good morning dow futures slumping a bit to start the busy week. we have key inflation data fed chair testimony with the kickoff of earnings season mission accomplished do you use that term richard branson celebrating the successful journey to the edge of space virgin galactic shares up nicely this morning. china continuing the crackdown on big technology. the latest target tencent. live to beijing. it is monday, july 12th, 2021. "squawk box" begins right now. good morning welcome to "squawk box" here on% n

cnbc i'm becky quick along with joe kernen and andrew ross dzhsorkin you can see this morning there is a bit of pull back with the dow. that is from the all-time high s&p indicated down by 11 the nasdaq is indicated up by 20 points this morning. obviously the there's cry market, the one you want to pay attention to 1.26 it had a 2 in front of it. almost impossible to explain what is happening. the 10-year is yielding 1.331% >> a big pull back lasted 15 minutes. >> it was one of those things where you stopped to turn on the tv >> it happened fast.

the meme stocks were down for a millisecond. they all came roaring back >> hard to explain why that happened and hard to say where things head from here. >> the numbers are big sorkin, you may know a few of them melvin capital they are losing 50% in a quarter. it's still happening i thought they covered we don't know what anyone has at this point they're still paying >> i can tell you what i know about it which is they have covered gamestop at the time they had also -- right i was going to say so many of the other meme stocks, they continued to short back in january, i mean, you looked at some of the situations that were happening and they

lost a fortune on gamestop gamestop became a small piece of the larger puzzle which is to say many of them were also short and they weren't able to get out. >> do you know melvin? is he like madonna everybody knows who that is? melvin we're supposed to know you know >> maybe at this point, i don't know if he was madonna melvin capital is run by gabe plotkin. gabe has long been considered one of the best investors of probably the last, you know, generation people like steve cohn and ken griffin invest in him and want to invest more in him. if you look at his record, it is

a remarkable feat. this year has proven to be difficult. >> as good as the arcagos guy? >> i think i'll go with better than the arcagos guy he was somebody who was trying to hit grand slam home runs every single time. that's not the plotkin approach. >> i was feeling pretty good about myself mutual funds >> index funds >> i'm not down 50%. you know, there are great investors. those are some scary numbers that we saw. this is the big story. >> let's talk about it >> it happened over the weekend. i taped this and watched it.

i taped it on cnn. i felt bad about the climate change i wish i hadn't done it after watching that coverage i watched wimbledon instead, andrew >> let's talk about both i watched it live. it was remarkable. sir richard branson achieving a dream for himself and also a dream for many others. blasting off from new mexico and reaching the edge of space two pilots guiding unity 22 above the 20,000 feet spot carrying branson and three employees. here is branson after the successful mission >> i think like most kids, i have dreamt of this moment since i was a kid. honestly, nothing could prepare you for the view from space. i mean, the whole thing was magical. suddenly you are looking down and you are seeing three people

looking up at you. what are you doing down there? we had this incredible earth i'm taking it all in it's unreal. >> after the flight, branson announcing a sweepstakes to win two seats on one of the first virgin commercial space flights expected to take place early next year. look at the shares they are up this morning over 7% meantime, jeff bezos is planning his trip to space one week from tomorrow he posted a message to branson saying congratulations on the flight can't wait to join the club. the space race is on joe, i did see it. i flipped around i was listening and reading because there are a bunch of people who are not happy that the space race is on for lots of

reasons. folks thinking this is an ego race as you said, a climate question. there's a billionaire question all sorts. >> the left loves to eat its own. they can never been happy. it's great it's awesome i have questions which is the better way to do it does it matter if you go above that line or not can you really do commercial space with experiments you can do all those things we can't do down here is it better if sigh even acti scientists go up massimino we had on is a ph.d. can you eventually commercializ asteroids? it becomes precious with the

asteroid there are all kinds of neat questions about where we go from here it's amazing you get your wings i will say, andrew, didn't you think i can do this. it looked like an inside of a gulfstream it didn't look too bad >> you are talking 53 miles. it's limited. >> are you going up? >> i'm not ready >> it is not as scary as i thought it would be. it is nice to see other people do it. it is interesting to see how small the atmosphere is. 53 miles and you're out of here. think about driving 53 miles >> at 40,000 feet, don't you feel high? >> i have no desire to do it i can understand people who do want to do it at this point and think it is viable and not as frightening as a couple of years ago. >> i think going up on the plane and sitting in your own little thing and having that booster go off is better than sitting on a launch pad in terms of just

being scared you saw that jet go off on that plane or whatever you want to call it. that ship. it was pretty scary. i guess if you are worried about -- >> oxygen. >> or a rocket engine. >> here is my question for you, though at what price point would you do it let's say we know it is utterly and completely safe and fun thing you would do for an hour or two, collectively would you pay $25,000? $10,000? $5,000 a first class ticket from new york to california is $5,000 these days i don't know i wonder right now, obviously, a lot more than that. >> compared to a signature not signature or wheels up whatever they now. that's expensive i don't know it depends on who you are,

andrew we are fortunate people. we have 1% of problems that are talking about this i wouldn't pay $250,000, i tell you that much. would you pay $50,000? >> me? no >> i don't think i would in fact, some of us are talking about you need to pay me to go i definitely would have to go to the bathroom before -- >> and during. >> that's a problem. you can't get up >> i don't think there's an on-board bathroom there. my hope more than anything -- more than going to space is this transforms aviation so maybe we actually get faster planes we return to the days of the concorde maybe that turns out to be a more commercially viable way to fly fast all the time.

i don't know if this technology will turn that way eventually >> does this have anything to get kids out of first class? >> you know what i didn't have that thought now you are thinking about it, maybe we could have separate planes >> maybe i know what you're saying. we had that capability that was an uncomfortable flight supposedly >> the concorde. >> right and an eight-hour flight is tough. >> and uncomfortable. >> to get back to that a lot of physical conconstraints con sonic booms and stuff. wie will talk more about tha and more ahead we have key inflation testimony from the chairman. we have the squawk planner next. the futures are indicated mixed.

dow down 107 points. nasdaq indicated up by 9 plus, shares of didi coming under pressure after the company is taking down additional apps in china after the orders from the cyberspace administration from china didi expects the app takedown may have an adverse impact on the revenue in china we will take you live to beijing at 6:30 a.m. eastern time to talk about it. otw stock down right no anher 4% "squawk box" will be right back. , not what's easy. so when a hailstorm hit, usaa reached out before he could even inspect the damage. that's how you do it right. usaa insurance is made just the way martin's family needs it with hassle-free claims, he got paid before his neighbor even got started. because doing right by our members, that's what's right. usaa. what you're made of, we're made for. ♪ usaa ♪

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time for the "squawk planner. earnings season kicking off tomorrow jpmorgan chase and pepsi we will hear from citi and delta airlines and blackrock we have united health and morgan stanley on friday. inflation in focus the latest consumer price numbers tomorrow and wholesale numbers. and jay powell testifies before the house and senate on thursday and friday we get jobless claims on thursday on friday, retail sales for june a lot of data for us to dig through this week. joining us now to breakdown the week is kamal shamar and

stephanie link a lot of us are still trying to figure out what happened when it came to the 10-year last week. what is your best guess? >> the best guess, becky, the volatility came out of the fact that of the drop on thursday a sudden worry that growth peaked and the world covid variant of delta was there and the fed promoting growth that caused the big drop in yield. by friday, the fear was gone the expectation was growth would be back and the surge was back to 135 then fallacies in both moves assumed if growth slowed, that means lower yield. i disagree completely. if you have a pick up in inflation at the same time

growth slows, the yield will rise similarly on the way up, if you are now happy that growth has come back, at 1.36, you should not buy the 10-year yield. you will get a negative lead and looking for something higher in both cases, becky, i still expect to be saying on the program for some time that we are headed toward the 2% mark. volatility of last week doesn't change my view one bit >> how soon will we get to 2%? by the end of the year >> it is very much like it by the end of the year. i said on the program in march and april, we are about six months away. roughly speaking, that is still the case as you said earlier, watch for the consumer price wh wholesale number prices the next two days and chairman powell will say inflation is still temporary

that might, in turn, put the yields down in the short-term, but longer term, at some point, within the next three or four months, you will see the reality of the pick up in inflation and calming statements from the chairman that is when the yields start to rise when they go up, they will go up 25 basis points in a matter of days >> stephanie, that peak growth is front and center with the earnings calls this week if we're at peak growth, that may be the case. the bigger question is do we fall off a cliff afterwards? what do you think? >> good morning. i actually think that peak growth is here first and second quarter of the year i think the stimulus is still plenty fault and you will see above trend line growth. maybe not the 9% or 8% growth we will see this year

probably 4% or 5% growth next year that is still above trend. as sri mentioned, i don't think it is all transitory if rates go to 2%, that is still a goldilocks risk for assets for earnings, earnings will be quite good 4% year over year. the key is margins and how companies are navigating through the supply chains and if they have pricing power if you have demand and pricing power and margins stay strong, you have operating leverage. you will see more operating leverage with the sensitive companies which i'm more overweight >> which one which sector are you talking about? >> i'm overweight on the banks and industrials and energy i'm not ignoring the technology companies. secular growth is too compelling

for the banks, although they have pulled back in the last couple of weeks, they are still up 40% or 30% year over year or year to date the expectations are high. you will have takes. they have to lower net interest income because of loan growth and flat yield curve if you think the yield curve is st steepening into the second half and the economy is continuing to be strong, consumer growth will be positive for the companies. you have to be patient by the way, after the companies report earnings, they will start to buy back stock. we know many of them have raised dividends. dividend yields are 2% to 8% >> stephanie, the one thing people bring up as you head into the earnings season, you have the incredible valuations that made their way through if you hear anything on the earnings calls that cause concern, you could see wobbling. you are looking for a more positive outlook than that

