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Learn more at chevron.com/meetingdemand. Market moving insight and analysis join Jim Kramer, David Faber and me, Carl Cantonea, on the opening bell hour of CNBC's Squawk on the Street. Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Cantonea, with Jim Kramer, David Faber, a post-9 of the New York Stock Exchange. Futures are read as alphabet and test learnings lead to some MAG-7 weakness. Meantime, some macro worries getting folded in as well. From Visa, Capital One, LVMH. To Your Yield is the lowest now since February. A roadmap begins with some warning signs for mega-cap tech. Tesla and alphabet fail to impress. Dragging down some other MAG-7 names ahead of the open. Plus, Visa is saying consumer spending remains strong, while JP Morgan sees signs the macroeconomic picture may be "cracking." And AT&T delivers a beat for wireless phone subscription editions, and the shares are higher at least a half hour before we get started with trading. Let's get started with Tesla this morning, tumbling in the pre-market on that earnings miss. Also reporting the 7% drop in auto revenue on the call last night. Elon Musk did stress the importance of autonomy and optimists going forward. I really just can't emphasize just the importance of autonomy. For the vehicle side and for optimists. Although the numbers sound crazy, I think Tesla producing at-volume with unsupervised MSD, essentially enabling the fleet to operate like a giant autonomous fleet. To taste the valuation, I think to some pretty crazy number, I can best think on the order of $5 trillion, I think they're probably not wrong. And long-term optimists, I think has achieved the valuation several times that number. I want to thank the Tesla team for a strong execution and looking forward to exciting years. Biggest miss in a few years here, Jim. Although you spent much of the morning defending the name. Yeah, but look, I think that ever since the stock broke down, based on the autos, it's not been as great a story that people want. Now let's come back very quickly and some of that is short-covering. But look, if you want to know what's going to happen with fully self-driving autonomous, you want to know what's going to be autonomous. You want to know what's going to happen with robots. You want to know what they're going to do with energy to the grid. David, you've got everything you wanted on this call. If you wanted to hear about great auto numbers, well, go to GM or no. No, GM was crushed yesterday in the stock market. Adam Jonas killed GM. Yeah, even though it had strong numbers. I have in my time, but Tesla is going to be down. You're right, listen. I advise anybody who's interested in just the future to listen to these calls. Now, with a great amount of at least skepticism, perhaps, and some of the targets and some of the numbers that Mr. Musk shares. Because he does tend to be a bit overly optimistic. And he said that at one point. And he admits it in terms of when the robo-taxi or when full self-driving will be ready. They're now coming out with 12.5. He says that's a huge increase. But he talks about governments acting rationally, almost saying, "Well, when the number of accidents by humans is clearly in excess of what full self-driving would be, everybody will just allow full self-driving." That doesn't really seem to work in the real world. He was saying the federal rules. Yeah, well, just change. Yeah, well, look, maybe a bit optimistic. I think you're absolutely right, David. If this was a quarter, the stock is down much more than it was when the company reported. But this is a quarter where the conference call just said to me, "All right, look, we'll do well with auto, but you've got to start thinking bigger than auto." Well, he's been saying that for some time as you will. No, they had no auto. No, they didn't. Right. And the margins, obviously, are people are focused on, and they did not come in where there was a hope for. We all know about the price cutting this taking place, the increased competition, the perhaps decreased demand at least. And for example, his former home state of California, which is a huge market for EVs, you have to wonder whether his political tilt is impacting in some way. Sometimes I do wonder on the sales front. But so many other parts of the business must, once again, reiterate. If you're interested in building cars, don't buy this stock. We're about full autonomy. We're about robots, and we're about storage, energy storage. And he spoke at length about all of those. I love when he gets into things like valuation numbers. No other CEO ever talks that way. Oh, they don't. And then actually, one of my favorites, it's several times that number. In terms of talking about overall, the valuation is a result of how many robots they'll sell. And then he says, "I mean, at this point, I'm not sure what money even means." But you know, he said something, I love this great. He said, Carl, this is one of the great moments in the call was that he said, "We're all going to have robots that do all the things that we don't want to do." Now, let's not that far away what Jensen Wong says from the video. By the way, in video with a big shout out, they have 50,000 Nvidia chips and just one bled. He actually has to take a shot at an Nvidia 2 because he says he needs more. He can't get more because of such demand, so we have to make our own. And of course-- Right, Dojo is their own. Basically, he says, "We're not--" Okay, there you go. They're in such demand. I think we have that sound. You want to play this? Sure, we'll play it. Yeah. What we are seeing is that the demand for Nvidia hardware is so high that it's often difficult to get the GPUs. And there just seems this-- I guess I'm quite concerned about actually being able to get salient Nvidia GPUs when we want them. And I think this, therefore, requires