Transcripts For CNBC Squawk 20240703

The u. S. Rating. No surprise there. History in the making President Biden would become the first sitting president to visit a piblt line hes planning to join strikers as those workers of the big three hit 12 days of walking out on their jobs. Lets begin with the markets on track for a lower open on this tuesday jim, youve been watching yields, of course. You commented this morning about the 20year in particular. Yeah. I think weave been going toward ive been saying this to club members a lets just say the opposite of an inverted yield curve t inverted is what im calling it youve got 4. 8, a 5. 3. What i think can happen is on the 20year you can usually get 6. Lets say Neel Kashkari is right, one hike. Then you have no more inverted yield curve. The problem is that when i go over stocks, locking in a 4. 8 is considered to be really pretty terrific. Its not bad. Its not bad. 4. 5 for ten years is not terrible either. People are looking at it. Go back 16, 17 years, wow, this is a great rate. I think thats really what were up against with stocks i can talk about what mike said yesterday, the ceo of chevron, talk about what jamie dimon is saying and get ready for 6 they havent been able to slow the economy down theyre selling a lot of bonds the fed is dumping its bonds im not saying were dinosaurs weve had tremendous periods where stocks are gone up and theyre 6, 7 on the 20year david, lets face it we can sit here all day and say i really like the 20year here, taking it to a buy, and no one would disagree with us. Listen, the tenyear has come into a lot of conversations. Yesterday we breached the 4. 5 level. It seemed to get a lot of attention. I dont know why 4. 49 doesnt, but 4. 50 does. Your point is twofold, jim one is the impact on the economy and the other is that it does pose a real choice or opportunity for investors who might prefer not to invest in equities exactly i think weve had tepid reception for equities for a while now. We had that vicious decision by the fed to surprise people in october of last year but carl, i just think that you could have this terrible situation where rates go up, earnings go down, the dollar is too strong what you have is people saying what do i need this for . No one i read today is saying this could be the end of the move, that rates could stop going higher that would be obviously one of the greatest things in the world. I just dont see the big layoffs i dont see the fed winning yet. I dont know whether one rate hike is enough i do know that when you speak to people they dont want to talk stocks its like, gees, 4. 8, i can go home bofa has a good note of what it would take to get the 10 to 5. They argue it would take more signs of reevaluation. They dont think thats going to happen and its going to come back down closer to 4. Interest rates went up so big yesterday, i dont think people realize that this is not on anybodys radar screen no one thought this. You have a lot of people who say, you know what ill sell the mega caps. The government is after them anyway ill sell them i got a good gain this year. Ill buy this piece of paper if it goes down in yield, maybe its all momentum i have to tell you, i feel exhausted by what Interest Rates are doing. Great piece in the journal today about americans, in their words, finally starting to feel the sting from fed hikes its worth listening to dimon and whabt he said about the world maybe not being ready to 7. Take a listen. Do you see another rate hike now . I think its more likely than not. I think people should be prepared for higher oil and gas prices, higher rates as a matter of just being prepared you and i can guess what its going to be. You dont know, i dont know, no one knows. I think the odds are higher than that so hopefully well get to it i think the geopolitical situation is the thing that most concerns me, and we dont know the effect of that on the economy. You agree with him . When i was in philadelphia with him at the beginning of the year, he was talking about 6 i think its perfectly realistic to think it could get to 7 do i agree with him . Hes hard to disagree with hes making a lot of cogent arguments. Its interesting he comes back to the geopolitical framework of things right now every time it doesnt feel as though that really is front and center for anybody who is making decisions about whether to buy or sell equities or, frankly, bonds. Geopolitics and the war in ukraine in particular doesnt seem to rise to the fore too often. He brings it up every single time as a chief if not the number one risk factor. Theres a great piece today about how the complete failure of the sanctions on the russians, because theyre selling oil to the chinese i came back i tried to find one positive article today, besides about the eagles winning. I honestly turned because ive had it i cant find anything positive i feel like many people who want stocks to go higher, i feel beleaguered. The only thing i have going for it is everybody feels beleaguered. Thats the contrary sentiment someone emailed me today from the club and said, jim, are you aware of all the stocks you have that are double tops yeah, thats still thats because everything you get a double top when everything is bad. David, i dont care about the double top i care about the idea that maybe theres something out there thats good. I just havent been able to think of it yet. In my mind it always comes back to either Morgan Stanley or goldman. Today its katy huberty saying that the fed is overemphasize growth over the inflation data they think markets are poised for maybe 50 basis point correction here. Im a believer that everything is so neg tich that youve got to find things to buy. Im not aggressive its not that much oversold yet. I was watching frank this morning. October is always good when you come out of this bad september here it is, the 26th of september. You bolt now knowing october has always been good after im not bolting. Im not john bolton either. Or michael. When i look at, for instance, whats happening in detroit, we have a president remember he proclaimed hes the Union President . Uhhuh. Hes backing it up. Hes actually going to be on the picket line. What does that say for the people that dont want a 32 workweek and 40 increase in wages . Who doesnt want that i want that. Will you give it to me, please my trust zone shares are in ford you cant get me to sell ford. I cant get you to sell ford . No. Theres nothing i could say, never be able to generate a real margin, that they are that tesla is going to dominate everything and everybody see the piece today about the missteps in china. Four times earnings four times earnings. I have stocks do you say that to yourself in your sleep, that three hours that you briefly get that you call sleep four times earnings. Four times earnings. Last night i took five classes. I didnt go to biology once and the final was coming thats your dream yeah. I didnt go to biology and i was about to flunk class thats the equivalent of macys at three times earnings. I didnt take biology. I didnt want to ruin my transcript. Not in any way indicative of the future performance of the stock price. Thank you. Im not saying thats good. Im saying they never get out of that trough. Like a valuation trough or something . Yes, yes. Boy, are you negative macys down 50 at 3. 5 times earnings you should consider it people arent shoplifting Tommy Hilfiger shirts. Its going to have to be an increase in sales. By the way, luxury is not doing well at all, looking at a recent note here. Merrill lynch eu luxury basket is back to flat. Val teen follows chairman says theyre seeing strong signs that growth this year will be much worse than the 10 expected. Weve got 44 Million People next week that have to start paying Student Loans how about this ive got an idea why dont we just stop and come in every morning and ill say, david, i like the tenyear. And then you leave. And we do a stop trading. David youre not in the shot. There you go. David, ive been thinking, i like the tenyear. Then i go back here, and we do what you look at here. Maybe i say to you, hey, jim, how about that tenyear . I like the tenyear here. I think the tenyear is breaking out. Okay, then were done. Then the bottom of the market and we get started. Kind of like when we run the specials wall street in crisis or markets in turmoil always a bottom. I feel like this is an on we bottom. Jim mentions, of course, the strike later this morning the president is scheduled to depart for wayne, michigan, where hes expected to appear alongside workers picketing. Phil lebeau is in wayne, michigan a busy day, phil. Reporter going to be a busy day, carl. Were not exactly sure where the president will be here in wayne county we assume its going to be the Michigan Assembly plant which is behind me. That hasnt been confirmed by the white house. Frankly, were waiting to see if this is where hell meet with union members. While we wait for the president , we know what all that entails, the politics involved, et cetera there is the negotiation between the uaw and gm, stellantis and ford when it comes to ford, a big issue that popped up yesterday is what happens with a new ev battery plant that the Company Plans to open just west of detroit in marshall, michigan. Why is this important . Well explain in a bit this is scheduled to open in 2026 with about 2,500 employees. Ford is investing 3. 