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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 Squawk on the street. Good Friday morning and welcome to Squawk on the street. I'm David Faber with Mike Santoli. We're live from post nine at the New York Stock Exchange, Carl Cantonea. He's at the Olympics finishing things off there, of course, big day and weekend ahead in Paris. Jim has a well-deserved morning off. Let's give you a look at futures as we wrap up a volatile week. You know, we use that word a lot, but I think it's really applicable this time. It has been volatile, and we are looking at what appear for a lower open. But again, it doesn't mean much of anything given what we've already seen this week during the sessions. Our roadmap does begin with that wild week of trading. As I said, the S&P and the NASDAQ came into avoid what's their fourth straight week of losses. Plus, Republican presidential nominee Donald Trump saying he should have a voice when the Fed makes its decisions on interest rates and paramount global reporting results. So that sends the stock higher in the pre-market media company taking a big right down though, announcing it's going to cut as much as 15% of its U.S. workforce as well. Let's start with the markets, the S&P coming off its biggest rally since November of 2022. All three major indices though still down for the week. Mike Santoli could always happen to have you. Yeah. Sort of tell us what your thoughts are and what we've seen so far this week. Are we done with the worries? I mean, of course, we're not of worries about a recession now that suddenly this week, everybody was talking about in a way that we certainly didn't even a couple of weeks ago. Yes, there's been some data to support it, but it's not clear to me that there's enough to support quite how much it seems to have impacted our markets. I mean, if you looked at the market actually, first of all, S&P down half a percent on a week-to-date basis. Obviously, it doesn't look like much, but it went down just about 10% peak to low, 3% down on Monday alone, and that was if you just took it as a macro message saying it was in a recession panic or it was a growth scare. It had these accelerants though. Of course, we spent plenty of time. Who knows if it's too much time talking about crowded trades, yen carry trades, forced repositioning, liquidations. The VIX goes to 60 in a phantom print for a second on Monday morning. All of that stuff kind of bundled together represents to me coming off of a condition when we got to mid-July, when we got to the record highs of extreme confidence and optimism about the likelihood of a soft landing. The Fed was going to do the right thing for the right reasons at the correct pace. You didn't have to worry about these volatility eruptions. What we are right now is we're past that positioning stress, that idea that we have to worry about some other shoe dropping coming from the macro church. I think that's where we are right now. You're monitoring the vital signs. The VIX has come down to 24. The yen has calmed down a little bit. All of those things. But I do think the path from here, even if it's a soft landing, is going to feature a lot of mixed data. I think that's what we have to absorb. Well, there is an expectation, of course, in September. I think it's the 18th. We're going to get a cut now, whether it's 25 or 50, I guess, is more in play. We're going to get another CPI report of PCE. We're going to get a bunch of things between now and then that we'll talk about endlessly. But I wonder when it comes to this market in terms of especially the megacap tech names as Nvidia, the next real thing that we kind of wait for, and that's a way. It's three weeks. Yeah. And I do think, well, it's the next thing we know about in terms of the big macro input that does have the power to kind of either reinforce or refute the optimism around AI, which is already obviously undergoing a bit of a rethink right here. We do, I do think the retail sales numbers and the earnings from the big retailers, they're going to get a lot of attention. Because we're getting Walmart. Yeah. Home Depot. Home Depot. We're going to hear a little more tangibly about how the consumer has done this summer. That matters. Earnings in general, I think, are fine. They're kind of supporting the overall story. The problem is, the S&P got to almost 22 times forward earnings at that moment of maximum confidence in the soft landing and also at a time of extreme low volatility. So I think you had all these forces, this agreement on the soft landing, this agreement on where the Fed was going, that was suppressing volatility. You had the leadership of the Magnificent Seven, which had the effect of smothering index volatility, and you get people trading behind that and piling into these strategies that benefit from continued calm. Let's not talk about the end character. That's just one of the many types of things you would do. If you said, things are common, they're going to stay that way. Once you break that pattern, you kind of unleash the suppressed volatility. That's what we have right now. That's what you get, the biggest one day gain in two years, because you let it out of the back. And that always, it always happened. It would be a bigger surprise if we didn't get a substantial pullback in the late summer of an election year than it did. I listen, it's August. I mean, I feel like, I know, it's every August, I feel like we have something. August, September, something seems to come along. We've