Because the odds for a june fed rate policy pivot, well, theyre going it was just it was ridiculous. It was always going to be hot. Yeah, yeah. No. Plus, big tech divergence, alphabet, amazon at highs, jim, but apple and tesla, i dont know if you noticed, theyve been struggling a bit. Nvidia, were going to talk about that stock, of course. How could we not . Its entering a correction. Well, if you dont know what it is or if you think its my dog, then why dont you sell some. Finally, jim, the airlines are leading s p premarket gainers. Delta topping quarterly estimates. Its focused on efficiencies im focused on the fact that phil lebeau has been here for 25 years and hes the best. Lets not lose sight of real things. Hes the best he is. Rely on phil more than we ever have. Lets start with the market, get your reaction to the hotter than expected cpi print. Weve heard from the analysis in terms of expectations for a fed rate cut, which are fading fast. The yield curve inverting a bit. The twoyear moving up more in yield than the tenyear right now. You start thinking, why did the fed kind of commit to neutrality . These numbers, what was bad was worse. Weve been worried about shelter for a long time, shelter going in the wrong direction. I think the employment number on friday gave you a good read of what was going to happen, things that have to cost more. We have a surge in people who work in travel and leisure, so of course, those wages have gone up. They had a surge in health care. Those wages have gone up. David, theres a premium to oil, and we know theres a war premium to oil, and that should be the least of our concerns. As long as theres a war, theres going to be a premium. If you think that war in the middle east is going to last for a long time, theres going to remain a premium. The only number that i really the numbers that i really freak out about, i guess im supposed to freak out about, are just the endless ways to find people to have somewhere to live. That includes immigrants, of which, by the way, since the government doesnt have any numbers at all, we have to presume is hot. It wont stay by the way, raising Mortgage Rates only makes it exasperates. Exacerbates. You dont want to build. If youre tol brol brothers, yo say, im going to make fewer homes. Thats the part that wouldnt make things better if you raised rates. Thats where the fed is really in a box. Finally, food stopped being more expensive at home its a little more expensive at the store. I like that. But these numbers are the numbers of an economy that is on the move, that is terrific, and if were all going to sweat the program, decide that the tenyear and 30year auctions going to go bad and get to 5 , you and i have been there at 5 . Thats called a great level, so i dont want to lose sight of how unnatural but the fact that we may very well get no rate cuts for the remainder of this year is very different than what people had anticipated as 2023 came to an end, not to mention even a few weeks ago or months ago. Well, those people what does that mean for the Broader Market . Those people are wrong. They can also vote with their feet and say, im not going to buy equities. They can go buy cds. They can buy the short rate. I have a lot of short rate paper, and im looking at it and saying, what do i do . Buy more . Buy cds . The cd rates went down yesterday. Its kind of disconcerting. But i think there are a lot of people who are on the wrong side of this trade, and theyre frantically getting out, and you see them first in the futures, and then there will be a lot of people who are very scared and are in the mag seven and they dont know what the mag seven are, other than its not Steve Mcqueen and yul brenner. Then, they think datacenters arent going to be built out. Thats wrong. Fellow travelers just say, this markets been good since the fed pivoted. Oh, my, maybe the feds done. All right, so, what does the year look like for a stock market in which the fed is, you know, were neutral in other words, no rate cuts . Well, one or none. Rick santellis been very right about whats going to happen with the auctions, i think, and yesterday, he said there was a short rate auction that was very bad, and i think this auction is going to be very bad today. But i also think i come back to say, let it come in. If you haventtaken any profits and you dont know what you own lets get to nvidia. Im sticking by it. I have a longterm view of nvidia, i have had since 2012. Am i changed . No. The intel socalled claim that theyre faster, stronger, this or that, give me a break. No ones committing to that. Nvidias a great company. Its got a very low multiple, but if you dont know what nvidia is, david, and you bought it because you liked what i said about it, just sell some. Just, like, please sell some so i dont have to hear when its at 800, why didnt i get that. We do have Morgan Stanley raising its price target as this continues to strengthen for nvidia. They have, but so what . Theyre talking about the hyperscalers, planning out data expansion centers that would tend to indicate durability. There is great durability. Own it, dont trade it. We also know there are people who dont know what they own, and when you meet people who stop you and say, thank you for nvidia, and you follow up and say, what does nvidia do . Theyre stunned. Theyre stunned. They dont know. They think, well, nvidia, let me tell you, they they wow. Jensen. Thats what they say. Those are the people who have theyre the fellow troavelers that im most worried about. They dont know what theyre doing with nvidia. They see it go down and say, it must be wrong. Those are the people, youre going to have them reassess, just like there are people who are reassessing the fed. And then, once rates get to where they have to go, which is not that high, because there is, frankly, at a certain level, selfcorrection, youre fine. But nobody wants to hear that youre fine. We have cash for the travel trust. Ive been waiting for a decline. Were getting a decline. Does that mean i