tv Squawk Box CNBC August 18, 2022 6:00am-9:00am EDT
winning streak on the agenda, employment data and retail earnings. and bed, bath & beyond sharing tumbling after the cha chairman announcement. and we have the cdc plans overall. dr. scott gottlieb weighs in it is thursday, august 18th, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times area. i'm rebecca quick an along with andrew ross sorkin if you twyou want to see what i happening with the futures,
things are positive. dow futures indicated up 50 points nasdaq up 27 this comes after a down day for the markets yesterday. the first time in five sessions the dow was down it fell by 172 points. s&p was down 0.76% nasdaq off by 1.25%. in the early going, we are looking at green arrows. treasury yields are picking up we saw this happening before the fed hewas out before the minutes the 10-year treasury is yielding 2.88%. you can see the 30-year treasury at 3.12% you have crude oil prices which rose a little bit yesterday. still well below $90 up another 1% to $89.16. brent at $94.96. natural gas up 1.2%. andrew thank you, becky
the fed talk with the meeting and officials indicating they would not pull back until inflation comes down officials did not specifically provide guidance for future increases. they said they would be watching the data closely as you imagine before making decisions. steve liesman will be with us later this morning with more on the fed minutes. becky, steve has been right and economists have been right we will see what right really is at this point. i think steve has been saying 75 basis points economy is saying 75 the market is saying 50. you tell me. >> the one thing that throws everything into a bit of disarray is what happened with the uk plus 10% inflation rate. coming up with the entire number to pull it out at 10.1%.
if what is happening in europe is different from here that energy story is different that has to have the fed looking at things and say what do we do next 50 or 75 we'll see. the bigger question is how long do they keep that up are we talking about months of this or through the end of next year is the market right about the fed having to cut rates by next year those are all big questions. it will take time. the fed is data dependent. every number matters >> i think they will keep their foot on the neck of the economy for a longer time than the market is expecting. that's me. >> we should check out shares of bed, bath & beyond sharply lower after several straight days of volatility. ryan cohen saying he is selling his stake in the retailer. if he managed to sell all of the stock at yesterday's closing price of $23.08, he would net
$60 million on the investment of $120 million this only happened back in march. that is when he invested on this we should note that cohen's filing notified the s.e.c. of the proposal to sell it doesn't indicate he has sold shares stock down 14% it was down 20% when this was first announced. maybe down 18% later yesterday this has been a huge bet that he made in the options market and we will see what happens with these things >> to me, there are lots of questions about this even legal questions about the selling. i don't -- this is not a situation, per se, of market manipulation i think the truth is a lot of people got the story wrong and possibly us yesterday. definitely including wall street yesterday in terms of what was really happening if you go back and look and i
tried to figure it out during the program as we talked about it yesterday, the stock move of 70% one day and yesterday again on the back of what looked like new options activity by him. the truth was it wasn't new options activity by him. in fact, these options were bought months and months ago because of a new filing by the company, the wall street bets crowd and others, i think misunderstood the filings and suggested they were new. that's what led to the decision by so many investors to pile into this stock. he clearly saw everybody piling into the stock and he decided he would run for the hills at the same time. i think there -- >> bought back in march when the stock was trading at $16 we have seen the run up. you can understand why he would file to sell >> you see the situation where
the stock is moving. in truth, i'm wrong on information. it was moving on the wrong information. he decided he would take advantage of that. there will be people who look at that as he goes into other investments in future and everybody talking about the diamond hands all the time i'm not suggesting that. a lot of people say they're apes and that's the strategy. they need to understand the sponsor just like in the context of spacs and other things may not be diamond hands >> especially if you see a 50% return on investment if you make $60 million on $120 million you made, look, sounds like a logical move. a lot of people would say time to rein in these gains maybe not the extraditional peoe who say diamond hands. that is a big gain
maybe what this volatility means is get out. >> sure. not the people driving up the stock. these are the typical investor this is not -- i don't know what typical is anymore people who have been in this stock and people in amc, any of the quote/unquote meme stocks related to fundamentals misumis misunderstand. i don't know maybe it shouldn't be shocking there are a lot of people saying how is it possible that our dear leader has left us this is what happens in the context of these things. i think there will be a lot of people -- i don't want to say there are going to be. a lot of people are upset over him selling the shares. let's talk about other shares this morning. shares are higher this time on
fundamentals earnings of 83 cents a share beat by a penny. revenue up 4.8%. the company has been struckgglig as they shift to cloud and subscription platforms the stock has under performed. ceo chuck robbins is talking to "squawk on the street" this morning. don't miss that cnbc exclusive. a developing story the u.s. and taiwan agreed to begin trade talks under the initiative announced in june the talks are expected to take place in early fall. it is another sign that washington iss stepping up support for the island which china claims it is part of its territory. you see step after step after step of walking up to the brink between the united states and china over this issue. new red flags on china's
growth goldman sachs lowered the year forecast to 3% down from 3.3%. slashing projection from 2.3%. those cuts represent continued pessimism over the growth target of prac5.5% the country may fall short of the gdp goal we saw the numbers on monday, andrew, that kicked off the decline in oil prices. china's economy not doing as well as expected that is cutting the demand picture out from wti why we have seen weakness this week. >> it is fascinating the other piece is we talk all the time about the end of the american empire. the takeover of the world by china. china's economy being this super strong, you know, system that some people are now wondering if we should be modelling ourselves
after and relative to what feels like a mess at home. the truth is that if you look at their economy, they have a lot of challenges ahead. you know, you can say all of these meaningful problems here at home, but china, long term, even long term, has legitimate problems. >> problems with covid shutdowns because they haven't managed to deal with it >> if you look out and see the demographic issues >> you could say that for a wh while. i agree. there are demographic issues they have to face. the short-term issue is they haven't gotten around covid. they don't have immunity because of the ockdowns. that is complicated. that is why they are looking at central bank cutting rates and the rest of the world dealing with inflation >> we agree.
coming up after the break, retail earnings and employment numbers on the docket today. the squawk planner is next we'll talk about it. apple expected to unveil the latest iphone. mark your kapcalendar i marked mine. september 7th. stock on a run of 30% in the last two months. we will hear the bull and bear case at 7:00 you don't want to miss that. you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist securities
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welcome back to "squawk box. a couple of things to look at today. initial jobless claims are due today and the existing home sales. we will want to listen to the fed speeches as well today on the earnings calendar, reports from estee laude r&b j's wholesale and then tapestry. all before the opening bell. we have the head of public market group at u.s. bank and wealth management and kari firestone with us as well. good morning to both of you.
lisa, i'll start with you. we have been listening and watching what the fed said yesterday. does that change your calculus at all >> andrew, we're cautious on the u.s. equity market if you see what happened in the fmoc minutes, they are resolute on combating inflation they acknowledge they will decelerate, but emphasizing the fact that they are looking for that data dependent that inflation is coming down before they are willing to move away from the current move toward restrictive policy that being quite a big headwind and signs we see of the economy accelerating those are, again, leading for us to have a more defensive outlook at this time. >> what does that mean are you sitting on cash? you are buying things. >> we are advising clients to
stay less emphasizing on u.s. equities under weight the allocation. we would emphasize moving more into high quality fixed income and global infrastructure. really the reason for the interest in those latter two areas is simply because they offer some very nice diversified cash flows to provide a buffer in the uncertain economy >> kari, did the fed minutes surprise you what do you think? >> hi, andrew. the one aspect of the fed comments we found interesting is the 75 basis point as a continuing percent increase may be a little higher than the fed had expected now we believe there will be at 75, but move to 50 basis points. we know that there is some
effect in the economy. we have seen the impact on interest rates, of course. we also are noticing that as companies report, they have been saying perhaps we need to freeze employment numbers were okay, not great in the quarter. amazon, facebook, google, many of the tech companies, have focused on cost control and either saying freezing head count or perhaps cutting back. that's true of a lot of start-ups and high tech companies. that will have an effect on employment it may not be this month it is going to be soon we see that trickle through the system that implies to the economy slowing down they had an effect the market is down 10% from its peak not down 20% anymore when the market falls further, if it were, we saw plenty of buyers there are buyers and investors when we sell 16 times forward earnings, we think it is
sensible we have some consolidation right here the market moved up quickly. buying stocks that have earnings that seem visible at prices that are reasonable to us makes a lot of sense names like amd and adobe. >> before we get into the names, you heard what lisa had to say in terms of under weight or overweight and how you are waiting the situation. she would be under weight equities in the united states on the basis where she might otherwise be is that the way you would play it or no >> not really. i think we are more aggressive about u.s. equities and where they have fallen in the market is oversold. on june 16th, valuations were attractive the united states is still a better place to invest than overseas no, i don't think we would agree. i understand we need to be
cautious because all of the unknowns of earnings and interest rates and the board and china. the price was telling us it was time to put money back to work for sure >> so, kari, quickly, you say certain stocks are cheap name them, but also what is the multiple that you think is fair value these days >> well, the market right now is selling at about 18 times forward erparnings. assuming those numbers are goin to come down soon. if 3% on the 10-year treasury is a top, it is not above that again. we think that is reasonable. if it comes down a little, yes, we would be more aggressive. 18 times earnings is not a multiple that is cheap, but not an expensive multiple for the interest rate level. paypal is 18 times earnings and committed to cost control. i think that stock can go higher amazon, under performing for the last year. started to out perform
we like that reilly auto. we believe employment as it is, people are using much more of the cloud and using their systems makes sense here i mentioned adobe and amd. how about the defense contractor which is having a good year? we think it can go higher from here >> lisa, what do you think 18 times? is that fair value to you? i'm trying to understand how you are thinking about it and how kari is thinking about it. >> on the valuation basis, we see the pe in the united states in the okay zone to kari's point, if you look at history, we are not in nose bleed territory nor cheap. with that in place, we are going back to fundamentals we are cautious because what you see going on so far is you have seen prior to the last few weeks, the multiples come down
on the fact that the fed has moved to more restrictive policy and those higher interest rates, of course, will bring down the multiples that people are paying our main concern going forward is what we consider a potential for a second re-pricing which would be, if again, further pressure on earnings again, simply because of elevated inflation and monetary policy continuing to tighten and the results on the effectively sales and earnings margins for those companies. >> lisa and kari, i want to thank you you both appreciate it. becky. andrew, thank you. when we come back, the decision of the closely watched opioid case it could mean implications for the biggest pharmacy chains. later, we will talk to dr. scott gottlieb about the changes the cdc is proposing after the ndi
when life's doors open, we'll handle the house. a federal judge in ohio has ordered cvs and walgreens and walmart to pay $650 million after two ohio counties found the pharmaciyies libel for contributing to the opioid pandemic this is the first case to target fa pharmacy chains. the spokesman for wallgreens sai the company never marketed opioids or distribute ed them.
