Transcripts For CNBC Squawk 20240703

Breaking overnight, the iranian president and foreign minister of iran killed in a Helicopter Crash. Lets get to correspondent Richard Engel with more. Reporter we just got word a few hours ago that the helicopter carrying the president of iran, raisi and the foreign minister and others crashed. There was a search and rescue operation where they did not find any survivors in the crash debris. This delegation of three helicopters and one went down carrying the president after he left the border area of iran and azerbaijan in foggy conditions. I have spoken with u. S. Officials who say the cause was foul weather. Iran, lots of speculation on social media, eiran is not pointing fingers at israel or the United States. This does create a few leadership issues or potential succession crisis for the Supreme Leader in iran. The president in iran doesnt call the shots. He carries out the policy of the Supreme Leader. President raisi was not exactly tapped. It is more hidden politics in iran. He was seen as the clear fr frontrunner to be the next Supreme Leader given the current Ayatollah Khomeini is 86 years old. This is a imagine other change of course. If raisi had become the next Supreme Leader, he could have been ruling iran for the next t two decades. They have to find a new president according to the constitution where the Vice President will take over as they will have elections in the next 50 days. The larger issue is what to do about the Supreme Leader now the frontrunner is no longer alive. Not expected to change policy, however, irans policy. I dont expect to see many people on the streets carrying american flags and demanding a change of course. What we could see, however, is the revolutionary guard stepping up to take advantage of the moment to assert more control. Irans basic principles which are three are not expected to change. Those three being pushed United States out of the middle east, replace israel with palestine or disrupt the world order with alliances with anyone who shares the agenda, russia and venezuela and many countries along the way. Richard, i saw something on social media last night with fireworks that were taking place there and people trying to play that off as celebrating his death there. What you are saying is dont read too much into that. Reporter i would not read too much into that. Look, it could happen. You never know whats going to be the spark that changes the course of history. Maybe that happens. That may be unlikely. They had a protest movement. Raisi led the crackdown of that moment. There was a Street Movement or street revolution by women. Women taking off their veils and insulting openly the clerical rule. That revolution was more or less destroyed and things were heading in the opposite direction after the last several months and last several weeks. I think it would be difficult for them to go back on the street and reignite that, especially now that the regime is going to be bracing for it. I think if there is any movement right now, the regime will be cracking down very hard. Richard, he was staunchly antiisrael and antiwest and denying facts in history. Was he about average for the type of leader we expect to come or is it possible there would be something that someone not quite as outspoken in terms of, you know, antagonizing . Reporter i think about average. I dont think you will get very different. It is not its not an open system. Yes, he is the president and elected, but the elections are not free, open and transparent. They are arranged. All of the candidates are preselected by a group of council that approves which candidates can elect and which ideological background they have and the president is not the one who calls the shot. He carries out the orders. He is responsible for picking up the trash and making sure the government functions. The Big Decisions of state rest with the theocracy. This country had thousands of years of rule. Shahs and kings and in 1979, they got rid of that. The revolutionaries under Ayatollah Khomeini said we will do things differently. We cannot have the corrupt individuals based on personal politics and the shahs close to iran and israel were repressive. The revolutionary says we cannot accept this. We have divinely elected leaders growing up who run the state because they commune with god. There have been two. Khomeini is now 85. The guy who just died was going to be the third. It would be very likely the third. The only other name has been mentioned is his son. Will his son take over . Challenging. The iranian revolutions had a rule. Now the president dies in the Helicopter Crash and people see that as suspicious and it would be difficult for the Supreme Leader to have his son take over for him. There is a leadership crisis right now that will play out over the next several weeks or months or maybe a year depending on how long the Supreme Leader lives. Richard engel with nbc. Thank you very much. In the next hour, we will speak with karim sa sdrks jsadjapour. Richard just laid out the reasons for why conspiracy theories are abounding. Back here, the wall street journal shows Bank Regulators are looking for an increase in capital that had been proposed after strong opposition from some of the biggest banks. The journal said the 20 mandated increase in capital which was originally proposed would be cut roughly in half. Those capital reserves are meant to have a sufficient buffer to absorb losses. The bank ceos criticized the requirements. Big story in the wall street journal this morning. Jamie dimon lobbying against the thing which would drum up costs and crimp lending. The real concern is it would be harder for u. S. Banks to compete versus international banks. They push that it would be a big issue. You heard jamie dimon speak out against it and Brian Moynahan speak out against it. It is not usually a move you want to take because you want to irritate your regulators. This is one that rose to the level where they should speak out. Others say we have the arcane and crazy regulations to prevent too big to fail, but all you need is more capital. The other issue is the regulated industry, the banks, versus the unregulated lenders, that escape the rules. If you look at the mortgage lenders, the bankers say you dont hold them to the same standards. Lets hope they have enough next time. Coming up, nvidia is the highlight of this weeks calendar for earnings. Well llte you what to expect. Thats coming up next. Squawk box will be right back. 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. A slow network is no network for business. Cla cpas, consultants, and wealth advisors. Thats why more choose comcast business. And now, were introducing ultimate speed for business our fastest plans yet. Were up to 12 times faster than verizon, at t, and tmobile. And existing customers could even get up to triple the speeds. At no additional cost. Its ultimate speed for ultimate business. Dont miss out on our fastest speed plans yet switch to comcast business and get started for 49. 99 a month. Plus, ask how to get up to an 800 prepaid card. Call today nvidia, one of the biggest names for earnings, especially in this environment will report this week on wednesday after the encl closing bell. Joining us is paul meeks with harvest management. Paul, we have seen profit taking from certain people with nvidia. It is up so much. Do you expect this to be blowout like recent quarters and the stock to trade higher . It has come back, but stalled for the last couple months. Thats a good point, joe. I would say the markers out there for 5. 57 eps and 27. 5 billion in revenue, i expect them to easily beat those figures. What im spec speifically looki for is 26 billion in rerevenue. I think some investors will be disappointed. Everybody knows the fundamentals near term are stellar. The question is how long is the runway . What happens if everybody and their brother finishes building the Large Language Models and does nvidia continue to increase with this cash flow . What the company has to do on the Conference Call is give us what we need. A nice big beat for the quarter and good guidance for the next and make us feel there is a long runway here and that its competitors with the products are further behind than people think. Even when these competitors ship their chips, they wont take as many market share from nvidia as p people think and nvidia will have a market share in a. I. Inference as theyve had in a. I. Large language model building. We will see. It will be a tlhriller on wednesday afternoon. Do one of those things have to replace the buildout part, paul . Will there always be upgrades or another cycle twith other thing or will there come a point where you do start to see the growth slowing even if it is not comp competitors, but just in what people need . That is key, joe. This year, the company will double its eps. Next year, the street has 30 growth rate. You know, 30 is wonderful, but it is a slowdown from what they will do this year. The key thing is nvidia dominates and will probably continue to dominate the chips for the buildout. The early buildout of large language model building and next step in a. I. Is inference. Inference does not require as strong Computing Power or as much Computing Power. Will they see market share fade a bit . It is an excellent question, joe, and one im watching carefully. Nvidia has great execution. We will see what happens. It is not what happens with their competitors, but how long is this runway. The competitors are focusing on the next step or still trying to make inroads in the large language model buildout . Are they focusing on the infer inferencing . I think the competition hits in inferencinging. They are chasing the large language model. One thing we heard from the quarterly reports is the tech majors, who are already spending a ton on this, have just ratcheted the capital ex expenex expenditures up more. Amazon will spend 60 billion. Meta and google and microsoft are going spend at least 40 billion teach. Zuckerberg said on his Conference Call that is the new normal and in the future years, they dont peak at 40 billion. They go higher in the next couple. The key will be can folks like amd catch up in the large language model building . It will go for some time. Even nvidia has announced another round of chips recently. The blackwell chip. We will see. Right now, they have a nice lead, but, of course everybody is coming at them hard. You talked about the capital spending. That is all Companies Developing their own a. I. Infrastructure or some of that gets spent with nvidia . This is Capital Expenditure building. Move that is based on a. I. And large language model going to inference. Joe, this would be levering nvidias chips. Theyre all working on their own chips to compete, but as long as the tech majors continue to announce higher and higher Capital Expenditures, the biggest beneficiary is nvidia. They are spending it on their own chips, but a lot is building out data centers to have Computing Power . Becky, most of it is going to build out the data centers. I think about somebody like amazon and Amazon Web Services with more and more data centers to support customers large language model building. When they do that, they buy more nvidia chips. If you bought this at 100 or 200 or 300, would you hang on . Would you sell . What would you do . I think i would hang on. I want to hear what they say on wednesday. If you look at the petogrowth ratio, the stock is trading at 30 times to next years earnings. We are expecting 30 growth next year. I think that growth will be up upside. I think the stock is expensive enough to just hold it if you own it. Dont trim it yet. If you dont own it, you need to own it as core and technology portfolio, but wait for a dip. Can i ask, paul, the potential risk . The company is based in california, but its ma manufacturing is based in taiwan. Any concerns of what china may do down the road may have a big impact on the company . Are yoyou are right, becky. The chips managed bys taiwan semiconductor. Xi jinping said it will happen. Yes, i would watch that carefully. In the meantime, i dont see a threat. All right. Thanks, paul. Paul meeks with harvest portfolio management. See you soon. Thanks, joe. When we come back, blue origin resuming Space Tourism flights about two years after they were grounded. We will tell you who was on board for yesterdays launch. Squawk box will be right back. My mother encouraged us to have a strong work ethic. It was the key the value of asian culture. My mother was encouraged not to speak cantonese to us in randle el elementary school. Hows the chicken . The prawns are delicious. Oh, i have a shellfish allergy. One prawn. Very good. Did i say chicken wrong . Tired of people not listening to what you want . Its truffle season ah thats okay. Never enough truffles. How much are they . Its a lot. Oh okay im good, that its like a priceless piece of art. Enjoy. Or when they sell you what they want . Yeah. 