been through weeks like this countless times. It doesn't mean that they don't, at least in gender, a good deal of thinking about what the heck is really going on, but we've been through them many, many times. That said, you mentioned the election, and I do wonder what the calendar would tell us in history, would tell us in terms of what to expect now that we really are in the heat of it. It sort of says remains unsettled, at least through September or thereabouts. I mean, you have to take it a little bit with a grain of salt, because this year, the market so outperformed the historical pattern of election years, like halfway through the year, that you'd have to say maybe you had some payback that was due anyway. But usually, it's a strong finish to the election year after the election, or at least when the market seems to have a fix on a likely outcome, and it starts to just anticipate it being behind us. Mostly, the market wants the election over, just like it just wants these macro prints to be over yesterday, who's saying the weekly job was claims, 7,000 light versus forecast. I mean, come on, that's nothing in the grand scheme of the US economy, and yet it got one of these outsized positive market reactions, because it was not incrementally bad, and guess what? It was behind us, and we didn't have to worry about it sitting out there ahead of us anymore. Yeah, and we're going to take a closer look at things like global luxury goods card insights, right? From the likes of City this morning, it's getting some attention in terms of what they're seeing. Down 11% over year in July versus 7% in June against the marginally tougher comp, sequential deterioration, transaction volume growth, these things of this nature perhaps will have an outsized impact given the concern. It's been a drum beating of a more careful consumer, Michael Asher, just now on Squawk said a more erratic consumer. So effectively, either it's value sensitivity, or it's just payback from the big binge on goods and travel in the last couple of years, and just a little more stress on budgets because of obviously the cumulative effect of inflation, and slightly softer job market, all that coming together. I still think it's a lot of companies took too much price to try to figure that out, but there's no doubt that it's not just isolated anymore. The question is whether it can be extrapolated to something more. Look, muddled through for the economy is a path, and I think we got used to that at times, and so you know, I let it fed real GDP, saying 2.9% annualized growth to the third quarter, probably too high, but you know, 1 to 2% is still, it's still not a recession, it's still not a downturn, it still can support earnings. I think it's the fact that the AI reassessment is coming at the same time, and you have Nvidia 25% off its highs, and you have one of these big, exciting sources of energy in the market that got a haircut at the same time, you know, the macro, questions were starting. It explains where we are right now. Look, the lows this week in the S&P, just about 5100. I mean, it's a couple percent above where we weren't at the lows in April at the after that pullback, it's still a pretty healthy year to date gain, it still seems like we're in this upper end of the range, you still didn't have your full 10% setback. So I think it's, I mean, you almost had it in the S&P. So again, it's in the normal range, it didn't happen in an ordinary way though, and I think that's what has people on edge. That market action globally overnight into the Monday open, I think it is going to have a little bit of a half-life in terms of people being apprehensive in terms of putting risk back on. Mike will continue to talk to Marcus, and of course we will as well get to a number of earnings that we have this morning and other movers, but let's get over to Carl now finishing up his assignment at the Summer Olympic Games in Paris. Carl. Hey David, wow, talk about 24 hours of emotion and drama here in Paris on a couple of different fronts, but you really got to start today with men's basketball, maybe one of the most epic games in the history of Olympic basketball. Team USA versus Serbia in the semis, down 13 points at the end of the third quarter, they were down as many as 17 points. This low tempo offense really wasn't clicking even with Steph Curry shooting 9 for 14 from free. They did come back though to win 95, 91 and they'll face France in the final tomorrow. Coach Steve Kerr said quote, "One of the greatest basketball games I've ever been a part of and Kevin Durant seemed to agree." This is the top. This is the one that's the best game I would play then. Being down with 14, going into the fourth quarter, you know, they four-point plays, how many threes they made, they made about 15, I mean, they were hot all night. You got to get them credit, they came into it with a nice game plan. We was able to keep fighting, keep fighting that fourth quarter we show why we all we are defensively is when we turned it up. Durant's been pretty fiery on Twitter as well, more fiery than usual. And then on the other drama front, you had Noah Liles who did not take gold in the 200 meter, took bronze, was actually taken off the track in a wheelchair, later said that he tested positive for COVID on Tuesday and was lightheaded, had some shortness of breath, chest pains after the race. He was set to run today in the four by 100, but he did post, I believe this will be the end of my 2024 Olympics. By the way, a USA track and field issue, the