tv Squawk on the Street CNBC August 1, 2022 9:00am-11:00am EDT
look at them again to the far side. >> it is great to see you this morning. we appreciate it. final tech on the markets which are in the way it. the dow is down 123 points that seems to coincide with the news that speaker pelosi plans to visit taiwan tomorrow night tuesday night. haven't checked gold or any of the other things that might move on something like that. the tenure at the to six level. make sure to join usomorrow. squawk on the speak is next. good monday morning, welcome to squawk on the street. i am kyle king with jim faber. august begins coming off the best month for stocks since 2020 with a big week ahead. 150 s&p earnings, 0% of the consumer and a jobs number. futures are weak and oils are down a few bucks. we begin with a july stock rally matching since 2020. bill deadly warning against
wishful thinking on inflation. boeing shares a rallying. faa clearing the resumption of the streamliner eliveries. and target upgraded it wells calling it oversold says it could jump 20% from here. we start with the markets after entering august with a blister live. best a license 39. >> it was all incredible. we were supposed to be hit badly by both the fed which hit us with everything we had and by earnings. it is not as great as it has been but it is still great. i think things went according to plan of a bull market not a fair market. i think it shocked a lot of people. the denial of what's happening in july and the desire to fade it is so palpable that i almost feel it is contrived.
>> meaning what? >> meaning that a lot of times when you get a temporary bottom that could be tested. that was all in operation. if you go back over the great peter d'oench, he would tell you four or five days a year that. and if you are not staying in the market, he will miss those. i feel that is what happened in july. the bears did not catch to lie a shortage july. july turned out to be better than we thought given the circumstances. >> i thought about you last night. denny had a good piece. he said they had been making the case that june 16th was the low. there is no reason to think that is wrong so far. >> i get his stuff. i just feel like, yeah. that low, again, in september. the fed comes back september. he will start talking about what happens in the election.
we don't know. it looks like 30 seats to be won by the republican. what happens if you have both houses of congress, republican what does that do? to me some amazing second, it will make it so nothing happens. there are a lot of people who feel like we have to wait to see what happens and wait to see is always okay when it comes to the fed but maybe not okay when it comes to politics. >> midterm years have a history of doing better once you clear out. >> that's why say it could go down and back up. i think the june 16th pivot, along with the way you have got november, october, april march, may and june, you have eight months. that is the length of a bear market. people calling for an extended bear market really think the fed loses. that is a very bad bet, that inflation is not peaked. but they will win on friday because the one thing that a strong as employment.
amazon list of 100,000 people. it doesn't have a bull, that's pretty amazing. usually that is the headline for weeks. what is amazon going to do next? >> the consensus has it handled. we won't get adp because they continue to refine methodology after having a series of hedwig face. but, we will pay attention to the view. the deadly has an op-ed on bloomberg saying as we said wishful thinking on inflation doesn't help powell at this point. >> okay, so food. we know that ukraine has been able to get through. there's a lot of green coming. we know that fires got crushed and refinery margins means what the consumer is going to pay which means by chevron has a big upstream and downstream, if you are valero you don't want to be in these stocks.
i think people don't understand, oil has come down substantially from the price at the pump. the tenure has come down substantially, which would say things are running to. i just think that people who are fighting the fed and fighting the tape in the same way in november if you are bullish you found the fed and the tape. we don't want to be against when it switches. when it switches it is always an unbelievable time. everything is going the way of rules. >> 94 as we are a few days out from opec plus. >> inventories from chips, i thought that was interesting. stock. the stockpiling of chips highest in six years. food is problematic. the tray down is palpable. it's a great story in the journals about going to channel general dollar tree for food. okay, food has not come down yet.
but if the employment picture gets it all cloudy and people will trade down and they will find ways to get food because they always do. i think food is a really slim read to hang your hand on. i think i look at the chemicals, all the chemicals are being downgraded. that is what we do in this country. take things and put in an chemicals. >> to that point interesting, timely always likes to lick fires. he did point out that the cleveland flood inflation tracker is tracking july cpi at under 3/10. that is 3% annualized, lowest in over a year. >> going back and forth larry williams in regards to trademark a story, into crushing. into is just going down. i think there is a lot going for the bulls within the cash carry comments are being interpreted by the bearsi happen to love
the show the bear but that is the only good thing about the bears right now, jeff. >> you mentioned talking to the times on friday night. i think on face the nation over the weekend, we have sound of what he said. the fed's mission and getting inflation back to 2. take a listen. >> it is very concerning. we keep getting inflation readings in the data that comes in as recently as this past week. we keep getting surprised. it is higher than we expected it's not just a few categories. it is spreading out more broadly across the economy and that is why the federal reserve is acting with urgency to get it under control and bring it back down. >> is that expected coming out of the powell presser? >> it is why they raised three quarters. the one thing i didn't understand is inflation spreading out because commodities peaked. there is any commodity except for oil.
maybe oil is down., prices have peaked. i know he is known as a dove. i also know that let's see what the three quarters does. housing is rolling over, what do they want? auto could be glutted in a nanosecond. what do they want to have happen? they want to go to the store and they want to see the bread lower and then they want to go out into the circus lawyer lower? bread and circuses high. in general has a piece of apartment rents out in the quarter. that is down from 11+ prior. >> brian monahan, ceo, that is the achilles' heel that rents are not going down fast enough. we see that rents could be going down. the onus is on the bears to show us where inflation is getting hotter. there will be some number on friday it will be like restaurant hiring or something. i have to tell you, in november, the bulls stuck by
their price targets and they were slaughtered. we are still getting price targets cut from november. now the onus is on the bears, particularly after last week, when we saw the resurrection of in. >> you are taking it out. you are taking the f out. some of these charts and the bottom line, the lower line is not a. >> i think that we all know, we check seven times a day. people are not posting. since i check and it's like i saw that post. software post. give me a new post. now tiktok i'm willing to have posts by anybody. so reels can be the same thing. if i were at amanda i would say listen, while i am waiting for the meta-verse to take in the quest, we have to figure out ways to get people to post. that i don't know how to do. it is like twitter and pinterest after the close.
are people too saturated and not as interested in posting? i post on instagram all the time. maybe i am an outlier. i posted my garden and my wife making encampment. i think people don't post as much as they used to. >> it is an interesting, instagram has been through a couple changes. now with the kardashians complaining. >> as crazy as it is, now that they are the great arbiters, but i do find, carl, that it is almost as if -- i don't know, it is not that the posters are on strike, but they don't want to seem to put stuff up as much. it is really what's going on. until they switch to more of a quest, and quest is ready yet as cool as it is, i look at the ftc blocking for to make quest even better. how do you get it so people say i really want to start posting. what do you do?
