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Good Friday morning. Welcome to "Squawk on the Street." I'm Carl Keats in Air with David Faber at Post9 of the New York Stock Exchange. Kramer's at One Market in San Francisco, wrapping up this blockbuster week on the West Coast. Futures mixed as we come off the 39th all-time high of the year for the S&P. Bunch of corporate news today. Nike, FedEx, Lenar, Microsoft, FedSpeak, resumes today. Harker at 2 p.m. Eastern. Robat begins with that shake-up at Nike. John Donahoe is out, replaced by a long-time Nike veteran, and shares a rallying ahead of the open. Plus, FedEx fails to deliver. Shares of the shipping giant Tumb Link pre-market this after posting is significant decline in profits and cutting its full-year guidance. And the AI and Data Center Power Surge continues. Constellation Energy is planning to restart part of the three-mile island nuclear plant. Why? Well, they want to sell the power, Microsoft. Let's begin there with the changes at the top of Nike and the wake of challenges in China and some heightened competition. The sports where giants as CEO John Donahoe will retire after nearly five years at the helm. He'll be succeeded by company veteran Elliot Hill, effective October 14. Hill has spent 32 years at Nike, including a stint as president of Consumer and Marketplace. Throughout the month, we've been talking about Donahoe's future at Nike. Take a listen. So you're on the record now calling for Donahoe to go. I don't want to put words in your mouth. I'm saying that if you look at that chart, you think that it does have a real Starbucks-like deal before buying a picnic. There has to be a bit of a revamping. How about a revamping? Yeah, running out of time. One would think. Yes. He's out of touch by David. He's out of touch. He's out of time. What's happening is that the erosion of Nike matches the erosion of Intel. These are companies that right now don't. They've lost their way. What are you? What? That's rough, man. That is rough. You need to listen enough to satisfy you. It's not good. Snicker satisfies me. I always like to say who's next to go, who's not cutting it? David, I'm getting Nike over and over and over again because they think that a technologist, someone who is a consultant, is running the company and they're getting taken to by on, by new balance, by Adidas and by Vans, it doesn't stop. This has been drum beat, David. Donahue. Literally tweeted a picture of you wearing them this week. Well, I know. But that was the Air Force One special bond craft anniversary. And those can be run with one with formal wear. Jim, investor days coming up November 19 and some discussion of what they can put together before then. Oh, look. They're in trouble. All right. Now it isn't shocking that they're in trouble because you looked at the stock chart and it says they're in trouble. But there were so many mistakes made by this man that you kind of wanted to figure out, did they think he had some sort of master plan that nobody knew? He didn't. I think that this is a welcome change to bring someone back in. But what they really need to do is try to figure out how to make better shoes which somehow got lost in the shuffle. All I know is if Kramer just changes his tune on me, Carl, and starts to say Faber's got to go. My exit negotiations immediately. Faber's good. Okay, good. Thanks, Jim. This is two now. Listen, I know we're overstating it and/or any real impact. Obviously, you're reflecting what you're hearing, Jim, when you listen to a montage like the one that we just heard. But it is interesting, of course, at Starbucks now, Nike. I don't know if there's more to come. I do know there's one more name on your list that you continue to go to as a particularly negative performer. I'm not sure a CEO change there is going to help. I don't mean to take us off Nike. Obviously, I'm talking about Intel, but these changes are significant. It seems less clear in your mind, though, that the incoming CEO at Nike is going to have the same effect, perhaps, that you think Brian Nickelwell at Starbucks. Well, look, I think that Chipotle model works really well at a place like Starbucks, because it's about service, it's about hospitality, it's about quality, it's about employment. I think that whatever you try to do at Nike has a lot more to do these days with new balance, and with Adidas, and with Hoka, with on-on. I mean, these places are just doing so well, and we have to spend some time on this notion of direct-to-consumer versus actually touching and feeling and putting on a shoe. Because I don't know who on that board thought it would be just a great idea to have it out with Foot Locker. You may not like to go to Foot Locker stores, but now they're run by Mary Dylan, and you better start liking it, because she's well ahead of the curve, and it's better than you. They forgot who their customers were, I think they've forgotten who their outlets were, I think they just thought about themselves, and the fault was in themselves, not in the stars. Stock may be moving to the upside today, Jim, but of all the sell side reports we read today, only Wells is the one that moves, they do up, or they maintain overweight, they have some targets. I think it was Cow in today, Jim, that pointed out EBIT margins since 2019, down 100 basis points. Yeah, look, there's, again, there's just so much that's wrong. What you would want to do, if you were this gentleman who comes in, I think what I would do is I'd call all the companies that