from bank of america, citigroup and wells fargo. got some coffee? suggest you drink some coffee. wednesday, july 14th, 2021 and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with andrew ross sorkin joe's back, even though he almost -- >> malfunction. >> what was that >> that was my chair it was like -- you know, you -- >> stuck in between the two? >> do you put it so it can't go back >> no. >> yeah. >> so i have the thing, it must have been right on the edge where it could miss. >> you almost fell out of your chair. >> it's tough to sit tough to sit without falling. >> we try. we try

let's check the u.s. equity futures at this hour you're going to see things are looking a little mixed s&p up by a point. nasdaq up by 48. the dow futures are down by 28 this comes after a down day for the markets yesterday. you saw markets coming back after two days in a row of ups boeing was the biggest decliner yesterday on the dow it dragged the dow down by 66 points dow down by over 100 points. s&p was down on the s&p 500 etf. you had the nasdaq down by 55 points you have jay powell who's going to be speaking before the house financial services committee and the fed beige book is coming at 2 p.m. eastern time. maybe the most important number of the morning is going to be the producer price number. yesterday it was the cpi numbers that were hot jer than expected that moved the markets moved the 10-year note

at this point it was at 1.39%. there was the hotter than anticipated consumer prices. 30-year is at 2.017% let's take aim look at the squawk stack the russell 2000 was off by 1.9% dow transports off by .9 you did have one standout. s&p technology was up yesterday. it brought that sector to a new high at the close and wti, which is down this morning, was up by 1.5% yesterday's settlement, $75.25 was the highest it's seen since october of 2018. it's at $74.61 a barrel. we always look at bitcoin too. >> it's in a range 31 to 35 i looked at a one-year chart

earlier. i was surprised to see it's been a long time. anyone who bought this year isn't feeling that great but it is holding 30,000. it's had a lot of challenges back to 35, back to 30, 31 it got under 30 but it seems -- we'll see. and i don't know if anyone knows short term where it's headed and the bulls. more and more of the people we've talked to are pretty smart, even now i can't remember who i recently said it was a bull that i didn't think necessarily would be a bull. a long-time wall street type farleigh is all in. >> joe, if you take the volatility out of it though, maybe that's what's happening

here, i don't know. >> it could be. >> that actually is a good thing. if you ever wanted to be in currency -- >> right right. >> if you want more adoption of the currency. >> you're never going to use it to buy things if you think it's going to be worth more tomorrow. >> can you imagine watching bitcoin trade is like watching paint grow, grass dry or whatever if it gets to that point, that might be a positive. we're used to -- the reason we could leave it on the stack every day is because it's always -- >> moving. >> -- doing something. 30 to 35,000 is a heck of a lot more than 4,000. do you remember when tom lee said it will be 20,000 by the end of the year? >> oh, that was a while ago. >> it was. i know it, time flies. he was saying it, i can remember asking him, tom, you're this well-respected equity guy that's had great calls. why are you getting involved with with this. >> that was a long time ago. i remember that conversation,

too. >> yeah. 20,000 why would you stake your reputation on something so speculative? he did and maybe it happened maybe it is getting more mainstream, sorkin maybe it is. >> i don't know. >> were you surprised how many transactions happened when visa said that? that was a big number compared to the previous year >> yeah. it's unclear how that was calculated the quote, unquote, transaction number because it wasn't clear whether they were all transactions as in sales of bitcoin to each other or actually for an actual transaction. >> it was still like multiple from the year before though, right? it was up by -- >> part that have is the volume of the activity we're seeing in terms of how many people are transacting -- i don't want to say transacting. transacting is the wrong -- how many times it is being bought and sold to each other but not necessarily for buying pizza

are you buying pizza with it or not? because that's when it's a currency otherwise assets transact all the time. >> as a store of value as an alternative to gold which has been strangely quiet with 5% inflation in the middle east and, you know, cuba. you know, take your pick but with all of the things that could be pushing gold up ahead, maybe 30,000 is what it's worth as a store of value and anything above that if it becomes transactional is gravy. >> you wonder where gold would be if bitcoin had never come into play. >> i know. now that branson can, you know, just head up there on a minute's notice, if an asteroid does come by, it's made of gold, we're going to go up and mine that i don't know what it does to gold prices. that is actually something people have postulated. >> i've heard that

i've heard that. >> it's nutso. i thought it might happen with diamonds industrial diamonds. >> yeah. >> but we digress. >> we digress. >> so unlike us. let's tell you what's going on in washington i promise we'll get back to bitcoin at some time in the next three hours. meantime, senate democrats announced they've reached a budget agreement amongst themselves calls for spending $3.5 trillion over the next coming decade. ylan mui joins us with the latest good morning >> reporter: that's right, andrew infrastructure is actually moving senate democrats reached that on the human capital on president biden's plan medicare, child care, climate change it is $3.5 trillion. chuck schumer says we still have a long road ahead but they are using the budget reconciliation

process to pass the plan no republican support would be required last night democrats said the deal is fully paid for in part through higher taxes on corporations and the wealthy but it's unclear how much revenue democrats plan to raise or what the net costs will be. i am told the debt ceiling comes back into effect at the end of the month. they have some wiggle room into the fall two sources told me whether or not to lift the cap on state and local tax deductions is still in flux right now democrats only need to decide on the top line numbers in the package the details will get hashed out in the next few weeks or months. guys, don't forget about the bipartisan group of senators that's been working on a core infrastructure plan. they also said last night that they're hoping to have their deal ready by the end of this week back to you.

>> so give us -- handicap it what do you think is really going to happen here >> i think it's very likely they pass this. they're calling it a unity budget, something that you supported by both the progressive wing of the party and the joe manchins, kry krystin synemas of the world the challenge will be, you know, coming up with the spending figure is one thing. coming up with a pay for is another. one assumes they've already decided at least how the plan for how much money they're going to need to raise because the budget resolution requires them to specify an amount for increasing the deficit over the next deficit they need the spending side but they also need the revenue side. we assume they have come up with it but they have not sthard yet. >> ylan mui, thank you.

>> coming up -- >> hey, joe? >> yeah. >> what do you think the market is baking in on what ylan just said >> she addressed what i was asking i've seen manchin say some things about how it's a lot of money, you've got to pay for it. >> i think they have paid for it. >> the old -- i don't know if he's going to stay in that -- stay a democrat, he's going to have to act like a democrat. >> not just him but sinema and i wonder what happens to the bipartisan deal. some of the republicans who had signed off are getting cold feet about all of the spending coming afterwards it sounded like they were working through a lot of the issues i think it was rob portman who said they worked through a lot of them and there are a couple dozen left i think there's still a lot of things that can happen and a lot

of moving pieces that need to be connected before this is a done deal. >> the journal and others, you know, people on twit ter, theres pressure on republicans not to be sort of moochs. >> yeah. >> like sheep led to the slaughter. yeah, great, let's do it thank you for letting us do a bipartisan thing and everything that wasn't in that the democrats pass themselves. you just look like you were totally duped. people are saying, do not do it. do not go that -- tom saying you guys would be crazy if you hooked on. stock futures down 14, 15 points on the dow, but the nasdaq is up and the s&p is up. we're going to run through earnings and some of the events that could move markets in the trading day ahead. plus, a new call from ark invest cathy wood on china

"squawk box" will be right back. . ♪ but entrepreneurs never stopped. ♪ 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. ♪ u.s. bank. we'll get there together. ♪ sales are down from last quarter we'll get there together. but we are hoping things will pick up by q3. yeah...uh... doug? sorry about that. umm... what...its...um... you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today.

girls... the chess club has gained an edge on our bake sales. we need more ways of connecting with customers, fast. i know some consultants with great ideas. can they help us improve our digital experience? absolutely. they've invested over $2 billion in tech. that could really help us manage inventory. and save us a ton of dough. then let's take back our market share. checkmate, chess heads. girls, i said “bedtime”!

every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the fastest, most reliable network with nationwide 5g included. and you can get unlimited data for just 30 dollars per line per month when you get four lines- or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

wood is taking on oil. the rising ev demand said she would not be on the long side of

oil. and china, there's a valuation reset. wood also said from a valuation point of view those stocks have come down and probably would remain down. wood's ark invest has been selling stocks like tencent and k.d. holdings. quarterly results are due from bank of merica, citigroup wells fargo and delta airlines we'll get the latest producer price index. fed chair jay powell testifies on capitol hill. let's bring in liz young head of investment strategy at sofi. liz, ican't remember the point that you made. the end result of the point are two competing narratives one favors value and one favors growth you might as well play both sides of this in some ways selectively. have i got that right? >> you're close.

the point was that we've got two competing trains of thought, two competing positionings and we have 1/3 of the people on one side say own growth because inflation is transitory, rates are going to stay low. 1/3 of the people on the other side saying inflation is a risk, rates are going to go up so you want to be positioned in the value trade and you want to own dividend stocks as well. it feels like an election cycle where you have 1/3 on one side, 1/3 on the other and the winner is whoever takes the middle when you position your cycle, you have to have exposure to both sides there will be times where the market flip-flops but there's no way to try to chase that flip-flop. i think as we get further into the year we're going to feel thatliquidity squeeze as the fed starts to talk about tape perfecting, which they should. some of that growth trade probably loses some steam.

