good thursday morning. welcome to "squawk on the street." with sara eisen and mike santoli live at the new york stock exchange. jim and carl have the morning off. the futures as we begin the trading day half hour from now you can see we are setting up for a significantly higher open. and that is where our road map

starts. well, chips, one reason why we're getting a boost this after micron sees, quote, robust ai demand. the company's ceo is going to join us in just a few minutes from now. >> plus, why billionaire investor david tepper says it's a, quote, buy everything moment for the chinese market. and southwest meets investors. the airline raising its summer revenue forecast and authorizing a $2.5 billion share buyback. >> let's start with the overall rally here. of course, we're seeing micron leading the way this morning and speaking as you saw with the company's ceo. would also love to get to china as well if we can, sara. we've seen a number of escalating it moves over the course of this week. the pollit bureau being the latest in terms of the language used. david tepper, much of wall street was focused on this morning during his time on "squawk box," made that the center of sort of his investment thesis near term in terms of

what he sees. take a listen to what tepper had to say based on his reading of what came out of this bureau meeting. >> so the question was, was china going to do the things that you want them to do? okay. are they going to do the easing measures that you want them to do? so, yeah, they came the other day and what's his name, pan gongcheng, apologize because i can't even speak glish wenglish well, he came out jovial, whoa, saying we're going to cut and we'll give you more, and he said we'll do more and more if needed. now the chinese say we'll do more and more if needed, they don't say that because it's not been healthy to say those sort of things in china. they said that the other night. i listened carefully what government officials say. so i took it that they did a lot, they ceded expectations, and he promised to do more and more and more. >> that's where we find ourselves this morning with

chinese stocks up again and lending a hand here as well along with the rally in chip stocks. >> finally china is showing that it's serious about trying to achieve its growth target. so we got the word. this one is more talk. we didn't get specific policy action like with monetary policy over the last few days, but commitments to doing more. >> to stop the real estate market from declining. >> which is important. >> that's strong language. >> that was in the xinhua news, chinese agency report, after the bureau meeting. >> this meeting itself my understanding it typically is not one that focuses on the economy and so that was a bit of a change as well. and just, again, to tepper's point, language that is not typical. again, to your point. >> yeah. >> we've gotten a bunch of action this week but we've been sitting here talking about yes, is it enough. it's not what had been hoped for in terms of at least dealing with the real issues and the

property market and/or a consumer that has been lagging dramatically. >> hints fiscal may be around the corner and got people excited like tepper. reuters had a report that china is basically looking to issue $2 trillion yuan of special sovereign bonds this year, $250 billion and part of that would go towards stimulating household consumption and fiscal spending. either way, it's enough to put chinese stocks positive for the year. we saw big jump in bond yields in china and there's a lot of excitement that's translating here. i think the 10-year bond yield rose to the highest level since november 2022. >> yeah. >> like on increased optimism they're finally going to do something about this. >> tepper making the case it's china's whatever it takes moment. that it's not just going to be just enough to hold things together. when it comes to the equity market in china not just wow things got washed out, outflows got extreme and we have a bear market bounce. whether that's the case or not i think it fits into this really

mosaic of things going on, which is, the economies and the rest of the world continue to plug along and now you have policy supportive on multiple levels when it comes to central banks in general and then, of course, what's happening in china. it's also happening at a time you had news that saudi is giving up on its $100 a barrel objective, this idea we're not going to get there easily so they're going to prepare for more supply. oil prices are down on a day china is ripping, and what's better than that? it's tough to feel that worried about even the u.s. economy or anything else, even if as tepper said markets are expensive, he's a value guy, doesn't seem like compelling buy, but i wouldn't short it. things seem like they're holding together. >> he did seem a little concerned about the valuation here, certainly also made the point versus europe, the differential in p/es i believe is as high as it's been in some time, 14 versus 22 roughly speaking. >> everything is downstream of how big and expensive our tech

stocks are. if you believe it's a marketed wh -- market where that gap can close, non-u.s. stocks should have a period of out performance. it isn't a zero sum game and i think that's the key. meanwhile, the micron driven semi move is like hey, i guess the game is still in -- >> the game is intact. a key quote from the conference call, robust demand is exceeding our leading edge supply and drive healthy supply dynamics and sara, they -- their guidance at micron was more than anticipated. only have an opportunity go through all this momentarily with san jay. you can see what the stock is doing having an impact across the board. >> i think the expectations played a role. both in the china story and in the micron story because expect takes had been lowered. a chip stock up into earnings like 12% year-to-date far below some of the other peers and competitors as last quarter was a little disappointing on the

momentum front. with that setup and then the bullish news which did surpass all the street estimates especially on the guidance front driven by strong ai demand and a really bullish tone from san jay this continues to be a theme across the ai-related names. you can see why the stock is jumping so much premarket. 18%, taking the entire complex with them and had good things to say on pricing. even ex-ai which has always been the concern about the cycle, the cyclical parts of the business. it will be great to get more commentary on what they're saying. it's about these hbms driving the growth. >> high bandwidth. >> high bandwidth memory. >> yeah. >> that's the ai growth. >> it's really fascinating. >> that's in the data center i believe. >> yeah. >> there was a tone of let's not get too excited in advance of the micron numbers and the semis in general because they have given up this leadership. this quarter the nasdaq 100 has been lagging the, you know, average stock in the s&p by like

5 percentage points. here we are at quarter end and you have people making the case on the sell side desk positioning has gotten muted in tech and end ttoned down. home builders look tired yesterday. the rotational market continues to find an answer to every little pocket of weakness at least for now. >> tepper was going through a whole scenario about the japanese yen and what the chinese -- what it's going to mean for rates there and what it might mean for the currency strengthening. i don't know if you heard that but it was interesting and i thought of you. >> what was his point? it was bearish? >> potentially over time, yes. >> if the japanese currency continues to strengthen. >> correct. >> as a result of what the chinese -- >> we have been able to shrug it off a little bit. the -- what the chinese are doing, as a result of their stimulus, their currency is strengthening something that's welcomed for a change. usually they like it weak because it helps with exports but it also spurred concerns

about outflows. >> currency they were concerned about. >> exactly. >> too strong a yen. look at the one-year chart like -- >> still weak. >> bounce after this. >> still very weak. one other thing i would point out that's happening that we haven't been talking as much about the movement in commodities. gold continues to set record high after record high the 40th of this year. we saw copper make a move as on the back of what's happening in china. some of these other commodities as well. i was noticing some natural gas up 24% so far this month on pace for the fifth positive month in six. it's interesting, mike, given the fed is trying to fight inflation, and i'm not saying we're going to see a flare up, but there is this idea there's a bit of reflation now that markets are so positive about everything. the rate cuts, the soft landing, the china stimulus. this is a risk, not that gold necessarily correlates, but it's going up for a reason and i think we have to watch it for any signs of potential emergence

of inflation. >> gold i have to say i'm seeing a lot of work yesterday saying this looks like it's burning itself out in the short term in terms of the vertical move, but i totally take your point long term, long end of the treasury curve is. >> higher. >> going higher and we have good weekly jobless claims this morning. >> four-month low. >> the fed so worried about the labor market and sure there's reason to be worried but weekly jobless claims, americans filing for jobless claims, continue to show a lack of layoffs there. after the break it's the stock of the morning. exclusive with the ceo of micron surging double-digits ahead of the market open up 18% now. taking a look at overall futures helping the chip stocks, the tone, as well as more talk of china stimulus pointing to a sharply higher open. dow futures up 224. we'll be right back. car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪)

