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Premarket is mixed, coming off Friday's record down close, and back-to-back positive weeks for the Nasdaq. Lots of Fed-speaking macro the next few days, including PCE, 10-year, 3-7-6. Our roadmap begins with a big week ahead for investors, 16 Fed-speakers and a barrage of data, including GDP on deck. Plus, Intel shares are on the move a bit this after Qualcomm did approach the company about a potential takeover. And FTC chair, Lena Kahn, warning that a Kroger Albertson's merger could increase grocery costs. We're going to break down what she had to say. Let's begin with the markets after a week which saw some new record highs for stocks, actually turning into a not bad September. We talked a lot about seasonal weakness coming into the month, but right now it is the best September since 2019. Yeah, I guess not all September's include a double-jumbo-sized rate cut, which off to the races, especially if you compare that with the soft landing. And that is the outlook and what has propelled stocks. And so here's a good stat that I read over the weekend from Bank of America. On the day after the Fed cut, when equity markets were ripping, basically, equity trading flows saw the largest long-only inflows into US equities in one and a half years at the open, and it was led by tech and consumer discretionary. So now one of the debates that's been forming is big tech or the rest of the market value, because value-valuation still look appealing. And if we do get this sort of best-of scenario for the market where you get rate cuts on top of an economy that doesn't go into recession, is it finally time for the rest of the market, the value stocks to catch up? Or is it still just about Nvidia? You know, that's the usual question, but the setup is different now with these rate cuts. You know, it's a new environment. Well, every day is going to be, we'll have to wait and see. I don't know if to tell you, sir. Let's see. Every day's about Nvidia, though, we know that much, no matter what, right? It is, but still, macro, right? We're still guessing on the trajectory for the Fed. We'll get Friday, PCE. That's going to be, I think, the highlight of the week as far as data and could vindicate the Fed because we're looking for another sort of low benign number. But now it's all about labor market because the Fed has now emphasized that they're more worried about the labor market than they are about inflation. So if we see a more softness in the labor market, it could be a bigger market mover than, say, an inflation report. Yeah, people are starting to take three month averages on the labor market job growth. Right now, you're looking at 116 and Q2. It was 147 and Q1. And it was 267, Morgan Stanley, over the weekend said, "If we get 100 or near 100k next week on jobs Friday, X strikes, then you would be in their words watching Powell's forcefulness of not falling behind the curve come to the fore." You mean more '50s instead of more '25s? Yeah, and that's what they're implying, yeah. So the base case is two more '25s this year, and Powell made it clear that just because we went 50 doesn't mean we're going to go 50 at every other meeting. So that is going to depend on how much the labor market softens and weekends because they don't want to see any more. You know, Neil's Kashkari, Minneapolis Fed President, was on spotbox this morning. He's not a voter. He was in favor of 50, though, clearly, and more '50s. Here's what he says about the risk going forward. Certainly the risks have shifted. I look forward and I think which risk am I more worried about right now? A surprising uptick in inflation or a surprising uptick in unemployment? It's the latter. At least it is for me. I think right now we still have a strong, healthy labor market, but I want to keep it a strong, healthy labor market, and a lot of the recent inflation data is coming in looking very positive that we're on our way back to 2%. So I don't think you're going to find anybody at the Federal Reserve who declares mission accomplished, but we are paying attention to what risks are most likely to materialize in the near future. So clearly they're watching the labor market, although I did note the dissent. Michelle Bowman, the Fed governor, publishing her statement on Friday saying she was worried that to the public, a 50 would be a sign that we are declaring victory on inflation, when we are not back at target on 2%, which is why PCE is going to be so important because that is the Fed's metric. That's what they target for 2%. The economists are expecting a number that could be as low as 2.3%, so getting closer. Yeah, Goldman, I think, on headline, they're looking for 12 basis points, which would put you at two and a quarter. Core would put you in their view, around two, six, two, seven or so. Not bad. We did hear from Waller, of course, joined us at least when talked about money movers on Friday, who's now throwing out four month annualized and rolling in PPI, which he argues would be running around one eight right now. Which is dovish, right? Or at least as a justification for their 50 basis points, which I feel like they have some explaining to do, right? On the recalibration of 50 and why they didn't go 25. But what matters now is obviously what they're going to do next. I would just point to the 10 year treasury yield because, you know, after they went, so if you look at yields, but right before the Fed decision, what was the 10 year? Three, six, four, around there. We're higher, actually, as the