three more hours to go put in three more hours of -- >> of pure joy. >> of pure joy tomorrow. we'll see whether this continues. we've got the rest of the day today until 4:00 to see whether it adds to these or comes back a little but it should be an interesting session tomorrow and hopefully everyone will tune in. we might talk about the beyond meat thing again >> i hope so >> make sure you join us tomorrow, "squawk on the street" is next. good thursday morning, welcome to "squawk on the street." i'm david faber along with jim cr cramer we are at the new york stock exchange carl has the morning off let's give you a look at futures. you've been listening to "squawk box," you know where we're headed right now, which is lower. to put it in perspective, to levels perhaps that we saw last wednesday. but let's start right there,

jim, in terms of the overall market and the bond market and i know a lot of themes that you have to watch as well, you know, trying to understand what's going on today, why the yields have fallen to as low as 1.25, why the equity market is going along with it. >> slowly. >> slowing i think there's no slow in the united states. >> right but worldwide i'm increasingly worried, david, delta taking the world by storm i think when i was up last night in the middle of the night, when the olympics, when the government said no spectators, the market took a hit like we wouldn't believe and that's delta because people recognize that this thing's coming, and i think it's going to be -- it's going to be the dominant strain in the united states and we have all states that are anti-vax. >> we have a lot of vaccine resistance in the country, perhaps more than we'd anticipated when president biden set out the 70% vaccinated goal

by july 4th. many people thought, in fact, that would be easily reached >> right now we're going to have -- >> it was not quite reached, and so that's a concern, but at the same time, jim, you watch even the uk where i know people are watching, the numbers move up. this goes to your point where there will perhaps not be the vast reopening and slowing of the overall economy, not necessarily here but in other places in the world. hospitalizations not up in the uk. >> no, but -- >> or not up sharply . >> when you listen to our own eunice yoon, who is amazing, she's not wearing a mask out of some sort of, mock safety. she's wearing a mask she doesn't want to get it, all right? i think china, they have to get right now the ntfs they really have to -- the chinese vaccine's not working. >> that's your point. >> you look at a great proxy for china, not just electric

batteries. it stopped rallying weeks ago. >> okay. so the concern here is that there's overall slowing in the economy as a result of the pred spread of the delta variant, which is potentially going to lead to increased case loads and not necessarily lockdowns, but people -- that's the thing, like what are we playing for? >> i don't want to get deep into the whole covid conversation again. there's so many other things to talk about what are we playing for? >> don't have the therapeutic. >> the antiviral. >> right, and because we don't have that, people are still worried that there's going to be hospitalizations and the numbers are going to go up >> right. >> and that the new jersey having no deaths the other day is a sign that that state is p pro-vax, but the anti-vax states of course which are very much in sync for who voted for president trump, are at risk. >> we're full speed ahead in the united states. nobody's --

>> people are worried -- is the nfl, those stadiums going to be full how about the s.e.c. the s.e.c. -- the southeastern conference you're talking about it. >> well, the s.e.c. is actually well-run because you've got university -- you know, those colleges are excellent, but aren't you worried if you're going to one of those colleges or football games, that's the kind of things people are thinking about. >> they're thinking about it. >> they're thinking about we haven't adjusted the hybrid work hybrid, rich people want to catch them, obviously there's not enough people. president xi's new tone -- >> china has definitely got to be a key thing you mentioned it in terms of the potential of their economy slowing because of the spread of the delta variant. we talked a lot about the changes that they made, their cybersecurity laws that made changes for didi's business model after the company went public and what it all is going to mean overall in terms of the

ratcheting up of tensions between our country -- >> david, you've been saying over and over again, billionaires are in trouble in china. >> well, he's an autocrat and he wants to make sure he knows who's in control. >> communist autocrat. g i think bitcoin is china. >> you do? >> the fall in bitcoin. >> the return of the different cars that you need in order to mine ethereum is rather extraordinary. that's behind the big decline in nvidia it shouldn't be. they would throw away the gpu's for ethereum because they're not good enough for gaming a lot of that is reck nix-- recognition that ethereum mining in china is slowing. >> i want to back up and get your tack. the equity market, we may have hit levels we hit last wednesday. we were up coming into today

16% up on the s&p. we're going to be down today, at least at the open. we'll see how we end the day we all know there could be a good deal of volatility. >> right >> you've got the bond doing something that i think was very much unexpected, even what, as little as a month ago. all i sat here to do was questioning your take. >> potentially headed higher >> blast powell when he looks wrong. did you hear a single word about how jay powell's right no no i'm the only champion for jay powell there is. >> okay. >> i think he's the only meme i would buy. >> he's the only meme you would buy. >> you've been ticking off your themes here, jim, seven themes to watch in the second half of this year. >> well, the speculation, david, is now out of control. >> okay. that's another one. >> you agree with me if we were to do a spac report right now. >> yeah. >> how many would you have

and how many have done five spacs. there's 500 spacs. have they been able to find 500 businesses >> no, it's not easy to find a business i wouldn't call it spac mania. that was the first quarter things are stronger in spac land that's a level of speculation to some extent. >> there's too much stock come sboog this market, david they can't find places to put it meanwhile, the meme people have diverted their money from amc, which should be up since adam aaron said we're not going to issue more stock, and gamestop to prop up a lot of other junk they've decided to get into like new egg. new egg, which is the rival to best buy. >> right >> which is merged with a chinese shell. >> tnow it's down 20%. >> all of which means what, for today's action and what we can expect in the days and months ahead, are we going to sit here at 129 and 13 on the ten-year for quite some time worrying

about a slowing in the economy when only a few weeks ago we were worried about overheating >> there is no real slowing. there's psychological, plus there's lots of money coming in from overseas. confirmed that from my desks. >> there is. >> that is true. >> buying our bonds we should point out. >> there is worry about tether about what commercial paper they're using that's integral in bitcoin. we have rampant ransomware you see those stocks go up every day. we're worried about that, the meme stocks and the challenges to president biden the russian challenge of president biden, the xi challenge of president biden xi decided that didi was going to be a big loss for the united states nothing. >> nothing >> no. too many overpriced yields david, i'm seeing a lot of deal saying -- this one's only 11 times sales, in 2014 we saw that in the march, april period, and we saw that in the -- let's see october 1999. >> vast amounts of liquidity out

there, it's just enormous. you can finance virtually anything we haven't seen big m&a, but there is an undercurrent in the spac area and so many others, it's limitless in terms of what people are able to finance >> really interesting, you want to know a theme of president biden? he wants to give money to amtrak, which he took all the time, that's how i first met him, and he wants to crash the freight trains because they are too monopolistic. >> we're going it talk more about that later in the program, particular -- >> you and i are going to discuss it. >> you and i >> i will discuss it as well yes. you're referring to this potential for an executive order dealing with freight, shipping, and rails. >> companies need to make less. >> and there is a look at ksu which isn't a deal to be acquired by canadian national is

going to be down sharply as investors try to understand the ramifications on the stb, the surface transportation board, which is not that far away from at least making a decision on the voting trust ruling which is key to that deal they did finally submit their filing yesterday yeah what sorry, you're raising your hand, yes, i'll call on you. >> yes, thank you. >> jimmy cramer in the back there, yeah. >> mr. faber. >> yeah. >> president trump made a few tweets about united technologies and gm okay this non-tweet president, you wake up and did you know you're just going to attack the rails he is just -- as president trump, except for he's going after whole sectors. he's sector orioriented listen, i'm gunning for the rail etf because you wake up and he's taking the rails he's attacking the rails what did the rails do? >> apparently there's a lot less competition than -- >> break up the rails?