statement said it was Noah's decision to compete tonight and we respect his decision, but we actually spoke to Max Siegel, the CEO of USA track and field earlier this morning. Noah is a tremendous athlete on and off the track. We have great athletes and I think, you know, their ability to inspire by being transparent and reminding people that these are human beings out there. They're world class athletes. You know, I know he's determined and resilient and he'll keep at it, but he's a great ambassador for the sport. You're going to hear more from Max later on today guys. We'll talk about the LA Games in 28 player compensation and a lot more, but it's been pretty fiery. These, as I said, these last 24 hours as we go into the weekend, talk about these 35, I think gold medal matches just today. And as we work our way to closing ceremony on Sunday. Yeah, I mean, again, not to mention track and field, the 400, the women's 400 hurdles. She's incredible. A world record, I believe as well. And amazing to watch and always. It just, yeah, it's been, you know, I've been riveted as you well know, not to mention, of course, LeBron triple double. What is he? 40 years old? I mean, and it's still like, give it to the old man because we got nothing else to do here. No, it was good. I think, and this is Steph's Olympic debut, right? He's just a few years away from 40th. Yeah, so it's cool to talk about these generations, but nobody can stop talking about this game last night. Yeah, and I guess it basically they had to be in peril of losing for those guys who've won NBA MVPs and championships to say that was the greatest game I ever played. In other words, you know, you had to kind of be that much in doubt and suspense. Yeah, fantastic. That's, this is why we do it, right David? Yeah, no, it was amazing. Listen, I said Steph Curry was saying the same thing after the game in the interview as well, Carl. I mean, you know, playing for your country, it's just a different, it's just a different thing, and they all were quite emotional about it. All right, France now, they get right. France in the final. That's right. Wumbayana, we'll see how they do. Obviously, we continue to be the favorites, but who knows? Yeah, it's definitely opening up some, the like of the markets, right? Wide range of outcomes or potential outcomes. Carl, great coverage as always. We'll see a bit later in the show, Carl, continue in Paris. And still to come right here, we'll have a close to look at those MAG 7 names. They're off to a rough start for at least for the month of August, some more than others. Let's give you a look at futures. We get started with the final day of trading for this up and down week, isn't it? A little less than 17 minutes from now. You can see we are expecting a slightly lower open. 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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. Welcome back to Squawk in the Street. Mag7 Stocks bouncing back after, of course, that sell-off earlier this week. Still under performing the broader markets for the month. Of course, we also had that rotation that we talked about for about a week or two that was pretty historic. Let's bring in Mark Mahaney, he's over Core ISI's head of internet research, has a buy rating on Meta, Amazon and Alphabet. Mark, you've been doing this a long time. Weeks like this, they come and they go, but I'm always curious as to what kind of questions you're getting, particularly we're after earning season for all these big names from your clients. What's the conversation been like this week? If there's any one or two key questions, what have they been and what's your answer been? Well, which of these stocks is most dislocated and which stock has the biggest, most interesting catalyst up ahead of it? Those are the two biggest questions. I continued like all three of these names. I don't want to be overly bullish and I look to see which is most dislocated in my mind. That's probably Amazon and then Google. Meta had phenomenal results, stock traded up. There's really nothing to worry about there, which means that it's probably less interesting, compelling as along where with Amazon there was a paramount debate. What happened to our margin expansion and why were retail sales a little bit soft and why didn't advertising revenue come through as strong as we thought it would? You had these lingering concerns, which I think sets the stock up. I think the overall fundamentals for Amazon remain very much intact. I think AWS and cloud revenue is going to accelerate. I think advertising revenue is going to start picking up in the back half of the year as they start really lighting up that prime video. I think the retail margins are going to continue to come through. This is a scale game and they're growing three times faster than retail. Those marches will continue to rise. Amazon, those three would be probably our top pick. That's where you're telling. It's down about 17 and a half percent from the July high. I mean, but there was concern about the quarter and a lot of people saying, "Come on, guys. Really, the Olympics is why people were spending a bit less and things of that nature. I mean, did you buy some of their explanation?" Not the Olympics. I wouldn't buy that. What I would buy is that the consumer's gotten a little soft. Look, we also just went through probably the best read I have in the consumer is online travel. I cover $400 billion of online travel spend. If I look at booking Expedia and Airbnb in July, consumer got soft. The question is