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tv   Squawk Box  CNBC  August 3, 2022 6:00am-9:00am EDT

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set if an hour and a half later this morning, 7:30 to 9:00 that we really look forward to. breaking news on crypto. two senators introducing a new bill that would regulate digital cur currencies it's wednesday, august 3rd, 2022, and "squawk box" begins right now. ♪ good morning and welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe kernen. and, well, becky quick is off today, so it's just the boys again. again, joe, but we're going to have a lot of fun doing it. u.s. equity futures at this hour, let's show everybody where they are dow jones up about 130 points. s&p up as well, 16 points high
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eric and the nasdaq, looking to open 53 points higher right about now. let's show you treasury yields, ten-year note up 2.765 let's show you the move in the past 24 hours. >> a plane flight heard around the world. i don't want to say all eyes, but a damn lot of eyes didn't you watch she's in taiwan's airplane and everything's okay. things didn't totally evolve into some worrisome situation we all had, it kind of came back and stabilized, but it looked like it was all about that yesterday, didn't it, which is weird, but uncertainty we know
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she's gone now. >> the question is the uncertainty over i don't know i mean that's the part you don't know. >> i know. we've got carriers over there, the record reagan. they've got four days of exercises planned. it's weird, isn't it if we were running countries, sorkin, would we do it this way, all this saber rattle and reverse saber rattling and posturing? >> no. not my way. >> all right let's talk things -- oh, we're not going to talk -- we'll talk about bullard in a second. he's going to be here. >> we'll talk about jim in a minute he's got a lot to say, and, boy, is it going to be interesting to hear what's on his mind. let's continue the conversation we're having right now because house speaker nancy pelosi did meet with taiwan's president in that high-stakes visit that did infuriate beijing, and we want to get to beijing right now where eunice yoon has been reporting overnight. eunice >> reporter: hey, guys
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speaker pelosi as you had mentioned is heading to south korea after her very controversial trip to taiwan today she pledged u.s. solidarity with taiwan and she was granted a medal of honor by the taiwan president who also held a lunch with her that included several business leaders including the founder of tsmc now, she also met with taiwan's president over the c.h.i.p.s. act and met with human rights activists toward the orlando f her day. beijing's response was very swift. they said this was a political provocation that was meant to embolden those in taiwan who want to see independence as opposed to falling in line with what beijing believes tee want is a part of china diplomatingly china summoned the u.s. ambassador. economically they banned some imports of citrus fruit, fish,
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sweets, they halted exports of natural sand and there's the military response. they announced minutes after her arrival they were going to have five live military rounds. they're holding missile tests off of tie wab this is after they dispatched 21 warplanes to the taiwan strait, all of this raising concerns about the possibility of accidental escalation, and at least in the short term, there's likely going to be disruption to the supply chain, and that's because taiwan officials have said that these live-fire drills are very close to ports. they say they are within taiwan's territorial waters and violate u.n. rules they also -- the taiwanese authorities have been coordinating with regional authorities, some in japan as well as the philippines about airline space because airlines have been reporting that china
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has been basically warning them not to fly into what has been described as danger zones that are around taiwan. so all of that as you guys were just alluding to kind of point as finger that perhaps some of in disruption is not over. >> that's what i was going to ask. are we talking about days here hours here or are we talking about weeks, eunice >> reporter: i mean it's really difficult to say because a lot of people are wondering exactly what can happen. i mean for the next several days, there are a lot of military experts who are worried about could there possibly be a mistake with so many military assets in one area around taiwan, especially when taiwan says itself that they believe that these zones that china has demarcated are within their territorial waters, so that's a
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big concern, at least short term but also what's interesting maybe long term is what's happening on the internet because her -- pelosi's visit was actually very closely followed on the chinese internet where at one point it almost crashed the social media platform people were talking -- there was a very loud voice of people who were saying they were disappointed that china didn't do something more, that her plane wasn't taken down or there wasn't some other big military strike, and now that actually is being tamped down. and state media has been focusing very heavily on the military exercises, and it looks as though they are trying to appease this nationalistic streak that is bubbling up, which could potentially lead to president xi jinping looking weak, and then if he looks weak, we don't know exactly what he would do next. so there are a lot of -- a lot
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of unknowns at this point. >> eunice yoon in beijing, we appreciate all the reporting you've been doing around this trip we're going the talk a lot more about this trip in the 8:00 hour with investor kyle bass who has some strong thoughts about what's happening in china and our relationship with it joe? >> a little strange, isn't it? i mean the ccp really ginned it up, you know, stirred up all the nationalist feelings because it's been going on for years where members of congress visit taiwan it's been a long time someone this senior did, so they get all fired up about it around now they're tamping down, that they raised expectations about how strong their response would be, and then they -- i don't understand it. i'll tell you. i think what they're worried about, once this gets out of the bottle, the notion that it's not
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a given that taiwan becomes part of china, if them boldens just the independence-minded movement for taiwan, that's something they want to cut off early before it goes too far. >> yep. >> the biggest skyscraper in taipei, welcome, thank you, speaker pelosi you can see. i guess we kind of do understand why both sides had so many, i don't know, signals to send to bolster their own point of view. i don't know how it ends up. when does taiwan become part of china, sorkin? and can they do it peacefully? negotiate a deal everybody's happy? >> you know, i've always speculated this happens in the next couple of years. >> and not a peaceful just everybody gets -- >> that part i don't know about.
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what i don't know is whether there's going to be strength by the u.s. and others to effectively fight back or not or whether they will. i'm not sure. >> all right. >> nobody knows. let's get to -- it's not really a strained segue, but certainly something totally different, and that is crypto. news out of washington about long-awaited crypto regulation poten potentially. >> good morning, joe top senators are introducing a new bill that puts them in charge of regulating bitcoin and either um. this comes from democratic senator debbie stabenow and senator john boozman senator booker and thune have also signed on this requires crypto trading platforms including brokers, dealers, and custodians to
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register with the cft c. it would set new standards for transparency and consumer protection, advertising, and impose fees to pay for all the oversight. it would close regulatory gaps, but they hold on guys, where to draw this line between what is a commodity and what is a security has been a land mine for the industry and regulators and that's why boenlt have been clamoring for congress to step in back over to you. >> yeah. security -- i know in terms of -- it's been a long time i had a cta commodities trader when i first got into business, ylan, and the cft c did not seem like a real -- i don't know. it didn't seem like the grt eatt regulatory body. i don't know
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wit as long time ago maybe it's in more of a position it makes a difference that the securities and exchange commission, the commodities futures trading commission we need to decide. if it's neither, then why -- could it be both a little bit of each >> yeah. so that's the debate that's underway right now, and currently there's this turf battle going on between the regulatory agencies over who gets to have the oversight over crypto the industry has been pushing for -- to be regulated by the cft c. perhaps it's seen as not as robust of a regulatory body, but this is being thought of it's really going to have to be up to congress to outline these definitions. we've heard, as we said, both the industry and the regulatory bodies say we need some clear lines because otherwise it's going to be handled on a
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case-by-case basis thashld just creates uncertainty for an industry that's already seen a lot of volatility. >> well, it seems like it's taken it pretty well 23,000 on bitcoin. thanks, ylan i love that shot everybody looks good next to the capitol. i don't know what it is. >> that is true. that is true coming up, joe, we are watching crude prices today ahead of a meeting by opec plus neighs on increasing output. a big lineup throughout the morning including fed president bullard and the cfo of starbucks. you're watching "squawk box" right here on cnbc >> announcer: this cnbc program is sponsored by truist
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st. louis fed chair jim bullard says he still thinks the economy can avoid a recession. in a statement bullard says inflation has come in hotter than he would have expected. as a result, the fed would have to raise rate as little bit higher than what he previously said he had estimated that rates would have to go to 3.75% or 4%. we'll have jim on at 7:30 a.m. eastern when he joins us as a special guest. i don't know we've got something on him, andrew he's agreed to 90 minutes to be here. >> it's going to be fascinating. i imagine his comments may move
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markets. >> yeah, they will we talk a little bit -- you know, cincinnati and st. louis are kind of sister -- we're not that far apart a lot of the same type of salt-of-the-earth people, fly-over states. as you're in the plain, you definitely look down at those -- from -- right? no >> salt of the earth, joe, you are. salt of the earth. >> that's the first thing you think of when you think of me. salty maybe. a little salty most mornings. >> let's talk about energy because we're going to need it let's see where the price goes with it. russia gathering virtually today to decide on whether to increase output in september for what is maybe ahead and where prices are going. i want to thank you for joining us
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you know, let's start here today's meeting, you think anything really newsy is going to come of it. >> i expect we'll get an incremental increase so i expect to see some type of -- couple hundred thousand dollars increase in barrels from saudi arabia, the uae. the question is this what president biden is looking for in his trip from saudi arabia? again, i expect some barrels to be coming back onto the market, but there's not a lot of extra capacity out there right now. >> so wti -- which is your favorite -- are you -- are you a brent person or a wti person >> i mean i'm an opec watcher, so i tend to be a brent person. >> all right so if you're braenlt person, look out, call it, i don't know, three months, november let's make it political here in the united states. let's make it political.