>> in global shipping, ocean shipping it's even more so it went from i think 12% to 80% -- >> you want ocean shipping, look at royal caribbean look at carnival cruise. look at the meme stock that is norwegian, which i like. see, the meme, david, those people, those people. >> yeah. >> you love coming back to the memes. >> well, r because they are -- >> we got a big market day here and you're talking about the memes. it's a little corner of the stock market still. >> they and the spacs control the temperament. the charge points of the world, david, do you remember your friend quantum scape have you seen that >> i haven't, no >> it's the spacs and the memes that are in control psychologically they are where the youth was, david. >> okay. all right. all that being said. >> jeffrey conrad, pass the bottle really great it's a novell a, you can do it during the break

>> i only read heart of darkness. >> that is not looking so good, quantum scape. >> high on quantum scape is 132. what does this mean for somebody today -- >> check out get ready. get ready to look for things to buy. that's what it is. >> right >> because you pointed out, david, this all our panic, we're back to when 2014. >> wednesday. >> last wednesday. >> we're back to wednesday oh, i was frightened on wednesday. not. i was going on vacation on thursday none of these is that worrisome. why? because delta is more worrisome for other countries than us. and i don't want to go back, i don't want to travel to europe >> i know. traveling. i know. >> our vaccine works >> and we are going to have the antivirus, just you wait >> we're hearing breakers.

>> and it could be as soon as fault. >> the chinese -- >> having an antiviral available for everybody to take immediately or prophylactically could be a game changer. >> the chinese have to meet and do the pfizer deal that's how you get delta under control. >> okay. glad we got that all straightened away. still to come, dozens of states are suing google over its app store practices. we're going to take a closer look at that let's give you a look at futures. we've got 17 minutes before we get started with trading here at the new york stock exchange. as we have mentioned, we are going to have a lower open jerry is here! j! mate, how are ya!? it's so good to see you. good to see all of you, yeah! why is jerry so... popular? it's been like this ever since we started using workday. what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry.

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attorneys general from 36 states and the district of columbia are bringing a new antitrust suit against google over it mobile app store this is the fourth antitrust lawsuit filed against google in the last year. you got doj in there as well as many states for any number of different reasons. obviously its hold or strangle hold they would say on the digital advertising market, jim. we go down this road a lot we always make the point that these things take a very long time to actually work their way out, certainly when the courts are involved, but it doesn't mean that it isn't in some way a

threat to their business, does it >> well, it's a threat to the stock, not to the business the real problem with google is that they own both the monitoring and they own the advertising, so it's very hard to -- circle for alphabet shareholders, david, this in particular i don't think that they are nearly as monopolistic as apple, and i don't think apple's -- >> in terms of their app store, you mean. >> here you got epic games taking them all. >> epic, that's the 51st state, i mean, enough now, david, i find these are nuisances because alphabet has been investigated perhaps more than any other company in america, and it's repeatedly found to not -- you know, the justice department, it's repeatedly found to be not -- i thought when they bought double

click, that was questionable. >> that's a long time ago. >> but the government -- >> listen, they took forever to review the fitbit transaction. that went on for -- >> at the same time, it doesn't mean -- all right so they're not going to be able to do any deal in terms of making new acquisitions we can all imagine that will be the case certainly as well with lina khan at the ftc, in general the tone from both sides of the aisle, there is some bipartisanship on this the tech is too big and powerful this is one of the most powerful names there is. >> the people love free search the government, it's interesting that the the one thing people love, they love amazon, alphabet, google they love facebook or else they wouldn't be looking at it every single night they love apple. i think the apple news feed is the way i now read things for heaven's sake. what can i say the only thing i'm coming after is netflix because they didn't have a really good schedule this

y year. >> meanwhile you're talking about companies that are well over a trillion dollars in value. >> big is not even the word. >> when you and i, you know, were younger men we could never have imagined companies of this size in terms of market value. $2.4 trillion. >> i remember, david, when merck passed u.s. steel. i remember when coca-cola passed -- david, those were halcyon days, we just didn't know it. i know we have to go because in my ear i hear music. >> yes. >> but before that, i want to do the -- >> we're just getting ready for the show, the top of the show. we like to get ourselves going. >> i want to say that google writes a really big check and the states are happy and we move on, just like the opioid -- it's horrible what happened, but they just write checks. everybody writes checks. nothing changes until we have a different kind of government than we have, thank heavens. >> unless we were actually to

get some legislation out of congress, amy klobuchar's bill unlikely but you never know. >> a will the of congressional mind share that's what you have to say. you have to call it mind share. >> we're going to have a mad dash we are getting closer to that opening bell set up for a far ler oniowpeng taking us down to levels we saw, oh, five trading days ago. u go—- they get our best deals. you got your existing customers — they also get our best deals. everyone. gets. the deals. questions? got it. but, why did you use a permanent marker? because i want to make sure you remember. i am going to get a new whiteboard. it's not complicated. only at&t gives everyone our best deals on every smartphone. like the samsung galaxy s21 5g for free. you packed a record 1.1 trillion transistors into this chip i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100

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actually says the numbers, the estimates are going toprove to be too high. david, you can't have a momentum stuck like this and have retail below consensus. so once again, david, china is slowing. china is slowing consumer. china is slowing industrial, china has to pump more money in the economy. they have to get the bntx. they've got to get better vaccines their vaccine doesn't work well, and all of this is amounting to what we were most fearful of, which is china was the engine. china is slowing, and nothing -- and now retail. >> this is also one of the more widely held if not the most widely held chinese companies in the united states. >> how about if you lose the fundamentals, no one thought that. >> it has been going down in part just because of so of the different things we've talked about. >> now we know it's the numbers. >> it's not just the $2.8 billion fine that they paid

in terms of remember for the monopoly laws and then the more scrutiny that they're getting from chinese regulators and the concern that u.s. investors are going to start to say no more. it's also just the actual eroding fundamentals in the country itself at least according to this. >> you've got it going down because people are worried about regulation and president xi and how angry he is at us. now you're going to have it go down on fundamentals and that's not good >> okay. we got an opening bell just a few minutes away stay with us

