Transcripts For CNBC Squawk 20240703

Premarket. The price for paramount. Sony and apollo submitting a cash offer. That includes debt. I will bring you up to date with the very latest reporting on this saga. Lets get the Market Reaction to this mornings job numbers. We were looking for 240. Negative revisions of about 22,000. Bond market kind of sniffed this one out, jim. It did. This is one of those moments where i think youre sitting there and saying, well, think about the narrative we had on tuesday, that tomorrow, powells going to lower the boom and talk about how, yeah, the chances are we could have a rate hike. He would have looked very foolish. Instead, now people are saying, did he have the number . No, it was a pretty tightly kept secret, but when i look at this, i say to myself, all right, we probably will get a rate cut if things get a little bit lighter and that the market is very poised to have a run here, which is really amazing. Yeah, the tenyear right there tells the story, doesnt it, jim . Sure does. Falling dramatically in terms of yield as it has. We were at 4. 7 very recently. Very positive. Its very positive. It is, because now were theres not much ahead of us because were kind of out of the big earnings period. Yeah. If you can kind of coast on a lot of stocks. That said, were still going to continue to have this endless conversation as to how many and when in terms of rate cuts. Oh, yeah. Doesnt appear that one is on the horizon in the nearest term. Lets do this. Why dont we just ban it here and do our viewers a favor and say, okay, look, we had unemployment, and we had a fed meeting, and those are the two things that really matter and now were going to have to be like the fed and be data dependent. If theres data thats in line, we should stop squawking about it. We should not be playing the parlor game of, well, soandso, from the state of cleveland youve just blocked out about six hours of programming on cnbc. How about we try to make people money . Thats a novel idea. Radical idea. I had draftkings on last night. I had brinker. I cant believe hes turned the corner. Cinco de mayo is a big day for him. Its possible they could do a 35 basis point. How about 36. 5 . David, let me tell you about the twoyear. Tell me about that twoyear. Im sorry to be dissident, but im not solzaniza here. Lets just say that the two big numbers are unemployment and the fed and the that lets not get confused. Were in a moment where we have now had the two big bad events, and lets just take a look. We should try to, at least, make sense of companies on the basis of earnings. I know it was impossible to do during the last three days and was very disarming because you want to make people money. And then people i keep hearing people say its a stock pickers market. Thats nonsense. Its an s p driven by fed market era, and i think, within that era, theres its very hard to pick stocks. Yep. Your whole work could have been undone even in apple if wed gotten the wrong number. Look at amazon. They reported a great number, but they were in the maelstrom of fed day, and we didnt find out how good the reaction was until after. Now, amazon can run another five. This is not paramount global. Oh, dont worry. Well get to that. Im just trying to say look, am i trying to dis coverage . No, im saying there are times when there is a game and there are times when theres chatter about a game, and im saying the chatter about the game is not that meaningful. Well, if rates stay calm, doesnt that lower the bar for earnings . Its not going to have to carry as much water . Exactly. So, what i can do is say, that alphabet quarter was so good, i think it might be worth 10 for the stock. I wont say this, that alphabet quarter was really good but i dont know what the fed is going to say. Is it us doing the thumbsucking . No. If jay powell is going to continue to have these moronic conferences where he subjects himself to this lunacy of questions youre referring to questions. The questions were, arent you worried . Moronic conferences where he subjects himself to the lunacy of these questions. Youve not been a fan of the fed press corps. He continues to do it. Can you just drop it . He can do whatever he want. Hes the fed chief. I just think he doesnt do himself any favors and they ought to have a blackout period all right. What about jobs . Anything in the jobs report . Unemployment rate is now 3. 9 . It is very interesting where the job growth was. I mean, were back in seeing health care really strong. Remember when health care was really strong, and we knew that health care was going to cost us more money . Thats the number. What did happen this week . We saw cvs have to pay too much for health care. We saw walmart write off a gigantic initiative. We are back in the world where Health Insurance costs too much. Yes. That is very meaningful. Thats what im focused on. All state, another one, right, on the insurance front. We talked about Car Insurance as well. Auto insurance. You want to worry. The other day, i said, look, maybe we should have a commission looking into things that have just not come down so that we can say, look, this these are the industries were most concerned about. I dont want a witch hunt. I just think theres an element thats intractable, and i would like to know which the American People would like to know. Id like to know why my Auto Insurance went up. I dont know what the increase was that geico did. It was incredible. Theyre not focused on that. Theyre focused on handbags. You mean the ftc . Ive spent some time on the handbag issue, and people are going to canal street. They got all sorts of kate spade there. Theyre beautiful. I know those handbags on canal streetlight or even broadway in the high 40s. You can find them. Lovely assortment on the sidewalk. You have to at least figure it out so that consumers pay less. At the same time, you have everyday low prices at amazon, but they dont like amazon. I mean, i want to know whats causing this. Now, you can call the heads of toll brothers, and you cant call kb homes and pulte and say, why dont you build more homes . Shelter and insurance must come down. Lets move to apple this morning, up sharply in the premarket with the beat, the year over year decline in revenue. China, down 8 is better than down 13 in the prior quarter. The big thing here, i feel like im really i really am this morning the second thing no ones talking about is that the vision pro, not only being a bust, its going to be very big business to business. When i spoke to tim cook act about it last night, its very clear that the orders that are going to come in from business to business in order to build things, to make things, siemens, auto company, this may be one of the biggest things theyve ever had, but its not talked about because people think its just something to be on an airplane with. So he agreed with you. This is the omniverse. This is what nvidias been talking about behind the scenes. Its a very important not mentioned by a single analyst, by the way. Not a single analyst talked about the thing tim cook said was very important for me, which is the business to business aspects of what is going to happen with vision pro. Its so great to build a factory using vision pro. Seems like a blip on the radar, given the focus on handsets and what thats going to mean and the next iteration of the iphone and the inclusion of a. I. I know you care about this vision pro thing, but its not going to move the needle for a while, jim. Youre wrong. Im wrong . Okay. All right. Youre wrong. Its the biggest thing that could happen in business that they have had. Yes, absolutely, a. I. Is going to be very important, and the theyre going to talk about a. I. Developers onference, but when you talk to nvidia, they say, this is the big blackwell use, omniverse to vision pro. I hear everything you said about apple, but what im talking about is jensen huang and what he thinks can happen. Okay. And what tim cook didnt do last night was throw cold water on it, which is what i was worried about because im out there on this thing. You are, you are. But i think that everyone theyve sold out of what they have. They didnt build new ones and i think a. I. Is incredibly important. Im just trying to add to the conversation. Youre trying to add this is something that may be overlooked. I read every piece of research this morning, and theres not mention of vision pro, and yet when i spoke with tim cook, hes jazzed about vision pro. There are a few target raises. Jpm, rosenblatt. The buyback, jim, 110 is the biggest ever. Its bigger than most s p market caps, the on the list of alltime record buybacks, apple has the top six. Well, the fantastic cfo is trying to run it at cash neutral. They have so much cash. So much. They have 162 billion in cash, marketable securities. 