outlook is maybe a little more hawkish than what people expected to get from the Fed, even if the action was more dovish at 50 by saying we're not guaranteeing more 50 by getting some stronger economic data. I remember jobless claims are still at the weakest since May, so that's not pointing to a ton of stress in the labor market. And we got better industrial production and retail sales. Retail sales were a little better. GDP tracking for third quarter is what? Three percent? Atlanta's two nine. Yeah, I mean, that's a healthier economy. So the market's in a bit of an interesting position right now in terms of maybe priced for perfection as far as cooling inflation and weaker data that would allow bigger Fed cuts. And if we get stronger data, then maybe they don't need to cut quite as much as the market's hoping for, which is good for stocks and for earnings power. But again, 10 year yield, a little bit higher. Pay attention. I think that that matters. That's one reason we got two tens. I think 18 basis points today as we see the curve continues. Well, that's something that has resumed, which is the steepening yield curve. And people saying it's long overdue. And we'll continue to watch that as well. But overall, it's been, look, good for the market. I thought Mike Wilson from Morgan Stanley with his comment about the Fed and how it relates to stocks was notable. He wrote over the weekend, the Fed delivered on what we thought was the best short-term case for stocks. Technically, we continue to be neutral on defensives or cyclicals as markets await more clarity on the labor data. We continue to recommend large cap quality bias. So again, we get to this debate about big versus small, where big has one out. Although the market has brought in two since the rate cuts. And then maybe some M&A. Yeah, you want to do that now? Are you ready to talk about that? I feel like you're very busy. I had nothing to offer. Make calls. That was a great conversation. But now you're on the podium. Thank you, sir. Thank you for that. I appreciate it. I always want you to just introduce me. I'm building you up. The podium. Well, you're reporting. What have you learned? Let's talk about Intel and Qualcomm, of course. On Friday, late Friday, the journal reporting an approach from Qualcomm to Intel. We've got a lot of people excited, as you might imagine, of course, if a deal where it actually occurred would be a monumental one, to say the least. And I can confirm, as so many other news organizations have, I think, since that first report, that an approach was made. What does that mean? Well, any number of viewers who've watched for years know that doesn't much mean anything depending on the level of difficulty of actually getting to the finish line. And, of course, the level of difficulty here would be quite significant. That said, it doesn't mean that it's not newsworthy, in part, because, of course, Qualcomm at least has interest in exploring that. It's very much unclear whether there's been much going on since that approach was made. Beyond early is the way one person who is, at least familiar with the situation, put it to me. And as is often the case in situations like this, the chance that you would see a completed deal, quite low. Quite low. Why? Well, any number of different reasons. First of all, let's keep an eye on shares at Qualcomm, because this morning you did have many of the analysts weighing in with their views, which may be reflected to a certain extent by the investor, basic Qualcomm itself, saying, "I'm really sure you want to do this." We'll get to regulatory in a minute, but let me just share a couple of the research notes that we've got this morning. It's a similar course. It's not as though there are those who don't say, "Hey, we see some of the merits of a potential transaction." That said, Stacey Raskin, for example, typically the axe when it comes to chips sector. Overall, hard for us to see a deal working out financially with acceptable risk if the fabs are included. Best I could tell right now, that is, at least hard to know. I'm not getting that level of detail, frankly. I did ask the questions, not really getting the answers to whether that's the case, but he says, "We'd be honest. We'd prefer Qualcomm not pursue this." Seems very risky. Over at B of A, overall skeptical of the merits of any proposed transaction, believe any announcement could create confusion, potential for headcount, roadmap disruptions, and be relatively positive for rivals of Intel, such as AMD and Vidia, Broadcom, ARM. You go on down the list. So, while certainly, for example, B of A also admitting there are scale benefits in terms of increasing their scale and scope of Qualcomm's business. There are just so many risks. We're also the risks while they're regulatory. It's not really here in the US. Chinese approval would be needed. Are you really going to get that? Is that really a possibility? Maybe. You can never tell, but it could take an awfully long time, if, in fact, even it were to ever come in a positive fashion. Where is the US in this? Sarah becomes a real question mark as well, because if there is a view in the US part where we've been trying, of course, to bulk up our domestic chip making ability, create in a sense a national champion to rival that of Taiwan's TSMC. If the US were to feel that Intel was faltering in that, they might be encouraging of such a transaction. And then there are other questions, which is Broadcom. I can go back a couple of years. Qualcomm at least had some interest in Intel. Broadcom