amy wu silverman, always great to have you on and get the options perspective. it's important thanks. let's take a quick final check on the markets you'll see green arrows across the board. dow is up by about 2.5 points, s&p up by 23, nasdaq up by 191 that does it for us today. make sure you join us right back here tomorrow. we'll see you later. time right now for "squawk on the street." good tuesday morning, welcome to "squawk on the street." i'm carl quintanilla, david faber, jim cramer. all eyes turning to the debt ceiling vote count yields are lower, futures up busy week. plenty of jobs data. our roadmap begins with that d.c. deal-ish in the race to avoid defaurlt, facing a key vote on capitol hill this week >> about to welcome another

company to the trillion dollar club, the ai boom fueling nvidia's stock surge it would be the first u.s. chip maker to cross that enormous market value and elon musk meets with china's foreign minister touting tesla expansion in that country. let's begin with a new market week following the tentative debt ceiling deal forged by the president and the speaker over the weekend jim, your political cynicism just won't go away. >> i think they have to have one more bit of drama. it's kind of like tarp let's do one more. maybe not more than that i think the speaker seems to have some grasp -- they really got along. david, i have to tell you, i think there's a friendship there between the speaker and the president. >> you're going there already. >> it doesn't matter there's still wings of the party that have to vote against the first time you know there's more drama coming. >> back to ronald reagan and tip

o'neill. >> i think they're not drinking beers, but i think they don't hate each other. i don't want to put a spoiler alert out there, but i think there could be one more secession kind of thing. we have like 100 people in congress saying -- the manchin pipeline how can there be so many people open oh it's 95% done. >> you've got to explain how you just got to the manchin pipeline. >> i'm saying there's something negative for everybody the republicans could argue, wait a second, there's still too much spending. >> and then the democrats argue there shouldn't be any work requirements the question is can you deliver enough enough of the middle ground >> don't you think everybody has to have one more vote where they say, listen, i stood up for you, and then cave. or is it just they can talk, i stood up for you and cave. either way, there's still people buying this one-month piece of

paper. i don't think they realize in the meantime there's this ai move where they could have made more i am cynical from the point of view there's enough people who i think really want to show, look, i stood up for it. but it ultimately passes. >> you think it does pass. >> yes >> the senate, even if we go into the weekend, we can get this done by monday? >> exactly, before any checks have to be paid. david, there's a lot of sense of -- the first one is social security, not a piece of paper it's not a note. so, therefore, maybe you can delay it for a day or two if you have to. what are you check >> just looking back at my notes, the treasury general account and where things stood that was late last week. >> what do you think >> they've got to get it done. june 5th is thought to be the real date. >> june 5th is a little closer

than many thought it would be than what they've given us the point is you have to get the deal done in the next week or so. >> i have to tell you, you're not worried about social security >> no, i'm not are you on social security yet >> no, no. but i will be very worried about medicare i think the problem is that they all know they can wait but i think that the markets figured it out that's why you can have some of these crazy things going on in the tape underneath. you know what, they're going to get it done. they have to have one more, i think -- i believe >> right well, if it does go through and we get into the weekend okay, we go back to now june odds of a hike up to 63% this morning. >> we still have this wage -- i've been telling you, david, as long as we have wage growth, that can't stop. >> you've been saying that

at the same time you've looked to consumer discretionary at certain times. particularly numbers from costco, home depot, lowe's we see the consumer not as strong, we see the consumer trading down to the in-store brands maybe that's a sign they should pause. part of the debate we have every day. >> i think they still can pause as long as unemployment has to go to -- >> then the other thing you brought up many times is housing. >> if you talk to anyone in housing, there aren't enough houses people are looking for anything, but that's because they can't build in a lot of places that's what -- listening to toll brothers, doug yearly is saying, look, we would love to build more we're only going to build for people that want a home and they can do it pretty quickly that's the other thing, david. they call it spec. we're only going to do it if you

want a home. we're not going to overbuild like they used to where they say -- wow, look at that lennar ai! imitation homes is sitting with jensen huang >> it's incredible >> if you buy a lennar home, you get an h 100 >> to your point, jim, about the resilience of at least the market last week it was bofa raised their earnings for the year. citi upped u.s. equities to neutral. today rbc goes to 213. they were at 200 they basically say the case against the u.s. versus the rest of the world has been overdone. >> what's amazing is our cyclicals aren't going up. they're reflecting a wide recession. china, 2% to 3% growth what happened? are they us and we them? i find the china growth, if it's

really that bad, it's always been that there would be a revolution if they ever went as low as two to three. that the populous would revolt they're back to t-- >> take a look at hang seng, almost off 20% from the january highs. there's headlines this morning china flirting with bear market. >> when you read the stories -- one thing that's certain, their banking system is somewhat shaky. >> is it >> expectation that the government is always there, the same way, many ways that our government is always -- >> there are supposed to be 50 million people with covid. what happened to that? we know we have numbers. we have nike numbers, we have starbucks numbers. >> we'll get lulu this week. >> lulu, did you see the clerks

tried to arrest someone? >> yes they tried to get the thieves, and they were fired. >> a new way to deal with theft. >> fire your employees >> if they try to stop theft i don't know where is the fencing there's got to be a fence. you can't just wear it all >> no. much of it is organized. >> organized crime but it doesn't seem to impact the congress every time they try to get congress to pass the retail or try to get congress to pass something, congress takes a pass. >> on what >> on the legislation to make it so that you -- that amazon can't operate as a fence, unwittingly because andrew jassy is not pro fencing. >> i don't know what laws would stop -- >> keep going after senator

durbin would you please pass legislation that makes it so it's a big-time crime if you fence. that is maybe they get it. right now i thought that article, gees, i'm old-fashioned. that's like when i was in san francisco, there was a guy trying on three gap sweaters found three that he liked and he walked out i was like -- i was buying a pair of pants. i felt like a complete moron i went to the register. >> and paid. >> yeah. >> apple pay i used apple pay how stupid is that no one else was. >> the big tech rally is going to be in focus today and ai. nvidia poised to track the $4 billion club, roughly 4,085. jensen huang is in taiwan. he's been mobbed by spectators and people wanting rock star

treatment. >> he gave a great speech. nvidia ceo unveils -- he presented use cases which i thought was important. one of them that was really important was the use case of how wpp, the advertising firm is using it i think there were a lot of people who felt wpp was a company that was disenfranchised. why do we need them? no it's the other way very important i thought both his speech and his amazing commencement address really just said, look, everything you thought about computing is over. 5% gpu, 95% cpu is now 95% gpu a lot of people are struggling, including cathie wood with how to value it. >> let's talk about how do you value nvidia the market at the open, if we stay at the current shares, it

will be over a trillion dollar market value so we will add another one to that club with the likes of microsoft, amazon and apple. how do you value it? obviously there are those who would say this has gotten out of hand in terms of a price-to-earnings or even price to revenues. >> it's hard because a lot of people worry where is he going to use it. he says it's going to be used on times received, cloud and data center, design and pro visualization, health care, high performance computing, self-driving cars and entertain. that's pretty much the shooting match. >> that's all of it. >> by the way, firm orders in every one of these >> i mean the problem, high-class problem is they can't make enough of them. >> he promised -- last year when there was a lull -- >> he put his orders in with