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Blue origins tourism rocket lau launched passengers to the edge of pacspace for the first time two years. On board was ed dwight as the first black candidate nominated by john f. Kennedy in the 60s. He was a couple months older than william shatner. Two 90yearolds made it to the edge of space. A french brewery founder and Software Engineer and retired accountant and of aviiator were board. And Xander Schauffele finished the pga championship yesterday with the series of clutch shots. Oh, my gosh. Almost went back out. First win in a major. He edged out Bryson Dechambeau who was unbelievable with the shots he made. It was at Valhalla Golf Club with the birdie on the 18th. He had to make a par on 17. Bryson dechambeau had the unbelievable birdie to get to 20 under. The lingering memory of the tournament is the Scottie Scheffler arrest on friday. He will be arraigned tomorrow. A poor round where he shot 73 on saturday. His first round over par in a long time. That kept him out of contention. He had a great round on sunday. Xander shot 65. The day it happened. He finished tied for eighth at 13 under. You know i spent two days this year with Xander Schauffele. Just watching him from close up with his irons. I cant figure out how he does it. There is never any question he will hit it solidly and hit it straight. He just hits down on the ball so well. I was horrible. I was sick out there. We did the show at 3 00 a. M. Im surprised that i didnt throw him off. Watching my tempo. He must have been turning away. Nicest guy. Those guys dont judge you ever. Out loud. Yeah. They dont judge you out loud. Spending time with him. I love it. Im happy to see him win. Bryson has had, not attitude problems, but people in the past have not liked him. He was class from atoz. Did you see him throw his golf ball to the kid . No. Did you hear about it . Throws to the kid and an adult grabbed it and runs away. Bryson chased the guy. Other people stopped the guy. They got the ball back and gave it to the kid. Thats terrible. He hits it 190mileanhour ball speed. When he tries hard, he hits it 380 yards. I thought it was going to bounce out. That last one. Schauffele. I thought it was going to lip out and go off to the left. He just acted like eh. He has been close so many times. Every shot that he made that was crazy and went in, he won by one stroke. Thats how hard it is to get over that hump. It was great. Great day. You liked the pacers . Yeah. Theres something about watching all of the celebrities finally jump on board the knicks and seeing them on the sidelines where im not hoping the knicks lose. You bet on the pacers . I did. You were hoping for it. I was. Coming up, why christies pulled a painting from aucti st before it was set to go up for bid. Robert frank has that story next. Announcer executive edge is sponsored by at t business. Next level moments need the next level network. Its a pillow with a speaker in it thats right craig. A team thats highly competent. Im just here for the internets. At t its superfast. Reliable. You locked us out . arrggghh ahhhh solutionoriented. [jenna screams] and most importantly. Is the internet out . Dont worry, we have at t internet backup. The next level network. I sold a pillow people couldnt see my potential. So i had to show them. Ive run this place for 20 years, but i still need to prove that im more than what you see on paper. Today im the ceo of my own company. Its the way my mind works. I have a very mechanical brain. Why are we not rethinking this . I am more. Im more than who i am on paper. Good morning many. W welcome back to squawk box live from the Nasdaq Market site from times square. The futures were up 13. Nasdaq was up 33. Here is a look at the meme stocks in the premarket trade. Gamestop is now at 22 after a big run up. Amc has had a big run up. They have all come down significantly. Once blackberry found out. Two people in the building. Thats why i had to give it up. They would not support it. Our tech group. Can you, at this point, type as fast on an iphone as you did on a blackberry . My eye sight has gotten worse. I type badly. Thats why i loved it. I had mo monkey fingers. You can take dictation. I could. I would. I would take notes quickly on things. Amazing. Disappointing week in the art world with flops on the Auction Block and cyber attack to boot. Robert frank is joining us with more on that. Good morning, becky. A cyber attack took down the christies webb site. Two pointings stumbling at the Auction Block. The one they would now rather forget. The spring auction sounds okay, but 22 down from last year and down 55 from 2022. Sothebys lot was the Francis Bacon painting which went for 28 million. The most expensive offering of the week was the christies sale with the pieces estimated at 30 million to 50 million. Christies pulled the works before the sale saying the market was too soft and not willing to jeopardize the seller. That was down from 25 works last year. Adding to the bleak mood was the cyber attack that shutdown the christies web site. It was restored yesterday. Christies is not saying if the Financial Data of the wealthy collectors in the world was made public or compromised. The 1954 painting by Leonora Carrington went for 25 million. That was twice the estimate. Eight times the previous record. This is not a good setup. People decide now whether to sell with november being the next big sale. After the experience in may, they will not have good stuff to sell in november. That was the challenge this last week. There wasnt great art to sell. I would say normally you have a flush market and a lot of liquidity like we do right now and you anticipate the auctions would go very, very well. There are just things that people sold that they didnt want to buy . There was a disconnection with the discount and sellers want prices back to 2022 and 2021. They cannot meet in the middle. There wasnt great art to sell. Is this an indication that the wealthy are worried . It is a paradox. I have never seen we are in a correction in the art market right now. Everything is down at least 20 . Thats a correction. I have never seen a correction in the art market and stock market at alltime high. It could be the art market is lagging or it could be it is seeing something that the stock market doesnt. Clearly, art has not been the great inflation hedge that everyone thought. It is behaving more like a financial asset, but it is not rising as a financial asset. It does appear to be lagging. Its annoying they can pull the spaghetti picture and pull it and say we dont want they dont want price disc discovery. Its rigged. They dont want to sell this company because they dont want to mark it. If you dont need the money i know. There is a price it is willing to be sold for with prsupply an demand. They are protecting. You have success bias. You only show the things you did well. You are not seeing all of the things that if they did sell today, there were things that sold that had been purchased two years ago and they were down 30 to 40 . A few items like that. They dont want many of those to be public. They dont show it. They hold it. This piece was guaranteed by christies. They owned it, essentially. They dont want to sell this because they are the owners. They sold it for the seller. The whole thing is built on worth. Im not saying they could paint that spaghetti thing. Thats never going back up. What did they want . 30 to 50. It will not go back there. I will make you one of those. I will. Do you want one . Do you have green, yellow and red and orange . Thats four colors at least. You know, the whole idea oh, well, it is obviously worth 50. Why . Why is that . Its not going back. Thats what someone is willing to pay for it. Not now. No, its not. I love it when i do this. The true artist. All of the beautiful clothes on the em imporporemporer. They love me. We have a lot of analysis on what is happening in the art market last week as well as more broadly. It is not good for everything else. It is interesting. So many cross currents now. Highend real estate. What type of wine are people buying . Thank you, robert frank. Coming up, a roundup of the top political stories with jake sherman of punch bowl. And you can join us anytime by watching the squawk pod. Well be right back. Wall street forecasts over 100 billion in sales for weight loss drugs known as glp1. Even with unliked and inconvenient injections, dehydratech processing of a glp1 drug demonstrated improved blood sugar reduction and reduced side effects. More human Study Results for lexarias patented oral Delivery Technology are coming soon. Lexaria bioscience, transforming the future of glp1 drug delivery. Music unnecessary action hero lexaria bioscience, unnecessary. Was that necessary . No. Neither is missing your daughters competition to do payroll. With paycom, employees do their own payroll so you dont have to miss your daughters big day. Time to shine. Get paycom and make the unnecessary unnecessary. Champion iron offers a rare solution to decarbonize the steel industry. Which represents up to 10 of global emissions. The Company Recently doubled Production Capacity at its mine in eastern canada. It is now investing to produce one of the worlds purest iron ore. Enabling green steelmaking without the use of coal. Controlling a large portfolio of high purity iron ore resources. Champion is considering Strategic Partnerships to further develop the region. Champion iron. Majority leader Chuck Schumer is expected to bring back the bipartisan border dea that republicans killed earlier this year. Joining us now is jake sherman, cofounder of punch bowl news. Any chance this passes this time around, jake . Less than zero, joe. Anything done in congress, for the most part, is done through political ends. This is can done for political reasons. Democrats see a reason to try and im emphasizing try to shift the politics and border in their favor by showing they will vote against the package that was crafted by republicans. We know how this movie ends. Theres a good chance that not only will this not get 60 votes, the requisite number it needs in the senate, but not get majority. The senate now goes through states like ohio and arizona and montana. It would be helpful for some democrats to be able to cast a vote in favor of this. I think thats whats behind this. I have seen the rhetoric that were sick and tired of republicans seizing on immigration as an issue. So well pretend were going to do this. Jake, there is increasing anxiety with the polls, the swingstate polls, and two issues morning tmore than tw. Immigration. You see carvell and some of the party types kind of see anxiety increasing. They sent biden out, basically, go on cnn where cnn fact checks trump. They dont fact check biden. He comes in at 9 . He knows that is not true when he comes in. They do it again. That is not going to work. I dont think this is going to work. There is a mayorkis ideo. He dumps the trump policies. For two years, people know the border was open. This is too little, too late to talk about it or be interested in it. Should i have flash commentary at the bottom for this, jake . There is truth in whatever many portions you said. Lets start with this. Number one, this is aimed at givings democrats an opportunity to say i voted for the most strict Border Patrol policy in a generation. Thats number one. Number two, if any democrat tells you they are not anxious about bidens poll numbers, they are lying to you. They are tenuous across the country. Although, i will say the Polling Industry is probably irrelevant re irrevocably broken. They say they are deeply concerned they have not taken the border seriously in the four years. It is a opinion that the border is a mess. I have been there. It is not good. You can argue the reason why with deepseeded reasons for the immigration problems in the country. It is undoubtbtedly true that t democrats underestimated the policy and political impact of what was going on at the border. Jake, on the sunday talk shows yesterday, the topic of debate that biden agreed to in june came up. It was Chris Van Hollen who said if the polls dont go up after the june debate, it is still time for them to pick somebody elses before the Democratic National Convention Comes a few months later. How likely is that . It is unlikely, becky. Absent so event we dont foresee, it is unlikely. The debate is attempt and democrats will say it brings donald trump in the living rooms of millions of americans and the Biden Administration hopes this reminds people why donald trump is not fit to be president , thats their view. The Trump Campaign is intent on setting the bar so low for joe biden and if he doesnt come out and completely collapses, he clears the bar that administration sets. They say he is the worst debater. There is no doubt this is important. It is in the eye of the beholder. Both camps think they have to get the other guy out there for people to see which is the commentary on the two choices we have. There are half the country that looks at the other candidate and says we just cant believe hes the candidate. It is so bizarre, jake. Joe, one last thought. Nikki haley was ahead in nearly every poll against joe biden and has no chance. I think it might be her. I have to think it through. Trump doesnt like anyone taking his attention away. What if he knew that it was a slam dunk if he picked her . Do you think he knows he is a lame duck when he gets in . Whoever he picks is an heir apparent. Im sure she would take it. Would he ever do it . Would you go the easy route with doug burr gam . Ill just say this, have we ever known donald trump to put his personal feelings aside for a politically viable option but to win, if youre talking about 340 electoral votes with nikki haley. They both think the other candidate is so weak they dont worry about that. I dont see it. It makes the most sense, but i dont see it. Okay. Jake, thank you. Thank you. When we come back, a setback for unioornirs in gazen alabama. Weve got that story next. Squawk box will be back after a quick break. Y 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 im not a doctor. Im not even in a doctors office. Im standing on the streets talking to real people about their heart. Hows your heart . My hearts pretty good. You sure . I think so. How do you know . Youre driving a car, you have the check engine light. But the heart doesnt have a hey, check heart sign. I want to show you something. Put both fingers right on those pads. There you go. In 30 seconds were going to have a medicalgrade ekg reading. There it is that is you. Look at that. With kardiamobile, you can take a medicalgrade ekg in just 30 seconds from anywhere. Kardiamobile is proven to detect atrial fibrillation, one of the leading causes of stroke. And its the only personal ekg thats fdacleared to detect normal heart rhythm, bradycardia and tachycardia. How much do you think this device costs . Probably a thousand. 