the stocks this morning showing down slightly. coming up, becky, when will talk about what we learned from the fed minutes and the path of the future rate hikes. steve liesman will join us after the break. and take a look at s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure rk-ery. 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.
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good morning welcome back to "squawk box. we are live from the nasdaq market site in times square. we are watching what is happening this morning yesterday was first down day for the markets, at least for the dow, in five sectssions dow futures indicated up 55 points s&p futures up 7.5 nasdaq up by 24.
andrew thanks let's talk about the fed awaited fed minutes offering support for the hawks and doves and the outlook for rates. senior economic reporter steve liesman out with the confusing message from the fed steve. >> good morning, andrew. there are a few things investors could know from the minutes. first, rates will continue to climb. second, they are likely to head into restrictive territory third, fed officials agree the inflation is the biggest risk. beyond that, hawkish comments and dovish remarks that offered support for a more benign outlook from the fed not very benign. hawkish stuff first. minutes said the move to the restrictive rate was required for the fed to meet policy goals. second, a commodity price decline is not enough to convince the fed that inflation is meaningfully coming down.
the third is the danger inflation becomes entrenched it is appropriate to slow tightening many were concerned overnight evening too much and the policy with a rapid effect on the economy than previous tightening policies the result of the dovish comments was to moderately lower the probably of the rate hike and possibility of 50% to 60%. still, overall hawkish tilt kept outlook for rate hikes in tact the hike of 3.70 by april. fed officials have been asrguing about that inflation is 8% over over year and the fed could cause concern. any sense the fed will back off
could loosen financial conditions fand that's why the fed speakers at jackson hole next week will be against inflation and be generally hawkish. andrew >> you think the market still is wrong? >> um, you know, i said for a long time, andrew, the market is not wrong if it is paid for the risk it is taking. you fight for the risk there are no lifeguards out there on this. the market came down a lot the extent to which the market thought or investors thought there was some value in betting on the possibility that the fed doesn't go as far. i can't argue with that. that's a risk/reward thing the probability is the fed is tighter for longer i did not hear a pivot last week by the fed or by the chairman
there is some support on the committee for really looking over your back and saying wait are we going too far >> i read it and said to myself, steve has been right that's what i was thinking steve liesman has been right meaning they will hold tight for longer i recognize you saying there is a little bit of opportunity to go the other way if you are looking for that >> yeah. that's right, andrew i think you have to think about what expectations were as i reported yesterday at this time. i had people say the fed will use these minutes to redirect the conversation and kind of attack or otherwise counter with dovish drift that markets have in financial conditions. i don't think that was uniformly the case it was mostly the case there were those other elements in there when they say that many
are concerned about tightening too much you have to take notice of that. you can't ignore it. i think i'm still right. the fed is going to be tighter for longer the market may be wrong about the rate cuts next year. especially with bullard on the show you may have been out last week with bullard on. he said our plan, i believe is to hike and maintain look, if the market is right that we end up having a recession and the fed backs off the rate hikes, that's not an implausible scenario here. there's also the possibility inflation ends up coming down faster than we thought there is some side to the discount. >> do we want to layer in the uk or not the reason i ask is because becky raised it. we saw double digit inflation over there yesterday do you look at that and say that's over there or do you say,
you know what, the world is a small place. >> i don't i think we will talk about this at 7:30 in depth it is a nice tease it is a difference with europe and uk and u.s i think that the uk is an example of where we will go if we don't stay on the right course with policy i think we have a chance of bringing inflation down and maintaining reasonable employment in the country. if our central bank is well ahead of the bank of england it will try to catch up next month. there is a lot of differences with the uk and u.s. i'll get into those at 7:30. one is they are more susceptible to happening in the international arena. >> steve liesman, thank you for breaking this down for us. we will see you in an hour from now. becky quick. thank you, andrew. when we come back, the cdc
proposing big changes citing fail an yures s of the handlinge covid pandemic dr. scott gottlieb warned of some of these things apple stock soaring the last few months does it have more room to run? we will bring you the debate the stock trading down right now at 173.90. "squawk box" will be right back. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to th world's markets.
the cdc director rochelle walensky selling senior leadership yesterday she plans to overall the agency in the effort how it responds to restore public trust this comes after the response to the covid-19 pandemic with i inad inadequacies we have dr. scott gottlieb with us now he also serves on the board of pfizer and illunina. i saw this yesterday and thought of you you said things need to change at the cdc and it was a need for
an overhaul. does this fit the bill is this what needs to be done? >> it is a bold set of diagnosis in terms of what is wrong at the cdc that the cdc director put out. she did an internal video that was unflinching inside the cdc i think she has keyed in on the right things it is an academic culture. it is not operational focused. it awards publications rather than execution they hold on to the information too long to inform policy making decisions in a crisis. they think they are speaking to public health agencies and not consumers. when you look at guidance or data they put out, it is not interpreted by the consumer and they need to speak to consumers. it is similar with the challenges the fda faced when it had to undergo a change with how it put out information
the fda thought it was speaking through providers to patients and not directly to patients that changed the cdc needs to do something similar. the one piece that was missing was the effort to skinny down and focus back on the disease control mission and national mission. i think the cdc can do things better by other agencies it is hard for the current cdc director to give up current authority. i wasn't expecting that in the proposal i do think that it is something congress needs to look at. >> scott, i guess i was surprised to see the news just in terms of the timing and how the director is actually taking this on. not shocked because the entire nation saw so many problems with the cdc as this was going on granted, it was a difficult pandemic you know, i had the idea of the cdc being what was from the movie "outbreak" or "contagion"
and this changed my perspective. can you restore public trust they have a long way to go >> i don't think the cdc was ever equipped to handle a c contagion of this scale. when you think of the cdc and think of the movies, you think of the epidemiology service and people going to the field and making a diagnosis i don't think the cdc had the ability to run a national response to the pandemic of the scale. we were wrong to assume it did that is the original mistake when you look at zika and ebola and the bad flu seasons. the problems the cdc experiences with the context of covid and now monkeypox, also surfaced during the outbreaks where it was not equipped to deploy a test or slow to release
information to inform public health decisions those became more exacerbated in the public health crisis the cdc was never capable of executing the response of the crisis of this magnitude if you want the cdc to be the nexus, it has to change the operational capability the director has been hiring more experts and putting them in key moves. the vaccine reporting system which is something they can do can be handled by fda or tobacco control work can be handled by other agencies when i was add fda, we tried to get the reporting system moved from cdc to fda. we were close to doing it. the deal i tried to strike was keep the money and we take on the responsibility post market vaccine reporting should be with the fda, not cdc. those are the kinds of things
where you can skinny down the mission and focus and get resources and authority to the control work this is the final point. the way to get consensus on capitol hill with congress members skeptical to give them more resources and authority is to say we will focus the agency more and focus it more on disease control mission and lose ancillary things or things handled better by other agencies, but we need more resources. that is the way you get political compromise >> that makes sense, i think i think i hear that the vaccine reaction should bed the fda cdc should track the disease as it comes in. i have to tell you, one of the things i was shocked by during the pandemic is how ridiculous it is trying to track this information. there is not a national database numbers coming from fax machines from all over the country.