5 billion in this plant. Thats going to be a key part of it, developing the infrastructure for electric vehicles yesterday ford said its pausing construction of that battery plant. They didnt go into a lot of de tails but said theyre assessing the ability to competitively operate the battery plant. Hmm. The word competitively there should catch your attention. Just a few minutes afford issued that statement, the uaw blasted ford saying were simply asking for a Just Transition to electric vehicles, and ford is instead doubling down on their race to the bottom clearly this has become a thorn in the discussions between the uaw and ford in terms of will these workers be represented by the uaw . Where is the plant here . A number of these ev battery plants are joint ventures between a big three automaker and a korean of japanese battery firm theyre not under the master agreement of that particular auto automaker. That statement from the uaw minutes affords, clearly this is one of the issues in focus today. One last thing as you take a look at what we might be seeing today, keep in mind as you look at gm and stellantis, youre looking at just 12 of the uaw members here in the u. S. Who are on strike right now. Certainly a big deal were not trying to downplay that keep in mind its just 12 of the membership on strike right now. The uaw could make this a much bigger strike in the days to come, weeks to come. They could say we want to strike this particular plant or take down a couple plants that remains to be seen. Were waiting for the president to come to the detroit area. Theres a pool camera with him you know there will be pictures of him shaking hands with uaw members, giving the speech that weve heard many times of how he stands with organized z labor. Beyond that, we dont have anything else. When we left on friday we seemed to think ford developed a better relationship with uaw we come in today, this feels like a 96mileperhour fastball thrown at the union. Good friday, bad tuesday what the heck . Reporter i think thats the nature of these discussions, jim. Weve seen this from the uaw remember about a week and a half ago, everybody was saying, hey, things are progressing between ford and the uaw they came out and they absolutely blasted ford along with the other automakers. They said, you know what, were going to have strikes at the Michigan Assembly plant, and then the two other plants for gm and stellantis and then last week very active talks between the uaw and ford very active doesnt mean its positive but ford then came out and said weve made some progress here. Still significant gaps and then this came out i think this is the nature of these discussions, jim, that its going to be its hard to predict what its going to take to get this over the finish line. Streets trying to gauge the impact of the strike on inflation by looking at inventories and the impact on used car prices, for example are we going in hot in terms of inventories on the d 3 im glad you asked. I checked in with j. D. Power yesterday. They have not seen a measurable difference in inventories. Keep in mind 85 of the production has not changed at all. Theyre continuing to crank out ram 1500s at stellantis, the Chevy Silverado at general motors, ford f150s. Those are the big sellers. Theres no change in inventory yes, if youre looking for a bronco or a ranger, you might see an impact at dealerships so far j. D. Power says theres no measurable difference in inventories at this point. Phil, talk to you in a bit, i imagine many times this morning. Phil lebeau in wayne county as the president arrives later this morning. A closer look at barry tillers take on the technology on spotify and gtp well get to upgrades and down grades as well ilungncdi calls on wing and draftkings when we come back in a minute. The next thing to Pay Attention tore for ai is not search and chat and Everything Else its when it goes from research to action, when it cant autonomously get things done for you. Think of travel, being able to say i want to go to istanbul it knows enough about you, enough about all of your preferences that it can basically ask you one or two questions and then actually go and execute the transaction. Right now its research. When it turns to action, everything changes thats barry diller on squawk with his take on whats next for ai spotifys chief tells the bbc the company will not ban aicreated content from the platform open ai says chatgpt can now see, hear and speak. Allows it to understand spoken words, respond with a synthetic voice and images dillers point is whether or not this is all fair use someone has to get paid in his view. Well, as we know, a key point in the Writers Strike and something they believe they have successfully negotiated an answer to. By the way, the leadership votes today. Its a little bit of a process here we do expect it will be fully ratified, the deal they did finally come to a few days later than i thought they would, but they got there its funny, though we talked every day hourly abou ai, right up to the introduction of chatgpt with all the excitement we dont do it as often. I dont think that means in any way this not moving forward at a rapid pace i certainly dont think our perhaps mentioning it only once a show instead of numerous times is reflective, jim, of the meaningful move forward this technology is making and the attempts at commercial that are under way at so many companies. Barry diller said one day in july of 2024, your wintel computer will do what he said. The chips will be shipped. Youll be able to book your restaurant just by talking saying im going to istanbul. A year from now youll get a pc that can do it. Youve been saying q1 thats when theyre going to be marketing them. In q2 youll get them. Q3 theyll be prevalent and its a whole new cycle. Thats one of the reasons why micron keeps getting recommended. Its here and youll be speaking to your pc it knows a lot about you exactly what barry said. Instead of taking you can take the emirates flight from kennedy. You live in summit you probably want to take the delta flight, and ill book it for you. Then it will do that it can speak, it can taushgs it can write. This is it i think one of the reasons why people are so excited about these stocks is its sooner rather than later. Now it looks like everyone is just yeah, i know that. But they dont know that the same way the advent of the internet 25 years its big. There was a huge bubble, as we all know. A great deal of excitement a lot of Business Plans based on nothing, but at the same time it wasnt as if it wasnt the most significant thing that happened. This time the companies that are using it are making fortunes they have enough money to put it to work. As the fed pointed out last week, its now in a world where i. T. Is stacked everywhere as opposed to some cases in the late 90s. When i look at walmart, i have con fluid on tonight, the engine that makes it so they can figure out, you want a pair of slacks from walmart, to use the term if you want them, they can search the data and find out whether its available same day. Can anybody else do that does anyone else have the money to do that i think thats why the other retailers are getting smoked they just dont have the money to do it there are going to be products that will be developed specifically for weve got to go my friend. Well talk about it more. Meta connect begins tomorrow take a look at the premarket here close to early session lowons the premarket, and well get the opening bell in six minutes. Gold isnt merely a commodity. Its an investment in people and communities. At osisko, we strive to build modern, safe, and sustainable mines that benefit all. Think big. Shape tomorrow. Osisko. A look at nasdaq laggards. Sirius is at the top chips in china tech, jd. Com, tesla will present at bofas future car conference about the future of the automobile opening bell is coming up in just about 3 1 2 minutes dont go away. 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. Lets squeeze in a mad dash. Micron. Im searching for something positive c citis quarter is released tomorrow theyre saying micron could have an upside surprise this is the only piece of research i saw other than the katy huberty note [ bell ringing ]. Nuveen global net lease doing the opening and hispanico. [ cheers and applause ] one of the great arts organizations. Theres something positive. David, thats nice, you know well m. C. C. Has done a good job there. You want to do the upgrade, jpm goes to overweight i think people are discovering that draftkings its like the default one. Maybe the government will go after them when people look at it, its an intuitive site david, that does matter. People want to be in the one thats easiest yes, whatever is the quickest and easiest way to lose money. Between that and the dominos topic, definitely football season the dominos and wingstop is interesting. I like the call because one of the reasons why theyve been down is they didnt have the doordash and uber. Now they have that then the other side of the trade is its up so much, so youre not early. Wingstop, i had them on last week, the piece i felt was wrong headed, talked about how wing prices are interesting wingstop does well because of franchises in terms of the franchises that are a bargain to buy, they cost 400,000 and average about 1. 