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Linkedin, the place to be to be. It's Jim Kramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action. Good Monday morning. Welcome to Squawk on the Street. I'm Carl Kingston here with Jim Kramer here at Post Night of the New York Stock Exchange. David Faber as the morning off. Pre-market is taking in stride. The president passing on the Democratic nomination. It's an important week as well with a third of the S&P reporting earnings. We'll get our first look at Q2 GDP. As Becky said, PCE on Friday. Our roadmap begins with this political history. The president withdrawing from the race, throwing his support behind the vice president Kamala Harris. Futures are ticking higher. S&P is eyeing some gains after the worst week since April. And the ongoing fallout from last week's global IT outage. Crowd strike shares are set to extend their decline. Delta among the airlines being hard hit again yesterday. Let's begin though with the president announcing he is ending his re-election bid and endorsing the vice president to lead the Democratic ticket. Although we'll see what we get in a few weeks here, Jim. These are very different people. Biden has been and remains unsophisticated about the way business works. Unsophisticated about the stock market by nature picks people who have been historically bad for Wall Street, neither Khan, Jonathan Kanner, Danny Truss. That is, that is entirely. You've got a person who's from California. I'm regarding this actually as mega versus mega. Mega tech does better with someone who's sophisticated, who understands California, who is not against tech. Biden has done everything in these agencies that he can to annoy, to go after tech. Let's not forget her brother-in-law is Tony West, who is a former General Counsel of PepsiCo, then was with the Justice Department, is now the General Counsel of Uber. And you tell me if there's someone who's more sophisticated and knows more about business and the West Coast than her brother-in-law, who would be an amazing advisor. They're close. And I just keep thinking, this is going to be globalist versus nativist, not nationalist. Nativist. A populist in terms of the Republican Party versus pro-business versus the Democrat, international business. These are very big differences. And I have followed her career and followed Biden's career. And if anybody, Biden didn't hurt the stock market at all. It was pretty amazing how well Biden has strayed stuff. But this whole idea that she's a clone of his, is this completely wrong? So she's much more moderate than he was. So you think it's a net positive for the markets? Absolutely. And for American business. Absolutely. There's no doubt about it. She's moved to the center, a person who if she comes out hard on crime. I mean, I'm sure that there are problems to try to say she's soft on crime when she was the district attorney for San Francisco. And I come back and say, "Look, she can come out hard on crime." There was nothing in her record that indicates that she was soft on crime, nothing. Well, people are pouring through her record as a G where she did pro ExxonMobil and she did look at pipelines. Well, look, I think that there's an environmental component to what she's done all her life. But I think that the Republicans are uniquely bad for oil because in 2016 they were so positive on drilling that our American oil companies lost discipline and they lowered the price of oil by their output. What matters is whether you can have enough pipeline out of the Permian and that's different. I thought that when the Tulluri got a bid today. Yes. And that is one of these companies that is banking on that Biden's 2028 pause goes away. What's on the LNG? Yeah. So, I mean, look, I think that everybody, I urge people to study her work and urge people to look at her campaign. She was a moderate. Take a look at the people in the FT as a good story about who was in favor of her. Well, the moderate. Yes. Well, it raises the broader question, Jim, about whether or not she is going to try to offer consistency or some new signature policy. In other words, how much delta does she try to put between her and Biden? Well, look, I think that you can be pro-American technology and be a harder line than she has been. I mean, a little more defined line on immigration, but if she comes up with a defined line on immigration, meaning that she can study, listen, we do have teeth here. And she comes out strong on crime, which she's able to do because she did, which she was a district attorney attorney general and people will say, listen, maybe she, she's in California is a little tougher, but she could be strong on crime. But what she offers is a level of understanding about the greatness of the megacaps that Biden wanted no part of. I mean, look, Biden's attorney general, their attorney general was antagonistic to the point of like making fun of Apple, saying, look, their phone is so good, we gotta stop that. I don't have to go into Lina Con anymore. I don't because everyone knows my view. So there's no need to reiterate. Yes. But I will say Jonathan Canner in the end, attorney general, he goes, Con goes, these people go. And you know, you're not gonna get someone who is as negative about tech as the people, except for Vance, who's incredibly negative about tech. I mean, Vance wants to, you know, he wants to, I don't know what he wants to do other than the fact that he favors the worker and she favors lower prices. That's what globalism is. It's lower prices for people. Let's forget, not forget the globalism