i had no idea we were that bad at tracking the problem. you don't know what you are dealing with, how can you figure out how to fight it? >> look, a problem on both ends. getting information in and getting information out. we talked about the cdc inability to get bottom line information out to inform real-time decision making by policymakers and businesses. the congress has given them money to invest and they ignored the direction from congress. >> what did they do with the money? >> not spend it. there's been articles written how the cdc did not respond to congressional directives to build out a better i.t. system the current director talked specifically about i.t. and lab services as two abilities that need to be improved. they don't collect information well they have an orientation
look how they collected information on hospitalizations in the early covid outbreak. they were not collecting hospitalizations they were modelling how many they thought were happening based on a sample that included 20% of the hospitals with the pandemic that was moving around the country in different ways, the model was way off. if you go to the cdc web site and look at hospitalizations through covid, they acknowledge on the web site that any data before august of 2020 is not reliable that is because that's when the cdc was charged of collecting that data. post august of 2020, hhs took over and mandated the hospitals report the hospital saizations happening on a daily basis >> i have seen rochelle walensky saying she was critical of everyone else and not herself. is that warranted? >> i think she is introspective.
i think she is in a hard position putting out sort of an analysis of the shortcomings of the agency as director i thought what she did was bold putting this out any time you acknowledge a mistake made on your watch, it is an acknowledgment of your shortcom shortcoming. i don't see that in the messaging. >> your and aalysis of the cdc e years from now >> she is trying to drive a culture change within the organization the challenge is now the first part of the mistakes and being public about it and that is driving that change. people are remote. people are not in the halls of cdc. they are still a remote agency as long as people are not coming into the office, it will be hard to drive change in the organization i think it will require congress congress will have to come in and legislate and successfully
legislate like with the fda two decades ago where it legislated on a regular basis through the user fee reauthorization every five years, congress passed legislation to provide more resources, but reforms. you need constant action by p congress to reorient the agency. i don't think they up to it. i don't think enough on capitol hill understand the organization to write legislation to fix it >> dr. scott gottlieb, thank you. >> thanks a lot. oekay. when we come back, natural gas prices are up 70% since july. that pales in comparison to europe we will talk about the fallout next. you can get the best of squawk on the daily podcast. follow your favorite podcast app. we are right back after this
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natural gas prices are surging amid an increase in demand in the united states and in europe, fueled by gas shortages. and new this morning, germany's chancellor announcing plans to lower the sales tax on natural gas there to 7%. joining us right now is energy aspects founder and director of research and when i saw this news that they were lowering the tax to 7%, i thought, my gosh, how much was it before? looks like that was 19% of a vat tax on this. that's crazy >> yeah, i mean, europe's always had very high taxes, not just on gas, gasoline and diesel as
well it's not surprising. you are seeing this across the board to ease inflationary pressures on consumers >> we are hearing stories not only in europe but also in china about how power shortages, in china, it's different because of the hydropower they're having shortages with tan seems like it is getting to be a pretty precarious situation as we get closer to the potential for colder months and the need to heat homes how do you see this playing out in. >> yeah, absolutely, the china part you mentioned is so important. we've already seen a big issue with supply chain bottlenecks. that's one of the reasons we see fl inflationary pressures in the u.s. china is one of the only countries yet to fully open up
workers aren't able to go to factories so factories can run and that's one of the big thins we thing we expect to change. we are potentially going to see some upside to other coal or oil, because some of these manufacturers may just use backup power but it absolutely adds to the inflationary pressures around the world. in europe, of course, very different. the gas increase in prices that you've seen hasn't been a particular trigger it's just been a continuing issue, and the risks around the upcoming winter, what if russia turns gas off again, not our base case, but that's what's been fueling the gas prices rather than any specific data point. >> what do you make of the pullback of wti?
back at 88, $89 now. earlier this week there was a sudden potential glut in wti i don't know how temporary that is, what happens, what happens next >> you know when inventories are at a ten-year low, potentially inflation's a tt a record low, really struggle to call it a glut i think these terms are used particularly in the media. i would caution against that yes, the market is not as tight tas as it was even a couple weeks ago ago. this is seasonal people are on holiday. we should always put that in context. the recessionary fields are very, very high. we put out a piece yesterday about what high gas prices could do to europe, but these numbers
are. >> realready baked in without iran we are going back above $100 by winter >> are you of the camp that thinks inflation has not peaked yet? >> temporarily it has, but we do expect to see higher energy prices in the winter, for oil it's going to be iran coming back but broadly speaking, higher energy prices. >> thank you >> thank you okay, coming up. we've got two big hours ahead. we're going to talk about apple's big run up in the last two months and the plans to introduce more ads on iphones and ipads and the big announcements about those phones coming up next mth "squawk box" coming back that after this
for the s&p 500. retail once again in focus today. is apple right for the picking the stock has been on the run since its low. eurozone inflation will it cause problems for chairman powell and the u.s. economy? we'll talk about the implications of the u.s. recovery as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box," right here on cnbc i'm andrew ross sorkin along with becky quick joe is out today but do take a look at u.s. equity futures at this hour. still got about two and a half hours to go before the market's set to open. going to open up a little
stronger dow looks like it would open about h45 points higher take a look at treasury yields steve liesman was talking about them a lot of people trying to make sense of it and divining, maybe, what they want to think of what the fed may or may not do. but right now the ten-year at 2.871. also take a look at oil, as we consider the cost of energy these days wti crude, you can buy it by the barrel it will cost you $88.98 this morning. and finally, let's get a crypto board on the screen. you're looking at bitcoin standing at just 23, $23,482 and then keep an eye on eth. a h a lot of people looking to see what happens later, next month when, well, anybody who's into
eth knows that next month -- i don't want to get into the complications. there are a lot of things that are going to happen. it is a busy one for economic data a little less than 90 minutes from now we'll get the labor department's look at jobless claims, as well as philly fed index and tearnings out moments ago from tapestry, the company behind coach and kate spade. it's one cent above estimates. tapestry raising its quarterly dividends. bj wholesale's also out with its quarterly numbers, beating estimates by 26 cents to adjust quarterly profit of $1.06 a
share. comparable store sales coming in we've also got shares of cisco higher beat estimates by a penny. revenue also beeating ex expectations cisco shares up by 4.8%. but it's underperformed for the year the nasdaq has not had a great year ceo chuck robbins will be on "squawk on the street. that stock is up this morning. the u.s. and taiwan have agreed to begin trade talks under a new initiative that was first announced in june. those talks are expected to take place in early fall, another sign that washington has stepped up support for the island which china claims as part of its territory. our next guest say it is will take a recession to bring
inflation back down, and to that end, joining us is mandy xu. and mandy, market's been up for the last month you're saying it's a time that would you be stepping back, maybe selling? >> exactly hey, becky obviously, we've gotten a very bullish bounce in the stock market i think stocks have gotten in a little ahead of themselves from peak inflation to a soft landing. the key question remains, how quickly account fed bring inflation back down to target? and i'm not so sure that it's going to happen quickly and painlessly and judging by the reaction in the stock market, the stocks are right now pricing in a soft landing, so no recession and to me, you know, the price action really stands out if you look across other assets
oil sub $90 is not a market telling you that growth is really going to rebound. moreover, if you look at the bond market, the yield curve keeps inverting. that's a danger sign that's why i'm a little cautious over here. >> vix has come back down. you're talking about sub 20 levels for the first time since when, april? >> yeah, exactly we've seen a very significant mobility the average stock trading about ten points higher than the vix what that means in terms of setup, i think this is a great time to be looking at overwriting your portfolio if you're a long-term investor, hold onto the stock you own,
take advantage of the overrated stock volatility sell some calls against those stocks the upside is going to be limited. but if we sell-off from here, you're reducing your risk and taking advantage of the very elevated levels of the stock volatility that we're currently seeing >> i know you track hedging flows how people are preparing themselves that tells us a lot. what have you seen lately? >> very interesting. if anything we've seen a pretty notable pickup i think in the options market, investors remain very scentable of skeptical. it stands out against the price action that we're seeing in the market >> what would be your biggest concern at this point?
what do you think would set the market back off in a different direction? >> what i'm watching very close s closely is core inflation. a bulk of that is come ing from housing or rent. that's not turning negative anytime soon and we're not going to see that until we see significant labor market weakness. to me, i think the fed cannot afford to take its foot off the gas pedal until we see significant weakening in core inflation. in my view, i don't think that's going to happen anytime soon >> mandy, thank you for your time and your thoughts this morning. >> thank you when we come back, are shares for apple ripe for the picking? we will take a look at what's driving the stock, that's next
before we come to a break, earnings just out from retailer kohl's the stock is sliding after it cut its full-year forecast the ceo, michelle gass will be joining the exchange at 1:00 p.m. eastern time today. "squawk box" will be right back. walter hagen. he was equal part style and skill. he won eleven majors. it's said he'd show up in a limo after partying all night. on the first tee, he'd ask, “what's the course record?” then he'd hoist the trophy on eighteen. the golf course was his stage. and now, it's yours. walter hagen apparel. available at dick's and golf galaxy.