99 wow. Thats impressive. Checking your heart anytime, anywhere has never been easier. Dont wait. Get kardiamobile today for just 79 at kardia. Com or amazon. still to come this morning, new data on wople rkactrends. We will dig into the numbers next. Squawk box will be right back. When you need to prepare for unpredictable adventures. gasp you need weathertech. [hot dog splat. ] laser measured floorliners front and rear. [drink slurp and splat. ] scream seat protector to save the seats. [honk ] theyre all yours were here hey, i knew you were comin. So i weatherteched the car can we get ice cream . We can now. Kid proof your vehicle with American Made products at weathertech. Com. Are you interested in safeguarding your investments with gold . Alamos gold is a growing canadian gold producer with a long track record of outperformance. Alamos gold. Invest with us. Our growth sets us apart. Deloitte is out with its 2024 gen z and millennial survey. The results from 23,000 people across 44 countries suggests that young people are likely to seek work that aligns with their values. Joining me with more is ashley g goodall the former executive at cisco and deloitte. Weve been talking about this off camera. They not only want things where it aligns with their purpose, they want to make sure that they are looking at Mental Health issues, Work Life Balance, purpose driven work, all of these issues, and right now it seems like the employees have more of the upper hand. Yeah, i mean, i think the data in the survey is more evidence of a gap between workers and their employers, if you like, and more of a gap between what people are hoping to get out of the workplace and what they are getting out of the workplace. I think the real question is to what extent is that gap relevant from a business context. To what extent cause closing that gap lift the performance of an organization. To understand that, you actually need to dig in a little bit to the questions of Work Life Balance in particular, of purpose and of Mental Health that we were talking about just before the segment began, and you have to ask yourself, okay, whats driving those things . And what would the fix be . What would the solution be . Because i think very often we can get wrapped up in the terminology, and in fact, if you understand what are some of the things that you can do to lift the tide on these, you find out that those are things that actually lift the performance of an organization anyway. Youre going to the same destination. Part of this has to be blamed on covid and work from home and the issues that came from that. I think when you talk to ceos, theyre pretty frustrated. Come back to work, come back to the office. When you talk to employees, they feel like, wait a second, ive been working really hard for a very long time and dealing with all the craziness that we had to get through that period, im burned out too. So wheres the mismatch and how do you fix that too . Well, i think what happened in the pandemic was many, many people got to see what it could be like if the balance of power shifted a little bit to more employee and less people saying you have to come to the office. The interesting thing is that then people felt they were more productive and more productive is sort of what were in the game of here. Sure, but then you see pictures of like the park in austin where everybodys out sunbathing at 2 00 p. M. And a guy saying those are the companies, go ask them where they were. Ask a lot of people and average the answers rather than just looking at the one guy whos foolish enough to post a picture. Can i do a mr. Never cracker take on this, do you mind if i do this, like the cranky old no, you play it well, go ahead. If you can live at home forever as a gen whatever, who are these . Millennials and what are the other ones . If you can do that forever, you have the luxury of being able to say i only want a job that aligns with my values, if you need to pay the bills and the rent and everything else, its back to the way it was all along, and thats where a job is something precious in its the value of work, and you might not get to have this like ridiculous motion that, you know, youre combining all your moral and value virtue signaling wishes with your job. It cant is it do all jobs have to be these things you can virtue signal . Does no one clean sewers anymore . How does cleaning sewers align with your values or being productive . It is weird, theres a body of research on things called dirty jobs skand it tells you tt people will find purpose thats what i think, the dignity of work and earning a living and being exhausted at the end of the day. You dont have to be at home playing in a park, you know the question on the question on work from home is do you do your best work where your boss thinks you do your best work or where you think you do your best work. If you trust people to say i do my best work if i can take a couple of days a week and have focus and not interruption and not a commute, is that crazy . Is that completely unreasonable . Yes, i think so. If youre a high enough performer, you probably will be able to get those exceptions and maybe more than that at this point. If we go into a recession does all that change . This does seem like a pendulum swing, who has the power . What were missing is a way to understand where performance lives. If i could look at either of you and go, hey, heres how you solve for performance on a team people, and this is the configuration that works, and by the way, it happens to be at home two days a week and office three days a week, wed be going how do we get more performance like that, more teams like that . What were missing in all of this conversation is a sense of heres where performance comes from at work. Theres all sorts of data on it, but it doesnt find its way on a conversation. A lot of the answer, if i can put you on a great team and if i can create great teams in an organization, whether the teams are colocated or dispersed or global or together some of the time, apart some of the time, you can do a good job. So keeping your job and trying to advance at your job is not enough reason for you to be a good performer . It has to be this you know what im saying . You want to keep your job, right . You dont want to get fired. You want to move up the ladder to the next thing. Your performance in how you do determines your eventual outcome and success. Thats not enough . I think the role of companies is to create conditions to help people do their best work and the question is what are those set of conditions. I dont think we know the cart before the horse. Ashley, its a very interestint interesting conversation. Its one we think about and talk about on this show. You know who never cracker is . Get off my lawn. Oh, get off my lawn. You did that well. I do it well. Better you than me, i was saying the same things before, but better you. Its okay. I can take it. Thank you, ashley. Expect it from me. It is just after 7 00 a. M. On the east coast, and you are watching squawk box right here on cnbc. Im becky quick along with joe kernen. Andrew is on assignment today. Among our top stories this morning, u. S. Regulators are reportedly moving toward a new plan that would significantly reduce the nearly 20 mandated increase in Capital Requirements for the countrys biggest banks. According to several reports, the new reserve requirements would on average be around half what was originally proposed. Mickey mouse and cinderella are unionizing. Performers at disneyland in california who bring those characters to life have voted to join the actors equity union. The union and 1,700 cast members and support staff will discuss improving wages, benefits, and working conditions before meeting with disney management. N 15 billion deal for u. S. Steel, that was one opposed by the Biden Administration. Former President Donald Trump and the united tsteel workers union. Bloomberg plans to meet with local staff and elected officials. The japanese steel maker expects that deal to close in the second half of this year. Taking the futures right now, still marginally positive. 45 points is okay on the nasdaq. I know dom chu probably had some fun yesterday, but we can talk about that later. What about the premarket move. I dont mean anything weird by that. That was quite an ending in the pga. It was. I will get to business first and then i will address that just after i finish the report. As joe points out and becky, we have many premarket moves. Well start with one that many investors think is the most important stock of the week. Thats nvidia. Those shares are kicking off up about 1. 25 , around 200,000 shares of volume. The worlds most valuable computer chip company is slated to report enarnings on wednesda. Analysts at barclays, baird, stifel, and others are among those with new commentary on the stock. Barclays is raising their target from 1,100 to 850. Baird goes up to 1,200, from 1050 saying outperform, and stifel goes to 1,085 from 910 staying buy. You can kind of see a theme here. The expectation is going across wall street that theres going to be stronger results coming out. For more on that and other top analysts kacalls of the day hea to cnbc. Com subscriberpro. Ryanair, chose shares down about 3. 5 in european trading. Thats despite reporting its highest fullyear profit ever. Ryanair was helped by its ability to raise ticket prices which helped offset operating cost pressures. It did note a relatively weaker pricing environment in the current quarter. Ryanair is announcing a 700 million euro Share Buyback program. Well get more on that whole story when Michael Oleary joins squawk box later this hour to talk about those results. Well end with a check on apple, which is down fractionally. The iphone maker app services giant getting hurt by reports that its discounting some of its iphones in china as it deals with fiercer competition from the likes of domestic makers like huawei and others. Certain Iphone Models are being seen with up to a 300 some dollar discount. Apple shares down onehalf of 1 . Joe, i had a blast watching. I watched it with some friends. The one thing we all agreed is that xander shauchauffele had b so close so many times, he was bound to breakthrough. The big deal for me was watching that competition at the end. Bryson dechambeau, the fact that he can hit a 243 yard 6 iron with those new 3d printed cobra irons that he has, i think is generating a lot of buzz in my circles as well. I heard his 9 iron has got really the loft of a 7 and the shaft is the length of like a 5 iron. Its unique. Dom, you know, you remember the king and because of cnbc i got to interview him and meet him and play with him, and almost became sort of friends with him, arnold palmer, and when i read one of his books it was every single time he hits a shot, hes trying to hit it in the hole, and i never do that. Even with a twofoot pud, im going to find a way to not hit it in the hole. Did you see some of the shots that i saw from Justin Thomas or bryson, they were just we take it theyre like 1 out of a thousand chances and it keeps happening over and over again. Those guys are so good. Did you notice that . Did you see Justin Thomas up on that hill and that flop shot he hit that rolled right in, and bryson some of those, its unbelievable. Scottie scheffler on the very first hole on thursday. And the holeout, yeah. Sure. And theyre actually repairing the hole from hitting the ball into the hole on the fly. Those guys are so good that its mind boggling. It made valhalla look kind of easy, which its not i dont think. To your original statement and point, i think that thats of course if you have the confidence and the physical ability to be able to hit those shots, then why not hit those shots. No, no. You and i by the way, i played in my local golf clubs, you know, president s trophy, kind of like a two person net event, and on my first hole i missed a two foot putt, so thats how much i mean, its a different piece for guys like you and i. Putting is the other thing. You see lowry on saturday . And there were a lot of 50 foot putts. Those guys, rory, those guys were making 50 foot putts. Maybe they just select, you know, theyre videoing everyone so they can find those. But it still seems amazing to me. Joe, becky, we need to spend more time practicing our golf game, is what it comes down to. Ive tried. Ive tried practice. It doesnt nothing helps. I need a psychiatrist. That might help. Thanks, dom. Coming up, fed speak and the dow rally and focus from investors this week, well have more on the markets and what you should be watching after the break. Then later, kyle bass is going to join us to talk china and the markets. Squawk box will be right back. 