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we got a little less than three minutes before we get started with trading on this thursday morning we're going to have a decidedly lower open, of course. we've been talking a great deal about lower yields in the treasury market as well and lower equity prices this morning. jim, something we referenced as well, though is on the regulatory front, and again, goes to something you've been talking a good deal about, the biden administration in this case, it's "the wall

street journal" story right now that says that the biden administration is going to push regulators to confront consolidation in ocean shipping and railroad industry. maybe an executive order as soon as this week, and they will ask, well, for our purposes what we care about most or investors do at least, the surface transportation board, the stb to combat a pattern of consolidation and aggressive pricing that they say has made it onerously expensive for american companies to transport goods. there's a look at what the response is going to be in the market, of course. canadian national is in a deal to acquire kansas city southern. >> say again >> i mean, you got to stop that if you're going to be -- >> the question becomes. >> we have a system in this country. >> how closely does the stb listen to and/or take guidance from the white house and these executive orders the stb is made up of five members. they each have five-year terms

they have three democrats and two republican appointees, led by a gentleman named martin oberman. it's unclear this deal is operating under the stb's new rules, and i don't want to get too into the weeds on this. it does make it more favorable for them they are waiting to get approval on this voting trust that will allow them to do the deal without risk to shareholders and to kansas city southern's share shareholders they submitted their filing on it yesterday. >> the rails were huge yesterday. the investors are savvy enough to recognize this is coming down that's why i say this is mercurial. the reason why rails a monopoly is because there's only one rail, right? i mean, norfolk southern is not going to suddenly to please the president compete with -- >> although there is this rule on reciprocal or competitive

switching. that's a practice whereby shippers served by a single railroad can request bids by a competing railroad if service is available. >> i have not heard many companies complain about railroad pricing they complain about trucking pricing, but rails are also a great way, an environmental way to ship. i'm not owned by the rails, but i do think they're off the reservation if -- who are they going to -- wake up tomorrow, who are they going to attack phone companies. >> the opening bell, you just heard it, of course, clean battery developer frayer did the honors celebrating its listing guess what, how did it come public >> spac. >> oh, yeah. >> over at the nasdaq fin tech company catapult celebrates its recent listing via. >> spac. >> the market can't absorb all this merchandise no one cares because the spacs

are kind of being done gensler freeway, but we can't absorb all this merchandise, so the market has to go lower. >> we have a great way to get the help -- get a sense of the help of the spac market via our three different indexes. one is of course spacs that have simply priced their ipo, which all should be right around 10. there it is, and then we have the -- those that have announced the deal. >> right >> and then we look at that one. thund that's the deal one. this one is post-spac. that's after >> some of the ones -- >> it gives you a sense as to their performance after they de-spacced and we stay on top of the spac on the street here, of course with the help of our great graphics department. >> spac on the street, i'd rather own pepsi co. >> okay. why? >> at this point if i'm really slowing down, which you know i think the market things but you and i don't. you buy consumer package goods

companies had that have earnings and organic growth north of 5% that is the definition, the definition of pepsi co. >> here we are with the s&p down 1.3%, the nasdaq down a bit more, 1.6. we're two minutes into trading so far this morning. you know, you said earlier -- >> it may present an opportunity to buy we're only down to levels that we saw midweek last week >> right >> so what would you think about buying pfizer? you get the delta, the numbers aren't going to fall from 2022 they have a big patent cliff >> that was shorthand for saying they will continue to sell a lot of the vaccines because of the variant. >> it has a 4% yield, but it has to make an acquisition so i'm -- but they're smart guys at pfizer. >> yeah, it's funny you say has to make an acquisition and i immediately think of the ftc and lina khan. we focus so much on the

acquisition of amazon. people who study her tell me in fact a lot of her work has been done on health care and opposition to consolidation there. that becomes a question. >> if you can't have mergers, other than game stop merging with amc i'm dc. >> you're moving on here >> the top of my show tonight, a lot of times i develop the top of my show when i speak and interact with you. >> i appreciate that. >> jimmy cramer. >> yes, sir. >> and d.r. horton was downgraded by rbc. if you read that downgrade, it's just like the downgrades of the minors from barclays it's as good as it gets. the schwab downgrade, which we haven't even talked about because we are fools goldman sachs, why because it's as good as it gets. now, they're almost using that, those words. it's as good as it gets. now, daivid, i wondered -- i think oil can go up. propane is hitting new records

a lot of people heat by propane. >> yes, i'm aware of that. >> yeah, they do i would tell you, david, chevron at 5% yield, i regard that as interesting. i don't think oil's falling apart. i want yield when you can have -- when the yield on the ten-year, when you can get three times -- >> on chevron's dividend >> it's 5.2% >> and mike worth is not going to be challenged, i think he's not going to be challenged by engine number one. >> engine one. >> he'd like if we call it number. >> newly comprised board exxon mobil is a bit above that, but its stock has also had a much better run over the course of the year. >> i like chevron very much, very much. new egg, david, is down. it's going to destroy your nest egg. it's down 16 that was yesterday's pump and dump by the way. ooh, i'm sorry, it was yesterday's liquidation. >> right, you're unhappy with the move of the memes to even --

>> i want gary gensler. >> union pacific's down five it was up four yesterday now it's down five because suddenly we discovered that our arbitrary and capricious president -- why doesn't he just tweet it should be lower. >> we haven't even seen an executive order yet. >> this is "the wall street jou journal", what do you think they made it up >> i don't think they made it up we've got to see they refer to it as a sweeping executive order. we'll see. >> does it include the b and o and redding? >> i don't know. i get it, though that's a monopoly reference. you can't break up the rails what are you going to tell them, listen the interstate railroad commission, they could not force prices down. you can't tell norfolk southern you charge what you're charging because it's america. >> it's america. >> it's america. >> it's pronounced america >> america >> did i get it right? kate winslet pronounce it is like me and you tell me that i'm

wrong? >> no, i won't. >> because she's the queen. >> she's english, too, did you know that? >> yeah, she is. >> american express, okay, one of my favorites, he's sticking with his underperform, but he does take his rating -- he does take his price target from 122 to 135 people expected that international travel was going to come back i am telling you that's one to look at because we are not shutting down in this country. >> in, we're not. >> it is true that dr. tople did point out that missouri had a 25% increase in -- but it's off a low base, 51%, 14-day. 1,000 cases. that's an anti-vax minimal we can only hope people will be encouraged to get vaccinated if they do see a rise in cases and unfortunately a rise in hospitalizations. >> if you read -- >> which is occurring in pockets. you and i both listen to dr. gottlieb

he's sort of been our -- >> by the way, he's on the board of ellume and pfizer. >> dr. gottlieb does expect there's going to be a rise in cases. it's going to be pockets >> i know. >> and he doesn't seem overly alarmed. >> that's why -- >> yes, jimmy. >> that's why i say you have to get your bio list out. in the end while people are worried about delta, it is not really -- i mean, i'm more worried about england versus italy. >> that's going to be good because those are two countries that are ravaged by delta. >> right >> i do think that we're going to -- the fears are overblown, so get your shopping list out. >> okay. >> okay. >> all right >> remember, this was chiefly the japanese saying, no, you can't go watch the olympics. that's what caused a big decline and that is the president saying norfolk southern makes too much money. >> which is very much unfortunate. >> this also is due to the continued ratcheting up of regulatory review by the chinese

and the questions there and what's going to happen. >> there are some analysts who are concerned about what it means for some of our larger financial institutions and their business in china. who knows, jim, then we get to the other questions you raise all the time, which is not the question you point out apple, nike, starbucks doing just fine. >> 52-week highs they are the chinese stocks, and they've been doing great >> but don't we ever get to that point? do we ever get to that point where their business in that country -- >> as k.j., kevin johnson says, starbucks is buy chinese, big employer >> so did donaho at nike i think that man is a man of conscience, and he would have said exactly what xi wouldn't want to hear, which is there is not as much religious freedom. they don't have the fist amenfirst amendment in china. >> it's a very difficult

