Transcripts For CNBC Squawk 20240704

Last week. Overnight, in asia, japans nikkei topped 40,000 for the first time. Stronger corporate earnings and surge of chip stocks with Artificial Intelligence playing things up. The nikkei above 40,000. If you look back here in the United States, the treasury markets show yields are higher. Tenyear yielding 4. 2 . The price of bitcoin has been impossible to stop lately. You will see it is up another 3. 7 . Above 65,000. It will be a new high. Theoretically. We are watching crude prices inching up toward 80. The high end of the range. 79. 68. Opec plus countries delaying production. That means 2. 2 Million Barrels per day of cuts planned for the First Quarter of the year will continue into the next quarter. We will talk more about this and the implications with helima croft in the 8 00 hour. Congressional leaders released the details of the first six budget bills to keep the government funded. Democrats secured full funding of the special Food Assistance program for women, infants and children as well as rent assistance and pay for infrastructure to pay air Traffic Controllers and railway insp inspectors. Republicans have funding cuts to several agencies, including the federal Aviation Administration and bureau of alcohol, tobacco and firearms and explosives. The funding package heads to the house for a vote where it will face opposition from the house ca caucus and it will require additional bills to pass. Former South Carolina governor nikki haley won the first gop nominating contest yesterday. Nbc news projects she won t district of columbia primary. Trump responded calling haley queen of the swamp. Super tuesday primary is not. Here is what haley said on meet the press. I always said this needs to be competitive. As long as we are competitive and as long as we are showing there is a place for us, im going to continue to fight. Thats always the case. 15 states and one territory will vote for the nominee in tomorrows primaries. It is super tuesday. We will see after that. If she goes 015 tomorrow, could you still claim you are competitive . The part of the interview says as long as they gets donations coming in. If anyone continues. She doesnt win any . I havent looked at the polls. D. C. Is a unique place. It is. Separately, a new poll by the new york sometimes found the majority of president bidens voters say he is too old to be effective. That cuts across generations and gender and race and education. 15 of trumps 2020 voters say he is too old to be effective at this point. The Supreme Court and we talked about this announcement yesterday. It would issue one decision today which is being seen as a signal it will rule on former President Trumps colorado ballot. The opinion or opinions would be posted online at 10 00 a. M. Eastern. The court would not take the bench. The Colorado Republican Party asked the court to act before the primary tomorrow. The decision is expected to apply to the other states where trumps eligibility to run has been challenged. No matter what, you will hear the same type of stuff. People want it to be 90 from one side so you cant make the claim it is partisan. Either way, you will hear that the court is stacked with conservative judges need to expand it. There will be outrage if they even if it it is 90. 81 or 72, less so. Either way, you will hear it. For people worried about democracy, if were you to really let a local judge decide on a National Election of who people are allowed to vote on, that is strange for people to advocate they want democracy. Before a case has been presented. What do you mean . Before he was convicted of insurrection. Right. Whether that would happen or not. We did have an impeachment based on that. Shares of macys are jumping after arkhouse raised the offer to buy the Department Store chain. Macys rejected the prior offers which were too low. The previous offer of 21 per share is increased to 24 a share. It is significantly higher than where the stock is now. Shares of li auto are falling. The maker of the plugin hybrid vehicles launched the full electric model on friday of a price of 78,000. The Company Also Announced it delivered 20,000 vehicles in february. Up 22 from a year earlier, but far below the january numbers. The stock has been on a tear in the last nine sessions before todays drop as you see on that chart. Right now, ill look up and see what one of these things looks like. No idea. You look that up. I will talk about what happened over the weekend. A big weekend at the box office. Dune part 2 brought in 81 million. That was the highest releases for this year. 21 of the ticket sales were for imax screenings. It wasnt higher because they ran out of seats and could not sell more. Did you find it . I did. I dont want one. I have no did you look it up . Im looking. Generic looking suv ive ever seen. No. No. I want the new tesla roadster, if it ever comes out. Another broken record. Caitlin clark is now the Ncaa Division i alltime leading scorer. She needed 18 fopoints to break the record and did it before halftime on a free throw based on a technical foul. Shes cool. They interviewed her at halftime. They said what do you think about this . You passed pistol pete maravichs record. A record that stood nearly 50 years. She finished the game with 35 points. At halftime, she said we can do better in the second half. We missed defense. You know, we have to clean things up in the second half. Totally talking about defeating ohio state. She hoped she would be remembered for more than this. The joy of the game and how much fun she has with the team. She is like ice. Its awesome to watch. Well be able to watch her turn pro. Coming up, Bitcoin Trading above 65. It has been above and below. We were just talking about a potential catalyst heading into next months halving. It is like a reckoning or the rapture. A lot tied to this when it had this thing happen. Later, elon musks biographer Walter Isaacson will join us. Squawk box will be right back. Announcer this cnbc program is sponsored by baird. Visit bairddifference. Com. Redib. Lets check it out. Says here it gets plenty of light. And this must be the ocean view . Of aruba . Huh. This listing is misleading. Well, when at t says we give businesses get our best deal, on the iphone 15 pro made with titanium. We mean it. Amazing. All my agents want it. Says here. inviting pool. Come on over too inviting. Only at t gives businesses our best deals on any iphone. Get iphone 15 pro on us. fresh, warm hot dogs when im not selling hot dogs, i invest in a fund that advances innovations like robotics. Fresh, warm hot dogs, straight out of my torso one for you, one for you. Oh, youre a messy one. Cool, right . So cool. Anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. Hot dogs fresh, warm hot dogs before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. Is it possible to count on my Internet Fund like my customersives, riskscount on me . Xpenses it is with comcast business. Keeping you up and running with our 99. 9 network reliability. And security that helps outsmart threats to your data. Moaire dida twoo . Your data, too. Theres even roundtheclock customer support. So you can be there for your customers. With comcast business, reliability isnt just possible. Its happening. Get started for 49 a month. Plus, ask how to get up to a 800 prepaid card with a qualifying internet package. Dont wait, call and switch today bitcoin topping of 65,000 this morning. It had its best monthly performance since 2020. Other cryptos like ethereum and solana also saw gains. Joining us now is saveeta gupta. Are you following the other ones . Absolutely. It is a simple thing. It was bitcoin and then everything else. The nickname is sh coin. Some of the others are real and they have blockchain characteristics with utilitarian uses in the future . Bitcoin has always been as we have talked in the past about the currency with the storage value. It has always now been coming with Technology Beyond settlement. Ethereum is looking really, really great with the decentralization and etf which is a lot of expectations about to happen. When you talk about solana changing technology and the big drop prices are down to 16. It was also because of the s. E. C. Naming solana a bunch of tokens as security without proof. We are seeing the Technology Come back. We have to bone up on this stuff, becky. It looks like it is here to stay. People are waiting for ethereum etf. That is just a matter of time. It does look like it is a matter of time. It depends on how the s. E. C. Takes it. In the past, even for bitcoin etf, they took their time and when the commissioner announced, s. E. C. Commissioner announced the etf was here, it was past the code. With ethereum, it will be super easy or more difficult. The commissioners have very, very contrarian views about whether it is a security or a utility. The Bank Commissioner saying it is a utility. Currently, they have not taken a great stand about it. The expectations and the numbers have been baked in. If you look at the jump in the last two months, you can see each etf expectations which has been launched, the defi with 8 billion on new criticals is something we are not talking about. It has, i think, been under appreciated. You see ethereum as bitcoin . I see it as an infrastructure. A lot of microsoft or oracle was. Bitcoin is more of a currency. Technology is getting there, but it will take time with respect to technology to get there. The Technology Tokens have not seen the rallies there. At the end of the year, we will see the rally in the Technology Tokens with ethereum or anything that will push the adoption of anyone holding the efts needs custody and way of settlement and transacting these things with the basic utilization. You said maybe it is the etf which may already be in ethereum. How much of the halving of bitcoin is reflected in the 65,000 . When is it happening . End of april. Okay. How much of the gains are reflected . I think two factors. One is the bitcoin halving expectation and it will be difficult to have more new supply of bitcoin. Secondly, the bitcoin etfs are getting buyers. We saw prices going down a little bit, but more money is coming in with more people buying in. I expect a liquidity or a dip after the halving because the expectations are built in. In the 40s . Yes, that is possible. Mid40s. I dont see it going back to 20s any time soon. I do expect the end of the year or early next year with a huge jump not only for bitcoin, but the return more into the Technology Tokens. The technology has built up so much on all these platforms with real users and adoptions. We have tried to figure out Gary Genslers story. He taught at m. I. T. He understands. Why do you think he has been so i dont know, when you are in charge. S. E charge of the s. E. C. , you want to do no harm. Worry about fraud. We made that point. He made the point about something else. He said you will throw that out . That doesnt really hold up. My question is there could be a Different Administration by next year. Would a different s. E. C. Be bullish . I feel there is a different s. E. C. Irrespective of the administration. Finally, we had a biden official on twitter indicate the bitcoin. The bitcoin was 64k plus. At the same time, trump has been focal about adoption of crypto. He has his own nft. It is difficult for him to come to the administration and go back on those things. I feel it will be needed by most of the young people in school and colleges are part of the retail customer and also you have the full wall street which has now billion dollars going to trillion in the space. I feel that is what will be a huge demand, not only from the young voters, but the wall street. Thanks for being here early this morning. Kavita, we needed that with the events of the past couple days. Im surprised it was only 50 this year. I did not realize bitcoin was in the mid40s at the end of the year. Other people were arguing about it. Are you a bitcoin believer . You have seen my comments. Did you see my 2019 comments . No. Im show you. Okay. In fact, if you search kernen and maximalist, it comes up from 2019. Im not new. People think i am. They cant believe a boomer believes in bitcoin. What are you going to do . Great. It is always good to have amazing people like you on our side. Ill show you. Well go to break and ill show you my article. When we come back, new data on backing for womenled startups. Thats next. Later, we will talk to media analyst rich greenfield of the success of dune part 2 at the box office ts hiweekend. Squawk box will be right back. 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 ontario has all the partners you need to make the electric vehicle of the future. With one of north americas largest i. T. Clusters. 