is telling customers, and how it's being received. probably not well. it is wednesday, may 24th, 2023, and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" right here on cnbc we are live from the nasdaq market site in time square i'm becky quick along with melissa lee and robert frank joe and andrew are off this morning. we're keeping an eye on what's happening in the market this morning. under just a little bit of pressure today after being down yesterday. this was a day that was down because of what was happening in washington right now you see the dow futures down by 71 s&p futures off by 8.5

yesterday the dow down by 235 points if you've been watching the treasury yields you've seen an increase 3.88 we are getting down to the wire. >> speaking of the wire, let's get the latest on the debt ceiling negotiations in washington kayla tausche joins us with the very latest. kayla. >> good morning, melissa the standoff continues the negotiators have not met since midmorning yesterday when they told reporters there was still an issue over the funding issues among the most fundamental that are part of this deal and after that meeting broke up midmorning, there were no other calls for the rest of the day as the white house team briefed the president on where things stood and where things could go from here in the meantime a new npr marist

poll recently released show americans by a simmargin want the debt creeling to be raised with no cuts it shows 52% for increasing the debt ceiling first followed by cutting spending or rather increasing the ceiling along with cutting spending at just 42 percent. they said they would blame republicans if they got dloes to or endured a default just shy of that, blaming president biden, if we end up going into that situation. we're now more than a week before that june 1st date that republicans on the hill, most of them, believe janet yellen when she doubles down on the date when the u.s. can't pay its bills, a jd now there's a question what the markets will do from here in past instances where

washington has failed to act and has needed urgency instilled by the markets, it it cuts it the markets began selling off 17% before that deal was reached, and it ended up being four days after the deal was reached in principle that the u.s.'s credit rating was downgraded and the market fell again. so certainly that chart that you're looking at right there is what spurred lawmakers to act in 2011 then there's 2008 during the great financial crisis when lawmakers failed to pass the program that would rescue banks, the program known as the troubled sate relief program, the t.a.r.p. the dow in a single day fell 7% when lawmakers passed that the next day they went to the board and were able to pass it there are a lot of people who say some sort of fire that needs

to be lit. the house is currently scheduled to leave for recess on thursday number word on whether speaker mccarthy has officially told them to stick around in washington that could certainly be something that happens today it hasn't happened yet. >> i'm glad you brought up prior to 2024. the markets did not see relief until the fed came in. the notion of the markets can fall, and also there is no sort of backstop to that with fed intervention that cannot be lost on the markets in this instance in 2023. >> no. it think it's also worth noting, melissa lee. it ushered in government austerity. there were many shutdowns that took place over that period of

time that's something that contributed to the general malaise of that economy, the absence of government spending that's one thick the white house is trying to avoid here, and i think is in some way that. there certainly is an interest in keeping relative lis high not cutting that bur the question is some of the groft money that's been flowing into the system as of late, what effect does that have in addition to whatever happens in the next week. >> kayla, you mentioned they're supposed to go home on recess, on thursday. do you think that actually hap happens? >> there's always a chance they can call them back, call them by phone.

they just need 24 hours to get the full senate back certainly they can act quickly if and when they want to and when there's an agreement. there's been some communication, go ahead and confirm the events you have planned for memorial day in your district, in your home state, but there are a lot of commitments many don't mace those tlr might be a situation where you'd have to come back. f there were no negotiations taking place throughout the day yesterday and talks broke up midmorning the president was previoused there has been the last fu-tes we're finding out whether they

plan to dig in their heels, put a new proposal foorksd and when in the process someone is going to have to blink. >> kayla tausche. >> a little crazy no one wants to inconvenience others. >> risk of government default. you want to makesure it's done but at the same time if we're serious about this that this was kind of overoverbearing. source i confirmed to s.e.c. news that florida grormg ron desantis will announce he's running for president. during a discussion on twitter spaces with elon musk. musk hinted it yesterday at the ceo council summit. >> we'll be interviewing ron desantis, and he has quite an

announcement to make, and we'll be drn this is the first time it's happening on social media le it's live and let's let it haine. a voice claims it's worth the time the list includes david horowitz of the horrow it was groups and cambridge of cambridge capital. >> what is could be drn the source was kev griffin and tom fetterly

he's officially backed out sirchs the abortion issue and the florida issue. he keyes keeping hi powder dry >> did he sea why? >> griffin has a big challenge between what he believed the political issues are he wants to see where the field plays out. hi's had a very bad track record of putting mill. fwu i thin slip is to they want a pro business candidate that is zpaed skpaeptable he'll have a lot of success ute side floridach. >> don't any less see that

temperature notice note enforcement mark liar a too town square he's hosting this big event for twitter spaces it's a high employee file, big move fur twir or hosting space with president biden or whoever else you know j >> the relationship between two the two has been part of the white house. f it's led to bad blood. >> i toe fe in >> it seems like with musk it's anything but biden it doesn't necessary he redeeden boo from scott he lyrics to have somebody

normal other than biden. net flick has begun its password crackdown it began alerting mens about its new sharing positioncy noting that neck flieks are only go be. users outside their household g e request get a new moments. our customers can pay a fee. netflix says over 100 million share accounts they'll already rolled up fp they've a activated their own account and boosted the lue rinne knew. >> what's a household? are they part of your loud

hollywood. it's foemg to betriy early adopters of netflix have go got you get your parents insurance at 16 but al kean legn feet if you have ten people in your household, split. >> it some people have a lot of tvs in their household so you've got -- >> it's the number of devices, i don't think. >> it must be geo related. if people are using it on iphones, e pads, i guess i can understand the argument. if you had to pay a cable sub

skrigs, you would lose it's the antithesis of catering to what the customer wants because you spoiled the people by saying, hey t whole benefit is you canniteny time. the asums that isth it's going to base more remember theme is they're goep so signs be their own accounts i wonder how many . >> there's only potential upside say only a quarter of the people sign up. that's revenue they would not have had. >> unless they find something else

>> we talk around in circles all right, shares of luxury goods marek lmvh falling 5%. that's the biggest drop in more than a year. the stock dropped ore concerns that a some offingeningky manned striking more than $11 billion from the fortune the world's richest person still. that brings the gap between the fortunes of arnott and elon milk musk we're going to be talking more about the luxury market at 2:45 with with the ceo. it's her first interview since taking the job in 2020 le we're going to talk about champagne and how people are

spending and given clom made change why those prices will stay heim the lom time it was interested yesterday. the luxury stocks were on a tear lvmh was at 2 dwl year the enirritable reports withen due slur the u.s. growth was half that of the rest of the board. wit aim aep investors yesterday were these le all rights of co-individualed a deepd that frmgts there will be more shopping, ending travel tourists

and i about up p that was going too offset euro beep and nonconference. >> that's extort so e. that was one listen whi this sox caught a bit membership men men. obviously a slowdown is a concern as well. when we come back, the dow futures dropping in the last few minutes. we'll dig into the possible reasons. you can now see the dow futures off by 115 points. teak talk the snaer sig kals and hater f. shares of visor u jumping out as a new outbreak of covid is hit you're watching this hour of "squawk box" on cnbc

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the yield on the three-year treasury bill and inverted note revetted it was probably flashing a false signal usually it means a recession is coming he thought that this was a false sig gnat a this point, but know he is reversing that position and saying it's a question how deep the reception will be joining us now, campbell harvey,

a professor of finance at dune university professor, thanks for being with us why did you think it was flashing a false significant back in january and what's changed your mind? >> i think i'm actually well suited to make this judgment given that the model is my model. so it's based on a dissertation fro 1986 yield incursions have exceed eight of the last recessions in january i thought it was a false signal if you looked at other day articulate it was indicating the economy is quite strong. we had excess demand for labor, but in january i was very careful, and on the show i said that there was one important caveat, and that caveat was that the fed needed to stand down and they did not given what they've done in

severely inverting the yield curve, what this has induced is a lot of riff income the banking sector, and we've seen that play out over the last couple of months, and this risk has greatly increased chance or a hard i thought we could dodge this if the feds stoot down. >> the fed failed to stand down because the inflation at this point is running twice their target. >> i just don't understand that sort of calculus. >> the calculus of their target or --? >> no, the calculus of what they're saying look the 4.9% yes, it's true over the last 12 months, inflation is 12.9% over the last ten months, if we annualize it, it's 3.3%. the reason it's 3ment 9 are

giant inflation prints in may and june of 2022 really we're at something like 3.3. and if you look at that 3.3, it is largely driven by shelter so rent, that's a third of cpi and 40% of the personal consumption expenditure inflater and we know that housing prices are going down rents are going down all of that will play through in reducing the inflation rate below the 3.3% so to me the job is done on inflation. why do we have to drive the economy into recession it's unnecessary >> just playing devil's advocate here, they'll tell me part of the reason inflation is down is energy prices have come down so significantly. there are a lot of people who don't think that will last

of course, that's a big question mark that will come from united states, europe, and china. the other thing people will say is inflation has really kind of built in the wamgs at this point. maybe that's a more concerning side because once it's into wages, it ice kind of hard to tip it out >> some has to go to inflation shelter is way more important than energy in terms of the components of cpi. so more than half of the inflation in terms of what we're seeing is being driven by shelter. and looking at the data, it's clear that rents and housing prices are going down. so i think we're fairly comfortable and even if there's some uncertainty, why push it. like why push us into recession? >> at this point there's no way to avoid it. they've raised for too long. >> so they've gone well beyond what they should have done, and the size of this inversion is

quite dramatic so it's 1.6% we need to look at that relative to the long-term interest rate and it's very large. and that really stretches the banking system because in the banking system the banks pay a short-term rate and then they receive in terms of their loans and investments a long-term rate and when you invert to such a large degree, that causes stress, and that stress means tighter credit, it's harder to get a loan, and this further squeezes the economy into slower and slower growth and eventually recession. >> professor harvey, thank you for being with us today. we'd love to are you back again soon. >> thank you coming up, goldman sachs ceo david solomon speaking out at the ceo council summit

we'll tell you what he said about the odds of a recession. that's next. "squawk box" will be right back. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones technology lets you monitor your pet when you're not at home, but to monitor threats to your hybrid workforce wherever they are... you need more than technology. you need cdw, who gets to know your business and can design and deploy custom solutions, with pre-configured hp notebooks with hp wolf security. ai-enabled threat detection and remote management protect your endpoints 24/7, giving your defenses some real teeth. bummer. hp makes always-on remote security possible. cdw makes it powerful.