have been great partners of ours. I know that they were trying to repair the relationship with Mary Dylan at Foot Locker, but say, look, we've made mistakes, which, by the way, is okay to say. It's never a sin to say that you made a mistake. It's a sin to continue to do the same thing, and we've made mistakes. We didn't judge how much you could be our partner. We want you back in. Please tell us what we can do to be better partners. We know we can't just take, we have to earn back the space that you have given to all these other shoe companies, and we're going to try to do that. But right now, I've got to tell you, they have lost space. They were about to lose space to underarm. Jim, you know, I'm looking at a UBS note here. The UBS, I mean, vans are like, they were like, like seven years ago vans. I'm looking at a UBS note here, and the analyst, I mean, he is named Jay Sol. So, you know, he knows his way around a sneaker. He's a very smart guy, but that's very good. He laughs. Yes. But he says, you know, again, given these direct-to-consumer challenges, and the company's recent commentary, the market is assuming Nike will start to make a much bigger effort to regain momentum in the wholesale channel. Interestingly, he writes, Mr. Hill was part of the Nike leadership team that set a goal to dramatically reduce their wholesale partnerships. And so, he wonders and questions whether he will look to reprise or change that direct-to-consumer strategy. Look, I think during the period of COVID, you didn't want to go out of your house to go to footlock or a champs. And that makes sense. And I think a lot of people made judgments during COVID that seemed to be lasting ones that turned out not to be. I'm not talking about Amazon and Jassy saying, "Listen, I've come back to work." I'm saying that maybe you felt, you know what, direct-to-consumer turns out to be pretty good. We're doing better than we thought without all these different retailers, who, frankly, we don't even like to walk into, because the stores aren't to our liking. Nike started thinking it was better than Nike. The great thing about Nike was that it was a competitive company that never always wanted personal best. And they got away from personal best. In the meantime, you have people like Deckers, who spent a fortune in years on Hoka, and then suddenly it breaks out. You have new balance that never lost its tech change that got reinvigorated, which is amazing. And then you have on, another outfit, totally out of nowhere that people didn't see coming. And meanwhile, Nike is trying to figure out how to get that shoe to you faster at home when they should have been thinking about how to stay at the top in the scrum, which is what they were. Jim, two things. One is this knock on Nike that they've spent too much time worrying about where they're selling stuff and not enough time worrying about what they're selling. And then this notion of blue chip management shuffles at Boeing and Starbucks and Nike, you could even go back to Disney? Yeah, well, look, I think that all of these are places where if you look at their charts, they tell you we are part of the stock market that people don't like anymore. We are just doing things and people think we all pay ourselves way too much. Every one of those companies, by the way, and all we do is win and the shareholders lose. And I think it's great that boards are waking up to the idea that, wow, we're really underperforming. Maybe we've got to shake things up. And by the way, maybe we should shake up the board members who got us here and shake up the other people who came in and recommended the strategy. The DTC strategy was a very good strategy like Walmart developed the DTC strategy. But Walmart never took its eye off the stores for heaven's sake. And when I go back, I mean, did a lot of work on Nike behind the scenes. And when I hear so damning, it's that the product isn't as good as it used to be. And that was something that you never heard. You've had her distribution, maybe not good, but the actual product. And I have to believe that Buck Knight heard the same thing I did. He talked to a lot of people. The quality was no longer great. How long does it take to turn around a product then that in the eyes of the consumer perhaps is not what it wants. This is multi-year. This is multi-year because you need the other guys. Nike gave these other guys in this window that was this man's tenure. Nike gave up a huge amount of shell space. It's very hard to get that shell space back. Very hard, especially because the other companies are all really good at what they do. We're going to talk a lot more about it today, of course, Jim. Let's move to some broader markets as well after that Fed cut fueled rally, which did result in record highs for the Dow and the S&P. Nasdaq up two and a half percent. Helped by Tesla and Nvidia, Jim Russell. Seven days green. Got BMO going to a street high 6100. Look, there was this weird, delayed reaction. We got a 50 basis point cut. It had been telegraphed. As long as something like that is telegraphed given to the Wall Street Journal so we knew in advance, then you know it's just good news coming and we get the good news. I'm used to seeing the good news being sold off. Well, that did happen for the first two hours. But then I think people realized, "Let's take a look at what's come down a lot. Let's buy some tech." And tech has come down a lot. There's a lot of tech companies that I think are viewed now as being part of the AI joke. And they're in on