65,000 stem graduates per year. And all the Critical Minerals to make electric vehicle batteries. Ontario. Your innovation partner. Theyre waiting for you. Hey, do you have a second . Theyre all expecting more. More efficiency. More benefits. More growth. When you realize you can give your people everything, and more. Thank you very much. [applause] ask, now what . Heres what. You go with prudential to protect, empower and grow. With everything you need to deliver, you guessed it. More. One more thing. Whos your rock . Learn more at prudential. Com right now is time for the look at women funding womenled businesses. In 2023, women businesses g garnered 2 of the startups in the United States according to pitch book. That number doesnt tell the whole story. Sharon epperson has more on that. Good morning, becky. A small fraction of the total pool, but funding has been trending up. It has been helped by funds and incubators for female founders and more companies. The emergency physician developed a device to stop nose bleeds. Each can be used for one episode. Her start up, nasa clip has raised 3 million in funding. Mostly from female investors. When women invest in women, they bring to the table more than capital. They are introducing the social network. When we met her last year, nasa clip wasnt on the market. Now the product is for sale and bringing in revenue. I dont think i would have actually got off the ground at all if i had not been believed in early on by my fellow female investors. One of the backers is portfolia with investments in over 140 companies. It is all about putting our money behind the companies that will enhance our lives and provide returns. The platform creates and aimed at women investors. We have 25 trillion of wealth in the u. S. Were approaching 50 of all weth being owned by women in the u. S. Today. That wealth is power if they use it. Investors in portfolia funds must be accredited with 200,000 a year in income or 100 million of net worth minus a home. Each fund invests in 10 to 12 companies. We let them dip their toe in and give it a try and see what Venture Investing is about. Investors have a stake in startups with the potential to generate value not just in dollars, but in womens lives. Major corporations pledging to back under represented groups have helped drive the increase in money going to women. For more on women funding women and women investing in women, sc join me tomorrow at 1 00 p. M. For the women in wealth sum the summit. Becky. Sharon, which companies have made a difference for funding for women . Where can female entrepreneurs find funding . There are corporations and Services Firms now looking to back womenled funds. One is bank of america. They pledged in 2020 of 200 million that they will put to womenled and minorityled firms. They have given 500 million in equity investment. There are a number of companies raising funds. There are a lot of places women can go to look for money. Angel investors and other Capital Investment funds. Sharon, thank you. Coming up, its jobs week. We will get you ready for the friday jobs report and other issues to watch for the week. As we head to break, check out the shares of doordash. Also highlighting the potential for the companies to Work Together in some kind of Loyalty Partnership against the common competitor. I dont know who they mean. The analyst does not expect a merger. Squawk box will be right back. [sfx wind, rain and rolling thunder] nobodys born with grit. British announcer rose is really struggling. Its something you build over time. American announcer thats 21 missed cuts in a row. [car trunk slammed shut] for 88 years, Morgan Stanley has offered clients determination and forward thinking to create the future. Crowd stop it . Only you can see. American announcer rose, back in the winners circle. [crowd cheers] [music out] wall street forecasts over 100 billion in sales for antiobesity drugs known as glp 1. But these treatments are largely administrated through cumbersome injections. Enter Lexaria Bioscience with their patented oral delivery technology. Early studies were glp1 suggest reduced side effects and better blood sugar control with reduced spikes. Lexaria bioscience. Transforming the future of glp1 drug delivery. Good morning. Welcome back to squawk box. Were live from the Nasdaq Market site in times square. Things are moving slowly so far for monday morning. Dow futures indicated off 90. S p futures down 7. Nasdaq down 16. Fed chair jay powell set to testify on the hill this week with the all important jobs reports on friday. That could impact the direction of the markets, all of them. For more on that, lets bring in Dana Peterson andcovering the equity angle is nate tuftt. Manager of the Solutions Team at an nanulife. Nate, have you ever not had time to explain it . Has anyone gotten it right the first try . Never gotten it right the first try. Good job today. A darn good job. Thooft. It is tuft. I cant imagine growing up and god bless you. Lets start with dana. Is it possible the conjecture of some hawks, no cuts . Anything is possible, but it is not the base case. We believe inflation will slow. We look at the year on year inflation rates for the pci and pc deflator is slowing on the year on year basis. You cannot just look at the yearend readings. These inflation gauges will descend upon 2 . Once they feel comfortable about that, they will cut rates. They will start to do that the middle of the year, we believe. Dana, we suddenly thought you could have good growth in the economy and it is not necessarily inflationary, why wont you get as much output as you could, plus, it never hurts during an Election Year to have the wind at your back and if you want to get reappointed and everything else. I can see what you are saying. If inflation doesnt come down, i cant imagine they would cut. First of all, the fed is not concerned about elections. They are focused on monetdetary policy. The thing is inflation is slowing. So, thats something that the fed needs to continue to see. When we look at the economy, the data have been mixed to start the year. Consumer spending was pretty weak and also incomes and after tax incomes in real terms are slower. The thing is we may continue to see this weakness. We think the u. S. Economy will probably slow to a growth rate between 0 to 1 in the second and Third Quarter and that will give the fed i ammpetus to cut rates. Nate, you believe the path of least resistance is the continuing upward move in equities . We do. They think there is a potential for broadening of breadth. We see small caps and em world and some sectors that did not do well last year are seeing a broadening of participation in the market. A lot of that is the broadening of the earnings profile as well. Last year, we had narrow markets driven by a. I. And tech driven. This year, we are starting to see Earnings Growth coming from other areas and broader participation. We think that will continue throughout the course of 2024. That would certainly help in terms of broadening out. Is that dependent on the economy staying strong, nate . Is there anything that you see at this point that shows theres cracks in that narrative that the economy will stay strong . Now were not expecting a recession. That is when you usually get one. Theres areas we see a bit of concern particularly with the potential for job weakness. Job data is really strong, but there is underlining things with intention to fire or higre. Our best case is the economy will hold up well and you have an environment that is pretty good for yeequities. That is predicated that we believe p inflinflation is comin in time. If that happens, the fed is likely to cut. 75 or 1 during the year which will help keep the narrative alive over the broadening of the equity markets. Speaking ofparticipation, dana, back to your purview, what will allow inflation to come down given the job market is still so tight . Unemployment is so low. Could you see Participation Rate start going up . Is is still too low . How do people going back to the office and fourday workweeks it doesnt seem like were back to maximum not maximum employment, but there are still arguments where i want to stay home and work three days a week. It seems there is slack left in labor. Well, we think about the Participation Rate, it is still below the 2019 level. When you break it up into two pieces, you have the people who are 15 to 64, the Labor Force Participation has recovered. People over 65 dropped out of the labor force during the pandemic and have not returned. Many are baby boomers and they are going to be retiring. I dont see much slack in the labor market. It is a tight labor market because of the labor shortages. What we think about what is driving inflation, housing prices and rents are slowing. That is showing up in the inflation gauge. That is a downward pressure. An upward pressure are wages with the labor shortages in certain sectors of the economy. All right. We will go on. Nate, is it too late for me to buy nvidia . I thinkthere are parts of the market that are effective. A name like nvidia with earnings which have kept up as much as valuation. Valuations are not higher. They have Phenomenal Growth with the semiconductor areas and it more than a valuation story. Im not saying the entire sector of the a. I. Story, but there is speculation there. When you look at the broader markets, there are a lot of areas which have not achieved. We believe that despite the commentary around things getting frothy and speculative, the overall market has recently hit record highs. Typically the market goes above the former highs with the secular bull market. We think there is room to go in the base case for higher highs across the major indices. Okay. Thank you, nate thooft at manulife. When we come back, china kicks off the parliament eiary meetings this week. We will take you live to beijing. You can get the best of squawk pod on your favorite podcast app and listen any time. Well be right back. Why choose a sleep number smart bed . Can i make my side softer . I like my side firmer. Sleep number does that. The queen sleep number c4 smart bed is only 1,599, save 300. Shop now at sleepnumber. Com businesses go further with 5g solutions. Thats why they choose tmobile for business. Pga of america and tmobile are partnering on 5gpowered analytics to help improve player performance. Tmobiles Network Helps aaa stay connected nationwide. To get their members back on the road. And Las Vegas Grand Prix chose tmobile to help fuel operations for one of the Worlds Largest racing events. Now is the time to see what americas largest 5g network can do for your business. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. The all new godaddy airo. Put your Business Online in minutes with the power of ai. China holding the annual parliamentary meetings this week. Eunice yoon is joining us live from beijing. Is it that time, eunice . Reporter it is. March. The thousands of delegates are here. The top officials have said, joe, that the Economic Issues are going to be the ones that top the agenda. Of course, businesses as well as investors, want to see what policies and other support would back the statements. The event which is a week long will be kicking off on tuesday. Thats when the premier will deliver his work report rolling out with the targets that are supposed to be for 2024 on gdp around 5 and consumer inflation at 3 and the fiscal deficit at to 3. 5 of gdp. A lot of analysts are saying these numbers on the fiscal deficit and gdp may hit on the high end. There is focus on special bonds treasury as well as local that would be seen as spending investing in infrastructure as well as advanced a. I. What beijing has more and more been describing as productive forces. The commentary all week long has been skcrutinized for real estae and consumption and private sector. Joe, so far, one signal on openness isk encouraging. That is because china will cancel the once a year meet the press which has been around since 1993. Not very good for openness. Just no, were not doing it . That doesnt satisfy me. What reason did they give . Reporter they did give a reason. They said the premier is going to be giving a lot of information at his work report on tuesday. They said that there will be pressors with other officials and they could go into detail. The past several years, they have not been going into detail. That is the reason they decided to cancel the press briefing which happens at the close of the ceremony. What was also interesting is they said it will be canceled for many years. No kidding. Reporter it looks like the press briefing will not happen. It only happens once a year. You speak to us once a year. We are over here in ignorant bliss, speaking for myself. This is all really important stuff which is linked. We have we are counting on inflation coming down and the economy and a lot of it has to do with the recent weakness in china. We keep waiting for china to rebound sharply. What you just said i dont know what we do without it, eunice. Thank you. We are much better here. How weird is that . Reporter yeah. It is. For china, you mentioned the concerns here and they are facing a crisis of confidence. Thats what the government has to turn around. Were not looking for openness any time soon from the ccp. Obviously. It is getting less open which is amazing. Eunice, thank you. Well talk later. When we come back, the openai feud. Elon musk suing the company that he cofounded and its Ceo Sam Altman. Is openai acting like a nonprofit . We will take on that topic next and see he what the courts view is. And as we head to break, check out shares of nvidia. Up nearly 70 so far this year. Squawk box will be right back. Announcer executive edge is sponsored by at t business. Next level moments need the next level network. From rylees rea hi this listing sounds incredible. Lets check it out. Says here it gets plenty of light. And this must be the ocean view . Of aruba . Huh. This listing is misleading. Well, when at t says we give businesses get our best deal, on the iphone 15 pro made with titanium. We mean it. Amazing. All my agents want it. Says here. inviting pool. Come on over too inviting. Only at t gives businesses our best deals on any iphone. Get iphone 15 pro on us. . Elon musk is suing open ai and its Ceo Sam Altman, in a 35 page lawsuit that was filed late thursday night, it argues open ai has been transformed into a closed source de facto subsidiary of the Largest Technology company, microsoft. Joining us right now is Rose Chan Louie, the executive director for the lowell mill ken center on philanthropy and nonprofits at ucla, and rose, les lets run through this first of all, i think people are looking closely at whether elon musk has the rights to bring this lawsuit because usually something ha is of this nature is brought by an attorney general. What