that we put a lot more effort on Dojo in order to have-- in order to ensure that we've got the training capability that we need. So we are going to double down on Dojo. And we do see a path to being competitive with Nvidia. And there it is. I mean, over time, he's basically saying, "Those chips are going to be in such demand that we need to have our own." Yeah, we both, the Black Wall 200, he's probably the-- that's the new iteration. He's got his game plan for it. I mean, Carl, this is one of those calls that the stock market doesn't like because it's too far out. But there are investors like Kathy Wood that embrace this very far out, which he was glad to share with. But in general, I mean, I listened to it, and I just said to myself, "I think it should be enough, but it's not at 176. It's now up much more, and there are people." I mean, I know people who sell it today. He would just be then completely as contemptuous toward them as he was George Mary Warren, and GM was then. Turns out that the robo-taxi delay was not fake news, as he suggested. Bernstein does today, Jim, if you believe what Elon is saying about his robo-taxi, sell Uber, if you live in the real world, buy Uber. Yeah, I like that. At one point, someone actually confuses the Uber role versus the Airbnb role. And he's like, "Listen, the Airbnb role, if that's who we are, you think we're the Uber, and the whole call was so theoretical." It was like a really great seminar, like the seminar that you wanted to take, but you were afraid that the professor would yell at you, so you're trying to skip that, but that was a great seminar. Mr. Manisham, listening to him, it's one of his great superpowers. He can speak with such enormous specificity about different parts of the business and different industries. And then he obviously also makes these long-term projections that seem insane, frankly, at least to some. Yeah, on energy storage also, most people don't understand just how much demand there will be for energy storage, because they underestimate the demand by orders of magnitude, total energy output he talks about, but he talks about if you actually have power plants that can operate at a steady state, it's at least two to three times the amount of energy that currently is produced because of the gaps, because they go low, then they go high, low, high, and they aren't producing as much as they could at steady state. So when you get storage that's available to you, they can just store their energy that they've produced. And that business, by the way, has been a significant growth driver for the company. Yes, it's really big off a small base, but you never know. Very small base. I've talked about a very similar thing, Carl, that the fastest growing part of the U.S. economy may be the demand for electricity. And if that's the case, then again, you've got a good reason to buy Tesla, not sell it. Yeah, you're all over GE for no for today, and then tuck it. Well, they got the hearing tonight. They got the hearing tonight, and they've got unbelievable the side that understands some of the issues with Limville has an incredible series of pictures. My friend Amy DeCibio, we'll be talking about that. We know Carmine DeCibio is the former CEO of UI. I've seen her pictures, and I've seen what she has to say, and it does not reflect well on the bonding of the windmills. But I would say also that offshore wind is not why you buy that stock. Offshore wind will go away. But windmills actually going to be positive next year. I like to cheat you for no, but don't get me wrong. But there are windmills that break up on a beach that's a nice beach. Doesn't go over well in these beach towns. No, I mean, David, you ever walk on one of those beaches out of those windmills charts? I have not. Well, maybe you'd get a couple of deckers or something. Where are some crocs? That's not a good thing. I didn't even know that was occurring. Oh my. Okay, I'll show you the pictures during the break. I'll add it to my series of concerns when I walk to the beach. I'll show you the pictures right now. Of a windmill that, what is it from? It's just, they break off and get into the water. No, they go on the beach, David. I mean, it's miserable. That sounds horrible. Yeah, well, do I show them? During the break, may not be good for the whales. Oh my god, the indictment on the whale situation is so bad. I mean, that's why that whale got very bad. When they, 1,000 foot pile driver, I mean, it's got everything bad. That whale was not happy. I would not have wanted to be on that boat. On that boat. My favorite Star Trek. Really, come on, save the whales. Wasn't that your favorite? I think the whale moves. It's going to hurt him. It's going to hurt as well. I'm doing this anyway. They're very smart, but I'm going to make a point, even if I'm inflicting pain on myself by destroying this boat. Well, I just say that stay tuned. The fireworks are going to be something for this hearing, and it's going to make you feel twice about some of these alternative energy sources, versus say, NACAS, which is crushing it for Bernova. Don't forget that. The other side of the story on tech today, of course, is alphabet gym. Search and cloud beat, but everyone's talking about these YouTube ad sales. Yeah, well, because that's their stupid. Okay, so get this. All right, so the stock's up for in the report. And then people have it in. They have it in from MAG 7, they have it in for Tesla. Alphabet goes for me, plus four, plus three, plus two, plus three. And the next thing you know, it's down four when we left, now it's down seven. And I thought that they told a very good story about YouTube. No, YouTube is what's upsetting people. Oh, they're going to read it. They were at 18% estimates. They came in at 13% in terms of that. That's what turned the stock, Jim. They gave reasons. I thought that they gave the Ruth Porat a last call. She's