>> how was i close >> you didn't use my analogy i wanted to use the election analogy. >> it sounded like exactly -- okay i don't know. >> you were right on, joe. >> you're talking about those -- in an election -- because when you use the election analogy, you said there's people on the left and people on the right and all of those people in the middle which in the election these days is about half a percent, i think, of the people that are not on one side or the other. maybe in the old days? >> i don't know. >> i think the independents. the independents are the swing vote. >> there's four of them left there might be one in each state and then their wife or husband is on the other side it's tough to find any common ground are there selective ways of doing this where you're not quite -- you're not quite as

strident about even valued growth certain companies that you can find that have aspects of both maybe that would work. >> sure. i mean, there's middle ground on either side of the equation, right? you can find growthy stocks that are priced at more attractive valuations you can find value stocks that have a little bit more growth in them and you can find more opportunity going forward. don't try to chase it. valuation is a terrible timing method another thing is a good place to find humility is in the stock market valuations are at a level that maybe doesn't make a lot of sense if we're looking at the price opportunity going forward, but what could happen is we thread the needle and the fed threads the needle well into the end of the year. what i mean by that from a market perspective and valuation perspective is as earnings grow and we're about to have a great

earnings season, as earnings grow, valuations naturally come down the market can still produce gains. it's just that the valuation multiple will look more realistic. the fed could also tloed the needle well by waiting long enough, where it doesn't have a narrative that will scare anybody. inflation is not a bad thing the bad part is if we have a huge spike in rates, that scares the market i don't know if that's going to happen. >> spent a lot of time in milwaukee. do you fear -- do you think the suns should fear the deer tonight? are you going to watch are you interested do you follow it >> of course i'm going to watch. yes. yes. born and raised in milwaukee of course i'm going to watch. >> do you think yanis will score 40 points or more? i have -- i can get an odds boost on whether he scores 40 or

more >> 41. 41 in the last game and we won so it's almost as if he has to, right? got to get that -- >> if middleton -- and drew holland. you've got a lot of weapons. i worry for the suns a little bit although they've got a lot of weapons, too. it's good. it's good. they haven't been around in a while. thank you, liz. >> fun to watch. >> i think you can watch if it gets to the weekend. i think it's going to get to the weekend. thank you. >> all right rooting for you, joe >> okay. see ya later coming up on the other side of this break, gamestop's rally adding millions to the coiffeurs of one state coming up in the next hour, the new ceo of marriott has a travel update. we have that and so much more as "squawk box" rolls on this morning. to be ready for whatever's next. that's why i have my finance team,

randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ this is hannah, she's a posh virtual receptionist at the ready 24-7 for a to answerworld. your calls and assist your clients. you can't be in two places at once. let posh answer. posh virtual receptionists. what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience

into strategies for the road ahead. we are morgan stanley.

quwelcome back blackrock just announced its shares 10.03. that beat the forecast revenue came in at $4.82 billion versus the 4.6 the street was anticipating it's up because of strong organic growth and 14% growth when it comes to tech service revenues should point out they are dealing with assets under management of $9.5 trillion. that's right, $9.5 trillion. that's up 30%. we'll be speaking with the ceo larry fink joining us at 7 a.m. eastern time we'll talk about what happened with the numbers how they have seen the in flows.

$81 billion of quarterly net in flows. that's 10% organic base fee driven by continued momentum we have active, alternatives, etfs and cash. talk to him about that and what he sees in the markets and maybe what he thinks about the energy companies and the plans that they've been making. they've been pretty active in pushing for change at those locations. andrew >> it's fascinating. so much to talk to larry about got a story for you. i would say this was a curveball for me not something i was anticipating because the state of alaska has become one of the big winners on the meme trade stock trade the state's revenue department owns 42,000 gamestop positions they have surged in value by 900% to $8.2 million not huge numbers in total, but

fascinating nonetheless. all of this according to a report in business insider they made a big bet in tesla ramping up from 2,000 shares to 127,000 shares at the end of december overall it rose to $9.9 billion. not bad for a state that was ranked, we should mention, last on cnbc's top states for business little news you can't use but i put it in the category of fascination. >> that's interesting. also with oil prices up so significantly, i wonder what that has meant for the state's coiffeurs and the money they used to pay out in alaska based on how much money they were getting in oil we'll see how that all plays in. it seems like it was a pretty good year for alaska when it comes to the markets. >> all relative. >> yeah, all relative. when we come back, dr. scott gottleib will weigh in with us

on the rise of covid cases on the unvaccinated as the spread of the covid vaccine picks up steams now yesterday's winners and losers on the s&p 500. hey lily, i need a new wireless plan for my business, but all my employees need 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.

welcome back to "squawk box" this morning daily covid cases are on the rise with states like kansas, oklahoma, missouri all seeing cases double just in the last week alone joining us right now is dr. scott gottleib also serves on the boards of pfizer and illumina. scott, there's so much to talk about in terms of what we're seeing around the country, mostly in the unvaccinated what's your big take away about what seems to be quite a move in terms of the trend >> that's right. a lot of the disease we're seeing is in unvaccinated people los angeles county doesn't have a single case in vaccinated people it's all in unvaccinated people. what we've said before is 85% of the population will develop some

form of immunity to covid. that doesn't mean we'll be at hea herd immunity. if you assume 85% we'll vaccinate 6% of the population and you further assume that of the people who remain unvaccinated, 40% have had covid, that's a safe assumption, i think it's probably a safe assumption, then you get to figures of around 25 million people who need to become infected with covid. they need to develop immunity with covid that's consistent with other estimates, other models that have been put out. they say 30 million americans will become infected with delta. that's between now and the fall. that's ballpark right. the outbreaks will be concentrated in reej gobs of the country where vaccination rates

are low. >> how concerned are you though that those that are vaccinated are maybe asymptomatic but potentially transmitting to others >> yeah, look, that's probably going on what we've seen in the data is people who are vaccinated and become infected and become asymptomatic are far less likely to transmit the da tampt that was the basis for the cdc to lift their guidance that vaccinated peopleneed to wear their mask we know that from the literature the delta variant itself is more contagious you develop high viral loads in the course of the illness. could even a vaccinated person be more contagious than with the old wuhan strain it's possible. we don't know that it's certainly possible. on the whole someone who's vaccinated is less likely than

someone unvaccinated. >> i know some places are going to do a third shot, booster, we're loathe to do it versus the side effects would be worse than the first or second. i don't understand the -- i don't know what you'd call it. what is the reason, the medical reason for that? if you've seen the spike protein, your immune system, each time you saw it again i would think you would have less than an effect they don't get the side effects from a third booster does anything happen if they see the spike protein from the virus itself do you have a reaction to it it seems like you fight it off and don't even know you were exposed. why does another booster cause you to have more severe side effects than the first or second

booster? >> it doesn't necessarily. pfizer, the company i'm on the board is looking at it so far the data looks encouraging in terms of the side effects profile consistent with the second dose and generating much better antibodies the question is do we need to boost more people, think the 1.34 million people in nursing homes, do they need another booster? or other older individuals who were vaccinated in january, they're eight, nine months away from the initial vaccination that's the population we're focused on we're not focused on boosting the entire population. i don't think younger, healthier people need a booster.

