Transcripts For CNBC Squawk 20240704

Disney also in focus this ahead, of course, that will be an after the bell Earnings Report but the companys espn unit striking that deal with ten entertainment. We will keep an eye on eli lillys record run sparked by not just its diabetes drug but also that very encouraging study in terms of the broader impact of those weight loss reduction drugs. Also an upgrade this morning jeffries. Thank you start with disney and that espn Sports Betting deal sounds like this morning that you wonder why markets not making a bigger deal of it on the disney side. Yeah, because i think one aft things theres 55 Million People who play fantasy. What people usually do is they have their lineup, they put their team on the espn site, but then they go to draftkings to play daily fantasy and daily fantasy is huge in this country now, i think Jason Roberts has done a fantastic job at draftkings, and disney had a stake, but now i think youll stay on the disney espn site to do your gambling and that is very powerful. And i think its just money. Manna from heaven. Is it bad news, zero sum for caesars and draftkings . Kind of, yeah other deals probably get phased out you know, disneys probably going to sell its stake. Draftkings does have tremendous market share, and by the way, penn has Terrible Market share you have to have something proprietary. The only thing i see thats proprietary that disney has, frankly, is Adam Schefter from espn you know, my understanding is penn, as you might have expected, has talked to any number of potential partners on this, especially in light of the fact that dave has admitted, basically, an impediment to them getting licenses in certain places that partnership, so to speak, did not work for penn. No. They got some market share, but really, portnoi in particular seemed to be an impediment you know who it did work for . Portnoi you talk about getting pants he pants snowden. Who the ceo of penn oh. But he gets control of the company back entirely, and if he ever does sell it, which he says he never will, they get 50 of the proceeds meanwhile, penn is shelling out a good amount of money to partner with espn. Maybe disney can do that dividend after all 1. 5 billion over 10 years. At the very least, it will be marketing the espn brand unclear how theyre going to roll this out. Apparently, penn does have a new tech stack, im told you can see the stock is responding very positively they have no market share, and theres actually a nice chart today which just shows you you cant you need to have you need to have some sort of, i dont know, binoculars to see it its very small and obviously, this is seen as being something that will super charge their ability to actually really gain. Would you buy do you ever look at dfs, daily fantasy im not the goto guy for all that stuff i used to have a show with draftkings its very sticky right now, there are some good ads on the espn site but they dont charge a lot this will keep you watching the espn site as the games go on, and particularly one of the things a bob igers always focused on is the Fourth Quarter of the game is watched because of daily fantasy i think its a brilliant coup. A coup for who . For disney. They have done listen, again, this is, by the way, not a surprise. If you remember, theyve been talking about this for quite some time. They wanted a lot of money. In fact, bob chapek, the former ceo of the company who was the former ceo . Bob chapek. Spoke very specifically about, you know, wanting to have a frictionless Sports Betting potential with not having to have four screens in front of you, and how espn has the ability to do that wanting to have a partner because, of course, they woere never going to be a book thats never in the cards for the Walt Disney Company he did want it. Jimmy petero wanted to do something involving isos, isolated cameras on your skill players for fantasy. Bob iger understands fantasy better than any of the ceos i know, and i think that hes a green bay fan, by the way, so thats probably going to make it so he has nobody to draft this year i shouldnt say that because aaron jones did quite well i had a. J. Dylan he did nothing for me. I think potero understands the space, and i think we keep leavings out the fact that bob iger was on the vision pro intro. You think thats important, i know yes, i do david, whats coming together here is that you will be following your players, isolated, on vision pro, while you youre gambling on dfs, daily fantasy, and youre and youre putting your team, your club team, on espn site. Espn gets seamless soup to nuts. Right now, its been espn to draftkings one of the reasons why espn why disney has a stake with draftkings but now, youre going to stay right on their site. You mentioned vision pro and disneys longstanding relationship with apple. Remember the mickey mouse face was one of the original watch fashions the headline of the Hollywood Reporter this morning, kim masters, disneys sale to apple, dont count it out this time as were once again back to Laura Martins dream oh, yeah, i talked to lina khan yesterday she thinks its a great idea the ftc would block disney merging with illinois toolworks. Yeah. I just you know, this wont go away for any number of reasons. But you really imagine apple wanting to be in the theme parks business no. But i imagine apple wanting there are so many other avenues for them that i could imagine them going down before i would see them making by the way, would become, even though it still would be a small part of the overall, and even if you bought this thing for 220 bill, it would still be less than 10 of your market cap. True. You cant move the needle. The apple car, you got to imagine thats a way more compelling opportunity for example, you want to do something a little off the apple car, at least, you can imagine that theme parks and what i didnt say that why are you looking at me . Im focused on friday nights game between philadelphia and court for major league soccer. When we have vision pro, you can watch, like i did, the ball come right at you and you dodge it. You look like this because its coming right at you. Mls is real. Its real. Everyone says, well you talked to eddy cue about this, this summer. Yeah. People keep saying, it will never be global. I mean, its in the biggest cities in mexico mexicos not part of the United States there. Now, not everything can be man u. Did you see that game . I did not i didnt either guys, it was never mind. So sorry to disappoint you. I want to go to will frost in london for a second. Come in jim, as for the quarter tonight, people are working for weaker box office, higher tax rates, right down to the galactic star cruiser. Well, he did bob iger did say its going to be a bad quarter. He did. He told me that. I got it too. Well, he was somewhat expansive in terms of the challenges, i think, that we discussed back on the 13th of july it was but that said, its unclear jim, what i would ask you is, its far from clear that theyre not going to make the numbers, because the numbers have already adjusted to a large extent could you have lowered expectations in this quarter this is the ceo saying, were going to miss the estimates. The estimates are wrong. Were way low. That said, you could imagine a scenario under which now they perhaps have underpromised so much that they overdeliver they have a story to tell about fantasy. Ive been begging them since 2008 to do this. Yeah. The debate for years was whether or not gambling could fit into a familyfriendly disney framework that discussions clearly over yeah, geez, thats over dont forget, you know, by the way, fox closed its deal with flutter recently, and i dont mean they closed it like they made it happen i mean, they closed it like shut it down yeah. Draftkings market share is fantastic. Break out the microscope thats why theyre doing this thats why theyre willing to put up a lot of capital, 1. 5 billion, another 500 million over time, essentially. Didnt get any shoare from portnoy. Portnoy didnt work for them. Good for portnoy. Well see what we hear from mr. Iger it will be the first time we hear from him since he spoke to cnbc on july 13th. At that time, you may recall, there were a lot of Different Things that we discussed in terms of abc wideranging interview. Cable networks, espn, and his plans for that speaking of espn, take a listen to what he had to say at the time, given weve talked about it a lot this morning. If you look at todays media landscape, sports stands very, very tall in terms of its ability to convene millions and millions of people all at once theres almost a guarantee that that occurs. Its an advertisers dream its a great demographic there it lends itself to technology in many ways, both in terms of coverage, distribution, and consumption. And our position in that business is very unique. We have a great brand. We have had a great business and we want to stay in that business that said, were going to be openminded there too, not necessarily about spinning espn off but about looking for Strategic Partners that could either help us with distribution or content, but we want to stay in the sports business so, another thing that obviously people may want to follow up on with him. You know, we have heard there have been conversations with, perhaps, sports leagues. Youve discussed the possibility of a tie with apple. I think its big. And i think, again, weve talked endlessly about the decline of these Linear Networks and what that has looked like and what thats going to mean. I think that when we look at tonight, i think you correctly laid out the bear case, but how about if he does say, listen, were going to be all the games that we have are going to be on vision pro, starting 2024 . And that would be apple doesnt have to buy the idea of apple buying them, i mean, geez, why put that stuff out i dont know. Why