In the late 90s. Its a whole smatters of tech joy companies from not just france but throughout. I should also mention that elon milk has just been added to the program. Were going to be laering from elon musk. And also moe di tomorrow. Many have said they dont understand it. They cant see inside the box. This new research theyve developed can see inside the box to understand what ai is doing. They can look at the difference. Up until now thats been impossible. Thals what im doing in paris, and weve got a lot more throughout the day. Just in terms of seeing what it does, how will they do it . The imaginations they can cook up, can they track it down . Thats exactly what this research seems to suggest that theyre going to be able to do. That they ee going to be able to understand hall like i. It may explain why one model writes one sentence and another writes another sentence and whats driving the different understandings of the nils that its taking in. Well talk to dario about it in just about an hour and a half from now. I guess you can think of it as a cat skarn. I its having its interesting. I couldnt read an mri either. Lets get a check on the markets this morning. Youre going to see the u. S. Equity futures are a little bit lower. The dow futures this morning down by 250 point. S p 500 futures down. Pretty stuck bornly high. Weve been at the recordhighs. I do think the market has been essentially waiting for nvidia numbers. Waiting for the next move. Everyone remembers. It seemed like we had high hopes for nvidia and then they had this blowout report and the entire market got an upgrachltd. Theyre High Expectations for the numbers. Totally. Well see how it goes from there. On todays squawk planner, really no economic data, but we will get the minutes from the latest fed meeting. Thats at 2 00 p. M. Eastern time. On the earnings front, retailer target set to report around 6 30 a. M. Eastern. Stay right here for those numbers and the reaction on wall street. Were also going to hear from tjx and William Sonoma before the bell. And after the bale, were going to talk to a chip analyst in the next hour. New this morning, the Biden Administration saying that it will forgive 7. 7 billion in additional student loan anniversary than 160,000. These involve borrowers in the public program. It brings it to 7. 5 million borrowers who have had or will have loans forgiven we the administration. Im not sure why were showing these College Protest pictures in the mix of this. Its like one in ten americans who owe on Student Loans have been forgiven . More borrowers got forgiveness. Not a surprise in the election year. Its obvious. Secondly the Biden Administration is going to release a billion barrels of gasoline in the northeast to try to reduce prices at the pump ahead of the fourth of july and the summer driving season. Gas prices at the pump have pulled back. The National Average is 3. 61. Former President Trump criticized that move as a political stunt saying high gasoline prices are got good for elections. He said biden was selling gasoline because in his words hes unable to drill properly. This was mandated by congress release. Theyre shutting this down. Its a million barrels. We burn 9 bouillon a day. In earnings news were watching shares of Toll Brothers this morning, they beat analysts estimates after the close. It differs homes. The company said demand for new homes is driven by the economy and inventory caused by the lockin effects of higher rates. Its been very strochlk up 28 . Doubled in the last year. Shares Urban Outfitters are looking to buy highend womens clothesing. They weighed in on a bigger than expected drop. The companys coo. Smaller tops over loser fitting bottoms. I dont know if this is for you, mike. I know. This is for women. We have daughters. I know exactly the trends. Big balloony pants and crop tops. Almost like the early 90s. Ive seen mens pants too. Have you noticed . Men are wearing broader pants with the bootcut. No, no, no. This is way more exaggerated. This is more mc hammer pants, not gradual things that are real subtle. This is a very balloony pants sought of and crop top to show it off. Not a look i could pull off. Youre in paris. Youre going to come back and tell us what the next next look is. I was commenting earlier, i like the dark shirt with the dark chute. Im trying to look techie. It works. Im going for the ai look. Its fancy. Youve got a pocket square. Thats a little fancier than normal tech look. Good job. Coming up, the s p and nasdaq both closing at recordhighs. Well talk strategy after the break, later dor. Scott gottlie will weigh in on weight loss drugs like wegovy. Squawk box will be right back. 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 i cant believe you corporate types are still calling each other rock stars. Youre a rock star. Were all rock stars. Oooo look look at my data driven insights, im a rock star. Great job putting finance and hr on one platform with workday. Thank you guys, can you keep it down. Im working. You people are guitar noises . Hand over the air guitar. Ive got another one. Norman, bad news. I never graduated from med school. What . But the good news is. Xfinity mobile just got even better now, you can automatically connect to wifi speeds up to a gig on the go. Plus, buy one unlimited line and get one free for a year. I gotta get this deal. I know. Faster wifi and savings . I dont want to miss that. Thats amazing doc. Mobile savings are calling. Visit xfinitymobile. Com to learn more. Doc . The s p 500 and nasdaq close on highs. Lets bring in the chief Equity National strategist from bank of america. Steve, good to see you. Good morning. I guess, making new highs is a bullish thing to do. The ends to be something that has positive forward implications, but what do you make of the rallies we had off the lows of april, up 7 or so, whether volume, breadth, the composition of the rallies suggests whether it can last or not. First and foremost, were about to enter the best seasonal period of the year, june through august. The s p 500 is up about 2 3. During election years, its on steroids. With new heise coming, we think it can continue. A lot of people dont look at volume. That also confirmed the highs last week. So i think thats very important and suggested that the rally should continue. What about the leadership or whether theres sort of a shifting preference evident in the market here. Youve seen common modesty base stocks and running with metals and you see on the other side banks doing well. It seems a little bit of a grab bag, not the old big cap growth leadership. I think thats great. We really need to see that. Quite frankly, shifts in leadership do help markets go higher. I will say, though, we do think that on an absolute basis you can get breakouts for the small cap instance or equal weight s p. You look at how they perform and its still down in the doldrums, still trending lower. Theres a chance even with this broader participation, it still could be a more mega cap market. Its not only in the u. S. Youve got europe. Japan has declined a little bit. Its a global bull market right now. And what about china. A lot of excitement over the move over washed out lows recently. I think the important thing is youre starting to see emerging markets break out. If you looked at the indices, they have a head and shoulders bottom meaning they should go higher. They look a little excepted here, but i think theyve entered into a by the dips kind of market. Is it because were expecting a rate cut ecb with the fed to follow . Lower rate environmental is better for some of these emerging markets. I would agree. I think rates have been elevated for a while and the market has digested that find. So anything other than, you know, having to hike again would support those markets. You know, all of this suggests that the trends remain positive longer term. That was also the case on march 21st. As people get a little bit positioned too aggressively. Right now i dont think were there. You did have a bit of frothiness and sentiment based on the ai bull and then we had that correction into april. They acknowledged the correction, became less bullish. Now theyre not near where they were at the march high. So even with sentiment indicators and positioning, theres the capacity to add to the market on the rally. Cash levels remain elevated as well. So, you know, that just gives us fuel for the market to continue to move up. We think the s p could be 55 rngz 5600 on a summer rally, you know, and we if we can hold 52 50, that would mean the gap we formed last week is intact. Work gets dicier. Obviously if you fill that gap, you have an opportunity to get in lower. Sometimes thats hard. The april rally could have gone to 4600. Pullback, yeah. Im sorry. The pullback could have been perfectly fine. That would have been great. People didnt get that opportunity. Youve got the 5 discount. Thanks so much. Good to see you. When we come back, Third Party Candidate rfk jr. Is buying shares of gamestop and v. Ting an interesting game poer wee got the details on that next. 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. 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. Welcome back, everybody. Were watching crypto prices as ethereum continues to rise despite optimism. The first of a series of decisions on krepp toe instruments are due tomorrow and friday. The previous consensus was that they would not be approved, but you have seen the belgium p as that consensuschange. 3,742, thats the last tick for ethereum. Bitcoin pulled back after starting slightly higher to start the week. In other crypto news, the Trump Campaign announced yesterday it will start accepting crypto donations. They say donors can use any accepted by the product. Meantime, becky, this story making wall street. Rfk jr. Saying hes invested 24,000 in gamestop in an effort, he says, to show solidarity with Retail Investors over large institutional funds. He posted this image on x and said his administration would support the ape retail rebellion. He said lets punish predatory shortselling to the moon. By the way, i ride with you, and im not leaving, unquote. Im so curious what you guys think of this. Look, maybe theres theres a lot of problems like naked shorting and all sorts of other things, but i fear this is irresponsible in some ways because its just going to be promoting folks to go out and buy a stock that as weve talked about, if its a longterm investment at least. You could think of it as an investment, but the numbers dont add up. We kind of settled this thee years ago. There was this big current of social outrage that was misplaced thinking there was some kind of conspiracy there. I think what you give his Campaign Credit for is identifying these hieshs of belief that are out there on social media and trying to tap into them, whether theyre based on fact or not. Hes looking for voters, people to come into the trade with him. All weve been talking about is each of these candidates doing things to try to win elections. Youve got biden trying to buy in voters saying hes going to forgive all the Student Loans. Trump is advocating for cryptos. Its a crazy election season. I think its the third time weve seen it. Now potentially game stock is a way of demonstrating some kind of support for or in the case of truth social, potentially funneling money to a candidate. Thats a very unusual and new thing in the stockmarket and politics. Weve got a lot more coming up on squawk box in a moment. When we come back, microsoft announcing a new data center in africa. Well bring you the details in a second. Target with a new day pa point. Well bring you the reaction on wall street. As we take a break, yesterdays s p 500 winners and losers. Announcer executive edge is sponsored by ats in business. Next level moments need the next level network. 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 if i told you something extends your life span, improves your sleep, makes you more empathetic, and reduces stress and cognitive decline, you would think it was a miracle drug. But im talking about reading. Reading every day does all those things and more, which is why i started my book club, read with jenna. So start a reading streak, even if its just a few minutes every day, on the way to work, your lunch break, before you go to bed. Every little bit helps. The more you know. Good morning, everybody, and welcome back to squawk box. Were live from the Nasdaq Market site and times square and from paris today too. If you want to look at the futures, a little bit in the red. Andrew . Thanks, becky. New this morning, microsoft investing 1 billion in kenya as part of a new Ai Data Center that theyre going to put together thats in a partnership with a Company Called g42. The faculty will run entirely on renewable geo energy. Its a fascinating new tracking. It will look at cloud through a new regional cloud region. Its the latest. In the past six months theyve been making a ton of new investments. I should just say not only did they make a 4 billion investment right here in paris, brad smith was here with president macron last week. As i was coming to this event this morning we passed an enormous microsoft campus here in paris. It was a Global Business, but the real Global Business is making investments in so many other places, but a huge piece of this deal this morning is about energy and renewable energy, just how much energy all of this ai activity is going to take. Andrew, weve got breaking news. Target out with is earnings alert. It came out at at 2. 