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welcome back cnbc's inaugural council summit convening on the coast they're joining by those to tackle the most pressing issue ceos face today. here's david solomon on the chances of recession and a stickiness of inflation. >> i think there's a greater chance of a recession than not as we look at the end of the year into early 2024, but i'd say it's uncertain if there is a recession. my best guess is at the moment it will be relatively shallow, but it's hard to tighten

economic conditions and not ultimately, you know, have an impact on economic growth. some of this is a rebalancing of the pandemic we'll see. there's no question that peak inflation has come off you know, when i've talked publicly about this in the last couple of months, i sense thats's going to be stickier it's come off its peak but is going to bo resilient that while we're mentioning it may pause, you may see higher rates to ultimately control it more. >> stick yermining it could go longer a pause but maybe more tightening could be down the line if the inflation number stays high. >> you see the two views played out. >> he owns and makes the model

everybody cites. >> he now thinks that's definitely the case. if you talk to anybody in commercial real estate, they'll tell you the same thing. they're seeing horrible things down the pike for them but in broader terms, if youly to jamie dimon and david solomon, this is a stickier problem than a lot of people anticipate you'd better look at rates going above 6% to 7%. >> i think the other reason that david solomon's comments are so important is he spends so much time talking to a lot of ceos in a lot of industries. he's getting that feedback about a potential slowdown but more importantly he's thinking about their plan. if many are plans for it, that could cause a recession. >> self-fulfilling prophesy.

>> i think it's a temperature read. >> i would say the same thing with jamie dimon an incredibly broad view based on all who they're talking with. >> the ceo council will continue this morning how to lead ambitiously and compassionately at the same time for more go to cnbc.com. when we come back, former senators judd dwgregg and heidi heitkamp, whether there's a solution we take a look before we go to break at yesterday's winners and losers >> announcer: winners and losers is sponsored by state street global advisers.

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good morning welcome back to "squawk box. we are live from the nasdaq market sight in times square if you take a look at the

futures this morning, a little bit under pressure it's gotten worse in the last half hour sore so. the dow off by 30, nasdaq down by 15 and s&p down. you're looking at pressure coming internationally and you have the debt ceiling, too, those talks. >> one of the sticking points in the debt ceiling negotiations has been the 2017 tax cuts, those provisions set to expire at the end of 2025, republicans are pushing to extend them democrats argue it's an expensive gift to the wealthy. it may be the next big fight in congress with u.s. former senator judd gray and heidi heitkamp, two of our favorite experts talking about tax policy heidi i want to talk to you first and get your per sspective

there would be taxes on the wealth we don't know what they were do you think taxes should be or should have been part of the overall debt ceiling discussion? >> well, it's hard you know, when you're talking about using the debt ceiling as an excuse to try to balance a budget and do fiscal policy, you're already, in my opinion, you know, breaching a line that you shouldn't breach but when you're talking about taxes, we knew this big bill come come through, the moment of reckoning, the increases that were given in the tax proposal so it doesn't surprise me that they're trying to get this done sooner rather than later

typically what happens is are we going to extend this rate, that rate, there's a lot of folks in blue states that are hoping that these things expire because it has the salt.a.l.t. tax deducti. >> sooner rather than later is not a phrase that applies to washington judd, i wanted to ask you, this discussion in washington is all about the duration and size of the spending cuts as opposed to what's happening on the revenue side but this is sort of a warmup of what will be probably the biggest tax fight in congress over the next couple of years as the 2017 tax cuts and provisions expire at the end of 2025. what do you think should be done and how should it be approached and are pieces of it extended but not all of it? what would you do if you were still in the senate?

>> if i had a magic warngsd i would set up the simpson-bowles group which is set up to address the debt and deficit and agree to 75% of it would cob from the spending side and 25% from the revenue side and work so that it would pass that could happen, who knows it's not going to to happen right now. this default fight is almost the political equivalent of counting angels who can dance on the head of a pin they're fightling over a numb per. i mean it impacts it but not dramatically the debt ceiling is set. this is political positioning. the democrats want to claim that

republicans are cutting spending of about, they're not cutting spending even if they go to a freeze. because you're not counting -- the democrats want to count in the baseline emergency spending, which is supposed to be one time for things like their boondoggles, like the inflation reduction act. republicans don't want to count that on the baseline, but as a practical matter, this discussion that's being fought over what is allegedly going to address our debt issue is like addressing your tool shed burning down while your house is on fire. something's going to ph here which straightens this out because neither side can afford a defauchlt but we may get a brief disruption which will be very unsettling and the markets may have to step in and explain to congress and the president this not oil and we can't tolerate it.

heidi, when you look at the tax provisions, there was some discussion early on about carried interest which is sort of the zombie tax provision that everyone in the capital publicly deposes but never seems to die i know thoect are both issues you've talked about. do you think either of those provisions will come up in the next couple of years and will republicans give a little bit on either of those issues >> i think definitely there's going to be a conversation about this i think judd's absolutely right. none of this belongs in this discussion let's pass a clean dead limit going forward. look, you guys have for the last 15 minutes i've been watching talk about the fragility of the economy today. we have an inverted yield curve.

guess what washington, do your job, payor bills, do not threaten, there and move on and do the responsible thing, which is actually have a real conversation instead of as judd says putzing angels on the head. in term os of the economy and thinking, o well, it doesn't matter because i'm going to blame the other side look, it's going to be a pop on all their houses get your job done. it's just irresponsible on both sides not to have a resolution and timely and this idea of doing it in a gachlt i've said many times based on the stuff that's been told to us when i was in the banking committee. yo cannot unring this bell if you can't do it in a timely tag and let it lapse, that is

not a good look for the full faith and credit of the united states of america and our position on being the reserve currency of the world. they have to with addressed bys who's in the congress or the white house is gbe a big hike. coming up, moderna and pfizer rallying after hearing china is experiencing a new bout of covid. and sharing stories of influential aa business leaders. here's the founder of apothecary. >> what makes me proud is my parents. they immigrated here in the 1980s with nothing they're farmer here i raised money on my second

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time now for the executive edge and we're taking a look at reports of covid in beijing. let's get to eunice yoon for the latest on this. >> reporter: thanks, melissa china is announcing they appear to be heading into a new covid wave it's a new omicron variant they believe that the current wave is going to peek at the end of june, reaching 65 million cases a week now, the surge in cases has people talking here and wondering as the whether or not beijing would put the country back into lockdowns. so far that doesn't look that

that's the case. they have basically been downplaying the surge while it's playing up the importance of the economy. the media has been quoting several different experts saying the cases are going to be mild large-scale outbreaks are unlikely and the impact on day-to-day life is going to be insignificant. at the sam time there's going to be an earth to control even further information about the spread for example t chinese have halted the data and releeings the data from december 2022. that's when zero covid lifted. in addition to that groups have reported they're being warned they could be shut down if people within those we chat groups upshare information about covid that isn't from official

chinese sources. >> eunice, there have been reports of mysterious shutdowns for no reason of large events. is this believed to be related to the rise in this xvb variant? >> it's difficult to know, you're right there are a lot of different venues around the country that have suddenly shut down, sometimes even when they've just begun. lrj largely they're entertainment venues it's largely unknown whether it's because of the spread of covid or whether or not it's something that happened here in thewhich a chinese military looked upon. that comedian is nothing being investigated, could be jailed. nobody is quite sure exactly where he is. and also the company that supported him was fined $2 million. so there's been a lot of discussion how this crackdown

could be related to the communist party not being happy ever in a way they think is not fla flattering. >> and, eunice, since the listing of covid zero, has there been an increase in vaccinations the doctor was saying in terms of china, it's interesting how many people have had covid and the vaccination rates are not as penetrated as here in the united states in terms of the number of people who have actually gotten the shots. >> well, you know, it's really difficult to get any hard and fast information about covid at all as well as the vaccination rate officially it's at like 90%. it's like 1.3 billion people supposedly had two doses you don't know exactly how well

people are protected and that's one of the reasons they're worried about reinfection or infection at all the other thing that epidemiologist had said, there's been a big push and a rush to try to have more vaccines here that xvb these are largely -- they're all chinese vaccines, but also there are two that have preliminary approval and then another three or four that might be approved, but the big question is to whether or not these vaccines will even have any impact on the current wave >> eunice, thank you eunice yoon in beijing when we come back, we're going to take a closer look at the chip sector after apple and broadcom reached a multibillion dollar deal that was announced yesterday. "squawk box" will be right back.