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citing increased appetite for its memory chips used in ai computing. sanjay mehrotra joins us now to discuss. welcome, sanjay, nice to see you. good morning. >> good morning, sara. great to be on the show. >> especially with an 18% surge premarket in your shares. is the ai story underestimated for you? >> you know, ai is a great story for us. it's transforming the industry. micron has strong products in our fiscal foulrth quarter. our fiscal year we ended 62% growth in revenue. of course ai is a great driver. we achieved a record data center revenue and record mix of data center revenue which is own expected to be growing further in '25. we have multiple product lines here addressing the ai demand in data center, high bandwidth memory where we ship $700

million of revenue in fiscal '24 and expected to become multiple billions of dollars in '25 and high capacity d-ram in addition to high bandwidth memory. another big growth driver for us expected to become multiple billions of dollars in '25 and data center ssds. we hit a record $1 billion of revenue in fiscal fourth quarter alone and this, too, will be multiple billions of dollars. ai is a great story. thankfully not only in data center, as you look ahead at smartphone and pcs, ai edge abled smartphones and pcs will require more memory content. as we go through '25, accelerating in the second half of calendar '25 you see smartphone and pcs also continuing to drive strong demand for memory. >> i mean, that also might come as a surprise because people were worried about the x, you know, server business, the

smartphone and pc business, the sick callty the downturn the high inventories of those products. >> so just like yesterday in our call, we talked about that, yes, while the selling is slower because of some of the inventory that has been built in pc and smartphone for three main factors, really, first is expectation of tight supply and smartphone and pc customers really built up some inventory to make sure they have supply for the second important factor of ai enabled phones and pcs that require more memory and third, of course, taking advantage of the lower prices that existed before in memory and building up inventories. we expect that by '25, inventories will be in a healthier place and then, again, going forward through the rest of the calendar 25 we see ai enabled phones and ai-enabled

pcs will be driving the refresh cycles in these end devices, continue to drive momentum, complimenting the robust data center demand that we expect in '25. we are looking at 2025 to be a record revenue year with significant improvement and profitability for micron. >> as you shift your attention and capex into the profitable businesses with high demand, how does the mix shift for you in terms of how big, for instance, the server business can get versus some of the others? >> absolutely. data center is a big driver of growth. server is, you know, if you look at training as well as high-end inference that require more memory typically in ai servers so ai and data center is a big part of the growth and a mix of revenue will be increasing. with ai, especially in the backdrop of a tight industry

supply environment, at the leading edge of the technology, the setup is great for demand and supply in 2025, and that bodes well for a constructive financial performance, increasing the mix of a revenue toward higher profit pools. high bandwidth is a great example. the most complex product that has been made in the memory industry yet, and micron is leading with that product best with hpm, shifting that into increasing mix of revenue in '25 and that's accretive to our gross margins so yes, i mean the shift toward high value solutions is putting us in a strong solution for constructive financial performance in '25. >> you detail that as well, talking about a total addressable market, sanjay for high bandwidth to be 25 billion by calendar '25. to put that in perspective it

was $4 billion in calendar '23. that said is '25 seen as the peak to a certain extent in terms of that kind of demand? >> we don't look at that as a peak. you know, ai is a 10 to 20-year journey here, and, of course, you know, we are very early in the journey. ai is creating -- to transform the industry industrial model and ai memory, for example, high bandwidth memory requires more to produce the same amount of gigabytes as standard products. that actually is a tailwind to the demand-supply environment because more required to produce the same number with high bandwidth memory is a headwind to supply. demand trends are strong. overall the trend is strong. of course, the industry can go through cycles. >> yeah. >> but the important thing is, the supply. >> are you dependent on continued increases in data

center demand so to speak or creation? again, you're getting into things that could be issues whether it's power, availability of transformers. i wonder to the extent you've become so levered into that particular channel are you at risk of what -- how many data centers can be put up in a given year or years ahead? >> so i mean there's no question that disruptive transformations like ai never go linearly. they can have their ups and downs. important thing for us, we can't just focus on the data center piece. ai is driving growth for memory content and smartphone and pcs as well, so when we look ahead we see robust data center trends, we see robust ai demand, as well as refresh cycle in traditional servers. we see that in smartphones and pcs. longer term trajectory is solid for memory and storage. important thing is, of course, continuing to build greater value for our customer base

through products such as high bandwidth memory which, by the way, is 30% lower power than any of the competitive product out in the market and as you can imagine, data centers which are power hungry, lower power high bandwidth memory from micron is appealing to our customers. then driving more innovation as we look ahead at the road map to bring closer partnership, differentiated solutions, continue to focus on capex and supply growth and maintaining the discipline that micron has shown, these are tremendous for long-term trajectory for memory storage and micron is well positioned. we say that we have really the most competitive product positioning in the history of the company in the backdrop of long-term strong demand drivers driven by ai. >> so given this very favorable setup that you're painting for us, this picture you're painting for us, sanjay, where do the --

where is the biggest challenge for you? is it in competition which is ramping up? is it in supply because demand is so strong? is it geopolitics given what's happening between u.s. and china? what is the challenge? >> look, leading edge memory supply is in tight place and we, of course, are continuing to work with our customers to address that, maintaining the supply discipline is an important focus area for the company. you see that, you know, micron absolutely focused on that, and, of course, continuing to manage the mix of the business through the leveraging the strength of our product portfolio toward higher profit pools of the market. that's another focused area for us. remaining diversified in terms of addressing the end markets from data center to the edge. the market today we talked about data center and smartphone and pcs, but hey, automotivers that's another possibility for more and more content as -- so

these with respect to geopolitics, of course, you know, what that requires is agile supply chains and the diversified global footprint in terms of customer base as well as manufacturing and micron has shown that we have been able to navigate through that successfully. >> okay. sanjay we appreciate you joining us ahead of the open with the stock up 18% premarket. sanjay mehrotra. thank you one reason why futures are looking strong, sorry to overcut you there, take a look as we count you down to the eng opin bell. higher open ahead it would appear. omorrow. as a leading global asset manager, pgim has established a track record of helping investors capitalize on growth opportunities. pgim investments. shaping tomorrow, today.

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the opening bell is brought to you by -- china stimulus, chips rally and that takes us to mike santoli for 30 seconds here before we get into the opening bell. what do you think. >> all of it amounting 1.5% gain in the nasdaq na100. the old style of how the market makes progress. s&p 500 has managed to hang on to the post-fed gains coming into today. you get the added catalyst, plays. they've backed off a little bit

here. [ applause ] everything settling down to a pretty broad rally. >> let's get that opening bell here at the new york stock exchange. [ applause ] >> headquarters here at the big boy. natural gas producer. [ bell ringing ] >> can't hear anything you said. a rowdy crowd today. >> that's when i put both of my fingers in my ears. >> this was long in coming. they had to delay it quite a bit. they're celebrating it heavily. >> where do we want to start, guys. >> meta perhaps. >> yeah. >> one name we talked about the big meeting yesterday this time ahead of time. they unveiled $299 guest 3s vr headset, a lot still about the

glasses as well. >> a lot of attention on the glasses. there was a rollout of sort of new their ai models and things like that that are going to have some utility down the road. the stock up about 1% here. most of the commentary around the street it's interesting they're resolute and investing in the hardware and glasses and vr headsets. everyone is mostly focused on higher engagement trends, bedrock fundamentals continue to be strong and they continue to benefit from the overhang of about alphabet as a play on those same trends and so, you know, the stock continues to make new highs. it's 24 times earnings. it's now back at a premium, not super expensive but feels like the street's willing to tolerate the heavy investment, continued investment, in the hardware side because they're making the numbers. >> i mean there were a number of product rollouts. wasn't just the cheaper oculus headset the quest 3s, but orion

their futuristic smart glasses that mark zuckerberg was wearing that i mean he -- he was very bullish, hopes it will lead to the next foundational shift in personal computing. julia boorstin was there talking with the chief product officer which was unusual. i was going over the analyst recaps of the event and one number that stood out to me from wedbush the reality labs of meta, the investments, it's an area of investor debate because it's still a lot of losses -- >> so much money. >> $16.7 billion operating losses over the past 12 months. >> right. that's incredible. for a thing about $2 billion in revenue. >> sure. >> although -- >> the glasses may bail them out at some point, i don't know. >> increasingly analyst and wedbush was bullish on the name, increasingly think it's going to be more tied to the core business, the core story as ai sort of takes over the company. >> ai, of course, being their

