What's on the horizon for financial markets? At PJIM, it's a question that over 1,400 investment professionals relentlessly research in pursuit of your long-term goals. Specialised across asset classes, but united in collaboration, our teams provide global and local expertise. Our investments shape tomorrow, today. Pursue your tomorrow with PJIM, a leading global asset manager. My dad works in B2B marketing. He came by my school for career day and said he was a big row as man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laugh at me to this day. Not everyone gets B2B. But with LinkedIn, you'll be able to reach people who do. Get $100 credit on your next ad campaign. Go to linkedin.com/results to claim your credit. That's linkedin.com/results. Terms and conditions apply. Linkedin, the place to be to be. Market moving insight and analysis join Jim Kramer, David Faber, and me, Carl Kaitonnier on the opening bell hour of CNBC Squawk on the street. Good Friday morning. Welcome to Squawk on the street. I'm Carl Kaitonnier with Jim Kramer, David Faber, and post-9 of the New York Stock Exchange. Bull's trying to put a bow on this week's 3% S&P gain, best in about a month. 50 basis point cut gets a little more support ahead of the Fed next week. The oil is hanging on to 70, a roadmap begins with this bounce back. Stocks hit the highest levels of the month on these hopes for rate cuts beginning next week. We are watching tech, of course, as well. NVIDIA looking to cap a stellar week, Oracle getting a cloud boost. And Adobe's outlook is disappointing investors this morning. And jet production is halted at Boeing this after factory workers overwhelmingly reject their latest contract offer. They're striking now for the first time since 2008. Let's begin with the markets. Interesting collision of bullish factors. Yesterday, Jim, whether that was Oracle or Evercore going to a soft landing stance. You know, all the piece. I do think that we're at this moment where we're like, like Nick Timmer's Fed Whisperer and they're unsure maybe 15, maybe 25. But I think that was striking was there's kind of like a do over in terms of what happened with Jensen, what happened with NVIDIA. And that perhaps the street got it wrong. And then verified by the fact that Oracle came in boosted numbers. And we talked about that. That's what they're going to do. Which where was that? Larry Elson boosted next year, but like a billion. But then he's using numbers in the out years that are so incredible that if you're not long these stocks, I think David, you might like miss even another move coming. Jim, I think you hit the week perfectly there in terms of at least the sort of week. I got a run. You did it. You did it. Going up to sheet for a lot. Great job. It's I've been hearing the same. I had a couple of conversations this morning. One of them with a very well known long time tech investor who mentioned very similar themes essentially to take a look. Oh, he's done. He's not even on time chat. Yeah. Very killing. I have no idea why that came on. This return to AI is a result of Jensen longs comments at Goldman. Oh, no. Oh, no. Of course. Who's the interview outside of the way? Outside of the way. That was killer. Everything we, you and I went through, of course, Larry Elson had to say on that Oracle conference call and everything that came out of the Oracle members. Microsoft as well presenting at Goldman Sachs and Communicopia also. Yeah. So focused in terms of AI and all the opportunity there. And so. Are you more of a believer? You've been a skeptic. Well, no. I've never been a skeptic in the power of AI to transform everything. And what I've been concerned about and continue to be is what it's going to mean for society in general. I'm not a skeptic on what's going to ultimately happen. There are still different points of view. One is held by the Sequoia camp, which we all started talking about earlier this summer with that first report from Sequoia talking and questioning about the return on invested capital. Right. And then shellless. And whether it would all find its way into apps eventually or how this is all going to play out from a value proposition. Whether or not this is going to transform everything. No, I'm not a skeptic about that, Jim. You're not good because. And I haven't been. You know that. Yeah. It's funny. When you speak to Jesse Wong, what he says is, you know, this has been alcohol for like 18 months and it's supposed to cure cancer. I mean, I ask myself, does it cure cancer? And you're like, any pause for a second. Let's just explain that. That's not the point. It's about getting data instantly that would take years to put together. I like that. Well, seamless skepticism came from recent examples in which doctors were still able to detect cases of breast cancer better than AI. Right now. No doubt about it, but it's a right now situation just to point out as he pointed me out that he has no problems with how well and then he is going to do. His question is the spend and how much. Now Oracle, Ellison comes out and says the spend is going to be endless because you had to keep up with the neural networks. There's no end to the spend. It's like with a bill and that's one of the key questions. This sort of idea that at least been braced by Sequoia. There will be a day when it's kind of done. You won't need to spend as much on GPUs. All the data will be taken in the generative. The models, the large language models will not be complete but be largely complete in some way and you'll move on to the next phase, but it won't necessarily be value that's created as a result of those that are running the models. Right. But I do think that one of the things, like you look at what Tesla's talking about. I mean, Tesla's talking about robots. He's talking about how to make real self-drive when you talk about self-drive. Like some of the applications. I mean, it's kind of like when you took chemistry, which I managed to drop because I knew it hurt my transcript. What I did was I recognized that this is about trying to do basic versus apply. The basics being done by Jensen. The apply is being done by Elon and the apply is huge. When it comes to actual stocks that, you know, again, we, until the last three days, the net where the NASDAQ has outperformed the Dow, for example. And we had a long period there. The Dow is outperforming all of these names. So as we move into the back half of this year