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apple announcing a new multibill dollar deal with broadcom broadcom stock jumping on that news as trading near all time highs. joining us with top picks from the sector, angelo zeeno great to have you with us. does this remove one of the biggest uncertainties that had been hanging over broadcom, that apple might have replaced broadcom by 2025 >> i think so. i think it is definitely a positive in terms of improving visibility for broadcom over the next couple of years definitely was an overhang and a concern of ours. i think at this point in time, as far as broadcom is concerned for investors is the pending acquisition and i think all eyes shift to that over the next couple of months

>> angelo, i wanted to get your take on what happened with micron earlier with the ban from china and whether or not other chipmakers, if that is incorporated in the valuation, should there be a discount embedded in the chipmakers that rely heavily on china, like qualcomm, for instance >> yeah, i mean, listen, i think as far as the ecosystem for semis is concerned and their exposure on the china side of things and even the taiwan side of things, which is really -- for the semi industry, you have to look at it on a case by case basis. as far as where some of the areas that are most exposed could get hurt from the moves on china's side of things, some of the moves that they have made in terms of ramping up their local memory industry on that side of things it is easy for them to attack micron it is much harder from their perspective the leading edge manufacturers, nvidias, amds of

the world. but nonetheless, that's where the risk comes into play, at least from what the u.s. can do from that perspective and -- so, yes, i think there should be some sort of discount on some of the names, but we're also talking about a lot of these chip names being at the bottom of the cycle here. significant upside here going into the second half of the year i think you have to, you know, probably kind of look at those two factors. >> so, significant upside going to the second half traditionally chips have been cyclical and, you know, according to economists looks like we're headed into a recession, that's the consensus at this point, some sort of recession, whether it be soft one or mild one or however you want to characterize it. >> yes. >> that doesn't seem like that would be the backdrop for chips to go higher >> well, i think you also have to put it into context in the fact that a lot of the chip names have been in recession for the last 12 to 15 months in many

respects, especially looking at it on the consumer side of things, right? you look at nvidia, gaming side of things, they have seen a crash on the gaming side of 50% from -- memory side, memory names out there looking at revenue levels down 50% from peak levels, lowest levels of 2016 a number of the names in the semiconductor industry are experiencing the worse downtime currently since the financial crisis and actually significantly kind of -- if we undergo a recession in the next six to nine months, a lot of that is baked into the stocks. >> we should mention you raised your price target on broadcom to 750 from 680, thanks a lot >> thank you when we come back, we'll take you live to washington for the latest on the debt ceiling negotiations and talk about the potential impact on the markets

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good morning debt ceiling stalemate both sides digging in as talks stall. look at the latest from washington and find out what a possible default could mean for the markets. florida governor ron desantis ready to take to twitter to announce he is running for president. we'll talk about tonight's event with elon musk and big sky country versus tiktok we'll speak to a lawyer of a tech centric trade group representing the social media app in its battle to be unbanned the second hour of "squawk box" begins right now good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square i'm melissa lee with becky quick. we have seen some pressure as the hours have gone on

the s&p looking to lose by about 11.5 nasdaq down by 22. in yesterday's session we saw the s&p and the nasdaq down by more than 1%, that was the first sort of tremors in the stock market, concerns about the debt ceiling negotiations hitting impasses we'll see how that plays out in today's market treasury board, we have got the action on the shorter end. two-year at 4.279. ten year at 3.679% one month, just about where that -- less than -- beyond the x date, 5.6% right now so -- >> that's come down from where it was it was 5.7, north of 5.7 when you were talking just a week or two ago. maybe two weeks ago. so you were looking at even higher four years. those were the ones ending around -- >> exactly the idea that once you get beyond that, there will be

theoretically, they'll find the money, somehow, tax receipts will come in june in theory. but, the concern is that a downgrade can happen prior to hitting the x date. >> which happened in the past. >> exactly what happened 2011. >> it is sobering to think that corporate bonds now are trading at a discount in yield to treasuries, which means people think that they have a higher likelihood getting payback by microsoft and johnson & johnson than the u.s. government, which is crazy >> that is crazy those debt limit talks broke down yesterday as negotiators described the disagreements over spending levels and other policy a add-ons as too far of a grip to bridge kayla tausche joins us now with more that may be one of the most surprising things to see the talks break up in such a manner. >> yeah. and so far nothing has been rescheduled, becky that breakup happened midmorning yesterday. the talks have not resumed since then white house negotiators are planning to brief the president on where things stood and try to

figure out where to go from here one democratic official said talks had hit a speed bump and so far there is nothing scheduled for today, with just over a week before the earliest default date some republicans have said they think treasury is maybe overplaying the risk on june 1st, but one key gop negotiator said secretary yellen said june 1st is the deadline, that is the deadline as far as the general public, americans want to see a solution in a recent npr marist poll, a slim majority said they would like to see the debt ceiling raised first, get that out of the way and slightly fewer, 42%, said they want spending cuts alongside it a slim majority says that republicans would be at fault if it weren't solved, though slightly behind that they blame president biden. in past crises, it was the market that had to provide the emergency. the s&p slid 17% in the week leading up to the deadline and slid even further when the u.s. debt was downgraded a few days after that in 2008, the dow tanked 7% in a

single day with lawmakers failed to pass a bank rescue plan and continued tanking in the weeks after that as the financial crisis had worsened. the house has two days left in session this week. the senate returns on tuesday after the memorial day holiday but without work through the weekend, it is hard if not impossible to see how this gets resolved before june 1st and we'll see if the white house or the gop puts anything on the schedule for today becky and melissa and robert >> kayla, no matter what the polls say, they have to understand that everybody is going to take blame if this actually happens, right? >> i think there is some understanding of that, except that the republican messaging so far has been that because they passed a bill in late april, that they already have done their part to avoid a default to raise the debt ceiling and it is the white house that is being difficult to work with and is not willing to budge on its position the white house, for its part, sources familiar with their negotiations, say, look, we put

forward a freeze in spending levels, two-year cut in spending and have also been willing to negotiate a handful of the policy positions that republicans passed in their bill and it is -- the issue that has come up as far as the white house views it is that republicans have essentially hardened their position instead of looking for a bipartisan compromise, they believe that now they're reverting back to some of the harder line positions that were in the bill that passed in late april and saying those are take it or leave it positions we'll see if that dam breaks, we'll see if either position blinks >> there are some stories that have been circulating just about how there are a group of moderate democrats trying to come up with an emergency plan to vote in favor of keeping kevin mccarthy's speakership because, look, he's in a delicate position. one member can try and force him to vacate the position there would be a vote on that. and that's a tricky position to be in. i don't know if he would want help, though, from moderate

democrats, what that means to the longer term future for him. >> well, yes and certainly that is a consideration that he has to make and one of the reasons why he has become beholden to some of the positions that were in the bill that secured the support of the house freedom caucus for one there is also the last resort bill that was put forward by the problem solvers caucus you had the co-chairs of that bipartisan group on "squawk box" many times talking about the proposal that they put forward that essentially was crafted as a back stop if these negotiations didn't yield anything and yet we're still one week just before the x date and there has been no serious talk about either resurfacing that proposal and using that as the starting point, essentially to spare kevin mccarthy or provide political cover for him, or to do anything short-term, which at the beginning of the month looked like it was the possibility if we got down to this point i'm told that there are going to have to be decisions made by the end of the week as to what path is the path forward and what

happens from here. but they're going to take this right down to the wire. >> kayla, thank you. to dom chu with a look at this market movers >> what we have right now is an earnings mover that is kind of shaking things up a little bit sentiment wise in the premarket. cybersecurity, that's palo alto networks, up nearly 5% right now, just around 15,000 or so shares of premarket volume the company reports last night and it comes out with profits and revenues that both beat analysts expectations, it also upped its full year guidance current quarter, revenue and profit guidance was also up as well and that profit guidance came in above estimates. companies continue to spend on cybersecurity, so there was a fear that some of these technology firms might be feeling the effects of budget shrinkage at certain companies palo alto is making a lot of money and continue to want to make more and see more coming in down the line. also watching what is happening now with the deal in regional

banking. specifically with pacwest. those shares are up 5.5% now driven in part by news it is going to sell one of its real estate lending arms. civic financial group, a firm that it bought a couple of years ago, it will sell it to privately held rock 360, another real estate lending firm the terms were undisclosed it is looking at strategic options, so pacwest shares up about 6% now, helped along by that bit of news and then we're going to end with an analyst desk call out of ubs. ubs asked all of their analysts to name their top picks for the rest of the year and so you got a slate of them out there, but one in particular is meta platforms. shares down right now. but analysts call it within that tech media and telecom sector one of the top picks they think that there is a discount valuation attached to this, robert, and that the ad technology platform they have is

showing some signs of gaining some more traction so with all of that in mind, they do think capital expenditures are still a potential issue down the line for valuation, but me meta platforms, a stock up nearly over the last year 35% in a massive move higher just over the course of this year to date period robert, meta is in the focus here i'll send things back over to you. >> that 35% increase helping mark zuckerberg's fortune, by far the biggest growth in dollar terms of any billionaire. >> and meta and nvidia, two stocks which doubled in 2023 pretty good. >> dom, thank you. >> you got it. we're looking this morning at a market picture that looks to build on declines that we saw on yesterday's session on fears about the debt ceiling negotiations for more on this and these premarket movers, let's bring in stephanie link, portfolio manager at hightower and cnbc contributor. great to see you it does seem like for the first time we're seeing the market

equity market side of things price in some worry. do you think this continues? >> yeah, i do, melissa great to see you there are too many uncertainties right now. i think we're going to continue to -- trading range. but you mentioned -- we still don't know what the outcome of the tightening they put in place, what that means can they engineer this and now with this china news, a lot of questions out of all of them, i actually do think the fed is the most important. i think we're going to get through the debt situation, we don't know about the china situation. but the fed is going to be the most important so far what's interesting, melissa, is that the economy has been able to handle it the consumer has been resilient -- numbers yesterday were really incredible and the composite yesterday in expansion

territory. so, for now, we are looking at, like, a 2, 2.5% gdp number for the second quarter we're able to handle all the uncertainties. but that being said, underneath the surface, it is a very defensive feel you guys have been talking about technology for the last couple of weeks and how it has been really the leader and i think it is going to continue because people looking for quality, free cash flow, defensive kinds of names in this uncertain time if we can get resolution on these things, then i think we can broaden out. for the time being, when you get companies like palo alto blowing it way, why not be there. >> in terms of big cap tech, i have to ask you this, the premarket is down 47 points, we're seeing the cracks in the bi bigger tech names, what had been defensive had been the biggest gainers and maybe people are using those stocks to draw on at a time when they're derisking.