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what you do think the price of brent is going to be and maybe we can extrapolate what you think the price -- and then we've got to talk about, you know, refining and what not. but what it will cost us at the pump. >> i think the key question as we go into the back half of the year is not simply how many additional barrels you can get from countries and what are the demablsd i think the big factor to watch is what happens with russia sanctions. we have december my date is december 5th. what happens when the sanction on russia take effect? the european oil embargo is it going to be displaced from the market is there going to be some type of mekkism to move those barrels to asia? will you get price caps? will they say, we'll take the barrel no matter what? how it plays out, what happens to 2 million barrels, i think that's going to be the key to determining where the price goes, i think, at the end of the
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year. >> was that december 5th is what you said was your number or your date >> i am watching what happens in december when those russian oil sanctions kick in because right now we've had no russian sanctions. the question is what happens when europe goes out >> i'm focused on the first week of november. >> you're focused on the election what do you think the price at the pump -- no, no i think this is going to be a hugely important part of the story. >> this is a huge important part of the story, absolutely the question is do we think that brent prices are going to hover around 100 for the remainder of the year yes. barring some type of like major, major recession. right now the market is holding up fairly well
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we have changes in consumer beh behavior we've not seen a major design of demand destruction we have concerns that is what is keeping prices relatively constrained right now. the question is do you have a major movie higher going into november i think that's all going to be played out in terms of like what happens with russia? what happens with these fears about demand again, i think we're going to hang out in this $100 brent range. what does it look like in terms of how many russian barrels are off the market. >> okay. helima, i appreciate it very, very much. we'll talk to you very, very soon thanks so much. >> thank you. >> joe coming up, more on the opec meeting and u.s. energy policy we're going to talk with amos hochstein in the 8:00 hour. first the news out from instagram. less than a week after it rolled back some tiktok-style changes
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welcome back to "squawk box" this morning here's some interesting news for you, joe instagram's chief adam mosseri is relocating from san francisco to london. he would assist the company's creator team which helps certain users make money from their posts and counter the reaction to tiktok. london is meta's largest engineering hub outside of the united states with more than 4,000 employees including a dedicated instagram product team but i think it says a lot, i think, about what's happening in this whole sort of, i don't know if we're in a post-pandemic -- whatever we're in, but the work from home, work from the office, work from anywhere situation i think is shifting. you have lots of employees
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especially places like meta that have decided you can do it anywhere you're moving some of your most senior people to very different places than, quote, unquote, headquarters. >> it probably doesn't matter. has he lived in london before? does he want the live there? that's what i would assume san francisco is a beautiful great city. >> oh, i knew you would go there. i knew you would. >> no, i'm not saying -- >> is this a comment about trans? >> no. isn't it our most beautiful city it is. it's got some issues i wasn't alluding to those right now. >> that was my doing, yes. >> could you not be happy on -- in the san francisco -- i could be very happy in the san francisco airy. >> i could be very happy. >> i don't know if i would live right in downtown, right in san francisco, but i could -- i guarantee i could be happy in a lot of places out there. it's expensive, but beautiful. great weather. i mean the city by the bay
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come on, sorkin. great sports. >> i'm with you. it's great got me. >> so what are you saying? you are -- you're like just assuming that there's going to be an issue with something and now you're just assuming that i've got some reactionary take on every single think we talk about does he like london? i love london too. >> i haven't talked to adam about it. >> spell it out, andrew. spell it out what are you saying? >> maybe i can message him on instagram right now and ask him about his plans. >> it may not be london. i would be perfectly willing -- our schedule would be a lot better >> if we were in london. oh, our schedule would be great in london. we'd start at noon. >> i will not go on the i. i've been on it once. >> you won't >> no, no, no. i sat right in the middle and i couldn't wait for it to be over.
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i have something genetic about it. >> it's so slow. it moves at a snail's pace. >> that's the problem. when you go moving around the top and go over each one, it's like, i'm never going to make it they've got the things with the mirrors underneath is there an explosive? maybe it's over here the whole thing scared me, andrew the whole thing scared me. coming up, cvs health. i'm not going on it again. i'm never zip lining again here's a look at yesterday's s&p 500's winners and losers >> announcer: executive edge is sponsored by at&t business at&t is fast, reliable, and secure oh, i can tell business is going through the “woof”.
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good morning and welcome back to "squawk box" right here on cnbc. take a look at the futures the dow is opening up higher, looking at about 132 points
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higher nasdaq up about 45 points and s&p 15 points higher meanwhile cvs health earnings opening slightly higher. let's go over to bertha coombs. >> good morning, andrew. cvs is up $2.40 a shower revenues topped $80.6 billion compared to $576.4 billion estimate, the company raising full year eps guidance by another 20 cents a share from 840 to 860, which is also above expectations ceo karen lynch noting the company saw strong revenue growth across all of its business segments. we give you a look at the insurance side, aetna side 11% increase year over year.
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membership was inline. it's interesting given that they talk about the extended flu season and we had the surge of the ba.5 variant in late spring. in the pharmacy benefit services, cvs caremark side, revenues were up 11.67%. this is very interesting because you recall last year during the second quarter, that's when they got the big boost from the wider introduction of vaccines you had a much lower volume of vaccines, but covid claims are up 5.7%. in the stores, retail pharmacy sales were up 6.3% and that was driven, they said, by strong cold and flu, covid home test sa sales, and what they call pharmacy brand inflation in the front of the store still in the retail farm circumstance operating income was actually down year over year because of the low volume of
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covid vaccines, reimbursement pressure, and reinvestment in the stores andrew >> bertha, you know, one of the big issues has been this question about crime have they said anything about crime at these stores? >> they haven't. and they haven't really talked about it explicitly over the last few conference calls, but all of these pharmacies have been working together. they've been working with law enforcement. both locally and nationally to try to combat that in some areas, they've started to close stores. that's part of the whole shrink to fit and sometimes crime play as role. >> all right bertha coombs, thank you for bringing us that new this morning. appreciate it very, very much. meantime take a look at shares of paypal they're jumping, beating estimates of 86 cents. revenue also beat. the company announcing a new $15
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billion share buyback program. they're entering into an information-sharing agreement with one of its biggest investors. that's elliott management. elliott management has made a number of big activist plays for companies over the years. take a look at shares, though, right now of airbnb because they are lower vacation home rental company posting weaker than expected revenue for the second quarter, $143 million that's the largest quarterly number ever. that fell short of analysts' expectations, if you can believe that the current quarterly revenue is higher than expected airbnb announcing a $2 million stock buyback program, joe. >> and shares of match group catering the dating group reported disappointing earnings. the company also announced a series of changes to tinder's
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management team, including the departure of the ceo after less than a year. match grooks is kilalso killing tinder's plans on technology and metaverse dating. in a shareholder letter -- what, andrew >> what about dating in the metaverse? >> like i said, i don't -- i'm glad i got married, no more dating i don't want to exercise anymore. no -- >> by the way, hey, in the metaverse, you don't have to exercise at all. >> that's right. i'm kidding. that's an old joke where you don't have to date, don't have to exercise, don't have to somehow snehowe shower. >> pick your avatar. pick your avatar. >> no. that's just stupid
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metaverse dating >> joe, i think there's an opportunity for us to start a company right now. metaverse dating i think there's a lot. >> andrew, if the opportunity were to arise, which is very rare, but let's say it were to arise, that something could happen you're not even in the same area of the person you're dating. it's ridiculous. what good -- do i need to draw you a picture? do i need to draw you a picture? you're in separate locations you're not one of those phone people, are you? >> it can be very emotional. >> we'd better go. let's go let's go we're going into a rabbit hole the ceo of match group blames it on disappoints improvements and profit initiatives let's get to amd. >> think about the tinder swindler in the metaverse. think about that. >> i didn't watch.