should now wait for a bigger decline . No. I dont know where as were calling it a correction. This decline of 12 from the highs. Nvidias multiple is down to what, jim . Where are we . It could be 23. Yeah. But david, if we go if we bore people and dont talk about musk havent talked about buffett lately. If we go over this news release from the on the Consumer Price index, yeah. The department of labor. Its energy. Its rent. Its its Auto Insurance. Can we have some competition in Auto Insurance . Food away from home keeps going up. What are you going to do . Stay home. The last month was actually not that bad in terms of food away from home. And liquor prices are coming down. A lot of people dont realize that. These are just sticky. You need commodities to come in a little. They are. And you need labor to cost less, and thats what the immigration issue is. The hidden labor workers in the kitchen will make it so eventually youll be able to get a cheap burger or fries and not diet coke but jack and diet. All right, so, youre not overly concerned as we look at a market we watch the s p have a significant decline, again, when we start trading 22 minutes from now. Again, if you know what you own and you look at the news release from the bureau of labor statistics, and you decide, you know what, im going to bail out of nvidia, because i see this food away from home number is bad, and im worried about used cars and trucks, well, i mean used cars and trucks are actually pretty good, so forget that. But you shouldnt have been in. You got a chance. Youre up a lot. Sell it to me. Come down so i can buy it. I know what it is. I know what nvidia does. I know that blackwell is multiple times better than what intel is doing. I know that google and nvidia are working together. I know that jensen huang said if googles making a chip, i want to help. Is that a reason to bail . Well, go ahead. I said it over and over again after the gtc conference, the stock goes now. Now were in the gtc conference. What a shocker . Shocker. As for the mag seven overall, mentioned it at the top. Alphabet, amazon, of course, alltime highs. Alphabet is something of a surprise. Again, ive made this point a number of times. Given the existential crisis that lasted a week there for investors. And thomas curry is the star of the show. And the number of wellknown pundits reflecting on social media for x, for example, about the coming demise or questioning its ability to compete or whether that got down to it might still have its monopoly in search threatened. It had the multiple in the french fry company, for heavens sake. Thomas kurian, of course, the yeah, they had their big thats a big get. Yeah, that is a big get. If youre not respectful to kurian and you call him tom . Interview over immediately. Im not familiar with the gentleman. Want to take a listen to what he had to say . What the hell else are we going to do . Watch the market go down . Lets have some information. This was him yesterday, the google cloud ceo. Take a listen. One of thems offering a closed system. They have one model, one provider of that model. They dont even own that model. The other one does not have any a. I. Expertise, so they only offer third party models. We blend both. We have our own models, and we have the expertise to build systems and integrate these models into our products to that people can use it. At the same time, were not taking a closed, proprietary point of view. Told you hes going to do 50 billion. Yesterday, i told you he was going to do 50 billion, and people were like, what does that mean . Hes doing very well. Hes taking share. Theres an awful lot of share to take. I mean, thats the point. You can have an environment in which the hyperscalers, amazon, microsoft through azure, and google cloud all are beneficiaries of whats happening in terms of generative a. I. I hate baseball analysis because second inning, now baseball games go so fast, but i do think that the cloud is just in such demand, and theyre only about 80 i would say about maybe 15 of businesses have moved to the cloud. Lot of room. Its a lot of room. What do people do . As long as Interest Rates are going higher, and we do have some auctions, and the auctions probably go badly, you start picking at things when you see things overdone, but you must know what they are. Okay . You must know that abbvie has a bunch of really good drugs, so when it gets to 4 yield, thats good, not bad. You have to kind of flip the equation and say, wow, you know what . The markets been good ever since the fed pivoted, but now were not sure about the fed. Lets go back to what looks interesting. Actually, lets get granular. Lets talk about caterpillar, because we all know what caterpillar does. Earth movers . They do more than that. Theyre central to datacenter and to oil, not to china anymore. Cat got up to 17 times earnings, and its had a run of 25 . All right . 25 for one of the companies that is decyclicalized, which is what i call it. Its a strange term, but i got it from the ceo. Is that stock due to come in . Yes. Do you buy it or sell it . Its an infrastructure play. The federal money is just getting there right now. That is something its 370. At 330, which is probably going to be at 3 30, at 330 at 3 30, i would buy cat. Let the people who have just been riding it and say, ive been great in cat, let them get scared. Let them get scared. Okay . Okay, jim. Lets talk disney. Theres one. We got to talk disney again . No. Lets forget disney. I know. Its enough. Im looking for dow stocks that i know are going to be the reason im doing this is the dow is down 500. How about your favorite . Salesforce. Lets get to probably goes down 5 . Servicenow probably goes down 3 . These are a. I. Companies. A. I. Goes down between 3 and 5 , and everyone gets scared and thinks its over. Maybe they retreat to the tenyear. Maybe they retreat to cds. Im saying this is the squall. Weve been expecting it. Im not saying, enjoy it. I am saying, it probably lasts a little bit, because we have to