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stock. from a margin perspective, how much opportunity do you think there really is? gene >> oh, for me, from my perspective, thank you >> sorry, i apologize, gene. i said barton, i meant gene. >> from an upside potential, there is measurable, i think 40% plus upside. over the next couple years, 250. i want to give quick context to how i get there. it's less about how they're going to get there with the product road map and chain coming out in september. it's more about my ledger view on apple on one side is the fundamentals. i estimate 70% of their products are necessities. also they're going to get into new markets. it could be health care, augmented reality. potentially auto this solves their growth problem longer term.
i don't think these are reflected in the current share price. that's my opt mimistic view is there a second side of the ledger, the geopolitical side, and it's something we can talk more about, but that is my near term concern >> so, let's go back, by the way, i mean, there are some folks, i don't know if you saw c carter worth the other day he said sell it all. you're on the buy side i get that how much of it for you, not this announcement this fall, but what's your expectation about what we're going to see this fall and whether it's going to of m move the needle. >> i think we're going to see the iphone 14. it's a 50% comp.
i don't think the products are going to be particularly earth-shattering, i think we will see nice growth to me, it comes down to great stable business and ultimately, where this can go longer term, getting into new product categories it's going to be pretty subdued, but enough to keep this train going. >> and o,so, when you say subdud you saw the expectation of more advertising, for example, on apple apps again, is that, does that do anything for you >> it doesn't. it's, i mean, this is kind of a, they have a been toying around with advertising for a long time this is like a trivia question at this point, called i ad, it's worked great for amazon. i don't see it being a measurable factor on apple, but, again, those will probably get a lot of the headlines just because they're relatively new
>> your gamble is the car then is that what we're talking about. >> this is a big fwamagamble on car in. >> i would look at it as a stable business. any one of those can measurely move the needle. if you are in cupertino, you're thinking about a couple things how do you grow, you get it by getting into big markets health and wellness. feature around afib. clinicians can use that data for more prognosis that is a step in the right direction. ar, we're a long way away. and to answer the substance of your question, do i think the car is what the bet is, it's not the bet. but if that does come to fruition, it would be significant, and just to quickly frame that in, is that the car
market's a $2.5 trillion market. smartphone market's a trillion dollar market. the car could potentially be bigger than the iphone they've been trying for seven years to get there if they end up getting there, i think the stock quickly of mos hig moves faster >> something's got to be behind one of those doors for your numbers to make sense. >> yes, for this to work, apple does have to get into other product categories and i think there's probably the near-term piece of it. if they reveal one of those doors, i suspect the stock will move higher. and then long term what ultimately can it do i do want to add one thing behind those doors there is one door we can see a little bit behind that car door. yes, they have been trying to
get there for a long time. it's been a little bit of a circus in terms of the leadership and the product direction. but one thing they will have, at the end of next year, an updated car play this may not seem like much, but there are 13 major car makers who have signed up to use this essential essentially they've given away the whole control panel. they're reinforcing the importance of apple and the experience in the car. it lays the ground work that even though it's been slow for titan, they know how to get there. it's a higher probability than most would expect. >> let me bring in barton into this conversation. barton, i don't know if you've had the opportunity the hear what sweengene's been saying he made the argument this is a great, stable, cash flow company. he's got three doors, and you
got to behind door one, door two, door three, something's got to happen. one's in auto land, meaning we've got to see a car out of there, a.r., maybe out of door two or maybe health care and in any of those doors, if any of those doors open up something, it's a win. what do you think is >> i think there's no worse time than the present to think about launching a car with car supply issues and to bank on that and the near to intermediate term i think is i have, very hopeful we know a lot of capital has been chasing cars, and it's difficult. and there's reasons why apple has been slow, because it's not an easy thing to do. could it happen t you can't ever say never with this company in terms of other kind of new product opportunities. a lot of people have talked about arvr
to say it moves beyond gaming i think is optimistic. again it's hopeful for substance. i think this is a company that's going to sink or swim based on what it does with device sales for the next, over the near or intermediate term. we've seen major products outside of iphone turn south because of pandemic pull forward, market saturation they've been a share gainer in computers, which is great, great technology but an iphone is what you're really banking on. the smartphone category is challenged at the moment these guys have been a share gainer but you listen to people like. a t aat&t and verizon
you have a lot of things that won't materialize near term and some fundamental questions that mean you don't have to own the stock today. >> so at $174, warren buffett's wr wrong? what's fair value in your mind in far be it to say that warren buffett's wrong. but this is where we have new capital. >> if you had new capital and were you trying to play in tech land, where would you put it in. it >> i look google and alphabet. there's few companies that have stronger competitive positions on this planet than alphabet and the multiple is not demanding at all they have pulled back recently unlike apple i think today that's more of a place where you look >> all right
barton, gene, thank you both for a bit of all sides of this debate and we we'll see where it heads when we come back, could europe signal tough times for the u.s. implications for the global economic recovery. and goldman sachs downgrading china's growth goldman sachs lowering its 2022 full-year forecast to 3% from 3.3% and nomura slashing down to 2.8% they were up to 3.32 "squawk box" coming right back after this sthoo time now for today's aflac trivia question. what three countries account for ab 41% of theor's wld total wheat production
the answer when cnbc "squawk box" continues e aflac pre-pain . aflac! paul is about to suffer a shelf-inflicted injury. luckily, aflac will help cover his unexpected medical bills. aflac! maybe you could use the money to buy a step stool. i have a step stool. so why are you climbing a shelf? the stool's on top of the shelf, isn't it paul... (shelf crashing) yeah... ♪ ♪ aflac!
now the answer to today's aflac trivia question. what three countries account for about 41% of the world's total wheat production the answer china, india, and russia the united states is fourth. let's in fact get over to china, because while it's still dealing with shutdowns because of its zero covid policy, now the people there face another big problem. heat wave, scorching temperatures, drying up water supplies and cutting crucial sources for hydropower that's leading to electricity rationing in some areas and forcing a growing number of global manufacturers to halt production at their factories. eunice yoon joins us how much is worse than it has been in the past
>> in the past hour the weather authority of the country issued another high-level alert saying that we should expect extreme drought conditions to worsen over the next three days the country has been battling with some of its most severe heat waves that it's seen since 1961, and they have been parching the provinces all along the country's longest river. so that is areas that are this central and southwestern parts of china, relying heavily on hydropower so the authorities there have been ordering power rationing for factories and supply chains. they've been telling factories to suspend or reduce operations, to cut working hours, grant high-temperature holidays for staff and then all of this of course to cope with i willed electricity until august 24. that's next wednesday. the air what yeah is home to
suppliers forei for apple, tesl. they are not sure if the drought will last until september. it's very unclear as to how long the power rationing is going to last >> i see it raining behind you is that kind of unexpected or is this just a drop in the bucket for what's needed >> it is a drop in the bucket, but beijing, we have been seeing some odd weather, where there's been rain, but it's also been extremely hot. and there have been red alerts this is like the highest level alert for bay ying as well as ot as well as other cities for the weekend. that means the temperatures are above 104 degrees. >> wow that is pain
eunice, thank you as always for i bringing this upclose picture on things. eurozone inflation reaching the highest level on record. and as we head to a break, check out shares of bath and body works. the company beating on the top and bottom lines, but giving a w weaker than expected forecast. the stock right now down by ceout half a pernt to $40 stay tuned "squawk box" will be right back.
