The 10year treasury is yielyieldin 4. 19 . I believe these are sitting at high levels for yields for the year i had a computer problem before we started. Of course. Thats why i was asking you i was deferring. Lets look. It is clear it is high yields for the year if you look at that year to date that yield up 8 all of this is happening as we got stronger than anticipated adp numbers this week and the downgrade from fitch can i point out, becky, look at when this is higher than the last time which is back in march when we had the problem with the regional banks oh, thats very interesting too many alarm bells. We are back to the pressure on the banks. Now, they had a lot of time to get their act together they had the fed program to take their tired, poor, hungry and underfunded bonds to the fed and get 100 financing off that. It is an area where there was pressure on the bacnks. We have to watch the regional banks. I havent looked in a day or so. They were doing quite well and i dont know if this is all created to see if the regional banks are quite the player they are coming up right now unchanged this morning xre is what we want to look at there. Its so good in the back i really enjoy testing them. Pushing buttons all over the place. It is jobs friday theres a lot we will watch through the course of the show all kinds of stuff circulating around i dont know if you noticed this this, but in the lead up, the data is telling me this. This is really good in the upside or downside surprise. I didnt do it this week. Why i couldnt get the story. I dont know what it was it was all over the place. I think we are just learning in the postpandemic period to deal in a different way to gauge and monitor the economy. When you get into the month of july with tremendous seasonal adjustments, im not sure the data is handling it all that well we will have to watch it over time and get a feel for how does it deal with the economy will add back 1 million jobs because of the layoffs in the educational sector there is another really weird factor going on which im picking up in the commentary out there which is the heatwave. Over the course of the 20 years you have known me, i have reported on the job market with hurricanes and snowstorms. Never a heatwave what does it do the idea that people cant work or arent working or outdoor jobs that would otherwise be done and cant be done there wasnt hiring. It is hard to know how wide spread this is i know the heatwave was a big chunk of the southwest and midwest and later in the month it is something which is hard to know we worked really hard to gauge the impact im using High Frequency and local data to understand when that storm that stayed over houston for three days we are able to look at credit card data by zip codes the fed is doing this. The fed the fed is using this the fed is using credit card High Frequency data. It wants to know if the falloff in retail sales broader or related to the storm how far outd does it generator last the thing i come on and say there is a hurricane, which is terrible, but we will see decline in spending now and see a bounce back on the other side of the home depot and lowes with the rebuilding. It evens out. I dont know if you get the same with the heatwave what do the forecasters say . 200 am i supposed to read that it is jobs friday. Forecasters looking for 200,000 nonfarm payroll jobs. The Unemployment Rate is expected to hold steady at 3. 6 . Folks, if you get confused, watch the Unemployment Rate. All of the other data around and the Unemployment Rate is what you need to know hourly wages is important. Participation rate. All of that is important with all of the stuff flying around and if you want to know what is happening in the jobs market, paeople say focus on that. And blackstones Steve Schwarzman is weighing in on the fitch downgrade. He shared his thoughts in the squawk box exclusive nobody expected it. Thats the first secondly, the numbers justify it regre regretably we had an explosion of debt since the financial crisis and we dont have a lot of discipline Going Forward were running huge deficits now. On the numbers, you can understand why they did it on the other hand, as jamie said because jamie is always opini opinionated. The u. S. Is the u. S. We are the reserve currency. We do defend a large part of the world. Including people who have aaa. Whether theres a crisis in the world, they buy our securities that doesnt last forever if you didnt keep some discipline. Again, that is adding to the comments we heard this week from a lot of folks we will show you the full interview at 7 30 a. M. Eastern time in the meantime, what we heard from jamie dimon, which is what steve was referencing there is the idea it doesnt change the opinion and what they think of u. S. Treasuries. Warren buffett says he buys 10 billion in shortterm tbills every week yesterday, we told you about bill ackmans call on shorting 30year theres reasury bonds. He does use that strategy from Warren Buffett yesterday afternoon, elon musk signed on to the strategy. He tweeted, shortterm tbills are a nobrainer this is ackman saying it doesnt matter if you buy shortterm if you want to say you are confident, longterm treasury. I have a lot of respect for steve. I dont think the numbers justify the downgrade. If you think of the cr creditworthiness of the United States and how much wealth relative to debt very high. We have the ability to levy taxes to pay for it if we need i believe the last debt ceiling debate showed the willingness of the body politics to step up and pay the debt the politics are messy i think maybe there is justification to the downgrade, it comes from that lets throw out a contrarian idea can i add on to that . I talked to buffett last night about these things he echoed what you said on the levels of the responsibility of fitch to tell you whether your debt is going to be paid back or not. Not to the tell you whether, you know, if you should get more on this not