done quite a number of calls. I don't know if you heard that. I'm aware. Did you, how many did you hear? I don't know. YouTube missed Morgan Stanley's estimate, for example, by 4.5% even as the company called out that it's the number one in the US. We know that. Everybody streams and it's the biggest reasons. David, they had good reasons. They had 30 billion hours of shopping. God bless you. 30 billion. But viewers of shopping related videos, who is that? A 25% increase in watch time. Who was that? Do we? There was a question as whether there was an early CPM compression from Amazon entering. The looking ahead, they now model YouTube revenue to slow to 30%, 10%, 9%, 3/4, 1/4, 25. OK, you had great search. You had unbelievable Google Cloud. You had totally, totally explicable problems with YouTube, which are not problems, by the way. The Cloud crossed $10 billion. It's an incredible $10 billion. True. I mean, are you kidding me? I know. And the operating income numbers, they've never seen it. CapEx numbers, though, are all are enormous as well. Pretty steady. Yeah, but how about they tried to trap? 50 billion, they're going to spend. They tried to trap them one. Well, are you spending too much? Well, if we don't speak, they're spending them. I'd rather write. That was where you said I'd rather spend too much than too much. He did say that even if we are overspending the benefits are broader than you think. But Jim, the read-through this morning to snap and to pins and to meta. I've been pushing the pins and pushing the Reddit for ages. This was a good quarter. No, but the read-through as Carl is about advertising conceivably and the concern there. Oh, are you really concerned? Are you really concerned? I mean, honestly, let's step back for a second. No, you were going to defend so aggressively this morning. Oh, wow. You know, I'm all over this speech. I knew Chris was here. I knew Chris was here. That's the last quarter. And I really feel that we have to tell the truth here. I do believe that Ruth Porter is listening and saying, "Well, thank heavens Jim read the call. He was the only one who read the call." I read the call last night, my friend, OK? As I was sitting watching the Nets beat the Yankees, I read that call. Well, I was watching the Phillies come back in the 9th with a Castellanos great hit and network advertising revenue. $7.4 billion is the only weak number. That's the only weak number. And they explain that very well. So, Carl, I can sit here and listen to Mr. Negative wearing two suits today for the first time ever. And all I can say is that after it goes down 10, I'm a bar. This is not my crime, which went from 150 to 115, which is incredible. It's not Texas Instruments, which I know you probably really like. Well, we'll get to Texas Instruments and Elliot talking about constructive engagement and so forth. Cloud revenue costing $10 billion. If you had told me that was going to happen two-quarter go, two-course go, I would have said this stock is going to $160. But we keep changing things. And Carl, this Mag 7 trade versus I was looking at the small caps, me, you know, the small caps 600. Oh, yeah, go buy those. I mean, look, it's in vote. I get it. I'll go buy it. Yes, there, OK? They win. I lose. You do not want to let go. No, I'm not letting go. I'm not letting go. Google goes up 30% going in. There's some 30% going in. That's the real problem. That's it. Carl, there's a conspiracy here. Yeah, great. Yeah. Right here. We got. No, I'm Gary Koel. It's a conspiracy game. It's a conspiracy game. Is it? Yeah, it's like Jim's. Jim's. Jim's. I don't even know the rules. You think it's a trilateral commission? Remember the criminal rules? He used to be a guy outside with a sign for Lyndon. Not that long ago. I was a follower of Lyndon, which was one time good. A follower? A follower with religious wise. What do you mean a follower? When he was very upset about the trilateral commission? Oh, yeah. You have a checkered political trust. Where is Lyndon? I was a socialist workers' league guy, but always because the crowd there was a trap. Never mind. When we come back, one former Fed official today, urging the Fed to cut, not just in September, but next week saying that waiting does increase the risk of a recession. Take a look at the pre-market. We'll get to AT&T and Visa. Capital One, Texan. Got some calls on Disney and GM. When we come back. At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care. And we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best? It's possible. Pharmacy benefits that benefit your bottom line? It's possible. Complex specialty care that cares about your ROI. It's possible. Because we're already doing it. All while saving businesses billions. That's wonder made possible. Learn more at EverNorth.com/wonder. 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 U.S. 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 in progress. Learn more at chevron.com/meetingdemand. My dad works in B2B marketing. He came by my school for career day and said he was a big RO as man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laugh at me to this day. Not everyone gets B2B. But with LinkedIn, you'll be able to reach people who do. Get $100 credit on your next ad campaign. Go to linkedin.com/results to claim your credit. That's linkedin.com/results. Terms and conditions apply. LinkedIn, the place to be, to be. Got some big eco data coming up this hour, set to give us a better read on the economy. Got this new note as well from the JPM desk saying, "The macro picture does appear to be cracking with regional activity data weaker. The housing market continuing to crumble." It's unclear, they say, if that is the driving force behind that strong two-year auction yesterday. We'll get a five today, by the way. Today's an opportunity to assuage those concerns with flash PMI data, Jim. But the visa