has. If, in fact, they were to go in a sale mode, then it would be very interesting to see who else emerged. But again, right now, you've got to put the chances of any potential transaction is very low. That always can change. Oftentimes deals like this. We say, "No, there's no way because it is such a small percentage, but you can get momentum." It's unclear to me whether there's any momentum here, as of yet. What about this potential investment from Apollo? You see that report too? I did. I did. That was a Bloomberg story. It's interesting. The FCC's already partnered with Intel in one of their fabs, the same way Intel has partnered with Brookfield, which goes, of course, to the constrained position they find themselves in at Intel in terms of capital needing to partner. This case would be different. Why not, right? You're Apollo. You've got, you've seen a potential opportunity. You can structure something to meet Intel's needs, perhaps, in terms of debt or equity and what they, what might make the most sense? Having spoken of Mark Rowan lengthily last week, that's the business they're in, whether that comes to any real fruition also is unclear. But we do know Intel needs, you know, they have significant needs in terms of capital, given the changing face of the business that they're in, the fact that so much has gone towards generative AI, towards NVIDIA, while Gelsinger is pursuing this long-term plan to turn around this company. Just a reminder, I think, of what's happened in, like, third year of shrinking sales, right? They have, they had this foundry business that the U.S. was all about, right? They got, they lobbied for the chip steal. They got chip's money. And then I guess, you know-- They've gotten it, although, and a lot of it hasn't come in yet, but yes, they've got the commitments in terms of the financial-- What is it that they didn't have the customers? They didn't get the NVIDIA? These fabs take many, many years. And so you've got to outlay so much capital, and meanwhile, your core business is in a bad place, and so can you actually meet the 52 billion in debt? And you're still constrained in terms of how much capital you can put out there, because fabs can cost tens of billions of dollars. And that, how you get through that period, that five to seven year period until you get to the other side, somehow, where you're producing chips that are at the leading edge on the market, and that's still a question. That's kind of the question. That's why the stock has lost 56% of its value this year. Definitely the worst on the Dow for the year. When we return, we'll take a look at what Lena Kahn told 60 minutes last night about greedflation, and in particular, the Kroger Albertsons deal. We will get to some of the earnings. The Fed speak the data this week. Apple. There's some news on airlines and Boeing. Downgrades of GM and Microsoft in a moment. Whether you're scouring business financial sites or listening to economics podcasts like this one, you'll find there's no secret to successfully managing your company's finances for the future. You just need PNC corporate and institutional banking. Whose team of dedicated relationship managers bring 160 years of experience, advice, and an array of tools and tech to scale to any size business. PNC Bank. Brilliantly boring since 1865. PNC Bank. National Association. Member FDIC. 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. 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 Indian Prime Minister Modi, meeting with top tech executives leading the global AI revolution. Our Steve Coback was there, spoke to some of the CEOs, CEOs of both IBM and NVIDIA yesterday, joined us now with the highlights. Sounds like it was a who's who of corporate America. Steve. Yeah, quite a few people there, Sarah. That was this meeting, of course, with India's Prime Minister Narendra Modi. And he met with several tech CEOs on Sunday in New York City ahead of the U.N. General Assembly that's happening all week this week. Among the attendees, we're going to show a bunch of them on your screen here, NVIDIA CEO Jensen Wong, Alphabet CEO Sundar Pachai, Accenture CEO Julie Sweet, and the topic of course, artificial intelligence. And by the way, India is important because tech companies from Apple to Google, they've been seeing India recently as a prime investment area thanks to a growing middle class and large workforce. I was able to catch up with two of those attendees, like you said, Wong and IBM CEO Arvind Krishna. Here's Wong's overview of his meeting with Modi, where he praised Modi for understanding the importance of artificial intelligence. Prime Minister Modi is inspiring. Every time I've seen him, he is such an incredible student. Loves technology, loves artificial intelligence. He was one of the first people I ever explain artificial intelligence to. This is an extraordinary time for him and time for India because it's a reset of the whole computing stack. Now I also asked him if he discussed with Modi, clearing up some of that bureaucratic red tape American companies often complain a lot when trying to do business in India. He said it's not a problem for NVIDIA. I haven't really experienced that. NVIDIA has been in India for almost 25 years. Our design centers are in Bangalore, Pune, Hyderabad. Really fantastic engineering capability there. Some almost 10,000 NVIDIA engineers are in India. They do every single aspect of our engineering. And so they've been a part of our company since the very, very beginning. I also caught up with IBM's