Transcripts For CNBC Squawk 20240703 : vimarsana.com

CNBC Squawk July 3, 2024

You have the nasdaq up by almost 9 treasury yields are a little weaker t tenyear yield at 4. 814 . And openai will have a product Conference Announcement today. Sam altman said they will not launch a Search Engine, but working hard on new stuff they think people will love and feels like magic to me according to people close to the information. This Technology Rolls Image Recognition into one product for advanced Voice Assistant and separately or maybe not separately, you will see how things are coming together apple nearing agreement to use openai and its technology on the next generation iphone to allow apple to offer the chatbot as part of the features that are coming next month. The big issue there, by the way, to understand all of this, openai is now processing all of its queries in the cloud apple, for privacy reasons, is to query all with siri and on the device processed on device. The question is going to be is there a clever way with some of the Openai Technology ends up being done on device if they can figure that out, that would be a neat manager we are expecting to hear about this in the next month and the other piece of this is well hear about that at the Development Conference in june and the other piece of it is does google, which has the Search Engine or button right now on safari stay there do they use gemini there were reports about gemini. Maybe apple will do a mix and match system with google stuff here and using some openai stuff here maybe that is the benefit for apple. They dont need to do it all themselves how does microsoft feel about this microsoft with the big chunk of openai that it owns they should feel great about it because apple has to use their product . They get the benefit of it. They want bing or anybody to use that service having said that, they are not in control of openai they are not supposed to be openai is supposed to be a thirdparty independent company. This is how the thirdparty independent company acts if microsoft doesnt control it there may be products or services not offered. That are unique to microsoft . Microsoft has done so well because of what it can do with a. I. I guess it would be great to be the platform supplying it to apple. You start to wonder. I dont know. Well see. We should tell you in some other sam altman news, shares of the oklo Company Started trading on friday yes, like every spac in the world, they plunged 54 . They went public with altmans spac and this is based on comm commercializing which could power advanced data centers. He is targeting 2027 for the first plant to come online like so many of the ambitious spacs, if you will, you could say Virgin Galactic was a spac it will work or not work we dont know. Youre favorite is working . Which one 51 . Thats a different i dont put that thats not in the same category. I didnt think about that because it is not the same category. One of the spacs. 7 billion workers at an apple store in short hills in new jersey have voted against unionization my apple place are there really chargers that i can get cheap . Steve kovach was telling you. I cant imagine you plug it in and says do not use this. Start a fire. Exactly Union Organizers filed complaints they blame the defeat on the Company Behavior apple denied wrongdoing. Meanwhile, workers in towson, maryland, who voted to unionize now authorized the strike. They said apple has refused to fairly negotiate apple will continue to engage with the Union Representing the workers in good faith. Overnight, softbank reported a 4. 6 billion gain for the vision fund in the fiscal year ending in march. The performance of the vision fund helps softbank swing to a quarterly profit with bytedance and u. S. Food firm doordash. The biggest gains of the year was the ipo of Chip Designer Arm Holdings s softbank has a 90 stake in arm. That stock up 1. 5 right now speaking of arm holdings, a report from nikkei asia says the company is planning to launch Artificial Intelligence by next year it will set up an a. I. Chip unit to build a prototype by next spring softbank is in talks with manufacturers including Taiwan Semiconductor to produce the chips and arm holdings are up 2. 5 . Shares of gamestop are soaring this morning and one of the prominent backer is back keith gill made the social media post on x, the first in three years. This helped spark the meme craze in 2021. It was an image appearing to state he sitting up and paying attention. Thats what we got. Thats all it takes apparently. Protests erupted at duke un universitys Graduation Ceremony as Jerry Seinfeld was due to give his address seinfeld has been supportive of israel he delivered his speech uninterrupted. 30 students walked out it did make headlineses. Protests disrupted other ceremonies, including one at uc berkeley in los angeles, protesters clashed with Police Outside of p Pomona College ken griffin said this was the product of the culture revolution in u. S. Education griffin is a harvard alum and has given more than 500 million to the university. He said, the narrative on some of the College Campuses has deinvolv devolved that the system is unfair in january, griffin called Harvard Students whiney snowflakes and he was pausing donations over the antisemitic comments on campus which he blamed on the dei agenda it did not all start on october 7th. He is right. Heres a novel idea for harvard. Embrace western values. Coming up, key inflation data due this week we will get you ready after the break. Later, Eric Rosengren will tell you what he expect from the cpi. Squawk box will be right back. Ice works fast. Heat makes it last. Feel the power of contrast therapy. So you can rise from pain. Icy hot. I cant believe you corporate types are still