105 billion in debt. Theyve got 58 billion of net cash. Right. This is a surprise for them. They have too much cash. Theyll be in there buying. Theyre in there buying all the time. I think that where people the two things people got wrong was, one, the growth for in quarter. But the second was, like, and tims kind of a, i think, a little shocked that there are all these surveys that talked about how china got worse, worse, worse, when china got better, better, better, so i think what tim is saying is that the surveys are just dont do a good job and maybe you shouldnt rely on them as much as people do. No, but it is clear that huawei has an entrant in the marketplace that has taken share in a significant way. Its also true that who knew they were doing as well as they were, apple in china . Remember, the government, which happens to be a totalitarian government, wants you to buy huawei, and yet people are still risking well, lets just say the aprobrium of government. When you talk to tim, i mean, by the way, like, you talk to tim cook, hes a very real person, and i dont mean to sound dopey about it. What im saying is that he, too, gets surprised when things are good. Like, wow, china turned out to be better than i thought. We started thinking that maybe china was getting weaker, and it didnt, and the big cities, were selling really well. I mean, theyre trying to do a rest of world where you with the conference call, you talk about how big india can be. Now theyre talking about soon, the conversation would be about r. O. W. , rest of world, and its also going to be about the wallet. Thats going to be really important. We dont know where the wallets going, but they intend to be much more Financial Services oriented. That matters to me. More Financial Services, more business, but then the a. I. The guy said, listen, do i have to go over all the things that samsungs doing or just forget about it . I got the impression that you can forget about the lead that the Android Phone has. That will be history three months from now. There will be no lead by the other guy. We do have an ipad event coming up in a few days. Its been a year and a half since that refresh, jim. And ipads were down 17. And they that when you look at that, thats important, but i thought it was very interesting. This quarter, if you added up mac, ipad, and you added up ear and watch, service is bigger. Services. Services, gigantic now. You really have something where if you wanted to extrapolate and be someone whos incredibly bullish about the service, you could see service becoming half the company within a few years. As we pointed out, of course, that is deserving, at least in the view of investors, of a higher multiple, given the recurring nature of that revenue as opposed to being in the market with a new iphone, and you never know. Right. Maybe you give that a colgate multiple, and suddenly you realize the multiple is not k colgate is kcolgate is having a good year. Like baby ruth versus calvin c coolidge. Absolutely. Im trying to analogize. Youve had it in for me the whole week. Thats not true. I love you like always. Its just this vision pro thing, i dont know. When we come back, david will get us the latest on paramount, including a bunch of movers today. Well get to expedia, booking, livenation, xpo, look ahead to berkshire. Nartis holding in there. Teye sll below 4. 5 and the vix, under 14. 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All right, and it just keeps getting more interesting on paramount. Lets give you the latest at this very moment with the idea being things can always change. Of course, tonight, you have the expiration of skydances exclusivity period of negotiation that it has been involved in over the last 30 days and which is trying to get to the finish line on this complex deal to take control of paramount. They didnt quite get there, as i indicated earlier this week, skydance, the ellison group, along with its partners, redbird, had been asked for a certain number, and certain considerations. They felt like they met that only to sort of still find that there was a gap, which they havent addressed, and then, yesterday, we got news that, of course, i can confirm and give you more details on, that sony and apollo have submitted a bid for paramount as well. Its nonbinding, so to speak. Its an indication of interest, but it is very different, according to people familiar with the situation, than the previous letter that was received some time back from apollo. Same number, 26 billion. Remember, were talking about almost 15 billion in debt, so dont get overly excited and take 26 billion and divide it by the paramount shares outstanding. It includes debt. But it is what i am told is a very serious offer being taken quite seriously by the special committee that, of course, is running this entire process, special committee of paramounts board, and is going to be pursued as such. Tonight at midnight, in all likelihood, fully expect the expiration of the of that period will of the exclusivity period will come, and the special committee will undertake negotiations, still with ellison if they want to keep going, but with sony and apollo. That deal is not without its own serious considerations. By the way, pricewise, we and im being told, significant premium. For the bholders and a double premium, so to speak, for Shari Redstone and for the ashareholders. Not quite certain where that comes from because significant can mean different things. Ive heard as much as 40 . Dont jump to conclusions. Maybe you get to the high teens. I dont know. It does not include, as im told at this point, though it is considered quite serious, this bid, things like a reverse break fee that would account for some of the risks taken on in the 12 to 15 months that any sony or apollo deal would take to get approval from the antitrust authorities, the federal communications commission, its a foreign buyer in japan. There are stations that apollo owns, so even though they already have fcc clearances, you know, would they be able to continue to increase in the station front . So, any number of complexity around that as well. But jim, thats kind of where we stand right now. Sony, apollo, now, again, and i want to stress this, very different. Night and day is what im hearing from what was that previous indication of interest from apollo alone. In this case, obviously, sony would be the larger investor in a purchase of all of paramount and then integrating the steed studio with sony. Apollo owns legendary. Then youre off to the races. Will it happen . That remains unclear. Will ellison and redbird come back yet again and try to mound something that meets whatever the hopes were for the special committee . Also unclear. All right, so, what do they see . We have every single day stories about linear not doing well. We know from when we talk about the nba the rights for things are out of control, and its really only the amazons of the world that wont get their Balance Sheet. Yep. We dont have any sense about any change in ordcutting. Yep. So, what do they see now that they want this . Its a great question. Let me im looking through my analyst notes here just to find what i think is the right thing. Listen, if you are sony, for example, youre going to have an enormous opportunity to save costs. I mean, youve got a very valuable tv library. Youve got some ip, but not as much, because frankly, skydance owns some of the more important ip in Mission Impossible and maverick, but youve got a library of great value in tv. Youve got an opportunity to save enormous costs because, frankly, you can lay off a lot of people. How that plays is yet another consideration. So, strategically, this is a one of the few where it actually might be 2 2 is five. Yes. Might be. You would hope to save as much as 1. 5 to 2 billion, straighten things out on the streaming front, whatever that may mean, and then youre off to the races, potentially. Its such a challenged industry. Those kinds of questions are certainly the key ones, jim. Great reporting. Well get cramers mad dash, countdown to the opening bell. One more look at the premarket as futures, willing to accept this miss in jobs. 175 if you missed it, below consensus of 240. Stay with us. car, this isnt the way home. Thats right james, it isnt. Car, where are we going . Were here. surprise the future isnt scary. Not investing in it is. Car, were you in on this . Nothing gets by you james. Nasdaq100 innovators. One etf. Before investing, carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com when you own a Small Business every second counts. Save Time Marketing with constant contact. With email, sms and social posts all in one place. So you still have time to make someones day. Start today at constantcontact. Com. At corient, to Wealth Management. Begins and ends with you. We believe the more personal the solution, the more powerful the result. We never lose focus on the life you want to build. Its time for Wealth Solutions as sophisticated as you are. Its time for corient. Finishing out this week on a high note. Opening bell is coming up in about four minutes. Dont gonyer awhe. Lets get to a mad dash. We want to talk a little amgen and may want to talk a little bit more because the stock is going to be up sharply. When i met with bob at the beginning of the year, he said, look out, we got something that might be better than glp1s. They just passed phase two. Phase three is a very difficult phase and because this is a different medicine, theyre not going to prove it immediately because they say, oh, we already have something on the market. However, if they do succeed, it would be very big because it does last a little longer. It does . It does. Its an injection now. Theyve given up on oral. You do have novo and eli lilly in this market in a significant way. Its more like cholesterol. Turns out, you have a lot of companies that do it and they still make money. I think amgen should have been up, and remember, amgen was up in january when they said this, and then we got the numbers and eli lilly turned out to be doing really well. Let lilly come down and buy a bundle. Jim, lets get the opening bell here. At the big board, it is the consulate general of mexico in new york. Cinco de mayo is this sunday. At the nasdaq, its the committee to protect journalists. Speak of amgen. Thats going to be the lions share of the dow. Mgen is a great company, and bradway is a serious executive. They have an anticholesterol drug thats still not getting its due. They have a terrific migraine drug that is not getting its due. And all i can tell you is that theyre a juggernaut that people dont think is a juggernaut, and their dow stock that everyone was unexcited about, but they and pfizer are the two drug stocks that are suddenly in the conversation again. And i think its important to point out that pfizer may have some momentum too. Yeah, huge weight in the dow, even before the jobs number was going to account for a couple hundred points of gain. Sure, and obviously, the treasurys are signaling theres got to be s p buying, and david, there were when we look at what happened with the megacaps, i mean, we know that alphabet was really good. We know that amazon was really good, and we know that apple is good, and thats