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We're here at Post 9 at the New York Stock Exchange. Karl has the morning off. Let's give you a look at futures. We begin trading a half hour from now. Yeah. Yeah. Mix. Yeah, mixed. Alright, let's start with our roadmap. It begins with holding pattern. What is next for the Fed? Of course, the rate cut path as investors await key results from the next batch of mega cap tech earnings. Plus, we're going to have a pharma in focus this morning. Pfizer and Merck both lift their outlook, but the shares kind of moving in opposite directions ahead of the open. And Sophia is showing strong guides, boosting its 2020 for outlook after quarter earnings beat. You think it'll matter? It doesn't matter. No idea. Wait. We'll ask Anthony Noto who will join us later in the hour. Let's start with the markets. Of course, Fed begins a two-day meeting ahead of tomorrow's decision on rates. Of course, most expect that it will just remain the same, setting up for September. Did there a little discussion yesterday? Oh, could it really happen? Could they go for a cut? Highly, highly unlikely, Jim. Yeah, look, there's always an element. Imagine this. Let's say I came out right now and I said, I think they're going to cut tomorrow. On Thursday, I would come in and if they had cut. You would say I was a genius, but you'll forget that I said they're going to cut if they don't. Right. So it's asymmetrical. You could look like a hero or no one remembers. And I think that what's better is just to say, look, it's highly unlikely. And then move on from it so that when we watch the press conference at 245, and someone says, "Well, this is a big deal," we can say, "No, it's not." Look, I think... I mean, isn't that the tell there there anyway? 4172, it's like this. Yeah. I mean, we're down. It's okay. I mean, you can see what's happened there in terms of take a look where that chart was in early May. It's a win. J-PAL is winning. I mean, you can make some comment that says it could be a little different, but sometimes it's good. Sometimes it's Aaron. Aaron Judge. Yes, sometimes. Two hundreds. He's incredible. He's incredible. Well, I think J-PAL is the rest of the team. I think J-PAL is incredible. I'm just saying, I'm using a benchmark. Yeah. That we can ferment a story that J-PAL made me doing something wrong, but I'm trying to figure out how we could do it better. And I can't come up with it. All right. But you are in the camp, along with everyone else, I guess, it's September. Yeah. I mean, look, there's a lot of things that are going not that well for the consumer, but they're better than they've been. We're not seeing a lot of bankruptcies. I would have thought we'd seen that by now. We're seeing some slowing in auto. We're seeing that we're waiting for housing prices to break. The supermarket, we get rollbacks at Costco and rollbacks at Walmart. TJX sales are good. I mean, it's kind of what should be happening. I think the mystifying thing is when you cut rates, people want to sell the Mag 7 and buy not small cap. That's wrong. That's just like this rubric. I mean, you want to buy things, I just say, you want to buy smaller than big cap things. Although, yesterday, we had a halt in the so-called historic rotation. But not in the mix that kind of showed some life. Right. And the Russell was down. Right. And I think that that's because there was an absence of news. Now, Microsoft, the way you play it, for those of you who are quick-term abroad traders, you can't do anything until Amy Hood speaks. Amy Hood, you have the C.O. speaking, then you have Amy Hood. And Amy Hood either drops the bomb or says things are better. And last time, the stock roared because she said, "And co-pilot, people are buying it and they like it." And that was it. So if you watch after hours, the stock's going like this. Right. So that's what you have to look for. I know a lot of people can't wait and they read the release, but that's not what's defined. I mean, people actually want to create conference calls. I prefer to just read them and then talk about them the next morning. I mean, you're rational. What are we going to be talking about tomorrow morning when we digest Microsoft's earnings? I assume I'm going to be focused on CapEx and just how much they're spending and what commentary around it is. And is there anything that indicates their concern somehow about what are you smiling for? Well, because if they say that they're not spending a lot because they don't have an ROI, then NVIDIA, and they go down, if they say they're spending a lot, and they're hoping there's an ROI, then their stock goes down and you get NVIDIA down. So I guess we can answer. The answer is don't buy Microsoft going into the print. Well, you could say it's down enough that you can, but I think the odds favor other stocks. That's all. The odds favor other stocks. And I think that these stocks have had a big move. They've been considered chair donors. Their charts are absolutely awful. And a lot of people just say, you know what? I see what's going on. You have to buy smaller cap and get out of bigger cap. You have to buy F5. Yeah, I wish there was enough money around that you didn't have to sell the MAG7, but it seems like the honeypot. And that's what you see. Those represent that enormous amount of the market cap of the S&P. Yes, until after they've made a lot. Often. Amazon. I think Amazon's going to be a really good quarter. Now, maybe by then the MAG7 will be down enough that you want to pick at it. But I was watching this show with Mark Zuckerberg and, you know, agents. And it's all very positive. And I say at the end, you know, this is so positive. I'm going to go buy Stanley Blackendekker. So you are still in that camp. It just says, you know what? Take a break from the