Krishna out of that meeting and he praised the meeting, told me a bit also about the delicate dance and doing business in India, even though that country is tacitly supportive of Russia by buying cheaper oil from there. Take a listen. Countries are going to do what benefits each country. So you've got to put those things a little bit to the side and say, is there any national security threat? So let's look at the major thing. If you look at the geopolitical lens, doing cooperation between India and the US is going to be strengthening both these nations to the point where then you can go take care of all the other secondary issues. And guys, just a few other little details from our Sima Modi who had sources inside that meeting. Modi giving Alphabet sooner per Chai praise for committing to invest $20 billion in India, pointing to investments in Indian companies like Flipkart and GEO. And of course, because some pharmaceuticals, like David Ricks of Eli Lilly, were there. There were discussions on biotech and IP protections for US companies operating in India, guys. We were just talking about semiconductors and how America wants to become a center for semiconductor manufacturing. Is that some of the because that's what's needed, right? The picks and shovels of AI. What's happening on that front in India? Yeah, that's what Jensen Wong talked to me a little bit about and I'll go back to his comments there in that first sound bite I played for you guys just really talking about how they understand or Modi understands the kind of infrastructure that needs to be built out there. I'll also point out that the hyperscalers that we talk about all the time, Amazon, Google, Microsoft, they've announced numerous infrastructure for AI investments in India, billions of dollars being spent there on that front as well, Sarah. Steve, appreciate it. While we have you, this downgrade of Microsoft is interesting out of DA Davidson. We believe competition has largely caught up with Microsoft on the AI front, they say, which reduces the justification for the current premium. Yeah, this is something, a theme that we've been hearing in recent months Carl, this kind of commoditization of all these large language models. Look at what Meta's doing with llama, that open sourced version of these large language models that have been closed down by Google and open AI and Microsoft and the like. And this idea that maybe you don't need to necessarily go out there and create your model or buy someone else's model. Maybe this has become commoditized to the point that you don't necessarily need to go to one of those hyperscalers. At the same time, I also noticed that DA Davidson didn't really talk about co-pilot that much. That is another really key piece outside of the Azure cloud business for Microsoft, but there's really not a much indication of what demand looks like for that co-pilot product. That's another thing that they could have an advantage on, but so far that hasn't really broken through, Carl. Yeah, between that co-pilot event the other day, dream force, definitely getting spicy here regarding competition among the hyperscalers. Steve, thanks. Steve Kovac, whose plate is very full today. We'll get a look at the pre-market as we go to break. More squawk on the street continues in just a moment. At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care. And we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best. It's possible. Pharmacy benefits that benefit your bottom line. It's possible. Complex specialty care that cares about your ROI. It's possible. Because we're already doing it. All while saving businesses billions. That's wonder made possible. Learn more at EverNorth.com/wonder. 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. FDC Chair Lena Kahn on 60 Minutes last night stating her case against the Kroger Albertsons deal. First time I've heard her talk about it. Yeah. While the FTC, FTC, we know is going after the deal. It's in the judge's hands right now because we've heard the final arguments for that preliminary injunction. She says the merger will lead to higher prices at the grocery store and it's that political environment that this deal is trying to happen in. Rodney McMullen, the CEO of Kroger, says under oath that prices will come down for consumers at the grocery store if they are allowed to merge. Why? Because there's a price gap. Albertsons charges more. They have higher margins. There's work to do to lower those and they can do that if they combine. That is at the heart of whether this deal gets approved. Kroger says people shop everywhere for groceries. At Costco, on Amazon and local, it's very different. So, none of them feel really disagree. Let's get the opening down here in this campaign to see real time exchange of the big board. It is the president of Argentina here in New York for the UN General Assembly at the NASDAQ. It's climate change makers from around the world, including Laurene Powell Jobs and Tom Steyer celebrating New York climate week. Actually an interesting piece in the Times over the weekend about Jobs and Sam Walton in the opening. And Johnny I working on AI devices as I notice you've been toying with your new iPhone. I got the new iPhone. I got the 16. But there's no AI on it yet, I guess, right? David, no Apple intelligence. I'm just happy because I need an upgrade. It's a couple of months away. You get the full software upgrade you're going to need for your Apple intelligence. It's better than your better better. You have Sarah intelligence and you're fine. I'm