just microsoft was great. So, you have money going back to those in a slowing economy, which is apparently what were getting, you buy those. There we go. Apples gains are significant as you see there. Paring its losses to under 4 . When you mention meta, alphabet, nvidia, microsoft lags in terms of its performance this year, which is basically in line with the s p. Im glad you brought it up, because their conference call, particularly amy hoods portion, was extraordinarily good. They had nothing bad to say. I think whats happened is that their chat is beingdiluted. Now people think that what google has is very good. So, with gemini, you ean . Terms of competing this meta product is really great. Im on it every day. What product are you referring to . Go to whatsapp and call it up. Its so good. I mean, here, let me give you an example. Ill see that cloudflare is down, is ill say, is cloudflare losing share . Theyll point which ones are better and give you the pluses and negatives, and its really coherent, very fast, fabulous. Thats on whatsapp. Thats a meta product and youre using it. Remember, zuckerberg brought 300,000 of the gpus from nvidia, and you see what its for. And yet, when i talk about it, no one else is on it other than me, and i was a claude iii guy. I happen to like claude iii very much, which is anthropic. Amazons the being investor there. Im now using the meta product more than anybody elses. I like these because i dont want to go to an interview and think theres something im missing, so youre interviewing brinker, put in, is there anything new with brinker . I think it was bancel from moderna where 60 of workers there are using chatgpt or some variation of a. I. I dont know how you dont use it. I dont know how you feel prepared enough to look at a Company Without going without putting it through the box. I just dont. When you want to have a comparison of a company or companies, it has every great trade publication comes down immediately and say, okay, ill read what this trade which i never even knew. Ill read the sidebyside, and it helps you make a conclusion. Thats what people do. It helps you make a conclusion. And metas is very i went to zuckerberg and said, listen, we ought to talk about this thing. I mean, listen, its been a while since we talked a. I. In a more significant way, given the avalanche of earnings, but blackwell is coming and the increase in power of that i mean, how much it uses or what its going to do. Not how much power. Sorry. Im saying the multiples of what that is versus now in terms of the compute. Right. Its shocking. Yes. And one of the reasons i keep mentioning im afraid to mention vision pro, because im afraid youll okay. Im done. Turn me into krusty or bozo or any of the variations. You use the omniverse as powered by blackwell, and that goes into vision pro, but it wouldnt work otherwise, because blackwell is so much faster. I wanted to recommend getty imaging. Its too small. Theyre feeding all these images and movies into the database. Thats what you understand that video had eluded had really eluded them. They were really text. Not anymore. So, they can put in every kind of movie ever made, every still ever made, and this is how you get to have lincoln give the gettysburg address after youve watched, i dont know, a program about getting manhunt. I want to see lincoln give an address. With blackwell, i can have that right in my room. I can have anybody. Blackwell has yet to it doesnt ship until the end of the year. Im sure amazon will get it in september. Everyones very excited about it, but remember, everyones a little tired of nvidia being the state of the narrative. Right. They want like if you go to amazons conference call, which was excellent, by the way, theyre talking about their different chips, but then, of course, they throw in that, yeah, we have to we are on the good side of nvidia. Well, the narrative today, jims, largely about things that are financed. The Home Builders putting together gains. Sherwin williams, home depot. So glad you mentioned that, because whats happened is those stocks have been horrendous because people were getting the notion that theres going to be, you know, higher for longer, so the Home Builders have been bad, and the companies that have been terrible are Companies Like floor and decor, which is a very good company. I love to mention companies that david has never heard of or is interested in ever. It has to do with floor and decor. Okay. Got it. Masko is one that is, i think look, theres some home depot and lowes. What about home depot and lowes . Well, thecy have been te terrible, and they might be good. Because rates are falling and then right. Okay. Theyre so rate sensitive. People are more likely to, what . To move or to undertake so, moving diy in their homes . Moving could be more prevalent. Thats what you really need to see more people go home depot and lowes. Floor was a double miss. Ir is down about 5 , jim. You know, you started getting some weakness in anything. Floor decor. New roads. People who are downgrade, vmc, i think that Sherwin Williams did not have a great quarter. Theres fluor corp. Thats water filtration. Ir is down. Sherwin williams. Youre moving too fast. Get back to ingersoll rand. Sherwin williams had been down badly. How about xpo . Earnings up 45 . Tonnage up three shipments per day at five. Well, i mean, they have they have had really good transport numbers and that thing had been going down because of the higher for longer has hurt transports. I dont know if you heard beckys great interview with the ceo of burlington northern. We got an upgrade of unp today. Unp is doing precision railroad, and its really paying off. I also think that this is a case where you can look, point by point, about everything that goes into a home and its pretty darn good today. What is . Homes. Homes. You like it . You like homes . Yeah, i do. Mahomes . I like mahomes. Who doesnt like mahomes . Its hard not to like but i Kadarius Toney did not fare well in that department. You know what he didnt do . He didnt bet on games. Draftkings turned in they turned him in to the authorities, which i thought was so now were talking about the nba player . If youre betting on your own game, betting on any game, they nail you for that, but draftkings is a stock that should go up. The nba has been particularly enjoyable. Particularly last evening was quite fun. That hurts. He has had it in for you all week, youre right. All week. I mean, like, what else . Josh hart. Brunson. Oh, brunson, hes villanovas own. The three villanova guys. They scored or assisted on almost all of the 118 points. Im so glad. Did you narrate that game at your home . Did you look in the mirror and say, oh, look at that shot. Holy cow. Did you do that stuff . From downtown i usually do my best clyde fraser. Hellacious and salacious. I wish that doris burke would replace you right now. I want doris burke right now. Here, next to you . Yes. Please. Todays the day where i say, could you replace david for one game. She would have the same questions. The single best announcer in the world. Jim, i dont understand the vision pro. He hasnt hit me on estee lauder today. We got, actually, it was is it hot in here . I cannot take it anymore downgrade. Please. That guys drowning in, like, mac. Jim, all week long, we have been talking about industries where one company ease on the sunny side of the street, the other side, shady. This expedia bookings split today is a good example. The expedia call was a disaster. They were saying, our vrbo application didnt work. Expedias conversation, it is nothing like bookings, which was very good. Booking talked about traffic and where things are if you came out the latest the earliest you came out of covid is now recycling and theyre no longer traveling the way they were. But the glitch that happened at expedia was not related to travel. It was related to their own internal bungling. Meantime, booking holdings was a beat. They did not raise their guidance. They said they want to wait a bit. Theyre worried about the mideast. They were more sensitive to the mideast than almost anybody because april is turning into a month that people are worried about, but bookings was a fantastic quarter. T they are a great company. Holy cow. Berkshires big meeting this weekend. Monday, well be running excerpts from what i assume would be the interview with warren. Becky had some great interviews this morning. Always worth taking a look at berkshire. It is one of the its the top, i dont know, six or seven at this point. Its got an 870 billion market value. By the way, owns 160 billion worth of apple. Right. That was a great buy. A great buy back in the 20162017. Cocacola. The portfolio and an enormous cash position that he has yet to actually hes getting a return on, thanks to Interest Rates, but has not bank of america. Has not bought something with. Youre right. Its big enough that we should be spending more time on it. That is not a bad chart. That is not a bad chart. No, it isnt. They dont tell you a lot. That is the greatest investor of all time right there. Absolutely. Well, you know what hes the g. O. A. T. Hes the g. O. A. T. Own the stock. He is the g. O. A. T. But is there a 30 for 30 about him . No. I dont know why that was funny. I dont even know why. The way your brain works, im like, what . Well, boeing hasnt done anything bad in the theres a piece in barons about the second whistleblower to die in recent weeks, jim. We didnt touch on the ftc pxd story about whether or not they will recommend a criminal probe of scott sheffield. That deals closing, by the way. I think its close. I reached out to some of my sources because i want to defend him but you didnt defend a guy without knowing more. Hes taught me more about oil than almost anybody in the world, and that doesnt mean i mean, i need ammo. I cant just say, listen, theyre wrong. You got to know. They have so many emails. Obviously, theres something going on. You can talk to darren woods. I guess. I mean, they claim its being misunderstood