>> you have to go out and travel. those are huge things for your feed. you have to do something. >> why is my wife checking seven times a day for something happening when nothing has happened. there is like well. nobody is doing anything. >> watching reruns. you are checking far more than they are posting. i am urging people if you want stop to hire into on it, post. >> we will talk more about meta- and off of it as well. in the meantime, boeing is the biggest free-market gator on the dow. the faa is clearing the way for three minor deliveries after pause last year. philip has details this morning. hey, phil. >> a, carl. this is huge news for boeing investors. they like they finally have the approval from the faa for the
resumption the 787 dream minor deliveries. at me tell you what has gone down. we confirmed this with multiple sources over the weekend. the faa improve the inspection process with the manufacturing of 77 dream minors. that essentially means they are saying okay, when you build these, we like what you have put in place in terms of these protocols. now you can resume deliveries. each individual dream minor has to be still approved by an authorized faa regulator. somebody who will look at it. it will do an audit of that aircraft. we have been down in charleston. we see some of the work they do in terms of checking the gaps to make sure they are within specifications on each dream minor. what does this mean in terms of the dream minor backlog? delivery stopped in may of 2021. they haven't been delivering these for 14 months. they have approximately 120 that are built but not yet delivered. they will clear out that
inventory. as you take a look at shares of boeing, that inventory is worth $25 billion. this will help the cash flow, not immediately. this will take some time. is you go into 23 and 24, that is where you see the benefit in terms of the cash flow. the first delivery likely in a few weeks no specific date has been set at this point and is instructed to go to american airlines. american is expecting to receive nine a dream minors this year the benefit of the dream minor delivery resuming is that it comes at a time where you will see long-haul traffic, the international traffic, the routes that the treatment is closed for, they will start increasing in the next couple of years perfect timing for the resumption of these deliveries. >> this is something that's a big win for calhoun, obviously.
next i would say is the hope of a china deal but with house speaker pelosi flying around. i don't know if that will happen. this is pretty huge. remember monday percent this would happen and it was a long time ago and it was a great amount of disappointment? this ended the disappointment to carriers. i think that is a big think, don't you? >> you combine this with the stabilization of 737x reduction of 30 a month. that increases middle of next year they want to stabilize at this year. that is the expectation through the early part of next year. if you can increase that coming up is huge. will not see the huge benefit in terms of cash flow right away. there will be some benefit there but they still have some charges there. it is in 23 and 24. that is when you start to notice the benefit of this. boeing will be increasing 787
dream minor production. they will move up over the next year and a half because there backlog in terms of orders some at 400 5480. they will burn that off. e a huge story going to help thdow this morning up 4%. appreciate that very much. that is our phil lebeau. the u.s. is said to be mowing a crackdown on chinese chipmakers. we will fill you in and take a look at futures here. you have some weakness in the premarket. oil is down 5% today. we will preview earnings coming out as. cut marriott, uber, live, paramount, anc and more.
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the u.s. reportedly considering a crackdown on memory chipmakers in china. source to sink this will bar he was shipments of chipmaking equipment to chinese memory chip manufacturers such a move would protect u.s. chipmunk makers. we will hear from the former later this week. you mentioned pelosi's strip which although not specific is expected to include a visit to taiwan which china said would raise their hackles. >> i do think there is somewhat related. ukraine, you have to make a stand if you are the biden administration. i also think this is very bad news. all of the big, everybody sends to china.
except for a snl us which blocks from the netherlands. lamb doesn't want this. applied materials doesn't want it, kaylee doesn't want it. the same time by on city was reported this morning the stock had spiked last week. this is very much auto it's down 6%. the chip market is all over the place. all i can tell you is there is the long trips everywhere. we are finally getting, we don't have enough high performance chips. that is still okay. i don't know where the on semi trip is going. i know texas instruments, they are going to autos. the autos need them very badly. i keep thinking you want to so on semi, you must think that autos are going to be a glut. i think that autos are still seriously seriously short. adam
jonas has a very positive filled out today about. but this breakdown has to be watched. be expect in advance. simmons are really at the heart of what is going on right now. we don't know what they are making the right wants. people take from intel. i think they're proving them wrong. i think advanced micro will be good not bad because they are due high-performance. people saying advanced macros are heavily related to pc, but is completely wrong. it is 10% or less. if you extrapolate intel i think you will miss a good one. >> you haven't been fazed by the loss of pcs the loss of crypto. you think gaming and auto keeps you in the game. >> gaming is going to be concrete. sony have bad gaming. the achilles' heel will be gaming as is and video because gaming a slow. i think that's why the stocks were cut in half.
>> it is true. the price action has been tough this year. we will get cramers matt dash account. take a look at the premarket as we get that opening bell in just under 10 minutes. so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision. let's create supply chains that have an appetite for performance. ibm. let's create.
time for cramers matt dash as we countdown the opening bell. >> wells fargo says they took much guts and action to everybody else that they should be clean of inventory. they are terrific what you want to buy target when the economy is slowing because they have great prices. they think that investors seem to perish in the 2023 earnings
recovery. is is the kind of thing that should frame the bears. what it says is cornell, who was such a smart guy, said okay look, i see the consumer slowing and i am taking action. is plants says the first to recognize is also the first to see a return. i like this very much. i think target has a foundation for recovery. when you speak to brian who is a smart guy, he would say listen, we got it wrong. we cleared the decks. i wanted to buy allie's bargain story i was bargain being on the member of all is fine. there is only so many watermark books that you can buy from flood damage. i do think that brian cornell is the one to watch. the stock, by the way, is selling at absurdly low at 15 times. this is target. is one of the great merchants of our time, 12 times earnings for next year. i like this call. i think cornell would have a
lot of praise for taking the action. >> go to 155. they do say the inventory problems they were not alone. walmart, that is in the note. >> some get it right. >> still not cutting them a break, are you? >> know. i am not. not because i'm not a nice guy but cornell said listen, everything goes. walmart is dripping and driving. i think what you have to say is i want to go to the company that took radical action. this is a radical acceptance to use a psychiatric term of a recognition of the consumer. man, cornell is smart. when you speak to cornell, here self-effacing whereas the walmart people are like just you wait. >> we still have a lot of consumer guidance headed our way over the next five sessions. don't forget, you can catch us anytime anywhere. is into and follow this? on the street.
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responsible investing. mark zuckerberg reportedly said modest growth forecasts have been too optimistic. he told staffers late last week and the company mistakenly expected a bump in usage and revenue growth during the covid- 19 lockdown would be sustained. kind of an echo of what some if i said in their memo. we made a bet that this is going to be forever, and a sense. >> a lot of companies, with the exception of amazon are unable to recover. a lot of companies didn't realize that it was a little more cyclical than they thought. moderately is weber. weber is in real trouble. i think that indoors this is going somewhere. going somewhere is the winner indoors is the loser. i just think that people just got to understand that we have had to be endorsed because of
too much like what we went through. that was the netflix problem. sure, the weather is bad but we will see disney soon on august 10th. if they didn't go to the theme parks and it gets wrong i think there was a okay maybe we hang out with them. and he said that is closest weekend. i think they need to make it easier to use and game stock has to become the principal supplier. now he has got to do -- nobody i two reasons related to affiliate with that at all. jim, we please stop saying he found it. i mean ice cream, i don't know. where is the guy? where is on aaron? they had the guy from imax today. but, we didn't have adam and erin later in the week. >> there is the opening bell cnbc opening exchange.
it is consumer goods packaging company celebrating 25 years as a public company in its first day of trading at the nasdaq afs intercultural programs, a global not-for-profit ringing the bell for the first time in their history. seasonality in august is kind of neither here nor there. it's not like we need to worry about seasonal historic trends. >> and 87, the last week of august pretended bad things to come. they tried to hold it together in september and failed in october. in really bad times at the end of august, use the actual announcements again. we didn't have many pre- announcements this time other than the parent is part one. >> in part why earnings estimates haven't really come in to bfa this morning. it does argue that earnings estimates they need to come in. >> i think they do but stock
prices have come in. the stock prices proceeded the earnings cuts which then proceeds people just need your the risk. is a lot that steve is meaning that the stocks are ready for some disappointment. obviously if it's right in your face like oil today it doesn't matter. chevron had such a good number. chevron be showing you that you may think oil is lower and it matters. but what will happen is the numbers are going to be incredible. will the numbers be considered the last good numbers how i think they are interpreting refinery? that is very positive for inflation and very negative for a lot of the oil and gas. i think oil and gas in america is just extraordinary. forget it, opec can't look the world like you think they can. this is very daunting.