biggest of the big. Just take a summer vacation from MAG7. And the broadening is not a bad thing. And it doesn't necessarily mean you should be heading into small caps. No. You just should be heading into perhaps. The small cap is Stanley Blackendekkers of the world. But the small cap is an illusion. That's just an index. So people should say, wow, which small cap do I like? It's like a few go when you buy the S&P mid cap 400. Well, in the top 10, you're going to get three banks that you've never heard of. I'm not kidding. You're right. Right. Yeah. And then you'll get three home builders. Uh-huh. And it'll be tall. It'll be Horton. It'll be Taylor Morrison. And that's six out of ten. And I, you know, that's what you're looking at. And that's, so people are just buying the index. They're not buying the individual stocks. David, because the individual stocks, you could get a real clunker. Yeah. And that's the trade. And not the Russell 2000. That's not the trade. No. And what about the S&P mid cap? That's the trade. That's the trade. That's the trade. Well, we'll sort of get to some of the earnings. I know. We'll end up, we'll end up, we'll get to the earnings. Oh, okay. Katie Uberty. Charge us again. We've yet to see a cross-asset rotation from bonds to stocks. And it doesn't look like that shift will happen or wouldn't happen any time soon. I hate to disagree with my favorite former Apple analyst. Well, yes. She beats to be the analyst. Why don't you stick with 5% when it becomes 3%. You just, you look for stocks that have a 3.5% yield that are doing well, where you look for MLPs, which have been terrific in the natural gas and oil space. And you sell the CDs when they come do you take the money and put it else. I mean, I love that call, but it's not historical. Historically, every single time you've had the rate cut, people put money in stocks. Every time. All right, let's move on. In 1994, 1996, there were rate increases. Yes. People still put money in stocks, which was very odd. Right. But that was the beginning of, I mean, it was the Netscape IPO. I know. That was because there were secular changes at work. Now, we're saying-- Of course, there aren't the secular changes right now, 30 years later. Yeah. There are, but no, but we've had a huge move. And now we're waiting for ROI. So, service now comes on. Bill McDermott. We can be waiting a while for this ROI. Bill McDermott said things were great and the stock went up 100 points. Service now. And then it didn't give up the gain. Right. And that's because they have really, now, they really made some real strides in making money in AI. Now, the next thing is, well, Salesforce and Workday, well, their AI product do well, because they have the data, so to speak. And we won't know until we get to Dreamforce and then we'll see. But yes, you're right. I mean, if service now is the only one that has an ROI, that's not great. No. It's not great. Let's move on to some of the earnings movers this morning. Not small companies, of course. We want to start with P&G. It's going to be down a bit for-- For $1,000,000 market cap company, Sega. But $1,000,000 down 10. I mean, yeah, Proctor is very cautious, as they always are. They talked about how raw costs are still not coming down. Net sales are flat, organic sales are 2%. Yeah, and they talk about some products that got too expensive. Yep. And they have to cut back. And what happens is down 10. I mean, there was a producer in our office this morning. The stock was down 6. I said the stock was down 10. I'm not a visionary. I just know the way people trade Proctor. So Proctor lowers the boom. John Moeller is incredibly cautious. Right. The CEO. And people sell it down 10, because the next guy, because they're afraid it'll go down 12. Buy Proctor. Buy Proctor down 11. The people who are selling it now are not even waiting for the quarter. Not even waiting for the conference call. There'll be cuts in Proctor, and there'll be people who say just own Proctor. But you don't sell one of the great companies of all time at 1.58. And that's where I'd say draw a line. And we sold some at 1.66. We sold some where buy back. Yeah, but you occasionally have been stopped a bit by the multiple. I mean, where are we right now? Well, the multiple's high. Well, the multiple's high. Yeah. Well, the multiple's high. What might mean if I could zero percent? Call it that a better job than Proctor. No, no. That's the organic growth is a little bit better than that. Oh, 2%. Okay. True. David, they're selling shampoo. They're not selling that. Well, I mean, it'd be for operating cash flow is 19.8 billion. That earnings 15. That's for the fiscal year, by the way. Right. Look, it was not a great quarter. And they were cautious. That doesn't mean it's a bad quarter. Proctoring gamble. And people are acting as if they miss the big cycle in AI. No, it's just it's, you know, surfactant. You know what surfactant is? That's the stuff that cleans your hair. That's how I have any surfactant. But I do think that you sell it down 10 because you're just scared. And what I'm saying, because you think it's going to be down 12. So just compromise. Buy it down 11. All right. It's proctor. All right. It's always going to be. The market likes to, it's going to be down, which is, which is Merck. And again, one of the larger companies out there. It's another one. I mean, $320 million market back. He, Truna was great. He, Truna, is amazing. Obviously, the cancer therapy used with so many other things. 