not a slam dunk but the predicted betting sites are very interesting right now. basically, the president is tied with vice president harris. it's wednesday, july 3rd, 2024. "squawk box" begins right now. >> good morning. welcome back to "squawk box" here on cnbc. we are live at the nasdaq markets at times square. i'm andrew ross sorkin and along with joe kernen. becky is off today. the markets will close today at 1:00 p.m. eastern time. a look at the futures if we hope up 53 points higher on the dow and nasdaq up and s&p 500 open

up about two points higher. s&p 500 closing we should mention above the 5500 level for the first time ever yesterday. the nasdaq also closing all time high after adding nearly 1%. look at treasuries as well. look right now at the ten year note and two-year at 2.422 and two-year up 4.75. all of this coming ahead of two key labor reports. the adp labor report will come out in june and talking about it at 8:15 a.m. eastern time when it hits the wire. economists expecting jobs to grow 160 thousand last last month and weekly jobless claims report at 8:30 a.m. and it's coming a day early due to the july fourth holiday when the markets will be closed. >> are you here friday? >> i am. >> good. so am i. that will be the unemployment number. nobody needs to know what i witness, obviously, but i broke my pinkie toe.

>> joe had to watch the indignity i had coming from seventh avenue hobbling across the street looking at me like -- >> i don't want to laugh at something like that. you're laughing because -- >> yes. i'm on advil! that is about as far as it's gotten so far. and some ice. >> you looked like you were on ethyl alcohol or vodka! that was watching that -- let's move. nobody needs to know all of the details but you told them. >> it's the pinkie toe. >> big toe is usually in the way of everything. how do you break -- not that we need to know. >> i won't get into the details because it's more embarrassing. >> is it a cool story? >> no. it's the least cool story. >> something i'd like to -- do

you know what i'm saying? we have heard weird stuff. all right. >> shares of paramount global moving higher this morning and looks like this could be it finally. sources telling cnbc that david ellison's skydance media has now reached a preliminary deal to buy shari redstone's national amusements and merge it with paramount global. the resurrected deal which initially philadelphia apart a few weeks ago would see redstone see a reduced 1.75 billion of dollars and skydance control roughly half of paramount's deal. paramount's special committee revealing and votinging on the new deal. remember, yesterday media reports had barry diller showing interest in the company. private equity pirm apollo and sony had shown interest and

julia will join us to talk about this. i don't know what to say. i thought he was gone. i thought they were gone. >> the question what they would come back at. >> is it over now? >> i think you still have a couple of players around and if shari redstone -- as we have said, she will make the decision at the ends of the day, right? full stop. >> it could be in the morning. could be at the beginning of the day she could do it, right? we don't know. >> we don't know. >> could be at noon. >> shares of eli lilly moving higher this morning. the food and drug administration approving their alzheimer's drug expanding limited treatment option for the disease is in the u.s. the drug sold auunder the brand name kusina with adults for early symptomatic alzheimer's

disease. we will talk about this with an analyst and what it means for the bottom line and those suffering. >> it doesn't seem right when they give you those two out of the box. >> right out of the box. >> with a broken pinkie toe! >> they say he is apologizing now he did that. they didn't need to do that, did they? >> no. >> it's not really your fault or our fault. it's the company's fault for coming up with that one. >> tough one. >> yeah. former president trump's sentencing date in the stormy daniels hush money case has been postponed by more than two months. the judge in the case making the decision after trump's attorneys requested that he do this, that are challenging the conviction based on the supreme court decision earlier this week. sentencing will now take place

on september 18th. that is still well before the november 5th presidential election. if the judge really wants to throw the book to him, he could still theoretically be behind bars. >> very unlikely. >> i'm not sure how that -- how did that help or hurt? he couldn't campaign for the last two months. we talked about this at the top. cracks in democratic spoupport r president biden is starting to show and trickling in yesterday and goes back probably in the end to donors. some donors in his campaign may be starting to change their tune. megan is joining us now. i think the 25 we don't know yet and started with a guy from austin, texas. then a guy in maine. both are in the house, right? and then former president obama

kind of pulled back and wasn't that solid in the first place. betting sites predicted who will be the democratic nominee basically tied? i think maybe it's been the president might be one cent ahead at41-40. same with against trump. they are both tied. that is a 20 cent difference from before. things are moving very quickly. >> they are moving quickly, joe. a rough 24 hours or so for the president after a very rough five or so days since that debate. one of the notable shifts i want to highlight is among the democratic donors and fund-raisers who had been sticking with the president through the weekend said they don't think this could last and emerging consendus among this group that president biden will have to step aside. they think he is weakening the down party candidates and no way he can survive and gotten much

more negative tone the past 24 hours for the reasons you mentioned and leaked polling came out yesterday since the debate biden lost two percentage points. and people are starting to think about the possibility of a president harris. joe? >> or a candidate for president. >> candidate harris. >> and the possibility. you got george stephanopoulos gets the interview. not even lie. after the criticism in the media i don't think they would edit it. i'm not sure what they want. a lot of mainstream media i think wanted biden out. james carville got me where he said things that can can't won't and you wonder whether -- but don't underestimate that enter

sanctum of the first lady and the president's son and ted kaufman and long time advisers. he can stay if he wants, can't he? megan, you can't tell him he has to leave. no one can tell him that. >> that's right. there is very little that anyone could do on their own to get him to step aside. it has to be a decision that biden, himself, makes. like you said that intersanctum is difficult to get in to. one of the big shifts we saw yesterday that some of the donors flagged something that changed their minds were those comments from nancy pelosi and jim clyburn, two of president's close allies in congress and still in support of him but a little bit measured saying, yes, they were sort of validating concerns about his health. one person i spoke with said the one thing that seems like it might be able to change president biden's mind and the one thing to watch for is whether those two and other congressional leaders, not just the rank in file like you mentioned, if the leaders start to come out publicly, that is

when maybe the campaign will have to start to recognize or at least the president will have to start recognizing something but it's not an easy pitch to make. the donors hope to have influence. they can do as much as they can to withhold money but nothing anyone can do on their own. >> the real possibility of him not being the candidate is front and center now. but the heir apparent is absolutely vice president harris at this point. the gentleman in michigan saying we would take a very dim view of passing over the vice president if that is what they decide. i think democrats, at this point, -- that is about right. that's right. it's hard to put these up because they change so quickly. one for who will be the democratic presidential nominee andth it's now 41 president biden' 39 kamala harris. if you were wonder whog is it

going to be whether gavin newsom it looks almost like -- look. some democrats, i think, are starting to figure out how they would go about running kamala harris, addressing certain concerns. >> definitely. >> highlighting her strengths. she has been out the last couple of weeks on abortion and things like that to try to maybe overcome -- nobody knows. >> who is the ideal v.p. for her? >> i saw andy beshear. people are talking about josh shapiro. >> where does gavin newsom lie on this list? you don't want necessarily two people from california? all of a sudden, you say whitmer who was high on the list prior? >> i don't know. >> does that change? >> fascinating, though. it's fascinating.

>> i think one point to make, too, on harris, she is polling fairly well. betting markets have her up and that is before she was chosen as vp. you think somebody broadly popular and leading a southern state like beshear and cooper in north carolina and pennsylvania, that is something that could boost her further so you're right the party is thinking about her much more seriously now. >> 70% of the country doesn't know who beshear is. i think it's touching. well, cnn they have done a good job since the debate. yeah. they want biden out! yeah. they have done a good job now, being honest. they want biden out because they are worried. >> oh, no. >> yes, yes, yes! i'm not going to accuse of that because you were sort of down -- >> down the middle is what i was down on. >> me too. but the part of the whole thing,

you acknowledged. >> yes. >> before many. before many of our colleagues across the board. >> thank you. >> you're welcome. now i think you have ulterior motives. coming up, when we return, fed chairman j. powell saying progress is being made on the inflation front but the fed isn't quite ready to cuts and didn't stop the nasdaq and s&p 500 closing at record highs. we will jump into the market when we return. daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer. daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this.

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we want to be more confident that inflation is moving sustainably down toward 2% before we start the process of reducing how tight our policy is of loosening policy. >> that was fed chair j. powell weighing in on the central bank's inflation fight during a discussion moderated by our own sarah a -- eisen. we will get data later today on path to the fed and how much it matters to this point the way the equity market seems to be moving. >> i think what he is basically call option, right? powell saying, listen. if things slow down we are here. i think the tone is different from what we heard before in the sense that, you know, people were really afraid, wait. maybe the fed is going to raise rates or stay here consistently and i think as we get closer to

the year and you're seeing some of the economic data soften, once inflation data comes down a little bit, i think, you know, the fed will be in play but he is basically signaling we will will be here especially as we get through the election season. >> and so your sense, though, just in plain terms, 2024, does he move? >> i think he only moves if you see economic data really changing. i don't think he is going to do anything because the economy is still strong and there is no need for him to do that. i think once you start cutting rates, then the market starts looking forward and saying, wait. what are we missing? the first cut is what did we miss? i think if you can stay here and rates can kind of come down where they have already in the t ten-year and strong earnings and the key is next quarter's earnings because we have run up so far expectations are so high, especially for the high multiple stocks. that is going to be interesting

to see where companies come out, not just on the quarter, but what are they going to say the next couple of quarters? >> in your sense -- is your sense where we think about where we are in this whole thing. he talks about we could be another year or two away from getting to 2%. the shift in terms of that time line is somewhat surprising given that people were talking about two years ago we were sitting here saying can you really get to 2%? how can you get to 2%? how long is that going to take? do you know what i mean? >> yeah, no. i think it's longer than people expect. inflation expectations in the economy are pretty high when you talk about labor and rents and input prices. so i do think the fed needs to talk about it. if he says it's impossible to get there, the market is not going to react well to that. so i think this is that dance that he plays with the market but, at the same time, the economy is pretty strong in terms of earnings and companies

but you are seeing softening. really it's that call option. he is there to say we will be here to save you. we are not doing it until we have to. >> any concern that we are in overvalue territory at this point in the ball game? >> i do think if you look at the overall evaluations of the market and we talk about this all the time the big seven and big five, they have to have really good earnings. if you look at indexes i think that is where the opportunity is going to be in materials and industrial, select financials. these are companies trading 10, 12 times earning the rest of the markets in 2021 and 2022 and getting earnings and not like you don't have earnings the rest of the sector but the concentration becomes so much i think being in other places as well. i'm not saying be in the other ones. >> if you're right what do you like then? >> commodities and copper companies and tech. i think industrials you have

suppliers that will do well in that area and then if you want to talk financials, jpmorgan and morgan stanley just had buy-back and increased difficulties so you see a bunch of companies across sectors and you're not focus are we a.i. play and how is that going to do? if a.i. works all of these other companies and industries are going to benefit. >> great to see you. happy independence day. happy july fourth. >> likewise. >> i hope you get to hang out at the barbecue or pool or whatever you have planned. talk to you soon. >> you too. apple's relation to open a.i. is getting tighter and we will explain coming up.