>> i always call earnings seaso silly season stocks can trade down for no reason i always have a little bit of cash on hand so i can buy on the dips you listen to the companies and what they have to say. i think they will be encouraging on outlooks for 2021 and maybe into 2022. we have high expectations. i would not be surprised to see a selloff. that is your opportunity, becky. >> all right we'll be watching for it step stephanie, sri, thank you. 2% is not a high yield, but higher than where we are right now. thank you both >> thank you >> thank you entertainment news involving movies we need to talk about the other stuff over the weekend >> soccer. >> soccer. awesome. italy. cheering italy on. i love that. did anyone watch mcgregor?

saturday night you didn't see mcgregor? a joe theismann type injury. he is a classy guy you know who was in the front row, sorkin? a ari. ari. ari in the front row trump was there. justin the blieber was there bob kraft. everybody. it was cool. the earlier fights were unbelievable it was really cool we're talk about -- i'm not going to say these are the types of films barry diller was talking about. anybody want to see this "black widow." the latest film brought in $80 million over the weekend the most for any film since the pandemic hit

barry. disney said it generated more than $60globally from the sales of the film. that is the first time they released sales on the streaming service. for $30, streaming on the same day. in the next hour, we talk to axeoicrd gelfont we're coming right back. y trade, which saved investors over $1.5 billion last year. that's decision tech. only from fidelity. only 6% of us retail businesses have a black owner. that needs to change. so, i did something. i created a black business accelerator at amazon. and now we have a program that's dedicated to making tomorrow a better day for black businesses.

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new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. time for the executive edge. gas prices headed up price of regular unleaded rose by 5 cents of the last three

weeks. bringing the price to $3.21. it is almost a dollar more than a year ago you got a 20-gallon tank price is going up. from the action of the ten-year last week, inflation might be transitory, sorkin when we get to 25 on the 10-year. we try to figure that out. we don't figure out how that happened it did >> i still don't know. that was the debate all week >> what i don't understand is the problem with opec. they haven't reached the deal there. how that drives down prices of oil? they have a problem because they can't agree on what cap to set that means somebody is going to start doing more than they agreed to at this point. you think long term that means higher prices, right >> not if they do less >> if they hold at this levels >> hold it at cheap and produce

m more, it brings it back down >> the opposite of what i just said yes. >> where it is now and close everything down. >> shale production will be back on >> that's what you get with cartels. we should talk at some point about the tax scheme that seems to be moving forward over the weekend. all these countries getting together as a cartel. we have a developing story in cuba. thousands taking to the streets of havana and 14 other cities demanding an end to the 62-year dictatorship and protesting the lack of food and covid vaccines. the biggest protest in decades in a country with tight police and control on disdissidents demonstrators broadcast live with cell phones, but authorities cut internet service. yesterday, the streets of havana were quiet overnight there was a heavy military and police presence.

also pro-government groups in the streets where demonstrators clashing joe, this is -- you always give me -- i don't believe i'm a socialist. this is what happens >> you were going to use -- we will have the same energy use as bolivia. you go down -- i forget how many kil kilowatts we use i don't know i'm -- i chafe at the word you call it a scheme that does not have a negative conno connotation, andrew. a large-scale systematic plan for obtaining a particular objective or putting through an idea into effect >> i think it might have a

chance i could be wrong >> really? >> it seems surprising to me how much support there seems to be internationally. i would have thought there wouldn't be. here in the u.s., it will be very difficult >> it can't happen without us. without congress >> what surprised me is the exceptions you started hearing from the minute they started talking through this that's a good idea for everywhere else, but in london, we don't want to tax the banking system because that's too important. we need a carve out for that as soon as you carve out, that's the whole deal >> ireland no >> the debate will continue. when we come back, we talk about china's crackdown on big tech that is continuing as with well. the latest target. this time it is tencent. we take you live to beijing. you have to hear what's going

on. the most wonderful time of year to be scott cohn. he will reveal cnbc's top states for business he joins us in the next hour with the first of one of his many diabolical hints. we're looking forward to playing the guessing game. we're right back after this. >> announcer: executive edge is sponsored by at&t business our people and network will help keep you connected let's take care of business. l m something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business... you can pick the best plan for each employee and only pay for the features they need. tailor made or one size fits all?

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china's crackdown on big tech continuing. anti-trust regulators focusing on music streaming on that arm of tencent officials will order the company to give up exclusive rights to music labels other anti-trust things going on over the weekend, china's anti-trust regulator killed a video game merger. i was reading. people really do watch other people playing video games i'm trying to get my head around that >> people really buy things on line, too, joe

>> do you really watch people play video games >> my kids i probably wouldn't do that. there is a huge audience. >> i used to be really good at asteroids and missile command. i can't imagine sitting there. these are more sophisticated they must be really good players. eunice yoon joins us from beijing. she was watching people play all weekend long, eunice y you barely had time to eat >> reporter: absolutely. that's right no, not quite. obviously, beijing was very carefully watching tencent the latest in the regulator's line of fire as you were talking about earlier with didi stock was down because the company confirmed beijing's order to remove 25 of the apps from all app stores and other platforms

that could potentially impact revenue. this comes after "the wall street journal" suggested didi pushed an let head with the ipo compared to bytedance. it shelved the plans to list and even though both of the companies, according to "the wall street journal" were alerted by beijing of the national security risks. also over the weekend, regulators signalled concerns about the chinese data getting into the hands of foreigners on saturday, the cyber watch dog revealed draft rules requiring companies that are seeking to list overseas to report for national security review first so, these are 13 agencies coordinated under the cyber watch dog which will vet for procurement and data management as well as any potential national security risks and review all of the ipo materials.

these are for companies that manage data for more than 1 million users. so in a chinese context, that's pretty much everybody. state media quotes securities regulator adviser saying a review is a premise to an ipo abroad essentially putting beijing squarely in the middle of the ipo approval process guys. >> all right eunice, thanks trying to figure out exactly what china is up to here i don't know how we can. for more on the china crackdown and latest and impact on u.s. companies relying on chinese consumers. we have sam, senior fellow at yale law school and cybersecurity fellow she advises u.s. companies on the tech regulatory environment in china i keep hearing, sam, that china and xi just wants to prove who's

boss i can't understand whether this is a confrontation with the united states and with privacy or whether they need to impress upon their own companies, their tech companies, of who is in charge is it both >> i think there are two stories here one has nothing to do with the united states. you have a number of private tech platforms that have grown increasingly powerful in large part because of the troves of data they hold the party is worried about this. for a long time, these companies have had free reign essentially. we think the party is always in charge, but the reality is there is more friction a push and pull power struggle i think xi jinping is stepping up saying you operate at behest of beijing

that has nothing to do with the united states. separately, but related, there is a concern with the tech darlings going to overseas markets rather than listing in hong kong or hang seng or shengen. >> the companies that are now on the list that we have problems with in china. is it really any different l i'm looking at it and saying this is an authoritarianism and this is what it looks like there. you can say you are doing the same thing to our companies and it is all about data is it different? >> you know. it is interesting, right we have two anti-trust power moves going on one in the u.s. under the biden administration with lina khan at the helm of the ftc and the anti-trust regulator in china also stepping up

i think there's been a lot of discussion about how do these two anti-trust companions compare and interact the reality is in china. beijing is not going to break up the big tech platforms that's not on the table. what is is using a number of different domestic regulatory tools to chip away at the power. one of the tools is data security regulation. another is anti-trust. looking at things like predatory pricing, competitors on the platform bundling of financial services i think the companies, didi, in particular, they have a target on their back and regulators are using different bullets to chip away at the power. >> samm, if you get in the mind of xi jinping, is it about keeping power? authoritarian power over companies letting them know you are operating and we love you to

do well, but when it comes down to it, we're in charge or is it about how much this data is worth? it seems like it always comes down to money and economics with china. with us, too a, about privacy da falling in the wrong hands is it control or money >> it is a combination of a number of factors. let's look at what data these companies have think about didi if a foreign adversary were to get control of the data, you could suddenly start targeting chinese government officials where they went. you could figure out geographic li sensitive locations. it is a treasure trove from the foreign perspective. the chinese government is wary of having that data fall into the wrong hands. this is why it was a big deal that didi hadn't come in

compliance with security regulations. that's number one. you think about companies like tencent and wechat wechat is the super app that people communicate with as well as hail taxis and shop if chinese government officials are using wechat to do something untoward, think about xi jinping's anti-corruption campaign they want to bring these companies under more central state management they want to make clear that yes, these companies have shareholder interests. they also have national interests connected to the public under the state so they will increasingly have to walk a fine line between shareholder interests and national interests of the state. that's what the parties are trying to signal here. >> i didn't think about all that we are still spy versus spy. we're still caring what the chinese -- we like to know about

their actions? the cia is alive and well. that's what you're telling me. >> absolutely. >> even more so? all right. a growth industry of the new millennium very good. samm, thank you. >> thank you >> see you later. when we come back, elon musk is headed to court we have the details after the break. and after the break, we talk about the trip to space for richard branson. remember, you can watch or listen to us live anytime on the cnbc app [wrestling bell rings] [music: “you're the best” by joe esposito] ♪ try to be best 'cause you're only a man ♪ ♪ and a man's gotta learn to take it ♪ ♪ try to believe though the going gets rough ♪ ♪ that you gotta hang tough to make it ♪ ♪ you're the best! around! ♪ ♪ nothing's gonna ever keep you down ♪ [triumphantly yells]

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welcome back to "squawk box. elon musk said to appear in court today. tesla shareholders sued musk and the board claiming the deal in 2016 amounted to a bailout for solar systems and enriched the musk family as serving as chairman of both companies he insists he was fully recused over the deal. some tesla board members settled the cases. he has not we will see what happens next. coming up, earnings season kicking off this week and big

banks are getting us started we get you ready for all of it after the break.