would you do that its possible they beat the number tonight, you get some good commentary on the call, and you know, they and they keep get an announcement i dont know about that they keep nelson peltz at bay. Thats still out there too he may represent at the very least a distraction in terms of another possible fight for a board seat my understanding is hes continued to ask even fairly recently Ike Perlmutter is a huge shareholder, not doing that well no. So, peltz is out there well see what the quarter looks like very interesting. Meantime, there are some stories on the tape this morning about whether or not were in a peak travel period here, jim, after some of the metrics we got from airbnb and some of the airlines in europe the numbers from hertz indicate its not true the numbers are extraordinarily good for hertz and bookings. Com had extraordinary numbers. American express had very good numbers. So, i still dont get the im not going against my long on, you know, long on money, short on time. It just doesnt add up, but it is international were just not were done with going and seeing the grand canyon weve seen the grand canyon enough last visitor to the grand canyon enough with the redwood forests, gulf stream waters. Enough with all those beautiful, magnificent things. Yeah. Time to move on. Does lake powell have any water left water is an issue lake como yeah. Succession. Wrong network. Sorry. Take a look at the premarket this morning its a pretty busy wednesday got news on nvidia, rivian, carvana, wework. 4. Ithhiese today. 811s e ght of the year autonomous vacuums work continuously around the house, but when your team has to work seamlessly around the world. You need more than technology. You need cdw who can help transform your organization with built for performance lenovo thinkpads. Preconfigured for management flexibility and equipped with the intel evo platform. 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Consumer prices down 0. 3 in july from a year ago, the first such drop since 2021 this morning, jim, jpmorgan says, if you recall, our last cpi print, it was precluded by a miss in chinas cpi. Right and a miss on manheim well, its interesting. When you look at these sets of performances since july 12th cpi, energy up 6. 7, finance up 3. 2 , but the rest of them are down its meaningful. I also think theres an outfit, country garden, are you familiar with these guys . One of the largest real estate plays. Its bigger than the brighton that was so bad. And i think that what youre going to see is weve got some serious deflation. Country garden, thank you to bloomberg, reuters, and new york times, but they didnt pay 22. 5 million in interest due monday on debt securities. This outfit is just gigantic and its probably the largest developer. I was thinking about what to do with all theplaces they have, and i was thinking, david, i dont know pickleball . The largest pickleball courts in the world it does shed light on the significant decline in Property Values amazing potential default and for many chinese, their home is their piggy bank, so to speak, and with declining values, it makes them even more reluctant, perhaps, to spend hence, you deal with sort of this deflation that were talking about now as a real possibility extending beyond, obviously, a quarter, carl theres also some takes that this crackdown on business interest has eroded confidence i think so. Not just for consumers but for Business Leaders deflation is such a tough thing. People think, oh, deflation, that could be great, particularly when we were running high makes stuff cheaper but where was the worst deflation in the world japan no, 1931 to 1933. Germany thats what destroyed the economy. And i dont know i mean, look, i dont want to say what happened is necessarily cause and effect, but there was a party that gained tremendous traction because of deflation in germany. That said, citi this morning says, look, its one print were going to watch for policy delivery in the coming weeks, perhaps. Good luck i mean, they keep trying to prop up property debt look, they want service to be their goal was to get it to be 60 of the economy instead of 30 , and theyre failing miserably. Just failing miserably it could lead to a lot of other geopolitical kinds of things, if, in fact, the economy does go into a tail spin there what do you do, david how do you ignite an economy in deflation . Most countries have never been able to turn deflation japan has finally emerged how many years . 30 years. Yeah. Took 30 years. And nikkei today says chinas set to lift the ban on group travel to japan, maybe as early as tomorrow. That could help if i were the chinese, ever since the president for life, its just the wheels are coming off the bus to carls point, i think that crackdown on business, the impact it had on confidence, particularly so many of the Business Leaders, you know, we talked at the time about jack ma certainly disappearing from the public venue it was not insignificant no, its hard to come back from that i think people are totally underestimating an American Company that would open a factory there right now, i think, would be frowned upon, other than apple apples able to do it. And obviously, starbucks and nike and tesla but the government does not favor it anymore yeah. White house looking to detail some restrictions on investment there today. Cramers mad dash coming up after the break and of course the opening bell one last look at futures on this wednesday. The biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. 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Its the same graph of jensen, and the keynote was incredible because theyre talking about, you know, theres 50 trillion in manufacturing spend, and if you want to go make a factory, a really good factory, lets just say you want to make a mercedesbenz factory. You could go to this new, you know, you could speak to it, basically, and say, i want the finest mercedesbenz factory that could be made using all of the great things of every factory in the world it will then build you one using robots that learn how to be robots im not kidding. And theyll build it to you in scale, actually, in a digital twin and then you just go make the factory from that digital twin, and he outlined it yesterday. Its a new super chip, and i thought, i want people to go watch this video if they want to know why this stock has done this, because its about power where do i watch this video again . Siggraph 2023 where he talks about the ecosystem. Now, we know, david, from your unbelievably excellent interview with elon musk, that he praises nvidia as having the super brain. This is the super super brain. And does it mean that theres even more to go, jim yes in terms of the stock price i mean, even after this incredible move . Now a 1. 1 trillion market value . Larry williams, whose work i respect, whos a great market historian, does say that it has to fill in this gap and go down to here and that it should be sold well, we should be patient, but its going to go down. Its by far the biggest gainer in the s p, so i do think that its even beating lilly. I know. Even better. It is the champ. Floats like butterfly, stings like a 500 stock. Were back right after this w frech dip sandwiches. Featuring fresh Artisan Bread piled high with tender roast beef, smothered with melty provolone cheese, just enough Chipotle Mayo and served with hot au jus for dipping. Try the roast beef or pastrami french dips today. Only at togos. Featuring fresh Artisan Bread piled high with tender roast beef, smothered with melty provolone cheese, just enough Chipotle Mayo and served with hot au jus for dipping. Try the roast beef or pastrami french dips today. Only at togos. Your record label is taking off. But so is your sound engineer. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire announcer the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. Its my top priority as expanding the capacity of our ability to make not just maunjaro but other drugs like it in our pipeline to meet the challenge here, which is a great opportunity here as well, of course people are frustrated when they cant get their medicine we understand that were going to fix that problem. Thats lillys david ricks on mad money. You think even with the move so far, theres more in the tank. This is going to be the largest drug of all time because its going to be used for Blood Pressure its going to be used for they have not started yet, for heavy drinkers, which is very important because alcohol is so bad for you. Youre going to see sleep apnea, and thats one of the reasons why rest was down yesterday. By the way, the Diabetes Companies were down. Now, the reason why i thought that interview at that moment was so important is that you really cant skip a week its dangerous to skip a week. You put the weight right back on people are very concerned that wegovy, not enough capacity. Meantime, they opened a giant North Carolina facility for lilly so you will doctors would rather give you theyd rather give you moderna because then you wont worry about running out, which is what the big worry is with wegovy right supply chain stress. Yeah. Once again. The actual vial that it comes in is not. Its a onceaweek shot. Theyre trying to get it so the doctor gives it to you so youre not scared, but i do think that doctors will be reluctant to give you wegovy because of scarcity versus eli lilly, ready. David ricks, also, tremendous drug about alzheimers, which he didnt talk about, but the work i did with American Brain Foundation tells me they have a very good drug for alzheimers lot of pots boiling were pulled back to 4,500 on the nose, jim. Are we just going to circulate around this like a magnet . I guess so. Oils up maybe people are trying to figure out whether or not the cpi will be bad. The cpi is exoil and gas, but yeah, were