by the ftc, but they said, okay, sheffield said, all right, i wont be on the board of the combined company. Going to be talking to darren on monday, by the way, from milken, and well certainly talk about that. Well continue to, as well, talk about, as i brought up any number of times, this sort of unique dispute that theyre in about that joint operating agreement in guyana, in which theyre saying they have a right of first refusal. Is that your lineup . Thats my lineup, yeah. Mnuchins my guy. Solomons my guy. So, those are two ive got the two kings. Youve got a 7, 9, and a 3 youve got there. Trying to move it in different directions. Day one will be good, though. Marc rowan is always great to talk to. Are you going to ask about colleges . Hes been so involved. I think it would be hard not to discuss some of the campus protests with him. But theres never enough time for marc rowan. Marc rowan is fantastic. Not to mention david solomon. And david, yeah. Strong earnings at goldmansachs. Hes got to be feeling decent about things. Yes, definitely. By the way, magnificent seven is having a great day. Well, at least, microsoft. Sure is. Well, actually, coin had some premarket gains, jim, but relatively flat now. The one i was thinking of was block with dorsey rolling out new plans for bitcoin. Theres two elements to block last night. Theres the dorsey rollout of which it talks about, so much about bitcoin, and by the way, they dont care for ethereum. But then there was just, you know, talking about the plain old business of the app. And it was really terrific. And i think the stock should go much higher. I thought that was a really, really Good Conference call and theyre doing a lot of business. Livenation, we havent touched on with a nice beat. They dont think justice will pursue a breakup. Concerts were a little light. I got to im not sure look, i think rapinoe is terrific. I think the game against the Justice Department here is a bad idea. You dont want to game the Justice Department, because the Justice Department, like the ftc, david, we have kind of a activist Justice Department. Yes, we do. Ticketmaster. Im not sure they like it. There were a lot of questions as to whether that should have been allowed in the first place, but now theyre coming after it many years later. Theyre trying to make up for a lot of things that others have checked off on, other administrations. When you talk to justice, i mean, justice is look, ftc and justice, very much aligned on a lot of things, but carl, one of the things theyre really aligned on is the consumer and Small Business has been hurt by all the big deals. You know, we havent mentioned the closing arguments took place in the google antitrust trial. Yeah, because it wasnt its going to be a while until the judge rules. Its not the big one. No, its not, but its not unimportant. No, its not unimportant at all. And i want to see the tenor of the judiciary does not necessarily agree with the different organizations. Theres another doj headline on something weve covered. Theres the judge im talking about, of course, closing arguments there. Asked a lot of questions on both sides, relying on the reporting of others there in terms of what took place in the courtroom. Jonlt Jonathan Kanter was there from doj. Very good guy very smart. Banks banks downs. They like higher for longer. With jpmorgan, easy to tell that they the banks have been adamant that higher for longer is fine for us, so if we get not higher for longer, then people say, okay, well, they didnt think thats that good. Im surprised that alphabet isnt up more, given the fact that the cohort that its in is doing well. Finally, we didnt some of the comps, the organic numbers on hershey were interesting, just given what the commoditys done. We got to get a handle on how much they locked in, because man, theyre going to have a good year next year. I think that stock should be bought. Michelle buck is a very good ceo. I thought mondelez had a really good quarter. Meantime, more data on the way. Services pmi. Lets get back to rick santelli. Hey, rick. Yeah, and services pmi popped the tenyear back above 4. 5 . These are april final. We take the midmonth read and toss it. 50. 9 now becomes 51. 3 on the services. Thats still the weakest level, actually, since november of 23, but it is the tenth consecutive month above 50. Lot of differences between services and manufacturing. If we take the composite, it was at 50. 9 midmonth, moves up to 51. 3, same as the services. Thats the weakest since december, but it still remains 15th consecutive month above 50. And as we sit here at 4. 78, were down 21 basis points on a twoyear and on the tenyear, which just popped up briefly above 4. 5 at 4. 49 . Its down 17 basis points on the week. We still have more data at the top of the hour. Ism, services. Squawk on the street will return after a short break. 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 happy mothers day some things never change. Like a mothers love. Get something as timeless as a mothers love at harryanddavid. Com. Life is a gift. Share more. vo what does it mean to be rich . Maybe rich is less about reaching a magic number. And more about discovering magic. Its a beautiful. Day to fly. Wooooo take a look at weektodate nasdaq 100 gainers. Tesla in there, moderna, amgen, not just helping the ndx but that and apple adding about 350 points to this 500point d gain. Take a short break here and be back in a minute. Ss. We need to scale with customer demand. In real time. jen so we partner with verizon. Their solution for us . A private 5g network. ella we now get more control of production, efficiencies, and greater agility. marquis with a custom private 5g network. Our customers get what they want, when they want it. jen now were even smarter and ready for whats next. vo achieve enterprise intelligence. Its your vision, its your verizon. Doors take us places. So you bought a place. To new adventures. Oh. Mwah. Planned. And unplanned. Surprise they lead to goals. For you, mama. And connect us to family. I didnt get the part. Your dedicated fidelity advisor can help you open those doors. But i did get waiter number 2. Because they know you. They can help you create a comprehensive plan for your full financial picture and personalized Money Management with the right balance of risk and reward. Doors were meant to be opened. New projects means new project managers. You need to hire. I need indeed. Indeed you do. When you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. Visit indeed. Com hire and get started today. If youve ever grilled, you know you can count on propane to make everything great. But did you know propane also Powers School buses that produce lower emissions that lead to higher test scores . Or that propane can cut your energy costs at home . It powers big jobs and small ones too. From hospitals to hospitality, people rely on propanean Energy Source thats affordable, plentiful, and environmentally friendly for everyone. Get the facts at propane. Com now. And theyre all coming . And environmentally fthose who are stille. With us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Its time for jim and stop trading. Once i would lake any way airbnb, i think chesky is doing a terrific job, brian, but on the expedia call last night the problem is vrbo. They had a glitch and the natural winner if you were looking at vrbo is to go to airbnb. They were offline for enough for me to think airbnb is going to have an upsize surprise. I would buy that stock and not recommend if it werent doing well. So many mixed signals in travel. The warning out of the european car rental company. Its confusing now, but if you are frugal traveler, you will go with the bookings and airbnb, its cheaper than a hotel. How will you close out. Generac which is an interesting company, were seeing were no longer getting the big money put in the Climate Change to stop it, and its going to security, the government, but generac is a way, if you think that your Utility Company doesnt do well when it gets hot because the grid is so bad, generac is there. You get more storms that are more powerful that come through and knock out your electricity for any period of time youre not a denier. Im glad. You and i can agree there is Climate Change going on. Yes. Theres the melting. Im not a denier. Youre not . No. I thought that, you know because i said that im im worried about Climate Change its not going to matter when ai kills us all. Thats davids point. Or put our visionpros on and see what world was once like, as were in our cradles allah the matrix living our lives that dont exist. Like contour sneakers and jeans my friends. Brooks. They were on today. Thats why i mentioned it. See you tonight, jim. Have great weekend carl, have a fantastic weekend. You too. Great cinco de meo. See you monday. Were back in a moment. 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 . in any business, you ride the line between numbers and people. Whats right for the business and whats best for everyone who depends on it. Solving todays challenges while creating future opportunities. It takes balance. Cla cpas, consultants, and wealth advisors. Well get you there. As an independent financial advisor, i stand by these promises. As a fiduciary, i promise to be the financial steward that you and your family need. I promise to put your longterm Financial Wellbeing above any short term transaction. Everyone has a big picture. My job is to help you invest in yours. [announcer] Charles Schwab is proud to support the independent Financial Advisors who are passionately dedicated to helping people achieve their financial goals. Visit findyourindependentadvisor. Com i cant believe you corporate types are still calling each other rock stars. Youre a rock star. Were all rock stars. Oooo look look at my data driven insights, im a rock star. Great job putting finance and hr on one platform with workday. Thank you guys, can you keep it down. Im working. You people are guitar noises . Hand over the air guitar. Ive got another one. Good friday morning. Welcome to another hour of squawk on the street. Im sara eisen with Carl Quintanilla and david faber, live as always from post nine of the new york stock exchange. Rally day on wall street today. Dow is up more than 500 points. S p surging now 1. 