7.3 billion in sales for the quarter. And they have other drugs in the pipeline that will be terrific. They're by that stock down five. They're talking about sales overall, what, for the full year? Somewhere in the 60. What did I see? Yeah. It was about 64.63.4 to 64.4 billion. But it gives you a sense of how important key Truna is. Right. If you annualize those. Those are not bound. Loss of exclusivity one day. As a percent of overall sales, key Truna is the most by far. No. And look, you could say, listen, any company that's that lever to one drug could be in trouble. And that's exactly what Rob Davis is going on. This tremendous spree for other drugs that I think are going to be successful. So I think you buy Merck knowing that Rob Davis has an ace up his sleeve. He's made these great acquisitions. He made them one and talked about them when they have money. And I was mesmerized by how good they are. So I'm saying Proctor, go against the grain and Merck go against the grain because you can't buy stocks up five and up seven. That's what idiots do. All right. You want to be. Yeah, but you're just talking about trading within the day here. Sometimes I need you. Trying to get a good basis. You go back and forth between being in the moment and then you talk longer term. And I think sometimes people confuse the two. Well, I'm just telling you that. I'm just sitting with you for 13 years. Well, I'm just saying that the National Lions on mental illness has rained a bell. And I have every right to be bipolar. Pow. I'm not schizophrenic. Thank heavens. You know, thank God for that. That is one that, by the way, Bristol Myers is working on. And they're going to have the first breakthrough in 30 years. Let's get some free. All right. 30 years. We're going to talk a little Pfizer. We'll get to that in a bit. Yeah. Because those numbers actually are resulting. But again, I just want to thank up a bit. Keytruda is great. Rob Davis is great. Merck is great. You buy it down fine. John, you know, molar is historically conservative. That quote wasn't perfect this quarter. But you're getting proctor, which is one of the finest stocks down, down 11. We sold some at 166. I am anxious to buy that stock back. All right. All right. We've covered that. But we've got a lot of stuff to come, including a rare joint appearance. Jim mentioned it from Mark Zuckerberg and Jensen Wong. They sat down to talk about the future of AI. They ended up swapping jackets. Look at that. You know, Zuckerberg is sporting. Zuckerberg was very cool. Wow, the hair. It was very cool. He looks like a woman. By the way, Justin. I kind of dream of one day, like you can almost imagine all of Facebook or Instagram being, you know, like a single AI model. Every single restaurant, every single website will probably, in the future, have these AIs. Before they were Team USA, they were kids, trading recess for reps and summer vacations for travel tournaments. All for one chance at gold. Stream the Olympic Games with fast Wi-Fi wherever you go on XFINITY mobile. Get the fastest connection to Paris with XFINITY. Proud partner of Team USA. Now through September 21st, XFINITY Internet customers can buy one unlimited line and get one free for a year. Learn more at XFINITY.com/TeamUSA. Restrictions apply XFINITY Internet service and two no unlimited lines required. Reduce speeds at 30 gigabytes of users per line. Data thresholds may vary. My dad works in B2B marketing. He came by my school for career day and said he was a big ROAS man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laughing me to this day. Not everyone gets B2B. But with LinkedIn, you'll be able to reach people who do. Get a $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. Imagine earning a degree that prepares you with real skills for the real world. Capella University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. There have just been too many things that I've tried to build and then you've just been told now you can't really build that by the platform provider. At some level I'm just like nah f*ck that. For the next generation, we're going to go build all the way down and make sure that there goes our broadcast opportunity. Yeah, no, sorry. Sorry. I think it's a beep. Yeah. You know, we're doing okay for like 20 minutes. Give me talking about closed platforms and I get angry. I was Zuckerberg and Jensen Wong last night at SIGGRAPH. It's a major computer graphics conference. Jensen is a man of many talents. Apparently he can also moderate fairly well in the moment, calling out Zuckerberg for dropping an F-bomb there. And that is his home court. He had to love that conference. That's why he's there. Okay, so look. All this is draws. Draws. What a good word. Thank you. Well done. I think that's yours is that Jensen Wong didn't like Mark Zuckerberg. They were opposed. I met one plan in one of the Mies I have with Jensen. He talked about how the model that Mark Zuckerberg had is based on combat. And that he didn't want to be part of combat. He wanted to be part of peace. So he didn't want-- What happened, Jim? Because you know, both of these guys. So what happened here? Okay. They got to know each other very well. They met each other a bunch of times out of work. And came to a first apocalypse in terrorists. And then over time, they really genuinely enjoyed each other. And that's who they are. I mean, but I got to tell you, Jensen wanted it that way. Jensen knew that Mark wanted to be a gigantic client. Okay? And he did not want to dislike him. He wanted to know more about him. I told him I thought that Zuckerberg was a totally reasonable man. And he had to like get off the desk and like see him in real life. Right. Not that-- No, Jensen did save. I want to meet you because Jim says you're dead. What should we think about the fact that, okay, these guys are now hugging and seemingly friends? Is there a takeaway? Yes, for the business community and for the world of large. The takeaway is that Mark Zuckerberg believes in the Industrial Revolution. He believes in Blackwell. He believes that Blackwell is going to be the, which is the latest