spending momentum, the capital-one provisions. Ma'am Weston. Right. Visa got worse since the quarter went on. I think they give you a pretty good answer. Richard Fairbank on Capital One, just to be sure, gives you a pretty good sense that the delinquencies are actually the rate of the ones you're going down. But what I thought was most interesting was, when you look at housing, the way the housing cycle goes is that people, the sellers back away, because they keep thinking prices grow up, up, up. And then at a certain point, they realized, "Wait a second. Maybe we're playing too close to the best. Transactions then sink dramatically." That's what we have right now. And then the panic begins by the sellers thinking, "Oh my God, we missed the top, we missed the top." And that's how housing goes down dramatically in price. That has been the way of the world that we've had in this country, even since 1960. That's how a cycle works. And we are right now at the peak of this cycle, at the peak. And I think that when I thought the JPMorgan idea was a little panicky, but made sense. You got the two-year down to four-four. No, that was-- You see the Dudley piece? Oh, geez, July. And he was in a higher-for-longer camp, and I've always loved Dudley's stuff. He's great. Basically, he argues it might already be too late to fend off a recession. He did. Look, I think housing is the-- if housing is rolling over as fast as I think, then, David, you better put your place up. Better what? You better put your place up for sale. I have no intent of doing that, but thank you for the advice. You're right, don't worry. Just kidding. No, it is. They-- oh, no, David. You might want to consider putting one of your 18 places up for sale. How about that, my friend? I think one of the Mexican properties is going to go on sale. Oh, Mexico, you're going down there first. So you're starting south of the border and working your way up? Well, if president-- If Trump wins, the patient goes to like minus seven. It doesn't matter who's the president of Mexico. Got a scientist down there. Not a shined-bound fan? No, just the property there is going down because of Trump. Understood. OK, so you're starting with the Mexican place. So that has nothing to do with the conversation we're having here. And no, thank you. I'm just saying Pecos intended air. I couldn't have been about that. And Deutsche Bank had bad enough. Deutsche broke a string of profits, Jim. Although they did pause the buyback. Said the five-year plans intact. Yeah, I think it just-- Anna Butine runs the best bank in Europe. She gets very little credit for it. It has been a horse, stocks up 19% yields for. She's the-- well, this is the largest bank in Europe, but nobody cares. San Tandere we're talking about, not Deutsche Bank. No, right. They're also the official bank of the fill-up use. Oh, is that why you talk about them all the time? Which is why they're so close to you. Yeah, I invited Ms. Butine to my box. I mean, on the broader economy, no, I haven't. I've never been invited. Maybe you had to make those. AT&T, which we'll get to more of the results. But the CFO, we talked this morning. You know, they're saying no weakness amongst the consumer in terms of paying their bills or anything like that. That was really cool. Yeah, generally positive. I didn't want to say good things, but I just did. You're such a complicated man. I love the Tesla call. Down 20. OK, OK, really. That's the call. NVIDIA is the big winner last night, so that's when we got-- That's an alphabet. Right? NVIDIA is the big winner. And then I'll put the Jonas GM. Yesterday he kills it, and today he kills it? Well, today was a cautionary note, and then today the downgrade, which we'll get to along with JPM doing a positive catalyst on Apple, speaking of mobile phones. We'll get Cramer's mad dash and the opening bell after a break. At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care, and we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best, it's possible. Pharmacy benefits that benefit your bottom line. It's possible. Complex specialty care that cares about your ROI. It's possible because we're already doing it, all while saving businesses billions. That's wonder made possible. Learn more at EverNorth.com/wonder. My dad works in B2B marketing. He came by my school for career day and said he was a big RO as man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laugh at me to this day. Not everyone gets B2B. But with LinkedIn, you'll be able to reach people who do. Get $100 credit on your next ad campaign. Go to LinkedIn.com/results to claim your credit. That's LinkedIn.com/results. Terms and conditions apply. LinkedIn, the place to be. To be. S&P laggards going into a week tape this morning. We mentioned Tesla and Alphabet. But Otis with the sales miss. And then there's Lamb West and the French Fry King saying that slow down and restaurant traffic in the United States greater than we expected. Share is going to open down with a fifth shaved off. Opening bell coming up in five minutes. Don't forget, you can catch us anytime anywhere. Just listen to and follow. The Squawk on the street, opening bell podcast. All right, squeeze in a mad dash. Get an opening bell. I want to talk a little verdive here. We talk about it a lot. Dave Cody, chairman, data centers. Organic wrote 13.7% above street estimates. Stock down. 15%. No, see David, this is the key to this market. And the reason why is because a lot of people are taking shots that there's too much spending at the data center. So this is the epicenter of the data center. And I think that's not true. Everyone needs to keep building them out. But be aware that this is the stock that people are going to seize because the guide up was gigantic. 