5 . The nasdaq in the lead up 2. 3 . Every sector in the s p 500 is higher right now. Information technology is leading with a 3 rise there. Energy is lagging, but has turned positive on the day. Reaction to what is being called a goldilocks jobs report. Well get into it. Take a look at treasuries which tells you the story theyre getting bid and yields lower 4. 5 on the 10year. The 2year down to 4. 785. It was over 5 this week. The dollar is weaker. A market friendly reaction. 30 minutes into trade percent starting with apple, one of the biggest gainers post results and well break down the results and comments from ceo tim cook in just a moment. Amgen shares are surging, announcing plans in favor of moving forward with its injectable drug similar to wegovy. The company will release initial data from a mid stage trial on that drug, but its pleased with the results so far. Travels name bookings, holdings, expedia heading in opposite directions. Ceos calling demand healthy on their conference calls. To ism services to close out this week. Rick santelli has got it. Hey, rick. Yeah. Theres a tug of war going on in these numbers. These are from ism versus s p global and theyre also the service side. If we look at the headline it dipped back below 50. Its 49. 4. We havent been under 50 since december of 22 and thats where we come to because that was 49. 0. If we look at prices paid, the exact opposite scenario, moving higher. 59. 2. Now granted it only comes to january of this year when its 64 but in the interim period we were lower. Lowest of the year last months read at 53. 4 the weakest, going all the way back to 2016 to find a weaker number than that. Yes, this was a big deal. Now if we look at ism Services Employment after we just had the big employment report, it comes in lighter at 45. 9 kind of in correlation with that number, 45. 9. That look the weakest back to december of last year. And finally the new orders component, expected to be around 55. Last look 54. 4. Drops down to 52. 2. That would be the weakest going back to 52. 2. You have to go back a ways. Thats the weakest since december of 22 when it was 45. 0. Its been running on the strong side. Of course, even though its above 50 in expansion mode its weaker than weve seen in years. Sara, back to you. Okay. Thank you very much. Feeling maybe that what weve been seeing post jobs, rick santelli. Lets talk about what we got on the jobs front, 175,000 jobs added in the month was good, but slower than its been and thats what market wants to see. Its what fed wants to see. So it was the smallest job gain in six months. One thing thats good. It still shows theres job gains. Why did that happen . Well, actually, if you strip out the internals here, i really wanted to show the health care and private Education Sector combined added up to almost half of the job gains which shows you it was the softer report than expected an the cyclical parts of the economy, but it was broad based in terms of where the jobs were. Leisure and hospitality adding 5,000 gains was notable because thats been one of the biggest job creators, adding ten times that in the last few months. Notable slowdown. The average Hourly Earnings, this is what fed is going to care about most because theyre trying to target inflation and bring it down. Wages feed into services, so the change on average Hourly Earnings a surprisingly low 0. 2 month over month gain. Expectation was for 0. 3. Some of the banks were preparing us for 0. 4 boa. Given the california higher minimum wage numbers and mandate in restaurants there. The annual change in wages was 3. 9 . That was below the 4 consensus and march which was unrevised and, david, the good news for the fed they would hope it wouldle filter into places like the super core inflation number, services exhousing which has troubled them because wage costs are a big component of the Services Sector and so after that hot employment cost index number we got, that was for the First Quarter, if we continue to see numbers like this on wages that number should come down. Does this start to pull forward those guesses in terms of when the fed will actually cut rates . Theyre thinking maybe 50 basis points well get, maybe two rate cuts this year, september and december. I think its too early to tell that because the tell is going come in the Inflation Numbers. But this is a god sign. Its a sign that the economy is still healthy, but the fed policy is working. I think its important to you were coming into this week worried about two things, which the market was, rate hikes and stagflation, this number and what we heard from the fed this week i do think goes pretty far away to alleviate those concerns. Bonds are rallying, the dollar is selling off, equities are rallying and that makes sense because, by the way, japanese have got to be happy about this too, because weak dollar on this really helps their case sort of helps on the soft landing which the bull case is all about. Beyond that in terms of what were gregts companies this morning and last night as far as the economy and where we go next, its a mixed picture. If youre in the mortgage world youre feeling the heat. Mortgage rates went up for the fifth week in a row. Heres what Rocket Mortgage says on their call. Its a tough market out there. You know, youve got rates that are kind of moving a little bit in the wrong direction, nba data showing Mortgage Applications are lower than expected. The only other one ill give you, which has been one of the stronger parts of the economy is live nation and they dont see slow down there. Just to make sure we hit hard on the consumer demand, we are seeing no weakness. The things that we look at that give us an indications of how the shows are selling and how the fans are spending when they go to the site, all continue to be very strong. Concerts, no demand weakness there. Making it very clear thats a part of the economy doing just fine. Experiences we talked about it. Yeah. Different story that weve heard so often from the clips weve shared over the course of the week in terms of the consumer, but not when it comes to experiences. No. But, you know, you are its enough weakness in the low income consumer and sort of permeating across the consumer given the high inflation and high rates where the fed can look at the anecdotes for earnings season and say it makes sense theres less demand for labor and the consumer is starting to feel strained, as they move towards this elusive rate cut. Apple sit higher after announcing the largest Share Buyback in history although iphone sales did slide. Steve joins us with a breakdown in the next few weeks. Thats right. Looking back to what happened yesterday, revenue for apple down 4 in the waquarter, iphon sales down, who cares. Apple gave its shareholders the biggest buyback in history, 110 billion, increased the dividend to 25 cents and guided towards modest growth for the june quarter. That was slightly unexpected as analysts had been trimming their june quarter system in recent weeks. Also ease something fears around china. China sales were down 8 . Than an improvement quarter over quarter from 13 in the december quarter. Ceo tim cook telling me in an interview yesterday iphone sales in Mainland China grew, countering the narrative weve been hearing. I asked about his recent visit to china, and he told me, quote, i feel great that in an extraordinary competitive environment that we grew iphone sales in Mainland China last quarter and may come as a surprise to some people and i feel good about china and think more about the long term than the next week or so. The Services Business appears to be pretty much over its postpandemic slump beating expectations 23. 9 billion in sales, up 14 from the year ago quarter. The cfo said on the Earnings Call to expect similar growth in services for the june quarter and as for ai, really not much material there to share. I tried to squeeze some fresh details out of cook, and he wouldnt budge, but he did tease again and again that announcement on generative ai soon which are expecting at wwdc on june 10th out there in cupertino. A lot of teasing going on. Well have to wait a few more weeks to get a little bit more. Thanks. Steve covac on apple. Our next guest does underscore the significance of iphone demand slowly turning the corner in china and awaits the drug world moment when Apple Unveils its ai strategy in june. One of his top picks, dan ives joins us at post nine. Outperform target of 250. Happy friday. Great to be here. Overall thoughts on china. Back was against the wall. China came in much less bad ill call it than anyone feared. We started to see a turnaround in march going into april. Now granted these are not phenomenal numbers, but now youre on the trajectory. You see growth again in china. I think it comes down when you bet against cook and coup no youve been proven wrong again and again this is another quarter they came through. Plus signs in china this year . I think in september you start to get growth in china and this leads to what i believe, not just from an ai perspective, next six, nine months, its going to mean ai driven super cycle with iphone 16. Youll get china 230 million iphones, 70 of them have not upgraded in the last three years. But its limited growth, isnt it, dan, overall . Yeah. I think for this quarter, of course limited growth. But i think when you look at the next 6, 9, 12 months, that renaissance of growth is coming back to coup tino combined with the ai story. To me, when you look out its a time i believe its just the beginning of the flex phase of the growth story for apple. The most important thing in this quarter given the doomsday about china being down 12, 15, 18 , its not youre starting to see a turn and thats why cook, 10 politician, 90 ceo. How important is june 10th and that announcement going to be . Put it in perspective of highly anticipated moments from apple . Its the super bowl for apple. If i look back to the last four, five years, its probably the most important moment because as we have talked on the show, this is really ai coming to cupertino, showing not just on what i believe will be on the iphones and the exclusive features, but about the developers, services, thats the rock of gibraltar for apple and this is going to be historical moment, not just for apple but showing that ai is coming to the consumer led by the 2. 