and finish up September, we soon enter the fourth quarter. Jim, I mean, Amazon's trading one of the lowest P's it's ever had. And yet it's above where it had the so-called disastrous quarter. Right. Meta and Google continue to trade at levels that they often do, which is not particularly high multiples. No. Different than an Apple, which is still 30 times. Yeah. Apple's 35. Met is very low. Very good piece by Deutsche Bank this morning. It's one of their big overuse to year end. The tech de-rating looks like it's done now. The sell off of tech could be over. I think that's very important. I agree with you, David, that what's happened here is that these stocks have been clogged and they got interesting people. You guys should. Meantime, getting some breaking news this morning out of Uber, the company announcing it is expanding. It's autonomous driving partnership with Waymo. The two companies say they will bring autonomous ride hailing to Austin and Atlanta on the Uber app beginning in early 25. Uber ads will manage and dispatch a fleet of Waymo's all-electric Jaguar vehicles in both cities. Uber's Dara Kuz. We're sure he's going to join us later on this hour. Of course, expanding Jim out of Phoenix. Right. And to do it, Austin and Atlanta, we know that the big problem has been local authorities. If you go to Phoenix and you want to go to the stadium, Glendale, there's real restrictions about what you can do. I want to know how open Boston is, how open Atlanta is. These are things. Are we going to now see them on the streets everywhere? Is that what's coming? And I fact that it's Waymo. Remember, they do not have it exclusive. This is not exclusive because Cruz, there's going back to Fort Mary Barra, Cruz has a deal with Waymo. I mean, I'm sorry with Uber. I will say, though, that I've been waiting. David just talked about the multiple of Alphabet. Well, David, until today, I thought that Waymo was starting to be a bus. Yeah. I feel better. You do. Yeah, this is an endorsement from Europe. Yes, because Waymo's been one of those things that, you know how Alphabet does these things and they don't really mean anything, but it's like they're there. I know. Don't you think it's interesting? Yeah, I do. I still wonder ultimately about the underlying technology in terms of how Tesla's going about it and how he's using generative AI to now power his autonomous, which is a bit different, I believe, than the approach from the Waymo's or the Cruz's of the world. I think the Cruz, one of the things that I wrote in a cruise right before the CEO was eliminated, so to speak. And you didn't call it one of the big problems is his head. When he was describing, the Cruz people always feel aggrieved that if someone is killed pedestrian, one pedestrian versus, say, 100 pedestrians from a regular car, we read about the death from the autonomous, but we never read about the other deaths. This has been Musk's take for years, that the aberrant gets reported the most, so for now it would be a robot making a mistake where as we just put up with humans making mistakes all the time. Right, I mean, you get these videos of the autonomous being jammed together or something wrong. There's whole movies devoted to autonomous hitting each other. No, without a doubt, but that's just human nature, I think, at this point. You're right. Rationally, you should want every car to be autonomous because it will take the death rate on the roads down dramatically. There seems little doubt about that. How tired do the autonomous speak it? They don't drive like this. Right, how many drinks does autonomous have before they're really drunk? They give them a breath while. Yeah, they don't do that either. We have self-driving in airplanes, but there's a pilot right there the whole time. I always feel a little better when that happens, but yeah, I mean, I do think that what's going on is that it just takes one story that's bad, and then they put a pause on it. And it's painful because, like David just said, I mean, you want safe driving and do this. I felt that the thing that they ought to emphasize is that the baby boomer generation started to get bad at driving. This is what Waymo told me. Waymo went with this. Elderly transportation is going to be a thing. If you don't need to drive, you don't need to take the keys away. That's a very difficult emotional moment for all kinds of families. Yeah, anyone who's done that knows that this is a conversation you love not to have and you want that. No, I mean, it's coming. But a boy, I've been sitting here saying that for so long. I mean, guys, five years ago, I was telling y'all, oh, five years from now, they're going to be all over the place. A million by 2020, and this must be now famous for saying it anywhere. Do you think, Jim, then, we're moving from a period where it's less about the hurdles of the tech and more about municipalities and local regulations? I do. And I think local regulations have a lot to do with this notion of the -- I'm going to say something. I don't want to regret this, but you could -- there was -- when I was out in Switzerland, there was a mother in order that were killed in an accident, and it wasn't in the paper. But there was someone who had -- who was dragged and was in the paper. And so what the cruise people were saying is, how does -- how do we have this situation where the ratio of deaths is so low? And I think the reason why you have it is because we don't have enough data. Because if we let these cars run, I think we discover that the fatalities are much slower. But we haven't been able to do it. This might be the test. Austin and Atlanta, that's going to be a test. Oh, and interesting. Of course, they chose Austin, which is Tesla's backyard, so I like to spread their face. Yeah. Speaking of Tesla, a couple of notes today on not just about October 10th, but on deliveries, which we'll get before then, mood's pretty good on delivery expectations for the quarter. Tesla's not a cheap stock, but I -- I like the stock. Do we want to get to Adobe guys before we wrap up this? It's up to you. It's up to you. Stock's down 8% percent. It's guidance. It's not the quarter. It's guidance. The guidance is my friend. Yes, the guidance is the guidance, and the guidance is disappointing. Q4Net ARR, $550 million consensus was somewhere $25 million or so above that. I'm looking at a note here from BMO. It supplies a down 3% year over year for ARR, also growth of 