Hey Fidelity, can I get a second opinion on stocks in the Fidelity app? With Fidelity, it's easy to get an outside opinion from independent experts in a single score. And then? When you're ready, trade US stocks and ETFs with no commissions. That's right. I am always right. Investing involves risk, including risk of loss. Sell or assessment fee not included. A limited number of ETFs are subject to a transaction-based service fee of $100. See full list at fidelity.com/commissions. Fidelity broken services LLC member NYSE SIPC. Market moving insight and analysis join Jim Kramer, David Faber, and me, Carl Cantonea on the opening bell hour of CNBC's Squawk on the Street. Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Cantonea with Jim Kramer, David Faber at Post Night of the New York Stock Exchange. Futures tried to erase some morning losses as June CPI gives us our first month-on-month deflation in more than four years. Shelter slows down dramatically. 10-year yield drops to the lowest level since March. Our roadmap begins with the rate cut outlook. Inflation does fall in June. What does it mean for the Fed's policy path? Plus, Delta shares are tumbling this morning. The outlook for the company falling short of estimates, despite what is, of course, very strong summer travel demand. Pepsi shares also under a bit of pressure. This is signs of weakening US demand. And yeah, that guy, he's going to join us as well. And then that fell commissioner, Roger Goodell. Let's begin with the market reaction to CPI. After yesterday's sixth record close in a road, Jim, everyone's pointing to Supercore down two straight months. Core X shelter down two straight months. Look, these numbers are the kind of numbers that if you were Jay Powell, you say, "Listen, I'm there. I'm ready. I've said that we have to be a little bit more worried about bouncing things." And looking at these numbers, I think that unlike Delta, which has got a lot of turbulence, this thing is perfect. Look, it's OK to say it's perfect, too. It's OK. So many things are not perfect. So many. OK, you want to know the line that's not perfect? Tell me. Indoor plants and flowers. Much higher than I thought. I thought when you were talking about things are not perfect, you were talking in a broader sense, but sure. Indoor plants and flowers. Don't worry, clocks were OK. Clocks were OK. Yeah, you buy clocks. You get very granular there. Do we get a cut before September? OK, see, that speaks to panic. And I don't think there's a need for panic. I think that these numbers, we're all going back, and we're going to talk about food today. David, we're going back to... It's the end of hyperinflation. It's the end of COVID. We're back to where we were for many lines. And then other lines, obviously, we're not. And we need things to be pushed back. But I like these numbers. And I think anyone that does like these numbers, right now is saying, "I got to talk this market down because my investors are saying, 'What are you doing?'" Right, well, we just looked at the tenure. It is hovering. And now below 4.2%. And how about how much money you made on a 10-year auction? I even... Those are... These are the days. I mean, like, you know, Carl, I kind of emphasized. I mean, you see, OK, here's a good one. I watch the tape, David doesn't like that. Apple's down at $1.28. Well, I saw a very nice piece of this point about the Bank of America raising numbers. So you think that that's going to be down at $1.28 by the end of the day? I mean, I don't know. Well, not necessarily with rates, but falling the way that they are as well. One would anticipate that would have a positive impact. As soon as somebody at Robinhood trying to knock it down is a serial auction. Maybe there's some other names as opposed to just the same five names that go up every day lately. Well, the names that are going down are the names you want to go down if you are president of the United States. Because what the president was, again, rail against was shrinkflation. And I think we're going to have to have a little shrinkflation when it comes to the... I think ConAgra has turned the corner. Volumes were up. PepsiCo, I'm not looking at vibes here, but PepsiCo, no. PepsiCo, I think that they raised price too much. The consumer is balking at the price of potato chips. Pepsi volume down three five. Frito volume down four. But they made it up. They made it all up in price. And I've got to tell you that I think that they're going to have... I think they may be out of value. I think they literally have to kind of make it so that they do cut price a little bit. Now, ConAgra did it through promotion. And that's why I think that that stock shouldn't be down. But, you know, Carl, when I look at PepsiCo, what I say to myself is, somebody has to bite the bull. Now, we know Costco, which we'll be talking about, has said that the only thing that has the work for the premium king, Kirkland Signature Band, is they've never been able to knock off soda. They tried to knock off Coke and Pepsi, they couldn't. But Frito-Lay, I checked in my Ollie's army. The flyer that you got today, Dave, from Member Bali's army. They're discounting hers potato chips, like they're going out of stock. Hers. Hers. Not hims and hers, H-E-R-R-S. H-E-R-R-S. Hers. Hers, if you can fill it off, it's hers. I need to think that is. No, because... Why do you think that is? Discounting these potato chips. Potato chips got too expensive. Oh, they did. They... Not that he would... No, Pepsi's going to say that. That's Ramon LaGuardia is very objective about it. Now, I will say this. You're selling that stock at an incredibly high yield. You're selling that stock when they had a great July 4th. You're selling that stock when this company has the option now to do a lot of different things. You're selling what premium stock, where the international numbers are the best they've ever been. So, I may be willing to take the other side of the trade down five on this. We've been watching a lot of staples, whether that was General Mills, LaGuardia today, did say price sensitivity across all income groups. Here's what he said. In the U.S., there is clearly a consumer that is more challenged, and it's a consumer that is