the AI joke and you're not. And I completely disagree with that. I think AI is incredible. But I do feel that other than Mark Benioff and Salesforce this week, I didn't see anything that made me think that it's going to set the world on fire. Not yet. Yeah. You know, it's funny, Jim. I continue to hear similar things now, which is that in the enterprise there is just they're not finding at this early day. And this will change. But right now, not finding a lot of use cases. And in fact, interestingly, I've been told by a couple of consultants at least that it's making employees who are trying to work with it less productive or at least those who are trying to implement it less productive right now as they search for applications. David, one of the themes of Dreamforce was the main reason why I came in here is that co-pilot is not doing what we thought it would be. The co-pilot is not as helpful. Co-pilot, the novel is worn off. Now, I don't know. This is Microsoft. They're going to figure out something. But David, you're right. And I think there's a sense of is that older is. And if that's the case, then there's a big rebellion within the old food chain that leads up to a video. I think that it's the failure of the imagination of people who have AI rather than the fact that AI is not doing something great for them. You have to figure out what to do for it. It doesn't just like wake up and change your brain. You don't get a new cerebellum. Say, "Hey, give me the new cerebellum." We didn't know it doesn't work like that. While we're on Microsoft, Jim, this headline that crossed about an hour ago, the owner of Shuttered Three Mile Island going to spend $1.6 billion to restarted by 28 and funnel all of the power to Microsoft. Biggest story out there. Now, it's funny. They've been talking. When I first heard it, I heard it from utility executive. And I said, "Well, you know, see, that's like the worst nuclear accident." But of course, there was one of those towers. One of the units was working until 2019. This makes a ton of sense. These things take forever to build. I mean, the ones that are being built right now are 2032. So this one, you know, they shortcut. And, you know, David, nuclear power, you know as well as I do that nuclear power is the cleanest, safest power. Yes. And we've talked about this a lot lately. In fact, I think we've briefly mentioned it yesterday as well. But not now. And the recommissioning of these. Now now, like three mile island, we be kings. Yes. A recommissioning of nuclear power plants, which is occurring. And to the point, and Carl just shared that news, all of the power is going to go. Yeah. The data centers that Microsoft is using to run, by the way, the GPUs and the large language models that power, for example, it's co-pilot. But again, back to the idea, nobody seems to question Jim that at some point this technology will be transformative for all of us, including the enterprise. It may not be there yet. But there's nobody questioning, oh, it's a fail. No. Not at all. It's the opposite. Like, oh, this is going to change everything. It just, it may take a little time. Yeah, I was at an excellent, and we do these really great things. We had this absolutely great CFO dinner last night. And when I get around and talk to the CFOs, here's what they say. They all try, and they try Jim and I, and they try Claude. They go here, they try chat GBT. And they find that every single time they go back to it, it is better. All right, work in progress. It's kind of up to where, like, eighth, tenth grade. So, David, I think it's going to get a college degree. Probably gets summa, gets into good graduate school, and then just has a fantastic time that makes a lot of money. Yes. And then, right, and then we get into the big existential questions. I was at an AI dinner last night where they were entertaining some of those. What is identity? What is personhood? Can AI have consciousness? Well, AI wears a tie. Oh, really? Yeah. Follows your lead. Where's a Breony tie? Make yourself think something. Make yourself look better. Yeah. And it's Breony. What is that? You're wearing it. Shmaka. Not a tie, my friend. It's Friday. Yeah. All right, this is not newsflash. I've been doing this for years. David's better than $15, because that's $15. There'll be no tie. There'll be no tie. I'm going to have to be here. No tie. When we come back, FedEx tumbling on earnings and guidance, also a big day for Apple as the 16 hit stores today. We'll get to Lanar, Sketchers, DJT, Chewy, Macy's, as futures are now uniformly in the red. Don't go away. Got a hunch about this football season? Put it in play with FanDuel's easy to use app. Right now, new customers can bet $5 to get 200 in bonus bets. Nothing can stop this team. Nothing. Sounds like someone's got an optimistic hunch. 21 plus and president in Colorado. Must be first online real money lately. $5 deposit required. Bonus issue does an honorable bonus bet. It expires seven days after the seat. Strictions apply. See full terms of FanDuel.com/sports book. Gabbencrop. Call or text, 1-800 Gabbler. 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. 