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that i started to watch a little bit of it. i don't know let me start again shares of advanced micro are following. the semi-conductor maker reported adjuster estimates. they fell short of expectations. lisa su says she expects the pc business to decline more than the company previously expected. she'll be on "mad money" tonight with jim at 6:00 p.m. in an exclusive interview. >> and then what do you think about this one, joe? take a look at shares of robinhood, the company reporting a loss of 64 cents a share not as bad as the 37-cent loss analysts had expected. the stock is not moving downward, still, but it's been a tough slog they will reduce its head-count by approximately 23% it laid off 9% of its work force in april they cited the deterioration of the macro environment, rampant
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inflation, and the crypto market crash, and then, of course, there's payment for order flow, which could upend all of this ultimately. >> not as much action. maybe it's starting to come back a little they had that weird situation yesterday with the mixup with the ticker and all that. there's some reddit crazies around again now i'm hoping for those to get -- you know, at least the sentiment might come back. all those people seem to be gone. starbucks shares are higher. the company reported earnings of 784 cents a share, beating estimates of 75 cents. howard schultz said customers have not been trading down or reducing their spending. u.s. comps road by 9%, driving higher average totals and a 1% uptick in traffic and the company said morning sales are returning as consumers resume prepandemic routines like going
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to work. i want to talk more about it with rachel rah jiri in the 8:00 hour first on cnbc is. sausalito, sorkin. sausalito. unbelievable place. >> what about sausalito? >> i could live there. it's more expensive than 98% of the rest of the company vchlt you been >> i have been it's beautiful it's beautiful. >> have you ever heard of chet baker? >> no. >> got in a horrible fight, couldn't play trumpet for five years. i love saucedo. >> what's the commute like >> maybe not great but beautiful over the golden gate with the fog and everything it's awesome. >> okay. we've got a lot more coming up we'll have travel tips and places you might want to move later in the hour as well as the
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futures, which we have right now. dow up about 130 points, nasdaq opening higher by 14 points. the s&p 500 looking to open about 15 points higher. and later we're going to have a debate with hayman capital's kyle bass and the trip to taiwan and rising tensions with taiwan. we're back after this. so you know all you need for recovery. and you are? i'm an invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.
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welcome back to "squawk box. i want to get a quick check on things center square has $15 billion in management also joining us is kevin nicholson. the front has almost $10 billion in it. i want the hear what you have to say about what jim bullard may have to say. we'll get to that in just a second we had a raft of earnings reports. it's a mixed picture there's a lot of investors out there. there are some who pick individual stocks and they like do that. a lot like to play etfs or mutual funds or larger indices, and that seems to be a harder thing to do right now. >> absolutely. coming into this year, we were expecting choppy waters. we're now very deeply inverted
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have been for a while. it's a great time. this is what we theev on we like finding winners and losers we're seeing some fantastic opportunities in a listing space from a real estate perspective we can offer consumers fantastic perspectives in their portfolios you're able to harness fantastic trends from a demand per speck active that should be fairly immune to some of the cyclicals we'll see coming through. >> why reit? reit has been beating down miserably. real estate is going to lose value over time. mortgage prices are going to get higher it's going to get harder, you know, to get a loan. it's going to cost more. you just think it's beaten up so
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much is that the play >> absolutely. you know, i think in the selling pressure that we've seen, you've seen the baby get thronewn out with the bath water. on the other side if you think about what's happening from a housing perspective here today, we're looking at a very structural undersupply of homes in the u.s affordability is difficult today, to be able to purchase homes. so the rental housing option is really what a lot of consumers are looking at it's a fantastic opportunity, and at the prices we're seeing in the listed market it really provides a great hedge fund perspective. as i mentioned, we're still seeing rental rates increase, in the 15% to 20% today. >> khevin, we're going to be t talking to jim bullard in a
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little bit if you had a question for him, what would you want to know right now? >> i think i want to know, andrew, whether or not the fed is going to be consistent and continue to raise rates and not pause. i mean i think that that's the big question that has been on everyone's mind. that's kind of why you saw the equity market take off as it did over the last week or so because they're pricing in the fed pausing, and the fixed income markets, you know, we're expecting a recession, so -- >> what are you, kevin, personally expect? we had gabriella santos on earlier this week. she said, i don't think they're pausing. she thinks this fall could be tough in terms of equity markets as a result of what we have with the fed. >> yeah, andrew. i would agree. one of the things i think is important is the fed wants to get real rates back positive, and if you noticed last week, when there was a thought there
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was going to be a pause, you saw it go negative at the front and at the curve again, and they have also seen a loosening of financial conditions as far as being availability of credit and things of that nature, and really they want to drain the monetary system at this point. the way to do that is to continue to raise rates, and i expect that they're going to raise into the end of the year i expect to see rates at least 100 basis points higher. right now feds funds futures are pricing in four 25 basis point hikes through the end of the year, and that's what i had been expecting all along. i did not think they were ever going to pause, especially given how high cpi is. >> uma and kevin, we've got to leave the conversation here. we'll see where all this goes. joe? coming up, a global is
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executive solomon trujillo is going to join us next. he's served o groups including pesco and others he has news aon fund that he runs stay with us we'll be right back.
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the total economic output of the latino community in the u.s. was $2.7 trillion in 2019. equivalent to the seventh largest economy in the world business leaders like our next guest are taking notice. let's bring in trujillo group. the first institutional fund raising over $100 million by the
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like of j.p. morgan chase, bank of america and others. and trujillo group, too, probably the biggest of the angel investors. sol, good to have you on the vc ecosystem is like in the stone age or something 1% goes to the latino cohort ma makes no sense you want to change that. >> absolutely. good morning, joe. i'm a capitalist s so i believe in capitalism and making it work but i do have an idea about how we need to do things differently than the last century. one of the cohorts providing the vast majority of business formation, labor force growth, everything is the latino cohort.
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and, as one of the people that you probably know well, forbes s said at an event that the latinos are like the cavalry coming over the hill last year we had this conversation, you and i, on the show, and i decided afterwards that i needed to show people let's create the prototype, let's start raising capital, let's get the people to manage assets and have capital to invest but i had to start first with my own investment and bringing in the likes of j.p morgan, bank of america. and all the others that are there, because now they're starting to get it i want to showcase these companies, because they understand the market opportunity, the returns, the job creation, the wealth creation, and obviously, community impact that a lot of
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the companies that we're already starting to invest in, to make a difference and help all of us show that, boy, we should start creating funds we need new structures that allow for capital flow into this cohort, because they are the growth cohort in the country >> you've got oscar, from unite airlines >> we have gary acosta as well, the co-founder of the national association of hispanic real estate professionals, which is a very capitalist group, that they make their way by selling, by doing, by mortgages, by a lot of things and so we want to create that aura and that availability of capital for this cohort, because they need it and there's studies that show out of stanford that there's a
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lot of these companies that they start, but when they get to be about a million dollars in revenues and size and when they really need equity capital, it's not been available so we have to change that. we, all of us, the collective we >> yeah, we've had discussions about other cohorts, as you would say, that are neglected by the vc, and i don't know what causes that. i guess it's just because it's always been that way, sol. >> yes >> it's kind of insular. and i don't know, used to call certain bankers white shoe type bankers. and vc needs to shake itself up a little bit and get into the 21st century it's not some altruistic thing, but in its own interest. >> exactly and the main consulting study that was done last year showed that less than 1% of all vc capital and all pe capital went
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into this cohort it's b it's both of them. because there are some companies that are in series d, a round of funding that they need more capital, but it's sizable capital. the terms are very difficult, et cetera, so we, we that are in the financial ecosystem need to start talking about it, need to start creating structures that we have done in the past but you're, you're talking about insular. the study showed last year that most of the capital, when you look at those who aggregate capital, treasurers of states, they put it to work with the same firm. that's why you see a blackrock go from a trillion dollar size to $10 trillion. everybody continues to do things the same way instead of looking for the alternative.
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i frogrew up in the tech side what's the next wave of technology technology in this case, it's the next wave of growth in our country >> let's keep this conversation going again. and we'll see what's going on, maybe in september all good, sol, but keep it up. just the beginning, and we'll talk to you soon thanks for being on this morning. >> all right, okay, thank you, joe. another big hour ahead when we come back. st. louis fed president, jim bullard will be our guest at 7:30 a.m. eastern time he says the soft landing for the economy is still possible. "squawk box" is right back after this
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good morning futures are higher as wall street tries to rebound from back-to-back losing sessions and speaker pelosi departing taiwan after a controversial visit. we'll take you tlilive to china this morning for reaction and find out what the trip could mean to investors. and bullard thinks it's still possible for a soft landing. he'll be here for an exclusive interview as the second hour of "squawk box" begins right now.
