good morning, everybody. welcome to "squawk box" here on cnbc. we're live from the nasdaq market site. i'm becky quick along with joe kernen and andrew ross sorkin. it is friday. made it here. and right now you won't see a lot of movement in the u.s. equity futures, but that is because of the big moves that we saw yesterday. no surprise after the dow crossed the 40,000 mark yesterday before closing below that. it took the dow about 3 1/2 years to go from 30,000 to 40,000. so that is making pretty decent time. in that time four dow components have doubled. american express, goldman sachs, caterpillar and microsoft. we're also looking at the other major averages with new highs as

well. i think the s&p has set 23 new highs for this year. if you look at treasury yields, you will see that right now it looks like the 10 year is at 438. so lower than earlier in the week. two year also lower at 478. if you look at some of the meme stocks, that activity still alive and well this morning. i will see shares of gamestop up after they fell by 30% yesterday. amc down by 15% yesterday. but this morning it is up by 4.3%. you have the blackberry stock up again by 1.3%. those stocks by the way are up -- come back a second. thanks. about 83% and 72% respectively. >> you were here -- you saw the ppi, you didn't see the cpi. >> but i read it. >> and that is where the yields -- boom, 438. >> meantime china announcing its

most aggressive steps yet to revive its struggling rehe will stays sector. beijing will have a $42 billion relending fund which they will try to put together to help local state owned companies repurpose unsold properties to public housing. china also eased mortgage rates nationwide and policy makes calling on local governments to buy some unsold finished homes for struggling developers at a, quote, reasonable prices. all very socialist. authorities did not provide details about how those purchases would be funded. stocks sharply higher on the back of that news. >> you'd think the size of the country and the population nz a the problem and then you think of 42 b$42 billion. doe that sound like a lot? >> mots surenot sure what they . >> they are trying to shore up

the market. they have difficult issues. their largest partner, us, is not trading with them so they have to look at other places. >> but you think about the property problems in china. and you think okay, we'll spend $42 billion, it is like that is like is spitting in the ocean. >> 2008, alan greenspan said the right you've would be to burn houses down. like you have to get rid of the housing stock. >> and we've done that and now you can't find any housing. so we're at that point. >> and somebody on our staff is watching the shares of applied materials. i'll look now. it says -- we're watching. but yeah, the company's current quarter forecast come above wall street estimates following strong demand for its semiconductor tools including those used to manufacture ai president zelenskyiers.

ch -- processors. companies are pushing to manufacture components prohibited from export from the u.s. there is concern that the single source of growth could be risky if geopolitical tensions were to he is can late. . >> and then you have shares of reddit sharply hire.can late. . >> and then you have shares of reddit sharply hire. higher in that they have announced a new partnership to allow ai to train on its content. openai will gain access to the programming interface which will provide realtime content. and they will begin offering certain operations. that stock up by about 14% on that news. >> and that is a big part of what the ceo said is the future of reddit. >> and how you can monetize it.

>> exactly. meantime take two interactive cutting it forecast for bookings after setting the release of the grand theft auto 6 for the fall of calendar 2025. it narrows the window for the release. this is following deposit app disappointing guidance last week. >> do we think that is little tone deaf? we don't like the carjackings. people get hurt and killed and we have a video game the sixth version of how to steal cars and how much fun it is. >> i told you, years and years ago my younger cousins were -- >> yeah, you hit a prostitute and -- >> you get your money back if run her over. terrible. >> i guess because crime seems like it is more front and center now. >> that does look realistic. my gosh. >> looks like fun, bullpen if that is all that the kids do is

play grand theft automatic though -- >> hopefully it is like -- amgen has second or later line treatment meaning patients can take it if their cancer progresses while on or after trying another form of treatment. amgen says they will continue pursuing other studies that could allow the drug to be first used as a first line treatment. some pretty amazing -- i guess the merck drug is amazing. >> and the justice department formally began the process of classifying marijuana as less dangerous drug to schedule 3 from schedule 1. yesterday's notice triggers a 60 day comment period. it could take anywhere from a few months to a year but of

course puts all these companies in a better position with the banking system and other parts of our economy. some story of my life. now i have no interest in it anymore, it is legal. >> if you had any interest in it. >> it has been a while. but if there had -- at one point if you could walk into a store and buy -- have like aselection of the really greatest -- so coming up meme stocks on the move again. we'll talk about the wild week for gamestop and amc. but next former atlanta fed president dennis lockhart will join us. trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos,

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butit didn't really spread very much. and especially beyond gamestop. >> no, it waspretty much 36 hours of excitement if you will. but quite honestly, it started on monday. our clients -- monday they didn't participate as much. tuesday they participated more. what was interesting is it was gamestop and also a bit of amc. and quite honestly, our clients participated more on amc and than they did in gamestop and i think that is purely a function of price. the fact of the matter is amc was a cheaper spot. cheaper options. an people who participated, and i'll guest in most every case, was not part of their normal game plan. it was a momentum stock and people were -- you know, part of their portfolio that they will want to take a little bit more risk on, they went in and did that. so overall this is not one that spread like wildfire which we saw back a few years.

>> was the volume strong on wednesday and then it dried up on thursday? what does that say even though we want over 40,000? >> yeah, i mean, dow is a wonderful index back when it was invented obviously made a lot of sense. but it is 30 stocks. price weighted. doesn't make a lot of sense. s&p is what people actually care about. the dow overall is not one that -- yeah, 40,000 great. you know, maybe psychologically some people thought it was a big deal. but overall let's face it, no professional -- here is what the dow is doing. the way for, you know, your viewers to think about it in terms of those who are retail, again, look at the indices that the mutual fund managers are compared to. it is always the s&p 500 so that is the one that you should be watching overall, that is the one that actually matters.

and because of the way it is weighted in terms of volume and -- sorry, flow and price of the stocks rather than just pure price of the stocks. >> and what about thursday, in terms of volume -- go on. >> yeah, yesterday was actually okay. it has been a strange week in that we haven't seen the crazy volumes. amc and gamestop did add volume, no question about that, but at the end of the day, that is not sustainable volume overall. so i think that what you are seeing, today we have expiration so i would expect more volume overall particularly in the first half hour and then the last half hour. but, you know, it has been a strange week in terms of it almost feels like people are already sort of winding down a little bit if you will for memorial day. i think next week may help a little bit in terms of we start to get some of the retail

earnings. i think those will be some of the most interesting earnings overall. target and macy's. so we want to see what they will say going forward in terms of their outlook. but it has been a little bit of a strange story from the retailers so far. and, you know, just i really thought the comments by walmart yesterday in terms of people searching for value which is often as you know people trading down a little bit in terms of maybe what they are going for, so i think that we're finally starting to see the real first effects in many ways on the consumer in terms of what is going on for some of the inflationary pressures, et cetera. so it will be interesting to see if target and macys are seeing the same kind of thing overall as they talk about the value type customers. so for me, next week is something that gives us a real in-seat into going forward and again, if you look at the rate cut expectations, a lot of people only have one on the

table right now which w. september being about 68% probability of a rate cut. >> were you here last time with tom? i don't think that you were here because he was sitting there. was that last week? >> last week. >> because remember he said instead of -- joe, he said instead of a sell in may, he said buy may might be the new thing. and then you know what he said, he said that -- we kind of talked about how he not again the next inflation readings would be cool and that would cause a jump in the market. and after the ppi, i remember thinking that he was going to be wrong. but then the cpi. once again, i think that that was a really good call. do you think may is going to be a really good month? >> well, so far. hard to argue. tom has been right a lot. he is a smart guy.

and may is turning out obviously to be a really good month. as i said, next week could be the one that starts to tilt us the other way in terms of outlook. and as i said, i am a little bit more perhaps nervous about the retailers than tom may be. but i wouldn't, you know -- one year does not a trend make. but we'll see. does sell in may go away. it has been somewhat successful over the years. but this is an odd year already in terms of where we came in expectation-wise with rate cuts and et cetera. so a lot of bizarre things that have gone on this year. and with the presidential election coming up at the end of the year, i'd expect some of this oddness if you will to continue throughout the year. and i think that that is one of the reasons perhaps you saw the gamestop/amc thing perhaps, you know, fade pretty quickly because there is -- there are many people afraid to commit

fully right now and that is the one reason we can continue to go higher right now. it seems to be the path of least r resist resistance. nobody is like i have to be in this market. when people don't say that, that is how you can continue on go hire. everybody may buy things, but they are still nervous buying. and that is good for the market. >> seems like there is speculative -- a taste for speculation still. >> people want to trade something. and there is money at the end the day. so one the reasons that we see success with shorter term options. >> so bullish stocks -- sorry to interrupt. netflix, nvidia, crowdstrike, roku? >> yeah, for our clients that is

what we've been seeing. the two names that surprise me, crrowdstrike, haven't seen that name in the longest time. and roku on the bearish. >> okay. jj, thanks. >> have a great weekend. >> it is friday and it is only drizzling which is like -- that is progress, isn't it? it has been raining all week. but it is only drizzling now. >> yay. when we come back this morning, cracker barrel planning a brand overhaul. the company announcing that it will slash its difference tend. we have the details after the break. and later we'll talk to sal khan about the use of ai in education. your skin is ever-changing, take care of it with gold bond's age renew formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond. you know what's brilliant?

