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 today.

>> plus, we're keeping an eye on shares of apple with its -- biggest biggest laggards ont on the s&p. and why larry ellison and elon musk are begging nvidia's jensen huang to please take our money. we'll give you the details. let's begin with jim this morning and his very big week in san francisco. you're going to work hard this week, jim. >> oh, i got to tell you, we've got everything from hock tan today, broadcom. we have rene haas from arm. these are the -- these right are in the center of what's happening right now if you look at the crawl underneath us. those stocks are all down. but you know, enterprise software is the real focus and that's salesforce, and david, you know this. enterprise software has been the big bust of 2024. let's find out why, because it's supposed to be so integral to a.i. >> yeah. all of it integral to a.i.

i don't know, should we take bets on how often that's going to come up in every single conversation you have, or will you say anything but a.i., a.i., a.i.? a.i., a verb, a noun, a.i. >> what's the matter with saying generative a.i.? why do i have to limit it to a.i.? >> that's true. i didn't think of that. more of a descriptor in front of it, which is what we're talking about. and will be talking about and continue to talk about, and it's going to fuel everything there. what about salesforce itself? i mean, when it comes to, obviously, the big event that they put on and the questions about -- and we dealt with this when the company reported earnings, and remember that klarna call that i recounted, and then you had marc benioff, of course, a guest on your show that evening, talking about are companies really pulling it out or not? >> look, i think you're right. right now, there's a lot of questions about whether salesforce is as relevant as it used to be. i think that its new product, its agent product, does matter

and it's going to be on display here, but i also think what we're seeing, david, is other than servicenow, which has a huge number of contracts, we've not been able to translate a.i. into earnings for anyone other than the aforementioned nvidia. now, i began to see that with oracle, and oracle would make me think that some of these applications are going to work. carl, what's happened is that hardware's winning, and software's losing. you know, it's been a dozen years since that's been the case. let's find out. i had to go boots on the ground here because i don't like it. i don't like the tone of what people are saying about salesforce. i think salesforce is doing better than people realize. >> we're going to talk about this upgrade of oracle out of meliu. we'll get to that in a second. talk some macro and markets to start off. bracing for this big fed decision this week. jim, greg in the jou"journal" o the weekend calling for 50 and du dudley saying not just that 50 is what we should get, he thinks

it's what we're going to get. >> i struggle to find out where the overall weakness is in the economy, given the fact twe jus had great earnings. i know we have retail sales tomorrow. job growth is not necessarily where we want it. i think that 50 is an overreaction to where we are, although obviously, we're restricted. i know we're so high, it's restrictive, but david, when we get a 25, we feel pretty good. there will be more 25s. we got 50, aren't you and i going to be saying, what's lurking? is it private equity? david, is it private credit? is that what's doing it? >> i think you're right, jim. there's going to -- certainly going to be questions if we were to get 50 or at least deeper questions about, are we misjudging just how bad things already are? that said, others will say, well, you've got a lag effect. you might as well get started and get started in a bigger way as opposed to be more incremental. >> well, look, i do think that the word is out to the journalists, credible journalists, that they are

expecting 50. the problem, carl, is that we had huge bets made on friday in the housing business. if housing doesn't get to 50, you're going to see the major weakness there. i don't know whether the mag seven will be able to take their place, but the number -- sheer number of bets that were made as soon as it went to 50 and in terms of chatter, sets us up for if we don't get 50, we go down and that's pretty much plain and simple. 50 or no. >> the b of a desk today, jim, our team can't help but think it's a lose-lose. 25, likely to disappoint. 50 could renew some slowdown fears. >> i'm in that camp. i thought that was a very cogent piece. i have ten piece on my desk that would indicate, don't worry about anything. that piece stands out as something that says, look, we're -- we set up the wrong -- it's not set up right for the stock market. david, a lot of times, we have, as you know, we'll have algorithms that will basically just say, sell if we don't get 50, and i think they're going to

be in play. 50 is something to worry about. but now, 25 means a lot of stocks have to go down. >> it's also the size of the cut and then the dots, right? we're just going to give you a little road map as to what comes next. >> without a doubt. all of this coming as you just mentioned the broader market after two kind of crazy weeks. i mean, we were down the biggest we'd been down in the broader market, and the nasdaq, and then we were up the most we've been up for the year. we're talking, what, the s&p was up 4% last week, best since november of '23. the week prior was down 4.6%. worst performance since march of '23. by the way, the nasdaq, very similar story. 5.9% was the gain last week. of course, we know why. we talked about it. it was jensen huang at the goldman conference. it was larry ellison. we'll talk more about that at oracle. it was just that trade coming back on to a certain extent and enthusiasm coming back into the possibilities being opened up by generative a.i. but of course, the nasdaq had been down 5.8% the week prior,

jim, all of which is to say, as we set up for the week ahead, we talk about rates, but what do you make of this market action overall? >> well, first of all, it's incredible that we could be so bipolar, that the first week of the month, we literally believe that a.i. is worthless, you got to sell nvidia, anybody in it has overstayed its welcome. then, oracle, we have 162 datacenters, we go down to from 1,000 to 2,000 from a very credible source, larry ellison, and then a belief that apple is going to have a strong launch. i have here in my hand, three pi pieces which say the apple 16 is already a bust. can you do that in 48 hours? 48 hours -- there were really good football games. maybe people just decided, you know what? i'm going to watch some football and not buy the 16. these people are the people who have kept you out of apple repeatedly, and they're back. >> yeah, there is a question as to whether preorders are really

something that is important to focus on. not that you wouldn't include it in your group of things you're -- you know, you're considering when or whether you want to buy the stock or not, but jim, i don't know. are preorders as big a deal as they might have once been? >> these are not taylor swift tickets. these are big instruments. a lot of money has to be spent. there's not a -- the a.i. isn't loaded in it, but you can't get the a.i. in 15. i want the a.i. i think it's -- carl, i think that when you base apple's future on the first 72 minutes of a -- which is about what they have with these pieces. they ginned up these pieces. they want to make us -- they want to make a splash. carl, when you look at the history of apple, these launches are why people sell. and then, they have incredible remorse, but not until the stock's at $240. >> i know, every time we do this, jim, he gets under your skin. he does, though, do an analysis of opening weekend, as you say,

and his work leads him to believe that the 16, the pro and the max, we should be specific, are going to open up maybe for the first weekend down, what, 13% from what the 15 did? >> i care more about what mahomes thinks. does michaelahomes like it? if we're going to focus on that, i want to see what -- who went off and what -- what are we hearing from kamara from new orleans think? people sell apple at $214 and then they wonder, why didn't i catch the move from 5 to $214? oh, yeah, it was because mahomes said that sales weren't that good. >> well, yeah, you've got the typical bulls coming out and defending, of course, gene munster was a guest on "squawk box" not long ago talking about the super cycle, and, of course, dan ives, he of the channel checks, coming out and defending on the x platform as well,

talking about being undeterred in terms of that super cycle. >> the super cycle is bad. >> one thing that does give people pause is the multiple, jim. we're back up at 30 times. >> i know. >> and when you compare it to the likes of a meta or an alphabet, it's a big dispersion. >> we're still not willing to include the fact that they have a revenue stream, a service stream, that is very much -- tim cook, hold your ears because i know he doesn't like having things equated to a gillette razor -- but you have this razor blade theme. we don't see the service revenue go up during the first 72 minutes these jackals come out and say, it's no good. i'm not buying a super cycle. maybe there's something in between. maybe really good sales. i'm not asking for a super bowl champion. i'm asking for the playoffs. they'll deliver the playoffs. >> right. >> he's never going to stop with the football stuff from now

until super bowl. >> i think he's worried about brown. we're in his head today. >> worried? worried? i'm despondent. >> every other sentence is a.i. or football. that's basically all your going to get out of him for the next seven months. >> 55 million people play fantasy, and we all relate companies to players, and kamara is apple. i'm not buying into the negative thesis but i'm also not saying it's lombardi. it's not the greatest ever. >> we will see tonight, jim. going to be an important one. >> yeah, real important. >> meanwhile, for the second time in just over two months, the fbi is investigating what it's calling an apparent assassination attempt against the former president. let's get to aeamon javers with the latest. >> here's what we know now. at about 2:00 p.m. on sunday, secret service agents were clearing a path for former president trump as he played a round of golf near his mar-a-lago home in florida. officers then came across a man with a long gun who was hiding in the bushes. they engaged that person, fired shots at him.