open source llama. 3.2 model, expanded business ai, chatbots unveiled, things like customer support. take a listen to what zuckerberg had to say at the conference. >> a lot of the stuff that we've been talking about for a long time, right, glasses, mixed reality, ai, it's happening, and, you know, we can start to see how the future of computing and the future of human connection are going to look. it's pretty awesome. >> by the way, mark's changed his look dramatically. i don't know. sometimes that can be a tell. maybe you want to buy the stock when he changed his look. i mean, what do you think, sara? way better right now. >> last year. >> least grown out his hair. >> yeah. >> he's not wearing a hoodie. >> no. >> he ditched the hoodie a while

ago, i guess. >> oversized t-shirt thing. >> working out a lot. >> he looks great. well done at 40 years old or whatever he is. he's looking well. >> all right. >> i was going to say. >> please. >> when it comes to meta, the street they might as well call reality the other bets because that's kind of the way the street views it in terms of alphabet with its other bets. it shows you this is a company that doesn't operate in a world of really difficult tradeoffs. they can kind of do it all. or they can have another bout of efficiency even though they're saying it's always the air of efficiency. you can modulate that if you want to. >> maybe they should have changed the name to other bets instead of meta. >> yeah. >> kind of stuck with the name. >> lot less to talk about in the metaverse. >> it's good you would think management is not succumbing to the sum cost fallacy, the three they're saying they're not, they're not doing this because

they invested a lot, but because they're getting closer and who knows. we'll see how many they sell. >> we haven't checked object def -- on the defense stocks in a while. >> okay. >> if you look at a two-year chart of it, it's hard for investors to process the geopolitical risk right now especially when we're in a sweet spot of macro economic news, but the headlines today, idf tells troops to prepare for a possible attack. china fires long-range missile into the pacific, japan, like every day, we continue to get these headlines that are moving us closer to a trickier position potentially all-out war, and, you know, these stocks in the defense space have performed well as production ramps, as demand continues to increase from all parts of the world. just worth noting. it's not moving that much today. good looking chart over the last two years. >> one of the stronger areas

within industrials. usually it will trade -- we didn't shut down the government. that's how it trades sometimes based on d.c. stuff, talking about spending less on defense, miss a payment, never happens. but the stocks trade off on that sometimes. >> yes. all-out war. on the other hand we have a chart that looks good. there's that. >> try to bring it back to the markets, david. >> yeah. i know. you did throw in the all-out war in there. that was a little scary. let's move -- >> what do you think when you hear troops on the ground? >> i want to talk about jefferies actually. the stock is down but worth mentioning because sometimes it can be a tell for the bigger investment banks as well, and they've had quite a year. you can take a look at the stock price itself. by the way, it's about a $16 billion market value now. they have about 253 million shares outstanding. a lot of that is nonvoting may not show up in some of the share

counts. they've added i think over a thousand people during the downturn and they ranked highl highly in a number of areas. that said the reaction to earnings not particularly strong, although they generally had something very positive things to say about the capital markets in terms of where they are. net revenue $671 million. they were down 3%. that's the -- from the last quarter, but up 28% from the same quarter of last year citing solid overall market conditions and strength across a number of their businesses in equities and fixed income. equities by the way, 42.3% from the prior year in terms of net revenues and fixed income up 13.2. so as you know, mike, sometimes it can be helpful especially because we got commentary around the conferences of a couple weeks ago that indicated perhaps the street was a bit high and some of the estimates for certain investment banks in

terms of trading and investment bank revenues. >> for the firms it's true it has been a busy period for fixed income issuance and sales and trading should play into the strengths. i did note jefferies forever has traded around book value. it's like 1.4. i mean the last three months, four months, it's ripped as the stock has gone up. i don't know if that's the market reassessing how the firm can perform through a cycle or just there in a sweet spot in terms of their business mix. things like private credit and everything feeds into that level of transactions even if the bigger firms aren't seeing massive volume spikes. so interesting. it's up 57% this year the stock. >> all right. we want to get to southwest airlines. shares are up in early trading. the company is holding an investor day in dallas, of course. we've been following the blow by blow between it, and its large shareholder elliott as they fight about directors. let's get to phil lebeau who has the headlines for us from the

meeting itself. >> that meeting will actually start in about an hour, but we know essentially what they're going to be talking about, and it's changes that southwest will be initiating in addition to priority seating, assigned seats, premium seating, all of that goes into effect in 2026. but in addition, the company announcing today it will be offering international airline partnerships in the future, vacation packages. it's going to be enhancing the frequent flyer rewards program. we want to show you this video this is our first glimpse of what the interior will look like on southwest airlines planes once they add the premium seating, which is essentially seats with greater leg room. you can't tell the greater leg room in these pictures but the blue is going to be the predominant color on the interior plane -- of the planes. once they start this. that's coming in 2026. the company announcing it's going to continue targeting cost cuts. $500 million in cost cuts is the target through over the next

couple years on an annual basis. as you take a look at shares of southwest a couple reasons why the stock is up almost 10% today. first of all raising the guidance for the third quarter revenue also announcing a $2.5 billion stock buyback, so you put those two together, that's the near term pop that you're seeing in terms of southwest. the question is whether or not these changes and what investors here at the investor day program which starts in about an hour is that enough to convince elliott management group that the changes at southwest will bring enough reasonable growth in terms of revenue and profits in the future? we'll talk with bob jordan, ceo of southwest airlines, later today on the "closing bell: overtime" show regarding what's going to be happening here at southwest airlines over the next couple years and the proxy fight with elliott management group. my take, david, from listening to bob and other executives as well as seeing the announcement today, i don't think this is

going to sway elliott at all. i think elliott has dug in and has made the decision that it's going to move forward and fight to get more of its -- first of all get some of its people on the southwest board. they've put forward ten names. i'm not sure they get ten but they believe they should have representation on the board and they're not going to slow down in their fight against southwest. >> yeah. that sounds like a fair characterization as well. they want jordan out. i don't think that's changing, you know that. >> yes. >> i will be curious to hear what his thoughts are. that said a 10% move in the stock -- >> i saw him earlier today. he's not going anywhere. sorry to cut you off. i saw bob earlier to uds. he's excited about investor day. he's not going anywhere. he's in a dog fight now with elliott. and he believes that he is the person who can turn around things here at southwest airlines. >> yeah. well well, as i said a 10% move in the stock price can have an effect on some of the rest of

the shareholders. thanks, phil. >> $2.5 billion share buyback, right. >> yeah. >> $18 billion market cap. >> yeah. >> elliott owns 10%. they're going to buy the rest back from everybody else if elliott doesn't sell into it. it's a weird -- >> they have a poison pill as well. they have to watch out. >> i don't know how that's going to work or how fast they will buy it back or what it means for the balance sheet. interesting dynamic. >> other movers to get to estee lauder at the top of the market again. it's a china story. lives of china fiscal stimulus focused on the consumer directly benefits a stock that has lagged so far behind. beauty competitors, staples and the market, it's a stock still down 32% so far this year. week-to-date up 17.5%. es ste has other challenges as well, but one of the biggest ones has been weakness of the chinese consumer and less travel by chinese consumers around the asian region. so if they get a little shot in

the arm in terms of government stimulus, that's -- >> i know they talked about it being a chinese tourist market but it was the way they distributed where you have almost like quasi wholesalers, consumers buying in the centers and then it was, you know, essentially distributing it back home and reselling something. they got over levered to that channel. obviously, any relief on that front feels like -- >> while on that note, i would love to take a look at shares of alibaba for the week as well. similar story as sara pointed out. it's all china based. the idea that the consumer is going to perhaps a willingness to spend a bit more as they become less concerned about how much property they own. there it is. similar move to estee lauder. long china names you would be happy right now. >> las vegas sands, freeport, copper has made a big move higher on this. >> wynn as well. >> you could argue that chinese communist party knows how to trade this market because it really did get washed out and everyone was saying it was