7 million average unit volume. They cant get to 2 million for our viewers who want to own something other than stocks and the tenyear, own chicken, chicken wings. Chicken wings. Kind of like plastics got it. Reminds me quickly of mcdonalds, lowest since march youre starting to see mcdonalds as a proxy for economic activity. Theres a fight between the franchises theyre not thinking theyre getting enough the franchisees are what matter. A great ceo has to do two things, sell a lot of product. Has to please the franchisees. And the franchisees are incredibly unhappy wingstop, its almost impossible to get a franchise because you have to demonstrate like a catch 22 you have to demonstrate youre good at a franchise in order to get a franchise. If these weight loss drugs known originally as diabetes drugs become more ubiquitous, does it hurt fast food sales there are those who believe that could be the case. I will point out eli lilly shares are up in this market, up 51 this year, 525 billion market value i asked all the execs in the socalled junk food category whether theyll get hurt they alwayssay the same thing. Theres a lot of people who just like junk food thats true. Alcohol has had this right now medtronic, you can almost see where these drugs began to get marketed thats true if you look at e. W. Which is recommended today. Thats when you have to have your chest cracked open you dont have to crack the chest cavity to use ew i thought that was a good upgrade this morning its down 2 these drugs could have a positive impact on the Health Care Environment if people have fewer heart attacks, fewer everything. Youre saying wegovy, mounjaro. Youre say thoog and combination of chatgpt has basically made it so nothing happens. Everything is done by the machines we dont even eat. Were going to be like the people in wally. The only thing we wont be fat. The only thing that tastes good with that ozempic soil and cream. Soil and cream. Its people how great was edward g. Robinson i always make him do it. I cant do soil and cream you dont do it on demand moses. Its a passover thing. Its so great. I like the laugh because the tenyear has made it the tenyear, ozempic, mounjaro, chatgpt, theyve wrecked us. Theres nothing left theres nothing were done all right cancel mad money. Dont you dare cancel mad money. I dont want to quit just because everything is bad. Weve seen everything be bad before 2015 remember when stock opened up 25 . Weve seen a lot at this desk. Weve lived through a lot worse many times. Weve been through financial wars together and we found things we like accidental highyielders here is one that i looked at yesterday and was like, are you kidding me 3m, is it really down . Dividend aristocrat, yield 6. 3 . What is that that still tops the tenyear, 6. 3 . Yes by the way, chatgpt, no. Ozempic, no. Flog to skachcotch tape, nothin. 3m conceivably moving towards ending a lot of the key litigation i thought that when they solved both these that these would be at 5 yield and decent company. I thought there might be some turn i didnt recommend it for the trust. I thought there was a possible lift nothing. Two ways one is to say nothing works. The other is to say, if the tenyear goes down in yield, were going to be scrambling for everything we just dont have that yet. Speaking of regulation, both real and potential, eddy cue expecting testimony about the google deal which the street doesnt know a lot about no. This is a trump case the other is remember, the biden case is the one about advertising. This is about search it was brought by trump. It was brought by the Justice Department at that time. Youre right. The Justice Department was totally independent under trump. I forgot. Well keep trying here. Here what are they doing . They basically say that there wasnt enough choice i guess nothing could rival the power of google apple. Theres an outfit called microsoft. They have bing. Which was a joke for a really long time, but now its powered by chatgpt the case has been overrun by events. That often happens. That sort of thing could even happen to jonathan dinners case when it comes to advertising. Youve read that case and you believe they have a strong one i think they have a strong one, but the events have started to over ride that. Theres so many ways to advertise. Youve got facebook. When you look at where you advertise, you advertise on amazon, facebook advertise on instacart. The cases seem to be previous generation but i am i remember the Justice Department under trump, the higher level was so independent that i stand corrected. Where did they come out on jan 6th . Who the Justice Department. Yes, they prosecuted. The trump Justice Department. Why are you doing this . Why . Because it was done in the form of a question, just like jeopardy its going to be a heck of a year ahead of us im just saying i look at that case and i think, are you kidding me we all love one of the things we love is search on google. Were on it every minute thank heavens the Justice Department is trying to get us to stop that whoa by the way, we need the ftc to break up amazon. I was going to ask you about that next. They charge very little its delivered to your house ive had enough of that. I want it to be done in two days and i want to pay more listen, your arguments are a lot of people agree with them. Thank you thank you. The Justice Department or the ftc would say its not about necessarily protecting consumers from these companies as much as it is stifling innovation. And well never know what we might have gotten if there had been a more competitive marketplace. Who knows what could have happened if Activision Blizzard had merged how about can i say the ftc has become very jock lar. Theyre the laughing stock of every law school in the country. They are fighting a difficult battle, to try to be fair to them and they have a very hard time convincing judges to their point of view when it comes to antitrust law. And hasnt been able to convince congress to change the law. Lina kahn is calling for class warfare. Obviously President Biden wants class warfare. Last i looked, class warfare, whats it good for absolutely nothing, jim i rest my case. Except maybe for the people i want amazon to charge more and, therefore, be less good, and i want to be able to support higher prices because thats good for the consumer. Thats what youd have if you didnt have amazon, higher prices. Can i remind you that you are a dollar sign masquerading when i met you, i was a dollar sign represented as a man. Investors in the big three automakers say, yeah, maybe its time to take a pause on buybacks and give some of that back to labor. Look, i think i dont think management has been crazy. Theyve offered big increases. Its true that the union hasnt had big raises in a long time, but i thought President Biden would have been here is what i thought biden would do come in, lets get this thing worked out, have the unions get their way for some of this, but lets get people moving, people working again. That would have been what i thought the president would do no, the president is on the picket line. Youre very upset about this, i can tell. I am, because we have a chance for the gdp to get crushed by this. At an incredibly important moment of transition for these companies. About evs there is this guy named musk who employs a lot of factories, of course, opens them in other places outside the u. S. As well. Thats pretty good. Hes a huge winner in this. Worked out pretty well. Brought manufacturing back, remember it was going everywhere else he manufacturers all his own parts, too. Now some of his exports out of china get b probed by the eu on some subsidies. Are we going to keep the 27 tariff on the chinese . I asked secretary raimundo that from commerce . Its not clear if we get rid of that, the evs well buy chinese evs it will be so cheap. We cant let that happen. That wouldnt be good for the american consumer. Or for the Princess Bride thats the thing. It goes both ways. To your point, why not let everybody, jim, have a really cheap ev so what if its made in china . Wasnt that the argument, how we got here in the first place . Weve done well to have a manufacturing you wouldnt buy a chinese ev not in a million years. Would you be happy if they were readily available here tarifffree . I had new core on last week i dont trust chinese steel. Its in a lot of bridges, you better trust it, u. S. Bridges. I stood against that. How is ever grand doing . The chinese always under a veil of secrecy. Well talk to eunice about it later. Lets talk about the two different countries. When a ceo screws up in this country, are they detained no, given a golden parachute. I cant figure out where hes coming from. I have no idea myself at this point. The ceos are making too much money and should be put in jail. Ever grand, i dont know whether they should be detained. Is that good im going to give you a minute break to think about things im depressed by the market give me a chance here. Im depressed by the market. Have some introspection rest a little bit guys, ill explain the sirius liberty situation. Everything associated with sirius, with liberty is typically complex. Weve had this tracking stock, because hold 3. 