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. FedEx is tumbling in the pre-market after cutting full-year guidance and posting this quarterly miss. The company says it was hurt in fiscal Q1 by reduced demand for its priority services and on the call, a Raj Subramanian took on that subject. Take a listen. The soft industrial economy is clearly weighing on the B2B volumes. It was definitely much weaker than we expected. We have to make adjustments accordingly. As you know, shipments linked to industrial production are the highest yielding and most profitable. At the same time, e-commerce is resetting and starting to grow again. We're also seeing some modest improvements in global trade. The dynamics of the profile of our traffic changed. UPS down in sympathy, Jim. But as we talked about yesterday, sometimes their guidance runs on the cautious side. Look, this was a tough call and it made you realize why the Fed certainly was with him bounds to do 50. The industrial side of this company is just much weaker than any of us thought would happen. Some of that was because truck rates have fallen and so we've got competition over the place. Some of it, they are losing a post office contract, but that's not in the numbers. But I will say this and David, I thought this was painful. I think that Raj has done a great job and the stock chart tells you when he's done. But there's an analyst and I'm going to mention his name because I thought this was really outrageous. Brandon Oglensky and he's from Barclays and he talks about literally in the question, he goes, reality is, this is one of the lowest profit first quarters that we've seen since maybe 2009. UPS is very much run rating, well below for your range here. So I think it's really hard to get credibility with investors with these types of numbers and the costs that are actually up, even though supposedly dry that's their expense program is underway. Now, I've got to tell you, there are so many executives out there that we could call out not this one. This guy's done a fabulous job, particularly when it comes to the equivalent of what you get from Amazon when it's delivery at home and I think this is very unfair. The fact is the economy was slowing pretty dramatically for some companies and FedEx is one of the first to feel it. That may be the case, but it does feel as though and I spoke to an investor this morning who's saying, I'm not sure they're capable of properly forecasting and managing their business. They have a good quarter followed by a not great quarter. There's been some inconsistency here, yes, without a doubt, a large fixed cost transport network, you need a good economy for that and you can print money when things are really strong and to your point, the industrial economy in particular has not been great, Jim. Neither, by the way, they operate overseas and Europe and things of that nature have not been great either, but you're really not willing to sort of take them to task in any way here for this inconsistency in terms of delivering on integrating the networks the way they really need to to get to that profitability that many investors are hoping for. The numbers were not good, so I can't give them a pass, but I can say is this, you're absolutely right. It was the prediction business, they got it very wrong and I think you've listened to if you've been a lot of those trucking transport conference calls, you would have seen what was coming, tempting with the rail, so that extra nut to be a little bit more part of the rest of the transportation index than I thought. I stand by the fact that I think Rogers is taking cost out and if the Fed rate cuts work, this is a coil spring down here and you would buy it not sell. One last point, Carl, they are still conducting an assessment of the role of Fedex freight in their portfolio structure, it's about a third of revenues, assessments well underway on on track to be completed by the end of the calendar year, and so that's an important thing as well that investors are watching, if potential is in the frame. It's good that the sooner the better, sooner the better. One gay Kramer is mad to ash and count down to the opening bell, September so far for the S&P, up about 1%, we're back in a minute. 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The news out of corporate America last night, as a whole, not terribly encouraging, you see the laggards here, Fedex, Lenard, some folks throwing in sketches, Mercedes, Warner Music, all with negative news last night arguing maybe the Fed was right to move, UPS and Wharton down in sympathy as you can see, opening bell coming up in about four minutes, don't go anywhere. Madash time, you know, Jim, I just looked up the market capital on NAR, it's $52 billion. Well it's the biggest and the best, well I guess people could say that Wharton is, but I think that Stuart Miller has done a remarkable job, like his dad Leonard Miller before him, it's a fantastic builder, he used to be Florida now, it's national, you'll see the stock down and you'll be thinking that something's wrong. That would be incorrect, there are actually people who want to get out of the stock simply because it's had such a good run and yet I would tell you, every number was good and some people had when they saw it down and said no, if I think the gross margin's going to be flat with this quarter, there's a good reason to sell it, that's stupid. So I'd just come back and say, let it come in and buy it, this is a good company and I think that it was an excellent quarter and I congratulate them in a tough environment, I'll allow what we were talking about with Fedex, they actually delivered terrifically, who's member in the end they had high mortgages and they're doing okay. Jim, let's hit the opening bell and the CNBC real time exchange of a big board, it is Intervex, a provider of engineering equipment for oil and gas, celebrating