uninvestable forever and all these false starts and you do it for maximum impact if, in fact, part of the objective as they've said essentially is to try and prop up the market and reinvigorate. >> is it good for a longer, more sustainable investment? you know, there are still serious questions. >> take a look at pdd up 11 plus percent today. >> jpmorgan in a note says that -- they call it a near term tactical rally they say can continue because the magnitude of the current rally is half of what we've seen in trading risk on episodes in china in recent years. >> a truly small market cap relative to the rest of the world. hard to avoid mentioning nvidia on day like this. i say it because after the micron numbers, morgan stanley's commentary about micron, they've been cautious on micron's valuation but they say it's a read through for nvidia because if micron's commentary about the total market size for the high band width memory products are plausible, then you'd look at

effectively nvidia's cost of goods sold and what it means for their demand. essentially, all they're saying is nice for micron, but what it means is the bull case for nvidia is probably reinforced by it and you see the stock, it's up again another couple percent, 2.75%. 130 for nvidia is the august high. it's sort of trying to fight its way back and kind of change the downtrend that's been in place since june. obviously, having a huge impact on the nasdaq 100. >> guys, a little bit of news on a name i haven't talked about in a bit, tko, owner of the ufc, wres wresting as well, reached a hard fought hard to get to settlement in terms of essentially violations of the sherman act. it was brought by the company's former ufc athletes. it was consolidated. these are a bunch of lawsuits dating from 2014 and 2015. and then you had a judge kind of

deny the originally proposed $335 million settlement. that was back in july. they seemed to have split the cases and now reached $375 million settlement on this one, a revised terms. they think the original settlement was fair and they say best interest for all the parties to bring litigation to a close. the johnson case in the early stages and they have a motion to dismiss that. erases at least a concern on the part of some shareholders. they did have to go up a bit, it would seem, again the judge has been quite difficult to deal with. that's what i'm told. wanted to share that as well. >> just wanted to mention accenture at the top of the market. we have julia sweet the ceo coming up next hour on a better revenue guide 3 to 6%, better bookings as well, and more ai related bookings as they help their enterprise customers navigate these new waters. before we head to break the bond report.

check out how treasuries are fairing this morning. yields currently have been firmer since the fed meeting and we got good economic data. jobless claims as well lower than expected, four-month low. a little bit firmer yields. the 10-year yield below 3.8%. steadily creeping a little bit higher here. we'll be right back. you'll find them in cities, towns and suburbs all across america. millions of americans who have medicare and medicaid but may be missing benefits they could really use. extra benefits they may be eligible to receive at no extra cost. and if you have medicare and medicaid, you may be able to get extra benefits, too, through a humana medicare advantage dual-eligible special needs plan. call now to see if there's a plan in your area and to see if you qualify. all of these plans include doctor,

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still ahead don't miss an excr excrew -- exclusive with the treasury secretary janet yellen as the markets rally to start this thursday morning with the nasdaq up over 1%. 'rba ia up mutwee ckn coleines.

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a number of headlines we're keeping an eye on involving openai including the company's business model. kate rooney has a lot of those changes for us. >> david, a lot happening with openai in the last 24 hours. right now it's in the process of pivoting from a nonprofit to what's known as a benefit cooperation, according to a source familiar with the matter as the company wraps up what could be the largest private funding round in history, the big nest recent memory and value openai at $150 billion. that's according to a source familiar who tells me sam altman

will get equity in the company for the first time. in the middle of that material changes we're seeing in the c suite. chief technology officer mira murati stepping down yesterday and she has been instrumental in openai's growth developing chatgpt. you might have heard this name she became a household name in silicon valley when she stepped in as interim ceo about a year ago when sam altman was momentarily ousted by the board. murati has been an advocate for responsible ai development and did not say why she was leaving aside from, quote, wanting time and space to do her own explanation. bob mcgrew resigned and another top researcher altman tweeted all these decisions were made independently but this has been a trend for openai the bulk of its co-founders are gone. elliott left earlier this year and schulman went to anthropic. greg brockman on a leave of absence. the list goes on. but this talent exodus is a

major vulnerability at a time when openai is battling it out with other tech companies. it has the lead with the large language model but others are spending billions to catch up, anthropic absorbing some of the executives, meta working on its competitive open source model, google, amazon, really sprinting at trying to have the top language model here and top researchers is one way to win in having deep pockets. the latest guys at openai. >> not stopping the enthusiasm amongst potential investors to the tune of as much as $6.5 billion coming into the company. just to your point to put that in perspective we have ipos that raise a fraction of that. it's an enormous amount of money and getting to $150 billion value of which mr. altman is now going to own a percentage for a -- for a profit company. >> one takeaway altman is keys man. you have some of these material losses with the chief technology

officer but power consolidating around altman. he has had this ability to raise money and make these partnerships. he is emerging as the key player. some describe it he's playing chess here. there's been a lot of executive turnover. one thing that has stayed constant, he is the leader and clearly back in the seat and able to raise an eye-ing on amount of money. >> everybody is digging up the comments that altman made to members of congress last year when he said, i make no money from openai. i'm doing this because i love it and positioning it as sort of this charitable endeavor to make the world safe which does raise questions i think going forward about safety and security in this new world we're venturing into where we're leading. >> what's interesting, the new structure that they're going for is a public benefit company which -- or corporation which is what anthropic is, xai is. you have warby parker, ben and

jerry's, patagonia. the way those are structured they have dual mandates. it will keep sort of the marketing side of this where they say we are also not only for profit, we are for the good of humanity trying to build safe ai, but they're kind of sort of had this dual mandate. it's an interesting structural change in terms of governance, but i think you're right in terms of some of his former comments we've heard what elon musk has had to say about that in terms of the pivot here, interesting stuff. >> all right. thank you, kate. kate rooney. mike, thank you for joining. see you next hour. another huge hour including an interview with the ceo of accenture and the treasury secretary. we'll be rightac bk.

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pgim has established a track record of helping investors capitalize on growth opportunities. pgim investments. shaping tomorrow, today. good thursday morning. welcome to another hour of "squawk on the street." i'm sara eisen with david faber, live as always from post nine of the new york stock exchange. carl is on assignment.

take a look at stocks here. we're in rally mode today and you can thank micron, china, two of the big catalysts for the move higher. the persistment move higher in stocks. it's been about the fed and u.s. data. china related names and earnings movers taking center stage. southwest at the top of the market on its investor day. the s&p up 0.7% right now. the nasdaq zooming 1%. nvidia, micron, broadcom, meta those are your leaders right now in the nasdaq. what's lagging, energy, consumer staples, real estate and utilities are flat, but utilities have been a big leader in this market lately. take a look at treasuries. jobless claims we'll talk about in a moment come in okay. the 10-year yield firmer below 3.8. 30 yield weaker. so not a ton of movement in the treasury market today as we wait pce the fed's preferred inflation number tomorrow. 30 minutes into the trading session. three big movers we're watching.