do you think . What are the odds . Well, we did need someone with the will and the wealth to bring attention to this, so were grateful, i think that hes keeping a spotlight on open ai based on the facts alleged in the complaint, it does look like he has a good case substantively, but youre right, becky, that it could be an uphill battle regarding his right to bring the case, whether he has what we call standing typically it would be a director or a recently ousted director who would bring a suit such as this, and so in his case, it looks like they have some novel theories for bringing the suit in at least one of the causes of action in the complaint, the one for breach of fiduciary duty, that is typically required to be brought by the California Attorney general so. Lets go back to just this question of whether open ai is behaving like a nonprofit. There are some nonprofits that have profits but this is pretty staggering just in terms of the numbers that are going to start adding up. Thats exactly right. It does look to us right now that the for profit interests are riding the nonprofit horse shall we say, but it was very carefully structured with open ai, the nonprofit originating the whole structure and being designed so that the not only profit board would govern the entire entity. And like you said, its not uncommon for this. But in this particular case when the for profit subsidiary has a valuation of what 89 billion right now and everyone except a couple of the Board Members has an interest in that valuation, it becomes very hard for that Charitable Purpose not to be pushed aside. So yes, yes, i think were not sure right now that the privacy of the Charitable Purpose is staying is being followed. I mean, reading through the lawsuit trying to figure out how theyre pinning this, that founding agreement is kind of where elon musks lawsuit stands on all of these things saying that they basically lit it up in flames when they took this latest step with microsoft. How do you think a judge will look at this . How do the courts come down with past press cedent . Its interesting. They basically are saying that the article, the certificate of incorporation is the founding agreement, and as nonprofit lawyers, we dont typically think of it that way, but it does seem like they have a good case for that. In delaware, took a look at that, it looked like they characterized the certificate of incorporation there as an agreement among the parties. So theres the other issue, i think, becky is whether a California Court will follow delaware law. So weve got a couple theyre incorporated in delaware, all of the entities are incorporated in delaware, but the principal place of business is here in california. So a lot still to come, rose, it sounds like. A lot still to come, yes. I think were really hoping that ideally, we have new Board Members will protect open ais legal purpose of developing ai for the benefit of humanity. But barring that, were hoping the suit gets regulators to pay attention. Rose, thank you very much for your time northern. This morning. Thank you, becky. Big week for the markets, fed chairman powell expected to testify on capitol hill this week, and the jobs report coming on friday. Will the bulls continue to rule the street. Thats coming up next. And check out the shares of apple. The Company Expected to roll out some new products, well find out what wl ilbe coming from the tech company in the next half hour. Squawk box will be coming right back. Wall street forecasts over 100 billion in sales for antiobesity drugs known as glp 1. But these treatments are largely administrated through cumbersome injections. Enter Lexaria Bioscience with their patented oral delivery technology. Early studies were glp1 suggest reduced side effects and better blood sugar control with reduced spikes. Lexaria bioscience. Transforming the future of glp1 drug delivery. 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 good morning. Retail earnings and the fed in focus again this week for investors. Oh, and the jobs report for february is coming at the end of this week. Weve not a look at the markets ahead of that busy week for wall street. Avoiding a partial shutdown, Congress Unveils the first six budget bills as the clock ticks. Well have the latest from washington. And a big weekend at the box office for Warner Brothers dune 2. Can the movie be a catalyst for whats been a Sleepy Box Office . Well go biehind the Silver Screen as the second hour of squawk box begins right now. Good monday morning, welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square, im joe kernen along with becky quick. Andrews off this morning. Well take a quick look at the futures, and setting up down about 90 points this morning on the dow. S p indicated a little weaker. Als also, the nasdaq fractionally down about 3. 5 points. Treasuries this morning with the jobs report on everyones mind coming up on friday. 4. 2 and crypto, at least bitcoin, actually, most of crypto has been i had a really firm bid. 65,200 getting close to i cant remember the exact high, but i guess in british pounds its already hit a high i read this morning. But not quite yet, i dont think, for based in dollars. Lets get over to dom chu right now, hes got a look at some of the mornings premarket m movers. Happy monday. Monday morning moves with a check on shares of macys. Theyre higher by about 16 or so premarket, around 100,000 shares of trading volume. The Department Store operator behind its name sake brand, bloomingdale, others, is seeing a deal pickup this morning, even further, after arc House Management and Brigade Capital raised their proposed takeover bid by 14 to 24 a share. That tops the previous 21 per share price that they had had. That values macys at roughly 6. 6 billion. Macys says it will carefully review and evaluate the latest proposal. Thats why shares are up 16 . Check out shares of lyft and doordash upgraded at rbc Capital Market doordash goes to 175. They cite better competitive positioning and new business initiatives and international verticals at doordash. Lyft up about 6 in the premarket trade. A check on shares of at t moving between modest gains and losses right now, just aboutflat on the session around 40,000 shares of volume. The telecon giant is slated to present at a tnt conference later on today. Jeff mcel fresh will be laying out at ts progress. At t shares ones to watch later on today. Thank you very much. Folks we do have some breaking news out of europe concerning apple. Steve kovach is here, hes got the details on that. This is a 1. 8 billion euro fine, thats 1. 9 in change in u. S. Dollars against apple. This is over apple music in europe, spotify filed a complaint with the European Commission several years ago. This is all the same stuff that weve been talking about, just the fees that apple takes. Apples inability or rather spotifys inability to charge within its app without actually, you know, giving apple that cut. Apples response here, they said they are going to appeal the decision, and they lay out theres a big blog post out now from apple ripping apart this decision basically saying things like spotify is taking advantage of the Apple Ecosystem by paying basically no commission fees, by kind of getting around those fees. I talked to one of spotifys lawyers about this last week, guys, and their position on this is, well, you know, we want to pay less fees, of course, they want to make more money. But what they also say is apples ecosystem wouldnt be as successful without these thirdparty apps. Their position is were adding value to this Apple Ecosystem too, us and a lot of other developers. Cleary the eu agrees more with spotify. This is going to be about 1. 9 billion u. S. Fine for apple. Ask t of course theyre going to appeal. The Digital Markets act, that big muscular eu law over there, thats going to really crack down on apple and google and facebook and so many other u. S. Tech companies. Those rules go into full effect, ill have more reporting on that later this week. This is just one beat in just this big drama between these companies. Is this the one where they kind of whittled it down over time . Exactly. This is basically them saying you have to at least allow the developers to have their own subscription signups within instead of saying you have to use apple pay for these things too . These are separate cases but related, and so the Digital Markets act in theory takes care of a lot of this. Were looking here. This is a much bigger fine. It was reported 500 million. Thats what i was going to say. This is more than double what people were expecting. Its more than triple. You heard me off air, i went whoa when the news came in. This is a huge fine, and it also shows this Digital Markets act, violations of that, 10 of global revenue, so 400 billion for apple. Thats a 40 billion fine if they violate. Obviously theres processes they can go through, so the fines are huge. And i mean, theyve already changed their policies on this. They changed the policies at least a year or two ago because japan was making noises too. Its different region by region. What weve also seen apple do is fight this region by region, jurisdiction by jurisdiction, the changes that theyre going to make to comply with the dna later this week, its only going to be in europe, so youre going to have a different iphone experience as a european customer than people in the rest of the world, but a lot of people see those changes as emblematic of what they might have to do in theu. S. Were expecting any day now the doj to file their antitrust lawsuit against apple, which covers a lot of these same issues. This could be a template for what we see around the world, even though this is happening now. I know apple doesnt break this out, but i was looking at numbers, estimates of what these things are. And at least according to the verge, some of the numbers that theyve looked at on this, i think its Something Like 1. 8 or 8. 3 billion in revenue that was taken in in apple music in 2022. If you compare that to the size of the fine, thats a pretty hu huge chunk. Spotifys argument has been they have the advantage. They can afford to lose money whereas we cant, and so thats part of spotifys argument as well because apple has way more businesses than music and its not charging itself a 30 either. Apples shares decline of about 3 4 of a percent. And there will be an appeal, and theres going to be more battles. Its not over. Apples idea for complying with the European Commission rules going in effect on thursday, apple doesnt even know if theyre in compliance with what the ec wants. So its going to be an interesting experiment to see once apple puts this out there if the ec agrees you are in compliance. Spotify and so many other developers are saying huhuh, this isnt going to cut it. We need apple for the market. Yes. And it hasnt or nvidia thats fine. Has the baton been passed . 2. 7 trillion on apple, wu it has been the batons been passed to microsoft. Right. Apple has no ai story to tell in the same way microsoft right, apples an important sign. Your 401 k , my 401 k . They got anything good coming out . Theres rumors that as soon as today we may get new macs and ipads. Is that going to change what weve seen with the stock . It hasnt, but its been enough for the last couple of years to keep it going. Apple is putting enormous pressure, this ai announcement tim cook has been teasing over the past few weeks, e. If it doesnt live up to that, look out. The goggles arent going to do it . Did you buy one . Are you out of your mind . I didnt even buy one. They make fun of people already. I dont think andrews even bought it, and hes like the biggest fan of it. Well see how long he changes, doesnt work out someti sometimes. Thank you steve. Joining us to talk markets, sam stillwell. Anybody in the meta universe . No. Ive tried to get as an avatar sam stow vvalls image, you have a copyright on that, i cant do that, can i, sam . Just look over my shoulder, joe, and youll see my bobblehead, ill give you a nod for that. Sam, are you bullish for the year . J i am bullish for the year. I have a 5,200 target for the s p 500. You might actually say, well, gee, were pretty close to that, so how can you be that bullish . But basically what we find is that after great years and last year was a great year the market tends to post good returns, meaning average gain of about 10 . And weve seen an improvement in the frequency of advance following a great year. So target prices, they might be adjusted, but essentially i regard them as weather vanes rather than laser beams, not necessarily trying to guess exactly where it will close. Just saying were going to close higher is in is and of itself, thats taking a stand, sam, and we get spoiled. What a year we had last year, and if you remember the beginning of last year, no one was talking about what the gains were going to be. Most people were talking about how low of a low we were going to revisit. We saw 3,500 on the s p. We saw some people down at 3,000. They dont have their jobs anymore, but thats right, but actually, if they followed history, joe, history said to expect about a 25 gain because we had a down year, we had an up january, and we had a q1 low that did not exceed the prior december low. Every time thats happened since world war ii, the market was higher 100 of the time with an average gain of more than 25 . Thats exactly what happened. And then so youre looking historically at the year after Something Like that too, sam, to get to yes, exactly. Weve got a positive indication from the as goes yjanuary so gos the year, average gain close to 16 with 100 up move. Also, we just concluded january and february in higher territory. We have never posted a fullyear decaroline on a total return ba when thats happened since world