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well well woman back to "squawk box. wednesday, we get news from bank of america, citi, wells fargo and blackrock. second quarter earnings expected to grow 65%. joining us is betsy rasick from morgan stanley good morning to you, betsy. >> good morning.

thanks for having me. >> let's talk about perhaps some of the big themes you're thinking about going into this then i want to get into your picks about the stocks you like and the stocks you'd stay away so fire away >> well, let's go fanatic real quick. if there's one thing to look for this quarter, it is what >> expectations for fees to be and the outlook for the interest income to come down. >> in terms of what you like -- maybe i should turn it around to see what you tonight like. >> while we expect earnings across the board ever going to be better than consensus expectations, the outlook for

net interest income which is half of bank revenue streams is likely to be guided down now that's in part because we've got a much flatter yield curve, as you know, and then the loan growth while picking up is very, very modest at this stage. so that's why the two stocks, they've been really strong year to date. we are saying for this quarter that we're not really looking for them to outperform the growth >> where do you put jpmorgan in that >> so jpmorgan already downgraded their outlook for net interest income just a couple of weeks ago at our conference so that kind of bad news is already out there. wells and b of a we think need to be more explicit for second half net interest income. >> in terms of stocks you like,

american express on the list ally financial, bny melon. what's the rationale >> it's interesting. each one is a little bit different. let's start with american express. we expect they will be raising the 2022 guidance range. look, one of the main reasons is the u.s. consumer is doing really well and the return to travel, it seems to me, is above their expectations and, frankly, has been ramping faster than investor expectations. ally is a different story. ally will be one of the only banks in our coverage to show net interest expansion coverage. ally is an auto lender auto is really trong and for bny melon, bk, it's

because they have a lot of exposure to what we call reserves at the fed. not to get too technical but the fed did raise interest rates 5 basis points at the front end of the curve in their excess reserve rate, and that will reduce the pressure of the long end coming down. i think the net interest income outlook for bny melon or state street will be less bad than many of the other stocks i cover. >> we will watch and see what happens later this week. we appreciate your perspective on all of it thanks for helping us through. >> joe >> thanks, andrew. digging in to yesterday's historic flight. we'll take you live to the launch site. plus, former nasa astronaut michael massimino would have feltik le. bill nelson on what comes next

in the industry. you're watching "squawk box" next on cnbc

ready or not, here comes earnings season. the nation's biggest company set to post quarterly earnings

historic weekend for richard branson. reaching space on a virgin galactic flight. after a pandemic related hiatus, cnbc's annual top states for business rankings are back can't wait to see this the second hour of "squawk box" begins right now. good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures. dow off 204 points nasdaq off 20 points s&p 500 off about 15 points. the 10-year treasury yield, we've been talking about this for the past week, we'll show you where things stand as of

right now. you're looking at 1.343%, joe. i don't know what you want to make of that right now >> yeah. see whether -- we're waiting for the summer doll drums, andrew, too. i don't know when they officially start you would figure -- >> i think they did. >> probably already have i think people might be traveling this year or might be looking for some time off given the pent-up demand shares of didi down showing it's going to take down apps in china. the app takedown may have impact on the revenue in china. other tech news out of that part of the world, wall street journal is saying tiktok owner bytedance put its plans on hold.

company valued at 180 billion. looking at a listing in the u.s. and hong kong. elon musk will head to court. the first witness in the $2.2 billion takeover of solar city the 2016 deal amounted to a bailout of solar city. they also argue that the deal unfairly enriched the musk family musk has insisted he was fully recused from negotiations over that deal. g20 finance ministers met in italy to negotiate a pathway to a global minimum tax ylan mui joins us. this is pretty complicated.

>> treasury secretary janet yellen spearheaded that. it would rewrite the tax rules for the largest multi-nationals. yellen did tell reporters there was enthusiasm behind the agreement. >> the international tax deal protects the free, open economic order that is crucial for i investment in growth and at the same time it's welcome news for middle and working class people around the world and i think especially for the american people. >> reporter: the plan would set a global minimum tax rate of at least 15%. the g20 finance ministers with the oecd hope to implement it by october. the group are holdouts like ire lapped and estonia are holding out. countries are able to tax

multi-nationals with revenues of more than $20 billion on profits above 10%. financial firms and extractive industries are exempted. it could be spring of next year before this part of the deal is complete and, guys, it's very likely the senate will need to ratify the agreement with a 2/3 majority. >> that's the tricky part. the idea of getting 2/3 of congress to agree to anything. we can't even get a bipartisan infrastructure bill through congress >> reporter: yeah. absolutely remember, it's not just the u.s. congress but it's going to be the legislatures of the 130 plus countries who are signing on to this plan as well. so in the u.s. what yellen said was the global minimum tax piece, she was hoping that could move as part of the budget resolution and reconciliation process that is underway with the american families plan as part of biden's larger human capital infrastructure plan but the second piece around digital

ta taxes, that would require a new international treaty which the senate would have to ratify. the political time line for that, both because of the reconciliation process and because as you mentioned the lack of bipartisanship on capitol hill will be extremely tricky. >> they could do part of it, budget reconciliation, and that would be a straight majority the other part of it requires 2/3 of the senate to vote on it and if one part doesn't get done, the other part doesn't get done too it has to go hand in glove >> the key issue is that other countries are going to be looking at the united states and see if we can make good on our promises the removal of those digital taxes was something the u.s. fought for it was a primary motivator for the u.s. in these discussions and it was the u.s. that really wanted these two things to be

linked if the u.s. can't make good on the deal and the framework that it's been spearheading that it's proposed, i think the rest of the world has looked at it, if the u.s. can't get it done, why should we? there is a lot hinging on what could happen domestically through the legislative process. >> what's the time line they've given? have they given one? is there a whisper time line people are talking about >> october for the global minimum tax framework and then each country would have to go through and try to get it implemented within its own legislature or within its own parliament and then spring at the optimistic time frame for the second part of the digital services piece. >> thanks, ylan. i think we're going to be talking about this through next spring and maybe even longer than that. when we come back, the billionaire space race sir richard blan son blasting

off on a virgin galactic flight. it was years in the making here's what he told us back in october of 2017. >> space needs a lot of -- a lot of companies doing different things to benefit the earth back here there are thousands of people who would love the opportunity of becoming astronauts and going into space and virgin galactic is the only company that's built a space ship with wheels that can come back and land again and take ppleoe up and enable them to become astronauts ♪ and found solutions that kept them going. ♪ at u.s. bank, we can help you adapt and evolve your business, no matter what you're facing. because when you close the gap, a world of possibility opens. ♪

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3, 2, 1. release, release, release. clean release. ignition and 60 seconds and that is a full duration burn, folks. we are headed to space >> sir richard branson making history yesterday when he blasted off kind of from that free fall from the bigger plane in that virgin galactic rocket plane i guess you should call it here's what he said on arriving back on earth. >> i think like most kids, i have dreamt of this moment since i was a kid and honestly nothing could prep you for the view of earth from space

i mean, the whole thing. it was just magical. certainly you're looking down and you're seeing three people looking up at you. what are you doing up there? the -- we had this incredible earth. anyway, i'm just taking it all in it's just unreal >> joining us now, former nasa nasa astronaut, mike massimino he's a mechanical engineering ph.d. from m.i.t so -- you got picked to be an astronaut. if they don't pick you, who are they going to pick >> thanks. >> thanks for being here. >> thanks for having me. >> how high -- what are the -- i'm interested in the differences between bezos and branson in advantages, disadvantages. and i'm wondering what are the constraints on the branson model, which looks pretty

attractive you go up, it goes into free fall and then you launch from there and then you land on a runway could it go above the harmon line or whatever it's called if people want to do -- are there constraints on how high branson's ship can fly >> well, they did get above 50 miles to get into the american standard for where space is, where the carmen line is so that's why they were given astronaut wings yesterday. if they want to get higher, they need a little more juice you get a little more power to get higher i think they'll probably end up doing that eventually. what's interesting about the branson model, as you mentioned, they take off and land on a runway so it could be something that could possibly lead to air travel from place to place it can go anywhere you can launch it from any air airport, you can land it as long as the runway is long enough,

you can land it anywhere when you see a spacecraft taking off and landing from a runway. you can go to different orbits as well. you can pretty much launch or land anywhere. >> that thing couldn't orbit, could it, mike could that orbit the earth eventually, do you think >> i don't any i don't know if it's able to take that amount of speed and heat on re-entry it went mackh 3. to go to orbit you need to go 17,500 miles an hour i don't know if that particular spacecraft can do it there's no reason why they can't use what they have and develop it into something further that can do that. that's a few steps down the road i think they should be really happy with what they got to achieve so far. >> definitely. i'm trying to think of the uses.