2% year over year and net new ARR, Jim, for the second half of fiscal '24. It's not great growth, but they had 11% revenue growth for the quarter they just reported, which -- and they have a big backlog, as you want to use to describe that. I think they're just worried about competition. I also felt, David, that it didn't seem no matter how well they did. Because all people cared about was what's going to happen in the next month. Is that fair? Do you think that's the way you should judge a great company like this? No, I don't. I don't, neither. I don't. I worry about competition nets. And, by the way, I've been right to Somalia's worried about competition. Conva is still there. There is a very cheap alternative, but firefly has been amazing. That's her AI. I was just -- I was agreed on this call because I think that someone should have just said, "Hey, you know what? We can deliver the numbers. We just want to be a little. We don't." You know, it's like, if you look what Kroger said, he brought me to my phone at an uncertain time. We don't know exactly what's good. I'm using that because food has to be, you know, you've got to eat other than a Donner Party, which was just a disaster for the numbers. It's better. You get to that Donner Party a lot. You know, my -- it's somewhere a lodge someone had in your room. The diary of the Donner Party is an incredible work, but if they ate the glue on the wheels. I do feel -- I just want to go back to correct something that David said. Yes. I was very proud of working 100 hours a week, and he meant, you know, just like Adobe had a great quarter. I think that you should be a little bit more, let's say, positive about my 100 hours, though. It's positive about it. Yeah. Oh, we're going back to that. Okay. Well, because, like, you know, what have you done for me lately? I felt this call was, again, this is like, you know, Sean Tanu comes on our air. He tells an unbelievable story. It is really amazing, and all anybody cares about is, like, hey, I'm not buying that. I mean, you've got a -- what's going on with Thanksgiving? Did you see that? There's, like, this switch to the calendar that, like, Black Friday is, like, in another -- another time. So it's going to make the kind of the comparisons of what they're helping. They were carping, and they don't understand how hard Adobe, the people at Adobe work, and Adobe's terrific. Oh, I mean, yeah. So they don't care how hard they were. Well, that's my point. Right. It's that you can work as hard as you want, and there's always skeptics that can't wait. Oh, it's my fault. It doesn't. A man who, on his tombstone, is going to say it could have worked 101 hours a week. Don't. Yeah. You could have -- you could have been a contender. Finally. So in terms of the macro, which we'll talk a lot about next week, of course, with the Fed meeting, Sean Tanu or Narayan of Adobe did talk about the backdrop. Take a listen. Most people would characterize the economy as either a little bit slow or stable. We have seen stability in our business. I think we're all probably looking forward to seeing what both the Fed says as well as what happens in the elections. That's going to be a key point as we await retail sales and a bunch of other stuff. Absolutely. I mean, look, for Q4, this is the line that everybody is focused on, no matter what everybody else, it's Daniel Dunn, CFO, he goes, we're targeting total Adobe revenue of $5.5 billion to $5.5 billion. That was it. No one else cared about everything else. That was the line. All this great stuff in here about what Adobe is doing in AI, no, that's all people care about David. Is this one line? I know. It's so sad. You've, you know, they're focused on the short term. It's terrible. You don't like that at all. I just don't like it when the guidance is the guidance. There's more to it. That's $2 check-like. Not Brady-like. What was that? Brady-like. Was that Brady-like? When we... Is that just rehearsals? Oh, it wasn't good. That wasn't good. It wasn't good. It wasn't good at all. That'd be better. He'll get better. When we come back, a bunch of other news, Boeing, of course, the largest labor union there going on strike for the first time in 16 years. Live picture here out of Renton, we'll get a live report from the Pacific Northwest. We'll get to some other news and airlines like United and American. Our H is a story, upgrade a Kroger when we return. Support for this program is provided by Chevron. The anchor offshore platform is utilizing breakthrough technology to enable us to produce oil and natural gas in the U.S. Gulf of Mexico at pressures up to 20,000 PSI, a new industry benchmark. Anchor is part of Chevron's plan to produce 300,000 net barrels of oil equivalent per day by 2026 in the U.S. Gulf of Mexico, home to some of our lowest carbon intensity-producing operations. That's energy and progress. Visit chevron.com/anchor. My dad works in B2B marketing. He came by my school for career day and said he was a big row as 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 $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. Linked in. The place to be. 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. Boeing's Machinist Union going on strike for the first time in 16 years after rejecting the jet maker's latest contract offer, our Phil LaBoe is on the ground in Washington State with the latest. Good morning Phil. Good morning Carl. We are outside the 737 MAX facility here in Renton Washington. There's no production going on this morning. Why? Because these guys who are usually in working on a 737 are out here picketing. Late last night, the Machinist Union announced that 94.7% of their members who voted rejected the tentative agreement between Boeing and the Union. Not only that, 96% then voted to go on strike. The deal included a 25% raise over four years. Time and again. I've heard from members saying that's not enough. We thought we'd get closer to 40%. That's what they're looking for. So 33,000 machinists have walked off the job. This is the first strike since 2008. And for Boeing management, it increases pressure to find a way to get a deal done. The company releasing a statement saying the message was clear that the tentative agreement we reached with the IAM leadership was not acceptable to the members. We remain committed to resetting our relationship with our employees and the Union and we are ready to get back to the table to reach a new