Transcripts For CNBC Squawk Alley 20240714

Earlier lossers. Well start in washington as several goernls decide to move forward. Roughly a dozen state ags are part of this effort. That number could grow this is expected to be bipartisan im told state ags discussed this when they met back in july. One of those at that meeting sent us this statement saying the attorneys general involved will consider the data telling us they will talk about the status of the state and the own anti trust debut they said they will be working together to ensure Big Tech Companies are being held accountable. Both the doj are being held to their views. Still question about the action and the scope of where they will be for the tech industry, the message is definitely clear. Regulators are watching and they are tired of waiting back over to you definitely will keep on watching this. Joining us now with the stock impact, founder and ceo of the international. I want to get your take on the market where we are at here i think right now, not talking tech but the Broader Market you have to be concerned with the rates of how they get closed maybe both are a little right. A little wrong having said that, what you would have said later in the year compared to what would have happened. That gap is huge, for any person in that position, it is a very difficult maze to walk through it is going to be volatile for some time. A couple of other factors on its one hand, you have all the china trade stuff and all the regulatory scrutiny of the Tech Companies here in u. S. Or europe, how do you navigate . It is a great question. Generally the way we are thinking about it is we are really focused on companies that are competitively advantaged that should prove familiar under the economic scenarios in terms of the potential. When we look through the market, we see interesting areas of opportunity. The tower businesses, the American Towers of the world they are structurally advantaged if we continue to see a lowering in Interest Rates, they benefit as well. They are really unique opportunities outside of where we might see the more significant headlines. We are finding really interesting opportunities. I highlight the semiconductor space. What weve seen so far during this down turn are margins and models that have held up incredibly well. Those businesses are much more positively positioned than they have historically. We continue to be enthusiastic you say 5g are trends settern that some companies are holding off on spending ahead of 5a. Ai, everybody is talking it up but it is hard to see who has a mond monetizable standing as it relates to ai, you are right. Everybody is going to talk about it more specifically where you can directly vest against the theme. Areas of compute infrastructure. Think about nvidias. The large Cloud Platform because they are providing infinit levels of compute and the al r gore rhythms theyve captured a ton of information to be able to level and provide new and Innovative Solutions to customers there are a lot of areas where it is not going to be a big boom where well point to, thats an aispecific company. But well be able to point to those as well. You mentioned volitility before one area you point at is nbx in the nasdaq 100 that has been fascinating the spread of the nasdaq versus the vax. It has been steadily climbing. That pred has been falling, falling. It is interesting. The megatech in the foreground it is also interesting in that, you are looking at the nasdaq, we are getting into the heightened risk. What will go up will go down i think it is also telling you as it relates to the broader regulatory production. There is a lot of distance between an angry elected official and actual policy when it comes to reengineering those business models. I wanted to get your thoughts we just saw the u. S. Grant huawei grant another to suppliers. He did speak to the threat of national security. Have a listen. The threat of having chinese tell come systems inside of American Networks or networks around the world is a risk our hope is to make that risk less it was across both political parties. President trump has said thats a risk we cant take to protect the american peoples privacy. I wonder how you think this plays out not only for the semiconductor and tech stock but also how it could create a template of the trade dynamic. When trump started ratcheting up the trade narrative, it looked like good Old Fashioned trade narrative. When you start getting into the geopolitical consideration, it makes it that much harder to undo it is a much more complex discussion when you are in security issues. To expect a nice tidy, clean resolution between now and the end of the year on trade is increasingly aggressive. The best stimulus is close off all tariffs and go after bad actors the way we have been with cleaner emission would you agree with that . I would i just dont think that would happen you are talking about trump putting tariffs on mexico. You look at the trump white house. It was very unstable those guys have some stability there. This is not a few monthtype situation. This is a sill ar of his presidency definitely a conversation well continue to have tha thank you for joining us uber ceo giving some credit to apples new card. Well talk about that, which goes live today. Dow has gone green we are up 11 soft music when i see obstacles, i create opportunities. When i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. Apples new credit card launching today for all customers. Some companies in partnership. Tweeting support get your apple card now. Another partner joins us here. Master cards president of north america. Great to have you. Do you like what youve seen there is no number on this card and they are encouraging people not to swipe it. You get the cash back if you are interacting on apple pay and not swiping. There is a number of reasons we are excited about this program. It represents a first for us in terms of putting into the marketplace what we are calling the Digital First call our partnership with master card and apple. Why is that good . Is. In particular consumers who identify closely with apples brand and apples eco system they are very closely connected to those devices they shop, when they shop, they transact we want to have payment capabilities close in line with how they are living their lives. The reason why Digital First convenient and secure is coming to market with this. How