tsmc. >> you are so right. >> so they have the capacity to make the h 100. >> all that he needs by the end of the year. it's a perfect storm. >> haven't numbers come up since then isn't that, in part, why we're talking about a trillion dollar company because demand for these has risen even from the time he put the orders in. >> i questioned him directly self-driving cars. give me gaming entertainment they say, listen, take 2, activision blizzard, they're going to use it and it will be much more lifelike i tried, i tried to poke holes in it. i did my best. >> i hear you. >> it's more art than science is what i just read in your tweet there. >> right >> what's the art here >> the art is everybody has to use it except alphabet saying they don't have to >> tesla, by the way, designed its own chip as well tsmc and samsung make that for

them, for self-driving for example. they're buying plenty of h 100s. >> now, there's this thing -- i don't know if you read that alphabet set up this false dichotomy. they're saying we're much faster than the a 100 yeah it's the h 100 being used. the gh 100 if you really want to get up there, the israeli super computer i'm not buying into the rap that alphabet is better they're better -- better than the 386. >> apples and oranges. meantime, the spread between the ndx and the russell, jim, is beyond anything we saw in 2001 it's a record. wouldn't you be fading some of the nasdaq and getting into small caps that's part of rbc's argument this morning. >> i think the problem getting into small caps is that everything other than ai says we're going to have a recession or the government is going to

hurt it. all the health care stocks are horrendous the industrials are terrible, the retailers aren't that good i don't know, where are we supposed to go where are we supposed to go? where? tell me. >> i don't give those answers. i ask those questions. you tell me. >> well, that's the problem. you look at the health care and say, well, i don't know. you can go to the fence because they didn't eliminate the defense budget. >> no. frankly, they didn't really do much other than cap spending for potentially a couple years in, by the way, not defense. close to a trillion dollars right now. >> you can go to wayfair jpmorgan, don't call it a coming ba i'm calling it a comeback. did you see the amazon triple trough >> i missed that. >> triple trough, just now, just now it's time to get into it >> i know you love the jefferies

call. >> waste more trees every day. >> you think they're going to read -- are you really going to read page 47 of the jpmorgan report >> that's the page i put upside down to see if anybody else would look at it you got to it immediately. >> a bunch of initiations on k view which we'll get to later. all the targets are kind of in the 29 range. >> it's kind of like, hey, we're not crazy about tylenol. >> when we come back, the name said to be entering the bidding war for the rights to air nba games after an eventful weekend of pro basketball. we'll get to the forward call, salesforce, coin, hasbro, disney when we come back.

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the miami heat heading to northbound finals after defeating the celtics. the celtics fell short in their bid to become the first nba team to win the playoff series after losing the first three meantime bloomberg reports that apple, fox and netflix emerging as potential bidders for rights to nba games, the price tag said to compete $5 billion annually david, you've been watching this one. >> definitely getting some talk. about $2.7 billion combined is what they spend. again, the expectation is going go up a lot. of course, the question is will

we see more participation from these streaming platforms and is it something the nba wants given declining viewership on traditional cable and the fact that as a league you want to reach as many people as you possibly can for any number of important reasons. so that will be a key question the other is given the financial heft of this, will we see some sort of partnerships is it possible that our own parent company, nbc, for example, might want to partner with a warner and figure out a way to split games in some way, or is there a streaming strategy that can play into that, or would a disney and apple somehow consider getting together. that's what i'm hearing as a possibility. want to do more work on it obviously we're relying on bloomberg's reporting to a certain extent, just saying here are some of the new entrants. >> david has been adamant it's the way to build your franchise. anybody watching the game, other than jimmy butler, you watched

seven batman -- how many. >> a lot of batmen. >> when you listen to eddy q i don't know if we have a clip whatever, we spoke with him at the council, he wants sports that are worldwide i think what we're watching is a worldwide sport. i think people want to watch basketball. >> certainly in china it's huge. >> europe has a lot -- >> not to mention, you think about the stars in the league playing in the finals, the mvp not just this year but the last two years, so you have a global audience >> i think mls which is what apple has, they have 300,000 people watch the nfl, we have 20 million. i don't know the numbers for last night's game. >> there was drama. >> there was drama

>> truist, by the way, to latest to trim disney's target, go to 105. they were 121. >> iger better discover ai soon. >> is ai going to save disney? >> if it's going to save sound hound, they can save disney. you ever see the ones underneath the crawl -- it's all ai disney ai. disney has got this problem. it's not ai. >> going to be like the internet age where you just say ai and your stock goes up remember k tell? >> i don't know if our viewers remember that. do you remember that that's a deep one. >> everybody is struggling everybody is struggling. we know there's froth. >> there does seem to be. >> but froth lasts a long time. >> by the way, the internet was kind of real ended up being a real thing. >> who made it next thing you know, amazon,

triple trough here. >> amazon made it. cmgi, not so much. >> i hear music, you've got to read nvidia ceo tells nyu grads to run, don't walk, but be prepared to stumble. >> we'll get cramer's "mad dash," countdown to the enoping bell in eight minutes. don't go anywhere. th and stabil. and deliver solutions that meet complex needs. massmutual. partnering with financial professionals, benefits brokers, and institutions. if you have this... and you get this... you could end up with this... unexpected out-of-pocket costs. so if you're on medicare, or soon to be, consider this. an aarp medicare supplement insurance plan from unitedhealthcare. medicare alone doesn't pay for everything.

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. once again, we're on nvidia, trillion dollar market cap watch, looking for a price around 404.85, roughly where we are. that would put it in the same

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>> announcer: the opening bell is brought to you by nuveen, a leader in alternatives and responsible investing. let's get to a mad dash before we start with trading here on a tuesday. short week this week avgo >> this isn't all that big and why? because it has orders -- google has a partnership with it. oh, my, these are hard. >> is this moving up on ai also? >> broadcom said they plan to ship 3 billion in chips to google, microsoft, meta. they've got the mojo when i look at this, i say, all right, well, it's not an expensive stock. people are looking for a new way to be there. i can't fight it you've got bemo saying great things, evercore raising price

target, jpmorgan saying things look good. i don't know what to say other than the fact that i don't know why you would necessarily buy it other than the fact everybody else is buying it. i know that's fat ous logic. 21 times earnings, so there you go you like that one? >> but ai is providing fuel for a number of companies that was perhaps unexpected at the beginning of the year. >> thank you i think broadcom was considered to be -- there's some plumbing. >> the vmware deal still sits out there. >> exactly i have marvel on tonight the stock was up last week where they talked about ai and other people talking about how other businesses aren't doing that well they said, no, the other businesses are troughing and getting better >> by the way, it is blowing out that vmware spread it's going up so much. there's people that don't believe the deal will go through. that's hurting the risk arms who

put that on as a spread, vmware versus broadcom. >> i have hp on tonight. who knows? if they talk ai, do you buy hp or do you just say it's overdone nobody thinks it's overdone other than cathie wood. >> there's the opening bell. a the big board it's walmart ringing the bell remotely. at the nasdaq joseph new garden winner of the 107th indianapolis 500. our congratulations to him >> your point is interesting, jim. later in the week we'll get dell i don't know what's more interesting, any kind of ai component or some pc trough metrics. >> dell has firm orders with jensen huang and nvidia. david, if you have a firm partnership with nvidia and