06. Samestore sales were down 3. 7 . Thats in line with estimates and previous guidance they had given, down three, to down 5 . They did talk about lower Sales Volumes for that decline. Target says its affirming its full year guidance, but if you look at the specifics for the First Quarter, it sees comps of 0. 2 . Adjusted earnings per share from. 59 to 2. 35. Thats a little below the streets consensus of 2. 19. Right now that stock is off by 3. 7 . I did speak with the Ceo Brian Cornell and heres what he had to say. While were not satisfied with what we did, we did exactly like we said we when going to do. Its grown po times since the First Quarter of 2019. Now its a 2 billion business for the Current Quarter. The stock is continuing to drop. Target is making cuts of a slew of items, 5,000 Grocery Store items. Lets go to the start of that quote. You know that that was work wed had in place for a long time. This is what cornell said about that. Whoever wants to take credit for it, we just hope the consumer takes advantage of it. He said this has been backed into our plans and guidance for the year. He said he hasnt been to the white house in at least 13 weeks. Lets focus more on what we see happening now with that stock price. Its down 6. 25 . What you can point to is the difference from what we heard from walmart last week. They announce its earnings and came out and said they were really benefiting because high end shoppers were trading down and trading to walmart. Those are people making more than 100,000. Thatsbeen walmarts biggest source of growth over the last year. You contrast that with what targets been saying and now, prompter, follow up with me a little bit. Ill find it myself in the script. In terms of what the consumer says, cornell says, we havent seen any significant change in the health of the consumer o every the last couple of quarters. One thing hes seeing is consumers rew returning to their prepandemic shopping levels, meaning theyre averting to what they did, waiting for the holidayings to stock up. He said for memorial day, they havent seen the big surge in people stocking up. They expect it for thursday and friday. Thats the same pattern they saw for valentines day, easter, and mothers day, and they say hes loo looking if shopping days. Wednesdays are leak saturdays. But saturdays are most important. For sure. Clearly walmarts for a variety of reasons, gaining some share. You know, they characterize it in in what we expect it to do. If you look at the full year guidance, it brackets the consensus and its on the high end for the full year of 8. 60 to 9. 60. A lot has to go right. They seem like theyre being careful and will invest in these price cuts. I did ask cornell about that, the idea that the streets a little higher. He said, look, the estimates will come and go, but were sticking steady with what weve said, however, the stock has gotten a benefit. Im not surprised. Obviously the whole market was in trouble. But 108 was the low and target has given some of that rebound back. Coming up, pollster frank luntz joins us after the break with just over a month to go before the first president ial debate. And a reminder, get the best of squawk box. Follow squauks pod on your favorite podcast and listen any time. lbeig bk. 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. vo what does it mean to be rich . Maybe rich is less about reaching a magic number. And more about discovering magic. Biden and former President Trump meet for a debate in just over a month. We want to bring in frank luntz, fil inc. Pollster and strategist. Thanks for coming in. What i love about this, nobody is talking about the rules. For example, are you stranded or seating . For the debates. If youre standing, that will help trump, thats how he performs. Seated, that benefits biden. Are you going for a 90second response, two minutes, three minutes . Its to bidens advantage. Trump likes the shortest the best. Thats when sound bites are the best. There will be no awe jens, no cheering, no applause. How do you shuch the microphone off as trump tries to speak over biden, how you have that interchange looks at who wins or loses. Nobody is plaining for june 27th. I dont think that its necessarily going to happen. Really. I think itd weird that either of them would agree to a debate before the rules are set. Thats what i think will happen. That one of the candidates will say, uhuh, im not doing it that way. Thole rules will determine who whips or loses. If the debate is called off, does it hurt that candidate, make them look like theyre afraid . Make no mistake, the public didnt want all this politics, but they do want to see these two people go apt each other. Youre going to have these titans ripping each other apart for 1 of america. How does rfk, the person who wont be on the stage, potentially change that . By taking photographs with owls and apes and doing what hes doing right now. In the end, hes got an interesting, intriguing message. Its not mainstream, but it can appeal to the fringe elements. He needs that 15 to get into the debates, and i dont think hes going to get there. He meades 15 to get into the debates, but he doesnt need that to change the outcome. Thats correct. We saw ralph nader got 1 of the vote in 2000 and changed florida. All it takes for rfk is to day one day. That could be the difference. Im also watching Young African american men in states like georgia, north carolina, the latino vote in states like arizona and nevada and the union vote in philadelphia and pennsylvania, michigan, and wisconsin because these blocks are going to decide who wins and who loses, and theyre absolutely shifting right now. Trumps weakness is middle age, middle income suburban women who really dont want to see him back, and so youve got that balance going on right now. Interesting you mentioned the union vote because both of these candidates are vying for the union vote. This is a different sort of race than weve seen in the past. Biden says hes the most prounion voter ever, but former President Trump. He showed up on the picket lines in michigan. You raised the most fascinating point. The Union Leadership is lined up, almost all of them are be behind. We have never had the confidence where the leadership is one way and the follow lowship is another. On what basis are the 1 of undecided who might be persuadable . Is it a decision whether tore vote or not or what would they be looking for in a debate or messages about the economy or anything else . Make no mistake. They dont like any of them. Its the second of two evils. The next is can they afford health care, housing, which is a big issue. Food and fuel. And third is immigration, which is a greater sense of stability. Security. Do i have to be nervous when im walking on the streets in new york city. Theyll be voting on improvement of the quality of life, not necessary will i on standard of living. What candidate polls better when it comes to those areas . Trump does better on affordability and immigration. Joe biden does better on abortion and the social issues. So its whatever were talking about on the show in the last week could well determine who wins. If you had to make a guess right now, what would it be . What would your prediction be if the they do that . Hes going to scream out persecution, witch hunt and all of that. Its going to give some merit to the case. The end, i dont think it will be about trump or biden but that voter itself and this one they want to look at in the next four years. Frankly, its neither of them. So the debate does it matter. Absolutely. I know people say it all the time, but i mean it this time. Im probably trying to figure out i probably shouldnt say this on air whats the best drinking game. Which word its not high person la. Biden will do high person la and trump will say witch hunt. And then you have to do some sort of drink beverage. I hope it happens. Ive been on both sides, so i lost both ways. Thats my record. It really doesnt matter because we never had a situation where the candidates differ more greatly on more issues than this one. Frank luntz. Thank you, frank. Thank you. Andrew . When we come back, ant anthropic, its a major breakthrough in mapping neural process. Im here in paris where the ceo of anthropic. ll be speaking with him in a few minutes. Well bring you the details on that. And then dr. Scott gottlieb will be sgeinugstg new product lines. Squawk box returns right after this. Welcome back to squawk box. Im live in paris. The owners of anthropic look at mapping the ai mind. The company now says its findingings could allow ai findings to control their models more effectively. Im going to be speaking to an through pick ceo dario amodi. Well bring you highlights from that conversation as well. In the meantime ill send it back to becky. Right now weve got a followup to a story. A 73yearold man died and several were injured after a Singapore Airlines flight encountered whats called sudden extreme turbulence. Six people were critically injured and dozens of other passengers were set up for minor or moderate injuries. This is closely, this is happening more and more frequently, youre seeing more issues of this High Altitude clear air turbulence that takes place. Situations where anybody who wasnt buckled into their seat belt was tossed around the cabin of the plane. Im wearing my seat belt all the time now in a plane just because of these incidents have happened, and are happening more frequently. Theyre looking into this. But clear air, High Altitude, at cruising altitude when this happened, really shook things up. It is going to be investigated, but we have seen a pickup in the jet stream. Youve seen planes making record times coming in with some of these and dealing with a lot more serious headwinds when going through some of these issues. And it is simply a warning of what is out there. Theyre going to investigate this, but you have seen a marked increase in the incidences and clear air at High Altitudes, no storms in sight, so they dont see it coming, and i would just say for anybody traveling, make sure you are buckling up when you are not up to go to the bathroom or something. Stay buckled in your seat belt the entire time. When we come back, were going to talk about a new line of Food Products for people taking weight loss drugs. Dr. Scott gottlieb will join us next. This is our future, ma. Godaddy airo. Creates a logo, website, even social posts. In minutes how . A. I. impressed ay i like it who wants to come see the future . get your Business Online in minutes with godaddy airo energy fuels, a leading american uranium producer, is ramping up production to supply expanding Nuclear Markets and diversifying into rare earth elements, key ingredients in many clean energy and defense technologies. Energy fuels. Dario. Box. This morning, live from paris, and were talking about nestle right now. It announced it is launching a frozen food brand aimed at users of drugs like ozempic and wegovy as a companion to their weight loss. This comes following gncs news last month that they would dedicate a wall of supplements they believe will appeal to glp1 users. Scott got letlieb is a cnbc contributor and board member for alumna and pfizer. Maybe this is inevitable. We knew folks would try to take advantage of this. Does this make sense . Is this food going to be fundamentally different . I think it could be. It depends how they formulate it. The focus is twofold. First of all, we know certain foods potentiate with healthy fats, everything you think of in a healthy diet, secondly, we see the potential for nutritional deficiencies in patients and people on these drugs who are caloric restricted. Potential for vitamin deficiencies, vitamin d, calcium, and also when you have a decreased caloric intake, your body starts to mobilize protein from the muscle as a source of energy because muscle is a very good source of energy for your body when your body is not getting enough calories. Thats why you see the skeletal muscle loss. Presumably, if you have a diet where youre taking in small portions, because you have early filling from these drugs, you dont have the same appetite, but that diet, those foods are more nutritious, have higher protein concentration, that can be very helpful. Doctor, though, isnt the truth that maybe we should all be eating this stuff . If the issue is were not having enough most americans arent having enough protein to begin with, when youre on the drugs, you almost have to force feed yourself protein so you cannot lose muscle mass at the same time youre losing fat. Is this food specific in your mind to folks on these drugs relative to all the other foods we eat . No, it is certainly not specific. But i dont think theyre going to market these products in a way that it is part of a sort of overall healthy diet. I dont think my guess is that by eating portions of what nestle markets in this special product line, youre not going to be gaining the equivalent of a diet of someone on a drug. There are programs that do try to replicate the diets which are associated with decreased