micron top gainer on the s&p and nasdaq after a top and bottom line beat alongside strong guidance. also boosting shares of other chip makers. we'll break down those numbers in just a moment. carmax on the move. revenue falling from last year after big declines in the average selling price of their used and wholesale vehicles. plus loan loss provisions up from a year ago in focus as mentioned southwest kicking off investor day today raising third quarter forecasts per revenue per available seat mile and targets for $500 million in annual savings as they, quote, minimize hiring and other capital expenditures. the stock up more than 10%. >> want to get to a lot of your macro stuff, but let's get fresh housing data first. it was out just moments ago. diana olick has that for us. diana. >> pending home sales in august rose 0.6% compared with july according to the national association of realtors a slight miss. the street looking for a 1% gain. sales down 3% from august of

last year. despite the slight improvement signings near cyclical lows. the realtors blaming that on high and rising home prices and this count base on sign contracts not closing people out shopping in august when mortgage rates were coming down off their recent highs of over 7% on the 30-year fixed to below 6.5%. we're at 6.2% according to mortgage news daily. regionally, sales were strongest in the midwest and west. interesting those are the cheapest and most expensive regions respectively. some of the big home builders reporting like leonard noted pent up demand as buyers wait for rates to go lower. supply is improving on the existing side but not enough in the lower price points. sara? >> diana, thank you very much. diana olick as we watch mortgage rates on the move in terms of economic data we got today, i think the headline would be jobless claims because the fed now is focused on the labor

market and cares about any potential weakness there when it comes to figuring out whether it's going to be a 25 or a 50 the next move or whether they'll go at all. on that front initial jobless claims at 218,000 was weaker than expected and a four-month low. and continues to point to the fact that we still have some tightness in the labor market where we're not seeing a ton of layoffs. now, it's not to say that hiring might be harder to come by, we've seen that in the softer reads on the monthly employment data and next week is going to be critical because we'll get the september jobs report next friday, but in terms of just potential worrisome growth scare recessionary signals on jobless claims just not getting it. we heard in the last hour from michelle bowman, she is member of the dissenter, a fed governor, first fed governor dissent in, i don't know, quite some time, almost 20 years, and here's how she's thinking about the world. she says she's continuing to see greater risks to price stability, especially while the labor market continues to be

near estimates of full employment. although the labor market data have been showing signs of cooling in recent months still elevated wage growth solid consumer spending and gdp growth are not consistent with the material economic weakening or fragility and they're not planning layoffs and continue to have difficulty hiring. therefore i'm taking less signal from the recent labor market data until there are clear trends indicating that both spending growth and the labor market have materially weakened. the jobless claims would back up her assertions there. >> you cover these people closely. their contacts. they are talking to any number of leaders of both large and smaller organizations. f f >> they do. in their districts especially. bowman has a little bit of a different background in the community banking world and she's talking to a lot of the small and mid sized banks and has sort of been out front on the flainflation story.

she was early on it. we'll get the pce number and see how much there needs to be worry. i mentioned last hour the commodity prices are rising again. we're watching it. the whole china entering, you know, the stimulus growth story does raise questions because they exported a lot of the deflationary pressure we had on our goods which brought our inflation down. so we need to continue to see, you know, prices come down to 2%, but that's clearly going to be a debate at the fed and beyond and the politicians all over it. i'm not sure if you watched vice president kamala harris's interview with our colleague, she doubled down on the price gouging and here's what she said she's going to do about it. >> you said you want to take this on by going after those who engage in price gouging.

>> yeah. >> as somebody who supports free markets, a capitalist, how do you go after price gouging without implementing price controls? because once we get in the zone, people start to get worried and say i don't know what she stands for. >> so, just to be very frank, i am innernever going to apologiz going after companies and corporations that take advantage of the desperation of the american people. >> she didn't say she wasn't going to implement price controls and didn't really explain the policy, but this continues to be one of her centerpiece topics around inflation, and it just doesn't make economic sense. to back it up further i -- here's a chart with what's happening with grocery price inflation. according to the cpi. it's come back down. >> yeah. >> we're all feeling it because there's a cumulative impact and prices still more than 20% higher than they were in 2019, but the prices are coming down

and it's not clear what a government -- >> but you made the point the margins did not appreciably increase. >> correct. if she were to pursue this -- >> maybe there are certain pockets of certain areas of the economy. i don't know. >> pockets where costs are still high and commodity prices are still high and, you know, the whole notion, look, if your opponent is painting you as a communist, maybe you don't talk about price controls and price gouging. last time we did this in the '70s when we had the last inflation scare where nixon put in place price and wage controls, there were all sorts of disruptions including shortages. it didn't end well. even democratic economists are saying -- >> i don't think there are many who fully expect there will be price controls. >> why did she -- >> i don't know. >> it's a weird -- >> i don't speak for her. >> people are feeling it, and it polls well and people have had sticker shock and continue to do

so. and, so i get it. it's hard to -- silver bullet is the fed tightening, bringing inflation back down and preserving the job market. that's hard to explain. people want a solution. go after the greedy corporations. we're just -- we're all about the economics. >> there you go. that's what i say about you, sara, all about the economics. let's move on to micron shares soaring on a strong outlook. the company saying robust demand for ai is boosting revenues fueling the rest of the semiconductor sector as well. micron's ceo sanjay mehrotra joined us in the last hour, and he was talking about -- i asked him about the risk of relying on data centers overall for so much their growth. take a listen. >> transformations like ai never go linearly. they can ups and downs. we can't just focus on the data center piece. ai is driving growth for memory content in smartphone and pcs as

well, so when we look ahead we see robust data center trends, robust enabled demand as well as refresh cycle in traditional servers. w we see that in smartphones and pcs. longer term trajectory is solid. >> wall street's take joining us is aaron retkers, has a buy rating. $175 target. good place to be given the move in the stock price. they seem to surprise many who follow them with that guidance. is it sustainable? >> yeah. i mean thanks for having me on. i do. i actually think one of the things that san jay you mention mentioned him on, the custom aspects of the ai memory opportunity, i think is still under appreciated. we think there's longevity in this. the mix towards those solutions continue to be positive, not

just for the top line, but also for the margin profile of micron. it gives us better visibility in terms of what has been historically considered a very cyclical memory market in general that micron plays into. >> yeah. we spent time with him talking about the high bandwidth memory in data centers, but what about the other parts of the business did we learn from this quarter and why are they giving you confidence? >> i think one of the things that we've been talking about with our clients has been, you know, the indicators of a traditional server recovery. sanjay allouded to that. a lot of spend went towards ai and we think those workloads will get refresh cycle and they will need infrastructure upgrades et cetera and we think that's a positive dynamic that's starting. not just in micron's results but broadcom and others. and then, you know, we also think that we get kind of an inventory kind of completion as far as digesting inventory in

pcs and smartphones as we move through the first half of '25 and the pc market where we see content growth with ai pcs and windows refresh next year. >> you cover all the sexy names, vi nvidia, dell, marvel. where does micron rank in terms of beneficiaries for the step in ai demand? we enter this year and stick by it, micron is our top idea. we've liked the story. we thought structurally memories rule in ai. it's not been fully appreciated. we also think the cyclicality of this market is probably, you know, an overdone concern, particularly as we look into '25. micron has been the top. we've liked nvidia. we've liked amd as well. we still think the memory space is probably under appreciated from the underlying fundamentals and lessening cyclicality.

>> appreciate the snapshot. thank you. let's give you a road map for the rest of the hour. micron fueling much of the rally along with that continued potential stimulus from china. we'll have a lot more stocks to watch. >> an alternative read on ai demand. we'll talk to the ceo of accenture. >> later this hour a cnbc exclusive, janet yellen will join us and, of course, perhaps, will tell us what she sees coming in terms of the economy and rates. she once ran the fed too. don't forget that. "squawk on the street" is back right after this. into the night. it's all the things that keep this world turning. it's the go-tos that keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone.