iteration. The next generation. The next generation. Yeah, he's going to be video. And video is what everyone's been missing. See, I don't think people realize the step change between the current and the new is that they can feed everything video. It's not just feeding in the novel Moby Dick. You can feed movies of James Bond. And that's why they do have the robot that can pour drinks. So that you can say, and Jensen could-- Could they train on all 13 years worth of our shows? You're sitting here, the three of us? Could they train on that too? When Jensen made me. It was frightening. Because it was me. And he said that he had worked all weekend on the Philadelphia lilt, which is not unlike Kate Winslow when she was in marriage. But they can input video, train on it, I guess as well. Yes. It's eerie. David, because you can-- The most important thing. No one would know that it wasn't here. The rate of change is accelerating. And we haven't talked about it as often lately, but there is-- It's still coming. Yeah. And I just think what you're seeing was not convenience. It was not convenience. They genuinely came to like each other. And I will tell you, I think that Mark Zuckerberg has changed. Now, when I text him, I say, listen, you got to come on about the rate bands, because the AI is good. I just get it hard. I don't get what I want, which would come on. But I'm not-- that doesn't mean I'm not going to try. Keep trying. Keep trying. I'm a reporter, for heaven's sake. That's what you do. We're down five with. All right. Coming up, apparently he's a reporter. It's a-- it's his mad dash. 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 in progress. Learn more at chevron.com/meetingdemand. Imagine earning a degree that prepares you with real skills for the real world. Capella University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. All right. Let's get to a mad dash, of course. We got six minutes for an opening bell right here at the New York Stock Exchange. Stanley Blackendeker, you mentioned earlier and how you want to do it as a mad dash. All right. This is Habershan. Listen up. This is a story of great expectations for Proctor, of which it doesn't deliver. And then a company that people think is never going to get it right. This is Blackendeker, but I'll see you may know in this to Wall. And if you were a professional, like I am, and they had good gross margins. They had nice expansion. But David, they had 1% organic growth. So there's some guys who go from, uh-oh, learn about organic growth to 1%. And that's what people are looking for. This is the smaller cap revolution, not the small cap. That's a canard. This is a smaller cap. And what's interesting is this happening with renovation, not doing that well. We know that, uh, that portion of brand innovations also had a good quarter. Mohawk had a good quarter. So people are getting a jump on the rate cuts. And they're using this for your forecast adjusted by 20 cents. Free cash for much, much better. So this is what people want. They want plus one from Stanley Blackendeker, and they don't want plus one from Procter and Gayle. Right. And that's it. Well, they got plus two organics. Well, Procter and Gayle. Alright, but I don't know what the respective multiples of these two stocks are. I would imagine this trades a little lower multiple than P&C. Yeah, but it's multiples going up, but it does have a 3% yield, which a lot of people really like. And they bought back stocks, so it shows you that their balance sheet's not as stretch as you think. They want back debt. They made, bought back debt. And David, what really matters when you see something like this, is that they are saying, "Hey, look, we think things should get a little better." Yeah. And when the Fed cuts, they do get much better. The stock happened to be almost at 200 before COVID. So anyway, this is the kind of thing that the market likes. And the market doesn't like Procter, but tomorrow could be different. Tomorrow will be different. Yes. And I just think you buy stuff. You buy stuff that's, look, if you want to have a long-term position in Procter, do it today. Okay. If you want a short-term trade in Stanley Blackendeker, blow it out. Got it. Alright. That's what I have to say. David, there are a lot of young people here, and when I ask them what network they are at. They knew. At least three people knew it was CNBC. I'm telling you, victory. Here to come on CNBC, we're going to have the CEO of SoFi. That'll be a first on CNBC, opening about four minutes away. Alright. We got less than a minute before we get the opening bell here at the New York Stock Exchange for trading on this Tuesday. Anything you think is sort of a key to this market, is you and I like to do it this time? I'm going to mention something. I did not, I was not aware of someone doing a great job until you interviewed him. And I said, oh my, Alex Chris is going to turn around. Alex is going to pay a pound. Yeah. Chris Martin's going up. Volume's fine. I don't know how, I did not know his work until you bought him one. I've been following him ever since. He told him right to tell his story. Remember, he said it would take some time. He did not say it was going to be next quarter. Well, it is this quarter. And congratulations Alex Chris for doing triple down. We'll come back to fair power pit. Here's the opener bell. Take a look at the real kind of stand back in our heads. Future sort of got a little stronger. You can move him to the upside there. He got closer to the open. Here at the big board, the National Alliance on Mental Illness of New York City. At the NASDAQ Carnegie Hall. Celebrating the launch of the New York World. Practice, practice, practice. Practice for a week at Carnegie Hall. I haven't been there in a long time. I'm going to make that a point. It's