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the relationship between apple and openai are getting closer. apple reportedly given an observer role on the board of directors that was announced at the worldwide developers conference last month. bloomberg reports that phil schiller will assume the role later this year. >> to see this cuts two ways. it's good in that apple wants to see what is going on at openai and gives them insight and transparency of the process and it's complicated because you're only an observer you don't really have the ability to totally change things if, in fact, somehow openai were to do something you weren't happy about and you would now know about it and maybe not do anything about it. >> you can rat people out like tim cook or something. >> but because you're not --

because you don't have a voting -- >> right. but at least they will know. >> then you know. coming up on the other side of this we will talk about gambling addictions inside our arm forces and military members are struggling with voting and it might have to do with gambling appears. we will talk about about. . okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them?

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welcome back on this wednesday morning and feels like a friday morning but not really because it's wednesday. a lot of people are working on friday morning. we will talk about gambling. concerns are growing over a problem and this one is especially a problem because it's among the nation's service members and military veterans.

experts now saying they are more vulnerable than the civilian population with studies conclude as many as 1 in 10 veterans are struggling with a gambling disorder. we are taking a closer look at this problem and hopefully some potential solutions as well. >> what we know is that the gambling problem among veterans is actually growing and here is what i learned about it. >> when i took money out of my 401(k) just to feed this addiction and it got so bad that i had the first of my four suicide attempts. >> reporter: dave jaeger has struggled with gambling on and off for two decades. he says it started in the army when in the wake of 9/11, this staff starting was stationed in south korea. to his surprise he found slot machines on base. >> it went from i have fun doing this to i have to do this and it

became an obsession for me. >> reporter: now jaeger publicly admits he borrowed from subordinates and stole from petty cash and left his family in the lurch financially. but problem gambling? even with counselors, those words never came up. the department of defense has installed more than 3,000 slot machines and lounges and game rooms in u.s. military facilities in a dozen foreign countries. the revenue of more than 100 million dollars animal according to a gao reports funds recreation for military members and slots are not permitted on bases domestically. unlike civilian slot machines, which carry advisories about problem gambling, jaeger says that wasn't the case on base. the department of defense declined an interview but affirmed that service members are screened for gambling disorders in their annual health physicals and it's 2018 survey, before sports betting expanded, indicated problem gambling in less than 2% of respondsents

about the same as the civilian problem. they say they feel service members with a gambling issue are encouraged for screening but not penalized for doing so but the policies around keducation and treatment are largely left up to individual commanders area vary from base-to-base. gambling has exploded legal in some form in all but four states. when states legalized sports and digital gambling it makes wagering easier than ever easement we are s-- >> reporter: the v.a. says the need is skyrocketing and says it's trading nearly as many patients for a upopathological gambling diagnoses in first half of this year as in 2022 and 20% of those referrals are women.

she is lobbying the defense department for more gambling education and treatment. >> i believe the men and women put on that uniform are willing to sacrifice it all. i think the least is the government tell them we have got your back. >> reporter: congressman is trying to ban slot machines on bases but he said he wants to lessen the risk to service members. the gao advised the defense department in 2017 before the boom in gambling across the u.s. that undiagnosed gambling is threat to service members readiness and could threaten national security. if you want to know more, visit cnbc and see my full report. clearly it's a problem that deserves more attention than it's currently getting. >> what are the casino companies doing about this? >> when i talked to mgm -- look.

around fourth july, you see a lot of promotions that are linked to the military and we want to thank you for your service. mgm does not do any gambling related promotion so it might offer dining or hotel stays or whatever but the service members and veterans will only get promotions about gambling if it goes out to the general customer base. bet mgm does no veteran related or military related promotions at all. what we heard from the national council on problem gamblizing that the dod estimates that say, oh, it's about the same as the civilian population. they are like no way. first of all, we think it's underreported because of the stigma attached because pooh he are afraid of losing their security clearance. secondly if you look what drives addiction to garbling, ptsd and men are more likely -- >> how is it from veterans versus those who are active in the military?

>> it's hard to say because the dod is not doing a hard study and a hard look at this. i went back and forth with the dod and said what the most recent data you have? they had the behavioral help survey from 2018 and they are doing another one right now and say maybe it will show up differently. in 2020, there are health screenings but the data is not there. >> contessa brewer, thank you. happy july fourth. >> coming up, two big elections in europe ahead tomorrow in the uk. and sunday in france. we will get a preview what the potential outcomes could mean for the markets here.

two key elections ahead in europe over the next few days with big implications for the markets. the uk election is tomorrow. the final round of the french parliamentary election is on sunday. michelle is joining us a cnbc contributor and she was long time chief international correspondent and covered many overseas elections for the network. what about the uk? start with that. >> uk the conservatives are going to get get trounced yesterday they haven't delivered on a lot of their promises and labour is the equivalent of democrats in this country have moved toward the center and gotten rid of their extremist and socialists singing the national anthem kind of folks

and as a result they will do very well and not as consequential for the markets as the french election is. >> what is happening there? >> french election is on sunday. it looks like we are going to get a hung parliament which will likely be a relief to the markets because one of the great concerns when macron surprised everybody they are were doing this election was that the far right as i like to call them and marine le pen would get the spend the country was doing when they already have a big deficit so that market has fallen 7% the last three weeks. >> what does that mean? anti-im anti-immigration? >> an important question. on social issues, yes. the big division is on immigration and where a lot of the vote is happening. what are the issues in france? immigration, inflation, crime. does that sound familiar? but what makes this different compared to the way we think about things in the united

states is both the far right and the far left in france are big spenders. both of these parties wanted to roll back -- you know, macron raised the retirement age from 62 to 64 and these folks are rolling it back to 60. marine le pen party moved to the center now it looks like they are close to power because reaction in the markets were so negative. the yield spiked and stock market fell dramatically and quickly. >> you have confidence in the polls? it's not going to be enough for macron to have to resign? that was worries. is it possible? >> it's still possible he could resign. he's insisting that he will not resign. he can stale until 2027. it depends on what the outcome is on sunday. if it's completely impossible. he could just live with, you know, like the situations we have here where the presidents of one party but the legislature is a different party and nothing much gets done and that is it.

i think the way french investors are thinking about the current situation the way it looks like this is going to go is the reform train has stopped. but it's not going to go back backwards. macron was trying to do a lot of things that were very un-french and make it easier to high area fen -- hire and fire and raise the retirement age and french like government control and think these things are very good and so, you know? >> factors some some of the things we is a you in germany with the push back on the green policy. not as prevalent in france? >> 70% of their power generated by nuclear power. >> not front and center. >> not as front and center and energy prices are a concern in france in the uk but immigration is much more of an issue there.

what is extremely interesting about the french situation is that the far right party and marie le pen's party was viewed antisemitic because of her father and now moved in a way they are seen as pro-israeli. she was very, very clear that no french jews should ever be fearful in their own country. the rebranding of her party is what has gotten her to this point. it's been extremely interesting to watch politically. it's a real political earthquake in france. >> they need to get this out of the way so they can start preparing for the olympics when we get there, do you know what i'm saying? >> maybe overhang yellow vest the entire moment is supposed to be opportunity to put a huge spotlight on the beautiful city that is paris but the entire country and the question is whether every news report about the olympics is going to somehow touch on the politics of this

country. >> right. the election will be over then. then they will be in the process of trying to perhaps form a government which is what they do over there. >> one of the times i was there, yellow vests were there everywhere. >> they love to protest. >> what a better time to protest when the whole world is watching? there will definitely be some protests. >> i think also intense security, though. >> yeah. french security. that gives me a lot of confidence. >> michelle, thank you. >> always a pressure pleasure to see you gentlemen. thank you for having me. when we return, eli lilly's alzheimer's treatment getting the green light from the fda and what will this mean for the stock and company's future earnings and more importantly, what does it mean r opfopele who are suffering? we will talk to an analyst coming up. win approving their a

treatment donanemab. it will help the stock today, i think, evan, in reversing some of the weakness we saw, was that yesterday or the day before on the letter from bernie? the bernie -- >> yes the learn. >> and president biden a. we are looking at maybe opening around $911 and trying to get to 900 billion and the all-time high. they are both very valuable because of that. >> they are both pretty valuable. >> yeah. kind of the -- but you think eventually this could add 7 billion in rvenevenue but a slo

ramp? >> yes. alzheimer's is very different from the obesity market. there is a lot more involved getting a diagnosis, getting patients on therapy and this is, you know, an infusion every month and we have 7 billion in peak sales versus 70 billion in peak sales for the obesity market just for lilly. another drug has been on the market since last year and hasn't been selling that well. it's been a slow slog for both, for that product and likely the same for this one, at least to start. >> you make the point that one is an alog negativity. the other one, how did oes it differ? that is expensive for little ly's drug? >> it is. the other product is 26,000 per year but you treat beyond a year.

this is one and done. after 32,000 dollars, the patient is to -- >> i see what you mean. one is to remove the plaques and the other one you need to keep taking? >> yes, exactly. >> neither one is a cure? >> unfortunately, no. one you n to keep taking. >> yes, exactly. >> neither one is a cure. >> unfortunately, no. both of these have been shown to slow the progression of alzheimer's, which is great. we haven't had anything. what is key here is you get six months more of cognitive function and memory, so, that six months more of knowing your name and being able to do something which really is impactful for families and patients who have the disease. >> so, just switching gears, what did you make of the letter from the president and senator sanders? i mean, it is populist. does it go anywhere? would it -- i mean, if you took

it to its logical end, where you just -- if it costs $3 to make, that's what you're allowed to charge for it, obviously we're never going to develop another treatment for anything. >> well, i want to take a step back because the journal article that they're referring to was done in a lab, and even the authors of the article basically said that this doesn't really hold up in the real world. so, these drugs cost more than $5 per patient per month to make. so that's kind of, you know, a little -- a little bit of a fantasy there. i think drug pricing is pretty important to talk about in our country. really what the letter failed to address were the pbms. that's what drives a lot of the drug prices, the list prices and creates the high out of pocket costs for many of the patients. >> but, the election matters in that respect, for trump talk about, you know, bashing the pharmaceutical companies as well, now he's talking about

holding them -- or investigating whether the rise in autism is due to pharmaceutical companies. so, who would the pharmaceutical companies give money to, to elect? >> it is hard to say. i think that they, you know, want -- it is hard to say exactly who they would want to support, given the rhetoric. it is pretty clear that, you know, they want an environment that is pro innovation and pro, you know, developing therapeutics and reimbursements. between trump's rhetoric and biden's rhetoric, hard to say. but i think at this point stability is best for the market. >> interesting because we want everyone to live a lot longer. would be good if we can get the alzheimer's treatment to go hand and hand with living a lot longer. otherwise the cost of people living longer is going to be -- get more and more expensive. it is a complex issue. >> it is very complex.