much more secure is this with no printed number on the card you can get a onetime use number people dont have to worry about copying down a number. If the consumer chooses to get that, that helps but the real key here is happening behind the scenes where we are tokenizing that and taking the 16 digit number and scrambling into a code where only weigh and Goldman Sachs recognize. If it shows up somewhere else, we can recognize that and kill it more revolutionized about late fees and interest what go you think of that . I wouldnt call it ray criticism. Anything that brings more transparency and awareness so they can better manage their Consumer Affairs is a good thing. More around the payment due dates, et cetera, apple is taking that another step further making that easily accessible adding their own twist to that anything that provides for consumers a good thing we are starting to get some retail earnings. We know so much hinges on the consumer right now. We continue to see consumers showing up well. That fundamentals that under pin. The high degree is translating to healthy growth. In the second quarter, we saw overall consumer trending. That is measured by the estimates that measure overall spending so we continue to see those types of pending we had some very high growth rate the fact that consumers are still showing up and voting with their wallet, we see that as a positive sign. Are we going to see anyone else do this . Other than Goldman Sachs wanting to take the risk apple was willing to put on the table. Will we see more of these numberless cards apple presents a unique set of circumstances because of the ability to integrate the card with the operating system others may seek to do that. We were very eager to work with apple and Goldman Sachs. There has been stories about people taking on personal loans to payoff credit cards as you know, master card is not in the Interest Rate business banks set rates as they see fit and manage that across the breath of their consumer portfolio. Thats a better question for one of the banks when you have them on craig, well be watching how this car goes and how deep the discount goes. When we return, why are irrational anxiety about slowed growth joining us on the other side of the break. Dow is up two points right now stay with us worries of a global slow down and recession are probably irrational thats what our next guest says. Morgan stanley Investment Management is with us. Welcome back good to see you. Well, good to reconnect with you from here. I understand there is a delate here. Ill keep my questions brief what is the framework here especially on a month some are arguing investors are trying to talk the economy into a recession . My basic point and in general is that the Global Economy today is facing four head winds. One is deglobalization which has to do with tariffs some of the biggest factors have to do with popular growth. Debt levels being high my point in the wake of that, it is very difficult to grow. In that era when the average growth was about 4 it is very hard when we see the pop u grow like we have what you are outlining here is the world has bigger problems do you feel like all of the tariffs back and forth has become a catch all is maybe oversimplifying the problem here yes, absolutely i think if you look at the slow down, that is consistently happening this decade the slow down and the Global Economy has been going on the entire decade going at a pace of about 10 with the slow down, a lot of it has to do with that Global Factor you could say that wake of that is very difficult to grow at the rate of 6 or so rather than just blame the entire thing on the trade war. Developed the economies like one to two exactly what has happened over the last four years that has helped the Financial Markets more than it has helped the economy. The fact that you had stock in places like the u. S. Trading at elevated valuation that is what happened. You have a lot of prices that benefit from the low Interest Rate it is very hard for the real economy to just keep going someone put it to me, you cannot print people if you are running out of people populations are declining including in the United States where the growth rate has slowed down after population. We are suffering from an incredible amount of entering bias we think we can achieve the same growth rate from the stimulus. Thats where i have a disagreement with the policy of every people which is every time the economy slows down, we want to head to implementing more stimulus has implications for monetary and mondayation policy a good read. Well talk to you next time. Lets get to sue for a news update good morning. Here is whats happening at this hour Authorities Say an armed man who took dozens of hostages on a bus in brazil was shot dead by police all 37 hostages were freed unharm unharmed taiwans president thanking the u. S. For approving the saet le 66 fighter jets. The round of arm sales already announced by president Trumps Administration these packages reaffirm the United States long Standing Committee to ensuring peace and stability. Nascar driver Dale Earnhardt jr. Responding fof the first time after he and his family survived a fiery crash he said his family is very appreciative of the privacy extended to them that is your update at this hour back to you. The dow looking for four positive sessions in a row hugging the flat line right now. Down 14 points this morning. Here are the names not hpielng the cause. Home depot is the biggest gainer right there. Apple and merck are also positive. Welcome back. Potential fall out marking todays activity focusing on this unfolding action there weve seen the Prime Minister here tearing chunks off one another inside the Senate Chamber behind me the last couple of hours. Weve also heard the Prime Minister will tender his resignation. What that means is that that confrontation confrontational theme and the power and theyve been in pow a little over a year and have not achieve the amount they have frequency with tensions among one another and raised concerns within the community weve seen it a bit today. That is something well be watching closely as weve learned there will be a new government that will be formed within this one the challenge with that is if you have elections in the union sch can has been a flash point and real mess within the italian market thank you major averages are down slightly the dow is down about 