stuck. And you know, david, one of the reasons, i think were stuck is because we were actually, and i did my lead on this, were out of things to trade were done you want to extrapolate take two . We dont have anything to trade off of, other than the upcoming auto strike. Are you worried about that, september 14th cant we all get excited about a. I. Again i just gave you the biggest a. I. Story, and you completely dismissed it do you know who grace hopper is . Yes, i do i think he knows. I think we all know. I went out with her before i met lisa no, grace hopper is the giant chips. I do. You were just talking about it i wasnt listening to you. Theres just nothing to trade off of youre going to drink going to have a celsius . Celsius had an unbelievable quarter last year. Are you a paid spokesman now for the celsius institute or something . What the hell . Pepsico has an 8 stake they had an amazing number if youre looking to things to trade off of, you can trade off of wendys can we start wearing little patches on our jackets to advertise things celsius was a great quarter jim, i hear it has no preservatives or sugar this is four times a coffee that i drink do we need to do the ding off your shiny teeth i cant believethis this is incredible. Tastes the way a seltzer should dont forget. Pepsico bought this thing bought a piece for a song. Theyll buy the rest a forwardlooking guy. Want to try some no, i dont but thank you. We talked to irwin simon yesterday about how hes changing their beverage portfolio. He better do something. Geez why, because we had him on i thought he was very good. His argument was this cannabis, if youre waiting for policy, getting a little bit impatient. When i owned varsity miguel, i went to the people at canopy, and i said, listen, do you think we can ever introduce this they said, no, its going to be a whole separate set of bars that will be cannabis. Well, that was about five years ago. I know, what happened well, the states havent approved it. Oh. Kind of like gambling cannabis came and went kind of quick really fast remember when we were sitting here, like back in the days of beyond meat too. So exciting. That was impossible, beyond meat we didnt even talk about beyond meat yesterday. Its too small. Canopys too small thats why i say theres nothing to trade off of. There was a time we talked about wework now, of course, it was not a Public Company at the time we talked about it. How can that not be a meme stock . Its bankrupt. They love that here it goes 10 million shares. Wework is theyre going to meme that stock. It may not stay solvable. It may be done for what about all the empty space from wework that they have i dont know. What about it . I dont know. But did you see Austin Properties was upgraded . Why are they such a Good Real Estate company theres wework, down yet again. Its over and done with. When you think about the capital that company consumed. David doesnt understand that when you have a stock thats at 15 cents and you have meme people going public as a spac. Look at this the meme people could double that stock dont encourage them, please. What are you doing dont encourage that im not encouraging anybody they did cut it to neutral, jim. That could be one reason dont do that while im drinking celsius i just did a danny thomas spit take on this 7,000 suit does celsius come out . Geez carl, did they see something they didnt like channel checks. Its always the old channel checks the other story in that realm is wheels up, getting a Capital Infusion from delta here looking. You know, if you want a wheelsup its another spac, by the way. Another meme stock. Some highquality spacing going on there you know whats one that i believe in i believe in blade, and nobody else does. Well because they did the organ business theyre not just not just your helicopter, my helicopter are we going to stay in the sub 300 million mega cap range all share . Blade is back on maps right lets just go back to the team what im saying is why we might be stuck is its wework, its blade, its wheels up. Theres, like, not much to really talk about. Oh, come on im waiting for disney. Disneys big take two is big. Carvana raising by the way, theres another company that people thought they never said we were anywhere near insolvent, but there was this concern and man, what a great performer thats been. I had i had carvana on, like, three weeks ago. And in the interim, they said their ebitda was doubled now, you mentioned the manheim index and that plus the fact that youre getting lots of different discounts on cars and trucks and the incredible facebook performance by sean where he called the offer trash. Were going to have, right when we Start Talking about the president of sole action, i think the biggest strike our country has had in years, which is the uaw you think thats going to happen yeah. You dont think Gene Sperling can talk both sides off the ledges no, gino cant do it because this guy who runs the uaw reminds me of errol broward. Hes a Long Shoreman Union the stevedores todays the hundredday of the writers on strike. Right that rhetoric isnt cooling down after fridays apparently failed meeting these things matter tremendously the auto strike is going to you know, i have dana on tonight. I have zool on tomorrow, dana tonight. The fellow whos running it if you walked in there, he would tell you he says horrible things. Hes talk about a kleptocrary, that the people who own these stocks are just bad people americans own it in their 401 k i have it in focus. Youve got to focus on this guy. He was made for our show we should bring him on . Oh, i want him on sean feign he should be a cohost he is so electric. He is third rail he is using rhetoric that Elizabeth Warren would say, keep your mouth shut. Really . Is it going to be like the day we brought in the queens councilman who was opposed to amazon hq. That wrecked the place that youre from. Wrecked me. Wrecked queens. And the dismantling of the mets the dismantling of the mets was quite disappointing. Wait until next year just you wait. We had ackerman on this morning. Yeah. Revenue beat, eps beat they raised the full guide but jim, after twilio and data dog this week where the revenue guides are a little soft i think that, look, we had fortinet and they made people feel that you got to get out of cybersecurity, which then caused the shorts caused a giant run on palo alto networks, which my trust owns, and everybodys worried about a friday number. People say, oh, they wouldnt report friday unless nikesh wanted to hide it. But they talked this morning about how strong cybersecurity is, and people have been knocking cloud, saying how weak it is. Thats just completely wrong matthew prince did not say that cybersecurity is weak. The ceo of cloudflare. We did have fortinet say that, amazingly, people are scrutinizing their cybersecurity spend. I dont believe thats true. I think theyre scrutinizing their spend with fortinet. Apparently the other folks scrutinizing their spend are folks who pay for posting on zip recruiter, this management saying this deceleration is accelerating what does that say about the labor market i think that has been one of the things that is going jay powells way there was a tremendous amount of inflation when it came to the very rich, when it came to the people, you know, comp sci people and he said a number of job openings and employers willingness to pay for those has been declining significantly from the peaks of 2021 and 2022. Thats fantastic for jay thats just thats what he wants to hear. Yes its perfect david . The labor market may be in some sort of so, we have the labor market. Theyre not the only ones there have been a couple of other and we know the Consulting Companies have put off sort of their new hires, for example. Absolutely. Coming and joining them the, you know, the latest entrants from college. Were down to service now still hiring their clients are not as anxious. There is something going on here its called a slowdown, i guess. Yes, thank you. Are you laughing at me . No, Buffalo Springfield are you laughing with me or at you i would never laugh at you. I would never do that. Not after that interview which one look what hes done he did the age of walmart. Age of walmart . Amazon . What are you, going back 20 years . You did amazon, walmart, and tesla, and those are probably the three most Important Companies of our time. So, well done thank you my whole career right there. Well, look, my father was such a huge fan of yours why does he hate you so much, jim . Jamesy, he hates you. I said, no, pop, he does not hate me. Thats the question we all get that question do they really hate each other jamesy, why do they hate you . And i meet your mom and she says, you love him so much. Its all love today, citi comes in. Margins have the easiest comp of the Year Inventory is clean i think theyre going to crush it look, i think that their numbers are amazing. Its the time for them, because if people are trading down, they dont go to i think theyve kind of discovered that the dollar tree, dollar general, other than their unbelievable candy aisle, is no bargain the bargains to be had are at walmart, particularly their private label, which, david you have been pointing that out. You said the quality of the private label has been quite high i like their private label food its good. With my tomato sauce killer are you going to sell your tomato sauce no. Jims own you going for it . Jims none better its not jims own jims none better tomato sauce speaking of consumers looking for bargains, jim, lyft, last night, saying that people are really turned off by surge pricing. Surprise profit, and they do guide solid, but shares are down about 7 yeah, i was hoping this would be the breakout quarter. Richard, i think, is terrific, and i think we all admit that we need two but he wasnt happy with his numbers yet. I think