>> bmo market senior research analyst. we'll have you back. lilly is incredible. >> thank you so much. >> thanks for telling us about it. like three years ago would have been nice, but we can't buy it anyway. what a run. can you believe it? it is unbelievable. it is like nvidia or something. almost a million dollars. >> almost a trillion. incredible stock. really incredible innovation. they deserve it. >> yeah. okay. thanks. >> thanks. coming up on the other side of this, tesla shares speeding ahead, will the bulls continue to ride that stock? our next guest will tell us d out his new price target. anyet another turn this morning in the takeover drama at paramount global. could we finally have a deal? "squawk box" coming back with that after this. ♪ ♪

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welcome back to "squawk box." tesla stock up again this morning, adding on to gains. our next guest raised his price target to $250. joining us now is garrett nelson, cfra senior equity research analyst. make your case, sir. >> sure, thanks for having me. you know, while everyone was focused on the auto delivery numbers they put out yesterday, the much bigger story was on the energy storage side. they just reported energy storage deployments of 9,400 megawatt hours in the second quarter. that was more than double the record high from -- that they reported in q1 and so while that segment is still a small percentage of the story, it was only 8% of total revenue in q1. the growth that they have been talking about for a long time is really starting to show up in the numbers. so i think that's a big reason

why you see -- why you saw the move in the stock yesterday, and then another move up here premarket in the shares. >> so you're at 250. how much of that is based on actual sales. how much of that is based on this being a robo taxi company in several years from now, if you believe that's going to be in the cards? >> sure. the basis of the price target is 65 times our 2025 earnings estimate. but, of course, if you look out beyond 2025, given the earnings growth we expect the multiple is going to be much lower. and so, you know, what musk really succeeded at a few weeks ago at the annual shareholder meeting, it wasn't about issues with all the near term headwinds with slowing ev demand, you know, declining prices, and a painfully slow ramp up of the cybertrucks so far. that vehicle has been in production for seven months now.

the volumes are still very, very low. but he really shifted the narrative more towards long-term market opportunities in energy storage, autonomous driving, a.i., and in robotics. and so i think ever since then, you've seen a lot of momentum on the upside with this stock, and really all eyes are on the robo taxi day on august 8th. much more important than yesterday's release or the earnings release on july 23rd. >> so is your gamble that you're going to get to robo taxi day and you're going to see the stock fly or what's the -- what is the upside and what is the downside piece of it at this moment? >> so the upside is that they finally unveiled this mass market low price ev that musk has been talking about for many years and people have been waiting for. been talking about this for six or seven years now. we do think they unveil it, but it's going to come at a lower -- at a higher price point than the

$25,000 which he's implied, just given the realities of inflation since then. we think the price point for the base model is probably more likely to be in the 30 to $35,000 range. but, you know, behind the scenes they have been rumored to have been working on this for a long time now. and so we actually think they're ahead of the curve and we could see first production by the end of next year. >> okay. garrett, it is great to see you, we appreciate it. thank you very much. and happy independence day tomorrow. >> appreciate it, thank you. >> you bet. it is just 7:00 a.m. right now on the east coast. you're watching "squawk box" right here on cnbc. i'm andrew ross sorkin with joe kernen. becky is off today. we got a whole bunch of big stories to talk about this morning. apple now set to get the role of openai on its board. according to some reports, phil shiller who runs apple's app store has been chosen for that position. so some transparency on what

goes on in that company. nippon steel's vice chairman will visit the u.s. again next week to discuss the bid for u.s. steel. that deal has been delayed because of concerns from the white house and united steel workers union over foreign ownership of u.s. steel. and a new report from adam research finding that the cost of a typical home, talking about mortgage payments, property insurance and taxes, well, it consumes 35% of the average person's wages. that is the highest share since 2007. rising costs and mortgage rates now near 7% have outpaced income gains as a shortage of listings pushes the medium price to a record high now of $360,000 across the nation. >> a big percentage. >> very big percentage. you bet. >> another twist in the paramount global saga and julia boorstin, you just might as well wait around here. you're back on set. >> wait around until the deal is

done here, yes. so the latest drama here, it has been less than a month since national amusement's deal to merge with skydance fell apart and now the deal is back on. t last night they reached a preliminary deal to buy national amusements, but the plan to merge skydance with paramount and inject $1.5 billion into the balance sheet. sources tell me last night the deal went back to paramount's board, special committee on the board, for approval. this is a step which the last deal never quite reached now, what has changed since national amusement called off talks after agreeing to financial terms of the deal back in june, first, this new deal offers national amusements more legal protection from any shareholder lawsuits and now national amusements would be paid around $1.75 billion for its equity. that's up from the $1.7 billion offer that redstone rejected last month, down from the

original offer which paid less to class b shareholders but left redstone more exposed to potential shareholder lawsuits. what's next? if this deal is indeed approved, then there is a 45-day go shop period for national amusements to look for better options. but the deal is far from done. it seems like this is the most likely deal, in part because remember that skydance owns so much valuable ip, 50% of top gun, 50% of star trek, and these franchises that are really core to paramount's value. >> what do you make of the diller -- we talked about it yesterday, but the diller being around the hoop and sony being around the hoop and all the other players being around the hoop? the other piece of this is there might be a go shop. >> there is a go shop period. >> if this period happens, do you think there is going to be other people that are going to -- >> look, sony and apollo expressed interest. they were going through the process. and then you have the fact that also barry diller and ic

expressed interest and signed ndas. but neither of those deals are as far along as skydance's. the thing to remember, this is a very complicated deal, complicated in structure, because you're effectively buying out the controlling shareholder, not actually doing a deal. this is really the skydance deal is a merger and really contingent on a lot of the ip that david ellison and skydance controls. we'll see what happens. this is an incredibly unpredictable type of deal, but this is the one that seems most likely. >> what about the shareholder piece of this? >> the real question is what is the shareholder lawsuit piece of this? the way this is structured is designed to make shari redstone less concerned. could there still be shareholder lawsuits? yes, of course. >> there is going to be lawsuits, that's what happens. then there is the timing piece of how quickly a transaction like this could close. >> if they wait long enough, the fortunes or the prospects might improve. i don't know.

obviously they didn't get top dollar. nowhere near it. it is sad, but it might be lower eventually. >> look at the stock now. the sftock is so far down off is piece. this is an effort suffering from cord cutting. >> is it the bottom or falling knife? i think it -- that's why barry diller is -- he thinks the legacy assets are undervalued? >> and in terms of the barry diller deal, multiple sources told me, this is a long shot, but he figures might as well check it out. they're always looking for new opportunities and worth checking it out when it was still in the market. we'll see how long -- see how long this all lasts. >> thank you, julia. appreciate it. and happy fourth of july. talking about the fourth of july, the travel rush expected to be the busiest in history, all of history. we're going to speak to the ceo of kayak about the booming business of vacations. and then digital assets subcommittee chair french hill on donald trump's promise to

loosen crypto regulation if he returns to the white house. "squawk box" returns with all that after this. ♪ (alarm sound) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo

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this is where it gets the best signal from the cell tower! i've tried everywhere else in the house! there's always a new excuse. well if we got xfinity you wouldn't have to mess around with the connection. therapy's tough, huh? -mmm. it's like a lot about me. [laughs] a home router should never be a home wrecker. oo this is a good book title. news just in from southwest airlines this morning, the carrier has adopted a so-called poison pill after activist investor elliott management disclosing an 11% stake. elliott has been pushing for changes at southwest, and criticizing airline's management team after the latest cut in revenue guidance. the shareholder rights plan making it more difficult for elliott to increase its stake without negotiating directly with southwest. joining us now for more, jim paulsen, author of "paulson

persp perspectives." big fan of godfather 3. they pull you back in, don't they? we said good-bye. we need to take that all back. just couldn't -- >> yeah, once you got a hobby for too long, you can't stop. >> woody allen talked about that. now you're knocking my hobbies. we saw 24% last year, we got 15% in the first half of this year. you were one of the few people that were pretty friendly toward the market all last year. how about after -- what is it 24 plus 15, that's like 40% in a year and a half, more to come? >> i think so, joe. we're still up 15% from its high at the -- you know, on the market in the last cycle before we had the bear market in 2022. which isn't a lot. that's two years we have gone up