its recent merger and at the NASDAQ Voyager Acquisition Corp, celebrating its recent IPO, Jim, as we should mention, got some quad-witching going on today, might make the close interesting. Yeah, I don't know, I have a strongly trying to figure out the impact and not sure, I have to kick that one to David. Wait, what? You got to kick that one to me? Yeah, because I'm trying to figure out myself. What? Head and shoulders, baby, head and shoulders, that's what I'm focused on, I have no idea. No idea. There are a lot of people. I don't feel this is. Quad, triple, I leave that to Carl. No, it isn't those words. I literally phase out. You were literally talking about gamma yesterday. I know it was, but I was talking about it because I'm like, I don't know what that was. I think you're David might know, I mean, to me, this is not a seminal moment in the market. I just, I don't see it. I will say this, I think that if you take a look at the AI complex, once again, people keep thinking, "Wemmel Nvidia move, Wemmel Nvidia move, is Nvidia's chart bad." I had someone ask me if Nvidia's chart was bad last night, how's the chart, Nvidia? What'd you tell them there, Jim? I said, but I don't know, I think the company's doing a really good job. That often plays a role in the chart. Yeah, Jim, yesterday, by the way, Russell, year on year, 26.4%, biggest annual gain in several years. He was your Danny yesterday, Jim, who argued small caps, not doing as well as mega caps, argues maybe this rate path is not going to be as dovish as some people think or as the bond market thinks. Well, look, Ed is absolutely right, that would be the conclusion you reach. What I think's happening is there are different things occurring at this very moment with some of the mags, not the others. I really feel like the Tesla's re-accelerating. I think that Amazon, if you go through the FedEx lines, you'll see that e-commerce is stronger than they thought stronger. That reads very well for Amazon. Remember, they're not clients, but Amazon, that is just a one-for-one tell and I really like it. So I see some things that I really think are good. I think the Apple launch is going to be very, very effective. Tim Cook looked really good this morning. I always love the fact that people want selfies with them and he talks with them, but actually it's a remembrance that the company is absolutely loved. And then David, best for last, okay? Yeah. What do you got? David, Waymo. Waymo. Waymo. Waymo. I don't want a human anymore. I want a Waymo. Why is that, Jim? Because they have no emotion. They don't want chit-chat. They don't want to ask me how I'm doing. They don't talk about the Eagles. They just drive. They don't hit anything. They don't seem to be tired at all. They don't ask you about Nvidia. They don't put on the Eagles either, so you sit there and go, not the Eagles, man. No, I mean, they're great. And you know what? Other than if I jumped into the trunk, which they can find, they'll find you, by the way, because they have cameras everywhere, I think it's such a more pleasant, safe experience. I'm all in Waymo, which makes me not want to hate Google as much. Interesting. Okay, so if you had an opportunity to order an Uber without a driver, in what was it? The two cities there in Austin and what was the other city? Atlanta. Atlanta. Atlanta. You would do so. You would do so. Oh, without a doubt. Now, I'm tired of humans. I am. I want AI agents like Salesforce gives me because they're really polite and they treat me like a human, and Waymo treated me like a human. I want to be treated like a human again. And the only thing you can treat me like a human is artificial intelligence bots. They treat you with respect, David, the way it was when we were growing up. Yeah, remember those days? The bots are raised by really good moms and dads, and we're very thoughtful and know about manners. Well, don't worry. You're hope for getting rid of humans. It may very well be embraced by AI as well. So who knows? We can, we can still play a critical part in the infrastructure. We can? And what would that be? What are the pods where we provide energy? No, but they may have to bring us coffee in the morning. A lot of people were really talking about the humanoid robots and what that's going to mean. No, they're not to see it. They're the only person who talks about them. No, they're really important because I need friends. I get up really early. There's no one to talk to. My wife tells me to shut up. Can you imagine going on stairs? And there's a robot who says, "Have you seen Boeing today?" I'm like, "Ah, Boeing's so bad." I know. What are they going to do? I think the guy made like 30. And then the guy was like, "Do you know how much I know God?" He's like, "I know. Can you believe it? I mean, 100 mil." That's what I want. I want a robot who gets me at 3 a.m., okay? I'm like going downstairs and listening to Beethoven's seventh or something. How about a robot who can also stretch you and work on you, get you ready for the day? I have this guy, Jim. He's really great. But yeah, I've been a robot. Other people can have robots. You might need to be replaced. The fact is, Jason Wong, don't forget, because I have mentioned his name in the show, Jensen says that they're going to be human-looking, which means David, they could come in. They say wear a white shirt, no tie, wear a flammable jacket, go in there and talk about how your friends are saying that Jeffries is doing well. Meanwhile, right now, they can't figure out applications