had some aspects. I'm not as, I'm a little closer to Vance's view to the globalism view. Yeah, well, your point's interesting that she's not Scranton Joe is essentially what you're seeing. That's what made yesterday afternoon interesting when you did see progressives in AOC fall in line pretty quickly. Don't you think there'll be some element of pushback to what you're saying? I think that she stands for a lot of civil rights things that are actually a little more visible and vocal than Biden, but I'm focused on our world. And I'm just saying that if you, that there isn't anyone that Apple would like to see less than Biden, because all that attorney general did was like lob calls into the assistant attorney general, lob calls into Apple about how horrible they were. I don't think that this person, I don't think that that comma was wildly anti-Apple. I mean, that's crazy. These companies are in California. She's from California. She knows the ethos. Her brother-in-law is very, very knowledgeable about the way business works. She's a general counsel to Uber. Uber is a very new company that I think Biden may not have known, that she knows and likes. Do you, so directionally, the futures move today? Do you think it's a reflection of what you're saying? Yes, because holy cow, we discovered last week that we're back in the Mary Lease 1890s populist party, which was so anti-business, that isn't an interesting that Vance said barons and didn't say robber barons. That was our job to put in robber barons. So, I mean, let's start calling it like it really is. A nativist plan from Trump is so bad for all our companies that do business overseas. That's what's a small cap rotation, but that wasn't like in favor of every company. It's never heard of the France. Well, the cover of barons on Saturday was all about exactly that. How the markets reaction to Republicans versus Democrats is much different than the 80s. Oh my God, we are, the Republican party is, you've got to go back, except we can substitute a small town for agrarian, because the populist party was very agrarian. I mean, I have a, I have a criminalist on tomorrow, and I was looking at the lineage of Cleveland Cliffs and with A.K. Steel and Armco. I mean, these are the companies that are pilloried and don't go to elegy, but that's, you know, what can I say? A populist agenda is so horrendous for meta value, meta? I mean, meta. I mean, they attacked Zuckerberg. What is Zuckerberg doing? He's got these really good Raybans. I just don't understand what people don't realize that Vance stands for the end of globalism, which means, even though you're in, of course, the end of China, China trade, she stands for what General Mondo's in favor of, which is measured in smart trade. Yeah, we're going to talk more, obviously, about China today, cutting rates first time since August. Oh, they're pathetic. But let's get to him in January just some morning for more on the president dropping that bid for reelection. Hey, man. Yeah, good morning, Carl. We're just about two and a half hours now from an event at the White House on the South Lawn, where we do expect to see Kamala Harris in front of cameras for the first time since President Biden dropped his reelection bid. This was a previously scheduled event for NCAA teams to celebrate championship teams over the past couple of years. Now, though, this will be the first time we see Kamala Harris in front of cameras. It will be an opportunity for her to make remarks. Typically, presidents and vice presidents can make any kind of remarks they want at the top of an event like this. We'll see what Kamala Harris has to say at 11.30 Eastern time on the South Lawn. It's raining here in Washington today. Maybe they have to move that inside still. This will be the most hotly anticipated NCAA event in maybe in White House history. So we'll watch for that. Meanwhile, people are trying to figure out sort of the policy differences between Biden and Harris as you guys were just talking. And we can kind of tick through a couple of them here. One is that Kamala Harris proposed a higher corporate tax rate at 35% than Biden did at 28%. It's at 21% now. So folks assume that she would be a little more aggressive on tax if she had her way. She may be more aggressive on abortion rights protections than Joe Biden, who had sort of a career long evolution on abortion. She may be more active on climate. She supported the Green New Deal in the Senate. And remember, she voted against Jay Powell when Trump nominated him to the Fed. And she may be expected to pick her own Fed share in 26 when his term ends. Presumably, a reelected President Biden would have done the same as well. So people are looking for those distinctions between these two candidates, but they are very similar in terms of their policies. And all of the policies that you look at from Kamala Harris were sort of concocted at a time when she was running in a Democratic primary. So you would think that she would tack toward the center in a general, and we'll wait to see whether that happens. And of course, we'll wait to see this NCAA event, which is really not going to be about the NCAA at all at 1130 on the South Lawn, guys. Meantime, Amen. Obviously, we're watching donor activity. All the speculation about the choice of a running mate. Would they debate again in September? Which of those questions are you most interested in today? Well, I think the donor question is sort of a self-solving problem for Kamala Harris. If she's able to wrap this up in the next 24 hours and really be emerged as the undisputed candidate