war ii, and only twice did we not end up in positive territory in the final ten months of the year. Well, unless we have it wouldnt be a surprise if we hadnt had volatility in a while. But unless we have no volatility, to end up with your year end target, i guess we could go higher. We could go lower. What do you see how do you see it playing out . When did you see weakness being m man manifested . When did you see a bit of a pullback . Well, history says we should be getting ready to pull back. We recovered all that we lost in the prior bear market on january 19th. Traditionally we advance about two months gaining about 5 plus. And what we have gained so far since january 19th is the third highest of all postbull market recoveries. Since world war ii. So were about due for some sort of digestion of gains, but i can offer some encouragement in that the average decline is about 8 , and we have not had a decline in excess of 14, meaning we done typically drop from exhaustion into a new bear market but rather into what i call a pullback, which is about a 5 to 10 decline before conning to move higher. Whats your overall view on what kind of economy this is, sam . Is it strong . Is it strengthening . Some people think its strengthening. Other people think eventually youre going to see some cracks and the prospect for rate cuts later this year. Right, well, i think the economy is in a good position right now. Our expectation is for a sub 2 growth q4 of 24 over q4 of 23, not surprisingly because i think that the fed will be slower to lower Interest Rates, meaning the first cut will come in june. Well probably see three 25 basis point cuts this year. One in each quarter. Unemployment might approach the 4 level as we move into 2025, so i would tend to say that things are going along quite s smoothly and what really would interrupt this market advance is probably an unanticipated event, which you know, joe, are hard to anticipate. Weve got to end it there. Well check back in a couple of weeks, i would imagine, or months. Good to have you on, thanks. Thanks. Still to come this morning, why a recession can be avoided thanks to women in the work force. Yale University Lecturer joann litman will be here to explain her latest oped. And later, lawmakers releasing the details of the first six budget bills needed to keep Government Agencies funded and open. Well have more on the budget battle in just a bit. Squawk box will be right back. Announcer this cnbc program is sponsored by baird, visit bairddifference. Com. Whoa, how did you defeat them . With a little kung fu strength and by connecting my devices to the most powerful force of all. Skadoosh. Hah, huh . Cool right . Amazing. Harness the power of xfinity internet and stay connected to the things you love. Ah, theyll be like this for hours. Hello dad, hello dad, hello da. Uhoh. Good bunnies. Ahh march is womens history month, and our next guest has a timely oped arguing that women are the economys secret weapon. Joining us right now is joann litman. She is yale University Lecturer, also the author of next the power of reinvention and life in work, and shes a cnbc contributor. Joann, this is a pretty interesting article. We have pushed off that recession that everybody thought was coming. You think a big part of ha is women in the work force. You want to explain . Yeah, absolutely. I do think that women are the economys secret weapon because if you look at whats happening with womens employment. Go back four years, first of all, to the beginning of the pandemic, which was actually next week four years ago. Women were slammed, right . We had the she session. We lost more than 12 million jobs. Women lost or left their jobs. Because they were supposed to be at home teaching their kids. Part of it was the kinds of jobs they were in. Part of it was because the schools were closed, day care was closed, they had no choice. There was concern then. It sent women back 30 years. Janet yellen among others said this could be permanent scarring she said. Now, you fast forward, by last spring what happened was women not only soared back to previous levels but surpassed previous levels. We hit a record of female Work Force Participation women age 25 to 54 last spring, and it has stayed historically high levels since then. You think part of that is flexibility. I think one of the statistics you pointed out is 40 of people work remote one day a week, which is a stunning number. It is a stunning number. Companies now are pushing back. I think this is actually of some concern. I spoke to quite a few women who have been pushed out now at this point. You know, joe you were talking earlier about the tight labor market. This is one group where the numbers have only increased, and now were kind of putting this pressure on. We have to have sort of a more nuanced look at because, look, i understand how important it is. We talked about this before to be on the premises to work for culture, for collaboration. At the same time, were pushing out an entire group of particularly mothers of young children, parents of disabled kids. Who were able to work because of these remote and hybrid options. Ive taken both sides of this argument. Sort of thinking about japan and the problems japan has had. One of the things that they have riding right now is their hope to get more women into the work force. If hay they dont, theres only much growth they can anticipate from that economy. Japans pretty notoriously difficult in terms of the hours youre expected to work, in terms of whats expected at home for mothers as well. And thats probably a unique difference we have and something that has helped us. It is as well, and theres been a lot of research, actually, on the relationship between women in the workplace and gdp, and moodys has done this and various other economists have looked at this and the figures ive seen are as much as, if we just level up women to the level of other developed countries where they have better day care and federally subsidized day care and they have higher levels of Work Force Participation, if we just leveled up women in the United States, it would add Something Like 650 billion to gdp every year. But what youre making the argument right now is that companies should be a little more flexible, especially if youre dealing with women or parents who have issues at home. My argument 100 is to have these inflexible return to office mandates, i understand why people are doing it, but at the same time, we need to be more nuanced. We need to have more flexibility in our thinking. Ive heard from so many women because ive been out there talking and writing about this, the stories you get from women are just heartbreaking. I mean, women who actually have been working very successfully at home or remotely for, you know, for a number of years, and then suddenly they lose their job. All right, let me ask make this a little bit of a tougher question. Sure. If you have flexibility, how old you make less money . I dont think so. If youre doing the job i think we have to get out of the mindset of thewhere you are doing your job and get back into the mindset of what are you contributing . Does it cost more money to commute in every day. It costs more money if youre krooiin driving in, if you have to pay for congestion parking. Should you get a reward . Lets turn it from a stick to a carrot. Should you get a reward for showing up and dealing with this stuff . I think rather than pay, i do think the reward could be more along the lines of well take care of your parking or well gif you, give you a commuting allowance, as opposed to saying you get more. Your job is not worth more. Your expenses might be more, but your job not we know how to do it are from home now, people who can benefit from it, they should be doing it. All the slackers that dont want to come back, those are the ones weve got to get back here. We should be on a case by case basis be able to decide, people who need to work at home, let them work at home. People who can come back, get your ass in here. Yeah, i totally agree with you. Youre absolutely right. We learn how to do it. Lets take advantage of it. Exactly. We know how to do it. And by the way were always simipatico. I just say it more bluntly. Always, joe. But it is true that, you know, also women are more educated than men, so we know that, you know, women ive talked to the economists who say, look, women actually as a group contribute more to productivity, which is another issue that is of concern. Women have become j working moms are lets not go overboard here. I dont want to feel badly about myself after this. Weve got to go. Im going to cut you off. Thank you. Coming up, the battle between elon musk and sam altman over ai heating up. Details straight ahead. Futures right now continue, it will be pulling back a little bit, and well be right back. The all new godaddy airo helps you get your Business Online in minutes with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo this looks like an actual farm. It looks cute on the app. [farm animal sounds] meanwhile, at a vrbo. When other Vacation Rentals arent what theyre cracked up to be, try one where you know what youll get. Welcome back to squawk box. Futures right now, we were down 100 a minute ago on the dow. Weve got some positive nasdaq is actually in the green at this point, check out the shares of disney this morning. Got some news about activist black Wells Capital sending a letter to shareholders urging them to vote for its slate of board candidates. It says additional independence in the boardroom is good for shareholders that criticize compensation practices at disney, and it said disney must produce an Artificial Intelligence strategy. Also, sort of criticizing some of the old boy aspects of the i dont know, maybe we need a different phrase for that. Some of the thats probably not thats not good either. They point out that bob iger has some pretty Close Friends on the board, and just sort of the criticism we have of a lot of corporate boards that there is some i dont want to use anything. Rubber stamp, but something not as independent as they should be with the ceo. I suppose, but do you want a bunch of people who have no idea and who havent spent the time . Exactly. Eyou look at the solutions, and sometimes theyre not great. If youve got a board thats in the pocket of the ceo, his compensation. Theyre criticizing that as well. So thats something we hear a lot from different the reason that boards, that directors should own a big stake in the company themselves, or a big part of their own net worth should be part of it. That does seem a way to make sure that their interests are aligned with the shareholders. Exactly. When we come back, lawmakers releasing the detailed text of the six bills needed to prevent a partial Government Shutdown. We run through the bills and well talk d. C. Funding. Thats next. And later in the program, Walter Isaacson joins us to talk about the war that has erupted between musk and open ais sam altman erhe future of ai. Squawk box will be right back. grunting at Morgan Stanley, old school hard work meets bold new thinking. laughter at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. Old school grit. New world ideas. Morgan stanley. After months of negotiations, lawmakers have finally released the detailed text of the six bills needed to prevent a partial Government Shutdown this friday. Lets get over to Emily Wilkins in washington. Shes got more on this. How should we be reading all of this . Well, becky for those who have been watching Congress Kick the can down the road again and again and again, lawmakers finally seem ready to actually fund the government for the rest of the 2024 fiscal year, at least what is left of it. Republicans and Democratic Leaders announced this agreement on the first batch of spending bills on sunday afternoon. Again, theyve been working towards this for months now. It covers 460 billion in government programs. The package also includes several additional measures like preventing oil from the Strategic Petroleum reserve from being sold to china, and another measure that would strengthen how Foreign Ownership of u. S. Farmland is tracked and reviewed. Republicans can tout some wins here on several issues such as prohibiting the tis department from targeting parents who speak at school board meetings. They also were able to keep a proogun measure in the bill making it harder for the veteran Affairs Department to report a veterans info to the National Criminal background check system. Democrats also got some wins. They were able to get more funding for a Nutritional Program for women, infants and children and to increase help to those in rural areas to afford rentals. Of course the bill still has to pass both chambers by friday end of day in order to prevent a shutdown, but lawmakers seem to be feeling good about it. Theyre not in a rush. Theyre not coming back to town until tuesday night and the first vote on the bill isnt expected until wednesday in the house. Speaker mike johnson is going to be prlanning to use an expedite process that will require democrats to help out. It will avoid the chance for a small group of hard line conservatives to sink this bill at the last minute. The pieces of government funding moving this week are widely considered to be the easiest bills when it comes to agreeing on funding. The rest of the 1. 