caloric intake. Things like the mediterranean diet. We have seen people step into this marketplace and offer reduced caloric diets that have high protein that could replicate what someone on a glp1 is doing if theyre doing it right. Would you be shorting Food Companies right now . Given all that we have heard about the idea that, you know, so Many Americans could ultimately be on these drugs . I think thats overblown because i think companies are going to do what were seeing here. Theyre going to pivot to different kinds of foods and find different ways to market. The challenge that Companies Face and you see that with this particular product line, they cant make overt claims on packaging that is associated with the diet itself or becomes a medical food. What they have said is theyre going to leave the claims off the packaging and they explicitly said this, something to this effect, theyre going to pull it through on social media, the connection to the glp1 drugs. A regulatory pathway that allows Food Companies to make qualified claims on health labels more easily would incentivize more companies to try to produce more Healthful Foods and foods that fit into healthy diets. There is pathways to do that right now, to make those claims on food labels, but theyre difficult to navigate. The evidentiary bar is very high to get a food claim on to a packaging of a food label. Given what you know about the success of these drugs thus far, and what is in development when it comes to putting this in a form factor like a pill, potentially as early as two years out from now, what percentage of adult americans do you think will ultimately be taking this drug, call it five or ten years from today . Right now it is about 5 . Thats people taking the drug both for weight loss as well as for diabetes. The estimates from the wall street firms go as high as 9 to 10 by the year 2030. Just to give you a baseline, about a quarter of the population is on a staton. I wouldnt be surprised if a portion of the population that gets on these drugs is over 10 . As there seems to be more evidence emerging that these drugs might have benefits beyond just the weight reduction, that some of the cardiac benefits were seeing come from secondary metabolic impacts of the drugs that are apart from the weight reduction, that still is tbd. We dont know the answer to that question. If it becomes true, and if we see through evidence these drugs are having benefits beyond the weight reduction, thats going to drive more utilization. But you think as a 10 story, it is not a 20 story . And what about the cost of these drugs ultimately . Yeah, look, i think it is hard to get to 20 unless you have a pill form thats just as efficacious as the injectable drugs. The injectable drugs for certain patients are going to be cumbersome. Costs are going to come down. If you look at the costs now. For the patients insured looking to get wegovy, with the coupon available on the market, that should cost 500 out of pocket, a lot of money, but not the 1,000 that is the list price. There are discounts on the market. As lilly and nova come into the mark wetet with more supply, it going to become more competitive. Wegovy is going to be on the list by next year and price regulated by 2027. That will bring the price down a lot. Lilly has to cut their price to compete and get on formularies. Once they become price reg regulated, formularies have to put that on formulary, somewhere, doesnt need to be tier ed preferencely. Thank you. Appreciate it very, very much. It is just past 7 00 a. M. On the east coast. 1 00 p. M. Here in paris. Youre watching squawk box on cnbc. Im Andrew Ross Sorkin with becky quick this morning and mike santoli is joining us. Joe is off today. Im at viva tech in paris. We have stories back home we want to talk about first. The top story this one, the Biden Administration saying it is going to forgive 7. 7 billion in Student Loans for more than 160,000 borrowers, these include borrowers in the Public Service loan forgiveness program. Some of those enrolled in income driven repayment plans as well. Meantime, disneys Pixar Animation Studios cutting its head count by 14 or 175 workers scoring multiple reports. The cuts coming as the studio shifts focus back to movies for Theatrical Release instead of those just for the disney plus platform nvidia reporting First Quarter results after the close today. A lot of folks focus on that. The latest test for the market rally that pushed that major indices to record highs. The stock is up more than 90 this year alone, making nvidia the third biggest u. S. Company by market cap. Thats just behind microsoft and apple and we will have a preview of what you can expect later in the show. We will talk a lot more about nvidia tomorrow morning. Lets look at the futures this morning. Youll see right now the dow is off by 40 points. S p 500 futures down by less than 4 points. The nasdaq is sitting just at the flat line. We want to get over to dom chu, hes got a look at this mornings premarket movers. Good morning. Good morning, becky. Good morning, mike. Good morning, andrew. Well start off with the big earnings mover, retail theme, thats target. The big box retailer is down just about 7. 5 right now, around 75,000 shares of Trading Volume after it reported mixed Quarterly Results. Profits came in below estimates on slightly better than expected revenues. Target was hurt as customers pulled back on spending for things like groceries and nonessential items or discretionary items. It did, though, reaffirm because it already affirmed, it reaffirmed its full year forecast. The results comes days after they rolled out a new program to discount thousands of everyday goods over the course of the summer to help drive traffic and spending at its locations. Those shares down 8 . Were watching shares of Toll Brothers, higher right now, but on thin Trading Volumes. The builder of high end luxury homes reported an earnings and revenue beat after last nights close. It also raised its guidance for the number of homes it will deliver on a full year basis. The ceo said that demand for new homes continues to be driven by a resilient economy, favorable demographics and, of course, the lack of supply. And well end with an analyst call on shares of shopify, which have taken a beating over the course of the last couple of months. Up 2. 5 here on 180,000 shares of volume this morning. Helped along by analysts at goldman sachs, upgrading that stock, the ecommerce Platform Company to a buy rating, updating the target price to 74 bucks. This is driven in part by the downturn we have seen post earnings especially right about here. Keep an eye on that. For more on that call, and other top calls of the day, just head over to cnbc. Com pro, where subscribers can get full access to detail and analysis. Back over to you. Dom, i think mikes right, he was talking about it earlier about the entire market kind of waiting to hear what nvidia has to say tonight, thats the next cue before you see any major moves. Not just that, you guys have no doubt talked about just how much the Earnings Growth in the s p and the nasdaq 100 has been driven by nvidia in and of itself. The forecast, the whispers about what nvidia might say about the next quarter or the Current Quarter that were in, would show that revenue could possibly double from what they made the same time last year. And by the way, if you look on the nasdaq 100 basis, i want to say i got to go back and look at the numbers, but if you look at nvidias point contribution to the nasdaq 100 so far this year, it is more than alphabet, amazon, microsoft, and apple combined in that process. So it is a huge move, nvidia is no doubt the driving force behind the market narrative right now. Of course, it is a big report coming up. Those other four you mentioned, those slackers themselves, thank you. Joining us now on the markets, noah blackstein, senior portfolio manager. Noah, good to have you with us. Good morning. Talk about the setup a little bit here. We had this little eight week round trip in major indexes, the 5 pullback. Another scare the soft economic landing isnt going to be there, yields are going to run away from us. We settled back into a comfortable zone. How do you read the risk reward from here . I think the risk reward is going to probably change over the next little while from our perspective. I think that this is a market where were confident were getting rate cuts this year. I think real rates are way too high versus where inflation is right now. But i think that if you look at what is going to be driving the factor behind companies and stock prices, it is clearly shifting more to focus on earnings and revenues versus recovery or low volatility. The market seems to be rewarding those companies delivering on earnings. So i think that has to do with volatility calming down somewhat, the equity markets still elevated volatility in the bond market. But as volatility has come down, and the stock specific or idiosyncratic factors come to the fore, were moving into a market that is punishing losers who arent delivering clearly and rewarding winners. For stock pickers, you know, picking the macro albatross around the markets next since 21 and allowing people to focus on individual stocks on the long and shortsi side is much better. There are drivers to be excited about. In terms of the overall market, it is a tougher call because the overall market is so top heavy, probably the heaviest its ever been in the last 50 years, so, you know, movement of a few of the Large Companies could affect the index. But underneath the surface, we are starting to see broadening overall and thats fundamentally driven, which is a big positive. So, you said youre confident you were going to get rate cuts. Is that just because based on, you know, the feds assessment, policies restrictive right now, you think inflation is going to show big decline from a here, how do we get to multiple cuts . I think that youre going to the things that are propping up the Inflation Numbers are, you know, ove overfitted. I think in other markets look at things like mortgage payments and other things, the inflation rate topped a while ago. I think sometimes it is hard to get the fed message because one of the things that former chair bernanke did is everyone goes out and says what they think, and the message gets a little muddled, the joint chiefs of staff, one person speaks, all the generals dont come out with different opinions and so the message gets muddled a little bit. It is fairly clear from what powell is saying if you focus on that things are much more balanced between the dual mandate of labor and overall inflation. The numbers are coming down. They are continuing to tighten. And so were seeing the early signs that things are coming down. Target this morning unfortunately is not having a good morning a couple of days ago, they announced price cuts on over 5,000 items. They talked about lowering prices, mcdonalds is trying to entice people with 5 meal to bring people back, that is not the sign of hyperinflation for sure. When that makes it into metric models, it is clear in the High Frequency data that things are coming down. The fed could pause, and then continue not to ignore those signs and thats a serious risk for the overall market, too high for too long. But in our view, they should be, and the sense we get from the Federal Reserve is they will be cutting at least twice this year. You mentioned that there are some themes to get excited about. A. I. And many of its aspects is the main one and the massive urgent investment cycle that is connected to that. In your world, the kinds of stocks you play in, how does that filter into the equation . Nvidia has been a great company, i think a lot of its move is fundamentally driven for sure. We like the company. I have no view on what earnings are going to be tonight. It is strong, butthats expected. And they are in a product transition. So, you know, well what the reaction is. I think as you look at allocating dollars, the beneficiaries have been on the ire of the investment side. You look at the hardware companies, semiconductor companies, the Data Center Companies or even peoples pipe dreams about new Nuclear Plants all over the world, to power the data centers. Thats the investment part. The return on that investment is going to come at the application layer. And at the app layer. That hasnt even started. So with Companies Like service now who are embedding a. I. Into software, we think where a. I. Gets monetized is the software layer. We look at software today, trading at a significant discount to where it was five years ago and even ten years ago, where semiconductors are near all time highs in terms of relative valuation. So i think the next phase as we move from trading these large language trillion parameter models, we move to small models and move into real time models, and more active chat bottomchat think the pendulum is going to swing. It is going to be the monetization layer of a lot of this a. I. And it is really not priced into any one Semiconductor Space anywhere in the software space, where as a lot of discounted and semiconductors right now. In terms of where were looking and how were thinking about things over the next three to five years, it is in that software layer, which is at a tenyear discount to the historical average, exmicrosoft. It is amazing how much the story has been about buildings and real physical assets at this stage. Thats always true. It is always the hardware layer. And then the monetization occurs at the app level and thats coming. Fiber and all the rest of it. Noah, good to talk to you. Thank you. Thanks, mike. Coming up, street reaction to target earnings. That stock down sharply right now, down almost 8 . Thats going to be next. Later, a Bipartisan Group of lawmakers moving to repeal president bidens ev credit rules, saying theyre subsidizing Chinese Companies that provide materials and minerals for batteries. Well speak to congresswoman carol miller. Squawk box will be right back. Energy fuels, a leading american uranium producer, is ramping up production to supply expanding Nuclear Markets and diversifying into rare earth elements, key ingredients in many clean energy and defense technologies. Energy fuels. Welcome back, everybody. Target earnings are out this morning. The retailer announced earnings of 2. 