2 billion shares of sirius. They have 327 million of the outstanding total outstanding shares of the tracker. So that works out to 9. 8 siri per lxsm theyre using a 1. 05 ratio here 1. 05 overall gets you to 10. 3 ratio. Thats what youre talking about f. Youre a siri holder, what are you getting . Youre going to get one share of the new company and 55 cents roughly in cash. Thats not as much as if youre a holder of the tracker. Its coming together here. Thats what the whole idea is. This spread has been enormous for the longest period of time the idea is to try to resolve it by creating just one company, one stock. Thats where they are. Its got to be approved. A special committee is going to have to approve it independent directors will be a part of that again, siri is coming down in part because of where the offer is, and then the tracker that you see right there in the form of lsxma and k, both moving up youre going to get, again 1. 05, 10. 3 ratio 2. 1 billion of debt gets you the 55 cents as well thats the cash payment i mentioned. And if you are lsxm, youre getting 1. 5 shares into know, i know. I failed to explain much of it to anybody its quite complex the overall thing is here, the trackers never tracked successfully the underlying, and theyre trying to resolve that well, sirius was always a play on used car sales this has nothing to do with the underlying fundamentals of sirius. Seems very expensive. It is, but it has weird moves. It got added to the index. You couldnt get shares, it got shorted. September the shaerz up even more sometimes deviate friday the underlying fundamentals. Well see if it gets approved. As we go to break, lets get a look at the bonds. As we said earlier, overnight, tenyear 456 has come back 48 billion in twoyear auctions. New homes in a few minutes bowman later tonight tenyear right around 4. 53 with the dow down 146 and all s p sectors red. Dont go away. Every day, businesses everywhere are asking is it possible . With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. 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You need more than technology. You need cdw. [phone you have arrived. ] so well implement cloud based microsoft modern Work Solutions like microsoft 365, teams and azure, so your teams can collaborate with zero trust security anywhere. [phone destination ahead. ] microsoft makes modern work possible. Cdw makes it powerful. Nice footwork. Man, youre lucky, watching live sports. Never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Time for jim and stop trading. Searching for positive research theres a note, fresh pick rivian talking about demand remains strong, margins improving, building a brand through growing showroom presence theyre using price targets of 21 one unbelievably positive note looking for an ev, lot of our viewers like ev, thats doing well, lets point to rivian. Very nice. Its a really good piece of research no one thing we didnt get to today was the under performance of apple one of the worst dow names despite some of the lead times, at least for the basic iphone 15. I dont get it. When i look at what i see, i see good demand, but it is a large cap stock falling prey to the 10year. Another casualty of the 10year for now. I dont see anything other than the watch band that people think coffee stains or something silly. How about tonight i have carrier, doing quite well because a lot of stimulus money and i have confluent which does well if you went to use ai. Im trying to play to the strengths of the market because i am a that are sign represented by man, but its im sorely what . Sorely tested. Tested. Yes. Our viewers could tell. Of course i mean. Costco to kick around tonight looking at consumer maybe getting share of higher income. I know david hates it because its in my trust how about that forward . How is that working out for you . You just just give me your this still works, by the way. It still works. Another couple days. This is where i double click you and get rid of you. Im aware of what that means. Yeah. Sorry to still talking. Im not protrump or probiden. Im pro the working person and the Company Getting together and everybody wins. Hes pro everyone working with the ceos. Theres enough money go around shareholders company. Union. I think President Biden made a decision. Jim, well see. Were about to on the cusp of losing 4300 here, the first time of the quaerrt well see you tonight. Dont go anywhere. Opportunity is using data to create a competitive advantage. Its raising capital to help companies change the world. Opportunity is making the dream of Home Ownership a reality. And driving the world forward to a Greener Energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. At ice, we connect people to opportunity. Good Tuesday Morning welcome to another hour of squawk on the street. Im sara eisen with Carl Quintanilla and david faber, we are live for you from President Biden post nine of the no Stock Exchange selloff mode head of a batch of data the s p down 0. 8 , giving back yesterdays gains. Keeping an eye on treasury yields and the dollar also at multimonth highs 30 minutes into the trading session. Three movers were watching starting with dominos. Oppenheimer raises its price target to 450. Saying dominos is quote an under appreciated revival story in 2024 baird reiterating its out perform rating on tesla, believing teslas is best positioned among its peers and a top pick of the year draft kings gets a boost after jpmorgan upgrades the stock from overweight to neutral raising the price target to 11 to 37 by 11. Stock up around 150 already year to date. Getting breaking news out of washington washington to eman javers. Jpmorgan has reached an agreement in principle to settle the Jeffrey Epstein predator litigation with the u. S. Virgin islands with a payout of 75 million that ends a bruising episode in which each side accused the other of enables Jeffrey Epsteins abuses and led to embarrassing disclosures of relationships of high ranking Bank Officials had with epstein including one former executive who frequented epsteins island. The wall street journal says the payments divided in 3 categories, social ills including fighting Human Trafficking and sex crimes, 25 million to enhance the infrastructure and Law Enforcement. In a statement jpmorgan says that settlement does not include an admission of liability, but the firm, quote, deeply regrets any association with this man and would never have continued doing business with him if it believed he was using the bank in any way to commit haze heinous crimes we dont have a statement from the usdi side of this. The settlement amount of 75 million matches the amount that Deutsche Bank paid this year to resolve a similar lawsuit that was brought by epstein victims separately, guys, importantly, jpmorgan also says it has reached an agreement with its former executive jeff staley to resolve jpmorgans claims against him. The terms of that agreement are confidential, so we dont know if staley is paying jpmorgan or what amounts that might be back over to you guys. Thank you very much thats our eman javers this morning. Confidence and some housing data lets get to Rick Santelli yes from the Conference Board september reads on Consumer Confidence expecting a number north of 105 disappointment here at 103 thats the weakest since may when it was at 102. 5 some revisions, good revisions from last month are going to help 106. 1 moves up to 108. 7. On a present situation, 147. 1. Thats the best since july keep in mind july wasnt that long ago we just had a lower read in between and last months lower read 144. 8 moves up to 146. 7 finally what lies ahead, may be the most important of all. 73. 7 thats the weakest since may as well now lets look at new home sales, shall we . New home sales 675,000 seasonally adjusted annualized unit, the weakest since march and that follows a 714,000 upgraded to 739,000 which still keeps it at the best since february of last year. Before we go to diana quickly, Richmond Fed Manufacturing breaks a record of 16 negative months in a row with a positive five business conditions, turns back negative at minus 5 which means 17, 18 of 19 are now in negative territory and for that, very close but still disappointing new home sales number diana is going to give us more granular detail. Diana . Rick, its about Mortgage Rates. These are signed contracts thats how new home sales are counted. Signed contracts in august and the 30year fix went over 7 and stayed there and thats whats hitting new home sales down 8. 7 month to month still up nearly 6 year over year note the median price was 430,000 that is down 2 year over year the builders are trying to lower prices to offset the higher Mortgage Rates and also buying down the Mortgage Rates as an incen fitch weve heard that from the Home Builders starting to do that again homes to a 7. 8 month supply up from 7. 