15% from that high, if you will, overall. i just think -- i guess, you know, i think this bull has been operating on less support than normally has, joe, and it is because the federal reserve has opted for this very unique policy cycle. this is the only bull market in post war history that has existed entirely under a federal reserve which is tightened throughout the entire existence. usually the fed eases rates before a bull even starts and eases in a good part of the early part of the bull market. this one got nothing but tightening. the result of that has been, i think, a very narrow bull market because a lot of supportive pieces haven't shown up yet. all the markets really gotten so far is disinflation, which has been very beneficial in helping the economy and the market go up. but it is missing a lot of the pieces that come with the fed

eases. the big one is lower bond yields and lower interest rates. but also if they ease monetary growth will pick up. it has been negative most of the time in this bull market, year on year growth, but if liquidity starts to improve, that's a big plus for the market. lastly confidence would increase. consumer business confidence would increase, which also typically is associated with bull arkets. i think because it lacked the other catalysts, it has been a very narrow advance, so if the fed does finally declare a victory on inflation here, which i think they're going to, and we do cut rates, then i think we're going to see a lot more stimulus come for the stock market and we might have a move that looks a little like the start of a new bull market that we never got in this cycle yet. >> the rise in rates orchestrated by the fed didn't come until after a couple of crazy things, unprecedented things like the pandemic and like staying at zero for six or

seven years. there is a lot of liquidity just built up from that and maybe they did go up 500 basis points, but you look at -- we keep hearing how much money is ready to go into the stock market, jim, whether it is from the fed or whether it is from all the stimulus that came even after the pandemic was over, there is $6 trillion or $7 trillion laying around ready to come in. it all does play into what you're saying, but it just doesn't seem like -- it doesn't seem like it is organic liquidity. it seems like it is faux $23 trillion in debt liquidity. >> well, i think that one of the things that makes me feel pretty good about this is that the economy to me, i think, still not likely to fall into recession anytime real soon, joe. the reason is because the private sector is pretty healthy. really healthy, really. and recession needs

vulnerabilities in order to bring the economy down. i just don't know where they are. the balance sheets of the household sector are very strong. debt to income ratios have been falling for years, debt to -- that service ratio is almost at a record low. real wages are going up. job creation is still happening. net worth disposable income is close to record highs. the corporate sector similarly in really good shape with low debt to equity ratios and high net cash flow to gdp ratios, corporate profits are at new highs. i don't know where the recession is going to bite to bring this thing down. >> that could all be government or at least a lot of it. even when you talk about, you know, i heard net income is up too. real wages are still down from three or four years ago. net income is up because of the pandemic stimulus in the last -- in the period. so, my only point is, yeah, i know there is a lot of money there, are corporations

benefiting from the infrastructure and inflation reduction act and the chips act and all these subsidys? is that, in your view, no piper that needs to be paid down the road or you just don't make me chase now? you think it is going to be like this long enough to where you want to be in, but is it healthy? >> i think so. i think -- i think the government policy has gotten way out of the box, joe. i'm not going to argue it isn't. monitoring fiscal policy bull have gone off the rails starting with the financial crisis in '08, '09 and we never put it back in the box. that may come up some day. i don't think that's going to be part of the rest of the bull or the rest of this recovery. i think that comes up in the next recession or something. but not now. to me, i also can't think of another bull market cycle that ended when there is this much pessimism around. when you look at consumer sentiment or small business

sentiment, they're closer to recession-like lows. and bull markets and cycles generally end when there is more optimism. how does a recession win if everyone's waiting on recession? they're all hunkered down, pessimistic, know it's coming and that means they're prepared for t i it. i think before this is over we're going to see optimism truly rule in the private sector and more aggressive behaviors -- people get out of their skis. >> nobody has a -- we did have a recession, everybody had pretty good probability for -- and that's gone already. nobody -- the soft landing, that's the narrative we have right now. so some of the complacency might be wrung out. we'll check back. so how long are you going to do this gig? are we going to have another retirement party or can we count on -- should we call you in six, three months or something? can you guarantee you're going to be there? >> if you're going to -- if you're going to sponsor the retirement party, i'll be there,

joe. >> i don't even know what that means. you can't retire from who you are. that's the way i think of it right now. >> that's kind of where i'm at. i enjoy it too much. >> i can never -- many people would like, as much as they would like, i can't retire from being joe kernen, i don't think. >> that's a good thing, joe. >> it is. see you later. thanks. >> okay. coming up next, the ceo of kayak talking travel trends in the fourth of july holiday rush. supposedly the busiest day -- busiest july 4th in history. we're coming right back after this. >> announcer: time now for today's aflac trivia question. what national park constitutes the largest subtropical wilderness in the u.s.? the answer when "squawk box" returns. ac. (aflac duck) hmmm the cash i got from aflac helped pay for medical expenses, groceries, rent. it really helped close that gap. (whisper) go, go, go! (group) yay! go aflac! go duck! get help with expenses health insurance doesn't cover.

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valued at over $500. call or go online now to request your free quote. >> announcer: now the answer to today's aflac trivia question. what national park constitutes the largest subtropical wilderness in the u.s.? the answer, florida's everglades. fourth of july travel rush is expected to be the busiest in history. phil lebeau joins us now.

people flying, why bother? driving, great open highway, it is nice, stucki's is around. i would drive. >> yes. but for a lot of people, joe, you're not driving -- if you're going down to the caribbean now -- >> people trying, those old buicks. i see them sailing around. they're coming here usually, though. >> true. that's true. and you see plenty of them, everywhere. let me show you what we're expecting in the skies. because it will be and has been a very busy week. busiest week ever? if you look at the numbers, it backs it up. last thursday, go back to last thursday, that's when people start measuring fourth of july travel, about a week beforehand and three or four days afterwards. a record number of flights, almost 54,000 in one day and we are on the cusp of seeing our first day with 3 million passengers being screened by the

tsa here in the u.s. for some perspective in terms of travel and how many people are flying versus last year and previous years, take a look at the number of people screened by the tsa. in june, the daily average was 2.73 million passengers per day. well above what we saw last year, which was a record year and most people believe, again, that we will see a 3 million passenger day, maybe today, maybe on sunday, which is when a lot of people come back from the fourth of july. domestic capacity is part of what we're seeing driving the number of people who are flying right now. if you're looking to go somewhere, generally speaking you've got more options than ever before. and in certain markets, there is too much capacity. let's say las vegas. that's a good example. a number of destinations in florida, the industry has added so many seats to some of these destinations that many believe that when you get past labor day, we're going to see a

pullback because there is over capacity in the system, take a look at shares of the major airline stocks, including southwest and i know you guys just had the news about the adoption of the poison pill. remember that airfares are down about 2%. some of that is because of this overcapacity in the system domestically. but right now is relatively speaking a great time to fly if you're looking for a domestic airfare. because you are seeing them close to not record lows, but really darn close to the lowest levels we have seen in a long time, guys. >> phil, the post pandemic, what we saw, the big rush to do all these things, i think it may have moderated, but we're at a permanently higher level, i think. >> i think we are. we talked to ed bastion about this last week. they see no sign of slowing bookings. it is in the system right now. now, corporate travel is not yet back to prepandemic levels. it is still a little bit below

there, but in terms of leisure travel, we're there. and we're there for i think -- i hate to say for good, because something may change if you get a recession, et cetera. but we're there on a permanent basis in terms of crowded airplanes, crowded airports, a lot of people flying, doing leisure trips. >> right. what else are you going to spend your money on once you got a couple of big screen tvs? you got every streaming service, you got your bundle. >> i got an idea. go out to yankee stadium, see your reds play the yankees. >> did you see that last night? >> i did. who doesn't like watching ellie. >> i think it is just beginning. it is just beginning. we were talking about it in fact, it is only hitting 250, 250 is like 330. today hitting 250 is like hitting .330 because everybody is swinging for the fences. >> bottom line, you have to -- when he is on the field, you have to watch him.

most exciting player in baseball right now, one of the most. >> if he hits a single, it turns into a triple because of the strides. it is really exciting. he was so proud yesterday too in front of all the dr people -- dominican republic people in the stands. he was so proud. awesome. great story, phil. thank you for bringing that up. >> fantastic story. >> you're a cubbies guy, right? or white sox? cubbies or white sox? >> i tend to be more of a white sox person, but we don't like to talk about that right now. it is a rough time on the south side of chicago. >> it is. that speaks volumes. when is it not? thank you. >> meantime, let's bring in kayak ceo steve hapner, get a sense of what's going on in the skies and travel. great to see you. as you know, i am a regular and almost religious kayak user. more for the interface more than anything else. i'm not sure -- i don't know if it is just, you know, been doing

it for so long. what are you seeing? you're more on the consumer end of things than on the business side of things. but in terms of prices and what kind of appetite there is for this yolo economy to continue. >> thank you for having me back. i love and appreciate you using kayak. you know, phil got it right, it is a very busy travel season which is a great time to be in the travel business. we are going to see 3 million people a day passing through airports and highly confident of that, and the roads are going to be crowded. talk to aaa, over 60 million people on the roads this weekend, which is an amazing thing because july 4th is on a wednesday. all that travel volume is smeared out across two weekends. and for those of you who are traveling by air, you're getting great fares. so, you know, i think the average airfare is down 2% to 4% domestically year over year. if you pick your route right, you can be down 18% according to kayak's data. if you're going down south to

florida, great deals to be had. i don't know why you go there, it is pretty hot. great deals to be had there. >> what do you think is happening in the hotel and lodging universe? >> for the moment, prices are still high, because demand is still high. so, according to kayak data, flight query, hotel and car queries are up 6% year over year. and prices on the hotel level about 280 a day. so up 4%. and if you're renting a car, $100 a day, up 6%. but i suspect as we head into the fall, those prices will come down. typically what happens. so if you can afford to wait, do so. >> right. the 2% to 4% decrease in prices on air, is that economy or is that across the board? >> i think it is capacity. so, the airlines added a lot of capacity going into the summer flying season. and demand hasn't quite kept up with that. and i also think there are input costs, so fuel and labor, a

little bit lower than they anticipated. they're able to lower prices a bit. but if your average airfare is still $350, which is robust, unless you're flying spirit or someone else and if you're trying to get outside of the u.s. to europe, for example, that's $1100 for a coach class seat, which is still high ticket price. >> final question, just because i'm a cheap skate and i want to get some value. do you actually think the combined deals are better or do you think separating things are better. i've always found the separating things turns out to be better in the end. but i know that's not the business model. >> yeah, if you bundle flights and hotels, you typically will save. you lose flexibility, right? i tend to -- most americans are like this, they don't buy bundles, europeans are different, they do. if you want to save, i know you like -- you've been using the kayak app, take a picture of the itinerary, send it to us and we'll tell you if you got a

great deal or not. it is cool stuff. >> steve, thank you. happy independence day. >> you too, andrew. take care. coming up, stocks to watch and thene' wre going to talk crypto regulation in the upcoming election with congressman french hill. "squawk box" will be right back. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. ♪♪ go deeper with thinkorswim: our award-wining trading platforms ♪♪ unlock support from the schwab trade desk— our team of passionate traders who live and breathe trading. ♪♪ and sharpen your skills with an immersive online education crafted just for traders. ♪♪ all so you can trade brilliantly. ♪♪

welcome back to "squawk box" here on cnbc. i'm dominic chu. here is a look at some morning movers. we'll kick things off with a look at deal news. paramount up over 12%. this comes as deal talks resume between national amusements and skydance with a new preliminary deal being reached. that's according to people familiar with the matter. talks had ended with no deal just weeks ago. a special committee at paramount is reviewing the revised proposal. next up, a check on electric vehicle giant tesla up 2% or so. 4 million shares of volume. a day after 10% gain on the heels of better than expected quarterly delivery numbers.