he fled on foot, 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 maneuver with the other vehicles that they were operating and took the driver into custody without incident. officials said the man had an emotionless response to the arrest. he didn't ask why he was being detained. he said little. officials said the man was 58-year-old ryan wesley routh, and he was just 4 to 500 yards away from trump on the golf course at the time that he was stopped by the secret service. his motive here is unclear. routh has told news outlets that he had gone to ukraine to help its war effort, and he has spoken publicly about ukraine's admitting foreign soldiers and has said in the past that he was working to recruit people for the war effort there. not yet clear whether any of that is true. officials are going to need to confirm his travel history and comb through all of his social media and other information. officials also said he had a

semiautomatic rifle with a scope, two backpacks, which were hung on a fence that had a ceramic tile for bulletproof protection in them and a gopro camera with which he was apparently going to take pictures of whatever it was that he intended to do there. now, guys, the investigation really begins to move into motive and whether this attempted assassin acted alone. all of this coming just two months, as you say, carl, after the first assassination attempt against trump. that was an attack that nearly killed the former president, missed by inches, led to the resignation of the secret service director and raised questions about the quality of leadership at the protective agency. those questions swirling again this morning, carl. >> eamon, some reports this morning that the former president is going to be briefed today by the acting director of the secret service. the other question is, how would anybody would-be assailant know that golf was on the former president's schedule? that's going to get some notice today as well. >> yeah. i mean, one question is, how long was he there? so, they're going to have to

reverse engineer all of thhis movements. he did have the backpack with him. did he have provisions? was he camped out for some period of time there waiting for trump? it's well known, generally, that trump plays a lot of golf on weekends, and if you know what state he's in, you know what golf course might be likely, but to narrow it down to that specific window of time seems difficult without some either intel or lying in wait for an extended period of time. we'll have to find out more as we go along, carl. >> eamon javers in d.c. when we come back, oracle among the names coming off that big week for the a.i. trade. listen to what larry ellison had to say about nvidia and jensen huang when we come back. in the meantime, take a look at the premarket. still split, although the dow leading the charge at this early hour. hour. stay with us car, this isn't the way home. that's right james, it isn't. car, where are we going?

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shares jumped by double digits, oracle among them. stocks also up 18% in the last month, jim, and we mentioned this upgrade out of melius today. >> i think it's important to upgrade because ben reitzes comes in and says, look, i missed 50%, but there could be far more. and he also talks about the notion of these companies being basically friends, that companies rent the new datacenters that oracle's building, oracle gives them business. david, these are all sworn enemies. it seems somehow to be creating some sort of -- it's not a coalition, but there are companies that are friends that haven't been in a long time. i'm trying to figure it out. >> yeah, i mean, again, to your point, in the piece himself, he goes on to talk about the partners, so to speak, that need to work with oracle, even though it is a cloud competitor in other ways as well. but they run a lot of the oracle -- the actual database stuff as well in part to help their customers. >> well, look, i think that to

come in now is to say that the real dream of 162 datacenters, which is what ellison has, to a thousand or even 2,000, that that continues to have cogencogenecy. oracle is an amazing company. all we used to talk about, google, amazon, amazon web services, microsoft azure. suddenly, oracle is not only in the conversation but oracle may be the most important because they are getting the space that people really need because the datacenters are very hard to build, and ellison, apparently, has distinguished himself as the person who knows how to build them fastest, bestest, quickest. so it does matter. >> melius does go on to say they built a great first-class a.i. architecture with nonblocking networks that maximizes computing density per megawatt. now, i don't know. the nonblocking part of that, i mean, usually, you want blocking, right? like, you know, i mean --

they're nonblocking. it's like the jets' offensive line. you want them to block, not nonblock. >> what's offensive line? what is that in reference to? >> just coming back at you. honestly, i'm not sure what that means other than i assume it means that they are more energy efficient, which is obviously a key that we talked about so often, jim. >> take a look at a stock, ge vernova. a lot of people are saying it's a windmill company. give me a break, don quixote. this is an labsolute bonanza fo companies that need natural gas power. that's datacenter for heaven's sake. that ain't windmill. >> yeah. that's -- that's what's turned the whole utilities playbook upside down. as for oracle, jim, the sound that got circulated over the weekend in which larry ellison describes what dinner sounds like between him, elon musk, and jensen huang. take a listen. >> if you listen to jensen huang, and i'm sure you do, i know you do because i've seen

his stock price and i know i went to dinner with elon musk, jensen huang, and i went to dinner, and i would describe the dinner as oracle and -- me and elon begging jensen for gpus. please take our money. please take our money. by the way, i got dinner. please take our money. no, no, take more of it. you're not taking enough of it. we need you to take more of our money. please. it went okay. it worked. >> that's how you sustain 90% margins, i guess, jim. >> yeah. three billionaires walk into a bar. now, i have to tell you that this is so different from where we were two weeks ago, but it's very similar to what jensen huang talked about at goldman, which is basically it's a highly emotional process. david, since when is it a highly

emotional process to try to get something that costs $40,000? >> it's a good question. it is somewhat unique in the annals of technology, jim, to think of emotion being a part of the entire process and how -- but i mean, ellison spoke to the competition that we talk about so often in terms of being able to get access to the chips that you need, the gpus, blackwell being the latest iteration, to run these enormous models that have to keep consuming vast amounts of data, keep pushing ja generative a.i. further and further ahead to the point where we see applications that we all can recognize on the consumer level, not just the enterprise, that actually generate a real return for those spending the hundreds of billions of dollars to run those models. >> well, hock tan would tell you, not yet, not yet. you got to stay with the hyperscalers. the big guns, which i think is absolutely true. elon musk has said critical things about jensen. the last conference call, he said nice things, but you really want to be -- get it right with

jensen, and i'm not sure whether musk is getting it right yet. >> jim, when we come back, west coast edition of your "mad dash." we'll count down to the opening bell. we'll get to boeing, intel, disney, the cruise lines, ford, tiktok, big day today, when we return.

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take a look at some nasdaq 100 laggards premarket. the chips are not helping out today. micron down almost four. you see smci. we'll talk about intel later on, and of course, jim has arm holdings on tonight with re en haas. "mad money" on 6:00 p.m. eastern time. opening bell in four minutes

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. >> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. time for a cross-country "mad dash." don't have much time, jim. i know you you want to talk a little t-mobile. >> i don't need time. september 18th, meeting, mike sievert. then, of course, on "mad money." do you think he doesn't know more about apple and sales than these three stooges who say apple's already timed to go, sell it? i'm done with my time. i cede it to you, senator. >> all right. we got cow bells here, so that's not going to be good either. >> that was very terse. thank you. >> there it goes, carl. >> yep. if you can hear me, the opening

bell and the cnbc realtime exchange. at the big board, staffing services provider kforce, celebrating its recent transfer from the nasdaq and at the nasdaq, the general -- consulate general of mexico in new york commemorating the 214th anniversary of mexican independence. so, jim, again, if you can hear the sound of my voice, we got to work our way and chop a lot of wood to the fed, but between now and the fed, we will get retail sales. >> retail sales is going to be another one of those numbers where all we're going to do is talk about 25, 50, 25, 50, missing the forest for the trees. what matters is we're in a rate cut cycle and a rate cut cycle, you buy a lot of stocks that could generally really start companies accelerating because they have been hurt. that's why i say the home builders are going to get hit on it if we do 25, but then you got

to come right back to them, because a rate cut cycle lifts a lot of boats, including this one. i don't know, carl. i'm not in the camp that just says, if it's 25, it's no good or 50, it's no good. i am in the camp that says, that particular day is going to have a lot of volatility and i'm urging people not to freak out about 25 or 50 even as it will be the major source of discussion. why 50? why not more than 25? it's a parlor game, carl, and i don't want to play it, but i recognize it's here. >> but in a rate-cutting cycle, what do you want to buy? do you want to keep buying cyclicals? i wonder -- we'll talk about the boeing strike. there's a lot of companies that feed into boeing, and i wonder, you know, does that start to become an issue? >> i think it will. there's not that much distance, i believe, between management and what rank-and-file want, but i think that the rank and file betrayed the actual leadership. i think that was supposed to be a sweetheart deal for boeing.