people are pointing out the commercial uses. you've done yourself, commercial uses you're sending a ph.d. up there to do -- who's also an astronaut. it would be nice to get to the point where you can send up normal people, normal scientists that aren't astronauts to do experiments up there do you need to orbit to do long experiments? is that the holy grail >> no. me and most astronauts do think we're kind of normal >> you know what i mean. you could send up laypeople. >> yeah. >> because when you are doing these really sophisticated exerr per -- experiments you need scientists. >> i couldn't resist some of my students at columbia, on the bezos blue origin, a

group of my students at columbia flew an experiment that went into microgravity and on the virgin galactic, they've flown test flights as well even getting a couple of minutes or even a few seconds of zero gravity, you can learn a lot that's another component that hasn't been talked about much is that it opens it up for tourists but also for researchers who now have access to zero gravity. now that they have zero access, they think of more things they can do now that it is an option -- >> yeah. because i'm looking beyond then you did bring up a good point. the idea that this could usher in a transcontinental travel but it would be expensive, it seems

like those boosters look like more than just a little bit of jet fuel. >> the thing about all of these new companies, the big ones, blue origin, virgin galactic and spacex is everything is reusable this is where we're trying to get to the space shuttle was largely reusable but not as efficient as what they are using now. with being able to refurbish these spacecraft and reuse them hopefully quickly after you've used them, that's going to bring down the price is what i think the hope is. all of these entrepreneurs are realizing you're going to run out of billionaires who want to do this. they'll make it accessible to more people. like a lot of things, the first people who do it will have to pay a lot funding those that come after them. >> we have a lot of people watching trying to fix that flawed system that's created the

billionaires, mike we're working on it. no more. no more. i don't even like the milli millionaires just listen to our show every day. we're trying really hard if we can to fix this flawed system. you're saying that blue origin, there's no advantages to the bezos model? it's going higher. sounds like there are advantages to the branson model >> no, let me clarify that i think there are advantages to each bezos, his spacecraft sits on top of the rocket ship it has a good abort system on branson's model he has two pilots flying the mothership and the space ship that requires a lot of training, human manual flying. bezos is much more automated this's no pilot on board

it is an automatic vehicle you get inside, the system takes care of it self- the rescue, the emergency system is such that if something -- there is a problem with the rocket, it can separate the spacecraft from the rest of the stack and come back safely i'm not saying one is better than the other i don't have anything against billionaires either. i want to be clear about that. i think each of them has their own advantages i think there's room for both of these models it kind of depends on what experience and what you're looking for. both of them have distinct advantages. >> we have to figure out -- to commercialize it and where the real opportunity is since we're a channel that tries to focus on that does one or the other have more advantages for the eventual commercialization of space >> right now, i'm not -- i wouldn't know which one is -- i hear what you're saying and you

want to try to make a decision i don't think we know yet. the piloting vehicle makes it more complicated bezos where it's operated from, it hits certain inclinations you might not have as much flexibility about the different places you can go. i'm not sure it's going to end up being that way. i'm glad you have one that takes off and lands on a runway and another that is more traditional from the launch pad. i know the people that work at both of these companies at different levels some of my students work at them and my friends at nasa work at them they are great people. i would bet on both of them, actually i don't think one is going to take over the other. i think there's plenty of room for both. >> what did you tweet? you were the first person to tweet from space what did you say

was it a good one? >> i'll tell you, joe. it probably could have been a lot better i had gotten some advice from neil armstrong i asked him how he came up with what he said he said he didn't think about it until after he landed. i wasn't worried i was using that as my model i was worried about the mission and when i sent the tweet launch was awesome and i added some other things i sent that to earth in 40 years we've gone from one giant leap for man kind to launch was awesome actually, i'm pretty happy with the way it was maybe that was the way to go in the end anyway it was a fun thing to do it opened up a whole different

way to talk about our experiences in space. >> hey, neil you call up neil armstrong i get chills. >> my all-time hero. >> when he's trying to land that bucket of bolts on the moon. he has 11 seconds before he's like, yeah, okay, this looks good over here guys like you, they don't make them like you and neil anymore they didn't make me like that. mike, thank you. appreciate you coming on today >> thanks for having me. i sure appreciate it. >> you're welcome. i don't know, andrew are you ready to pilot that lunar landing module on the moon where you can't get back >> if i could be -- i'd go as the 10,000th flyer, astronaut. i don't know i don't know i don't feel compelled but i'm

fascinated. >> seeing the curvature of the earth, that was appealing. that was pretty cool. >> yeah. >> to see it from there. i've got to admit that i don't know >> nolo. we're all living in a yolo world. maybe weel very have to do it. >> i don't know. >> talking about yolo, cnbc's top states for business. scott cohn has been hard at work putting together the list and joins us with a preview. check out the markets this morning including some of the biggest pre-market winners and losers stay tuned you're watching "squawk box" right here on cnbc competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute.

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introducing schwab intelligent income. a simple, modern way to pay yourself from your portfolio. oh, that's cool... i mean, we don't have that. schwab. a modern approach to wealth management. trying to win business and jobs our annual america's top states for business study is back to figure out this year who's winning. our own scott cohn is in this year's top state for business. a mystery for now. talk about how we are changing

for this changing world. scott, it's dark this is unfair you can't even get a hint here i need a hint. >> we're getting there you know, this is cool we're not only back but we have our own official top states for business yurt. it's very comfortable, by the way. it is, you know, a really unique year we started this back in 2007 but this year being so unusual, coming out of the pandemic after taking last year off of the top states for business study, we knew there were a lot of things we needed to take into account like the whole push for inclusiveness and the covid-19 pandemic and how the states are prepared to respond to that in future issues. so we worked that into our tried and true methodology which has always been built for change remember, 2500 points and 10

categories of competitiveness. here for 2021 is how it works. we start by learning what the states are talking about, their pitches to business. >> light taxation. good work force training and a bins big welcome mat for new residents. >> reporter: the more something gets pitched, the more weight it carries. this year with the economy still rebuilding they're pushing low taxes and incentives making cost of doing business our most important category followed closely by infrastructure. not just roads and bridges anymore, we look at sustainability, broadband and reliability. >> millions in texas still left in the cold and dark this evening from a failing power grid. >> reporter: we broadened our measure of quality of life a new category like health and inclusion looking at health care including covid vaccination rates and inclusiveness. we look at work force, availability and diversity the economy including state

finance, business friendliness, regulations and red tape access to capitol. technology and innovation. education and cost of living you can read more about our methodology and all about this year's study at top states.cnbc.com. we will reveal where i am right here on "squawk box" tomorrow morning. we have a lot planned between now and then including our patented diabolical hints. here's your first one. ready? turn, turn, turn turn, turn, turn that is our first diabolical hint again, the top state revealed tomorrow on cnbc guys. >> turn, turn, turn. we should tell the viewers, we don't know you know obviously, scott, where you are. it's light out though where you are so i don't know what time the sun comes out west of the mississippi.

do you have another hint, a little bit >> no. the hint, have you to keep watching all day along this is how we milk this. >> does the yert not have anything to do with it >> it might. yurts in certain states. >> we had a tight shot we thought you were at rome in the vatican. i thought you were going to start addressing the -- i really did, or like a -- you know, over at buckingham palace you know how they come out of the door >> yes >> turn, turn, turn. a song by the birds ♪ for every season ♪ question for you, scott. it was an amusement park from the lake, from the ocean when i zoomed in i thought i saw palm trees are there palm trees in the

