insurance doesn't cover.
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all right, a little more than half an hour to go to the opening bell on wall street. frank holland joins us with a look at some of today's premarket movers. hello again, frank. >> good morning again, becky. we're going to start with shares of colgate palmolive, down after a wells fargo downgrade to underweight. however, the price target remains the same at $100. that's a few bucks lower than the stock is currently trading at. analysts really emphasized they don't think the company is
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broken, but they do believe that colgate palmolive is facing a number of headwinds, including losing global toothpaste market share. shares down about 1.5%. intel, shares moving higher after the chip maker reportedly qualified for as much as $3.5 billion in federal grants to make chips for the pentagon. that funding is part of the department's plan to establish production of advanced chips for the military and for intelligence. shares of intel up almost 2.5%, but of course, important to note, year to date, you see the moves here, down just about 60%. moving on to another company that we're going to talk about probably all day today. that's boeing. you can see those shares just fractionally lower, but still near multi-year lows as a strike by the company's machinist union enters its fourth day. talks with mediators continue today but the leader says he expects the strike to last quite a while. you can see for the week, down about 4%. back to you, becky.
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>> okay, frank, thank you. you. >> it's not me. it is? >> it is, sir. >> good. final check on the markets. >> tag, you're it. >> yeah. tag, you're it. we don't have any time, but we do have the dow up. nasdaq, down. there was some weakness in apple. join us tomorrow, which will be tuesday, i think. "squawk on the street" is next. >> that much, we know. >> that, we know. ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber at post nine of the new york stock exchange. cramer is at one mark in san francisco ahead of dreamforce. premarket is mixed as we come off the s&p's best week of the year. a lot to tackle with retail sales tomorrow, the fed on wednesday. ten-year, 3.65%, and empire manufacturing was a beat. our road map begins with the fed on deck with the case for 50 gaining some steam
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