6 trillion in Government Spending is due on march 22nd. We know that negotiations on that are ongoing, but thats going to be a lot more tricky to do, becky, and so well have to keep a krclose eye on what happs with that next tranche of bills. Congress is now almost six months past that initial deadline found the government. So what hasthis meant for the ability to have congress to move the other bills. Have we gotten any work done . March 22nd isnt that far away either . There really has been a lot of kicking the can down the road, not just with these spending bills. You look at key programs for the federal Aviation Administration, thats gotten bumped to may. Programs to update key security, thats gotten bumped down the road as well, and there are all these things that lawmakers say they want to do. We havent seen any legislation on ai despite that being a top priority for majority leader chuck schumer. Weve also seen a lot of lawmakers, especially after that hearing with Mark Zuckerberg come out and endorse some of these Child Online Safety protection bills. But again, not a lot of chance for that to get to the floor. Tax packages. The fact of the matter is that you do have all of these bipartisan bills in congress that could potentially move forward. But theres just not the opportunity to get that work done. Theyve been so focused on these spending bill deadlines. Emily, thank you very much. Right now for more on this conversation, we want to bring in kay bailey hutchinson, former u. S. Ambassador tomat nato, and steve israel, former congressman of new york, the director of Cornell Universitys institute of policy and global affairs. Welcome to both of you. Senator hutchinson, lets start with you on this. From the outside it certainly rook looks like it is a lot harder to get things done in washington these days. As somebody who knows their way around, what do you think . Oh, becky, thats the understatement of the year. Weve watched this back and forth, of course the house and senate have very small margins. The democrats on the senateside and the house on the house republicans. It means that youve got to work across the aisle and that is very difficult to do with these small margins. Its tough. Thats for sure, but i was pleased to see that there is now some funding coming forward to fund this cycle that were in now, halfway in already. So hopefully they do fund the government. I know republicans are trying very hard to hold the line on spending and start whittling down that debt, which we know, and also take care of some of the over regulation of business that is beginning to really hurt our Tech Companies and our energy companies. Congressman israel, if this is the easy stuff and we still dont even have approval, were assuming at this point well get it before friday, if this is the easy stuff, what does that mean about all the rest of the budgeting items that still need to take place before march 22nd . Well, thank you for having me on. Look, some of the most important budget imperatives are still out there, funding ukraine, funding israel, taiwan, we have National Security needs in this concern, and theyre not being funded right nowbecause of the on city innocence of several members of congress. I will say to emilys reporting, she mentioned kicking the can down the road. Whats significant about this compromise, after months of kicking that can down the road, were right back at the beginning of the road. This agreement largely conforms to the agreement that was made between the white house, president biden, and then republican speaker kevin mccarthy. It largely conforms with that agreement where many months later in dealing with some of the same issues that were already addressed. The question whethill be wha ill be look ago the when this vote is taken in the house on wednesday. Dm democrats will support this. You need a twothirds vote. The question is will speaker johnson be able to get at least a majority of his majority to join with democrats and support and pass a bipartisan bill that the senate can then vote on. Senator hutchison, lets get to that, just how complicated it is in washington these days. Obviously the two sides often disagree on things. Whats been different in the past that has led to Bipartisan Legislation getting passed . Becky, i think it is because more and more members are being elected at the far fringes, and thats on the republican side and the democratic side. Youve got the far left, the far right, and unfortunately these people are saying my way or the highway, but theyre not realizing that in a legislative body, you have people elected from very different constituents, from very different states, and you have to compromise and get something of what up but not everything. And i think these far right fringes, far left fringes are not compromising, and i think until we start seeing that in the electorate make a difference where people start saying im going to vote for a conservative or a liberal but someone who wants to get things done and will compromise to do that, i think were going to continue to see this unless the electorate makes larger margins in congress. One thing im focusing on is the house and senate for the next election. Thats where i think the rubber hits the roads, and if were going to have a change in this over regulation in the inflation, in the border crisis, were going to have to have people who are willing to roll up their sleeves and compromise. That makes a lot of sense. Congressman israel, were about out of time. What can you add to that . There was a bipartisan compromise on the borders and immigration, and donald trump rejected it, demanded that republicans oppose it simply because he wanted to take the credit for it, rather than give it to joe biden. Thats not the spirit of compromise and bipartisanship we need in washington. Im sorry, were out of time. Senator hutchison, congressman israel, thank you both for joining us. Coming up, Warner Brothers scifi sequel dune 2 riding sand worms to the top of the box office raking in 81. 5 million l. Were going to speak with media analyst rich greenfield about this weekends movie success, what it could mean for wnearr brothers discovery. Well be right back. Help make trading feel effortless. And its customizable scans with social sentiment help you find and unlock opportunities in the market. E trade from Morgan Stanley. With powerful, easytouse tools, power e trade makes complex trading easier. React to fastmoving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you wont miss an opportunity. E trade from Morgan Stanley. The notsosecret to our success . Earn and keep trust. Build and maintain financial strength and stability. Deliver solutions that meet complex needs. Do right by customers, clients, and policyholders, always. Repeat daily for over one hundred and seventy years. Massmutual. Partnering with financial professionals, benefits brokers, and institutions. 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 new details emerging in the fight between elon musk and sam altman. Steve kovach joins us. Im back, did you miss me . Were you on here earlier . Yeah. I knew that. Who am i reminding you of . Go ahead. Im not going to say it. President of mexico. Im not going to say. No, so friday morning i was here talking about this lawsuit, and then, you know, we didnt hear from open ai. I did get a look at some of its internal communication that Ceo Sam Altman and his chief Strategy Officer set out, you know, company wide, obviously concern inside the company. Ill read directly here from what the chief Strategy Officer told employees, quote, we believe the claims in this suit may stem from elons regrets about not being involved in the company. So this is kind of what i was saying. Sour kbgrapes. It feels like sour grapes. He was involved in this company, he helped found this company. Hes going really hard on this as well saying, you know, obviously he has a financial stake in this too, but this also goes back to the question of another claim in the lawsuit of artificial general intelligence, and here in these memos, the executives basically saying elon musk is out here saying weve achieved this artificial general intelligence, which is like human level intelligence that weve not achieved. No one at open ai is saying theyve achieved this. When they do, that relationship between microsoft goes away. Microsoft doesnt have access to that special technology if it ever happens. So thats kind of the argument for unwinding thats going to be a difficult part of the case they need to get involved with, proving whether artificial general intelligence is, what that line is. I do think going back to this founding agreement, there are lots of questions about whether they agree to do this, whether the company is acting like a nonprofit. Right. And we have heard other people saying, jay clayton saying and others the guests we had on earlier today, Rose Chan Loui suggesting that attorneys general, their hope is that this case will get interest in attorneys general who can then go in and look at whether they are comporting themselves as a nonprofit. And in the memo sam altman sent out, they defend the structure, you know, and saying we are still a nonprofit, you know, the mission haa change. We still want to benefit humanity, all the things that elon musk is saying in a lawsuit theyre not doing, but again, this is also i mean, the vc has been on x kind of defending the open ai side about this saying, you know, this is a normal structure or this happens all the time. A nonprofit can spin off or form this kind of separate for profit entity. Usually the for profit isnt worth 80 billion. On maybe even 100. Theres some rumbling about that. Absolutely. This is becoming such a headache for microsoft, this wonky structure with this company they got involved in for this subsidiary and kind of hinging so much of their technology and future products on what open ai is doing. It certainly helped microsofts shares to this point. Absolutely. Its an a irgs story. Its a really weird thing. They bought 49 of the profits from the profit entity. The capped profit, yes. Of the nonprofit. Its kind of difficult to understand how all of this is going to hinge and how the courts going to see it. And also with all the money invested in this, those investors are going to want a return of some kind. How do you ipo a company like that. Theres so many questions, and you know, microsoft is even kind of backed off saying, trying to say were less reliant on open ai than we may have presented early. They invested in that open source European Company a week or so ago, said theyre kind of spreading love a little bit so as to hedge their bets in case this part blows up again. Human level intelligence. Yeah. You drive a truck it depends on what you can drive a truck through. Depends on which human youre talking about. Have you been on twitter . Can i pick the human . You can. Its you. How about we use you, joe. Even in the middle of the belt grove. If were down here, were already there. No one thinks its general intelligence because, i mean, weve seen it hallucinate a few weeks ago, chatgpt was answering english questions in spanish for some reason. Thats not human intelligence, no one, even a layman would call it that. Its got to be a lot smarter than some of the people that i see. Its already there. The bars going to be pretty low, though. Right, not my followers. No, definitely not. Thank you, steven. Next hour, musk biographer Walter Isaacson is going to join us. Hes smart, maybe if we can get it to get his level of he writes books that are thousands of pages. Hes a professor. Political views are pretty screwed up. Hell be on, join us for that. I just did the tease, didnt i . A programming note, tomorrow on squawk box targets Ceo Brian Cornell will join us at 7 00 a. M. Eastern time after the companys latest quarterly results, and ahead of the companys investor day. That is tomorrow at 007 a. M. Eastern time. Squawk box will be right back. You founded your Kayak Company because you love the ocean not spreadsheets. 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 theaters this weekend. Hit them and grossing 81. 5 million at the Domestic Box Office making it the highest grossing movie of 2024 so far. Joining us now is rich greenfield. A lightshed partners. Rich, its a good number, i guess. Didnt we used to do hundreds, 200s . All the time . What, what did we used to do typically. Look, joe, this is a great number. I think the team at Warner Brothers should be very happy. A great start for this film and shows when you put, you know, really compelling content in theaters people show up. I mean, i think the challenge is that audiences are being a lot more selective and thats a function of, i think, just so much incredible content at home. The bar to leave your house, the bar to go to a theater it just higher than it was, and i think the pandemic just pushed that even higher. I dont know if you heard my question, what excuse me, didnt we used to do hundreds all the time for openings . I think better way to think about it is, i think this would have been the 11th or 12th best weekend of 2019. If you think about prepandemic, you know, this was a, not even a top ten weekend. Now, you know, dune was a very good number. Its going to be a profitable movie, but this certainly isnt sort of the, the massive successes that we saw during 2019, but its a very good start for Warner Brothers and, look, zaslav and team need success on the film side for sure. I know i have to see it probably this weekend. Going to have to probably go together with parts of my family, rich. Should i see the first one again . I dont remember what happened. I remember the worms. Thats about all i remember. Bone up on the first to see the second . Have you seen it yet . You actually can watch the first one. I believe on both max as well as netflix. They had a very smart strategy of putting it on to netflix to broaden the audience. Ahead of coming out, the second one coming out in theaters. The the demise of the Movie Theater was or wasnt greatly exaggerated. Now im back to thinking still tough sledding. Whats going to turn the corner, rich . Joe, were not, you know the industrys changing. Right . Its getting tougher. You know . Look at you know, if you look at overall box office, yes, its impacted, no doubt, by the strikes last year. But youre still down, you know, 40plus percent from prepandemic levels. It will get better probably finish the year better than where we are now because volume picks up across the rest of the year. The question, though, is, are we still going to be down 15 , 20 25shgs20 from prepandemic levels. Its not terrible just a smaller business than historically. The key, is it being a mauler business than you had before . A great year. In my view. Maybe because i saw all of these oscar nominees at telluride. Five unbelievably great films that came out. I mean, these should be some of the best of times not some of the worst of times. Im not talking about, like, ridiculous, the aeeighth sequelo a superhero. N anatomy of the fall. Did that leave you wondering what really happened, though, joe . It did. Yeah. Might have done it. Not sure. Wasnt it great . Did you see zone of interest, too . I thought anatomy of the fall greatest picture ive seen. Rarely do you see Foreign Language films show up and salt burn sick. Just sick. You auditioned, joe. Like the that guys hilarious. I did not like poor things. Didnt get that at all. Rich, but this should be a better time. Im not sure what the anecdote to this is. I dont know. I dont know how you fix things, rich. You need to help me. I dont think its not a fixing or not fixing. Just the way our job at lightshed, where is the puck going . When you look at the explosion of streaming and whats happened in the streaming universe over the course of the last decade, theres just an incredible amount of content. So, yes. Having a collective experience at a Movie Theater is still amazing, and i think people will always want to gather together to watch something and have that quote unquote experience. Its less special than it used to be. All right, greenfield. See all of us sanrstrge see that . Rich, thank you. Hi, im greg. 