3 month supply in july and that means that builders have more to sell which is better because, obviously, theres nothing for sale in the existing home market one number i love to look at, homes that have been sold but not started, that had been pulling back, but its actually rising now again the builders are up against all kinds of issues with labor and material delays and costs. Theyre saying its harder to build more homes high supply, but when you see that number start to go up you have to say okay, theyre selling a lot but not able to build them disappointing number for august all based on higher Mortgage Rates and affordability. Ill say today, that yesterday, the 30year fixed went over 7. 5 for the first time in more than 22 years sara, back to you. Follows the step up in treasuries thank you. Diana olick. Where does it all leave us we know that higher Mortgage Rates are starting to bite and the fact is that treasury yields are still rising were at the 16year high on yields maybe a little bit of relief today, but the long hand is what everyone is paying attention to. The 10 and 30year where we have seen this move up despite, you know, some mixed signals on the economy, i think we have to start with jamie dimon speaking to our colleagues in india jpmorgans chief saying hes still cautious about the outlook. Listen. Right now it feels good that fiscal stimulation was extraordinary, the monetary stimulus was phenomenal. Its a sugar high and thats a little bit going go away and we hope we have a soft landing, but other things are there, qt, ukraine, oil, gas, this winter, disruption in trade flows, so, you know, i think good leadership on the part of, you know, india, china, europe, could make sure the negatives dont happen i put myself in the cautious category. Sounds like hes cautious on the soft landing story which is the consensus in the market, not inconsistent from jamely mi but good to get an updated view. He has been, as you say, consistently cautious and that has been reflected to the risk jpmorgan has been willing to take the mini bank crisis known no one was talking about jpmorgans assets being long dated, for example. They were not. He also talks about geopolitics often. I mentioned this in a way others dont as being a significant risk brings it up a great deal. Yeah to your area i mean sort of this Macro Economic Inflection Point we may at in terms of the 10year its what people seem to be wondering. Rates going up to 7 . Look, ever since powell came out last week, its been a steady march higher on yields and the powell message was maybe still one more hike this year because we got that in the dots and the forecast and take out the cuts in the beginning of the year and expect fewer of them it feels like the market certainly heeded that call as far as the economy, though, its interesting that rates are marching higher among some weakening signals. For instance, what a jamie was talking about the sugar high fading everyone talking about the fed data on household savings, its come down for the low income all the ceos we talked to and consumers say the low income is feeling the pressure pantheon made it really clear to tell which is, the bottom percent of the income scale, 0 to 20, 20 to 40, look, theres the household savings. Theres the assets, right. All the way down back to prepandemic levels the top line is the top income. Top 20 . Correct. Only they still have savings. Right everybody else has less cash on hand than they did when the pandemic began weve been waiting for this moment this is not a surprise. Makes you wonder if Consumer Spending as a whole for the u. S. Economy is going to hold up given that headwind, given the fact that rates are higher diana reported on where plrz going. Weve talked a lot about credit card rates and personal loan rates all moving higher and the market is tightening off the back of the fed meeting in other ways now, one interesting thing might be to talk about is the deficit and the fact that were heading into a shutdown and whether thats starting to have an impact interestingly, this move up in rates is not happening with a huge adjustment in expectations for inflation or for Interest Rates. Were at 60 of another rate hike by the end of the year. Its not like its all due to that which does make you wonder if there are concerns about supply and about the fiscal outlook. The dollar has a few things going on, growth differential between us and other economies, obviously, risk off behavior has something to do with it, but 106. 2 overnight and thats remember when we were in the 114 range. Its going to be a headwind for earnings and headwind for the economy. Dollar i think following yields and also the fact that u. S. Is still looking better than the rest of the world. On this fiscal question, theres a question mark about what the dollar would do if there were worries about fiscal i think moodys a warning that a Government Shutdown while wont delay Interest Payments and wont affect things fundamentally, but it would be negative for the u. S. Debt rating because it would highlight the political issues that we deal with relative to other aaa rated nations. The dysfunction that has been cited previousry in downgrades or warnings from the rating agencies as well remember when s p downgraded us was during that time as well. And then fitch downgraded us again. This is not like the debt ceiling because were not going to default if we have a Government Shutdown but it does highlight we have an unsustainable fiscal burden. What are we running a deficit of gdp, 6. 5 . Those are recessionlike numbers. In response to you says thats not what she looks at, interest as a percent of gdp and that is still at 3 . Its lower, but its still its stale problem and i think you disagree with janet yellen. I will not disagree but investors i talk to are paying attention to the 6. 5 sghoop the denominator can change in a hurry. A lot of it is in the interest expense federal governments paying more because of higher Interest Rates, but its a headwind because it could put upward pressure on yields it makes it harder to stimulate if we go into recession. There are geopolitical consequences of it so people are talking about this. What about the shrinking of the Balance Sheet. Are we underestimating the impact that has . Jamie dimon continues to highlight this as a rugisk. As ive been saying, when the fed stops raising Interest Rates theres going to be tightening going on because of the shrinking of the Balance Sheet and that will be the test of whether that will be a headwind for stocks and the economy its still a massive Balance Sheet people are saying. The whole question of stock and flow its headed lower and thats an important signal, but were still at high levels. Yes do you know where we are were in the trillions. I dont know exactly. We started at 9. In the 8s. Watching paint dry. Thats all you need to know. I always say its a headwind for stock and where mike santoli argues with me. We lost 4300 for the First Time Since june. Other news that involves President Biden making his way to michigan will join autoworkers on the picket line phil lebeau has been live on the picket lines for over a week now and has the latest phil i think were going to be on the picket lines for some time to come. Let me bring you up to speed where things are in the negotiations between the uaw and three automakers with regards to ford, ford announcing late yesterday that it would be pausing work on a 3. 5 billion ev battery plant that is scheduled to be built west of here this is a plant that would employ 2500 workers, scheduled to fire up in 2026 ford now saying that its reassessing whether it can competitively run that plant competitively is the word that catches a lot of attention because shortly after ford made that announcement, the uaw issued a statement blasting fords decision not to continue work at the battery plant saying we are simply asking for a Just Transition to electric vehicles and ford is instead doubling down on their race to the bottom thats shawn fain, president of the uaw. Bottom line is this, that plant clearly has become a conp tensious issue between ford and the uaw. Also, when you take a look at some of the stock keep in mind in addition to ford, gm, theres Stellantis Stellantis yesterday putting out a statement saying hey, were negotiating, we want to reach a deal, but were not going to do it unless we can operate competitively on the cost front. Thats a big part of this for the big three. They have higher costs in terms of their line workers than ford awesome in the u. S. And higher than tesla with regard to the president s trip here, he is expected here in the detroit area basically wayne county, this is where hes expected shortly after noon. Whats unclear is exactly where he is going to go when he comes here the white house has said he will meet with strikers he will be joined by the uaw president shawn fain and voice support for those picketing. Whether or not he walks a picket line or meets with workers, that remains to be seen this is tightly controlled by the white house. Theyre not saying where he is going here, but its not hard to see all the cameras around here. There are plenty around and, obviously, the pool camera with the president