he could have been happy with them. They do have a good airport option where you can kind of tell the lyft operator youre coming in, versus that scrum that you have to do when you come in on the airport, david. Yeah. Guys, i will offer you got something i dont have anything great, but its something thats been an ongoing theme we should be focused these alternative Asset Managers have become so large. We talk about them often but perhaps not often enough not just blackstone or apollo or kkr. We havent talked 850 billion under management there now. Theyre talking about being close to their targets of and their Fund Raising Efforts of raising 37 billion of private capital yeartodate, and expect that to accelerate in the second half of the year, and on track for what they said would be a record 150 billion of capital coming in this year. Wheres that come from, david . Whos putting the money with it . Is that like, they have are there fundraisers that they have they have an insurance product as well. Free flagship. Several complimentary funds that the money moves into, jim. Interest rates, a very important component for them theres a lot to do in infrastructure and you know, these are areas these are private transactions, typically, in areas we dont cover that often, but they are enormous, and the size of these platforms now has become such that they are worthy of at least a little bit more attention. The stock is up. We never talk about them. Very Good Real Estate investors. We never share about them as a problem versus stocks moving up in real estate, obviously, its right here. Brookfield they did give up, i think, like any others, have given up a couple of buildings. But overall they have howard transformation Platform Global container Network Global datacenter. U. S. Renewable power european payments. North American Midstream these are monetizations, but it gives you a sense as to where, how, their size and scale, what it is. And real estate, to your point, has always been an important component. Do you think theyre just a quiet force . Yes yes. I mean, yeah absolutely ive never run into them in the sense of just, like theyre canadian. You know there you go. Yeah. They keep it modest canadians are great shopify is canadian. We can go through all the Canadian Companies there are quite a few. They dont boast too often name me three Canadian Companies. Nortel. Canadian pacific . I dont think so. There was, yeah, blackberry are you leaving no, no, im not no, im not leaving. Where you headed, jim im not going anywhere. Canada is our greatest ally. Yes and you know what we talk about china. And im sure im going to hear a lot more. Both of us will about Canadian Companies that we forgot about how about major Banks Td Bank Rbc Royal Bank of canada. What was the last one . Bmo. Canadas a huge can i say that canadians that deal at the ksu deal yes huge. You talked about it opening mexico up. Very Important Union pacifics at mexico, but i would prefer to be ksus on mexico and no one seemed to care i want to get you really quick on crude highest level of the year this morning. Nat gas, highest level since march 3rd. The iea had some demand forecast for the year which would put us at a fresh record, jim i had one oaks partner midstream on last night. Yep buying mlp, but they are the nat gas business of one oak is on fire, which is terrific. I had embridge on the day before they own the big pipes out of the permian that magellan doesnt own, and these companies are on fire, and no one cares because people think one day, well wake up and there is going to be no nat gas and no oil, but i think this nat gas price could be breakout. If this thing takes out three, you want to buy coterra, because they have a dollar cost for nat gas. Think about how much money theyre making people didnt like the quarter i thought that was silly the stocks on fire. Only commodity up more from the recent lows is orange juice. I know. Rice is very high. And rice is having trouble too. But ive got to tell you, i think nat gas breaks out here. We stopped talking about the war. The war is just so horrible just horrible cluster munitions are actually working for ukraine, reading the journal today. It was just the loss of just horrendous we can talk about it more as we get into the colder months if it continues quick reminder, you can get in on the cnbc Investor Club with jim. Find out more at cnbc. Com join the club or using qr code on your screen. Bonds today, important tenyear auction. Yesterdays threeyear, not too bad. Not a plot of macro data on deck today, but you have yields lower as the tenyear approaches 4 . Be right back. Announcer the bond report is brought to you by pimco. We planned well for retirement, but i wish we had more cash. You think those two have any idea . That they can sell their life in policy for cash . So theyre basically sitting on a goldmine . I dont think they have a clue. Thats crazy well, not everyone knows coventrys helped thousands of people sell their policies for cash. Even term policies. I cant believe theyre just sitting up there sitting on all this cash. If you own a Life Insurance policy of 100,000 or more, you can sell all or part of it to coventry. Even a term policy. For cash, or a combination of cash and coverage, with no future premiums. Someone needs to tell them, that theyre sitting on a goldmine, and you have no idea hey, guys youre sitting on a goldmine come on, guys do you hear that . I dont hear anything anymore. Find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. Good night hey corporate types. 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They do reiterate their booking guidance, a lot of the street looking at the fiscal 25 targets. Well geta tdi wh m. T lkrangitti dont go away. With just one capsule a day of advanced hair complex. Conquer hair thinning. And fall in love with your hair all over again. Only from natures bounty. The citi custom cash℠ card automatically adjusts to earn you more cash back in your top eligible spend category. Hi. You dont have to keep tabs on rotating categories. This is the only rotating i care about. Or activate anything to earn. Your cash back automatically adjusts for you. Can i get a cucumber water . Earn 5 cash back that automatically adjusts to your top eligible spend category, up to 500 spent each billing cycle with the citi custom cash℠ card. I love it. [voice vibrating] my cpa told me i wouldnt qualify for the erc tax refund, so i called innovation refunds. Their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound] take the first step to see if your Small Business qualifies. Lets get to trading this Company Reported unbelievable quarters until the other day. This is one of those companies that is the essence of Enterprise Software. Consumers dont see it but you dont want cracks in Enterprise Software because thats been the area where most venture capitalists have put their money. And i want to watch this because holy cow, the favorite waiting for the it to come this month. This is very discouraging for companies that had been in the big pivot of going toward profit watch datadog, which is the most pursued by other companies because of their books one of the big stories of the week for sure. Look at that, that kldecline. Much bigger. What are you looking for tonight . Apropos of the strike, theres a really Good Good Company to talk about, dana. That remarkable turnaround kelloggs doing that split and trying to bring out value. Campbells bought they bought that company theres a lot going on in the food group to bring out value. Kelloggs will be interesting to see. Well see you tonight great show. Mad money. When we come back, straus zell nick in a moment mom hey cheap flight alert daughter hawaii can we go . Dad maybe. Ill put a request in monday. Sfx shattering glass. Theme song unnecessary action hero dad was that necessary . Unnecessary action hero no. Neither is missing this deal. With paycom, vacation is yours to manage. Unnecessary action hero not to mention benefits, scheduling, payroll. Its hr in the palm of your hand. Dad wow. Unnecessary action hero ask your employer about paycom. And make the unnecessary, unnecessary. Dad approved good wednesday morning welcome to squawk on the street. Im sara eisen with david faber. We are live at post 9. The dow has been up and down, higher by only 13 points s p 500 does remain weaker this is after yesterdays selloff be there is strength under the hood, energy, utilities, stap ms, health care, industrials, and real estate. Those sectors are there. We are 30 minutes into the trading session. Here are three big movers starting with lyft shares are moving in reverse revenue per rider decreased almost 5 this quarter from last quarter. Thats a potential reason. Look at carvana rallying, expecting ebitda adjusted to be way higher than its Prior Guidance and analyst estimates the stock is up more than 850 year to date this is one left for dead. And taketwo interactive out with results, missing earnings estimates, reaffirming fullyear booking guidance well talk with Strauss Zelnick later this hour at post 9 to break down the numbers and the longterm impact he did say, guys, on the call last night that as far as the economy and the consumer goes, hes seeing some green chutes. This is an industry thats been under pressure post covid for the last, i dont know, 18 months or so but, you know, its a light data day, so trying to make sense of the Market Action is so tough lately in the wake of rising bond yields and mixed Economic Data one quote really stood out to me from vital knowledge, the Research Note this morning, about whats happening with stocks for the upside and the downside i wanted to sort of go through that as we look for some explanations here. Market remains stuck in the purgatory zone, but valuation constraints blocking above 4,600 on the s p in the near term while favorable, the