position to put yourself in to antagonize that country's leadership when they're total totalitarian >> i would not confuse xi with jefferson or madison >> right >> there's the real takeaway of the show. >> thank you >> he wants -- he likes to have total control. >> xi does not -- xi wants to hear. >> he's leader for life. >> that america is begging look at boeing that's a proxy for xi's strength >> is it >> yeah. >> i think we can stand up to the chinese. i've been saying this pretty much all my life, but i feel like i'm a lonely voice. people want to do too much business with the chinese, and they're not thinking about our own people the president i think has been willing to say taiwan, forget about them don't you even think about it. pl president trump said it privately to president xi the first day. i don't hear president biden say taiwan, don't think about it. >> maybe he's done it privately

too. we don't know. >> is he trying to get the -- >> you're down on biden these days. >> biden is cutting numbers. that's what he's doing he's taking down numbers. he wants them to make less money. what is he going to do it? eat it i want you to have lower margins. he's against pacific rail. >> 400 miles to a gallon >> certain companies have gotten too large or had too large -- the question how the you go about ameliorating that. >> amtrak hold the biden norfolk southern by the hold, maybe he's doing a double downgrade. >> what do you think he likes? what's he like here? what's on his buy list >> first solar. >> tesla has a big -- we forget sometimes that they also own a solar panel company.

>> i think he is, right? i'm just saying that i'm not giving -- >> are we going against apple here. >> ev entirely. >> go buy some moderna if you're worried. >> that's your buddy. >> my buddy? no, yeah, uh-huh my buddy, right. okay >> is airbnb over valued if we're worried about -- >> i don't know, that's your buddy. >> chesky. >> i love him. >> i find most people now when they go away they check airbnb before they check hotel prices. >> there it is. >> i'm just saying david, a little bit of weakness because of concern about the delta variant. >> i think you can start here, yes. i think you can start here. >> david, are you aware that the defense department had given a gigantic contract to microsoft now that is more mercurial than president trump who just said i

don't want it to go to amazon. >> because i don't like jeff bezos. >> how is that lawsuit with zuckerberg you get any response on that >> i don't- yeah, i don't know about that one. >> i'm going to cover every stock in the s&p 500 and you're slowing me down. another number cut in walgreen's because of the problem, the vaccine's coming to an end. >> which is it i can't figure it out. vaccine's coming to an end or more vaccines needed because the delta variant is spreading at an alarming rate. >> you read the stories. they would rather get the dez t disease than get the shot because the shot's still emergency use, which means it hasn't been cleared, unlike the fact they cleared a drug for alzheimer's that we don't even know if it works and don't forget this has been cleared for emergency use and most likely soon will be cleared for -- >> when? when the fta cleared -- they fast tracked a drug that may not work at all for $56,000.

>> we're talking about the biogen drug for alzheimer's. >> how many people have to take the vaccine, how many people have to take the vaccine before they say, you know what? it's not emergency use >> the nfl, how did you get to the nfl. it doesn't trade publicly, jim. >> i want to go to the nfl i want to go to football games. >> you do? oh, that's what you're talking about. >> i'm worried about games. >> you're going to be able to go to games they're outdoors. >> can i go to the tepper versus eagles game? >> am i allowed to take tickets from tepper? he's private i'll pay face value. >> let's take a look at shares i want to talk about didi for a second if you are -- by the way, there are a number of hedge funds that have significant china businesses and/or private equity funds. you do have to wonder, and some of them stepped up big and own a lot of didi. mine, 14 bucks, that was, what a week ago where it was priced and

then it went up from there. >> xi decides to host. >> its market value now is as high as 75 bil or more it's now $53 billion. >> just do wonder in six months is a lot of this past or is this the new world? >> i think president xi is directly challenging president biden. >> will we see any new listings from chinese companies >> there's always a brokerage company that is such a mendacious joker that they're willing to say, hey, listen, you got to buy this one. it's fine. >> this is a high quality company, one of the -- the largest single ipo we've had since alibaba, and that was seven years ago. >> david, i'm depressed. >> really? >> yeah, because -- >> why >> newly issued chewy. >> need ham put a hold on chewy.

i find chewy boxes everywhere, when you see -- david, as a puppy owner, don't you find this offensive? valuation full, as good as it gets chewy. >> wow down 7% on just a downgrade? >> i know. >> no, it's just a hold. they start as a hold by the way, they have great collars, and what you can do is say it's new york, david new york, and your phone number and then it says where you have your town. >> my dog wears a new york mets collar has for a long time. hasn't worked out so far >> david, we have to -- >> i have to tell you, amd should not have been down yesterday. >> okay. thank you for that. >> micron breaking down is the symbol of what's the matter with the semis. micron, mu there's still seven more s&p 500 stocks i've got to cover. >> we'll get to them >> say again >> brunswick. >> brunswick, yeah brunswick? >> ppg or car sales slowing

which they're not. >> coming up in the next hour, you're not going to want to miss morgan stanley's adam jonas -- >> oh, we get jonas? jonas is fabulous. ask him about quantum scape. damn, i wish -- excuse me, darn, i wish i could stay. i think jonas is the real deal have you ever watched his fireside chats >> he's a good analyst. >> he's as good as it gets, man. plus he has a great sense of humor. >> you know what it's time for now? the bond report. we're going to get to that we talked a lot about treasuries this morning, and i bet you know exactly how they're trading. the yield on the ten-year it continues to slide you can see it there, 128, down for a fourth straight day. that is a low of 125 -- >> delta. >> that was the lowest we've seen since february. now we are a bit higher than that right now, closer to 1.3% >> what retailer did the best when we were worried about the

variants costco >> here it is again, costco.

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citi group is the latest company to discuss the return to office with the bank's head of human resources saying in a linkedin post that she expects most u.s. and uk employees to be back in the by september speaking, by the way, citi, mark shafir will join us the next hour i think it is one of the most important stories in business. >> my theme, hybrid work >> it's one of your seven themes what i think is interesting is be back in the office in september at least a portion of the time citi has not been as focused on five days a week, for example, as morgan, jpmorgan, or goldman sachs, to name three of the firms we know that are sort of get back and we expect you back

more or less full time in the office. >> what happened there was a good article about ketchum. they can't find work. >> it's in idaho, where sun valley is. >> rich people have -- >> sun valley. >> biden would have hated him. so you go in and you -- rich people have mobility so they go to towns why they establish their base. >> right. >> and then these companies can't pay. so they basically new companies come in. you heard what president biden said. >> pay more. that's also a question i am not going to pay you the same wage if you are not in new york working in new york if you are going to be working in colorado i am going to pay you less. >> yeah, that's what should happen. >> we both agreed there is a seminal change now and you are not going to have people coming back to the office five days a weeg. >> no, jay powell -- >> there is transitory inflation, as we get a second house, the rich people

i call them the cool guys and the billionaires. >> got it much. well, on that happy note, we have "stop trading" coming up with jimmy in the back here. we are back in two minutes i'm searching for info on options trading, and look, it feels like i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪

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the s&p rebounding ever so slightly. >> campbell's soup now, yield is 3% great edge on the treasuries mark clause says they will have a better quarter and if you believe in delta you believe in pantry stocking. so i don't believe in pantry stocking i don't believe that delta is that a bad you know what? i have eric topol on tonight, another man like dr. gottlieb, who has been dead right. we got to get to the bottom of how fearful we should be mark clause, i think, will deliver. we are going to warm a colder period, people drink up soup s their quarter not up to snuff. >> no, shares suffered as a result. >> this is one to watch.