as well. Well hear from him at some point early afternoon. They will be interesting, phil, the fact that hes there is a strong statement. I wonder if you know anything about the president and the administrations i guess strategy here . Because at what point i know he fights for the workers and puts unions above ll, but at what point is too much that we dont want to bankrupt our or at least hurt our American Automakers fuel and supply side inflation, hurt the overwhaul economy which is the flip side of the strike great point sara, i think theyre going for populace politics here if you want my honest opinion here look, there is public support for the uaw and the strikers here obviously, in michigan, a lot people feel like they should be making more than what has been offered by the automakers. If you are President Biden and you have said you are for organized labor you are for the working man, this is a chance to solidify that. Remember, donald trump will be here tomorrow night and while the uaw president shawn fain has not had kind words about donald trump, he also has not endorsed President Biden. So its unclear who really gets an advantage out of coming here to the detroit area. I will tell you this, guys, i hear this from people all the time, the rank and file r they all behind President Biden are they true democrats . Ive heard from members who believe in donald trump. This is into the clearcut democratic stronghold and the president is coming here and hes going to be cheered on. Theres a likelihood more than a few people wherever he goes who are donald Trump Supporters and who knows, maybe they will tell him that. Yeah. Of course, michigan itself is considered a socalled swing state, certainly when commit to the nat comes to the National Election the lebeau meter, on the negative side, late in the week where it appeared we had Real Progress made between ford and the uaw, how do you view that . Are we back to square one there or, you know, is there real improvement . I dont think were back to square one, but i think the battery plant, that is a huge stumbling block. They have to figure this out if the uaw, look, both sides are being coy about exactly where they are on this if the uaw is pushing for that battery plant to be under the ford master contract, im sure ford is saying, oh, no, we dont want it under the master contract a number of our other battery plants, joint ventures with a Korean Battery Company and we dont need this one to be under that thats the rub here, guys. I mean, we all know that these battery plants will employ fewer people for electric vehicles but whether or not those employees go under the master contract im sure thats at the heart of it bottom line, im not terribly optimistic we get a resolution any time soon. Finally, phil, ubs talks about the Plant Construction pause and they say its possible its not just with regard to the strike but maybe treasury guidance a house ways and Means Committee investigation looking at whether or not its trying to get around the ira and reduce dependence on chinese supply chains. Right they are licensing the technology from catl out of china. Its a wholly owned subsidiary but licensing the technology from catl which raises the question about this relationship thats what washington is asking questions with regards to the battery plant. Phil, thank you we will go to the president when he arrives there and hear from him live in the meantime phil lebeau, appreciate it, with the latest on the uaw strike. As we head to break our road map for the hour including a closer look at the health of housing following todays data real estate sector more than 10 off its 52week highs. Three stats you need to be watching in the market from here. Apples eddy cue will be taking the stand in the google antitrust trial. Tech on paces for another day of losses. One of the worst performing sectors for the quarter as the dow is down 300. Lowest level for the s p since june dont go away. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Got the housing data new home sales below estimates lowest since march with the real estate sector 10 off the 52week highs. Logan joins us this morning to react to the data. Logan, i mean, not pretty. Is this does this mean incentives can be ramped up further than they are . The builders will do what they can unlike the existing home sales market, monthly supply spiked for them they sell homes like selling a commodity. They will do what is needed but theres limits on how much they can pay down rates i think people forget that their Profit Margins are higher than in the previous decade, so they have wiggle room to allow this to continue. Higher rates never a good thing for the Housing Market and the 10year yields keeps rising will play its hand over the next few months. Are you modeling in any relief on rates at this point . If jobless claims tick up higher thats what im looking at jobless claims are almost under 200,000 again. The fed is frustrated they havent been able to create more labor supply even though they might talk like theyre happy with the recent data the one thing that can do it, construction employment might be easier for them to target than the service workers. Theyre trying to target prices, which have remained elevated i thought it was a surprise what we got from caseshiller on home prices its back to july, but an upside surprise is not what you want to see. You know, rent inflation is the core cpi index theyre happy with rent inflation slowing down home prices are a function of supply, more than demand right now. Again, 21st century lows in demand, but active inventory is near alltime lows thats the only reason caseshiller index is back to alltime highs not muchthe Federal Reserve ca do about this since the majority of loans in america are fixed longterm debt. What do we do about the inventory problem . Is that going to selfcorrect . Unfortunately, right now, probably the only thing that can create supply faster is a job loss recession in the back of the feds mind if that occurs, maybe they could alleviate the pricing pressure the growth rate of home prices are slow now, so i dont think its to their interest publicly say that, but inventory year over year is negative, new listings data is negative. The price cut percentages last year currently this year were 4 below that this is a supply story were dealing with better home buyer profile right now with home sales near 4 million. Not much they can do to noov unless they create a job loss recession which will create forced equity sellers this time around the foreclosure story is 9 to 18 months away from the first few months that we lose jobs thats not going to help them any time soon. But the discount in prices or i should say the closing of that discount being less than last year thats a function of not enough homes being sold . Not enough homes and stable demand i think last year we had the biggest oneyear home sale crash ever now were kind of hovering around 4 million its a different marketplace, but we keep it simple. New listings data has been trending at alltime lows for 13 months now on the Positive Side homeowners are doing good on the negative side inventory hasnt been able to grow near the four decade average weve seen in america. Weve had realtors come on and they have an agenda of their own but argue that at least supply is not getting worse. Well, supply getting worse to me is supply going lower supply getting better, you know, to me is the growth rate of inventory rising for more choices. I think the housing industry is so bent on making sure that this isnt 2008, that they forget a lot of the forced bidding in 2020, 2021 and 2022 didnt help them because home prices accelerated. If you list your homes, the majority of times youre qualified to buy a home. With affordability at alltime lows people cant list because they cant afford. This is a difficult problem to solve in the Current Situation and to me, a job loss recession creates forced equity sellers. Outside of that were dealing with the tug of war in the Housing Market between sellers and buyers one last thing, diana olick asked a good question about adjustable rate demand i just wonder if youre seeing that and if not, maybe thats a signal that consumers dont believe there will be meaningful leaf in the years ahead. Adjustable rates loans are not what they used to be the demand you might see is a small increase on a year over year basis that story ended after 2010. Were never going to see a growth in adjustable loans the qualification process is different and its not the loans that we saw from 1996 to 2005. So to me, its just a traditional 30year fixed, were working off the 10year yield. Thats the story for housing. Hot stove has been touched before logan, thanks. Appreciate the help today. See you soon speaking of housing, next hour we continue the conversation with the ceo of Real Estate Firm redfin. Thats coming up at 11 00 a. M. As we head to break, watch shares of fisker the ev maker planning to ramp up deliveries bank of america ran the stock with a buy saying it has a lower risk business model. Shares rolling 14. 