229 goes to 247, 253. But David, when you see this, you say to yourself, the long lives are out for the companies that spend on the data center. They spent too much. That's the right. I disagree. I put it out there. And that's for the weaknesses. Yes, it is. Epicenter data center. Despite, again, what we're very strong on. Well, look, it could be Lamb Wesson. I mean, the French Fry Revolution. I thought that was true. [INAUDIBLE] [CHEERING AND APPLAUSE] Let's get the opening bell here. And the CDC will kind of change. It's a big board. It's infrastructure capital celebrating the launch of the infrared cap, small cap, incoming GF. At the NASDAQ, financial software maker, one stream backed by KKR celebrating its IPO. And the CEO will be on closing bell over time later today. Now, that puppy is bringing the infrastructure. You go along that and you short the big cap infrastructure. And then suddenly, you're really happy. You think you're really smart. It's really hard to do. This is all algo-driven. I don't mind that. A lot of trading is algo-driven. But if you can buy a small cap infra and sell a big cap infra, even, I don't know what people think, Qantas, too big Qantas, very good. But that's the way of the world right now. And we're seeing every mega cap for sale. Because they're all linked. They're all joined at the end. Well, and it's not like smids are benefiting today, Jim. Right? There's the rotations not in place. It's early. And I think that what happens is they sell these stocks early. And then they put the money to work later in the smaller mediums. So you have to sell these first in order to have the cap of the play. And I think that's going to continue to play out. Even though I think it's somewhat ludicrous, because these stocks have moved a great deal. The smaller mediums are. But people have it in for maggots. Maggots, excuse me, maggots, maggots, maggots versus maggots. They've got it in for mega cap tech. Mega cap? Yes, they make it. Don't use the term hyperscaler. And I tried tech titans for a while. Didn't work. No. I got to go back. I got to go since 7. I don't know. It's a really 7. It can be 8. It could be 6. I feel it's just fine. It's just your Brenner right now, and maybe Steve McQueen. Steve McQueen, you know, I-- You wrote his obituary, yes. He was a great man. People don't know that. Steve McQueen. Steve McQueen. OK. Do you ever go to a bullet? Do you ever see where the little one barks street? Oh, of course. Yes. I have. It's awesome. I pray you can't replace that. Go ahead. This room about walking there. What do you have? Wait, wait, what was that? Never mind. Just give it to me. Hit me French from it. What do you want to get hit with? Hit me French from it. What do you feel like getting hit with? Oh, I'll eat with AT&T. See if I can get a smile out of you. Focus on him. Will you go in real tight on him? Let's see if he's not going to crack us up. There it is. Jim never has a nice thing to say for AT&T. But by the way, not necessarily. They had additions. What was the video additions for Comcast versus this? They-- well, they added 239,000 fibernet ads. They have 8.8 million fiber subs, 40% penetration. The number of people always focus on, though, would be post-paid phone net ads, 419,000. And churn across the industry is staying very low. Did speak to the CFO, saying generally, as you might expect, hitting all of these things, free cash flow of $4.6 billion. Their leverage ratio is down to $2.9 million. They expect to be to $2.5 by the middle of next year. You can see what the stock has been doing. John's thanking the company's CEO on the call. Guys, had some interesting things to say about upgrade cycles. And here, you're extending beyond just AT&T. You're actually getting into Apple territory for that. I think we have it for you. Take a listen to what he had to say about the upcoming AI devices and whether they really will spark a significant upgrade cycle in people buying and getting new phones. There have been other AI devices that have come into the handset ecosystem over the last couple of months. I haven't seen anything in them that suggests to me it's going to cause customers to immediately say, this is world-changing for them. But it doesn't mean that somebody doesn't unlock the key at some point. There's a lot of ways you can experience AI without having to necessarily change out hardware per se. Like a ringing endorsement of a huge upgrade cycle as a result of a new iPhone. Well, I mean, what are they going to say? Listen, you ought to do this. And we'll give it to you for free like we always have. Right. Not free. That's called hyper. There are some, including Moffat. I know who thinks that that will not be a good thing if you get a big upgrade cycle. But by the way, squawk box, when they're growing Hans Vesburg, that was the problem in the case against Verizon. Basically, they're going to have to really pony up. And if that's the case, David, then Tim cooks the winner and all these guys are losers. Right. They may not be rooting for a big upgrade cycle as the point because of all the subsidies that have to go along with it. From the carriers themselves. But it's a big question as we head into the fall now, especially with the next model getting ready. Apple is so important today because we had some incredibly positive notes about Apple. And if Apple can hold, then that would be the Mag 7 that would try to-- that's the one that if Apple can hold, that's a better need on Mag 7. It's also the smallest drawdown of the 7 so far. But JPMorgan today does say we expect Apple to reassure investors that the upcoming AI replacement cycle earmarked to begin in fiscal '25 is leveraging a more robust launch pad for phone. Yeah, and I think that's very important. By the way, Apple not hit by the outage crowd strike because Apple technology was not hurt by what happened with crowd strike George-- by the way, George Kurt reminding us that the vast majority of the systems are operating properly. They continue to work shoulder to