you're dell, do you want to sell that snuff. >> i don't know. what's the partnership about >> to make high-performance pcs which i think hp is going to say. hp is more in klein with advanced micro but anybody who says this stuff -- i had palo alto on last week, nick cash war rah. he's been using ai for a long time, to find out who is doing the wrong things and using it internally he blew away the quarter he said ai has really helped us. every time you think it's going to be like 2,000, someone comes along and says, no, you have to understand, like wpp, we have real business. i went to nvidia and i said, is there any industry that you think this hurts their response was, just like any new technology, it creates more jobs than it eliminates

i can't say that jensen is wrong. who am i to say jensen is wrong? >> we have debate about that in terms of how many jobs will be destroyed as a result of the rises of artificial -- particularly generative artificial intelligence. >> in his incredible commencement address where he takes off the biker jacket and wears the black gown, he's talking about pursue -- whatever you pursue, he told the 10,000 graduates of the islands premier university, do it with passion and conviction, stay humble enough to learn the hard lessons. he gives three lessons where he almost failed. then he gave the takeaway that i'll use as my motto, david. remember, either you're running for food or you're running from becoming food, and oftentimes you can't tell which either way run there you go i got it eureka right here

either way run >> just run. got it >> and be prepared to stumble. >> yes, yes. >> mobil phone he went into mobil phone in 2010 and got out the next year. >> that was the definition of mankind for most of our time on this planet. either running for food or running to not become food by the way, ai may actually also destroy humanity it's a distinct possibility i think still. >> we are going to kill it if they destroy humanity. >> did you guys see that statement from altman and the others joining to try to stay safe got my attention what did they say, a short statement signed by sam altman, a handful of microsoft execs, mitigating the risk of extinction from ai should be a global priority alongside other soesal /* societal scale risks

such as nuclear war and the pandemic. >> it's learning really fast. >> maybe that's why he's telling us to run, because it's sneaking up on us. >> generative ai means it's taking in everything when i was at nvidia, now more than a year ago, they had these pseudodogs picking up jello. i remember jensen saying some of these guys are starting to get it, some are a little slower that's like my dog nvidia and my dog marley one is stupid -- he said no, it's not really like that. he has dogs that are learning, but they're mechanical dogs. i find the whole thing a little bit existential. i think david might be on to something, which is one day we'll wake up and they are smarter than us. but maybe we contain them. i don't know. >> we may not know when that day is >> right >> and there are different arguments about what will happen if and when that day comes.

>> like buffett's joke, the trick is to ask it how it would undo us and turn it off before it can do that. >> waste not want not. they're anti-waste. >> they are. >> digital factory. >> musk thinks they'll recognize we're an interesting thing in the universe and they'll want to keep us around. >> as what fodder >> i'm not sure. >> waz knee ak's theory as well. >> copilot, the great product from microsoft david, all we can do is we can write on top of their platform right now we can write faster and better if you don't know code well, it helps you. maybe it's just luring you in. >> it's going to be a little while until that -- general intelligence -- >> how is it going to kill us? is it going to seize our nuclear arsenal? >> once it has more intelligence than we do, i can come up with a

lot of different ways. you want me to sit here and regale you with them yes. it would be able to take over the nuclear codes in some fashion and make us believe a nuclear attack was being launched even though it wasn't which then would start one it can figure out a way to kill us all via pandemic or virus it can turn off the electricity. that wouldn't be good, would it? >> no. i would lose both shows. >> both squawk and mad would be gone. >> you know how to make tomatoes you can farm. >> i'll outlive everybody. i also have a cave i'm building. did you know that? i found a place. >> let's talk about the stock market >> the stock market is this -- you want to talk about abbott labs fine, fine we'll talk about abbott labs >> medtron. >> even though they had a bad quarter, abbott starts in the hole even though they had a good quarter. actually it's initiation

i found other things that people talked about here it is morgan stanley return to office settling into a hybrid future. i thought you'd like that. >> i like this call. it's their annual alpha wise survey they've done it three years. this time companies, they don't think they're at peak in-office connectivity spent which they say is positive for dell and cisco and p. >> i agree cisco would certainly tell you that what's going on at the gnarly building, david? >> i print out usually the first two or three pages, jim, and i find that's sufficient. >> the machines don't mind >> instead of printing out 37 pages. i'm sorry i missed this last exhibit 105, next three years. >> while you're out there having fun with your kids, this is what i do. >> the other good thing about that morgan stanley note is the number of firms who think they need to shrink their real estate

footprint is loer. >> which means it's not the end of the world for s.l. green maybe. >> people are never coming back to the office five days a week that's also clear. >> friday is off >> if you can get people in on mondays, good for you. >> at our conference, where you can get people off the desk -- people talk a lot at the conference and everyone pretty much admitted to me that friday is a joke and only idiots work i said i work friday kind of the lesson was, you're an idiot >> you work friday at like 5:00 in the afternoon >> don't make me feel like more of a chump than i am when i say they can't find evidence that people are as productive on friday that's what it really is it just has to do with productivity. >> we're going to get productivity numbers later in the week we'll see if any of this is beginning to show up, either good or bad. >> you said something, carl, at the beginning of the show, we're

the fastest growing country on earth. >> now that the china rebound didn't happen. >> amazing we're the fastest growing country. i think people should start recognizing that when musk goes to china, it's not because he needs them it's they need him >> by the way, netflix up nicely tesla having a very strong day so far meta is also up. you are seeing mega cap tech taking in some money. >> how about the ford alliance >> let's talk about it ford is also up over 5% this morning. you've obviously been following that company closely for quite some time. >> they made peace although i would tell you i think it's a trojan horse. >> why don't you explain to people what you're talking about. >> you know, i was going to -- >> i'm saying tell us. you can't say made their peace >> i'm keeping it from everyone. i have no desire to keep it from

everyone >> ford and tesla have a partnership. >> i say it's a trojan horse because i think farley who is going to do $6 billion in pre cash flow not 2 billion, jefferies would agree with me, i think. >> has basically said, listen, we'll use your chargers, but he's in the f-150, and he didn't believe in tesla's truck >> no. he's not a believer in the cyber truck. he think it's a niche product. >> right, if not a boutique. they use words like boutique there's a piece out today that tesla doesn't have enough models. >> you mean tony's piece >> yeah. bernstein still thinks the price cuts are not spurring demand, and the volume targets are at risk he's been underperformed forever. >> true. i've laid off being mean to him because i feel bad i am i have remorse he's a really nice person.