like an Equity Analyst saying this is a better purchase to put money elsewhere the responsibility of fitch is to say are you going to get paid back if you look at it, yes, the United States will payback because they only have debt issued in u. S. Dollars they can always print more there is the ability and willingness to pay back if you listen to schwarzmans point, we are growing to a level by 2029, the cbo is saying you at a higher level than world war t ii 60 of gdp down from 2007 to now 114. I do see your point. Are you going to get paid back historically, tyrants default on their debt. Democracies do not default on their debt because the people voting are the people who hold the debt. You default on your debt if you issued debts in a foreign currency that you dont control. If you are argentina and issuing debt in dollars instead of pesos, you will have a problem you pointed out japan seems to run its economy with 200 of gdp . Ill tell you during the time the british pound with the reserve currency in the 18th century and 17th century, britains debttogdp was 100 i dont know if that is good the idea of the reserve currency it doesnt mean we should not be more responsible. Manchin wants that call we have to go the more interesting question is whether these guys are wrong you look at the 10year at 4. 17 . Do you or do you not believe the fed can get inflation down to 2 if that is true and ackman says he doesnt. If the fed hits 2 and you give 2. 17 real on your money, thats not a bad buy it is an interesting question. The reason packman made the bet is he doesnt believe they will get it down it does make for a very interesting conversation good conversation. When we come back, we dig into the tech movers amazon shares are up apple shares are down. We will dig into the reports straight ahead this is squawk box and this is cnbc announcer this cnbc program is sponsored by Truist Securities experience, expertise, execution. Pretzels. Watch movies. Watch more movies. Get airline miles. Get onekeycash. Book inapp to earn onekeycash on top of your airline miles. We earn your trust. Maintain our financial strength and stability. And deliver solutions that meet complex needs. Massmutual. Partnering with financial professionals, benefits brokers, and institutions. Ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt know that if she owns a Life Insurance policy of 100,000 or more she can sell all or part of it to coventry for cash. Even a term policy. Even a term policy . Even a term policy find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. At pnc bank, you can find us in big cities and small towns across the us, where our focus is to always support the people who live and work there. Because you call these communities home, and we do too. Pnc bank. Sleepovers just arent what they used to be. A house full of screens . Basically no hiccups . You guys have no idea how good youve got it. How old are you . Like, 80 . Back in my day, it was scary stories and flashlights. We dont get scared. Oh, really . Mom can see your search history. Thats what i thought. Introducing the next generation 10g network. Only from xfinity. We moved out of the city so our little sophie could appreciate nature. But then he got us tmobile home internet. I was just trying to improve our signal, so some of the trees had to go. I mightve taken it a step too far. chainsaw revs tree crashes chainsaw continues daughter screams lets pretend for a second that you didnt let down your entire family. What would that reality look like . Well i guess i wouldve gotten us xfinity. And wed have a better view. Do you need mulch . What, we have a ton of mulch. Welcome back apple shares are under pressure. They are off the worst levels from last night. Down 1. 8 rights now the company beat the expectations the Services Unit grew 81 . Overall sales were down 1 apples cfo said the Company Expects decline of sales in the Current Quarter. Joining us is the bank of America Global Research of i. T services is looking great. The big question has to be what happens with hardware . Good morning, becky thanks for having me here. Absolutely we have seen a transition in services which declined for three or four quarters in a row starting to reaccelerated back products are weak. Products are weak for a macroeconomics reasons we heard from the ceo yesterday that the u. S. Smartphone market is remaining weak. We see china struggle a lot. We see the overhang from the excess shipments we saw from ipads and macduri during the pandemic it will take time to revert back to growth. Although, for next quarter, the iphones are expected to accelerate a little bit. We take that as a point or two of growth. Ipads and mac will still be down it will take time for us to work ourselves out of the soft spot in the demand particularly on the hardware side. You have a neutral rating on the stock. The price target is 210 which is above where it is now at 187 the way we think about it is the price target when we think about what determines that, dit is the pace of estimate revision what we have seen so far has been an interesting year for apple. From the start of the year or a year ago, people were forecasting 7 of earnings for fiscal 2024. That has come down to 6. 