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the new york fed's tenth annual u.s. treasury market conference under way right here in lower manhattan. steve liesman is live. he's got a very special guest. steve? >> david, thanks very much. i am here a couple blocks away from you with treasury secretary janet yellen. thank you for joining us. >> my pleasure. thank for the invitation. >> they're going to be stability and you will give a speech about stability in the market. some things have seemed to work out right. are we past the period of time where you have concerns about the balance sheets of banks and their exposure to high interest rates and what are the risks you're concerned about. you mentioned in your speech stable coins, the nonbank financial sector? >> yes. so we want to make sure through our work with the financial

stability oversight council and more broadly that we have a well-functioning financial system that can contribute to growth with respect to the banking system, i believe it's well capitalized and we did see risk materialize a year ago. i think we've dealt with those successfully. it did show, though, that a vulnerability is a high level of uninsured deposits in parts of the banking system and inadequate access to the liquidity that's needed to be able to address deposit runs, deposit runs large and very rapid, and so a good deal of thought is going in to how to shore up the liquidity, the access to the fed's discount window, for banks that do have

insured deposit. >> [ inaudible ] over $250,000, congress' mandate not something you can do broadly under treasury federal reserve mandate. >> i really think this is up to congress, the fdic issued a report discussing possibilities. this is for congress. but in terms of access to liquidity, better functioning of the discount window, making sure that banks are prepared to borrow from the discount window quickly, this is something that the banking regulators can -- are working on in discussing. >> let's shift andtalk about the economy, some revisions to gdp this morning. told us we didn't have two negative quarters in 2022. generally upward. gross domestic income came towards gdp which is a kind of thing only for the wonks in all of us here. bradley do you see us heading towards a soft landing and do you feel like inflation is

sufficiently under control? >> well, i do. i think that all of the indications we're seeing both in the labor market with respect to inflation and with respect to growth suggests we're on a path to a soft landing. of course, there are always risks. we are seeing a less tight labor market and some growing -- a little bit more slack in the labor market that we had previously. the unemployment rate has drifted up, low by historical standards, but hopefully this is going to turn out to be a staple situation with the fed supporting continued strength in the labor market and inflation has come down considerably the last mile on inflation involves housing costs and i believe there's good reason to think that they will fall market rents

have declined considerably and with a lag i think we'll see housing costs fall further and take the fed to its 2% target. i've said for a long time i always believed that there was a path to a soft landing, that it was possible to bring inflation down while maintaining a strong labor market, and to me that's what the data suggests has happened. >> so i know you think a lot about the fed. but i also know you don't talk a lot about the fed. i've written a crafted question here to see if you might respond to it. when you think about the level of rates now relative to the progress on inflation, do you think that rates at the fed are too high? >> well, you do see in the material in the comments of the chairman and in the projections of the members an expectation that rates will come down more

and that short rates are currently above neutral, and when you have an economy that's growing at potential that's operating at full employment with inflation in the vicinity of the fed's target, that suggests that a more neutral stancive policy is apropopropri. the fed has run a policy to bring inflation down. we've seen considerable progress on that front and yes, i believe over time, if we stay on that path, that rate ws will decline against neutral. >> do you have a path rates get there. >> that's getting into details. >> you talked about potential growth and something that has been troubling to many market observers which is that we're at or above potential.

we're at or near many estimates of full employment. yet we're running these very large deficits. can you explain why that is and how the administration justifies these large deficits with the economy doing as well as it seems to be doing? >> well, i think the metric we should be looking at is to decide on the sustainability of fiscal policy is real net interest costs as a share of gdp. and historically that's been under 2%. it is under 2%. over time, if we don't do further deficit reduction, it would be likely to drift up. so i think looking forward, it will be necessary to get deficits down and to do some deficit reduction in order to keep the interest costs manageable. the president, president biden, and vice president harris,

presented fiscal 2025 budget that has considerable deficit reduction. something like $3 trillion over the next ten years. >> i've seen that, but if you can't get the revenue, isn't it prudent not to do the spending? >> well, i think it's important to be on a fiscally sustainable course. the approach that our administration is taking is that we want to be able to invest in ways that will boost growth and do so in an equitable way whether it's investing in industries of the future, in places that haven't had opportunity, addressing housing, child care, things that are boosted the cost of living and made life very difficult for middle-class families. so we want to invest in the country and be able to do that

afford that, by raising enough revenue to be able to pay for those things. and we've made some progress. we do have now a corporate alternative minimum tax that went into effect. we have started to bring down the cost of pharmaceuticals, which both loewers the cost of living for families and also saves the government considerable amounts of money. importantly, we've basted the resources of the internal revenue service so they can both improve customer service and i think anybody who's dealt with the irs over the last year or year or two, can see that. but also, begin to close the tax gap which is the enormous gap between the revenues that are being collected and what was estimated to be due. >> all that said, do you regret over the course of the pandemic,

and its aftermath given to what happened to inflation, not having reduced spending so that you weren't adding to that inflation? >> look, i think at the outset of the administration we felt that the largest single risk facing our economy was that people would not get back to work in a timely way, and we could be faced with a real crisis of high unemployment with substantial scarring. and we put in place with congress a program that was meant to address that risk. every developed country saw a surge in inflation. ours was no worse than other countries experienced. inflation has come down more quickly and we've had a more robust recovery than other countries, so there's no

question that inflation has been a problem, it remains the top priority of our administration, to address the high cost of living that burdens households. but inflation now is down considerably and real wages, wages adjusted for inflation, are rising so that families are getting ahead. >> you mentioned in your speech the risk of china and the importance of having a positive relationship with china and building on that relationship. over the course of this administration you have kept the tariffs put in place by former president trump and you've actually added to them. do you believe that that relationship has gotten closer? >> i do believe it's gotten closer. i think we've deepened our ties with china. we've found ways to constructively discuss and address our differences. i don't want to say that there will be some miracle in which we see china address all of our concerns quickly, but we have

had productive discussions of our differences so that we better understand one another and we're cooperating in areas that the world needs us to work together. financial stability is one of these areas. and, for example, if we were to, god forbid, see a globally systemic important bank, fail, that has operations in china and the u.s. and europe, we would need to be able to cooperate and we're working closely with financial authorities in china doing tabletop exercises and deepening our ties so that we would be able to work constructively and quickly to manage a financial crisis that involved the banks and the financial system in our countries. >> madam secretary, a last question, i've been interviewing

the treasury secretaries since the '90s. when you wake up do you look at the dollar? how du think about the dollar? it's weakened with federal reserve rate cuts? do you think about it in a range? how much concern do you have for the value of the dollar versus other currencies? >> so at the beginning of our administration i tried to articulate what the u.s. dollar policy is and what i said is that we believe in the market based currency that the value of the dollar should be determined in markets that we should run a strong macro economic policy consistent with macro economic stability, price stability, and full employment in the united states and allow the dollar to adjust as necessary to accomplish those goals. so, of course, i watch the value of the dollar, but it's been a long time since the united

states has intervened in currency markets. i can't imagine situations where markets are so disorderly that intervention is called for, but as a normal matter, the dollar is determined by markets and interest rate differentials globally have been important drivers of that. >> do we need a central bank digital currency? >> this is something the fed has been looking at. we've been studying as well. there are pros and cons and we're looking at alternative approaches. we have a good, new, fast payment system. we're looking at ways to facilitate and reduce the frictions and cross-border payments. there are many international discussions taking place about ways to improve the efficiency of the payments, payment system, and it could one day involve a

central bank digital currency, but there are other approaches as well. >> madam secretary, taken more time than agreed, thank you for joining us and giving us your time. >> thanks. >> back to you david a couple blocks away at the new york stock exchange. >> thank you. of course thanks to treasury secretary yellen as well. moody's analytics mark zandi is here to break down what we just heard and a lot of other things to talk to you about as well. first off anything that the treasury secretary said that you sort of paused on or have anything to share with us in terms of what your thoughts are? >> well, david, i didn't catch all the interview. running around here a little bit. caught about half of it. the one thing i totally agree with and very sympathetic to her argument that the american rescue plan, the support that the biden administration provided to the economy early on in the administration, that that is not a key factor in the inflation that we saw subsequently. that was largely due to the

pandemic and the supply chain disruption, labor market issues, and, of course, the wars. i thought she got that right. on china, they're, perhaps, you know, a bit too sanguine about the relationship but this feels vexed to me. i'm glad she made it clear we have a good working relationship with the chinese so if something goes off are the rails we can have a discussion and try to address it. at the end of the day it feels like our two nations are moving in very different directions. this election will have a lot it say about what direction that takes. broadly speaking, you know, pretty much down the center of the fairway, nothing really surprising. >> yeah. >> i didn't hear anything surprising. >> no. i think that's largely the case to your point and i think all of us sort of pause on china given the continued level of it tension between the two. we started with sara talking about initially jobless claims, let me come to you on that,