>> there are some upside target moves on crm wells goes to 250, microsoft, dan ives goes to 375 now, jim. >> crm brought -- salesforce has -- when i asked marc benioff, my friend -- >> yes, he is your friend. >> he says einstein had a trillion different predictions of which a wag i spoke to said how many are right ha, ha trillion knows a lot a lot of predictions how about einstein versus watson man, that was a 4.0 series >> nvidia is a trillion. tesla was once a trillion dollar market cap >> yeah, and lost it you're comparing what might happen to nvidia, are you saying that can happen? >> it can happen

>> wow, look at salesforce >> it can. $650 billion is not bad. >> jensen went to the town he was from and speaking taiwanese? >> i saw pictures of him at the night market. >> he's a regular person he's an incredibly humble regular person people don't know how to deal with the fact that his yeah knewity is such that you're taken back ba by it. he says, well, we have a lot of orders he's got a huge number of orders i question on the day that he reported, i'd like to see real evidence of orders then he gives the come pew techs speech and the orders are so real that he can't meet demand he's an exceptional man. we don't talk about him as an exceptional man. we've had these big figures over time the reason i don't think we talk about him is he's completely non-promotional. i had dinner with him at saga, a great restaurant downtown. ben stoto, my researcher

saga got a michelin star that night. we suspended all talk about nvidia and just talked about cooking and how great it was they got the star. how can he be so humble? he's just humble. >> you've talked about him pl plenty i'm just saying. >> throw me a bone here. >> the bone is that you got this one right. >> no. according to some sources i hated it the whole way up. >> that's not true. >> no. i think why am i an apostle? because it's a trillion dollars. unlike some of the other trillion-dollar companies, there may be numbers here. he raised the quarter by $4 billion. i've never seen a 4 billion increase in estimate when you drill dourngs i think

he's being conservative. a lot of companies you thought weren't going to use his products are aggressive users. i think the one thing i thought was amazing is the gaming companies don't realize what he's going to do for them. take 2 did give a two-year projection for the first time. i think take 2 could be ai and stop at 200. >> interesting takes over the weekend. thank you gamers and crypto for allowing nvidia to get to this point. >> i thought that was fabulous a lot of it, he was hated because ethereum, it wasn't his fault they found out how good his cards were it's so interesting that i first heard of it from audi, from the head of audi north america which was more than ten years ago where he just said the company to watch is nvidia i said nvidia? they make gaming cards he said, no, the electricity -- everything is run on our audis using nvidia chips that's when i first heard about

it i thought, wow, audi the stock was around 12. i didn't believe it, because i said, well, isn't that when you open up a gaming thing right? you want the oil and gas is that what you want me to do >> sure. >> how about farm machinery. >> talk a little oil and gas >> okay. there's a glut of enormous proportions of everything including oil. the fact that oil is where -- >> how did that happen >> because the russians are frantically pumping because they may be losing the war. we're going to be at 14 million. we're exporting, thank you, rusty brazil we're exporting a huge amount, importing from canada exporting a lot because it's light speed crude, we don't have enough refining capacity we're killing the price. we're killing the price. by the way, natural gas, there's a lot of coal. there's still coal --

>> yes even as we decommission here, when you talk about climate change, the chinese are building new coal plants every week. >> put up a starbucks, put up a sk coal plant >> right >> i think natural gas at this low reflects the fact that demand from europe didn't come, freeport, the natural gas is not working -- it's coming back. >> coming back online. but it took a long time. >> they don't have the big orders >> no. what's wrong with that most people look at that and go, great? >> powell is not looking at it he's the only guy that masters masters thinks it's an inverse. >> why wouldn't that lead to me saying, okay, yeah -- >> because, david, that's not the way it works >> got it. thaems not the way it works. >> one thread from that is travel names tsa screened how many passengers over the weekend

300,000 more than we did -- >> we're running out of plays on that people still want to go to the cruise, royal caribbean. >> chief rp fun officer of carnival. >> the nasdaq is up over 1%, in part driven by nvidia. >> look at alphabet. google is down >> google down. >> because people understand the a100 is not as good. >> i just find everything else, you try to get into something and you think you have a thesis, but it's not tech. it just goes down. there was a recommendation of one of my worst picks which is j&j, the talk lawsuit. it was a recommendation to buy i thought, okay, we'll get relief it could be up a dollar. no, it's down. >> i know you notice the constellation of great over at mkm.

>> they have nielsen data that shows corona light has come back to life, and that's good that's a lot because of the problems of bud light. >> the sands family continues to sell they have to sell -- they're not in the market now. this is a bud light -- >> i'm not going to say everyone -- also the summer months it tends to do well bill nuland is doing a good job. the nielsen data came out two weeks ago and was pro constellation. >> so classic action with the nasdaq up 1% but the dow negative s&p highs for the year going back to august or so as we go to break, check bonds as well. we did get relief in some of the t-bill yields this morning june 1 yielding now about 5.1 as this debt ceiling proposal

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it's been a while since we talked about regional bank lending stress a piece in the ft that the kre has two consecutive weeks of gains, first time since february they argue it's a relative bargain for? >> yeah. i still think you're going to see they have to pay more for fdic coverage and i think the losses haven't gone up but the lending. david would like that normally. >> others argue that was already in place we'll see. something to watch there's the kre with the dow down 65 and s&p 4220 don't go away. ♪

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it's time for jim and stop trading. >> lost in all the market is that crypto has been going up and there's a piece saying that coinbase is the best way to play it, and saying it's starting to regain custody assets. i've been skeptical but this is

a positive piece about coinbase and i have to to admit that they were supposed to be challenged by the s.e.c. and looks like they are okay. really amazing. >> yeah. $70 target. >> yes. >> what are you going to tackle tonight? >> i have two ai plays marvel which had a bullish a.i. conference call last week, up 40%, david, and then enrique lores will want to talk a.i. in the evolution of pc. what can i say this is what works it's what works. i think we all feel challenged in our business to say, is this going to be a spac thing and i met a lot of people last week who said, you know, please don't be a part of this and then i get to jensen huang -- >> please don't be a part of the a.i. - >> it's a change there's nothing to do with the financial creation of wall street that enriched a handful of people -- >> it's a new way to compute and it's working for even companies

that we thought were going to be wiped out like advertisers >> it's a sea change. >> i would like to be more skeptical, his all we're going to die thing - >> longer term story. >> yeah. >> longer term. >> we're all going to die, by the way. that is still the news flash. >> our great, great grandkids -- >> maybe our kids won't. singularity -- >> our kids are going to be helped by it. >> you will live on in the cloud no matter what you'll be there. >> i'll see you tonight. "mad money," 6:00 p.m. eastern time we covered a lot just now. more on nvidia's valuation surpassing a triiolln dollars for the first time back in a moment ish allergy. one prawn. very good. did i say chicken wrong? tired of people not listening to what you want? it's truffle season! ah that's okay... never enough truffles. how much are they? it's a lot. oh okay - i'm good, that - it's like a priceless piece of art. enjoy. or when they sell you what they want? yeah. the more we understand you, the better we can help you.

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. good tuesday morning welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber live as always from post nine of the new york stock exchange. take a look at stocks, s&p 500, the highs of the year up about a third of 1% continues to push higher after the rally on friday the nasdaq leads the charge, the tech specific a.i. stocks doing a lot of the market's work up