03 that missed the streets expectations. Revenue came in at 24. 5 billion, ahead of expectations. It is the guide ans tance they talking about too. If you look for the Current Quarter at the midpoint of that guidance, it is below what the street had been anticipating. That stock is off 8 . Joining us right now to talk more about this is sucharita kudali, retail analyst at forester research. The big difference between this is what we heard from walmart last week, pretty different than what were hearing from target today. Right. And i think that is really ultimate what the story is, when you look at walmart versus when you look at target versus the competitive set, walmart, amazon, costco, all of those other retailers are outpacing, they are capturing more of the share of where consumers are spending. Consumer spending is at this point flat lining relative to inflation, so, if anybody is growing, thats a good thing. And those retailers are. Target unfortunately is not at this point. Why do you think that is . I think that what happened during the pandemic is that the company joined the 100 billion Retailer Club and really it probably did a significant part of that not just with good assortment, but also raising prices, and ultimately the shopper is just pushing back. It has come to a point that prices for a lot of these core commodity goods and sectors like grocery are just too high, and the shopper is retreating to valuebased retailers where walmart and costco and even amazon seem to be more price competitive and thats exactly why you saw that target announcement earlier this week of lowering prices on those 5,000 goods. Yeah, 5,000 goods, they say, lowering prices on, do you think it helps because Brian Cornell tells me that for this Current Quarter they anticipate that they are going to see a return to growth in the com store sales, anywhere from 0 to 2 . I think they were down more than 3 for the last quarter they just reported. Yeah, the discounts and the that the decreases in those prices, thats a return to some of those Value Proposition that target historically has been known for. And thats certainly on a lot of those key value indicator goods, it sounds like it is going to be on some of the commodities like maybe milk and eggs. Thats a good thing. The fact they announced it even just a few days ago i think was a signal that todays numbers were not going to be terribly strong because that when you make an announcement like that, i dont think it necessarily suggests that you are already the value leader, youre moving toward becoming what you hope to be is the value leader. What do you anticipate, you think it works to any extent or do new shoppers kind of stay where they are . Walmart had some big success with the shoppers who are making over 100,000. They lured them n. Thats where the bulk of their growth has come from in the last three years. This is targets core demographic. They have a much more affluent Consumer Base to start with. And it was really candidly it was their war to lose. So, they certainly have the ability to bring consumers back. I think that it has been an odd last few quarters for target. They are generally known for executing very well and having great Value Propositions for shoppers. Consumers historically have gone to target because target often has great values in everything from apparel to commodity goods like household products like t paper towels. The fact that the shopper has retreated or chosen other alternatives suggests that they have they have some work to do from a marketing standpoint and bringing the shoppers back. Last summer target said that they were suffering, there was a backlash against the lgbtq and pride merchandise and that did hurt sales. Do you think theyre still suffering from that . I dont think that theyre necessarily suffering from that. A lot of those Corporate Social Responsibility backlashes from the consumer are usually a few weeks and shoppers move on because the news cycle moves on. So, actually next quarter their comps may be a little bit stronger because they dont have that same issue. So, thats actually something that they had headwinds last year, they may not be facing those this year, although they do have some of these value issues, these issues related when i mean value, pricing issues, related to whether or not consumers are finding the best prices at target, thats really the challenge for them is to make sure that shoppers recognize that youre not going to be paying 20 more for your target basket this year versus what you remember from several years ago. Sucharita, thank you. Thank you, becky. Andrew . All right, up next, new rules for buy now, pay later lenders, which the cfpb says 17 of consumers with a credit record use. Details after the break. Announcer time now for todays aflac trivia question. Where is americas first brewery located . E sw wn quk x returns. See that . Thats like the gap in my Health Insurance. Gap in your Health Insurance . Yeah, it didnt cover everything when i got hurt. Good thing i had aflac. Hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent. It really helped close that gap. Go, go, go yay go aflac go duck get help with expenses Health Insurance doesnt cover at aflac. Com wish we had aflac on our team. You can i wanna hold you forever hey little bear bear. Im gonna love you forever cmon, bear. You dont. You dont have to worry. Be by your side. Ill be there. With my arms wrapped around. To todays aflac trivia question. Where is americas first brewery located . The answer, pottsville, pennsylvania. D. G. Young ling son was foundefo founded in 1829 and is officially recognized as americas oldest brewery. Welcome back to squawk box live from paris this morning. At viva tech. We have a tech media story to bring you back home, though. Former republican president ial candidate Vivek Ramaswamy is taking a 7. 7 stake in buzzfeed. This according to a new regulatory filing. You can take a look at the stock right there. Ramaswamy saying that the Digital Media company was undervalued, seeking a meeting with the companys board, according to bloomberg. Buzzfeed surging on that news. We should note that the companys market cap is below 500 million, about 100 million at this point of the ball game, once worth about 1. 7 billion at the high. There were a number of big investors at one point including the Parent Company of this network, nbc universal. What Vivek Ramaswamy wants to do with buzzfeed we dont know yet. But an interesting move by somebody who is clearly made waves in the media and potentially wants to use buzzfeed in a similar way that so many other folks including the former president , President Trump, has taken truth social. Well see the future of buzzfeed, but a lot of folks buzzing this morning in tech and media land about this story. Meantime, new rules from the cfpb on buy now, pay later. Megan costello joins us with more. The cfpb is taking steps to better regulate the buy now pay later lenders, issuing a new rule requiring them to offer some of the same protections that Credit Card Companies provide. So the cfpb outlines three specific areas where the lenders will be require d to protect consumers, investigate when a user disputes a charge, give refunds when a user returns a product or cancels a service and provide billing statements the same way you could get with your credit card. Now, allof these will apply within 60 days. It follows a cfpb report from 2022, which found that the industry was growing rapidly but that borrowers were facing uneven protections and in particular were having issues with refunds. Officials say now that these lenders are already providing these services, many of them are at least, but this is an issue this is an effort to ensure that the rules are applied more consistently. Now, it is also a step to level the playing field. The director said the goal here is to make sure buy now Pay Later Companies are not fwaning an advantage over other lenders by sidestepping the law. Now, while this is likely just the start of regulation for the industry, it is still fairly limited in scope. The agency says that todays requirements focus on disputes and refunds because those are the aspects of existing law that they believe can be applied to these lenders. Anything further would likely require a much longer regulatory process and likely some help from congress. Guys . Megan, you know there has been a lot of talk in the past couple of weeks about these pay later services, and the risks in the marketplaces as a result of them. Folks from affirm, the pioneer in this space, has suggested that theyre nothing like the kinds of risks in this market are nothing like what we see in the credit card space and others. Where do you land . Yeah, he really did push back on that. The issue that i think youre referring to is all the phantom debt out there, that people are buying things with buy now, pay later and then not realizing that they owe more or that their debit card might be charged automatically. So, that really is an issue here. I do think that the biggest problem with it is really i think at this point just that theyre not able to track it. There is no way for economists to know, for the Federal Reserve to know just how much is being held in buy now, pay later. The companies arent forced to report on that. I spoke with the cfpb about this. They dont think there is a way to mandate more disclosures here. It is something they have explored. Not with the regulations today, but even in the future, theyre just not sure that they could do it. I think the Biggest Issue is that unknown there. And it might not be a problem, but we dont know at this point how big of a problem it could be. Right. Megan, thank you. A story that is not going away anytime soon. We appreciate it. Becky . Thank you, andrew. When we come back, nasa again delaying boeings debut of its starliner capsule. We have the details right after the break. And then nvidia, a big focus for investors when it reports Quarterly Results after the bell. We have a preview of those results and what it means for the market rally. That is straight ahead. Squawk box will be right back. iconic brands speak for themselves. We are so excited to welcome you to our community. Today is all about you. Champion Iron offers a rare solution to decarbonize the steel industry. Which represents up to 10 of global emissions. 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Crypto prices, ethereum continues to rise in optimism that regulators can soon approve a spot etf squawk box coming right back from paris this morning and, yes,im saratheasq after this nda marci so, how long have you lived here . And how are the restaurants around here . Are they good, bad, meh . luke marci, weve gotta go. marci im sorry. luke weve got seventeen thousand more parks to visit. [marci screams] luke we bring you the best neighborhood info. marci ding dong luke homesdotcom. You founded your Kayak Company because you love the ocean not spreadsheets. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire umgc has been absolutely instrumental in my postmilitary success. After doing about eight years active duty, additional four reserves, i wanted to go after that lifelong dream. Since graduating, ive gotten promoted; and im able to operate with confidence now because i now have the technical expertise. At university of maryland global campus, i feel i can accomplish anything. Learn about our more than 125 online degrees and certificates at umgc. Edu. Welcome back to squawk box. Were live in paris this morning at viva tech where ceos from some of the biggest tech companiecompan s around the world are converging were in the red on the dow, off about 57 points. Nasdaq looking up, 12 points the s p 500 off about three points just to give you a little scene setter about where we are right now, were in the middle of viva technology, thats the name of the conference here in paris, thousands of Tech Companies are here ranging from startups, some of the biggest players in Artificial Intelligence and one of the buzzie topics at the conference, a team of researchers at a. I. Company anthropic announcing a big breakthrough into the ability to understand how a. I. Language models actually work up until now, a lot of it considered black box researchers have been working to map patterns inside the a. I. Model that are activated effectively when the chatbot is prompted to talk about certain topics, the company says its findings could allow a. I. Companies to control their models more effectively. And im going to be speaking in just a little bit with anthropic ceo dario amodei well bring you the highlights from that conversation among some of the other big names speaking at the conference, arthur mensch, robin li is here, former google chairman and ceo eric schmitt who i ran into yesterday, and then meta chief a. I. Scientist yann lecun, a local if you will, but who has led their lama 3 program, making a lot of ways here as people question what the market will be for some of the paid Large Language Models when meta effectively has an open model given away for free. And late addition to the conference, all eyes on this one, guys, tomorrow, elon musk so, thats whats going on here in paris this morning, mike. Yeah, just how he likes it, andrew the bar is set high for nvidia, which is expected to report earnings today after the bell. Joining us now on what to expect is joseph moore, Morgan Stanley semiconductor analyst. Good to have you this morning. I guess the real questions, we have the published consensus out there for maybe 560 a share and then Investor Expectations where do you think the bar sits at this point . Good morning. I think expectations are higher, i think. This is a transitional phase were looking at blackwell that will start dipping around august time frame and so were looking at hopper driving business and i think a month ago there was expectations that there might be a little bit of a pause given how much enthusiasm there is to the next generation product were not hearing that and generally the market is pretty strong i would tend to agree. And i think that there will be material upside around the quarter and the outlook, but importantly, i think the market is also looking to next year with a little bit more enthusiasm given that we heard from some of the big hyperscalers, that we do have a big product cycle. So we are setting up for something bigger that is coming, and i think this should be a good quarter and one that gives people a sense of enduring growth beyond that. You dont think there will be some kind of a pause or a stutter step in sales based on this product transition, despite what we heard reported about aws intentions here there could be. It is not out of the realm of possibility. Blackwell is 2 1 2 times as powerful, more so in some workloads. And will probably be 20 to 30 more expensive you can see people deferring, but i would say were not seeing that right now were seeing Strong Demand for the hopper products, certainly into the july quarter when we dont have any blackwell and then once we have blackwell, the minority of products but well be back in a very tight allocation situation for those products and so right now, i dont actually anticipate a pause. It is possible that one could evolve i think the amazon thing was a bit of a misread of, you know, the transition to this blackwell, something that he talked about quite a bit, the initial effort to do the great hopper product, that transitioned into a great blackwell product and it is not a cancellation, it is a strong ramp we would expect next year to the extent that grace hopper was a small ramp thats something understood for a while. I think in contrast to last year, where we knew near term numbers were good, but there was some sense of what does next year look like, we have good visibility into next year, we heard from the big customers and we have the product cycle. I think it is if there is a pause, it wouldnt be the end of the world, i dont think it would be a reason to pull away from the stock but as of right now, i dont anticipate there will be one. You mentioned a couple of times, the durability of the demand has been the main question, i guess, for a while you can see they were in shortage for so long, and there wasnt enough product to go around but just exactly how much investment capacity does the industry have to maintain nvidias growth rates . Cant continue with the current growth rate, 112 billion of revenue this fiscal year it is up by 4x in the last few years, but i guess how do you see it unfolding over the next couple of years . Yeah, i mean, look, they have done a remarkable job, the demand side and supply side. You mentioned there were shortages, those shortages have been easing, which was some created some consternation for the stock earlier in the year. But the reality is there is other shortages. Were dealing with power and rack space and sort of places to put these things that is more of the binding constraint, still growing quite a bit, but nvidias supply had been outgrowing that. I think the shortages had been easing, but i think there is quite Strong Demand and i think if you look at the hyperscale comments, in january, we got some confirmation, we heard that spending would be more like whats in the nvidia model versus what previously had been lower, but then in the april quarter, the april earnings period, we heard quite a bit about Hyperscale Companies continuing that spending into calendar 25 and multiple instances of those companies talking about not just how much theyre investing, but the enthusiasm that they have for the returns, even those returns arent apparent yet, were still seeing the Business Models evolving for a. I. , but the enthusiasm for that investment to endure into next year is pretty significant on top of that, the blackwell product will be a significant value, will probably help them deal with any potential market share concern, and there could be some pentup demand for that product once it starts to ramp so, you know, i think the view of 25 is pretty good still questions, i would expect some deceleration over the course of the calendar 25, but for right now, things are really strong yeah, i mean, you have now the stock, you know, it has been in a way sideways since march. It is at the highs, but it hasnt necessarily been powering a ton higher since shortly after the last Earnings Report but, you know, it is 2. 4 trillion market cap, it is obviously not as highly valued because earnings estimates have gone up so much as it has been but still kind of rich where do you actually think the stock should be on a fair value . I think the stock has been strong and i think for those of us who have been watching this stock since the ipo, talking about, you know, coming up on 2. 5 trillion market cap is a pretty surprising milestone relative to where we were a few years ago. But the reality is, you got to the earnings have come up about as much as the stock has, and in contrast to all of the other semiconductor companies, who sell into a. I. , you know, those companies have seen numbers coming down, the amds, marvels of the world, should be in a much better position going forward. But they have seen multiple expansion that is pretty significant. I would argue a dollar of a. I. Sales of nvidia buying it through nvidia is a cheaper way to get that a. I. Exposure than the competing stocks i feel good about the stock on a relative basis i think when a. I. Is this strong, you need exposures we have a price target of 1,000 which were a few percent away from, but i anticipate the number comes up tonight, 1200, which is, again, you know, thats in the kind of mid30s multiple on a nongaap estimate for next year. It is not that difficult to sort out as long as business remains good. What are the main questions you expect that the company is going to be asked here in terms of the outlook you have all the big participants in a. I. Trying to develop their own proprietary chips. There is a sense out there that nvidia might be at maximum competitive advantage right now. And then maybe only goes down from there. Well, i think theyll be able to talk to that. You have blackwell coming up here, which is a significant improvement of state of the art. The company has moved to an annual cadence so, well now see new products coming in 2025 as well and i think, you know, you certainly see this is a big area where there is a lot of opportunity. And i wouldnt necessarily say nvidia is gaining share per se because there are these kind of fragmented opportunities that people can address with custom silicon, with alternatives, but i think they put themselves in a strong position to answer those questions. And i think on the call, where theyll be able to lend credence to that is more on the ramp, when we will see blackwell becoming more material, can they talk about, you know, their prospect for seeing a pause . I think theyll be pretty optimistic about that. And then there is the significant ramps next year, which come in different form factors, the company is going to sell full rack scale product theyll be able to talk about a lot of that, some of the themes that came out of the Graphics Technology conference a couple of months ago, well hear about tonight. That will give people a sense of comfort, a sense of comfort that well be able to move through this transitional period without any hiccups. Joe, the i guess people are talking about it, but the impact of what would happen to not just nvidia, but any of these companies if china actually invades taiwan. Is that too hard to figure out does it go to a zero sum gain . Is there a point where, again, this is a u. S. Company, but all of these chips are manufactured there, majority of the high end chips, the vast majority of these high end chips are manufactured there and i dont know how you as an analyst look at this and figure out that risk factoring in. Yeah, look, i have a hard enough time getting stocks right rather than opining on geopolitics. I would say nvidia worked pretty hard to geographically diversify its supply chain, right . They made a big investment, bringing up samsung as a second foundry, beyond tsmc, there has been a fair amount of discussion that theyll work with intel down the road as well. I think theyre going to focus on geographic diversification. This is not an issue that is going to go away from peoples minds in terms of the dependence on taiwan. Nvidia has done what they can to establish geographic diversification. Yeah. Hasnt held it back to this point. Are they the best positioned of any of these companies in terms of geographic diversity if Something Like that were to happen well, you know, i wouldnt say theyre the only ones who have done that diversification we have seen qualcomm, you know, using samsung at scale as well companies are aware of it. I think samsung does is a scale foundry that has done very well so, i think that alleviates some of the concern and we all like to see intel on the foundry side as well. For sure. Joe, thank you very much, appreciate you helping us set this up for later. Thank you when we come back, the combination of rising auto costs, limited new vehicle sales and slowing economy is promptin americans to hang on to their cars longer. New numbers on the car market next squawk box will be right back. 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. I dont want you to move. Im gonna miss you so much. You realize well have internet waiting for us at the new place, right . Oh, we know. We just like making a scene. Transferring your services has never been easier. Get connected on the day of your move with the xfinity app. Can i sleep over at your new place . Can katie sleep over tonight . Sure, honey this generation is so dramatic move with xfinity. Vehicles in the United States reaching an alltime high phil lebeau joins us with more whats the story, phil reporter becky, take a look at this chart, because this is a snapshot of the american vehicles that are out on the road right now and youre seeing vehicles are at an alltime high in terms of average age. 12. 