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good morning, and welcome back to "squawk box" here on cnbc i'm joe kernen along with andrew ross sorkin. u.s. equity futures getting back from yesterday's losses. 128 now on the dow nasdaq was strong for most of the session yesterday on a relative basis up again this morning. and check out treasuries did you watch that yesterday it was like 255. >> i did >> if you looked away, it was at 277. you know, it's only, what, 20 basis points, but a little bit weird. saw it at 255 and next thing you know we're almost back to 2.8. oil this morning, which has been pretty well behaved, trending lower, 93 now on wti
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and crypto, bitcoin back above 23,000 this morning. up almost 2% earnings just out from under armour, they reported a profit of 3 cents a share under armour maintained its revenue outlook but cut its forecast due to a variety of factors including more promotional activity and headwinds in currency. meantime, joe was just mentioning bitcoin bitcoin and etet ear yum being regulated like commodities >> it would be under a new bipartisan bill introduced today. the digital commodities consumer protection act would define the
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two largest cryptos as commodities. the bill sets standards for transparency, consumer protection and advertising and also directs the cftc to draft rules for trading and it would impose fees on crypto platforms to pay for all that oversight. this proposal comes from debbie stabenow and john bozeman. senator cory booker and john thune have signed on, too. it would close regulatory gap, and other agencies have jurisdiction over other types of cryptos. the chairman of the cftc rostin benham says he's encouraged by the movement in washington to work toward grants his agency more authority >> what would be the time rline for this
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>> i think this is still far away, andrew i think they're still sort of testing the water and sort of socializing these frameworks with other members of congress, other members of the senate. but i think what's interesting is the two big bills around crypto regulation o so far, the one from gillibrand, and now this one both give the cftc quite a bit of authority i have yet to see a bill that outlines what the fcc wsec woule authority over they have been using youthe pow of their authority to go after some platforms congress for now appears to be pushing back we'll see how senators think about this bill and whether they get behind it as well.
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>> yum! brands fill short. revenue was in line with street forecast comparable sales for the parent of taco bell, pizza hut and kfc rose 1%, slightly more than analysts had been forecasting. joining us to talk about some of this morning's stock ideas, and a cnbc contributor, we're getting, i call it stragglers. these aren't companies with fiscal years ending in july, but they're still reporting, we're going to keep doing it, stephanie. i'd like them to be all done in july, but they're not. i don't know makes me wonder, how much time do you need in what are the high points for you amd's interesting. >> yeah, i mean, look, it was
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pretty busy last night with all the companies we reported. you have a lot of companies reacting pretty substantially. this move in paypal i think is absolutely amazing the tstock is still down 52% to date but it's all about the cfo and the pedigree from levi's, yahoo. you've got a buyback and elliott involved th i think it's interesting. i wouldn't chase it today. i anythink this this market you don't chase anything >> star bucks? he's pretty good. >> i own starbucks and it was interesting to see the comps in the u.s
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transactions, ticket was up. we new international was going to be crummy, and it was, because china was down but to an extent you think that's the worst because they are reopening, i think this is an interesting story they have an analyst day in september. and you have howard schultz back at the company he is going to stay on the board. i think that stock is interesting. trade's at the low end of the historical range i like that one a lot. >> do you own airbnb >> well, airbnb certainly, and amd. so those are the other two airbnb is telling you that the pent-up demand that we all have seen post covid is starting to moderate right? and so the room night numbers came in a little bit less than expected, and they guided lower on room night, again, that demand is actually waning a bit.
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so it's not a disaster, but it's like, what's the normalization sow h so you have to see how the stock trades i think you have to see how it trades and let it stabilize. i have opened expedia in the past, and i like that one. amd is a disappointment only because we thought they were taking a lot more share from intel, right intel report ed a disappointing quarter. the one positive i thought at amd was data center. it grew 15% in revenues sequentially broadcom trades at 13 times. i just think there are other semi-conductors that are cheaper that are worth paying attention
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to >> i still laook at amd and the market cap, years and years and years, all the way back to jerry sanders, this goes back to i was a kid then steph, i don't even think you were born. stephanie, but you're very wise. very young and very wise thank you. >> thank you >> good to have you on as you are coy ha . we have a lot more coming up on the broadcast speaker pelosi wrapping up her trip in taiwan, departing for her next trip to south korea and then at 7:30 a.m. this morning, less than 20 minutes from now, a big news-making interview you cannot afford to miss we do not say that lightly st. louis fed president james bullard will be on the show for an hour and a half, answer all
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of our questions before we head to a break, though, we take a look at the markets. dow looks like it's opening up higher, 151 points hheigr. we're coming right back with so much more in just a moment
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in three seconds, pam will decide... i'm moving closer to the grandkids! wait. i got to sell the house! don't wait, just sell directly to opendoor. easy as pie. piece of cake. whichever. when life's doors open, we'll handle the house.
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house speaker nancy pelosi, departing taiwan early this morning. the first visit to the island by a house speaker since newt gingrich, way back in 1997 and he still has the same hair very weird her visit coming amid ongoing heated rhetoric from beijing which claims taiwan as its own joining us is eunice jyoon with reaction >> reporter: speaker pelosi declared unity with taiwan she was at a dinner and spoke at the local parliament where she was promoting the u.s. chips act and met in a closed-door meeting with some human rights
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activists. china described the trip as a political provocation meant to em embolden the folks in taiwan who favor ein independence. china halted exports of natural sand and barred donations to two taiwan foundations the biggest concern is the military response. minutes of a her arrival, beijing said it's holding live military drills. airspace as well as water, thursday to sunday, holding missile tests off of taiwan, and this comes after it dispatched 21 war planes to thetaiwan strait taiwanese officials warn that these drills are very close to ports and are coordinating with authorities in the region for aviation to reroute air traffic
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routes, because airlines have been reporting that they're getting warned by beijing oto avoid flying into what are called danger zones. nod not good news for the supply chain which is already very fragile. >> thank you for that. we'll check back next hour hopefully. meanwhile we want to continue to discuss this trip and what it could mean for investors today and how they should think about the risk. a lot of investors, you saw the markets move yesterday when she decided she was going, and then i think there was a sense of everybody on contitenterhooks a then the ongoing risks >> look, i think this trip has focussed a lot of us on current
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relation, economic relations and market conditions, but taking a step back, i think this is one data point on a shift that we need to recognize as investors and more broadly 20, 25 years ago, we saw the great potential for growth in china. middle class, growth in developing capital markets, and i think we assumed some things would happen along with that, which is that the chinese capital markets would develop western-style protections. the inevitable integration that would occur globally as a result would lessen political tensions. and, you know, frankly, that we would have a much more cooperative approach and not a geopolitical fighting over the world economy. so those three things have not happened the one that i know best is sort of investor protection
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shareholder rights and thing like we have the listing of chinese companies coming in 2024 as part of the holding companies accountable act. but we need to recognize that what we expected 20, 25 years ago in some way s has come to fruition and in some ways not so >> what do you think from a policy perspective if were you back in office the answer should be and the stocks on this list to be delisted, would yous want to own those stocks or do you think that this is just a foregone conclusion >> i think this is a difference in approach. and the holding companies accountable bill introduced
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aboby sma senator kennedy, in the rest of the world, it's permitted if you're listed in the u.s., but it's not in china. it's gone on for tooi long. let's either figure it out between now and 2024 or we're not going to have the values listed that has given the market time to adjust to see whether the policymakers will come to an agreement. i don't see a lot of traction on u.s. getting that kind of access i didn't see a lot of traction when i was there the and that's one of the reasons i supported the bill if you have time to adjust and you are moving your list ing frm one place to another, my
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economics 101 view on thisle the the time frame to adjust is going alleviate some of the dislocation. >> a couple stocks to talk about. we told our audience yesterday about wild trading in amt digital and its parent company the stock surged just in the last week. apparently as a result of hype on twitter and reddit. yesterday amtd issued a thank you note to investors this if response to the volatility if you were running the sec today, what would you be doing >> look, anytime you have moves like this, you're going o to use the data available to you. continue to dig and try to find
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an explanation for events like this because as we've learned over the last few years, events like this cause opportunities for profit, but great risk of loss, particularly for our retail investors. and look, going back to my point a while ago, we have established norms and the most rigorous requirements for companies listed in the united states, and that's why we're going to see this shift for companies that aren't willing to abide by, what i would say is that level of transparency and accountability. >> and then finally, i wanted to ask you about robinhood. i don't know if you saw their earnings and plans to slash 23% of their staff clearly when you look at this business model, which has been challenged, this idea of payment for order flow, being taken a very hard look at.