telling us that in particular parts of our portfolio, they want more value to stay with our brands. That is not for all the consumers. It's some consumers that is not for all the portfolio, some parts of the portfolio. And we have been working different tactics to give the consumer what they want, and we see that it's working. And that's why we feel comfortable about, you know, given the oxygen that we have in the P&L, that we'll be able to deploy in a very targeted way. - Well, this is very interesting. So, when you're basically saying listen, instead of being able to buy, say, five bags for 20 bucks, they want to get it down. They want to do $5. They want to be able to say, listen, we're going to do one bag at a time. The customer is walking at anything that's 20 bucks. Now, that is really something. Mentally, the customer doesn't want to pay. They're spending $50 at the grocery store, and they're walking at a very high price point Pepsi. Now, I will, and you really-- >> Well, what wins out, Jim, does a higher margin, no, for the company, from an investor standpoint. Higher margins or lower volumes? >> They, okay, right now, lower volume is hurting them. >> It's over, over taking. >> Yes. >> It's more concerning than the higher margins they are seeing. So the low price point, it's $10 is psychologically level. Now, you have to understand the input costs you're going up 40%. Think of it, it's cooking oil, all right? Fertilizer, corn, you're talking about heavy Russia. So they have higher input. At the same time, they're not giving us the volumes we want, but they can fool around with those volumes. >> And do we think that there's any real impact yet from GLP? >> Okay, so they are telling me point blank, Jim, drop it. >> I know. >> Drop it. >> I know. >> Con ag was saying drop it enough for the GLP dash one. We're not seeing it, and they're using focus groups. It's not what's driving it. >> Would they know? Would they know? >> You know, I just, I gotta take the word for it, 'cause I've known these guys for 25 years, they've never bagged me. >> Okay, that's a good question. >> I don't know what to say. >> Hey, I think market research would argue, yeah, they have a clue. >> They have a clue. >> They do, I mean, these are really good companies with really good executives. >> Do they do, they sit people down and sir? >> Yes, they do, they do. >> They do market sales. >> They are on, yeah. >> Or Gobi or yeah, and what they're saying is, we're not spending it with $10, so I'm not spending this much from potato chips. You guys have raised the price too much. That's what they're saying. They're not saying, hey, listen, you know, I take two, I beat that one, and I can eat just one. >> Well, we're on the topic. It doesn't sound like you're that impressed with Pfizer's oral correlation. >> Okay, like the two scientists, what was that the other day, look? All right, now listen, Dr. Borla, I'm not saying he's over-promised and under-delivered, but there has been a consistent issue with Pfizer that they haven't delivered, period, not over-promised, haven't delivered. Dave Ricks has got a phase three pill. Okay, phase three is well ahead of phase two, David. I don't know if you know that game. And he's built in factories to do the pill. So you know what, Pfizer, go pound sand. I am not gonna buy Pfizer on this. I am not, because Pfizer has not been a delivery machine. You know that they said that they couldn't make this. Now they can make it? What is that, David? What is that? >> No, it does raise a question as to why they're-- >> I mean, listen, it's an enormous market. It doesn't need to be dominated by two companies, conceivably, but that said, unless you have an entrance that in some way is either gonna be lower priced and almost as effective or more effective, why would you bother? >> Okay, and we know it is big market, it's a like cluster market where everybody came in and in. >> But believe it or not, everybody did come in in the end and there are certainly plenty of winners there. >> Yes, although the greatest was Lipitor, a Warner Lambert drug that was bought by Pfizer. >> Was first. >> Many years ago, yes. >> And then Warner Lambert, LeapFrog, so you're looking for the Warner Lambert situation. >> You're looking for LeapFrog. >> And they did not LeapFrog and that's what matters. Now, people don't understand, I mean, Jacobs makes these, what's Jay now, these plants. These plants are much more complicated than a typical-- >> You said this before. >> Right, and so in fact, if it was $5 billion a plant and Borla's fooling around with like a phase two, maybe, maybe not, he's hamlet. >> Is he? >> Yeah, to make or not to make, that's a question. >> Well, their biggest investment was in SeaGen and-- >> Well, we're waiting. >> Oncology, right? >> We're waiting, we're waiting. Now, look, maybe Borla has a magic bullet here, but I just find, I don't want people to go buy it on this and I do want to say that there's some notes out on Lily that are so positive and David Ricks has been money and he's got phase three and I'm doing a drug right now, believe it or not. >> And I'm talking about, well, what's phase one to phase two? Not so bad, phase two to phase three when you already have a drug? The FDA is not interested in promoting a lot of new drugs if you have a drug, that's the way the FDA works. So, I don't know, I'd say take it with a grain of salt, Lily's had a great run. >> Yeah, really quick, are you surprised that futures couldn't benefit more from this print? >> I think yesterday was a fantastic day and anticipated some great numbers. >> Well, we're going to talk a lot more about it and what it means for certainly September rods now above 80%. When we come back, the business of football and the streaming era and exclusive with the NFL Commissioner Roger Goodell, Life in the Sun Valley, Julia Borsten's got that. We'll get to Delta, Costco, Alcoa, MicroStrategy and of course, VW QuantumScape when we come back. >> High five, up top. >> Dave's company just got the first ever five-year price lock guarantee from Comcast Business. It's five years of gig speed internet, advanced security and a great rate that won't change. All from the company with 99.9% network