shoulder, of course, with their customers. And there is a report out on the website. If you want more, crowd strikes have been up the last two days, but a little teeny-weeny profit-taking. Final thought from me here on AT&T again, which is sort of an outperform of this morning, still up 3.8%, not really an impact from this affordable connectivity program that is no longer in effect has helped subsidize in the broadband or wireless bills of a number of customers throughout the country. Verizon got hit on it. Comcast as well has said it may be-- You're the only one talking about this. It may be hitting them in the next quarter. Charter shares. AT&T has said earlier this year, they just don't have that many of those customers. So not as much of an impact. Guys, Alphabet's down 5%. It's taking meta with it down 3%. And to your point, megacap tech is basically weaker. Look, sometimes it just comes together in a way that just says Alphabet is up 30% for the year coming in. They're spending too much money. They're the data center, verctive, Nvidia, spending too much money, getting too much money. You've got a must saying listen, we're paying Nvidia in order because there's a shortage. I mean, look, there are so many reasons to sell these toxins, and they just decide, you know what? Well, I don't know if there's so many reasons to sell them. I mean, many of them sell at relatively reasonable multiples and still have very strong growth rates. So that would be the reason to own them. Right. But you've got to let them have these periodic scores. Now, there's double tops in it. And multiples, to be fair, have gone up. Oh, absolutely. Look, anybody who does it, look, if you take profits in Alphabet up 30%, you could say, look, I don't even care what they said. I just think it's proved to sell some. You once wrote 20% gains? Nothing wrong with ringing a register. No one with it at all. You know, my travel trust owns many of these and it tempted to buy Tesla, it's so good. But I'd just say, OK, let it come in. No need to be a hero. You know, find out there's a bunch of stocks that are still cheap, some of the health care stocks. You do not need to go and just get mowed down by the, you know, enflating fire of the sellers when it comes to Alphabet. No. I mean, interstitial warfare. I'm not like, there's like, machine guns. Interstitial. You know, they do that with free enflating fire when you have a kill zone. And that's where the Meg 7 is right now. Kill zone. Well, it all goes back to this enormous rotation that was historic in nature, something we hadn't seen for the likes of 30 years in terms of the outperformance of the Russell versus the S&P. And now it's switched to the NASDAQ, actually, the QQQs. It's switched to the S&P small cap, which I have. The numbers are really incredible. I mean, is that run its course? No, you can see, of course, some are referring to is that huge run up right at the end of the chart. They sell the big cap first, and they take the money, and they roll it into these stocks that they've never heard of, which is an algorithm. Because believe me, the companies that they're rolling into, David, you don't want to even get near it. Well, the quality is not pressed to what it once was. I'm sure you read your-- Xembalist, yeah, Xembalist came out. It was at yesterday, I was reading that piece. No, it was a really good piece. Xembalist is fabulous. And he talked about, right, the JP Morgan-- what is he, a strategist? He's a head strategist. He writes the I on the market, which-- But he means diamond reads-- He writes great stuff. And I always read it, and I know Carl also-- It's much-- he talked about historically these patterns of the Russell-Out performing. I mean, it's not a great damage. There have been long periods where that's been the case. But he also did talk about, to your point, the declining financial health of many of these companies, versus what they've been in the pattern. Well, 4% of the Russell is negative earnings. Right, well, let's go over the top ones for the small cap where they're going right now. It should be chewy, OK, takeover bid, lumen technology, sold to you, and backed up. Oh, yeah, got to have that. Astronaut, ooh, must. Green brick partners is about time. Forward air, who wouldn't want that? S&T bank corps-- oh, so first bank shares. VF corps. That's burning a hole in my pocket. No, they got rid of that business. Community finishes-- Are you going to sit here all day? All right, I'm not-- No, I've got the ones that are also-- Enough. Why? Because you made the point. But this is-- I think this works. It's like really falling, bro. I just love when you say sold to you. That's my guy. And then some SBS comments. OK, I'm sorry. Look, I guess you want to talk about lamb wussing. I do want to talk about lamb wussing. Yeah. What's going on with french fries? What's the problem? Restaurants. I got to tell you, this could be GOP-1. French fries. It's a-- That's what I wondered. Is this a GOP-1 effect? Coca-Cola thinks it liquors the one that's most impacted. Do you think there's enough of the populace on these drugs to make that kind of dent? No, I actually think this is possible. Going out-- this is outpropos of the JP Morgan. I think the going out trade, other than when it comes to Texas Roadhouse and Brinker, which is-- Not eating french fries on the Upper East Side anymore, Carl. All those people going for their wargovia appointments every day on Park Avenue. Oh, there was like a Charles de Goulton. Wendy's doing terribly. I restaurant brand doing OK. I still think McDonald's is not crushing it. That-- like, who asked french fries? Well, McDonald's is not necessarily in west of it. I have french fries. I think they're the greatest thing ever invented. McDonald's is down 2%, and one with milkshakes. Almost back to the lows of the year. Look, people aren't going out as much. I think that this is my