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. Dad, dont forget about my new cleats. Sweetie, i cant make it to dicks this week. Have you heard of dicks. Com . Have i heard of dicks. Com . Girl lets go lets go have i heard of dicks. Com . screaming whoa. Dont overthink it. Lets go shopping. Actually what i need are some cleats. How about one of these . Great. Done. Anything else . No. Golf clubs . Not for me, for a friend. Yeah, yeah, of course. Anyone impressed with how fast that was . Yeah, totally i know, i went to dicks. My cleats thank you i love you wha. Ii went to dicks. Com. Ever heard of it . Girl 2 yeah, i told you about that. people couldnt see my potential. So i had to show them. Ive run this place for 20 years, but i still need to prove that im more than what you see on paper. Today im the ceo of my own company. Its the way my mind works. I have a very mechanical brain. Why are we not rethinking this . I am more. Im more than who i am on paper. Fed speak and retail earnings, nvidia, dow at 40,000, all in focus for investors. Fed speak every week we could say thats in focus. Maybe thats part of the problem. Joining us to talk inflation, the fed and more, kamar sha ree kamal. They do talk a lot. Some people think all that guidance is part of the problem. Other people like transparency, sri, but after last wednesday, i think it was wednesday, after the cpi soft landing back on. Were goldilocks back on, rate cuts back on. It only two one number to make us think that everything the first three months of hotter numbers of inflation and questioning all that stuff, now is it back . The fed has done it. We have had this happen time and time again, joe, and after wednesday, it happened yet again. Every time they have one positive statistic, it is just saying everything just hallelujah, its great time, and it is not. I want you should remind listeners that in october of last year, the month on month inflation rate for the same measure, which down from 0. 4 to 0. 3, thats what caused the rally from wednesday, it was only 0. 1 , and then it accelerated sharply in the following months. In october of 2023, it was in october of 2023 0. 1. 0. 1 and then it starts to accelerate november and december, and then we reached 0. 4 and came to 0. 3. Why isnt the market feeling upset about it rather than going up . The fed people you mentioned quite rightly so, the fed speaks too much. They contradict each other, and they just cant wait to cut interest. Why . I am a lots of reasons. I think its an election year. I kept repeating it, they want to cut it in an election year. They keep repeating that they dont look at the political calendar, but the political calendar is very important. It kind of signals that they were successful. Exactly. To ensure that they are successful, and they are doing it number one. And again, with the two candidates and i dont have to guess President Biden has said twice including at a press conference at the white house recently, he expects a rate cut before the end of the year. And this is from somebody who they do not interfere in Monetary Policy. Then you have donald trump whos also said if elected he will not nominate Jerome Powell for another term. So take your pick. You have all the political things in front of you, and it is not surprising at all that the fed behaves the way it does. Is the economy finally moderating, sri, or not . The economy seems to be moderating. There are so many signs from the labor markets suggesting fewer job openings, increased amount of jobless benefits. They all suggest that there is a slowing. A slowing that is taking place gradually. Yeah, they arent market. Its clear to me that means inflation is going to come down. Thats where the problem lies. Then youve got the stag thing that starts. You think eventually theyre so dead set on cutting that they will . They are dead set on cutting it, but right now they cant do it. It cant be in the june meeting. You have to wait until september and im guessing before september, something is going to go all right in the whole problem. Then the fed is again thinking about what are they going to do in september. Wait, something go awry, you mean like commercial Real Estate Markets bottom, banks have trouble, something along those lines . Not things breaking, becky. Let me divide into two parts. Something goes wrong in terms of signing of inflation picking up again. Thats number one. Second, on the other side as you said, commercial real estate just breaks. Or sadly you discover a new banking problem, which is a mediumsized bank rather than a smaller bank. Either of which means all bets are off. The fed has showed you time and time again they talk inflation, but what they are all about is saving the system and flooding the market with liquidity, september 2008, september 2019, i dont expect this september to be very different either. All right. Weve got to go, its a great sort of a midpoint in what were its like episodic with you. I dont like i dont change my forecast. This is essentially the same thing it is going, and if you ignore the ups and downs in the journey, the longterm the journey is proceeding exactly the next move is a cut, not a hike. Next move is a rate cut. You cannot have a theres no way its a hike. You cant have rate increase in an election year, no, they wont do it. All right. Ha thanks. Thank you. Still to come, low cost carrier ryanair says an increase in fares helped the low cost airline overcome a spike in cost. The ceo Michael Oleary will join us next. Later, kkrs hen rhode island mcvey will injo us. He sees no cuts from the fed next year, he will explain why. Squawk box will be right back. Your record label is taking off. But so is your sound engineer. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire are you interested in safeguarding your investments with gold . Alamos gold is a growing canadian gold producer with a long track record of outperformance. Alamos gold. Invest with us. Our growth sets us apart. Welcome back. Ryanair results out this morning and the low cost european carrier reported its best ever annual profit driven by higher demand and Revenue Growth despite a sharp rise in operating costs. Joining us right now is Michael Oleary. He is ryanair holdingsing groups ceo. Ryanair is the largest European Airline by passenger numbers and boeings biggest customer outside of the United States, and michael, thanks for being here. Becky, great pleasure. Great to be back in new york. Profits were up sharply because demand was up sharply. What happened . More and more people want to fly . Last summer more and more people are coming out of covid. Everybodys traveling, lower fares. Weve also taken out a lot of costs during covid. Weve had much lower cost aircraft from boeing. Weve renegotiated out of the airport contract. Were carrying people. Last year fuel was up 35 , fares were up 21 . Higher fares covered the higher fuel costs we still recorded record profits, just under 2 billion euros. Lets talk about what you see. Just a few weeks ago you warned that prices are not going to be as high as you had hoped for this Summer Travel season. What happened is th . Its different than what you thought last month. Weve had two surveilmmers i europe where fares were up 20 . We didnt think that was going to happen this summer, we thought maybe high singledigits. Weve moved that back. We think fares will be up low singledigits this summer. Its much more modest. Were going to carry 8, 9 more passengers this year. Weve hedged 70 of our fuel next year. We banked savings of 450 Million Euros, and were going to use that to offer people lower fares this summer than we had originally expected. That has to be part of the demand picture, or is it part of the supply issue . Because its been a while getting some new planes, getting some parts that have come in. Is that just capacity constraint too . Capacity is constrained in europe. Youve got the air bus groundings with the engine issue and youve got consolidation in europe. I think we thought pricing would be a little higher this summer because of capacity, but you look across the european space. Consumer spending is weak. Consumer confidence is low. Interest rates are materially higher, cutting inflation. Pricing is going to be weaker this summer than we had originally thought. Thats good news for consumers. Lower fares is good for ryanair growth. The challenge we face, weve locked down our cost, particularly with the fuel hedge. The challenge is the boeing deliveries. Were only going to get about 39 of the 59 aircraft we thought we would have this summer. Were working with Stephanie Pope, dave calhoun and the team in boeing. Theyre still running late on aircraft. Thats going to constrain our growth. Why doesnt that make you as mad as the last several times weve spoken with you. Did they come in and offer you better prices . Its not like i mean, you were calling for the Management Team to get tossed out. Yeah, and thankfully they did. The team in seattle has changed. I think Stephanie Pope is doing a good job. There are greene shoots of recovery. Fuselage has been moved from wichita to seattle with no def defects. Were not seeing an acceleration of those turn around times in seattle. Spirit airlines talking or Spirit Aerosystems talking about laying off people because theyre having cash constraints themselves. They havent produced a significant hold for about two months because of all the production was kind of frozen, but i think theyre getting there. We for the first time in recent weeks with boeing, we were supposed to get two deliveries in june and three in july. Its now two in june, seven in july. Theyre promising us ten in august. Frankly anything youre taking in august is arriving too late. We think were beginning to get there. What we dont want to see, theres Good Management in seattle. Were working with them. Its too late for us to be shouting and screaming about those delivery delays. We are where we are. Nobody else is getting delivery either. Capacity will still be constrained in europe this summer. Next summer, were one of the few forces, the 737 customer in europe. A lot of our competitors have aircraft grounded while they repair those engines. Lets look at just the ecb, its expected to cut rates next month. Will that help in terms of consumer demand . It had come too late to fundamentally alter this summer. The key thing for us is weve hedged forward a lot of our fuel. Weve locked down the costs. Were generating substantial cash flows because of boeing delivery delays, and weve announced this morning, a Share Buyback, 700 Million Euros as well. We are ygenerating spare cash. Looks like the stock right now is about flat. Obviously some good news coming from you guys today. The good news is going to be lower fares this summer in europe. Customers . Yeah, im always in favor of good use for customers. Shareholders can wait. If its good use for customers, the return will come to shareholders over the medium term. Anyone who wants to sell were buying. Michael oleary. Thanks. Coming up, irans president and foreign minister were killed in a Helicopter Crash. More on this developing story after the break. Squawk box coming right back. 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. 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 iranian president ebbola ra raisi has been killed in a Helicopter Crash. He was elected in 2021, he was seen as a contender to succeed ayatollah ka he knee. Joining us is a fellow with the middle east program. What does this mean for the United States . What happens next . Its an important question, becky. I think in the nearterm it means very little for the United States. Ebrahim raisi as president of iran was not a powerful person. He cannot oversee irans external conduct, irans activity in the middle east, Irans Nuclear program, nor is he that powerful internally. Whats most important for the United States is what it means for succession in iran. Irans Supreme Leader, 85yearold Ayatollah Khamenei, hes arguably the longest serving dictator in the world. Hes been ruling since 1989, and raisi was really one of only two people in the conversation for succession. T now theres only one serious person at the moment whos likely to be in the conversation for succession, and thats the important implication, i think, for the United States. Karim, that has already raisra raised some questions and conspiracy theories around this entire idea, the entire republic was founded on the idea that youre not going to have succession that comes by birthright, and is this a situation where things will be seen differently, that his son will succeed him. That is an important question, and iran has a highly conspiratorial political culture, and i think few people are likely to believe that this was merely an accident, and, you know, if indeed Ayatollah Khamenei is succeeded by his son, i think that only further undermines the legitimacy of a regime, which already has threadbare legitimacy. So i think in practice what ends up happening, its very difficult to obviously speculate about the politics of any country, but i think given the lack of legitimacy and popularity of khameneis son, he will be more reliant on the revolutionary guards, on the military to maintain order. I think what essentially raisis death does in my view, is it hastens irans transition to either military rule or it hastens the improlosion of a regime which is in many ways like the soviet union. Its ideologically bankrupt and increasingly economically bankrupt. A revolutionary guard, you mean the military kind of taking over and taking over from the khamenei . Right now iran in many ways is already a militaryled government in that at the top of the