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do you think it's a good thing for the market >> look, we've talked about this before there are a number of studies that demonstrate that payment for order flow and this approach to the retail aspect of our market provide retail investors with an all-in better cost of execution than other forms of, i o would say that eliminate it and specify other forms of broker compensation or market maker compensation there's no one, most studies made it pretty clear that our retail investors get a very good deal across the board on execution in listed equities and before do you significanting chains to that, i think you need
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to explore it. the real question at the end of the day, are we driving prices for retail investors to the best possible price for stability. >> thank you coming up, james bullard check out the shares of cvs. earnings of $2.40 a share. you can see the reaction in the stock. revenue has topped $86 billion the company raising full-year guidance by another 20 cents for earnings per share from 8.40 to 8.60 "squawk box" will be right back. time now for today's kwaf lack trivia question
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aflac trivia question. what are the top five most valuable sports tranchoices in the answer the dallas cow boyce, the new york yankees, the las vegas raiders, the new york knicks at $6.1 billion and the goemd tait warriors at $6 billion >> i thought the raiders were las vegas. still to come, our special guest of the morning james bullard is going to join us next. then later, don't miss our interview with starbucks cfo rachel ruggeri stay tuned u'ating "squawk box," and this is cnbc
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the fed has a good chance of avoiding recession and managing a soft landing, says our next guest, who's right here in studio love having him on i like you as a person when you're in. st. louis fed reserve president
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and ceo james bullard. he's an fomc voting member this year thanks for being here. we've been to st. louis. you've hosted us out there we've talked baseball. we go way back you're a "squawk box" viewer >> yeah. a >> and would you say you're a lies maniac? >> i follow anything, you know, that's tracking the central bank you guys -- >> you're starting early with the tactful answers. anyway, it's great to have you here we're not in a recession, in your view, and we may be able to avoid a recession. >> yeah, the, as the chair said, you know, we're not in recession right now. we do have these two quarters of negative gdp growth, to some
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extent, recession is in the eye of the beholder. there is a dating committee. and that's really bob hall at stanford, so he makes the call but with all the job growth in the first half of the year, it's hard to say that there was a recession, with a flat unemployment rate at 3.6%, it's hard to athesay there's a reces. i think the first quarter showdown, negative gdp was probably a fluke but the second quarter was more concerning, so i'll watch that carefully. now what i think is going to happen in the second half of the year is that we'll get positive gdp growth in the second half. i think that we'll have a reasonably good third quarter here and so i think jobs will also hold up over the second half of the year
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job growth is vslowing. that's how i'm assessing it right now. but we're watching it carefully. >> maybe don't use that third quarter. you remember potter stewart's st estimate, how do you define obscenity? i know it when i see it. the reverse works. it doesn't look like that's what we're looking at i think to anyone because of the jobs picture. >> yeah, because the jobs market is so strong, and there are these other indicators of course we're raising rates rapidly. you're seeing interest rate effects, that's natural, i think. something you'd expect to see. but that doesn't, all by itself mean at that you're in recession just because you see some negative signs in some parts of the economy. >> 75, not usually done.
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usually it's a quarter, and you'd probably like to get back to a quarter at this point, but not only you, but nestor and others have said it seems like inflation might be more persistent than we thought, and we might have to do another biggie why should we not think that you guys missed transitory, basically. you said transitory, and now you're overshooting the other way. commodities rolling over. >> are you saying you don't trust our forecasting model? >> i'm saying if you were too laissez-faire, and now you get religion, and how do you know you're not going to overdo it? >> we're going to follow the data very carefully here, and i think we will get it right inflation is high. and we've had to move aggressively just to get back in position
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i think one thing pfor everybod to remember we're starting from an extremely low, near-zero interest rate, and now we've raised a fair amount, but we've still got some ways to go to get to restrictive monetary policy i've argued now that with the hotter inflation numbers in the pri spring we should get to 3.75% to 4 this year. i've liked front loading i think it enhances our inflation-fighting credentials we did do the two 75-basis points in a row. greenspan did one, once in 1984. i think here it was appropriate to go twice. >> been so long since that last bout, which was awful, and i remember it. i don't think, probably you don't remember it.
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you might remember you might remember the reds won back to back there's an interesting piece in the journal today that if you don't remember history you're doom doomed to repeat it thisin certn ways reagan, it was 12% inflation at one point. >> the fomc dillydallied
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it was a different era not everyone agree add it was up to the fed but that all changed in the '80s and '90s, and now we have an inflation target we explicitly say we're trying to achieve that part of the mandate, get table prices for the u.s. economy we're going to be tough and get that to happen we're going to get back to 2% over time. that the part of the mandate that we're missing right now because labor market still very strong it's just the inflation side that we're missing so i think if we can take robust action and get back to 2% we'll avoid this >> you've got putin, oil, thing
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tasthings that are totally out of your control. maybe the supply chain eases, and the pandemic, hopefully there's not another, monkeypox, but as that's in the rear view mirror, is it double digit now now? do you trust the 9% in. >> the headline is 9%. i like dallas fed meme you look at the middle of the distribution that one has gone up to 4%, shows no sign of turning around yet. so i think we're going to have to see convincing evidence across the board, headline and other measures of core inflation all coming down convincingly before we'll be able to feel hike like weary doing enough.
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>> you're not going to go above 9% hopefully inflation's going to be coming down in the middle somewhere. >> i think what will happen is you'll get some natural moderation om some of that's happening with commodity and energy already it hadwill only go away becauseh fed taking aggressive action and we need that part to be headed lower and all of that to happen all together in order to be in a convincing place you mentioned there's a lot of shocks of course. part of our job is to manage the many hoshocks that hit the macr economy. >> i referenced the article of phil graham. it was an op ed piece. they talk about one of the issue back then in the '70s was that the fed had to enable all the
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fiscal spending that was occurring in a couple of administrations. and they seem to think that there's some similarities in the current situation. and maybe rightly so, with the pandemic we spent a lot of money, trillions and trillions. >> yeah. >> we're talking about spending some more. we just did the chips act, we may do another tax and spend of 700. does that make your, that might make it easier tax increases might slow the economy. are you for these latest thing ms. things >> yeah, i'm anxious to hear about the bill sometimes when congress does that they're not really there. we'll see with this particular one. but i agree with you, the pandemic was a special shock, a globa
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global shock at the beginning we didn't know how severe it was going to be. the trend was to do a lot in order to mitigate the economic damage on top of the human suffering. if there was ever a time to have a big fiscal program it was probably it. the fed was all in with a very aggressive monetary policy you could say that was risking high inflation we didn't see it at the first of the year we got into 2021 and saw the inflation. now we ahave to witcswitch backo monetary policy much tougher on inflation. >> there's people that argue that it was all because of too many dollars chasing too few
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goods, the pandemic, after that, and others aithat say the invaso of ukraine do you think it was too much money in the system chasing too few goods in and if you believe that >> won't about too far with that story. >> then what are we doing now? when they made the inflation reduction act, do you rlaugh ou loud in do you see the irony in tacking on another $700 billion with taxes and spending involved, does that in any way look like an inflation reduction bill >> i think there's a study out
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of penn that tries to evaluate >> they've already thrown that out. they don't believe >> i did look at the committee for responsible budgets. >> another thing they throw out. >> those numbers are small the the central bank has nation targets. why do they have targets >> you're not opposed to it. there are good things in it that you think might make sense >> i'm not going to weigh in on a piece of legislation we try to stay out of the political fray and let them argue about it, but farceas far can tell it doesn't seem like pure deficit spending. it sounds like senator manchin insisted on that >> if you're trying to get a soft landing and avoid a hard
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one, do you think a tax increase makes sense for any sector of the economy? make itmakes it easier for you. >> i haven't done an assessment, so i don't know. >> i can come right over there and start twisting your arm if i feel it's necessary. from we >> we want to stay out of the political fray >> what about the chips? there's spending involved there that you're probably going to have to print some money for >> i think jaegeopolitics comesn the sources of chips may not be there in the future, and it's such a key element of the
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economy. so it's a big issue. fro >> all right, i'm exhausted already. you know in wrestling, they reach for the other guy outside the ring leas liesman's coming in. don't be starstruck. james bullard, great to you have hire >> great to be here. >> you're two games back >> the cardinals in the past have had great runs in august and september. >> the reds are in third place, ahead of chicago >> they're roaring back. from >> they are roaring back >> only 13 games back for the wildcard andrew >> okay, a lot more coming up.
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i've got some questions for mr. bullard as well. st. louis fed president james bullard, plus senator shelly moore catee poepito will be joi right after this
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we're fighting inflation by
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further putting more production in energy so we're basically taking care of the needs of energy now and basically investing this energy for the future, and we're doing that while we're reducing the amount of prices for gas all of us agree, the more supply you have, the better chance you have of driving down the price so we're doing that. we're paying down, reducing all the drug prices. so when you think that millions of people across america will be paying lower drug prices because of medicare being able to negotiate. >> that was senator joe manchin explaining how he came to an agreement with the inflation reduction act.
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good morning to you. you saw your colleague on the air yesterday as he made the rounds, talking about his decision to support this there are benefits to your state, is thasenator. >> i think the overall impact to our state is devastating last weekend, the folks at home were very aware that the taxes would go up. this would be put directly onto them as individuals or businesses they understood that the heavy foot of advantages to green energy, disadvantages our state. while we're very supportive of renewables it will hurt working people the massive increase of the irs will come down on the heads of our mall
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small business in west virginia. west virginiaens feel like they've been sold a little bit of bill of goods here because of the initial promises that this would be very slim and help with inflation. the studies show that the continued high prices will continue under this bill and it's re dis it's very discouraging to folks back home. >> speaking of the folks back home, the pipeline, i want to know what you think about that of the and secondly, you look at the polls right now. and i look at a poll this morning showing that basically half of americans favor this while a third say they're opposed to it. when you start to talk to them specifically about some of the benefits, potentially lower cost of prescription, 61% would favor it, 14% would oppose it. are they misinformed in.