goldilocks data, the end of rate hikes, decent earnings, presents a sharp breakthrough, 4,400. I think it sums up where we are. The soft landing is helping support the market, but the valuation concerns are keeping the market from going up even further. Its been consistent looking at the downside of the coming disinflationary environment were in profits could suffer even though its a relief from the concerns weve had up to now, its going to be hard for earnings to fill the multiples but so far its been all right, at least. There are no major red flags we read the tea leaves for company earnings, one that a lot of people talking about is ziprecruiter the stock is under pressure today, and we saw a pretty big decline, 29 in yearoveryear revenues heres the quote people are focused on relating to the job market theyre a big employment search Firm Employee employers continue to respond with caution, the number of job openings, the willingness to pay for the job openings has been declining. That kind of goes against significantly from the peaks of 2021 and 2022, especially among small and mediumsized business across multiple industries and geographies. It goes against some of the data weve gotten around the Small Business index that i highlighted yesterday, but its worth watching it is it may be indicative of a job market in some form of flux. I mentioned the major consulting firms putting off the new hires in terms of when they join because theyre not seeing the incoming business quite as high as it had been its hard to measure for obvious reasons, and i rely on you to help do that but there is something here potentially. Absolutely. A slowdown but the thing is how do we read that how does the fed read that probably its not a bad thing. As long as we dont see unemployment spike, thats the soft landing its a good thing because theyve been worried about the wage pressures. Wages have been running hot, and thats that makes it harder for them to fight inflation, makes things stickier. Speaking of inflation and wages, i dont know if you saw the bloomberg article today. I thought this was a big deal as far as quantifying the first time i saw this, the uaw demand, the automakers, the uaw workers are demanding from the Auto Companies saying it could add 80 billion to u. S. Carmaker labor costs according to people familiar with the matter that over fouryear term of the contract negotiation, but if youre looking for wages to go down, i mean, i know theyre in negotiations now, but a 46 wage increase is what theyre after, including shorter workweeks and all sorts of concessions its 150,000 people that will be affected by this its not midfield it would be 20 to start and 5 for the remaining four years, but what made the rounds yesterday was the comment from u. P. S. That drivers with pay and benefits comped now 170k 170 so Wage Inflation is very much alive. Well watch this because of the deadline of september 14th theres a lot of stuff happening. September 30th is the end of the fiscal year, people worried about a government shutdown, so well have to start watching d. C. Again, not that that might have a huge economic impact, but it certainly could there have been estimates, 0. 27 per month from Goldman Sachs there are things happening around the fall. The student loan repayments start in october for thousands of people. And at the same time, the atlanta fed gdps forecast, you know, the tracker 4. 12 4. 1 in the quarter its unbelievable. Four times consensus. Theres the atlanta fed forecast for gdp above 4 on the orange, then the blue is where the wall street consensus is so its way high and its early to talk about it because well get retail sales and a lot of other numbers. But when people say were not in recession and the Economic Data has been goldilocks, good data, falling inflation, this is one of the things theyre talking about. Reuters has a poll out just now looking at the 10year and 80 of strategists believe it has peaked in the current cycle. The moodys downgrade of the banks created a little more risk, and that helps treasuries. I think the key yeah that will be interesting to watch. Even if they peak, the question is are we higher for longer on treasury yields as well in the wake of this even if we get a recession, if its mild, there might not be this massive flight. And people are watching options. Were issuing a lot of debt. Had a good one yesterday. Thats key. Its good to see these options well received. I think that will ayear to date some of the concerns about demand well keep watching. There was a good one yesterday a lot to come meantime, the prospect of deflation continues as deflation fears are hitting china. Lets get to eunice yoon for more hi, eunice unlike the u. S. And europe, china is struggling with falling prices the Consumer Prices for july turned negative, the first time in two years, shrinking by 0. 3 yearonyear factory prices dropped faster than expected, down by 4. 4 . The falling prices on both counts is stoking, as you could imagine, more discussion to suggest how long this deflation could potentially last and what this really means for policymakers when it comes to stimulus the official today said the decline in cpi is temporary. They say they see it picking up, the prices, of course, and previously the central bank had downgraded the risk of deflation saying they believe that Consumer Prices were going to pick up by to 1 by the end of the year. Now, the optimists out there are looking at the core cpi. It came in at 0. 8 , so thats the highest since january, of course stripping out the volatile food and energy prices. There are also folks who are looking at the services inflation, the tourism prices, which were up by 13. 1 then there are those mainly pessimists who are more concerned about the Consumer Prices and the impact of food in particular, which is a major staple here. Those prices dropped in july by 26 . Then of course the greater context that people are worried about when it comes to the Weak Consumer Confidence and a once dependable engine of growth, exports are coming in surprisingly bad yesterday so that just means that china has one less Growth Engine to rely on. Guys yeah, eunice, its david. You know, what are the expectations in terms of what the government is most likely to do to turn this around is there any hope that they will actually give money directly to consumers, you know, in a sense really creating or trying to create more demand right the signaling is there that theyre concerned about giving out those direct texts or really doing anything much more than what they are doing. Obviously theres a lot of hope that they will, that the situation might become so dire because there arent a whole lot of Growth Engines at the moment. We were talking about exports not reliable when it comes to investments, not reliable, the job market is bad, private investments are bad. So theres a property sector, i mean, but there arent any signs of growth, but a lot of people can see that the signalling from the top is they are worried they dont have the money for this, that they are concerned about the risks involved, especially when it comes to debt. And then the local governments are struggling with their own finances because of zero covid so there are a lot of challenges they face and a big question mark as to exactly how the policymakers here are going to solve this problem. The other question, eunice, that i hear from investors that theyre trying to figure out, is what the appetite is for stimulus and how focussed the current regime is on economic growth, and if theres been some sort of change in priorities from president xi and his lieutenants and where theyre focusing their efforts and the spending absolutely. A lot of the discussion here has been about how president xi jinping and his top seven in terms of his deputies and the folks at the top are really not policy people when it comes to the economy and that the priority has been much more on security grounds for National Security theres a big black box as to whether or not, as you know, the leadership really truly understands whats going on with the economy or just doesnt prioritize it as much as National Security. And weve seen the impact of some of those regulations on the tech sector as well as on its relationship with other countries including the United States eunice, thank you eunice yoon in beijing meantime, were keeping an eye on shares of a deal with espn involving Sports Betting. Contessa brewer has the details for us penn ceos just wrapped up a call doubling down on the strategy of using a media partner as the primary vehicle for promotion and marketing. This time of course its a much bigger brand name. Penn paid 1. 