>> for a moment we?? below 93. tonight i have been saying we are low on oil. we just think that there is just not enough in the world. this is reflective of china, reflective of a bunch of numbers in retail. and spain factory. people just feel like oil is really slowing down. i think it is the demand-side. i want to see the supply side flood the world and that is not happening. >> you don't have big aspirations for oil plus this week? >> this is a knee-jerk off data. i do think there will be people who once again so oil and they should remember the dsp don't stocks in october and they should understand that we are still not pumping in this country at the level. i know that brian will say this on is pumping furiously. chevron is getting them what
they wanted. >> exxon's qualitative commentary last week was that refinery capacity was taken out 3x the prior financial crisis. right? >> they still have a big refinery for sale. do i think oil is by regular? yes. yes. >> you don't think we cracked into the 80s? >> know. i haven't seen 90 and 110. stocks are reflecting cataclysmic. a lot of these companies report this week. he may say it is the last good quarter, i don't think that. i just don't think that because in the end, a lot of the oils are insulated themselves. they just pay these special dividends.
they are cost per bowel is incredibly low. natural gas is amazing to me. we saw australia is trying to put limits on how much they are sending because they don't want to be sure it themselves. you can see okay spain. >> jeff carr has been right. i am going again. 65 would mean heavy recession. that was mean our country's. including devon marathon halibut apache they are all toward the bottom of the list. >> it is still down five. i'm going to have to be on that to see what's going on. it is a great company. if he says he is not going to say it and i hear him speaking of the ceo. is not going to say all of this for me.
i don't know where the auto week story is other than to say yes it is coming down. so maybe the autos are weaker and i am not seeing that. >> very much so. >> i was going to say, if you're looking for cooling inflation, he will be reminded next month the cpi is largely about energy. >>, saying it -- >> the one to watch as marriott. is marriott says good things and i think tony was going to say good things, the consumer is still okay doing different things not gaining, ordering through amazon or going to dollar tree, not buying a lot of apparel, but traveling. that is a good scenario for boeing, for the airlines. southwest has a number cut. a decent scenario for oil, not great scenario for oil.
i can't write off oil because there is not enough of it. i still think that matters. >> hiltons quarter was so strong that if the consumer is really still moving to services, big implications for names coming our way. he mentioned marriott starbucks mgm, caesar. our trips coming up this week? >> that is going to be howard. i am urging you right now. come on and tell us about how things have improved. presuming they have improved. i to think that one of these i always thought was amazing was starbucks hired in buffalo someone who is in an organized. >> i would have checked that is in a close fit it is a bad resume to hire. union organizer. i once helped a union organize
and i was the worst hire imaginable. >> what did you do wrong? >> i tried to break a company that went out of business. it was not great. we all lost our jobs. >> that didn't work out. i want to turn into apple because this four-part offering bond sale to fund buybacks and dividends is interesting because of their size but also because they have a reputation for timing the market right. >> i do believe they are making a book big move into finance. i still think will tim cook told me they are punting on the info. i think if they got the contract, that would be unbelievable. finance coming on into maybe have the nfl. in the meantime, you have morgan stanley. i shot them an email. i sent them an angry email. no, not really. >> reiterating an overweight. >> that guy is back and away. he is so not katie you ready. he doesn't like it.
>> katie's replacement. >> i was really reeling from his negativity. it was basically services okay. >> about how coleman see john. >> what i did feel was that he is trying to distance himself from the 100% bullish case just when i think she should not. if china opens of, like macau, you're going to wish you stuck with katie huberty's wrap them in the huberty is research director, i botched it. she gave him the link. that's okay. i don't know. i happen to love the shot very much. i think they would have read negatively. and i was surprised that it was so negative. >> win we were talking about was berkeley is on cable. both
our own. there to equal weight. they take turner to underweight jim as they ponder in the wake of both of those quarters whether or not the foundational trade of cable at this point broadband is being questioned. >> that was very disconcerting piece for those of us who work for comcast. basically say they peaked and that t-mobile, everyone is wanting how aggressive t-mobile is. it was a strong case to sell. >> one of their points is that his team owes guidance comes to pass, it will be larger than all tis. >> one of the things that the piece, which was an excellent piece in terms of the bigger said you have to understand that everything is on denial. they are and tonight of what is doing denial with t-mobile. mike has been going after every -- i felt when i read that --
here is what i think, they have to come up with more things. the ball is in the court on our network. disney has theme parks that are jammed. why do comcast put a theme park in new mexico still trying that. >> is will be the last thing you do. >> i have to work at disney. comcast has to start putting them around the world maybe? and they have to start integrating what they had in europe better under the wills coming back and doing some tv on friday. that piece was a dagger. it was a dagger basically saying you must get out of these. it was so emphatic that the numbers have peaked that the numbers were very disconcerting. >> we will keep an eye on that. clicked it on the open but
dollars off the initial low down 143. you can get it off the cnbc investing club. find out more i cnbc.com/join the club or use the qr code on the screen. it will take you right there. as for bonds, we are watching closely. the two-year yield was lower this morning. obviously a big week for macro. the jobs number along with all of the s&p guidance look at tenure 0263. back in a moment.
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is of the lowest levels in over two years. july of 2020 you are at 50.9. we continue to monitor all that is manufacturing and specially in light of the inflation reduction act which takes direct aim at manufacturing. squawk on the street will return after a short break. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster. for a solve problems like a genius world. workday. for a changing world.
@big earnings to tomorrow morning from. don't miss our interview. it will be 9:00 a.m. eastern time zone we cannot wait. >> i think jen has done a remarkable job in terms of really making it so cats on the monger up and down. obviously he is we were to mining metals but oil is more important than china. the crosscurrents are great. that will determine what it looks like. i love eden i think it is a great company known. i am really thrilled. i think jim is one of the best i have ever seen in industrials.