2 billion ios devices. Dan, the capex numbers from the other mega cap tech players are just mind boggling. We dont really know exactly what apple spends, do we, when it comes to ai, generative ai . Do we have a sense to what theyre doing . We believe its going to be up 40 to 50 in terms of ai capex this year. Because i think apple recognizes and cook has talked about it, behind, you know, competitors, you saw the Ev Initiative that they ripped the bandaid off and now its all deep end of the pool on ai. Thats the right strategy because we believe when this is all said and done, it could add 40, 50 per share to the story in terms of services that could be an incremental 8 to 10 billion in what will drive the ai driven super cycle with ai, the china story, just the start of that turnaround. I think its going to be a brunsonlike moment for apple and for cupertino do you taylor that just for david . Is that a new one in your repertoire thats one i just unveiled right here. Yeah. You mentioned the bandaid on evs. People are saying the same thing about tesla in some ways, that evs going into a bit of a dark age. Its robotics and ai ascendent and that company will change as a result . It was a dark day as we talked about for musk and tesla, but i do think turning it around in terms of what weve seen the sub30 vehicle that gets launched next year but it is about autonomous. The golden goose for tesla is autonomous and fsd, but the sub30 key vehicle was so important theyre going to release into next year. For the first time as weve talked about probably in a year and a half, you feel like there is a pilot on the plane and thats snmusk . Of the two you favor them equally . I think apple is the one you fay investigator vor over te tesla favor over tesla, because of ai coming, the ai driven upgrade cycle into ai 16, its a pop like popcorn moment for apple as we look forward. You didnt mention the buyback. Why are they doing that now . Whether you look at the buyback, it speaks to our view from a capital allocation. That Free Cash Flow generation will continue to increase and another drop the mic moment in terms of 110 billion. Its going to be additive to the story. I think coming into this quarter new york city cab driver was bearish on apple and the bears go back into hibernation mode on the apple story. Not just retail, right. Active managers have been reducing exposure for to apple for years, night what is the positioning look like . The institutional i think the most negative on apple institutionally in four or five years. Any positive that you say about apple, you get 25 emails coming back saying negative. I like that relative to the setup here. If im betting on someone its cook and cupertino. And thats good stuff. Important print. Great to see you. Dan ives. Berkshire hathaway shareholders are gathering for the companys annual meeting this weekend. To becky quick who is there and she has a lot more on what we can expect. Becky . Reporter hey, david. Its great to see you guys right now. We are looking around, were on the floor of the Berkshire Hathaway annual meeting. This is where things will be taking place. Obviously, this is the calm before the storm. Everybody is set up. You can see this is the booth behind me, a very popular edition in the last couple years. This was a company they picked up when they bought allegheny in 2022 and turns out out to be a popular one for the squishmallows. You got forest rivers, rvs and boats here, Berkshire Hathaway energy, justin booth is here, cs candy and the geico gecko. Looks like it does every year but this is a different meeting than it is normally. This is the first time this meeting is taking place without Charlie Munger that has raised a lot of questions among shareholders trying to figure out what future of Berkshire Hathaway is. Obviously, this is something theyve been planning for a long time, succession, greg able, a vice chairman there, has been named the ceo successor to warren buffet, but these are questions circulating with the shareholder base. We got a chance to talk to sue decker, the lead director at Berkshire Hathaway and said even though Charlie Munger is not here physically the reminders and morality and the culture that he built into this company are still very much alive and well. All of those lessons and talk about those things with us this morning. There are other big issues that are facing Berkshire Hathaway this time as well. Issues that warren buffet laid out in his annual letter to shareholders and talked about how profits at two of their Major Companies Berkshire Hathaway energy and bnsf the railroad profits were down, and he talked about that and laid out how they think theyre going to get to better profitability and margins. Tomorrow warren buffet is taking the stage and he will be there along with chairman greg able and jay james to talk about the issues facing the company. He will be taking questions from the floor and shareholder questions weve been collecting over time. Mike santoli and i are here covering this at 9 30 eastern time tomorrow on cnbc and cnbc. Com but again, this is the calm before the storm. Theyre expecting more than 40,000 shareholders to come here and shop and go into the meetings and listening to all as well. Ill send it back to you. Im curious about the Insurance Business and how its doing. The industry has faced scrutiny lately and weve been covering on the inflation data, steep rate increases in auto and home homeowner insurance. Yeah. Those are issues that were it took time to build through the pipeline to catch up with the inflation that was so rampant a few years ago. You cant just raise rates automatically at an insurance company. You go state by state and ask the regulators to approve those signoffs. It is something youre seeing that shows up in the inflation data that fed is watching so closely. I think this year was the year that Auto Insurance went up across the board because it took them a few years to get those through. I dont know if you remember during the pandemic all the supply chain issues that took place it got a lot more expensive to fix cars between that and the parts and labor, so those were things that they had been pushing for rate increases, and it did take time for the states to say okay and catch up with it. The Insurance Business was profitable for Berkshire Hathaway last year. I think thats less because of margins in home and Car Insurance, more because of the reinsurance and there werent as many storms. Thats what berkshire the big issue in terms of profitability is, whether you see big storms and storm damage that takes place across the country and globe. Reinsurance is a big part of that too. Okay. Grab a squish mallo for me, these. Thank you very much. Okay. Looking forward to the coverage. And just reminder becky and mike santoli will be live in omaha beginning 9 30 eastern tomorrow. Tune in to cnbc or you can stream it on cnbc. Com. As we head to break here on squawk on the street heres our road map for the hour. More on whats next for stocks and the fed with Goldman Sachs chief economist jan hatzius after a week of data earnings and another hold on rates. Okay. That you sounds of berkshire shareholders gathering and what to expect and then amgen soaring while novo is down. More on the battle over these booming markets for weight ls os drugs as squawk on the street comes right back. Count on. grandma and a million stories to share. vo the key to being rich is knowing what counts. Market in rally mode. We have given a little back in the last 20 minutes or so. The s p up 1. 5 . Some of the sects turning red, energy, staples, and financials going negative. It is still a broad rally and the nasdaq is leading. Its up 1. 6 . Technology the best performing sector in the s p thanks to apple and also some other gainers. Energy, first solar, Motorola Solutions going strong. What to do next is lisa, Morgan Stanley Wealth Management cio. Lisa, the jobs number certainly helps feed the soft landing narrative and the view that the fed can cut rates. Should that be positive for equities . Look, im a little bit of a skeptic here. I dont think anybody knows anything. You know, i think we were due for a little bit of a lighter payroll number after the streak of upside surprises. Our labor data is its still quite mixed and while i know that market got itself a little bit off sides in terms of positioning, with regard, you know, to worries and fears about a hawkish fed and they, obviously, didnt get one, chair powell never goes there, i just think theres a lot about the repositioning that were seeing that is just that. Were going back to an estimate on feds funds futures for two cuts as opposed to less than two cuts and where we should be at this point. Why are you not feeling better about the equity market market which loves rate cuts . I believe this is a market that loves rate cuts but what are the rate cuts going to buy you . The parts of the market that have been, you know, most successfully rewarded, some of the mega cap tech companies, generative ai stories, some of the cyclicals, you know, for the most part theyve been in Interest Rate insensitive for a large part of this cycle. Theyve benefitted from the fact that that higher Interest Rates didnt matter and so one of the things were reminding our clients is, you know, if they didnt matter on the way up, they may not matter on the way down. For us lower Interest Rates are going to help those who have been left