0.6% the weakness in broader stocks with the dow down again, although kind of flatish, nine points or so 30 minutes into the trading session. shares of nvidia hitting all-time highs, and its market cap topping a trillion dollars for the first time ever and the first time a u.s. chipmaker has joined that exclusive trillion dollars club more on this and the a.i. arms race ahead. tesla one of the top gainers as ceo elon musk heads to china for the first time in three years. the latest from beijing this hour. and netflix shares are pushing higher the stock up 17% this month, and its market cap once again topping disney getting some data this morning out of conference board. let's get to rick santelli hey, rick. >> yes, good morning, carl conference board, consumer confidence for the month of may, headline number expected 99.0. comes in much better, 101.3. that jumps over what now is a

revised from 101.3 to 103.7. what's notable about that, with that revision, it makes the current better than expected read at 102.3 less than the rearview mirror and the least, the smallest month over month confidence numbers since november of last year. if you look at the present situation, not a good number 148.6. that's the lowest number of the year you have to go back to december of last year to find a lower number finally, on the expectations, what may lie ahead, 71.5 71.5 that follows a revised 68.1 that moves up to 71.7 which makes 71.5 the lightest read since february as, of course, expectations have been a bit on the depressed side interest rates have been pretty much across the curve lower. debt deal hasn't been passed but there is a deal. we're in the middle of the range

on a 10-year, as high as 3.77, as low as 3.70, hover in the middle at 3.73.5 sara, back to you. >> rick, thank you rick santelli with the consumer confidence, better on the headline, worse on present situations guys, today is about digesting the deal we got from speaker mccarthy and president biden as we await what will happen in congress, basically. it's a tight margin for error, tight window, until june 5th date that treasury set, next monday all the research and commentary has to do with how this is going to affect the economy, right, the new deal there's been preliminary looks at it, the good news for markets, appears market friendly from that perspective of it could hurt the economy a lot worse. 2011 saw more austerity, for instance i'm looking at the goldman note, the spending deal looks likely to reduce spending to gdp year

over year compared with the baseline in which funding grows with inflation jpmorgan also says despite the fact that we've got a lot of hurdles and not a lot of time, if it does get signed into law, the implied spending reduction does not look like a game changer for the macro outlook. so that should be good news for the market that could have been worse in terms of cutting spending and weighing on the economy >> for example, jan is looking at 0.4 shave from the credit crunch and regional bank stress. this would be not very much of a shift in the macro forecast because of the debt ceiling itself. >> it's a flat line spending basically from 23 to 24 and a 1% increase to 25 the bigger issue, and i think, you know, we've been covering the market reaction, sure, maybe a little bit of a relief rally but the equity market didn't price in any kind of disaster happening and didn't get worried about it hard to price in relief now. i think the next steps that

market are looking at, we've talked about this before, the massive issuance of treasury bills needed for the treasury to refill its cash balance like 38, $39 billion, the lowest its been in a while. >> you've made this point and did last week. asked a couple questions about it i was starting to hear about it in the marketplace as well, that it may push out other liquidity. is it a real concern or something we're going to talk about and then that really - >> depends if it sucks out revenues from the banking system because then you really got a liquidity stock. bank of america says it could be equivalent to a 25 basis points increase in the fed funds rate you have to think in terms of how much it tightens the economy and the markets. this is a market fed off liquidity. it could be a real thing we don't know. it depends on what kind of buyers step in for all this debt that treasury is going to issue, right. but that is a real thing it's happening i think at a time where liquidity is already being

sucked in because -- sucked out because they're shrinking the balance sheet and we're expecting another rate hike in june the market has moved into more than 60% odds that we get a rate hike because the data and the fed speak just don't sound like they're justifying a pause necessarily. >> so the sucking out of liquidity as a result of massive issuance could be worth 25 basis points we're dealing with the question mark of lending from many of the regional banks and whether that is going to be curtailed because of their own balance sheet issues and still telling me we're going to get another 25 basis points >> the argument is that the data has run warm, the stress that we're getting from the banks arguably was already happening anyway, it has been for a while, and you got this package if it passes why wouldn't they hike in june >> we got good news on friday from the fed data on -- looks like loans rose again, commercial bank lending $10.4 billion in the week a high deposits rose across the banking system, $30 billion, during the

same period. yes, we're still expecting some sort of squeeze, but it's not the credit crunch that worse case scenario, at least not yet. >> the numbers are not bearing that concern out. >> they're not that's going in one direction. and the data has moved in the other direction. it's come in strong and the inflation, the pce numbers on friday went in not the way the fed wanted it to go. we still got an inflation report and a jobs report, but david, it's the fed speak we have waller on the tape, the fed governor, who has been pretty out front on this hiking cycle, coming out and saying, he doesn't expect the new data coming in to tell us that we're necessarily at a restrictive enough point. >> i know. although, i mean, look at energy wti, natural gas they don't care about that, i guess. >> because it's come down. >> a lot. >> come down a lot. >> trying to hold 70 this morning. we have to get this package past the hill and we'll turn to an expert whip, kayla tausche hey, kayla.

>> hey, carl, good morning president biden and speaker mccarthy fully in sell mode. they're trying to shore up the 218 votes needed to pass the fiscal responsibility act, it's being called, and first it will be taken up in the house each party was briefed over the weekend. the house rules committee is set to advance the bill today. two republicans have said definitively that they would vote no, leading to questions how mccarthy would respond and whether he would still move it forward. if he would, the house would vote after that and the senate would begin its proceedings after that some members in the senate have been vowing to slow walk it and that could delay passage to over the weekend, right before that monday deadline. asked about the chorus of criticism, the president said any skeptics should talk to him directly, and he said he's optimistic about the deal's prospects. >> i feel very good about it i have spoke to a number of members. i spoke to mcconnell i spoke to a whole bunch of people it feels good.

>> mitch mcconnell has vowed to get his colleagues to support anything that can pass the house. house republican leadership has pledged 150 votes with democrats expected to provide around 70 votes. members today as they study the bill could shift their views we've already seen some moderates coming out on twitter, guys, who have said you know what, i'm not going to be able to support this, but we know the white house and several cabinet mbs are working the phones behind the scenes. dozens of calls being made every single day so we will see whether that campaign can move any hearts and minds and find out a little bit more later on this week >> they're both spinning it as a win, but the white house and the republicans. who got more of what they wanted >> well, i think you have to look at the vote counts that are pledged there. house republicans believe that they can put up 150 votes. that would mean that democrats would only have to put up 70

i think it's fair to say that deal that was reached was based off of the original republican agenda yes, democrats in negotiations were able to shave some of those numbers down substantially, and certainly white house officials have put out some memos and talking points suggesting they did get some wins that there were some parts of the snap program that were protected. there is some slight change to permitting reform that will benefit more green energy policies, although the big kahuna for permitting reform did not end up being part of the bill there are small wins that democrats are trying to tout here, but by and large the package resembles a lot of what the republicans brought forward and why the president is having a hard time with his caucus specifically. >> kayla, thank you. kayla tausche. the s&p and nasdaq coming off their best day since early may and the tech rally, marches on nvidia hitting a trillion dollars in market cap for the first time ever. senior markets commentator mike santoli joins us at post nine to

break it down. beyond nvidia what is the market telling you? >> nvidia and then this very narrow channel with other stocks that are able to feed off of the a.i. enthusiasm have been doing a lot of work. the nasdaq 100 came into the week up 30% year to date the equal weighted s&p flat year to date. it shows you that's where the upside impetus has come since march, and because of that, the nasdaq 100 is, by almost any measure, getting stretched it's overbought. just in a routine way, kind of the way it was november 2021 but also last august as well it should cool off and that would mean, perhaps, that s&p would have some either kind of absorb it through the other stocks that haven't participate ord pull back at the top end what i find interesting is, a lot of this tech performance has been a massive catch up move on a three-year basis, mega cap growth stocks to the equal weighted s&p they're basically neck and neck right now, but