for the enterprise that get anybody particularly excited. That very well could change very, very quickly. David Health. You're never always supposed to say health when that happens. But David Health. Health. Yes, health. It's going to help us with drug development. We can't... Right. Everybody comes back to that. And the call centers. And the call centers. And the call centers on embracing. Right. And the call centers, as you say, it's changing those right away. Absolutely. You act when you call, you say, "Remember, you always used to say, 'I want to speak to a human.' That day's over. I want to speak to an Asian." That's for sure, Jim. Speaking of Boeing, that's some fresh year-to-date lows. Going to take you back to November 2022, Jim. The strike, finishing up week one, and it looks like furloughs are going to begin today. Well, they have to do that. They have to conserve cash from the old long, long, long ago Boeing days. Boeing and Intel both are two companies that you have to pull for. You have to just say these are really important for America and that they have to be able to get through this morass. And I include Intel there, David, because it was, at one point, a really important company. It was. The pride of the country in many ways, what they were able to do, obviously, at the forefront of technology. We talked about Nike earlier. I mean, I know that you continue, though, to be very, and I don't want to put words in your mouth, but I do listen to what you say. You're very negative on Intel and its future, Jim. Well, yeah, I mean, if you're not, then you drank some sort of Kool-Aid that I think is impermissible in the workplace. I just think that everything seems to be done robbing Peter from Paul. They put pause to Germany. Well, Germany was counting on them. If you were in Germany, Intel was going to be a savior in an era where like Mercedes has tough numbers and VW, Intel was going to save you, but no, Intel said, "Hey, you know what, guys? We'll come back to you. We'll give you a jingle." And then they left. 10 billion euros right there in Germany ready to give them a nope. So yes, I think they're in trouble. But I'm going to be, I want to be a kind man and a good man, a lot of apocalypse now, up city. International businesses, David, IBM? Yes, I'm aware of it. What about it? Arvin Christian is doing a great job. He is making that company very relevant and look at how that stock is doing. It's had a good year. Someone who's... It's a quiet turn. He's pulled it off. Nobody's talking about it. It's great. Okay. Really. Quiet turn. Nobody's talking about it. And it's great. You want to give us a little more behind what the great... Well, okay. All right. All right. All right. When you do your best football league, it tells you the next... How you did? It's actually written by Watson. Watson. I haven't heard Watson's name in a long time. Yeah. I think he's... I think Watson's... I think somehow IBM writes our fantasy football league note now. I don't know how that's possible. No, but IBM is just somebody you bring in, Honest Broker. Tell us what to do. And they're back in that role as a critical, a co-pilot. Right. Yeah. Guys, you know, it's ten years since Alibaba went public right here. That was ten years. Yeah. That was... Okay. See you later. Yeah, that was it. I'm standing that conversation. We're moving on with this one. Yeah. Yeah. David Tepper never changed quarterback on this one with it the whole way. That was a good time. I mean, I remember that day so well. I can't believe we've been... It's that long. Jack Ma of course joined us here. So did... Maasa, if you guys recall, came up and joined us. The enormous crowds outside the exchange of Chinese journalists. During time, stock has not done particularly well over that period of time as well. You can take a look at it ten years, of course. Yeah. Not ideal. Well, I'd say that capillary percentage for ten years is not going to quite take that. Obviously, for a long time, it did reflect basically the hopes and dreams of the Chinese consumer. Now, it has competition in that market. We talk about it all the time and around the world. Whether it's Timu, Xin, or obviously Pindo, duo, and/or Tencent in their own market, so many different competitors in different areas for the company. But did want to point that out, guys, because I know we all remember it well. Kind of takes us to some macro news on China, guys. I don't know if you saw China did not cut lending rates as expected last night. Youth unemployment, David. I know you've been watching that number 18.8 for people between the ages of 18 and 24. That's going to be the highs of the year. Yeah. I thought they stopped reporting it for quite some time. Listen, we talk about it every so often, Jim. The Chinese economy is in no way strong. It is still the second largest in the world. The exports of the country are, though, really an issue, in part because that's where they are focused, and that's where the leadership seems focused. Whether it's solar panels, or EVs, or any number of other things, they are an export powerhouse, of course, as we know, and that's where they really are seemingly putting the pedal to the metal, as opposed to perhaps trying to bail out their property market and/or giving significant fiscal stimulus inside the country, as many say they need to as they're facing deflation, which can be a really dangerous situation. Well, they're exporting deflation. That's their number one export. If you want to antagonize a country, if you want