>> well, certainly i can't blame anyone for taking profits, right? i think that the underlying fundamentals remain strong and the free cash flow and market shares are going higher, especially with ai so, you've got this now ai tailwind, which is a $3 trillion total addressable market over the next several years and so, look, i don't think you want to chase any of them and i only really own meta in a big way because of the valuation is still compelling but on weakness, i think you want to be using the weakness to be adding to some of these names. >> steph, thank you. stephanie link, hightower. >> thanks, melissa. when we come back, is there more turmoil ahead for the regional banks we're going to talk about the sector, a new warning from jpmorgan's jamie dimon and possible investing scenarios, with the ceo of kbw. that's next. ron desantis is set to announce his run for 2024 president on

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sentiment. >> i think there is a greater chance of a recession than not as we look at the end of the year into early 2024 but i would say it is uncertain if there is a recession, my best guess is it will be relatively shallow. it is very hard, the tight economic conditions have the inflation we're having and not ultimately have an impact on economic growth. so some of this is a rebalancing of the imbalances from the pandemic, but we'll see. it is unclear. >> earlier this week, the latest survey from the national association of business economists showed that roughly 60% say that it is likely the us will enter a downturn in the next 12 months jpmorgan chase ceo jamie dimon warning of turmoil ahead in the banking sector more to come, he says. at the bank's investor day on monday, dimon pointed to the likelihood of higher rates and tightening credit. for more, we want to bring in the ceo of kbw, a stifel company, and, tom, thank you for being here >> good morning, becky.

>> let's talk about where things stand. it feels like we have gotten some of the worst of the banking turmoil. when you have someone like jamie dimon saying there could be more troubles ahead, that makes us sit up and pay more attention. >> whether or not we get a recession or not, i think it will feel the same way the economy is slowing, the surprising thing is that credit and the banking industry, the credit costs have essentially been zero for so long. it is inevitable that we're going to have more credit expense going forward. also, we're dealing with the surge deposits that are still leading the banking system that was happening even before we had the recent bank failures. so banks are going to have fewer deposits to lend out i think that the credit tightening story started six months ago even before these bank failures, so this is happening right in front of us right now. >> you think bankers figured this out at this point now that they have been stressed in these ways and are they changing their behavior >> i think the banking industry dealing with this situation, because remember the covid

response was so exceptional, no management team has been through this before. the size of the quantitative easening, the tightening, i think the industry by and large, notwithstanding the significance of the three big bank failures we just had, don't discount that, but i think the industry is doing a pretty good job of managing its way through this at the moment. >> there is a lot of criticism coming towards the right from -- toward the regulators for not having seen what was happening at silicon valley bank and the other banks. you just testified before congress last week and talked about what needs to be done to change the scenario. we are sitting at a situation where, look, community banks may be threatened at some point. >> so, what i talked about is that there have been two major changes that have happened since deposit insurance was last changed 13 years ago one is the speed of money is exceptionally fast and faster than anybody would have thought. when 85% of silicon valley's

deposits leave in a day and a half, that's shocking that no one saw it coming. the second is the too big to fail theme is even bigger than we thought it might have been, so i called for increasing commercial and retail transaction and operating accounts day to day operating accounts. increasing that insurance so that way depositors don't decide who their bank is going to be just by how big it is, instead of the service and the products they get the second thing i said is we need to restart healthy bank m&a. there has been a pressure against healthy bank m&a we need it because the bigger banks need more competitors and we also need the healthier banks to take care of or resolve the weaker banks before it gets to the deposit insurance fund and becomes really expensive we learned it is really expensive when that happens, le the private sector do it if they have clarity on how the banks can merge. we have two bank mergers turn

down pretty publicly by the regulators. >> the speed of the capital markets in terms of how shareholders react with the stocks is faster than before and in past banking -- i'm wondering what your thoughts are on this there is an article in the journal about pacwest being the newest meme stock, why it is having outsized moves. the difference between pacwest or bank and amc, there are many obvious ones, but the equity is part of the capital structure for a bank a huge drawdown really, you know, impacts a bank so what are your thoughts on how all this plays out and how can we put up guardrails i don't know what kind of guardrails you put up. >> i went to congress, i read president roosevelt's speeches about why we had an fdic it is because the banking industry's different than other companies. it is built on the confidence of the deposits folks can get really scared really fast about the safety of

their money and the fdic's first response after silicon valley's failure was not to give their money back to depositors they were going to get a certificate. didn't happen until sunday, they said you'll get your money back. that made people really nervous. so we need to break this feedback loop that you can go on social media, you can talk about taking a run at a bank, you can talk about telling other people to take your money out of the bank, and then get the reward that the stock price going down. that feedback loop has to be stopped. i know there are calls for banning short selling, i'm not in that camp because i think the greater solution is deposit insurance reform and that's why i -- that's why i have been advocating as aggressively as i have to protect the midsized banks especially. >> protecting the midsized banks makes sense. to allow more activity to go through seems counterproductive to that, that means fewer banks in those levels. you're an investment banker. >> that's true

but and frankly i think -- so on this topic is four banks control 40% of the deposits. left unintended, the growth will favor -- we'll have bigger banks more skewing if nothing happens. but the best thing to do is not to have four really big banks. but to have other big banks that have capabilities and scale to challenge them to give more choices to consumers i think it is building competitors that can compete with the biggest banks the other thing, though, for most of my career, when a bank got sick or in trouble, there usually was a healthier bank willing to step up and resolve that bank in the public markets before it gets to the deposit insurance fund that's not happening now -- >> because of what happened in 2008 and the banks that got burned by taking on those deals doing them really quickly and having the government come back later and saying -- >> that's what government assistance i'm saying without government assistance, because what is really -- in the last two and a half years, it takes twice as long to get a bank merger

approved than it did previous to that the regulators are still rewriting merger rules that they haven't come out with yet. the risk premium that a buyer has to put into it about how long it would take to get their merger approved going into a choppy economy with a sick bank as the target, that's a very tall bar for any bank to gin so my view is if there is more clarity on the rules, on how bank m&a can happen, you can have a healthy bank step in, resolve it with their shareholders' money, rather than meeting the deposit insurance fund's money and one thing we learned too, even a surprise to me, is how darn expensive it is when a bank fails. the hits to the fund are even bigger than i thought they might have been, which, by the way, the industry pays for, not taxpayers, but the hits are bigger it would be better to let a healthy bank take it over beforehand rather than afterwards >> thomas, thank you for coming

in. >> thank you. >> thomas michaud. should investors expect rates to stay higher for longer and how should you be adjusting your portfolio we'll look at futures at this hour looking at a lower open here as investors are looking to d.c. for guidance on debt ceiling negotiations s&p looking to lose 15 at the open nasdaq look to be down by almost 50 and the stock to watch intuit, the stock is lower by 60% right now. we'll be right back. time now for today's aflac trivia question. what roller coaster holds the record for the world's steepest drop the answer when cnbc's "squawk box" continues to this retire. ahhh! coach k, there's a goat here. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill? but i have good health insurance! gaaaaaap! did you say 'gap'? he's talking about the expenses health insurance

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>> not high. >> not the length. >> right. still to come this morning, florida governor ron desantis set to announce his presidential bid on twitter later today we're going to dig into the decision to use the site as a venue, and what it means for elon musk's push for engagement. and tomorrow is the ninth annual red nose day. the nbc family is a big supporter and we need your help. buy a red nose at walgreens for a dollar to wear tomorrow and you can watch an nbc red nosed edition of "the wall" at 8:00. since 2015, that campaign has fought childhood poverty in the united states. "squawk box" will be right back. what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management