at it. Just stop calling each other rock stars. And using workday to put finance and h. R. On one platform. Tim, you are a rock star. Using responsible ai doesnt make you a rock star. It kinda does. You are not rock stars. clears throat okay. Most of you are not rock stars. Oooh. Data driven insights, and large language models. Oh, thats so rock roll. It is, right. He gets it. Yeah. Norman, bad news. I never graduated from med school. What . But the good news is. Xfinity mobile just got even better now, you can automatically connect to wifi speeds up to a gig on the go. Plus, buy one unlimited line and get one free for a year. I gotta get this deal. Thats like 20 a month per unlimited line. I dont want to miss that. Thats amazing doc. Mobile savings are calling. Visit xfinitymobile. Com to learn more. Doc . The cpi and Retail Earnings Take Center Stage this week. Stephanie link is joining us from hightower advisers. Were not done with earnings, obviously, stephanie, we have home depot tomorrow and walmart. There is an interesting piece and lead story in the journal, which is different than your take you like the Overall Results the journal points out if you are disappointed, you got hurt if you exceeded expectations, did you not get the bang for your buck in previous quarters to me, that sounds like multiples with perhaps no Interest Rate cuts and multiples will have a hard time expanding further from where they are. If you meet expectations, you get a bounce and if you dont, you go down with the earnings or staying down if you dont have multiple expansion, but earnings going higher, that will be enough, joe, i think i always call earnings season silly season you know that because you have the absurd reactions if you miss, some stocks being down 10 to 15 to 20 and that gives you an opportunity if you have conviction in the idea. If it doesnt go up that much, but they actually do beat, that is also an opportunity stocks follow profits on the way up and on the way down the names in the sectors seeing earnings revisions higher, obviously, the stocks should go higher over time. Home depot has been uncharacteristically uncharacteristically, as least as far as the results, it hasnt been the stalwart it has been in recent years the stock, for a while, had a really sharp comeback although the fundamentals were not sharp. It emerges right where the stock peaked and inflation doesnt help home depot usually. Well, higher lumber prices will help, actually, joe, for this quarter alumber is up 13 home depot, if you step back, they were a beneficiary during covid. We were buying everything for our homes because thats where we were living 24 7. They benefitted in covid you had that postcovid hangover and you have had five negative quarters of samestore sales i think you are coming to an end of the negative comps. You have a little bit higher commodity price. They are focusing on pro they made the acquisition of srs. Now pro is 50 of the total revenue as opposed to lowes which is 25 i think pro will hold up better than do it yourself. That is why the stock is poised to do better higher Interest Rates is the concern and overall concerns about housing. Im a bull on housing. I think we are 5 million homes short in this country. If you talk to any of the home builders, they underproduced for 14 straight years. It is cheaper to buy back stock than to buy land i think housing over the long haul is going to be favorable. Maybe this year you have ups and downs and volatility i like the home play through home depot comps are going to be another down quarter this is not where you think things are bottoming, but not in this quarter with year over year gains . I dont think you will see that great of a result it is not going to be negative if we look at scots miracle gro and the read through is record shipments to Retail Partners home depot is a 29 customer i think this is also a se seasonally strong time for the Home Improvement companies and housing stocks look at dr horton, they have 59 growth in the quarter. You have puts and takes. I think you are on your way to a nice recovery. Maybe flat samestore sales or slightly higher yeah, i think flat or flattoslightly higher. I dont think negative after five straight quarters of negative comps, it will show improvement. They have the easy comparisons throughout the year. I think we should see a better setup. The stock has done nothing, by the way, joe its gone down. Yeah. The housing is tough right now. Supply and Everything Else this is a housing proxy. There are times it does better if people cant buy new houses you can always make an excuse why home depot is doing well or not doing well people arent moving, then they are improving. If the housing is strong, they are doing well for the professional builders. We will see what happens you like other ones . Energy i do. I think one of the most powerful themes that i heard throughout the quarter that is starting to come to fruition is the Energy Transition super cycle we have been talking about this for a long time. We will spend about 4 trillion on anything thats tied to green clean power. Grid or data center or also a. I. This past quarter, we started to see it you guys were talking about utility stocks last week and how well they have done. Thats because earnings for utilities were up 30 . Cap ex is going higher because of all of the initiatives. If you look at Companies Like ea eatothe eaton, up 37 . Ge was up 24 . They are looking to build in electrification being 2. 2 times. We are starting to see this come together thats why it is really a powerful theme i own all three of those names i would be buying any of them on weakness you had the jobs number which started to become sharply higher you had the claims number which was a big surprise being higher. That helped the markets. That helped yields were starting to think you are seeing a slowdown and you come back with focusing on the atlanta fed at 4. 