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Early studies were glp1 suggest reduced side effects and better blood sugar control with reduced spikes. Lexaria bioscience. Transforming the future of glp1 drug delivery. Good morning. Stock futures at least far as the dow goes lower ahead of the monday morning opening bell. S p and nasdaq both ending last week, though, with record closes. On investors minds, testimony from fed chair jay powell and the big jobs report coming friday. Apple hit way nearly 2 billion antitrust fund allegedly favoring its own streaming service over rivals. Out of the eu. Details ahead. And opec hopes to keep crude Production Cut for longer. Asking about how this decision could ripple through the Worldwide Energy markets as the time hour of squawk box begins right now. Good morning, everybody. And welcome back to squawk box right here on c nbc. Live from the market site in times square. Im becky quick along with joe kernen. Andrew is off today but here we go. Its a monday and so far not a whole lot of movement, but you do see red arrows. Dow futures off by 115 at this hour. Weakened during the course of the morning. S p futures down by about 7. Nasdaq indicated off 8. 5. Treasury yields higher. Ten year above 4. 2. Two year at 2. 56 and bitcoin and other cryptocurrencies. Bitcoin pushing higher. Up almost 4 this morning above 65,000. 65,241. Among todays top business stories the European Unions competition enforcer fining apple for allegedly favoring its own business over rivals. Upset over apples 30 fees and apple prevented music streamers from informing users of Payment Options outside of the apple store. Apple said it would appeal. Macys increased buy out outoutbuyout bid. Brigade capital management, macys rebuffed the firms prior offer of 21 a share as too low. Macys says it will review the new offer. See that stock up by more than 15 . Still trading well below the offer at 20. 79. And lawmakers releasing details of six budget bills needed to keep Government Agencies funded and head off a partial shutdown this coming weekend, but the bills will likely face opposition from the Republican Freedom caucus. Half the battle. Congress still has to pass the other six spending bills before march 22nd. Those seen at the trickier part of all this. Over to our senior markets commentator mike santoli, and, mike, i dont know what youre watching this morning. Worried about apple. Finally hit the law of large numbers . Mike . Well i dont know if you have to worry about apple too much. Also, not really what the law of large numbers means. One of my pet peeves. Tell me. Well, just cant go to the sky. Not double. Base effects are so big. Exactly. So, no. I dont think thats necessarily true. If thats the case it also should be hitting microsoft. I think in a lull. Not been a growth story in a long time. What i think is interesting, proven out multiple times over the last say 15 years in the iphone era that apple is not really always a bellwether for the broad market. Kind of goes its own way, in sprints, consolidates for long periods of time. S p 500 able to really shake it off at this point. Yes, taking a breather today but one of the stronger fourmonth returns seeing in the s p 500 in a very long time. Rare. Up 1,000 points from the late october low. Just about 25 . Obviously youve been able to say overbought a few weeks now. Shrugged off often seasonal weakness in late february. So far so good. Although, again, you have to believe youre in for a breather. Why have we been able to do this . Some of the concerning i think beginning of the year, one, market too doepend on the on mea caps. Not helped. Including apple. Disproven to a degree. Two, this idea that we need the fed to cut rates soon for the market to hold up. Also seems not the case. Look at the midcap index, because it kind of tells you. People worried about the russell 2000. Not broke into a new high. This is a three year midcaps. Okay. Just slightly above that high from late 2021. Things are starting to come around. The markets broadening out somewhat grudgingly. Also gotten into this real embracive risk and Retail Investors trading a con of opt ton of options. A good proxy for what smaller investors are doing. See whats happening in bitcoin and other crypto pap strong stock. Vertical. Have to be at least aware were in what i call the belief phase of the bull market. No longer fighting it. The question when it tips into euphoric. Eye of the beholder stuff. Dont have the case its really super overdone. Joe . All right, mike. Thanks. Very beginning what could be interesting in the next five days ending on the jobs report friday. Thanks. Joining us now to talk markets and specifically the behavior hes seeing from Retail Investors is joe masoli. Charles schwab director Trading Services education. And joe, pick up where mike left off. Just talked about this idea that Retail Investors are really embracing risk right now and trading a lot of options and other things. Is that how you see it . Hey, becky. Good morning. To a certain extent i can agree with mike on that. What i would say, though, is we have a monthly activity index called the stacks. The schwab trading index measuring behavior. So its behavioral and what we see, we did see an uptick in february relative to january. But i do want to take a step back and say that the uptick we saw is still moderately low compared to some of the highs we saw in 2021, and whats interesting is had we look at that number itself, it takes into account, as mike was talking about options, takes into account leverty etfs and what we see right now is clients are long, long the market. Buying dips. Theyre buying equities, but not levering up. I think thats a key point to make. That were not seeing fomo with our clients at this point. What were seeing longer market. Selective in buying. And choosing information technology. Thats the sector theyre hitting up now. Fits into the other part mike said. Maybe in the bleach selief sect the euphoria yet . 100 agree. There is a belief. I look as opposed to the flash number i look at the trend. Fourmonth trend bottomed in october, november. Riding that trend where i believe investors are feeling more confident but selective in buying. Not buying across the board. You guys mentioned the mega caps and can this rally continue without the mega caps . I think it can, because at least what were seeing from our investors is theyve kind of shifted a little more towards the chips. The big buys we saw nvidia, amd, smci, arm. Trying to ride that momentum, that a. I. Momentum. How long that lasts well see. But theyve been successful so far. If stacks, your monthly tracking index called stax looks whether people are using margin giving it ay whoer rating. Usually around 35 to 70 falls somewhere in there. Correct. More margin activity gives it a higher number. Does a higher number correlate also with bad things potentially happening in the market as people get more and more leveraged and something breaks . I mean, i dont know if you can make that direct correlation but i would say this is why i feel as mike said you mentioned its the belief stage as opposed to the reach stage. Right . The reach stage when you see levering up, dipping into margin. You know, buying the leverty etfs and high call activity in the options market. I think we are starting to see agena little bit of that activity ins options market. Look what we see on the cibo put call ratio. Not showing something in the 40s where i would be concerned. I right around 60. It is reaching. One thing gives me a little pause is the lack of hedging activity. Im seeing that, institutional and retail side. Its hard. Because as a hedger youve lost money the last two years hedging. I understand where clients, whether institutional or retail dont want to pay for the hedges, but i do think, though, when you see the markets at alltime highs you see, you know, breadth flattening out and then you see a little divergence maybe on relative strength. Probably makes a little sense right now to look for some of that hedging. Yeah. I mean how would you, if this is not near the peaks you saw back in 2020, 2021, where is it . Havent even put a number on whats showing now. Right now at 47 65 up three points from january. Alltime high you mentioned 70s in 2021. Got a ways to go before getting to that. Important to recognize when looking at the stats relative to s p 500. Stats can go up with the s p 500. If it, if the ascent is slower than the s p 500 that means clients are still long, still buying. I mentioned earlier, not reaching and not levering up to do so. In this market i think thats wise. Okay. Joe, thank you. Joe mazzola. Thank you. Coming up, speaking with elon musks biographer walter isa isaacson. And next latest on the extended oil Production Cuts from opec members with rbcs helene mccaul. Heading to break check out shares of microcomputer ugg maker deckers outdoor. Two Companies Joining the s p 500 prior to the market open on march 18th and replace whirlpool and zion bankcorporation respectively. Stay tuned. Youre watching squawk box on cnbc. Leaving you lost. 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 the future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future. A future where you grew a dream into a reality. Its waiting for you. Mere minutes away. The future is nothing but power and its all yours. The all new godaddy airo. Get your Business Online in minutes with the power of ai. Upbeat music upbeat music welcome back to squawk box, everybody. The futures this morning under pressure at least for the dow at this point. Down by about 120 points. S p futures down by 5. Nasdaq positive up about 8 points. Wti crude trading highest since early november. Over the weekend saudi arabia, russia and other opec producers announced they will extend voluntary crude Production Cuts until end of the second quarter. Joining us now for what this means for overall oil market. Global head of commodity strategy and managing director at rbc Capital Markets. Good to see you. First of all, anybody cheating, do you believe that some less than others, or believe that theyre going to follow through with what they said . I might think the most important thing we think about opec is they look more unified. The most important producer saudi arabia, is going to continue with its million barrel a day unilateral cut. The lollipop and the rest of the group may not be quite at perfect as saudi arabia but not an astroeshs situation. Not facing a situation with extreme cheating like in years past. Some better than others but the group seems to be better together. Saudi arabia looks to continue to be balancing this market. Just seems, helina if i told an oil watcher a year ago that the ukraine war would be dragging on but youre going to add in all the conflict in the middle east with the houthis and the u. S. Economys not going to go into a recession. In fact, going to look like its upticking. Seems like all of those factors would have us maybe at 100, and were not. I dont and the cuts and everything else. Can you explain it to me . I think, joe, look, a sense with the Russia Ukraine war wed see significant disruption. We talked 3 Million Barrels a day off the market. That did not materialize. I think you have a lot of Market Participants who are looking at this war in the middle east saying, yes, we have tempers diverted. One sunk over the weekend. Tankers. By and large oil is still making it to the market. Theyre still in this show me situation. They want to see a physical disruption and then you had really strong u. S. Production growth last year surprising the upside nap said, i was just in london for ie week and there is more optimism now. People are looking at the physical market saying looking tighter. A sense the u. S. Is not going to be a Million Barrels again in terms of growth. Sub500,000. I think sentiment is starting to turn, but, again, were not seeing yet the runaway path to 100. What about china . Hilena, does that answer it a little . In terms of demand, is it down in china . Year over year . No. I mean, joe, i think this is a situation where everyone thought it was going to be a grand reopening for china last year, and chinese, there was growth, but it wasnt as spectacular. I do think if we look at import data for china it remains constructive. Not blockbuster, but a divergence between this sort of china macro worry and what were seeing on the oil side. Again, coming back from london, coming back from saudi arabia the week before, i think there is sort of green chshoots about the oil market. I dont see it caught up in bearish sentiment as even a couple months ago. Test only almost 80 . Going to just head back down to the trading range weve been in . 