5 this is a 30 ocstk back in 2021 well be right back. Welcome back to squawk on the street. Take a look at stocks were pulling back today more than a percent now on the s p 500. Nasdaq is getting hit a little more than that as well were negative on the week if you look at the breakdown by sector there in the s p, everybody is weaker right now. The hardest hcommunication services, technology and utilities are getting slammed. More than 1 decline in real estate financials are getting hit whats holding up the best, health care and energy. Speaking of health care, its going to be one sector well keep a close eye on when the Fourth Quarter begins a few days from now it is under performing the s p by the widest margin since 1999. Angela has more on that for us david, Health Care Stocks are taking a beating this year the S P Health Care sector is down 4 this year which is on pace for its worst year since 2016 meanwhile, the broader s p 500 is up 13 . Thats the widest margin since 1999 and its surprising because health care is normally seen as a safe bet during times of Economic Uncertainty because people need health care no matter whats going on in the broader economy. Pharmaceutical companies are under pressure from washington theres a new drug price law and also the looming election season isnt helping because politicians love to beat up on pharmaceutical companies meanwhile, smaller Biotech Companies are spending less because their stocks are under pressure and thats bad news for Service Providers like dana her and alumna, but its not all bad. Companies developing obesity drugs are seeing a big gain this year take eli lilly, the Company Stock up 50 this year ahead of the expected approval of its obesity drug carl the sea change in the business and markets, obviously, trying to get its arms around it like with ai great to have you on the beat. Thank you. Still to come, a second apple executive set to testify in the google antitrust trial. The latest on that when we return in a montme every day, businesses everywhere are asking is it possible . With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Welcome back im Kristina Partsinevelos with your cnbc news update at this hour the Supreme Court rejected alabamas latest attempt to approve a redrawn congressional map that includes only one majority black district. The high court refused two emergency requests from state officials to block Lower Court Rulings that invalidated the map. The Supreme Court sent the state back to the drawing board in june because of discriminating against black voters. The u. S. Focusing in on clean energy the Biden Administration hoping to create a commercial Nuclear Fusion plant within ten years according to Energy Secretary Jennifer Granholm and says the facility would produce the Carbon Free Energy source to power homes and businesses californias governor signed a bill to ban School Boards from rejecting Library Books or textbooks that cover race or lbgtq plusp topics any school that defies the law could face state fines the matter took effect immediately after the governor signed it yesterday. Back to you. Thank you mega cap under pressure as the nasdaq drops more than 1 . Today apple as eddy cue is testifying in the doj antitrust trial against google over its search dominance steve joins us with more. Sara, apples eddy cue took the stand minutes ago to testify in the governments antitrust case against google. Why is eddy cue at a google trial. Hes in charge of services at apple that includes the app store, apple tv plus, apple music and the billions a year apple collects from google to keep Google Search the default on iphones and other apple gadgets. Thats the key to the governments case against google alleging google uses its deep pockets to Pay Companies like apple, samsung and more, to be the default Search Engine squeezing out smaller competitors. Im told by sources familiar with cues expected testimony he plans to defend the arrangement with google saying, for example, he believes google is the best Search Engine an users have the option to switch their default to something else. Hell say apple doesnt make its Search Engine because googles is there and again, considered the best, and apple doesnt feel the need to allocate resources to building a Search Engine. For perspective on why cue would defend the arrangement the Google Payments go towards Apples Services revenue segment and according it analysts at Bernstein Google will pay apple about 19 billion this fiscal year or about a quarter of all expected Services Revenue. Now so far according to cnbc. Coms lauren finer who is in the court right now, cue testifying about the search agreement with google and how he was the lead negotiator for apple and hammered out the door with Sundar Pichai and how apple shares ad revenue with google based on searches that happen on apple devices. This is part of the testimony and were expecting some of it to be closed but right now this is what were getting out of eddy cue. Will he be treated as a hostile witness in some way by the prosecution . I mean, i would assume theyll ask him tough questions given he is used here in googles defense. Exactly he basically has to he defend the decision not to go inhouse with a Search Engine weve seen apple do this before. There used to be google maps built into the iphone until apple decided to do it instead of paying google for the licensing. The money the other end and its interesting up to a quarter of the Services Revenue thats eddy cues business, quarter of his business is at threat if google loses this case. Were back to the game that street was playing earlier in the summer when microsoft chatgpt really hit the street and people wondered whether or not there could be a shift in that deal . Yeah. Thats a little different, though, than what were seeing here there is some rumblings i remember that oh, chatgpt is going to super power bing and these search deals will get blown up a headline samsung was reconsidering its deal with google despite what microsoft said they could gain market share because of chatgpt built into bing has not happened some months big actually lost a little bit of market share so its less of a factor in here now, carl. Thank you technology broadly speaking has been amongst the worst performers, second worst, this quarter, as yields are jumping to new highs our next guest sees many of the favorite tech names as uninvestable, at least until we exhaust the selling in the correction that seems to have begun in july. Independent solutions wealth Portfolio Manager paul meeks joins us now give me your broad take on the market with rates moving to highs we havent seen on the 10year in some time does that simply mean that apple, alphabet, meta of the world will tread water if not go down i think you just hit the nail on the head. We had a huge rally in 2023 with some of the mega tech names, and i think too many people thought it was driven only by ai maybe it was 20 the ai theme, how important that will be in the future, but 80 exactly what you said remember at the beginning of this year, the consensus view were going to have a recession this year and that would leave to a pivot in rates. Forward december 31, 2023, we might be able to stir through 2024 without a recession and we will have a pivot next year but more subdued and pushed later in the year and these tech stocks and other aggressive stocks really crave low and falling rates. Of course that thesis has been pushed out quite a bit so youve had stocks like nvidia, fundamental sterling, but up triple to the first half of this year of course theyre going to continue to consolidate. They might drop further. I think the fundamentals of some select names are great and its not a fundamental issue. Its just take a look at the price chart and see where they settle an then get ready to buy them. You mentioned ai and we looked at all of your top picks but the top fives nvidia, microsoft, amazon, amd are in the sweet spot how important is that . How much of a growth driver will that be . Why are these your top picks nvidia, for example, is probably the only mega cap tech name seeing a true benefit theyre powering the learning of the large language models. What we saw in the ai theme over the last couple months, everybody talked about it early in 2023, unfortunately for most companies, unless training the models and get into an inference after, that ai is going to be further down the road. I do think its going to be a big deal you leaned with amd and leaned with nvidia, the chips powering the models i think the other players, the microsoft, the amazon, the google, will be beneficiaries with a little bit of a lag. What about the fundamental question of regulatory action and charges from the government . We heard from steve on apple amazon facing a decision are you not worried . Those are in your top picks. Apple is not. I think apple is unfortunately too slow growth to peek my interest if youre a tech investor you have to have a core position of apple but trade around it. Im underweight now. Amazon i worry even though the ftc charges will be brought, it will be a splash in the headlines, thats coming soon. Thats well telegraphed. I probably would hold off on amazon and at least wait until they clear through that ftc announcement pipeline. But man, i like what they did last quarter i like