2 growth now you are telling me theres no slowdown in sight whatsoever. Which is it . I dont know. I dont know i dont think were going to grow gdp at 4. 2 like the atlanta fed tracker is now i think we are growing above trend. Is that 2 or 2. 5 is that 3 the whole point is we are running above trend. All of this fiscal and Monetary Policy and stimulus we put in place from covid until now is actually doing its job i think the better growth is the reason why were seeing that last piece of inflation really challenged to come down. Were going to get the core cpi this week and it is 3. 6 give or take a tenth or two or whatever the number is, we have made progress from 9. 1 to this 3 area we are not going to get to 2 if we are growing above trend so, to me, ill take faster growth and a little bit higher inflation any day from an investment point of view because that means earnings can continue to go higher 9. 1 is where it was when joe biden took office. Actually 1. 6 whos counting stephanie, thank you it is headed in the right direction. Thanks. Thanks. When we come back, the Northern Lights on display in some pretty unusual places over the weekend. That solar storm also disrupting one of elon musks businesses. We have details after thfris. A programming note, cnbcs fast and growing startups is back for the 12th year the 2024 cnbc disruptor 50 list will be revealed tomorrow on air and online at cnbc. Co cnbc. Com disruptor well be right back. Over the weekend, a geo magnetic storm was driven by solar flares from the sun and resulted in the display of the Northern Lights in locations that dont usually see them. You probably saw pictures of this if you did not see it yourself the sky lit up pink, green and purple the hues in alabama and mississippi. The Northern Lights stretching far south. On saturday, elon musks spacex warned of the storm and sat satellites were holding up well. I bet you have seen wonderful pictures. Were you in iceland i have been in iceland, but not the Northern Lights. I had a friend who had been flying during and took a picture from the airplane. It was cool. Coming up on the other side, openai will live stream a product event later today. We will tell you what to expect next. And tomorrow, we have an interview with Boaz Weinstein on his campaign against blackrock we will talk abouthat en twh we talk to him tomorrow on squawk box. Announcer executive edge is sponsored by at t business next level moments need the next level network. Ed an idea. Its a pillow with a speaker in it thats right craig. A team thats highly competent. Im just here for the internets. At t its superfast. Reliable. You locked us out . arrggghh ahhhh solutionoriented. [jenna screams] and most importantly. Is the internet out . Dont worry, we have at t internet backup. The next level network. I sold a pillow voya there are some things that work better together. Like your Workplace Benefits and retirement savings. Voya helps you choose the right amounts without over or under investing. So you can feel confident in your financial choices voya, well planned, well invested, well protected. At pgim, finding opportunity in fixed income today, helps secure tomorrow. Our timetested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. Pgim investments. Shaping tomorrow today. Good morning welcome back to squawk box. Were live from the Nasdaq Market site in times square. Futures are in the green this morning. Dow futures up 40. The nasdaq up 39. Openai is expected to make a big announcement later today we have steve kovach at the table with us for more on what is a fierce a. I. Tomcompetitionn big tech i think the timing is the most interesting part. Today is at 1 00 p. M. Eastern with the openai announcement which is reported to be a supercharged sirilike ass assistant. Then the Developers Conference and then a week after that is apple. It is getting head the Big Tech Companies would not be doing this without openai openai forced them to reorient their business with Artificial Intelligence it is interesting they are going first in this and it will look like appearance wise, they are following the big guys. What is the take that there is an agreement with openai and apple and what do you think that portends for what that product could like likor what deal they could have in place with gemini being in talks with apple and google stock surged. Google stock went down a bit. We were talking about the on chip and off chip and how google is implementingthis structure. Lets say it does happen. This is great for microsoft cloud because openai runs on the azure cloud. The more stuff happening on openai, the more money microsoft makes from the cloud products. If it is trstructured that way siri and stuff is running on timers or if you ask a question, that goes to the internet. That is not a new paradigm, but if that is running in microsofts cloud, that is hug news for microsoft it depends what does it look like your colleagues reported on friday with a supercharged siri. They will finally make siri this really smart agent to help you out with everything. What does this mean to google the gemini thing . Right. It depends where the money is going. Google is paying apple enormous amounts of money to be the default Search Engine. What is that relationship if it is the default a. I. Search engine or with the doj case, does that doj case impact the relationship or is it backward looking . Google benefits from that, i think, from having exposure to all of those users even if they pay a significant amount of money to apple to do it. What is the chance that openai ru

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