he has changed the model. we will know where america is after you speak to him. >> up $25 in a couple of weeks. >> he is just money. i wish he hadn't run advance but he is money. he has managed this thing the way a on cyclical manages things. cat, never buy cat going into a recession with umpleby you say wait until you can see what he can do for the good. >> meantime, google's show sending a message to employees productivity and focus of the company must improve, he says as he launches simplicity sprint to gather employee feedback on efficiency he says we're facing a macro environment with more uncertainty ahead. jim in, a time where you're getting better cash flow at old-line energy companies than you are out of tech. >> i look at alphabet with aof cash and a lot of other players in the industry, they are subtly just not filling jobs. engineers leave, and the next
thing you're going to see is an inventory glut recession and the first group of unemployed that are really going to get thrown out other than the amazon people are the engineers. and a lot of these places have said, you know what, we've been riding it, and we can't do that anymore. we have tighten our belt that's been a sign that things are bad. i take it as a sign of realism they have just been crazy. they felt that they are immune to everything, but alphabet did have very good numbers on travel and entertainment. >> i was going to say remember the days when the knock on alphabet was they were fiscally undisciplined and now we're in an eare a of hyper discipline. >> the cfo, she hasn't tolerated it she's been trying to assert this now it's really, really happening. i think it's very positive but, obviously people don't want to believe it a alpha can come out of it. read the procter & gamble call the procter & gamble, 50% of
their advertising is digital now where is that going? it's going to twitter? well, maybe some, i don't know twitter -- we could talk about the cesspool that twitter is. >> yeah. >> but i think it's going to amazon and alphabet. because, you know, when you type in tie, it -- you doesn't exactly send you to porn. >> we try -- i tried to get you to look at some of the wrinkles on procter friday. you weren't having it. >> no, i just think -- i thought joe asked you a very good question do you think the stock would be down it's down a lot more than people remember the -- they say the last month they lost share, but they can turn -- i'm totally viewing it as when i look at the chemicals, they are all coming down when i read the dollar tree story, anything, it looks like there's not a lot of trade down, so they should be able to hold multiple expansion like cole get. people like colgate. procter is too good a company to write off and everybody has decided to write them off,
everybody, in one quarter. people now think that producter is a bunch of fools, yesterday threat really big single-digit growth look, i'm not going to fight, you know, but people are buying stocks on big dips have been making very big money, and procter down 9 was one of those things where the traders were saying, listen, i got you an average price of 139, and it went on 138. i'm a genius that's what they do, bang it down at the close, but i have to tell you that prock procter has had it, that's wrong i thought he did a good job on the call. >> meantime, you've got the dow down 63 today. let's get to bob pisani. good morning, bob. >> very defensive tone to the market speaking of procter, they are holding up things, coke, merckx, a defensive tone consumer staples leading that tells you it's a little bit of a defensive tone for the market here. tech is flattish you see the metals and mining stocks and commodities like
energy down. it's curious to me, i want to -- carl mentioned a i want to mention that futures dropped when we got word of the apple four-part bond deal just before 8:00 a.m. eastern time and even oiled dropped, and i'm not sure they are related. remember, the idea is you float the deal now when interest rates are low and maybe they will be going back up. apple has a reputation for knowing what they are doing in terms of the timing for the kinds of bond offers, so maybe this signals the move down in rates is over, i don't know, but we did drop on the futures as we got the word as for the july real 9.1% gain in the s&p two things that happened there bulls convinced a lot of people that there was going to be a fed pitch-out meaning that the fed would cut interest rates in 2023 you see all the fed officials pushing back against this idea last week and over the weekend sorry, guys. it's not going to look that way, but nonetheless, the market came to believe that. the second part of that rally was the earnings kept holding up the earnings apocalypse i kept
calling it hasn't really happened look at where we are in the sectors. what's rallied from the june 16th bottom is largely cyclical sectors that would do better if you had a bit of a pivot consumer discretionary has been strong, technology, real estate and what's been lagging is consumer staples remember, the s&p is up 12%. big tech has held this real. apple an absolute monster, 25% since the bottom paypal and nvidia which had a horrible time for several months rallied dramatically and so did microsoft and micro. these stocks aren't moved off the bottom, you get notable rallies. the whole story other than the fed pivot idea that bulls have is that we've been stable in it the earnings q2 estimates have actually been going up in the 6% range, now in the 7% what's come down is q3 and q 4 you see the 7.23 for q3 an so
were the q4 numbers in the mid-8s they are definitely coming down i.wouldn't be surprised if the q3 and q4 numbers were in the 6. rarl, remember, even when you have a mild recession, that's in vogue that word mild, earnings tend to drop 10% to 20%. they don't tend to stay up 7%, 8, and that's why a lot of people feel that at least the flashing from the corporate america, the earnings boss tour still doesn'tindicate any kind of recession and if it does, a mild one at worst. back for you. >> thanks for that jim, what are you going to tackle down? >> we've got travel and fire, stephen scherr and agco, a good indicator whether we'll have a food problem or not because they are premiere food equipment and then we'll have second raimondo. >> a hunk week. >> working very hard to get jobs created. >> that's going to be the next challenge, implementing this new
law. >> it doesn't say solar. they should add the word solar and they can get through. >> jim, we'll see you. a long week ahead. >> a great week. >> 6:00 p.m. eastern time. as we go to break, dow trying to shave away some early losses down 36. don't go anywhere. - hiring is step one when it comes to our growth. we can't open a new shop or a new location without the right people in place. i couldn't keep up until i found ziprecruiter. ziprecruiter helps us get out there quickly and get us qualified candidates quickly. they sent us applicants that matched what i was looking for. i've hired for every role, entry-level technicians, service advisors, store managers. ziprecruiter helps me find all the right people, even the most difficult jobs to fill. - [announcer] ziprecruiter, rated the number one hiring site. try it for free at ziprecruiter.com
on-premise... in the cloud... and right here too. comcast business. powering possibilities. good monday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla david faber has the morning off. morgan brennan is on maternity leave. kick off a very busy first week of august. macro dating under the belt with pmis with more rick santelli has got t.ray, rick. >> reporter: ism manufacturing for july expected in the vicinity of 52 comes in a bit better actually at 52.8. 52.8, but that's still on the light side because anything in this 53 or lower camp, you're looking at levels we haven't seen since the summer of 2020. it not sles a minor improvement,
and if we look at the prices paid component it moved down dramatically from 78.5 down to 60. down to 60 this is a huge move. 78.5 down to 60. we haven't been down as low as 60 since, what, august of 2020 nearly two years the high water mark right in between there was 92.1 that was in june of '21. that was the highest level in 42 years, so it's very welcome to see that move lower. new orders still under 50 in contraction mode at 48 that's a miss. sequentially following 49.2 and on this very special week where we do get employment, the ism employment at 49.9 just a whisker away from the expansion separation line. definitely an improvement over expectations and sequentially higher than 47.3 and maybe some of the worst news i've seen in a while. housing just gets worse.