reliability. >> Yeah. >> He hasn't given this many high five since Deborah brought in her famous banana bread. The Comcast Business five-year price lock guarantee. >> In Z8-21-24, guaranteed rate applies to monthly service charge for new customers on qualifying internet bundle, excluding taxes and fees, other restrictions apply. >> Support for this program is provided by Chevron. Demand for energy is projected to continue rising in the future. To help keep up, Chevron is increasing their US oil and gas production and they're innovating to help do it responsibly across their operations, including their Gulf of Mexico facilities, which are some of the world's lowest carbon intensity operations, helping supply energy that's affordable, reliable and ever cleaner. That's energy and progress. Learn more at chevron.com/meetingdemand. >> Some prominent business leaders convening at Allen and Company's annual conference in Sun Valley, Idaho. Our Julia Borson is there this morning with a very special guest. Morning, Julia. >> Good morning to you, Carl. That's right. I'm joined now by NFL Commissioner Roger Goodell. Thank you so much for speaking to us here this morning in Sun Valley. So before we get to all the conversations here and the implications of streaming and media M&A, I have to ask you about the lawsuit because I last saw you testifying in this direct TV, this lawsuit about direct TV's Sunday ticket package, and you lost and then appealed. What do you expect to come from this lawsuit and how do you think it will impact Sunday ticket and other deals going forward? >> Well, we obviously disagree with the jury verdict and we are committed, obviously, to following the legal process. It's a long process. We're aware of that. But we feel very strongly about our position, our policies, particularly on media, that we make our sport available to the broadest possible audience. Sunday ticket is just a complimentary product. So we're committed to following the litigation and all the way and making sure that we get this right. >> Well, we will continue to follow that trial. Now, speaking of rules, there has been a lot of discussion about the rules about private equity, investments, or ownership of the NFL teams changing. What's your perspective on that and where is this going to go? >> Well, we've been very deliberate on this. Just looking at our ownership policies in general and as sports evolve, we want to make sure that our policies reflect that. We created a committee last September that looked at all aspects of our policies, including debt and including private equity. We've had a tremendous amount of interest and we believe that this could make sense for us in a limited fashion, probably no more than 10% of a team. But that would be something that we think could complement our ownership and support our ownership policies. So we think we're moving in a very positive direction and hopefully we'll have something by the end of the year. >> No more than 10%, other leagues have capped ownership at 30%. >> We're not other leagues, Julia. So I think we're going to do what's right for the national football league. And we feel that we like our ownership policies. We think this is a compliment. But this is also something that's the initial cap could we raise at some point in time, of course. >> I am certainly, certainly potentially some owners or investors here as well. Of course, in Sun Valley, we're always talks about M&A. And the big deal this year is the one that was just announced between Paramount Global and Skydance. There's been some discussion of the fact that if there's an ownership change of CBS which broadcasts some NFL games, then you can renegotiate with CBS because of its new parent company. Do you plan to? What do you expect to happen? >> Well, listen, CBS has been a great partner for us. Back to 1956, I think. They've been extraordinary right up to the Super Bowl this past year where we had record ratings at the Super Bowl over 200 million people watching. So they've been a great partner. We'll obviously paying close attention to the process. We know Skydance, we're partners with Skydance. They've done a terrific job with our relationship. So we'll look at the structure of the deal. We'll see how it impacts us. We'll see how it impacts our business. And we'll make the best decision for the NFL at that point. >> But given the fact that the NBA is now negotiating for its rights, a $75 billion package, roughly, do you think you're underpaid for NFL rights? I'm going to renegotiate it. >> I pray a lot of people in the NFL think they're underpaid. But I think, listen, we have great relationships with our networks and a lot of our media is not about the dollars as much as it is. How do we reach more fans? That's the primary objective for us. Obviously, we want to be paid fairly. But for us, it's about reaching fans and being on a free platform like we are allows our fans to see that. And I think that's what's led to the great, not only popularity of the league, but obviously the great ratings. >> Speaking of new partners, Netflix. You know, it's Christmas Day, Games on Netflix. Netflix is, I saw at least one co-CEO here in Sun Valley. Explain to me the strategy of partnering with all of these different platforms, especially when there does seem like there's a risk of fragmentation or simply making it very expensive for your fans to be able to watch all the games. >> Well, over 85% of our games are on free television. And we've committed even when it is on a platform that's a paid television platform that in the local markets of those two teams, it will be on free television. So I think we're going where the fans are, Julie. You see the changes. And so fans are moving off of paid television platforms. So we want to be where the fans are. Netflix has close to 300 million subscribers on a global basis, which was really attractive for us in being able to reach that global fan. As you know, international is a huge initiative of ours. And I think they want to really make this an event at Christmas Day. And we think that's important, just like Thanksgiving. And so we've seen that. I think the three games we played in Christmas last year were in the top 25 of the entire season. So