50. In the meantime, the stock has moved from a 150 level to 190 or 195. There has been the disconnect which is driven by multiple expansion. That is happening for a number of reasons including strong cash flows they demon demonstrated knowing the fact that the growth is not as volatile as a lot of other Companies Even in the face of the downturn. This is unprecedented for the market for many years. When you look at china, you said there was weakness there, but it looked like chinese consumers were willing to pay more for their phones. Thats a different scenario. You expect that to continue . Becky, china is very interesting in the Smartphone Market there is low loyalty and high churn. That comes because the thing that keeps you with apple, at least in the u. S. , and my kids with personal experience you use imessage and photos. You want to be in. When you think about that as the lockin factor, it is not in china. Everyone is on wechat. There is the tendency to switch phones on a regular basis. However, what we have seen lately is very good sales with the apple watch in china and no other competing product out there. The lockin scenario is coming from the ecosystem in china which means you are getting a little more of that tendency to stick with apple once you are apple. That is something that is new in china. I have a basic question is growth or domestic Smartphone Market shrinking is apple losing market share no, no. Steve, not atall app apple is a strong share. It is on the android side of the world, it is just shrinking for many quarters. It is not losing outs with the losing out with the folding phone . No, not at all. Apple is doing a good job with the spread between a 14 and 14 pro max is shrinking in terms of what you papy per month. Until you upgrade next thing, is apple tv registering at all is it a big loser . Where does that stand . Any potential for the company . If you think of overall s services, 80 billion of services, you are talking about less than 1 billion for apple tv it is moving in the right direction. They have more content now than before streaming is just under pressure right now. Im watching something on apple tv i wish i had a business under 1 billion. It didnt marry wamasi, thank you coming up, the other big tech earnings story of the morning. Amazon shares jumping after the blowout yquarter. We will dig deal into the numbers. We are counting down to the jobs report coming up at 8 30 a. M. You do not want to miss. fan 1 there ya go thats what im talkin about josh allen is this your plan to watch the game today . hero fan uh, yea. I have to watch my neighbors nfl sunday ticket. josh allen its not your best plan. But you know what is . Myplan from verizon. Switch now and theyll give you nfl sunday ticket from youtubetv, on them. hero fan this plan is amazing josh allen another amazing plan, backing away from here very slowly. fan 1 that was josh allen. fan 2 mmhm. vo for a limited time get nfl sunday ticket from youtubetv on us. A 449 value. Plus, get a free Samsung Galaxy s23. Only on verizon. Welcome back amazon with the biggest earnings beat in years. Joining us is brad ellison at rbc. Good morning, brad what went right . Good morning. Kind of everything, huh . It turns out aws in q2 is the trough that was the number one issue people cared about which was the Cloud Business and turning around to faster growth. Second is they continued to show upside on the retail margin which is what everybody was waiting for longer term. Third, you know, i really thought the Ceo Andy Jassy laid down the hammer of a. I. And generative a. I. Strategy people viewed amazon as a laggard after chatgpt and open a. I. I thought amazons ceo put on the put out a stronger case and why they are well positioned last night. I want to take this piece by piece. Lets talk about the consumer facing business. Amazon. Com where you order all that stuff how is that part of the business doing . Yeah. Generally speaking, it is doing great. The thirdparty marketplace Beat Estimates last night i think in line with the other Consumer Reports through the earnings season, the consumer is proving resilient. In amazons case, they talked a lot about putting more essentials and staple goods where people are tight ening th budget in cases and wanting faster delivery. They are doing well there. They worked on the cost structure and tightened the fulfillment and they are making money finally. The whole thing, years and years, amazon cant make money, but they are making money now. Do we walk away thinking the consumer is in pretty good shape or is amazon adjusted the business for a more challenged consumer you know, from my perspective, i would say the consumer is still in pretty good shape. We hear more caution around Small Business where those types of folks exercising caution. In general, you have airbnb last night with travel strong through the summer months. What is concerning or what people are concerned about still is the future. What does the holiday look like and then 2024 . Lets go to the web Services Part of this they had profit in the Single Digits and now back in the double digits. They are still forecasting double digit growth in aws they are. It was tricky to sift through what the cfo said on the call. What they implied is they exited the quarter at a faster growth rate than where they started just the math of it is accelerate in q3, but not a ton, but maybe one or two Percentage Points they should accelerate after that. Brad, have you changed your guidance or target on this stock . We have we have. We were out a bit ago and took the target up to 180 per share. The big factor there is our earnings estimates are operating margin estimates and earnings estimates went withup a lot las night. We set a conservative bar over what they could earn, particularly in the Retail Business and they are out outperforming expectations amazon stock gets look at crazy in valuation it got less crazy last night thanks for joining us. Thanks for having me. Appreciate it that was interesting. Yeah. When we come back, fisker set to report. Phil lebeau will bring us the numbers and he has he has an in with the ceo phil fisker as we head to break, here is a look at the s p 500 winners and losers good night hey corporate types. Would you stop calling each other rock stars . Youre a rock star. You are a rock star. No more calling coworkers rock stars. Look, its great that you use workday to transform your business. But it still doesnt make you a rock star. So unless you work with an actual rock star. Hi, im ozwald. Hello ozwald. Pam, you are a rock i wasnt going to say it. Good morning welcome back to squawk box. Were live from the Nasdaq Market site in times inquire y squa