there's a downgrade today, colgate. colgate's an exceptionally well-run company, just keeps making the numbers. if you looked at the chart, it's like machu picchu. i see a lot of the consumer companies that are recession-resistant, i see them continue to climb. that is what ends, and that money goes to more cyclicals. you can hit -- hit up coca-cola. coca-cola looks like nvidia without the downturn. maybe that changes. those stocks are up too much. >> yeah, you got some interesting moves. you're right. i mean, by the way, look at philip morris. taking a look at that name? and the move there. not to mention walmart. i talked to some people, and they come back to me on something called factors. i don't even want to get into it, but you know, a new way of measuring or not even that new, hedge fund performance, and people buying these names because of the way that they're assessed in terms of their various factors. they're not shorting stocks anymore as a hedge.

they buy other names such as walmart or philip morris to offset some of the other factors on their own p&ls. i'm not going to go into it, jim, but those moves are stunning, not just walmart, obviously, but look at that one in philip morris. >> oh, geez. i mean, but you notice all these have a possibility of a tip. except for walmart. you know, carl, i first looked at those stocks to roll over, coca-cola being the one that is the best. i read this morning, coca-cola's a mega cap consumer product stock, but those stocks have to become donored, share donors not likes of companies like, let's say, home depot. home depot is at the precipice. it either has to climb or we've decided that we're going to stick with the recession stocks and that would be a bad sign. if we stick with coca-cola and don't go over to home depot, then people don't think that the fed's going to be doing its job making the economy stronger. >> yeah. i don't know, jim. mcdonald's is about to reclaim

300 after losing 50 bucks in the middle of the year as i think it's jpm goes to $290 today. >> i saw yum numbers going up. i have to tell you, other than wingstop, these things are expensive. when you go to mcdonald's, are you not shocked about the $7 egg mcmuffin. admit it. you're shocked. >> it floors me every time, jim. >> darn it, i knew that you and i had something in common. plus the wendy's upgrade, even though wendy's has got very subpar performance. this bet is a contrary bet to what i'm seeing, but you know, mcdonald's became a charm stock. i don't know how mcdonald's became charmed again. maybe because they're willing to sit by the $5 meal. >> you can look at the chart and see the day where they announced the $5 value meal in july. from there, it was just a matter of driving traffic again. >> well, it turns out that it matters tremendously at that level, which is why we have to see what brian niccol does with starbucks. i have to tell you, i only

waited seven minutes for a starbucks on saturday. that's a windfall. if you can only wait seven minutes,that is going to be -- that's going to ignite that stock, because sometimes you have to wait, like, 12, 15 minutes and then you forgot what you wanted. >> although you really believe the changes he's made in, what, a week on the job are already having an impact? >> people are already writing off apple after three days. yes. now, i have to tell you, he hasn't -- he's actually being thoughtful in coming up with a plan, and the plan requires you to figure out what to do with mobile orders, so there's no mosh pit. you know, carl, it has to get to be not a third place but a place that you can sit down and feel comfortable. right now, brian doesn't have that. i've suggested that they have mobile order and pay stores and then they have stores that are third place. this is something that kevin johnson, couple of ceos ago, suggested. never happened, carl. but it would be nice to be able to go to starbucks, get your coffee, and sit down.

is that too much to ask for, sir? >> we are seeing significant weakness in megacap tech in particular. nvidia shares down about 3.7%, reversing, obviously, the gains of last week. we've talked a lot about apple. it is one of the leaders of the downside again. roughly about 3.7% decline. but also, meta, alphabet, amazon, microsoft, all down, jim, at this point. tesla as well. you know, again, we point to last week where we saw such a significant rally in those names followed by the week previous to that where we saw a lot of the declines. unclear. and again, we do have the fed meeting right in the middle of this week. >> meeting are just wham-a jam-a throwing these stocks around. the first week of the month, these were dead. last week, you had to be in them. can i ask people to take a deep breath? stop trading the megacaps like they're rag dolls. there you go, carl. there's the bell to stop trading the megacaps like they're

ragdolls. >> we mentioned the consumer. i know you saw this matt boss note on the cruise lines in which he quotes management in saying there are "zero signs of softening in any lead indicator." i think rcl is about to take out its high of the year. >> look, those are -- i think that those are just extraordinary numbers, because the cruises are actually a great buy. everyone knows that they're, versus a hotel room, they're extraordinarily inexpensive. when you go on a cruise, it doesn't break your budget. almost everything else, though, has reached the outer limits of what people are willing to spend. the american express is the way to monitor that. i think american express is having a great quarter, but whenever you see it down, people start thinking small business is not doing well and the millennials and gen x and y are not spending. but when they do spend, they spend on cruise lines. watch that stock. when it reported last, people

were very down on what the numbers awere. david, are we going to grade the consumer by the minute? >> of course we are. of course we are. that's what we do. >> we are? >> yeah, of course. >> is that helpful? >> no, of course not. it's not helpful at all, but we got to do it. what else are we going to talk about? >> it's not a horse race. >> it's not? >> we don't have the companies that are coming in dead last. we don't have companies that are hung at the wire. i mean, can't we just say that business is good at some places and not as good as others? is that too simplistic? is that wrong? do you think i'm -- should i tell hock tan that his business isn't doing well because broadbroad is down today? >> i'm looking forward to that interview because we haven't heard from him too often. the market cap there has been higher but it is still one of the biggest at a little less than $800 billion in market value. obviously -- >> well, hock doesn't suffer fools gladly. on the call, you basically hear

the contemptuous nature he has for those that don't do homework. i spent most of the nonfootball time studying broadcom so i'm not upbraided by the magic man that is hock tan. >> speaking of what people are watching, we had a discussion during the break about the emmys and what it means for warner and hulu, fx, disney, certainly got some news regarding media over the weekend, david. >> yeah. we have disney-directv dispute resolved, perhaps not unexpectedly, but not after a period of time when directv users were unable to watch key sporting events, for example. and it resolved in a similar fashion as we've seen a number of these now where fewer, you know, perhaps fewer channels that they have to take opportunity to have disney+ available, ad-supported, to their subscriber base, not unlike the deal that disney did with charter, roughly, a year ago, and similar in some ways, again, to the deal that we

talked about a lot last week between warner bros. discovery and charter, which operates as our viewers know under the spectrum brand for both broadband and wireless as well. warner bros. discovery shares had a nice move last week, disney shares up, and a bit of a fall through this morning, but not much. the stock did get in the mid- 8s, which is saying a lot for warner bros. discovery, given it was a lot lower than that not long ago, jim. again, when you put it in perspective over any period of time, it still looks horrible. they also hare coming off a nic movie release with "beetlejuice, beetlejuice." >> another solid weekend. >> well, look, i think that that company benefits from lower rates. warner bros. discovery may be like a home builder company. i mean, they need to see rates down if they have to refinance. one of the things david zaslav would say immediately, is, what

is cramer talking about? it's just a perception that they have to get that balance sheet fixed, and any good news does matter. david, i'm going to go at you on disney. my travel trust owns disney and i mention that so that you can have a good laugh at my expense and call me, basically, a mo, i don't know, shemp, i don't care which one you call me. if that stock were to bottom, that would be huge because it has been an eyesore. it's a pimple. it's something that has to be popped. >> that's really valuable. if it were to bottom, that would be helpful, yeah. thanks, jim. >> well -- >> that's the kind of insightful analysis we look for on "squawk on the street." >> how about nike? should that bottom? >> you going to go through all your greatest his here? >> listen, boeing man, no. i'm just talking about how there are some stocks that seem to have been left behind. you know, smith corona marchand, you remember that? >> i guess i do.