I think they're going to take this, they'll globalize it, they'll put a Netflix twist to it. And I think it'll be great for the fans. >> So what does that mean in terms of international expansion, more games, more games for Netflix? >> Maybe all of that. I think our objective here is to try to globalize our game. And so we're playing five international games this year, including a new one in Brazil that will be a part of a super kick-off weekend with NBC. We'll kick off on Thursday night in Kansas City and come back on Friday in Sao Paulo, Brazil. And so we think that's going to be very great and come back on Sunday night with NBC. So we believe that the game is going to be incredibly popular globally, we just have to bring more games to them. >> Unfortunately, we're almost out of time, but I have to ask you because it is so dominant, the conversation here in Sun Valley about politics. You know, the NFL is something though, the whole nation watches just looking at the ratings, especially for big events like the Super Bowl. Are you worried that a polarized election season could impact your viewership? Or do you think that you're worried that some of your players might speak out about the election in a way that could impact the game? >> Well, Julie, it's always a difficult period in the country when you go through an election. And I think it's important to hear voices. We support a program called NFL Votes. We ask our players, our teams, our partners, to stand up and say to our fans, go vote. That's a democratic way. That's what we all support. So for us, that's the important platform. But we understand our platform, we understand, frankly, that we unite people. And that's what we like to focus on. So hopefully we're that harbor where people can come together and get away from politics or anything else and enjoy football for a day. >> Well, we have so many more questions for you, Commissioner Goodell. Unfortunately, the bell is about to ring, but we'll have to leave it there. Thanks so much for joining us. Guys, I'll send it back to you at the NYC. >> Julie, appreciate that. We'll chew on that. And after a short break here, is we get ready for the opening bell? Jimmy got immediate thoughts on 10%? >> That's high, but when they forget to do that, no, I don't know. I did think that, one thing I did think about Rogers, I was shocked that he just said, listen, CBS great partner for a long time. We're going to stick with them. I mean, why? I mean, you know, Amazon's doing incredible product. Why not just like say, listen, Amazon one is possible. They want to, we see guys, we see the hyperscalers willing to pay far from far more. Who cares? Who cares? I mean, Amazon products on Thursday nights, every minute's good. I'm just surprised that there's any loyalty. And I say that because as a season tick hold over from the Eagles, I seem to loyalty what's the win. (laughing) None, what's the win? >> But they want to have a diversified platform. They want streamers, but they also want over the air. They want to make sure as many people as possible have access to the games, they as instead have a long-term relationship there, they have a contract in place. I think it's very unlikely that they would break that deal. >> 85% is free, he can do whatever. Look, their tip, our first game is in Sao Paulo, okay? >> I'm not going, I don't know. I mean, like I was looking, the subway to Sao Paulo is very exciting. >> What does that have to do with anything? >> I'm just saying that they do anything for money. And I love the NFL, but the NFL is jump fall when it comes to money. It's jump fall. And that's because the owners are, I think, overall, recognizing that the product is one thing that people really want. And they can go to Amazon, they can go to Alphabet, they can go to any type of skin. >> I mean, Alphabet does have a YouTube contract. >> Right, but they can go every day. >> Amazon does have an NFL contract. >> They could take everything. >> Apple could take everything. Microsoft could take it. >> There's no doubt that there could be significant competition for even more from those, but the NFL's approach, as I said, in that way. Maybe as the landscape changes even more dramatically, and so few people get anything over the air, maybe you'll be right. But these, by the way, these contracts are in place for many years to come. >> Guess what I'm saying? Younger people do not care where they get it. They don't care. And I just sit here and just wonder, how did these companies get to be at $3 trillion? And the answer is they get anything they want. Anything they want. >> Sounds like a case for the Department of Justice. >> Well, look, I'm watching Warner Brothers' coverage. I hope we hit that. Because they need a level of concentration to this industry that's not possible. >> Well, that's what Zazlo was saying in Sun Valley. >> Well, I just-- >> That we would like to see the ability to actually have consolidation. We talked about that yesterday. We don't need to go into it again. >> They got a Friday game. Amazon got a Friday, Black Friday game. They'll do anything. They'll do anything. And the gross margin stream, I'm sorry, I just say-- >> Well, they're getting the NBA for streaming. Of course, Warner Brothers' discovery made very well compete with that and or even litigate because of the difference in sort of approaching the NBA in terms of the streaming versus the hybrid that Warner Brothers' discovery would offer. >> But when you're offline, do these people not tell you who they're most concerned about and scared of? >> Everybody's scared, of course, of the enormous power of Apple, Amazon, and Alphabet. >> Well, I'm just saying-- >> Apple, Amazon, and Alphabet. >> 50-year-olds. >> You can't compare the two. >> Come on, look, I love the NFL and CBS. I'm just saying that it's just highest dollar and we all know that. >> We're not like other leagues, Julia, as Roger just said. >> Highest dollar and let's stop fooling around. Let's accept that they don't care about the season taking orders that much, at all. They'll do anything, anytime. But when Christmas day games, they don't care. >> We gotta go, we're gonna miss the opening bell. Stop talking. >> We'll get Kramer's mad dash