for nomination here, I think the donor money just switches back on like a light switch. And she gets that money that would have otherwise gone to Biden. And maybe even some more, because there's some renewed enthusiasm. So I think for that, that's a self-solving problem. The vice presidency is an interesting one, and you've got to look at who you can govern with, and also who's going to get you something that you can't get yourself as the nominee of the party. So you look around for Kamala Harris to look at, perhaps, a Josh Shapiro governor of Pennsylvania as somebody who might be able to help her in a place where she might need some help going into the fall. And then this question, ultimately, of what happens between now and then, I mean, we're going to have to see how Kamala Harris kicks off this campaign. The scrutiny on her is going to be entirely different than the level of scrutiny she's really ever faced before. Can she handle that? Does she have wobbles in the initial couple of days? All of that is going to be what everybody in American politics is looking at. We will see. Still a 20-year career of AG and Senator in VEEP. We'll see how much the spotlight is not. Love is not. Nothing like this. There's nothing like this. Yes. She's better for the stock market. She likes making cap tech. She's not the enemy of the West Coast. She's from the West Coast for heaven's sake. We're stock people. I'm looking at the mega caps. And I'm thinking, you know what? Here's a little relief. But Biden didn't like them. Vance didn't like them. Trump. Well, Trump's Trump. There you go. There's a really smart on it. That's a good one. Good salvation. I think Trump's Trump. That's real valuable. All right, thanks to him and Javars. We'll talk to him later on this morning. When we come back, tons to get to regarding the markets today. We'll talk about the global IT outage, what that means for CrowdStrike, a couple of downgrades today, down on the pre-market. And then this rotation doesn't continue after the worst three days for the Triple Qs since February of '23. Stay with us. 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Earning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track. We care about your success. And are dedicated to helping you pursue your goals. Going back to school is a big step. But having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. We want to be able to say what we're doing. We want to keep people updated. We want to be as transparent as we can and be front and center with our customer standing shoulder to make sure they get them up and running. That was CrowdStrike's George Kurtz on our show Friday after apologizing for that global IT outage. Shares of the cyber security firm extending some losses in the pre-market this morning. Over the weekend, nearly 1,500 US flights were canceled according to flight aware. And this morning, at least two firms, downgrading CrowdStrike, Guggenheim, one of them, Jim, just thinks that it's not good when it happens at the end of the quarter when you're trying to close deals. It's very true. And there's a long tail of impacted systems that need more help. That's an issue. I think what a lot of people were surprised about was how pervasive and successful CrowdStrike had been that they were 18% of the protection. And I've had George Kurtz on numerous times. And look, the man's a hitter and the company came out immediately. And I got a call like, yeah, it's an awful Friday. I got a call from George, a text from George, an incredibly early saying, "Listen, this is on us. Are you going to work?" And I said, "Well, you know, let me check with Lisa." I didn't say that. I just went to work. Lisa set up the, Mike, now many people will do this stuff at home. Use the iPad, please. It looks great. You did look good. It looks great. Yeah, iPad's better than the expensive cameras that the network uses. There's a little saving for you. I will point out that George accepts the fact that it was all on him. He understands that. But they got hit by this Azure outage the same time. And that was not on him. It just happened to be bad luck, a lot of bad luck here. But the fact that it was just an update, it was not a hack. And I think when things settle down, people go right back to George. It will. We own Palo Alto for my trust. I thought Palo Alto up seven. I thought that was ridiculous to be up more. But the market is spoken. It's not going to be a big transfer to Palo Alto. Or else the stock will be up 25. Yeah. They're the two competitors. Even the downgrade, Guggenheim says that the response was impressive. Yes. But that the restoration of the reputation may take more time. We'll forget about it three months from now. And what we remember is that George Kurtz was a hero. It worked 24 hours. Now, remember, he is a race car driver. Legendary for not needing sleep. He could go to 24 hours. I mean, the guy won Le Mans for heaven's sake. He's no joker. I'm trying to think back where big reputational risk events happened, like at Chipotle. What was your timeline for repair on? Two years. Two years. But this is the few months. Well, that one was airborne, and you had to have a change of management. And that was difficult. The only guy who really stayed there was Jack Harton, the retiring CFO. So you need that, Brian, Nick will come in. But 18 months is the average time for any time you have a-- I've looked at it was Taco Bell, Jack in the box. Those took 18 months. And this one, at Chipotle took 18 months. So this would be, you think, pretty short term? It'll be shorter term because CrowdStrike