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misinformed? >> no, there are items that we have been working on, in terms of the mountain valley pipeline, i've worked hard to get that completed. it's 95% completed, permitted and it gets rejected by a regulatory regime that we've seen before, in the obama administration and there is no will in this administration to actually see our energy, our fossil energies move so while i'm very supportive of getti getting the mvp passed but if you say you're going to get a regulating bill in 45 days, i've never heard of guarantees like this
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and we know this is a divisive issue on the regulatory front between republicans and democrats. what people realize, food's higher, gas is higher, electric bills are going up, and this will have a more direct effect on those kinds of issues, and that's what people are worried about. >> do you think the govesh gove should be investing this this transition >> absolutely. i was the tauthor of the large portion of the infrastructure bill we have incentives for liber electri cars building back resiliency we've worked together on this. to say we've done nothing and to
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innocen this is hlike taxing, taxing, taxing and is going to have a bad effect on individuals and keep the stagnation that we see in the mix the supply chains are down yesterday i was in committee i talked to somebody from the wireless industry. i asked them, if you look at the tax, the corporate tax proposal that's before us, what does that mean, and because they have to count spectrum as part of their book tax, that means it's going to be a $7 billion raise in their taxes. where does that go there's all kinds of ramifications when you begin to massively add new taxes. f >> senator, hold on a second, we have jim bullard here from the st. louis fed. i would like to get his reaction
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when you talk about the implication of inflation as a function of this bill. >> i think the implications would be small on inflation, inflation's mostly a job for the central bank, and i are a quest have a question for the senator this all minimum tax for corporations, how would that work and would that set up two different corporate tax schemes in the u.s. tax code >> i think that's the big question we have no answers as to how this 15% minimum tax works there's the book tax aspect of it when you look at the industries that are mostly harmed by the new way at looking at taxing and a minimum tax you see manufacturing is 50% harmed in this, that they're projecting to
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lose over 218,000 jobs in the short term if you look at the coal industry, which i'm very interested in, their taxes are projected to go up 7.2%, but we still don't have the details of this it's wednesday, and this is going to try to get crammed down our throat in the next 48 hours it appears as though and we're making massive changes here, massive changes would be made i'm not voting for this, that i think would have implications not only in the pricing, and if i could add one thing, mr. bullard, thank you for the question, when you say this would have no effect on inflation, shouldn't we be doing things to bring inflation down down >> the interest of carrot interest where do you stand on carried
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interest at this point >> we looked at it in the 2017 tax bill i understand they're having trouble on their side because there are differing opinions on what and how that should go forward, so we'll have to see if it even stays in >> senator, we appreciate you being with us. >> sure, thank you, andrew coming up, another big hour. we'll talk to starbucks ceo and kyle bass. "squawk box" will be right back. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit ♪ ♪
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good morning dow futures are up after the index's worst month. and nancy pelosi's whirlwind visit. and job gains.
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but growth pains how can we understand what's going on in the u.s. economy right now? we're going to talk about it and ask our special guest, st. louis fed president jim bullard. final hour of "squawk box" begins right now good morning, and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square becky is off, but our special guest today, steve liesman no st. louis fed president jim bullard is here with us. but liesman's here, too. u.s. equities this far a little better, 65 now on the nasdaq
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s&p. interesting move yesterday in treasury yields as people all at once seepemed to get a little me hawkish. liesman might ask jim about that >> good call >> back end of the curve is interesting. >> we're talking about the back end a lot. >> cvs shares jumping. also raised its full-year earnings forecast, helped by the company's insurance unit, also strong sales of over-the-counter covid tests. and under armour the company matching profit estimates. a slight beat on revenue did talk about increased promotional activity and currency head winds have impacted some of the margins andrew >> meantime, it is but 48 hours
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from now we'll be getting the july jobs report, and you can bet the data will be a big debate about when wether we're recession or not steve liesman joins us now with more on what has become a disconnect between job gains and economic losses. m nice to see you, mr. liesman >> expectations are calling for continued job growth in july that continues this ongoing anomaly we have between negative gdp growth on one hand it stepped down from the 372 unemployment rate unchanged at 3.6 and sort of moderate job growth, 0.3% growth for the
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month on month changes cnbc research going back to 1947 showing that when gdp has been neg diff negative for six months, pay rolls fall we've gained about 3 million the dallas fed out with a similar conclusion it shows job growth during these past six months is far stronger than the average recession we should be negative right now. and that's true, by the way for virtually every other metric that they looked at, except of course gdp to be sure, it's been really hard to forecast job growth and even count job growth during the pandemic economists are turning to high-frequency data. the hr software company counts what's going through their software you can see not badly.
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it's done a better job at forecasting strength or weakness in a given month how long can this strong job growth last? a lot of what we've been doing, putting people back to work who've left during the pandemic, that process could be ending several big companies have announced lay offs if we don't have a big decline in jobs, have we had a recession? jim bullard, president of the st. louis fed, i guess it's kind of an existential question, like if a tree falls in the forest >> there's no real official definition there's this nber dating committee, but they're not official government or anything like that. it is in the eye of the beholder but traditionally, we've not
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said that there's a recession in an environment with flat and low unemployment and substantial job growth as you're pointing out. so that's where we're at >> two questions that come from that the first one is take a look at the rate structure that we've had m tin terms of where the mat is pricing we look at next year and they have cuts built in, and a lot of people say those are the markers for prinedicting a recession >> one thing about the market, they expect inflation to come down quite rapidly next year, and they've been wrong on this so far so i think the better bet is that it will take a while for inflation to come back to 2%, it won't be as rapid as what the market expects
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you know, whether there would be a recession or not, right now i think the second half will be stronger than the first half was. so a lot of the indicators will go back in the other direction of positive growth, and i think labor markets will hold up pretty well here just talking to firms it sounds like they're still scrambling for workers. >> are you saying the market's long here it should plan on staying at the level in. level? >> i think we're going to have to be higher for longer. not just a parttick lower here r there. >> it was up 350 there's some hedge fund guy we've been talking about, joe,
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who says this makes things harder, who is that guy? >> ackman. bill ackman. he says if yields go down, financial conditions loosen, which is the opposite of what the fed wants, so you're going to have to lean harder against that >> yeah, it's always hard to read markets, because there's always feedback going on but you could read what they're saying as a sign of success. we front loaded interest rate changes, two big moves right in a row of 75 basis points credibility was restored at the central bank now expectations are lowered for next year, maybe a little too low, but lower for next year, and that's good news that's market confidence that the fed's policy is right and we're going to get back to target now a hlot has to happen before we can be sure that any of that's the correct way to look at it and right now the
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inflation numbers, it's still going up in typical market fashion, you're bringing these stories forward pretty rapidly >> i'm surprise d that joe didn' let you do this. you've been right. you called for 75 before anybody was talking about, they talked about 50 i think you deserve time for a victory lap. how did everybody else get it wrong in why was the fed still buying assets well into march, even after the chair himself pivoted. and i don't really care to pr blais blame. i want to know fort if the fed s figured out what it did wrong so it doesn't do it again in the future >> what i said in february was that i wanted to get to 1% by
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july 1st that happened. i said we shouldagain the balance runoff in the second quarter. at the time that wasn't the norm we did start balance runoff in the second quarter i like the idea of front loading. and i think the chair did a lot of good things here. he said we wanted to get expeditiously to neutral i had to look up what expeditiously meant. and he also has said, you know, that we really need to get inflation back to 2%, because that's a prerequisite for a great run for the u.s. economy >> unfortunately, you've lost your skills for a co-host. when the music begin, we have to be quiet you just talk right through it >> that has no bearing on
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anything you're sticking around >> i am. >> still >> still coming up, presidential energy advisor we're going to grill this guy. amos hoch stein joins us next. and we'll go inside stark bucks in the third quarteritth wh e company's see to stay tuned kwaux will be right back
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"squawk box," we're going to talk oil prices, pass they are on the rise receiight now as thu p opec and opec plus meetings are kicking off. >> arguably, maybe the most important opec meeting in two years. they're going to make some of their first decisions about the months and quarters and maybe years ahead. early reports are that opec is likely to agree to a very small output increase, maybe around 100,000 barrels a day.