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the united states might have hit peak inflation, but in europe it's getting higher and higher the inflation a continued to rise, hitting 8.9% in the uk, they marked the highest inflation in decades joining us, rick santelli at the cme and steve liesman. just to toss this around and see what we think about it
ian, why don't you set the stage. the uk numbers we got earlier this week, now the eu numbers tell us there's a pretty raging picture of inflation energy is a big part of that, but how do you see this shaping up around the globe? is this still a global nobody > problem >> it is a global problem. but it's much worse in the uk. the broad-based core inflation as well in europe and the uk it's not just an energy problem. it's not just a food price problem. but there's no question that those things are making it much worse, and they're likely to be a problem for a good bit longer yet. that's really the big difference between europe and the u.s i can't say the same for the uk and for the eurozone
some of this is already baked in because of the lag between rising wholesale natural gas prices and retail energy prices. and some of it is more persistent pressure as well. they're really dealing with what's likely to be a deep-seated problem than the u.s. it's squeezing real incomes and putting pressure on the ecb, and the consequence of all of this pressure is that the euro has been very weak against the dollar in the last few months. >> rick, what do you think about the inflation numbers we've been getting here in the united states what's your expectation for what's to come >> you know, it's so difficult to try to keep up with the minutia, but i like to monitor the markets. because of course inflation is playing a key role, not only in the interest rate identify but the yield curves, the relationship between different maturities and i think it's pretty obvious over the last couple months by how interest rates have moved,
how they've affected stocks that we are past peak inflation and i think the data does bear that out and there's some logic as well. definitely energy policy or lack there of, of a good energy policy has contributed more than its fair share of the inflation issues we're discussing, but there's also lots of left overs from supply issues, covid issues, war issues and all of that, of course, is pralaying havoc. and i agree with ian we kno we t we know they are not truly seeing the true nature of energy prices coal is king it's having a banner year. and to think that putin isn't paying attention to all of these issues as germany advertises
cutting back 20% so they can stockpile enough to heat homes in the winter, b believe me, he going to do what's mostly the most painful we need to prepare for the worst. and with regard to how this is affecting the global trade issues, ian knows as well as anybody. it's a relative value trade. the capital flows will favor the u.s. >> steve, that gets us to the fed and how they interpret all of this, how they handle it, because, again, inflation numbers look a lot better here but when you're looking around the dproglobe and trying to fige out what happens next with energy commodity prices, it's a lot to assessment should we feel like we're in the clear? or are we really on heightened alert here in. >> definitely not in the clear and i think one big issue, it's really hard it game out is the effect come the winter on
natural gas prices in the u.s. if europe has a big shortfall. there's going to be a huge demand for whatevery we can sed over there, and obviously some limit on the infrastructure. you can imagine that could pressure our prices. there's a couple things here on the fed. one thing that's helpful to the u.s. compared to the uk is our fed is ahead of both of bank of england and the ecb by quite a bit and this idea they may do 50 or 75 come september is going to put them further ahead the boe pretty much signaling it's going to do a 50. it has among other things strengthened our currency. if you look at the openness of each economy, the uk is much more susceptible to what's happening globally than the u.s. is 55%, trade is equal to 55% of
their gdp. just 23% in the u.s. we think of ourselves as an open economy, but a lot of the prices that are made or taken here in the united states are the ones made in the u.s. with obvious influence on national commodities, we have less influence uk is going to be rocked back and forth much more by what's happening internationally than the u.s. will be >> what do you think of germany saying they're going it lower the vat, the taxes there for natural gases to 7%. my first reaction was what how much was it before i think 19% before how much do they bring oe ridics taxes. ri rick, i think i heard you laugh. i'll let you take shot at that in i >> it's insane to think, you know, the germany has three nuclear plants that were scheduled to close at the end of december.
they're most likely going to stay online. as a matter of fact they will stay online even though legislation hasn't been finalized, but that does underscore, all of this hasn't reach reached a peak yet ultimately, the issue will boil down to what things will look like in october, november. steve's right. >> ian, your thoughts on this? >> oh, yeah. it's really scary. we have the potential of russia shutting off the taps and germany and the rest not being able to get enough gas into store to see them through the winter so energy rationing is going to be a real thing, initially for businesses so that's going to depress produ production in german manufa manufacturing. and europe is going to pay the
price for its energy policy, increa increasing relying on russia you can't do it in one winter, and winter starts in a few months' time so real vulnerabilities. as testeve said, that probably means higher natural gases in the u.s. as well i don't think it's going to be as big a deal for the u.s. as the gasoline price shock was earlier this year. it certainly can't be ignored. but the fed chair powell says he's focussed on the core. and i'm impressed that it's improving in the u.s in the uk it's not >> i want to make one quick point. the u.s. is part of its national security policy should be doing everything it can to get as much gas over to europe for the winter time, as much effort to send military equipment to the ukraine. i don't know what the
limitations are of the infrastructure i think we are doing more than we have before >> there was that fear, right, at one of the lng loading stations off the gulf coast that prevented a lot of it. but there's also political pressure that comes from it. when prices jump here, politicians are going to feel the pressure because people are going to say, hey, we care about ukraine, but not when it costs more here to heat your home or something else do you think the politicians willbe able to withstand those pressures, steve if. steve? >> it's a huge issue it's possible that results in diminished support for ukraine, but it's a one of those from an economic and egeopolitical
standpoint of can you pay me now or pay me later. >> let me ask you. we had am n energy analyst on earlier who's been right many times. she thinks even though you have wti pulling back slightly you could see those numbers go higher again the reason our numbers have come down is largely because of energy prices coming down. if that happens, what does that mean for the fed what does that mean for the markets? steve, we'll start with you and go around the horn. >> so it is interesting. it's unclear to me it seems like russian oil has found a way to get into the market and to the extent that it's going to india and china at lower cost, by the way, than international commodity prices, it's not cheelear to me that th
supply situation is as dire as those make it out to be. the fed had a really interesting comment yesterday that i think is worth remembering they said lower commodity prices is not going to be enough to convince them that inflation is under control. so higher commodity prices are going to be something that really keeps the fed from loosening up but it's going to be more than commodity prices that are going to be required to get the fed to ease off on its rate hikes >> they're rolling us out. rick and ian, i'm sorry, we don't get "the lastthe last wor. negotiations set to begin for more than 500,000 supply chain workers for the west coast ports. frank collins is going to take a look at the state of freight we'll do ha that next.
take a look at futures dow up about 51 points a reminder you can get the best of squawk on squawk pod on your favorite podcast app and listen anytime. stay tuned s here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq
outlook for the industry, and frank, this has kind of been the sleeping giant we have been hoping nothing goes wrong here, because all the supply chain problems we've seen to date will be nothing to compare to if this goes wrong. >> yeah, absolutely. you know, i talked to some analysts basically supply chain's on high alert and people aren't talking about it roughly half a million supply chain workers are negotiating new contracts or flat out say they need more kpntcompensation that includes the white house getting involved long shore men are working on an expired contract right now and more than 300,000 teamsters working pour u.p.s. want higher wages. their contract expires in june of 2023. they kicked off negotiations earlier this month fedex ground is operated almost entirely by outside contractors. that's 6,000 small businesses. the largest of them, spencer patton is the organizer of the
annual meeting of contractors that kicks off in vegas tomorrow without financial relief he could have to shut down his business right before black friday and claims many other contractors are in the same situation. >> our fuel prices have doubled. that has been unprecedented in our business's history and has seve severely impacted our profit margins. >> the industry saying in part, we adapted to the tremendous growth of e-commerce and the average annual revenue per service provider business has more than double to 2.3 million. now with market conditions changing, fedex ground and service providers must all adapt. also talking to bernstein about their supply chain outlook here's how they see it trucking rates, 15% lower this the spot market today.