why is the government slow to embrace this i think there's concern talk of boosters will discourage people from getting vaccinated but i think there's a way to address this by telling people who get vaccinated, you won't need a booster. it will take you through the entire season. i think there's concern of political optics when a lot of people around the world haven't had a first dose there's a lot of considerations going on here and also because the data is still being formulated the reality is, if we plan to vaccinate the older population, we need to prepare now that's what france is doing and this will be a multi-month process getting it through the cdc and then you have to operationalize it. you have to start it soon if you want the boosters in people for

the fall surge. >> we had dr. anthony fauci on yesterday and talked to him about exactly that, all the reasons that the administration is a little reluctant to start down this path right now the moral considerations the political considerations all of these other issues out there. what does the science say? we should be following the science because this reminds me a little bit of the conversation at the very beginning of the pandemic when we were told you didn't need to wear a mask because they didn't want all the masks to get taken up and taken away from the health care workers. >> ultimately the fda and cdc will determine whether you need an emergency authorization to get a third dose, a booster. we end up with some complement of the population because it does suggest people further out from their vaccination and older individuals seem to be getting

infected with covid a higher rate than before particularly with the older train the company believes that's declining immune protection in older individuals. you have people in israel 6, 7 months out with their original vaccination. it may be a fact that the delta view view rant, it generates titers, then you can overwhelm the cells. final point i'll make here, it's not clear that we're going to need boosters forever. it may be the case that many people will need a third booster and they're going to get a much more durable response after that third dose it may be if you space apart the initial two doses you get a more durable response but what we've clearly seen with these vaccines is that you need some priming of

the immune system. you need to get one dose to prime the immune system and one that it could be a case after you get a third dose, they just don't know yet. >> scott, if you were living in one of the areas with higher numbers and you were vaccinated, would you mask, change any of your behavior? especially since there are populations that haven't been vaccinated to the extent you're talking about potentially asymptomatic -- asymptomatic spread, i'm wondering sort of how you're thinking about that, kids and the like and everything else. >> yeah, look, i think we're in a situation now nationally where public health guidance needs to be dictated by what the prevalence is, what the low calories being is. we're not going to have national mandates anymore this is going to be a regionalized epidemic. if you are in a location where

there's dense spread and there's parts of the country where it's very dense right now, i think people need to start taking precautions including people who are fully vaccinated if you are a vulnerable individual. someone who's immunocompromised and it may not work well you are in part of a country that has dense spread. i would be taking precautions. this isn't going to be a six-month wave of infection. the delta variant is going to move itself through the course of the country from august, september maybe through october. that's what the modeling will show the peak of this epidemic will be sometime around the end of september back to school season. that seems to be what is happening. unfortunately, the worst is yet to come. it's going to get worse instead of better. >> skotd, very quickly you said two shots, you need at least two shots to get some durability you need a third to get true durability what does that mean with the people who got the j&j shot with just one shot? >> i think there's going to be

some active discussion about boosting the j&j vaccine j&j is looking at a second dose as a booster we can open up that discussion it's not clear for most people whether you will need a third shot you may get durability out of two shots. what we're really talking about is a vulnerable population where you want maximal protection and there is some evidence, at least pfizer believes there's some evidence, i've seen the data, that there's declining protection over time with the vaccines in an older population in particular. i think that's what the israeli data so far is suggesting to us. >> doctor, thank you very much we appreciate t. >> thanks a lot. coming up, norwegian cruise lines suing the state of

florida. details coming up. plus, we're awaiting results from bank of america "squawk box" is coming right back t-mobile is the leader in 5g. we also believe in putting people first by treating them right. so we're upping the benefits without upping the price. introducing magenta max. now with unlimited premium data that can't slow down

based on how much smartphone data you use. plus get netflix on us, and taxes and fees included! you won't find this with the other guys. in fact, you'll pay more and get less. right now, pay zero costs to switch! and bring your phone -- we'll pay it off! only at t-mobile.

welcome back, everybody. u.s. equity futures.

down day across the home before the record closes wilfred cross, he's got some of the numbers. whiffle? >> hey, andrew we've got revenue coming in here 21.6 billion fractionally behind on that number the eps of $1.03 looks ahead of consensus which was 77 cents but there's quite a lot under the surface here to break down firstly, the provision for credit losses is a benefit like with jpmorgan yesterday. that's 2.2 billion and just a very, very broad range of estimates there. always very hard for analysts to come up with a number there. that flatters the bottom line a little bit of course, a very positive position to be in versus last year to be releasing from these areas. there's also a one-time deferred tax asset revision because of

the corporate tax rate going up in the u.k that makes that deferred tax asset more valuable. and that's worth 2 billion i think that number is going to be a lot more than analysts expected and probably flat is that eps number relative to expectations that $1.03, 26 cents better than expected eps number. expenses is a key area for bank of america including over the last couple of quarters. that comes in bigger than expected 15 billion the forecast is 14.1 billion they have pointed out there's a one off item of 800 million including 500 million donations to the bank of america charitable trust, charitable initiative it's about 900 billion -- 900 million higher than people were expecting. they're saying 800 million is one off so we have to dig into

that expenses if they are occurring will be seen as a negative net interest income has come in at 10.3 billion. forecasts are for a bit higher net interest margin key area for them very rate sensitive bank 1.61% that's down from 1.68% in the first quarter. we're expecting it to tick down a little bit because of what yields did perhaps that has ticked down a little bit more than expected. in terms of the capitol markets, investment banking, 2.1 billion. fixed income 2 billion that's a little bit more behind the forecast 40% year over year similar to jpmorgan and goldman sachs equity trading, 1.6 billion. that's ahead of expectation which is 1.4 billion that's up 33% in the year over year that puts bank of america in the best on equity trading yesterday goldman was down a

little jpmorgan up a little up 33% not surprised to see that share price decline a bit. because of the expenses a bit hotter than expected it's a little bit more disappointing despite the headline eps looking good. a lot to unpack there, guys. >> that's what i was going to ask you, wilf. we're down nearly 3% on this news is it the net interest margin? is it the expenses what do you think was not baked into the cake? we had a number of analysts come on even in the past week it seems like almost expecting what you just said. >> i think it was both of those two things i think that expenses, which have been absolutely key to them over the last five, six years when brian moynihan has really delivered for this bank expenses always top of the agenda every single quarter people don't mind if the expenses is a one off if it's

pandemic related they need to get on the call if that's the case. this number 15 billion is ahead of 14.1 billion. there's a line number that it is a one off. brian moynihan, they're not adjusting their full year forecast forex pens for the next couple of years, then i don't think people like to see the expenses number higher than expected net interest margin, 11.61 is down a lit more. >> cnbc viewers will get to hear from brian moynihan on those issues with you at 3 p.m. later today. when we come back, airlines set to report. we'll get you ready for delta's numbers plus an interview with the ceo ed bastian at the top of the hour we're right back after this. undeniably versatile. unlimited 2% cash back.

this is the card built for... ...real life. (dad) she's gonna be a drummer. (cashier) yeah she is. that's gonna get loud. (dad) right? (vo) the new wells fargo active cash visa credit card. unlimited 2% cash back on purchases. that's real life ready. 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. hello! hey, rob, there he is. workday. the finance, hr and planning system for a changing world. ♪ ♪

when technology is easier to use... ♪ barriers don't stand a chance. ♪ that's why we'll stop at nothing to deliver our technology as-a-service. ♪ - i'm sure you've heard how grammarly improves your writing, but let me tell you how grammarly business helped my sales team. look at simon. since simon's team started using grammarly business, we've closed more deals. with suggestions to sharpen his writing clarity and overall confidence, simon's pitches always stick the landing, which leads to more of these and these. learn more at grammerly.com/business.

s. delta set to report in a few minutes. looking for any guidance on the return to the skies. international and business travel ceo ed bastian will join us in an exclusive interview at 7:30 a.m. earn. american reported early the ceo said it was moving in the right direction as it flew 82% more in the second quarter than the first quarter. this is happening today. do you see this? guess who is ringing the closing bell >> kenny >> symbol is up. it has been a long road.

one thing -- it is tough to make money. covid and alls that happened in terms of marketing. the triple crown guy had it on its pants. in the marketing, when you are putting your shoes in the thing in the tsa line, the wheels. they got the marketing down. we'll see where it trades. up >> up up and away. a huge lineup on tap including black rock's larry fink and tony capuano. details on the delta variant and more

♪ ♪ experience, hyper performance that takes you further. at the lexus golden opportunity sales event. get 0.9% apr financing on the all 2021 lexus hybrid models. experience amazing.