and count down to the opening bell, don't go anywhere. >> At Ever North 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, but 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. >> We are back and we'll send you right to the opening bell, but we're gonna squeeze in a mad dash. We've got a little time for that. Costco is the name you want to talk. >> The legendary Rich Galante is retired, the CFO. He has always said, it's just a matter of time. It's a matter of when, when they put through the increase for club membership. David is going from 60 to 65, September 1, for the regular, and then for the premium, it's going 120 to 130. They're gonna use it mostly to be able to bring back even more great things for members. But David, this is the first time since 2017. Why is this significant? Because they were not going to raise the price of this until they saw inflation under control. >> Interesting. >> Interesting, right? They probably have as good a read on it as anyone. >> Okay, I think they're the best at Rich Galante. I'm proud to call him a friend. He's the great, well, I'm gonna really miss him. He does the best conference calls that are in it. >> But you guard miss him, you talk about him every single day. >> Okay, so let me tell you what Ellison's up to when he goes shopping in cost. >> Now get back to the inflation point you're making. Don't get way later since I-- >> They're the guys who basically say in companies, you know what, if you're going to come into our store and not lower your price, we're going to put signature, purple and signature premium brand right against you at a much cheaper price. And we're going to, well, they don't wanna say crush you 'cause that's like, but they, other than Coke and Pepsi, they've never been able to, they're the only ones they've never been able to challenge, they've always been able to come in at or, as I know from a product that I once had, they kick out. That's too expensive, they kick out. So they are the first line of defense on deflation and Walmart's the second. And I think anyone who doesn't know Costco, 'cause if you wanna get these lower prices that the CPIs now are reflecting, they had these prices months ago. So anyway, congratulations to Costco for not gouging, for doing great things. (crowd cheering) There you go. (crowd cheering) There you go. (crowd cheering) >> It's been a long time coming, seven years. And up and, and through. By the way, gold is not selling as gold. >> And interestingly, not a bigger increase than it was since 2017, same dollar price. Let's get the opening bell in the CDC real-time exchange. It's a big board, it's Oliver Wyman for him. A community of CEOs addressing climate change, social and geopolitical issues at the NASDAQ. Stardust power and manufacturer lithium batteries. >> You know what that is? >> Recent SPAC. Jim, this QuantumScape news is big. Stocks of 30% free market. >> Never, yesterday I said, David, you said we'd be safe in QuantumScape. And you said I never said that. >> QuantumScape is up. >> It's up, yes? >> Yes, Volkswagen solidified a steel with a groundbreaking agreement. Now this has always been the issue, is how much is Volkswagen really committed to their battery? And Carl, I have to tell you, this makes me feel, there's not a lot of money in this particular release, but I've been waiting for Volkswagen to say, hey, listen, we love this deal. And it's happened. Now maybe they watched our show yesterday, 'cause everybody watches the first 15 minutes in this whole country. >> And then the next 45 minutes, too. >> Oh, yeah, absolutely. Then we lose one or two people. Anyway, do you buy QuantumScape on this? This is what Adam Jonas was always helping. Hope it could happen when he did his teaching. But batteries have been a, any sort of solid state battery, anything that makes it so you can charge faster, that's the Holy Grail. Meanwhile, the drawdown in CPI used car and truck. Wasn't that so? Biggest since 2009. I don't know if you've seen wholesale inventories of autos all time high. >> Go to car bottom. Go to car bottom. One of the things that's so great about that is that was really all supply chain-related. They couldn't get the large form factor semis to make the new cars. So that went, drove up the price of used cars. That is so great for America, because 50% of the people live in hand in the mountains in the country, they need a car to be able to go to work. That's fantastic. Cape Town knows that because he actually is very sensitive to this. >> 5636 S&P. We did not mention Ed Yardenny. Long time constructive bull, taking his year-end target to 5,800 gym. >> He does use the word mela. Well, I guess it's two words. But it's continuing mela. I just think that, what can I say, it's one of the greatest markets ever. And I think it should be celebrated because a lot of it, and Yardenny talks about that in the piece, a lot of it is AI. But yesterday, if you look at what happened with Intuit, I said Intuit is letting people go and moving people around because of AI. And a lot of people say no, they're being hurt by AI. But AI is so front and center, actually happening right now. And my prediction is that the company that we benefit the most from AI is. >> NVIDIA. >> No, no, they're the, I've met a customer. >> Oh. >> Chaking worried. >> That was unexpected. >> What? >> Why? >> Jamie Diamond's probably spent more time with NVIDIA than any CEO. >> There's been a lot written in the last few weeks about a structural re-rating in your cost basis at banks. And what that means for return on capital. >> Well, that's why I keep thinking, how can change from Morgan's stay at 12 times terms? How is that possible? >> How could the premier bank in the country, in the world sell at 12 times terms? >> How is that possible? >> Well, what should it sell out? >> What's a more appropriate multiple than 12 years worth of earnings? I mean, it's a bank. >> No, let's say President Trump becomes president. >> Former president Trump becomes president. >> I don't think that the banks are going to be hurt by that. I think regulation is hamstrung these. >> You know, we don't talk enough about the Chevron because it's too boring, I know. But the Chevron decision by the Supreme