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as markets count down to the fed's june meeting on rates, policymakers are grappling with the prospects of fighting higher inflation. t alexander wilson, deputy cio at gol goldman sachs asset management i want to ask you about the debt

ceiling. you, like many others think that something will actually happen it is what happens afterwards. what are the longer term impacts that investors should be thinking about >> our key point is we have been here 78 times before we have seen a resolution. it hasn't always been clean. there is lots of volatility. typically the trend continues from where you originally started from it is the secondary order effects that are really important. that's the confidence channel in the u.s. government and in terms of fiscal spending one of the biggest things that has driven the markets this year has been that fiscal support we have seen over the last 8 to 12 months close to $800 billion of stimulus. if that fades and we ultimately do see some sort of growth patch that goes down, what is going to drive us back out of that? and that's where we're spending our time right now. >> so you have that as a drag on top of tightening credit picture in rising rates, and so, where are you advising people to put their money? we were having a conversation about private credit

it gives you such returns compared to any other asset class basically. >> yeah, we really think that we're in the bend, not break stage of the cycle that's why we're seeing a lot of mixed data come through. in that time period, while the fed is keeping rates higher, the economy can very well stay positive and continue to grow, but just at a lower rate and the key focus for us there is, you know, there is a lot of opportunity. there is some fear in the marketplace. those are the places you want to go and start looking for -- one of those is private credit you're talking midteens, low teens returns, profile, you can do it on your terms or pick up secondaries at a discount. and we think from a diversified portfolio perspective, that makes a lot of sense. >> you're at the top of the capital stack in terms of risk people like that prospect. your clients are typically insurance companies, pension, sovereign wealth funds and retail what are you seeing about their desire right now for exposure to

public markets and public stocks and what are you advising? >> one of the things we have seen in the marketplace is that there is a lot of cash on the sidelines. people have referenced t-bills, they're trading cheap because of the debt ceiling stay invested. this is a market that deserves a neutral posture. and when you look at, you know, e equity markets, this could very well take us over year end time period, which we discussed, in terms of when we start to see growth turn down and when you look at the positives, if you take the ledger, look at the positives and the negatives in the marketplace, we see more positives. and we think there is some upside risk. this is a market where you don't want to sell the upside. but you can effectively buy cheap protection and that's what we have done to mitigate some of these volatile time periods like the debt cerealing >> in terms of cash, it makes

sense to just stay there and not go into stocks, right? that's what clients are thinking >> it is but this is the -- it depends on your time frame. are we looking at the market, but we see so much resilience and so much information content in how resilient the market has been, how resilient credit spreads have been, even throughout the entire crisis in banking. and when we look at tech, you know, which a lot of people are focused on, it has become 40% of the broader market, but there is so many reasons that it actually is trading the way it is, and it deserves to trade that way and whether it is quality, you're looking at companies with, you know, x billions of cash on hand, free cash flow generation, whether it is trading on duration, while the rates curve has been contained >> prospects for ai. >> exactly our global investment research team has been focused on over the next ten years you're looking at $7 trillion of, you

know, potential pump into that space. so in growth terms there deserves to be somewhat of a growth multiple there. >> what happens if the government decides to cut back spending even more and pulls back on the investment plans that have put to this point. how does that change the picture if at all? >> i think that that's the big question and that's why we're focused on that second order of fact clients are saying when is the recession coming and we're trying to change that narrative and the questioning. it is about how deep and wide it will be and what pulls us out. and if the government does really pull back, that's going to be an issue >> if the government pulls back, the fed continues to raise rates because they think inflation is still a problem, that changes the whole perspective? >> it somewhat does but it depends on timing. people have been looking for leverage in the system you don't have to look much further than the u.s. government at the peak in '21, there is an issue here it has to be resolved.

the brinksmanship is going to -- it is going to come to a head and we're going to have to tighten up some of the spending. >> tighten up the spending at the same time the fed is raising rates and quantitative tightening is taking place it is hard to understand what the impacts will be. >> and that's why it is so important to be in a diversified portfolio from our perspective and even though the fed is raising rates, we find the hedging, the hedging outcomes of fixed income to be really important. and so we have seen 30 basis point backup in ten-year yields in a short period of time, that's starting to look attractive to us again. >> thank you. >> thank you so much. coming up, florida governor ron desantis and elon musk set to host an event on twitter tonight where it is expected that desantis will announce he's running for president. we'll discuss that move and what it means for twitter and much more as we head to break, two retail stocks on the move kohl's, the company posted a surprise profit helped by

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sources confirming to nbc news that florida governor ron desantis will announce he is running for president. during a discussion with elon musk on twitter spaces this evening. musk hinted at that announcement at yesterday's "wall street journal" ceo council summit. joining us now for what this means for the future of the social media platform, dan cremak for axios thank you for joining us you tweeted us yesterday that you're not quite sure what this means for desantis, but this is a, quote, huge coup for musk why is it bigger for musk than desantis >> because we all knew desant

was going to announce he was running for president. it is for musk because the center of the conservative media movement is moving from fox over to twitter and ultimately this should get a lot of engagement and that's really musk's main goal here. if he could get an announcement from joe biden on twitter or one on one interview, i'm sure he would take it. what he wants is eyeballs or ears in this particular case since he's doing it via spaces the more people on twitter and paying attention to twitter, the better it is for musk. >> and i want to go back to desantis because my initial reaction was almost the opposite of yours i thought, well, he gets the association with elon musk, who has 140 million followers on twitter and he gets people caring about this whether better or worse on both sides, where as if he had announced on fox or just in a media scrum, people would say he may have expected that

doesn't this help desantis in some way, just the exposure or will it hurt in some way his exposure and his association with elon musk, david saks, and two rich silicon valley guys that aren't exactly part of the base that will have to elect him in a primary >> yeah, it remains to be seen how this plays for desantis. the big risk, two big risks, if this gets an enormous amount of traffic, we don't know if spaces can hold up. i think the biggest issue for desantis is he could get overshadowed musk is a massive personality who is liable to say who knows what during this conversation. and it is possible that desantis could be the b player in his own announcement. >> and interesting, all the coverage about this has been about musk and twitter as opposed to desantis. you're right about that. it is interesting, you know, when musk bought twitter, the bull case was that this was going to be a technology solution he was going to create the super app. he was going to use his

engineering genius to fix twitter and instead it seems to be a cable channel he's bringing in tucker carlson, he's hired linda yaccarino from nbc who comes from the tv side is there a risk that just when tesla shareholders thought that elon was going to get out of the public political debate and focus more on tesla that this form of twitter is going to bring him back in? >> i think if tesla shareholders really believe that, they're makie ing an enormous mistake. that's what tesla shareholders should take solace in. elon musk is not going to walk away from the political sphere or being part of the public conversation that's why he bought twitter in

the first place. that's the part of twitter he's always found fun. >> and spaces is an audio only format so i guess we're not going to get video and elon musk said it is going to be totally unscripted let's let her rip. how do you think they're going to choose the questions and make it unscripted and, you know what do you think the event is going to actually be like? >> i think that is -- it is hard for me to say. musk has said that it is almost impossible for me to believe that desantis' political advisers said this is going to be -- there is not going to be any structure to this at all one interesting thing about spaces is other people can participate or ask to participate. if you look at past twitter spaces musk has been involved with, high profile ones including around the acquisition, et cetera, he does bring certain people up, quote, on stage, to ask questions we don't know if he'll be doing that we don't know what david saks' role will be here. he's listed as a moderator here.

saks, for what it is worth, it is interesting in this, because a week ago it was announced he'll join the board of rumble, which -- or video platform or its growing video platform, a competitor to it we don't know. i think arguably that's why a lot of people will tune in. >> the idea that musk put out there, look, i want to do more of this, this isn't just desantis, i want to create space for more voices on twitter, do you think other people will follow desantis' lead and do events with elon on spaces or twitter? >> it depends what kind of numbers this gets. what you need to think about, on the republican side, the real comp is fox. fox, numbers are way down since tucker carlson left, it still averages 1.5, 2 million per hour in primetime can spaces get that? the other thing about spaces is it is not just about what you get live in the moment, you got replays, you got clips being played one tricky part about it,

though, without the video aspect is how television is going to replay it. are they going to put up a blank screen with desantis' face or the audio? one of the more interesting announcements was ben shapiro talking about how his podcast network, audio, but has a video piece, they're going to put those on twitter because twitter is now allowing longer form video and i would think that even though this is on spaces that kind of the future of these is going to be a combination, a return to periscope, an old twitter product that was shut town. >> you would think elon musk would think about how to get live video on twitter. >> twitter used to have it it has to be coming back. >> thanks so much. >> thank you >> an interesting brave new world that we're getting into. >> but he's right. how are we going to replay -- the audio, do you have pictures of both of them? it is just not -- >> clubhouse was an interesting and brief phenomenon but we'll see.

maybe this changes things. never say never, i guess when we come back, tiktok trying to overturn montana's decision to ban the app. and since november, more than two dozen states have banned the app on government-issued devices. we'll talk about the battle, account safety and what it could mean for creators after this break. and in the next hour, we're going to talk about tech's run, the future of ai and much more with bradley tusk. "squk x"ilbeig bk.awbo wl rhtac

tick tock ceo saying they would ban the platform in indiana. net choice's members include tiktok, meta and twitter thank you for being here today, carl this has been a huge issue you're representing the app companies on this front and kind of pushing back. what do you think is particularly wrong with montana's proposal for this? how do you plan to go after it >> thanks for having me on as an attorney, as a professor of law, this is a slam dunk case for tiktok it's a slam dunk case for the creators essentially this is a clear violation of the first amendment and a clear violation of what's

called a bill of attainer, saying that you cannot shut down a business this is not because of malfeasance or they broke the law but because the state of montana does not like them that should really scare investors, innovators and will have a real chilling effect across the industry of anyone looking to start up a business, start up an innovation with a new idea knowing a government could just come in and shut them down because they don't like them >> you're probably right montana has actually recognized the flaws with this law. they tried to make changes to it to go back and say it's not just tiktok, it's all of those other apps, including anybody who would have chinese ownership so they themselves tried to broaden it it was too late. the legislature was out of being