typewriters. >> you don't want to be one of those. you don't want to be night ritter, some company that we don't care about. i think that disney's time is now. they have to start growing. they have -- david, maybe this is the beginning. this, you know, 70-cent move, could that be the beginning? >> sure. sure, jim, it could be the beginning. why not? why not? they still have to settle the dispute over the hulu valuation with comcast. that has gone into extra th innings, to say the least at this point. >> what is going on there? >> i'm not sure. i'm not certain as to exactly what is going on there. what's going to be the catalyst for getting this stock higher, then, if you're excited for potential bottom here, so to speak, jim? i'm talking disney. >> i can't think of one. >> oh. >> that's why -- >> okay. >> that's really helpful, too, i guess. >> you still own it. or i should say, it's still in the -- >> we sold some. we sold some into the peltz sale. we knew to do that. then we started thinking, hugh johnson, the cfo, bob iger, ceo

for life with maybe two ceos. i don't know what the structure will be. but i can tell you, david, that this is one of the worst-acting companies that my travel trust has ever owned, other than, oh, i'll throw -- here's some more. bausch health. that was one we owned. that was horrible. estee lauder, we owned. that's worse than horrible. yes. these are my worst hits. >> let's go through them all. do you still own e.l. or is that out? >> i got rid of e.l. i have e.l.f. tonight. you add an "f" to that, i would have been a genius. >> you would have, could have, i know. could have been a contender. >> there. i think it's important. i think it's important that their stock has been down, because people don't think cosmetics are good and yet i've substituted some e.l.f. in my wife's, whatever, the thing that she makes so it's nothing but make-up in the bathroom, and i put the e.l.f. stuff in this front of the mac. she looked fabulous.

she didn't know it was e.l.f. you tell me. it's 1/10 the price, so e.l.f. has been a great stock versus e.l. but right now it's at a downturn. >> i know all your names. and nike, you have a lot of questions. and then there's intel, which the government seems to want to give more money to or at least give them an opportunity, and i think your point is, look at the balance sheet. >> yeah. well, i mean, the government -- maybe they don't know how to look at a balance sheet, because you would never give them any money. if you did that, they have a lot of foundries they're building, they have more money going out than coming in. it's hard to sell mobileye, which they need to do. altira, nobody seems to want to buy it. they're very good at floating rumors, making you feel like you should own it, and then they just annihilate you. nike's different, and i'll tell you why. i went to a wedding this weekend, and i wore my air force ones with my suit. i wore them, david. people thought that i was outside my comfort zone.

i felt i was doing something that bob kraft does. air force ones with a formal outfit. that's what you wear. 50st anniversary of foot locker, take that. >> did you pull it off? what do you think? >> people thought that, at last, a guy who gardens in his brioni has gotten a little more forward fashion. and then, when i danced to "pink pony club," people said, he's real. >> he's the real deal. no doubt about that. >> you don't even know what "pink pony club" is. >> not a clue. >> carl, will you help him? help him. >> i'm sorry, guys, i've been busy watching the markets. dow's at an all-time high here, jim. >> you cut me to the quick. just like the cowardly lion. >> he can deliver a line, that carl. >> i want this market led by nonmag. that would really help us. we have nothing but magnificent seven, and it becomes a market that people are contemptuous

about. anything that says, big cap stocks doing well because we got a fed rate cut coming up , thats fine. i like that, carl, because it makes sense. >> jim, i want to return to something we've focused on because it is a political football punches well above its weight. >> football! >> that is the battle around u.s. steel. and whether, in. that i that is going to get turned down by the cfius review. they have nine days. that said, nippon steel can just pull and refile. the latest news we have is this looks like it's going to extend beyond the election in terms of a decision coming or something coming from the biden white house, and so you've seen the stock run up there. at the very end, obviously, far below the $55 a share cash deal that is a done deal, many thought, prior to opposition from many politicians across the spectrum, because of the unions'

opposition to the deal. you know, jim, gives them more time to potentially keep working. an interesting story as well over the weekend about the impact, conceivably, that moving out of pittsburgh for u.s. steel's headquarters, not to mention the closing the valley plant over time would have on the community there. and on many workers. there's going to be a fight at cfius, potentially, you know, that's made up of treasury, department of state, d.o.d., commerce, it will be interesting to see how it all plays, jim. but it does appear that governor shapiro, at least, in pennsylvania, well aware of the fact that, hey, wait a second, this could actually hurt the state, potentially, seems to have gotten sometraction in the biden white house in saying, can we just take a chill pill for a second? >> well, look, nippon steel has offered quite a deal. obviously, the union would rather have it go to cleveland-cliffs, which is the other buyer. cleveland-cliffs has a plan to be able to offset and sell

different divisions but nippon steel wants to pump money into that area, so i think you delay because you might think if you're just plain old voter who doesn't belong to the union, you don't want that area to lose those plants. so, i thought that was a significant move to delay, because i think it directly helps vice president harris in her effort to be able to get all of pennsylvania. >> anyway, carl, just mentioning that in part because the move in the stock at the end of last week, continuing a bit this morning. >> meantime, crude reclaiming $70 this morning. watch bonds. the calendar's not too packed today. of course, it will heat up tomorrow with retail sales and some other numbers. but for the time being, you got the ten-year around 3.65%. empire did have its first positive number since november of last year. back in a moment.

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housing has not come down, apartment represents hasn't come down. i would like to see more evidence of deflation or disinflation. maybe she'll talk about that. >> this ftc survey says the u.s. still on pass paste for a soft landing. we will see. in addition to arm? >> all right. right now we see ulta up a lot, maybe should start buying elf. i have tarang amin on. tarang amin has delivered the best numbers in that group but the stock is driven down by shorts. big short position there. i like it. if you want to know what's going on in this world, the big tech stocks, talk to hock tan. broadcom is one of them. then rene haas. look, arm is in everything, so let's get a little -- let's get a measure of these people before we decide that 72 hours is how we make or break apple, which is what you think is happening? >> who's going to get bragging rights tonight, you or chuck

robbins, the atlanta falcons fan? >> i made chuck wear number 11 when julio was playing, we beat them, wore number 11. he was true to his word. he would probably have to find a new number to wear, but it's going to be very similar colors. >> we'll see what happens. a big week ahead for jim out at one market in san francisco. inw, all-time high up 320 pots. s&p has gone green. s&p has gone green. stay with us at t. rowe price, we help advisors move . by building agile etfs designed to outperform the index. that's the power of curiosity. better questions can lead to better solutions. t. rowe price. invest with confidence.