just excited about the bubblegum pink. You're fine. I'm happy that they had it in stock, which may or may not be reflects. Carl, in talking about devices, there is this question that as we move deeper into the AI world, what does an app going to look like? What do you really need? What is a device? If a device can be fully run by AI, is there an opening perhaps for some sort of competitive device to Apple that is, you know, different, but cheaper and runs solely on the edge by the AI that you can just talk to it all the time. And then what does that mean for the Apple ecosystem? As Jensen Wong would argue, there'll be a super AI that you deal with. And then it basically has a hierarchy, passes along certain duties to other versions of AI. Interesting stand out of barons over the weekend. They looked at Apple performance on launch day and announcement day, usually up or down, a tenth of a percent, which sort of explains why often those days seem a little tame. Yeah. But six months forward, average 11% on Apple over the last 17 cycles of phones. Dan Ives is going to be with us in the next hour. Yeah. I mean, I think the general view is they will not be threatened. But you do wonder when you hear Johnny, I'm potentially working on a device of some kind, what that really will mean over the longer term for the likes of Apple. Meantime, mixed open here. Dazz down 12, holding 5710. Mike Santoli joins us here at the desk this morning. Talk about, I'm not sure what interests you the most. This surprising September or some of the commentary over the weekend. I think it's kind of a now what moment. I mean, the broad, you know, market weather is very favorable at this point. You had the Fed easing aggressively into a resilient economy and also an earnings recovery. I think that's a unique aspect of what we're doing here. We had an earnings recession at the time the Fed was tight. And now we're loosening. So it seems as if you get a new high in September, which actually is not that common, it's almost never been the ultimate high of a bull market. Perhaps absolutely never, not even almost never. So all that stuff makes sense to actually act as support for the market right now. I think currently we have a pretty slow macro week in general. Boring is bullish for markets, meaning no big, no macro events is a positive thing. Working against that a little bit is we got after the Friday's options expiration, very busy, you get a little bit of a cleaner slate, market can slosh around a little bit more after you get through that. And we are expensive again. I think you have to contend with the fact that this starting point, you have a fully valued market. We were near this level, a little below this level at the mid July peak, close to 22 times earnings. You're just a little bit under that right now. Earnings moving in the right direction, but it seems like fully recognized. I do think that the really relevant thing is, look, we've talked about Nvidia meeting being the market. Has it been true in like four months? Nvidia first got to today's price in June 4th. Since that, the S&P 500 is up seven and a half percent. If you look since July 11th, that was the day of the June CPI report, which I think was the real everybody in soft landing is here, Fed's going to ease moment. You have the equal weighted S&P up like five percent. You have the NASDAQ 100 down a similar amount. So all these things are kind of kind of doing what people were hoping they would do in the first half of this year. Now it's just a matter of monitoring the economy to make sure it doesn't slip away because the only thing that matters after the Fed cuts for the first time is, do we get a recession in the next six to 12 months or not? If you don't, markets have been able to hold up. You talk about things being expensive, a lot of charts over the weekend looking at S&P versus XUS MSC. I talk about expensive. You got to go back to periods of euphoria to see numbers like that. Now, the one thing you have to mention is it's been the case for so long. I mean, the rest of the world trades at a huge discount to us. It's a very value-centric mix usually in non-US, but there's no doubt about it. It's very similar to growth versus value. It's US versus the rest of the world. So I do think they don't have the same secular growth sector we have that's now 30% of our market, but there's no doubt about it. We've had massive outperformance in the US. If you believe in this rotation toward kind of real economy, more value-type sectors where earnings growth matter more, well then that also should wrap in non-US to a fair degree. You might even want to do XUS X China. And then you'll see maybe a cleaner view of that. On the outperformance of growth, the dollars stronger today, treasury yields are firmer again. I highlighted that they've been firmer since the Fed did that surprise cut. And if it's on a better economic outlook, great for stocks, right? That should be helpful. But if it is also on, well, they're not going to have as much to do as far as cutting, is that really great for stocks that have craved rate cuts for so long? It's at least an offset to the mega bullish view. So I do think if you look at history, interestingly, after the Fed cuts for the first time, treasury yields do tend to drift higher. I mean, this treasury market-- High the rumor sell the fact. Really, really anticipated this move. And in fact, some would argue, push this move. You know, in terms of what the two-year note yield did. So I do think you can give it room for yields to