agreement. How long that will take remains to be seen. As you take a look at shares of Boeing, keep in mind that the estimated costs, and they're all over the map, anywhere between 500 million and a billion dollars depending on how long this strike lasts. The history between the machinist and Boeing is not good in terms of resolving strikes quickly. The last one in '08, when 58 days on average, if you look at the last four, they go about 45 to 60 days depending on which strike you look at. Bottom line is this, guys. The machinists want more than 25%. They'd also like to have the pension re-established. I'm not sure that Boeing will go that far, but 25% is definitely not going to cut it in the eyes of these workers who are on strike. They wanted to get closer to 40%. Guys, back to you. You know, Phil, I was watching your excellent covers this morning and there are some people who seem, they're very angry, but they're also, I think it's almost like an existential crisis here. Are we back to the days of William Wintersinger where this union was maybe the smartest union in terms of trying to figure out what the employees should get versus management? Because I feel like there's like this kind of an underlying tone of, "Calhoun made all this money and we're stuck making little money." Is it really as visceral as some of those people you've interviewed made it seem? Yes, it is. I've covered this company since the early '90s, Jim, and I have talked with many machinists over the years. The relationship between management at Boeing and the workers has never been strong, and it's near its low point right now, at least over the last 30 years. When Boeing said they were going to open the plant in South Carolina, a non-union state, that really stuck in the crawl of the union members here. They felt like, "Well, this is the beginning. Why do we, when do we know that there's not going to be other plants opening in other non-union states?" In this agreement, by the way, there is a commitment by Boeing to build its next airplane, which is going to come out somewhere in the early 2030s or mid 2030s. That plane will be built here in the Puget Sound area, but when you bring that up to the members here, and you say, "Well, they've made a commitment here," they all roll their eyes and they go, "What's a commitment? There's nothing in writing. There's no guarantee that Boeing is going to do that." That gives you an indication of how the members feel about the relationship with management at Boeing. This is incredible, especially given the fact that the balance sheet of Boeing would seem to be very stretched by this, wouldn't it? Yes. This is going to cost them tens of millions of dollars, depending on how long this lasts. There's no production going on. Will they deliver some aircraft that are basically built but not ticketed, which is essentially paperwork? Yes. They will be able to do that, but that's not a lot of planes. The next delivery numbers that come out early next month, we'll see some of those planes in those numbers likely, but you're going to see a big drop in terms of deliveries depending on how long this strike goes on. They delivered 40 aircraft, by the way, last month. How often does leadership diverge from membership? You cover the autos as well, Phil. Is this an uncommon thing to happen? Not uncommon. The only thing I can really compare it to is the relationship between the UAW and the management of the various automakers. And look, they're not lovey-dovey in Detroit when it comes to the UAW and the management of the so-called Big Three. What said, the relationship here between the machinist and Boeing, it's been strained for a number of years. The strike in 1995 was brutal. It went on, I think, 69 days. And there's vitriol coming from the members there. So they've got it. Boeing management, first and foremost, has to get the strike result. Then, Kelly Orberg, the CEO, can go about trying to mend the relationship between management and workers. So job number one, get these guys back to work. Phil, I imagine we'll talk all day about the impact on suppliers and the war, the ongoing battle with Airbus and a lot more. That's our fill of O in Washington state. When we come back, we'll get Kramer's mad dash, count down to the opening bell, take another look here at the pre-market as try to add a little bit more to this 3% upside week for the S&P back in a moment. My dad works in B2B marketing. He came by my school for career day and said he was a big row, as man. He told everyone how much he loved calculating his return on ad spend. My friends still laugh at me to this day. Not everyone gets B2B, but with LinkedIn, you'll be able to reach people who do. Get $100 credit on your next ad campaign. Go to linkedin.com/results to claim your credit, that's linkedin.com/results. Terms and conditions apply, linkedin, the place to be, to be. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. Imagine your future differently at kappella.edu. Alright, we're going to get to a mad dash, and then we get the final opening bell for the week as well, a couple of minutes from now. The banks have had a rough go of it this week, Wells Fargo amongst them. Yes. And I want to point out, J.P. Morgan has a piece today saying a significant new negative developed Wells Fargo anti-money laundering issue is back. Okay, first of all, no, it's known, it's been disclosed, there was something, nothing significantly new, then it talks about it all, it's surprising. No, it's not surprising, they've been working with the government on this. Well, it was surprising that the government came out and released it right now, but there's many banks that are covered by the same thing, you're going to hear this, but a lot of banks. But this is an ongoing situation. So the idea that you should send the stock down for a second day, I think, would be wrong. I understand. Look, when this stuff comes out, you think, "Oh, my God, Wells is back on the Red Hot Griddle," but they're not, and I think Charlie Sharp has got this situation well more advanced than what J.P. Morgan is saying. But that said, people are back just liking the banks. Yes. So the regulators are back talking in a tough game again. Kind of. Well, when you say that, what are you referring to specifically? Well, the standpoint, is city able to raise its dividend without government compliance? I don't think so. It's TV. It's a TV. It's a TV penalty. Yeah. Okay. All