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good monday morning. welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber, ha live as always from post nine of the stock exchange. stocks are bouncing back a little bit. nasdaq under pressure half a percent. energy the top performing sector after a long streak of under performance month to date, year-to-date, it's only up 3%.

financials, materials and industrials and health care are all higher today, but it's technology that's lagging and so that's what's dragging on the overall index. apple is certainly hurting the major average as it's a big weight. amazon, tesla, weaker at the open. microsoft is bucking the trend. take a look at treasuries as we kick off a big week, midweek we get the fed meeting. the 10-year yield firmer 3.6%, but the two-year yield continues to move south 3.572%. the odds of a 50 basis points cut have increased. 30 minutes into the trading session. three big movers we're watching. apple, shares are under pressure following reports of preorderer sales are coming in less than expected. much more of what we know ahead on the show. chuck charles schwab expects third quarter results to finish in line with its july business update. revenue up between 2 and 3% from q2. and then finally keeping our eye

on gold hitting record high after record high on a weaker u.s. dollar and prospects of a rate cut this week. it is outperforming the s&p 500 on the year. currently hovering around $2600 an ounce. continues to push a little bit higher. guys, that's the story of the week. i would say two big macro catalysts. the size of the fed on wednesday, its retail sales on tuesday which could shed light on how the consumer is doing and a bit of a question mark around how the consumer is doing right now. we'll get key earnings from fedex always a good economic tell, general mills on food inflation, and then the fed, obviously, on wednesday has a little bit more mystery to this one in this meeting. we're going to get all the dots which again confusing but exciting because we get -- those dots are the forecast for every fed member on how low they think rates are going to go, where they think unemployment is headed, gdp is headed. they haven't exactly been on the mark in terms of their forecast.

as for the uncertainty going in, bank of america had a nice chart on just how uncertain this fed meeting is. they look at the -- this is the implied probability of a 25 basis points cut, and it shows that it really only recently got so high above 50%, and by the way, that's out of date because now, there's more than 50% odds they're going to go 50, a double. does the data justify that? that's going to be a good debate around the table. while the data has shown softness it hasn't shown collapse or recession. a number of influential voices have come out and said, front load it, show them you're serious. you're over tightening right now given the data. what's happening on inflation coming down. expectations are low. go 50. they have a decision to make here. >> not even a week ago we were talking about not particularly likely they would go 50. >> agree. >> what -- what has changed?

i mean other than these influential voice yuz reference? unclear whether these voices they're not around the table, so i'm trying to understand it, because again, the idea that now the market is expecting 50 potentially, right. more than 50% chance. >> i agree with you. what has changed is we did get more inflation data last week and you can read it however you want. those that are rooting for a 50 cut say the pockets that were hotter than expected on inflation were temporary and very laggy end gators. like shelter, which should come down. then they look at jobs and also a mixed picture. read it however you want. the 50 basis point cut can say, look, there's more evidence that job growth is weaker and that the fed has to get out ahead of it. there's also the refrain that continues to come in that if you look at the three-month average of job growth and the unemployment rate, if it goes 0.5% from the low of the cycle

eyre, which we have, that always precedes a recession and a bigger spike in employment. some people are paying more attention to that than others. bill dudley is one of them. i highlight him because he made comments about this on friday, wrote an op-ed for bloomberg. the fed should go big now, i think it will. he used to be on the new york fed. he still clearly remains an influential and respectable voice. we spoke to john paulson on friday. we talked a lot about, obviously, the election and what he thinks is atstake here. huge for the economy. he did say he thinks the fed should go big. listen to this comment. >> firstly, i think the fed is a little behind the curve. you know, rates are, you know, 5.25 plus and inflation is down to the 2.5% rate. we have almost 3% real interest. i think they've seen enough data and they can start bringing rates down. i would suggest more

aggressively would be better so i would be for a 50 basis point cut rather than 25. >> i think my biggest question if they go 25, if they don't have the votes to go double because the economy looks okay, then would we see financial conditions tighten. >> at this point, that would be a surprise because the market has tilted in favor of the 50 basis point cut and that would go against what they're trying to do, right. >> yes. although you mentioned the dudley piece, the last line is a bigger move now makes it easier for the fed to align its projections with market expectations. the market has opened the door to do this. >> how much are they going to get bullied by the market here, or are they just going to go based on where they think the data is showing. if you look at the data, it's really not all that bad. i'll leave you with a consumer chart. it comes from bank of america. we get retail sales this week. that's part of the debate how much is the consumer weakening. deposits, this shows all the income levels, right, if you make over 50k, 50 to 100k, all

the income levels show deposit levels in the banks are 33% still above 2019 levels on average, but all of them are above that line which is the inflation adjusted 2019 level. which means still not too bad shape. and that's why brian moynihan said we seen stabilization in the delinquentsy data and show see a consumer that has softened but in decent shape. that's one metric. real wages you've been paying attention as well, carl, have also showed signs of strength. so again, it's not all bad news, but, of course, the fed wants to get ahead of something worse. that's what they have to figure out. >> indeed. our next guest says the 25 or 50 actually isn't the most important part of the decision. he's focused on the dots for the end of the year and the end of '25. jefferies chief market strategist, david zervos joins us this morning.

good to see you. >> good to be here carl. what you make of our discussion and whether dudley or anyone else has made a case that has moved the needle in your own mind? >> not in my mind. i don't think things have moved that much. the 25 story is the most compelling for what they're likely to do, but i'llstick with what i wrote to you earlier and you insinuated in the opening remarks. the most important thing is to revise these dots at the end of '24 and the end of '25. if you look at the end of '25, for example, the fed has a 4.1% fed funds rate at the end of '25. that's really only -- that's 125 basis points over the next year and a quarter. that's -- if we're going to start talking about 50s now you're getting half of that done in a meeting. something doesn't add up. so -- and that was just the projection in june, so i think going 50 is a little bit scary

for the market. i understand the idea of wanting to go faster, and i'm actually reasonably comfortable with the idea that we get to neutral, something around 3, 3.25 quickly. i would like to see us there mid year. maybe that would be a sensible story and what the fed is thinking. i think that's a good idea. but to go 50 here, right before an election, when, you know, in particular, you know, bill dudley has been one that's had some election sort of interference of sorts in the past with his article on bloomberg in 2019 talking about, you know, enabling the trump administration and not enabling it and voting for or pushing for rate hikes going into the 2020 election, so i'm very wary of the politics and i think 50 looks political, smells political, and feels political. and i just think that jay has been so good about avoiding politics. he's been good at it. good at it in '18 when pushed

around by trump, he's been good at it when max yeen waters and elizabeth warner saying he should be cutting. why compromise i think his excellent agnostic stance politically by going 50 right here before an election? it looks a little -- >> you think 50 gives the appearance he is fighting for his job? >> no. i think it just -- it just -- it's something that gooses everything a little bit more right before we're all about to go vote in 50 days. i'm not sure he wants the appearance of that. especially when he has a -- he's got a meeting two days after the election. he's going to get to learn whether we have a harris administration or a trump administration. i hope he does two days after. we might be waiting a little longer. but i think the easy story with the data sara was showing is do 25 and maybe give us a kind of dovish look at what you're

talking about for the end of the year. remember the dot for the end of '24 only had one rate cut of 25 basis points priced in. so you would be -- you're really making a pretty big revision if you go 50 and then you have two more meet where is people are going to start talk about another 50 or at least another couple 25s. so it's a big switch in three months. as i think david was saying in the beginning of the segment, you know, really has that much changed in the last three month we're starting to talk about 50s. seems aggressive and i would argue a little suspect. >> agree. totally' gre. everything you say makes sense. it would be very hard for another administration to fire him with cause, so he's got a term for another few years. i think it would look like he was in the camp for the democrats even if the fed is totally independent. david, there is this argument, though, that they're behind the curve and doing so would catch them up and would send a signal

that they want to get out in front and they don't want to -- what did powell say. i don't welcome more weakness in the labor market. that's the counter argument. >> he did. no. and i'm actually pretty, you know, open to that idea, sara. we've been talking to our clients since the end of august and saying, you know, there's a really cogent argument for these guys to get back to neutral fast, even by mid year next year, being at 3% is probably a reasonable story line now. i've been pushing back on that argument for a while, particularly because of the size of the balance sheet which has contracted a lot now. i think there's an argument today given what's happened with employment, the risk management of the dual mandate, let's get to neutral and see what happens. i can argue, i think there's a good argument they go faster. i just don't think september is the right time to pick up the speed. give us a dovish outlook on the sep. tell us some 25s and possibly 50s are in play for the end of