behind, right. So who are some of those . Theyre the unprofitable companies, the small companies, small cap. Theyre, you know, some of the emerging markets. You know, Type Companies who are very Interest Rate sensitive. And so thats where we would be buying today. We wouldnt be piling into the stuff thats already expensive, was already Interest Rate insensitive and now suddenly, you know, the belief is, oh, we could push the multiples higher. Do you have confidence Inflation Numbers will come back down . It was a good sign to see average hourly wages but some folks paying attention to the prices paid in the manufacturing numbers which were firmer. Of course we got that employment cost index. And there are still questions, right. I think we get the next cpi the week after next on the 15th. Yeah. Were not convinced. Were not convinced were on a sustainable path to 2 . Do i think that there are clear indications that disinflation is in the economy, yes, i do. But look, the super core Inflation Numbers have been accelerating for literally 10 months straight. And we shrugged it off for a long time. I think if theres real inflationary pressures there, we know that housing market, which is key to the cpi readings, Single Family housing prices are continuing to hold in there. I mean, the latest National Housing numbers are up over 6 , up over 7 in urban areas. So, you know, i dont think were wholly out of the woods yet. Lets just remember todays number even on our average Hourly Earnings as you talked about, 3. 9 is less than 4, but just. And 4 is still two times two. All right. Lisa, thank you very much. Skeptical take there. Appreciate it. Absolutely. Coming up after this, goldmans first reaction to the bsumr enjo nbewh were back in just a couple minutes. At corient, Wealth Management begins and ends with you. We believe the more personal the solution, the more powerful the result. We treat your goals as our own. We never lose focus on the life you want to build. And our experienced advisors design custom built strategies to help you get there. Its time for a Wealth Management experience as sophisticated as you are. Its time for corient. Its payback time. All these years, youve worked hard. You fixed it. You looked after it. Maybe its time for your home to start taking care of you . If youre 62 or older and own your home, a reverse mortgage can put more money in your pocket by eliminating your monthly mortgage payments, paying off higherinterest credit cards, and covering medical costs. The fact that were still in this home, means so much. I get to go do what i want when i want. Our customers homes are taking care of them, maybe, your home could do the same for you. Call aag and get your free info kit. Call this number. Did i read this . Did i get eggs . Where are my keys . Memory and thinking issues keep piling up . It may be due to a buildup of amyloid plaques in the brain. Visit morethannormalaging. Com its a beautiful. Day to fly. Wooooo welcome back. Im Pippa Stevens with your cnbc news update. Donald trump says his legal team plans to file a lawsuit challenging a gag order in his new york criminal hush money trial. The order prevents him from speaking about potential witnesses in the case online or outside of the courtroom. The judge fined him 9,000 earlier this week for breaking it four times. Meanwhile, trial testimony continues today with the forensics expert who examined the phone of trumps former fixer michael cohen. Connecticuts governor says a major artery linking new england with new york will be closed for days. He says the state will have to take down a bridge over i95 that was badly damaged by a tanker fire thursday. The governor says he hopes the interstate will reopen before the monday morning rush hour. And china launched an uncrude spacecraft to the moon today. The lunar lander will go on a twomonth mission to retrieve rocks and soil from the far side of the moon which faces away from the earth. Its expected to land in early june. David . Thank you. Take a look at amgen shares up as much as 13 , on news surrounding its weight loss drug. Shares of competitors such as eli lilly, where you see right there, novo nordisk as well r both down. Lets get to angelica who has more on the story. Hey, david. Yeah, so amgen shares are up this morning after the company saying it will advance its injectable drug for obesity into the final round of clinical trials. Thats a big deal for amgen because its, of course, the final round of trials and its a huge market for obesity drugs. Theyre saying theyre planning a broad phase three program, so for obesity as well as type 2 diabetes. This news came out yesterday on their Earnings Call. Theyre also saying that they are dropping plans to develop an experimental pill for obesity. But investors are happy theyre moving ahead with the drug called maritide. They need to prove the drug works but youre seeing pressure on novo nordisk and eli lilly just on news of this drug moving forward. David . Ill take it. Thank you. Angelica peebles. More on stocks in this mornings jobs number after the break. In the meantime check out shares of estee lauder. It sees a slower recovery for that name which has had no t lt mthf challenges down 34 inheas12ons. Stocks are in rally mode and so are bonds off the weaker than expected jobs report. Steve liesman joins us to discuss what todays data might mean for the fed going forward. Excited about rate cuts again. Its a onetwo punch. The job numbers on the heels of the fed meeting restoring confidence in rate cuts but some of that taken away in just the past few minutes by an inflationary undercurrent in the 10 00 a. M. Ism services report. A more dovish press conference by the fed than expected on wednesday, that offered the first and then the jobs report gave the probabilities a second boost. The cut was 38 from 24, not even money and theres the current from the post fed meeting. September, though, hitting 66. It had been under 50 earlier this week. Now an even bet a lot of volatility in these numbers with each of the data that comes out. Best news from wall street in the muted wage gain, maybe the result of immigrant workers filling lower skilled and lower paying jobs. The lowest gain since june 21, suggests a loosening in the job market. Fed chair powell monitors the employment cost index and showed an acceleration First Quarter and the ism price index that rick was reporting higher than expected but remains lower than it was two years ago. It was up in the 80s. Now fed governor bowman was kind of hinting in this and i will get back to that, she says her baseline outlook is still inflation will decline with rates at colonel levels. Thats part of the sort of what was more dovish this week. Willing to hike if inflation progress stalls and reverses and expects inflation to remain elevated for some time. Last years inflation progress was temporary. Monetary policy is restrictive and needs more data to know if its sufficiently restrictive. That was above it was hikes not being on the table, not necessarily signaling any cuts but the idea that the current rate is restrictive enough to bring down inflation, a belief of one of the most hawkish members of the fed makes the statement and the position of the Federal Reserve more dovish than the market feared. Appreciate that setup. Lets continue that conversation with Goldman Sachs chief economist head of Global Research jan hatzius here at post nine. Happy friday, thanks for coming in. Good to be here. You nailed the wage number, although in a week where we got unit labor cost are you confident in the trend here . Im confident the wage trend is down despite the eci and go back to the press conference on wednesday afternoon, chair powell also said that you focus on the year on year rate, in the year was flat, average Hourly Earnings is below 4 , and if we take a broader look at other wage indicators, the atlanta fed wage tracker, for example, the trend there i think is clearly downward and thats very encouraging. The price Inflation Numbers have been, obviously, unfavorable and they will need to slow significantly over the next few months for a rate cut to occur, but i do expect that. I do expect much better core pce and cpi numbers in the second quarter. Youve written a lot lately about relief in the offing in insurance, written about the lag in shelter and that keeps you in the july camp . It does keep us in the july camp. I think thats still the reasonable baseline. It can be later if we dont get as much deceleration in wages, then it probably wouldnt be july. But i think still more likely that it will be a july cut. Are wages the key to that Super Core Services cpi coming down . I think the wages and the labor market rebalancing that were seeing in the job openings numbers and the quits numbers, i think that is the key to be comfortable that the trend is still down even with these worse monthonmonth numbers in the First Quarter. Do you think that if they cut in july or maybe later in the year, that will prevent a recession or something worse on the economy . We dont expect a recession. I think if we didnt get a cut in july, that wouldnt put me into the recession camp. We have a probability ofa recession over the next 12 months of 15 . So if you have worse inflation news, maybe that wouldnt raise that number somewhat, but its pretty far from 50. Q2 tracker youre on 3. 3 in line with atlanta at the moment. Right now were exactly in line, and 1. 6 in the First Quarter to us seemed held down by special factors, investors, net trade, government, so we think well get took about a stronger growth pace. Do you expect the tone of the fed speak beginning tonight to change over the next few weeks ahead of cpi . Well, i think the tone on wednesday was more dovish than i think many people had anticipated. I think it was more adamant that rate hikes are not on the table and thats certainly the most important fed speak. What we have from other people is going to depend on a range of views you heard from governor bowman. Shes been on the more hawkish side. She is not sure that policy is sufficiently restrictive. So there is a range of views and i think people will want to see the cpi. Why do you think policy is sufficiently restrictive . Because i think the trend in inflation is still downwards. Yearonyear rate has continued to come down despite the worst sequential numbers. The labor market continues to rebalance. Wage growth is coming down. I dont think you need significant economic weakness to get inflation back down to 2 . I think were getting inflation. Were on the way to getting inflation back down to 2 . Dont forget, we were at 5. 