lowest in the last four months, right. is the fed overly concerned about employment at this point given at least it would seem to be pretty strong, not to mention what michelle bowman, who dissented in the last meeting had to say about it as well? >> no. the ui claims, we have to step back and abstract from the seasonal issues. if you may recall a couple months ago, maybe a month ago, it felt on the high side of what everyone was comfortable with and now they're kind of on the low side. this just goes to so-called residual seasonality created by the pandemic. if you cut through that it feels like we're a rock-solid 225, 230, that's very consistent with an economy that the job market is going to continue to create jobs. businesses have pulled back on their hiring, they've cut back on hours that people are working, cut back on temp jobs and all of those things suggest that, you know, businesses have turned cautious here, and i

always worry about layoffs. i mean, it's -- the argument is that businesses aren't going to lay off because they've been grappling with labor shortages for a long time and don't want to get wrong-footed like during the pandemic. they will be reluctance to lay off. that's a reasonable argument, but it's hard to prove, hard to show and, you know, speaking to you now as kind of a business person who hires a lot of people and employs a lot of people when one company in each industry decides to lay off, it sets off layoffs across the board. it feels like a ten new was situation we're in, the economy remains resilient but feels like kind of a tenuous resilience if that makes sense. >> is there any reason to be worried about price pressures, about inflation? i know we've come down from 9.1% to in the 2 to 3% range and we're overly tight and the fed has given a nod to that with their rate cuts and expected

continued cuts, but now with commodities, receding a little bit, china starting to stimulate, is there a reason to be concerned they might not be able to get as much cutting down as they or the market anticipates? >> no i don't think so. the only difference between the current inflation rate, pick your inflation measure, and the fed's target is the cost of housing, the implicit cost of housing. if you exclude owners equivalent rent there's a strong argument to be made you should exclude it for lots of different reasons, it's not useful in trying to gauge what's going on with how you should conduct monetary policy, inflation is below target and it's been consistently below target. it's like 1.5, 1.6% year over year. it's been that way for more than a year. if anything feels like one of the soft sides of inflation, not the high side. given the labor market and the slowing in growth, you know, i think -- i'm not worried about the job market at this point

given the fed cuts, and i'm not worried about inflation. it feels like we're right where we want to be at this point. >> we'll leave it there. right where we want to be. appreciate it. thank you. >> any time. >> shares of accenture higher on strong earnings and new buyback plan. the consulting company's generative ai business reporting more than a billion dollars in bookings for the quarter. that was a step up from last quarter. accenture's chair and ceo joins us now on a first on cnbc interview. welcome back. good to see you. >> good to see you, sara. thanks for having me. >> there were some concerns in previous quarters about a slow down of spending in the consulting business as the economy softened a little bit, but feels like ai is pushing ons other side of that. war -- on the other side of that. what are you seeing? >> on the spending side there was more of the same. what you saw in our q4 results and momentum into fy '25 is how we're executing in that environment. we realized very quickly that

clients were going to focus on the bigger spending on the big transformations an so we ended the year with 19 more bookings of $100 million more a quarter than the prior year. so we had record sales of $81 billion. our strategy to go to where the clients were, the bigger reinventions is working, and we entered the year off a 5% growth in q4 with momentum and a really strong view of our early leadership in gen ai is expanding as you mentioned a billion dollars of bookings for $3 billion for the year. so really feel good as we enter the year. it's not dependent on the market. the market about the same. it's really a focus on how we've been executing. >> so what are those enterprise companies hiring you for on ai? what do those bookings look like? >> sure. so it varies by industry, but

what we're seeing, for example, industrials and energy, a lot of the values coming around asset management, better safety, better predictive maintenance. if you're looking at insurance it's about claims and writing, underwriting. if you look to areas like health it's around customer service, patient service, customer service, so in every industry where we're seeing the most value is you go to either their biggest growth opportunity or their biggest cost. you know, there's always this question around, you know, when is it going to happen? we are seeing real value from ai right now. >> julie, i'm always struck in part by how many employees you have, 774,000 around the globe. our viewers may be stunned at that number. i wonder how much do you do -- do you eat your open cooking so to speak? your clients are trying to save

money to free up areas of gen ai, what about serving all your employees? how are you doing it internally to try to save money as well? >> well, we always like to think of accenture has to first be our best credential. for example, we're 95, 96% in the cloud. we use our own operation services to run our corporate functions. we are using gen ai for our own delivery and how we operate accenture. we need to invest at our scale and making sure accenture can be using the technology and bringing that to our clients. >> you alluded to the overall spending environment. what have you seen from clients since we've -- we've seen the fed rate cut bigger than expected and high expectations the fed would begin cutting rates. have you seen a change?

>> you know, clients are cautious and going into budget season so we'll know how that caution plays out in january or february when they finalize their budgets. a lot going on in the u.s. in particular. for example, as the election comes up. so, you know, i'm not seeing a big shift. i'm talking to ceos every day and what their focus is saying look, the macro economic environment is not getting better when you look at the estimates for next year and so how do we make sure that we're transforming to grow and to cut costs in this environment. and that's why you continue to see this focus on bigger transformations and the discussions are not changing. there is a big focus on talent and understanding they need to rotate talent more. that's the other big discussion that we're seeing increasing as we go into the year and our clients are seeing how much ai is going to transform. we talk about ai as the next digital, it will be truly

transformative. >> you get a broad sense of the world's economy, confidence underlies so much of the spending decisions. how would you chair u.s. ceo confidence versus what you're seeing from a european client base? >> yeah. there's more caution in europe. the u.s. has been performing better with the view next year it's going to click down and europe is supposed to click up. there is more caution in europe generally. and at the same time, you know, we're seeing a very good results in our business there because the answer to the environment is, you've got to transform. all roads lead to technology which definitely serves us well with our ecosystem relationships and industry expertise. >> how big can gen ai bookings get for you in terms of overall revenues? it's still very small and growing fast. but where do you see that going? >>. >> sara, next year, at $3

billion this year we'll see a healthy rise next year. what drives our growth is that our clients say see the potential but they're not ready for it. in some industries you're still very early in the cloud journey, let alone the data journey and in industries like banking where you're farther along in the cloud journey they have more to go with data. you're going to see our growth next year continue to be driven by the digitalization that has to happen across industries and then you have industries like retirement services we just announced an amazing new program with t.i.a.a. where they're going to improve their services for retirement for americans using automation and the cloud and technology in partnership with us and that's an industry that's very early on in its digitalization journey, let alone their ability to use ai. think about our industry as being driven continuously driven by digital and then ai really acting as a catalyst for accelerating that journey.

>> it's not cannibalizing it, is it? the spending on ai. some are worried with the cloud names it's eating up some of that business? >> we're seeing ai to be just like prior technology changes, right. we move to software as a service and everybody was worried. we moved to just regular intelligent automation using traditional ai that was around 2015, 2016. so far what we've seen is that gen ai is kind of developing just like the prior, you know, the prior technology ways and where we really benefit is that because ai is the new digital, digital is about technology and changing the ways you work. the ai revolution isn't about the technology. it's about the ability to change the industries. look at espn. espn we just announced a great solution there where they're now going to cover sports that they weren't able to cover before and are using gen ai and human

editors. that's a whole new growth area for them that didn't exist. that's a different way of operating. so it's really important to understand when you think about accenture what we bring is the ability to do the change, right, and to change the way you're working and that's what you're going to see ai is really driving is a whole new way of operating. >> market is excited about it today the last few months up 5%. thank you so much for coming on and talking through the quarter and what you're seeing. >> thanks, sara. >> thank you. up next, micron and semis fueling the market gains. there's some big movers outside the chips. we'll tell you about them next.