Court. >> Yeah, the Chevron decision was, it's incredibly helpful for many companies. >> We don't know about it enough. >> Marion Lake to Reuters today, has set an ambitious goal of attracting 15% of the country's consumer deposits. >> I'm telling you they can get it. And I wonder whether the concentration laws will finally be suspended because Jay from Morgan's over them anyway, because they're the first republic deal. But, okay, David, look, this is what I'm talking about. I don't want to be, I'm not hyperbolic here. Okay, so the S&P 500 is trading. Let's say, that's a little high, geez. Okay, the S&P is 24, all right? >> 24 times. >> Yes, so that's pretty high, do you? >> Do you think that Jay from Morgan should be half of that? >> Honestly. >> Oh, I don't know what it's historically been. >> Well, it's certainly been a heart of the half. >> Yeah, it is. >> And yet they're automating, they're the ones that I think can do the most with AI, 'cause these places have a lot of overhead. >> But yesterday we had a great interview with the person who runs tech from back in America. I mean, I've been billions of inquiries being handled by by chat, chat bots. Nobody's on the line. >> About howling out of some of these banks, losing, continuing to lose personnel to the alternative asset managers. >> And too well as far though. >> There's a very senior person at City who recently left to go to Blackstone. That just continues. >> You know, that's absolutely true, and that's where the multiples are, I agree with that. I just-- >> Although, frankly, when it comes to alternative asset managers, I mean, if you own Apollo, you're very happy to see your area's okay. Blackstone, not so much. That's actually down. >> Wow, now let's consider a guy, David Solomon, who has done such an amazing job at Goldman, all-time high today. That stock sells at 18 times in your church. Now, should Goldman sell at that much more of a premium than JPMorgan? >> What's the moldable to book these days? >> Man, they're both high. >> They're both high. >> Yeah, you want to vote a book, a city. No one understands that one. >> You are always-- >> There has to be some accounting for the rest of your taking on. >> I mean, yes. Fortress balance, you know, J.P. Morgan. Nobody ever thinks they're going to make a big mistake. >> Well, last time I did a piece about what-- >> Bet on the economy, I guess. >> The eight companies that are the largest that you could go into the trillion dollar club, J.P. Morgan is a 580 million, and I was saying to myself, 108 billion, if the moldable went up and won nice earnings, you can get it to 600, maybe 700. But in the end, it's broad com that's going to be next, and broad com and Tesla are the two that will be the next trillion heirs. >> Yeah, we'll be watching for FDIC chair confirmation hearings today for Romero. Visa MasterCard, 10% drawdowns now, Jim, this year. >> Jeez, I think they're doing so well. I can't believe that. I think Michael Meebach and MasterCard is masterful, and I'm surprised at that. I probably want to take the other side of that trade. >> Delta had decent numbers on Amex renumeration, although Bastion's comments about the guidance for the quarter, not the year, but the quarter is largely in his view about capacity, where it's growing at 8% summer domestic, where his demands up for. >> I think all of us got very complacent because we've all been on planes that are completely full. Obviously, we are not on the routes out of New York. New York must not be the case, because I thought that Ed is great as I love Ed, at Bastion. But the interview with Phil was a little challenging because I didn't know they had great supply. I thought everyone was short supply because of Boeing. >> Well, that turned out to be climberical. This was incredible. It was an amazing interview with Phil because it was kind of like, what, what, Ed was saying the experiential is still here, but we have too many seats. Well, still here, how can there be too many seats? >> Three million people are flying every day, or close to it. We set a new record and these guys are, these guys are-- >> David, they're back to the way they-- >> To Ed's point, when you're growing routes at 8%, this is what Bastion told Phil earlier this morning. >> It's such good interview. The industry brought more capacity for this summer. Capacity is up 8% for the summer and talking particularly in the domestic marketplace. Real demand in the second, in the summer anyway, and I'm saying summer between June and August is probably closer to 4% in terms of real, organic demand growth. So you do have an oversupply. >> So they left the full year unchanged, Jim. >> Yeah, I know, and that made me think maybe the stock's down too much, but I think we're just so in shock to hear too much supply. >> Carl, it was one of those interviews and one of those sets of numbers that you had the, it's like the old days, the costs are way up, even though by the way, the consumer did well in gasoline. The costs are way up, there's too many seats, and I'm listening, I'm saying too many seats. Well, I'm a crayon back there, David in road 28, and I got to other people sitting next to me and a crying baby, which is fine 'cause I'm a very pro baby. But you know, David, there's like no seats whatsoever. You know, I'm in the back row sometimes, and it's like, hey, man, okay, I get it. >> A man of your stature and your age should not be in the back. It's just hard, do yourself a favor, sit in the front, and I am happy to hear your pro baby. That's good. >> I'm just making a case for babies. >> Yes, as you should. >> Yeah, 1.7 is hard per family in this country, it should be 2.6. >> Well, we're never getting that out. >> Should we have a present with that one? >> Yeah, wow. >> Yeah, and CBS program, I'm not done with it. Can we talk Nvidia for a second in this note from Coston? >> Nvidia? >> I'm sure you've looked at it. >> My little name. >> I know it is. Since the start of 23, 97% of Nvidia's return has been driven by greater earnings versus just 3% from valuation expansion. However, year to date, Nvidia's next 12 months PE ratio has increased from 25 to 42, and that accounts for 56% of the 165% year to date or a 171% year to date return. >> So