70 to 80 or do you see it 80 to 90 maybe . We have 85 for brent back half of the year. Important to watch, joe, think about what catalyst did, see what happens in the middle east. Biden Administration Working so hard to get a ceasefire before the start of ramadan. Real questions about, will think war potentially expand to lebanon . And iranians signaled if it becomes invasion of lebanon, thats their red line. I think we cant write off middle east defy destruction risk yet. U. S. Production. You said that, why would it not continue at 79 . Why wouldnt people be everything stay open . Again, its not that were saying, joe, u. S. Production is not going to grow. Its a question were gains we saw last year due to particular, unique circumstances not replicated this year. Again a view youre going to have more modest u. S. Growth. Now if we got something that surprised to the upside, again, last year did surprise the upside. Everyone talked about capital discipline, but we werent seeing 13 million barrel as day again and look what we saw last year. Along with strong growth out of brazil, gaia and canada. Again, i think people are saying the u. S. Will grow but not make it, cause by surprise like last year with a banner u. S. Year. All right. Finally, weve got one guy run hoog s who says shut down fossil fuels industry and another saying drill, baby, drill, and so bashar b then again, prices high neff, producer going to produce. Do what they do. Does it matter whos sitting in the white house next year . Certainly matters rhetorically. We saw what happened with u. S. Lng exports. Republican administration would not have taken that type of pause, but end of the day youre right. The Biden Administration came in said they would keep it in the ground. Caught with Higher Oil Prices and Energy Prices potentially were like, put the money in the ground. End of the day the Biden Administration had encouraged u. S. Production. Had release from the spr, facing Energy Prices. Interesting to see if theres a change on iran policy, because you have people around President Trump saying take a much tougher line on iran and reimpose energy sanctions. A good beat. In london, vienna. Saudi arabia thats, that can be i dont know. Maybe thats yeah. I know. I like going okay. Yes all right. I think its a cool beat. Smart. Hilena, thank you. Thank you. Okay. When we come back, boeing looking into buying aircraft fuselage maker spirit aerosystems. What that could mean for each company, and for shareholders. Got a reminder as we head to a break right now. Dont miss an exclusive interview with target Ceo Brian Cornell tomorrowal alt 7 00 a. M eastern time. Quarterly results already of invests. Stay tuned. Youre watching squawk box and this is cnbc. Ps are mindblowi they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. And you are . Im an investor. In invesco qqq, a fund that gives me access to. Nasdaq 100 innovations like. Wearable training optimization tech. Uh, how long are you. Im done. Im okay. vo what does it mean to be rich . Maybe rich is less about reaching a magic number. And more about discovering magic. Rich is being able to keep your loved ones close. And also send them away. Rich is living life your way. And having someone who can help you get there. The key to being rich is knowing what counts. Welcome back, everybody. Proxy advisor Institutional Services offering a new es g skeptics option according to executives. Permission to provide a wide array of Voting Policy changing. Iss currently offers seven types of specialty voting guidelines beyond the benchmark like climate focus groups or religious funds. Iss last year added borderline guidelines opposing many esg resolutions though the new offering may appeal to clients who want to go even further against esg. Pretty funny story. Yeah. Isnt it . Yeah. Want to be anti probably better returns. Boeing in talks with spirit aerosystems. Really jl i knew that. Rising on that news all comes full circle. Phil lebeau, it does. And called it either way. Right . A good business. It is a good business. Somebody who once worked in wichita many, many, many moons ago talking early 90s covering aviation, i remember when Spirit Airlines part of boeing and the leadership at boeing said, spin this off. Get rid of it. Bringing them bac in. Cant blame them given number of problems facing the last three, four years especially with a product coming out of spirit aerosystems. This probably friday both companies confirming in talks, though the price is unclear at this point. Heres the pro behind this. Closer oversight for boeing. Look, spirit has been the game that cant shoot straight over the last several years. They need to do even greater oversight. Really need to do an overall. The con is, fix their own problems in washington. Now you want to take on fixing the problems at Spirit Aerospace as well or aerosystems . Boeing, remember, look at spirit, injected 100 million into spirit. Theyre 70 of the revenue at spirit. So they needed to prop them up to a certain extent. Prop is probably not the right word there but needed to assist them and adjust the deliveries over the next couple years. Look at spirit as well as boeing and what weve seen here since, go back last five years. Last time spirit was profitable, 2019. For dave calhoun, asked about them. In fact, asked during the last Earnings Report saying, yeah. Did vertical integration go too far . Probably. It what it is. By that means buy it, fix. Do a complete overhaul and have a better say in terms of what happens. Boeing released a statement saying we believe the reintegration of boeing and spirit ire oh systems manufacturing operations would further strengthen aviation safety improve quality and interests of customers employees and shareholders. Look at boeing and spirit, look at those stocks, theyve got to go back to 2019. Last time that spirit was profitable. Boeing 70 of revenue last year. Airbus the other 30 . A facility in europe, would have to work out a way of clearly spinning that. What was the rationale to get rid of it in the first place . Everybody said, well be the integrator. What does that mean . Take parts and integrate everything and then going to be responsible for the parts . Quality of the parts . Correct. Which is if you ask people right now, general investors. Say to them whats the problem at boeing . Aww, cant build the 373 max. One problem after another. Constantly announcing that something was wrong. Theyve got to check it. Where most of those problems have come from . Spirit. Nobody says that. Nobody says you know their supplier spirit had problems and thats hurting boeing. Looked ed strictly at boeing. Problems with it. Spirit hasnt been profitable five years while all of these problems are coming out. Talking about a very longterm fix for boeing. Takes it back inhouse. Yes. Remember, they havent pulled guidance for 10 billion and Free Cash Flow annually in 25, 26. Havent reiterated or pulled it. Wonder can they hit the target bringing in spirit . Its going to cost them. And what about the nuremberg leave . 2019 . Calhoun came in december 2019. Been there five years . I would say daves been there three and a half years. Maybe came in 20. Down 54 in stock . By the way, mention an exclusive on money movers talk be with report isom exclusive before talking about whats going on this year. You dont want to miss what he has to say in terms of outlook for american airlines. Profit return. Im not arguing with you. All right. Thank you. Thanks, phil. You bet. When we come back, elon musks biographer Walter Isaacson help us make sense of the lawsuit against sam altman. Space x launched its first nasa late to of 2024. Bound for the International Space station lifted off from Kennedy Space center at 10 53 p. M. Eastern time. Four crew members onboard. Stay tuned. Youre watching squawk box and this is cnbc. Power e trades easytouse tools, like dynamic charting and riskreward analysis, help make trading feel effortless. And its customizable scans with social sentiment help you find and unlock opportunities in the market. E trade from Morgan Stanley. Perhaps you know me as, the kung fu panda. Help you find and unlock opportunitie n the market. Ah, youre adorable. Huh. Oh, whah welcome back to squawk box. Futures this morning now flat on the nasdaq. Down 155. You were that close, wasnt he . That that close to almost walked away. Wanted a cup of coffee. Pulls back in. Breaking news. Jetblue merger with Spirit Airlines. The other spirit. Yes. Cant let you walk away. Called it a mutual agreement. Spirit putting out a note saying terminating the proposed merger with jetblue. Look, not a huge surprise. I think this is what people ultimately thought was going to happen. That, a. , wasnt going through after shot down once by the doj. And while they appealed it, very few thought the appeal would work and so now jetblue pays spirit 69 million. Thats the end of this courtship, but whats interesting here. Remember when jetblue, robin hayes adamant we need them. Need them so much well give a special dividend on a monthly basis to spirit shareholders. Remember that y. Yeah. Guess how much they paid since that story . 29 million. A nice chunk of change, if you were a spirit shareholder that 500 million to go away. Whats going on. Now the question becomes for spirit, okay. What do you do . Because youre, burning cash, losing money. Ted christie is sharp. Know whats hes doing. In a flooded market. More judicious in the First Quarter but its a tough market for them and there are more than a few people said dont make the merger go through, how do you survive . By the way can you imagine . Ted making comments saying remain dmft our future at a successful independent airline. Well see. The shares Still Holding for Spirit Airlines. Jetblue shares up. The jetblue shareholders once the doj said no they did not want this could, continue the appeal. Joanna garrity ceo of jetblue. New ceo. Yeah. Once that decision was made, like, lets get back to blocking, tackling, running an airline the right way and quit this focus on mergers, alliances, et cetera. Phil, thank you. You bet. Latest point of contention in the race shading future of a. I. Technology elon musk suing openai and its Ceo Sam Altman claiming theyve abandoned the startups original Mission Create for benefit of all humhu humanity. Relationship with altman bring in walterize,en, Perella Weinberg cnbc contributor maybe most importantly in this context, his book elon musk for that book had unprecedented access to the an ptra tra an pral neer two years. A slow train wreck taking lake. Just the latest. Those who know who not surprised. Absolutely. Surprising me traveling with him two years is how focused he was on a. I. And goes back to 2012 when he was worried that deepmind is going to be sold to google and he was worried that two Big Companies google and Microsoft Might some day control a. I. So he and sam altman started openai, and what musk wanted was it to be opened. Open source, and nonprofit. What they decided at the beginning. Why hes so upset is because obviously you know, openai is no longer open source and microsoft has 49 of a forprofit arm of it. Exactly a year ago soon after he took over twitter. In february 2023, he summoned sam altman toal twitter hea headquarters bring the founding documents. Outrageous musk said he funded a lot of openai as a nonprompt and now sam turned it into a forprost. Near end of my book theres a wonderful scene where elon musk asked me back to austin and we sit outside by a backyard and he said, ive got to start my own a. I. Company, because this is a disaster, whats happening with openai. So for documents and memos seen from inside openai just this morning, all saying this is basically sour grapes from elon musk, because hes no longer involved. What would you say to that . Well, certainly he has his back up. Hes no longer involved. At that meeting i talked about, end of the book a year ago, altman says, do you want shares . Want shares in openai . He says, no. Musk says, ooimim not looking money. Wanting to keep it so microsoft and google dont dominate the industry and he started his own a. I. Company. I think musk does things because hes got a pretty strong passion for what he feels has to be done on a. I. So i would say calling it just sour grapes doesnt nearly get to the depths of the passion that musk feels about this. Big questions that have been raised, walter, about whether elon musk can bring this suit. I mean, obviously, looking at founding documents, thats the best legal argument that they have in this. Right . But others in the nonprofit world say that typically if youre questioning whether a nonprofit has strayed from its mission, thats really the responsibility and duty of attorneys general. Weve spoken with others this morning saying they hope this lawsuit brings attention and maybe put pressures on some of those political types like an a. I. . Yeah. Youre seeing the attorneys