june, a couple months old, on construction spending, down 1.1% that's a human miss, and it gives us a rare -- well, they just revised it. i was going to say a rare back-to-back negative reading. last month is down 1.10 and moves into positive territory but minus 1.1, really a very, very low read for our june construction spending. sara, back to you. >> looks like, rick, the market likes that data. lower prices paid, a little bit higher manufacturing overall we're recovering off the lows here for stocks. rick santelli, thank you. we're about 30 minutes into the trading session. three big movers we're watching. boeing is heading higher after getting the green light from the faa to resume deliveries of its 787 dreamliner separately its workers will now vote on a new proposed labor agreement on wednesday after averting a strike that was supposed to begin today. eb player neo rallying after plans to open its first overseas plant in europe in september, and in line with alibaba
releasing a statement saying it intends to keep its new york stock exchange listing after finding itself on the s.e.c.'s potential removal list over its auditing practices shares though are down still 22% in a month. in a month that was pretty positive overall for stocks. >> turn to the broader markets this morning as we kick off a new month of trading our next guest points out new area of opportunities, including a sector that remains a top pick despite recent recession scares. joining us at post 9 we're glad to have adam parker, research founder and ceo. >> thanks for having me. >> i wonder if you react to the data are you impressed or moved by some of the disinflationary metrix coming in >> you know what is interesting, and this could be confusing to some of the viewers. there's a difference between nominal and receipt. can you have a 1% gdp and 1% inflation and get zero you can have 8 and 8 and get zero and what's confusing people we have a very high inflation rate and a nominal gdp so in
earnings season you're seeing slightly better numbers than people think because the nominal gdp is high at 8% and we have negative cpi so don't be misled it will take time for the fed's action to slow the economy down, but i don't think people should be mistaken. it will slow and it will slow more in the next couple of quarters that people think. >> the idea of there being a recession to you is not if but when. >> you know, i -- i think -- when i focus on corporate earnings, sara and i were just talking about this a second ago, look at the revenue growth for consumer businesses over the last 20 years. basically every done sumer industry, retail, restaurant, they all grow between 6% to 8% to have the last 20 years, look at the trailing 12 months, 20% for every single one you know we've pulled forward revenue from the future and that ritz are going to slow is it all in the price i don't know i don't think so i think what companies have missed they have generally gone down. not all of them, generally, so i
think we're in this sort of period where i would say i can't be as optimistic as i was a month ago because the market is up 9, s&p 12, nasdaq and my expectation for earnings are not any better than a month ago. i'm not like dr. doom, but you have find winners and losers in that context. >> it sounds like your view is you're not super positive on stocks right now on the idea that a lot of what we're seeing is sort of distorted by covid, and a lot is -- the giveback is still going to come and the downturn is still ahead of us. >> it's interesting, i think it was quote, unquote, i want reopening exposure and i don't want work from home exposure you look at it and there's good reopening exposure and bad depends on the quality of the balance sheet, what the expectations are for revenue and how much the consumer is going to spend you can look and say carnival cruise, that's a reopening stock, but they have high industry expense and income and lots of didn't and have to repay it it's not all just reopening, yay
and work from home nay i think it's a stock pickers market more and more as we go forward as we get farther and farther from the covid trough. >> the counterpoint to your view is maybe we're seeing the worst of it now. maybe -- maybe we can avoid a hard landing maybe there's a big cushion in the economy than feared as we get these better than expected data releases with the fed still hiking like this. >> i want that to be true for, you know, mesh aamerican and hun society but i don't think so based on what i see in the long term you can send up a scenario where equity is good in the medium and long term and right now the s&p estimates are $243 for 2023. the real number is 2010, 215 so a 15% haircut, is that in the price? i don't know i don't think so and i think you'll see a little bit more disappointment as we get later in the year. there's still things to own. i love energy. i think you can buy some copper and aluminum for the long term and make a lot of money.
most parts of health care i still look pretty attractive there's things to own and i don't think the s&p, you know, is going to tank but the risk/reward skewed more to the negative than a month ago. >> if the street has rose colored glasses, does corporate guidance have rose-colored glasses? >> the companies that you know because you've been interviewing these people for years and you can do a job not making them feel better six months later they are the last guys off to know you can go out and the supply chain and figure out what's going on look at markets that are the most optimistic, you go out and say i couldn't produce what i needed to. can't get the sill cope. make sure i'm in the backlog, whatever and as the economy slows you cancel the backlogs so the revenue can really collapse for some of the businesses i don't think it's draconian but the risk/rewards skew the negatives on corporate earnings over the next couple of quarters >> why do you like energy if you think we're going to a recession in. >> it's interesting. what's interesting if i told you five years ago we'll have a big scare on a recession but oil
will remain at 100 or above 100 and brent, you'd be like really? in the past that was 40 or 50 or 60 the reason i'm more optimistic in the medium and long term is demand growth will exceed supply growth you can't say i don't want to extract and i'm mad prices are high i think the demand for oil is pretty darn good whenever i get a dip of 20%, 30% i'll want to way that dip where other part of the markets and other consumers i'm not excited about buying the dip i think it's more about a shifting dynamics on capacity and shifting demand. you can't tell me bush didn't say this some people would say the terminal value of oil is zero, really peak consumption will be probably 10, 15 years from now that's a long way anticipatory to get negative on loyal >> if some of these prices paid interm and get reflected in cpi the next couple of months, do you think the fed has the resolve to just plow through it. >> i don't understand the fed's calculus we talked about it a year ago. >> nobody has a framework.
>> they were buying billions and billions of mbs when housing was on fire in every msa what i know is math of cpi the math of cpi is one-third the owner's equivalent rank. that will stay consistently high for a long time y. because young people are saying i have high borrowing costs and high home prices i'm going to rent for a bit. one of those things has to beingia. prices have to come down some or the 30-year fixed will have to come down. so i'm going to wait and represent the. i'll getting upward pressure on cpi. if i were the ed if, i would say wait a minute. guys, we convinced for many years we could run below 2% cpi if we staved off inflation now we're on the other side. we'll run above 2% for a long time but i'll try to take the edge off of hyper inflation. that's what they really want to say but it's going to take furr to five years to get to 2% cpi the math of cpi is going to say down 10 and that's massive and why would they want to do that >> well, it could come down fast. >> and then they would have to
cut rates in the second half 20623. >> and the conversation on this show would be a lot different if they do that the respect of the organization will have if they cut rates at the end of 2023 will be low. >> you're in the dudley camp, dudley in bloomberg saying it's wishful thinking that the fed is really pivoting here. >> i mean, i heard that we had a bunch of investor dinners last week and we heard a sentiment shift that they got dovish i think the cpi will remain elevated longer than people think. there's stock opportunities. there's hockey rinks where the fed does the watching. that's not the research i do when i look at the fed rate i can say there are things that i can own and things i can't that's not an area want to be overweight in the portfolio to e. >> it worked in the last few years. >> look, i think it works a little bit think about the nasdaq unwiped have you a two and a half year period still had massive countertrend rallies and everyone was setting up for in july, but now you're
looking at maybe it could last until september and your point is interesting positive momentum makes people more optimistic. >> yeah. >> a month ago when the market was in bad shape, people thought it was horrible. now i get a little recovery i feel better about the world. is the world better than a month ago? it is not. it is not. >> fair. >> it's just data driven. >> definitely sentiment positioning. >> yeah. >> huge swings. >> massive. >> great to see you. thanks for coming in. >> thanks, adam. investing a having a hard time getting a read on the economy this earnings season be a strong inflation and the dollar are wreaking havoc across the nation steve liesman with mixed signals from the c suite. >> interesting to follow the previous guest the economic forecast raise concerns about a loom recession the message from ceos is more mixed despite marquee warnings from consumers of wall mort and best buy, but not everyone is seeing the weakness and some are outright rejecting the recession
call. >> demand continues to be strong as you know, we've got a very strong labor market, consumer balance sheets are generally strong things are very good no recession. >> there's a lot of debate out there about whether or not we have a recession coming, but in my view, as we look a couple of our top markets, all of these we've seen very robust growth in q2, and i expect that to continue >> critical to the recession is what happens with jobs, and many ceos continue to see a tight labor market and suggest they are not going to be so quick to let go of the workers. you may not have the huge spike in unemployment. >> for me, the most difficult part is labor. labor is part of, you know, where we have seen the most increases over the last year. >> it is a direct labor, and it is skilled labor that is the hardest thing to get right now, and while 3.6% unemployment looks great, there's 11 million job openings in the u.s. and that means, you know, there's a
lot of things that we can't get done because we can't get the people >> all right in the second quarter so far, revenues up in every sector. earnings have risen 7 of 11 s&p sectors. goldman sachs, notes that the outlook has darkened somewhat. said in a report this morning that management guidance has pointed to continued revenue growth in this quarter and cap "x" above expectations for this year, so, guys, i don't know what you do with that, but you're right, maybe they are more optimistic out there in the c suite than they are elsewhere. >> steve, i also wanted to run by you the latest data that we got, ism manufacturing survey just out it was better than expected, though obviously it's been weakening. interesting component to pull out. prices paid slipping to 60 from 78.5, and obviously there's -- there's an energy relevance in this number and we've seen oil prices fall. >> right. >> but i'm wondering how much stock to put into these sort of inflationary, disinflationary
figures ahead of the big cpi report. >> i think you're right to point to the importance of this report, and you're right to point to the importance of the prices category inside of it sara as you know, the process is going to work like this. the manufacture remembers going to see the price breaks first or the decline in the commodity prices first, and now we have to wait to see the extent to which that moves on to the consumer level which is what, as you know, the fed is watching, so this is the first piece i think. we've had a couple others. some of the regional federal manufacturing surveys have shown those prices paid component coming down. it's going happen here first at the beginning of the pipeline, and we'll see how much it works down to the consumer level so maybe we get a break on the cpi report coming in july -- for july coming this month >> yeah. time will tell for sure on that one. steve, thanks. steve liesman, as we go to break, take a look at the road map for the rest hour. cryptors coming off its best month since late last year
how to trade it. some of the new names investors are betting on can take on bitcoin. >> moving in the other direction, chinese tech names. they are among the biggest lag yards on the s&p in july is there more to come? >> and investors eyeing higher taxes ahead for corporations across the board who could get hit and how it could play out this hour. a big show ahead as the dow 35n s&p move into the greeup 41 don't go away.