the year into the beginning of next year. you want to get to neutral quicker, like what you see and feel successful. to do that out of the chutes with an election 50 days away strikes me as creating more fire than you need to create. >> all right. >> you can get a lot done with a 25 and a dovish -- >> you are a market strategist. i mean, again, given this seems to be in the balance at least the idea of 50, what is the market do at 25 versus 50? >> well, again, david, i think a lot of it depends on that sep. i'm going to be going straight in as soon as that release happens and looking at the dots for the end of '25 and end of '24. if those come down d, for example, if the 25 comes from 4.1 to 3.25 to 3.5, that's dovish and the market will like that, that they're getting to neutral or something faster. if the end of the year dot is

down to 4.5% the market will like that. they're telling you they're going to get at least two more 25s and possibly more after that. 4.6. so i think more -- the market reaction is not going to be 25 or 50. the market reacction will look t the dots and judge what jay says in the press conference, always super important, but a dovish press conference, dovish dots gets him where he wants to go without looking political or like he's getting pushed around. >> david, i hope we get a chance to talk to you around that presser, if not before. jefferies david zervos, thanks, as always. >> see you guys. >> for the second time in over two months the fbi investigating what it's calling an apparent assassination attempt against former president trump. emily wilkins here with the latest this morning. carl, yeah, ryan wesley routh appearing in court for the first time this morning in palm beach.

in thisapparent attempted assassination of donald trump. remember on sunday trump was golfing when secret service agents spotted a rifle with a scope in the bushes outside the course. the secret service opened fire on the man. routh was arrested a short time later. now law enforcement officials are still trying to learn more about exactly what the suspect's motive is and if he was acting alone. the suspect has told news outlets that he had gone to ukraine to help its war efforts, and he has spoken publicly about ukraine's admitting foreign soldiers and said in the past he was working to recruit people to the war effort, but it's not clear whether any of that is true at this time. officials will need to confirm his travel history. we also had president biden telling reporters this morning that congress needs to give the secret service more support and here he is speaking with reporters just before departing the white house today. >> thank god the president is okay. i think we got a full report so

far today. one thing i want to make clear, the service needs more help, and i think congress should respond to their needs, if they need more services. >> there, of course, saying that more help, biden saying more help is needed for the secret service, congress needs to provide more funding. you are seeing secret service acting director ronald roe in florida at the golf course. he will be meeting with law enforcement down there and doing a walk-through of the area and also working on having a meeting with trump today. guys? >> thank you. keep us posted on the breaking developments on this important story. as we head to break, here's our road map for the rest of the hour. apple shares are falling following new reports about iphone 16 demand. >> they've been under pressure this month. what is expected when rate cuts come this week?

>> the fight against cancer. the cutting edge technology being used and which companies are leading the way. the market with a dow at all-time highs. "squawk on the street" is back after this.

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it seems like at least at first the iphone 16 could be off to a slow start coming off that first week of preorders. now the analysts on the street have been digging through the chip times, going on the apple website for the preorders and they're seeing lower ship times, which comes off as a signal demand is weaker than last year. i'm going to point to basically the best analyst covering apple these days says, unit sales for the iphone 16 appear to be down almost 13% compared to last year's iphone 15 lineup. it gets worse for the pro lineup the more expensive phones. appears to be down 27% while the pro max, the top of the line model, down 16% year over year. now, other analysts across the street had similar system this morning, but i want to point to bank of america kind of adding this caveat here, that apple may be producing more pro models this year, which explains the reduced ship times. preord ship times is not the

perfect gauge of demand but it is the best we have now, and it directionally tells us how demand can compare to the previous year. now, we also have to start asking, though, is the street narrative holding up that this ai driven demand is going to create a sort of super cycle for this crop of iphone 16. it could be people are waiting because the ai on these iphones aren't going to launch for another month or so and this is a slow rollout of ai gunking up the true view of demand. we will have to wait and see a few more weeks, but the iphone officially launches this friday along with all those other products they announced. guys, i'll send it back over to you. >> steve, historically speaking how accurate has a view -- and i know -- i think it was mowhan saying this is helpful, but how accurate has this close look at preorders been in determining the overall success of the latest version? >> pretty good. it's all directional. of course, we're not going to get exact numbers. keep in mind, david, these are

looking at a unit basis, not necessarily looking at the way apple reports iphone sales these days, just the total revenue, the iphone category has been drawing in. so when you see people still going toward -- by the way, all the estimates, all the reports today are saying people are still gravitating more towards those pro models, so that is good news. those are the higher cost models and that's good news for apple, but we still got to keep in mind it's unclear if this narrative is are really going to play out people are buying these phones because of ai or if they need a new phone and this is kind of a normal so to speak upgrade cycle for the iphone this year. >> we'll be tracking it every week. steve on apple today. do not miss a star-studded week on "mad money" as cramer sits down with some of tech's biggest names this week in san francisco. see some of them here. "mad money," 6:00 p.m. eastern time. after the break, the latest in the ftc's battle over this

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welcome back to "squawk on the street." we are watching shares of tapestry and capri holdings. the two have been in court after an antitrust challenge after announcing a merger last year of tapestry buying capri. the ftc sued to block the deal in april saying it will lead to higher prices for consumers. the two have been facing off in court or facing a federal judge. and, you know, what i'm told about this case, i know you're following it closely as well, the companies -- it all comes down to, to win an antitrust case you have to define the market. and the ftc is saying the market is accessible handbags and it's dominated by michael kors and coach, which run two different companies here. kate spade another one here as well. the idea that handbags that cost $200 to $500 sold in department stores these two compete a lot with each other and if they are allowed to combine, we'll see higher prices for the consumer. the companies are saying that's

outrageous, because there is so much competition and you cannot define the luxury handbag or the handbag market accessible handbag market in that way. they compete with luxury. they compete with secondhand, with direct to consumer, that aren't sold until department stores. they compete with lululemon and joanne, the ceo of tapestry in court said, her daughter much to her chagrin has a absolutely belt bag and they've built hundreds of millions of dollars business out of this. the competition is everywhere. the companies according to people i talk to, feel pretty good about their case and that is, consumers set the price. companies don't set the price. this is not like kroger-albertsons where you have to buy your groceries. consumers have a lot of choices when it comes to handbags and pick based on style and what's in. the companies don't a lot of market power. they have to innovate and grow and also, what has struck a lot of people, david, in this case

is how up front both companies executives and management have been about the challenges facing them because there's no guarantee this deal is going to go through. for them to say and testify that they're facing a lot of challenges and they're struggling, especially capri and kors, why they feel they need to merge to compete. >> investors looking at it a bit differently. you can see what spread is. it's a $57 all cash deal. and so you're talking about 19 bucks there. >> they don't think it's going to go through. >> i think it's close, sara, and again, i don't have a broad sampling but i have spoken to a couple investors. your point is the key one. the government has to win on market definition. they are using internal documents to support their contention that, in fact, those executives talk openly all the time about accessible or affordable luxury as a market. their response, my understanding, yes, but never to the consumer, only internally.

it will be interestinging to see how the judge decides in terms of that. no industry group recognizes the term accessible or affordable luxury. and to your point, if the government wins on that, then they'll say the market share in that market is going to be dominant. you're talking tori burch, mark jacobs, kors, spade and coach. five make up most of the market. everybody else is a small number. >> as someone who shops for handbags, i do wonder how many people at the ftc are shopping for handbags. there's emzi weallace -- >> they don't represent enough of a market share to make a judge believe -- if that's accessible or affordable luxury there's five competitors. >> define it based only on what is sold on department stores. that's not how people shop anymore. >> from macy's, they have no plans to increase these price.