endure jamie dimon saying hes very concerned that rate thats tomorrows business i mean, fridays business. Were getting jpmorgan. Memos starting, earnings season begins at the end of the week. Were working off his comments from the annual letter in which he said that rates could hit as high as 8 as a risk. He didnt say its going to happen. Hell, like, Say Something negative, and kill his own stock for a couple weeks, and youll say, whyd you do that . Hell say, thats what i think. Meanwhile, his stock is up over 52 in a year. Yes. It sells at 12 times earnings, which is too low a multiple, but i think that when i look at im trying to pick dow stocks. Im not being random here. You ditched me on disney, that was fine. I didnt care. But jpmorgan is at 12 times earnings, and he is going to say negative things because thats what he does. So, do you buy it or sell it after he said negative things . How about you wait four days, start the buyback of the company well, hes not going to buy that much here, but i just think that this is real life, that jamie dimons stock is up huge. So, people are going to sell a little. Thats what happens. Thats what happens, jim. Thats what happens. We are potentially going to have a down day. Well see how we move towards the in the midst of the trading day. This is not the playoffs. No. And what happens is were one and done. Its not that. This is a longterm situation. And we can trade it. You want me to trade it . Oh deere, i bought it and sold it. No, let it come in a little. If you dont know what the company does. If you think deere is a deer, and you think cat is a cat, well, i mean, go to the darn zoo. You shouldnt be doing this stuff anyway. Right. Of course, these days, a lot of a lot of it has been reduced to almost trading on your phone as though youre betting basketball. My wife maybe she watches the show. Lovely woman. Ive had the show for 12 years. Im aware how long weve been doing this. Why dont you tell her . Why change a good thing . When we come back, delta is one of the mornings bright spots. Were going to explain why. Take another look at futures, of course. Jims not worried. 14 minutes until we open. David, im really scared. The market is up huge. Were right back after this. Off the comcast business van. Into the vending area. Oh, not the fries wheres the ball . Anybody see it . Oh wait, there it is back into play and. Aw no, its in the water. Wait a minute. Alligator. Are you kidding me . You got to be kidding me. Rolling towards the cup, and its in the hole what an impossible shot brought to you by comcast business. At Morgan Stanley, old school hard work meets bold new thinking. To help you see untapped possibilities and relentlessly work with you to make them real. 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. My name is oluseyi and some of my favorite moments throughout my life are watching sports with my dad. Now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. Giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. Weve seen a 15point acceleration since the start of the year in Business Travel, and were now back, revenuewise, at or above prepandemic levels. The volumes are still a little bit off, maybe 90 , but were doing really, really well. That was deltas ceo, ed bastian, discussing the state of Business Travel with phil lebeau. That was an interview earlier on squawk box. The airline did post Quarterly Results that were above analyst estimates. It is forecasting strong Summer Travel demand. I thought that was interesting, jim. It was a question we asked so often during the course of the pandemic and since then, would Business Travel ever, ever get back to the level . Hes saying, dollarwise, i believe it has. Stock is up 2. 50 when phil interviewed mr. Bastian, and deltas really on its game. Theres some there are actually a lot of different dispersion among the airlines about whos doing a good job. Theres disarray among the spirit, jetblue, not clear whether united is momentum. Southwest air is, unfortunately, really bad, and delta has shined here, and thats because its really well run, and i applaud mr. Bastian. Hes done a great job. That stock will be down today. Thats the kind of thing im looking at. All the analysts tomorrow will come out and recommend it, and its got a good model. Pilots are being laid off right now. Pilots are being laid off, yeah. We had a pilot shortage. That ended. Thats a good example of what can happen if you take rates higher and not everybody does well. So, thats where the economy is working. And where its not, david, can we just, like, talk about the idea that there are theres no price cutting in insurance . Theres nothing. Your Health Care Insurance has gone up, up, up. Theres no Competition Among those companies. It seems like theres no Competition AmongAuto Insurance, and were accepting, and that is a shame. I dont understand why the capitalist system isnt working and someone doesnt come in with a decent Rate Health Care plan and a decent rate insurance, because thats killing us, and the fact that we havent been able to build enough buildings to be able to accommodate 10 Million People that have come here, legally and illegally, in the last three years. And those are the things that i dont want to get too political, but those are the things that are going to create an issue when it gets to the election. Those are the things people get mad at and blame the president. Well, and or right, inflation overall. Again, were running at whatever 3. 5 or more. Weve dealt with 4 before. Thats off 19 to 20. Get ready. You got a mad dash coming up. Were going to get back to talking about stocks as we count down to an opening bell. You see futures, you know were going to have a far lower open based on that cpi print that was, as we like to say, hotter than expected. Bracing, perhaps, many hopes that had already been dashed to a certain extent that we would get rate cuts in the near term. Tesqwkn e re et afr this. At pgim, finding opportunity in fixed income today, helps secure tomorrow. Our