to make it so leaders hate you, then you take over the car business from the people who work in the car business in your country. This is the kind of ill-fated, still one more ill-fated initiative, where if you want the world to turn on you, then start selling $10,000 cars when your country is making $70,000 cars. I think that the Chinese, once again, have a very weak hand, but we revere them. We think they're smarter than we are in fear already complex is always on show. I heard it last night from people. When will people realize? I'm not saying they're a paper tiger. I am just saying that they've become the second-rate economy that we thought we were. Wow. It hasn't been closed lately. That's for sure. In terms of growth. Meanwhile, we're tracking 3% for Q3, a real GDP per capita now, record high, retail sales amount of you have saw, the real core control last six months is annualizing out at 4%, looking at 3% to 4% consumption at a time where we were so worried about the consumer. Look, our consumer, great balance sheet, did really well. I hate to say anyone did well during COVID, but sake a lot of my during COVID, our productivity is amazing. We have costs that we know are coming down. We have rates coming down. We should be, I know it's not good to celebrate when you have a number like a FedEx did. But man, we are doing it right and we are, we just have such inferiority company. It's repulsive. It's repugnant how much we think that we're losers and it's kind of tiresome. Well, both parties say that the other side we're a bunch of losers. You know, if you listen to these guys, we're just all losers. I mean, we've created so much, we're so good at what we do. We are such a strong country, but somehow everybody thinks we're losers and China's losers. I'm not buying that narrative one bit. I think that narrative is a false narrative. Yeah. Meantime speaking of consumer spend apples, new phone, as you know, hit stores today. We want to get to Steve Kovac at the flagship in Manhattan. He just spoke to Tim Cook, okay, Steve. Hey, they're calling, yeah, I just caught up with Tim Cook. He was actually out in front of the Apple store here. He was filming a sketch with Jimmy Fallon, our colleague over at 30 Rock for the Tonight Show. I caught him on his way out and asked him the most important question of the day, which is what iPhone demand is looking like so far. Take a listen. Today is great and very exciting. Better or worse than last year? Oh, I don't know yet. It's only the first hour, so we'll say. Pre-order's good? It's amazing. Everything is enthusiastic. So too early to tell that this is something we've been hearing, guys, from Wall Street analysts kind of picking apart the pre-order data that we've gotten so far looking at those ship times and noticing basically that the ship times have kind of narrowed compared to last year, leading some to believe demand is weaker than it was a year ago. But we also heard from the T-Mobile CEO this week as well saying that demand or that they've sailed so far are greater than they were last year. That's one data point we have. I will say the line is around the block today. A lot of people out there buying iPhones, but you heard from Cook what they're seeing so far as far as the demand, guys. Steve, have you been hearing criticisms or concerns about limitations on memory and what that says about the kinds of tools that you're going to be able to use on Apple Intelligence? Well, all the phones that they're selling right now, the iPhone 16, the entire lineup, it is going to be able to run Apple Intelligence when it launches in a month. As far as older devices, it's only the 15 Pro from last year that's going to have it. Plus the Macs, that recent Macs that came out in the last three or four years will also be able to use it plus some iPad models, but obviously everyone really cares about the phone. It's really interesting, Carl, because I was talking to so many people waiting in line. These are the top tier Apple fans who are here every year no matter what. Almost no one said they're here because of artificial intelligence. They want the new phone. Most people pointed to the camera as the number one reason they're here, not artificial intelligence. Despite the fact that they decked out the store behind me in this new look for Siri all talking about AI and artificial intelligence, that's just not going to be ready yet for another month or so. Did the camera get appreciably improved, Steve, in the new model? I'm sorry, I said that one more time? Sure. Did the camera get appreciably improved in this new model? Yeah. Yeah, that's the big thing people are talking about. It actually has this new shutter button, like a dedicated camera button. So not only are the cameras improved over last year, it sees more dynamic controls that you can do. I talked to one person in line, a 25-year-old YouTuber who is really excited about these new camera controls almost more than what the camera lens and the quality of the picture itself. So this is almost like an influencer phone, if anything, guys. Steve, if you take a look at what's going on, say, in the sports betting world, if there were people who were constantly saying, "Look, take me over," or, "Go with the dog." And they were wrong each week. I mean, wrong. We probably would not be willing to pay for their services. We would dismiss them. All these different little services that we have, that we get, that tell us how Apple's doing, seem to be equally as wrong as a bookie who tells you to take