they forecast those rates to continue declining along with air and ocean trait. >> wow that's worse than i had even expected or anticipated. you say the white house is getting involved with some of these. i know particular litly the pors are a huge issue, what can they do to get involved in beg t everybody to come toward the center line? >> we don't talk about the rails, but a crucial part of the supply line. the mediator has suggested rail workers get a 14% raise. the industry itself has admitted they're having a hard time holding onto workers a lot of people get into the rail industry and it is very demanding, they have a lot of turnover that is one example of what the white house can do but the u.s. doesn't want to see any big supply chain issues. >> are the railroads bound by what the mediators say
if they say a 14% increase, is that what's going to happen? >> railroad workers and union workers are bound by the national railway act if things continue, and there is no definite resolution, i don't think anybody ever wants to be out of work, but they are seeking better compensation and also some other allowances when it comes to work conditions. >> thank you for noib anybody who thought we out of the inflation picture, that's a lot of wage inflation that could be coming our way, too. talk about inflation, we'll talk inflation deflation and nfts check out the futures at this
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that helps protect you at home and on the go. you feel so safe, it's as if... i don't know... evander holyfield has your back. i wouldn't click on that. hey, thanks! we got a muffin for ed! all right! you don't need those calories. can we at least split it? nope. advanced security that helps protect your devices in and out of the home. i mean, can i have a bite? only from xfinity. nah. unbeatable internet. made to do anything so you can do anything. welcome back to "squawk box" this morning from makers of nba's top shot, football fans ahead of the upcoming nfl season can purchase nfts of their favorite favorite players and moments it's great to see you this
morning. i'm not a nft collector yet, but i've been a long time baseball, basketball card collector. i'm fascinating by what you dpd guys are doing let's talk about this and contextualize this nft drop is happening at a time when nft prices have come down materially >> absolutely. thank you for having my. sume you the key thing to remember is they are different than the speculative things people may have heard about on the news these are real things that fans can get involved in. you have the expensive, steph curry sold the other day for $20,000. but an accessible way for
collectors could come in, trade with their friends, get the same experience you would get as a trading card collector but super charged, because it's digital. we're also giving fan benefits if you're ha really big rams fa, you can get rewarded for being a rams fan and being involved. digital first, that's the key thing here we're really excited about the drop tomorrow. it's going to feature the legendary debut, the first kind of legendary moments, top-tier moments from some of the biggest stars in the league. and we encouragees everybody too get started. >> a lot of people bought and still do, hopefully, buy cards, physical cards when i was a kid i bought the cards because it was fun. >> yeah. >> then over time i started to do it a little bit as an investment like that but it originally was not as an
investment do you think that people should be buying this stuff because it's sort of a fun thing to have it's just a fun collectible? or do you think it should this be this new asset category there's a philosophical question underneath that. >> i think it's definitely both. on the one hand, it's fun, fan you lo and if you look at it, can you start on your phone and don't have to go to a store. they're instantly liquid if you pull a really high-value card out, can you choose to keep it or choose to sell it, 24/7 global market place, everything is guaranteed authentic, et cetera we see folks that come onto the platform and spend time with their kids, opening packs, $9 each, three nfts in there. there might be something extremely valuable or might just be players that you're fond of
a and collections that you can be proud of we have people who spend $100,000, a million dollars. it represents them and their fandom, just hike buy ago historical trading card. you get the benefits of blockchain, which is instant authenticity global market place, 24/7 available. that sort of thing >> it is a longer conversation i want to have it with you because i am so vlasic fascinat this entire space. congratulations on this new drop coming tomorrow. we look forward to talking to you begin very soon. >> thanks for having me. when we come back, what happens if you've adjusted to working from home, but now your boss wants you back in the office we'll talk about navigating the uncertainty, hybrid work and much more. plus, the latest read on jobless claims is out at 8:30 a.m
income shoppers. and what's on elon musk's mind a single tweet from him can send the world spinning the final hour of "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc welcome back live from the nasdaq market seetsite in times square. i'm becky quick with andrew ross sorkin are you are looking at green arrows this morning s&p up by 11 the nasdaq up by 47 and treasury yields have been hanging in there. the ten-year is 2.864%
we've been at 2.88 before. >> let's talk about some of the big headlines making new this is hour kohl's cuttingi its full-year forecast shares dropping on the news. we're down about 7%, just about now. meantime we've got a very different story on the screen. take a look at bj's wholesale, rising after the company posted better than expected earnings. we continue to watch shares of bed bath and beyond going in the very different direction this morning. this stock under a lot of pressure after investor ryan cohen filed a notice of intent to sell 7.78 million shares of the housewares retailer. cohen's disclosure of prior call option also contributed to that buying spree in bed bath and beyond
increasing more than five fold in value over that time. stock off now about 9%, becky. so some folks saying, liit's an intent to sell, diamond hands, paper hands, what kind of hands does he have i don't know that you file intent to sell if you don't really intend to sell. >> serious diamond hands, right? you wouldn't bother doing it unless you were seriously considering all or some of your stake in that thing. that's kind of where we've watched this yesterday bed bath and beyond shares were down, but now we're talking about down 10% markets continuing to try to figure out yesterday's release of the minutes from the fed's july meeting the minutes were mostly hawkish, but senior economics reporter steve liesman says there was a hint of a dovish tilt. and i guess that's the real
question here, steve the dovish tilt, that's kind of what the market picked up on and why we've seen things move up so sharply in the equities market >> yeah, they've take and ball of uncertain providence and run with it pretty far but there are a few things that investors can know for sure from these minutes. first, rates are going to continue to go up. second, they're very likely to head into the restrictive territory. inflation remains the biggest risk to the economy. beyond that the minutes had a few dovish comments that are worth noting i'm i'm not sure how far they'll one that they're required to meet goals commodity price declines are not a guarantee that the fed will stop meaningfully. they're going to have to slow at some point maybe the point is in september.
maybe we're concerned that tightening too much, tightening too much and policy may be having a more rapid effect if that's the case the fed has to do maybe a bit less the result of these dovish comments was to modestly raise the probability of a 50% hike in september. but the overall hawkish tilt did keep the outlook for still more rate hikes in tact we go to 370 by april or so, but it's still pricing in rate cuts next year. the fed has to be care ful with this dovish talk it could work against by loosening too much that's why fed observers think the overall message is going to be hawkish at jackson hole >> the fed speak has been pretty hawkish since now. jackson hole is where if they want to set the record straight they can
who are you going to hear from at swrakson hole what are you kind of thinking in terms of how the week plays out is this out? this is something could you put on your calendar if are you an equities trader. >> we are going to have a bunch of fed officials i think we'll talk on monday about who we'll have but there will be the leadership of the federal reserve will be talking publicly and we're going to get a sense of how uniform those feelings are. there are some things, becky, from these minutes to report that one bullet item about concern about tightening too much how widespread, how deep is that concern? the idea that policy may be having a more rapid impact is something else i'd like to report what does that mean for the outlook, and what are they seeing that suggests to them that maybe financial markets and economic conditions are responding more quickly to
federate hikes than they have in the past those are interesting things these minutes did lay out a bunch of questions for me to put to these fed officials >> steve thank you. >> thurpleasure the u.s. and taiwan have agreed to resume trade talks eunice yoon joins us live from beijing with china's reaction. eunice >> reporter: thanks so much, andrew the ustr said these discussions by the two were agreed upon under a negotiating mandate. they say that mandate is going to cover 11 areas, which includes digital trade, agriculture and other measures the first round of discussions are expected this fall now taiwan's top trade negotiator had said that he hopes that these discussions get under way next month
and eventually lead to what he described as a long awaited and sought after free-trade agreement. he said that china's economic coercion will also be on the agenda now this has been a long-awaited move by both sides the tsai administration has been trying to reorient taiwan so it isn't as reliant on china through a re-shoring programs for taiwanese companies, also initiatives to help her country's companies to diversify away from chchblina, and the u. sees taiwan as a very important supplier, especially on chips. from china's perspective, though, this is just another way for the u.s. to try to tdraw taiwan closer and make things more challenging for china to be able to unify taiwan, which it
believes is a renegade province. so the chinese government today said that it strongly opposes trade talks between the u.s. and taiwan the response was a bit boilerplate, but at the end of the day, it indicates that this is yet another issue that china and the u.s. are going to be dealing with and that will weigh on the relationship. guys >> eunice yoon in beijing this morning. becky? >> thank, guys when we come back, september is right around the corner, and for many major companies, this year that also means a return to in-office work but not all workers are ready to go back to pre-pandemic norms. we're going to talk about the fights that could be brewing, and how they'll play out right after this first, though, as we head to a break, clerheck out this morning's premarket winners and
losers cisco up by 5% chuck robbins, the ceo will be rns squawk on the street thi moing with an interview. you're watching cnbc power e*trade's easy-to-use tools make complex trading less complicated custom scans help you find new trading opportunities while an earnings tool helps you plan your trades and stay on top of the market
welcome back to "squawk box," everybody. we've been watching the futures this morning we've been higher all morning long t dow futures up by about 75 it was the first time after five trading session a row where it was higher the return to work push may have returned, management wants you back tips to talk to your boss about what you really want "the new york post" wall streit reporter good morning to both of you. jason, i'm going to start with you. is nethere a conversation to be had in or what kind of leverage
exists or doesn't exist given in where we are in the unemployment picture being so low >> absolutely. i'd say there's definitely a conversation to be had let's be real. corporations have been governing their response through the global pandemic ranand are now n the other side where they're telling people they want them to come back to, would. applrk >> lydia, you've been covering this ad nauseam, and you know it david solmaomon's not going to agree to this. >> it depends on where you work. tuesday, september 6 will be judgment day we are hearing from ceos and executives that there are three groups of people they're willing to have a conversation with.