true. It's a matter, though, to Goldman Sachs, Morgan Stanley, Wells Fargo, Bank of America, or J.P. Morgan. Well, Bank of America has been mentioning its cue about something very similar to this, that this is something that they're working on. So it shouldn't be surprising something happens with Bank of America. This is like where the regulators are, but it's not surprising because this is something that has been ongoing. There's no consent decree. There's no slap. There's no fine. Right. I mean, listen, this week's performance is not about that. It's been about those comments out of Daniel Pinto and a general concern about a recession, perhaps. Absolutely. It's all about to me when Pinto lowered the boom on 2025, when Carl, I think he was freelancing. I think the man was freelancing. Let's get the opening bell this morning in the CNBC real-time exchange of the big board. It is city celebrating Hispanic Heritage Month, and if an Azdak celebrating an IPO, by a scientist, a focus on the treatment of endocrine and metabolic disorders. Jim, I know you disagree with the nervousness on the consumer, and you have good reason if you listen to RH, and some of the charts of cruise lines spend today. I'm so good you got to RH. Now, this was the big thing left I've been waiting for, and Gary Friedman, they beat the numbers. They raise numbers. Mark talking about plans everywhere from Naples, a beautiful place we're going to go to, David in LA overlooking the water, what they're doing in Europe. The vector, Gary, talks about the vector, but what I really loved about this was this man in the last three quarters, who said, "Listen, I know I'm out there. Where's the housing market ever?" But I'm still buying back stock, I'm putting my money in my mouth, and it's happening. And it was a remarkable quarter. Remarkable. We're down seven, but the guidance for July, August, and of course for Q3, you're now into the double digits. Oh, yeah. And the cadence, you have just a month after month getting better and better and better. This was the quarter I've been waiting for, I've been waiting for. I think Gary's a remarkable visionary Picasso, because he basically says, "Listen, we got to destroy things in order to be able to make it great." I don't know if anyone's been to his rooftop, but in the meat packing. But one of the things he says is like, "This whole social media is ridiculous. You're paying to buy the name of a competitor so that you get in the queue, because we don't do that. We don't do Instagram. He's so contemptuous of Instagram. I love it. He's his own guy. He marches to the beat of his own drummer. This is an inspiring conference call, inspiring, because what he says basically is, "You break the rules. You can win." Awesome discussion today about gross margins, inflecting positive. Oh, my God. Here's a list of inflections. The inflection set on the call. We feel very good about the business right now. The inflection happens a couple of quarters later. You know, when you're making big moves and big innovations like this, it's not as much about the timing as it is the vector and the increasing magnitude and direction of that vector. I sit here and I think about what the mix will begin to shift today, but we like where we are. We like the demand vector that's unveiling itself. We like that margins have been reflected positive. We would have liked to tap in a couple of quarters earlier, but that's not really the point. I said to somebody, you know, how many times does anyone much been on time? You know, when you're making big moves, it's really hard to be on time. Well, look, there's a lot of the calls devoted to people who are his heroes, such an idolatist, is how they didn't mention Dublin. Anybody said, you know, think about the way that Microsoft was destroyed, and then it came back. I mean, he's got a lot of analogs. I find him inspiring. I find things like when he says, "Look, things remain challenging. How's Mark begins to rebound?" He'd been very worried about that, but the transformation of a sort in his incredible level. And he's really trying to do something very different. What he's trying to do is make it so that you go to these incredible places, not galleries, not stores. There's no real word for where you go, but wow, you buy. And I just think he's going to have a remarkable rebound. People should be in the stock. I know I wish that my child would trust us in it. This is it. This is going to be Big Palm Desert, California, opening in November. A Paris and London is going to be refreshed, Milan in 2026. He has grand dreams, and he's hitting it perfectly. Gary's real. Now on to lingerie and bathing suits that you buy for your wife, which gets us to Tamu, Timu, Tamu. Right. Do we know what you have in here? Tamu, right? I'm going Timu. Yeah, say Tamu. Tamu. Andrew said Tamu. Oh, Andrew. Well, there you go. All right. Case closed. That guy's never mispronounced anything. Wow. Look at that, huh? You know, I'm going to see Clorox next. Wait, wait, wait. No, it's related. It's related. Well, okay. Oh, I know. Right. chemicals, and Tamu, and everything. No! Kingsford. I measure flammability by the Kingsford index. All right. Why am I talking about this? Well, because PDD, the company that owns Timu, may be subject to new tariffs. There is something called as the de minimis loophole, the trade provision that allows packages with the value of less than $800 to enter the United States with little overall scrutiny. Those shipments have skyrocketed since she and Timu took over in so many ways, selling so much stuff, perhaps flammable, perhaps not to U.S. consumers. I think I'm seeing here 140 million to more than a billion of these shipments. And so the Biden administration is now talking about putting a new rule in there to basically curb them as well, essentially a tariff. Well, David, you know that they were a gigantic advertiser on Facebook, and that's why I think that is now $5, it's because people say, wait a second, they make a hole in their horns. And I think that's true. But it's up to Biden, actually, those of us who've seen the ad straw know that it's not been a great story. Although in the last quarter, they actually said they needed to market more at Timu, which actually had a beneficial impact on that as their price. But you're right. I think they'd anniversaryed at meta, that quarter that was enormous where you saw that huge uptick because of the advertising you