boeing is headed higher after the long-awaited faa for the 787 dreamliner one of many positive this morning as the manufacturer also narrowly avoids a strike at three of its plants. our phil lebeau has a wrap-up. hey, phil. >> reporter: hey, carl the strike news is important but i think the reason the stock is moving higher is because of the 787 dreamliner news which we confirmed through a couple of sources over the weekend here's what's happened the faa has finally approved the inspection process that every dreamliner must go through before it can be signed off on, ready for delivery that doesn't mean deliveries will start right away but we're likely to see them within a couple of weeks with the faa signing off on each individual plane before it is turned over to a customer. boeing has said production increases are likely maybe not immediately, but over the next couple of quarters you will likely see that happen. the inventory stands at approximately 120 planes that's 120 planes that are built but not yet delivered, so they
each have to be individually inspected, but boeing believes that that process should improve overtime they have an order book that stands at 476 planes, so as you take a look at shares of boeing, keep in mind this will be a big help in terms of cash flow maybe not immediately, but certainly as you go into '23 and '24. remember, they have already taken about $1.1 billion in dreamliner charges for abnormal production there will be more charges over the next coup of quarters, three quarters, but eventually you're going to see this swing to profitability here they also expect to increase their 787 deliveries gradually, but they do expect an increase as you move into '23 and '24 guys, we've talked about this before it comes at a perfect time for boeing and their customers because the customers are looking for long haul aircraft for the international routes that are starting to open up and will be opening up over the next year and a half. that is exactly what the dreamliner was built for
>> hence 96% move higher phil lebeau, thank you adding 62 points to the dow right now. kathy woods art fund finishing up july double digits snapping an eight-month losing streak some of the group's top stocks like tesla and block finished up july better than 20% but roku is getting crushed post-quarterly results. kathy wood joined cnbc on friday and weighed in on whether or not we're in a recession. >> what we do see in these earnings results is that we are in a recession, and we've been calling for a recession for quite some time. a lot of it based on excess inventory so we think this is an inventory-led recession, and i think that's coming through loud and clear. >> cathie road reiterating her stance that that we're in a recession which might be better for her stocks, the up profitable growthy tech companies which have been slammed on the fed raising interest rates
the lower multiples, you -- you buy typical growth stocks during weaker economic periods and lower interest rates which is something we have seen in the market in july, and that's why they rallied carl, a lot of people think that this arc innovation is the poster child for the last bull run that we've seen. and we've seen inflows even though the arc innovation etf has lost three-quarters of its value since the peak you just need to see the giving up on those type of stocks before we actually put in a bottom on this overall market. we have not seep that. >> yeah. we kind of thought we were getting there when there were etfs specifically designed to short which she's doing but even amid her recessionary narrative she buys more roku on friday, right, an area which would ostensibly be hit by a resflegs it's working a little bit today. wokeu is up 3.4 today. they have seen inflows this year they have not seep outflows to correspond with the performance, so i think the jury is out also, if we do go into a deeper
recession, is it necessarily good for these stocks in maybe you want growth stocks maybe you also want stocks with positive free cash flow and earnings. >> yeah. they would argue you want areas that will have a rmg laer percentage of gdp spending, i.t. spending, innovation, productivity, that sort of thing but it's fascinating to watch and gives us real belle weathers to see how sentiment is tracking. >> bitcoin falling today after the best month since october of last year. what we might expect in the days ahead and where you might play it if u'yore interested in crypto when we're back in three. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you...
july was a good month for the markets but a great month for crypto bitcoin up almost 30%. our kate rooney joins us now with a look at what cryptocurrency could be stealing, the bitcoin spotlight hand why hey, kate. >> hey, carl yeah, we usually focus on bitcoin but the world's largest crypto currency had a bigger most ethereum or ether was up 70% for
july versus a 30% jump in bitcoin and smaller currencies got a bid as well, still down off of the year and well off the november highs though. the july bounce has been partially macro related. currencies will still tracking tech stocks for the most part and have really been sensitive to things like rate hikes and inflation data but optimism around ethereum is specific to that network ether is the cryptocurrency tied to the ethereum network. developers tend to use that blockchain network to build things like nfts, for example, and it's in the process of what you can think of as a software upgrade. the way the whole thing is run or validated, as they call it, is going to change and the way new crypto is created will become a little bit more energy efficient and, therefore, more environmentally friendly the carbon footprint for crypto has really been a knock against cryptocurrencies and bitcoin in particular the date for what people are calling the merge is now on track for september 19th, but that date had been pushed back multiple times, so there's still
a little bit of skepticism ore way, crypto investors are pouring into the trade ahead that have time one address or people who hold ethereum jumped to a 15-month high and there will be a spot jump in volumes and some of the bullishness is playing how the in the derivatives matter. it's being called a parabolic increase for an interest in ethereum fufrps. getting close to the high back in november and this is, of course, all crypto currency exchanges. the majority are call options or the options to buy and the november and december expiration dates as investors are hoping for a rebound in ethereum after a tough year for that cryptocurrency sara. >> kate reason, thank you. for more on what's driving the price action let's bring in crumb bland head and dr head chris sulke.