pyramid, yes, you have Ayatollah Khamenei, and below him the revolutionary guards have become the most powerful, political, and economical institution in the country, and if khamenei is replaced by either his son or another very weak cleric, we may see simply more overt military rule whereby they simply, you know, kick out that cleric and decide to rule things for themselves. You know, the question is whether that is going to be a stable model. What i always tell you, becky, is that iran is unique in that you have a regime, which in many ways has aspired to be like north korea in a society which aspires to be like south korea, and that gulf between the ruling and the ruled is not sustainable forever. You wouldnt say that its something that is on the verge of turning imminently, would you . I dont think raisis death is likely to cause nearterm instability in iran, in part because there was already a mass Popular Uprising in iran in 2022 and 2023, which was beaten down. But i think what it does is it further undermines the legitimacy of the system when theyre moving towards succession. Raisi had been groomed by the Supreme Leader for two decades. He had been introduced to the public as the president. Suddenly that person is out of the picture. This is a regime, which came to power overthrowing a hereditary monarch and the shaw of iran, so if they simply replaced one hereditary autocracy with another, that only further undermines the legitimacy of a regime, which barely has any to begin with. Karim, thank you for joining us. Karim sadjapour. Thank you. When we come back, kkrs henry mcvey will join us to talk inflation and more. And the futures this morning in the green even after the dow closed above 40,000 for the first time on friday. The dow indicated up another 30 points. S p futures up by 10, the nasdaq up by about 55. Squawk box will be right back. Unnecessary action hero. The nemesis. It appears that despite my sinister efforts, employees are still managing their own hr and payroll. Why would you think mere humans deserve to do their own payroll . Because their livelihoods depend on it . Because they have bills to pay . 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Lets talk first the markets. Dow closing above 40,000. Questions about what the feds going to do. Youre convinced that the fed is not going to cut rates this year. Why is that . Thats our base case. I mean, you know, we have 24 offices around the world. We have over 150 portfolio companies, and when we look across our enterprise, we still see pretty good growth. The second thing is just bigger picture, our theme in kkr has been this idea that were in a regime change, that the world is changing where theres going to be a higher resting heart rate, more fiscal stimulus, more gop politics, messy energy transition, and sticky wages, and with that the fed probably doesnt need to cut this year, so if they do, it will be late in the year. We do see them cutting in 25, but when you look atthe Services Inflation that came out, its still north of 5 , and so will it trend down . Yes, but im not sure they need to rush to cut, and when you look at the corporate profit outlook, companies are doing okay in a 5 Interest Rate environment. Whats that mean for the markets, if they dont cut rates but they dont do it because of a strong economy. Our thesis has been glass half full. You get a look around the world and say theres a lot of bad stuff. The offset of that is theres a fair amount of capex spending. Consumers are keeping their jobs much better this cycle, and growth is going to be okay. So, you know, the other thing that i mean, we dont do Technical Analysis at kkr. When we look at our world, we dont see a lot of supply. You look at ipos, high yield and leveraged loan issuance, its as low as it has been since 2008 and 2001. Theres a lot of liquidity that has to go somewhere . Yeah, so whats happening and then, at the same time, s p is buying back a trillion dollars of stock. I was in europe last monday and tuesday, theyre buying back almost 400 billion of stock, which they typically dont do, and so theres some real technicals that are keeping the market stronger. If you think we are in a new regime where inflation levels are just going to be higher around the globe, does that eventually lead to stag Police Station flag station. We are getting really strong productivity. This reminds me a lot of the 1990s, if you look at those two dec decades, you have strong productivity growth. Its not ai driven. Its driven by the capex that we saw during covid, and thats led to more corporate profitability efficiency. And its led to inflation too. We need that productivity to offset the money that was put into the system. In hindsight putting that much money into the system as the economy was recovering was not the right idea. Whats to offset this from getting flagstation is getting the productivity boom. What are we doing from an investment standpoint . You know, you see this in kkrs business. Were much more active in private equity around corporate carveouts, in doing those in japan, the u. S. , europe. Our infrastructure business is on fire. You want to earn more collateral based cash flows in a world where you want to be long nominal gdp. Were leading a decade where you wanted to be long financial gdp. Where you wanted to get Long Duration of equities. A lot of money went into venture capital, a lot of money went into Long Duration bonds. Thats not working out so great. What are people doing, theyre pivoting to more upfront yield, owning more assets. Utilities have been on fire lately too. All that ties into this idea of being long nominal gdp, and at the same time weve got a huge surge in demand for energy from ai, and we actually dont have enough Energy Production particularly around electricity. One of the bik takeaways from europe, even when we do have the production its not in the right spots to get to where the demand is. Theres going to be a huge re reconfiguration of the Energy Supply chain. You guys were talking about nvidia. Thats the headline number, the most interesting part from kkrs perspective is all the infrastructure thats going to be required to make that electricity get to where the more power in the grid. Absolutely. Lets talk about your survey. You talked to Insurance Company cios about what theyre doing. It seems obvious that theyd be chasing higher yield because they can get it now. One thing we learned during covid is the Insurance Companies have a great window into inflation because they fix the window, they fix the bumper on the car. You can look around the world, and they see that price increase coming first. Theyre still telling us that inflation is a little bit higher than what the fed is saying. Thats point number one. Point number two is despite rates going up, 21 fed hikes, yes, they bought more Investment Grade debt, but i think the bigger message is that Insurance Companies now want to be more diversified. Theyre doing more in private equity, doing more in infrastructure, more in private credit, more in high yield, and theyre trying to diversify. My takeaway is they had rates pushed down massively on them, then they had rates taken way up against them. And what theyre saying is i want to build an all weather portfolio, and say what you see is them broadening their portfolios to include what we call kind of nontraditional assets. Thats now about a third of their portfolios. So obviously they have to manage the illiquidity, but what theyve done is theyve built portfolios that can take low inflation, high inflation can take geopolitical shocks. It as huge part of the market. We surveyed 8 trillion. These guys, men and women are on the cutting edge of where that moneys going, and for people that think that bond yields are going to go materially higher, its probably not going to happen from the corporate side because what theyre doing is theyre buying Investment Grade debt at 5. 5 and 6 , and theyre buying high yield at 8 to 9. The theres always one culprit that creates problems. In the past its been the consumer being levered. All the excess issuance is coming from the government. Its not coming from the corporate iside. Its not coming from the consumer. Theyre overweighting those parts of the business where they feel more secure about the Balance Sheet of the bit. My takeaway from this is that they see insurance costs higher than the fed sees it right now, that they are continuing to pay more whether to repair your car, your home, or Something Else. Definitely, i think the other thing is that they found out today now that rates arent being suppressed by quantitative easing that they can actually go out and run a regular business. At the end of the day, quantitative easing did inspire economic growth, but it took away from the saver, and in todays world. And the Insurance Companies. Berkshire hathaway, thats had what they do. You need to have some yield in the market to be able to create value for Financial Intermediaries that can save on behalf of individuals. Henry, thanks for coming in. Glad to be here. Thank you for having me. Coming up, the pc market and how Artificial Intelligence is changing the socalled refresh cycle. Thats next. And then how much are you willing to pay for an order of wings . Were going to speak to a georgia staple ingredients like beef and produce up 40 , what it all means for your wallet. Well be right back. Are you interested in safeguarding your investments with gold . Alamos gold is a growing canadian gold producer with a long track record of outperformance. Alamos gold. Invest with us. Our growth sets us apart. And theyre all coming . Those who are still iwith us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Microsoft set to unveil its provision its build, at its build developer conference this week. Joining us with expectations for the a. I. Pc market and whether it will actually move the needle for purchasing. A lot of information around this. This is expected to be big nove the next two years. First it windows 10 in late 2025. Secondly, average fouryear pc refresh cycle set to hit end of the year. People buying laptops in 2020 covid. Two companies when at t intel saying pcs at the musthave product especially with the event today, tomorrow software, tomorrow hardware, and early until taiwan, definitions vary. Think of a pc at any locally laptop that can be run a. I. Workloads just on the actual device using a gpu, graphic processes unit and cpu and npu specifically for a. I. Work. A lot of Companies Say its better for security and power. The Product Offerings are growing across the board. Intel aims to sell 100 million by 2025. Qualcomm making news today with microsoft. Has its a. I. Pc chip on sale second half of the year. Similar for amd and then apple. They expect expect more details from apple in the june Developers Conference but their chip coming in to the laptop, and companies trying to convince investors a major revenue driver. Wall street, well, a little skeptical. First, there is no killer app aside from may microsofts copilot driving people. And price tag. Delaying adoption, really expensive. Last thing wells fargo says, confused what actually is processed on the actual a. I. Pc versus in the cloud. Companies are convinced this is the moment. I say this, amd, intel, qualcomm, arm, talked to alls them. The next week corporate computer buy. The wrong person to ask these questions, but how would i notice how much better, like, my pc would be if it was an a. I. Pc . Three major points. Stealing this from qualcomm cfo. Spoke to him about it. Performance. Any database or anything a. I. Computing program you run, will run faster on your computer. Thats the performance a. I. Capabilities. One of them. The last one, seems to be the major driver now, battery life. All competing on battery life saying that you can work on your aipc and not work if youre not connected to a power supply for quite some time. Wondering, whats will i use it for . Obviously saying take copilot write emails without having to connect to the cloud. Intel told me, hey, if youre deaf and warrant to do sign language, sign to your computer and it can write for you. An example of the a. I. Capabilities coming in the near term. They want corporations, hit the security factors . Its more secure. Going on the cloud. But there is a little bit of pushback on that. Yes, more secure because its on your laptop. But your laptop is still storing all of that information. What happens when you connect to the cloud, too . Already seeing with bing. I dont know how often you search, if you use it, my bing shows me already what emails ive written on a certain topic. Pop it up first before all of the web searches. The concern is that, is it really that secure . Theyre going to argue, yes. I mean, you can download the a. I. Program on your computer. You can get the chatgpt. Use that right now. Why do you need a pc to a. I. As well when you can just download . I dont think arguing why need the internet back then. Why did we need i dont understand. Thought you can just download . Can you just download the a. I. Program . Why does a pc that has a. I. Air base. Going back and forth. As i said, the wrong person to be asking these questions. Giving you a more okay. I dont you might not realize in a few years from now. Its on my phone. Thanks, christina. Up next, food prices and inflation. Speaking to the ceo of restaurant, of a Restaurant Investment Group who has seen his average ticket price rise by more than 20 . Where the inflation is hitting the menu. Thats next. Squawk box will be right back. Champion iron offers a rare solution to decarbonize the steel industry. Which represents up to 10 of global emissions. The Company Recently doubled Production Capacity at its mine in eastern canada. It is now investing to produce one of the worlds purest iron ore. Enabling green steelmaking without the use of coal. Controlling a large portfolio of high purity iron ore resources. Champion is considering Strategic Partnerships to further develop the region. Champion iron. Fruit costs still surging in in spartz of the country. Last weeks cpi data showed food outside the home was up 4. 