whether this is a temporary summer storm or whether we're going into a hurricane. Our guess is that it's more the first than the latter. If that's true, then as the consumer rebuilds his and her confidence a little bit, you want to stick with these names. There's definitely cyclical exposure with these names, but it's not like there was any material down tick and consumer softness from Amazon's perspective. The consumer for Amazon has been somewhat soft for about a year. I don't think things are going to get materially worse. In that case, you want to buy this kind of correction on a name like Amazon. And in Google real quickly, you got a product cycle here. I think people underappreciate how much better their search product is. Now, the big headwind you've got here is the DOJ, but assuming that doesn't turn dramatically negative for Google, I like Google as a product cycle place would be our number two pick amongst those three. Mark, you mentioned so the consumer concerns for Amazon and then the overhang of regulation on Google. But what about for both of those, the CapEx cycle and whether you're getting questions or, you know, management's getting questions about Payback. It seems like that's been a big feature of this quarter. Yeah, I'm sorry, Mike. You nailed it. That's obviously been a new one. So the two biggest concerns probably have been how much cyclical exposure do these companies have a lot and how much softness are they having to deal with and how extended is it going to be. And the other one is the CapEx numbers just keep rising. Of those three companies, Amazon, Google and Meta, I think we raised our CapEx numbers, something like 15% for next year or 20 billion, like the three of them are spending 160 billion in CapEx. Are we really going to see our ROAI return on that AI CapEx? I think we will. And I think the best example of that is Meta. Meta turned around its business class two years in part in a significant part because of AI deployments. And especially if you're a content company, I think the markets completely missed this point. Content companies can be dramatic beneficiaries of AI if they deploy it well. And Meta's deployed it fantastically. And I think Google is doing that now, too. So I know that's a debate in the market. I'm going to take the other side on this. I think it's going to be, I think a year from now, we're going to look back on this and say, wow, they really did get a great return on that AI CapEx spend. And until the market fully realizes that it makes longs out of these stocks. Yeah, all right. But there will be a bit of a vacuum in terms of that. A year can be a long time in a marketplace. So what are you going to be looking at beyond Meta then? I mean, you expect that you're going to start to see the real evidence of that return in what names and what way? Well, probably those, probably the content name. So again, I think Meta's just this, is showing how both in terms of the products at the great for advertisers, they're called ads, and the products at the great for us consumers of the news. What are the content names though, Mark? When you say that, just explain what you mean. Uh, you know, Google and Meta really at the top of the list. But if you want to go down and talk about some small cat names, I really like this name Duolingo, which is using AI to materially improve its language learning app. I think other companies like Pinterest or Snap can use AI to materially improve the user experience and the advertiser experience. That's how I want to think about it. And I think the market's so fixated on the infrastructure and the chips side of AI, and they're forgetting that people are using AI to materially improve the service, the offerings, the product, the user experience, the consumers like you and I feel every day. Marco, it's good to have you. Appreciate it. Have a great weekend. Thank you. You too, David. All right. As we head to a break, take another look at the futures here. You see the S&P down just about 10 points just for context. It was up 120 points yesterday, up 2.3 percent. The Dow off about 20 NASDAQ with a little bit of downside leadership off 80 points at the moment. More squawking the street when we return. While Mark plus members save on meeting up with friends, save on having them over for dinner with free delivery with no hidden fees or markups. That's groceries plus napkins plus that vegetable chopper to make things a bit easier. Plus, members save on gas to go meet them in their neck of the woods. Plus, when you're ready for the ultimate sign of friendship, start a show together with your included Paramount Plus subscription. Walmart Plus members save on this plus so much more. Start a 30 day free trial at walmartplus.com. Paramount Plus is central plan only. Separate registration required. See Walmart plus terms and conditions. 