>> fed chairman jay powell to deliver semiannual monetary policy report. looking to stress he is not trying to exit the central bank's easy money policy vowed that the current strategy will remain on the employment

inflation goals. coming up, larry fink will join us. delta airlines set to report in a few minutes. we'll bring you the numbers. the first to report.

every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the fastest, most reliable network with nationwide 5g included. and you can get unlimited data for just 30 dollars per line per month

when you get four lines- or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities. good morning it is a day of news makers and news breakers on "squawk box."

larry fink, ed bastian and earnings still coming. waiting to hear from city news and wells fargo. key inflation data about 90 minutes away after that hot read we got yesterday second hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc here with more going on this morning. us equity futures this morning bank of america, black rock. the dow off marginally nasdaq looking to go higher. s&p 500 up two points.

there are some headlines jay powell set for two days of congressional testimony. he'll appear today to speak to the banking committee tomorrow to face questions about a recent surge in inflation which powell has maintained american airlines says it expects to report a positive cash flow. american was running -- burning about $100 million per day a five-fold increase over the same period a year ago cruise line operator norwegian has filed a suit against florida to strike down on the ban florida has to require proof of vaccination. norwegian is sticking to the

rule of proof. florida still plans to fine them blackrock, the company beatests on the top and bottom lines. breaking down the numbers with larry fink, the ceo of black rock which is the world's largest asset manager with now $9.5 trillion in assets managed. >> hi, becky >> looking through your numbers, it looked incredibly strong in total net in flows strong numbers and growth. 14% growth and technology revenue services 13% increase stocks are weaker which tells me, look, there are very high expectations we've bid up a lot of these

stocks the way through is that your take on it. >> the quarter was very broad based. the different enteral you mentioned about the 14% technology growth. we had $63 managed products and it just represents our voice is even louder and more important to our voice worldwide we are willing to share our wallet and continue to be vested in our future the purpose is to

stay in front of the needs of our clients and anticipating the needs. i believe this quarter again, shows how to move forward and continue to look forward about the voice of long termism and try to move away from the tic toc of the ups and downs of the market related to the stock today, i can't relate it to where the stock is going to be all i can do is focus on what we are doing for our share holders and making sure we stay focused on our share holders >> when you talk about the t tick tock of the market, there

really hasn't been any what concerns you or makings you think that trend will continue >> the amount of stimulus has never been greater the am of physical stimulus has never been greater there's no question from my conversation with clients. their bigger concern is how to put their money to work. where should they put it and how should they think about it especially europe. europe this time around versus 2008 and 2009, aggressive monetary policy. very aggressive stimulus great deals of cash from the sidelines. i do believe we'll see the world rebounding economically. i was in italy they had a 9% decline in gdp in

2020 it will take them 18 months to get back to where they were but they are in a great trajectory so we are seeing different metrics. there are fingers i worry about that it will be more systematic over time. how the federal reserve navigates that will be very important i amworried about th delta variant and can that slow down asia. we have seen a disconnect between countries moving forward in vaccination and those late on vaccination and focusing more on isolation. isolation worked before we had a vaccination. now, these countries that were late are going down in isolation again.

so, we are going to see this unevenness in the world today, so i'm not trying to suggest there would be a great line up ward but overall with the stimulus and the amount of cash looking to be put to work, i believe the trend line is still going to be upward maybe not as fast. maybe it will be very moderate as we digest how the world is able to handle the delta variant and the speed which things will advance and what will be the inflation out six months in the year you've spoken about everyone getting closer to retirement age recent articles written about

the fed and everything the fed is doing with well intentions is actually just killing savers people that are doing well given the fed's action are people that own assets income and equality is getting worse. everybody that owns a house or getting stocks are getting marked up but not for the right reasons or the underlying organic-type growth. savers are continuing to be slammed. are you not worried about the fed's action at this point i don't see how they get out >> inflation is higher they are stopped the more they don't stop, the more savers get hurt so what's the answer long term >> i think you framed it really well and i've been talking about it for years thinking about the silence crisis of the retirement as central banks are low, savers

are getting slammed. you are correct, asset owners are the biggest beneficiary of monetary policy. a year ago, two years ago, i need a more fiscal stimulus or less monetary stimulus there is no question savers are being slammed using your word. that is a persistent problem and will remain a bigger problem much of this has to do that this is the reason we are seeing savers are more confused and some of those are finally entering into asset priorities you can remember on your show, you asked what should be your asset allocation i said 100% in equities. inquestionablely, we are going to have to address, what i would

call the silent crisis of retirement people may have to work longer because they are not earning the same returns on their savings. on the other hand, if you had a balanced portfolio, you are doing quite well you may be getting hurt on your bond or cash allocation but equity allocation, you have done quite well those who own homes have been big beneficiary of rising asset prices i think the big question is where is inflation out six months it is my view that inflation is going to be more systematic. it may be more of a navigational change i think post world war ii our

policy was based on consumerism. we always believe the cheaper products for americans was the best way more americans could have more things i would say the last five years, we've navigated away from that foundational belief. now we are saying jobs are more important than consumerism we are now focusing more on national security issues and bringing more manufacturing back that is going to problem lead to a systematically more inflation. what we are looking at now around the imbalances around supply and demand and the back order of so many things. i'm hearing from every ceo that they have huge price increases that they are passing on here in the united states and in europe. many had to do with we had such efficient supply chains. those are now showing what i

would say the weakness around this imbalance and then moving supply chains around different parts of the world including china. all of this is just changing our network. another thing i wanted to say, i wrote this and said this in venice, if we don't focus on the demand curve in our energy transition, only focusing on supply, we are going to see rising energy prices i raise the question, what does that mean if we have $100 oil or $120 oil i firmly believe we'll see wage increases. all of this spells we'll have 3.5% inflation in the coming year >> help us with this there is a view that inflation should be good for equities.

depending on how you are describing this, it may not be which one is it? >> the big question will be if we are able to pass on the prices and it doesn't change the margins or we are able to create better productivity which we've been able to do, then inflation is good for equities if inflation is going to be absorbed in the margins without productivity then we are going to see flattening or declining margins. that's the pivotal question related to equities. what i've heard in a lot of conversations with many ceos, they are passing that on and that's why i think there is a little more inflation. the other big question, if i'm right that we'll see very large wage inflation, that may be considered good inflation too, andrew we never thought having deficits

this large would be good, yet, we are able to handle our own deficits i have my own doubt. we have to see the mood or market do we differentiate inflation between wage and other inflation. we'll have to spend more time focusing on margins to understand if this is good for equities or bad. >> another question unrelated to inflation but related to black rock's role and the increasing aggressiveness which you are pursuing things around climate i know you just gave a speech. i read a fascinating essay who famously wrote about buffet. not judged on exxon or any

stock's performance. he says that the problem is that the people casting votes are policy setters rather than economic owners. administrative conveniences they were chosen to manage nothing and that their voting power is an accident. i thought given all of the things you've been trying to do, i'd love to give a response to what roger was saying. >> i would disagree with the term it was an accident. w one chair, one vote. the only power we have for clients who awarded us that money is the power of the vote i don't think roger spoke to the investors who have asked black rock and other firms they want us to be a fid uchry

and to be focused. the ups and downs of the market. people can buy or sell and somebody could manipulate or change the course of a company and we are still going to own that company after the activist leaves this is the type of conversations we had in 2012 and 13 on this show. as a fiduciary, our investors are asking us. i'm having conversations with owners of the assets we are at the nexus between the owners of the assets and the companies of the assets we invest in. those owners are looking forward to us having that vote in representing their shares. we are looking at other ways of changing that. we are looking at the

possibility we could democratize that vote and looking at different ways to think about the vote but our responsibility as an asset advisor to these owners is to make sure that they are being representative to protect their long-term interest here is one fact nobody actually thinks about too, last year, last proxy season, we voted on 165,000. 165,000 shareholder and management proposals we voted on 63,000 directors we talked about a few over the