an exciting day. This is the beginning of the days of days. Microsoft, Meta, Apple, Amazon. Yeah, it's an interesting way. Many people use quarter. This is like all we cared about. Here we're thinking, okay, alla proctor, alla murk. Tell me which smaller cap company, F5, could really say something new to needle. Because right now, even though Amazon, I think, is going to have an excellent quarter and talk about how Prime Day, they cut prices up to 50%. I don't know if people care. I mean, I think the only thing people care about was they couldn't get the Yankees Philly's game. They make care. I mean, Amazon, listen, you know, the focus has always been on the spending side. It's amazing what they have done logistics wise today. In the Wall Street Journal, they have a report on how Amazon is now getting into rural areas in a very significant way, competing with the Post Office. Larger in many ways than UPS and FedEx in terms of their ground operations. Yeah, they're almost hard to conceive what they have done. But we do remember, of course, the quarters in which we would look at those numbers they were spending and go, how can this be? The question has been, when will they rein it in? But they did create in what, a space of four or five years? Remember, we used to drive. You would see an Amazon truck. You cannot get on the road now. For any lengthy trip and not see numerous trucks with the Amazon logo. It's a wonderful company. And I think that people, if they sell it, go back and see why you would sell it. Because that company, when you read their quarterly statement, has so many things in the pipe as you say. Yeah. It's a very exciting company of all the Mag 7. It is my favorite. Is it really? Yeah, because I just think that they invent and then invent. I mean, Apple is a cycle, right, with service stream. Meta is a black box, but it's not that expensive. Alphabet did a good job knowing care because of YouTube, even though YouTube was good. Tesla, they hated it. But I think the Tesla was actually a pretty good quarter because he laid out a lower provision that was not vehicle. Right. That's really terrific, Microsoft. That's the quandary because if they choose to talk about the new cycle of PCs and the adoption of co-pilot, and as you're growing and not losing share to Google Cloud, which is very good, then you have a stock that works. But they have to check off every single one of those boxes. One of those boxes. Can you say that Amazon's your favorite over in Vidya? Come on, that's not possible. Well, no. Okay. In Vidya is my favorite company. Amazon's my favorite stock. They're very different. Because in Vidya's stock goes down pretty much every day versus the smaller cap semis like the one semis. It is up 125%. But it's had a big run. It's the second best performer in the S&P. So, I don't expect the second best performer in the S&P to knock everybody flat. And I know that I just say you own it. Don't trade it. But there's people who just keep thinking, "Wow, this is going to be fantastic. I'm going to buy it." And these people are sunshine soldiers, David. They're summer patriots. I don't have time for them. We have Amazon up 1%. Now, obviously, I spend a lot of time just now talking about their logistics effort all related to, of course, selling things and retail and delivering them. But really the most important unit of this company continues to be Amazon Web Services, which is by far the faster grower, the key contributor to its profitability. So that will be the focus one would expect as well. Yeah. I mean, if you remember the stock one, you look at the bottom. If you take a look at the need, you're the stock. It was because people thought that Amazon Web Services was going to go below double digit. They thought it was not. I remember having a fight with Brian O'Slamsky to fantastic see it. I come in peace. I never liked these fights. But you know what? I was like, if you guys can't grow this thing at 10% of that, and you've got the Django where you've got all these different warehouses. And Brian said, "Well, hey, you see, people have to understand these companies have great heads of divisions. Retail, that guy's a genius. The CFO is a total heavyweight. And they'll walk you through why you're wrong. Or walk you through why you're right to be concerned. But at all times, David, they are so in control of their destiny. It's a delight to speak with them. So I'd speak to Jassy, the CEO. With Jenson, it's Jenson. And he's mesmerizing. He's got a long term view. And if you sell a stock, you've decided that the long term view doesn't matter. I can't do that. The long term view is very bright for you, David. But not for the stock, just for the company. They're very different animals right now. Yeah. All right. Well, again, we are going to be discussing Microsoft and Amazon and Meta and Apple as this week goes along. Listen, listen, listen to Zuckerberg. No one's going to pay. I mean, it was a fun thing to talk. But Zuckerberg's basically saying, "Listen, man, I need your stuff. I've got so many different ideas." And there's a great return on investment. They're the only one open sourcing, too, with llama3, right? llama3, everyone says, "Hey, what's llama3?" The llama3 is the code, the secret. I just like both companies. Yeah. But do I like both stocks? I like meta stock more than Nvidia stock. Okay. You like meta more than Nvidia. You're like Amazon more than meta stock. Well, the advertising that you didn't like in YouTube could be unbelievable for meta, especially because Reels turned out to be a better place to put a lot of things in TikTok. And that was on Zuckerberg. I remember when he unveiled Reels and everyone said, "What a, you know, what an all-sera." Yeah. And yet, if anyone in a small business used Reels like we did at Bart St. McGill, Reels