the other one that i think matters in terms of the variant is disney. i felt that disney down here kind of interesting, but we have to worry about the variant we don't really. >> the question is how much -- >> it's in people's minds. >> we are, obviously, vaccinated it doesn't appear if you are, you are susceptible. even the best vaccines are 95% effective. >> that's the problem. last night at ford, okay, they said i tested positive for covid-19 even though i have been vaccinated this is someone who tweeted. >> somebody tweeted that >> yes a combination of people who get it. >> right when you get it and you have an vaccinated you typically don't get sick. >> i don't want to scare people. >> making sure people don't get scared. >> that's why i have poshmark on tonight and goodrx they have been good at spreading news about how the vaccine is good and poshmark, david, the

wardrobe purge, pandemic wardrobe purge wp get used to hearing that. >> i am taking down numbers for union pacific. >> taking down numbers on union pacific? okay it's been a pleasure. >> fantastic. >> yes, jimmy. >> teacher, i really liked this class today. >> i am glad you have permission to leave. >> i am going to have a bagel. >> okay. another hour of "squawk on the street" starting aerhift ts.

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♪ good thursday morning. welcome to another hour of "squawk on the street. i'm morgan brennan with david faber. we are living from post 9 at the new york stock exchange. carl has the morning off a quick check on markets right now with a lot of red across the board. everything under pressure with the dow down 1% down, 355 point. the s&p down 1.2%. and the nasdaq faring the worst, down 1.3%. this of course as treasury yields are in focus.

the moves lower there. 30 minutes into the trading session. the three big movers, google on the move after three dozen states and the district of columbia filed an antitrust lawsuit against that company over the google play app store you can see the shares down more than 1% now. also tesla driving into new delivery numbers the china passenger car association reporting this the company sold 33,155 china-made electric cars in june. those shares down 2% we will discuss those numbers and more this hour a little bit later with morgan stanley's adam jonas and i mentioned it, keep an eye on yields, the ten-year hitting the lowest levels since february that we have seen a lot of action there a lot of dramatic moves there the last couple of days in general. over to don chu with a breakdown. >> just about 1.25%, that was the lows we have seen in the day for that 10 year benchmark, u.s.

treasury note field. below the 1.3 mark the lowest level since mid-february in terms of that overall yeed again a key focus on that ten-year note yield. across the yield curve the maturities in focus. the long bond below 1.9% as well keeping a close eye on those also watch what's happening with regard to the difference between long-term and short-term rates that so-called yield curve, the spread compression it doesn't matter what part of the yield curve. two years and ten years year 1.08 is the difference between two-year notes and ten-year note yields earl earlier this year was close to one.6% and reverberations in the market, these interest rates are having an effect across every single asset class out there, including in the stock market. so keep a close eye on the stocks closely tied to that interest rate complex. we are talking about bank names

like bank of america, pultegroup down 4%, akamai and cloud computing, lower longer-term interest rates have boosted higher valuation outperforming this this market and utility stocks, tend to outperm when interest rates fall nextera almost up almost 1%. back over to you. >> thank you. turning back to the markets overall as dom told you, we are in the red after what are record highs recently, in fact yesterday for the s&p 500 and nasdaq let's talk about it with chris, needham growth fund's portfolio manager. and chris, you are a growth stock guy. you had are great performance in your main fund what do you make of a market like this today, particularly that move in the treasury and whether it's indicative of a slowdown overall in worldwide

growth >> i think days like today are painful for investors, but you don't need to overreact here we are in the summer months. volumes are a little bit lighter and volatility is higher we are going into earnings in the next couple of weeks and i think you really have to focus on the fundamentals of what companies are going to share with us in their forward guidance is revenue growth going to decelerate, not be as strong will margins hold up how are cash flows coming in those are the things we as and mental investors will be looking at i think the longer-term investors, this is the time to be doing due still generals, looking for the good stocks that can continue to flo grow through some form of a deceleration. when you look at the bond markets, everyone has been trying to figure out what is causing this compression of yields and i think there is a lot of different answers out there.

some of the smartest people i have spoken to say that there is, you know, people caught on the short end of the insured bonds and the trades unwinding, is growth peaking, so it's less inflationary i think it's yet to be determined what is driving it and i think you need to be patient, but, i think inflation is still here for a period of time i think it's going to be here for about the next 12 months again, you have to be cautious don't overreact. get good stocks. >> listen, your point on the bond market is an important one. i have been heard the same everybody has a different explanation, but nobody really knows. specific to equities, the long list of things that you own in your holdings as of the lend of last quarter, china has been a real concern i don't know how it figures into many of the companies that you own. are you thinking about it? is it a concern for you in

terms. growth over there but also the increasing tensions when it testimonies to the capital markets between our two countries? >> where we invest with china is more tangential. selling picks it the miners. so semi cap equipment is the way we play that there is clearly a national plan to build out their semiconductor industry most of that technology is really held by western companies. so we think that that's still something they will be working on the shortages are going to continue to persist into next year and you are having a separation of technologies and i think china wants more independence on that front with regard to some of the companies that have been hit hard within china, we tend to spend more of our time domestically where we can rely upon gap accounting as opposed to the accounting that comes out of china more cautious on those names in

china, burr you can get exposure for u.s. companies. >> chris, it seems especially if you are talking about longer term that there are quite a number of potential risks or at least unknowns when we're talking about tech and the growth areas of the market right now. you just talked about what we're seeing in the treasury market. but in general, and we had those minutes yesterday, we do though that taper is coming which is arguably why we are seeing this flattening of the yield curve right now. we are talking about a fed that is going to start to tighten, albeit perhaps modestly. then you have higher corporate taxes on the table and, of course, antitrust scrutiny we talked about google at the top of the show too how are you weighing those risks and what that will mean to some of the investments you make here on out >> we think that the headline risk is a lot more elevated right here in this month before congress goes out of session in august so you will have a lot of rhetoric, a lot of noise around these dpakt issues with regards to corporate taxes

but in general, we're looking longer term and we probably see some opportunities here that, on pull backs, you stick with fundamentals and buy good companies. so i think that there is going to be a lot of noise out there, but it's still going to be ferreted out through earnings season companies have been cautious generally. supply chains are very constrained and components, labor costs are up but how much of that begins to dissipate over the next 12 months is my point on inflation. so i think you have to be patient and observe and find great companies when they sell off. >> chris, always appreciate your insight. thank you. >> thank you for having me faang among the host of names getting swept up in today's sell-off keep in mind though many of those names have been hitting fresh highs in the last couple

of trading sessions. should you be putting your money elsewhere or are there still bets to be here? our next guest seems to think so, that there is other opportunities within tech. we will talk about names like viacom and ibm sea shaun o'hara, president at pacer etf. faang alternatives, what do you like and why >> good morning. thanks for having me its valuation driven for us and its free cash flow based it's the free cash flow you receive on an annual basis divided by the total enterprise value of a company a different way to measure value. tech is expensive right now. the nasdaq is at 38 times earnings so you can buy, for example, a name like ibm, which trades at less than half of the forward pe to the tech sector, you buy a company that's starting it to move towards the cloud which is a very profitable business they generate huge amounts of

free cash flow if you are looking to play cloud but not at the elevated valuations, look at a name like ibm. str stream,ing, netflix is the obvious, the big player in that space. but there is growth constrained going forward. they have 200 million subscribers in the u.s in order to grow the numbers at the rates that they have, they either have to increase the number of subscribers dramatically or increase their rates, which they probably can't do in this market. two names that screened into one of our etfs entering the business, cbs viacom and discovery. the cbs viacom story, they have raised some cash they own content via paramount the discovery story is a low-cost input streaming service because they are reality-based who doesn't lmike rowbury and