5 billion, 150 million annually, which in espn marketing and access to espns personalities. Snowden pointed on followers on social media. He says he needs all those people in order to compete with draftkings and fanduel this is an opportunity to really appeal to the masses, and one thing thats become Crystal Clear over the course of the last call it three years, weve all watched market share and online Sports Betting continue to consolidate really amongst the top two players. And youve got to have scale to compete. Snowden says the exclusive integrated strategic relationship is the recipe to achieve that scale at their game plan a couple weeks ago, they were asked about the appetite for engaging in the Sports Betting industry. Here it is its definitely a Growth Business from our perspective, and weve been in this space for quite some time from a news and information and odds perspective. We have linkout deals with a couple of partners, but we do believe that theres a financial Growth Opportunity there for us and we plan on continuing to expand our participation in the space. Those deals referred to with caesars and draftkings, which now have the right to terminate. That saves them about 75 million each my sources, guys, tell me that both of those operators will be happy to say sayonara, with what happened with disneys 4 stake in draftkings. Contessa, you know, the Barstool Partnership obviously goes away. Theyre giving back their stake in barstools, if it every sells they get some of the proceeds. But is it fair to say that partnership with barstools and its founder was a fail i think characteristically they are trying to sidestep calling it that, but, yeah the industry insiders are looking at it didnt work you had this rebel brand, outspoken, that didnt fit in will with the regular industry we heard that with dave portnoy yesterday. He tweeted out this calculation that it didnt work, it didnt fit. So that was an experiment that cost penn 550 million that theyre now taking they say they learned a lot. They have a customer database thats young and theyll apply that moving forward to espn. By the way, theyre not just going to spend that 150 million on marketing with espn they say they could spend roughly another 150 million a year on outside marketing, not just with espn so well see if that makes a difference they were talking about a 10 to 20 market share that would be significant and could potentially just place bet mgm and caesars important to watch, obviously. A much different partnership this time with espn. Contessa, thank you. Contessa brewer. Speaking of disney, of course that company will report earnings after the bell. Just to remind people what the analysts who follow the company are looking for in terms of the consensus, 95 cents a share. That would be down about 12. 6 year over year revenue number of 22. 5 billion. Its a little less than a month ago i sat down with disneys ceo bob iger to talk broadly about so many of the different challenges the business faces. He was not in a position to obviously comment specifically on what was that Third Quarter or yet to be reported, will be tonight, but he did sort of speak about some of the nearterm challenges take a listen. There are a lot of challenges out there, and, you know, theres just so fast you can go with certain things. In some cases, the market has to cooperate. In many respects, some of these businesses are still recovering from covid, for instance, dealing with some complexities in terms of continued disruption, as i mentioned, which well talk about but im pleased with how much weve gotten done, but i also know how much we have to get done well hear from mr. Iger this evening as well and see what he has to say in terms of commenting further perhaps on so many of the Different Things that were raised during the interview, whether its potential sell of abc and fx, whether its continued talk about a partnership for espn in some fashion, including perhaps taking in equity the penn deal was a separate kind of thing. And the challenges in front of him. Advertising on the linear cable networks, not to mention those Networks Overall that are in a steep decline in terms of the fees paid by those subscribers as those numbers cut down. Abeneficiary of inflation parks are the earnings behind the Company Without a doubt. There will be focus on direct to consumer and disney plus and the efforts being made to it to a neutral position in terms of no longer losing money for a company. But those are the challenges and nelson is still out there. Hes tried a number of times to get aboard, whether its with the threat of a proxy fight, an actual proxy fight he gave up, or at least trying to cajole them and say why not, why not, come on. He was satisfied with the plan but wanted to see results and wasnt going away. Maybe tease the idea he could be back. Yeah. A lot to look forward from disney tonight heres our roadmap for the rels rest of the hour and shares of roblox getting crushed, down around 20 before the bell today we have details. And the chipmaker is facing a talent tug of war, names such as intel and wolf speed are promising to bring thousands of jobs to the u. S. But theyre having trouble finding employees. Bish aad dont go anywhere. Its an entire trading experience. With innovation that lets you customize interfaces, charts and orders to your style of trading. Personalized education to expand your perspective. And a dedicated trade desk of expertlevel support. That will push you to be even better. 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Taketwo interactive missing revenue estimates and shares Holding Steady as investors focus on the companys outlook and some particularly bullish comments about fiscal 25 joining us is ceo Strauss Zelnick. Welcome. Nice to see you. Thanks for having me. Its great to be here. So you said this on the call, your industrys been in recession for 18 months. You had this big boom during covid when everyone was home playing video games and then a big giveback where are we now were stabilizing on a yearoveryear basis, consoles are up, which is great, mobile is flat, maybe a little down, maybe coming back. I would say consistent with my expectations that things would hopefully bottom out june, july, and we begin to see a nice sort of gain heading into the end of the year and by calendar 24 we feel like well be in a good place it remains the Fastest Growing part of the entertainment business the longterm outlook for the industry is exceedingly positive i was going to ask relating to the entertainment business, it seems so much spending power goes towards live shows, beyonce, taylor swift, all on tour thats what people want right now. Is that coming at the expense of video games . I think thats right. I think in a time like this when inflation means the stuff you need is more expensive, you have to be more select wich your spending and thats taken a toll on digital entertainment, entertainment you consume at home people are leaving their homes rental Car Companies are doing great, hotels, live events are doing great. Where does that settle . How does it all shake out . I think if the economy in general comes back and if weve actually reached close to our limit on Interest Rates, if inflation is under control, then growth means consumers will have more to spend and everything will normalize but the thing is people are now worried about recession as the Interest Rates start to bite i think thats right. My own view is weve been in a recession. I think two quarters of negative gdp growth kongs teuts a recession, even though the white house said no last august. I disagree, and i think this has been a recession so i think were in for a soft landing, personally. Pretty nice feeling recession. Hasnt been that hard. It certainly didnt feel great for the industry it was the first time the mobile business was down in its history. Youre right, sara, we did enjoy this big growth during the pandemic, obviously a terribly tragic time, but it did benefit Industries Like ours i did say during the pandemic we expected postpandemic demand would be greater than 2019 but lower than what happened in the pandemic that has turned out to be the case it was probably a little rougher than we expected so if were in a period of say peak travel and people will be home more on a relative basis and films and Entertainment Production goes to zero for a while, does that benefit gaming in the coming 24 months, 12 months you never want to benefit from other peoples hardships, but yes, i think so. I think were well positioned. Thats without regard to the strike a lot of your investors, when i talked to them, whens the ship date for grand theft auto thats the first question. Which is it . We leave announcements for upcoming titles to our labels. We have a robust line of titles and a great fiscal outlook for 2 2025 pretty exciting time but we havent spoken about the specific release schedule. We have titles coming from all of our labels, including from zynga. When it comes to gta, i think materially Higher Development costs, so theres some question as to profitability ultimately when you do shift. How do you answer that the franchise is perhaps the most profitable franchise in the history of entertainment we focus on costs. We have a threepart strategy, be the most creative, be the most innovative, be the most efficient. So were not cav clear about cost however, undoubtedly, a title like grand theft auto will always be highly profitable. Sam houser has been involved in that franchise. Theres some question if this is his last goaround, if thats the case, and who would replace him. I believe that sam and i will both be carried out there, you know, many decades from now. Were equally committed to the suck session of the enterprise and we both love what we do. Ill let him speak for himself, but thats my guess. Neither of you are going anywhere im not going anywhere. Where are you in direct to consumer, that journey, and how much growth lies ahead direct to consumer activity is on a platform side for interacting with the consumers as they buy inapp purchases as you mowknow historically, wel continue to do so. If we create a lot of that, its much higher margin revenue were just beginning on that journey. We havent talked about the percent of revenue one of our big competitors has sp specifically said about 25 of purchases are inapp direct. Thats a big margin. Thats worth shooting for, 20 , 25 . Were not there yet. Im curious how many hours a week you play games and if you do, if youre on a hnd andset o not. I dont actually play video games. I am not the consumerinchief ive been involved in the video game business for decades. Im not actually the lead consumer in terms of headsets, you know, thats not so relevant to our business since our consumers can choose the headset they want right in general, taketwo even, as you as your team sort of explores competitive offerings and games that are out there in terms of whats out there competitively, there are a lot of great titles in market right now. In terms of how they