6 years according to s p global mobility. Again, never higher than this. Three things drive this. First, reliability of vehicles built after 2000, its not uncommon to see a 2011 say rav4 on the road running well and new vehicle prices close a record high add in high financing costs. High insurance costs and a lot of people saying you know what good with what im driving right now. And slow ebitda adoption as many in a waitandsee mode. I think theres still a lot of waitandsee, if you want to jump into the electric market or see how the infrastructure and everything develops. Thats the key. Many people say, iddd like to electric at some point average ages and three buckets here thing to focus on here, 6 to 15 the sweet spot for, do it yourself repair, if you will, or keeping that vehicle going on the road an going to an auto parts retailer i mention that, because look at shares of oreilly, auto zone, advanced auto parts over the last year. Yes, off their 52week highs back further, these stocks have been off to the races. One last stat that will make you say, hmm. Not surprised. Pre2000 models in the u. S 24 million that is almost 9 of all the vehicles registered in the u. S almost 9 , were built before 2000 gives you a sense how long people are keeping their vehicles so many things im thinking about. I remember when we first started seeing that big increase in age of cars on the road. It was around the financial crisis in 2008 all of these conversations about how people couldnt afford to buy a new car. Couldnt get financing some many of the Companies Holding cars for longer and longer liability is an important fact, also just the price. I mean, the price that youre buying price is a good part of it, deck. A upits a huge, huge part ot not like buying a house but almost like taking out a mortgage to purchase some of these new cars they do a lot better than they did before all pretty cool. What do automakers becky, your average Monthly Payment for a new vehicle right now, becky north of 700. Wow. And for a lot of people looking around, whoa almost the rent of a small apartment, i dont know, 30 years ago. Yes, i know im probably dating myself people saying apartments dont go for 700 now. Lots of parts of this country 700 is flatout ridiculous to people who are looking to buy a vehicle. Thats why they decide theyre going to hang on to their current model or look for another used model and see if they can keep it going longer. Is this the same thing as outstripping inflation, like College Costs out drsh strippig inflation . Even if you factor in inflation . Hard to tell. A big part of what drove vehicle Prices Higher was the chip crisis so that when chips were available the automakers did what automakers should do. Trying to make the most profit per vehicle, building highest trim models, generally speaking. Not bu not building lowest trim, why by this for 30,000 when we you sell you this for 54,000. In the market looking for a vehicle going, wait a second i dont want the high trim i want lower trim and why youre seeing prices come back a little but not a whole lot. Phil, thank you you bet andrew, send it over to you. Thanks, becky meantime a group of bipartisan members of Congress Introduced a Congressional Review Act resolution challenging president bidens electric a joins us to talk about it, introducing Congressional Review Act to appeal the administrational ev ruling from what i understand, while youre trying to press ahead with this and what the impact ultimately will be well, good morning. Thank you for having me. My concern there are three branches of our government there is the congress who makes the law. Theres the president , and then there is the judiciary and we passed a law that no electric vehicles that are made with an input of Critical Minerals should be awarded to our foreign adversaries, and theres been a ruling through the administration, through the treasury, that, golly, you cant even tell if graphite is traceable, which isnt true, because the people who manufacture graphite in the United States say it absolutely is i know that our president is so gungho on everything green and as many tax credits as anyone could imagine, that they want to happen, but Congress Makes the law, and so it is my opinion as well as my fellow congressional and senatorial members that this is wrong this is illegal and should not happen so that is what we have introduced congresswoman, explain this, though the issue is, what were talking about ingredients, if you will, inside the evs youre saying some of those materials are coming from places outside of the u. S so its hurting u. S. Manufacturers and the like the question i would ask you, though, at a time when we are still deeply concerned about inflation, what is the inflationary impact of your bill well, the fact that were giving tax credits, giving money ta should go to American Companies to the chinese. Its wrong. You know, we have so many expenses, and, you know, you were talking about how expensive these vehicles are, and the problems that we still have. The government doesnt need to mandate things that should happen naturally through science, et cetera and i think back to the time when an electric vehicle stalled out in my wonderful state of west virginia, and who rescued them and took them, was a bunch of coal miners they got together and hauled the car where it could be taken care of so we need to protect our american manufacturers and our american people. What does that mean in practice i mean, just so we understand. Are you will you be effectively against subsidizing any of the evs to begin with well, you know, you get into government subsidy that isnt the natural way things happen in the United States. We work hard we get ahead the same with anything you make. If youve got a government subsidy, who are you not subsidizing . Why are you picking winners and losers we shouldnt if this is a wonderful product, we shouldnt have to pick winners and losers. Congressman, a longer debate and a longer conversation. Hope we can continue it with you and sure well follow your progress with this repeal effort and see where things land. Thank you for joining us this morning. Thank you. Becky. Thanks 8 00 a. M. On the east coast and you are watching squawk box on cnbc im becky quick along with mike santoli at the Nasdaq Market site in times square Andrew Ross Sorkin is in paris, paris at the viva tech conference among todays stories target shares lower on mixed First Quarter results. The retailer beat revenue expectations but profit missed forecasts. Samestore sales down 3. 7 in the quarter inline with estimates. Target affirmed fullyear guidance but midpoint of that guidance below what the street expected and as a result that stock is down by more than 8 . The Biden Administration says it will forgive an additional 7. 7 billion dollars in Student Loans for more than 160,000 borrowers including tens of thousands pursuing public loan forgiveness. The total, 167 billion forgiven by the white house and tiktok lays off operations in marketing employees according to the information which says that the Company Plans to completely disband its global user Operations Team the number of exact job cuts, though, is unclear look at futures at this hour hesitant here. S p 500 backing off about six points up a third percent on the week up 7 from equal lows. Do you lower bein 78 nasdaq Holding Steady with nvidia earnings waiting after the bell treasurys take a look. Firmness in yields this morning. You see the ten year up at 445 picked up a little bit of the yield decline over last couple weeks. Not much twoyear yield, 487 at this hour dom chu with a look any other this mornings premarket movers. Good morning, mike and becky and andrew look at whats happening first whats happening with t it jx shares up about 1. 5 . Quarterly results generally positive earnings an revenues better than expected comp sales in higher end of the companys previously forecast range. Helped in part by basically Comparable Store sales growth across entire system bow domestic and internationally. Raised guidance for fullyear profits per share and also Profit Margins on a pretax basis as well. Tjx companies up about 1. 5 in the premarket trade watching shares whats happening with Analog Devices on chip market side. Better than expected quarterly profits and revenues as well Artificial Intelligence continues to fuel demand for the entire sector. Analog benefiting up 6 in that premarket move. Of course, the main event as mike alluded to in just the last couple minutes here. Nvidia up after the closing bell today. Computer chipmakers about steady, very steady. 954 dollars per share ahead of todays report after the market closed right now just to put things in perspective, the Options Market is implying what could be a plus or minus 7 move in that stock after the results come out late other than this afternoon. And for reference, over the lastary quarters move in nvidia shares plus or minus roughly 13 . The market is pricing in what should or could be, mike, a less volatile than expected Earnings Report at least over the last two years. See if that plays out in this afternoons big event. Send things back to you. Still a big move in value stocks only had a smaller than 1 daily move three times this month. 2. 3 trillion market cap it swings around, dom see how that goes. Still to come, lazards ceo. R well be right back. 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Again, waiting for nvidia earnings after the bell, but this morning a little weakness especially from the dow. Well, the metals trade shining brightly copper had another record yesterday back to its contract inception on the cme in 19 8 ev and a. I. Sectors. Meanwhile, gold hit record after record joining us to talk about this, senior base metings analyst, and edward, love for you to set the scene a little bit especially about the copper move while its been incredibly aggressive recently and talk of real supply demand mismatch, seems heavy, heavy speculator in the near term. How does that set up for you right now . Yes michael, thank you a perfect storm, as you said weve seen demand pretty strong. Mainly coming from the a. I. ev space. Especially out of china but certainly here in the u. S. As well as spending gets under way. We have the ev kind of push. A lot of it government mandated, which is driving demand as well. And on the supply side, we have lots of issues with some key producers. Namely in panama, in chile, peru, indonesia, and then add into the mix sort of the hype that all of this is generating, you get the Fund Community part parting and our study shows they are the may exaggerators in the move once they come into the market. If this is perhaps an exaggerated move, does the market seen a little vulnerable . Whats your expectation . Weve been saying vulnerable a couple months now. In fact, all the forecasters, all of their highs have been just blown out of the water nobody anticipate add big move, including yours truly. But having said that, yes. I think we could see a bit of a pullback in fact, were seeing some selling today. Keep in mind that if these funds get into the market at some stage they need to exit. Especially if the fundamentals are not really changed that much so, you know, were all kind of waiting to see when that pullback will happen, but we kind of need a trigger, and we havent gotten the trigger yet. What role can we discern china has in all of this its always the story when a lot of commodities start to move in this way maybe theres going to be a little more effort in terms of infrastructure and Housing Investment in china or perhaps just, you know, trying to acquire more stockpiles of things like copper, but does that have a relationship to whats going on shortterm in the market it has, actually. Just for some context, copper is a 25 million ton market. China consumes 15 million tons more than half about 2 million of that goes into the real estate market. We thought with real estate being flat on its back, we thought prices would probably struggle they didnt. Thats because the chinese kind of made up for that demand by putting a lot of money into a. I. Spending, into Infrastructure Spending cables, transmissions. Society chinese have picked up their copper spend outside of the real estate side stockpiling, i doubt china is going to be buying copper for its stockpile at 5 a pound. Its just too rich for them. And a word on gold. Obviously it sort of feeds off of a Different Energy source in terms why people want to own it, but similarly aggressive move. Folks love what the charts look like at this point where do you think that might head yeah. Gold, again, one of those that kind of is defined, the odds, we thought with the dollar strong and with rates rising gold would be under pressure, but that han beehan hasnt been the case i think the gold market sees a couple of things sees inflation running high. It sees obviously the debt hemorrhages pretty much from every major economy, which doesnt bode well for kind of the longterm viability of the Financial System so people are seeking some safety in gold and to some extent in bitcoin. And and then similar to the other metals you also have fun participation in gold and lately in silver, which got to an 11year high yesterday. Yeah. Obviously all of that at play. Well see how it all develops. All with the dollar firm, as you say. Edward, appreciate the time this morning. Thank you. Thank you. When we come back, amazon and the race to dominate Artificial Intelligence. How does the retail giant stack up against its magnificent seven counterparts well get into that. And then later this hour, former pennsylvania senator pat toomey will join us hes going to weigh in on a new brand of economic conservatism emerging across the political landscape. Stay tuned youre watching squawk box and this is cnbc. Earning a degree doesnt have to mean starting from scratch. At university of maryland global campus, it means building your next success on the foundation of life experience. Umgc values the successes youve already achieved. Thats why you can earn up to 90 credits from prior learning and life and job experience toward our bachelors degree programs. No application fee if you apply by may 31 at umgc. Edu. Shares of Williams Sonoma jumping after Quarterly Results. Earnings for that company, 4. 07 a shire. A lot better than the 2. 70 the street expected. Revenue 1. 6 billion in line with expectations. I can only assume Profit Margins were up. Samestore sales fell 4. 9 during the quarter better than decline of 6. 