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that would be a tdisappointment from the group g gasoline prices $1 above where they were a year ago a lot of people think why don't the saudis put more oil on the market they are likely too nervous about putting it on now when the current russian sanctions kick in o in they'll kick in on december 5th. will the alliance with opec hold the headlines come out, you're going to see my face again he'll i'll get back to the meeting, back to you. >> aaa says the average for a
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gallon of gas is $4.16 the white house wants to take a victory lap. but if you're in california you're probably not cheering tho loudly joining us, amos hochstein it's good to see you progress, still expensive, though >> yeah. there's, we're pretty pleased with what we're seeing, but we know that this is not enough wti was at 118 or 120. and now it's about $94 that's a remarkable decrease in prices and at the pump, the most important for the consume are,
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have come down the average is already quite a bit below $4 you know, $3.89 or $3.90 that is the right direction. we want to see more. >> some of what we're seeing, the progress that's made is demand the fed is raising rates trying to orchestrate a soft landing. i don't know how much of it has to do with supply still and increasing supply at this point. i know we did the spr, but when we're on, i kind of get you to concede that we're not going all we can, regulatory wise in terms of opening things up domestically do you still take issue with that in would you argue that, you know, in testimorms of permitting, whatever you want to look at, do you think we've done
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a manhattan project for domestic hydrocarbon production we just haven't, and we probably need to. >> you said a few things let me answer all of them. first, yes, i think demand is an important part of this, obviously, but gasoline demand is not down. it's either flat or up during this diving season, compared to before so prices still coming down despite the fact that we have not seen a demand destruction. and we're in the middle of the highest demand season of the year, in the summer. we're right in the middle of that and sell we're seeing gasoline prices come down in this season. we want theoil and gas industr to increase production you've just seen the second quarter results from some of these companies.
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they are record profits. they should be investing those dollars right back into production increases they don't need permits. they need to put together the frack crews, put together and invest so they can have additional oil output. as far as refineries, look, we have to face the reality that over the pandemic, during covid, some refineries shut down in the united states, refineries hut d shut down in europe, when the chinese were taking over the building and exporting of refined products we would like to work with the industry we've met with them. we've discussed this with them to see how we can be supportive and ideas to increase the life of some of the refineries currently in operation and bring back additional refining capacity but at the end of the day, the prediction on the market in your show was, about six weeks ago, j.p. morgan was talking about $350 oil, and we were talking
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about $7, $8, $9 gasoline, instead, woule've brought the pe down below $4 for most americans. during this time when we're at war is quite remarkable. f >> thank forcs for your discuss. it seems like china didn't grow in the second quarter and they're expected to come back in the third quarter. the risk would be on the upside of international oil, just based on that simple assessment. >> well, i arhave to say i was asked a similar question about chinese growth coming in the secondquarter. let's see what happens, every time they look like they're coming out of lockdowns they come back into lockdowns and they haven't been able to manage that part of the economy
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we'll have to see what happens at the end of the day we'd like to see more refining and see prices go down but rook, look, we're n making do two things at the same time, making sure we have enough oil on the market now and increasing the diversification of demand away from just relying on oil. i know that takes time but investments have to start today. that's why we've been pushing on electric vehicles. we're very bullish, especially with the legislation in the senate now, that we can get to a faster deployment of electric vehicles and work on increasing supply and decreasing demand >> you said we want the oil
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producers to produce more oil and redeploy these profits that they're making back into producing oil, that wasn't the case as recently as a year ago and i'll reference members of congress, a friend of mine, ro khanna, was berating oil company executives for not matching the cut, this is prior to the invasion of ukraine, but berating our guys here for not matching the production cuts that we had seen in europe, when he was campaigning, president biden said he will end the fossil fuel industry you want these guys to spend money and drill and produce, and yet, there's a stated intention to basically put these guys out of business at some point. if you were a ceo, you'd rft mo rft invest money on a five-year when the rug can get pulled out from
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under you based on the green we're we're looking at a green utopia when it may be enccloser to 2050 when we're near it >> the president has been clear even in october or november when he said the energy transition is not a flip of the switch and we immediate to manage the transition that's what a transition means it's not the next two or three years. the goal is still by 2030 we'll see a significant increase, perhaps 50% of new vehicles sold being electric and on the investment cycle, we both know in the united states, they can invest in short cycles
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that awill increase production so instead of trying to lock in more profits and share those with shareholders, i think at this moment in history, i think it's fair that we ask that they invest it on profits that they may not get. we know they're going to get profits in the short cycle that is the shale oil production onshore of the united states some of the ceos themselves have said that they were going to increase production. so at that's the kind of approach that we'd like to see from the rest of the industry, and to use those profits toward production what happens p thein the outer s
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yes, we going to increase the transition we're at a time of war if europe, and we're trying to maintain as hoe a price as possible for consumers, and we've turned those prices down, not up from >> okay, i won't say you're taking a lot of credit for when they went down, but no credit for when they went up. didn't cicero say i'm not going to talk about mark anthony being a kitten drowner or something? good to see you. >> we got a lot more coming up on squawk. 'lspk ld drinks and hot numbers.
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wel eato starbucks cfo you're watching squawk
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welcome back to "squawk box" this morning
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s star starbucks chief financial officer. good morning to you. >> good morning. >> so we've been talking about it all morning, just the strength of the consume arr, ant the extent that you're seeing it differently than some of your peers. there's this sense a some people pe may be trading down. in your case they have not done that what are you seeing on a store- store-by-store basis . >> we're incredibly proud. we had record customer counts, and what that means is, we see more customers connecting with the brand and more engaged when they come nointo our stores. we've continued to focus on ensuring at that we're creating
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a fregreat experience digitallyd opening stores and street something sfoer senate ssssssss >> i talked to howard schultz probably two months ak during at that conversation he talked about reinvesting, re-imagining the formats, investi investing in the employees where would you say you are in terms of what at that investment looks like >> i would say we're in the ea early stages o 50% is going to come if n the
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upcoming quarter there awill be an average ways f $17 an hour. our partners had have more time behind the bar and we're rolling out more efficient equipment. but we have a ways to go but we're starting to see a little bit of reduction in turn over, not certainly where we need to be, but we've seen green shoots, i'd call them, in terms of our turn over, and we're seeing partner engagement start to tick up and we hook atlook at that as al important measure. with we have low turnover and higher partner engagement, our
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metrics are better relative to the peer set stability really drives success. >> how much of at that investme is on the employees versus the tools and reformatting we talked about cold drinks are har harder to make and sometimes the blenders break because of the ice. and that makes the experience with your partners bet are becaubetter, because they don't have to deal with longer lines. >> it may shift in the future. but of the billion dollars that we've invested this year, that's how it breaks out. >> jim bullard is with us.
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>> interp from the st. louis fed. >> rachel, i'm fascinating by this idea that you haven't seen trade down because when i talk to other ceos and cfos, they talk about this issue, and you're not seeing it, so from my foi point of view, that's a bullish factor for the economy what would it mean for your business to talk about trade down if people really like your drink and they don't want to switch to the other drink? >> what i would say is first and foremost, we can never take the customer for granted and we don't and that's why it's so important for us to continue to innovate and provide reasons for our
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customers to come into our stores so as we create more premium beverages, it's more difficult for customers to replicate at home that helps with trade down it may mean maybe a customer doesn't come in as frequently. cold is now close to 75% a lot of them are customized our customers chooses to customize it and weigh focus that as a way to put sar starbucks ahead of the
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competitors. we've seen a great history of when we have great engagement from partners it leads to great experiences for our customers and value for all. that's worked for us for over 50 years and that's why the reinvention plan is so critical. >> one thing that did drag on revenue, of course, i apologize. he i think jim has a followup >> what about pricing? do you feel that you can pass on a higher cost that you're experiencing through labor and elsewhere to the customers who like these custom drinks >> we've been able to do that to the more premium offerings and through customization, which is a choice customers have the choice to be able to customize and what we've seen is our demand is strong and that tells us that, you know, we have an offering at that's worth paying for today,
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but, again, it means we have to continue to create the experience to not only bring the customers in but to ensure at that they'll return. today our pricing largely is helping to cover inflation now we hope at that will moderate over time we don't have signs of that slowing today, but as that moderates over time, at that will help us to be able to support some of the investments we've made and some of the choices we've made in terms of labor and training and things of that nature. fro >> and rachel, finally, i want to get your sense of what's happening in china right now i think the stock has held up in large part because there's an expectation that things hadwillt better there >> as we see mobility
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restrictions lift, we see resiliency it gives us optimism for the future as balelenda shared in the call, we continue to focus on the foundational aspects of the business, that when we do see restrictions lifted we brief we a believe we will be able to continue to grow >> we appreciate you joining us. >> thank umt apyou. appreciate the time. we're starting to understand the implications of house speaker pelosi's trip to taiwan. kyle bass will join us next. you're watching "squawk box" on cnbc
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expe sta house speaker nancy pelosi departing taiwan a short time ago after a visit of rless than 24 hours the speaker vowed solidarity with taiwan, but china has