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. Sure. It's a bit like Lilly extending yesterday's gains following of course what was on earnings beat. Certainly revenues, commentary as well from David Ricks on our air, the company CEO in which he basically said, "You don't need to advertise. We're not interested in advertising. They're all coming to us right now. That's a high class problem." Without a doubt. I mean, it's almost monopolizing the growth in domestic pharma at this point. Interesting stuff with the stock. I mean, obviously had a big rebound. But this was a real victim of this momentum unwind. Stock is at 950, goes down toward 800 and it's 6% of the momentum ETF. So it just shows you there's a lot of the stuff. People are buying it for the factor, not even for the fundamentals. Some kind of the great mega cap stocks even though of course it's not a type of sale. All right. We got the pride everybody. We'll be down here at the big board, see the real kind of things on your screen there. I'm doing the honors here by Hanson. We're celebrating the launch of its dividend focus fund at the Nasdaq City Girls Golf, teaching women of color the game of golf. Mike, I'm happy to give you the board here. You can take us anywhere you'd like to go. What category would you like to start with? Let's start with, well, consumer. I do think that there's some reasonable stuff to talk about the consumer. We did get some of the earnings, ELF beauty. And this would be in the category of growth secular, I mean, chain retailers. So specialty retail in a hot part of the market that's now had a little bit of hesitation around its guidance. So good quarter, a little bit of muted guidance on the EBITDA cash flow stuff. And also at 40 plus times multiple is what we're talking about here too. So obviously valued as a secular winner in this area. I think they're huge in target and mass market. So I mean, it's all working for them in a big picture way, but expectations pretty high. And I think, again, we're trying to sort out all the mixed messages coming out of the consumer. And people are talking about sweet green at being a bright spot. But when you're kind of smaller, still growing on an organic way, you're adding stores, it's a little bit different than when you're already a big company like a McDonald's or Starbucks, you don't really have that kind of share to gain. One other point, and I always talk about kind of the index makeup and what drives these things, consumer discretionary as a sector. But look at sweet green for a second before you move on. Oh, it's ripping. And that's an incredible move there. I don't know about what they had a huge beat in same store sales. It seems to have a substantial short position as well, but definitely was not just better than feared. It was actually kind of a pretty objectively, pretty good, pretty good number. And they've been, you know, seen as having a tough time in terms of high price point and things like that. And they managed to manage through that this time. I was just going to say consumer discretionary has dipped below 10% of S&P market cap. That doesn't happen very often. And by the way, like 5% of that is like Amazon, Tesla, and Home Depot. So it just shows you that the market as a whole is not as consumer dependent as the US economy is. Part of that is autos, huge, you know, spending category, but trivial in terms of market value. So just something to keep in mind when we say sort of thinking that the market goes the way of the consumer. Also, of course, Costco, Walmart, Target are in consumer staples, which is kind of just the categorization ceiling. We got another name, which is Capri, which is also down on earnings, a bit of a slowdown there as well, in terms of accessible luxury, as they so to speak. Of course, don't forget, their deal to acquire tapestry is being opposed by the FTC. That sort of figures into this as well, in terms of from the risk our perspective. But the overall trend remains kind of along the lines of what you've been describing. Yeah, exactly. And you know, the aspirational luxury category is arguably kind of tough, because you have some people, by definition, who are kind of stretching to afford some of those brands and then others who just are, you know, kind of, you know, your basic mass market offerings. You mentioned the city card data on luxury spending. I mean, it's a pretty significant reset. Down 11% on, you know, July basis. Just to remind people, Versace, Jimmy Choo, Michael Cores, some of the key brands, Capri. Yeah, Capri. So, and again, there's that mention that note we've hit a couple of times there as well. But those shares are down, and again, don't forget sort of the likelihood of a potential being able to persevere in that litigation from the FTC also figures prominently or can overall into what's going to happen with tapestry and the like. What else we look at top of the S&P is expedient at this point. So that's bouncing about 9%, didn't have results. Wedbuss category rising, the quarter has better than feared. This is, you know, it's been an interesting setup because booking has been the leader in the area, the favor of investors. Expedia has been a laggard, cheap, 10 times earnings as opposed to 20 for booking. And it seems like even though they were somewhat muted in terms of talking about the third quarter guidance, it was good enough progress, I think, on the revamp. We have the CFO, I believe, as well, discussing the sort of the state of the consumer right now. We have been focused in part on travels. Take a listen to what he had to say. While we accelerated our growth bookings throughout June 2, entering the third quarter, we have seen a more challenging macro environment and a slowdown in travel demand consistent with recent commentary from others in the travel industry. And while we saw flat ADRs on a like-for-like basis in Q2, we saw a decline in July stemming from FX headwinds and from consumers trading down to lower price properties. And we have also seen more continued softness in air ticket prices. None of which has stopped in the stock price from moving higher, as you said, over 8% right now. I mean, you know, it had been, I don't know, well off its high. So it's