course of the year most of it is done very smoothly without any controversy. there are only a few votes that have any controversy that has media attention. we can ask, you know, roger, has he thought about the 165,000 votes and how few of those was really raised to the attention of the media and was very controversial. it was a fraction of our voting on behalf of our asset owners. >> larry, you just said something that caught me off guard. you now have the technology you might be able to soon allow every one of the people who invest with you to be able to vote their own shares. is that new? how quickly could you make that happen >> we have talked about that we are just investing in things like that. the question is, do asset owners

want that responsibility or when they entrust us with their assets, do they want us to do the vote we are working with them and talking to see if this is of interest it is mixed. some say we are paying you to be our advisor and for you to focus on those long-term issues. other of our clients are saying, this might be interesting. maybe we want to take back that vote and have that responsibility and we'll give it to you when you aggregate all those votes. i don't think it is something new but something we are looking at going forward we talked about this investor day. i don't believe this is anything new. >> in october of 2020, you talked about how retail investors -- this was much broader than what we've seen with robin hood and other areas. is that still the case what portion of america is

actively making sure they put money aside? >> i'm very excited about seeing how investors are focusing on even meme stocks and other things like that, as you said, robin hood as we improve financial literacy and focus on markets and the ups and downs and translating that the issue about retearment will be as much of a problem, we are now focused on things like equity markets i look at this as a possibly good first step. if they remain to be speculating on a few stocks and that's all it is, thens that all it is. i will say, again, what happens on those shares, those types of trading activities is totally

unrelated to our mission at blackrock, i don't have conversations about what is happening there. long-term investors are looking at how to build long-term investments over a long period of time. you've asked me about crypto and bitcoin. again, in the last two weeks of business travel, not one question has been asked about that that is just not part of the focus off retirement and long-term investors. we see very little in terms of investor demand on that type of thing. they might not come to blackrock for that type of demand. for all of the insurance companies and iras, the discussion is how should i navigate my portfolio over a long horizon >> larry, thank you for your time today it is very good to see you i hope next time we do it in

person >> i would love that i was in person with a lot of my clients in europe and we had a lot of hugs. >> thanks. >> thanks, guys. >> fabulous conversation >> we may not hug. >> we are not huggers but we'd like to see you. >> i'd like him here in studio that would be good i'm ready. >> you are a hugger? >> i'm doing a lot of hugs but still avoiding the handshake i think the hug is better than the shake. >> you can sanitize your hands you can't sanitize your body coming up. this morning's biggest pre-market movers and delta about to land quarterly results. we'll preview the numbers and be joined by the company's ceo ed bastian. d!

the aflac duck is just covering for sophie. same way he got me money to help cover her hospital bill when my health insurance didn't pay for all of it. but this isn't fair! that's exactly what i said! but then i learned health insurance isn't even supposed to cover everything. wait...for real? for real real. luckily i had aflac. aflac!!! get help with expenses health insurance doesn't cover. go aflac! !mm-hm! get to know us at aflac.com. zero-commission trades for online u.s. stocks and etfs. and a commitment to get you the best price on every trade, !mm-hm! which saved investors over $1.5 billion last year. that's decision tech. only from fidelity. the world's first fully autonomous vehicle is almost at the finish line what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq-100 like you become an agent of innovation with invesco qqq what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders

offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley.

. welcome back to "squawk box. futures are now in the green as

you pointed out, earnings will be getting filled up in the session so far no surprise with the earnings in fum force right now. there's a question about the comparability estimates. revenues came in below analyst forecast they blamed it on net interest issues trading revenues coming in lower than last year as well tough comparability there. bank of america shares off about 2% right now it has fallen about 8% entering this earnings report next up, you've got an analyst down grade

peloton. those are off as well. the reason why, partly because wedbush have taken this from outperform to neutral and cut from $115 from $130 prior. they are saying peloton's next leg of growth will not have as much of the pandemic tail wind so peloton shares off 2% we'll end on another story with apple. it hit a record high yesterday and will likely again today if these hold up 2% partly because of a bloomberg report that says according to people familiar, they've asked some of their suppliers to ramp up as much as 20% for next generation wireless iphone roll outs in the next year to two years out there. if it does portend a bigger demand, those could make another record the market cap at $2.4 billion

>> trying to avoid talking about golf you do know we have a golf channel, don't you >> i did so the producers asked me to send it back over to becky but i'm always happy to talk about golf >> so it is the producers? nbc cover the open on the weekend too. it is important to note that who do you think is favored? >> i got to figure you have folks like john rahm >> two jordan spieth >> he's got to be a fan favorite as well. i'd like to see rory in the mix as well. >> koepka is next. rory, dustin johnson, xander are all plus 1,800 then you get guys like justin

thomas and dechambeau k koepka and jordan spieth. >> you saw the practice round? >> no. this is why i ask you these things and it makes me mad the producers try to go around me. >> there was some great footage of those guys all together that's a power group there a lot of chatter in the golf world because justin thomas made a big putter change going into the scottish open. >> he did. >> the one i thought was interesting because words matter in our business, phil mickleson tweeted about the controversy about what you call the british open the open championship or the british open >> tgs it is golfer of the year champion golfer of the year. >> so phil mickleson tweeted

that back in the day, the person who awarded him the trophy called it the british open the earl of ansley >> he was the one who decided it it is not an ugly american thing. they named it that joe, not the first time today the producers tried to produce around you >> i'm going to stop trying. >> trying to hold nature back. >> maybe they don't know who signs those paychecks, nbc >> not us. still to come this morning, travel and the consumer in focus. one half hour, two special guests delta ceo ed bastian marriott's chief executive he'll be here too. stay tuned we are watching "squawk box" and this is cnbc

♪ ♪ ♪ ♪

delta out with better than

expected second quarter results. >> andrew, as you mentioned, better than expected second quarter results. a loss of $1.07. revenue better than expected they were pretax profitable in the month of june. that's what they are expecting for all of q 3 and the second half of this year. let's bring in ed bastian, ceo of delta airlines. as you were looking at the quarter as it played out, what was the acceleration like within the last month let's say june >> i'd say in the last 60 days we are in a full recovery of our business led by the u.s. consumer u.s. consumer travel is at or beyond the levels we saw in 2019 we are working on businesses coming back. international is a little

choppy we were able to take fairly large losses we had been losing $3 billion a quarter down to a loss of $900 million. in it the third quarter, we are expected to stay solidly and stay profitable which is the main data point. to say we are going to be profitable and free cash flow positive just a year removed from the worst crisis we've ever seen >> you are seeing all domestic leisure travel back to 2019 levels right now on the corporate side, we are still down 45, 50%, so to speak? >> if we look at domestic travel for corporates, it was only down 20%. in june, 40% so it doubled. the month of september, as labor day comes.

as businesses begin to reopen. they'll be about 60% and they'll continue from there. >> last time we were here, you mentioned you had some corporate clients coming in. where is thehes tennitating? >> just getting offices open we still have many big corporations our offices are still closed and people working from home when we surveyed our customers, over 95% tell them they will be open and back in our offices no later than the end of the year that will be the catalyst. people need some place to go if we weren't here operating, you wouldn't be here

we need that to happen we'll see another significant increase in office reopenings. international has to reopen as well >> asking you about the delta variant, is that pulling back in demand at all or is this sort of accepted to a certain extent that you are going to see this >> we haven't seen 60 60 to 90 days out. with the news of the up tick, we haven't seen any cancellations the vaccinations work. the vast majority of our customers are telling us they are vaccinated we are learning to live with this >> how optimistic are you that you will see the eu and the us

lifting restrictions on people coming from the eu the europeans optimistic right now. >> i wish i could tell you i just don't know. it is a source of frustration. we've been giving them all the science as to the vaccination trial. the white house isn't ready to release and open our borders yet with the uk and the eu americans are ready to go almost anywhere they want in europe except the uk. our business, until we get full transfer of travel back and forth between our couldnntinents will be limited. >> a long-term question, i wonder how you view it i think it might be a freinemy