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launched military drills and summoned the ambassador and halted some imports. joining us, kyle bass. sw take me through your thoughts of when you heard the speaker wanted to go and then you heard president biden say "please don't go." that's a song, i think and then it's like she had to go take me through your, as we first heard what was going on all the way to right now >> i applaud speaker pelosi for having the guts to go do something like this, standing up for human rights as you know, this current administration ran on the ticket of saying they'd never trade human rights for a checonomic deal, but i have fevery few peoe
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the guts at that speaker pelosis to her moral platform on human rights, it's genuine and inside of her i think she's capping off the end of a long and decorated career i think in the midterms you're going to see the republicans take the house, and this was her decision to stand firm on something she brielieves in china has labeled her as full of disinformation and lies. china will use this moment as a ratchet, as a way to really create a new normal for their military operations in the south china sea. back in 2015, china's navy went
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more from a zone defense to use a football analogy this will and new ratchet to where they'll go to a full-court press. and if you look at the map that beijing has published for their exercises over the next four or five days, it's an essential blockade of the chinese strait, the south china sea and taiwan strait from ships at that come in, and why that's functionally relevant, what's relevant is it creates a blockade for imports into taiwan. taiwan like japan has to import all their energy needs the west coast of taiwan is essentially blocked by these exercises. so what china's doing is engaging in economic warfare by using its military to basically
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close down staiwan's ability to import things into its west coast. >> has china -- i don't say helped us with the situation with putin, but there are many who say that they haven't hurt us as much as they could have, and therefore, to poke the bear or the panda, at this point, was a huge mistake i just wonder, like tom friedman, and other loud voices on the left, that talk about human rights and virtue signal so much about caring about thing, we're so quick to want to appease president xi, and they talk about mutual respect, not a lot of respect for the uighurs happening. but were you surprised at all those very loud voices >> you know, you brought up a great point. that tom friedman article
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calling pelosi's visit utterly reckless is an abomination what we've learned is that dealing with autocratic, genocidal a rulers across the world with pacifism gets us nowhere. imagine if neville chamberlain were running the uk and we never had a churchill. none of us want war. but when you go back and read that press release between xi jinping and putin, it was before the invasion of ukraine, they co-endorsed each other's moves basically, xi jinping endorsed putin's reacquisition of ukraine, and putin basically assured china's, quote, reunification of the taiwanese separatists. they backed each other's moves here, and china will take taiwan, whether pelosi visits or
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not. they're just going to use this as an excuse to ratchet up their naval activity, to a new normal in the south china sea the question is, as you know, just recently, china said that they're no longer navigable waters for the u.s. navy now what happens with the chi chi chinese strait people like friedman don't have a place, in my view, in this world from a perspective of protecting democracies, and if you look at pelosi's work, you really listen to what she says, she's saying exactly what needs to be said, and even richard haas has said the u.s. has had this long-term policy of strategic ambiguity. now we need strategic clarity. >> kyle, i just, i'm going to take issue, for myself, not for
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tom friedman or anybody else, because i actually happen to have agreed with tom friedman's piece, and not because i'm some sort of pacifist and not because i haven't spoken out about human right's rights abuses that happen in china, you've heard me on the air probably to the consternation of our audience. there's a sense, essentially, that you have to pick your fights in life and the wequestion is whether a trip like this, which you said is going to be an excuse by the chinese to launch a more aggressive stance militarily that may become the norm is the right time to pick ha fight. meaning there are probably other times in the future where we want to pick a fight or create some better type of relationship and whether we should be using this trip, simply because she wants to go there, i mean some
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people would say that this unto itself was just a photo op so i sort of, it's sort of hard to look at this whole situation in total, and i mow tknow therea lot of people who disagree with me but there is a sense that you're poking the bear. why poke the bear right now? is there some strategic reason to do it today rather than wait for this election in china to finish itself and see where we can get later. that's the question. to me, it's a fame it's a game g >> we sit here on cnbc which is about investing and understanding the global economy. we're talking about poking the bear,poik poeb being the panda,
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question here, if you say, is now the time to poke the bear? go back and look through history at not sanding up to autocratic, totalitarian leaders, and look where it's gotten the world. whether right this minute is the right time to g. go. >> the question is when and in what moment. >> we're trying to decide when the vastrategic moment is right. in pelosi's view, i think she won't be speaker after the midterm elections and china was going to ratchet their activity anyway they're just going to use this an excuse straight out of putin's playbook where he says
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the ukrainians forced him to invade the chinese are going to say the ta taiwanese forced them to invade. >> and twowouldn't >> i guess we should just stand down and what you're saying the 24 million people in the democracy of taiwan should handle this themselves you and i both know they can't handle it themselves >> we're actually in more agreement than you think go ahead, jim. >> kyle, this is jim your map about the blockade reminds me of berlin in the cold war. do you think that that's where this is going, that, you know, you'll get more and more restrictions in tha lanes, you'll try to do airlift and
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something like that and that this would spark a deglobalization, which is for macroeconomics, would you end up splitting the world back in a cold war sense >> i think so. i think when you look at that map and you see that the industrialized area of taiwan's coast, or where all of their imports come there is on the west coast, and if you note the way that the blockade or the way that those military exercises are let's say postured, it basically is going to keep any ships from engaging or let's say coming into ports on the west side of taiwan for four or five days the question is, does the chinese military then elongate those exercises? imagine if you had no energy imports for four or five days and you relied solely on imports to run your country, it looks like the ratchet is going to create a new normal for taiwan, and that's going to be a very,
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very difficult situation for taiwan to keep its economy running. so, yes, i think that you're going to see the shipping lanes change if to you look at global lng exporters and shippers, they're already diverting their cargoes around the east side of taiwan it's going to create pretty significant delays in global supply chains for both lng and goods and services so, i think we're going to see a cold war kind of breakup between call it the axis of evil, not to use an old term, but when you look at the totalitarian governments that don't share the same values as the west, you see them already unifying as in that february 4th press release, and the russian foreign ministry even on twitter last night condemning this visit and backing china's efforts to reunify whatith the taiwanese
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separatists. >> kyle, thank you for the conversation and debate. you brought up a lot of important points there's a big audience that agrees with you. we'll talk with you again very soon >> thank you in the meantime, down to the new york stock exchange where jim cramer joins us now. you can weigh in on all of that if you want or we can talk starbucks earnings >> sure. why poke the bear? and the reason i say that is because i think it's stre strengthened president xi's hand right now he's got problems with covid. there are people who don't like his policy toward mortgages for real estate. there was an actual chance he would be challenged, and now he can play the national card what we did is solidify xi's position i think it was obvious it would happen and it happened, just at the moment so weak there was a
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chance in china. it was an ill-advised move by the united states when the president of china was in a weak moment >> jim, talking about china, we were talking about starbucks, huge business in china revenue and profit was -- actually came in better than the market expected broadly for the market, of course still hit by china. what's your sense of starbucks i thought it was a pretty good earnings report, and potentially sets them up for a better situation than some people had expected this quickly. >> i think you're even as correct as you are, i think it's better than that i think china comes back amazing, the united states was good i met with jeff marks this morning for the charitable trust and said we had to consider starbucks many the mix because it was a stellar quarter and also, of course, you know howard is back and he orchestrated an amazing conference call that made you feel like this is the
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beginning of the next act. i agree. >> okay. jim cramer, we will see you in just a couple minutes. >> that's it that's it. >> you know i love you >> a lot of cool stuff >> there's so much cool stuff to talk about, but i need to save time for you to start your show on time. that's what i'm trying to do we'll be right back. we have jim buller for just a moment before we end back after this. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.
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our special guest today st. louis fed president jim buller back to work and the world we're living in, is the labor market totally different than what the fed is used to trying to analyze because of, you know, state at home, the pandemic it's so strange, isn't it? >> i think there's very much an upheaval in labor markets and how they work. i think one of the places this is really showing up is that we track wages, we track nominal compensation, but what's happening is you're changing the work contract to say, okay, i'll pay you this amount but you can ambassador be more flexible than you used to be and you can work from home a certain amount of the time or whatever and so i think that makes it hard to read the wages just
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correctly because you're changing the nature of the employment contract. >> and it's giving people the opportunity to ask for more money. so it may give you a signal that you need to be more concerned about a wage price issue in terms of inflation become sticky but maybe it goes away eventually >> -- more money by saying i want the same amount of money but i want a lot more flexibility. >> that's not something you need to be concerned with as much >> to an economist, that's an increase in the wage you know, you've changed the nature of the work as to be the same as if you went to a four-day workweek. >> that's a problem for the fed, then >> you know, the wage price spiral i'm not a big advocate of that i don't think -- that's not the driver of inflation. that's a symptom of inflation. of course companies have to keep up with the market and of course workers want to get the very best that they can >> thank you again >> all right
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>> thanks for being here. >> thanks for having me. final check on the markets, 200 on the dow, up 198 you can see the nasdaq chipping in strong, up 81 july was a good month in terms of a rebound just headed back down any day, andrew that's why i have to tune in, i guess. >> that's right. the train may have left the station. >> i believe so. it's not backing up. join us tomorrow "squawk on the street" is next good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer live at post 9 of the new york stock exchange. david faber has the morning off. stocks looking to give back some losses as speaker pelosi departs taiwan lots of corporate results, starbucks, sofi, opec with a production hike.


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