2 the street expected. Williams sonoma affirms guidance for full year and stock up. A strong one today, too. New developments on amazons a. I. The company is planning an a. I. Driven overhaul of alexa. We have details. Good morning. Yeah amazon plans to give alexa its voice assistance a major a. I. Overhaul this year and add a Monthly Subscription to offset costs according to people familiar with amazons plans sources telling me the company is planning to unveil a new version of the now decadeold voice assistant. Later this year. It would potentially position it to compete with new generative a. I. Chat box and googles but not part of primes subscription but a price point not decided yet. While amazon wowed consumers think about the taxdriving tasks back in 2014, seems old. A little oldfashioned recently what weve seen with Artificial Intelligence. Last week oak a. I. Announces its latest version of chatgpt has can go significantly deeper that are alexa. Translate different languages realtime and google launched a similar a. I. Future. People still for the most part are using alexa and apple the siri for much more basic tasks like setting a kitchen timer, announcing Weather Development of new a. I. Chatbots in recent months increased pressure on the Alexa Division internally at amazon really seen as the darlings am zone founder jeff bezos now subject to stricter profit imperatives since andy jassy took over in 2021. Jassy has been, said he has been privately frustrated with alexa capabilities did not comment but said alexa is a priority for amazon and its ceo according to andy jassys shareholder letter highlighting alexa what he called substantial geni applications back to you. The question if they want to impose more rigid profitability standards how much of the a. I. Related features would serve the purpose of feeding everything into the amazon ecosystem and engagement and obviously sales ultimately yes, mike different than what Microsoft Offers for example, a lot of people arent doing tasks and things that make you more productive on alexa. Its quick interaction thought in the beginning, drive more sales remind people to order thing only amazon. Youd see a bit of that flywheel effect with generative a. I. So different where google and microsoft sit in in the workload told one of the challenges that theyre up against the other thing is price point interesting. E dont know where it is priced. Told not decided yet open a. I. Priceds 20 a month. So interesting if you arent willing to pay that subscription, for example, for alexa what will it look like still the basic offering and then genai addition a Monthly Subscription a new model and interesting that its not a part of prime. Yeah. I dont know how many penal want the sort of hyperintelligent human voice kind of in their house listening all the time anyway they have advantage 500 million devices out there. It is remarkable. I think were in the minority. For sure. Creepy and weird, i think but i dont know definitely losing the fight here. Im in a weird position, when my kids used to ask siri silly questions on my phone, i cringed. Dont bother her with that wasting your time. I felt i was, we were imposing thanks very much. Arent you polite. When we come back, Steve Liesman sifting through all the recent fed speak and there has been a lot of it trying to figure out whats next for the u. S. Central bank and he will join us with his findings. Then well ask lazards ceo peter orszag what he thinks about it all plus a check on the pulse of the m a market now, too. Stay tuned youre watching squawk box and this is cnbc. Representation for Asian Americans in the workforce decreases higher level of seniority. Mckenzie and Company Found same is true of promotions. The Consulting Firm estimates that asians account for 9 of senior vicepresident s, but just 5 of svps ascend to the c suite and women of asian descent make up less than 3 . For Asian American heritage month, im deidre bosa. Welcome back to squawk box. Right here on cnbc futures this morning a little low perp looking a the dow off by close to 7a points. S p only down by about 6 nasdaq relatively flat off by two or three points. Treasury markets fairly steady this morning, too. Talking about the ten year at 445 and two year at 487. Weve gotten a lot of new fed commentary in the last few days. St. Steve liesman joins us to try to make sense of all of it. Thanks, mike. Follow as barrage of fed speak a better idea whats on the table and whats off the table these days when it comes to monetary policy. Look at whats off the table the fed president mester took her three rate cuts off the table and both powell, fed chair and waller on yesterday saying rate hikes unlikely or likely off the table. Whats on the table . Waller saying cuts possible with three to five moss of good inflation data towards end of the year talk about that in a second. Michelle mester saying rate hikes possible other fed Officials Say it, too. Wallers comments causing a stir for those hoping for cuts soon as this summer. If the data were to continue softening next three to five months you could think about it doing it towards of end of this year. So not multiple consults . One or a few. Depends on the data. Consecutive and show clear progress we have to be confident. Doubts about summertime cuts creeping into the fed funds moocher market 18 chance of what happened in july 59 for september. Both down. Now its 70 for november as confidence and cuts further into the fall towards the end of the year which is what you heard waller say. You can only assume stocks are incorporating this change in a particularly, arent particularly troubled by it, at least not now. Talking about multiple cut or processes of cuts once it begins bad news, bar for multiple cuts could be higher than a single cut pointing again towards the fed serving up reduction of rates more towards the end of the year, and, mike, throw this at you usually you throw one at me. Im throwing one at you. Is this does the stock market really get this . This is perhaps more of a later fall end of the year kind of thing. I think stock market is happy to continue to roll forward the beginning of whatever rate cuts might come as long as they are cuts right. Also i think crucially, if longerterm bond yields remain tame how that all kind of interacts with the Inflation Numbers that are going to come out and whatever else fed folks might have to say, i think thats probably where things are. Maybe thats going to have something to say about the composition what works in the market or not. Steve, interesting you mentioned waller caused a stir saying needs several months of good inflation data, but also kept pointing to some signs of deceleration in the economy as essentially helping their cause and not really noting it with any real alarm its going to get to a worrisome point. Right im going back to my wrestler analogy. One where youve got to get both shoulder blades on the floor there before the, the umpire starts i guess the ref, one, two, three what happened in january, february, the wrestler got up. Had to start counting again. Waller yesterday says april counts as one. Yeah. You know, you got better april inflation data some weaker demand pointed to the isms being below 50 three to five months area youre looking for, well, count one depends on three or five i was thinking what that three or five is what i think that means is, if you can get a sharper fall in inflation, which would provide the fed more confidence, maybe you could sneak in with the three moss of good data. But if its. 2 and, remember, waller yesterday talked about how, look. I have to go to the second decimal point to get that confidence if thats the case, then maybe you want to count on five months. Yeah. Gotcha, steve. Its real wrestling were talking about. Not wwe. Yes exactly. In advance. Commentary. Commentary you dont buy that either, mike . How am i not surprised joining us to talk about the fed, economy and state of m a. Peter orszag, former director of management and budget under president obama. Throw this one at you first, peter. This idea of needing to wait for at least another three to five months of good inflation data before you can see a rate cut. Does that play into what you would be expecting from the market yeah. And look, i think the market is now much better aligned with what the fed is likely to do probably still a touch too optimistic i agree with the commentary just expressed. Odds of a summer rate cut are exceedingly low, barring some, know, financial crisis or something traumatic and focus on september perhaps november again, assuming inflation continues its downward path, which is what i expect it will do. If thats the case, does it change anything that you have in the plans . If we dont get a rate cut, say even in september, what do you see in terms of the health of the market and maybe more importantly the health of the m a market which weve seen a real slowdown in m a over the last year and a half or so, because people have been waiting for lower rates. Higher rates makes it tougher to finance a deal. Yeah. I actually think the m a market has been coming back, and this higher for longer environment is okay for it because at least youve taken off the table the risk that rates will go higher so we are in a bit of a waiting period, but m a is picking up and momentum is picking up even in that environment. At the same time, by the way, theres a lot of Liability Management going on in this higherrate environment with the way, the maturity walls hitting in 25 and 26 from debt taken off during covid but with regard to m a, its actually progressing decently and i think will accelerate whenever the rate cuts begin, if its september, great. November, okay january, you know, people are moving forward nonetheless when you say pick up, a pretty lousy year last year. Yes. A pickup back to prepandemic levels we saw maybe in 2017, 18, 19, up until things shut down the way i characterize it, last year was a terrible year. New discussions and new mandates et cetera started to pick up towards end of last year takes a while to translate into announcement and then translate into completions so the process takes a bit of time, but it is occurring, and where we are in the process right now is, id say strategics, companies, are kind of back on the playing field, and the next stage is for sponsors, private equity, to become more active also. That is starting to happen, but it would accelerate back to the previous discussion whenever the fed pivots to a rate cut for ceos rate cuts matter its also a matter of confidence do you feel confidence is really there at this point . Yeah. I think ceo confidence is a decently high level. Obviously broader macro environment matters, and i think there is generally some generally a good situation with a bit of signs of a bit of slowing in certain categories of consumer spending, but overall, a pretty good picture with a pretty strong labor market and the Consumer Holding up very nicely even after running through the cushion of the excess savings built up during covid. Were seeing slowdown in discretionary items or certain segments of the consumer overall, pretty good. Peter, the other wild card in all of this is a Regulatory Framework that is a lot tougher to try to get big deals in and in some cases not even big deals. Think of an amazon deal scuttled recently for a roomba or something. What do you make of that how do you convince people, and as somebody who spent time in washington under an administration, what do you think looking at washington these days and trying to figure out how to advise your clients what had work and what wont first, i think the fact that the government has lost some cases, microsoft activision perhaps the most prominent among them, means deterrence effect now is probably smaller than two years even though much higher than five years ago. Many boards and c suites are willing to litigate knowing laws have not changed, just interpreted in a new way point one. Point two, in my opinion, there are clearly some undertakings on efforts that are problematic highlight the new Health Care Task force the department of justice is are toing that seems to be focused on vertical integration in health care the last place i would be focusing because the evidence suggests that vertical integration leads to efficiencies in health care theres clearly tension in multiple domains, health care, t to some degree banks and other sectors between what makes sense from ar overall policy perspective. Like in health care trying to drive lower costs better outcomes, and the initiatives some of the antitrust folks are undertaking. You were working in a Democratic Administration in washington are you perplexed by the well what some would call over reach from some of these things . Now looking at it from thside of things, do you look at it and think, what the heck i wouldnt say im perplexed. I think its often mistaken and again go back to that Health Care Example exactly there are concerns about horizontal consolidation in health care local hospital markets, for example, become much more concentrated over the past two, three decades. Sure. To focus and vertical entities Kaiser Permanente is a good example of that. Evidence strongly suggests in fact coauthored an article on exactly this point strongly suggests those entities lead to better outcomes. To focus in lowering costs, focusing there seems just off to me. Peter, lets talk a little bit last week and the week before. Yes talk about something you mentioned a little bit ago the debt matchation taken out. Maturation, loans coming due in the next year, two years is this a problem beyond commercial real estatstestate are there other arenas we should Pay Attention to a lot of companies took occupy a lot of debt during covid. Giving the maturations of that debt its coming due in the next couple years and now in a new environment refinancing that debt into this environment will be more expensive. Meanwhile, some companies, you know, its natural some are thriving. Some are experiencing more difficulty relative to a different Business Environment when the debt was taken out. So a lot of this, the change has been less bankruptcy and more Liability Management so trying to work things out without a chapter 11 or a formal bankruptcy proceeding, even if you do have a very burdensome debt load. And the second piece is the increasing share of that activity that is associated with appreciate equity and private capital. So those are the two big themes in that part of the marketplace. Sounds like associated . Less of the chapter 11 bankruptcy because you can find funding elsewhere or someone else to guide it through oh, and also because the companies themselves are often private equity owns and many of those owners would prefer not to go through a formal bankruptcy proceeding. Okay. That makes a lot of sense. Peter, finally just on the m a front. Are there tailwinds helping things out aside from the promise of potentially lower rates . There are a lot of tailwinds. So energy transition, derisking from chinaened eand move of supy chains the piece of innovation. There are lots of strong underlying titanic ships driving this and talked about headwinds, generally fading that combination is leading to an upward trajectory in the marketplace. Peter orszag, great to talk to you see you again soon. Thank you. Coming up, who are the key economic pop p coming up, who are the key economic pop lists in Todays Republican Party and what do they want . 