the run today continues a trend higher that has already seen a 66% rise just since the lows that we saw on april 22nd. new this morning, analysts at redbush have upped their target price on tesla to 300 bucks. it was $275. they maintain the outperform rating. tesla reports on july 23rd. we'll cap things off with a look at shares of mgm up a percent or so, thinner trading volumes. we're getting some help from analysts at btig who initiated coverage of the casino and online betting platform operator with a buy rating and $52 price target. that's a 23% upside from last night's close. they're citing things like near term upside revisions to estimates thanks t ss ss to bet results. for more on that, head over to cnbc.com/pro. back over to you. >> thank you for that. when we come back, the pathway of manufacturing and the

path that brings boxes to your doorstep. we're going to take a deep look at the global supply chain and its impact on daily life. the author of "how the world ran out of everything" is going to join us as we head to a break. we look at crypto this morning. we're going to speak to congressman french hill next about regulation of the industry. "squawk" returns in just a moment.

it's been widely reported that former president trump would loosen crypto regulation if elected. the comment made several times, also at a republican fund-raiser in san francisco last month. joining us now to talk crypto regulation and the upcoming election, arkansas congressman french hill. and vice chair of the finance committee and chair of the digital assets subcommittee. congressman, it's good to see you. welcome. how are you? >> hey, joe. good to be with you. >> there is -- it is widely thought there would be a light touch across the board on a lot of regulations, maybe, you know, antitrust, we heard about crypto.

but he's -- the former president is a mercurial guy, do you think the environment would be better for bitcoin and other crypto assets if the former vice president -- why do i say that -- the former president, maybe i have the former vice president on my mind because of what is happening today, do you think the former president would be more friendly? >> joe, it is good to be with you. i think our fit for purpose fit 21 act we passed in the house with 71 democratic votes is exactly the kind of framework that president trump would support where he we elected and brought back to the white house because it directs the s.e.c. and the cftc precisely what kind of regulatory framework we need for crypto, for people who are innovating and starting a token crypto related firm, how to trade, how to custody those

assets, how to make sure consumers are protected, so that framework, i think, is the right approach. i think that's what i would recommend to the president that endorse if we haven't passed it between now and the end of this congress. >> is a vice chair of the financial services committee, what else would you expect from a re-elected president trump? >> all the financial services committee, i think you'll see president trump wants to be a progrowth, proinnovation president and therefore something like the fed and the supervisors are considering now this bazell 3 new capital standards for our commercial banking industry, i think that's a very pro cyclical approach, meaning it will exacerbate downturns. it is an approach we don't need. it is an approach that the banks in europe are generally rejecting. i would hope that president trump would reject something like full implementation of

bazell 3 and use a much more tailored, appropriate view to bank regulation as well. >> congressman, one of the things that we hear a lot about is his plans for tariffs on china, and others. and the inflationary effects that could create. you look at some of the reports in terms of when people try to do their estimates of what that could mean. and the one thing that i'm sort of yet to be convinced about, maybe you have a different view, is that i'm not sure that he would actually necessarily go through with all of these tariffs, even though i know he says he would, and that they are more potentially as a political cudgel that would be used to negotiate for other things from a china, but i don't know if you think we should take it at face value and take the estimates as what they are. in which case we would have enormous inflation, that would be a real headwind or look at it as something else. >> i think it is a good question. i was -- spent a lot of time in trade when i was a white house staffer for president george

h.w. bush, the trade policy review group was part of my responsibility, looking at tariffs and other trade-related negotiations. and i think you're right. i believe that president trump says to our countries, from big countries, huge trading partners like china, to others, we're going to impose tariffs on you if you dump goods in our market, dump goods in third countries that then get sold in the united states. and then it is, as you say, a cudgel to bring people back to the negotiating table, and have a fair trading relationship. we saw president reagan do this in the late 1980s with japan. and i think this is the right approach because as you say, across the board tariffs imposed on all imported goods, obviously that's going to contribute to inflation and not necessarily increase production of those similar goods here in the united states. >> so, congressman, as a lot of

your colleagues are meeting with president biden, i think 25 or so, i don't know if you -- if they tell you what they're going to talk about, obviously the democrats, governors, going to hear from some governors, what do you think they're going to tell him and we have got -- not the betting sites change very quickly, but it has been amazing to watch vice president harris and president biden more or less with the same numbers for who becomes the nominee and the chances of becoming president. do you think president biden can survive at this point? do you think he'll be the nominee? >> as a republican, i hope he's the nominee, because i think president trump can beat him in a re-election bid. but let me say on behalf of the whole country, joe biden is not being rejected because he's too old, he's being rejected because his ideas are terrible. he's made terrible decisions on

foreign policy to coddle iran, not push back aggressively against russia and ukraine, the horrible exit where 13 of our military were killed coming out of afghanistan, and then his domestic policy, he's green lighted $6 trillion in new spending and the budget deficit, the cbo says it is going to be up again this year, that's because of his dumb student loan forgiveness idea. he's going to be a candidate that republicans can campaign against in the house and the senate, and at the white house. but i think it is because his ideas are bad, not because he's too -- >> that's the biden administration that did all those things, so that -- putting vice president harris at the top of the ticket doesn't negate any of the things you just said, i guess, so just -- >> i agree. >> okay. all right. congressman, thank you. >> great to see you, joe. see you. happy fourth of july. >> okay, you too. >> that one is a longer

conversation to get into some of the policy stuff. >> all your conversations are -- all conversations are long, but some -- if you cut to the chase, they're really not that long. >> maybe. coming up, economist peter goodman's new book "how the world ran out of everything" takes a look at how the pandemic disrupted the global supply chain and its impact oevydn eray life. in the meantime, look at the futures. we're coming right back after this.

welcome back to "squawk box." during the pandemic, we ran out of toilet paper, computer chips, car chips, baby formula, so much more. the new book "how the world ran out of everything" takes a deep dive into the sensitivity of the global supply chain and how it impacts our everyday lives. joining us now is the author of that book, peter goodman, "new york times" global economics correspondent. great to see you, peter.

fascinating book. as you get into sort of all the things that happened during this period, i'm hoping what you can do is sort of take us back and spin us forward in terms of how you see the challenges from the past and where you think we are now and what you still think we need to do to avoid this again. >> yeah, you know, it is a really important question. this is not a history book. there is a lot of history in it. it is about the present and the future if we don't figure this out. we're at the mercy of a largely unregulated shipping cartel to bring us most of the things we depend on in modern life, gadgets and gizmos, parts for things we make in the united states, that's basic medicines, that's life saving gear, personal protective equipment like face masks and medical -- a lot of this stuff made in china, a country that we decided to have a trade war with, and then we're really at the mercy of badly run railroads, a trucking

industry that has been kind of decimated by loss of drivers because we downgraded that job to the point where lots of people are quitting, and every step of the supply chain during the pandemic we have these shocks that reveal the vulnerabilities that had been there for decades, and they're still there. >> so what is the answer to that, peter? >> well, we need to look at the supply chain, sort of like the way we look at electricity. most of us don't think about the supply chain any more than we think about the electrical grid when we flip on the switch. unless the lights don't come on. this is a moment where we have got to get back to sensible regulations, so there is some transparency in how these companies are dealing. we certainly need to hold shipping companies to account when they're jacking up prices, you know, sometimes ten fold in the space of months. and breaching contracts, we had lots of importers have contracts to bring in containers from factory towns in china, the west

coast of the united states, we're told, sorry, we don't have space on the ship unless you pay five times as much and special handling charges. that's just a basic antitrust problem. same goes for the railroads. we need to get back to more transparency in pricing. so that we have pricing so we have some idea what sorts of sweet heart deals are getting cut. we have a supply chain optimized for a handful of companies, amazon, target, walmart, and smaller businesses are just getting screwed. >> to the e xtent we need more regulation, what does that look like? and how are they regulated on the way, by the way, to a europe or china, the other end of things? >> they're not regulated anywhere. europeans have gone further than most but because it's an industry in any country you're talking about foreign carriers bringing the goods. it's going to take some

international cooperation. but it also takes the r realization that we've overdone it with just in time supply chains separated by ocean. trade is a wonderful thing, it brought us prosperity. this is not a book about how we need to go back in time but we need to be more sensible in terms of diversifying our risks we can't depend solely on container vessels. >> let me throw a hard one at you. how do you feel about tariffs? we were talking in the last segment about the tariffs that former president trump wants to put on if he becomes president and what the inflationary effects of that would be. he may tell you, i think, not only does he want to do that for economic reasons but believes it could encourage manufacturing and other things back in the united states. >> we saw the movie in the last administration it didn't work. we saw loss of manufacturing

jobs. there are lots of americans employed in the united states depending on a global supply chain to bring in parts and kevin mccarthcome po me -- components. when you slap tariffs across the board without a look at the details you're making american companies less competitive, separating them from their suppliers. >> the book is called "how the world ran out of everything" it's a fascinating look into the modern era and the intracaseys of how the world does work in a way that most people don't think about. coming up, america celebrating its 284th -- 248th. who else says that? 248th birthday tomorrow. we've been together too long. but is the american dream still

alive and well? jon fortt is here to weigh in. plus, expecting the latest read on adp employment and initial jobless claims in the nextou hr. the futures ahead of the data are mixed. big moves in any of the averages. we'll be right back. and relentlessly work with you to make them real.