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welcome back. cracker barrel is slashing its dividend by around 80% as the chain plans to invest hundreds of millions into overhauling its restaurants and updating its brand. they say that it expects earnings next year to be flat or down slightly before increasing in 2026 and 2027. the company's ceo says the 54-year-old brand needs to update its image a, menu and retail selection to grow. the stock down 46% over the last year. underperforming rivals like olive garden's parent darden and chili's parent. and when we come back,most of the 39 billion chips act fund has been allocated. we'll get an update on where the rest of it is sdekt expected to

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good morning. welcome back to "squawk box" live from the nasdaq market site in times square. a quick look at the futures. not much happening. single digit moves in all three of the averages. house republicans delivering rebuke to president biden on israel over his decision to pause a shipment of certain weapons, the house passing a bill seeking to enforce the weapons transfer. the democratic led senate expected to reject it. the white house has said the president would veto the bill if it passes congress. remember when we called something bipartisan if like romney voted for it? there were like eight or nine

democrats or something or maybe even in the teens that voted for this on the house side. so it was at least on the house side a bipartisan measure that is going nowhere. and the biden administration has handed out the lion's share of the chips act. but there is more some left. and megan is joining us with which companies could get the remaining funds. >> hundreds of companies are still vying for a piece of the money. most of the $33 billion has gone to leading edge producers like intel and sam sasung. but mike smchmidt says that now the focus is on smaller companies. and the goal of majoring production sustainable over the long term. >> once we begin to rebuild the

scale that we expect to see in this country, i think that that will create ongoing investment dynamics and continue to make it attractive for companies to invest in the future. >>one company hoping for an award is iqe. it produces what is called compound semiconductor wave wafers. sbl and so compound is at the core of the infrastructure. without compound there is no smartphones or 5g or ai. have industry sources tell me that texas instruments, applied materials are also likely in line for the funding that we expect to be allocated before the end of the year. >> you say the commerce department expect to the fund the supply chain end to end.

and that is a critical com component. but is that enough money? >> of course not exactly. commerce says that they always expected this to remain a global supply chain. that suppliers -- that manufacturers will always have to look overseas for some of their components. and they say is that okay. but they also say that chips act 2, round 2, would be well spent. and the industry sources i spoke with said that there will have to be intense juggling here if we really want to build out the supply chain. the criticism or the concern is that if we don't focus enough on the rest of the supply chain, then it is great to have manufacturing in the u.s. but we'll still depend on overseas. so was it really a success. >> so if the suppliers are so important, why all the focus on all of the huge leading edge companies that may not need the money as much?

>> some sources i spoke with said this is mostly political. that there has been so much focus to getting the advanced manufacturing here, leading edge chips here that is what gets the buzz. they wanted to make sure they did that. but commerce also says they want to make sure they have are spending taxpayer money in the right way and get as much private investment as they can for the public funding. so the thinking might be part of if they give some to intel, intel can then invest a lot more here than a smaller company could. so there are some tradeoffs. they do want to get the next flashy thing and build out ai and also looking to build out the supply chain if they can. >> megan, thank you. nice to see you. when we come back, sal when we come back, sal cannes khan will b (office chatter) is it me...or is work not working?

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come back. our next guest is an education technology pioneer who is leaning in to ai. joining us now, sal khan. his new book is called "brave new world, how ai will revolution al education and why that is a good thing." thanks for joining us. i think this is something that people will think what are you talking about because ai is what is destroying education. everybody is using chatgpt to write their essays. explain why that is not a bad and how you think it is a good thing. >> everyone is very familiar with the underlining technology with chatgpt, but i think the main issue is chatgpt was not built for education. and i remember we were under a non-disclosure agreement with openai at the time and we were working on our tutor and teaching assistant.

and then chatgpt comes out and we weren't supposed to launch until march of 2023. so we didn't launch anything, just put a chat interface on an older model and the whole world exploded. but schools saw this as that students will use it to cheat. >> and kids are using it. i can -- >> they are using it. some good use cases and some not so good use cases. i was bummed at first. but the good news is when we launched in march of 2023, the school system said if someone just took the technology and put it in the framework to help the student but not give them the answer, teachers can have oversight, there are data protections in it, it not all chat interface, you can have the student write the essay with the ai and not by the ai and then they can tell the process so now -- that is actually a way to

avoid he cheating. >> and the teacher can tell and the chat bot can say this is not the normal writing. >> this is not consistent, we work order this or -- on if they did do it, it is consistent and we work order it for 4 1/2 hours. so that gives the teacher more information.order it for 4 1/2 . so that gives the teacher more information. >> i saw recently where someone said if you have a paper, the way do it, did it on chatgpt, same prompt in gemini, another in claude. and another program i've never even heard of, that jams it all together and then you take that version, you go back into one of the other ones, and you say write it like i would using their -- a lot of work? this is three minutes compared to three weeks of work. right? and then out comes the paper and you can get -- you see it happening. and it is happening all over the

country. >> and some of that might not be the worst skill to have to be able to produce that. >> a huge -- >> with schools, a student will do their essay and if they did this or -- there is ale whole chapter on cheating. the state of cheating before chatgpt, they didn't make it worse -- >> just more accessible. like legalizing marijuana. >> exactly. but if the student does it with the ai and copies and paste it is into con m imigo, it will te the teacher this looks shady. >> so i wouldn't copy and paste it into con migo. >> so they are saying that you must -- >> exactly. unlike most things in technology, this is a nice to have, i think is this a must have for a lot of teachers. >> is con mi gchlt o free?

>> this is interesting for us because our mission as a nonprofit is world class education for anyone. and when we came out as we know these frontier models, gem any, they use a lot of computation. it is not cheap.ny, they use a lot of computation. it is not cheap.ny, they use a lot of computation. it is not cheap. we thought it was cost $70 per year. so we had to charge them something. but the costs have come down. we'll be making an announcement with microsoft on tuesday. they will be giving a big grant to make it free to all teachers. and so here -- >> students would still have to pay to be able to use -- >> quickly ways to bring it to -- >> how much does it come down? from what i'm hearing, maybe dropped by -- you know, you get down to $20 or $10 even? >> i think that we'll get it in that range. it is almost a factor of ten. and knock on glass, i hope that we can get down by a factor of

ten in the next year again. >> and there was a review written, i think in the "wall street journal," either the "new york times" or the "wall street journal," they tried this and said that con migo was bad at basic math. >> when we first saw gpt 4, we said it was amazing but it had issues. we put a bunch of layers on it. so even if they used it a year ago compared to chatgpt d dramatically better in ath. >> it was getting like 324 minus 17 wrong. >> most of those errors are well a thing ofthe past. even in the past -- part of building on generative ai, how do you build a tool to measure what the that solution nature rate is. when i tutored my cousins in 2024, i wasn't perfect all of the time.

so this is a tool that you have to use in certain contexts. >> so an error rate similar to you? >> i think that we're still building the tooling, but it seems to be in that range. >> i understand the argument that you have to use these tools in the future. but a lot of kids can't write cur cursively, they have trouble doing some of the basic things that we think would be fundamental. do we lose our ability to write over time? >> it could go either way. a lot of why what you are describing is happening, and i've talked about kids atop universities who can't write anymore, i think that it is because take dtraditional tan sd standardized testing is -- >> so it dumbed us down? >> in certain contexts.

what is exciting about generative ai, not out yet, but i'd say in the next year you will have ways that students can do their work and write it out with a stylus or a picture on paper. it could be their math work or writing out reasoning for humanities class and that will bring back -- it will make scaleable these things. >> and i almost think only way that you have the ability to write is to say no computers, no phones. you write it out on paper and pad and turn in an essay. maybe not for everything. but are there areas of the curriculum where you think there should be no computers at all to try to get back to that is the only way to not cheat, walk in, you know, pencil and paper -- >> i've preach this had for probably 15 years now even pre-ai. use the technology where the technology makes sense. where it doesn't, make it as human as possible. we have a lab school in california that my kids go to.

and they are using technology in strategic ways. but then when they get together in rooms, they are having dialogue and doing simulations and group projects. >> and so everything that you have done has been to quaulg liz the playing field i think to this point. free education that people can get online, that they can see the tutorial classes. i to worry if there will be an aspect that is it so expensive, maybe it is back to the in-equal area where only school districts even if it is $7 or $10, there are places where no way people could afford that. >> that is where we're in the game. we have these debates why are we so anchored on ai. and i say yes, there is billions of dollars, but most of them aren't thinking about this issue. so we want to do world class. even if people have resources, they should say we want to use this academy and bring everybody

else along for the ride. so if we can take tutoring that costs in this country can cost $50, $100 an hour and we can make it something that could cost $5 a year, 50 cents a year, if we could make being a teaching assistant which most teachers don't have, save them hours and it is like $5, $10 a year, new york city spends $40 per student per year. so this could make a big difference. >> thanks for coming in. coming up, news from the aviation echsector. we'll talk layoffs and regulatory issues. i need to flush my commentary sticker -- >> look out. >> we'll brit ck e ghba. (music playing)

spirit aero systems is laying off 400 to 450 workers in wichita, kansas city amid the slowing at boeing. spirit is at the center of many of the quality issues affecting the 737 max jets. bo eeg ef evening's efforboeing's efforts been held off. if you are the company with all the quality issues and the answerng's boeing's efforts hav been held off. if you are the company with all the quality issues and the answer and you said they don't have enough money. you are the capitalist here. i'm person saying if i had quality issues, i'd be adding

400 employees. i wouldn't be you canning my cutting my wourkforce in half when you are the one not finding the holes. now 450 less people to make products. that is a bad system of capitalism. >> less flights. what do you do about the flights? they are cut back on everything. so you don't need as many people. >> shareholders might have to suffer a little bit while you make sure -- you're the one that got into this mess, not anybody else's fault. >> you know this story better than i do, does it mean that they are flying the same up in of flights? >> this is spirit aero systems. so you need -- so people -- boeing doesn't need as much stuff. >> that will be bad news for all of the airlines. >> true. but the ones that they do sell, doors won't fly out at 30,000 feet. >> i hope you're right. >> in the capitalist system, this is the way it works.

they don't have enough money, you immediately got to do more with less. but you see what i mean. it is non -- >> but this will be bad news for all the airlines waiting for additional plane ts to be delivered. we've heard warnings of this and we know things are slowing slowa complicating factor. >> not all the 450 employees are the ones that screwed up but they're the ones moving -- we'll talk -- we'll talk to nunez about this, who will be here in the 8:00 hour, former united states ceo oscar munoz. this is you. >> next hour, we're gearing up for the presidential debates. we're going to talk about how each candidate will prarand epe potential risks. "squawk box" coming right back after this.