30 points. S p lower. Nasdaq going green thank you. Ill start with you in this latest round how is it being assessed by traders right now and how does it speak to the broader risk out there . Ill tell you, one, well get those out on thursday. One is weaker than anticipated theyll do the shock anda. Now is it going to speak on friday the topic is in the Monetary Policy he will use jackson hole as a forum to communicate dovish signals to the market. There is significant minority that wants 15 basis points out there. Theyll be disappointed that they wont give that nod there is a lot of risk to the down side. This whole case here is a little problematic short term the stock market trying to losen this market. That yield went down to the lows of last week, you have the stock market a few perfect higher. Apple perks up they say what does the macrohave to do with me nobody has gotten that much more confidence on the other hand, the yield being low. That is my point. Weve vague hopes for more stimulus in china. Vague hopes for ecb and jackson hole when did that become a vehicle i do think that bold case is interesting and reheating where they are not yet in the numbers. It is a reality weve been living with for a while in terms of slow growth and recession or if youve made a killing in bonds, you dont want to be too greedy even taking some technical selling. You would think it has to happen i would look to guys like bullard. He still thinks 25 basis points where that seems to be the center is. I dont know how much this minority basis point would move the market in the low liquiditiy environment, they could move to sell saying, guys, whatever you want. Infinity andon the minority fifty Basis Point Group put their sales could actually affect prices give us a broader look. Im looking at the s p chart weve gone basically nowhere in a year but taken a really exciting trip to get there given where those journeys are, it is different. What you can basically say is another one of these trading interests. We didnt go beyond those lows they are not plattered a number of people have come on our air with the potential rising risk of recession talk and said, you know this looks a lot like late 2014 to early 2016 you are one of the first people to actually flag those similarities do you still feel that way it seems to matchup with the 2016 pattern, which is an extreme low in bond yield led by defensive stocks and Growth Stocks we have to wait and see. The industrial recession talk is worse than it is right now we havent had as bad a correction we also had the chinese devaluation. Bomb, that hit us like a ton of bricks that is a little different these days and you are clee years later. Right now, the mechanics are in that direction and coming up, the biggest retail movers are next santelli is coming up next im watching Interest Rates within a handful of basis points of historic lows in theong nd lbo case, alltime lows the feds cure lower rates. Well talk about that after the break. A look at whats coming up. Half time report questions about the state of the consumer as home depot and others discuss their earnings. We are all over the apple come back that stock surge is up 10 a new high almost 20 away is it heading there . A big day for beyond meat. All at noon. We are about 15 away well see you then in the meantime, lets get the Santelli Exchange at the cme. It is crazy it is like chasing your tail so many stories have two themes the last couple of weeks one theme is many investors dont think what Central Banks are doing, lower rates are going to spur growth the other issue is the recent drops are also accompanied by negative rates and plunging treasury rates making investors nervous as well. This loop is crazy lower rates to cure the fear of lower rates. The treasury markets are leading the way. Pushing Central Banks to follow. I understand all that. In normal times, it would make sense. Consider you have a good economy that would deteriorate usually because a good economy raises rates and slows them to spur brother that spurs more stimulus and lower rates they would have a period where they were able to put nine Third Quarter raises in place. The rest of the world creates a growing amount of fears. Here is a vicious cycle. I dont know that i know the answer but i do know what we are doing does consider the answer the variety of people that want to buy something, say a house. Do those lower rates change the inform ability no it isnt the price or the quality. The fact is, they cant afford the house. The rates arent really going to change that. Maybe the same can be said for what the rates are trying to accomplish jay powell has walked into this. At the end of the guy, no matter how much pressure they try to put, maybe shock them a bit. Maybe the rates continue to grow, so will fears. Why do you think gold is going up for the most part not because of inflation not because of a safe harbor but as rates continue to drop and how they seem to be unresponsive with morgan back to you. Afterhe t break apples sprending spree on content. Well discuss their streaming strategy coming up i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu that could allow hackers devices into your home. Ys and like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Welcome back. Apples ceo says the greatest contribution will be in the health work. The health team has faced departures and questions about the scope of the bet it is placing. Our story just went up on cnbc. Com live from san francisco, what essentially is the struggle here is it about pushing ambitious bets for health . In a way, its a weird fear for apple. On one hand, they can do anything in terms of healt so you can see how employees would get trapped in the middle. Someone would do health care payments, telemedicine and change i had fundamentally and others want to play it slow and steady and those competing forces have led to some departures. Years ago when apple was first starting off with the watch, there was a sense of leadership they didnt want to get involved in regulated devices because they were afraid it would slow them down then pushed that aside and went ahead and made the apple watch a regulated device is that perhaps one of the things at the core of this yeah, its a great point. When the apple watch first launched, a lot of the focus was on sports and it was on fashion. But it didnt take long for the company to realize that it was really