has unbelievable technology. And it was not their technology. It was the problem. It was a sloppy update of which he completely owned. And you know it was not hurt by this, apparently? Southwest Air. Because they had nowhere near the latest Microsoft Windows. They're so far behind that I expect it's going to be Elliot Air by the time the December. We'll get to the Elliot stuff later. And another name. Another name with Elliot today. And of course, Southwest has earnings later in the week. We'll get Kramer's Matt Dash, countdown of the opening bell. One more look here at the pre-market as stocks do look to start the week green. Stay with us. Support for this program is provided by Chevron. Demand for Energy is projected to continue rising in the future. To help keep up, Chevron is increasing their US oil and gas production. And they're innovating to help do it responsibly across their operations, including their Gulf of Mexico facilities, which are some of the world's lowest carbon intensity operations. Helping supply energy that's affordable, reliable, and ever cleaner. That's energy and progress. Learn more at chevron.com/meetingdemand. Earning your degree online doesn't mean you have to go about it alone. At Capella University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals to academic coaches who can help you form a plan to stay on track, we care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step. But having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. Boy, the defenses of NVIDIA come out. NVIDIA's been the big worry. The stock peak, come back down. Really bad chart. Well, this morning, we've got Loop coming out and saying, 120 goes to 175. We have Reuters saying there's a new flagship AI chip that actually works in China. Won't be prosecuted necessarily or pulled off by this administration. We got Piper Sandler raising price target and talking about material upside. So when you see material upside in Loop Capital, material upside in Piper, what you say to yourself is, man, are they ever trying to make this work. Blackwell sold out. I mean, all these things are just the kind of thing you get when you have analysts saying, we have to get this puppy up. Because this is the key tech name. All I come out and say is that, again, the Harris presidency is much more benign for Silicon Valley than a Trump presidency. Do you think that they really would be able to come up with a Chinese chip that Trump would approve of? You kidding me? But General Mundo's been OK with a certain scale down Chinese chip. Conference sector. Meanwhile, you mentioned Piper in Loop City, Positive Capital. Oh, my Sid. But the big, big time positive, like the most positive. And there, by the way, because I've been in touch with NVIDIA, this is the fireside chat. Sit down with Jensen Wong and Mark Zuckerberg at a graphics conference on the 29th. Remember, I know people laugh at me on this Zuckerberg, on the Luxautica lenses, but this thing sold out. And I know that a $5 billion recipe is nothing because you're dealing with the mega caps. But you've got to remember that this was incredible that Zuckerberg sits down with NVIDIA. When Jensen used to say, listen, he's for combat, I'm free. He used to say, he's for combat, I come in peace. I'm in love, and he's angry, all that stuff. Well, they are together. And I think it's fantastic for both of them. But don't forget, what matters is, who do you think is going to be in the White House? And we'll talk more about the SMH. It's been a rough few days. Easy come, easy go. It's up huge. Get the opening bell in the moment, stay with us. As we begin a new week of trading, following the president's decision to exit the presidential race, S&P Nasdaq coming off their worst week since April. Small caps were in the green, as you might know. You also got the MAG7 names. Tesla alphabet leading a pretty busy earnings calendar this week, Jim, Tesla's tomorrow. Yeah, look, I think the Tesla, he can tell any story. Let's say he decides that he wants to say, listen, we're no longer an auto company whatsoever. We're an electric company, we're a solar company. Well, the speed will lap it up. This week wants to stock to go higher. Kathy was a come out and raise her price target to 5,000. This is what happens. The promotion machine goes on and on with Tesla. You can't do anything wrong. Nor do you want to do anything wrong, because you won't be on the wrong side of history when it comes to Tesla and Musk. Because it's not a good place to be. Although of MAG7 drawdowns, where you got Appledown 4, for example, Tesla's still down 41 from the high. Yeah, Tesla just took off in that short squeeze where the shorts over played their hand at 170 and they've been reeling ever since. Apple, I think, in many ways, is the key to this market. Because Apple represents China, which, of course, Trump does not like, and Vance thinks it's like, you know, the communist China of the prediction days, versus a very enlightened policy toward Apple that I think that President Harris would have, no longer just like, let's just prosecute. Let's prosecute. That's over. People have to understand, that day is over. The cancer con tyranny of business is over. It's mega versus MAG7. And people's better start understanding that when you have Tony West as your chief advisor, which I think you would be, who's the general counsel of Uber, you're not gonna go after a tech for the second, go after a tech, which is what I think. I mean, how many times do they have to sue or break up? And by the way, con stops every deal. That's over. Right. How about a