those are people who have either chark needs. people who are in industries like coding, even journalists to an extent where you do better in a quiet environment. we're hearing from employers, they're willing to accommodate those people and then people who were hired remotely maybe moved out of state, never been there in the first place. they certainly can buy a little bit more time coming back to the office the group of people they will not be sympathetic to is the under 30 crowd who just don't want to get on the subway. they have had a lot of power but the labor market eases up as the economy contracts. i think that locus of power is going to be shifting and in the 1980s after a crash, there was a phrase on wall street that they can't take your desk away from you if you're sitting at it. so i think people are going to be aware of that, and it's much
easier to take that desk away from you if you're sitting in mother city or even in another state. >> jason, have i misunderstood in i thought it was the young crowd that actually wanting to be in the office more than anybody else, am i wrong >> i think it's a mixture. on one aspect you have the young crowd. she said it perfect i wily, the under-30 crowd i hear from thousands of employees avenue year, especially gen z-ers who say they want to come to the office because we want to show our employer what we can do. working remotely, while it has perks, they have not had the opportunity to physically meet the managers they've not had the opportunity to physically meet their co-workers in reality, they're sitting out there this this virtual space wondering when is somebody going to tag me so i can actually play for the team >> lydia, how do you think these
conversations go and by the way, do you think there's going to be -- look, i've always thought there's a proximity to power issue people who want to move up the ladder have to be in the office, they have to be seen all the time it seems like it would be hard for that not to be the case. but his tor clirks pre-pandemic at least, there was sort of a two-tiered system. there were people who hopped out and weren't going to be in the office but it was sort of like they were opting out of career advancement for some people. do you think that's totally shifting here or not >> i think showing up is always sort of the best way to get on someone's radar and bring risbir visibility we are tahearing from a lot of ceos, for them it's been a real bragging rights issue to say they want to tell investors and their peers that they have 90%,
100% of their workforce back in the office that's a hot topic among the jamie dimons we are hearing from some ceos that they are trying to get creative with how they're framing those numbers and actually moving some people to basically part-time roles, because those people don't want to come into the office. so i think in some situations, you may actually have to show up if you want to maintain your been fit been fits and be a full-time employee it's shorthand for productivity in a left ways >> jason, what do you make of ha in that it is it an ego game? do you think the investor class is assigning a hire multiple to a company that has more people
in the office? being in the office changes the fundamental dynamic of profit, and i'm not sure we've seen tangible evidence there. >> i think it's a combination of everything i think it's ego i think the stakeholders are really on top of these organizations saying you need to get your people back in the office it's a generational issue, your baby boomer, gen x-ers are used to being in the office because as we said in this conversation, that's sort of how you make your way up but there's another side of this that we're not talking about the fact that managers are having to continue to do their work while trying to manage a workforce spread out throughout the country if not throughout the world. it's one thing when you can be physically present with your people and to talk with them on top of everything else i have to do, now i have to make sure that i schedule all of these zoom calls or all of these virtual calls with 50, 60 people
spread out across the country, different time zones, and it becomes so difficult so i think it's all of the things that we've talked about, but also from a sheer organizational principle, it becomes more difficult to manage your people when they're not there. >> jason, you think all these tech companies, and i'm thinking of meta and so many others who said you know what, forget about it, if you want to work remotely, god bless. >> here's what i'll say. i think they can say that. in the case of meta, they can say that because the last majority of their people were logging even before the pandemic hit, they were logging in remotely anyway. for them it's business as usual. when you look at other industries where it's really prudent that you have your people in place where you can actually do the work on a daily basis and see those folks, then it becomes more important for that particular industry >> jason, lydia, we appreciate it nice to see both of you this
welcome back to "squawk box," everybody. the futures this morning are indicated higher dow futures up by about 50 points, s&p up by 8, the nasdaq up by41 now you see wti up by about 1% to 89.02 natural gas is up, too andrew >> thanks, becky greg moffett cutting his price on the company, his note reads, verizon has done its part to avoid being dragged into the abyss. you can read more about the call on cnbc pro. shares of cisco are higher this morning, too.
earnings and revenue topping expectations it has been struggling to grow the stock has underperformed the broa broader market cisco shares up by 5%. the last we look, it was the third top performer. so keep an eye on that chuck robbins will be on "squawk on the street" at 9:00 eastern time today in a cnbc exclusive interview. also coming up, breaking economic news. we'll bring it to you, weekly jobless claims the numbers and instant market analysis plus, what's going on with elon mk?us we're going to talk to walter isaacson straight ahead.
dividend by 26%. estee law dlauder did beat wall street estimates and the stock down about 1.2%. check out canadian solar the company reporting better than expected quarterly profit and solar modular shipments were at the high end. canadian solar raisedi its full-year forecast it's up by about 5.8%. i i futures are in the green the s&p up a little over 8 points let's show you the ten-year note as we speak before we get to rick santelli, who's standing by at the cme the ten-year at 2.842.
rick, i know we have about 20 seconds before we hit the number i'm curious before we hit it, you read the minutes yesterday do you think the market and the fed are in the same place? or no. >> to me, i would say the answer is no, but i would always go in fav favor of the market. eventually, the market will pull the fed in its trdirection. i do thit marnk the market is expressing its opinion initial jobless claims dropped to 250,000, that's 14,000 less than we were expecting and it's a dozen below the 262,000 that's in the rear view mirror and yet to be revised and do consider, 262,000 last week was the highest level since
the second week of november 2021 now if we look at continuing claims, also less than expected, but sequentially higher. 1,437,000. last month was the highest level going back to the first week of april. so obvious i ly, this is no exception. historically speaking, these are still pretty good numbers. if we look at philly fed, expected down five, it's up 6.2, the best number since april, and we really to need to pay attention to some of these feel-good answers.
we want to see if activity in various parts of the country is starting to pick up a built some of the manufacturing areas have been picking up. though much of the focus has been on the service sector >> thank you, rickster want to get to steve liesman what do you think? >> empire state index fell it crashed when something moves like that, there was this fear that manufacturing may have stopped on a dime in the month of august this number coming out strong, it's a much more followed index, and the market seems to react to it much more than any other fed manufacturing survey really suggest that we are not necessarily on the cusp of recession when it comes to the manufacturing in there
looking at the details, the employment index was up. capex was up, and prices paid were down. not a hugely robust number, but considering what might have been, not only that we're looking for a negative number, but the fear of the empire state one, we did dodge a bullet in that regard. on the jobless claims number, week to week there's a lot of roll volatility hun you had overhiring in some parts of the economy to cope during the pandemic as these things balance out and hopefully normalize, there's going to be pops or increases this unemployment. so what you can imagine is some of the industries that overhired, they may be letting people go. they may spend time in unemployment, collect the unemployment claims before they can find another job so the idea we're at this run rate of 250, not symbolic of
huge softness in the job market, but you would think that as this turn happen, there could be some increase, the idea that it's down and not going streiaight up suggests maybe the softness in the job market may be limited for now. >> therefore, j. powell thinks what, right? >> well, i mean, here's the thing. i'm sort of an outlier on this i'm getting more and more support for this idea. i'm the guy who thinks that more employment is a solution to the inflation problem. in that we don't have enough people working there are, there's pricing power that comes from the fact that there aren't enough. so i don't think j. powell was on board with this idea. we have to watch wages that's what he's going to watch. i think he might want to see more softness in the job industry, but we have had this big decline in job openings, and we haven't had the increase in unemployment that you would have expected by now, even though
people say it's coming this idea that powell has that we can bring down job opening, not necessarily crater the employment market, i think that remains in tact at least for now. >> steve liesman, rick, thank you both becky? oops, he did it again. elon musk once again calling a twitter frenzy, this time over manchester united. joining us to talk about why the tesla ceo continues to do what he does on twitter is musk biographer he is a cnbc contributor among many, many other titles. we obsessively follow elon musk. he's got a huge following, not just around the globe but on twitter in general, as much as i admire him for what he's done, everything from spacex, to tesla
and more, you wonder why these unforced errors, tweeting about a publicly-traded company that he might buy, watching the stock jump and drop, why does he do that >> he's somebody who follows t twitter memes enormously this is a running joke on twitter. manchester united is always begging billionaires to buy manchester united. this is a joke and anybody as deep into twitter the way that y elon musk is knows that this was a running gag. it's basically a joke on twitter. >> i think you're right. i would agree with that. but not thinking it through. yesterday we kind of made the anal
analogy, with great power comes great responsibility he may not have had the intention of jacking the stock up, but that was the end result and it wasn't the first-time offense. >> you could say, gosh, i wish this guy weren't so impulsive, i think if you had a person like that he might also be somebody who wouldn't be sending a market to mars or somebody moving us into the era of liberelectric vehicles >> there's a piece out on "town and country" the beginning of the piece starts with an anecdote from john vogel that he said at one point he had kurt vonnegut out at his house along with, you know, with another people at shelter island, and joseph heller was there, and at one
point, kurt vonnegut said that volvo was making more money in a day than they ever made for catch-22 and he said i have one thing he doesn't. enough is there something to be said for the cult of personality that has developed these days, not just around elon but around so many other billionaires? >> you could go back to the era of jay gould and rockefeller and many others when the malfactors of growth, it has in some ways ever been thus. but it allows for the creation of wealth in ways we have never seen before. i make a distinction between people who are accumulating wealth versus people who accumulate great wealth because of financial engineering or hedge funds or whatever speculation they may do.