of yours, wheels up. we'll see them on the stock exchange we'll see your friend ring the bell the term, if you can't beat them, join them. do you thinks that a viable way for a certain traveler to get where he's going it is not a competition for delta? is it a next step after first class is wheels up you have a partnership you entered into a couple of years ago with wheels up >> absolutely, joe and a shout out to kenny and the wheels up team as they go live today. we are great partners. about a year and a half ago, with he were contributing our assets with our private jets together with wheels up. we came out of that as the number one share owner in wheels up we are still the largest share

owner in wheels up it is a partnership that grows together, when you think about travel many of the wheels up customers are not exclusive private jet travelers. they probably travel commercially more so the value we've created. if you put a deposit down on wheels up, $100,000 travel, you can use that on wheels up or for travel on delta. one of the obstacles has been the size of the department and the question of how often are we going to use this. we've eliminated that question >> is that like a round of financing when you contributed those jets what is the valuation then are you rich now how much money did you make on that, on paper >> we are not rich yet we are working on it those jets were leased

a lot of that business was contract we didn't even own the assets. we put the asset levels on the cost going live today, the value of our investment is over $500 million. by the way, we did the same thing with clear our friends over there they went public a few weeks ago. our eco system is pretty massive. we are all friends and work broadly in the travel space together >> i want to ask you buying a number of used aircraft getting great deals on relatively young planes to add to your fleet but you are about 20% smaller than prepandemic how worried are you to be able to add the staffing over the next year to get flight crews or

maintenance. whatever the job may be. is this going to be a harder push than you initially expected >> it has been the most difficult aspect getting the staffing in place. the delta staffing, we are hiring a couple thousand people this quarter and will hire another couple thousand people the people who push the whe wheelchairs, clean the kitchens. we expect our domestic business to be back well over 19% by the end of this year we have the capacity, the seats, the people we are ready to go. >> ed bastian, ceo of delta airlines reporting better numbers solid for june and they expect that to be the case for q 3 and q 4. back to you.

thank you. ryming up. ma at ceo will join us live. we'll be right up. see all of yo! why is jerry so... popular? it's been like this ever since we started using workday. what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry. they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world.

when we come back, our own

eamon javers will be here with us some news that could be the talk of cyber security today. first, marriott ceo is here with us on set. we'll talk to him when "squawk box" comes right back.

ah! my helicopter has better wifi than this. you thinking what i am? upgrade time. don't worry i have the best internet people. hello xfinity. get me xfi pronto. that was fast. yep. now we just self-install. and we're back baby. do more of what you love when you upgrade to xfinity xfi. baby ninjas? i love it.

marriott saying their july 4 numbers were very strong but consumer travel still lagging. with us tony capuano do we have anything to talk about? we covered everything on break >> it is great thanks for having me >> let's go over what we were talking about off camera the overall environment on a scale of 1 to 10 in terms of the bounce back. some things are above but other things are still down 50%. >> that's right. you almost have to look by segment and by region of the world. looking at asia.

in march, business was ahead in march, little different mix talking about 4th of july. we had a smashing 4th of july. terrific pricing power 10% above average daily rate if you look at the luxury tier, we were almost 35% ahead >> that's because of pricing >> that's what we do not year over year we do year over 2019 for your business >> i miss arne i love that man a lot. i know everybody does. i would always, i don't even know who marriott is anymore he would go, you better learn.

>> two reasons really breath of choice but two groups our customers love that breath of choice. we have round numbers. 7,600 hotels we own less than 12. our owners and franchisees love that breadth of choice >> we heard from he had bastion on the return. >> fall will be telling. we are about 50% in special corporate versus 2019. if you look at the secondary markets. we are about 80% it is markets like this where

folks haven't gotten back to the office yet fall is telling. school opens kids get back to school. you see some of the big banks saying you got to get back to the office we think the return to the office will be a catalyst. >> in terms of your revenue, how much is big urban cities >> again, 7,600 hotels, i almost have to go market by market. business and group are critical to your ebita. >> keeping your eye on delta and the variant. we had delta airlines on talking about the delta variant. it was weird do you have someone -- you must have a staff that looks at vaccine policy around the world and how it applies to marriott >> we have two things. at the very outset, we assembled a group of health experts to really guide our decision

making then we had government affairs and teams. these are in a inconsistent set of rules >> be glad you are not the cruise industry. you don't need to be quite as weary? >> no. absolutely >> in countries that are still a problem, what do you need to stay in a hotel? do you need a proof of vaccination. >> from the outset, owl of our associates have to be masked guests have to be masked today in the u.s., if you go in hotels, if you are fully vaccinated, you can wear a mask, you are not required the same is true for guests. >> you haven't mandated vaccines for guests or associates >> we have not mandated but

we've encouraged we have offered some financial incentive and it seems to be taken. our number is ahead of the u.s. pace and aggregate >> air b&b, is it a frienemy >> my friend brian was one of the first to call and congratulate me. i would say friend we launch the marriott homes and villas prepandemic, we only had about 3,000 listings we are not doing shared bedrooms and couch surfing. these are multi-bedroom, large homes. >> tony, as you know some housekeepers busted up a potentially terrible situation by noticing and finding a whole

raft of guns, ammunition and body armor by going into the room do you believe and would you like to see a requirement that housekeepers go into every room daily? should there be something like that how are you thinking about these kinds of issues? >> like many of these, we have to balance the safety of associates with privacy. particularly after the tragedy at mand lay bay. even with a do not disturb we have a policy to do a health check on a roam after a couple of days. >> happened to stay few nights ago in the city. a big sign, we are coming in every 24 hours to check on your well being and how you are

doing. that's where we are today. just to make sure you are okay and everything all inclusive. i don't see marriott as club med marriott is that something you need to do >> we are growing that business. in my old role, people would say how do you develop our growth strategy i would say you listen to what guests want. our leisure guests like the way they purchase and because of our size and scale of our portfolio. >> that's an understatement. >> we didn't win every deal but rare we didn't get to step toupt plate and compete. we have seen dozens of fabulous resorts getting built we didn't even get a chance to compete we've seen a rapid growth and

our guests love it >> if i'm booking a place, i just say use my marriott rewards here and they always are >> that's the right answer >> you have more than anyone right now? >> that's a good question. we are happy with our portfolio. we have 30 and we are happy to keep adding on >> "squawk box" will be right back s take a different turn? i wanted to help protect myself. my doctor recommended eliquis. eliquis is proven to treat and help prevent another dvt or pe blood clot. almost 98 percent of patients on eliquis didn't experience another. ...and eliquis has significantly less major bleeding than the standard treatment. eliquis is fda-approved and has both. don't stop eliquis unless your doctor tells you to. eliquis can cause serious and in rare cases fatal bleeding. don't take eliquis if you have an artificial heart valve or abnormal bleeding. if you had a spinal injection while on eliquis call your doctor right away if you have tingling, numbness, or muscle weakness.

while taking eliquis, you may bruise more easily... and it may take longer than usual for bleeding to stop. seek immediate medical care for sudden signs of bleeding, like unusual bruising. eliquis may increase your bleeding risk if you take certain medicines. tell your doctor about all planned medical or dental procedures. what's around the corner could be worth waiting for. 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. ♪ ♪ i am tiffany. and this is just the beginning. ♪ ♪

good morning, earnings season we'll bring you all the numbers and stock reaction senate democrats say they have a new $3.5 trillion budget agreement the question now, can it pass and will it jeopardize the bipartisan infrastructure plan and we have an exclusive interview with former treasury secretary steven mnuchin and looking into cyber security with some very big news the final hour of "squawk box" begins rightnow. good morning and welcome so far, so good.

we are indicated and they've turned around. the supply is still up based on the value. the default trade has been green for how long reopening fed. >> a big news if there is a downed day we continue to plow through earnings citigroup and more >> eps 285, forecast 196 it looks like a very big beat on that line. similar to bank of america saying current quarter tax reflects certain tax haven't found a number for the size of that some tax benefit a one off likely because of the uk corporate tax rate change and

the deferred tax asset because of past losses provisions for credit loss line is a benefit to $1 billion compared to a $2.4 billion net interest margin is 1.92. forecast was 1.89. let interest income $10.2 billion. the forecast was $10 billion doing a little better i than expected similar themes $1.8 billion. a bit better equities up 30%, 1.1 billion fixed income down like the others coming in at 3.2 billion coming in. nice little beat we have to figure out in terms of the tax and qualifying the scale wells fargo, 20.3 billion.