the american dream turns 248 years old tomorrow. counting from the signing of the declaration of independence. the high cost of living and the growing inequality in the economy it's fair to ask, is the american dream dying? people say it's already dead. i don't like this one. i hope you come down on it's still -- >> you can count on me, joe. >> to move that pin from right to left and for me not to know what you really think? >> yes. >> i'm listening closely. i hope you make a good case for one but it's a whimpy case for the other. >> the dream is dying, joe. it was articulated in 1931 but

james adams in his book "the epic of america "he said not the dream of motor cars and high wages merely but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable. the idea that kids can do better than their parents did, 90% of kids born in many 1940 grew up to make more than their parents did. only have of millennials born in 1985 did. many millennials and gen y can't afford to buy homes. student loan debt doubled. this post pandemic inflation surge is the straw that broke the camel's back. home ownership is out of reach,

college loans. save the system so talent wins out. >> the second one you do is normally the one you believe in. what's the benchmark year for the american dream? what are we -- where are we trying to get back? >> joe, on the other hand, the american dream isn't dying. loving america means knowing the truth. the dream has never been fully alive for everyone. and the work of our republic is make it more real each generation. in 1776 america didn't exist as a nation much less a dreamer. the supreme court's wrong headed 1857 decision in the dread scott case nearly killed the dream. it took a war to bring it back. in 1931, the great depression and unemployment on a march to 20%. no shock kids born a decade later would earn more than their

parents. but here's why the dream isn't dy dying, the american people have more access to knowledge in history. we have better products and tools and as expensive as four year colleges are, getting skills for career advancement doesn't have to break the bank. an essential part of the american dream and july 4th is sometimes seemingly a rational optimism that despite overwhelming odds this this generation can make things more fair and economically just for the next one. things are better than you think, joe. >> no, they're not. they're good. i'm not going to judge if the american dream is alive by what millennials are doing. i'm kidding. i'm kind of kidding. it's a work in progress. we know it's a work in progress. i would say you're adamn good example. i was in an orphanage when i was born. not that i'm the end all, be

all. you were in scarsdale or something. we all have overcome things to get here and we've got a modicum of success, i think. >> a modicum, yes. >> a modicum of success. the one thing i was thinking when you were saying that, is there another country where they say, are you going to achieve the french dream? are you going to achieve the cuban dream? just by the -- because we call it something so unique in american exceptionalism we talk about whether the american dream -- you don't talk about that anywhere else. people do they not want to come here. >> i'll tell you. read the newsletter and you can decide which one you believe more with the qr code on the screen, if you like to type,

type in otoh. get the full text -- >> we've been arguing about it for years. >> that's what you've been arguing about, the american dream. >> we were arguing about the definition of the dream. >> i think no. after doing the research on this one -- >> is it just upward mobility. >> you can look at the -- i was thinking about this. the valuation of the european stock market in 2007 was based -- of all of europe was basically the same as the u.s. today the valuation of our markets i think are four or five times the entire -- >> right. >> by the way, the size of nvidia is larger than the entire valuation of every stock in france. >> you know what that would say? that would say trying to game outcomes instead of opportunities in the -- you know, the analyst quest for total societies ends up lowering everybody down here. you'd rather have some people up

here if everyone is trying to get there. i would rather try to join people at the top than the bottom. >> you're not going to get any disagreement on that front, the question is how you affect that. >> it's july 4th, can we please be happy to be here and believe in the american dream? >> we're definitely happy to be here. >> we're happy to be here. >> we're happy. >> and we also disagree, that's the american -- >> not on this issue. >> no. >> we should never, ever complain about -- >> no, that's true. >> we shouldn't. >> right. look, a work in progress. let's get everyone to the point where if they work hard and do the best they can, get to that position where they have a chance and then it's up to them. it's 8:00 a.m. on the east coast. you're watching "squawk box" on cnbc i'm joe kernen along with andrew ross sorkin. becky is off today. among today's top stories, sources tell cnbc that sky dance

media has a preliminary deal with national amusements to merge with cbs and paramount. sources say paramount's special committee will review the deal. shares are up about 13.5%. tesla shares are high in the premarket and that was a 10% gain, which we saw yesterday that led the s&p 500. second quarter production and delivery numbers weren't great but they beat analyst expectations. deliveries fell from about 5% from a year ago. and southwest airlines adopting a so-called poison bill after activist investor elliott management disclosed an 11% stake. the shareholder rights plan makes it more difficult for elliott to increase holdings without negotiating directly with southwest. they've been pushing for changes at the airlines and criticized the management team. markets do close today at 1:00 p.m. eastern time.

ahead of those, where things stand in the future. dow would open up about 35 points higher. nasdaq off just about close to 3 points. s&p 500 call that bunch, but we want to get down to the stock exchange where mike santoli is standing by thinking about what may happen between now and 1:00 p.m. >> absolutely. yesterday market kind of woke up you know, after a couple of weeks of calm sideways movement on the surface. it was the first day yesterday, actually that the s&p 500 moved half a percent in two weeks. it was up .6%. you can see that flattening out before yesterday. kind of remarkable. we've assumed more or less a similar angle of assent from the october lows just after that april pull back. now a lot of people will kind of criticize and they want to essentially say that this is not a true reflection of what's going on in the market because it remains top heavy. yesterday was a broader rally.

since this point right there, the median stock in the s&p is down 1%. if you own the big cap stocks you're okay, everything else is going sideways. look at the more cyclical indicators for a lot of the rally you've been able to say and i've been able to say, pointing out things like home builders be industrials, they're participating in uptrends. they are but they lost altitude here. home builders back to where they started the year. industrials have flattened out, one of the stronger groups but first reached the levels in february. so could be consolidating right here but it does show you cyclical areas of the market are looking a little bit softer as we figure out how much the economy is decelerating. i know we've been looking and talking about tesla all morning and yesterday as well. here's a five-year chart with the 200 day moving average. now you see it poking above the to 0 day.

now the trend line is still going down. usually it takes some work. you saw efforts there to try to reverse the trend. what i found interesting, 235, 231 was the price at which tesla traded as it went into the s&p 500 in december of 2020, actually. so been a big round trip topped around that level quite a bit but definitely an aggressive burst yesterday. andrew? >> mike santoli, want to wish you a happy independence. >> thanks. >> talk to you again soon. in the meantime we want to talk more about the markets. we have data coming up at 8:15. treasury yields have come up in the last week roughly since the presidential debate. joining us is the president of global strategies. we also heard from jay powell yesterday in europe about what he thinks the path of things are, which may take longer than some had anticipated. you've been right about this, the question now is, what do you think the path is? >> the path i think clearly

depends, andrew, on what the two candidates are going to be saying and doing from now to next couple of months. clearly the curve has deepened since the biden debate performance because with the chances of the trump presidency rising the long-term bond yields have risen. and the issue is what does donald trump do about it to the extent that it's a reaction and he talks about how deficit may be kept in check. not going to be comprehensively issued tariffs, only on selective import. so that's the immediate impact. longer term it depends very much on what the fiscal deficit is going to perform like. because we have clearly a big expansion in the deficit. big expansion in spending which

needs to be controlled, andrew. >> are you surprised about how the markets are reacting right now? we're basically just high high high high, and i can't tell whether you think we're in for a turn at some point in all this? you think also there would be more volatility even given what we're hearing around the presidential election at this point. >> yeah. you do have -- first of all, two things. one the equity market is rising and the impact -- or the influences are very different from the bond market. you have technology, you have nvidia, you have the ai boom which is all affecting equities in a way that fixed income doesn't get affected. you mentioned volatility, you don't have as much volatility on the equity side. but treasuries have been volatile. you can see if you go back three months how they've been up and down and in the ten year yield we have a move up of about 15

basis points immediately after the debate. so the bond market has taken the volatility hit whereas the equities are doing well due to other considerations, andrew. i don't think that is going to change in the next few months. >> do you think right now the market is pricing in a straight trump win? we keep talk about the prisoner's dilemma issue. if you believe president biden is going to get switched out with somebody else, and i don't know if you believe that, does that change the entire equation all of a sudden? >> first of all the bond market is not assuming a trump victory, it's increased the chances since thursday, that's the first thing. if it's a switch of candidates on the democratic side it depends on who it is going to be. vice president harris is freq frequently mentioned. if she's the one who replaces him, the question is what does she say she's going to do in the

days and weeks after the domination. can it change the conversation? can it change the direction of treasuries? yes, it can. but it is not going to be a wholesale definition until the elections are over because the elections have to end and you have to find out who wins. but if there is a switch of conditio candidate, clearly it's going to influence. >> we have to get some data, inflationary pressures -- we talked to former president trump about this, the idea of what the tariffs would look like and how inflationary that may be. but what we were talk about with french hill earlier is whether or not former president trump would implement the tariffs he's talked about or whether this is a negotiating ploy, if you will, with china and others. >> i think it's very much a negotiating ploy. i don't think it is going to be comprehensive. because i think he and his advisers would realize it would

push up the inflation rate. the question is, though, the bond market right now is affected. every statement that is made is going to push up the yield. that's why i think in addition to a negotiating strategy with the chinese, he needs to have a negotiating strategy with the u.s. waters -- >> we have to leave it there. appreciate your perspective. you've been right about a lot of this so we're going to listen to your words with a lot of attention. thank you. >> thank you. >> talk to you soon. happy independence day. we have the june adp employment numbers. that's next. stay tuned. you're watching "squawk box" on cnbc.

welcome back. futures right now haven't moved much since last time and haven't really seen a lot of action this morning. a couple of highs yesterday in the s&p. first time over it's closed at these levels, same with the nasdaq all-time highs. treasuries this morning finished talking to shri. want to get to steve liesman. we have three seconds to get the june adp employment report. steve has the number. >> thanks for having my back on the timing, joe. 150,000 june adp payrolls. they're saying the private sector, that's what they're trying to estimate. they're actually just saying here's our measure of private payrolls and how much they rose, 150,000. all the heavy lifting done by the service sector. and maybe a little bit shy compared to the nonform payroll estimate of 200,000 unless the

government does a lot of the work. may revise from 152 to 157. not really of consequence. where were the jobs? you can see they were not so much in small, not so much -- but in medium as well as mostly in medium and large-size businesses. by industry, leisure and hospitality 63. construction doing a little bit better. could be a lot of government construction jobs or private sector jobs hired by the government. professional business services 25. and trade and utilities. and mining down 8,000. this is important, the median wage. they use data from millions of paychecks. and they find it's down .1 in the job stayers and changers. this data i think is very good. when i look at the difference between the private sector payrolls and adp it's plus or minus 77,000.