was really good. Great take rate. So anyway, you've got to use the products. You have to just say, "I want to use every product," like the Ray Band glasses that you laughed about. I've not laughed at the Ray Band glasses. I laughed at the Vision Pro. Look at that. Shut him up. Can we talk crowd strike for a second, please? Okay. Yesterday you did the Med Dash. Well, I didn't know that Dell was going to show up. Let me just set this up. Right. It wasn't on you, Jim. You were talking about the fact that many Wall Street analysts were rallying behind the name, saying, "Okay, the worst is probably over." And then, of course, we report this story at CNBC. David. David Boyes is coming after them. Oh, my. And, of course, the concern here is that Delta is just the first. And there will be many others, and what is the liability, and the stock is down five and a half percent. Okay, so I'm looking at one of my favorite sites called One Mile at a Time, and it talks about how Delta had an operational meltdown, that they were the one that totally broke down. They couldn't handle what happened. So I don't blame Delta for being angry, but I think it just goes through these other guys because you may not have had the systems. Remember, everybody else had systems to deal with except for Delta. So do we really blame Delta? I don't know. I think that this may be a long and protracted battle that could end up being like Shakespeare much to do about nothing. All right. All that said, crowd strike is going to be dealing with a lot of lawsuits, potential. No, no. Fair to say. I'm saying not a lot of lawsuits because not many companies here is in my favorite site One Mile at a Time, which obviously I had never heard of until yesterday. Delta hardly, I'm not a hack, it's just that I discovered the site Delta hardly underperforms peers with recovery. So it's about, and this is not about the lawsuit, but the Delta was the one. Now Delta, by the way, at Bastion's going to be on school. I guess he's at the Olympics, so I hope they ask them about this one mile at a time. Oh, it's the Olympics. I'm sure. He's got a lot of time in his hands. The people are delivering a lot of time in their hands. Me? I ain't going anywhere. No, you say right here. Yeah. Yeah. I was up at 3.30 trying to do this darn job. Oh, good. I'm glad to hear that. No, I'm saying I'm not at the Olympics. No, you're not. No, you could be there working. All right. No. You're getting ready for the likes later this week of Apple. This is go time. Let's talk a little about Apple because yesterday, the story, what I got, do you get it? I set it up. Then you talk. No, you're right. Okay. I'm like 13 years. I'm like 13 years. I have my battle with shoulders. You give me a hand curve. All right. So this is where I set it up. You're ready? Sure, partner. All right. Yesterday, we had the story from Bloomberg sort of indicating in some way there was a delay in AI that really wasn't the right word to be used. No. But there was a question as to whether it would be released with the new iteration of the iPhone. And then later in the day, we get Apple releases for its preview, it's on the weighted phone name. I know. I mean, Apple's very hard. They watch the stocks of Skyworks and Corvo because those are the suppliers. Now, they're not allowed, you know, it's Fight Club Apple. The first rule of doing Apple is you can't talk about Apple. But if we got the charts of Sky Wars solutions, and if we got the shot of Corvo, not Corvo, we're going to talk about that in a second with Diagio, and you will see that these are the charts of the orders of that Apple place. And they're amazing because it's showing you that the business is so big. And David, who's going to give them all the AI? Which company is going to fawn over Apple because they want the billion and some billion plus users? Right. We don't know. But one of them, we think it's going to be alphabet. We do. Yeah. And that's just a great thing. I remember speaking to Tim Cook, he said to me, I said, which one's going to give up the ghost and give you the AI? Well, the word word is alphabet. He goes, how about this? Maybe they hold it. Maybe they do. It's good to be the king. I thought it was very interesting yesterday when you talked about Apple and you referred to them as a free rider. I thought that was a regular free rider. It's an interesting concept that they're not having to spend nearly as much obviously as the highest scales. Right. And that's why I like the stock very much. And yet they are going to benefit from all of them. They are benefiting from the fact that they have the highest. I got a billion of those. There are more of any company in the world. And they've got no, look, they're their winner and you want to be in their phone. And that's why you don't sell the stock. You just don't. What do you look for? Well, we've got a couple minutes before we get to Anthony. You want to talk Diageo? Because I think Diage is really interesting. Sure. Let's go Diageo. Okay. So Diageo, can we get DEO? Yeah. This is one that is shocking. If you were clueless and knew nothing, if you've been following liquor business, you know that it was in maybe a decline that could be the largest in history. And that's because the GOP-1s, it's because they raise price and because there's a whole generation of younger people who do not want to hurt their bodies, okay? And there's cannabis. Now, let me just give you a fact. They have Casamigos, okay, which is the high-end tequila and they sell Don Julio. So if you go to the Pennsylvania liquor control board price sheet, which is the best price sheet for everything that I can find, their Blanco, Casamigos, is for one liter is down to $33.56, it's one special right now. That's a good price. What? Because they've got too much inventory. Yeah. So