new theory, is that they have to cut the price of things. Like, they have to cut the price of homes, the price of airline tickets, maybe the price of theme parks. Everything got too much. It's actually-- customers had it. Good piece out of Barclays today. Why the universal theme park weakness is not-- may not be reflective at Disney, because of differences in price and mix. We have to get a new Johnson order in that. Yeah, I tried to get some answers yesterday. It was unable to, in terms of the impact-- Disney shares ended yesterday down more than Comcast. I know. Our parent company. Is that Pearl Mudder? And it may have also been the news reported by the journal and confirmed by Mr. Pearl Mudder. He no longer runs the stock. I can call him out of him. He's a very long shareholder. And of course, represented by far the majority of the stake that was voted by Tryan during that bitter proxy fight that they lost. Right. And he's gone. I can call him out of no longer a shareholder. He blew it all out. I mean, that's incredible. I got-- This is a picture of the Grand Teton. Tell me that isn't the Disney chart. Grand Teton. I mean, I'm going to show on TV. You know, this is a visual medium where we need the picture ahead of time. See it and say it. No, no, OK. Well, but the Grand Teton is the exact same chart. And by the way, it doesn't stop here. It goes, look. So you're not a fan of Disney. No, I happen to like Disney, there's Grand Teton. But all right, let's-- but this question is whether or not the weakness blew out something, we blew out something. Whether or not the weakness at the Universal Parks is also attributable to Disney. Well, the piece is new. Again, Universal, they talked about upcoming-- this epic universe. And maybe some people are staying away because they might want to come later when epic universe opens. That's a beautiful picture by the way. Thank you. That's why I was waiting for that. You're welcome. No, look, I think that there was-- the piece really didn't say that it's apples and oranges. I don't know. I don't know either. It's French fries and baked potato, I don't know. Right, well, Disney does have cruises. And they did get the Disneyland workers now have a tentative, which kind of averts some labor strife over there. Look, Nelson Peltz did sell at the high. It was a good sale. It was a good sale. Promutter getting out was a good sale right now as well. Promutter, listen, over time, given how long ago he sold marble to them, made money. It's not like they didn't make money over a long period of time. You got to go back to 10. It's a 15-year period. I may have been ill-advised to fire him. Didn't take it well. Didn't take it well. Wasn't happy about that. She's a proud person. I wouldn't blame him. He created something great that seems to be a little bit lost in the shuffle. You think it's lost in the shuffle? Well, that movie sleeve is not exactly the one that, like, Promutter would have recommended. Speaking of things aimed at kids, Jim, you had Mattel on last night. Nice 5% pop here. Yeah, well, look, I had to go into the stories that Elle Catterton, which David knows very well, may have approached them. They do have so much. They have 700 million in cash. They buy and backstop. The numbers were fine. It's questionable. We have 700 million going to a billion in cash. It's a $6 billion company. David, it makes sense that someone can say, you know what? Let's take this private. It's possible. It's certainly of a size that could do that. Would House, Hasbro, be interested. What was the answer you got when you asked them about it? I said, listen. You want to listen? Take a listen, we got it. Yeah, we have it. Take a listen, Matt, money last night. Wow. Beyond 2024, we believe the trends will further improve, and industry will return to growth and continue to grow over the long term. That was not what I was looking for. I wanted the answer when you asked them about the takeover rumors. Was Reuters wrong? Just wrong? Look, it's a very hard call because he obviously would not say that Reuters was wrong. He just talks about how he's going to realize the value himself. I think he'd be a fool to sell the stock right here. Sell the company. Why is the stock up so much? Well, that's because people believe that the cattered in rumor is real. I mean, he certainly didn't-- So he didn't deny it. Well, you know, he just said they didn't want to talk about it. David, you've been in these phone calls. They don't say, hey, let me tell you something. That Reuters piece is just spot on. I'm selling the company. No, they don't. We don't comment on the rumors which is what he had to say, and he believes in the long term as your-- I'm saying buy the stock. Now, Hasbro, the idea that Hasbro might buy them with this antitrust alarm? I know, not in this interest. Are you kidding me? Not in this world, not in this world. I remember 20 years ago covering when Mattel tried to buy Hasbro. Remember that? Very true. Yeah. One gold was a eight prime gold. That didn't-- no, it was even before that. This was a long time ago. Really? This one, Hasbro was, yeah. I believe it was a long time ago. Hasbro has and fell. I forget my dates, but I remember covering it. I think it was a long time ago. It was a long time ago. By the way, you mentioned Trust Division would not let a toy company merge with a steel mill. I mentioned how cattered and it puts me in mind of LVMH, which we haven't mentioned this morning, and slow down and luxury. David, did you hear about the champagne numbers? What they said about champagne? People must be unhappy and they're not drinking champagne. What the hell? And is that really your analysis? They've never seen bad numbers, so they don't know what to say. How about the Cognac numbers? Can you imagine talking to me? Hey, Cognac, pretty good in US. Did you read the call? I read parts of it. It was historically funny. I