margin, excuse me, multiple expansion is pretty significant here. >> Okay, so the way you have to look at Nvidia is that if you look at how much they beat each year, you will see that it turned out that the stock was very cheap. So that's what you're dealing with. >> The analysts are underestimating the ultimate revenue and earnings. >> No, that's been, I mean, I can show you from 2013 on, David, they beat except for the 2018 quarter where they got hurt by the people mining Bitcoin. >> Yep, and what you'll see is that, oh my, you thought it was selling it 30 times earnings, it turned out in retrospect it was selling it 15 times earnings. So that's the story with Nvidia's mobile. >> The great defender of Nvidia has spoken. >> Defending yet again. >> Not worried, so not worried about what appears to be the multiple expansion, because ultimately, that's actually ephemeral because in fact, the multiple is lower than it appears, given the earnings are going to be far higher than analysts expect. >> David, you said it much better than I can. >> All right, just making sure I understand. >> And by the way, Carl, the price tag for Nvidia's Blackwell is about $35,000. Now that is much higher than it cost to make. It doesn't make it a Taiwan semi. But, Jensen Wong, the CEO would tell you, listen, we've spent billions on this, so we're going to get our return, and that's another reason why people are always surprised. >> Although, given what CPI gave us today, Russell's up almost 2% is now the time to start buying an IWM and everything else. >> I still like so many of these companies that are connected with data center. >> Really? >> I find it so exciting. >> What level of inflation or rates would get you interested in small caps? >> Small caps are so hard because they're in the scrum. They're just in the scrum. I mean, when you go and you look at it, well, WD-40 was one of the rare ones. >> Lower rates help. >> Well, yeah, I know, but when you can go by the index, but then when you actually do the granular nature, you find, well, that one's not doing that good, that one's okay, that one's not doing it. You know, that's what I'm saying. >> Yeah. >> I'd rather buy microns stay at one, you know, 1/32. >> You know what, we got a cool inflation number, and the S&P is down, or flat, let's call it, and then ask that's also-- >> Tell me, it's like, to me, it's tell me something new. Did I really not think that it was a cool inflation number? If you're listening to Jay Powell for two days, he was so patient yesterday, remarkable. >> He definitely kept his cool in some of those questions. >> Wow. >> We do have an upside pre-announcement out of Elkoa today, although the stock's not moving. >> Yeah, I was surprised at that, because the metals have not been that great, or the copper's up a little, because of, you know, pre-data center. I think that when I come back to looking at the very simple building blocks of the economy, they're not doing well. I saw Dow yesterday at $51, all the way back, all the way back, it was at $59, not that long ago. When you look at the premier steel company in the country, Newcore was at $140, it's at $140, it was at $203, went down to $140, it's about to $155, I don't want to own it here. I do not want to own it. >> Really? >> No, because I don't think I can make the numbers. Steel, not great. Cleveland Cliffs, I don't know. >> I still got a deal to buy a US deal at 54 bucks a share. >> I'm just saying that these are the weakness, and I don't know the small cap, give me one that I'm not worrying about, you know. >> Okay. >> Small cap. RPM, maybe? You do the RPMs, okay. RPM speed, but you don't know that? >> No, I don't. I know REO, speed wagging. >> Oh, okay, no, these are the WD-40 RPM, these companies are good. >> Ah. >> They do the WD-40s on the edge. >> That's niche, it's niche. Almost everything that's sold in Home Depot is struggling. Almost everything that's sold in Costco is struggling. Anything that goes to retail is struggling, anything that goes to the enterprise, like enterprise software, we haven't even mentioned HubSpot, struggling. So, the smaller guys are being heard, the larger guys are winning. I don't know how else to say it. >> And you mean that thousands of price? >> You mean that in tech, I assume you mean that in finance? >> Everything. >> You know, do I want to buy Comarica, which looks like the value play, or Huntington Bank shares? No, I'd rather buy Wells Fargo and JPMorgan. We are in an economy that, despite the fact of what the FTC might want, or justice, the winners in every single category keep coming back to the same stocks. And the companies that supply them, like now it's pointing out to a stock horse. >> Sounds like you're building a case for Khan, Wu and Cantor. >> I actually think these companies are excellent, and I don't mind them. I don't think this is standard oil, where they have 100% in the market, and they take what they want. >> No, but do you listen to yourself, 'cause at the beginning of the show, you were talking about the incredible power of them, and how they can do anything. We want buying it, then we want everybody's afraid of them. >> I don't know if I listen to the debate. I mean, I don't know if I listen to the debate. >> My mother and my daughter, that's you. It's like you don't know which side you're on. >> No, I'm just saying that I'd rather buy big companies than small, that's okay. >> Oh, yeah, that's fine. >> I'd rather buy Lenoir, and I'd rather buy Toll Brothers than I would-- >> What if you were someone who is interested in starting a small company? >> Good luck. >> Thanks. >> Guys, in the brief time we have here, I do want to come back to a story from three years ago that we followed pretty closely, Archigos, because it is worth noting that Bill Huang, the man behind that fund, that frankly, few of us really were familiar with, that had $36 billion levered up to 160 billion worth of buying power. He was convicted. He was convicted of essentially fraud and other charges. It was a Manhattan federal court. One of his associates also convicted as well. It was 10 of 11 criminal counts against Mr. Huang. Let's take you back. Remember Warner Brothers' discovery? And what was then Viacom's CBS went up every day in a way that was parabolic? >> I remember in '90, remember in '90 I said, what the hell's going on, Dave? >> It was incredible, every day we'd point at it and frankly unable to figure out exactly what was going on. In part, because so many Wall Street firms didn't know what was going on, because all so much of his buying was done through total return swaps with different firms that didn't have, there was so much opacity, they didn't know what other firms were doing. That's part of the fraud, of course. >> Of course, how would that come? >> They went out of business, that was the last straw in many ways, although they had one more to come. They had the other subsequent scandal before Credit Suisse. And then obviously they went out with the banking crisis we had in March of 2020. >> Why did you just not get more talked about? 