they have direct to consumer channels not to mention stores where they're selling. it's not clear. key witness i understand is going to be fee owe na scott morton. this is wrapping up. >> final arguments september 30th. >> final arguments september 30th. final witness. >> this week. >> this week as soon as tomorrow. they got to poke holes in the government's numbers in terms of market share. to your point and in terms of market definition. then we'll get closing arguments on the 30th and a decision soon after. >> we think. the judge technically has until february. >> i think the expectation -- >> it will come sooner. >> a biden appointee taking copious notes and asking a lot of questions, not showing her hand. >> no. there have been a lot of in camera discussions, basically private. testimony we're not going to be aware of. >> it's going to be another big test for this ftc that is clearly challenging, what it sees as any kind of merger. a lot of mergers. not any. >> still to come, the fed taking

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welcome back. i'm silvana henao with your cnbc update. the man accused of making an apparent attempt on former president donald trump's life yesterday, is in a florida courtroom this morning for his first appearance since his arrest. authorities say ryan wesley routh was hiding in the bushes at trump's west palm beach golf course yesterday with an ar-style-rifle while trump was just 400 yards away. they say he ran after secret service opened fire on him and was later arrested. it's not clear yet what charges he's facing in the assassination

attempt. the second trump has survived in matter of weeks. more than 100 criminal counts have been filed against routh in north carolina where records show he lived for decades before moving to hawaii in 2018. that includes a conviction for possessing a machine gun in 2022. meanwhile, president biden said this morning the secret service needs more help in the wake of the latest attempt. it comes after house speaker mike johnson called for more security detail to be provided to trump. johnson says the house is demanding he have ever asset available. carl, back to you. >> thanks. meantime bank of america calling this the most uncertain foreign markets fomc meeting as investors work through a 25 or 50 basis points cut is in the cards. hey, steve. >> good morning, carl. very few surprises in the world of fed rate moves usually. someone is going to be wrong

this time. markets are often priced 80, 90% probability for whatever the fed will do and almost all the time they're right. take a look now. fed funds probability show the market trading 57% chance of a 50, that's a reverse from where it was this morning and a 43% chance of a 25 a sharp turnaround from last week's pricing of an 85% probability of just 25 after those inflation reports. so here's the case being made for those who think the fed ought to do 25. it's the default move by the fed to be gradual unless the economy is being -- buffeted either way the data have been reasonably strong still. no gdp running around 3%. 50 sends a panic signal. there are politics both internally at the fed where you may want a unanimous decision and we're in the midst of a presidential election. fed chair powell has rejected the notion that politics plays a role in these deliberations. the case for a 50, where the fed is going anyway.

might as well get there quickly. there's no harm since the fed is thought to be restrictive and plenty of room before it starts to really stimulate the economy. and it's insurance against weakness since weakness is now the biggest risk out there. jpmorgan writing over the weekend that a closely followed monetary policy rule shows policy is currently a full percentage point or more too restrictive. just fyi, david kelly at jpmorgan, but asset management, he's predicted 25. st. louis fed president jim bullard telling me over the weekend he thinks 25 is on the way and the fed will lay out a dovish set of projections, 125 to 150 basis points over the next year. here's the problem. markets are pricing in 250 basis points of cuts this time next year and a 50 today could encourage them to be more aggressive. guys? >> yeah. the pricing is -- it's hard to read because the market has gotten ahead of the fed before.

thank you, steve. steve liesman. appreciate looking at those odds. our next guest is expecting a 25 basis points cut on wednesday. wells fargo head of equity strategy chris harvey joins us at post nine. the price target by the way is 5535. little bit lower than we are right now. thank you. it's good to see you. so i guess the risk, if they don't go 50, is no that they could tighten financial conditions, which they don't want, since the market has gotten so excited about all these cuts. >> i think that's right. i think there are bigger issues than whether they go 25 or 50. if you look at the inversion at the front end of the curve between fed funds and the 2-year, it's 175 basis points. that's hissetoric, the market saying you have a lot of wood to chop, hurry up and get going. what we're talking about is, i'm not worried about 25 or 50, but the path. the other thing with the path is, people don't know how to play. right. we're talking about 25 or 50. what do you think the average

individual is talking about? the average corporation is talking about? they don't know. what we heard from ism manufacturing when you don't know you slow down your activity and your purchasing. which is bad for the economy. the fed really needs to give some communication and some path going forward where people can begin to plan. >> they've said they want to get to neutral and showed that in their forecast or dots. >> but the question is now are we going to see 175 basis points in the next three to six months, or are we going to see similar -- >> how can they know that right now? >> i don't know -- so -- okay. the first -- let's take a step back. five three on fed funds not a competitive cost of capital. you can't find that at ten years, two years or 30 years. >> they're two ten. >> you need to normalize rates. that's a normalization. once we get to the normalization, we have to talk about what the economy looks like and what kind of shape you want to put in the curve.

one of the things we can't lose sight of what credit spread are doing, still less than 100 basis points over comparable treasuries. to your point means they don't have to rush, but at the end of the day they have to normalize and way too restrictive for what we see right now. >> we spent time talking about fixed income but you're an equities guy. you upped your target in april, but haven't since, and it's below where we are. why don't you believe the s&p has further to go higher? >> david, the s&p might have further to go higher. one of the things keeping us on the sideline right now you have a lot of uncertainty. you have a lot of event risk. what we typically see before an easing cycle is uncertainty. people not sure the path going forward. in addition to that, what do we have? we have an election and that election looks like it's a coin toss. as people don't understand it and don't know what path is going forward, they slow down their activity, slow down their purchasing, which often what we see in the market is more of a risk off, risk aversion.

that's what we've been saying the last couple days. we're cautious just heading into these big events. >> and ones they're resolved? >> once there's resolved. you sell the first cut. you buy the election. typically, after the election, after the fed, 6 to 12 months equities are higher and don't see a recession and if that's true, equity markets in 2025 should be good. >> what is the doifb rally telling you, utilities, staples? >> yeah. so first off, we've been overweight utilities since the end of last year, and it wasn't a really -- it wasn't a consensus call. it was out of consensus call. coming into this year it was a beaten up sector, downtrodden and volatility very low. what it's telling you, there's a little bit more uncertainty in the marketplace and also telling you is that hey, we don't know the path going forward. rates are coming down and that's pushing things higher. as we get through these events, we think maybe that's not the

best way to be positioned going forward. but that's something we're talking about internally right now. >> okay. well, keep us posted on that. chris, thank you very much. nice to see you. chris harvey from wells fargo securities. >> financials one of the worst sectors on the month as we head into rate cuts potentially this week. how to play those big banks from here when we return. trend tracker is sponsored by -- (woman 1) all right, here we go. no, no! uggggh.(man 1) oh n, (man 2) what's my next step? oh! ugh. (girl) dad. (vo) you break it. we take it. (woman 2) we can take it. (vo) trade in any phone, in any condition at verizon for the new google pixel 9 with gemini. (man 2) give me a recipe with these ingredients.