in the last year they've been a little bit light relevant to the government but the government data is yet to be revised. adp will not. >> stay with us. let's bring in the chief economist, neila richardson. if i was going to look for a report to confirm what reports have been indicating, i guess this would be it. any major divergences from what you are expecting? >> no. this has been a very modulated pull down. the labor market is tracking the right note at the right time to be consistent with that gradual easing that's consistent with a 2% inflation target. the concern, and this is one concern we have, is how co concentrated these jobs are. as steve mentioned they're in the service sector, the leisure and hospitality sector is carrying 40% of the job gaines

this month. so while we think this is a gradual cool down we all expected, i'd like to see the hiring be more broad based than it is now. >> nela, the details in the numbers, does it make you think that the progress on inflation that we've seen recently, can that continue or could we get stuck? >> leisure, leisure and hospitality, the labor market more broadly has helped the fed. helped the fed be more patient. it's kept its pace and gradually cooled, again at the right time. but if you look at the paychecks and the fact we've broken 5% year over year growth with the strategic, individualized match data set that's important. the last time we were under 5% is in august of 2021. so this pay growth, the fact that it's slowing in a modulated way is so important for the fed. i think it's the most important

data point right now. >> would you change any of your expectations for what we're going to see on friday based on the details here? >> i think it's harder to predict what's going on in the bls report. one, government jobs have really been strong in that report the last couple of months so will that continue? health care has been again picked up strongly in that report. this is a factor that is not as sensitive to interest rates. so we may see that again. but what you are really, i think, is worth paying attention to is the unemployment rate. how cool is cool enough for the fed and how fast is that unemployment rate going to rise or is it going to stall? i think that's the key question going into friday after we all have a break on thursday. >> steve? >> yeah, joe, i want to point out when you talk about with nela about wage gains. the rate of decline, this kind

of highlights the fed's problems. it's true of inflation overall and it's true of wages, it's really flattened out. so you went from 5.8 or so back in october of '23 down to 5, real quickly and then the last four months we've gone from 5 to 4.9. so there's not been all that much progress. it's going, as nela said, in the right direction but it's like what's happened with the overall inflation rates you have the big drops of 2023 and now the drops have moderated. what's interesting, though, about what nela is saying if these numbers are right, 150,000 there shouldn't be much rise in the unemployment rate. >> nela? >> to continue with that line of thinking we did see percentage points decline last year. we're not seeing that anymore. it's edging down.

our contention when we look at the data it's likely not to get back down to prepandemic levels. the economy has shifted. the demographics are not in the favor of seeing year over year pay increase of 2%. so if you think of a future where job rates are elevated, it's tough for the fed, they can't rely on year over year gains in the industry that's not happening. >> nela were you up late carry the three, minus the -- you didn't do that? it's like homework, isn't it? like getting a paper done. when did it have to be in? 8:15. >> i always get a good night's sleep for you, joe so i can be sharp in the morning. >> a.i. would have given you 150, i'm sure, i'm almost positive, right? >> likely, yes.

>> that's a future. >> call us with the friday number if you figure that one out. thank you. >> will do. thank you. have a good fourth. >> what is it, steve? what are we looking for exactly? >> we're looking for 200 right on the button. >> okay. exactly 200. >> thanks, steve. when we come back, another rapid fire of economic data, weekly jobless claims in a few minutes and tens of millions of americans hitting the road for ju 4lyth. what can they expect at the gas pump? we'll ask an expert from gas buddy. stay tuned. you're watching squawk and this is cnbc. detects a power outage, it automatically powers up, giving your family the security and peace of mind they deserve. we don't have to worry about whether we lose power or not. if the utility company does not come through, our generac does. after the hurricane happened,

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hurricane beryl making its way towards jamaica after

killing six people in the southeast caribbean. on monday it became the earliest to develop into a category 5 in the atlantic. a hurricane warning is in effect for jamaica and the cayman islands. jamaica looks to be in the path of the storm looking to weaken slightly in the next day or two but still powerful even friday when it's peedexct to hit mexico's yucatan peninsula. up next, a look at the trade deficit. "squawk box" coming right back.

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welcome back to "squawk box" on cnbc. we're just about a minute away from more economic data. we're going to get initial jobless claims and a new look at the trade deficit, the futures can you see now, the nasdaq is down 24 points or so. the dow jones just over 20. the s&p backing off an all-time high. it hit the number yesterday. there you can see the ten year, which is backed up a little bit. right now, 442.

442. we talked about with komar earlier. a lot of speculation now. we talked about who's more inflationary if they're elected in november. just depends on -- it's like a roar shaq. >> a little bit. >> they're both inflationary. rick santelli standing by in chicago. >> good morning, joe. we're looking towards the trade balance claims a lot of data this morning before the independence holiday, expecting a number around 235,000 pretty close, 238,000 now that's up 5,000 from last week's 233, but i would expect revisions to come shortly. 238 is still rather well behaved when you consider that this would be the one, two, third month in a row we're in the 230s. let's look at continuing claims,

a different story. a last look on continuing claims we were at the highest level since november of '21, and it's out at 1,853,000, higher than expected. and in the rear view mirror, revisions coming in subtle on initial claims and on continuing claims also subtle revision. but let's put a face on this. 1,858,000 that would be the highest eluding towards november of '21. but this is now the fourth consecutive week above 1.8 million. trade balance coming out, we know that trade balance is a deficit. we're expecting a deficit, the red ink around 76 billion, 75.1 billion with a minus sign in front of it, subtle revision to last month. what's noteworthy here, there's been a lot of benchmark revisions here but we finished

last year with three months around 64 billion, we came in this year minus 66. so it is starting to grow a bit and we need to pay close attention to this. not only does it give us an assessment of demand globally but lets us know potentially how the u.s. ultimately is dealing with the export/import situation. the imports seem to always run a little bit more aggressive than the exports although both toy with records. we're not an export driven economy like china, japan we are a consumption economy and much of the problems in china would disappear if they could only fan the flames of consumption a little bit stronger. interest rates are down a little bit on the long end, joe, you're right. but let's look at what we're dealing with here, nowhere near 4%, 5%. we're smack dap ib in the middln

an election year where tax cuts and deficits and comparing one administration to the other is center stage and the more it's talked about and the more the press shadow boxes it the way they normally do, they're make a bigger deal about deficits now than they have in the past. i think they'll pressure longer dated rates higher and the short end, as the fed chief pointed out, many times, especially yesterday with sara's interview, deflation isn't the word. it's dis-inflation. the fed likes the word disfd disinflation. disinflation doesn't make the compounding of history disappear, it just makes it a little bit slower. back to you. >> if you had to say which administration you think would bring about more inflation, the trump administration or the harris administration? >> you know, i would think that both -- >> i'm kidding.

>> -- administrations respect going to necessarily -- >> are we assuming it's going to be harris at this point? i was just saying that. because i don't know. i'm looking at the -- >> i personally don't think. everybody is bashful. i'm never bashful to give you my opinion. i can't imagine the ticket is going to stay as it does. if it does, woe be to them. we know that joe biden was a much more vigorous person in the past and i really think that when you look at what happened during the debate night it puts to bed all the things that we've been told by the administration and, of course, the water carriers in the press, ignore your eyes, everything is fine. you know what, the only threat to democracy is challenging the public's ability to get to the ballot box in november. that's where democracy is founded. that's where basically it's born. and you know where it'll die? it'll die when we don't get a chance to speak through the ballot box of who we want, what

policies we want, and have a chance to vote on how all that is affected. there are so many agencies involved in the supreme court this week has slapped down much of the agency activity that we don't have a chance to vote for. so i think, you know, when i read that one administration is the end of democracy, i laugh because it seems as though -- i have a name for both parties i call the democrats the projectors, they project everything. they say the other administration does, they basically do. and i think the republican party are kind of pretenders. they're antideficits, conservative, but when they get in power they don't seem to act on those principles. i don't know if we need a third party. what we need is a party that delivers their message. i will say one thing about trump, people can say what they want about him but when he the trading card when he got elected, he had a checklist, tried to make a difference.

whether you agree with him or his personality, that's another person. but there hasn't been a politician that said they were going to do a, b, c and tried to do a, b, c. we did -- get you to weigh in on the 10% tariffs across the board sometime, rick. because there are some -- both administrations, the trump and biden, knew how to spend. we know that. steve liesman joins us with more on the data and fed news. don't start anything with rick now, steve. >> i just wanted to offer another perspective to something rick said. >> thank god! thank god! i was going to stay quiet because i didn't want to start a riot. >> this is the way it always starts. >> i offer it gently and just for consideration. that people may say they want a

deflationary period but i don't know how many people consider generally in a deflationary period incomes go down too. i think there's an argument if you restore the prior supply chain situation we had before the pandemic and the prior competitive situation before the pandemic that indeed prices could go back closer to where they were before the pandemic on a short-run basis. but i would urge people not to wish too much for a deflationary period because your prices go down and your incomes go down. two examples one was the great financial crisis and of course during the pandemic. if you look at wages and salaries, they fell as well. i would offer on the jobless claims numbers, rick said this. we're towards the high side but not towards the red flag side i could say. i would think 250 or above would be where you might get concerned. you have a 1.2% unemployment

rate or unemployment insurance rate. and that's pretty much where it's been as the number of people employed goes up. well, the actual number of unemployed insurance becomes less concerning. i'm not going to say anything about elections or anything like that. just that almost every study has said that tariffs are paid by the people domestically. not by those companies overseas -- >> give me one more second. >> go ahead. >> sure. >> i'll tell you what, here's the issue with tariffs, you say we're going to pass it along. i couldn't agree more. but my counterpoint is, look at what the world has been without them being the driving force of any type of revenue. do you think we should be bragging about 35 trillion in debt? like the other side of the equation, isn't anything to strive for throw a flag up the pole and call it success. maybe going the other way would be better. pass it on? we pass everything on.