go to that and you can see the... Well, I have to go there physically. I can't order them online. No, you can go on their website. Okay. And you can see that they have got a discount right now. Okay. It's almost in half. So people who want that Casamigos just go to the Pennsylvania liquor control board in order from there. Okay. Because the... Don, who is 65 bucks? So this is a once-in-a-lifetime definition of how they raise the price for Casamigos so much. That's the Blanco. But... No. The representation is really expensive. Oh, it's still... Yeah. Now remember, all Blanco's have to be the same by regulation of the government. So it's just people who really think... I used to come and say, "I want a margarita with Casamigos." I said, "Why the... How would you do that? I can give you the well." Which was peloton. Which was, by the way, better than... Well, the right spot was Guinness. I believe they did... Beer is still selling really well. And it's appealing to the younger cohort for some extent. Nobody cares. Nobody cares, Jim? No. No. Because... It's down every day. How much is STZ down? And I'm going to look... I don't know. Well, why don't we check? All right. Well, we've got to do so fine now. You're going to do that for us? Oh, you want me to leave? I guess so. Okay. So flex that knowledge. Constantly snap again. Just snap again. All right. Let me go there. All right. So by second quarter results, we're out this morning. And we're going to find out from Anthony Noto, who's the CEO, that the numbers are really great. We want to see if the stock will react to it because it's not react to the last two times that they had good numbers. Anthony Noto, welcome back to the show. How are you doing? Doing great. Jim, thank you for having me. How do you and David? Yeah. I've got David here too. All right. So, Anthony, explain to me how you can have such extraordinary numbers. And why do you think that the market's not reacting to the fact you're 40% now, I guess, of a software product that's absolutely terrific? You have a declining number of charge loss, which is really amazing at this point in the cycle. And people, a huge number of people, signed up, when would people realize that you're going to have a breakout of tremendous proportions and go ahead of it? Or do they have to see the real breakout before they realize, "Holy cow, why didn't I buy that stuff?" Yeah. I think this quarter is definitely a milestone quarter. When people sit back and do the work, they'll realize the magnitude of the transition we made. We had record revenue, as you know, almost $600 million, up 22% year of year. That would have never happened without us driving diversification outside of lending, which only grew 5%. The financial services sector grew 80%, grew 80% year of year, and it's driven by both 40 plus percent product growth and 29% growth in revenue per product, both of which will continue to propel the growth of the overall company. So we've made a transition from risky capital-intensive lending business to higher return less capital, less risk financial services business. That's been happening throughout the year, and without the scale that we've achieved this quarter, we'd have never gotten to another quarter of record revenue and really strong improvement in profits, and some good underlying trends, as you mentioned, in lending, which is an optionality on rates coming back down. I think in terms of the stock, I think it's just a question of where rates going, where the economy is going, because people feel great about the results. Now they're worried about what's going to happen next week, what's going to happen next month with rates and with credit overall. We did also point out that we saw an inflection point in our delinquencies for personal loans, which is an important milestone as well. All right, do you think, Anthony, that there's the possibility that people still remember the heritage, which is student loans, and they say, "As President Biden forgives student loans, I can't own so-fi stock?" I do think there's a legacy of us being predominantly a lender. On the earnings call, as a matter of fact, we had analysts ask questions, 99% of them were about lending, there was only one question about the financial services segment, and a question of whether we could sustain the 80% growth or not, and I talk through product growth of 40% and revenue for product growth of mid-20s to 30%, which there's still a lot of upside in both of them. And their focus continues to be on the thing that we used to be, as opposed to the thing that we've become, and we're trying to emphasize the magnitude of the innovation we're driving. We've rolled out alternative assets, which helped us drive 58% growth in AUM and Burpridge, and in addition to that, we're providing auto home and life insurance, our credit card business is starting to make a turn, and so we're seeing really strong trends outside of the traditional letting business, and it's going to take a while for people to accept that that's the driver of growth going through the rest of the year. Well, I think it's really important to me to do a move to the fact that you are becoming the AWS of financial services, Anthony, I've known you for a very, very long time, and I thought to myself, "When are people going to recognize that this is actually an enterprise software company that caters to individuals, not individuals, but individuals, and why is that so hard? Why can't people see that it's enterprise software?" You know, I think it's just a matter of people hearing the metrics over and over for the first time. So today was the first time we talked about our interchange revenue, which is growing very nicely. We also, for the first time, started to break out the growth in AUM as well as our non-interesting common financial