measured M&A? So in the M&A pipeline, are those conversations rooting for Harris? Oh my God, yes, you can. Plus there's according to S&P capital, $6.6 trillion of private equity drug powder. No, I mean, of course they look, no. Go read the comments of Brad Carr, who is the manager of Polewise in the F.T. Polewise is very much in favor. They are in the middle of the road, except for Peter, who left there, and going in the last thing he did this. Over, over. It's the end of tyranny. Let's get the opening bill. The CNBC real-time exchange and the big board. It's rail car manufacturer. The Greenbrier company celebrating 30 years at the NASDAQ, a global X ETFs doing the honors. Jim is, we're still sub 5,500 after those last couple of days. Well, I mean, look, you can't just turn on a dime. First of all, most people don't even have my view on what I've been talking about, but that's okay. They'll come around to it. Second, I do think that any attempt to try to undo the small cap trade, there's so much money went that way. I think you'll try to kick it in again. And I understand because Trump's still heavy favor. And the small cap is about favoring small business and medium-sized business over globalization, which means favoring workers' wages over prices being lower for all of us. These are very difficult, I find, you know, great theoretical discussions. Do we want small business favor because you've had so much small towns decimated by small businesses leaving or being crushed? Or do we want lower prices, Ella Walmart? It's a very difficult question. And I think that philosophically, I think that you'll find that Harris is to the left and Vance, who's very sophisticated about this, I was to the right. And I believe that Trump will listen to Vance on this issue 'cause he's got a pretty compelling rap. - Yeah, we did talk about some of the choices that as an economy, we've made over the last 30, 40 years. - Is it a good manifesto? Big manifesto. - Meantime, Goldman desk is out. It does, here's the quote. It feels like the highest velocity of de-risking could be behind us. A lot of charts about prime book de-grossing over the last few days. - I like that. And let's see whether Nvidia can rally. Let's see whether Apple can rally because these are the stocks that I think a lot of people feel like, wait a second, what was I still doing in these? - I was supposed to sell these in my small town, you know, Sintos, and by paychecks. And I think that that traded was fun and a lot of it was a short squeeze using ETFs. They came in and really blitzed them. It was a very impressive short squeeze. But, I think there's a lot of people who've been anti-smoked. Remember, listening to Saunders was some very good comments this morning on Twitter that Russell was one of the worst years ever in 2023, but it was the best since November of 2016. Now, what happened in November of 2016, that's when Trump came in. See if in your Trump comes in, you bought the Russell 2000, it worked. Trump comes in, you bought the Russell 2000 work again. I think that's simplistic for only just because the Vice President this time is not Pence who stood for, we don't really know, to a rather remarkable intellectual vice presidential candidate who is so smart and so sophisticated on the issues and really does present a kind of very stark reality, which is the nativist versus globalist. And I think that resonates with a lot of the country. - Clearly, that's the bet that the Republicans are making. You mentioned Apple, we did get Verizon today. Hans Vesperg on Squax shares down 5%. They do keep the full year and the CapEx Guide in line, Jim. - Yeah, I just care about and it was not really clear how much they got to spend on the new Apple phone. I mean, they need to open a lot of accounts and you need to stop T-Mobile, which continues to crush them. The answer to the fixed wireless that Andrew asked, I thought was not comprehensible. I think that Vesperg's best not around reporting period. - Yes, here's what he did say though, about the consumer, take a listen. - In Quincy, it's basic on the same level as pre-COVID. Then I think what is important for us, we have a very high quality customer base. That is very resilient and very strong. Maybe we're a little bit set aside from other industries that might have some softer consumer feeling, but in our case, we feel really good about the product. - I don't know what to say. - Yeah. - Yeah, look, he says the wireless revenue and he says the broadband doing well and I think these are all relevant to what we hear from the other guys. He's first, he can say that. Again, if you see what the ATT's are about, a hack. I still see smooth sailing for T-Mobile and they're fixed wireless. Comcast is in the mix. David's not here to, I don't want it to all take a pass. - Well, I think earnings tomorrow, I believe. Meantime, speaking of the consumer, I know you were mentioning earlier, Elliot Starbucks, the news we got on Friday. Also McDonald's is gonna keep that $5 meal. - Yeah, they have to. I don't think they have any choice. Actually, we're really good. I have Domino's on tonight and they got hurt by international. They keep, they still represent the value. I think we should talk about Starbucks. I think that if I were Elliot, I would believe that you can work with these guys but that the execution's horrendous. I believe they think that the brand is on a sale so that if you fix the execution, then I think you have a big winner here. We own it for the trust. We bought some down here, we bought some above. But I think that this is a clarion call to