'Cause it was hard to understand. >> Yeah, I think perhaps 'cause it was hard to understand. Don't forget by the way, the current paramount, I mean they've benefited, they sold two billion dollars worth of stock in a secondary led by Morgan Stanley right near the top. That actually had the effect of toppling these things. I was hoping we could just remind people and take a look back at where the stock prices were with long-term charts. And Warner Bros. Discovery of course was unable to do a secondary in Part B cause. Yeah, that's not helpful. In Part B cause, they weren't talks with Time Warner about doing their huge deal. And so there it is. Look, it's that tiny little Empire State thing, that chart, look at that. >> Oh, that would have been when Sherry should have sold. But where we end up is years later, fraud charges, jury fines, guilty. And the losses were enormous, but not, you know it's funny 'cause this was larger than Madoff in terms of a, you could argue a fraud in some ways, but not at the expense of investors since it was mostly his money. Of course he had been a tiger, Asia. He'd run that for years. >> Amazing though, 36 billion we didn't even, I mean we never, who'd ever heard of Archigos before that? >> That's an incredible story. >> Yeah. >> And I do feel that we, I'm not saying we dropped the ball 'cause it was just very hard to understand but having applied to, you know, credit suites for that at school. Credit suites for that. >> Right, that was for no more lost in enormous amount of money if you remember. >> Yes. >> And it went on from there. Morgan Stanley and Goldman Sachs also still involved in litigation. As a result of it, Morgan Stanley leading that secondary as I pointed out for Paramount. >> Right before the collapse. >> Well, I'm glad you brought that to us. >> Yeah, thanks. >> So important. In the meantime, it is the small caps there's still leading. It's the travel stocks that are getting killed. And the home builders are back because I think Morgan trades Karl coming down. >> 419 on the 10 year. Jim's right. Big laggards are all the airlines and the cruise lines. And it is the best day for small caps on a relative basis of the year so far. S&P's up three points. Watch bonds as well as we work our way past some of these auctions and look forward to PPI, Jim, where people are not as sanguine given the different construction of that index. We'll be back in a moment. We were going to do stop trading but you've got some thoughts on top states for business. >> Yes, I was, look, I happened to love it. And it's got kind of such a good job. And it was Virginia and I started to be thinking about a time I sat next to Dave Matthews, legendary Dave Matthews. And he told me that he started a vineyard. He's got a huge vineyard in Virginia. It's been Glenheim vineyards. And was telling me, look, here are the things that you don't know about Virginia. I felt that I heard things I didn't know about Virginia. And I just think that the network does a great thing. We have a lot of people thought it was going to be Tennessee. We had people who would be Florida. We play the guessing game and we enjoy it. So I just point out that Scott Cone did a fantastic job. >> How about the worst state? Did you see that? >> Oh, why? >> Oh, yeah. >> Why was the worst? >> The cost of doing business and climate risk. >> I mean, yeah, that's all true. >> What a thought. We were right up there in New York. I'm only if a new president selected. >> Well, he's going to make life very difficult for New York. Yeah, I think that's true. >> But anyway, not particularly good. I mean, we had the most important company in the world want to be headquartered here and we said, now get away. >> No, that was in Queens, David. Who wants to be in Queens? >> Everybody. >> We got Micron. >> Yeah. >> Yeah, I'll stay, I'll stay here on Micron. >> Look, sometimes, I mean, look, I, sometimes I just want to say, listen, great job. And that's all I'm saying. Great job and the Dave Matthews, who's one of the next people. Didn't know you and DMB were to be close. >> Why not, man? Come on. >> Joe, what's up tonight? >> Hey, man, okay. Tonight, I have the stock that's down right now, probably about the most, or in top five, I've cut agri. And yields 5%. And I think we have to get to the bottom of what's going on at the supermarket, because the supermarket is the battleground for the president's stuff. Don't forget, there is an economic issue, not just kind of a, I don't even want to use a word. >> But there's an economic issue in the battleground of the supermarket, and who's trying to hold the wine. And that's one of the reasons why I like Costco. I know it's down, people who I guess felt that no new news. But it's important to see who's raising the price, who's prices come from? >> Yeah. >> Jim, an important day, we'll see it tonight. Mad money, 6 p.m. Eastern. >> And I'll be in Brazil, for São Paulo. >> Good, I used to go. >> Not. >> Yeah, I'll go down to Brazil. Instead of going to Philadelphia, just jet down to Brazil, you use David's jet. >> That's where the white space is, Jim. >> When we come back, any C-director Brainard with the White House reaction to the inflation data, as the small cast, Russell, up almost two and a quarter percent. 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. 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