interact with the technology, so far new offerings like vr offerings havent impacted our business. Youve sort of poohpoohed the idea of going into entertainment and movies on the call yesterday my children watch the super mario brothers movie every single day its the only thing that gets them calm and sitting on the couch. Why are you against Something Like that . Im not against it. We have to find that intersection of great intellectual property and a great producer that can deliver a wonderful outcome. Thats happened precious few times. For us, were not using our balance sheet. Its not a good asset class compared to the asset class were in those are the facts. Ive been in the business. Ive obviously been in the film and television business. Yeah. But that isnt the place we want to put our investors money. However, we could see licensing Certain Properties as long as we have enormous creative control, because the disaster scenario is you put out something in film and television and it hurts our underlying i. T. , which is very profitable you have been pretty vocal and supportive of the deal from microsoft to buy your competitor, activision im curious why and how you think it changes the industry beyond potentially boosting your valuation as a takeover target look, even if something is against my particular enterprise, we believe in telling the truth, and i dont think theres anything anticompetitive about that merger i dont think its going to hurt the Business Microsoft was a very important Business Partner of ours i wish the best for them i dont see it hurting consumers at all finally, the ftc was overruled here, which is the right thing the eu has approved the deal and the only barrier right now is the uk, and id be surprised if microsoft allows the uk to stand in the way of that deal. That would surprise me finally, strauss, the key question as someone whos devoted to fitness and spent so much time focused on it, Mark Zuckerberg oh, gosh. Im not taking that one on between musk and him but there is a big weight differential musk probably needs some of your help and enthusiasm getting himself in shape hes got a big weight advantage. Im not betting against either one of those people. Theyre both really tough. You think the weight is the advantage. Sure. Yeah honestly, hes got musk has like 100 pounds on him its the walrus, right, david . He put rockets into space you really dont think he can figure this out . He might want a little bit of training if he callings im happy to help him thanks for playing ball and for joining us appreciate it. Thank you as well speaking of gaming, look at roblox today, on pace for the worst day since november, a miss on the top and bottom lines. Dau is up 25 yearonyear and says it expects to continue reporting losses for the foreseeable future you can see 20 loss stay with us welcome back to sidewalk squawk im bertha coombs. Wildfires are rage across the Hawaiian Island of maui right now, prompting evacuations and school closures. Maui Officials Say the fire is scorching the popular Tourist Destination of lahaina where the coast guard says a crew rescued a dozen people from the water overnight. According to the counting, 911 service is down, which is complicating rescue efforts. Russian authorities launched a criminal investigation into an explosion at a factory near moscow that injured 45 people. At least six have critical injuries from the blast at the warehouse, which reportedly houses pyrotechnics. The russian capital has been targeted by drone attacks, but authorities have not confirmed whether a drone may have been involved in this incident. And ohio voters rejected an effort to change the states constitution during tuesdays special election the measure would have raised the bar for constitutional amendments to require a 60 volt instead of a simple majority it was seen as an effort to derail a planned vote in ohio this fall that would enshrine Abortion Access into the states constitution carl, sara, back to you. Bertha coombs, thank you. Tomorrow the interview with Linda Yaccarino. Well be right back. The dow is negative about 15 points upbeat music woah. Constant Contact delivers the Marketing Tools your Small Business needs to keep up, excel, and grow. Constant contact. Helping the small stand tall. Ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt know that if she owns a Life Insurance policy of 100,000 or more she can sell all or part of it to coventry for cash. Even a term policy. Even a term policy . Even a term policy find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. An hour into the trading someday. Lets go over to bob pisani. Good morning. Good to see you. The important thing about today is were down 6 out of 7 days if we end down today, and were selling into the open every single day recently. Look at the sectors here this is happening because the leadership is changing right now. So energy has been a big Leadership Group in the last couple of weeks. Health care, particularly pharma stocks, have been coming up. Whats been lagging is tech stocks banks were a Leadership Group yesterday not withstanding, a little weak today, but the trend has generally been up. Take a look at the Leadership Group. I want to emphasize in the last month, the last 30 days, its been about Energy Stocks, banks, and pharma this is nat gas, up 15 , 30 days Exploration Production companies, oil services on fire. Regional banks, the kre also been a big Leadership Group. Pharmaceutical stocks also rallying in the last month whats been cooling off is technology stocks. The s p tech group is down about 1 this is with the s p up 2. 5 in the last month nasdaq 100 down, semiconductors down, ai stocks are not performing as well as they were earlier in the year. Utilities also weak because of the rising yields that weve been seeing. What is the problem here why have we been so weak in the last couple of weeks you cant blame it on volume its seasonally light volume no one is selling heavily right now. The volatility has been muted. The vix is around 16 thats not an elevated concern level. The macro backdrop, you heard about the lower china data, but overall the u. S. Data has been pretty strong here the problem is on several fronts the valuations with not compelling at nearly 20 times forward earnings its a seasonably weak time of year sara was talking about the macro risks weve been having and the main one is the rising yields. Its a doubleedged sword. You have a validation of recovery getting back towards more inverted yield curve is better, but it makes it tough for groups Like Technology stocks, when they start going up, those yields, thats what happens. The other thing i would mention is this astonishing inflow into Money Market Funds you would think with the s p up 18 people would say, oh, well, who cares about 5 in a Money Market Fund . No money every week continues to go into these Money Market Funds, 21 billion last week. Now there is 6. 7 trillion in Money Market Funds thats a record. I go back to 2010, theres nothing close to that. So there are people who just arent interested in the market even with the s p up 18 i think thats another problem a lot of competition out there for investment dollars that is for sure, bob thank you. Bob pisani another bob joining us this morning. Our next guest says valuations are stretched, momentum is showing early signs of turning bob dole joins us today from crossmark. I wonder why you think the performance hasnt created more of a chase environment, or are we in a lull in august right now . Weve had an incredible chase environment, i would argue, carl, the 4,200 to 4,600 move on the s p happened just in a few weeks. It caused me to scratch my head. Bob pisani covered it well valuations are extended. You have to have things going well to justify these kind of valuations im still concerned, carl, about the lag impact of what the ted did over the last 15 months, the inverted yield curve, money growth, the leading Economic Indicators all this tells me more sloppiness is probably in our future so just when some of these recession calls get pulled or pushed back, you think thats when the weakness really starts to demonstrate the high was almost the same day as a lot of people who had recession in their vocabulary said, sorry, only kidding. Were on record since the beginning of the year, a recession, mild, starts between labor dep labor day and the end of the year for the reasons i just stated. Whats going on with oil prices 87. 