it's ban huge comeback by those tech stocks in the last few months so i feel like it's a less stable way for the market to rally, so the criticism of the narrowness of this rally has been somehow that it's sort of not the way you want to see bull markets act. grant that you prefer to see a broader market to me the equal weighted s&p has been registering what we're dealing with it's been dealing with all these scares, the regional bank scare, with what the fed will have to do and the fact that the economy is considered to be supposed to slow down at this point, and it hasn't quite taken hold yet. i would point out what you were talking about before in terms of the treasury issuance, we could be double counting what i mean by that is, the anticipation of the issuance has distorted, the bond market front run with the yields going up a lot, and it might be goosing the implied fed funds expectations still about june there's no way of knowing exactly how much of it is that,

how much fed speak in the next week until the blackout window might go against that, and by the way, i'm seeing commentary about the consumer confidence report just now that employment read was soft and so that might change the calculus for all of it it leaves us at the top end of the range for the s&p 500, reliant on a relatively narrow group of stocks that are really partying and feeding off of this excitement that doesn't have enough places to go. >> the a.i. excitement you mean? >> outside of nvidia. >> yeah. what about -- i mean it does bring you back 25 years ago to the internet craze or even more than that at this point. >> exactly. >> and people, obviously, for proper reasons being excited about what that would bring. that spread wide and far you don't see that happening >> that's thing. if it's a real bubble, it's not there yet. if it's just kind of this eruption of temporary enthusiasm, reprising flids for this massive buying panic by

their customers what it seems to be, it's different you're not seeing ipos - >> we haven't seen any of that. >> everybody hit the markets willingness to buy this stuff, it feels like might have gone too far in the short term but doesn't yet merit the comparison to what we have. intel did half a trillion dollar market cap in the year 2000, 23 years ago, in a much smaller market. >> cisco also was over - >> way less than half -- >> scisco half a trillion at one point. >> a trillion dollars today is less than half a trillion then. >> got it. >> always good for the historic perspective. thank you. as we head to break our road map for the hour, exactly two weeks until the next fed meeting on rates why a pause as we've been discussing may be in peril. >> don't know if you heard but nvidia topped a trillion dollars on market cap, the first time ever for that company. we have a lot of commentary out on a.i. overall and we just discussed with mike, are we in bubble territory in any -- of any kind

we'll question that. also the health of housing, home prices rising and so are mortgage rates red fin ceo will join us with his pulse on the market as we hit highs for the year settling back aou tch, 4215

welcome back to "squawk on the street." we're exactly two weeks away from the next fed meeting. of course we've been talking about whether or not the fed will raise rates by as much as 25 basis points. the stakes have been raised as a

result of the conversation recently, maybe not a pause, steve liesman has more for us. those permission keep going up, steve. >> yeah. and they're staying there for a couple reasons, david. i will go through those. the hope for a pause looks to be in peril we have several economic risks that they could have stayed the fed hands from hiking rates and look to be less likely the debt default would have stayed the hands but an agreement appears to be more likely and the deal importantly, perhaps less negative, for the economy. jpmorgan estimating that the debt ceiling deal would save about 0.2 percentage points off gdp next year, less than they estimated and much less than you can see the 0.7% subtraction from the 2011 debt deal. for another reason the banking turmoil might have stayed the fed's hand but the data shows domestic bank loans and deposits are up a bit in the past week

and deposits still down from before the silicon valley bank fail loans are liar anhigher and doet look to be a credit pullback nothing like the 08-09 chart friday's high inflation data, fed rhetoric futures trading with a 60% probability of a rate hike in june, priced through july. you can see now the big deal here, the year-end rate now just estimated by the market, 14 basis points below the fed officials' own forecast. it had been as much as 100 basis points shy okay got the jobs number this friday that will play a role in shaping expectations wall street forecasting a slower, but still strong, 188,000 jobs so that leaves only one inflation report, guys, standing in the way of the fed and another rate hike. sara >> and here we go again.

waiting on the big inflation report thank you. steve liesman. our next guest laying out what he calls shock absorbers keeping the economy from sliding into recession here. joining us is research president edgar denny. ed, the market is actually not doing terribly with the fact that we've had a rapid shift in fed expectations in the last few weeks. now thinking about a june hike, maybe a july hike. what do you makeof that? >> well, i think the market has been resilient, mostly because the economy has been resilient my thesis here is that the pandemic was a big shock to all of us. it was different none of us experienced anything like it. the last time in history we had something like it was the spanish flu in 1918. so it was a big shock, and now that the pandemic is basically over, there's still shockwaves from it, and yet there's some very substantial shock absorbers that have cushioned the economy

from falling into a recession. >> hey, ed, it was fun to read some of your stuff over the weekend you said parts of your roaring '20s thesis remain intact, although i remember a few weeks ago where you did say another hike would make you pretty nervous has that gone away >> no, it hasn't gone away i have to be realistic about the opportunities and risks in this market i'm not going to take one position here and tell you that nothing can go wrong i mean i have to -- since i am an optimist and bull in this environment i have to be aware of what could go wrong i think the fed has got to be pretty close to done i think that banking crisis demonstrates that we are in restrictive territory, jerome powell basically acknowledged that a few days ago that we are in restrictive territory, and what they really wanted to do is get it up to restrictive and keep it there. they didn't want to keep raising

interest rates until something seriously breaks and be forced to lower interest rates. i think they're where they want to be and i think they're going to keep it here. >> when you talk about shock absorbers, are you talking about fiscal policy, the enormous stimulus we've had, the legislation around infrastructure and that sort of thing? >> right absolutely. >> what i hear is that that definitely works against the recession idea, but the excess savings wear out by the end of the year. >> well, there's still a tremendous amount of liquidity in the system, some of it is visible, still about half a trillion dollars above the prepandemic trend line there's excess saving. it's very likely that that excess will end by the end of the year, as you point out but meanwhile, the labor market continues to generate jobs meanwhile, we're seeing the wages are actually starting to increase faster than prices. and then another important shock absorbers, the baby boomers, i'm

one of that group, so i know what we're doing, and i'm still working for a living but a lot of my friends are retiring and getting pension benefits and 401(k) payouts and social security and they got a lot of time to spend money on early bird specials at the diner and they're traveling a lot. i know that from what my friends are doing. >> not to mention a lot of home equity one thing that you did mention was that rent inflation is moderating pretty fast and you think that's going to continue through the course of the year >> absolutely. we have as you know, we've got these monthly coincident indicators of rent showing what current leases are doing, and that inflation rate is coming down substantially and that is a good leading indicator for the rent measures in the cpi and pced i think that's coming down and durable goods inflation is going to be zero for the foreseeable future, so i think we need to see some moderation in other services and i think we will. >> so are you a buyer of

cyclical stocks? they haven't acted well, even though we haven't had the recession yet. >> well, you know, my roaring 2020 thesis certainly has come back strongly with this a.i. development. and i think we're just in the early phases of integrating artificial intelligence with robotics and automation. it really adds up to an increase in the productivity of the brain. previous productivity booms we increased the productivity of horsepower, and i think this is a radically differently productivity boom that would suggest to me all companies and tech companies, if you're not using technology to increase your productivity you're left behind. >> good to get your views. thank you. still ahead this morning, tesla is headed higher as elon musk returns to china for the

first time in three years. we'll get the latest from the ground over there as the stock above the 200 day for the first n'gowa steermb dot ay.