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welcome back to "squawk box." after speculation there would be no presidential debates, there are now scheduled between president biden and former president donald trump. the first one is june 27th. joining us now on what is at stake and how much the debates will matter, jonathan martin, politics bureau chief and senior political columnist at "politico." how much does this matter and how do you handicap the situation? >> hey, andrew. i think the fact they're happening at all is significant. it is a reveal. look, joe biden's advisers were not thrilled about the idea of doing any debates of giving donald trump a platform. i think that calculation changed for a couple of reasons. number one, obviously, biden is struggling in polling, but even more to the point, andrew, this trial is not breaking through into the popular culture. when kristi noem's dog is getting more attention than the

zeitgeist of the trial, they knew they had a challenge. they have to get trump back in the camera frame, get him back in the conversation. this is the way to do it. that's why they're doing this debate in june. because the white house knows they have got to change the nature of this campaign, sooner rather than later, and make trump once again central. >> okay, but there is sort of two views of how this could go. one is that depending how the conversation emerges during the debate, and i imagine this is the perspective of the biden camp right now, somehow they're going to make him look like the adult in the room, relative to trump, there is others who say that, you know, you put both of them together and trump is going to eat his lunch and he's going to look more spry and with it, potentially than the current president. how do you weigh those two issues? >> that's why trump accepted in a moment's notice theother morning, trump wants to get biden on stage in front of a camera, regardless of the rules or circumstances and agreement.

and so i think the trump calculation is that biden is just not going to be able to go for that long of a period on live tv and not show some signs of his age, of slippage. that's the trump calculation. i think the biden assessment is, no, like, we're going to rebut those questions, show that joe still has his fastball and the perception of him being over the hill is sort of overall and once the american voter sees that again in real time, they'll give us a second look and that, too, can shake up where this race is right now. >> that puts a lot of pressure on him. i guess that begs the question, but doesn't matter what you think, john -- >> no choice, yeah. >> i don't think he has a -- i don't know what you have to put in -- i don't know what would work. >> the biden folks point out that every big moment he has stepped up, and obviously they point to his speech before

congress in march as an example of where he rebutted the doubters. i think, look, it is a matter of the biden folks recognizing something has to change in this campaign. they're trailing. they got to reassure the american voter that biden still has it. and more to the point, also get trump back in the -- >> if you're stuck with him as a democrat, you got to say all that stuff. you may be with him every day and see things that you're just, like, whoa, i hope no one ever sees this, but you're stuck with him, so you have to put on your happiest face. i'm not buying it. the other thing i was going -- oh, yeah, what is more front and center than being in front of a -- on proffer for a felony conviction, not front and center, unless you're buying into the notion it is actually helped him politically which i think it probably has when you look at the polls, but he's more -- on a debate stage for two hours, he's been front and center every day -- everybody

else is doing the trial. >> nobody is talking about the trial. i couldn't -- >> fox. >> of course, nobody gives two -- >> do you see anderson cooper yesterday talking about how they nailed michael cohen on -- you saw that, right? >> two points, number one it not televised. it's aoj. that's a huge deal why it is not breaking through. a lot of this is not new facts and people, after nine years of trump being a political figure, are desensitized tohis conduct. that's why the biden folks are doing a june debate because this trial is not getting through like a lot of people thought in american politics thought it was going to. forget the cable networks, fox or cnn, talk to any average voter in america, they're not following this. it is not a central

conversation. it is not o.j. and that's why we're talking about june debate for the first time in american history. >> two hours of seeing what trump's really like in a debate is a lot -- in your view, he's so outlandish, seeing him every day, talking about paying off a porn star -- >> they're not seeing it every day. it is not on tv. it is not on tv. >> it is on the front page of all the newspapers here. so how are the two -- how are the two hours of the debate going to show so clearly that trump is not worthy of the presidency, jonathan? >> well, the expectation is that he will act in the fashion that he did in the fall of 2020 at the debate where he apparently had covid, and remind the american voter of why they voted him out in the first time. the biden campaign is down a couple of touchdowns to put it in sports terms. they got to put the ball in the air, they can't keep handing the ball off. they got to change the nature of

this and put points on the board. and this is an effort to do that and do it early. >> well, there is some people that think you do it in june so you have time to replace him when it becomes clear he shouldn't be the nominee. >> he's not going to get replaced, but they have to change the narrative of the race, no question about it. >> okay. jonathan martin, thank you. appreciate it. >> thank you, andrew. it is just about 7:00 on the dot a.m. on the east coast. you are watching "squawk box" right here on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. we have a lot going on this morning. two big hours ahead. among the top stories, the fda approviing amgen's therapy for patient, a second or later line treatment, meaning patients can take it if cancer progresses after trying another form of treatment. meantime, boeing shareholders will vote today on whether departing ceo dave calhoun should remain on the board. they're dealing with multiple investigations and possible criminal charges for past actions and slumping production

of its top telling jet. and calhoun said he would retire by the end of the year as part of a management shake-up, after the midair blowout on a jet in january. and house republicans delivering a rebuke to president biden on israel over his decision to pause shipments of weapons to that country. lawmakers there passing a bill seeking to force that weapons transfer. the white house said the president would veto the bill if it passes and the democratic-led senate expected to reject it. all right. here is the futures. about where they were -- looks like we copied it and pasted it up and put it up again. nothing happened. let's get to dom chu with a look at this morning's premarket movers. and i've never shot a 62, but that's just me. go ahead. >> you know, i never have either, but i'm sure xander schauffele has shot some of those in his time. anyway, i'm going to give you some movers that are moving much

more dramatically than the market overall right now. we'll kick things off to your point with an earnings story in video gaming, shares of take 2 interactive lower right now. this is the video game publisher behind blockbuster franchises like "grand theft auto" and "red dead redemption." it is cutting its booking forecast for the coming fiscal year. it says that "grand theft auto 6" installment in the series will not be released until the fall of next year. so those headlines are weighing on shares of take 2 right now. we're also now watching shares of reddit, up 16%, roughly 135,000 shares of volume. the recently public internet messaging board service, social media platform inked a deal with artificial intelligence powerhouse openai. that agreement will allow the chatgpt maker to train its artificial intelligence models on reddit's content and it is going to begin offering certain a.i. features to users and

moderators that are powered by openai, which previously announced a similar deal with google. and then let's cap things off with an analyst call driving premarket action in robinhood. up 6% or so right now, 275,000 shares of volume, helped along by a double upgrade at bank of america securities, it goes straight up to a buy rating from a prior underperform or sell equivalent. the target price to 24 bucks, it was 14 with shares already close to 18 bucks at yesterday's close. they're citing things like better engagement, retail traders, better cost trajectory and organic growth acceleration. that's powering that stock. and, by the way, for more on that story, other top analyst calls of the day, head over to cnbc.com/pro, subscribers there as always can get access to more detail and analysis. joe, becky, andrew, i'll talk until the cows come home about xander schauffele's 62, i just hope some way we can see a continuation of that kind of thing for the pga championship.

>> you said it was going to be rory. still could be. schauffele was in my group this year at the at&t. he saw -- i'm surprised he's still playing well after he saw my swing and my tempo. i am. >> are you playing better, joe? are you playing better? that guy has a very smooth -- >> you know what, his attitude is, man, it is, like, nothing ever affects him negatively. and stuff always happens as you know, terrible stuff, bad luck, he just -- >> shakes it off. >> right off the duck's back. >> i like it. i like it. i'm going to go now. >> you have the tempo. >> china announcing its most aggressive steps yet to revive its struggling real estate sector. beijing will set up a $42 billion relending fund to try and help local state-owned companies repurpose unsold

properties into public housing. china also eased mortgage rates nationwide, and policymakers are calling on local governments to buy some unsold finished homes from struggling developers at what they're calling reasonable prices. authorities didn't provide details about how those purchases would be funded, china property stocks are sharply higher, you got gains of 20, 25% on some of the stocks this morning. when we come back, the impact of social media is having on young people's mental health. the author of "the anxious generation" will join us. and then, cfpb director rohit chopra will join us after the supreme court ruled that the watchdog that was created in response to the financial crisis can continue to operate in its current form. "squawk box" will be right back.

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welcome back, everybody. the dow briefly crossing the 40,000 level for the first time ever yesterday before pulling back to close the session lower. right now, we want to bring in mary ann bartels, the chief investment strategist at sanctuary wealth. and, mary ann, this is weird, we're in may, and nobody is selling and going away. markets are all at new highs or just below them and the question is does this momentum beget more momentum? >> well, the answer briefly is absolutely yes. and we have been in the camp that you didn't want to sell in may. maybe want to buy in may and sell before labor day where in september and october you get a lot of volatility, but we think the momentum will continue and

that indices in our market and actually globally are going to continue to hit record all time highs. and what is telling us that is the breadth of the market also reached a record all time high, confirming these new highs in the market, and you've got fundamental support. earnings are coming in better than expected. profit margins didn't collapse, they stabilized and improved. and it is even possible that we get a rate cut before the election. and this is going to allow the equity markets to continue to rally. >> mary ann, i wonder, is this a situation where you can kind of set it on auto pilot and go away for the summer though? is this going to be a summer that is rife for volatility? if we get another inflation reading that is hotter, you just wonder what could happen on a geopolitical basis. how are traders and investors really thinking about this

summer? >> well, if you look at the vix index which measures volatility, it is extraordinarily low. that would suggest that you could have some bumps along the way, some bucking. but i don't think it is going to be that significant. the pullback we just had was 5%. you couldn't even get a 10% pullback. that is actually a confirmation of the strength of the bull market. and bull markets, you never get the pullbacks that you want to get to get in the market. so, i think you can have some volatility, but i don't think it will be significant. so i think you can ride this into the summer. >> when you're talking about the fall, though, you think there will be some pullbacks at that point? do you think it will be a pullback from the gains we have seen or will continue to see through the summer? >> so, i think we'll continue to hit record all time highs through the summer. august is the month where you traditionally peak and then you start a correction that goes deeply into september. you get animportant bottom in october. so, if we're correct, we get a strong rally this summer, and continue to hit record all time

highs, we think the fall is when you really will see the volatility, but you -- we still want to stay with the markets because we think by year end we're going to continue to be at new highs. our target for the s&p is in a range of 5600 to 5800. that's probably the highest within the market. >> yeah. >> go ahead. >> so we have very strong confidence that this market has a lot of legs to go a lot higher than people are anticipating. >> the -- your view on the treasury markets is that two-year and ten-year yields have probably topped out at this point. you think we're going to have lower yields. is that a key component of your thought process that you will continue to see new highs set this summer? >> that's a great point. yeah, absolutely. we think for this cycle, interest rates had peaked on the two-year and the ten-year, now that doesn't mean they can't back up a little bit if we have

bad data, but we don't think you're going to hit new highs this cycle. so, yes, having lower rates will be a benefit because it is going to allow the pe multiples to expand. so, that is a key component. >> all right, mary ann, thank you. great talking to you today. >> same here. >> okay. still to come, if you haven't seen it, you need to stick around. insults fly during a house oversight committee. we're going to have the details and the sound. you don't want to miss watching what happened. and then social media and the impact on parents and children, the author of the anxiety generation is going to join us to discuss what he calls the rewind of childhood epidemic of mental illness. it is an important conversation. we're coming right back. >> announcer: time now for today's aflac trivia question. what was the average price of a e r 20?00 thanswer when "squawk box" returns. that's like the gap in my health insurance. gap in your health insurance? yeah, it didn't cover everything when i got hurt. good thing i had aflac. hmmm