not as if it's coming off of a strong level. But, you know, echoing some of what we hear from Airbnb as well, just more careful consumers, shorter stays, etc. You know, there's also a talk that the higher-end U.S. consumer has been traveling more overseas. And so, you know, the beneficiaries are those that have that exposure. Yes. I mean, even Disney said that in terms of an explanation, for example, while there's some salt, why there might be some softness in parks, they're starting overseas travel is sort of taking precedence over domestic travel, at least in their parks. Oh, those of you doing okay. The lead anecdote in the Wall Street Journal story today about, hey, should we really worry about the economy, was a family in Minnesota that reduced their Walt Disney World, stay from six days to one or something like that. So, you know, obviously, anecdotally, there's just a little bit, you know, less of less demand. Yeah. Well, and also, and as the journal pointed out, but Jim Kramer's been talking about it as well. It's expensive. Yeah. You know, it's, it's, it's just dollar-wise. Of course. It's a pretty big ticket in terms of going to Disney World. No doubt. There's, there's no doubt about that. That said, you know, we can take a look at that stock and sort of see if it's not really any kind of a rebound during the course of the week after it did report earnings earlier this week. And there was that concern about the parks, particularly when it comes to operating income in the parks, which was a significant reversal from expectations in terms of what they've led to. Still talking about a potential revival, so to speak, in the back half of next year for the parks overall. But, you know, that gets me to Paramount. It's been an interesting week, sort of in the group that I certainly cover more closely than many others. Obviously, Warner Brothers Discovery was a key yesterday watching that stock lose as much as 10% or more of its market value. Significant right down there, continued questions about the linear cable network. Same here at Paramount. But it's a bit of a different story, isn't it? In part because the company is, at least a lot of it's getting bought. So you've got that bid for it. Remember, of course, the Skydance Redbird transaction calling for as much as for 50% of the company to be bought at higher number than here at 15 bucks a share. That said, you still will have a stock that trades on the fundamentals. It's up this morning, not because of losses at the linear networks, not because revenues were down 11%, but because, as was the case at Disney, there was some signs of life, so to speak, in terms of profitability at direct to consumer, that being Paramount Plus. Overall, you know, revenues of $6.8 billion, as I said a year over year decline of 11% led by, of course, declines in linear cable networks, which just continue with pace. But there was that actual EBITDA mic at, at Paramount Plus, whether that can be maintained and what the ultimate looks like over the course of the year in terms of the expenses yet to come remains somewhat unclear. They're also taking a lot of, a lot of expense out of the business. Yes, it seems like that was a big one. The workforce, 500 million bucks is the three-headed monster that is the office of the CEO at this company, but is part of the 1.5 billion that Skydance is at least eyeing as it expects to take control. Let's call it midpoint next year, second half of next year when regulatory clearances are all received. Perhaps it could be a bit faster than that when I talked to David Ellison and Terry Cardenow a few weeks back. They sort of indicated, I hope, that it would move more quickly, but they are sticking with that somewhat conservative timeline. Sports figures so prominently into all of these conversations. CBS, obviously, an important component of it. I do want to make the point that the NFL does have the right to renegotiate on a change of control. It's not expected that they're going to actually use that right to go somewhere else, but they most likely will get their pound of flesh from Paramount. So add that into the expected cost of the deal as well. Yeah. I mean, key banks reaction to the Paramount news was shrink to survive, and I think that's been the rule for a while. You know, you can take as much cost out as you can. Obviously, getting the capital infusion, it sort of creates this anchor to the business, to the balance sheet. And then you have... Coming on the balance sheet, obviously, 50%. I mean, it's an $8 billion deal as we pointed out many times. Many have also questioned the valuation for Skydance of $4.75 billion. I can see to hear that in many of the amongst the people that I speak to in the media world. How could they value it at that? Well, listen, if you believe it's going to do $545 million in EBITDA on 2026, then the multiple is not that high, right? And they say a lot of that is assured based on pipeline and based on commitments that are already there in terms of paying for the programming that Skydance will produce. We will see, but that's what they say not to mention. Of course, they're getting their stock as well at 15 for that $4.75 billion. So they're taking an inflated price on the stock that most likely will be far lower, ultimately meaning that they're really paying less exactly. I'm not for the unit. Yeah, no, all makes sense. I mean, and just bigger picture, it's kind of fascinating. I mean, Netflix, the acclaimed winner in this whole game, it's under a $300 billion market cap, right? Yes. So