"dirty jobs" we think you can enter some of these growing tech opportunities, but which buying different names that are trading at a discount to the overall market and that are generating a lot of free cash flow today. that free cash flow is important in a rising inflation environment. growth will get hurt by that getting a current return on your money is where you should be if you see inflation rise. >> no doubt. there is a reason that stocks are cheap. ibm, and i am not here to pass judgment on it, but they are challenged in a lot of different parts of their business. loot of people are concerned about the erosion of market share they have and their legacy kbiz, not to mention their debt lead there is occasionally the marke is right in paying a low multiple for things despite it might be generating a decent amount of cash flow. >> i agree the cash flow is what we measure here that caused us to own the stock. they have had a troubled past, if you will, it looks like they are starting to focus themselves

on different businesses. they are shuttering some and selling some assets off. $20 billion a year in free cash flow gives you a lot of opportunity and options and perhaps maybe they will surprise everybody and start to get it right from here on forward >> all right shaun o'hara, thanks for joining us today >> thank you as we head to a break, a look at our roadmap for the rest of the hour. we will have more on the latest market action adds the nasdaq heads towards what would be its worst week since may. >> and china's crackdown continues. a discussion with morgan brennan's adam jonas over whether tesla could be the next target. and a check on the markets and the m&a landscape. mark shafir will join us in person right here at the nyc ayitusll are as we st wh that even as we return to the office, collaboration is still evolving. it's time to make collaboration better, seamless, secure. with cisco webex orchestrated by cdw,

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acquisition volumes hit record levels the first half of the year as companies continue to position themselves for whether what we hope is a post-covid world. mark shafir, citi group's co-head of global m&a. great to have you and nice to have you in person again, mark. >> great to be here. >> and i want to get to actually citi's plan for bringing people back let's talk m&a as we have for many years and get your take on things it has been a very strong market to say the least can it keep going?

>> look, it's kind of hard to fight the tape at this point, right? i mean, record volumes in the first half north america is driving it. the groups we cover, over 20, which is not that surprising, very good comparisons to '19 financial sponsor volumes are at record levels. this a very, very strong market. we were worried in the mid of february dependents on the spa market that's 13% of first half volume. so the traditional m&a market has rebounded substantially. >> yeah, obviously, spacs, they shouldn't be counted as far as i am concerned they are a different animal. but i know you as a guy who is always sort of worried that's not a bad thing but what concerns you now, mark? because you typically through the years have been a little bit concerned it's not going to be as good as it has been. >> we took a look comparisons to 2007 nine factors, really the previous peak. six at or exceeding. volume levels, sponsor volumes,

vix is about, you know, slightly better we are in correlated consumer and ceo confidence. stuff like that. three areas, hostiles, cross border and most importantly the gdp outlook. we are in a better situation than in '07 which raises one of the issues that concerns me is the mark row economic outlook. how sustainable is this? we are - >> you can finance virtually anything now. >> yes but then you see concerns about is it too much stimulus on the one hand is tapering going to be a problem? how does this play out if liquidity cries up that is definitely a concern but different than the outlook in the middle of '07 when we were recognizing we were in for a tough go i worry about macro. the second piece i worry about is regulation. we clearly -- i'll leave aside cfius and protectionism.

antitrust is possible. >> we have been talking a great feel about this potential executive order from the president that will involve the rails and there is a big deal of course underway there. and move out from there. google getting sued by more states today about their app store. it would seem to have to be a key consideration. >> it definitely is. look, antitrust enforcement is going to be higher under existing law the question is are we going to see changes? are we going to see a basically the shift of the burden of proof shifts on the buyer. that would be a major change a broader definition of anti-competitive behavior that doesn't go to consumer harm. and i am not going to take a position on the likelihood of legislation getting passed. >> a lot of this activity that we're talking about is taking place in the lower overall dollar level, but 2 to 5 billion. if you are a ceo thinking about not transformational, but big dollar-wise do you have to think

about the regulatory response in a way you might not have previously >> i can't say that it's overwhelming i if think if you are close to the line in an environment like this with increased enforcement and potential legislation you have to be smart about this, think it, take it into account we know timeframes for getting these deals done that are challenged are much longer this administration may go it courtmore. it's a factor. when you look an an economy as strong as this one looks like at this point, and aside my macro concerns, people are transacting and they will continue in the near to media future and also an exage nis event, china, russia, the middle east, something that could put a shock in the marketplace those are the things we look at. right now boards are pretty sane

begin and ceo confidence is high. >> always a key having covered this as long as i have you have done a lot of deals in technology, for example, through the years. do you really think some of the bigger and the market caps are enormous are they going to be able to still pursue consolidation opportunities in the same way they had previously? i am not talking about the 10, 15, 20, $30 billion market cap more about the 200 billion and plus. >> the answer is, as i said, generally we are in a more difficult environment. but again in all these situations you have to still go case by case what i would call more regular way store, ordinary stuff that's not very material, i still think you can get stuff done i think the bigger stuff that hits the media headlines and guys like you reporting on it, given the climate, may be tougher. >> you mentioned spacs only 13% it was important for investment banks. we had a lull but things seem to

be coming back not the torrent of deals that we saw in the first quarter, but certainly a steady flow. >> it was unrealistic to think that kind of activity in the late fourth quarter in the mid of february was necessarily going to continue. i think we went through a lull and i think it is getting a bit better and you are seeing deals happen again so what the hope is that we get into a more steady state environment where this there be far part of the landscape. there are 400 of them. this business is not going away. >> where are they going to find the companies? how can you maintain the quality in terms of the acquisition that the spac is chasing? >> it still staggers me when you look at the number of unicorns there is a tremendous amount of private valley value creation happening every day slew venture money and other things you're right there are a lot of them out there. you may have a supply demand imbalance. i think investors are scrutinizing the deals and the

good ones will get done. >> real quick on sponsors. we are always talking about all the dry powder they are active. are they going to continue to be >> 37% of the market, $1 trillion sponsor related activity 2 trillion of potential buying power. >> and financing it -- >> and $2 trillion on corporate balance sheets yes, they will be a factor now the sydney airport deal. i think it's real and here i am usually the guy looking at the glass half empty but it's very hard to fight this right now. >> all right finally, let's talk about here you are, back to new york stock ex hang in person with me. what are your expectations i think you are head of -- your head of human resources came out, september, citi you are not spursuing it quite s aggressively in terms of having people in the office five days a week what are your expectations