the Health Features that were sticky and those were the reasons people were rushing to the store to buy the apple watch. So since hen theyve been increasingly pushing the line of whether this is simply a wellness tool for people w. H. O. Want to be fit and healthy or whether its something that could be more in the medical space and as theyve been rolling out those features its forced apple to start to play differently and think differently. How do you launch a medical feature . Apple has never done that before how do you communicate with physicians about it and convince them that its safe for their patients thats another thing that came up internally. Some employees wanted to say, change the playbook on apple and do things differently, less secrecy, more transparency and more work to convince doctors its tools are safe. How does it speak to challenges to apple as it thinks about its strategy for health and how much does it speak to Tech Companies getting involved in the sector more broadly and the fact theres so much opportunity for disruption but as weve seen for years now, so many challenges that come with being able to forge ahead on it . Yeah, thats a great point because these are problems im seeing across several of the Largest Technology companies it is certainly not just apple facing these issues. You see this at amazon you see glimmers of this at google recently hthere appointed a ceo of health and some reasons were the same they saw at apple you can do anything. You have so much money and budget to spend on r d but what do you do in the Health Care Space . And having a visionary leader and a company like google, what they did and what apple is doing, we need to see that from them as well. Youve owned this health care piece. Go to cnbc. Com thanks for being with us and sticking with apple upping its spending on original content ahead of its streaming Service Launch josh lipton has more from san francisco. Josh so, i spoke to tim cook when the company last reported results and i asked him about apple tv plus. How is he going to define its success, by the number of subscribers . Cook telling me, initially with a subscription business the most important thing is, one, the product. And, two, the number of subscribers and whether we are going to announce that or not, i dont know we dont aspire to have the biggest audience we want a curated best experience how much is he willing to spend for that 6 billion on original tv shows and movies according to a new report from the financial times, apple declined comment on that report though some are disputing that number nbc news media reporter dylan byers was on cnbc saying at these according to his sources the number is a lot less but cook knows hes entering an increasingly crowded field that will include netflix, disney, nbcuniversal and amazon and say they are considering 10 a month for the service, 3 more than disney plus so this content better be must see tv. Service could apparently launch in the next two months longtime apple watcher ben baharian says angle has certain potential strengths in his opinion and chief among them their active install base meaning the total number of active apple devices in peoples hands is 1. 4 billion and counting apple can leverage that installed base to reach potential fans and that he argues could attract hollywood talent willing to create top notch content. Guys, back to you. Definitely in the hit making business now, josh, fascinating stuff. Well see what happens our josh lip tongue. Today is the official launch of its apple card cobranded with Goldman Sachs. Gold planes chief David Soloman put out a statement writing, the launch stands as a milestone for our consumer business and the firm apple card is big but its also a beginning. The decades to come, i expect us to be a leader in our consumer business just like we are in our institutional and corporate businesses with customer centristy at the core of everything we do dow is down 51 points. Squawk alley is back in three mitenus. These folks, they dont have time to go to the post office they have businesses to grow customers to care for lives to get home to they use stamps. Com print discounted postage for any letter any package any time right from your computer all the Amazing Services of the post office only cheaper get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com tv and never go to the post office again alley. Retailers reporting. Courtney reagan spoke with the home depot cfo moments ago and has more on those reports. Hey, court weaker than expected results but Different Reasons for each home depot and kohls beat earnings all three missing expectations for revenue. The street expected more at 3. 5 instead of the 3 they reported. Pri prices 50 lower on lumber and i spoke to their cfo she said company hasnt oob served any sales impact on consumers from tariffs home depot is modeling for impact of 2 of u. S. Sales but with its mitigation strategies she thinks it will be a less than 2 billion hit however tome questions what happens to consumers broadly with more tariffs. If consumers start to slow down, more broadly, could it actually have an impact on gdp so as a result of that concern and that continued lumber deflation, home depot is cutting full year Sales Guidance kohls fell more than expected they point to unseasonably cool and wet weather early in the quarter and says it hurt sales of spring goods but it improved with the weather and turned positive in the last six weeks by 1 . That continued into august with a strong start to back to school and kohls says its continuing to Source Diversity adding to that sourcing diversity to address higher tariffs and its aiming to do the right thing for both shoppers and shareholders didnt give us more more detail. Tjx posted weaker growth in home goods being the weakest segment there. Back over to you guys. What a day in your space, courtney great stuff. Getting us all up to speed dow is down 55 to the judge carl, thanks. Scott wapner, front and center apple comeback shares surging over the past two weeks. Is a new high possible its 12 noon this is the halftime report. Apple making big moves. The stock up 10 in two weeks. Your next trade is straight ahead. Home depot, kohls and tjx missing the mark on sales. Is the American Consumer running out of steam beyond meat shares sizzling on an upgrade. Is it time to jump back in after the recent selloff . The Investment Committee is