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elon musk arriving in china this month, his first trip to that country in three years. over to eunice and get more on this trip. she joins us from beijing. eunice >> reporter: thanks so much, david. elon musk's private plane was spotted here in beijing today. he met with the foreign minister and the expectation is that he's going to meet with the chinese premier and then head to shanghai where he would oversee the factory there for the company. upon his arrival, musk had a very positive things about china and tesla's relationship according to the foreign ministry which published his comments, he said that china's development achievements were natural, that he, like beijing, opposes decoupling and breaking chains, and that he's willing to expand in china and share china's opportunities. now his remarks were met with equal enthusiasm from china's

government about tesla they said china shows or tesla shows that china's commitment to international business climate is very strong and then the minister used tesla as an analogy on u.s.-china relations tesla is needed to avoid a dangerous driving and also that they should step on the gas, the u.s. and china, to promote mutually beneficial cooperation. musk isn't the only american ceo who happens to be in china this week jpmorgan's jamie dimon is also in shanghai already for an event there that's going to gather about 2600 bankers as well as clients over the next two days in fact, just moments ago, shanghai's government posted on wechat that jpmorgan dimon met with the communist party chief

there and discussed jpmorgan's rate process in the city and also a way to increase its investment there in the development of shanghai as a financial center guys >> yeah. eunice, it's david tim cook was there not that long ago there as well. specific to musk it's not just the shanghai factory, he has a battery factory they're building as well, i believe, and there are some who say he made certain commitments to the chinese government in terms of investing over time. do we know anything about that >> nothing very specific like you, i've heard a lot of rumors or reports about what he might be doing, that there's a possibility that he would be overseeing and checking a refreshed model 3 for this market the market has -- tesla as a leader but there's a huge price war going on and tesla doesn't have a new product that's one thing people have been talking about you mentioned tim cook i think what's interesting is that when tim cook came and when

a lot of other american ceos came here, they were very much under the radar or when they did speak publicly, they tried to not really take any sides or sound overtly pro beijing. elon musk taking a different task obviously, much more pro-beijing than a lot of the others, and one would wonder then what that could potentially peen for him back in d.c., since from the conversations i've been having here with executives, especially american ones, they're worried about the impressions they could leave back home by being so open to beijing. >> jamie dimon hosting a banking conference there, not something we hear about that often it's such a tricky dance is it, eunice, that the attitude of the chinese government, are they welcoming of these american ceos is the feeling as long as you're not in a strategic industry like semiconductors, you're good?

>> well, i think they say that they are open and that they are committed to a very welcoming environment for international companies. i think you hit the nail on the head when you said that if it's an industry, that china wants to promote, and they think that foreign help is going to get china there, to where they want to go, then you're very welcome, but, of course, the backdrop of all of this is that there's been a lot of uncertainty here within the international business community because of crackedowns on various sectors more particularly in the consulting sector. there's a big question mark because there's an anti-espionage regulation coming into place in july and a lot of questions about the kind of vague wording about what is considered a spy because it looks like right now really any

type of information gathering is being scrutinized. >> thank you eunice yoon in beijing tonight. >> speaking of a.i., the race pushing shares of nvidia to all-time highs, as the chipmaker hits a trillion dollars in market cap our next guest says a.i. is in a bubble tech investor roger mcnamee joins us to explain why. s&p and nasdaq remain positive back in two minutes. f it may qualify for a payroll tax refund of up to $26,000 per employee, even if it received ppp, and all it takes is eight minutes to get started. then we'll work with you to fill out your forms and submit the application; that easy. and if your business doesn't get paid, we don't get paid. getrefunds.com has helped businesses like yours claim over $2 billion but it's only available for a limited time. go to getrefunds.com, powered by innovation refunds. electric dream days are here. come in now and experience the intense thrills and incredible offers on any of five mercedes-benz electric vehicles.

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welcome back to "squawk on the street." i'm bertha coombs with your news update at this hour. moscow hit by drones this morning in what appeared to be the first attack on residential areas of the russian capital since the invasion of ukraine. the russian defense ministry blamed ukraine for what it called a terrorist attack, but

ukrainian officials said the country had nothing directly to do with the drone strikes. china declined a request from the united states for a meeting between the country's defense chiefs the pentagon suggested the meeting take place during a security forum in singapore in june washington has been trying to restore high-level communications with beijing as both sides show a willingness to ease tensions stoked by clashes over taiwan, a chinese spy balloon, and russia's war with ukraine. meantime china launched a new crew into space today with its first ever pavilion astronaut on board the spacecraft is headed to china's space station to relieve a crew which has been living there since november china has been ramping up efforts in space exploration lately and aims to send a crude mission to the moon by 2030. it gives a whole different meaning to the moon. >> everybody wants to do it. >> right. >> thanks, bertha coombs

as you know nvidia hit the trillion dollar market cap this morning for the first time ever. the a.i. boom fueling more than $4 trillion in gains for tech stocks this year according to refinitiv data our next guest compares it to crypto and the metaverse saying companies are more concerned about building market value before they build the business for a.i. joining us this morning, early facebook and google investor rog roger mcnamee. i don't think you're comparing the a.i. structural change to crypto or the metaverse or are you? >> carl, the big thing that's comparable is that the incentives of the system are not aligned with the incentives of society. so if you wanted to do a.i. properly, you would do it the way the people are doing in drug discovery, which is you have a highly curated training set and you put a great deal of effort in making sure whatever outputs come out are always going to be

accurate today's things that they're calling a.i., particularly the generative a.i. like with openai and chatgpt, these are literally just b.s. generators they have no verified content in them and the results are incredibly unreliable. the notion that we're going to apply this to things like search, it's just -- it's going to result in just one bad outcome after another. >> what you're saying reminds me of what the bofa desk said last week that is that the nvidia quarter and the guidance and the actual dollars being marked as a result of all of this, made them believe that market is going to sniff out any kind of phony association with a.i that you can put it next to your name, but it's not going to -- the market is not going to reward you necessarily the way it has nvidia. you disagree >> well, the key thing with nvidia every time you make a large language model you spend a

half a billion dollars on nvidia chips. that's real money. the trick is the guys at openai are trying to create the illusion what they're doing is inevitable and yet there is no obvious business model, no way to monetize this other than with surveillance capitalism and we know from social media how much harm that costs. so what you're looking at here is a battle between the openai guys trying to create the inevitability and the marketplace saying wait a minute interest rates are 5%. half a billion dollars in parts just to do each training set that you do. plus the labor, plus if you do this properly, whatever the costs rf curating the data, that's too high in a 5% interest rate environment when you have businesses with no obvious business model. >> but isn't the business model, isn't it going to change everything i know there's dangers and worries about a.i. but that it's going to make everything more productive and efficient and

lead to all this technological innovation in the way that the internet did, ultimately, improving the way we do everything >> well, that's what they want you to believe, but there's no evidence that today's technology can do that. i mean, the search engine results you need to do fact checking on a search engine. that defeats the purpose of a search engine. and, you know, you see these stories, there was a story last week about the - >> you have to do that with google too. >> i'm not disputing that, and i'm not saying that is progress, right. when you have a thing with google, google gives you a long list of potential sources. this is going to give you one answer that sounds authoritative and yet has what they like to call hallucinations, basically just nonsense, made up things, and the point here is they could do really great work a.i. has enormous potential. the trick here is you need to