point to. From both CNN and Timu, as they competed here in the U.S. market, she and still waiting to go public, not here in the U.S., but at some point, I think a public listing, maybe it's in London, if I recall. David, political, political. At a time of a closely election, people want to bash China right there, people's faces. Yeah. Of course. Well the other big news out of China, of course, is raising the retirement age for the first time since the late '70s. And just a discussion about the box they're in where they clearly need stimulus. But the debt load makes that difficult and fending off deflation is a scary thing. But I also know that there's always going to be these articles which say there's unrest. No, there's not. I mean, this is a military police state. And I think that what will happen is that it's just another thing that we read about that doesn't address the core problem that Unisune is so often talked about, which is the trillions of dollars in families. Trillions. Many trillions. We're scared of that kind. Related to the property sector in particular, the journals done a good job covering. It has a number of others. I mean, they say if you were to really write down across the board all of the value of real estate as it needs to be, you'd get to some number of $15, $18 trillion, a number that is hard to almost conceive. But again, this does go back to, you know, so many people put money in property. They don't have a source security system similar to our own. So people save a lot more and China's saving rate is much higher. But for a long time, it was putting the money into property that has fallen dramatically. And then you have the municipalities that were able to sell land to help fund so many, what they wanted, so many of the things they wanted to do, took on debt to do that. And now we're in a very difficult position because they can't sell the land to the developers. And they're penalizing the auditors, in this case, PWC, on Evergrande, that's the other big headlines today. Well, look, I mean, every single look, they were arresting bankers, the headline, the other goes arresting bankers. I mean, they're doing a lot of things that are emblematic of what, of going toward a much more extreme state. And I know that we have, we continue to have talks with them. But I keep emphasizing that the money that they are, should have put to properties, going to military, trying to get it, intimidate us. And I just think that some of the players are still working. I mean, they are at export powerhouses they've always been. But even more so compared to, obviously, imports, given the lackluster consumer demand in the country. But we talk about it every day, they are autos and solar panels. I mean, they dominate, dominate, dominate, dominate in batteries. And they will continue to. We may not let them in this country, and there may be others that choose to do the same. But no, you're spot on. But Chinese, they control those markets to some extent. They sure do. And I think that we have to stay on this not over. Big implications for commodities. We'll talk about oil in a second. But chips as well, which brings us to Jensen Wong's appearance at the White House yesterday, talking about AI and the build out nationwide, how much of a public-private partnership they'll be with the government, are Megan Cassella caught up with them. If you missed it, take a listen. We've got to make sure that everybody understands the needs coming, the opportunities of it, the challenges of it, and do it in the most efficient and scalable way we can. Absolutely. Do you see the need for a federal role here in terms of federal investment in combination with private investment? Well, there's probably going to have to be public-private collaboration in this area. Because the rate of growth is really quite high. Although artificial intelligence consumes a lot of energy to train, it also saves a lot of energy when you consume it. Because ultimately it's not about training the model, it's about using the model. Covered a lot of ground. Yeah, look. It's really interesting. Training and using, I mean, that's just really important. I think the world of this is so an AMG, but they don't have as much training. They have more inference in them. What matters is that you just kind of have this vast catalog of things that is embedded when you get an invidious chip. Well, it's not a chip. There's seven chips on a blackwell. We've got to really get it. It's an 80-pound machine supercomputer. We've got to stop calling it a chip, because people just say, "Oh, it's a little set about together." Right. And that's what you get. And by the way, back to Ellison's comments though, in his as well, we talk about it every day. Power, power consumption on the need for it, the fact that, I mean, Ellison actually did talk about having a team of ex-utility executives at Oracle who were figuring, trying to figure things out, given how many data centers they're building. Recommissioning. We're referring as well to the power consumption. We're recommissioning nuclear power plants. We have to. We have no choice. No. It's very exciting, actually, for those of us who think there's nothing wrong with nuclear power plants. I slept next to a nuclear power plant for many weeks in Sacramento, when I was in my car. No problem at all. I mean, there's no reason why I was betting. I found it great. You seem fine. I mean, look, I, well, I can tell you it was one of the greatest times of my life. I mean, look at it. Please say, this is a good place to stay. You know, it was like, hey, shut down. It was great to say, go do it. Was it? That's a nice place out here. Yeah. Very nice. It is. No, you can, that's French and Mirage. Oh. Bob Hope, bro, you think about it? No, I'm talking about a nuclear power plant that was shut down for a while because it was hazardous. And they said I could park there all I wanted. Okay. Anyway, I would have pulled nothing. Uber shares rallying after announcing or bringing driverless Waymo rides to Atlantic Austin, Texas, starting early next year. This is very exciting. Uber CEO, a direct customer, sorry, is with us now exclusively, I might add. And Dara, I think that this may be what we've all been waiting for, which is a notice, which just says, look, it's not just California. It's not just as town in Arizona. It's big places that we'll be hailing, getting, ubers, and almost maybe expect that it's rivals. Wow. Well, I