say, to Starbucks saying, "Listen, you can fix this." But in typical stuff, Elliot's passion, I would say if you can't fix it, then we will. - Yes, in other words, like when someone steps on your toe and you're like, "Please get off, otherwise I'll help you off." - Yeah, I think it's like that. I think that they are kind of astonished at how poorly that last quarter was so bad. It resonated in corporate America and I think that locks me in the CEO. Now, he's got a shot here to work with Elliot. I, of course, I would bring Elliot in and say, "Tell me what to do." Kind of similar to what Bill Newins did at Constellation. That's what I would do. Say, "Look, the Constellation Medele on Corona." What do you want me to do? Give me some help and throughput. Give me some help in what Trinks I should do. I don't want to lose the brand. The brand is great. The real problem with Starbucks is they have too many customers, kind of a Yogi Berra thing. And if they can figure out the technology, then it's a win. But if they can, if Starbucks can get, can either be friendly or antagonistic, it's really up to Starbucks. Elliot wants to help. And it's not like the IRS showing up more. They want to help and they can do a lot. I mean, you mentioned Constellation, thinking of Salesforce, where it was very much a handshake. And then you have Southwest and Disney, right? Yeah, Elliot goes to, I think that they would have expected a lot more resistance with Salesforce. Elliot goes to Salesforce. And Mark Benioff says, "Hey, tell me what to do." And they are thinking like, "Oh, give me a break." It's going to be, "No, he's a no, like, really." Like, "Let's meet Constellation." "I'll meet you whenever, I'll meet you on Saturday." I mean, there was an amazing synergy between what Elliot wanted to do and Mark was really great. And then Southwest, it looks like they just want a total overhaul because Southwest is not where they think it should be. Newlands and Constellation, very good. If you work with Elliot, they have a lot of good people. It's kind of like bringing in McKinsey, but not having to pay for it and being more attuned. - I think that Starbucks is a very big buy here because of Elliot. - Well, you've been saying, right? Have you not been saying like you did with Best Buy to 90? - Yes. - Has that been the, that's been-- - Oh, no, I think Elliot. Elliot recognizes that as they may, they haven't crushed the brand. I also think that, and I am being vicious there. I do think that there was a problem with pro-Palestinian protests. Maybe as that, I don't want to say anything dies down because it's not right, it's a political issue. I don't know, but that has really hurt hundreds of Starbucks stores. So if that goes rear-view mirror, then you've got the win at your back. And I know that Elliot is, they always, they come in peace, not unlike 10 Bears in Elmo and Josie Wells. But then it gets ugly if you don't respect their view. You gotta respect their view, and if you don't, you're really out of your mind. - You point out the quarter was one that burned in the ears of Wall Street, and on this desk, and this was the conversation between Jim and Narasim and just a few weeks ago. - I think that if I look at the US occasional customer, they have clearly cut back on visits to us. If you look at the value for money scores we have, they're still strong. But there's no question that the occasional customer is cutting back on visits to us. We have not been able to communicate to them the value that we provide. - We'll see if that changes. - I think that a lot of that occasional customer may have been cut off by protests, and that I wanna give locks minutes due here. I mean, who would've thought that that was gonna happen? At the same time, I do think that there are big issues that were solved, say, by Chipotle, which had a real problem with throughput at one point. You can solve these issues. McDonald's had problems, 2015, 2016. They solved the issues. These can be solved, and that's why Starbucks is a huge buy here, because think about it. It isn't like anyone saying, you know what, I'm never going to Starbucks again, the coffee's awful. No, no one's saying that. They just want their coffee on time, and they want it hot, and they want a value orientation, a little bit more than I think locks have been indicated there. But most important, they come in with a plan, and the plan is always really reasoned and rigorous. And the management's that give them the Heisman, so to speak, stick their hand up. That's just a very ill-advised move, really ill-advised to take that stature. - Yeah, it's definitely an engineering question, and then a marketing question after that. - Totally right. On Berkshire B of A, what'd you make of this trim? - Oh, geez, I mean, Bank of America's been an incredible standout, I think it's one of those things where it's just, it makes sense from a portfolio management that you don't want to be the Bank of America fund. Like, you don't want to be the Apple fund. Bank of America's has been the unsung hero this whole way. They've done a remarkable thing. No one talks about them, because Brian Moynand, to his great credit, is not a, he doesn't hog the spotlight, he talks about the team, he's really a very good coach. It's been the big winner. We've had big losers like Schwab, which I think is probably overdone at this point. Wells had some problems, but now they're big play on lower rates. No one thought that Jay Pimorin was anything other than good, but it was Brian Moynand, who quietly has built this franchise that Warren Buffett, it's like the old