lift a little bit here and not really have it be much of an issue. Remember we were talking about, oh, can the US economy handle a 4.3 percent, you know, 10-year treasury yield? That was not that long ago. So right now, what you do want to see is these yields, if they even go up, stay kind of tame. You don't want mortgage rates shooting to the moon. Fed doesn't want to see that. Fed doesn't necessarily want to see that. So yeah, obviously a lot of moving parts to fit together. But at this point, you know, don't fight the Fed. Don't fight the tape rules. Suggest, you know, give the market the benefit of the Dow. We're still under 4 percent on the 10-year, which I think people see as encouraging. I was just looking for individual stocks today if there was follow-through on Nike because of the huge announcement that came Thursday after the market closed, and I wasn't here on Friday. So I'm curious to discuss it with you guys, but a little give back today, 1 in a quarter percent. A lot of excitement and over the weekend speaking to sources inside Nike. Overnight, the morale changes. As the company announces it's bringing back 32-year veteran Elliott Hill to become the next CEO. That's going to happen on October 14th. Before that, though, Nike's going to report earnings on October 1st. And today, there are questions about what that's going to look like. Are they going to reset earnings and guidance lower because they have this new CEO coming? And because the trends have not been favorable for Nike on the innovation and growth side, especially in China where the macro is weak, we know, but also in North America where there are questions about how much market share they're losing. Look, they're still huge. They're still the giant player in the room. And there's a lot of optimism that going, "What's new? What's new is old is new again." Bringing back Elliott Hill who understands product, understands what sells in the marketplace, understands the unique culture of Nike. Things that John Donahoe, the CEO, is criticized to have not done will bring back that kind of growth momentum, the brand heat that is so important for the growth story of Nike going forward. But in the meantime, for instance, JP Morgan this morning opens a negative catalyst watch on earnings on October 1st because of the reality of numbers. You know, it's great that they're bringing in this guy that everyone seems really excited about inside and outside the company, but it's going to take a while to see what the strategy is toward returning to growth and towards pivoting away from some of what's been. I guess, Mike, also you look at valuation of Nike and you wonder how much damage has been done and what the numbers reflect at this point. Yeah, and how reluctant the street might be to kind of give back that big premium that the company used to trade at. Now, relative to the market, it's rarely been this modestly valued in recent history, so it's not as if the bar is that high. Yeah, you always have the question of people embrace the CEO change, but you have to ask what was the sense of urgency to catalyze the CEO change. And so I think that's where the JP Morgan call comes in, which is a little bit of a rough go in terms of market share and things like that in the near term. But, you know, seems like the initial verdict of the market was a good move, probably a positive long term. We'll see how it plays out there. You see what's at a five year chart or no, that's a 20 year term. Although today, B of A, ups on holding to neutral, strong brand heat and white space opportunities helping to fuel top line growth, translating into higher margins. So it is only to neutral, but the idea that there is opportunity for rivals. Well, that's the thing that you hadn't, yeah, exactly. You didn't used to necessarily have to think about with Nike. It was all about its own, its own cycle. So, yeah, no doubt about it. Although it seems like they kind of missed it, you know, and they were upgrading it to a little bit of a catch up call. You know, I was thinking, page one of the journal today is Israel and Hezbollah approach warfare, full scale warfare. And I wonder if you think that's getting reflected in anything beyond crude back to '71. Doesn't seem like it. No, I mean, the market usually I think has a pretty high bar for like what exactly should we be replacing today based on this. And at this point, you know, not a lot. You know, for correctly or not, it seems as if, and even oil is a little tangential to it at this point. So, you know, you did see oil, you know, bounce just on a technical way, I think, more than anything, when you also had kind of an everything rally after the Fed, which included some commodities. So, yeah, I don't think that that's necessarily the thing filtering. And one thing you do here is, this is the moment where if you're going to see a little bit of election year give back seasonally, it happens now. And I don't know anybody who sort of won't go out there and say, yeah, history says, you know, it could be choppy from now through the election. On the other hand, almost every one of those people say, then you buy it for a quarter rally. So, nobody's too nervous. Even if the stated bullishness is not really that conspicuous. I think the highest target on the street for the S&P is Brian Belsky at BMO is like up 7%. Right? He's the only one saying we got more than 5% upside right now. I think it was the JPM desk today. To your point, we are inclined to buy every dip as they see, as they look for some election chop in the next