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An effort by some, at least, to steer away from the reagan consensus of low taxes and lower regulation and steer into a more worker and familyfriendly policy that might better benefit trump voters in particular now, i spoke to a faormer wall street journal writer and author he says the goal of the populist economics reverse hollowing out of the middle class that led to many pressures on American Families driving the anger of todays culture wars in a Republican Party that he says increasingly represents what he calls downscale america, he argues theres a political imperative to harvest a vast swath of voters out there. These voters, he argues, believe in traditional male and female gender labels but also embrace the economic gains of the new deal which is traditionally seen at something from the left they love associate security, support unions, particularly the unions they themselves belong to also they want a stable Financial Foundation for their lives. One that they dont necessarily see as available in a service sectorbased economy so that leads the economic populist to a dramatic different set of policy ideas than seen before from republicans. Across the board tariffs, blocking u. S. Investment in china. Stricter immigration enforcement. Reforms corporate bankruptcy to prioritize payments to displaced workers and to the communities that are affected, and maybe most significantly for wall street, a financial transaction tax ten basis points on the secondary markets sales stocks, bonds and derivatives and these populists would ban stock buybacks trump the bale calling downscale america, accounts for his polling success among hispanics and African Americans seen over the past year. Befuddled pundits inside the beltway for months why thats happening and suggesting a powell rout to a Trump Coalition in 2024 that could be broader that many in washington or wall street are anticipating right now. Becky, back over to you. Eamon, stay with us were going to dig deeper into this for more on this new republican brand of economic pop populism former senator pat toomey from pennsylvania what do you think of the debate taking place within the party and more broadly becky, thanks for having me first of all its important to note theres nothing new about these policy prescriptions the idea having the government take more control of the economy, allocate capital, pick winners and plloser. Even set some wages and prices and tell americans from whom they can gi sells and whom sell things standard policy for democrats for a long time. Theres nothing new about them whats new, republicans are now advocating it. I think as you can probably guess, i think this attack on Economic Freedom and the Free Enterprise system is very illconceived. It starts with a hubris of thinking that as long as our guys are in control theyll make the right decisions how to direct Economic Growth and direct prosperity to where it should go as though someone can know that. I think its also a misreading of the politics. I think Donald Trumps appeal is much more cultural in nature, and if you look at the success he had in Economic Policy in his first term, it was overwhelmingly with traditional republican orthodoxy on taxes on regulation not on trade he was a protectionist on trade. And he did some damage there, but it was pretty limited in its application. So i think this, first of all, this is a minority view among republicans both across the country, and in congress i certainly hope it stays that way. Thats an interesting point when it comes to trade donald trump certainly was a protectionist on these issues. Right. That other laundry list of things you dont think hed go along with as president , looking from banning stock buybacks to raising taxes on issues . An interesting question, because i dont think donald trump has a welldefined ideology regarding Economic Policy generally one consistent idea hes had for a very long time is hes very hostile to free trade. Hostile e by the way, i do think they will take very dramatic steps if donald trump is reelected, you know, Bob Lighthizer has laid out in his book exactly what he thinks President Trump should do, and President Trump seems to be adopting it thats 10 universal tariffs on all imports as the first step and then successive increases of 10 until our trade deficit disappears, which will happen as we have a very severe recession. But thats the trade side. Thats predictable i think the rest is much less predictable, but there will be a backlash from Republican Voters who believe in Economic Freedom and the prosperity that has always accompanied it if they start going down this road senator too, its eamon jave here we talked about phone the other day about this some of these economic populists talk about this idea of free market fundamentalism, which they would accuse you and others in the Republican Party of sort of embracing the value of free markets over Everything Else despite the damage that can be done to communities and families what do you say to those voters in the Trump Coalition who were on the losing end of globalization and on the losing end of free markets . Their communities were harmed by this their livelihoods were harmed by this it might have benefitted the country netnet, to your argument, but for some people, there was a real loss here how do you approach those people and bring them back into your economic approach . Its a fair point first of all, the vast majority of americans gain enormously from having a free economy, and our relative performance to our peers and near peers continues to underscore that greater freedom leads to greater prosperity, but youre right if you have a free society, there will be disruptions, and some of those disruptions will be painful its really very similar to new technologies when word processor software became readily available, im pretty sure it devastated the typewriter industry. If you worked at a plant that made typewriters, you probably lost your job. The answer is not to prevent the word processor the answer is not to prevent the enhancement and productivity and the gains for society as a whole. We should have a discussion. What doyou do about dislocation . I think the most important thing, not necessarily the only thing, but the most important thing is really strong Economic Growth thats driving up wages, real wages, which is exactly what was happening before covid struck, by the way thats the most important thing you can do for people who are displaced by whether its technology or trade or any other dynamic. Senator, youre not the only person who thinks this obviously, there are theres a massive part of the Republican Party. There are also some moderate democrats who feel the same way. You have said if this continues, you think its almost an existential threat to the party, but do you see new parties being formed that kind of break out along these lines . I doubt it. I think well have this debate, and it may manifest itself in primaries where competing ideas are sort of litigated before the voters, but i think theres a reason that the Republican Party, for a good, i dont know, 70, 80 years has been dedicated to Economic Freedom. Theres a reason thats been quite successful, politically, and enormously successful economically by the way, theres a lot of very flawed premises that we hear from these status these anticapitalist folks. Like, one thing we often hear is, well, American Manufacturing has been hollowed out or wiped out. Im sure youre aware that the year of the alltime biggest manufacturing output for the United States was 2023 and well probably break that record this year theres a lot of mythology thats involved in this, and i still think most americans believe in opportunities and freedom. You know, and eamon, its interesting, if you look at some of the implications of some of those proposals that you put out there in terms of very strict immigration restrictions at the same time youre imposing tariffs. When you want to, you know, increase the supply capacity domestically, a lot of thats not going to work. Our labor force isnt working very quick i wonder how much of it seems sort of a campaign approach as opposed to a policy set that would be implemented well, look, the critics say this is about grafting an ideology on to a populist movement and coming up with Economic Policy points after the fact to hit your demographic group. Thats one criticism i think the other criticism that you hear of this new economic populism is this idea that its inflationary if you put tariffs in place, youre going to raise prices if you have this strict, strict enforcement of immigration, in fact, deport massive numbers of people from the u. S. Economy, thats going to be inflationary too, so a lot of pressure on the one thing voters seem to value right now, which is inflation. Can i add that tariffs will lower the standard of living of americans, most severely, low and middle income americans. If you raise the price of all the ordinary things they need to buy for their families week in and week out, theyre just going to theyre just going to be able to buy less of that their standard of living will decline. Their ability to have Discretionary Spending domestically is going to decline. This is a very bad economic formula. Senator toomey, eamon, thank you. Ene mewh wco back, some top stocks to watch on the way to the opening bell dom chu is back with a few more stocks to watch ahead of the opening bell mike, becky, andrew, heres a quick recap of some of those morning movers for the earnings side of things the retail heavy portion continues of the season. Big box retailer target just down about 9. 5 right now after earnings missed expectations also, revenues were just in line with consensus it also reaffirmed its fullyear forecast target was hurt as consumers spent less on things like groceries and discretionary items. Another retail mover is Urban Outfitters, which reported after yesterdays close. The apparel retailer behind brands like its own as well as an al free people. Then, the main event, arguably, for the entire earnings season, happens after the bell today, and thats nvidia. It reports the worlds most valuable computer chip company is expected to earn 5. 59 in profits per share, but all eyes are going to be on the forecast as well as how the stock reacts. Some traders say it could be a big indicator of how the rest of the market will fare in the coming weeks becky, its just about flat, maybe up 0. 5 . Back over to you guys. Thank you very much, dom. Mike, youve been saying all day this is what the markets waiting for. Yes, and three month ago, it was a catalyst for the broad market now nvidias at a high. Goldman says positioning is high we will see what happens after the bell today, and we will see you back here tomorrow. Make sure you join us. Right now, its time for squawk on the street. Good wednesday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer at post nine of the new york stock exchange. David faber is on assignment alltime highs here, but futures are a bit cautious ahead of the big event tonight, and that is nvidia earnings. Meantime, retail earnings are a bit mixed. Target largely fails to impress. Oil now down 2 for the week road map is going to begin with targets big miss, consumers buying fewer groceries and home goods shares are down sharply premarket. Nvidia shares are coming off a record close