it sort of adds some perspective to see, you talk about Mark Mahaney saying it's Google and Meta in terms of advertising destinations, not to mention Amazon, and everybody else is sort of fighting over what's left to some degree. Disney's the clear kind of runner up to Netflix in terms of the model and the franchise and everything else and market value. And then it's the rest. Yeah, and we always come back to sports. We've talked a great deal about it as it slowly, slowly starts to migrate and most likely continue to as these deals come off over the next five to 10 years to the Amazons, the apples, and potentially the Netflixes of the world. Remember Netflix, of course, has two Christmas NFL games. They have no idea how they're going to produce them, by the way, Netflix. It's my understanding. They don't have it out for bid or what? Yes. Yeah, they're asking others to, will you do it for us? They don't have any announcers. They don't have any production capabilities. And they got two games about what five months from now, whatever it is that they got to figure out how to produce. I'm sure they'll figure it out as well in Netflix. All right, let's change gears a bit and talk about presidential politics, Republican presidential nominee Donald Trump. Hold a news conference yesterday and he weighed in on a number of topics, including the Federal Reserve and Fed Chair Powell Trump saying he should have a voice when the Fed makes its decision on interest rates. I feel the president should have at least say in there. Yeah, I feel that strongly. I think that in my case, I made a lot of money. I was very successful and I think I have a better instinct than in many cases people that would be on the Federal Reserve or the Chairman. Let's bring in Steve Leesman, the man who's been following the Federal Reserve for a very long time. Give us some context here, Steve. Never exactly sure what he's saying. You know, having a say, well, you know, the president kind of has a say already does he mean something more formal, something more structural changing the independence of the Federal Reserve. Dave, let's have a quick look on ways the presidents can influence the Federal Reserve right now. There are these things which Trump used very liberally back in his day. Open mouth operations. He's free to criticize the Federal Reserve. The Biden administration hasn't done it. The Harris people tell me she's in favor of the independence of the Fed. Not really inclined to comment. They can appoint members to the Federal Reserve Board and they could work with a friendly Congress to amend the Federal Reserve Act with some question about how much of the Congress's control they want to give up. It turns out, David, that just by the quirk of the calendar and the way that the Fed terms are staggered to really maintain that independence, if Trump wins, if Harris wins, neither will have a lot of ability to really influence the makeup of the board. If you look at it, for example, Powell's term doesn't expire until May 2026, Vice Chair Jefferson, not until 2027. The first Fed governor term expires January 2026. And just one more thing, you know, there was this April Wall Street Journal story that quoted some allies and a paper that have been out there that said there's thinking among his allies about going further than existing rules, giving the Fed Chair, for example, the ability to fire the Federal Reserve Chair. So that's where we're at right now. I would just make the one editorial comment. Donald Trump does speak to the press and we're not sure what he says. Harris doesn't speak to the press at all. So that's where we're at right now. You know, Steve, it's fascinating. You mentioned he Trump made liberal use of open mouth operations. Clearly always in the direction of he thinks rates should be lower. When I find fascinating, if you listen to Donald Trump when he's asked about inflation, he immediately goes to interest rates. He thinks of interest rates as inflation, as a high cost. He is a private sector operator. That was his biggest cost. He always had to pay interest. He was always leveraged. He went bankrupt a few times. And it's really interesting that he doesn't really have the equation in the same direction the Fed does in terms of higher interest rates are fighting inflation. It is interesting. Mike, it's unclear to me what the Trump plan is to lower inflation. When we do our national surveys, Americans blame Biden for the inflation. And whether that's the case is a different economic discussion. But it's unclear what the Trump plan is other than he has spoken about this idea of maximizing energy production that would bring down energy costs. And then what essentially he says, bring down all of inflation. That seems to be the Trump plan at this point. So it's one of those things where interest rates are on the fore of the mind of a real estate developer, because that is his number one cost. But again, lots of talk at the top, not a lot of details underneath David. Yeah. But something that we will continue to monitor, and should he regain that office as well, I'm sure we'll be hearing a lot from him on his social media platform, as he did. Last time he was president in terms of jaw boning with Powell, numerous times, Powell never responded. But basically saying, did he kind of call him the enemy? Are we sending me the China at one point, Steve? We're standing me. Yeah, he did. And one more thing, David, Trump has had some good instincts in business. He's had some bad instincts. So you don't quite know