there for the time so they couldn't fix it now. they may very welcome back and amend it and say it's not just one company, it's anybody taking u.s. or montana citizens and transmitting that information back to china. would that change the perspective on this? >> so it still falls into a first amendment problem. similarly you get into a supremacy clause issue where only congress can really regulate international transit of data and there's also what's called the dormit common clause issue. >> it's not the same thing legally. if you can say first amendment versus any concerns about security and then you have legal experts who will give you different opinions >> well, keep in mind the argument of national security has always been the basis by which authoritarian regimes have seized power you can quickly see national security being the shutdown of

business to be weaponized against twitter or can be weaponized against a.i. or rumble or parlor or any business that the administration doesn't like and sees as potential security threat to democracy so that's the precedent that we're setting and that's the chilling effect we have on innovation as a result of this action from the state of montana. >> my guess is that's probably a bigger concern for your clients, the idea that let's say the national government does step in and say this is a security concern, they absolutely have the power to do that it it's not a slam dunk on any legal point. then what do you do? >> we heard the argument of national security concerns and ultimately it comes down to the first amendment. imagine if the government came in and decided to shut down your web sight or app because of national security concerns that's a clear violation of the first amendment. our founders recognized this

when they created the bill of rights and that's exactly what protects us. if the government decided that cnbc was a danger, which is absurd, they couldn't just come in and shut down your web site or app that's what we're seeing on capitol hill, is the government ultimately deciding for the american people what sites they can visit and what apps they can download it no it's not just an impact on tiktok it's the businesses who rely on tiktok and the ability of their voice being heard. >> free speech is a huge argument for this but are you saying the government can never say there's a national security issue or do they just need to back it up with proof? >> it's a really tough hill to climb. you saw this effort from president trump trying to take down tiktok on national security concerns the court threw it out very

quickly. it's a very steep hill to define you have to define what is a national security concern. the way that the united states operates is we hold the first amendment as sacrosanct, the right to free speech you see that as a national security threat because it's challenging your authority but that's an important thing we need to have to have a functioning democracy and republic, is the ability of anyone and everyone to challenge people in power. >> carl, thank you very much c and 3.4 million americans are expected to fly this holiday weekend. we will talk to the founder of the point sky brian kelly. "squawk box" will be right back.

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summit and this weekend is shaping up to be a test of the nation's air travel network. the final hour of "squawk box" begins right now. good morning, everybody. we are live from nasdaq square i'm becky quick with melissa lee and robert frank we're talking about the dow futures off by about 120 points, s&p futures down by 60, the nasdaq down by 50 points this is coming after you saw quite a bit more weakness in europe that came after a stronger than expected inflation data read. stocks there are down by about

2% you see weakness across european markets. this does come after a day of declines yesterday with the nasdaq the biggest loser yesterday down by 1.25%. it looks like the 10-year is yielding 62.75%. the latest on progress to raise the federal debt ceiling or perhaps we should say lack of progress in this situation, we didn't hear any significant developments coming out of the two-hour meeting coming out of democratic and republican negotiating teams yesterday. mckathy says the two sides are not close to a deal but there is some time left to avoid a default. all sides have pledged to not let the default happen janet yellen said the u.s. will run out of cash to pay its bill tomorrow so the clock is ticking. >> let's bring in mike santelli with a look of what he is

watching ahead of the opening on wall street. finally we saw the market reflect worry about the debt with a decline >> more broadly right at the top end of this range, the lack of progress is causing issues in the market three of the last four days traded above it, intra day did not close above it the big nasdaq stocks came into the week kind of overheated and stretched, needing to cool off the overall market hasn't had an answer for it and we're leak being lower with this lack of debt ceiling progress. i don't feel as though investors

feel it's a reason to be scared but it's certainly a reason to be a little frustrating and maybe wait to do any more buying at this point. at least they're trying not to be one those people panicking. look at the russell trying not to break down below these levels that we saw late last year 1800 has kind of been the ceiling for the russell 2000 it's a very small piece of overall equity market cap but it is a signal of whether in fact financial conditions are seen as tightening or improving and obviously whether the domestic economy is reaction sell rating globally but an interesting picture. if you look at all equity markets outside the u.s. have been doing okay recently, particularly japan and europe. you see china, the orange line, has really diverged to the down side, people talk about copper breaking down, maybe another covid wave

that was kind of the case with the u.s. as well markets overanticipated a strong reopening a couple of times before we got it and then you have this disengagement-type measures from both sides clearly one of the weaker markets in the world right now, melissa. >> you mentioned text being overheated coming into the week. i would agree with that ka characterization, but i think now a more like derisking, it's interesting to see the big cap defensive names finally pulling back and you wonder if that defensive nature is still going to be ascribed to the text sector with this debt ceiling uncertainty. >> sure. i would say everything at a price. three months able they were a lot cheaper, more underowned and seemed like they had some up side at this point the nasdaq had a break out to the 52. week high and slipped back

below. this market is kind of hemmed in on both side to a degree if growth starts to look really good, the yields perk up and the yields start to collapse it's because we think economic growth is going to falter it h it's hard to escape that on a market-wide basis. the nasdaq did the work and we'll see if if has anything left in the tank >> thanks, mike santoli. >> goldman sachs chief executive says he thinks there's a greater chance of recession than not by the end of this year he made the comments at the ceo summit >> i think inflation is going to be stubborn. i don't necessarily see rates easing at the end of the year based on what i see now so i think it's harder.

and it's also uncertain. there are a lot of factors that are going to have to be balanced and it just not clear. >> for more on the markets, including solomon's investor call, we want to bring in scott sterling, the chair of mass. general brigham. scott, it go's good to see you >> good to see you >> you see lots of different business's numbers you know exactly what's happening. what's your gauge of where we stand? zh >> my sense is similar to david's that we're dealing with a lot of uncertainty, we're dealing with fundamental slowdowns. we've seen an earnings recession and that's projected to continue so we're looking at a situation where we're trying to reset the base level of what earnings and revenues are in the economy. at the same time that we're looking at both the challenges and opportunities of new technologies, particularly

regenerative a.i. that's coming out that can fundamentally change the business model of companies that we liked to buy over the last few years, including the software space, but could also provide additional ability to drive productivity, which is really the necessary element if we're going to bring inflation under control. i don't think we're going to get wage inflation down to 2% or under. i think we're in a world where that's going to be stickier than people think and it's going to be in that 4 or 5% range for a while. >> your microphone slipped off >> oh my goodness. >> we're grabbing it >> neal kashkari was with us he's worried the fed loses too much credibility

if that's the case, how would that play out, if they keep raising rates to get to 2% inflation? >> so i think you can get there in a different way, which is if you believe wage inflation will be in the higher single digit, below 5% but let's say 3 to 5, not 2% you can drive 2% productivity growth to bring you down back to that 2% level of inflation people are looking at. people are looking at ways to automate lots of different things and that's been going on for quite a long time and i think the ability to use regen regenerative -- generativpe a.i.

they're things we never imagined a year ago but it's still not quite ready for primetime. i think it going to be ready for primetime in the next two years. we'll deal with the issues that cause it to be less stable and it's going to be a tool that can be used to drive significant productivity increase. the large language models, friends of mine who are much smarter than i am about these things would suggest that's going to become a commodity, that's not the area of competition. it's really the data and the texture of the knowledge that you have about a specific domain that's going to drive competition. so the ability to use this technology as a tool, the large language models as a tool will be broadly applicable. >> you mentioned implementing that for your software company i assume that's to get efficiencies on the coding sign immediately? >> yes >> how do you think of a.i.?

we always hear about it in terms of efficiencies and gains to corporations but gains come with losses somewhere else. how do you think about that push and pull does that influence companies, wooer not going to go here because we think a.i. will eventually make this company, this sector obsolete >> yes that's what we're looking at now. where is it that business models will be disrupted in a way that the long-term profitability of that business or industry is going to be impaired that's a process i think all of us in private equity and beyond are looking at we're trying to fuind companies that we think are good companies in great areas, where there's going to be tail winds we're trying to bring a set of capabilities, mostly business expertise that they can't afford at the size they're currently at and then help them grow faster

and improve their business model. fundamental to that is to be right about the fact that the growth you're suggesting is going to occur is secretular and sustainable in nature. this throws open that question in some of the areas that we had thought would have very long, sustainable growth drivers to them >> when you look at the future of private equity, i talked to a lot of big investors and they still have a large exposure to private equity but this is an industry derived from cheap debt, which is gone is the future of equity going to be wringing improvements and efficiencies out of their existing portfolio >> it's interesting. i don't think cheap debt has been a great thing for private equity >> because you have to compete >> you pay up for it if you look at the vintage analysis, the best vintages are

when debts are more expensive -- >> that's better for buying but is it better for selling your company? >> if you own a company that you think has that strong, sustainable growth to it, you'll pick the right spot to sell. >> 40% of private equity sales in recent years were to other private equity firms and that's gone, too. there's no ipos and no -- >> i think you're still seeing pe sales, in these secondary sales. we're buying companies where the prior private equity owner generally doesn't have strong operating capabilities we're looking for something that's proven itself in terms of the secular growth blend but we have a team of 22 operating experts in a wide range of areas

that we employ on our teams to our companies as a resource. >> so basically you're buying from bad private equity companies that can't do that >> not bad they picked an interesting area that had good growth now to get to the next level of growth, they need to have the help we pre described. that means we have to pick companies that can benefit from in a and still have strong secular growth we can't pick the ones where what we bring may not be as beneficial >> scott, we'd love to have yo here we'd love to continue the conversation please come back >> thank you very much >> jay clayton coming up stay tuned you're watching "squawk box" on