is that zs that comes out of the crypto crash, that ethereum outshines becane it's been a month but kate made a good point. >> a month in crypto time is a lifetime i think she's right. one of the things we're paying a lot of attention to is the changing dynamic of ethereum relative to bitcoin and i think that analysis on the open interest was sport on. more specifically, we've seen a jump in ethereum open interest from 2.75 billion in early july to the peak of about 7 billion last week, and where it's covering about 6 billion right now. what's interesting there is the market cap of bitcoin is over two times that of ethereum, yet the open interest in bitcoin options is only 5.1 billion, so there's a much larger deployment to capital into e-options than btc options. where the developlers land right now, the december expires, the 3,000 strike, all indicative of
people leaning pretty heavily into the eth merge. >> what's the case right now for bitcoin? for a long time it was supposed to be an inflation hedge it was supposed to be a downturn hedge, like sort of a hard money gold-like. it failed both of those tests, so why buy it now? >> well, i don't think it a short-term blip in terms of its utilization for an inflationary hedge means that the thesis doesn't work long term it's a bit of a chameleon in thattard are a at times it tracks really aggressively, particularly with the nasdaq currently trading like a .65 30-decorlation but other times it will decouple and offtimes it decouples when the market has a bit more predictability in terms of what long-term monetary policy looks like and while the others fear the unknown in terms of what the fed is ultimately going to do, people are treating it it as more of a risk asset the way they are treating other assets as hard commodities while i think there's a momentary blip here, it's important to realize that the
underlying thesis of bitcoin hasn't fundamentally changed, and we see that in terms of how people are interacting for instance, if you look at the ratio of spot volume to futures volume in bitcoin, the actual spot volume has increased over the course of the past month, from like a .13 raichia to .18 ratio which to me implies means that people continue to me of in the long-term viability and they are expressing that via stock which has had a long duration as opposed to a future or option that will expire in the short term. >> that's interesting. it makes it sound like maybe you think the overall longer term price action depends more on the return of a retail investor than say an institution, or not >> you know, i think it's a little bit of both at the end of the day the institutions are ultimately going to i think recognize the importance of a decentralized asset and the ability to move assets in realtime across various different locations, and to that point i think
institutional investors might turn to bitcoin. they might turn to stable copies or any other number of assets that solve that problem whereas i believe in the shorter term the retail individual is particularly quicker to move and are the ones to jump in with some hard selloffs perhaps what we're seeing right now in the bitcoin space is the retail investors buying spot and what we're seeing in the institutional spot are the larger organizations putting leverage on in the options world in order to capture that ether. >> you clearly have a good vantage point here, chris, as to the trading, both from retail and institutional investors. so talk to us about how your business has changed cumberland does crypt currency trading, correct so how have you fared? we've seen bankruptcies from lenders and hedge funds blowing up what's changed for you >> well, listen, it's never good for nip when organizations default. it's not good for lows it's not good for the market it's frankly not good for the overall adoption, but what we
have seen over the course of the past couple of months is a flight to quality, and not in terms of assets but in terms of those that you conduct business with i think in the lending market, those organizations that have had sound risk management policies in terms of collateral and what not have gained a lot more attention than those organizations that were previously much more kind of further out on the risk curve. for our business, what we've seen is that a large portion of our institutional counterparties have been looking to us for the kind of backstop of liquidity and the dependability during volatility when markets are moving and when volatility is high, they want to know that they can conduct business with someone that has a reputation, someone that has been around for 30 years in a larger organization and understands common risk principles and practices, and to that end, we've actually become much more busy than we typically are given the lead-in by the industry to looking to the higher purchase quality events. >> chris, that's interesting
thank you very much from cumberland. >> okay. thank you. let's get a news update this morning with contessa brewer hi, contessa. >> carl, good morning to you here's your cnbc news update right now. the first ship carrying grain from ukraine left the southern port of odessa after months of a russian blockade that helped fuel a mounting food crisis that breakthrough follows as united nations backed deal between kyiv and moscow late last month 16 more ships that have been blocked since the beginning of the russian invasion are also waiting to leave odesa cleveland browns quarterback deshaun was the op will be suspended by the nfl for six games after violating the league's personal conduct policy according to multiple reports. watson signed a five-year $230 million guaranteed contract with the browns in march amid allegations of sexual misconduct during massage sessions involving more than 20 women and edgewell personal care company announced it's issued a voluntary nationwide recall of three batches of banana boat sunscreen after the presence of
benzine was found. that recall was issued for three batches of ban noh boat hair and scalp sunscreen pray spf 30 packaged ina aerosol cans. benzine is a carcinogen and bad for humans. >> the biggest losers on the nasdaq in july why our next guest says the ham serg not over. that's that's coming up after the break. a term policy - for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance.
digging into some china tech this morning, plunging in july marking the worst month of the year so far. alibaba trying to maintain its listing on the nyc meanwhile working on requirement for regulation requirements. joining us now is a capital managing partner of awesome and talking all things china great to have you back i wonder your reaction to some of the pmis and this notion that the market had -- that there was
no way they were going to continue to miss their targets by such a great degree what does this mean the data we got last night >> consumption is down we're certainly seeing much less purchasing amongst various groups within china, driven largely again as a hangover from the q2 lockdowns, youth unemployment is high in china. fears over mortgages, runs on the banks and that will certainly hit the e-commerce giants. >> is that just a leftover drag from the lockdowns because a lot of the headlines that we wake up to on this side of the world are about macawo recoping, no infections in nine days. >> it's an overall malaise in the economy. you saw revenge buying automotive prices and automotive purchases jumping over the last few weeks given that people didn't buy any cars in shanghai for instance, in april and may,
but overall i do think there's an overall apprehension in the market with consumers worrying about what the future may hold and, therefore, maybe less likely to consume at rates that they had been projected to >> pep, your headquarters is in beijing, and as someone who ises having and talking to all these chinese companies, what can you tell us about the risk factor of taiwan, especially right now as we're trying to figure out whether the house speaker nancy pelosi is actually going to touch down there and make a visit? >> i think limited commercial risk to these businesses again, it will be a certain overall macro factor that are global investors will take into account and could use to further discount chinese adrs, but i think overall, you know, this is -- this is, you know, the kind of chinese response to what looks to be now more likely visit from pelosi in the next few hours maybe even what will really be -- really be
the driver, not something from the american side, and i -- overall i think it will have a limited impact on commercial sides of things. >> for chinese companies, for american companies or for both >> for chinese companies in the sense that, you know, i don't think that this is something that would affect the kind of commercial relationship between the two countries. i don't see american companies facing a pushback from the chinese side otherwise, but certainly the chinese are going to try to draw a line in the sand here and ward off this trip however possible and make significant political-related threats around it. >> we mentioned china tech in the lead why do you think the hammering continues, and why wouldn't the government, given the malaise among the broad populace that you talk about, want to give at least some policy tailwinds to the names that have been beaten down >> a month ago i would have said we're expecting further stimulus, given the 0.4% slump
year on year in terms of gdp growth in q2, that there would have been more of government action on stimulus, on lowering interest rates, potentially printing more money, you know, and some of these larger infrastructure investment projects that could have stimulated growth and at least created some more positive news stories. the information that came out of the politburo meeting on thursday where they walked back and department mention hitting the 5% plus gdp growth figure cause immediate to worry that we're not going to see, at least in the short term, a lot of those levers being pulled, and, therefore, maybe they are holding it back for q4, who knows, but it -- it doesn't feel like there's as much immediate action coming. >> right i was going to say i mean, you mentioned q4, but is there a broad sense as to what growth will look look there in '23? are we starting to set some targets into in harder terms >> havien't seep the numbers ye,
but certainly as we've said consistently, this is a government that ties its legitimacy to economic growth. the rising unemployment rates, fears of kind of bank crashes, mortgages that are being paid on projects that might never be finished because liquidity has dried up for the developers, there's a lot of fears out there among chinese consumers and savers those will have to be assuaged, and i do expect a large-scale infrastructure project to be implemented so i certainly think the 2023 will be a better year than 2022. >> yeah. interesting, especially as we continue to feel a lot of earnings with companies highly exposed. starbucks this week, for example. pep, thanks so much. good to see you. appreciate it. >> thanks. as we mentioned, house speaker nancy pelosi kick off a closely watched trip to ashamp the big question will she make a stop in taiwan that's something that china has warned against pretty forcefully more on what we know the chinese would do here.