45, crude. Were at the highest point of the year despite deflationary signals out of china, and youre worried about the u. S. Economy of course it had declined earlier in the year, and now the turnaround, its come back up a quick 20 . Part of that is, you know, supply is just not abundant. Youre absolutely right to question demand, but supply is the problem. Its hard to get a permit to drill somewhere here in the u. S. , and thats been going on for quite some time. So, bob, whats the strategy to play i dont know, i dont want to brand it, what a soft landing, a mild recession . What are the sort of sectors and areas that work . Yeah. So im still interested in the hmos had a great year last year, died the first half of this year, doing a little better here i would own some of those. We talked about energy have to own some Energy Stocks in this environment i think. Ive not given up on visa and mastercard theyre not cheap, but the fundamentals are quite good. Dont want to be totally out of Technology Software like adobe makes sense. There are names here and there that i think can be homed. Youre still hearing clients saying, you know what, the 2year, money markets, just too enticing at the moment until i get a clearer path to what earnings are going to do next year thanks for bring that up, carl absolutely a 5 handle for money shorts out a period of time, very enticing for people after theyve made so much money in equities let me just go park some of that its hard to fight having some money and a 5 instrument over a severalquarter environment. Were hearing that from our Financial Adviser clients very regularly. Finally, if cpi does roll in soft, bob, like china and manheim are suggesting it could, and it becomes clear that november might also be a skip for the fed, does that give us any solace in terms of what earnings or what the markets may do going into q4 i think, carl, thats the expectation. The disappointment would be if it goes the other direction. Look, inflation has come down, but core inflation, core pc, the feds favorite indicator, has only come down about a point from its high. Now you have as sara pointed out oil prices, other commodities moving up. I think that we have to worry about some of these labor discussions. Big increases being sought, and with labor so tight, that can carry other places im not convinced inflation is going anytime soon. Labor strikes potentially a story well be talking about more in the coming weeks bob doll, thank you. Thank you still to come, a look at one year later, upstart heading for their worst day in over a year eiinsuri aust t profits. We never just see the numbers. We see the people. Marcus detroit, its just changed so much. You can see what it once was. And then, i think about what it can be. As an entrepreneur, its about how i can give them the tools to empower themselves if we can just all do something small, all the small things will start to amount to something big. Thats why were here to help make it happen. The first time you connected your godaddy website and your store was also the first time you realized. Well, we can do anything. Cheesecake cookies . The chookie manage all your sales from one place with a partner that always puts you first. we did it start today at godaddy. Com billions of dollars are pouring into Semiconductor Manufacturing in the u. S. With the promise of creating thousands of jobs, but one of the biggest challenges, finding those people to work them. Our Kristina Partsinevelos is live from North Carolina this morning with more. Kristina it was actually 231 billion in private funding coming to the chip space in america. But as Companies Like wolf speed begin construction, they realize how difficult it is to find talent prime example is taiwan semiconductor. Theyre the First Company to publicly announce that theyre delaying production of their arizona plant till 2025 due to a lack of skilled workers in the United States. So i caught up with the ceo of intel, pat gelsinger, to find out if hes facing the same shortage listen in. I think theyre inexperienced operating on a global fashion. Samsung hasnt complained, theyre building in the u. S. , but theyre very much a global company. So ill just say, hey, weve been operating in a global sense for years. Weve been in the u. S. For many, many decades so after that interview i went to arizona and caught up with the president of tsmc arizona to ask if he was flying in taiwanese workers because it was cheaper or if it had anything to do with being inexperienced. Listen in. I also want to dispel another comment about cheaper. It actually is more expensive to bring the worker from taiwan, pair them a fair u. S. Salary while theyre in the u. S. , and pay for all their relocation and housing and support. It actually makes them more expensive. It reminds me of a conversation i had this week with intel Ceo Pat Gelsinger i asked him specifically about the hiring gap and the comments and his response is they were inexperienced at being a global company. I think that the majority of our manufacturing of our manufacturing capacity today is in taiwan, but we have for 27 years operated a facility in washington so we do have some International Experience reporter International Experience or not, companies are realizing its not just about getting the federal dollars, its about finding the right talent guys i mean, its great. You were able to hear the same message from so many people, kristina i thought who was notable, the Commerce Department put out new numbers on statements of interest in building ship plans here in this country or materials associated with chips. That number has risen to more than 400, 460. 460 statements of interest since february, coming, from manufacture in the u. S if we dont have the workers, what happens here . And how do you fix it . Is this broken immigration well, to your point, it was 400. It went up to 460. And those statements of interest arent even the actual applications theyre the first part of getting federal funding. And thats the reason why the Commerce Department is so overwhelmed. Theyve hired 140 staff members. In terms of how we can fix it, the Commerce Department says that theyve worked with 50 community colleges, theyve created semiconductor programs theyre spending about 13 billion on workforce training. But theres no doubt there is going to be an issue finding that talent. Its estimated to be a gap anywhere between 60 and 70,000 workers that are going to be unable to fulfill, because that talent isnt here in the United States, because the supply chains have been overseas for so long so, kristina, how many years . Is there an estimate in terms of when we would actually have the workfor workforce to effectively service all of these potential new chipmaking plants excellent question. Unfortunately, i never get a straight answer with that. Theyll say, you can train a technician within a certain number of weeks or months at a certificate program, but when you get a little bit more high tech, its an educational program. Theyve got to do night school, two years, three years and these fabs sometimes take three to five years to even produce. So were looking at a timeline of at least a few years. Well, by then well have ai ready to build our chips, maybe. We might. Hopefully not thats moving faster. Thanks, kristina thanks. Still ahead, the ceo of aic shares are slumping on weakerthanexpected advertising sales. Stocks down to about the lowest level since early june theyll join us to break down the numbers, talk about where the demand goes from here, next hour at 11 00 a. M. Eastern well be right back. Stay with us you know doug, ever since switching to workday youve been a real rock star. Rock star . What do you know about rock stars . Billy idol . I mean wheres the skintight leather . My shoes are leather. Wheres the unnecessary zippers . That thing billy, rock star is just how doug feels when he uses workday. Thanks, rory. Ill show you rock star be a finance and hr rock star. Workday. For a changing world. Billy idol just stole your golf cart sfx people cheering sfx Stock Exchange bell ringing sfx people celebrating sfx people celebrating sfx Stock Exchange bell ringing elon musks x, formerly known as twitter, looks to win back advertisering by focusing on brand safety, planning an exclusive partnership with Digital Advertising firm speg ral ad science which else ad verification technology, ensuring that ads dont appear near controversial posts and is, quote, brand safe and brand suitable for advertisers, something thats became a major concern at x over recent months who better to ask about the deal than the companys rebrand and the ceo of the platform, Linda Yaccarino, who will be joining us tomorrow morning in a cnbc exclusive on this show and i guess this new technology, integral ad science uses Machine Learning to help companies, help ads make sure theyre not placed near problematic posts that companies are against apparently, they do the same sort of thing with youtube and with tiktok. Well see. This is a big Linda Yaccarino push she has been brought in there to turn around the business and her bailiwick is the ad market not an insignificant hurdle she faces. Especially when her boss says, if it costs us money, who cares. Her owner being one of them, sarah. How she controls her own his tweets, you mean or whether his willingness, as he said, to speak his mind whenever he wants. No matter what cost correct, correct. But im sure youll get to that with her. I have no doubt that you will building off your interview with elon musk just continue to build. Build, build, build. S and elon, anytime you want to talk again, im ready. Ill look forward to that tomorrow as for where we are today, we have the markets down yet again. The nasdaq down almost a full percentage point keep it right here a lot more coverage of the markets and, oh, so many other things in the world of business comingouwa yr y. swords clashin had enough . No. Arthritis. Here. Aspercreme arthritis. Full prescriptionstrength . Reduces inflammation . Thank the gods. Dont thank them too soon. Kick pain in the aspercreme. fan 1 there ya go thats what im talkin about josh allen is this your plan to watch the game today . hero fan uh, yea. I have to watch my neighbors nfl sunday ticket. josh allen its not your best plan. But you know what is . Myplan from verizon. Switch now and theyll give you nfl sunday ticket from youtubetv, on them. hero fan this plan is amazing josh allen another amazing plan, backing away from here very slowly. fan 1 that was josh allen. fan 2 mmhm. vo for a limited time get nfl sunday ticket from youtubetv on us. A 449 value. Plus, get a free Samsung Galaxy s23. Only on verizon. upbeat music Constant Contacts advanced automation lets you send the right message at the right time, every time. Constant Contact. Helping the small stand tall. Good wednesday morning im Carl Quintanilla with sara eisen live on the floor of the new york Stock Exchange. This morning, former fed jis chair rich clarida is a surprise move to the upside coming this week on the inflation front. Aiece with us, taking sthook lower this morning well ask him went what wrong for advertising this quarter later, speaking my language, d the pop star joining us. And stocks up and down up and down the pain