1 year over year. Our next guest, restaurateur, says his food costs increased by more than 20 since 2023, and hes had had raise many prices three times in the last year. Joining us, founder and ceo of a Restaurant Group which owns some locations down in georgia, and just looking over your numbers. A lot of this stuff i hadnt even considered, until you brought our attention to it. You can explain better than i can, but just overall food costs up 24 , but that includes, like, you called staple ingredients, poultry, beef and produce, up 40 . Throw on labor. Up 20 . Allin, i mean, its significantly higher and youve had to raise prices. Good morning, joe. Yeah. What makes it worse, overall revenues are down 11 even after raising prices 20 . If we hadnt raced prices revenues would be down even more. The whole supply chain issue, i had no idea about this. This is something thats interesting. They had to repair, and maintenance costs, you say up 50 . Say at your wing place you fryers, one of those things go down, days to recoup from your equipment . Yeah. We used an example. We had two fryers go out last month. The first one we had an emergency and called a maintenance copy that charged us 1,300 to first the fry whir i can buy a brand new one for 800. Second one went out i couldnt afford to fix it. Drug it out back and i went and wa bought a new one. We have 15 average margin a little over 7 profit. That fryer goes out. It takes 111 tables just to pay to replace the first fryer. God forbid the second one goes out or Something Else goes wrong. We need hundreds of customers every time a repair comes. Looking at all the metrics of this year, i feel like, i mean, its tough to run your business. Revenue is down 11 . I dont know why. People are migrating to fast food, which is also expensive. Funny. In the restaurant the other day watched somebody come up to the bar order two drinks 30. The guy looked around. These drinks are really expensive. Yeah. Costs are going up and people are thinking twice about going out and eating a lot. We rely on people to come back. Like a microcosmos. Costs up revenues down. Almost sounds like stagflation. How about labor . What does that situation look like for you . Does everyone make more money everywhere so youve got to keep up . You know, the Restaurant Industry is very tough, because if we are too hard on people or make them work too long or whatever, they can literally go across the street and get another job in five minutes. So its they want more money and its very difficult to manage people when jobs are so plentiful in the Restaurant Industry. Youre opening up more spots. Rethinking that . Or just hoping for better times next year . You know, the one we just opened last week, signed a contract on it three years ago. So construction ridiculous. Costs to build a restaurant from about 900 to 1. 3 million, and we didnt think that would happen three years ago when we signed that contract. Construction costs across the board are killing us. Makes you think twice about doing another one. Not opening, you dont have plans in the works now beyond that . Currently do not have in plans, becky, to open yore restaurant. Got to figure out this economy and market and how were going to do it. Brian, is inflation moderating or not . We work on dynamic pricing particularly in the Restaurant Industry meaning they charge me a doft plus 6 . Ive had months cost of chicken went up over 100 but my menu is printed. I cant change costs on menu. We end up eating that pricing going up hoping for it to come back down. Very difficult to run a restaurant profitably, much more so than in the past. All right. Good luck, and i dont think if i was in sea island, can i get to any of your restaurants and check it out . Which one would be no. Were just above atlanta. No, no, no. I cant do that. Have to go to atlanta some time to have some of these wings. Really hot ones, or medium or different, teriyaki ones . Yeah. Our specialty on wings we call roasted wing. Fall off the bone. Literally, you pick it up off the plate the meat just wants too come off. Our wings are really, really good. Very good. Sounds good. All right. Brian, thank you. Joe, becky, thank you. Just after 8 00 a. M. On the east coast. Im joe kernen along with becky quick. Andrew is off today. Watching a container ship that crashed into that bridge. It collapsed in baltimore in late march. Refloat it and moving back to port. Officials say that they plan to remove the ships containers while its docked. Imagine if you were crucially waiting for something in those containers for your business . Still ahead. And get them off. Fda, approval to elon musks chin. Neurolink implanting into a second patient. A wall street journal report saying that neurolink proposed, and regulators accepted, and it fixes a problem that occurred in the first patient. And Jeff Bezos Blue Origin launching first to edge of space since a 2022 grounding. The flight included ed white. A 90yearold. First black astronaut candidate picked way back when john f. Kennedy was president in 1961 to train as an astronaut, and hes a couple months older than captain kirk, who went up. Yeah. 90plus. 90 and a number of months. Captain kirk had never been all b. S. All that stuff we watched. None it of ever happened. No. Unbelievable. Unimaginable. Futures this morning are indicated up a little bit after a pruty strong week yesterday after the markets. Dow closed above 40,000 First Time Ever. Indicated up about 32 points this morning. S p futures up by 10 and nasdaq up by 47. Over to dom chu. Taking a look at the big premarket meevers. Movers. What some call most important stock of the week. Nvidia. Market value higher by north of 1. 25 . Just over 300 shares volume. Nvidia reports results after wednesdays closing bell. Ahead of that report a slew of analysts on wall street out this morning with updates to their outlooks, views and price targets. Among them bash clase, baird and steeple buying equivalenttype rating. Expectation across wall street now for stronger results for nvidia. Shares up. 5 . Stick with the semiconductor trade. Micron higher 2. 25 . Over 100,000 shares of volume. Maker computer memory chips upgrade at Morgan Stanley up to equal waite from prior underweight. Up to 130. Was 98. A catchup upgrade if you will after a 40some run in the stock. 8 pe 88 over the last 12 months. Admit things used in Artificial Intelligence and highperformance datacenters is leading to better Pricing Power for its products. Watch those. And those and other calls head over to the website. More access to detail and analysis behind the calls. And end with a move lower in shares of ryanair now. European trading, Budget Airline reported its best full year profit ever driven by its ability to raise prices offsetting price costs and 700 million euro buyback program, but there are concerns over the current pricing environment in this quarter, which appear to be weighing on that stock. Some ryanair Michael Oleary talked about right here this morning on squawk box. What weve been trying to do, in europe fares up over 20 . Never happened before. Didnt think it would happen this summer. Maybe high Single Digits. Moved it back a little and think fares low Single Digits this summer. Much more modest. Trade on ryanairin european trading. Send things back to you. Thank you. For more on the market, we bring in the head of small and midcap strategy and senior strategist at bank of america global research. Your price target for the s p end of the year is 5,400. Less than a percent away where we are now. Yet you city think things look pretty good in the market . Still see upside. Equity sentiment wholly proved not yet u foric. Pockets in the market we see more opportunity than others. Still a good earnings backdrop continue to surprise to the upside this quarter. We do think earnings for the market are starting to broaden out and that should continue as we get into the latter part of this year. So as some of the magnificent seven stock, big tech stocks, start to spend more on capx earnings should slow and the rest of the market catch up why end of the year. You say not exuberant. Will you raise it potentially . More opportunity in pockets of the market than just s p 500 overall. Think about the market broadening out. Some of the equalweighted benchmark relative to the capweighted benchmark. In parts of small caps even though a bit more cautious on the russell 2,000 after the april inflation data and the fact our economists pushed out our first fed cut to december of this year, which could challenge small caps as a benchmark near term. I still think some of the more gdp sensitive, commodity sensitive parts of the russell, too, that dont have leverage or refinancing risk, the biggest risk for small caps, reits stay high, energies, industrials, materials, could do very well in the near term. I think pockets of the overall market are still positioned to have healthy numbers the s p 500. I think you also said you Like Technology broadly. You think its going to catch up with the magnificent seven to some extent . We think a lot of the actually other cyclical parts of the market will catch up. Weve been in a back drop where that segment of the magnificent seven has led earnings, surprise to the upside. As the stocks start to spend and invest more as a proportion of their earnings that they should slow. Certainly pockets of tech. Weve seen Tech Companies initiate dividends and think Equity Income and important style or factor going forward. We were in an environment where dividends were rather lackluster but now Dividend Growth for the market should start to pick up again as Earnings Growth recovered and if the fed does cut rates then we think Equity Income will be all the more attractive. Certainly parts of tech, but cautious on tech overall as we expect some of the other cyclical sectors to come up. What could potential problem be you worry about . Higher for longer rates, not as much of a problem for large cap and large cap value. Certainly for small caps as mentioned, this could be a headwind given that a lot of small caps have short term debt, refinancing risk. More in some sectors than others. Small cap real estate more cautious on. Thats where you really want to be selective. We think this is a Good Environment for stock picking or even in small caps our analysts say 1,000 small or midcap stocks. A market you want to be selective. Jill, thank you for coming in. Thank you. Coming up, founder kyle bass from hayman capital joins us. A few comments about iran as well. Stay tuned. Youre watching squawk box on cnbc. [crowd chanting] they ignored your potential, dissed your achievements, and mocked your ambition. But its not the critic who counts, and you know that. From the beginning, you couldnt be stopped. Breaking resistance with every swing and block. Your game plan never changed. So enjoy this moment. The one they said youd never live to see. Some would still call it luck. Let them. Because you know what its always been. Inevitable. Our next guest talks china including President Bidens tariffs. Tesla inside the country, maybe touch on iran as well. Bring in cobb bass. Chief Investment Officer. Thats front and center, i guess. Do you know anything we dont know, kyle . Weather, fog, anything else . I mean, what do you see playing out . Is this a flashpoint . Is there a potential situation that we need to be concerned with . Iran, joe, if you look at the photos of the crash site, what happened there, it looks just like similar to what happens to kobe bryant. A fog so think you couldnt see 100 yards in front of you. So i dont believe intelligence officials dont say there was foul play there, but now the only potential new leader of iran behind khamenei is his son whos about as brutal as he is. So i think its kind of par for the course in iran, joe. Yeah. I was wondering whether this gentleman that was in the helicopter i dont know a lot about it but i just read he was very, very antiisrael, antiwest, denying all kinds of historical occurrences. Richard engel said hes about average for anyone in line to be in power in iran. He wasnt overly, you know, hateful towards the they all are, i guess . Joe, the same guy who said that israel should be wiped off the map. Karmas a bitch sometimes. Exactly. Ive seen some biden video commenting on trumps tariffs. I mean, nothings off when it comes to politicking or, you know, if you think you can get a couple of votes, nothing that you said in the past really matters for what youre likely to do at any time. Well i mean, if you noticed, the steel and aluminum tariffs werent touched it although a lot of laundering about trumps tariffs being too onerous on the chinese and their markets, but we put those tariffs in place to try to save our markets. The Chinese Government can act economically to try to put our industries out of business. Still working on our modem industry arguing we didnt put near enough tariffs on chinese aluminum but we put tariffs on steel and aluminum and now tariffs on chinese evs. They would flood our market with evs and ford lost as much money in evs at the whole Combustion Engine market this year. So i think these tariffs are absolutely necessary, and, look, i think that, you know, china trying to take over the electrical Vehicle Market here has a lot more to do with their desire to gather information from everyone in the u. S. Remember, xi jinping bans teslas from being in cities he travels to, if you remember all the way back to any of the conferences they were having he was attending. So i think that what musk is doing in china, what the chinese are doing here, are things that we need to be paying a lot of attention to, and while all of this is happening, i think youve got a scenario in which no ones paying attention to whats happening with xi and Putin Meeting over the weekend and what the Chinese Government card said on friday. Theyre going to start detaining anyone that interferes with their territorial waters including all the way to the philippines. I think that youve got a scenario in which youve got a potential powder keg happening over in Southeast Asia and i dont think anyones paying attention. Yeah. Thats all kind of concerning. It seems like theyve overbuilt everything there, and when the state run things it has nothing to do with just doing enough to just satisfy the man. It what dohas to do with keepine employ and keeped gdp growing. Never seems to come over to roost. You saw the real estate, month are bad money, theoretically bad money at bad money in real estate there. The evs overbuilt. Does that eventually come home to roost or not . Yeah. They let the Real Estate Market grow unchecked, joe. Four years of real estate decline. Every public Chinese Developers in bankruptcy. They announced this weekend, trying to support their collapse in real estate, you know, they lowered the mortgage floor rate from call it 3. 