12 state you are joining us from. >> there were palm trees where i was friday, yes. that was no big -- yeah, there were palm trees there. i might still be there i might not. >> i do want to say, guys, just so you know, the birds play the song "turn, turn, turn." they're from los angeles i did a little google. >> it's never that easy. >> i tonight think the light is up on the west coast yet, i don't think. now i've got to google when the sunrises over there. >> you know, we can do some amazing things with lighting, just pointing that out. >> throw us off the track. >> pete seger wrote that, andrew people think dylan wrote it because "times, they are a changing" was on that same

album. >> it's never this easy. i try it every year. >> what state was it last time >> in 2019 the top state was virginia >> okay. okay is it virginia no, all right -- coming up -- >> not going to tell us. >> -- pfizer plans to meet with top u.s. health officials. on the agenda, fighting variants first as we head to break, check out bitcoin this morning it is down -- nothing for bitcoin but below 34,000 stay tuned, you're watching "squawk box" on cnbc

good morning and welcome back to "squawk box" right here on cnbc. take a look at futures the dow looks like it will open down better than we were a half an hour ago. down 126 points. nasdaq up 26 points. the s&p 500 off now about 9 points making headlines, indian retailer flipkart raising $3.6

billion in funding it values thecompany at nearly $38 billion. it was led by walmart, soft bank's business fund and singapore's sovereign bank fund gic. f's whatsapp division facing a number of complaints by consumer groups in europe it's now sharing some data with facebook whatsapp said the changes allow users to talk with businesses and it wouldn't affect personal conversations. meantime, consumer groups have filed complaints with regulators and "black widow" bringing in $80 million over the weekend. that's the most for any film since the pandemic hit disney revealed that the latest marvel film generating $60 million from sales of the film on disney+ talk more about the return of

the box office with imax cer richard gelfond. pfizer is making the case for federal authorization for a third dose of the vaccine. joining us is dr. patel. the idea of the third vaccination is picking up a lot of interest and some push back too. dr. anthony fauci saying nobody needs a third boster shot just yet. what do you think? >> good morning. immunity from six months ago decreases over time. the question is over you how much time? pfizer is saying they can see it from internal data and external data from israel 6 to 9 months after the two-dose

regimen there's a decrease in the titers it will be discussed with officials or so how much do you need you can have decreasing immunity over time and it can be sufficient the data supports all three of our current authorized vaccines and it provides enough i78 community against hospitalization and death. >> this is the question parents are facing that's great that it's going to protect me from severe hospitalization or death but my kids aren't vaccinated yet. if it goes down to 65%, what are the odds of me being out at work that i could bring it home and infect my kids that's probably the crucial question i'm not worried about myself. >> that is the crucial question. i think even more important on top of that is at what point

then do parents need to get boosters and it's answering the important question, asymptomatic transmission if you don't have any awareness of being ill, you could unintentionally pass it on to unvaccinated individuals the data is sparse we have data that points to early signs that you do not have a high threat of asymptomatic transmission that being said, that's exactly what i think will happen between federal officials but also it's a global discussion, right this is clearly not just implications for the united states but with the threat of the delta variant and potentially other looming variants in the future, it seems like it's an inevitability that we'll need a booster shot. seems like six months might be too soon i was vaccinated in december i'm already past that six-month

dew date but many health care workers have shown six to eight months later high levels of immunity very low levels of viral load if they, indeed, do become infected pointing to a very low likelihood of that transmission you were describing. >> doctor, the moderna and pfizer, i can't remember how many milligram it were, one was more than the other. >> yes. >> could you just go get the same one it would be identical to the first? could i just go in and say throw another one in my arm because no one wants them anymore or do we need a whole new regimen or structure to do that? >> yeah, joe, great question tempting to do that, right i've had patients come up and ask me, can i just get a third shot of any kind, pfizer or moderna. >> i'm ready i'll go today if you give me a time and place, i would.

>> here's the problem. there could be unintentional risks with that. in fact, we've seen patients who have unintentionally done that or intentionally done that and they've had even more dramatic side effects than the second shot i would not encourage anyone to do that. the reason it's important is the new data shows it needs to be tweaked. this could be a much better formula to boost your immune system in a way that creates more of a memory and current cells against the delta variants taking the third shot might be appropriate, joe, if you're immunocompromised in a certain age group. we have grown data for that, it's not you, but it is a good question to ask anyone

>> what do you make of the criticism that pfizer came out with the news that they're pushing to move forward with the booster at a time when the cdc has yet to say that one is necessary? >> yeah. so, look, i don't criticize pfizer for working on the booster, developing a dataset to support the use of a booster and work with the fda to talk about what that data involves and the process for authorization. this will be an authorization for the first set of vaccines because we'll need different sets of data to support the immune data and response i think where i would be critical is that it caught the public off guard because every day now when any manufacturer makes a vaccine press release, it becomes front page news it certainly did not get coordinated with conversations between cdc and the fda.

the regulators have no right to kind of, quote, prove those conversations, but they should be made aware. you heard dr. fauci say they did not realize pfizer was going to come forward with this so the criticism here is that for science communication it gets confusing, who do you listen to? it puts people in an awkward position to try to defend or not defend one position or another. >> dr. patel, the other question is the ethics of those of us in america getting a third shot before health care workers and developing nations get their first. that's a more complicated and complex question >> becky, i will tell you, we should anticipate the cdc's advisory committee make recommendations. it will not be come one come owl

like we saw with the initial rollout. the question that manufacturers should answer, how much of the development and manufacturing of a booster will actually take away from manufacturing for the worldwide process? that is critical we've seen pfizer lift its manufacturing more and more. moderna has as well as well as others, novavax and others not in the united states that will be a question that will be discussed today between officials or when they meet because it's not going to help the united states if the remainder of the world ends up with an opportunity. >> last week we had scott gottleib on and we were talking about the booster that was being proposed and the one you mentioned that would be more suited to the vare yachbts that. would have to go through all new testing which wouldn't start

until august it sounded like the third booster would be more designed for the variants one booster would be identical to the one you already got but a third shot another one being proposed would be one where they'd actually tweak the messenger rna to be more effective against the variants >> yeah, joe, you're right the booster that i think came out in a press release with the comments from pfizer last week were for the same formulation but, again, i think it's dangerous to have people -- you can walk in and as you mentioned get a third shot of moderna, pfizer, whatever, but you would have to make a -- one, you couldn't do it with your card now, it's not authorized with the label. there is that risk of side effects. i do think that this is why you're going to -- this is why

we're always seeking that internal data, to understand what is it about the third shot and when and for whom? i do feel like those are critical questions it is not trivial what we're seeing with people who have taken more than the current regimen that's recommended with two doses. you're correct i do think the tweaking is the booster that we do want as the public, especially as it supports the in community from the first two doses does remain over time. i think becky asked the right question that's why all of us are seeking data pfizer has. >> what do you think happens first? we authorize the booster shot or vaccines for kids as young as five or younger than that. that's what parents worry about. >> yeah. i actually do hope, becky, to your point, it's continuing to show data for authorization of

younger age groups, particularly, as you know, under 12 we're leaving them exposed and it's becoming a hot button issue for school reopening one, let the data leave. as we know, kids are in trials right now. those are ongoing. we should have as the pfizer ceo mentioned readouts on that data late august, early september that should be a high priority it feels like the announcement about a third shot did take people by surprise and that seems to be a lesser priority unless there is some data we haven't seen yet thangetting kids accinated. >> that's going to be the question let's let the science kind of dictate where this goes. hopefully we'll know more about that internal data too >> doctor, thank you very much we appreciate your time today. thank you. coming up, why amazon could be facing more regulatory scrutiny we want to remind you you can watch us live on the go on the aybc app

st tuned you're watching "squawk box" on cnbc

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acquisition to mgm it's known as an antitrust advocate and amazon critic the probe would look for any legal competitive advantage that the merge could give amazon. they announced it in late may for $8.5 billion amazon saying alita khan should recuse herself we'll see what happens next. when we come back, "black widow" smashing estimates the latest sign of the box office making a pandemic comeback we'll talk with richard gelfond next watch "squawk pod. stay tuned we're back after this.

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welcome back to "squawk box. "black widow" had the largest opening weekend since the start of the pandemic. they're reporting the film made another $60 million on the streaming service disney+. joining us to discuss what this means for the future of the theater industry is richard gelfond. great to see you this morning. great to see the movie and

theater and film business back up and running this weekend's box office is a stark reminder that maybe the movie and theater industry is changing forever >> forever's a pretty long time, andrew as a matter of fact, it's changed forever about four times in the last year remember warner brothers was doing day to day releases, now they've gob to a 45 day window your parent company universal was changing everything forever. now it's a four-month streaming window it's building back but we're still just coming out of the pandemic i think it's way too early to predict the future based off one week end be. >> how much of this though do you think is going to focus on the kinds of films that will do well in the theater? we already saw a trend in the last decade around the big tent

poll films they will around 10 pole films that's great for imakts. w -- imax. what we do is a lot of the mid level films will split off into streaming only releases. a lot of the small films will be sacrificed on the big screen and will be streamed i think films like black widow are going to have theatrical windows. in fact, disney said that. if you go forward and you look at shang chi, when you look at free guy, they've already said those are going to have 45-day theatrical windows so, yes, i think the mix in multi-plexes will change in terms of the kind of films the blockbusters are going to drive the multi-plex business and certainly imax's business.