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>> welcome back to "squawk box." among today's top, we're going to put this in the water cooler story category. a house oversight committee hearing devolved into insults last night. i don't need to explain. take a look. >> i'd like to know if any of the democrats on this committee are employing judge merchan's daughter. >> please tell me what that has to do with merrick garland. >> is she a porn star. >> do you know what we're here for? >> you know what work here for. >> you're the one talking about -- >> i think your fake eyelashes are messing up -- >> hold on. hold on. >> that is absolutely unacceptable. how dare you attack the physical appearance of another person. >> are your feelings hurt? >> oh, girl, baby, girl -- >> oh, really? >> don't even play. >> baby girl? i don't think so. >> we're going to move and we're going to take your words down. >> i'm just curious, just to

better understand your ruling, if someone on this committee then starts talking about somebody's bad built butch body, that with not be engaging in personalities, correct? >> what now? >> congresswoman marjorie taylor greene eventually agreed to have those words of hers taken down from the record. but refused to apologize. so, this is what we have -- >> devolved to. >> this is what america apparently wants. i hate to say it. apparently this is what america wants. >> you saw the rest of the -- it got crazy. crazy. >> it is really crazy. >> we only have ourselves to blame. >> we do. i mean, we heard things -- we're hearing crazy stuff out of congress, about israel -- i watch every day and think you got elected? you really got elected? there are individual little pockets around this country

where you can elect some people that probably aren't names for -- >> because people don't turn out for the early rounds of these things, where -- >> i think some are getting prim primaried, some of the more extreme -- >> you recognize there is extremes on both sides that -- you say to yourself, is this the role model you want for your kids? i think that's a fair question. but that same question is now not just happening in small pockets of the country, that is also part of the larger conversation about this presidential election. it is. >> and your point is that you know the history of biden, so you're talking about trump, that he's a bad role model, you think biden is a good role model? >> i think there is -- i think there is a fair question about character that i do not put them in the same category. >> really? >> really. i know you disagree with me. >> that's where the disagreement

is. >> you think biden is, like, in the -- as a radical -- >> coming up -- >> i mean, i can show you his entire career through -- >> i know you can. it is on twitter. i know. i know. i know. it doesn't make it so. >> it is all so. it is all facts. coming up, has the rise of smartphones and overprotective parenting led to the rewiring of childhood? the author of the anxious generation joins us to discuss. "squawk box" will be right back. i come from india, i come in from a patriarchal community earlier where it was about having a male child and i had two daughters. for me, to lead by example was so important, that they saw, yes, there is a legacy to leave for them. it is about financial independence, about being empowered to do what you want to

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this morning. smartphones and social media addictions are destroying our children's lives. that is a message and it is an important one. "the anxious generation" details a four part solution to this growing and unfortunately very familiar problem for so many parents around the country. for more on this and his take on the recent campus protests and other issues, want to bring in jonathan haidt, professor of ethical leadership at stern business school. it is a book, if you haven't had a chance, folks in the audience to read it, go out and get it. it speaks so loudly about some of the issues we're all confronting. speak to what you think is the fundamental problem when it comes to social media, but also i'm very curious what the reaction has been because this has been a very popular book, from social -- social media companies or maybe the phone companies. have you heard from these folks?

>> let me start with what the problem is, thank you so much for having me on. mental health stats were pretty stable for american teenagers from the late '90s all the way through 2010, 2011. then all of a sudden, rates of anxiety, depression, self-harm go shooting up for girls, very sharp. for boys, up too, not quite as sharp. we have an epidemic of kids saying they're depressed, anxious, suicide rates are up 50% for teenagers since 2010. 30% -- 25% of american teen girls say they made a suicide plan already. so, something went crazy wrong in the early 2010s. and we didn't know what it was for a while. but once we see that the same thing happened in canada, britain, australia, many, many countries, now it kind of narrows things down and there is experimental evidence too sharing that time on social media is bad for kids. it correlates with negative -- so everyone has seen it, i'm in a debate with other psychologists, but all the parents, all the journalists, everyone has seen it in their own kids.

so i think story is resonating very widely. as for what the tech companies are doing to push back, the only thing i know from some journalists is that meta is sending around some papers by its favorite researcher saying, you should look at this, ask haidt about this. that's fine. they have a pr department. they should be doing that. but so far, no, i haven't found any dead horses in my bed or anything like that. >> what do you think that parents can do? some of these companies have tried to create ways -- screen time and other things, i find to be honest this is the least effective -- i love apple for many things, the screen time function and my ability to control what my kids can do is the least effective thing on this entire product line. >> that's right. once you give your child a smartphone, the technology is so much fun, it is so addictive, you have the rapid feedback and great colors. once you give your child their own personal iphone or ipad or tablet, it will move to the center of their lives and it will stay there for the rest of their lives.

so, parents have to be thoughtful. is it age 6? at what age do i want my child to withdraw from the real world, teenagers are spending five hours a day on social media, nine hours a day on their phone and half of them online almost constantly. once you start it, you get all the conflicts that you -- >> the way to think about this is what kids really, really need is play and social interaction in the real world, face to face, wrestling, putting their arms around their friends, all that stuff plummets after 2012 because kids are spending all -- even at school, doing this at school, not playing with their friends at much. they need play in the real world. in terms of safe amount of time, i wouldn't think that way. i think movie -- stories are good, if you want to watch a movie with your kid, that's fine. if you want your kid to watch an episode of a cartoon, that's fine. it is the interaction for hours a day, that's what seems to really be harmful. >> before the cameras start rolling, you suggest to me there

is a sea change that is about to happen, potentially in this country and starting to see it in parts of europe. what do you mean by that? >> so, we parents had a creeping sense since the early 2010s, once our kids got the devices, oh, the kid is quiet, this is great, i can do my work, but over time we just watch our kids, we all had a creepy sense that something is wrong here. this isn't right. and then as kids got more and more depressed and anxious, we had a sense, we didn't know what to do, we weren't sure. in britain, in february, the parents revolution began. >> parents revolution. what is a parents revolution? >> so mothers in particular, they see it, they're upset by what's going on. a couple of mothers put up an instagram post about a whatsapp group they had and overnight thousands and thousands of british parents joined, they have to have a hundreds of whatsapp groups, they're organizing, it is a smartphone free childhood.co.uk. >> that's in britain. and there are lots of groups in

the united states, you can go to anxious generation.com, we have a list of 30, 40 organizations in the united states. and so the parents are up in arms saying we got to do something about this. we got to come together, we got to agree not to give our kids a smartphone until 14 or 16. i recommend 14 is the minimum. and then in britain, the government is acting. it passed two of the best laws on the planet to regulate social media, to require them to treat children differently, that children are not adults, you have to treat them with some care and to push us toward age verification which we have to have. >> china is effective too. nobody is playing video games. >> the chinese are able to do things we can't in a free society. and they see the problem and they have put limits on screen time, they put limits on tiktok. they're very happy. >> regulators could do something about this. >> in the united states. whatever we do, the tech industry, they have a trade group, they sue and everything is going to get held up. the florida law is a great example of a nice straightforward law, 16 is the minimum age, 15 or 14, if you

have parental permission to open an account. >> are there any tools, technological tools, you suggest parents use at all? that's not even a workable scenario. my kids, if they change the time zone they're in or do all sorts of other things, then all of a sudden, i'm out of luck. >> once you give your kid their own personal device, you're in this game we're all playing. it is a constant struggle, is that what we want? what i'm arguing is four norms, we can change this. one, no smartphone before high school. we got to clear this out of the lives of elementary and middle school kids. >> but you need the entire classes to do it collectively. >> half the class to do it. if half the class does it, it is easy to say -- we don't want our kids to say, mom, i'm the only one -- >> that's the problem. then you realize your kid is being left out. i was holding out for a long time and then i felt like i was making my kid be a social pariah because theywere having text

chats, he was left out of everything and he was going to be -- it is the equivalent of bike helmet laws. >> that's why this is a collective action trap. that's the key to the whole thing. you were alone, you did the right thing, but you imposed a cost on your daughter. what if half the kids had followed this advice. it would be easy. then people see -- >> that's step one. you said there is four. >> number two, no social media before 16. what is the proper age at which you want your daughter interacting with strange men pretending to be young girls or boys? what is the proper age you want them to see beheading videos? i don't think it is 9, 10, 11, 12, is 13, it should be 18. let's say 16 is our minimum. we don't allow them to -- social media is not appropriate for minors. third norm is the easiest and really powerful one. phone free schools. the evidence is really clear. when kids have the entire internet in their pocket, on their desk, at school, they're using it. even if they're not supposed to. you have to tate phones, you have to lock them up in a special phone lock, they get it

back at the end of the day, when schools do that, it is spectacular, people say in the hallways they hear laughter again. used to be silent between classes. and then the fourth norm is far more independence, free play and responsibility in the real world. because if we're going to greatly reduce the role of these things in kids' lives, we have to give them that play, fun, adventure, each other, time together. >> a related question, it is not on the device, but how you feel about video games? there is roblox, which is supposed to be something where the kids are interacting in a way, as they get older, unfortunately, some kids are now getting older and they're playing fortkninite. it is a way for them to communicate and talk to friends. i would prefer them be rolling around in the dirt. >> social media stuff that -- >> video games have changed a lot. and so we have to tell the boys' story is different. when everybody got devices, the

girls went for social media, the boys went for video games. video games are not harming most boys but are harming a lot. between 5% and 10% get addicted. if you let your son play video games three, four hours a day, it changes the dopamine circuits in their brain, 5% to 10% gets addicted. that causes problems in every other part of their life. the second thing is for most of the boys, it is pushing out time together. you can't -- if a boy wants to play with his friends, he can't go to his friends' house. he has to go home. he has his own headset, own controller. so time with friends has dropped 65% since 2010. kids need each other. they don't need to talk over screens. >> john, thank you for coming in. the book is called "the anxious generation," we appreciate it. thank you. >> thanks so much. >> good advice. i hope people listen. when we come back, we're going to ask former atlanta fed president dennis lockhart whether or not the latest inflation numbers gave us clues on the future of interest rates. if you check out the equity market futures this morning, you'll see that right now a

little bit higher. not a whole lot of activity, but this comes a day after the dow touched 40,000 before closing below it. got all three of the major averages near or at all time highs. maybe at all time highs. dow is up 21 this morning. s&p is flat, the nasdaq indicated up over 17. "squawk box" will be right back.