think that we're incredibly excited that this rate technology is now expanding. And we're incredibly excited to be expanding with Waymo, who we think is the leader in terms of driverless technology. And, Jim, this is really cool tech. If you've ever taken a ride in a Waymo, it is an absolutely delightful experience. And we're very much looking forward to introducing it to the folks in the land in Austin as well. Now, yes, I've been in Waymo. I actually said, look, let's go to the best pizza place. It took me right there. It was really kind of has a brain. But I wanted to know about what you're doing in terms of municipality. Sometimes if we have in Phoenix, I couldn't go to the Super Bowl a couple years ago because well, what happened is once you went out of Phoenix, you weren't allowed to be driverless. How are the municipalities handling what you want to do? Well, anytime we expand in any city, we want to be in very close contact with the municipalities to make sure that we're expanding in a safe way, in a way that makes sense, in terms of traffic flows and what their goals are. That said, our intention is to bring Waymo and Uber together to market in Atlanta and Austin in a fairly broad way. It'll take time for us to grow. But the intention is for you to be able to get, you know, Waymo through Uber, wherever you live in those cities. Dara, you mentioned the municipalities, but it's notable, of course, that Austin is the home to a very large company called Tesla, which has its own ambitions. Did that have anything to do with the rollout? There is it specific to the efforts they've been making there as well to accommodate these types of vehicles. Austin is a big fast-growing market. Texas is a terrific state and obviously a big market for us. So that was really the consideration. We're trying to find a couple of other markets to partner with Waymo in and Atlanta and Austin turned out to be great targets for us. To the extent you've seen some behavior of your consumer base already, what is the willingness of people to order an autonomous Uber? Well people are very open to it and we're seeing actually the percentage of accept rates when offered an autonomous vehicle going up generally. There are some people who aren't ready for it. But I think the more you see these cars in the street, the more you see how safe they are, how cool they are, the acceptance rates are going to go higher and higher. And we make sure with our technology to dispatch the car to you when there's a pickup zone or a drop-off zone that's convenient. So we want to make sure that the experience is a top experience as well and we think with that kind of experience, warmer people will want to experience autonomous. Dara, I'm guessing at this point, for those who, as you say, might be a little reticent, you probably have some kind of 30-second pitch on what they can expect or how they should feel about it if they're taking a ride for the first time. Yeah, we tell them a little bit about the car itself, what the experience is like, what the pickup and the drop-off is like. And people are very open to it and again, I think if you take a ride and we're very much looking forward to the folks in Austin, Atlanta taking a ride, they will want to take another and another. Dara, I'm curious about the underlying technology and your thoughts about it. I mean, Waymo and I believe crews have gone about it a bit differently. Certainly, then Tesla is now in terms of very much focus on using generative AI to power whatever their latest version is. Do you look at either of them and say one is better than the other? Well, we look at Waymo and we believe Waymo is the leader here, you know. Their goal is to build the world's most trusted driver. There are different ways to approach the technology, but as you know, Waymo was the original player here. They are very much focused on safety and we want to make sure that any partner that we work with is wanting to grow this business but build it in a very safe way and you can't ask for a better partner than Waymo and that regard. Well, Dara, I have the August 22nd, 2024 announcement between Uber and Crews GM where you praise the Chevy Bolt deal that you have that's going to come out next year. Does this mean that you think that the Waymo technology is better than Chevy Bolt? Well, the announcement with Chevy Bolt was more on EVs as well. Of course, we have announced the intention to work together with Crews. I think all of these technologies are going to bring a safer driver to the road and it's going to be affordable and available to everybody and hopefully people will truly start ditching their personal car to have a robot driver who's very, very safe, you know, taken to the places that they want to go. That's ultimately what it's about and we think that there are a number of companies out there that are building, that are building well and are building safely and we want to partner with many of the players out there. You know, Dara, I can remember having conversations with you years ago. I think when you first took over asking about this because obviously it's very important overall in terms of the cost and everything else that go into it, what you do, it's taken a lot longer than anybody would have anticipated. So where are you now when you really think about this becoming something that becomes you know, more than a test site here and there? Yeah, the technology has been difficult and challenging to bring to market in terms of dealing with all the circumstances that we take for granted that human judgment gets us through whether it's a traffic jam or something happening with an emergency vehicle. That is proven to be a difficult technical task. Now we do think from a technical space, from a software space, that's a task that is being solved by a number of players out there in the marketplace. Now it's time to take this technology that is working, that is improving, that will get safer and safer and safer, now it's time to commercialize that technology. And the commercialization requires high utilization of the cars making sure that the repair recharging of the cars, the fleet management in the city works and works economically and that's what this partnership between ourselves and Waymills all about because it's a cool tech but we want to scale that cool technology because ultimately it's going to make the street safer. And for viewers Dara who are in Philly, Miami, D.C., New