>> what are you seeing in terms of folks getting back in the neat ter given the footprint you have. >> so where it's safe and where people feel good and maybe most importantly where there's good content people are coming back in really big numbers. we set post pandemic records in 12 countries with the release of black widow. korea was the biggest film in a very, very long time so we are seeing people come back in fairly significant ways. even if you look at the u.s., the last three kind of big blockbusters, quiet place, f9 and black widow all did about $10 million more so "quiet place" was 60, "f9" was 70, this was 80. i've always said it's not going to be a switch it's not going to be one day we're back to normal it's more like a blossoming.

from my perspective it looks like the fauceting is going to work well. >> what do you make of the valuation of amc right now and what's happening with that company? >> i mean, so to be clear, amc is our partner, not our competitor we have an asset like model. we don't have real estate agreements running long times. as a matter of fact, we have no net debt we're in 84 countries. we're entirely different kind of company. i mean, i think their valuation is driven by their fan base. they love that and they've driven that stock to the higher ranges good for them. we're a beneficiary. because they're our partner, they're rolling out screens. their liquidity is good for us

i wish i was smarter as a valuation guy, andrew. you guys are better at that than i am. >> we'll let you off the hook. it's great to see you, rich. appreciate you being with us and nice to see the theater business on the other side hopefully here we'll see. thanks >> thank you, andrew >> you bet when we come back, mohamed el erian will join us with his take on the markets. plus, nasa administrator bill nelson joins us to talk about richard branson's travel i wonder if he would emergency this would be happening when he was going up to space in 1986. stay tuned, everyone you're watching "squawk box" and this is cnbc

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good morning dow futures lower as we approach the opening bell on this first trading day of the week. set to dominate the discussion in the next five days, a big slate of corporate earnings. and china escalates its tech crackdown. didi shares getting hit once again after the company confirmed to chinese authorities it's all app stores to erase 2

dozen of its apps. serial entrepreneur and virgin founder sir richard branson making it to space fulfilling a lifelong dream and launching a new debate about the future of private space travel going to talk all about it with nasa administrator bill nelson as the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc. with becky quick and andrew ross sorkin it's a monday. monday, 127 points that's about what you expect, just blaaa, monday >> we're back. >> back at work. it's just -- i don't ascribe anything to it it's earnings week we're going to start the flood gates will open

eventually we'll get to see how companies are doing with the reopening but maybe some difficulties getting the labor that they want, getting workers to come in in certain areas. i've seen restaurants say, don't expect great service we're doing what we can. we're not staffed up to par where we'd like to be. the nasdaq maybe is more interest rate sensitive. when you see the 10-year yield, people start big gross again there is the 10-year 1.34% this morning. you guys were messing around, screwing off last week, whatever you were doing. >> working. >> okay. whatever you were doing. we did get down to -- were you watching dv. >> >> i did. i turned it on thursday morning.

>> you weren't out -- >> good, concise -- >> were you on the serengeti, sorkin were you away from a tv? your life is so interesting -- >> i have to tell you happily, happily i did not watch tv last week. >> there you go. there you go that's good. what about summer camp no phones for six weeks. that appeals to me >> for your kids >> yes, that shouldn't be on -- >> it's one way to break the habits we've all gotten too used to way too much screen time for kids yeah, take it away, go cold turkey >> it's an idea. >> idea. they might -- >> you wouldn't last three hours. >> being 21 and 19, i'm not sure if i told them they're going to camp they're going to listen to me. >> probably not. >> yeah, probably not. start the hour this morning we have some additional evidence of

china's crackdown on the home grown tech sector today. ride hailing company didi global confirming the cyber space administration has removed two dozen apps the obvious that that could impact resch knew in the region. seems that that's been figured out. earlier it was down by 4%. in the meantime reuters reports china's antitrust regulator will order tencent to give up certain rights to music labels they're going to stop tencent's chances to merge two big companies. bytedance plans for a public listing outside of china after government officials told the company to address data security risks. sources say bytedance had been considering a full or partial listing in the united states or hong kong. g20 finance ministers in

italy to negotiate a new global agreement on a minimum tax it would require countries to top starting america's technology giants. janet yellen spoke to reporters yesterday. >> the international tax deal protects the free open economic order that is crucial for investment and groetd. at the same time it is good news for middle and working class people around the world and people. >> blending in. >> it could be next spring before the current part of the deal is complete it's also likely it will need a yes vote from 2/3 of the senate. there are no guarantees. people watching the united states to see what their legislatures do and kind of playing off from there. >> trying my best. i couldn't see her

she had the blue outfit. the gray hair with the white on -- it was like -- i couldn't -- >> moving face you saw the lips >> yes stocks show some resilience last week bouncing back from thursday's selloff. posting record highs on friday we haven't seen a larger pull back in a while. a period of new potential market challenges mike santoli is here to tell us what those challenges are. whether the market's going to continue trending upward and all -- we all realize that it's mid july, too, mike. >> yeah. >> we're factoring that in. >> getting there just the fact that everybody knows that mid july seasonal factors turn a little bit more negative, maybe that doesn't immunize us from them. resilience has been the rule we go back to september since a 5% pull back the second largest stretch when

you have not had a strong pull back it doesn't happen for no reason. whati'm focused on here is thi period going march into april because you had this flattening out, then, boom, a three-week sprint new highs. looks a little bit like that we have not gone quite as high and not as over bought as we were in mid april. it's the large growth stocks to keep the overall market supported, the rotation is friendly take a look at the comparison between what's known as the quality stock, quality factor. balance sheet and steady margins. momentum is what's really been up the most in the last period but also has rotated into a lot of financials and cyclical stocks three months or so we've been relying on the big, steady, reliable technology stocks the market is keeping itself in

shape. volatility index is something that's been kind of i say rolling downhill with occasional bumps along the way. that's what's been happening mostly this is a coincident indicator. it's telling you that the market has been calm which we know looking at the market. where it's relevant is a di dive divergence it does not go back against the previous high. that tells us, maybe it's a good thing. vice versa we have to wonder if there's something brewing out there, joe. >> mike, in terms of earnings, we all know we're in reopening and we're expecting certain things there are some bullish forecasts for what to expect what do you think the most important things to look for what would be surprising to you that might throw a wrench in the works if something doesn't live

up to expectations what sector would it be? >> i don't know if it's too much sector based if the top line can't keep up with what is now really aggressive estimation just because, when was the last time we had a 10% nominal gdp growth quarter. that's what the revenues were earned in domestically the eyes are pretty big in terms of investors the pattern has been over the last three earnings seasons, massive beats but not commensurate reward in terms of stock price reaction that's because everyone gets the earnings are going to be great the one real benefit is as we get through earnings season, the estimates are getting revised higher that means the market isn't as expensive as the beginning of the year the pe is down a little bit from the beginning of the year even though the s&p is up 16, 17%. >> growth is still leadsing even though we hear value, value, value. >> it's leading in the last phase.

pretty neck in neck. they also -- it's a growth index. therefore most of the earnings and the earnings expansion is coming from the growth sectors in terms of aggregate dollars. >> okay. all right, mike. thank you. >> yeah. >> okay. let's talk about the markets our first guest says that lower bond yields are no longer good news for stocks. that's the title of his new op ed just out in the financial times. joining us is mohamed el erian the president of queens college cambridge. what was the turning point for you, mohamed >> so, andrew, while you were not watching tv last week we had this very peculiar development on thursday where 10-year yields hit 125 and the stock market got a real scare now until then the view had been lower yields are always good they're allowing companies to reduce their debt. costs, allowing refinancing. enabling ipos and guess what,

they also allowed financial engineering that benefits stockholders so last thursday was a bit of a surprise to a lot of people and i think you've just got to keep an eye on this >> so in terms of the equity market playing off of this how are you thinking of this in a rotation if there is one. >> think of what mike said and putting it on its head what are the big three drivers one is growth prospects. really strong growth two has been confidence inflation is transitory. three has been faith that central bank will continue to inject liquidity this week we're going to have a test of all three, both in terms of what we have in data and what the earnings tell us so that is going to be key and that's going to determine not just the rotational aspects but also the market as a whole.

>> what are you expecting on the earnings front though? it's not clearthat this past quarter is going to give us really any indication of whether this is transitory or not, right? >> i expect the world to hear what i've been hearing, which is that companies are doing really well, however, their cost structure is going up in a persistent manner. we're going to hear as to how confident are they to pass this through to higher prices the key issue for me on every single earnings call is what's happening to the costs and are they able to pass it on to higher prices? because that's going to determine two critical things, how transitory is inflation? and will the fed revisit what's been its pedal to the medal approach >> mohamed, we're going to hear from the banks starting tomorrow what can you take away from what

they say about all of this >> so three aspects of the banks. the one that i'm most focused on, what are they seeing households and companies do? the banking side the real banking side. then there's a capital market side what are they seeing in terms of activities i think that's going to be positive and finally what are they seeing in terms of market making. how much of a strain has there been on the market making activities firsz household and corporate activity i suspect that's going to be positive focus on the inflation aspect and central bank policies. >> finally, i think we're going to see some pretty fat profit margins. the question is what's that going to do to comps a quarter out, a year out? >> we know what it is going to be base effects. you and i a year out are going to say it's base effects, let's reduce it. let's not look at it i think we've started to

understand what base effects look like. i'm not too worried about comps. what this will do, it links back to what secretary yellen was saying is the more the profit and the profit share goes up, the more this administration will look to rebalance the labor capital equation >> final question since you just mentioned janet yellen we had her on the screen earlier talking about this tax plan. how do you handicap the situation on the global tax? do you believe it's going to happen >> i think it will ultimately happen i don't think it's much of an issue for the u.s. if you are in the republic of ireland, you have to figure out how much you're going to retain the public interest. it will ultimately happen. it's not going to be immediate it will take time. >> i'm curious you say it's going to happen yet it seems like we're going to have a fierce debate in this country about it. >> yeah. the debate is going to be much

broader. it is a reshifting from favor ing capitol to labor some people will see this as the thin end of the wedge. for us it doesn't really matter. it doesn't impact us, it impacts the rest of the world. we should want the rest of the world -- >> why are you so confident that it happens because it seems like you're going to have these political debates internally here in the u.s. and in so many other countries. to get everybody to effectively be on board and then to also prevent others from effectively a year or two, five years later a new administration coming to play saying, you know what, we're out of this, why are you so optimistic that this is on board? >> so take a very narrow u.s. perspective. it doesn't really affect corporate rates here we are well above 15%. it does make us more competitive

because those who have raced to the bottom by subsidizing the corporate taxes now have to come back towards us. if you take a very narrow view of the issue, it favors us it makes us more competitive however, if you take a broader view, that's where the debate starts and gets really heated. >> mohamed el erian, thank you for helping us kick off the week appreciate it. >> thank you still to come this morning, a special interview with the head of nasa we'll ask him what richard branson's successful virgin galactic test flight means for the future of private space travel walmart owned flipcart raising $3.6 billion from a group of global investors. the indian ecommerce giant has a post money valuation of more than $37 billion soft bank was one of the leaders of the new funding round

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richard branson is now an astronaut. yeah he accomplish the that fete yesterday. morgan brennan is there and has a live update for us next. it's truth or consequences how did that happen? i think that's true, morgan. what's on tap? >> reporter: well, i think the town got named that because of a marketing ploy a long time ago that being said, this is space port america atz richard branson said, welcome to the dawn of a new space age. this is the first time ever a person has built and funded their own space ship and actually ridden it to space in human history. we'll break that down and why investors should be paying attention after break.