change the incentives. you need everything to operate where the executives who are leading these projects have an incentive to protect the people who use it, to ensure that content produces accurate results, and neither of those things exist today until it does, until you see those things driving the industry, the products that they make are going to suck. >> you keep talking about use cases and come back to search and inaccuracy meta, another name that i know you love, but they're using it all the time writing code replacing jobs with a.i. i'm having a hard time following you on this argument about search, and yet from what i hear from so many different enterprises right now, they are incorporating generative a.i. into their daily tasks and slowly but surely replacing jobs with it. >> so if you think about this for just a moment, so relative to programming, i think the

argument that you can enhance the work of programmers with a.i. is indisputably true. that is one of the places where this thing does work to me, the core question that we have to ask as a society of all technology businesses is, in a world where you have real problems like climate change, like health care, like education, is the best stuff that you can do with a product like a.i., the kind of stuff that openai is demonstrating i agree with you, there are corporations throughout that have absolutely bought into this journalists have completely bought into this my only point here is before investors completely buy into it, we should just ask the question of, how are they going to get paid? how are you going to get a return on what is effectively half a billion dollars each time you do a training set in a 5% interest rate environment. >> the costs enormous to have the large language models, which

is whiy it may only be a handful of players who do it given they have the resources to do it. you come back to responsibility. are you one of those concerned overall, though, that growth of a.i. will exceed our ability to control it >> well, david, i'm worried about what a.i. does today look at the things that preceded large language models, predicative policing and use of a.i. for resume review, and mortgage -- in those cases the lack of care and incentive alignment resulted in things filled with bias and until we change the incentives of the industry real world is the most likely outcome we're going to get i look at it and go it doesn't have to be that way. it wouldn't slow it down that much and wouldn't reduce the opportunity that much to require

that people exercise due care in the creation of large language models and that's all i'm suggesting in my mind that is the most important thing to do now. right now, if you will, the mania going on here -- i think it is a mania -- because journalism, politicians and cooperations have all embraced this stuff without thinking through the lessons we've already learned from recent technologies that basically have the same words. >> yeah. we thought we had our hands full with moderating online content this is a bigger issue to deal with we'll talk about it in the days to come. roger mcnamee, thanks. >> my pleasure. >> meantime mortgage rates off their biggest weekly gain since february more on what invtoesrs need to know after the break.

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story or something to be afraid of when i think the fed is figuring out what to do. this is 15 years of under building in this country and a huge supply-demand imbalance. >> that was the toll brothers ceo underscoring of how 15 years of under building in the u.s. created a massive supply and demand problem and new case-shiller data showing home prices up in march driven by tight supply as mortgage rates continue to push higher and the average rate on the 30-year fixed jumped 7.14% that was as of friday. more on the health of the housing market when we turn to glen helman for that always good to have you. inventory lack of inventory, the number one issue right now in housing? >> it's number one, number two, and number three, so not only do we not have enough new construction because of political gridlock and financing challenges, but we don't have anyone putting their home on the

market because they have a 30-year fixed rate below 3%. so nobody wants to sell a home right now and there's still plenty of people who want to move. >> so what changes that? what will be the change agent here, so to speak? >> well, i think we're going to be on hold until rates come down 7% rates aren't that bad historically, but it's been such a steep rate increase, that many people have very low mortgage rates and very long to go on those mortgages, so they're going to hold out until rates come down a little bit most people couldn't buy the house that they bought two or three years ago, so it's unthinkable for them to move pup we've seen a slight uptick over the weekend in listing demand. some people are coming out for the summer, but it's well below where we would expect to see at this point in the season. >> so with all these forces, what's happening with prices they're clearly not coming down as fast as the fed wanted them

to >> yes we've been pessimistic about sales vol i am -- volume, around 4.2 million units when you normally see 5 million we're sticky on price. prices are going to stay fairly high and real affordability crisis for the millennial millennial generation. many people want to move but they can't do it because the housing prices are not going to come down in this housing price correction it's the weirdest price correction i've seen >> is rent or prices coming down faster >> neither is coming down but rents are coming down faster than prices. >> across the country? >> mostly, yes. >> what about the migration, glenn, has that gone the other way as we saw such big changes in where people located after covid. >> not really. if anything, the affordability pressure is still driving people into the center of the country, into the sun belt, into the american south so, that's where we see the

strongest demand that's where we're still seeing bidding wars it's crazy, people are talking on the news about a housing crisis but at the same time a buyer is facing five or six bids, especially in places like texas and florida. i don't think that's going to stop any time soon the one exception in texas is austin is pretty flat. >> well, also boise, a couple of those places that were particularly -- >> yeah. >> they benefitted from that move do seem to be coming down year over year, right? >> right well, these little boom towns that suddenly had a million californians coming in trying to buy up the whole city, those are the ones that have gone up and down like crazy. even then, people have been rate sensitive in boise if rates come down just a tick, all of a sudden we have a bunch of buyers in boise out of the woodwork, then they'll go back up the tick and it will be a quiet weekend. even those markets are rate

sensitive right now. buyers are looking to get in, but they just need a break on rate, and maybe the debt ceiling deal will do it. >> this is the least happy i've heard you in a while, glenn. >> oh, no. i just had bronchitis. i just had bronchitis. >> that explains it. i thought it was the market getting you down how do you grow your business in this kind of environment we've all seen the stock collapse from the 2021 levels. >> yeah. >> how are you pivoting? >> well, we're pretty proud of the fact we've come back from 3 bucks a share up to 9 or 10. you have it on the chart thank you. we paid down our debts - >> it was $100 in '21 -- >> from major rivals, we have a high other share of demand than ever before. we just have to execute against it i'm bullish on redfin in the second half. i promised investors we would break even this year, and if we can do so in a down market, we'll make so much money, and good money. >> there's the enthusiasm

we've -- >> oh, yeah. sorry. >> sorry you're not feeling well, glenn, but appreciate you taking the time. get better soon. thank you. >> great to see you guys, bye. coming up, we'll speak with national economic council deputy director bharat ramamurti about the debt deal. should we see both sides have the votes? we need to find that out to finalize the agreement before june 5th 'rat's the new treasury x date wee back in a moment dow down 100 points. s&p still positive was hiring local talent. if i knew about upwork. i would have hired actually talented people from all over the world. instead of talentless people from all over my house. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find

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holmes was convicted of wire fraud and conspiracy she appealed that conviction and a judge ruled an appeal is unlikely to succeed and ordered her to prison by 2:00 p.m. today. she is expected to surrender to a minimum security prison in bryan, texas, where we have live cameras. we'll be looking for something this afternoon. carl, i wanted to get to something we've been following

closely, microsoft's attempts to buy activision there's a hearing going on in the uk microsoft is appealing that ruling from the cma that said, nope, no go. we think you'll have too much dominance in the cloud area. the hearing is going well for microsoft, the judge moving the trial along to trial quicker than anticipated and saying certain things in terms of the cma and his expectations there so, you can see activision is responding positively to that. we termed it mostly dead, but you never know kind of like the princess bride. that's it for this part of "squawk on the street. we've got another hour coming your way right after this.

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good tuesday morning i'm carl quintanilla with sara ei eisen. setting the agenda, bharat ramamurti with a debt limit reached in agreement, will the house and senate pass it john chambers is with us he led the downgrade of u.s. debt back in 2011. could we see another