York, Chicago, do you think announcements about those kinds of cities are also in the offing in 25? Well, I can't predict timing but this is a technology that's going to scale and hopefully with the regulators, with conversations with regulators will be available broadly both in the U.S. and globally, that's certainly our area of operation and that our ambitions are global. So we think it'll get there but it will take time and again, I'd say safety first at the stage. Dara, I just want to switch directions for one second. I'm on a lot of these consumer calls and you are just part of the conversation every time whether it be Kroger or be any of the food companies, any restaurant chain. It is just talked about how, look, people do get it by Uber, people do get it. You become the way that people get things. How did this happen so quickly because it's really rather remarkable two years ago. I did not think that Uber is the delivery company. Well, for us, it's about the power of the platform, Jim. Obviously, we started in mobility, that was our core business, but we thought that we could not only get anyone anywhere but get anything to your home as well. We've been investing in Uber Eats and we've also been investing in our membership program. It's free delivery, discounts on mobility, etc., and we're getting a higher and higher percentage of our population, not just thinking about Uber as a place where you get rides, but also get your food, groceries, etc. It's taken some time but the power of the platform and the brand that we are building on a global basis, it's definitely working now and hopefully we can keep building it in the future. Well, look, I had to tell you, I want to congratulate you. We need this. You're all we're talking ahead of time, Dara. We need this because you'll save a lot of lives and we have to be talking about it as a life-saving change. That's our plan. I want to thank Dara Cotswissari, who runs Uber and does a remarkable thing here, CEO of Uber. Thank you so much, Dara. It's really great to have you. Thank you very much. It was a pleasure. You seem encouraged on the Uber version. We have to have this because when you see the numbers that Waymo has and they have numbers of millions of miles and how much for safest thing is, it's really time that we realize if Henry Ford were alive and were to design a car, he would not have a driver, he would have this technology. Drivers are flawed. Dave, we have a podcast. No one knows if you're just nodding. Jesus. Yes, Jim. You are correct. End the week on a good note. Nice. We're about to ending the week on a good note, Dow up 225, back above 5600 S&P, watch bonds as well. Two here, once again, with a yield almost the lowest in about two years and the 10 years, still below 3-7, as we await you, Mitch, in about 10 minutes. Jim, what have you got planned for Matt? Oh, man. I've got Foot Locker. I've got Mary Dylan from the new store that's right near Macy's. I cannot wait. She is turning that thing. She was the great turnaround analyst at Ulta. This has been a tough turn, but she's getting it. It's not like Starbucks with the guy, like the moment they heard. Ryan Nichols stocks up like 27 points. Anyway, I think Mary does a great job. We're going to find out everything, putting Nike, House Hokey doing at 1-1, a new balance. Adidas. I can't wait. You're busy tonight, and then you'll be busy next week. Yeah, I've got some other guy next week. I'm going to have some just go for Dreamforce, and I've got Salesforce. I've got Arm, AMD, Broadcom, I've got T-Mobile, Workday. I've got Elf. I've got HP. I have Octa. I'm going to do some stuff. David, what do you got from Broadcom? How about Hocktown? Oh, man. Really? You got Octan? What, you think he's yours? No, I didn't say that, but it would be nice to have him here. Hock... Sorry, I have to go out and see him just go see the great Hocktown. And he has to... That's where they are. He said that it was a good quarter. The analysts all did that. Like, oh, but the December number, and now it's up 15. In Hock, I trust, period end of story. Always have. Can't wait to get out there. No sleep at all for you. I don't like sleep. I told you that. How do you get the 100 hours of your sleeping? It doesn't add up. Well, we're going to be relying on you by coastal for the Fed, for England. Bank of Japan, General Mills, Darden, FedEx. Easy companies. I mean, FedEx, by the way, I think it's going to be outside surprised. I like General Miller. I like the new play. I think that was a very good boot to get rid of that. And the Bank of England, well, I don't know. But where are you on perfect couple, because the numbers are incredible. That plays extraordinary numbers. Talk about that, too. Okay. I'm getting that place. They don't know that yet. I'm going to go right in front of their office. Oh, really? I am. I'm going to do that. Handcuff yourself. Yes, I am. Do that stuff. I hate Jensen. How's the numbers? That's what I'm going to do. Jim, we can't wait. We'll see you tonight. Thank you. Mad money, 6 p.m. Eastern time. Everybody looks for the best week since the middle of August. Stay with us. You've been listening to the opening bell on CNBC's Squawk On The Street. All opinions expressed by the Squawk On The Street participants are solely their opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates. And may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information Squawk On The Street participants consider reliable. But neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Squawk On The Street disclaimer, please visit cnbc.com/squawkonthestreetdisclaimer. 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. and how Capella can make a difference in your life at Capella.edu. [BLANK_AUDIO]
Carl Quintanilla, Jim Cramer and David Faber discussed Oracle shares jumping on the company's upbeat sales forecast, joining AI players Nvidia and Broadcom as big weekly gainers on the S&P 500. Boeing's machinists union has gone on strike against the jet maker for the first time in 16 years. Phil LeBeau reported from the picket lines in Washington state. Uber CEO Dara Khosrowshahi joined the program exclusively to discuss the extension of the company's autonomous ride-hailing partnership with Alphabet subsidiary Waymo. Also in focus: What Nvidia CEO Jensen Huang told CNBC about AI, Adobe slides on revenue guidance, RH soars on an earnings beat.
Squawk on the Street Disclaimer