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sir richard branson becoming the first, it says here, billionaire astronaut. the first knighted astronaut there was a guy named knight morgan brennan joins us now and she's out there. you're going to tell us about this first successful test flight, morgan you said you'd go in a minute. you weren't trying to sneak on there, were you, like a stowaway or something was that the general idea? >> reporter: i would so be a

stowaway i -- especially after watching this here on the ground in person yesterday i would absolutely take a trip, a suborbital trip to the edge of space if the opportunity ever arose to be able to document that as the first journalist in space. that being said, actually wasn't the first billionaire in space but he's the first billionaire in space to have done so, gone to space on his own spacecraft this was a major milestone for commercial space overall after virgin galactic successfully completed the unity 22 mission the first crew and for founder sir richard branson with whom i spoke post flight yesterday. this has been 17 years and upwards of a billion dollars in the making. >> everything i had envisioned it would be and 1,000 times better absolutely impossible to describe it unless you are actually doing it. and i hope we can get thousands

and thousands of people to experience what we experienced today. >> reporter: so sunday morning mothership took off from here and at about 45,000 feet it released the unity space ship which fired the rocket ship to mach 3 which reached 53 miles above earth. a few minutes of weightlessness. you saw views of the earth gliding back down to land on the runway in the new mexican desert a little over an hour after takeoff. branson and the other three have actually flown to space before became astronauts with this trip as 500 people including singer khalid, dozens of actual ticket holders with the company called future astronauts, board members, virgin group executives and friends and fellow space billionaire elon musk were in attendance for this.

following the flight visrgin galactic's worker said the initial check this have they land looked pristine pending further analysis that the space for the two final test flights is still on track for before the summer is out perhaps not surprisingly shares of virgin galactic are higher this morning joe, a major, major moment i think so much of the world was watching as we talked for so many years about the possibility of space tourism finally starting to become a reality. >> who was the billionaire, morgan was it the guy who paid the russians to take him up? >> yes. >> he's the one? >> yes the founder of cirque du soleil. guy lali bertolay. he went up and stayed at the

international space station. >> yeah. the interior looked okay, morgan it looked like a gulf stream sort of. i felt more -- you know, not that i'm always on gulf streams. i felt more comfortable. you could have got some gummy bears out of that door they've got nuts for $60,000 for a short flight that didn't look so bad. you could talk me into doing that in ten years maybe, morgan. >> reporter: yeah. i think again based on my conversation with branson after that flight, i did ask him given the fact there are so many comparisons to the early days of aviation, high price the tickets, very big events and then it will become more common place, you'll see production of space ships scaling and more people flying more regularly

he expect that to be a similar trajectory right now they have bills to pay and tickets will be expensiexpe. the market is expected to be pretty strong for high worth individuals. in the next five, ten years it's very likely that we could see this potentially become more common place also, guys, just note that one of the other pieces of news yesterday was that they did unveil this partnership with amaze which is basically going to set up a raffl for two of the seats -- two of the flights -- future flights to be different to people through this raffling process. so we're seeing all of these commercial space flight companies, whether it's spacex with inspiration 4, whether it's blue origin with their upcoming flight in a week and a half or now with virgin galactic trying to reach out and make this more common place by allow people to have a shot at some of these seats. >> you're trying to figure out what cheap would be, morgan. 250 an hour or above

50 -- that would take a while to get to where it would be 50,000, wouldn't you think that would take years, wouldn't you think? >> yeah. it's going to take a while and it's going to take folks just getting more comfortable with the concept of this. when you see somebody like r richard branson or when jeff bezos goes up. when you see folks so high profile, it is a major marketing moment for the companies but it is in a sense a vote of confidence for the space flight systems and the visions that both of these people have enacted over the course of the last almost two decades. >> morgan, thanks. while you were out there in new mexico, keep some eyes for from other stuff that might not be from around here ufos. >> reporter: i wish i had time. >> look behind you i was watching thanks, morgan. for more on virgin gal

galactic's test fright, let's welcome nasa administrator bill nelson by the way, you probably know that bill is a former senator.

there's a lot of excitement. the cape, all of those launch pads were abandoned. there are frequent launches from the cape and there's an excitement there now on the kennedy space center side as the largest rocket, most

powerful rocket ever is being stacked and will be launched at the end of the year, the space launch system with the spacecraft owe ryan. , that has an excitement you can't believe. >> what do you think the biggest promise is with some of the private companies, what they're doing. what is the public promise what do you hope to see. >> >> space manufacturing. we're seeing that already on the international space station which is 300 miles above us. it has constant experiments. it has pharmaceutical manufacturing. we're going to see that further out into space in the future we're going to see mining on as

steroids we're going to see all kinds of commercial ventures on the surface of the moon. needles to say, the heavens are there to be explored >> bill, you said you're proud of what these billionaires are doing. senator bernie sanders was a little less impressed. half our people here on earth live paycheck to paycheck. people are struggling to feed themselves and see a doctor, the richest guys on earth are into outer space. it's time to tax the richest people on earth. what would you say regarding the class warfare that's taking place? >> well, bernie is very sincere and he puts his finger on a lot of inequities that are here on the face of the earth.

but we never want to lose our character as explorers, adventurers. that's part of who we are as americans. we've always had a frontier and we've pushed that frontier it used to be a westward frontier, now it's upward. >> what's the biggest challenges that we face just in terms of being able to do some of these things in space? once you're up in space, what are the big challenges >> safety. as a matter of fact, as you cut new technology, as you push the edge of the envelope as the test pilots, as you dare to do new things under very hostile environments, it's risky we lost 14 souls in the space shuttle, we lost three apollo 1 astronauts it is not without a price but that, again, says something about our character as

explorers. >> virgin galactic lost a pilot as well, one of the test pilots in 2014. how safe do you think these forms of travel are at this point between virgin galactic and then blue origin >> i think branson wouldn't have flown unless he thought it was safe i think you'll see that in a week or so with jeff bezos we've already seen that with human life on the spacex that now takes our astronauts and their dragon spacecraft to and from the international space station. so i think that they have gotten it to an acceptable level of risk. >> the companies may be trying to play down the idea of a space race at this point, but you've seen some pretty heated exchanges, the trash talk, as to whether or not virgin galactic

is in space since it just goes past the carmen line what do you think as somebody sitting back looking at this competition? is it good >> i think it's great. competition is great they can trash talk and all of that theis just part of the competition. the real space race which used to be with the soviet union years ago, i think that space race is going to be more and more with china as the chinese government becomes increasingly aggressive in their space program and, i might say rk very successful. >> how do we share with other nations once we're in space? rules are a little different up there. >> well, that's a lesson from russia and the u.s back in the middle of the cold war, 1975, american spacecraft rendezvoused and docked with a soviet spacecraft. the crews lived together for

nine days. ever since we have had cooperation between the russians and the americans in civil space. they are our partners on board the international space station. the chinese, the chinese government, the chinese space program have always been very nontransparent and so this reminds us of the old soviet union early days but we broke that mold with the russians and we still cooperate today >> bill, do you ever hope to go back up in space yourself? >> no. i'm going to leave it -- it ought to go to the younger guys. when i say guys, that's a generic term because we will land in just a few years the first woman on the moon, the first person of color and it's going to be a continuing

excitement, a great journey as we venture out into the stars. >> administrator nelson, thank you so much for your time today and your perspective really great talking to you. >> have a great day. >> you, too. andrew coming up, an update on the delta virus spread and earnings and the ceo of pepsico with second quarter results. stay tuned, you're watching "squawk box" on cnbc ♪♪ ♪♪