eunice >> yeah, that's right, sarah there is no official confirmation there are growing reports that speaker pelosi will visit taiwan in the coming days and meet with the taiwan president the exact timing is speculative by taiwan media say she could arrive as early as tuesday now, the whole region is consumed by the whereabouts of speaker pelosi she today was in singapore meeting with the prime minister there. the ishaan appropriate has been sparking a whole lot of debate in foreign policy circles, not only here in the region, of course also in the u.s. as to whether or not a visit to taiwan would be in the best interests of the u.s. or for the security of taiwan. the don't go camp have said that if she visits that could escalate tension between the u.s. and china, further damaging the relationship by creating unnecessary riskss risks and possibly threaten the security of taiwan.
the must go camp believes that the u.s. shouldn't allow china to bully it and that the u.s. needs to stand by taiwan now as for beijing, the chinese government which believes taiwan is a part of china claims it as its own and sees it as a threat to national security the foreign ministry weighed in on that, again ratcheting up a lot of the threats saying that the chinese military will not sit idly by if speaker pelosi visits taiwan. guys >> eunice, we know that investors are paying close attention to this. we saw futures dip on a report that show was indeed going i've been watching the taiwan dollar which has been weakening pretty much since russia invaded ukraine in january on fears that china may do the same for taiwan is there a feeling that pelosi is just sort of a excuse for what has been a long time coming in china strategy around taiwan, that it's going to happen
inevitably either way, some sort of invasion? >> well, the people who i spoke to here don't think that this is an inevitable situation, that beijing would in any way claim taiwan by a military strike or anything like that, but there is definitely much more discussion here, not only among investors but also among international businesses as to whether or not the risk for taiwan and for some sort of potential conflict could become a reality, so this is what her trip really highlights, some of the dangers that investors and international businesses need to think about. >> eunice, appreciate it very much we're watching her trip closely obviously and herritery, especially whether there's an overnight stay in taipei that's our eunice yeun. names like amd, uber and others are getting set to report key names to bet on or avoid
on semi, the biggest lagard on the s&p following results after a rough result forever names like intel and qualcomm last week. more on what's going on. the quarter itself didn't look that bad. >> it didn't look that bad, and i'll get to the why, but what we've seeing is a lot of cautious commentary from semiconductor manage president and on semi they warns that the remaining sensitivity to market conditions evened though, and to your point, the q3 guidance fell in line with expectations. they beat on the top and bottom line and yet here's the stock off the lows down almost 3% right now, but of concern was this was the cash flow from operations, over $200 million short from estimates that's according to the street account. free cash flow also fell short, but what we're seeing across the board is a growing trend that automotive and industrial chip
stocks are faring much better than consumer end markets. msp semi, for example, the second biggest supplier of chips to the auto industry, and they were able to give a strong forecast for the current quarter pushing shares higher this week, and they are trending higher today. areas like mobile memory and pc face weakness. the chip maker had chips fall chip of expectations but apple's results show how iphone demand remains pretty consistent. you've got intel suffering from the same macro weakness, even though intel ceo wants to convince investors the bottom is in the company though is also suffering interm execution issues, pushing its full-year guidance down dramatically its stock plunged 8.5% just last friday, so this is paving the way for intel's competitor amd, and amd earnings are out tomorrow after the bell. you can see the stock moving up
higher today, up over 3.5% and, of course, the chips and we keep talking about it driving the stocks and smh higher, actually 16% higher just last month alone, and we know that intel and micron are probably the obvious winners given the side of the cap "x" t billion spent over course of five years possibly dampening immediate impact carl >> kristina, thanks. watching on semis as we keep our eye on chips. meantime a quick programming note going to break. we said earlier caterpillar's chief sdwroin joins us break it down tomorrow morning, bellwether numbers for q2. cramer is excited about this one. supply chain, currencies, energy, mining, you name t. ism manufacturing read, slowest growth in a few years but expanding. new orders softening and prices coming down. great rates on inflation and
demand looking forward to that. and two names to keep your eye on pepsi and celsius. announcing a partnership with celsius. not the crypto and making 8.5% ownership. stock reaction up 17% in return becomes the main distribution partner globally, long term a board seat as well on celsius's board growing. monster and red bull dominating the market but celsius coming up fast fast pepsi's more stock "squawk on the streee we come right back. security ss all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network.
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welcome back to "squawk on the street." i'm dominic chu. stocks moving higher session highs s&p up 14 points at this point. consumer discretionary you see behind me a relative bright spot on the day so far. a wide range of names holding on to gains heavyweights, tesla, amazon, of course dollar tree and target among leaders. cruise line operators slipping again with royal caribbean down roughly 10% announcing a $900
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stocks turned into rally mode and so are bonds. look at the ten-year note yield. 2.6. just dropped below 2.6%, first time in a while. we did get that prices paid stub component of the ism manufacturing report showing a big drop in prices the bond market, stock market, seeing evidence inflation is cooling down did see that in the manufacturing report in a meaningful way whether just oil prices or further. either way, market likes it. watching technology turn positive within the s&p and nasdaq 100 now up 1% liking the lower rate story corporate taxes could be headed
higher soon according to a new health care and climate package backed by senate democrats, a manchin/schumer agreements what do we know ylan >> yes, sara, democrats' plans hit manufacturing industry hardest according to analysis by the joint committee of taxation. under this proposal, $1 billion or more profits have to pay at least a 15% tax rate right now means betweens 150 an 200 companies need to pony up. half are in the manufacturing sector tech and media companies make up 11%. another 11% are holding companies, and wholesale and retail firms affected, too republicans are slamming this idea warning about the risk of raising taxes ahead of a potential recession, but this is the one tax provision all 50 senate democrats might be able to agree on.
senator joe manchin saying closing a loophole and senator kyrsten sinema publicly called it a common sense step didn't say that nine months and and not supporting it now. waiting for the senate parliamentarian to scrub the act before saying how she'll go. we'll see what happens this coming week. >> ylan, keep us posts, thank you. dow up about 82 points, that does it store "squawk on the street." "techcheck" starts now. good monday morning. welcome to "techcheck. i'm carl quintanilla with jon fortt. d deidre has the day off nasdaq bounced back in july. is now the time to double down kathie woods thinks so calling it new leadership and breaking down some of her calls within tech. then now heard from a lot of tech heavyweights. some warning of further deterioration in ad spend. others, need to reduce hiring. some a