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you can see now the dow is only down by 87 points, s&p down by 13, nasdaq off by 34 and reuters is reporting meta has begun the last of three rounds of layoffs. this round is to target the marketing and sales. and robert asked a very smart question during the break. >> i asked them how many employees they had their portfolio company is about 70,000 people. i said are they playing people off? he said some have started but they're being really careful about any knipind of hiring or capex. if people are planning for a recession, they're planning to either cut back or freeze hiring or they're freezing hiring, i think that also bodes for the recession argument

these private equity firms have so many different kind of companies across so many industries and broadly they're certainly freezing and planning to reduce, that's not a good sign >> and steve schwarzman told me the same thing at blackstone a couple months ago. this has been something private equity has been watching >> the international security watch dog aimed at regulating crypto markets, they cover things like dealing with conflicts of interest. the group wants regulators across the world to move faster on the task of regulating crypto jay clayton is a cnbc contributor and a senior policy adviser at sullivan and cromwell thanks for making the time to come here. i think what's interesting here is what we've seen in terms of ftx and we've seen with finance, there are crypto operators and

different rules and regulators can see harm so this call for cross-border regulation makes sense but it seems even more elusive and difficult to achieve >> let's try and look at it as a little bit of a positive as we talked about before, crypto, let's call it a technology that enables new products and may enable a lot of products we know to function better, crypto has not been handled well by the industry or frankly by the regulators on a global basis and that we talk about is because it emerged globally and outside the financial system so what does this report say it says financial instruments, whether they're classified as securities or commodities, that are going to touch the retail public and are going to be part of our ecosystem says they need to be regulated. these are principles that should

apply around the globe you got to protect customer assets, segregation, conflicts and the like on trading, we have to have fair trading. we can't have spoofing, front running or anything else we have to protect money laundering, terrorist finance and all those kind of things and at the end of the day, prudential no excess, no liquidity transportation you need to apply this to digital assets. >> makes sense i want to move on to another issue that is potentially impacting the stock market we had a report earlier there was this a.i.-generated image of smoke coming out of the pentagon, fire it moved the market by 3% that day. it quickly recovered because people noticed the a.i. image wasn't that good, that it was fake this opens up the broader

question of manipulation of the markets because of achlgts i it could have been somebody spoofing an account saying the fda is going to approve this drug do you think this is on the radar of the sec >> it is, i am certain it should be let's take a step back and watch information dissemination into the marketplace. 20 years ago you roo lied on companies posting their information with the sec now right here in this studio, this is where information -- this is where it happens that is a huge transformation. we have instantaneous dissemination of information that relates a new risk. you used to have a bit of a gape keeping function when aulg information sort of flowed through the sec years ago. now it's somewhat ubiquitous we need to look at how we can

verify that. where do you go with companies for trust, it's easy it's their website when it's macro events, that's different. it's something to think about across the community >> seems like a losing battle, though >> i'm an pt mist. there's got to be a way. if technology creates a new risk, it ought to create a way to mitigate that risk. >> the technology would have to come from the platforms. how do you motivate them to do that >> hopefully self-interest and regulation it doesn't always work but what i keep asking myself when somebody hands me something, is there some sort of water mark or the like that i can tell whether that is a.i. assisted or not i don't know if it's possible but it would be incredibly handy to me. if someone hands me a draft, is that a.i. assisted or are those

your thoughts? it would be very interesting to know i don't know if it's possible but it's something i'd like. >> i want to go back to crypto for just a minute. isn't the whole point of crypto to preserve anonymity for the owners of crypto and how hard will it be if you did have rules like that in the u.s. and other countries, would crypto just disappear, a lot of people just wouldn't want to own it because the whole point it have is to stay off the grid that were designed to be anonymous and the like and hundred dollar bills people use them for their various activities are we going to shift to program so i think the distributed

nature of technology and what we've seen in stable coin and the ability to program cash so you can trace it, that's a pretty powerful technology and main, in fact, change our cash economy, especially our global cash economy. >> i wonder, this is a global rule a global governing body saying we hope the sec and these bodies take our lead because they from. doesn't every country kind of want to do their own thing >> the track record is what i would say is not bad on very significant issues, but what you you can see is securities issued in the eu and the u.k., we don't regulate that. what disclosure eu companies are required to provide is very

different from the biggerishous like like i would say manipulation in trading but it is an issue pi the ability of the u.s. regulator to get those dollars back is very limited >> thank you good to see you. >> when we come back, are the airlines and the the nation's air traffic control system ready for a suspected memorial day surge. brian kelly, better known as the point guy, will join us to tell us >> and abercrombie and fitch, sales are raging that stock is now up by 16%. actually better than 16% to 2687 don't miss the company's ceo at

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creating super intelligence, who's in control in. >> artificial intelligence is going to create a productivity boone that we've own seen a few times in the last 75 years i feel it's moving fast but moving fast in the right direction where humans are more in control >> we're doing everything we can when it comes to autonomous. you might find it comes a little faster than you think. welcome back to "squawk box. futures right now seeing some pressure, s&p looking to open 13 lower, nasdaq down by 48 points.

taking a look at the treasury markets. fairly quiet through the morning. we're seeing gains at the yield at the 2 years netflix is initiating its crackdown on passwords in the united states. the streaming service said it given alerting members about its last sharing policy notie netfli accounts are only to be use within the household or the customer can cover an extra $8 a month to cover a user outside their household. netflix says about 43% of its customers share an account outside the house. leslie picker joins us on the squawk newsline. what's happening >> reporter: good morning. citigroup announcing it will

network its outsourced business. i'm told by a source familiar that a listing destination will not be decided, though it's possible that they choose to do a list in mexico and the u.s i'm told it will be a few years out, likely around 2025. as sales tax are ongoing, the business was reportedly valued around $7 billion. it's part of the announcement to exit consumer banking in 14 markets outside the u.s. the shareholder saying the decision allows city to resume a, quote being they will continue to assess that on a quarter by quarter basis the big headline as opposed to

selling it, guys >> leslie, thank you very much >> coming up, much more on the markets and especially bug tech can venture capitalist bradley tuk. stay tuned, you're watching "squawk box" on cnbc

welcome back to "squawk box" right here on cnbc we're watching the futures this morning, and once again we're looking at the dow down triple digits, by about 107, 108. yesterday they were down by 1%, the s&p this morning indicated off by about 16, the nasdaq down by another 60 points let's focus on the tech sector, the nasdaq's 161 point slide yesterday made for its worst day in about a month hard to believe, it was 1.25%. microsoft, amazon and alphabet have all gained more than 30% and meta has roared back, more than doubling since january 1st.

joining us is bradley tusk, the ceo of tusk ventures but he also has a background in politics, too. he ran a successful 2009 reelection campaign for mayor michael bloomberg in new york city bradley, you have to be watching what's happening in washington right now, too >> you mentioned mike. he's the only politician i worked for that said what's the right outcome for society and let's try to get to that place i think the reason rational people in the markets, in tech, misunderstand government is because we still think in our heart of hearts at the end of the day they want to do the right thing. we all understand that a default with be cataclysmic. we understand biden, you need these things politically and at the last minute you'll figure it owl o all out and do the right thing

the only thing that matters to them is reelection because of the system with g gerrymandering, the only election is the primary and what's the primary, nuts to the left and nuts to the left. they just care about being true to their ideology. you have to figure each politician will make decisions based solely on the next election and that's why we keep getting it wrong >> you don't think they will make the right decision in the end? >> they may make the right decision because it works for them politically if you said to kevin mccarthy, you can sacrifice your speakership but we won't default, right, or you can continue to be speaker but all hell breaks loose, he's picking the second in a heartbeat and so

is chuck schumer and so is joe biden. other than mike bloomberg, i have never met a politician that wasn't that way. >> that's pretty grim. >> i spent 15 years working in city government, state government, i worked in the senate i've seen this from every possible angle the thing i took away -- >> they all suck >> yeah, they all suck and every political output is the art of a political input. it has to be in their interest to do it or they're not going to do it. metrics for people who watch this show is dollars and cents and what's good for people for politicians, poll numbers, fund-raising numbers, twitter and the like and it's based on their ego and nothing else >> you're saying if the stock market takes a big step down --

>> they don't care the only metric to affect them is if their voters care. it's usually not people watching this show or really closely watching the market. >> how about the people on medicare because $47 billion will be owed to medicare on june 1st. >> for sure. if they voted in primaries, they would matter if they don't -- one of the things i'm trying to do out of my foundation would be possible to vote in elections on your phones simply because i think if you could do that safely, that would be the only way to increase primary turnout we were this tiny little startup and taxi was this big muscular history. we won by mobilizing our customers through the app. a couple of million people said to elected officials, look, don't take this thing away from me we changed the inputs, that changed the outputs. that's why i'm trying to get

mobile voting happening so medicare recipients are now voting and all of a sudden their need matter. if they were voting, we'd have no debt ceiling problem. it just about inputs and outputs. >> what about business and technology leaders pushing back on these issues and ideas. i spoke to a ceo recently who told me he was going to have a big fund-raiser and had to cancel it for an elected official because nobody was coming >> or maybe the other way to go is to say in the greek senate and roman senate they were probably the same way. what if the ceos said we're going to put together a $100 million pac, so you vote with jefferies and the democrat,

you're going to get prime ripped from the right in your next election, we'll guarantee you you have 10, $20 million that's probably the way to do it but you got to do it middle line >> do tech stocks valuations at this point make accepts if you're this worried about what happens with the debt ceiling? >> no. i think like we always do, you know, overestimating a couple of factors. and whether that's the fact that we don't think interest rates will keep increasing or the promise of i.a i'm a strength tur capitalist. it's a great concept but the motion that all these companies will be a simply because a.i. now exists, we don't know that we're at the very first inning of this stuff. i think a lot of what's fueling the gains is enthusiasm that's slightly misplaced and should we have anything remotely like default, that's all going to go