services, which ties to those two numbers, and they're much more transaction-driven without a lot of risk, and they don't require capital. Anthony, finally, just on the macro, obviously we don't expect we're going to get a rate cut tomorrow, but we do or many expect that we're going to get a rate cut come September. What's that going to mean overall for your business? A declining rate environment is positive for a business that will definitely be a tailwind. It'll increase the amount of home loan refinancing, which we're now in and doing quite well. We saw a very strong trend in home loans, up 71% year-of-year. We're now also doing home equity loans, which is a good diversification because it's a secured product. So both of those businesses would benefit from lower rates. Student loan refinancing to Jim's point, there would be a lot more demand for student loan financing because the rate they currently have relative to a lower rate, benchmark rates, would give them more of a savings. And so it would be a tailwind there. I also believe we'd see a tailwind to our invest business, which is also seeing great growth in AUM, but as people have less yield in money markets and fixed income, they're going to have to go back into equities as a higher percentage of their portfolio. So that business would also benefit. And then last, the value of the loans that are a balance sheet in declining rate environments generally increase the value all else equal in the loans. Right. Well, look, Anthony, again, you know, people call in all the time when they have money and all I can do is talk and in place you're doing exactly what you can do, it must be frustrating to be you. But I want to thank you for coming on Squawk on the street and always telling us straight. Thank you, Jim. And thank you, David. Really appreciate it. At SoFi, I said in the earnings call, we like hard. Hard is durable, hard is hard to replicate, and we have a great motor on our business. So we'll keep executing and we know we'll reflect it over time. Thank you. You're welcome. Anthony, you know, from SoFi. Before we head to a break, let's give you a quick look at the bond market, of course, talking a bit about rates just now. Treasuries this morning, we'll keep an eye on that 10 year, of course, as we head into the Fed meeting on the two years as well. You can see we're right around the same level that we have been yesterday, 4.16 is the number on the 10 year, 2 year 4.379. We're back right after this. Let's take a look at Pfizer. Shares are down for the year, but up after the quarter, Jim, I don't know if you got any very quick thoughts on it or not. Yeah. Look, I think that Dr. Borl is starting to make hay with some of these new drugs, but the problem is David, it moved up three quick bucks beforehand. Good yield, a solid management, I'd say. All right, we got to stop trading with Jim after this. All right, you want to do a stop trading McDonald's? Is that what you want? My thing in the morning is it's not a move from big cap or from a mega tech into small cap. You know, from things that have done incredibly well, like in a video, the things that have it. So you have McDonald's down 11, they say they commit to a cheaper value meal. I think that it's for real. It's going to help their sales. So yesterday goes up big and today it's going up. So you want to be involved with companies like Stanley Bock and Decker like the dogs, which have been dogs, but suddenly have a path. And that's not a bad way to go. By the way, sometimes the market misjudged. I think Burke's doing very good, I think Parker will be good six months from now. Yesterday, I think we had David Pomeron later, a well-known analyst. He was befuddled as to why the stock McDonald's was up yesterday. He's like, that was not a good quarter. And he's by the way had a buy on the stock, he's been around a long time. Then that surprises me. He's been around a long time. He did not. It had nothing to do with McDonald's. Right. It didn't have to do with the fundamentals. It had nothing to do with the fundamentals. That's why I'm saying what? Well, also because he wouldn't be be befuddled if you recognize that the rotation is taking money from really great companies into companies that are not doing that well, but betting they will do well. And that's okay. Because if you look at it, if you bought Stanley Bach and Deckard two weeks ago, you're up a lot. Yeah. Um, 3M. No one thought 3M was going to do well. 3M didn't do well, but he talked, but Bill Brown gave you a path. So 3M then goes up a lot. You have to recognize the zeitgeist of the moment more importantly than the actual company. Yeah. And that's what I've been saying all morning. It's my consistent theme. It sounds inconsistent because what it says is, wait a second, by proctor down 10, that's just because it's not large. You want to do that. I get it. I get it. I enjoyed this morning. We're trying to put it in context. I'm glad you did, Jim. I always enjoy our time together. I do too. Yeah. What are you going to do on your show other than this me? Okay. Okay. So this is an example of the zeitgeist. I have Huntington Bank one now. That is a honey bank shares. That's a bank in Ohio. And Steve Steinauer told me during the great mini crisis, listen, we're fine, which he was and he'll tell me the straight dope about the small cap, the medium sized banks that have been so fabulous. You know, they've been fabulous. I'll see you tomorrow. Yeah, absolutely. Absolutely. Absolutely. Good. Glad to hear that. Thank you. We got breaking economic data wraps with brake. Don't go anywhere. You've been listening to the opening bell one 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. They 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. 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