if you want to give that power to a president to set interest rates. And then let's say Trump had the best instincts of anyone ever, there'll be another president who you want that president to have the ability to set interest rates. So whatever changes are made need to be made for the long haul, hopefully not for an individual, David. Yeah, Steve, thank you, Steve Leisman. One appropriate time to do a bond report before we take you to a quick break. We can check out how treasuries are faring this morning. Of course, we've exceeded 4%. It's been an interesting week to say the least when it comes to yields for the 10 year, which I've been watching most closely given where we were, Mike, on Monday. Yeah. And where we sort of end the week, as you see a bit below that 4% yield. The two year though does exceed it. We're back right to this. Check out shares of take two interactive course brand theft auto. Is there a key product? They're up to the fourth version. That's the one that's coming is the sixth. Sorry, six. You know, me and Roman numerals, Mike, what can I tell you? No help on video games either, but I did hear Steve Kovacs say it yesterday. You're right, six. Yeah, a little ironed out. But you can see right there the stock is up. Of course, they're talking about net bookings outlook for the year 5.55 to 5.65 billion. That does seem to be enough to reassure investors at this point. Before we head to break, Carl has a look at what is still ahead in the show. We're here in the start to France today. What a night for U.S. track and field. Eight medals last night. The most in a single day for that team in over 30 years. Our coverage continues live from Paris in a moment. Welcome back to Squawk on the street. New data from China overnight showing consumer prices picked up more than expected in July. Our Eunice Eun is live from Beijing with more on these numbers. Hi, Eunice. I'm having audio issues. Can you hear us use? It sounds like Eunice is having some audio issues as you heard her say. I don't know if maybe we can get to her. It's just us. But yes, she's back. Now she's back. Sorry. Eunice, take it away. Oh, okay. I hear you now. So inflation data came in better than expected. CPI was rising by 0.5 percent year on year. PPI also came in at minus 0.8 percent. But that was actually better than expected. The underlying issues though are the same. If you strip out the food and energy prices, core inflation came in at higher by 0.4 percent. But that was still lower than June. So the authorities here had said that the main issue was weather. The weather issues, both the heat as well as the rainfall here, has been pushing up prices, especially of certain vegetables and pork. The summer travel has been able to give a temporary bump. People have said to the tourism figures up by 9.4 percent. But a lot of analysts think that that's just going to be a seasonal factor. In terms of the PPI, the falling prices of materials was one of the main issues there as well as the intense price scores. So what we're seeing from the data really is that there still continues to be a lot of weakness in this economy, especially with demand. Yeah, no doubt. And it seems as if markets were pretty quick to categorize that inflation number as a lot of extraordinary factors, not something particularly to worry about in terms of inflation turning higher. Eunice did also want your thoughts or your way in on this port explosion we've been hearing about this morning. All right. Yeah, again, we were having some audio, some audio issues with Eunice in Beijing. It was a container ship explosion that they get a lot of attention this morning. It's sort of not clear that it's going to necessarily be broadly disruptive, but it was a hazardous goods container. Mike, I always like to end the show here when I have you on just sort of saying what you're going to keep an eye on as a day unfolds. Not to mention, of course, you have a show tonight or CNBC special taking stocks. Do you have a special tonight? I mean, honestly, just watching the market react to itself in a way as to whether we can hold yesterday's bounce. That's the key thing. The S&P of 5300. And watch the volatility, and next you want to see that drain lower a little bit into the weekend. If not, people are going to be on edge about some geopolitical stuff, and maybe the Japan noise is not completely passed. Yeah, taking stock 6 p.m. tonight. Josh Brown and I are going to take the hour to sort of size up the week, figure out what will continue to matter into next week for the markets and try to break down exactly where we sit. Correction in an uptrend. What about this rotation? We all spoke so much about in the markets. It seemed like it was a fleeting moment, or at least for it to be an easy one, was a fleeting moment in the whole hard landing, soft landing story. And then try to have some fun with it. We'll award medals to various companies. Very nice. So a little metal ceremony. I think we're going to try to be some majestic about it. Are you yet metal for the hardest working man in business journalism, Mike? Every time you take home gold. Thanks a lot. Okay, we're going to take a quick break. We'll be right back. 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/squawkonthestreet disclaimer. Earning your degree online doesn't mean you have to go about it alone. At Capella University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track, we care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. 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