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welcome back to "squawk. the spread of the delta coronavirus variant spooking investors last week. meg tirrell joins us with the latest case numbers and tells on possible booster shots good morning, meg. >> reporter: good morning, andrew the numbers moving in the wrong direction as delta is the predominant variant here in the united states. nationally cases are up about 30% week over week according to the latest cdc data. just under 18,000 now being reported each day in the u.s that is way fewer than we saw in the peak of this but it is going

in the wrong direction hospital admissions rising up 15% week over week to more than 2,000 a day. deaths at 183 per day. the states with the highest infection rates are ones where we do see delta predominant and also see lower vaccination rates. the red there is where the cdc says the highest transmission is happening in the country states like arkansas, missouri, florida is a real worry. louisiana and nevada all seeing the highest per capita case rates right now. areas in the northeast and some around south dakota in the blue there seeing the lowest transmission right now boosters, of course, a huge topic since pfizer came out last week saying it has data suggesting we need boosters. now the company is meeting earlier this week, potentially today with u.s. health officials to discuss data and brooster shots. this as yesterday israel said it plans to offer booster shots to those who are immunocompromised

which is the data suggested that the people who were vaccinated first and also folks who have weaker immune systems are the ones that are seeing more infection. guys >> so, meg, just to be clear here, we're still talking about the unvaccinated that are primarily both transmitting this and that are unfortunately victims of this. we're not seeing massive breakthrough cases. >> no. 99.5% of covid deaths are in people unvaccinated. the really good news about the vaccines is they protect against severe disease as for the rate of breakthrough cases for infection, we really don't know that quite as well because the cdc doesn't track or make public those data but you do see that the high infection numbers are in states with lower vaccination rates. so it does track that's where this is spreading. >> is there any conversation about surging -- either surging

efforts to try to create -- to get more vaccination in those states and implications for employers in those states? >> yeah. that's a really interesting question they are going person by person, door to door in some cases in these areas focusing on the local areas that have the highest risk trying to get folks to get their first vaccine that's why there was such an uproar about this talk about boosters there's such a focus on getting people to get vaccinated in the first place. the question about employers, they're trying to involve them as well because they find the more convenient you can make the shots for people, the easier it will be for them to get them obviously. then the question, of course, full approval comes into play because a lot of employers are squeamish about requires vaccinations of an emergency use authorized vaccine even though folks like dr. fauci make the argument there's very little difference there in terms of the amount of data we have. >> i know we have to run but in

terms of scheduled time line for full approval if one is to come, what do you think the earliest we can expect that to be >> we really don't know, andrew. analysts were thinking they would come this summer we haven't heard any signal on this we know companies are still sending in rolling applications. we don't know exactly when the fda is going to act on this. there is mounting pressure so hopefully they'll give us a sign soon. >> meg tirrell thank you for giving us the update appreciate it. >> andrew, dr. gottleib tells us the application, it's not finished. >> not any of their top priorities a lot of other things they're running after. >> sorkin, did you hear nasa administrator talking about bernie sanders he said bernie's very sincere. we're going to use that, the two of us. doesn't that sound good. andrew, he's very sincere. i want you to do the same thing to me. joe is very sincere.

we'll leave it at that we'll leave it at that and then we can save ourselves all of that aggravation, right? >> and the rest of us. >> it's a good line. >> all right when we come back, jim cramer's first take on the 'srkets this week. it a big one for corporate earnings stay tuned we'll be right back.

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want to get down to the new york stock exchange to say hello

to our good friend, jim cramer it's been a week i haven't had a good chance to say hello. i want your take on what happened over the weekend, a lot of things happened over the weekend. the space race is on i don't know if you want to weigh in on that or the earnings we may be hearing about later this week. >> the space race, it's almost prurient i think a lot of americans are jealous but in the end it didn't i don't know, it's just a couple of minutes i think the market is exciting today. and one thing i wanted to mention to you, andrew the futures early on have completely been wrong. i mean, they just don't matter up nine straight weeks in the nasdaq incredible run straight up. each day you come in and it looks like it's going to be down and it's just an opportunity i want people to stay open minded and take a look andrew, it has been phenomenal we don't talk about it being phenomenal we don't think it matters

because it's all being done by the fed. andrew, it's right it works it's been going higher >> we're going to hear from the banks starting tomorrow. we had an analyst on earlier this morning that said, you know what, we're not recommending you own things like bank of america or even jpmorgan we think you should be in american express, should be in american express and ally financial and other places like that. >> i think american express is definitely right i really like that call. jpmorgan was at 150 on thursday. could it revisit 150 in a heartbeat i do think we know the trading's not that good. we know there was a cessation of volatility we know there are ipos if they would -- i just wish they were to drop today. if they drop today we're okay,

but i can't say anything other than american express. i think american express is terrific. >> jim cramer, we're looking forward to seeing a lot -- >> that's it i missed the whole week with you, and you didn't tell me what was going on your family? >> i will call you during the commercial break to say hello. >> i want to know. you look great. >> i'm being told by my good friends in my ear that we have a guest that's waiting. >> all right, i just felt like a little conviviality was due. >> always conviviality you know we're convivial like crazy. >> i love conviviality i'll talk to you soon. >> i'll see you later, jim >> yep >> all right, let's talk more about the markets, what to expect this week as earnings season kicks off joining us now is jill kari hall, head of u.s. small and mid cap strategy at bank of america securities and managing partner at d.c. l.a., a cnbc contributor

jill, i don't want to bury the lead, i don't want to emphasize it too much. you like value, you're watching earnings, and the revisions have been historic obviously. but when it's all said and done, you think the biggest gains for 2021 have already been had, and we may -- and where we are may be down from here by the end of the year >> that's right, and thanks for having me. you know, we do expect this is going to be a great quarter for earnings, and you know, really a great year for earnings, and that's what, you know, last year the valuations in the market reflected. we saw last year's returns driven bythe multiple expanding, so this year is more about those earnings coming through. sentiment is already very, have -- for the u.s. equity market, so we do think we're going to see an earnings beat this quarter a lot of the early reporter results, macro indicators we're

looking at are pointing to a beat versus consensus. we don't necessarily expect that will be enough to continue to drive the market higher from where we are right now >> sarat, do you have similar sentiments i know it's more about stocks with you we have had a good run already and, you know, if you look at long-term expected returns for stocks, it's about 7 or 8% we've already had 15 does that mean we should at least consider raising little cash or no >> i wouldn't go to cash in any way. i think the market has definitely discounted, as we just said pretty good earnings, and i think at 21 times earnings, that multiple has got to come down a little bit. i do think bottoms up if you look at different areas where even the financial is trading at 20% market discount, something like a morgan stanley there, or if you look at secular growth stories, whatst going to be important, joe, in this earnings season is a couple of things one is who can have revenue

growth and keep their operating margins. revenue growth without margins -- even if the s&p stays at these levels, you can win if you've got stocks that are going to do well through a period like this if you can't raise your prices or you can't raise revenue, you can't expand, i think those stocks that have already reflected really good futures could get hurt >> so jill, we go back and forth, i want to drill down on why you think value makes more sense. i don't think you like industrials much either. at least you went to equal weight what's your overall sort of feeling? why do you end up there in terms of value and not liking industrials? >> right i mean, so we lowered industrials from overweight to equal weight within our s&p 500 sector strategy recently you know, a lot of that is due to the fact that industrials has done well, the sector is rerated. it's no longer cheap as it was,

and you know, as we see rising wages, this is one of the sectors that's more at risk there, so obviously so far so good on inflation with respect to overall s&p 500 margins consensus has been, you know, consistently kind of forecasting worse than we've seen, and you know, inflation has actually been a positive so far for corporate earnings, but as wages now start to see more pressure to the upside, that's a sector in addition to consumer discretionary that's more labor-intensive, a high ratio of employees relative to sales for the sector that one, i think it's still a higher quality sector, but you know, that sort of question could be warranted value is an area, though, that we still like. i think, you know, value stocks are slated to see higher earnings growth over the next, you know, one to two years than growth stocks right now, and we're only about ten months into this value run historically, you know, longer term value runs have lasted over 30 months on

average. you can see these growth head shakes of shorter term performance versus growth in them we don't think the value run is over yet. >> and sarat, what would cause you to say i'm concerned would the ten-year need to go up or down a lot, or would inflation be on the radar? what would it be that would get you a little bit worried >> i think if companies come out is and say, hey, our costs are going up way too high. we can't control them, and we're not able to see any visibility for the next two quarters or three quarters, those are the type of companies that would really concern me at this point. the other thing i think is, you know, to the value play of rates do move up, that's the sector you want to be be diversified. right now it's impossible whether the ten year is going to 1 or 1 .8 you've got to be in good stocks. >> okay, s arat, thanks, jill, thank you as well. it's almost time to go, but we're coming back one more time.

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let's get a final check on the markets this morning the dow futures down by about 94 points that's quite a bit of improvement. we've been down by as much as 200 points almost. s&p 500 futures down by 2. s&p, the nasdaq, the dow all closed at record levels and the

nasdaq is indicated up by about 57 points. take a look at the ten-year as well that's the one that caused so much consternation last week with the yield falling all the way down to 1.26%. right now sitting at 1.344%. we'll have a lot to talk about tomorrow when we look at what's going to be happening this week. we've got earnings coming in so we'll see you back here then. right now it's time for "squawk on the street. bye bye. good monday morning, welcome to "squawk on the street." i'm i'm carl quintanilla futures are mixed with more worries about global growth. we've got q2 earnings this season, the fed chair powell on the hill cpi this week, retail sales and more our road map begins with china's crackdown continues. bite dance shelves its ipo, didi removes additional apps and now a report that tencent is being ordered to give up its music label exclusivity. >> one small s