>> i think a great job balancing health and employee concerns and welfare within the business. i think we opened new york on tuesday. happy to be back look, as vn investor banker of many years, this is an apprenticeship business. but also from the standpoint of the client base. it's hard to replace incumbency in an account over a zoom call you want to be on with clients i am supportive of getting back and teaching the juniors it's got to be done in a way that balances -- >> can you do it three days a week in person >> we will find out. >> and so many technology companies, mark, there is no way they are going back to five days in the office. >> that's right. i think this hybrid model is here to stay i am not disputing that. that's a personal view i am not speaking on behalf of citi. >> i think it's being supported by the evidence so far. >> yeah, and i think what we

have to do as bankers is accommodate to the client. if they want zoom, we will do zoom we will do whatever it takes, is my view. >> appreciate it thank you. mark shafir from citi. morgan, over to you. >> thank you. we will get a check on the dow right now. it's down about 1.5% now 5 503 points plusers space, tesla, china crackdowns we are going to discuss that and more with morgan stanley's adam jonas. stay with us

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it is now time for our "etf spotlight. the transports through the tick eiyt the bay area is looking to impose more regulation on ocean carriers and freight railroads an executive order on consolidation of perceived anti-competitive pricing as a major class one railroad deal first in over two decades looks to proceed with kansas city southern and canadian national making a final pitch to regulators for preliminary approval of their $30 billion plus combination that involves a voting trust

sk su today setting a special shareholder meeting date for august 19 as well. the number two holding in the iyt. look at the shares, down 8% right now. d canadian national down all other stocks are selling off steeply today. every component in the dow trnts in the red as well reciprocal switching that is going to be the key technical term to keep an eye on if we get this executive order >> yes, so important to see what the stb takes from it. meneed you can see chewy had been down as much as 7%. higher wages, they say, could cause near-term headwinds. we got a lot more "squawk on the street" straight ahead

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♪ welcome back here is your cnbc news update at this hour. the games now just about two weeks away organizer of the olympics say they will be no spectators they agreed to the total ban after japan announced that the city will be under a covid state of financial that will last to at least august 22nd due to an increase in cases fueled by the delta variant. foreign spectators were ruled out, but that's been ruled on. adds the covid death toll crosses 4 million, the made of the world health organization says the world is at is perilous point. around the world variants are winning the race against vaccines because richer nations are keeping most of the doses. after a moment of silence at the sieft of the condo collapse last

night, the search shifted are from rescue to recovery. six more bodies found, the confirmed death toll 60 with 80 people unaccounted for. and elsa bringing heavy rain to the carolinas it will be moving along the east coast today and tomorrow with around 30 million americans under a tropical storm warning you are now up to date david, back to you. >> thank you, rahel. well, whether it is crypto or technology, china is cracking down across the industry and now eunice yoon has the latest for us plenty to run down >> yeah, that's right, david i am in the tech hub of xinjiang one of the places in china where the chinese revised rules for overseas listings are having a chilling effect. it appears that two companies now have decided to pull their new york ipos. alibaba-backed linked up as well

as tencent and softbank fitness app keep link dock bland to raise $211 million today and keep $500 million there are other chinese companies on the docket. because of the lack of clarity around the rules it's unclear as to whether or not they will go ahead with the ipos and at what pace and then separate to that the hong kong exchange has just announced new regulation changes to try to streamline their ipo process. the hong kong exchange said that they are going to cut the time between pricing and ipo'ing from five to two days this is meant to try to match hong kong to new york's ipo process as well as the process in parts of europe at the end of day, trying to make hong kong that much more competitive. now, separately, the central bank announced that

anti-monopoly measures that are aimed at alibaba's ant group are going to be applied to other online payment companies measures, details of the measures are still to come and then "the wall street journal" is reporting that the cybersecurity watchdog is being empowered to coordinate an overseas, the overseas listing process with the financial and economic regulators. at the end of the day, the goal for the cybersecurity watchdog is to make sure that chinese data stays out of foreign hands. morgan >> eunice. thank you. our next guest says the crackdown could spill over to u.s.-based companies like tesla. adam jonas joins us to discuss this as well as space. adam, great to have you on first, before we do get into the billionaire spaceflight, your thoughts on tesla. given the strong and swift crackdown on chinese-made

companies right now, what are your expectations or how are you gaming out the risks for u.s. companies that are participating that market like tesla >> thanks, morgan. yeah, from a tesla perspective, we are very constructive we are overweight, $900 price target we are skeptical on the long-term future of foreign companies that operate in dual-purpose, grew guilty military-grade a.i. for civilian use in natural monopoly networks in foreign countries not just china we think other nations will look at the automotive industry like the utility where the gdp and national security of the country runs on it for people think we are overreacting here, i would ask the audience to imagine a chinese transportation autonomy company operating services and conducting services in the city

of boston or miami would that be something that would really be realistic? i don't think. so without, you know, singling out china, we think it's -- this is just where these industries are going. there are a lot more -- when you connect the cars and add the a.i., it gets real sensitive >> you mentioned your constructive on tesla and you said china but more than just china, that this is essentially a global dynamic that will continue to take shape that being said, i mean, for tesla, it is these internainternationa markets that represent potentially the biggest growth levers in coming years >> they do, but we again encourage investors to say don't rely on china, for example, as your number one reason why you own tesla. i talk to some investors that think that tesla will have 50% market share of a.i., robo taxi or something in china. to us that would be equivalent to a u.s. telecom company

operating in china it's just not where the market is going please don't take my word for it talk to automotive executives as well when you connect the cars. so we are positive on tesla due their growth not to much geographically internationally yes, there is opportunity, but taking their model lineup from just four today to maybe 24 in coming years addressing markets like vans and trucks and suvs and fleets and getting into the recurring software-based revenue, the saas revenue, which we think could have potential well beyond the 900 target. >> we start talking about space when we talk about connected cars before we get into the nitty-gritty around that, suborbital space tourism, sir richard branson making his flight potentially this sunday jeff bezos later this month as well how big of a moment or a milestone is this for a sector

that has been decades, commercial space, decades in the making >> well, i mean morgan, i just got to tip my hat to cnbc and to you, morgan, and michael sheetz. i mean, you guys have totally nailed the space aim really kudos to you. it's so important. >> thank you. >> just nailed it. and i think the bezos and the branson tourism moment is important for public awareness and support. it's indescribably important in addition to that, morgan, you got starship now being mated to a super heavy booster at spacex. morgan, we don't even know where the hell that's going take us. that would be like talking about space before super heavy and starship is like talking about the internet before google search or talking about autos before the model t we think the combination of what's going on in south texas

with spacex and the human spaceflight, which is some of the most visible human beings on earth, wow just get ready i don't even know what to say. i'm speechless rns and that's rare. >> adam, it's david. i want to let you get back to space because i always learn something listening to morgan as well but just to come back to tesla for a second because i was listening to you you seem to be reducing the total addressable market for their automobiles at the same time you're talking about a lot of positives i can't figure it out. >> all right. >> are you forcing a buy on the stock? help me understand this. >> yeah, people know i have been over, under, equal, everything on tesla, frequently wrong, occasionally lucky, rarely right. so, look, david, it's more than just unit times price. if you put your henry ford hat