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check out shares of game stop this morning. the stock is down by almost 10% right now. after the company filed to sell securities in the mixed shelf offering of unspecified size. it expects current quarter sales to decline and gamestop shares at this point down by almost 10% to $25. group of fed officials are suggesting that rates will stay higher for longer and separate appearances, cleveland fed president loretta mester and tom barkin say it may take longer to

reach the central bank's 2% inflation target. let's bring in dennis lockhart, former atlanta fed president, now professor with the sam nunn school of international affairs at georgia tech. thank you for joining us, professor. >> good morning, joe. how are you? >> it has been a case study in kind of human nature and psychology that once we settle on some kind of consensus, the next number that hits usually flies right in the face of it, so we haven't talked to you in a while. i think right now we're back to the economy's pretty good, maybe slowing a little, but inflation may be still moderating lower. which, you know, we weren't sure for first couple of months because of the hot numbers we got. now we're back to that, which means one, two or three rate cuts minimum at this point. can you guarantee me that's what's going to happen, dennis?

>> can i guarantee you? no, i can't. i don't think anybody can. cpi report we had on wednesday was moderately positive, didn't set off any alarms. i think it suggests the moderation of inflation as you said. but it -- the inflation numbers tend to be somewhat noisy and month to month there are things that happen that affect the numbers, it is very hard to tell what the underlying inflation trend is. so i think this committee is just going to watch and wait and be patient as jay powell emphasized in his amsterdam remarks. and just watch it carefully. i think september is still possible, i'm more inclined to believe that we will not see such consistent numbers, that we can do september, so it will be

in all likelihood later in the year, which suggests one or two cuts. >> which begs the question, why was the default mode always that we're definitely going to cut, we're definitely restrictive, and we have definitely done enough, we're just waiting for the right time to do it and we're almost positive the numbers are going to allow us to do that. why that bias? why was that always present? you got the answer for that? >> i'll give you an answer for that. and that is that the experience of bringing down inflation particularly in the second half of 2023 was so positive, it just seemed to fall in line perfectly that i think the -- they became believers in a narrative that this would just continue and then the first quarter, of course, threw a wrench into the narrative. now we're coming out of that period, and the question is are we going to see disinflation

resume in a very convincing way and it is very early in that story. so i just can't tell you one way or another how that will play out. >> we had jobs numbers that seem to be finally showing the effect of the 500 basis point increases, maybe we're seeing consumers start to show you. do you think there is a lag to the hikes that we're now starting to see in a moderating economy as well as moderating inflation? >> i think the data are a little bit confusing in that respect. of course, i'm somewhat loyal to my former colleagues and i follow gdp now, the atlanta fed's tracking estimate for the current quarter. it is set at 4.2% annualized growth. that suggests a really very strong underlying economy. so, there are data points that

suggest slowdown and there is some that suggest that the economy will continue to roar forward. >> do you think that we had -- some people criticize all the forward guidance when we get to the fed. is it helpful? was there a reason to keep telling us, well, i really think we're close. any of you people that really want the rate cut, we're not doing it today, but you can count on us. we'll give it to you soon. why do that? is it -- what is the reason for that? >> well, i think the belief is transparency is a very positive thing in central banking and taking a long time to get to the point where we have press conferences after every meeting, and as much communication as possible. so, it clearly is a trade-off, some very serious observers have said stop the forward guidance, stop the cacophony of the -- of

all the fed speak. but on balance, i think the markets would like to know what people are thinking, even if they change their minds as the year goes on. >> and, i guess the last thing i would ask you, dennis, there is a fear and you remember the transitory and that was a total miscalculation of inflation. we could miscalculate again. we could be stubbornly, especially with all the wage gains we have seen in, you know, all the pressure to raise wages around the country, we could see us in my view stuck a point higher than the fed wants us to be for, like, a year or two. and if they don't move the goal post, they won't, you know, they wouldn't really be allowed to cut. they wouldn't have the, you know, the go ahead from what they said they need to cut. is there a greater than zero percent chance they don't cut or

actually hike is the next move? >> yes, greater than zero. i don't think it is the base case at the moment, but you noticed that i think jay powell and others are reluctant to take the hike scenario off the table. >> they did, though. >> well -- you may have interpreted it that way. i think he's kept his options open. he's basically said it is unlikely, but it is greater than zero probability that we could have a rate hike. i don't think it is likely to happen. but it is possible. >> okay. you like the atlanta fed still? do you like, now, georgia tech? do you not like the bulldogs? do you weigh in on that? >> no, i could never say in the state of georgia i don't like the bulldogs. >> that's what i mean. >> i like them all. i like them all. >> people always say --

>> georgia tech is a really outstanding place and so i enjoy my association there. >> that's right in atlanta. isn't it? >> right in atlanta. exactly. >> a lot of good places down there, dennis, thank you. appreciate it. >> thank you, joe. >> okay. all right, still to come this morning, the uaw's high stakes effort to unionize a mercedes-benz plant comes to a vote today. what it could mean for workers. "squawk box" will be right back. . i'm tasting it- or a night person. or a... people person. but he is an “i can solve this in 4 different ways” person. and that person... is impossible to replace. you need clem. clem needs benefits. work with principal so we can help you help clem with a retirement and benefits plan that's right for him. i'm short but i'm... i'm confident. you know? let our expertise round out yours.

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light 'em up! gentlemen, it's a beautiful... ...day to fly. wooooooo! whoa! on your wing, grandpa! welcome back to "squawk box." today we're going to find out if workers at two mercedes plants in alabama approved joining the uaw. phil lebeau joins with us more on the vote and some possible targets for the union next. >> we will find out the results probably around noon, 1:00. that is the expectation at this point. they're finishing up voting this morning and as you mentioned the

count begins at 10:45. here is what at stake in alabama. 5100 workers over two plants that are located near tuscaloosa who have been voting since monday through this morning. their current pay, anywhere between $23 and $34 an hour. it would likely move up $5 to $7 per hour if they get some type of a uaw contract if the uaw is successful in this organization. it has been controversial to say the least down in alabama where the governor has been very vocal along with other local leaders about the unionization effort. specifically saying, look, this is going to raise the costs of manufacturing in alabama. one of the reasons that so many companies including automakers have moved to the southeast is because of the lower cost, when it comes to manual labor. and that would change if the uaw were to be successful in this vote. for the uaw, what is at stake

here is a chance to reverse this decades long decline in membership down to 370,000 members as of the end of last year. and as you take a look at shares of mercedes, keep in mind, we'll get the results from the nlrb around noon, 1:00, that's the expectation. unlike with vw, in around noon. like in tennessee last week. pretty much forecast. clear the uaw would win that vote. members said, yes, let's have a vote. calling for a vote that means you're voting for uaw. in this case not at clear-cut. a number of people believe they will be successful here. answer your question, what might be next? a hyundai plant in alabama uaw believes it has a decent chance of organizing and a toyota plant in missouri that the uaw indicated to be a place they could try to organize next. make no mistake. plenty of targets in the southeast where foreign automakers have clients that are

not unionized at this point, but the uaw believes it could be successful over the next couple years in turning them into uaw bases. >> okay. phil lebeau, sure we'll talk a lot more about it. thanks. still to come, cfpb director joining us after the break talking about yesterday's supreme court ruling and much more. and later, united states arlines regulators easing restrictions on its growth plant after a number of safety incidents this year. the former united ceo will join us. quk x"ilbeig bk."sawbo wl rhtac k can help your business. search talent all over the world with over 10,000 skills you may not have in house. more than 30% of the fortune 500 use upwork because this is how we work now. energy fuels, a leading american uranium producer, is ramping up production to supply expanding nuclear markets

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all right. the supreme court has rejected a business-backed challenge against the consumer financial protection bureau's funding structure. in a 7-2 vote, justice clarence thomas wrote, although there may be other constitutional checks on congress' authority to create and fund an administrative agency, specifying the source and purpose is all the control of the appropriations clause requires. cfpb director rohit chopra joins us this morning.

director, thanks for being here today. this could have been about existential crisis for the cfpb, if congress, or if the supreme court had ruled against you in this issue. it would have brought questions about every rulemaking you've had. every enforcement you've had since the bureau was first created 13 years ago. how are you feeling today? >> well, a lot of relief. if this went the wrong way, we could have seen quite a bit of turbulence in so many markets. you know, our financial markets depend on clarity, and that's really what we are trying to provide, as well as some accountability for those who violate the law and take advantage of consumers. so we see this as a big victory and sigh of relief for all the people who depend on that. >> let me tell you what a couple of the groups that have been kind of pushing back and fighting against you over the years have said. the american financial services association says, while there may be cfpb staff breathing a sigh of relief over the ruling

the supreme court decision does nothing to bring clarity or transparency for consumers. the consumer credit marketplace or congressional oversight. the consumer bankers association says that this should not be considered a popular endorsement of the cfpb's recent and seemingly political rulemakings, many of which skipped important legal requirements, they say. i guess the point is, those on the other side arguing with you probably won't go quietly into the night. although both organizations look forward to continue working with you in the future. what does this mean just from a logistics perspective or a reality perspective, what you will be able to do at this point and what you plan to pick up next? >> there's never going to be a time when big, powerful lobbyists just throw in the towel. they're going to keep fighting us, of course, because what we're doing is, we're enforcing the law and making the markets work better so thatpeople can't be cheated. so we're working on a lot of fronts, becky, from making the mortgage market more competitive

and fair, tackling credit card fees and interest rates. the scourge of junk fees that creeped across so many markets. junk fee lobbyers, other s, they'll keep fighting. we'll keep doing our job every day to have a set of rules fairly enforced. >> what's the primary focus in terms of the next action you'll focus on? people pointed to popular credit cards and airline rewards programs the airlines have set up? >> last week secretary buttigieg and i hosted a hearing about this credit card rewards markets, and i'm really worried that people get, hear promises about points and then suddenly it gets devalued, losing a lot of value for themselves. we invited some of the biggest credit card companies and airlines, and they were no-shows.