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the street." ahead of a fed decision. the financials, one of the best performers on the year but worst performance over the last month. erica najarian is large cap bank and senior analyst and joins us now. erica, 25 or 50, we're going to get a rate cut. what is it going to mean for your sector and is it reflected in the prices? >>. >> yeah. so i think part of why you called out the under performance and part of why that's happening, is because now the market's grappling, what do these cuts mean? we've baked in more cuts into the yield curve, but i think investors are starting to think does this mean there could be maybe not so soft of a landing coming up, and i think that's why the stocks had performed poorly. in terms of it being priced in, you know, the basel iii endgame relief and some of these rates cuts may actually start to be pricing in to the money center bank stocks given their out performance year-to-date but if we get 50 i think that actually could be good news for the mid

cap stocks where commercial real estate had been the big issue and so bigger cuts could be a sense of relief there. >> yeah. what about net interest income levels, though, if we get 50. >> absolutely. so the interesting part is money center banks tend to be more asset sensitive. that means they benefit more if the fed is raising rates. some of these mid cap banks are liability sensitive where their liability or deposits reprise faster and that's why that could set up really well for those. >> yeah. last week we got a bit of news, we got basel, it was lower cap threshold than had been anticipated, at least. >> yep. >> that said, the stocks reacted badly and you had comments from daniel pinto at jpmorgan, sort of, you know, kind of bringing in growth targets for investment banking and trading. what do you make of it all? >> i think there's sort of a three apart whammy. the first is we've been talking about basel iii softening since december of 2023. so in terms of being priced into

the money center stocks i think that started quite early. second, it's never great when the best earner on the street essentially says hey, consensus is a little bit too high on net interest income and the read across for other banks is not so good, especially for someone like bank of america and wells fargo. and third, from that same conference that daniel was speaking from, we actually started to get, you know, signs that the consumer is weakening. a lot of those consumer weakening signs were coming from lower income, but i think there's fear in the market out there that that might start spreading upwards. >> but -- and i know you -- david asked about the net interest income, it feels like it's really hard for analysts and investors to forecast the troughs and peaks given the changing rate outlook and, you know, for so long, it was that higher rates are good for banks, better for profitability and then it was like you have to cut rates because these high rates

are hurting the bank's financials performance. what is the confusion around things area? >>. >> yeah. i think that's a great question. i'm not even pencilling in the rate cuts until we have the yield curve squared away after wednesday, right. what that means is the buy side or investors are saying there's more uncertainty over net interest income and to your point on, you know, rate cuts becoming, you know, going from, you know, bad to good, i think the biggest question mark here is what will deposit costs do? because the asset side of the balance sheet is largely mechanical, right. the assets are priced off of the curve, off of sofer and that's largely, you know, going to reprise relative to the index. but the deposit reprising is a business decision, and so does the bank sacrifice the volume in order to cut rates, right, which has an impact on net interest income, or do they cut rates more immediately? that's where the confusion is because the deposit side ends up

being a pricing decision. over the short term maybe the banks get a little bit more aggressive because there's not a lot of loan growth to fund, but if loan growth picks up next year you're scrambling. that's the dilemma in terms of not just what analysts and investors put into their models, but also strategy terms of not just what analysts and investors put into their models, but also strategy for the banks. >> always appreciate it. thank you. >> thank you. when we come back, a look at the burgeoning field of cancer tech and what it means for consumers when "squawk on the street" returns in just two minutes.

the moment i met him i knew he was my soulmate. "soulmates." soulmate! [giggles] why do you need me? [laughs sarcastically] but then we switched to t-mobile 5g home internet. and now his attention is spent elsewhere. but i'm thinking of her the whole time. that's so much worse. why is that thing in bed with you? this is where it gets the best signal from the cell tower! i've tried everywhere else in the house! there's always a new excuse. well if we got xfinity you wouldn't have to mess around with the connection. therapy's tough, huh? -mmm. it's like a lot about me. [laughs] a home router should never be a home wrecker. oo this is a good book title. while weight loss drugs have led the headlines, when it comes to health care stocks, we have a different look at a part of the market seeing big gains. >> good to be back, carl.

we're seeing a lot of focus on drugs that deliver radiation directly to cancer cells. bristol-myers squib, astrazeneca and eli lilly have spent billions to get their hands on this technology. guggenheim sees revenue being from $5 billion on the low end to tens of billions at the high end. it's also somewhat surprising we're seeing companies making such big bets here. it's not easy to manufacture, ship or administer radio pharmaceutical because they have radioactive material that's only good for a few days once it's made. novartis is making it work with its drugs. and it's investing $300 million to open and expand its u.s. radio pharmaceuticals manufacturing and it's paying off. they are estimated to bring in $4 billion a year by 2027. novartis and other companies telling me the real opportunity is to expand to many different types of cancer.

but the trick is finding markers that are on cancer cells and not unhealthy ones. there's no guarantee they'll be able to thread that needle but there's a lot of excitement here, carl. >> is production as challenged as it is in weight loss at the moment? >> it's really different because you need to make the drug right before you give it to the patient. there's no inventory and it looks a lot different. eli lilly telling me that you go into a weight loss manufacturing facility and you see a lot more. there's less to see at the radio pharmaceutical manufacturing facility but it is still a really complicated production. >> the general take is a lot is about thematic discipline, the way lilly stuck with diabetes for 30 years and wound up with this pressure. is novartis the equivalent on this cancer front? >> exactly. this is something they've been working on for decades. some of the first drugs were approved in the early 2000s, but they weren't that successful and so it was -- there is skepticism

whether it was a worthwhile endeavor. now novartis has proven you can make it work. >> what are the cancers that are sort of front lined in terms of this therapy? >> pluvcta for prostate cancer and endokrin cancers. they have proven these are cancers where it's works, but they're also looking at more common cancers like lung, breast cancer, even pancreatic cancer. if it works, there could be a lot more. novartis, they're working on one marker found across 28 different types of cancers. if they can succeed there, it could be a big opportunity. >> how much is dependent on being able to decode your genome as part -- >> it's not about individual people. it's about finding the specific -- the marker. again, you want it to be on cancer cells, not on healthy cells. like on pluvicto, psma is what

it goes after but it's also found in your salivary gland, so a side effect is dry mouth. there are also worse possibilities. >> thank you. >> thank you. >> appreciate that. let's get over to phil lebeau with breaking news on boeing. >> there is a memo that has come out from cfo brian west. he said they would be taking steps to conserve cash as long as the machinists were on strike. now we know some steps boeing is taking. we won't go through all of them but some major ones, there is a hiring freeze that the company is putting into effect. it is also halting orders for parts for the 737, the 767 and the 777, all planes built in the puget sound area. they're stopping nonessential travel for executives. they're not eliminating it all together, just the nonessential

travel. one final note from the memo from brian west. they are considering, and the key is considering, furloughs of company employees, depending on how long this strike lasts. they're not announcing furloughs at this point. they're considering them. remember, the talks resume tomorrow between the management of boeing and the machinist union. back to you. >> last week you shared some numbers in terms of the loss of free cash flow over a 30-day period. maybe you could refresh for some of our viewers what they're looking at in terms of boeing of why they're focused on conserving cash. >> it's all about free cash flow. jeffries estimates if this strike goes for 30 days, it's about a $1.3 billion hit in free cash flow. another number you should consider. every time they deliver a 737 max, that's about $10 million in free cash flow. they delivered 32 last month. you're looking at one being

delivered, on average, every single day. that's $10 million every single day in free cash flow. that's the kind of financial hit they're facing immediately. >> what about the suppliers. you mentioned, of course, that it's starting to ripple. how focus should we be not only on boeing but some of the companies that supply it? >> at this point, i've seen a couple of notes where they outlined the suppliers, i think the impact is limited at this point. for a couple of reasons. a lot have been struggling to increase their production as much as boeing would like to increase it once the cap from the faa comes off. i'm not saying it gives them breathing room but doesn't immediately force them to say, we're going to stop production all together. >> finally, where are we on the strike? any update in terms of where negotiations stand? >> they resume tomorrow. i can tell you based on the

rhetoric i heard last week, the rank and file are nowhere close to 20%. they want 40%. does boeing go to 40%? this is similar to the uaw strike, saying they'll hold out for x percentage. they didn't get what they said they would hold out for. do we see a resolution if they get to 32%, 35%? that's probably the magic spot most people are focused on. >> thank you. phil lebeau with an important update on boeing. that does it for "squawk on the street." time for "money movers." good monday morning. welcome to "money movers." i'm carl quintanilla with sara eisen. jim breyer is with us on opportunities in a.i., especially in health care and how he's working to combat alzheimer's. >> plus, the ceo of janice henderson, is 25 or 50 the