on, 100-year-old hat, unit times price and then you needed big shares in markets like germany and france and china that's great but the market is different. we think the opportunity is in installed base tesla has 1.3 million cars on the surface of the earth, 40 million by the end of the decade put an rpu on that, you don't need full autonomy and you get many, many tens of billions of recurring software revenue very high margin 60, 70% type margin. if i talk to my tech team, katie, who has been on your program many times, that transformed apple, for example, to a relatively cheap company at 20 or 25 times ebitda. so that moment hasn't happened yet for tesla. they are still covered by auto analyst that probably shouldn't be covering it when you let the tech company get ahold and see the software opportunity, that's what i'm

channeling the units are important. you don't need half the chinese market to get the software revenue. >> got it. >> you know, in some ways i would say virgin galactic stock kind of trades -- there are same layer tease in the way it trades around headlines and milestones and how buoyant the stock can be and how dramatically on the other side it can sell off as well reminds me of tesla's stock heart historically and the volatility where do you stand now as we do go into the flight this weekend? >> we think the story this weekend is bigger than one company. much bigger. this is about the genre. of course, space is hard whether it's a publicly traded company or the private companies, expect crazy volatility, delayed time horizons, things that you see in a powerpoint chart move it to the right you know this move to the right five taen years i think the market is unprepared by maybe the greater wisdom is

they are willing to fund it anyway the spac phenomenal and our discussions with morgan stanley clients and the lead analyst on v virgin galactic, there is something bigger at work branson and bezos are putting their lives on the line. we are opening up the space economy for transportation, coms, earth observation at a time we are being hacked every week and the relationship between all modalities ev and urban air mobility. flying cars. now do you think they are going to communicate to the cloud terrestrial, but satellite down link maybe as primary coms it's way bigger than one company. >> that speaks to why you are seeing space-based investments by the likes of amazon and microsoft, too you mentioned earth imaging. two more companies this week in that part of the sect tor

is this the moment. should i be investing in space companies that are coming to market? your message to them >> my message is yes, but -- yes, but you need to take a venture capital mentality. you need to have a be realistic that perhaps the majority of these ventures will fail that when there is an accident in space, especially one that involves human lives, you are set back years it's not going to stop, morgan, burr set back years. and so you need to be realistic. take a venture mentality spread your bets use your -- i am not giving private wealth management advice here, that's not my bailiwick. use your time advantage to spread your bets and think long-term and thematically if you do that, you are going to generate alpha and i think

keep -- even if you don't pull the trigger now and make the investments now, it is definitely not too early talk to people like you and get smart on this space it's like an mba, accelerate that mba now and get ready this is going to effect the rest of your investment lives essentially. start now. >> the space space adam jonas, thank you for joining us. >> thank you coming up, with so many small businesses raising wages, is a reckoning in store? we'll discuss. stay with us our retirement plan with voya, keeps us moving forward. hey, kevin! hey, guys! they have customized solutions to help our family's special needs... giving us confidence in our future... ...and in kevin's. voya. well planned. well invested. well protected. that building you're trying to sell,

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one of the market's bulls sees a challenging dynamic for money managers now that story and more on adgniocn.com more "squawk on the street" next

let's check in on markets. you can see of course near the lows, but off the lows here is mike santoli who has answers to all of our questions. all right, what is going on? >> answers >> yeah. >> correct or not, we'll see what's going on? i think there has been a accumulation of concerns about maybe we have decelebrrated in growth in the u.s. globally, a little bit of more of a complicated picture the decline in treasury yields, it confounded a lot of people. just a sense out here that the economy is coming off the boil a little bit and i want to point out this has been registering in the market for months two months ago is when transports peaked. it's when materials peak the it's when housing, home biluildn stocks - >> mid-may as well >> right as well as banks

so all of this stuff is already -- they have had 10%, believe is or not, pull backs from the highs it's not over. the plarkt was drink and supported by the big growth starks of the defense in the form of the big growth stocks were holding the lead for the market between that and the fact we had this little vertical move mostly driven by a few stocks the last week or so, we are trading where we were a week ago close june, i think it was 42.95. right now a little too cute. that's all we do is skim that off the top. that to me explains lat of the setup today. >> sort of fitting back into this entire discussion and particularly the debate we are having about the bond market, the action there and why specifically, it's telling is what we are seeing in the crude market as well we started the week with no deal with opec. that hasn't changed. we are seeing draw yawns and yet it's under pressure. that speaks to the swirling

questions, concerns, et cetera, around long-term growth trajectory. >> that's right. if your concern is demand we were counting on when we drove up crude up into the 70s will be weaker, whatever the supply side is going to be is going to be and i think that's what you are getting. everything is trading at one thing now. like this was part of the reflatio reflation reflation trade that was exciting into march. we'll take them down now that's what's happening. it's important to say nothing tremendous has changed about the macro. it's much more about the shadings of the incremental, new piece of information the index just dipped into negative territory after a record streak in positive ground not to say things are falling apart but at the margins maybe a little bit exciting on the growth side. >> unusual move in the bond market may be technical >> and summer volumes, right >> we're getting to a period in

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welcome back to "squawk on the street". i'm dominic chu. nearly every sector is trading in negative territory as we monitor this moaning's selloff defensive sectors like utilities and real estate, these groups tend to fare better when treasury yields come under pressure so keep an eye on those. more "squawk on thstet" e re ahead. keep us right here after the break. cynthia suarez needed to buy new laptops for her growing team. so she used her american express business card, which lets her earn extra membership rewards points

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welcome back our next guest says this is a critical time for small business, especially when it comes to raising wages joining us now is david dodson dave, what are you hearing about their main concern as we're in the post-pandemic period >> yeah. i think there's a lot of confusion right now among business owners. what we have, we have this short term effect which is a massive

pandemic, global pandemic and incredible government intervention that completely mixed up the market. now small businesses are trying to figure out okay what is temporary and what is permanent. for example all these job numbers flying around it makes sense the. you have some states opening, some states not opening. some states are ending subsidies, some states are trimming subsidies that whole disruption is causing the labor market to be very strange. what business owners need to think about, think about where the trend is going not where it is now >> in terms of where the puck is going, it sound like you think these labor restraints will ease, these inflationary pressure what does it mean for small business >> it will ease because people will no longer be paid to fish, they will be paid to go back to work that will change permanently there are some really interesting permanent labor changes. for example, working at home

a lot of america has worked at a home and a lot of people liked it small business owners need to start thinking about if i want to attract the best and brightest how can i make my business such that they can spend he some of their time working at home. that's a permanent change in the marketplace that business owners need to think about. >> dave, we've been focused on that, obviously, for big business because it's a permanent change that's what you're expecting and seeing among small businesses. this hybrid approach is the rule rather than the exception? >> i'm convinced of it no question that's where it's going to be. yes a lot of people will work and you can't serve a taco from home so, yes, there are parts of the economy that has to be back on premise. so many parts of the economy that don't and we figured out ways to do it through technology and the way we manage work and to communicate those lessons we learned is permanent. that's absolutely the case with small business >> dave, thanks as always.

sorry we had to keep it so short today. >> that's all right. look forward to continuing that conversation. in the meantime, david, major averages all under pressure today. looks like the nasdaq is down 1.6% the laggard in this market the s&p is down 1.5% and the dow is at session lows, 503. that will do it for us here on "squawk on the street" "techcheck" starts now >> bonds are what holds the physical world together or hold us together. >> yeah. yeah, i know i got it bonds. ♪ happy thursday welcome to "techcheck" coming up on the show today stocks sell off. tech jus