we're going to keep going when it comes to credit card. people are paying huge rates and fees. we're going to tackle them. the high-interest rate environment is actually making a lot of people have some stress on their bills, because of those high rates. we want to make sure no one is taken advantage of and that people are able to pay those bills and get ahead of their life. becky, we had a lot of cases that were put on hold pending this supreme court decision. with this decision behind us, all of those lawsuits will start to restart and we will be able to seek justice for all of those individuals who we think have been taken advantage of. >> rohit, sounds like full speed ahead from your perspective. i want to dig into some pushback you get, say, on the airlines rewards programs. there are, the industry has said, again, this is the industry pushing back, but the industry has said that if the bill that you all are supporting passes congress, it could mean

that the funding for those rewards programs gets stripped away. in which case they won't be able to continue the rewards program. the entire their you're worried about that they eventually become value-free, have no benefit to any consumer signing up and using them for years could come true because of the bill that would be passed to prevent that from happening? >> the cfpb is, working on law enforcem mment holding these fo accountable for their promises. i want to make sure that when a consumer is getting a promise about rewards that people are listening up to it. we had to take an enforcement action against bank of america for falsely implying they would give cash for signups and then didn't can't come through with it. i think what we're doing a bread and butter making sure there in fraud and scams and false advertising. >> do you worry about the goal

of the agency? i mean it does seem to swing pretty radically, depending on which administration's in charge. the goals that you go after, if there's a change of administration, aren't lasting ones. i realize that's the case with all federal agencies but it seems to be more of the case with the cfpb. when donald trump was in 3power someone didn't want to see a lot of this happening. seems like an agency that is particularly rife for being swung in the political directions of whatever administration is in place. seems like it's pretty tough for businesses to try and take direction from that. >> well, the key is, we have laws on the books, and it's our job to enforce them. we have to make sure that it's not just about protecting consumers. it's also about making sure that the companies, start-ups and others, who are playing by the rules are not disadvantaged by those who try and cheat people. so i actually see this, becky,

as pretty straightforward. i don't want to see the ping-ponging. i want every single person in my seat during this whole agency to vigorously enforce the law as congress has said, because i think that's what makes american markets work well. when we don't have any rule of law and when not everyone is following the rules, it's chaotic and just doesn't work well. >> director chopra, thank you for your time today. it is 8:00 on the east coast. you are watching "squawk box" right here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. among today's top stories, gamestop shares falling in the pre-market. short time ago the company said it expects first quarter net sales to drop from a year ago. as customers buy more products online, rather than in physical stores. gamestop also said it filed for a mixed shelf offering. stock down roughly 70% from

highs back on tuesday. spirit arrow systems will lay off up to 450 employees because of slower delivery rates on commercial aircraft. spirit is feeling a pinch as key customer boeing struggles with a slowdown in the wake of the alaska airlines door plug blowout back in january. and the chair of tesla assumes the carmaker has a mount everest like fund ahead of it working to convince shareholders to reapprove elon musk's multimillion dollar pay package and relocate the company to texas, according to an interview the chair did with the "financial times." talking much more about this and that upcoming shareholder vote later this hour. and dow up 18.5 points this friday. nasdaq looking to open higher and s&p 500, a point higher. ten year note at 4.396. two year, 4.795, and mr. santoli

is down at the new york stock exchange this morning. mike, what are you looking at? >> andrew, well, index is hovering, hesitating, maybe, all-time highs. usually look at the s&p, more comprehensive index that captures the market. here's the dow. obviously a touch of the 40,000 level yesterday. it's a five-year chart of the dow. wanted to show the experience with 30,000 to suggest it doesn't necessarily have to be either a barrier or a launch point. so 30,000 here. got there first time in late 2020. you can pretty much tack ed on n immediate 10%. high as 36,000 but not an escape from because bear market 2022 breached it again. obviously a noticeable number, not necessarily something i think is necessarily going to be all that conclusive in terms where we go from here. but the more indexes that do make new highs, of course, the more confirmation you get about this move. now, here's the other dow index.

six-month chart. dow industrials, utilities, transports. not trying to make a grand point about the old dow points dates back to 19th century but noticeable weakness for transports. true for all. domestic, road, rail things like that softened up a little along with maybe goods inflation and goods demand. although, of course, you see a big aggressive move in utilities, upside. longer term, utilities depressed and washed out and bounced back from there as people focused on potential power needs and pricing. you mentioned the ten-year treasury trading. interesting spot here. 200-day moving average of the ten year here as well. 434, 435 or so. back in february and march, considered to be a little bit of a threshold that would be a little bit of a problem if we got above it. we did get from 420 to 470, when the market had its 5% pullback in s&p 500, and yields have come

down. a little more fix on a patient fed at this point and slightly more friendly inflation number this week as well. >> mike, thank you for that. appreciate it. have a great weekend. china announcing this morning the most aggressive steps yet to prop up its struggling real estate sector. joining us now we have more. eunice? >> reporter: joe, a support package will focus on converting unfinished homes into affordable housing as well as trying to get more people to feel confident enough to buy a new apartment. this program involves a $42 billion relending fund which would help state-owned firms to buy inventory for this public housing. local governments are going to be leaned on heavily. they would be asked to buy some unsold homes at "reasonable" prices. also urged to fight hard to finish stalled projects as well as to buy back some of the land

from developers to ease those developers' financial burdens. for potential buyers the national mortgage rate floor removed as of tomorrow. a down payment will also be cut, or ratios, i should say, state media had been describing these steps as historic, and investors really liked the moves. we saw a rally especially in real estate stocks. however, what's very unclear is how effective this program is going to be, joe, because of the fact that we don't have any information on the timing of these purchases, given the problem, the scale, of the problem here in china. it's unclear, you know, how much money this is going to be involving. where the money's going to come from. it's going -- so heavily leaning on local governments and a lot of them have had financial issues for quite some time now because of all of the covid testing that we had to deal with here over a number of years.

so the local governments really don't have the money to be able to do this. >> yeah. lessons to be learned here, i think, eunice, and i don't have a lot of faith in the notion that when the government and central planning obviously they overbuilt for a lot of reasons. you know, you create jobs. if things aren't percolating like you'd like, you try to stimulate it, but then you're totally overbuilt, because the government -- you know, isn't the private -- isn't free market. so you don't know when you overbuild. now just doubling down. okay. spent all of this money and screwed this up. now we're going to spend another $40-plus billion, but we're going to fix what we screwed up the first time around and normally it's like, you know, a glass of water in the ocean. keeps going south. and just throwing bad money at good. >> yes. it's a really big problem over here. because when you mentioned the overbuilding. the government had thought that

people will move to the cities, the economy will continue to do well. well, the economy isn't doing so well. people don't have a whole lot of confidence right now to buy apartments. online, after this announcement, there are people saying why would i buy an apartment when i can't even find a job? because of that, a crisis of confidence here, it's really hard to see how this program is going to be so successful if they don't address these confidence issues. >> okay. thanks, eunice. maybe it will work. >> maybe. >> maybe. >> although when china sets its mind to something, the communist party sets its mind to something, get align. we'll see. >> kind of makes sense, but they -- got into this mess on their own in the first place. >> right. when we come back, a debate on elon musk's multibillion dollar pay package as shareholders gear up to a

critical vote. next, former united airlines ceo oscar munoz joins us on what's at stake at boeing's annual meeting today. stay tuned. you're watching "squawk box" and this is cnbc.

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welcome back to "squawk box." it's friday morning. so we're almost at the end of the week. right now the futures are feeling -- aww, kind of okay about it. green arrows, not much to write home about. s&p futures not up by a point. nasdaq indicated up by about 18. dow on pace for fifth straight positive week. and s&p and nasdaq on pace for their fourth straight positive weeks. boeing's annual meeting kicks off later this morning. investors expecting to hear for the first time from new board chair steve mollenkopf.

boeing currently deeging with a slew of issues from a search for a new ceo to the justice department claim the company breached the 2021 agreement shielding it from criminal charges tied to two 737 max crashes. joining us now to talk more about boeing is oscar muniz, former united airlines chairman and ceo, and a cnbc contributor. it's good to see you, oscar, as always. the point is made, almost sounds like a bank. boeing's too big to fail. boeing knows that. the government knows that. the department of justice is obviously looking into this. what are the chances something really stringent comes out of that, in your view? >> two things. one, good morning to you. happy friday. you know, i have spoken to several people close to that situation and it's too early to tell. and from my perspective, at some

point, i don't know. i don't know who we're trying to punish anymore. all the right management changes have happened at boeing and think about the people that work there, make these aircraft and when do we give them a little lift and this latest thing, while i understand why woo it's being done and it's important, again, to hold people accountable. we got the 60-day process going ob and 30 days from that, let's get past those things. really hard to find a leader and that board has to be shaking their head because every day is a new item. no matter what happens on an aircraft it's boeing's problem which doesn't necessarily have to be that. i hope doj does their work but i, again -- we have to ask ourselves who are we trying to punish at this point in time? let's get this venerable brand of american production back on track and find the right leader or leaders for it and get

moving, because, again, it's -- it's just -- it's difficult to see the impact on these great people that work there, and i've spent quite a bit of time over the last few weeks talking with alumni. even a couple of the candidates that might be considered to get an understanding what's going on there, and that board has a lot of decisions to make. if you find a product engineering person, fine someone with gravitas that can solve and bridge issues with the customers the government, your -- your employees and unions. it's a difficult job, and i invite ideas how that can be done. the same time feeling for me over the course is months is, how do we help them move forward? hold them accountable for sure, but, you know, the beating just has to stop to some degree. >> do you think -- okay. the prosecutor could charge boeing with a criminal charge. boeing is -- apparently likely

plead guilty, if it's unable to get the prosecutor not to charge it with a crime. then it would be -- do you expect it to get to that point or do you think in the next month doj or the prosecutor decides that that's just too draconian, or can boeing provide information to change their mind on going ahead with it? how do you see it playing out? >> that's a complicated constant, right, joe? it's politics. we're in a political year. you know, fear in d.c. will take over to some degree, and i really hope that in these next 30 days, as they finish their conversation, we get tangible results. again, you know, back in the day, there were at least a phrase, if it ain't boeing i ain't going, and customers would reach in the back of pocket on their seat and a boeing aircraft a genuine stamp of approval kind ofe were don't have that.