days when Warren had this position in Wells Fargo before he dumped every bit of it, 'cause it stumped in the chicantery that we discovered for it. So, Bank of America's big win, and congratulations to everybody, but if I were Buffett, I would trim it too. - Financial's doing okay here, although almost every sector is up, except for utilities. Handful of downgrades today, Jim. Bernstein cuts American. Ray Jay cuts E.L. Goldman cuts Lenar. We mentioned the crowd strike calls. - Yeah, I think that I wouldn't have cut Lenar after the way that I saw that people reacted to Horton, which was just an okay number. No wonder Lenar is barely down. I do think that the home builders, if there's going to be a change that the federal reserve, that would be bad for the home builders, 'cause Jay Powell has done that. It'd be interesting to hear, why would they change? I mean, maybe because his terms over, and he doesn't want to serve, but I think that anyone who would want to say, "Look, if you want to stay on, "I think that'd be well received by Wall Street." I think a new person who was a wild card, not well received. - You would welcome more Powell. - Yeah, I mean, vice chair for life. That chair for life? That chair for life, Powell, I mean, why not? I mean, look what the guy's done. I mean, we had the hottest inflation in years, and now we've got inflation going the right way, and I think that inflation is far more determined about who's going to be present than anybody realized, and I don't know whether she will be tagged with the inflation that Biden has. - But Harris, you mean? - Yeah, whether she will be tagged. I mean, people, I think mainstream America feels that prices have gone up, and that we've lost jobs, and that therefore Trump represents a salvation to that. Biden got hit by a lot of infrastructure spending and maybe too much, and the idea, who knew that Cooper was going to get under control, and then I really think that the inflation to put it on Biden would be silly, even though he was in favor of some very big programs. But inflation has a lot to do with supply chain, and that was nothing to do with Biden. We haven't had a lot of prices come back down, that's the problem. You have to go to Costco, you have to go to Walmart, you have to go to Amazon Web Services. By the way, 20% discount was back below 2019 prices. That's how Amazon figured it. Amazon Prime, their prime day, got you prices that were below COVID, and that has been what people are not. The unsung hero of this has been Amazon, but they're big cap tech, and they're hated by, hated by Vance, and people think that Harris will hate Amazon, but she won't. And that's just a bad reason. - That's interesting. That's a really interesting corner that you appear to be seeing around. Regarding Harris and technology. - Just remember, I think your chief advisor will be Tony West, General Counsel of Uber. Is there any more internet oriented company in the world that's been created during this period than Uber? - Yeah, I mean, look at the winners list this morning. The top 10 are almost all semis. Do you think it's just the rubber band snapping back, or is it having something to do with what you're talking about? - Well, look, these are all ETFs, but I do think it's something to do with what I'm talking about. I think that there's a recognition that Trump has listened to Vance, and Vance is very for real. He represents a populist strain that is so horrendous for international trade. But, let's understand, most Americans think the international trade, I think, is horrendous. 'Cause what that means is you lose your job. Everybody gets a little or a wage, but it means your job, your factory is exported to the country that puts up the tariffs, and then you say, well, our country's gonna let that happen, and the factory moves there, and I lose my job, but we all go cheaper or won't. - Right. - Well, I'd rather have my job than paid less for jeans. - Right. Lily, coming off the, I don't know, the worst week since March of '21. - Yeah, I-- - Well, it was up for 12 straight weeks before that. - Well, I think that Lily, it was one of those moments last week where I had, I had Roshawn, they had the pills to speak, where they introduced the pill on my program and how they were gonna do it, when I had money when I was out there in January. So suddenly they reintroduced it, and everyone goes gaga. It's not a question of pill versus injection, because Lily's working on the same thing. It has to do with factories, and no one wants to believe that. They don't understand, these are like foundries, and it takes a long, ask Intel how long it takes for a foundry to go up. These are like foundries, and Lily's spending billions to build factories in order to make the drug. That's why him and hers can sneak in there, because there's a special rule that the FDA allows other companies to be involved, but I would come back and I say, listen, guys, it's about factories and throughput of injections. It's not about a pill, but Wall Street doing gaga over Viking therapeutics, they should have gone gaga over Viking cruise lines, they got the wrong Viking, right? There's the Minnesota Vikings, there's Viking therapeutics, and then there's Viking cruise. It's like the old days-- One out of three ain't there? CVS and CBS, right? Exactly, and you buy the wrong one there. Channel two, channel two, never ever call it CBS. It's channel two. Maybe the people outside of New York don't know that, but it's their loss. Olympics are coming Friday, Jim. LeBron James is gonna lead the delegation of American athletes. Nike