5 to 3 . To your point, the State Government said theyre going to lend 40 billion through roughly 300 billion chinese yuan into the market 1. 7 to buy up unfinished commodity housing and make it guaranteed housing for the citizens of china. Imagine if a third of your gdp, driven by real estate and your Real Estate Markets are down 30 to 40 . Thats 10 gdp points at least and china says, yeah, still on track to print 5 plus 5 gdp. We all know that they lie, but the real thing, the real thing we need to Pay Attention to here is they have a third of their market down 30 in four years. And they dont admit it. The chinese systems is insolvent yet were starting to see the Chinese Government print money like the rest of the developed world with their central bank and that began on friday as well. So all of these things are happening realtime in the last call it seven days, joe. Theyre trying to move things around. Seeing you, not since elon musk was over there there. Whats in it for china . If they want to control the ev market why are they being conciliatory towards elon musk and robotaxis and the like in china . Yeah. I mean, look. Musks got upwards of a third of his revenues from tesla in china. Giga factor started turning out cars just a few years ago, and its, its a quarter to a third of his business. Why china is conciliatory, they still have things to learn from tesla and the United States and our ingenuity and engineering prowess, and in the end, i think what were going to see is china has acquired all of this technology, you know via various methods woe would employ and in the end i dont know whats going to be left of musks business in china or any u. S. Business in china once their militaristic and economic belisten rinse gets the bestof them. Pay attention whats happening in the south china sea, Pay Attention to the Scarborough Shoal and others. I believe thats where the flashpoint will happen. Then all of the wall street investments, corporate investments, fdi in china will come into question. Youve already seen u. S. Institutional investment either titrate down, turn off or reverse. In many cases the texas institutions seen it come down materially. I think youll see that across the board continue. So wall street still has a fascination with earning money or earning returns in china, and in the end i think theyre going to lose everything. Okay. All right, kyle, its been a while. Good to have you, kyle, on this morning. Thanks. Pleasure to be here. Still to come, well have more on that Helicopter Crash in iran that killed the countrys president. We will get a live report from the region. And with two debates set well get into President Biden and former president trumps Overall Economic plans and talk about what, if anything, could move the needle for voters. Stay tuned. Youre watching squawk box and this is cnbc. And electricity. Are forever in bloom. Welcome to beyond. The mercedesmaybach eqs suv. Ameritrade is now part of schwab. Bringing you an elevated experience, tailormade for trader minds. Go deeper with thinkorswim our awardwining trading platforms. Unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. And sharpen your skills with an immersive Online Education crafted just for traders. All so you can trade brilliantly. A Helicopter Crash claiming the lives of irans president and foreign minister. Keir simmons is in the region and joins us with more. Hi, keir. Reporter hi, becky. Well, theres diplomatic overdrive here in the gulf and across the middle east right now with countries sending their condolences to the iranian leadership. Images were seeing now, becky, from the Iranian State television and even turkish tv at crash site tell us how difficult it would have been to survive. Everybody onboard died according to Iranian State media. Those pictures, too, of the rescue effort overnight, you see the depth of the fog. The density of the fog in a very mountainous area. That is, appears to be, the primary, likely, cause of what happened here. It does look like this was an accident. Said Chuck Schumer overnight racing he has been told by intelligence source theres in the u. S. That there is not blame, blame cannot be placed anywhere else other than an accident. And iran moving quickly to replace president raisi. President raisi, of course, a hardliner crushing the dissent, the new int prim president , who was the Vice President stepping in. Also a hardliner. Election expected in 50 days, but the consensus of it now falling here in the region and beyond is that we will not see a change in direction for iran. Although this is, becky, what history called a black swan event. Were you dont know ultimately what impact could be happening. Just two years ago we saw demonstrations on the streets of tehran and across iran over womens rights. Can Something Like this make a shift . Certainly there be many in iran who are satisfied with the clerics with the leadership of iran. They will be very cautious about making their voices heard, but you dont know how this plays out. Of course, how it impacts u. N. Foreign policy. Youve heard from the russians, from the chinese, describing what you see as a friend, that to be expected. Not so much from the western capital, becky. Keir, also questions just in the region. Revealed that king solomon of saudi arabia has a lung infection and undergoing treatment. Hes 88 years old. His son, Mohammed Bin Salman canceling plans to go to turkey as well. What does this mean or add to turkey in the region . Reporter yeah, exactly. I mean, king solomon is older. We dont want to rush to conclusions. Southern bin salmans decision not to go to japan is important. So much going on in this region. Isnt there . He is trying to push forward with a deal, towards a deal with the u. S. Which would involve a trade deal, a security deal, a Civil Nuclear deal, and all of those would require agreement by congress. The nuclear deal, for example, needs the house and the senate. So the collection clock is ticking with the u. S. Elections coming down the pipe. We had Jake Sullivan inside israel trying to push forward on that, too. Its stability and instability. Today i think instability is winning. Becky . Thank you. Keir simmons. Coming up, even though europe and more of an inflation problem in the u. S. , it looks like overseas investors could get a rate cut before america. Why is that . Steve liesman is going the o lp us with that after a break. Stay tuned. Youre watching squawk box on cnbc. Some people say, why should i take prevagen . I dont have a problem with my memory. Memory loss is, is not something that occurs overnight. I started noticing subtle lapses in memory. I want people to know that prevagen has worked for me. Its helped my memory. Its helped my cognitive qualities. Give it a try. I want it to help you just like it has helped me. Prevagen. At stores everywhere without a prescription. 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. Well, it is just under an hour to go until opening bell on wall street. Mike santoli joins us now. Mike, i tried to read your column over the weekend, and i couldnt remember my cnbc probe password to try to get in but i think you were talking about something about how this is going to be the moment that tells us whether were going to continue to push forward or whether we give it all back . That was the general idea. By the way, provide your email to read my promo on cnbc probe. I was talking index hitting highs historic not worry some thing. Persists. Market trends. Exceptions, 2007 was scary. Otherwise, looks like were back on this sort of track. Just want to look at the angle of ascent before you had resets. From july to october of last year. 5 pullback. Famed to come back. Then correction. This time so far just been a little 5 dip. Had it in april. Yields went up and questioned exactly how strong the economy was in the face of those yields and were back to it. Not toot much upside for the market to the look overbought and people get overexcited again. At least basic trend work says things are okay. Earnings coming through. Markets less expensive now on forward earnings than in march and at a similar level because earnings forecasts revised. A bit of of a defensive turn in leadership. This is the minimum volatility. High beta more aggressive volatile ones. Recently calm and somewhat perceived safer stocks doing better. Consumer cyclicals, manage to watch. Chinese stocks, copper, global reflation trade going on. A contrast. Here we have a look at credit. Junk bod sprends ads basically as they get. 3 over treasuryss what this measures here. A lot of stress in the system, covid, you know, and this was back in 2016. Industrial recession. Right now talking about 7. 5 nominal yields on junk bonds and shows you were comfortable about the idea were not going to get a lot of defaults. We have a high nominal growth economy, joe. So far acting as a cushion. Okay. All right, mike. Thanks. Going to give me your eel mail . I dont think thats internally, he has it. Oh, yeah. Okay. Looks like the European Central banks mikes my friend. Going to i dont know what he might do with that. Going to beat the fed to reducing rates. Steve liesman joining us now with a look why the fed, calling the fed a likely number two . Thats not nice. Well when it comes to cutting rates, joe, seems to be the case. Remember, the fed hiked rates earlier, lifted rate higher than the European Central bank. Looks now ecb beating us to the rate cuts. Maybe soon as june. America waiting to the fall maybe longer. Weaker European Growth developing slack led to lower european inflation in the u. S. More u. S. Government stimulus. Also have, though, better Monetary Policy transmission in europe than in the u. S. Carl weinberg, the economics governor saying briskly growing and dead flat and not at full employment. They have a credit crunch. We dont. U. S. Soared to 15 . Remember . Fallen sharply. 3. 