the over or the dog every single week. But why do we still pay those brokers and we shut down anyone who doesn't know how to do a fantasy link? Yeah. Look, I'm not a gambler. I only know what people are reading into any data that can get. And right now, Jim, the only data that we have is what those ship times look like. And of course, the analysts will be out there doing their channel checks today, talking to folks like those people behind me, why they're buying the phones, which features they're excited for. So I expect over the weekend and early next week to get even more clarity on how well the phone is selling compared to last year. So basically, everyone's saying the same thing. It might look a little muted at first today. UBS analysts actually use that word, Jim muted. But that doesn't mean this isn't going to be a longer upgrade cycle. I'll point to what Wamsi Mohan over at Bank of America has been saying that this is going to be a multi-year cycle just because of the way Apple intelligence is rolling out. It's going to take a month or two or three into next year, more countries. So it's not going to be a one-off, huge surge of phones. That's the bull case right now, Jim. Jim, your point has been watched not just the pre-orders in the opening weekend and hardware in general, but keep in mind the underbelly of that enormous, installed base and what services revenue you can do for earnings in the long-term. Absolutely. So he started doing people just obviously want to start a business. They have to go to the App Store. I don't really like to quote Stalin very much because he was a pretty bad mess, murder. But he did one question, how many divisions the church had? I would question how many divisions all these other people have versus say T-Mobile because I prefer them as someone who can give me better data than anybody else. Apple shares are up guys, 44 cents. Mega Cap tech, generally in the green, Microsoft is down a few cents as we had to a quick break here, Karl. A little bit of selling at the open here, down 82, S&P holding 5700. Watch bonds. We mentioned FedSpeak resumes today. We're going to hear from Waller and then Harker at 2 p.m. Eastern time. Get some reaction, not just to the decision, but all the data that led to it earlier in the week. Stay with us. The security industry has always been under attack. It's been under attack for the last 30 years. That's not going to change. I think when you look at the landscape, it really underscores how determined these adversaries are. Time for Jim and stop trading in line of that sound last night, Jim. Right. You just heard George Kurtz talking. He is one of the foremost people in cybersecurity. He's a crowd strike. Crowd strike had a big mishap in the month of July, which shut down a lot of different computers. It was not a hack. It was a mishap. And what's incredible is that George lost almost no clients. He said that yesterday, really just a couple percent, which is really remarkable given the fact that a lot of people were very angry at him. He did touch paces with everybody possible, say, "Look, I'm sorry." But the most important thing that came out of yesterday was that Sachin Nadella joined him, by Zoom or by Teams or by whatever. But what matters is that George had been very critical Microsoft. Those days are over. They're working together. That is very threatening to the rest of the industry. It's very positive. Crowd strike's bottomed. Wow. That's incredible given the sentiment around the name during that crazy week, Jim. Meanwhile, congratulations again on an amazing week of viewers are richer every time you go out there. What about tonight? Okay. So we have HP. Everybody knows HP. A lot of people use the PCs, particularly at work, but the stock has just been okay. Our age sort of major breakout Gary has been spoken in ages. We're going to find out exactly how big the inflection is. I like that stock. And then Octa, you just heard what George Kurtz said about cyber security. It's still hot. I'm a kid in this identity software. We keep all this keep getting hacked. We're all so sick of it. But maybe the big guys are winning right now. Let's find out from Todd. I don't know how he does this, David, and manages to have fun out there too. I don't either. I mean, he doesn't sleep. I guess you're going to get a little, maybe a little time off to just recharge, which yeah, you know, I mean, I would have needed on my Tuesday. I think I would have needed that full vacation, but I maybe I'll take an app and I'll be ready for next week. Thank you. All right. Congrats, Jim. Look forward to getting you back. David robots. David robots. I know. Everybody was talking about robots, which means that I'm talking about robots. They are so madderly. They're madderly. You've got to sleep. You think of robots. You wake up. You think of robots. Count robots. To fall asleep. I know. Well, I have a great wife. I'm not going to go around and do that with the robot. Oh, you're not. No step for wife for you? Yeah. Okay. No. No more interchangeable parts. There you go. David. We'll see you next week. Trust me. Bad money. Trust me. 6pm eastern time. Down down 72. We're back after a short break. You've been listening to the opening hour of 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. Gotta hunch about this football season, put it in play with FanDoor's easy to use app. Right now, new customers can bet $5 to get 200 and bonus bets. Nothing can stop this team, nothing! 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