>> that's fine, rick, but don't sell it as something paid overseas and not raising prices and not essentially as a tax increase. the public can decide or the government can decide -- >> versus what the tax increases they want to bring without the tariffs? the other administration talking about tax increases too. i don't understand the difference. prior to income tax, the country paid for its bills with tariffs. >> but one is called a tax increase, the other is essentially lied about -- >> call it anything you want, both of them aren't going to be generous to us with all this debt. >> if that's the way you want to do it, it's okay to make things up -- >> nobody likes deflation because when you're in debt up to your eyeballs it exaggerates debt. >> that's another reason not to like deflation. >> maybe people would like a little deflation not crisis era deflation. why does it have to be a little, none or a ton.

there's something a little bit in the middle. >> and rick, i agree with you that i think there needs to be a little bit more discussion about why some prices have not gone back to where they were before. and we've come -- >> let's ask elizabeth warren it's because of gouging and anticapitalism. >> let me finish. >> all right. >> remember what i said, prices can go back to their old level if we restore the competitiveness and the supply chain of the pre-pandemic era. tariffs work against that, rick. >> hold on -- >> if we want to play -- >> globalism reversing outpushing prices up but we're better off. >> you call it globalism, rick. i call it -- >> what's the alternative. >> i share it capitalism. >> this has been a while. >> i call it capitalism. >> i want to see what -- hold on.

we're done. we're done. now i want to argue with you. this is not what you were talking about. you were talking about something totally different than tariffs weren't you? no, i'm kidding. i don't want to argue with you. we got to go. thank you two. i'm sorry to cut you off, they were screaming at me in my ear to do that. i like watching that. do you like watching that? it's not us and we can sort of -- >> just watch. >> watch from afar and not be part. meantime, if you are planning to hit the road for the july 4th, here's a bit of good news, gas buddy saying independence day prices at the pump projected to be the lowest since 2021. it's only a penny lower than last year's market but $1.30 below the price in 2022 when the economy was runner hotter and russia had recently invaded ukraine. joining us to talk about how prices are filtering through the consumer is patrick.

good morning to you. we often talk about the price of gasoline being this sort of bumper sticker or, you know, add for what's going on from an inflationary section or how the economy is going in every corner in america. you're saying here we are and it's much lower. i wonder actually how that you think is going to affect the consumer psyche and maybe even the political psyche. >> andrew, to your point not to start another argument here. i think the one thing that nobody can argue about is how low gas prices benefit the psyche of the american consumer. they make every american feel like they can travel wherever they need to go without restriction. so low gas prices are a huge part of the psyche about feeling freedom this july 4th. we're feeling more free than the last couple of years as you mentioned, russia's invasion of ukraine caused prices to skyrocket in 2022, that and apparently everyone decided to hit the road in 2022.

now that we've kind of been in this post covid era, people are adjusting their travel habits. people road tripped last year because it suddenly became more affordable. this summer it's about the long-haul destinations, the overseas destinations. having said that, gas prices are inching up. oil prices have jumped $10 a barrel here in the last couple of weeks. however gasoline demand still relatively soft, holding under 9 million barrels a day according to gas buddy data. people saying they're going to hit the road but demand still soft amid prices that are affordable. >> real quick. how do you feel about president biden and this administration selling gas to producers like bp at maybe below market, i don't know what you think of that. we talked about releasing spr, some people think these things are politically motivated some people think are consumer motivated. do they need to be done now?

what's your take? >> andrew, i think the northeast gasoline supply reserve had been sitting there, costing taxpayers $200 million in the last decade to maintain. something like this is apolitical. trump tried to shut it down, congress has required biden to shut it down. the value of the gasoline, $98 million i wish they would have done it in 2022 to shut it down because it would have had a lot more benefit to taxpayers but it was one of those things in a solution in the search of a problem. now we have the earliest category 5 hurricane on record it highlights that hurricanes can disrupt the supply chain. hope it doesn't happen the next 8 to 12 weeks as hurricane season gets into the prime. that could send the wild card to above $4 a gallon for the summer. >> we'll gas up, happy fourth.

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we could be seeing the start of a new chapter for real estate right here in new york. robert frank joins us on set with the details. is it a happy time there? >> if you're a buyer. seller not happy. the average price in manhattan fell 3% in the second quarter. only costs $2 million to buy an apartment in manhattan. one reason is rising inventory. unlike a lot of the country where inventory remains tight. unsold apartments in new york are piling up fast. there are now more than 8,000 apartments for sale. so at the current rate it could take about 10 months to sell the apartments listed. anything over 6 months basically signals a buyer's market.

by the way, they are buying. the number of sales closed in the quarter jumped 12% over last year. that's the first increase in two years. brokers say more sellers are listing their properties and dropping prices to get deals done. and more buyers are biting the bullet because prices and rents remain high, $5,000 a month on average. they expect the rest of the year to be strong especially if rates fall and mortgage rates are not a factor in manhattan. 62% of deals were all cash. that is near the all-time record. you have a more discretionary market in manhattan unlike the rest of the country. people in manhattan bought with cash and now they're saying enough is enough we have to sell. >> you think this is going to hit everywhere? >> i don't know about every market is going through. south florida right now has a ton of new inventory and prices are expected to drop.

whereas like parts of the west and southeast are not seeing that. i think in new york you'll start to see more sales and prices fall. >> fall? >> okay. >> are you in the market? >> i'm not in the market. >> it's all they can't leave. >> new york has more flexibility because both the buyers and sellers are not as mortgage-locked. they're doing a lot of cash. >> do you think there will ever be a day where banks -- you know how in a commercial real estate universe, you can effectively take over somebody else's mortgage or take over the loan? do you think that banks will ever -- if banks ever allowed that, and you do a blended mortgage, it would be -- >> people have been fantasizing about that for a long time. i just don't see that happening. >> you don't see it? robert frank, we wish you a very happy july 4th. >> you too. when we come back, top stocks to watch ahead of the opening bell. take a look at futures right now before we get there. still got about 40 minutes to go before the open, and you're looking at the dow, off about 11

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a little more than half an hour to the opening bell on wall street. dom chu joins us with a look at some of the morning's top premarket movers. >> andrew, joe, we'll start off with a bigger earnings-related mover this morning. that's constellation brands, which is higher by just around 3.5% to 3.75%. this is the beverage alcohol company reporting quarterly profits that topped estimates on revenues that were just very slightly missing compared to consensus. constellation also affirmed its full-year guidance. next up, you got paramount global higher by 11% on 3.5 million shares of volume after deal talks resumed between national amusements and david ellison-controlled movie studio skydance. a preliminary deal has been

reached under revised terms. a special committee at paramount is reviewing that proposal. those shares up 13.5%. we'll end with a check on tesla, which is higher by nearly 2%, just around 8 million shares of volume after a 10% gain yesterday tied to better delivery numbers. new this morning, analysts at wedbush have upped their target price on the stock to 300 bucks. it was $275. they maintain the outperform rating. those shares up north of 1%. joe, back over to you and andrew and wish everyone out there a happy independence day and happy birthday, america. >> excellent, dom. we appreciate that. thanks. joining us for more on the markets and the third quarter ahead, megan horneman, verdance capital advisor's chief investment officer. we've been asking similar questions to people that do this for a living, megan. 14, 15% in the first half after 24% in the s&p last year. those are pretty good numbers. i mean, no one ever went broke taking a profit, did they?

>> no. i think that right now, the market's sit tting at this reco high and it's a little bit concerning to me that they're not looking at any of the downside risks we may see. the market is focusing on upside risks and what they want to see, which is that the fed is going to come in and can cut interest rates in september. i don't think that's something that we should bank on at this point. the fed's made it very clear, they don't have to be quick to cut interest rates, and then i think from an economic standpoint, we saw it with some of the data today, and we are starting to see weakness in the labor market. that was one of the last dominos that were standing from an economic standpoint. >> is there just so much -- trillions and trillions on the sideline that people have not deployed because they haven't trusted this market? is that a good sign? is it true? is it a good sign? >> well, the trillions of dollars on the sideline because they're worried about the market or because they're earning 5 to 5.5% on their money and we

haven't seen that in so long? i think a lot of it has to do with you're earning a significant aptmount of interes on your money, so why take the risk? let's not forget, we've got a lot of election risks coming up in the second half of this year. we have earnings that, in our opinion, just seem too unrealistic for this year and next year, and we haven't seen anybody budge that, but everybody's talking about how the economy is going to slow, but earnings are going to be 10 to 15% on the upside. i think that you start to see earnings and revisions coming down, i think it's going to take the wind out of the sails of this market. >> what does the election risk look like, megan? is it uncertainty? is that all you need to say? or do you want to even be more specific? we did have, i thought, lawnsdale that was on, he was talking about either unrealized capital gain taxes or long-term capital gain. he said both would be really hardon entrepreneurs and innovators.

if you recall, he said that it could do that. when you say election risk, what kind of election risk? other people think the end of democracy if donald trump is elected, that that could be a problem for the markets too. maybe so. i don't know. what type of election risks are you referring to? >> i think you kind of hit it there. i think there's a lot around the taxes, a lot around the uncertainty depending on if president trump comes into office, what does that mean for the federal reserve? but our biggest concern on the, you know, uncertainty is what are any of these politicians going to discuss about the unbelievable and unsustainable path of debt that we have in this country? that's going to have to be addressed. i don't know how. i don't know exactly when, but that, i think, can cause a lot of volatility, not just around the election but into 2025. >> right, and the -- i think the solutions are kind of -- they're mutually exclusive.

one would be, try to grow with a vibrant private sector, lower taxes. the other would be, try to raise more revenue from higher taxes. so, you know, it's just -- it is very difficult to try to -- to decide what's more market-friendly, but -- and then you got, you know, unsustainable entitlements that something has to be done. that might be easier to fix if we accept something needs to be done, but neither party wants to touch that third rail. >> the unfortunate thing right now is i don't know what the solution is. i'm not a politician, obviously. i do know that we do have -- we have to be very careful because we're walking a fine line. we haven't been in this situation from an inflation standpoint that inflation -- it's coming down, it's getting better, but there is still sticky inflation, so if you do things to promote growth, what happens to inflation there? we're running a deficit of roughly 7% of gdp. in the past, we haven't seen

that. it's a difficult situation. >> okay, megan, thank you. >> okay. quick final check on the markets. dow off about 12 points, nasdaq off 33 points. the s&p 500, off 6. when we open in about half an hour, we want to wish everybody a happy independence day, july 4th. watch yourself with those firecrackers. >> worried about the dogs. >> worry about the dogs. join us on friday. we will be here. "squawk on the street" begins right now. >> give them some gummies, i think. maybe me too. ♪ good wednesday morning, and welcome to "squawk on the street," i'm david faber with melissa lee and mike santoli. we're live from post nine at the new york stock exchange. jim and carl have the morning off. we have an abbreviated trading session today ahead of the fourth of july holiday. market closes at 1:00 p.m. eastern. bond markets, that's the stock market, yeah, and we end trading of bonds an hour later. let's take