9 , below 4 a long time. A sign slack in the europe oh area economy that helps bring down inflation. We dont have that kind of slack over here. Gdp meanwhile, cratered by 15 in europe at its worst twice as bad as the u. S. Only came back anemically, u. S. Growth remained a margin above trend. Citi economists telling me u. S. Exploded out of the pandemic. Lots of government stimulus. Quicker removeal of restrictions and very eager american consumer. Europe more cautious and, of course, hit harder by the russia invasion of ukraine. Saying stronger demand in the u. S. Reflected in stronger growth, also in higher inflation. European inflation has been relatively steady. Just above the 2 target trending down. Same measure in the u. S. , nothing above 3 . Not given beneficials confidence to stick that its headed to the 2 target. One of the biggest differences here. Ecb policy translates better into their economy. Most of their lending comes from banks. The u. S. Has a very large nonbank lending sector that gets around fed policy in a lot of ways making it of youer for tfor suffer for the fed. Might have to wait longer for fed policy and like more Government Spending higher growth . Maybe longer, lingering inflation . Or like the european model with their economy tanked or maybe you have a better idea . Compared to europe . No, no. Always take the u. S. You know ill always. Esse socialism land. June whats september for a cut . Hold on. Hold on. Fresh quotes, joe, just like fresh bread. Fresh quotes. A couple clicks here. We got 20 5 on june. 24 on july. 62 for september. Thats the one. You could kind of, i dont know, joe. Take the summer off, my man. Boy, only in a position to from your list. Exactly. Ill be okay if i do that . I can come back in the fall . Or probably not. You have no authority to do that. As youve said, joe, i dont have that authority. So i cant say if youre going to be okay but i can recommend it. I know. No. But i like coming here. But theres a lot of stuff. I mean, heres the thing. If you can get inflation down, good prints of inflation. If we can maybe see unemployment come up a little bit, creating a little slack that reduces some of the wages out there, and who knows. Maybe by this summer the fed will say, hey, were getting that confidence back. Its going to be the key. I think that, you know, the Government Spending story is an interesting one. Its a great debate, but its supposed to wane as the year goes on. So if that is indeed part of the source of inflation, that impulse should be declining as we move forward. Explained it well. Wondering why policy seemed to work better. Did have higher inflation. Now almost 2 . Its luke a slowing economy definitely is i guess thats the remedy. What were trying to do here. But, you know i dont know whether id rather have a Slower Economy or inflation. Now you and viewers. You and viewers, joe, have asked the module on economics courses on comparative international Monetary Policy. You can check that box. Great. Now i can get a cup of coffee with that. Right . No. I cant. Exactly. At 6. Why they got problems. Thanks, steve. When we come back, biden versus trump on the economy with less than six months before the election. We will talk Market Performance under each man. Tariffs and what Economic Policy would look like over the next four years. Stay tuned. Youre watching squawk box and this is cnbc. To help you see untapped possibilities and relentlessly work with you to make them real. And when i got there, they have the sushi this is clem. Like sushi classy clems not a morning person. Im tasting it or a night person. Or a. People person. But he is an i can solve this in 4 different ways person. And that person. Is impossible to replace. You need clem. Clem needs benefits. Work with principal so we can help you help clem with a retirement and benefits plan thats right for him. Im short but im. Im confident. You know . Let our expertise round out yours. President bidens decision to raise tariffs on 18 billion worth of chinese goods is bringing back that debate over tariffs effectiveness and who really ends up paying. Joining us, former white house chief of staff mick mulvaney. Cochair at a company as an advisor and Heidi Heitkamp director of university of chicagos institute of politics and a cnbc contributor. Let me throw this out here. The idea of tariffs is one used by both men who are running for president this time around. Both President Biden and president trump. So maybe we should just talk about whether tariffs are here to stay . Mick, start with you. President trump had already put tariffs in place. President biden raising terrorists in some areas. What are your thoughts on the matter . The question is territory to stay, certainly more than a generation ago. The philosophy towards trade has changed in washington. One of the ways donald trump changed the republican party, and especially as visavis china. Thats what youre see during this campaign. Both of the major candidates trying to get harder and harder on china than the other. Now that biden sort of raised the spectrum of tariffs on china, seen trump raising his expectations higher, theyre going to fall over each other, whos toughest on china. I dont see that going away. Few things right now, becky, bipartisan in washington, and views towards china is one of those things. Look at the Chinese Company and the trade deficit youre seeing less importation from china. So is that the goal . But if the goal is keep prices low and curtail inflation, tariffs are inflationary regardless what the senator of ohio believes. So it used to be the republicans rightfully says tariffs are a tax. That has gone away with the advent of the trump administration. I think that it gives the administration and the president a lot of power, and we need to rethink whether we should give them unilateral power to tax the american people. I mean, thats a fair point. The idea tariffs are a tax. A conservative, long been, talking point and instruction around this idea. I can understand some situations where we think its an issue of National Security and want to make sure its not so easy to dump products here, but a lot of these things really just wind up making more inflationary pressures and many consumers will play a lot more when they go to the stores . They do. Cost analysis for both policymakers and voters. One attitude towards the tariff on Chinese Rare Earth Minerals or chinese green energy. Thats one thing. Putting a tariff on australian steel could be something entirely differ. The cost benefit analysis will vary from country to country and product to product. The real question, are voters willing to pay the price . Right now she seem to be. A lot more voters saying at least put tariffs at least op china. Not on european automobiles or japanese cars, anything like that. Certainly whichcomes to chine in theres an attitude on that. Voters do what they want, if they get the chance. Turning the conversation just a little to try toget your sense what you think about the polls right now. Because the polls show President Biden behind especially in some of those swing states, which dont even look like swing states at this point. Democrats will say at this point they dont believe the polls. Republicans said last time around they should have won the election based on what the polls were saying. Ill ask each of you, and heidi, start with you. What do you think about the polls . Are they right . Are they predictive . T. I think the polls are early, and i think that they are definitely a warning sign for the administration. Theyre going to have to get their voice out th. Theyre going to have to get their message out there, but, you know, when polls say what people want them to say theyre deadon. Polls say what people dont want thi extremely distorted. And hard to poll people these days but amazing to see people use the facts when they polls when they feel like them and heidi is right. Never saw a poll said i was losing i thought was right. Ignore topline numbers and national polls. Something interesting in polling data right now, look at polling data on third party specifically rfk jr. I dont really care much about his top line number. 2 to 22 . Doesnt make a difference. Not going to win. But hoot is he polling from is the most interesting piece of data. 22 . Evenly from trump and biden, a nonplayer. 2 all from donald trump or joe biden could help impact the outcome of an election especially in a state like michigan, pennsylvania, wisconsin, et cetera. Biggest news in of the last 30 days, rfk made the kennedy made the ballot in michigan and the polling im watching forward is who he is polling from. Thats interesting. Mick and heidi, thank you both. Thank you. You bet. Up next, well look at jpmorgans investor day a dive into key bank sector stocks. Squawk box will be right back. Pickle yeah, aw whoo these guys are intense. We got nothing to worry about. With e trade from Morgan Stanley, were ready for whatever gets served up. Dude, you gotta work on your trash talk. Id rather work on saving for retirement. Or college, since you like to get schooled. Thats a pretty good burn, right . Got him. Good game. Thanks for coming to our clinic, first ones free. You know whats brilliant . Boring. Think about it. Boring is the unsung catalyst for bold. What straps bold to a rocket and hurtles it into space . Boring does. Boring makes vacations happen, early retirements possible, and startups start up. Because its smart, dependable, and steady. All words you want from your bank. For nearly 160 years, pnc bank has been brilliantly boring so you can be happily fulfilled. Which is pretty unboring if you think about it. Welcome back, everybody. Joining us right now with what to expect at jpmorgan annual investor day is our very own leslie picker. Leslie, good morning. Reporter hey, becky, morning, were here at jpmorgan headquarters, those shares a bit higher as the firm provided investor day here in new york city. The Program Began less than an hour ago with presentations by cfo jeremy pinto and the coo. With the net income markets for the year, the protestability metric for loan making. Jpmorgan expected 91 billion for 2024, thats up 2 billion from april. And up 3 billion from q4 earnings in january. He said thats due to fewer rate projections than there were at 4q earns. He noted despite the prediction, its urgent clients but urges investors not to map out predictions for where the track might be bought the trajectory is, quote, noisy. The firm also bumped up its guidance for againsts by 1 when to 92 billion thats due to a contribution to the foundation from the 8 billion jpmorgan received after restructuring its stake in visa. Out the numbers, investors will be focused on the presenters themselves today. In late january, if you recall, the firm announce smd changes giving increased responsibilities to several people who are widely seen as next Generation Leaders and potential successor candidates. In eventualitity, that ultimately chairman and ceo Jeremy Diamond sat down and it concludes with remarks and q a from diamond which historically have created quite a few, guys. This morning, leslie, we were talking about the fed now looking at softening the rules that they had planned these are the rules that Jeremy Diamond had pushed back on potentially jpmorgan and other big banks. Have you heard anything about that story . Its on the front page of the wall street journal this morning. Yes, absolutely. So, they hit that kind of first thing this morning, we heard from banham who said, quote, we dont have anything from regulatory regulations that you dont have. And he said, despite the recent press coverage, we think it would be naive to predict the outcome with any confidence. So regulatory bodies responsible for overseeing the capital hikes that took place recently. And this is something that was proposed in terms of cutting those increases in half. But it sounds like from the industry side, what theyre hearing about is just whats in the media right now. Okay, leslie, thank you. Well be watching. And ginning us now for more on jpmorgan and other big banks, chris sikes, portfolio manager. Jpmorgan is not your biggest bank holding. But its lapped. J. D. Diamond has lapped the other competitors, 600 market cap, the next closest is 300 billion, i think. Thats right, during his tenure, hes given two gifts to shareholders over the tenure, the firm has conpounded 9. 8 for the s p 500 and double that of the industry. So shareholders have been well awarded against passive, against the industry, from his tenure. And the other thing hes done, weve heard today, hes instituted this culture at jpmorgan, great bench, but a philosophy making is one of the most competitive banks in the world in terms of Risk Management, underwriting and capital allocation. I think hes incredibly young at 68. How many could he go five more years, ten your years . Any indication all right. He loves it, its a passion still. Well, if you looked at omaha with charlie and warren, theyre decades old. And jamie, look how well theyre doing. So, i would think his passion will take him where he goes. Sure. And well have to see. Certainly, it sounds like hes committed for several years now. Some of the Management Changes that we saw in january are kind of more of that positioning for the future without him. Probably nothing new on that today on that. From what they said in january . Right, i didnt see anything incremental. Okay. What will we hear today . Well, obviously, but what would be what would you be expecting . What would be surprising to talk about . I think we got big headlines for the earnings model. Digging in, people hear about technique nothing how is seeps into their businesses in terms of a. I. Automation, standardization for processes to improve. They talked about the guide being 17 billion of tech expense. They earned 50 billion last year. So its a pretty significant number. Its up 9 year over year, to continue to spend in technology and help customers go forward, the Risk Management and hold the platform in a more productive state going forward. If its not 20 capital, if its 10, theyve already done that, havent they . Will they have any increased capital from where they are now . I think with jpmorgan which is fairly neat, you have apo terrible output in the game. To meet the requirements but as you discussed earlier, theres potential changes and maybe a loosening of some of those risks, especially with mortgages. So, i think you get a bank thats already well positioned to do that. But if you do get loosening of regulations thats upside for invest everies in terms of share value. Weve got to go, but any worries about loan growth or credit losses . Anything surprising on either of those fronts, do you think . Well, i think within the hot pockets area of the markets, et cetera, there are certainly hot spots, but jpmorgan, well diversified, great Balance Sheet to deal with whatever comes forward. Okay, thank you. Do you see him every day . Of course. We send our best. Taking a look at the futures at 17 seconds, maybe we can do stocks. Youve got that moderated a bit. Nasdaq up about 15. Yields, as we saw about 440 or so, wasnt it, on the tenyear . Yes. Well be back tomorrow. Tomorrow. We, we. Make sure you join us. Squawk on the street is next. Good monday morning, welcome to squawk on the street, im Carl Quintanilla with criminal cramer, david faber has the week off. Premarkets steady. Dow 40k in the books. Positive commentary. Well get to that