few weeks. By the way, we mentioned crude, Nat Gas, highest since July, watching utilities as constellation energy, David, adding more to Friday's gains. Yeah, I mean, this story that we have been following, I think, fairly closely in terms of just the endless need for power given really the rise of the data center in terms of powering generative AI and any number of other areas. Of course, it was last week that they said they're going to bring back on the power from one of Three Mile Island's reactors in order to essentially provide power to Microsoft to run what else? Large data centers. This has been a sort of unexpected story. I think if you had told people when CHAT GPT was introduced back in the fall of '22, that that would be the case. I'm not sure that they would have immediately mic rushed to buy utility stocks. No, it was definitely like the third bank shot off the AI trade. If you look at a chart of industrial production, electric utilities, basically just electricity production in the country, it's like flat for, I don't know, 15 years or something. And just barely has ticked out. So this is all kind of on the com, obviously, in terms of electricity demand. Although the percentage gains that are at least seen by many of the experts are very significant. We're talking 20, 30% over let's call it the next 10 years or so. Right. And so off of no growth for that many years. So it's obviously very, very new. You do wonder if it also just catalyzes reduction in cost in terms of every other alternative kind of energy. In other words, innovation, investment. It just seems to me it can't just be, yeah, we're going to be using that much more power and at higher prices. And that's going to be where the profits of AI flow is to the bottom lines of utilities. That seems a little bit of a stretch to me. But I guess we have to see how it goes. Well, and to your point, many of the biggest companies in particular, the ones that are putting out so much of the capital to actually be leaders in generative AI, have climate commitments that require them to take most of their power from all sources. Right. So you do have a number of forces there. That said, you're also going to have a lot more people plugging in their automobiles and using the grid. You know, coal is still 17%. I think of where we are right now. Obviously natural gas is far above that. And that's one reason why perhaps Vice President Harris, for example, at least she could cite it. I haven't heard her do that for the national security needs of the US to say I'm in favor of fracking because you need natural gas because we have to stay ahead in AI. And the reverse day in the head in AI, we have to be able to produce power. So you may want to use that line actually. But arguably we have too much natural gas for how many years now if you look at the chart of it, you know. Yeah. Well, you stayed the same. Right. Sorry. Thank you. Correct. The value stayed the same. Right. Speaking of AI, Microsoft, it's having an impact. That downgrade. I mean, I don't know when the last time Microsoft was down on Galoria of DA Davidson did downgrade the stock and cited, you know, competition in AI. Microsoft has outperformed over the year also cited margin pressure on the fact that it's just getting more expensive. They rely on NVIDIA, for instance, to supply the NVIDIA chip saying Microsoft now guiding for decline in operating margins in order to pay for those data center chips. It is interesting. Microsoft is in the top 10 according to fact set of names with a high percentage of buyers along with Amazon and NVIDIA. Even Delta United have a high percentage. I was going to say that it now feels a little safer to downgrade the Magnificent Seven because they've obviously kind of faltered a little bit. They're no longer leadership. It no longer seems like the clients are just feel compelled to buy every day. Only Metas making a new high. We talked about that. That's kind of got its own drivers to it. So it is, you should get a little more two-way, you know, ratings and flow through there. I also want to point out this is not like a pure downgrade as we would think of it because he kept his price target at 4.75, which is still higher than Microsoft is trading right now but took it from buy to hold it. So it's not exactly bearish. The other name there is Tesla on the winner list today. Commerce, according to Reuters, is proposing prohibiting key Chinese software hardware in connected vehicles on American roads due to national security concerns. A move that Reuters says would effectively ban nearly all Chinese cars from entering the U.S. market. Yeah. It's just actually been a pretty resilient chart. I mean, it's obviously got a lot of work to do above this 250 level. But at least right here, it seems like that's been one of the big overhangs. It's this idea that they're just not going to be able to compete long term with that. PMIs in Europe were not necessarily strong. We're going to get some of our own right now for that. We'll turn to Rick Santelli. Hey, Rick. Hi, Carl. Indeed. These aren't necessarily strong either. But some of them are above 50. Let's look at S&P Global. On the manufacturing PMI, 47.0. We're expecting a number well over 48. In the rear view mirror, 47.9. This is the weakest since June of last year. Now, if we look at the services, it is above 50, 55.4. But it's still the weakest since, well, just July of this year. And if we look at the composite, 54.4, same scenario. It's over 50, but it's the softest since July of this year as well. So