the fact that theyll probably see a reaccelerate growth at aws which is their profit driver. Even with all the cost cutting in the last year, they will see resurgence in profitability in their ecommerce business. Very much like amazon, after we get through the government announcement, not an apple fan right now. Finally, paul, youre old enough to remember, of course, the advent of the internet or the excitement around it in mid to late 90s and stock prices during that period how do you view ai in terms of this revolution versus that one . Unfortunately, theyre early similar. I remember i used to run the largest tech fund on the planet and when companies uttered the words dotcom, even if they were not tech companies, their stock skyrocketed. We saw a little bit of that earlier this year, but what happened, we reported the secondquarter results and begin to report Third Quarter results in a few weeks see companies that probably give up the ghost a little bit because they talked about ai, but it didnt show exnvidia in their Financial Model yet. They are similar and why i was a little bit worried and reticent to jump on the bandwagon as the stocks were flying higher flerl 2023. Always appreciate it. Thank you. Wbest wishes. Back to eman. Were getting new information. Statement on jpmorgans 75 million settlement in the Jeffrey Epstein case from the u. S. Jury Virgin Islands attorney general jpmorgan has agreed to implement and maintain antitrafficking measures to help prevent Human Trafficking in the future. This settlement is a victory for survive he was and for state enforcement and should sound the alarm on wall street about banks responsibilities under the law to detect and prevent Human Trafficking. The u. S. Virgin islands say the commitments jpmorgan has agreed to include informing Law Enforcement when customers are identified involved in Human Trafficking, terminating customer accounts if jpmorgan has credible information it is engaged in trafficking activity. Identifying and escalating clients associated with force ord child labor trafficking or slavery and the settlement will create a 10 million fund to provide Mental Health services for Jeffrey Epstein survivors. Want to clarify because i spoke to jpmorgan who says these commitments that were outlined in the press release are previous and ongoing efforts and these processes are not new. They were ongoing already. Theres dispute about the specific new elements in the settlement today from both sides and you get a sense that theyre talking past each other a little bit as they release the dueling press releases. Eman javers in d. C. This morning. A break here with near 1 declines on the nasdaq, russell 1,000 and s p. Dont go away. 202 pounds on golo. ve lost i was 424 pounds and my doctor was recommending weight loss surgery. So i decided to go with golo and its changed my life. 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. Dow is down 250. Join us from the delivering alpha investor summit thursday in new york city we convene Industry Leaders to provide insight, ideas, analysis to balance risk with maximized returns and scan the qr code on the screen or visit cnbcevents. Com delivering alpha. Squawk on the street will be right back welcome back to squawk on the street. Selloff mode this morning with the s p down a percent the nasdaq down a little more than that with the hardest hit of the market. Our next guest has been calling for a correction for a on it while now. Sees a buying opportunity near 4200 not quite there yet. Evercores isi Julian Emanuel has a yearend s p target of 4450 joining us at post 9 youve been expecting this pullback not surprising. If you look at the last year and a half since the alltime highs in january, every time rates got too high, the market is starting to sell off. When you think about where we were in terms of returns on the s p 500 and on the nasdaq, which is much more sensitive to rising rates, this is a normal correction how much more does it have to go it does feel like a little bit of a delayed reaction that the equity market is having to the bond market. It definitely is. When you think about sort of the psychology around a. I. Thats been permeating the majority of the last six months and how easily the market rebounded off the Silicon Valley bank bottom, even as rates started rising, that tells you theres some buying, there is more legs but for us, again, this is part of the rebuilding of the wall of worry that as long as the labor market stays strong, we think this will be a buyable correction. Are you on the lookout for falling yields and falling stocks that is one of our sort of flags where if we do get a turndown in yields and we think yields on the tenyear go back towards 4 and stocks dont respond positively, that will be a change in the narrative that as strong as the Economic Data is right now, the concern will shift to a potential recession we dont see it yet. We will be watching that very carefully. But in that case would you want to buy the big tech stocks or is it too soon to even talk about that its really too soon. Again, part of the thesis here is that if you think about it, actually, if you talk to institutional investors, there are core people that hold these names, but a lot have been underweighted. The public, however, is overweight those stocks. Has been overweight those stocks for 20 years continues to be. If the public doesnt lose his or her job, those stocks are a buy. But we got three months left in the year. You have a target now percentage wise is a decent move higher whats going to get us there so, seasonality, as crazy as it may sound, why does the market go down every september maybe because we have to put our suits and ties back on but it works the other day as well october bottoms lead to Fourth Quarter rallies. Lo and behold, lets get an upside surprise and our government figures out how to stay open in the next 30 to 60 hours do you think some of this decline is due to the worries about a Government Shutdown . Look, we heard theres a potential downgrade in the works here yields going higher. Its all part of the calculus. Were reading more about dealer gamma, risk parity. Is Market Structure okay or are you worried about that Market Structure is okay. Its different and actually whats happened is that zero date expiration options because youre closing out your position at the end of every day, has actually kept volatility more subdued than it otherwise might have been. And that will be actually, if anything, a risk mitigating factor as the buy spot opens up. I did notice tesla and nvidia have gone positive on the session. Does that tell you anything . They are leaders. If you look, they will tell you theyre near numbers if they go down another 5 or so, the psychology changes, the psychology is holding. We like that. Julian, thank you very much for giving us a quick snapshot of your view Julian Emanuel, isi. The nasdaq and s p down about a full percentage point. Well have more on the broader markets right after this many Holocaust Survivors are impoverished and suffering today in their final years. At this Holocaust Museum in israel, you see the names; the faces, of jews that were brutally murdered. This great cloud of witnesses cries out to us comfort, comfort my people. Were in a race against time to reach every holocaust survivor in israel and the former soviet union. Many are poor and hungry and they have nowhere to turn. Naroj has had such a hard life from the day that she was born into the holocaust. We were so hungry that we would go with my mother and find the leaves and grass nd we would pick them up and eat it. Still today, shes suffering with no one there to help her. Dare we turn our back on her now . For 25 you can rush a food box to a holocaust survivor or an elderly jew. The International Fellowship of christians and jews brings them urgently needed food and comfort in their final years. Lets do what we know god has called us to do. Call the number on your screen now and help save jewish lives. No Organization Helps Holocaust Survivors and the elderly jewish people as much as they do. Valeria is saying that, she didnt receive love her whole life. You seem so full of love, and not of hate. Just 25 helps to rush a food box to a holocaust survivor. I hope youll join me at the International Fellowship of christians and jews. We can do something to relieve their suffering. Please, do something now. Good Tuesday Morning im Carl Quintanilla with sara eisen on the floor of the New York Stock Exchange. Coming up, a blindfolded fed the economics of a Government Shutdown and its impact on policy. Plus, risk for retailers new data and a new call highlighting bearish activity from the street today. Mortgage rates at a two decade high now. Red fins glenn kelman will join us to talk about housing. Topping the tape this morning, no tech support amid higher rates thats what barclays is looking at this morning. They say bonds are fairly priced, equities have not adjusted enough to the rise in yields lets bring in senior commentator, mike santoli. This is what weve been talking about all morning, another step up in rates and equities have a delayed reaction. Agitated for sure once we got the breakout in yields