the forecast was 17.8. it seems to be an out size game in the venture capital business. not typically something we talk about but the decent beat. eps forecast was for 95 cents per share. interest margin just above 2%. net interest income 8.8 billion. the forecast was 8.9 billion we are not too bad there the expenses at 13.2 billion fractionally below and that was an area bank of america was slightly below really a big revenue beat on the none business part of the business digging into, of course, the cfo of wells fargo will be on

closing bell later today >> we've now heard from a lot of the banks. five or six we've heard of maybe one theme is they've all done fairly well we knew they were all going to do fairly well it has been hard to boost the stock price even though we see these great returns and numbers coming in from every financial >> stocks are up 30% to 40%. that's not just bounce back. that building on the gains they got particularly on the third quarter loss in terms of share price return the commentary yesterday was very, very strong but the guidance on things like net interest income because of yield curve moves, not particularly encouraging. so we are not shooting out the lights yet even though the economy is very strong that is coming through today

there is a bit of nuance city versus wells fargo versus bank of america on that we might get some stock differentation the theme there is that pandemic induced party isn't over yet yes, it is declining last year q 2 and q 4 are not as fast i'm not sure the european banks will stale take part in that to the same extent. they are holding on to big gains and not declining as fast as expected >> thank you we'll be watching some is of these on closing bell today. other key earnings out from bank of america and blackrock b of a, three cents above

estimates. about $800 million are said to be one offs. we'll hear more about that and get more on the conference call. catch bank of america ceo in a first on cnbc interview at 3:00 p.m. eastern time. then blackrock, it beat profit and revenue for the second quarter as assets under management surged to $9.5 trillion. lots of new inflows. more than $80 billion for the quarter. that is a new record for assets under management larry fink joined us live and weighed in on some of the current economic anxieties including inflation. >> i do not believe inflation will be transitory, that it will be more systematic over time how the federalreserve and other banks navigate that will

be very important. >> we'll get a new move over the hour remember yesterday, the cpi was much hotter than expected. pointing out larry fink today trends continue like we've seen in the markets lately. >> trying to decipher what this means in the market long run >> we'll see we've got an interview with former treasury secretary with some news that could be the talk of the cyber security sector today. stay tuned you are watching squawk on cnbc.

that's a good sign we are joined now on set by someone who hasn't been here in quite a while. he's our own eamon javers here with an interview on the cyber world. >> it is so great to be here >> is it possible to be better looking in person, you did it. >> you are >> i still have not mastered the art of taking off the jacket >> you are here. >> i'm in full body spanks here. cyber security firm led by former treasury secretary steven mnuchin following $389 million

from previous. the company founded in 2012. secretary mnuchin's firm is investing $200 million sieker security is number 32 on cnbc disrupter 50 2021 list. our guests loining us now. leo, your company, after all congratulations. what are you going to do with all of this money? >> thank you very much it is a very exciting time for us we are going to accelerate our growth it is kind of a massive pressure on companies when it comes to ransom wear. hackers particularly from russia have become particularly aggressive companies need to find a way to

develop themself we have developed a platform and to keep growing like we are right now in a hyper growth. >> when you look at the $275 million, that's a lot of money is this your last round of financing before an ipo is that where this company is headed >> the natural round for companies is to keep greing. naturally, the next step is to go public. >> do you have a time line for that >> we don't have a time line right now to disclose. >> let me bring you in to get that time line out of you that investors might be wanting to watch for. this is a big investment for you and for liberty. why this company and why this sector we are very excited about participating and leading this round. when i was treasury secretary, i was very focused on the cyber

risk i was responsible for protecting the entire financial services industry and the irs this is something i've been focusing on for a very long time and is a major focus of this new business we really like this company. >> can you give us some insight on that time line? 1245 a 2021 thing or out of these? >> is that use of the capitol or something to put in to grow the business this is a long-term investment whether the company is public or

private. i'm very indifferent using the business to focus on the customer >> with all the ransom wear we've seen are they doing enough based on the financial system? >> i believe this is one of the few sectors they've started with early on and work closely with the treasury and regulators. i think the treasury is in good shape. having said that, there is always new risks this is an area that people continue to investment

from my standpoint, technology to protect national security is one of our biggest priorities. >> i want to ask you something a little broader in scope here this legacy of january 6 we have seen the former president out there saying the election was stolen from him you worked for former president trump. you know him well. when the president says the election in november was stolen. do you believe that was a lie? >> let me just say, i was very, very involved in the campaign in 2016 i traveled with the president across the country and was inter rally involved in everything in 2020, i wasn't able to participate in the campaign. i also was focused on a massive amount of work in covid, so i'm really just watching this from the outside.

>> but even from the outside you were the secretary of the treasury you are access is it a lie for the former president to say that the election was stolen? >> what i'm saying is i'm focused on our investments and business going forward i think the president's policies were extraordinary in covid, whether vaccines or other issues all the work we did under covid. the bipartisan support we had to get the economy recovered. >> okay. i think that gives us a sense of your position there. let's talk about the economy going forward. we have this big infrastructure pending. is that something we need and will pass? i've had the opportunity to speak to senators and senate republicans on this. i'm really glad to see the bipartisan work and that's

really important that is something i'm really proud of there is an issue the senate and people can work together another thing is to focus on the infrastructure where people can come and work together i'm concerned about this $3.5 reconciliation bill. if you look at all the government spending, we spent $2.3 trillion, $900 after the campaign i thought we were pretty much done nancy pelosi wanted to do $2.3 trillion before we did the 900. they did another 2.3 i think we should focus on infrastructure and move on, the economy is in great shape. >> i know the people on the set here have questions for you on and off. >> i don't mean to belabor this

point. i think you did a remarkable job as treasury secretary when it came to the problems covid and the economy. we also recognize we want to have a great economy and great eco system for business. part of that requires a democracy based on truth i don't understand why given your stature, you are not willing to engage on what the president has said about this election i gather you are trying to dodge the question i think for the sake of the country, the economy and business, you should. >> let me be clear we have a great democracy. it is working. it worked. we had a transition of power i hope the president considers running again down the road. i thinks this is an

extraordinary economy. i couldn't be more proud of how we worked with the house and senate had we not passed those bills, we would have had a great recession and not recession and we are seeing one of the greatest rebounds we've ever seen >> we just spoke with larry fink he said he doesn't agree with the fed. he does not think inflation is transitory what do you think? >> i just saw larry on i was going to comment i agree with larry notwithstanding my close friend jay powell who i have a lot of admire operation of. i respectfully disagree with his not being concerned. the inflation numbers are in the 4.5% to 5.5% range it made sense before covid

treasury models won't predict what happens after the massive amount of fiscal response. i think it is important for fed to make sure they get ahead of the curve so they don't end up with 4% or 5% interest rates which would really slow down this recovery. >> you would like to see them slimming assets immediately? >> i would i think these assets particularly in the mortgage area were important last year. these were the varying functioning. the fed has to normalize it. it is a question of how fast and how far. >> based on what you know, there is a fascinating debate going on in washington, which is should the united states retaliate. presumably the nsa the question that everyone is debating is should the united states hack back and hit these

or is that not the appropriate role for the u.s. military and u.s. intelligence? what is your view on that? >> first, ransom wear and payment and cryptocurrency like bitcoin, i put policies in place to make sure we have complete transparency in cryptocurrency this should be treated like cash it shouldn't be treated like numbered bank accounts in switzerland. you can't deliver $5 million in cash you shouldn't be ably able to send bad guys $5 million in bitcoin. if they need to move it, they should go through bsa compliance we need to crack down on the payment of ransom wear and insist they get licenses from

the treasury any companies that pay this is likely sanctioned. i have extensive knowledge of what they can do and can't do and comment on on. if president biden can comment on it, i think it is important to enforce those redlines. >> we've seen some of the great traders and investors. a lot of companies has it evolved at all or are you still a no bitcoin, never, no inherent value kind of guy