how do we get back to that point? to your question. i hope the next 30 days and faa results come out with clearly, come up with something, but nothing too, too impactful and that the doj sort of releases their concerns and we get moving with this, but, yes. can it come to it, of course. things come out of this review pretty negative, the political pressure will be so much they're going to have to do something. my only point from a humble, you know, source sitting on sidelines is that i don't know who that's going to help at this point in time. i don't know how it's going to help them get a leader that wants to run and do something like this. so while, of course it can get to that, my hope over the course of the next couple months we get past that and can get them back on their feet. >> asking myself whether i really feel different getting on a boeing. i still feel pretty good getting on a boeing jet. >> i talked to a lot of pilots. pilots, asked them blankley.

are you at all concerned? they're not. it's a safe aircraft. safest mode of transportation. right? everyone will tell you that. so i think while there are certain tidbits team talk about being worried about flying, it's probably those that fly often. i don't think the safety issue is there. a heightened concern. a few weeks ago we spoke and becky was meeting on the series of issues that happened at united, and it was very distressing and it wasn't boeing aircraft. a combination of things. faa's gone in there, just released that conversation. gave united a clean bill of health and that gives people a sense of relief. that's what i hope the process will be with boeing. but, boy, find a leader quickly. my god, every day is a day that when it passes people that work there are just becoming disillusioned, disengaged, disenfranchised and that culture needs to change. they need the right leader to

make that happen. not easy to find those kind of folks, at least all of these years -- >> in regulatory issues now to try to buy back spirit arrow systems. that's, that may or may not have stalled out. and because spirit, you know, i guess they're built, or at least they have a labor force for much more production than what they're getting. even though there are safety issues and quality control issues they got to lay off a bunch of employees. that's like the opposite what you want if that's where the problems lie. the government's going to think of that, too. >> exactly. well, and, again. you have different factions opinion it's a political year. we're going to have to face some of that and i just hope cooler heads prevail in the sense because you're so right, joe. you've got a large machine that manufactures now being stalled and put down and to regain it and sort of remachine it back up to the 100% is going to take

time. don't put anybody in those roles. you need experience, a level of expertise. and certainly a culture of, of the quality standards that have been around for so long in that company. so not an easy task and not only this might give us, how do you think about giving them a little bit of a -- a breathing room to get back to where they should be. >> you have, like a 2-1 favorite on ceo? i bet on almost anything, oscar. any idea who's -- >> from what i hear, and it's only what i hear, that there's a divide between what kindof person you need. and there are so many opinions around that, that, you know everybody trying to find the right person that fits many of those thing. i'm not sure that person necessarily exists. i suggest things like do you bring up air, bring up sort of a ceo that has ability to bridge

gaps? fix some issues in d.c. as well as with customers and regulators and unions and also bring strong product. to not only fix the production process but this is the other thing. they got to get their collective stuff together with developing new products. because that's what airlines want. right? we want -- we have had, called an maa aircraft sdirnsdirnedesi next-generation aircraft. all of that done concurrently and regulations and restrictions that might come up by doj. i have no names. knop bets whatsoever. i just am hoping that they are able to find the right person or persons. >> oscar munoz, former chair and ceo of united. now, now a cnbc contributor. so that's -- it -- >> onward and upward. >> onward and upward. thank you. >> thanks, everybody.

we're going to talk about this big debate as elon musk, does he deserve the 11-figure pay package struck down by a judge in january. a debate lined's you don't want to miss. up next you early reviews in. microsoft's copilot a.i., see what tech execs thing right after the break. stay tuned. you're watching "squawk box." you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed.

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welcome back to "squawk box." let's take a look at treasury yields. focused 439 on ten year. two year, 479. what's going on with reddit? >> shares jumping announcement

of partnership with openai allowing the chatgpt on graded content. gaining access to realtime unique data from reddit. for its part reddit offering a.i. features to users and moderators. google announced a similar program to train gemini and when the company went public talked trying to create revenue from a.i. and other prospects like it. this effectively helps them diversify revenue, frankly because they there was concern almost wholly dependent on google. >> actually makes sense. when you see stock up 10% versus gamestop, up 10% or 20% or 50% and then had toy is a, oh, by the way, sales are down and issue more stock. >> different category. this is a real business. meantime -- mr. kovac is here. six months since microsoft copilot a.i. assistant rolled

out to businesses and isn't working. a status check. is it? >> a vibe check. ow how about that? next week the builder conference what is perceived leader in a.i. and a big part of that is copilot. of course, marquee a.i. assistant. microsoft making a big push to sell it to businesses this year. change pc keyboards, copilot button afrsing on nba playoff courts. might have seen that. hiring a new ceo to run microsoft a.i. focusing on copilot, but it's not cheap. $30 a month per user. for now investors have little clarity how well it's actually selling despite all the hype from microsoft. we spent time catching up with ceos and other execs who make those decisions whether or not to buy tools like copilot to see how well it's being received so far. the answers were mixed. first off, no one we spoke to is ready to deploy copilot widely across their entire organization

and still testing with a couple hundred employees at a time. bottom line, too expensive with benefits unclear. one large company told me copilot would have to be about 80% cheaper for them to consider deploying it to thousands of their employees. not all bad. almost everyone i talked to said they love how copilot worked with video meetings in the teams app, handy, summarizes everything that happened in case you missed the meeting or want to go back and catching up also on piles of missed emails. a common problem everyone's talking about, the props. questions you ask an a.i. assistant like copilot to get the answer you want. many don't know what to ask to get the most out of copilot. it actually requires some training. this one was interesting also. some are making their own custom a.i. assistants within thi organizations using a.i. tools from facebook and other a.i. models instead of buying co-pit.

a much cheaper option for a lot of these people. microsoft has given out a few nuggets. recently announcing cokeca-cola testing it entinternally. do the math there. everyone agreed on tools like copilot will only improve and eventually become another tool in modern work life just like we use email today. next week we're expecting the latest updates on copilot. one with a slew of other a.i. announcements. that's coming monday and tuesday next week. number one thing for customers hoping for cheaper pricing options and more variability there, guys. it's not cheap. the big thing i'm hearing, what's going to happen as competitors come on to the scene? >> yeah. this is a real interesting option, because some of the people i talked to. they said we have very specialized tacks.

copilot is so broad across the organization and only works if you're microsoft or a company for, like, innance, for example. we use slack sometimes. >> right. >> we use different, sometimes even zoom or dropbox. unless you're all-in on microsoft, copilot doesn't work as well and all your can employees have to be on it, too. >> what do you think of llama 3 and other models, whether they ultimately really actually create such competition and reduce price for everybody? >> what's happening. in fact, i talked to one cto of a huge company just last night who said for some tasks we're using facebook llama instead of spending money on copilot, use open-source things to create tools for our organization that are more spoke or customized or niche. something they want from microsoft. make it more like that. >> steve, thank you appreciate it. >> more to come next week. when we come back, focus on

elon musk's pay package worth tens it of billions of dollars. shareholders ready to vote whether or not to the reinstate it after struck down by a judge. talk all about the story in a few minutes. stay tedun. you're watching "squawk box" and this is cnbc. in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there.

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although it did close below that level. the index is up more than 20% from those recent lows we saw last october. for more on what he's watching in the markets right now we want to bring in paul hickey. spoke investment groups co-founder. paul, here we go. up 20% from those lows. got to have a lot of people looking, thinking, oh, my gosh. if i wasn't already invested i missed out. what do they do? >> people saying that for a while. had your chance in april. had a pullback. i mean, people made a big deal of this pullback. 5%. very run of the mill on things, but, you know, the new highs confirm that we're in a bull market. the length of this bull market since october 2022 has actually been a little longer than normal. 19 months versus the median. gains only 50, only, 50%. the median burl market see as

gain of about 75, 80%. so, you know, there can certainly more more upside in the market. >> which do you look for closely? percent of garins or the time frame? >> put it in perspective. we're constantly watching what's going on in the market here and the underlying breadth of the market is expanding. everybody's talking about last week, about how the strength in utilities was this canary in the coal mine things weren't right in the market. when you look at historically, utilities hit new highs after not hitting new highs, historically it's been just fine for the market. then look within utilities, the gains have been so uneven. people talk about the narrowness of the market rally and s&p 500. just 16%, or just 5 of 31 stocks outperforming year to date. it's driven by these subset of the sector, which are benefiting from the hyperscalers and demand for electricity. where it as, typical traditional

integrated utilities aren't performing nearly as well. >> you're bullish. are you bullish because of fundamentals ar veeps we've seen? bullish because of the next quarter or the momentum factor? >> a combination. fundamentals are the season just got through. again, coming into this earnings season, expectations analysts were low eerring forecasts and companies came in and beat the forecasts. low bar sets the stage for positive earnings. two things looking at going forward. you always want to worry about something. the sluggish economic data, which has been a concern. seeing slower men moeant um and lower expectations. counter to that, seeing periods of economic weakness high-yield spreads start to widen and they're actually narrowing. last three recessions in the year leading up to a recession high-yield spreads wide uning. even going into the covid recession went up a little.

not saying a new covid is coming but haven't seen it this time. trending down from 500 basis points a year ago to about 300 basis points now. the other factor to watch is that we started to see a lessening of, selling into strength. within the market overall. seen gaps at the open drifting lower in the market and companies reporting earnings. what we've seen is they've gapped up higher, about 30 basis points this earning season and then sold off about, on average, half percent. what we're seeing is -- stocks gapping up and investors selling to that strength. that's something to keep in mind going forward. but where we have seen it in exception to that, it's in companies that report what we call earnings triple plays. so -- just -- simply a company reporting better than expected earnings, better than expected sales and then has, you know, has the confidence. >> yeah. >> when the economic picture is murkier and these companies still see clarity going forward,

we're seeing a shrinking of those companies, but those are the companies we're focusing on going forward. >> maybe you think they're just being cautious. okay. >> i think companies are cautious but companies that can raise guidance, have the ability to do that, that's a vote of confidence. >> paul, thank you. >> thank you. i don't know if anyone has any -- concern about this yet. probably have. if you haven't, i don't know. you've got, you're in a tunnel or something. world number one golfer scottie scheffler was detained by louisville metro police this morning. trying to drive into the entrance of where the pga is being held in valhalla golf club for that championship. traffic outside the course stopped after a man was struck and killed by a shuttle bus earlier in the morning, and espn reporter, who witnessed the incident said scheffler was trying to drive around the crash scene up on the median. a police officer instructed him to stop, but scheffler continued

to drive. at one point the officer attached himself to the side of scheffler's car. then finally scheffler stopped and rolled down his window. the officer grabbed him opened the door pulled him out of the vehicle and he was hand cover hn charges second-degree assault, a felony and misdemeanor charge and disregard ing direction fro an officer. biggest trending story on, everywhere. but on twitter. every take you can imagine is on twitter. people that are -- >> talking about this. >> on his side, not on his side. >> trying to get details worked out. talking. >> memes of movies someone's driving by. arnold shachwarzenegger.