so if you look at a bezos and a musk, the two people at the top of the wealthiest list they've both created phenomenal companies, and their wealth comes from having equity that they put into those companies. >> that's a fair point, and i do appreciate the difference on those two. when you look at what happens with that wealth, i guess the other next question is what do you do with the wealth do you give back to society? do you use it to create new ventures the answer is fyes, they're usig a lot of that to push into new venture us and exploration >> are you using it to indulge yourself in ridiculous things like buying islands and yachts or whatever, or do you use it for a mission that you particularly have? in musk's case, that's almost a strange phenomenon, which is, although he once had four or five houses, he's gotten rid of
all of his houses. he lives, you know , in a rente place in texas he doesn't have yachts or islands or whatever. and the money, and i don't mean this as a grand moral statement, but the money is all invested in either tesla or spacex so that it can push the boundaries of what he wants to do. >> walter, talking about what he wants to do, there's a story, and i'm sure you saw it in "axios" this morning, about musk attending and speaking at a gop donor event that was taking place in wyoming he was in conversation, it looks like, with house minority leader kevin mccarthy, and it's fascinating, because he's shifted, as you know, from being
a staunch democrat publicly at least, really on the basis of his views around climate and what he thinks tesla's trying to do in the climate space and seems to be edging closer to being a republican saying that he's at least for this go round, come this fall, that he's supporting republicans in large part because he feels, i think, that president biden and a lot of the democrats have not treated him properly or at least given him the respect that he deserves, given the kind of conversations from the white house at least early on where they would praise mary barra and ford and everybody else except for tesla. how do you think, though, taking that ego piece of it out, how do you think he squares the circle around this issue around climate which i think has been his life's work, i think, with these shifting political views >> his political views are as eclecticas many of his other
personal atrubts, attributes gm has created like i don't know, 25 or 26, that's it. so that hurt i also think that he got some what turned off by the overregulation but also what he called the woke mind virus that he thought was infecting society. so right when he twoepwent to k mccarthy's retreat that you rive referred to, he said i'm for the left wing of the republican party and the right wing of the democratic party he's trying to be eclectic in his politics, not be, extremely ideological, and he went to kevin mccarthy's retreat
but kifevin mccarthy is a congressman for where spacex has its head quarters in california. i know last night he was back working on the raptor engines and boosters he was at meetings trying to figure out how he was going to launch starship. i don't think this was a major political statement. >> you're working on the biography. and i know you said earlier this year that trying to take in his life and it was like trying to take notes while drinks from a fire hose. >> you're right. >> without giving it away, we get so much information, you have an inside seat for all of this, an up close and personal look without giving away the book, what would be something that you have been surprised by the most during your time studying him and getting to know him?
>> i think one thing that surprises me the most is the intensity of his engineering instincts and how much time he spends on that we all think of him as somebody joking about manchester united, making political things. but hour after hour, including at 10:00 p.m. last night, he's sitting there figuring out the new boosters, booster eight and booster seven that he has down in bowcha chica and exactly how the welding is going to work because he wants to have them launched in the next few months. and to me i totally get head napped because everybody else would be talking about buying twitter or manchester united. that would be their topic of conversation and he hones in like a laser every day, whether it's on the auto pilot of the car, the optimist, the new robotics that he's trying to do.
he's hour after hour focussing on engineering. >> that's amazing. when's the book come out >> you tell me it's like, i don't know. i feel i'm in the middle of a story here and i just have to let it play out. >> i don't see a stop date >> it will be in the next couple of years >> then you can write the addendums and the addendums and the addendums. >> i think i will let the torch be passed. i'll take all my leftover notes and say who's next maybe i'll do a volume two we'll figure it out. >> thanks for being here >> it was great talking to you and andrew coming up after the break, jim cramer's going to join us with his take on the trading day ahead, and then our final take of the morning, mitchell green will be our guest. you're watching squaurk on cnbc.
board. i think it's interesting that just literally this morning we get a filing from the people at bed bath saying that they are looking to strengthen their balance sheet. af constructive talks with rc ventures, which is ryan cohen's outfit are they going to offer equity, when he this say strengthening our balance sheet. so i think we have to watch this, andrew this is brand-new. and it seems like they want to take advantage of the memesters and get something done >> where, by the way, philosophically, where are you on the take advantage of the memesters piece. i gather you don't want them to be issuing new bonds, when you look at like amc, you say, look, that he took advantage of the, the co took advantage of their
investors or no? >> i'm totally in the camp where he saved the company by taking advantage of the memesters, if you look at it, the memesters should have liked. but i think he saved the company on the back of the thing gamestop had a good balance sheet to begin w i like that ryan cohen stays out of the public eye i don't really understand this notion that you can have material public -- none public information and still do a giant filing you think we're in the wild west these days right now that is something that i would expect someone from the sec pick up the phone and say what are you doing? how did you get legal checkoff on this? >> what do you think was going on with the se krc right now? we very gary on on occasion. do you think they're working as hard as they should be >> i think they have so much stuff that they have to worry about. i just think this is kind of a
pimple look at all the crypto stuff they have to worry about they have this kind of, you know, multitrillion dollar market that no one knows a thing about that is supposed to be ready to -- that congress wants to be regulated because then they can get away with anything they want. you have myriad of issues involving what i would say is how to deal with all the spacs that came out and the different new instrument that's the street continues to want to do. so should they worry about this? i think they absolutely should they did giant report about what happened with gamestop they're front and center they should not do reports they should make inquiries you l nonpublic information? and get things going i mean, look, i don't have subpoena power i would -- if i did, i would use it right now >> okay. final question just reaction to the federal
reserve, those minutes the market seems to be, i think, in a different place than what the minutes say. but maybe i'm misunderstanding it >> i think there are people that are worried now about what could happen if they heighten too much the fed wants wages to cool, wage growth to cool. and they want rents to cool they have to keep going and that's what i think that jay powell is really worried about >> jim cramer, the one and only. will we'll see you in just a couple minutes again, you'll be on "squawk on the street." >> you're my buddy the? always and forever and tonight "mad money," you'll s see jum again. ese straps are mi! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech.
welcome back joining us is mitchell green mitchell, we've been watching tech it rallied back. but we're looking at the fed this is just a big question mark right now over all of it in terms of what -- i keep going back to the multiple issue there is the actual earnings piece and then what is the appropriate multiple for this company? what are you thinking right now? >> hey, how are you? thank you for having me on
interesting times. you know, we obviously -- we all got to experience in 2020 and 2021 massive multiple expansion. and now we've got to, you know, experience from november to march, april what the opposite effect is. i obviously think you've seen markets -- look, at one point in june the bearish sector was so high we were due for a rally. if you look at hike software multiples, they're about where they were. let's forget the last five year multiple i think that is silly. it includes that giant, like, rip up but if you look at from 13 to 18 multiples in software, they're about where they are, you know, they're about on an average, maybe slightly higher and then, you know, a month or two ago they were slightly lower
but, yeah, i think it's just -- you have to make a market call >> so where are you putting your money right now? somebody that likes to play in tech land. >> yeah, look, i don't know if you want specific names. but more in general, we like names where if there is a recession who knows if there will be if you ask ten macro funded you get 15 answers. we like software names that companies will do more with less and enable them to save money. be more efficient. so it's companies like elastic search which is developer tool business and open source version of data dog which is another great business it's just a cheaper way to use data dog lots of types of businesses like that a lot of vertical software buzzes, things like that >> we have some of your portfolio on the screen right now.
where do you stand on uber at $30? >> we haven't been involved in a while. i think the entire team at uber are doing a good job i think if you compare the operating performance versus a lyft, they have done better. but their challenge, too, getting drivers out of this world is absolutely impossible it will be interesting in the labor market, you know, loosens a bit what happens to them we don't own the stock i do think that they have -- they executed. it's a tough business, ride sharing. i do think that they still face tough covid comps as it relates to uber eats and i think, you know, the whole delivery business around food, you know, whether you talk door dash, uber or the other companies remains to be seen how profitable it will be. but i think the team has proven that uber ride share business is a real business.
>> we all had a big debate earlier about apple. warren buffett doubling down adding to that position. we're going to be hearing from apple. we believe, rumored on the 7th of september with the new phones and the like there is talk of new advertising products and more ads within the apps then, of course, down the line, ar, vr, cars, more health care stuff. i don't know whether you want to bet on any of them >> we're not involved. we tend to focus on some $10 million market cap and software and internet companies look, it's an incredible business number different than microsoft is it prints cash it's a subscription business i'm sure you have an iphone, i have an iphone i'm sure when they release the new one, you'll go get it as well look, i don't own the company. but, like, if i was, i would
have no idea how the china business is doing right now. but it's an incredible company you know, that's transition over the last 15 years. and you do a subscription. >> mitchell, we have to thank you. we appreciate you being with us very much. look forward to talking to you again soon >> talk to you soon. cheers have a good summer >> all right that does it for us today. make sure you join us tomorrow right now, time for "squawk on the street." >> good thursday morning, everybody. welcome to "squawk on the street." i'm david faber live from the new york stock exchange. carl has the morning o we have a big interview coming up in a bit. you don't want to miscisco ceo chuck robins they did report results that are being met enthusiastically in the market, at least thus far. the stock looked to be up as much as 5% in the premarket. speaking of the premarket, let's take