6 for core pce inflation now 2. 8. Weve done three quarters of the adjustment without any weakness in Economic Activity and i think than can continue. Do you think financial continues play into the view forward on inflation . Powell was asked about this and, you know, the fact that stocks have been hit and bond yields have risen, i mean, that bodes well for what hes trying to do. If that reverses now, as the market gets excited about rate cuts, is that another challenge . Well, all else equal, easier financial conditions deliver a positive impulse to grow and then the question is how much growth can the economy do in without a set back in inflation. Now weve been fortunate to also see very strong supply side numbers. Demand has been strong. Supply has been even stronger. You can see that from the rebalancing in the labor market. Despite these high jobs numbers, todays number withas weaker bu 1. 75 is not terrible. Despite strong employment numbers the Unemployment Rate drifting up. Quits are down. All of that is telling you that we are rebalancing without economic weakness. Finally really quick, ism Employment Today expectations, hiring intentions percentages are beginning to game out very low numbers for the coming months in payrolls. There is a Downside Risk to your portfolio . There is a little bit more Downside Risk if i look at some of the surveys that have been a number of them and you mentioned them both of these Service Indices for purchasing managers, ism, and market were on the weaker side. The new York Fed Survey of expectations among consumers on the job market has been softer. So well monitor it. The good news is, its coming via still very subdued hiring. We have not seen a major layoff wave and the claims numbers continue to be very encouraging. To me, this still looks like a controlled deceleration which is better than the alternative. Always great stuff. Thanks, jan, for helping us. Jan hatzius. Next hour on money movers dont miss the ceo of hasbro talking Consumer Spending in the companys billion dollar bet on digital gaming. The ceo in the middle of a turnaround there. More squawk on the street when we come right back. Trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the awardwinning trading platforms. Bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. Tailor the platforms to your unique needs with nearly endless customization. And track Market Trends with uptotheminute news and insights. Trade brilliantly with schwab. I cant believe you corporate types are still at it. Just stop calling each other rock stars. And using workday to put finance and h. R. On one platform. Tim, you are a rock star. Using responsible ai doesnt make you a rock star. It kinda does. You are not rock stars. clears throat okay. Most of you are not rock stars. Oooh. Data driven insights, and large language models. Oh, thats so rock roll. It is, right. He gets it. Yeah. [crowd chanting] they ignored your potential, and mocked your ambition. But its not the critic who counts. With every swing and block, your game plan never changed. Some still call it luck. Let them. Because you know what its always been. Inevitable. Next week were going to be live from the Milken Institute global conference on squawk on the street. I will sit down with the ceos of apollo, Goldman Sachs, exxonmobil and next from steven mnuchin, former treasury secretary perhaps pursuing tiktok, for example, and well talk ai. Openais Brad Lightcap will be my guest. Ill be there with you. Hearing from the ceos of ibm, ai front and center, chevron, mattel. Weve got an exclusive with jane fraser the ceo of citigroup who has been knee deep in her restructuring turnaround. Thats going to be coming up on monday afternoon and ken griffin from citadel. All the big investors are there. Yes. We want to hear he has not revealed who he is supporting in the election. Any chance he would support biden . Come on. Doubtful. Yeah. So maybe hes got somebody else in mind other than the other candidate. Well wait until he answers the question next week. That ism prices paid, some of the shine off the data as steve said. Dow is hdi otoaiolngn gn of 361. Stay with us. Ch is less about reaching a magic number. And more about discovering magic. This is our future, ma. Godaddy airo. Creates a logo, website, even social posts. In minutes how . A. I. impressed ay i like it who wants to come see the future . get your Business Online in minutes with godaddy airo we put our heart into celebrating moms. 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Customers now get exclusive access to wifi speed up to a gig in millions of locations. Plus, buy one unlimited line and get one free. Thats like getting two unlimited lines for twenty dollars a month each for a year. So, ditch the other guys and switch today. Buy one line of unlimited, get one free for a year with Xfinity Mobile plus, save even more and get an eligible 5g phone on us visit xfinitymobile. Com today. Stocks are higher. S p is adding a full percent right now. The nasdaq is leading 1. 8 . A little bit off the highs. Stocks initially surging on the report. Whats next for stocks . Senior markets commentator mike santoli is out in omaha, ahead of Berkshire Hathaways meeting, with his take in what weve seen in reaction to jobs and whether you think its justified. I think it is, sara. Especially if the yield move starts to look like, you know, the nearterm high is in for market yields, right around 470 on the tenyear. I think its the latest in a series of things this week that the market was kind of tensed up for and then we got a not so bad response. That includes amazon, Apple Earnings as well as powell, even the employment cost index. Its a cause for concern but didnt blow out yields too much higher. I see the market trying to fight it out in the minor pullback range. The high for today was just another visit to the 50day average. It didnt hold there. We did that once before on this run earlier this week. Well see if we have more chopping around to do. In aggregate the earning story is coming through. Yields, if they stay tame, are fine. I dont think its about how much when were talking about easing policy by the fed. Its more does the soft landing seem plausible. What about berkshire, mike, so its off the highs. Its had a pretty nice run, though, in the last 18 months. What will you be listening for . Excellent run. It fits in so many buckets that people are interested in right now. Certainly the quality trade has been dominant and Berkshire Hathaway in terms of Balance Sheet quality. The apple stake is interesting. Its 5. 9 berkshire owns. Theyll own more because apple will keep buying back stock from everybody else, presumably not as much from berk Berkshire Hathaway. Its fitting the model which buffett has bucked about. Its indispensable brand product company. The Services Growth is better than the product growth. Thats where the higher pe should be placed on. All these things are fitting into place. In general, i expect to hopefully hear his outlook on the Insurance Industry and bond yields. Im sure theres going to be talk about the fiscal position of the u. S. Over the course of the weekend. Okay, mike, thank you. Mike santoli will have a busy weekend at berkshires big meeting. Did want to share reporting we heard earlier on squawk on the street, with the continued saga at paramount in terms of potential change in ownership of the company. A new bid from partnership of apollo and sony. Sony being the primary partner is being taken quite seriously by the special committee thats been tasked with reviewing potential offers for the company. Thats a contrast to the previous letter that had no specific content that got the attention of the special committee previously from apollo. This very much serious, has specifics in terms of price, both premium for the b holders and significant premium above that for Shari Redstone who owns control of the stake of the company through the a shares. The exclusivitity period in which skydance is negotiating which is a complex deal weve explained a number of times involving a purchase of the sky dance studio and merging of that and plus the purchase by that group of a significant number of primary shares from paramount and buyback of existing b shares at a premium. That deal, the exclusive period will expire tonight. As i reported, is not expected to be renewed in any way. That will expire giving the special committee a beginning to explore more about sony and apollos buy. You would merge the studios together. Should point out as well there is the possibility that nothing happens. That you continue on as the Company Currently is constructed with three people running it. A very strange situation at present, of course. This leadership came up with earlier when bob bakish departed the company and they pursue on their own a renewal plan. That being pushed by one member of the special committee, im told, but it remains unclear, exactly, how much momentum that really has. Certainly in the face of this current bid. As a reminder, well have all that coverage from omaha, becky quick, mike santoli and that man right there. That starts on monday morning. Dont miss it. You can also stream it as well over the weekend on cnbc. Com. Were back after this. 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. Good friday morning. Welcome to money movers. Im sara eisen with Carl Quintanilla. Former nec director gary cohn. The ceo of hasbro is with us. Stock is up 20 for the