over the weekend with this ad, pretty fascinating marketing framework. Basically, athletes asking, am I a bad person for wanting to win? What do you think of that? Mike put a four under Nike. I think Nike is, look, the endless bleeding in Nike is probably down 32%, and I don't want to go against Nike anymore. Really very negative on Nike, but I didn't down 32%. I don't want to buy it because, remember, I think I used the word China and pathetic, and I did that because they can cut rates all day one. You and us, you told me not that long ago, it's $6 trillion in bad loans. That is not the resolution trust committee of when president Jay when the first Bush was president. That's where we had a big SNL crisis. That's like an SNL crisis times like 100. So they can cut rates all day one. Look, the only thing I really care about is who would defend Taiwan? And the 2016 Trump was very, very eager to defend Taiwan. The 2024 Trump is basically saying, you know what, that represents international globalism. We're not gonna defend them, they have to pay us. And that was really bad for the stock market. Now, I think that president Trump may be saying, "Jim, there's more to life than the stock market." And I will come back and say, "Look, yeah, "but I'm not like, you know, I don't work for a world peace. "I work for a world market." The stock market. What am I gonna do? From now on, as of today, I no longer care about helping people make money. What I care about is that we help small-term America. Well, what am I, William Jennings Bryan? You want William Jennings Bryan? Here you go. Go get his, you know, his ghost. Yes. William Jennings Bryan. Cross of gold speech. Jim, the other thing that's come in this week in addition to all these earnings is gonna be Q2 GDP. We figure out where we're tracking. And then PCE Friday, I think the consensus is a tenth, which would be pretty mild. Well, it's going, it is definitely going pathway. I mean, autos are coming down. Look, we're lumberback rally last week, which was negative for the housing portion. But look, rates are doing what they're supposed to be doing. They're hurting a lot of America. And the defaults are going up. A lot of people felt that the American Express Conference call was a linchpin of the economy really slowing. I didn't mind that call at all. And I thought that Steve Squeary's doing a good job. But wow, the reception to that is wow. Yeah, we talked briefly on Friday, I think, after we had hung up about marketing spend guidance, was up 15 or so. Yeah, he's got the money to do it. But I think that people are saying, look, the travel and entertainment budget goes. That that's kind of cutting back. And that was very negative for a big thesis that has worked for a long time. Right. We'll take a break here. Dow up about 50 points. Watch bonds as well. As we said, busy week for macro, at least, not much today, but we'll see what the GDP and certainly the inflation data bring us along with some things like starts and some inventories later in the week. For now, 10-year, 4-2-2, don't go away. Interesting back and forth between Nike and Kevin Durant, who's a little bit, I think, annoyed that he was not included. He himself asked, am I a bad person? But it all brings to mind the idea that our Olympic coverage will begin quite soon, as Squawk takes week one, and you'll be seeing Squawk Box live from Paris as CNBC and all of Peacock and NBC's coverage begins Friday, July 26. Stop trading with gyms coming up next. Bear in mind, CNBC's Game Plan Conference in LA, September 10, we were just talking about Kevin Durant as we sort of buff up our sports coverage. Jim, Andrew's going to take on this one. I love the sports coverage, but Kevin Durant had a great speech about his mother a few years ago. He's a tough guy, a tough customer. Yeah. Meantime, Jim, what's on, Madeline? OK, so I just wanted to say crowd strike. George Kurtz saying that cloud remediation is starting to work, a machine reboot, so it could be fixed remotely. He's spending 24/7 on it. Now, people say, well, what does that mean? Well, he is an endurance driver. He can go for literally days without sleep. Someone said he looked haggard. I said, are you kidding me? This man wins Le Mans when he's haggard. I have Domino's pizza on tonight. Domino's missed the quarter, but a lot of it was because of international problems. It was an inline quarter when it comes to domestic. They've got a new introduction to pizza that's working very well. There's a lot of good things happening at Domino's, and you're getting it, I think, at a very reduced price. Well, listen to Russell Wienner's-- And it wasn't so much to come, says the growth-- unit growth forecast, right? Yeah, and it was because they have a master franchisor who just didn't do well. And we have to look into that, obviously. But the same for sales number for inline US and the welding programs could-- I'm not saying go by Domino's. I'm saying stop selling it. Jim, good hour, helping investors understand the market dynamics this morning. We'll see you tonight. Thank you. Mad money, 6 p.m. Eastern time. When we return, fun strats Tom Lee on the markets in the wake of the president's decision to drop out of the presidential race, don't go away. You've been listening to the opening bell on CNBC's Squawk on the Street. All opinions expressed by the Squawk on the Street participants are solely their opinions and do not reflect the opinions of CNBC, NBC Universal, or their parent company, or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. 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