did. It was like, where was Robert Franco in the narration of this call? Hey, rich people, we didn't spend as much more rich, so it's not that much of a surprise. I mean, Burberry did not have good numbers. You go boss. You go boss did not have good numbers. There's concern obviously in China. But it's just a funny call, because it shows you, if they're like Lenin said, if they're rich or unhappy, it's their own fault. And it absolutely had to let him eat gat-toe. Let him eat gat-toe, because I used to take-- I was a French cop. Well, we're worried about champagne and fries today, Jim. There you go. There's a combo. Barbell. Champagne, caviar, French fry. Meantime, we're sub 5,500. Triple cues, red for the month, and now some flash PMIs. Let's get to Rick Santelli. Hey, Rick. Yes, indeed, and also Bank of Canada just cut for the second consecutive time, 25 basis points down to 4 and 1/2%. S&P Global July preliminary re-sitting the wires on manufacturing, not good news. Back below 50, 49.5, the lowest of the year, lowest since December of last year. If we look at services, a completely different story, 56. 56 takes us to the highest level to March of 22, March of 22. So that is cooking in Greece, and of course, affected the composite in a positive way. The composite is 55.0, and 55.0 would be the highest read since April of 22. We still have new home sales at the top of the hour, and 70 billion five-year notes to hit the auction block at one Eastern. Squawk on the street or return? After a short break. Time for Jim and stop trading. One of my favorite companies is Texas Instruments. It's a long term, and one of the first talks I ever bought in the '80s, and I've got to tell you, they did a very good number last night. But the most important thing is, Haviva Law and the CEO was on the conference call. Now, Elliott Partners took a very big stake in this. Elliott said they-- it's the release and it took positive steps. What I think they really did was actually explain themselves. They're going to do a big meeting about what they're up to. They've been historically spiteful of Wall Street, to the point where I always found their conference suppose very uncomfortable, where I said, geez, how much-- they're so contemptuous. That's gone. The contemptuous attitude is gone, and with the declines after the report. So good for them. Did NXP lower the bar on these guys? Well, they're stuck in. I would say a little bit, but the one thing I would say about Texas for ZenxP, Texas didn't even say a lot of good things. They just said, look, we had a long-term plan, and that was great to hear of me. It's typically that they would never say anything to you. I mean, the conference call was like, frankly, my dear, I don't give it to you. Although, I mean, Elliott wants that $2.5 billion stake. We reported on it. They want them to at least change their approach to CapEx. Yes, they haven't said-- They haven't said they're going to do that yet, but they haven't announced-- CapEx meeting coming in. A capital management event in August. I think that's going to be very positive. Elliott is saying they're looking forward to it. Yeah, I do. To find a way to attach themselves to it. Do you think they're having an impact? I think that the company is changing the way it communicates with Wall Street and does many good things, and it's going to be a terrific story. So, how about tonight? OK, I've got Benioh, Enterprise Software. Everybody hates that. They just hate it. Service now reports tonight. Maybe Benioh can tell a good story. The problem, of course, with Enterprise Software is that we fell in love with hardware, and then we decided we didn't like hardware. We didn't like small and medium-sized business stocks, and then those stocks were all nothing we've ever heard of, so we'd just buy the index. You'll have IBM and Ford and-- Oh, it's great. And Ford, me and member, Jonas likes Ford. Yes, he does. But we're still dealing with you overhang, and don't forget, David, avocado prices. Drew, again, I always feel like they're going up, some but I don't know. David is-- Oh, he's hearing about an avocado? I don't know how to roll my arse, but it's Guerrero. Guerrero? Oh, that's the state in Mexico that makes all the avocado? Yeah, yeah, don't forget, David. They're grown, aren't they? They aren't made. David, you're a black something. How's that good? It's a great for him to bring up a stock that we haven't mentioned at all at the very end of the show. We've got 10 seconds left. What did a non-cries, millies-- Blackstone, mortgage, trust, and Mercer real estate stocks down the cover, David and-- Stuck the dividend. Where's Judy Marks admitted to any buildings that are above six-- If you have a six floor and below, just six stories, you're still fine, but the numbers weren't perfect, but the service numbers were very good. I don't-- can I stay? I've got a lot of them done. You're done, you're out of here. We'll see you at six, though. Mad money, six PM Eastern time. Dows down 300 housing data after the break. 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. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information Squawk on the Street Participants consider reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Squawk on the Street disclaimer, please visit cnbc.com/squawkonthestreetdisclaimer. High five, up top. Dave's company just got the first ever five-year price lock guarantee from Comcast Business. It's five years of gig speed internet, advanced security, and a great rate that won't change, all from the company with 99.9% network reliability. Yeah. He hasn't given this many high five since Deborah brought in her famous banana bread. The Comcast Business five-year price lock guarantee. In Z8-21-24, guaranteed rate applies to monthly service charge for new customers on qualifying internet bundle, excluding taxes and fees, other restrictions apply.