away >> are we as investors not factoring in enough how much a.i. could destroy or disrupt current business models of these tech giants? >> on the uber up here, i was looking at the vc daily news letter that we all read and it was about a.i. picking startups. i was like, wait, they can disrupt us, right? >> they can really take over >> yeah, look, history has shown whenever you have these major shifts like from the horse to the car, long term a lot of jobs are created, a lot of innovation and a lot of help. but a lot happens from point a. to point b., his point i fet was pretty good. in 50 years we may say ancht i. helped create 100 million jobs

there still will be 20 million people over the next 20 years who get displaced. what are we going to do about them a.i., a lot of promise, a lot of risk but i think we see this especially because vcs tend to wildly overvalue things. we get excited about a concept and sort of dive head first in and usually that proves to not do the right choice. >> now you're worried the rest of the market it doing just that >> bradley tusk, thank you so much >> thank you for having me >> coming up, we'll ask the points guy to weigh in on what's expected to be a hectic holiday weekend. stay tuned you're watching "squawk box" on cnbc you to understand your nee, then customize a netapp cloud services solution to integrate data management for all your clouds, helping you reduce spend, improve security, control data 24/7 and automatically detect anomalies. in the cloud, at least.

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triple a estimates 3.4 million americans will fly somewhere over the holiday weekend. pete buttigieg warning this weekend will be a test of the system they blamed faa staffing shortages for recent flight delays and cancellations >> the secretary said a week ago -- it's not their fault. there's fewer air traffic controllers today than there were 30 years ago. and weep just have to fix that that's the issue we all know that's the issue we just need to get that fixed if we're going to really have an impact on this -- this -- on

delays >> in other words, it is their fault. joining us now on this busy weekend ahead and the nationwide flight traffic is brian kelly. brian, what do you think this weekend will look like are we going to see issues on monday like cancellations and delays >> i'm an optimistic i'm traveling weekend so i need to put the good vibes out there. so much is based on weather. we saw on the holiday meltdown that southwest blamed on the weather, it was really their technology i think it's going to be smooth sailing this weekend but you never know with the airlines >> we heard the airlines basically blame the faa. how much of this is also the airlines they've cut routes, they've basically ensured profitability and strong margins by filling planes but basically probably still under capacity under

frustrating a lot of travelers what do you think the airlines still need to do to improve that experience in. >> this summer the airlines had to cancel flights in and out of new york due to the shortage we've seen a number of new misses where aircraft have almost hit into each other in general our air traffic system is way outdated we need to do a multi-billion dollar investment. i was hoping that would happen in our government infrastructure plan but that really focused on roads and bridges, which is needed but the airlines need to staff up, too. we scored all the best airlines last year. complaints were up nearly 100% missed bags were up 25%. you can't blame missing bags on control. >> when you go to book a hotel

in just about any major city any time of year, any month, and you book airline tickets, especially if you're traveling business, they're still very high. do you see that changing and how do you see demand right now? >> demand is still through the roof it's crazy i booked a last-minute trip to puerto rico this weekend the flights were out of this world. google has this feature where you can put in your hometown and find the cheapest fares around the world. new york to l.a., $3,000 one-ways are common in first class. people still want to travel, the economy is not in complete meltdown yet so people are still bullish saying i'm going to get my trip in now and china is reopening. chinese tourists with tons of cash were not in europe. are they going to be in europe like the levels that we thought? no but we're seeing hotels in italy if you haven't booked now,

you're not staying. >> we talk a lot about a.i. in one area where i think a.i. should be applied is the airlines, especially when you have to change something and you have to call them and that's your whole day you're sitting on the phone with some really bad hold music for hours. what do you are getting the message? >> i think airlines and airports how silly is it that you have to wait in a tsa line for a relatively unskilled worker to eye your horrible license picture and say, yep, that's the secure way to get people through fastly biometrics and technology should be media speeding up our airports it's incredible how often you have to call an airline to change a flight. chat bots, the industry needs to increase the level of technology across the board >> when you look at the summer, what are some popular destinations that may not be obvious or where are people, particularly sort of affluent travelers, going this summer that are maybe not popular destinations of the past or maybe good deals

>> it's interesting. the caribbean used to be off-peak the caribbean is as busy as ever, because europe -- and people -- europe still will be busy, but there are a lot of strikes about to happen. the french air traffic controllers have basically said, all summer long, get ready german strike. last year, we saw the baggage meltdowns in london. 10,000 bags just -- i think so many people got burnt going to europe last summer that people are staying closer to home mexico, caribbean, and those rates are through the roof >> where are the rates not through the roof i'm asking for a friend. >> asia is open now. granted, japan is still really expensive, but you can get really good deals, thailand, indonesia, takes a long time to get there. also, south africa is a really, you know, there's now multiple nonstop flights. south africa is one of my favorite places to go, and also argentina where the u.s. dollar is really, really strong that's where you get bang for your buck. the euro has strengthened. the dollar last summer was really, really strong, so latin

america, south africa. >> minimum eight-hour flight you're talking about >> basically >> to get the good deals >> as far as europe, i'm still a big fan of portugal. it's still so much more affordable, amazing quality of life and great culture >> great food and wine brian kelly, safe travels, thanks for joining us. here's some breaking news for you folks. house speaker kevin mccarthy just speaking to reporters he says that the debt ceiling talks are still productive, although he added that he hasn't spoken to president biden since monday he did say, though, that the negotiators will get together this morning, so that's kind of the key. yesterday, they left things, it sounded like, there was no movement, no additional talks at that point, but they are restarting the talks with the negotiators today. when we come back, what to watch ahead of the opening bell on wall street "squawk box" will be back after a ick eaqubrk. futures down by 100.

little more than half an hour from the opening bell on wall street. we're seeing pressures on the future across the board with the s&p looking to open lower by just about 13 points at last check. let's get with lisa erickson,

co-head of the public markets group at u.s. bank wealth management lisa, great to have you with us. it seems like finally markets are waking up to the reality that there might be an impasse here, actually, s&p looking to be lower by about 19, at this point, lisa, and if we take a look at 2011, as sort of the playbook, default is not off the table either because default happened days after a debt ceiling agreement was reached. and so, if we are to factor this in, lisa, do you think there's a lot more downside to go? >> well, there certainly is a lot of volatility because a lot of eyes are focused on what may happen with the debt ceiling, and it is a significant event. our base case still remains that they are going to avoid some sort of impasse and be able to hopefully pull out an agreement here in time before, again, any types of default so, on the back of that, we are not recommending any positioning changes just on the back of it, but we certainly will want to continue to monitor the

situation. >> we're seeing the pressure especially put on the tech sector here. we see the nasdaq looking to open lower by about 69 points. it had been viewed as relatively defensive within the markets, lisa, in part because of the large cash balances, stability, et cetera, and i'm wondering if you think that gets, you know, rethought in terms of a thesis >> from a longer term basis, we still view the tech sector as something that's very attractive, so for clients with horizons greater than a year, we are recommending that they look at that as a potential interest sector to continue to commit to, but to your point, in the near term, there could be more volatility for the tech sector in particular, and there are a couple of reasons for that while the longer term growth prospects are very good, we certainly have seen a very strong run-up this year. nf in fact, if you look at the percentage of gains that they represent, for example, at the s&p 500, it is historically high, even given the fact that

in the last few years, we also saw some nice runs from tech, but it's even historically high relative to that this year so, certainly, you've got more of a valuation situation where it could pull back certainly, on top of where interest rates are heading, that has been a buoy to the tech sector, simply because, again, as rates have come down, those future profits have been more attractive, and again with some uncertainty about how long the fed may stay higher for longer that could also cause tech valuations to waiver too some extent >> yeah, there might also be some concern about china, lisa, and i'm wondering if you think that's a wild card right now and should be factored into valuations we're looking ahead to the first cabinet-level meeting between the commerce secretary and the united states and her counterpart in china happening in d.c. tomorrow thursday a lot at stake, given the recent micron ban >> well, certainly, to your point, there is just a general

trend worldwide to really move to more on-shoring and really being able to source supplies from local partners or nearby partners, and that, again, could affect companies like tech companies or others that have very large export markets. so, again, it's another factor, and we will just have to see how some of those trends play out. again, there are incentives on the other side, again, for governments to continue to cooperate, so again, we will just want to see how those talks continue to play out >> lisa, thank you thanks for your thoughts, lisa erickson all right, let's get a final check on the markets this morning. as we've been showing you through the morning, we are looking at the futures in the red. dow futures off by about 115 points we did get that news that the negotiations on the debt ceiling default will be continuing on trying to get a deal with that that's what kevin mccarthy just told reporters it didn't seem to help much when it comes to the futures. s&p futures still off by about 20 the nasdaq, down by 70

ten-year has been sitting at least lately if you've been watching this, it's been sitting around that same threshold of 3.684% two-year is left almost at 4.3%i want to thank melissa lee and robert frank for being here today. that does it for us today. make sure you join us tomorrow right now, it's time for "squawk on the street. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber, live at cnbc's inaugural ceo council summit in santa barbara, california take a look at futures this morning. still in debt ceiling limbo, although talks resume today. uk inflation runs a little bit hot. decent batch of some specialty retail earnings. our road map is going to begin with that d.c. debt deal no signs o