two out of three are above 50. Services, of course, pushing up the composite. And similar to Europe manufacturing, not doing well. Think Germany here. And some highlights to keep and pay attention to. We do have two's, five's and seven's, 183 billion in supply. That'll all be occurring Tuesday, Wednesday and Thursday of this week. And we want to pay particularly close attention to all the yield curve spreads. Two's, tens right now hovering around 17. Well, that's the steepest on a closing basis. It's been in 27 months. Well, kind of street will return after a short break. We've been watching developments regarding the threat of a potential port strike. Now word this morning from the United States Maritime Alliance. We've been unable to schedule a meeting to continue negotiations on a new master contract. And they add that we would be open to working with the Department of Labor and the federal mediation and conciliation service. We'll keep an eye on that as well as the overall markets. Dows up four points. Don't go anywhere. Pretty tight range to open on this Monday. Let's get to Bopasani here post night. Well, modest open, but look at the trend. It really is very, very powerful. I just want to show you what the sectors are and how they're moving right now. Because we have historic highs on a lot of things here. Look what the leadership is right now. Consumer discretionary, historic high right now. That's a three year high, I'm sorry. Materials are historic high. industrials are at an historic high. Financials are at a new high. This is a lot of insurance companies and some of the banks are doing really well. And utilities. Well, look at this leadership group. This is the kind of stuff you expect to see with the economy strong. These are cyclicals by and large and interest rate sensitive stuff. There's utilities. None of this is dramatically overbought, believe it or not. Utilities probably, it's been on a tear for the last three weeks because utilities is essentially two stories. It's an AI story for all of the power they're going to need to supply to the AI companies. And it's also a low interest rate story. So arguably utilities are a bit overbought, but nothing else really. It's really quite remarkable to see the kind of leadership. What's kind of lagging right now? Well, technology has been lagging throughout the month, but not disastrously so. Nobody's terribly worried about it. And defensive names like consumer staples and health care have been lagging as well. This is all indication of a still growing economy. Nobody is suddenly throwing money at defensive names necessarily, even though they're holding up quite well. Technology's holding up. I'm quite excited about meta. Have you been watching? This thing has been on a tear. We're up 60% for the year. And the last few days have been enormous moves upside for meta. This is another new high for meta. And believe it or not, it's not stupidly overpriced. We're talking about 23 times, 20, 25 numbers. That's really remarkable considering a 60% move in the stock. Usually you get overbought territory. So where are we right now? This is called the broadening. That's what's going on here. All-time highs, S&P, equal weight S&P. All-time highs, breadth, advanced decline line for the S&P is at a historic high. That's the biggest sign you're going to get for market breadth. And the Russell 2000 is 3% from a new high here. Everybody talks about week September. And it's true, this is one of the weeks of the year. The last two weeks have been terrible. But if you look here, what's going on here, the average week of, you know, fourth week of September, you get down 1%, S&P 500 down 1%. Now, this is normally this week is notably week. But they said that about September. Remember, we were talking about four down months for September for the last four years. So far, September is up 1% despite all the clines that we saw in the last four years. So not only you have the not the seasonal weakness that we're having here, look at this, we're up 1%, compared to all these poor seasonal September's. We've got the Fed easing, we've got no recession. It's no wonder people are optimistic right now. There's a good reason to be reasonably optimistic. Do you worry about the buyback window closing? Yes, it's closing, but that always happens right now. And the buybacks have been very, very strong. We're probably, we may do, we're going to do $900 billion in buybacks this year. And we may even come close to a trillion. That would be a historic high. I'm not worried about that. The buyback window will reopen very, very quickly. Bob, we'll see you soon. Thanks, Bob Bassani, as we kick off this Monday with the Dow. Just down a touch. You can see a couple of points back in a moment. 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. 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Carl Quintanilla, David Faber and Sara Eisen kicked off a new week for the markets: The Dow off to a fast start, hitting a new all-time high thanks to Intel's rally. Qualcomm recently approached the chipmaker about a possible takeover -- and Apollo Global reportedly offed to invest up to $5 billion in Intel. Also in focus: What the CEOs of Nvidia and IBM told CNBC after meeting with Indian Prime Minister Modi, Minneapolis Fed President Neel Kashkari spoke to CNBC about economic risks, FTC Chair Lina Khan on CBS' "60 Minutes" about the planned Kroger-Albertsons merger, an update on Nike following the company's decision to change CEOs.
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