>> assumption, get there by tee time. delayed an hour. charges. serious charges opinion not just disregarding an officer and -- something along those lines. i don't know how quickly -- >> you're going to be in -- in the clink for a littlebit. >> unless there's something they "clear this up." those charges are quite a bit more serious than i anticipated. interesting. let's see the footage from the bodycam. >> to see exactly what happened. >> right. >> in a lot of cases like this, though. he's the number one -- a big money event. he's a number one golfer in the world. he's -- you know, xander schauffele five, six strokes ahead but usual ly money, you should be there. >> the law's the law. >> bodycam will decide it. knowing what actually happened, not knowing. >> arresting cop getting -- he was -- who is he exactly?

getting a call from the police captain. also someone talking to his son saying,a -- valhalla used to host -- a time they did. everything you can possibly see is on twitter. >> again is -- yeah. >> someone had -- >> somebody said -- >> didn't think about that. how many people had scheffler? i thought about it. >> police officer worked as a security guard on the side for liv. the golf tour. i mean, every possible take, until you see what actually happened you can understand -- going to be hard to -- >> number one. the great tiger woods. the great tiger woods had some -- a terrible accident, had escalade with the golf club and someone said -- the torch has officially been passed. golf is so back from -- >> my favorite, somebody says golf, this is proof that golf players are overpaid. >> overpaid. >> this -- didn't know who the number one golfer was.

>> scottie scheffler. >> still a beard. such a nice guy. -- i think -- from what i've seen in tournaments. coming up, elon musk's multibillion dollar pay parque package fair or assessive? i'm going to look up "fair." people use that word so much. stay tuned. "squawk box" will be right back. . it's all the things that keep this world turning. it's the go-tos that keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone. powering possibilities.

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welcome back to "squawk box." tesla shareholders getting ready to vote whether reinstating elon musk's compensation package worth tens of billions. a judge struck it down in january. our next guest criticizing the vote, according to the "washington journal" ended up in his resignation. talk about the pay package, family director of weinberg center for corporate governance at university of delaware. also joining us, professor emeritus and widener

university's delaware law school. good morning to you. charles, we talked about this before. you came on the broad cast and have you particularly negative perspective on musk's pay package. and what you think the, this new effort by tesla should be. tell us just about what's happened here, about you resigning from this consulting gig? >> well, i was filing, going to file a amicus brief. and another issue came up as to whether the, a vote on the pay would cleanse the package, if you will, and lead to its adoption. basically overruling what the judge had said about the package, and as was reported, a conflict was raised. i disagreed with it. and i thought the easiest way to

protect everyone involved, to protect my academic integrity and protect the economic interest obviously of the firm involved was simply to resign. >> and what was the conflict, exactly? >> well, that i had been a consultant of the firm for a long time, and that i actually did witnessing for the firm, and the firm apparently had, representing tesla in two other matters not related to this case, and it was raised, tesla as i said in the filing raised the fact there was a conflicts and the firm couldn't dostructe the brief. i discussed it with them and determined the best course of action resign from the firm and file a brief. rather disappointing, i thought, on many levels, but you've got to do the right thing and i think a brief needed to be filed. >> larry, do you agree with charles' position on all this?

>> let me split the issue into two, and i'm going to take a pass on the question of his relationship to the law firm and to tesla, and his ability to file the amicus brief. beyond reading what was in the papers i have no idea what transpired there. >> on the merits of the package itself. >> yeah, well, again. there, i have no opinion whether this package is fair in any sense of the term. where i come to a different perspective from charles is, he used the phrase "reversing or overruling" the court chancery's earlier decision, and i don't keeven this upcoming vote as being structured or set up that way. what the chancellor did in setting aside the pay package was a ruling that the process is used to approve it. the board action. the action of the stockholders.

those actions were not based on independent ashgsz. they were based on bad disclosure and i don't have a quarrel with a outcome of that case, but it's one thing to say it wasn't approved properly. it's another to say the stockholders simply don't have the power to vote it up on down especially six years of hindsight. charles' view, they do have power. democracy and folks with money at stake. >> charles, what do you make of that? >> well -- >> could you have effectively argue shareholders don't have the ability to cure this, if you will, or vote even with all of this information to provide for the pay package? >> it's actually very simple. the thing is, found the package itself was a gift. it had no real corporate purpose ux and companies can give money away. but, to do so, everyone has to agree to it. it has to be a unanimous vote.

problem this wit, unanimous, sure it won't be, reality, a gift. critical to our whole regulatory scheme that every investors is protected. you can't force force someone's money to a noncorporate purpose unless they agree. >> charles, i'm actually very curious from a very practical, realistic perspective, what you would do at this point if you were a shareholder or board member of tesla that wanted, i believe, to compensate elon musk for the work that he did for these last five years and accomplish what was in the contract, even if you disagree about the contract, he obviously was working underthe presumption that that contract was a genuine contract. he did the work, he accomplished things people thought were impossible, frankly, at the time.

and as a board member, as a shareholder, i imagine you want to keep him, maybe you don't want to keep him. i don't know. what would you practically do? >> practically, i would have gone back to the drawing board. and i would have taken a look at the package. i would re-evaluate it, look at the disclosure that was done and i really would have started again. i would have gone to a compensation consultant to discuss the issue. this package was flawed in its creation, obviously, it was his idea, so the judge found. it was not negotiated. and it was sort of, if you will, pushed through, with she found, inadequate disclosure. i think i would start again. look, it can be done. we simply look at it. think about it. and come up with a different package. i think that's the issue. the fact you took the same package and while the proceedings are still going on, you said okay, here it is again, and here's a little more disclosure about -- >> but if the problem, charles

and then larry in a second, if the problem was disclosure and now you have all of the disclosure, you know, if the issue is disclosure, that's one thing. if you think there's something else going on here, can the conundrum is you're sort of creating multiple problems and it's unclear all of them exist. the disclosure issue at least as i understand the ruling is the issue. >> i don't think it's a primary issue, no. >> you don't think it is? fairness is not -- by the way, the issue of quote/unquote fairness or this waste argument or that you're somehow paying back in the past, to me at least, doesn't make any sense because how many times have people been paid a bonus for things they have done in the past year or two years or three years? that happens all the time. larry, what do you make of that? >> equities, which he found. he had so much equity in the company, this extra equity is

going to innocent him to do a better job. he had 20% of the company at the time. there was no relationship between the equity he was getting and a, quote, better job. >> then he could go on the beach. the guy could stop working. most people would. larry, what do you think of this? >> he wouldn't have the money to buy twitter then. >> larry? >> yeah, let me just address this point about waste and gift. it's not a gift. the guy worked, sure, he had other incentives. he had a large stock position. that's great. just because you have a significant equity interest doesn't mean you don't deserve to be compensated for the work you do. he had a deal, turned out to be improperly validated, but to say he doesn't have entitlement to incompensation doesn't accord with reality, therefore, whatever the stockholder -- he could decide, yeah, it's too much. you should go back to the drawing board. we're not going to approve this.

if they say, no, this is the right kind of compensation. it doesn't require unanimous approval, i don't know how i would vote, but they should be able to do that. >> the judge found it was a gift, and that's the issue here. she determined that it was a gift. and that's the problem. >> she did not. >> that's the law. you know, better or worse, that's the way it works. >> she determined it's not a gift? how could it be a gift if he devoted five or six years of his life to work for the company, uncompensated? >> look, if you look at other companies, whether it's look at amazon, gee whiz, there are other companies similar where the executive who is the owner founder doesn't do this sort of thing. that's the difference. so the question is, was it a gift? she found it was. so now, the question is, what do you do about it? you either have to have a unanimous vote or you redothe

package. it's pretty simple. that's the problem here. >> this will be about the premise of the judge's ruling. i don't think she found it was a gift. she found the defendants failed to show affirmatively it was fair. >> it's a longer debate. i'm sure we'll continue to have it because this debate is going to go on for the next month after everybody fights it out and we find out what shareholders think of it themself. we'll talk to both of you, i imagine, over the next couple weeks. thanks. >> espn's reporting, he's been released. he's going to make his 10:08 tee time. he's got to -- you wanted to throw the book at him. he's going to make it to the putting green. >> here what michael kim, another golfer tweeted, i assume scottie thought there was a small issue involving traffic. >> do they drop the charges? >> scottie was probably just thinking i need to get to the course to start my routine on time. with the circumstances, the cop

was on edge. >> that means he's still facing felony charges? >> i doubt it. >> can you just drop them? then it's oh, he's dropped the charges for the big number one golfer. >> look, we'll see. we'll see how hela pys today. something to watch. >> it will be. >> we'll be right back. options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley to start a business, you need an idea. it's a pillow with a speaker in it! that's right craig. a team that's highly competent. i'm just here for the internets. at&t it's super-fast. reliable. you locked us out?! arrggghh! ahhhh! solution-oriented. [jenna screams] and most importantly... is the internet out? don't worry, we have at&t internet back-up. the next level network. i sold a pillow!

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domchu joins us with stocks to watch ahead of the opening bell. >> let's start out with the original meme stock. gamestop tanking 22%. the catalyst is a release detailing what it expects to be quarterly earnings to be. the preannouncement, the revenue range fell below expectations and it plans to share stock at the money offering. watch that, down 20%. shares of take two down 2% as well. the company reported better than expected results but cut its forecast in the coming fiscal year, also adding it doesn't expect to release its grand theft auto 6 game until the fall of next year and a jump in robinhood shares, upgraded to buy. target goes to $24 from $14. keep an eye on these shares.

for more on that, head over to cnbc.com/pro. more details and analysis for subscribers. >> let's say the under and over is, what do you think, 69, 70. you taking the under or over on scottie scheffler? >> if he comes out i think he comes out with a vengeance. >> okay. happy friday, everybody. enjoy the weekend. i might be watching that later today. make sure you join us. >> i'm going to watch it. >> join us. "squawk on the street" is next. good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david faber is on assignment. bulls look to close out a solid week with futures pretty steady. s&p aims as a fourth positive week in a row. that's the longest streak since february. the road map begins with china's housing hail mary, attempting to end its property crisis. reddit shares are surgin