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♪ welcome back. let's get over to leslie picker who has news on wells fargo for us. >> take a look at shares of wells fargo having their best day since february of this year on a headline report showing that there could be momentum on

wells fargo's quest to get rid of that asset cap that has been in place for the past seven years. something that analysts and investors have been parsing over any progress on that front because it would -- it has essentially been a drag to earnings as it limits the size of this bank. as i mentioned it is a -- has been a seven-year process, but according it a report in bloomberg which is citing people familiar with the matter the firm has submitted a third-party review of its risk and controls overhauls to the fed for the central bank's analysis and sign off and that follows a years long process in which wells fargo has had to submit a plan and get it accepted which took a few tries and then enact it and hire an outside auditor. the report says that they expect the executives at wells fargo expect to see that cap stretching into at least next year and there's a lot that needs to take place before the final signoff. the cap has been limited to

about $1.95 trillion in assets which, of course, limits the size and the ability for the bank to grow. you can see shares are up 3.9% right now on this news. i received a no comment from wells fargo and i will let you know if i hear anything more. guys? >> we ask them every quarter the cfo every quarter, when is the asset cap going to be lifted. is there any explanation as to why now? >> i think part of it is this back and forth review process and the fact that this has been a signature aspect of charlie scharf's job as ceo thinking to get some of these regulatory impediments lifted, this being the key one here, and lot of that takes time. a lot of that is making sure that you're going back and forth and getting the appropriate comfort from the fed and so, you know, there's still a long way to go, but it appears that there's some momentum in ultimately getting to that

place. >> i mean, leslie, we're talking about enormous loss of potential profits here given the results of this asset cap. i've seen some reports that during the cap's life span, jpmorgan, which, obviously, has not operated under a cap, has been able to add basically as many assets as wells fargo's entire balance sheet. >> yep. if you recall, one of the big kind of fomo moments of this is asset cap you when silicon valley bank went under and wells fargo, given its sizable presence in the bay area, would have been poised to kind of prosper and take on some of that business from silicon valley bank and prosper from some of the turmoil whether from first republic and elsewhere. they were restricted as a result of these regulatory, you know, requirements here, and so they weren't necessarily able to capitalize in the way that they may otherwise have been able to do. this is something, you know, rightfully sara is asking the cfo every quarter whether there's any progress on this

front and it's something that's just absolutely priority for the executives at wells fargo. the investors in wells fargo and analysts, the key story for this company. >> it was sort of the missing piece and the investors got all excited about the cost-cutting and the growth plans and this was the missing link. thank you, the investors got excited about the cost growth and cost cutting and this was the missing link. thank you, leslie. keep us posted on that saga. let's go to eamon javers with breaking news on the new york mayor. >> that's right. we now have the indictment here of new york mayor eric adams that has just been unsealed. it is a 57-page document here. there's a lot to go through. five counts in this indictment. the question was, what would eric adams be charged with. it's conspiracy to commit wire fraud, federal program bribery and receive campaign contributions by foreign nationals. those foreign nationals from turkey in this case. wire fraud, solicitation of a contribution by a foreign

national, solicitation and bribery. there's a number of details in here, but what this indictment is alleging in broad strokes is that adams reached out to these foreign nationals, including turks, developed a relationship with them that predated his term as mayor. they say by 2018 adams, who had been -- by then made known his plans to run for mayor of new york city. not only accepted but sought illegal campaign contributions to his 2021 mayoral campaign as well as other things of value from foreign nationals, as adams' prominence and power grew. his benefactors sought to cash in on relationships with him, particularly in 2021 it would be clear that adams would be new york city mayor. we do know the details of the charges, the allegations of him. mayor adams in new york city remaining defiant.

issuing a statement, calling these allegations based on lies. we are expecting now to see some news events from the prosecutors in this case later on this morning. we will bring you those details as soon as we have the on the record allegations from federal officials. back over to you. >> but he's vowing to fight it, right? they released that video. he hasn't been arrested. >> he's not. the question is, when will he turn himself in for initial process willing? that may happen next week. that may happen sooner than that. it's a fluid situation. we saw fbi officials at gracie mansion this morning searching the mansion, looking for additional information. this goes back to a year ago, remember, nearly a year ago, i should say, in which the mayor's motorcade was stopped by federal officials and federal officials told his security detail to stand aside and went into his vehicle, his suv, and grabbed his phones in order to search for evidence for this ongoing investigation.

so, this situation has been brewing for a long time. booef seen just in the month of september a host of officials in this mayoral administration in new york resign as a result of various tentacles. what we're learning now is at least what the mayor is being charged with. i don't think we know the full extent of this investigation and where it might go. >> should he step down, which we don't know and he hasn't said, the public advocate takes control and there's a special election, right? >> well, yes. that's the question. who are the figures out there who are lining themselves up to run now. this has been headed in this direction for a while. political figures in new york are not slouches, right? they've seen this coming. and so they've been positioning themselves for a while to run. we'll see what the names are on that list. >> okay. eamon, thank you. >> you bet. keep us posted. head fund billionaire david

tepper on "squawk box" explaining why he's getting very bullish on china. have a listen. >> i thought that what the fed did last week would lead to china easing. and i didn't know that they were going to bring out the big guns like they did. and i think there's a whole shift. >> let's get to dom chu, tracking some of the big china plays, which are doing well, having a great week, dom. >> that's right, sara. he also mentioned in that same interview he was buying everything, his words, quote, unquote, everything with regard to investing in china. let's take a look at, first of all, the kraneshares etf which has spiked given what we've seen with china stimulus measures up 9%, building on yesterday's gains. another place to watch is the etf ticker fxi, which is the large cap china stocks, which are traded in hong kong. many of those names getting a huge bid. you can see a massive move higher. with the individual names that make up many of these large cap

indices tied towards the china trade, you look towards names traded here in the u.s., like alibaba, baidu, jd.com, net ease, up 3.5% to 12%. there are some direct plays and indirect plays people are taking with that particular move as well. tepper mentioned names like wynn and las vegas sands. i'll send things back over to you. >> dom, thank you. sorry. was trying to look up news on super micro. i believe seema mody has more on that. stock is down about 8.5%. >> "wall street journal" says doj is probing micro on accounting concerns. the article says the probe is an an early stage which comes three weeks after hindenberg lunched that investigation into the company, accusing the company of accounting concerns.

we reached out to super micro. it follows that news as they delayed their 10-k, which raised concerns about the company. we're looking at the stock currently down 8%. it's had a tough couple of months here. david and sara? >> a probe does not mean they're going to bring charges. remind me, did they restate anything or what is the company actually said previously after the hindenberg piece came out, seema? >> so far the company has defended their accounting practices, saying there are no concerns and that they're looking into it, david. >> okay. seema, thank you. seema mody on super micro. of course, that stock is down. nvidia shares have also turned lower on the session. micron, of course, which we've covered very closely, having spoken with the ceo, remains strong performers. you see super micro reacting to those headlines. >> micron is the halo effect. this is a little downer. overall, things are still looking good. the s&p is up a quarter of 1%.

we've lost a little bit of the gains. nasdaq, though, to your point, that's what's rolled over a little bit. micron still up. amazon, tesla, meta, and nvidia a little lower. >> the s&p up a quarter of 1%. the nasdaq has actually given up a lot of its gains. it had been up as much as 1% earlier in the session. we've got a lot more live market coverage for you straight ahead. are often paused. citi's seamlessly connected banking, markets and services businesses, deliver global financial solutions. so our client can keep investing in innovations for patients around the world. without pause. for the love of moving our clients forward. for the love of progress.

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good thursday morning again. welcome to "money movers." i'm sara eisen with mike santoli. new highs for the s&p 500. will it be the mega caps to make the move for stocks? we're live in dallas at southwest's investor day. sign of life for the ipo market? nat gas producer bkv going live. we'll talk to the ceo at post 9 if a few minutes. markets lost a little altitude in the last hour or so. the s&p 500 opened up about three-quarters of 1%.