general look at this and, yes, the law is pretty unclear in the sense of, can you sue a nonprofit for becoming a forprofit . But as musk said, wait a minute. If this can happen, anybody can do it instead of saying im going to raise money with Venture Capital to start a company, you say im starting a nonfrost. Give me tax deductible dollars and then turn it into a profitmaking thing. It doesnt smell right. Correct. I wonder what you think the next logical step is . What a court does with this lawsuit and what it spurs from politicians who would be much more interested in setting up it has potential for bringing discovery for any of those precisions looking at this . Yeah. Im not sure this lawsuit will ever go to a full trial, and hes not asking for very clear remedies. If you read the lawsuit. Hes not saying he wants huge amounts of money. I guess hed get the money he put into the nonprofit back, but thats not what he wants. He wants it to make it so that once again it become as nonprofit and that, it breaks the contract with microsoft. If you read deep into it, it says, that contract with microsoft should be null and void now, because chatgpt 4 and beyond will be artificial general intelligence. A very technical thing, but its not just with what they contracted for. Its going to be able to do almost anything. Going to be able to reason and have intention and this frightens musk and he said, he wants to remedy for openai no longer to have this contract with microsoft. Raising pretty serious questions for investors involved in all sides of this. Microsofts about the Biggest Technology company out there. One of the Biggest Public Companies out there taking on sam altman and owe a. I. You see front of the a. I. Race. All of this happening with one of the worlds richest men on the other side of this. How does this break down and what do you hear in terms of i guess scuttle from other investor classes on this . You know, for 12 years, musk has been worried about jut two or three Companies Dominating the a. I. Space. And when he and altman started meeting 10, 12 years ago, they said the more companies that get into it the safer its going to be. Now, thats a philosophical argument. I think you read isaac and other science fiction, and he even talked to president obama about it. So what his main worry is, is that the way this is all shaking out, youre going to have google and microsoft totally dominating this industry. So hes going to do whatever he can to make sure especially when it gets to what i called it artificialgeneral intelligence, agi. He has advantage. 8 million flames of video from tesla cars. The type of thing you can train realworld a. I. Like robots. He wants to make sure that this is much more of an open process, not dominated by microsoft and google. Walter, i think about all the things, huge things, elon musk is dealing with that hes thinking about every single day. Whether that be tesla, spacex, twitter. The Delaware Court system. Openai. Where does this rank in his level of importance . If this is something he thinks is the end of humanity, where do you think he would put this versus finding a way to mars all of these other things . I think two things that rank high for him. One is safe Artificial Intelligence. This ranks real high. The other is getting humanity back into space. You talk about him juggling a lot of things. You showed it earlier in the show. At 10 30 last night they sent, spacex, four astronauts into the International Space station. Nasa hasnt been able to do that since it grounded the shuttle. Phil talking about boeing. Boeing has problems with the 737 max. But it also, in 2014, got contract to send astronauts below earths orbit and boeing has yet to be able to send astronauts to the space station. Whereas spacex, got a contract bid. I think, i personally believe that x. Com, twitter, is a bit, a distraction for him. I think so, too. On which he were focus in effect, a. I. I understand why you wrote your book on him after writing on people like benjamin franklin. In the book ends with a the launch of starship trying to get to mars. The first test launch and with him deciding to start his own a. I. Company. And that sort of qucrystallizin the focus he has right now. Walter, thank you. Thanks. Good to be with you, becky. Mars is far off. I think keeping twitter open and thats even more noble and more important. Coming up, apple getting lit with a nearly 2 million musicrelated streaming fund. This morning, much more on that after a break. And Spirit Airlines resumed training after jetblue announced termination of a merger agreement with the airlines. The shares are down, as you might expect. Well be right back. , char okay love it umm. First word. Tonsillitis nostril uhuh. Bill uhhuh. Hiphop limping mmhmm medical bills uhhuh pancakes cash who pays you cash when you have medical bills . Grrr no idea. [tapping] gap the gap left by Health Insurance . Who pays cash to help close that gap . Aflac oh, aflac get help with expenses Health Insurance doesnt cover at aflac. Com pictionary . 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 Las Vegas Grand Prix choose tmobile for business for 5g solutions. Because tmobile is helping power operations and experiences for hundreds of thousands of fans with reliable 5g connectivity. Nows the time to accelerate your business. Did you ever worry we wouldnt get to enjoy this . [jeff laughs maniacally] inner monologue seriously, look at these guys. They are playing great. Meanwhile, im on the green and all i can think about is all the green im spending on 3 kids in college. Not to mention the kitchen remodel, and wed just remodel the bathrooms last month. With empower, i get all of my financial questions answered. So i dont have to worry. So youre like a guru now . Oh here it comes join 18 million americans and take control of your financial future with a real time dashboard and real live conversations. Empower. Whats next. 6. News this morning, the European Commission hitting apple with a nearly 2 billion fine for allegedly favoring its over streaming services over others like spotify. Nvidia breaking above a 2 trillion market cap. Doug clinton, deepwater asset management, managing partner, and its earlier actually, doug, saying, the Inflection Point is nvidia now taking some leadership away from apple at this point . I think probably is. I mean, i think someone said this the other week. The market is really all about nvidia right now. I think as long as nvidia continues to show this its seemingly unstoppable fundamental strength in their business. I think the market in general can keep working. And so, aside from nvidia, i think you also see this with microsoft versus apple. Microsoft now is bigger than app approx le, so its about that transition to that a. I. First world and the most a. I. Focused companies are benefitting. Looking at the history of technology, im trying to figure out how apple bridges the move to a. I. , and in the past, weve seen leading Tech Companies that, for whatever reason, were supplanted by new entries in really important arenas. I mean, microsoft, somehow, doesnt seem like it was ready for maybe social media and some of those things. Here it is again, but is apple up to the task of living in the a. I. World in terms of leadership . I think they are, joe. And were going to learn a lot more later this year at wwdc. I dont think its been unintentional. The last few weeks, the last month or so, weve heard tim cook talking more about this large language model project that they have been working on, talking more about a. I. , using the word. Last year, it almost felt like apple thought a. I. Was a bad word. Now were hearing them talk more specifically about a. I. , and not only that. Theyre putting their money where their mouth is. They have reorganized what was their titan car project to focus on a. I. I think when we get to june, we start to hear what apple has been working on in a. I. , well see whether or not theyre up to the task. I do think they will be. They do have a history of generating these sort of magical products that combine hardware and software, and so if they can figure out a way to do it again with a. I. , i think they can still be a winner. A. I. Or, nvidia, its very arcane, exactly how everything works, but the case has been made that theres a difference between setting up the a. I. And then deploying it and that maybe upstarts or competitors are going to make inroads in, you know, in that second step. Whats it called . Inference . Its very arcane. Training and inference. What is it . Training and inference. Yeah. You train the model and then do inference when somebody puts a prompt into chatgpt. So, you can get cheaper chips and maybe not as sophisticated to do the inference. I mean, is that is there going to be more inference versus setting up the models . In other words, is there a competitive threat some day to nvidia . Its hard to really see that playing out. We like to think about things in terms of odds. So, if you had to set odds on it right now, today, odds are, in five years, i think nvidia is still the marketleading, the dominant player in creating a. I. Chips. We do think theres a chance that some competitors can come in and do inference and maybe even specific kinds of inference, so inference on the edge, specifically, so actually on a device, for example, versus inference in the datacenter are sort of two different use cases. In the datacenter, you dont have to think as much about power consumption. When youre on a device at the edge, you might be working on a mobile phone battery, and that means power really matters. I think there are some use cases like that. Weve invested in a Company Called rain. Theyre producing chips that are focusing on some of those edge use cases. I think thats the one area where somebody could come along and disrupt nvidia, but i would say the odds are nvidias still in a really great place competitively. Got to do more research. Ill use my commodore computer and look up some of this stuff. More firepower in your iphone. Still waters run deep. Youre deep water. Youre not related to muddy waters . No, we respect the muddy waters. We respect all waters. Smoke on the water. Smoke on the water. Thanks, doug. See you later. When we come back, were going to talk markets and get you ready for the first trading today of the week. Stay tuned. You are watching squawk box, and this is cnbc. Dow futures now down by about 170 points. 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Before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. A little more than half an hour to go before the first opening bell of the week. Joining us right now in the markets is joann, partner and Portfolio Manager at Advisors Capital management. How are you feeling about things right now . This rally has continued to roll on, people asking questions, but you also have some strategists on waull street raising their Price Expectations for the year. I think the latest i saw was bank of america now looking for 5,400 for the s p this year. How are you feeling about things . Yeah, becky, you know, the economys in really good shape, so theres good foundations out there. We dont really play the game of trying to pick where the s p is going to go, because thats not where our clients are invested. We invest in individual stocks, so at this point in time, weve seen certainly the growth from the tech side, but there are a lot of opportunities out there that we see right now as were coming off a year of really challenging markets for some areas of the global economy, in particular, look at health care. I mean, look at how challenged it was for the Tool Companies, the analytical Tool Companies like thermo or brooker when Interest Rates shot up last year and spending was curtailed. Theres opportunities for the investor to go beyond tech at this point, and we think some of those are good places to be, but also industrials. People are really overlooking the opportunity there. Secular growth because of the Infrastructure Spending bill. Step back from what is the market going to do, and look at where the opportunities are, because theres some very attractive valuations that can build a portfolio for the longterm investor. Were almost out of time, but if health care was a challenge because of higher Interest Rates, is your idea of looking at it now on the assumption that Interest Rates will come down this year . Were a little cautious about that, becky. We think eventually theyll come down, but right now, inflation is pretty persistent. Last year, there was a lot of inventory digestion that took place. Thats the thing thats now out of the way, and were starting to see that come back. I think results were a good signal and their guidance, not so much for this quarter, but it looks pretty good for the second half of the year, and were starting to see that show up in invest every enthusiasm for those health care stocks, so its more than just about Interest Rates. Were pretty cautious, because we see inflation is going to be persistent. We think is fed is going to take a very cautious view towards cutting Interest Rates. We think the market is a little too optimistic about that at this point in time. Thank you very much. Joann feenny. Folks, that does it for us today. Join us back here tomorrow. Right now, its time for squawk on the street. Good monday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer and david faber at post nine of the new york stock exchange. Nasdaq futures stealing some love from the broader markets as we set up for a big stack of news this week. Sellsideconferences. Our road map begins with stocks in this ongoing a. I. Fueled rally. B of a ups its target for the year. And the nasdaq looking to build on fresh ecords. Plus, as usual, were keeping an eye on shares of apple. Theyre pulling ba