>> i think my view has evolved i think as it relates to bitcoin, people can buy no different as it relates to gold. i don't personally want to have it in my portfolio i do think it is very important that this is an asset that has a complete bsa and regulatory compliance and under the occ last year, we approved that banks could custodian it the reason we did that is we wanted to make sure that this was becoming in the regulated world. my real focus is that people want to buy it, that's fine. some will go up, some think it will go down

it should be in the regulated world. >> sounds like you are still evolving you are more or less saying, hey, if people want to buy it and lose all their money, it's fine for me, it is not. >> similar to a store value, similar togold and gold has been very different. >> it has been a stored value for hundreds of years. people think the math behind bitcoin does have an inherent value. doesn't sound like you are from yet. >> from central bank standpoint, i'd rather hold gold than bitcoin. >> fair enough >> with what about the idea that

the united states should have digital dollars that ever day people could buy i think i know what you are going to say your signature was on the dollar what do you think about the digital dollar >> that's an issue we focused on i don't know what their current thinking is. the fed and the treasury should do the work on this so it can be considered i consider the digital dollar being very different it's really like a stable coin. we wouldn't want money taking it out of the feds and holding

dollars in the future the digital dollar, i think there is a real need across border and that's an area of investment we are focused on. >> there is so much talk, is it backlogged and trying to get supply and demand. do you think this is here to stay or some of the hot numbers we've seen recently are going to pass i would say it is more likely than less likely this is real inflation and we have to be careful it doesn't get out of control. i think 4 or 5% ongoing inflation would be quite concerning

2% or 3% would be fine if i were the fed, i think they need to be careful not to wait too long and get ahead of the curve. >> congratulations on the big day for you. we'll get you back on the air before too long. i know we have some data coming up fascinating morning here >> very interesting to see with all the cyber security news we've seen how this gets played up how it develops >> the question is, if you are an investor, which of these companies do you want to put your money in? there is a whole group of cyber companies and ceos that hired them, how do you tell the difference it is sort of a black box if you don't understand the technology. how do you figure out what these guys offer and how i do

differentiate. >> thank you very much glad to have you here. >> great to be here. we've got some breaking news on fed chair jay powell's testimony. getting over to steve. powell is before the house financial services committee today. there it is 8:30 he will tell them the fed will maintain the target until employment and inflation reach fed's goals. he is not giving much here in terms of higher rates. we will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of policy if we saw signs the path of inflation or longer-term inflation expectations

>> and those still, quote, a ways off and will continue discussion of asset purchases of upcoming meetings and provide changes and notices on the issue of inflation >> the fed chairman has inkr increased notably. the fed's expectations and by base effects and strong demand that have experienced bottlenecks and will be on a range consistent with the fed's goals. just want to get the producer price index. well, the producer price index for june, up 1% on headline we are expecting up.

baseline revisions do come slow. in january, it was the all-time high too we are not far away. strip out food and energy, still sticky up 1%. more than expected food energy and trade up and this eased back up 1.7 our last look. year over year, big numbers. headline up 7.3. of course, we look at year over year x food and energy up 5.6. x energy and trade, up 5.5 the last one, the only one a bit under expectations we look at these numbers, i know the word transient is the word used highly interpretational. is covid transient, maxism transient? we don't know. the episode and chapter we are going through is hotter than

expected new zealand will quit quantitative easing on july 23rd chairman powell was i'm sure listening to that. >> bringing steve back, these comments made, let's put them in context to the hotter than expected inflation numbers and larry fink saying he doesn't think this will be transitory that six months from now, we'll have more. former treasury secretary said he thinks this is not going to be transitory. by the way, he'd like to see the fed start cutting back on those asset purchases immediately especially when it comes to this >> powell is being a little defiant here he's not listening to rick, steve or larry and fink and santelli he's saying, you know what, we will offer policy only if

inflation is materially and consistently above where our goals are or where we expect it to go. he is looking at these issues and saying continuously it will mod rate in the months ahead he's not really making any concessions on policy saying this gradual wind down will happen with asset purchases. he's not following the bank of new zealand. i'm not hearing or seeing any concession to the higher rates actually from powell this morning. >> looking at the futures to go up and the inflation prices from yesterday. >> i don't think it is necessary to consumer prices than the yield. it wasn't until investors nearly

shunned. rates shot up and they were a lot more sticky in the afternoon than in the morning but they are coming down again. listen, it doesn't matter what we see the only thing that matters is what the fed will do and when the market will heat up and when it is obvious the transient will heat up. remember, everything is in real time now nothing the markets prepare for too early. you can't afford to hold a position. >> basically, you don't blink until you see the whites of their eyes in terms of what fed may or may not do? >> exactly there are some tantrum out there. trust me >> thank you when we come back, we have more on the markets check out the price of crude oil after reports that suddeny arabia and united a rarab

emirates have reached an .0isement. 754 where it stands right now. stick around we'll be right back. entire line of vehicles at the lexus golden opportunity sales event. lease the 2021 is 300 for $379 a month for 36 months. experience amazing.

>> shares of lululemon up. analysts calling it their top pick in apparel and brands buy rated on the list of $447 price target based on positioning and including men's and inclusive sizing >> and next up, estee lauder issued with a strong buy rating. $355 is the target buy price they like the positive over the return of social gatherings work and school those shares up. we'll end on shares of broad come and marvel. strong exposure to cloud computing and storage trends keep an eye on those chip

stocks more markets coming up after this break what's on the horizon? the answers lie beyond the roads we know. we recognize that energy demand is growing, and the world needs lower carbon solutions to keep up. at chevron, we're working to find new ways forward, like through our venture capital group. backing technologies like electric vehicle charging, carbon capture and even nuclear fusion. we may not know just what lies ahead, but it's only human... to search for it.

welcome back senate democrats, i should say, they have reached a new multitrillion dollar budget

agreement. we have more details now good morning >> good morning. senate democrats have struck that deal to start moving president biden's economic agenda and a $3.5 trillion packet if successful, it would be the most profound change for american families in a generation >> we are very proud of this plan we know we have a long road to go we are going to get this done for the sake of making average american lives a whole lot better >> democrats are using the fast track budget reconciliation process to pass it meaning all 50 democrats need to get behind it no republican support is required ranking republican on the house and budget committee tweeted, quote, the very same day we find out inflation growth is the highest, washington democrats are celebrating trillions more in spending.

democrats said the plan is fully paid for throughing through increases in corporate and individual taxes i'm told it does not address the debt ceiling that does not come into effect where treasury will likely use the mooerdss this fall the reductions remain in flux. president biden will have lunch with senate democrats today to discuss the path forward back to you. >> thank you we'll see what happens later this week. it will beinteresting. will problem continue to go on, joe. >> i don't know. it has been years. we've been trying for infrastructure how would you handicap it? coming up, jim cramer's first take on the trading day ahead. a conversation on earnings and

market's reaction to the ones we've seen heading to break, catch ark invest ceo today at 4:00 that building you're trying to buy, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you see it. you want it. you ten-x it. it's that fast. if i could, i'd ten-x everything. like... uh... these salads. or these sandwiches... ten-x does the same thing, but with buildings. sweet. oh no, he wasn't... oh, actually... that looks pretty good. see it. want it. ten-x it. yum! ♪ ♪ ♪ digital transformation has failed to take off.

because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work.

down to the new york stock exchange i want you to talk about the banks but i want to have a couple of viewers left after that you got anything really

interesting? what can you tell us >> it seems like if you weren't doing that well, people love you. wells fargo wasn't doing so well, now people like it citi wasn't doing so well, now people like it it's a silly script. if you are good, people like you. fur bad, they don't like you citi group not as bad as we thought. there's a reason to buy it bank of america, wow, really good but rates aren't going up so sell that one joe, there's kind of a script that bothers me. you can't really distinguish these they trade together. >> i loved your question, now i'm a big fan of robert lowenstein you got these shares but no one put you in charge of every

personal opinion you have? who made you king? >> i thought that was an unbelievable interview at that critical moment, i said to myself, why is he voting my stock. another moment maybe someone should >> or give you a reaction. >> we are so interested on the essay is that this would be the index fund isn't being measured on the performance of the funds themselves like an asset manager if your performance is not being

measured, that was his argument. >> we should start thinking of these people as elected officials. would we elect larry fink to administer i know he would say the election is to give us the money. now we discover they are doing that, i want to elect someone else people say you can walk feet, b found that discussion extraordinary because i realized it's a total disenfranchise, but it's done by the fall. fortunately i like his views more than i -- he's really smart. that was a good interview. >> jim, the other issue is an agency problem which is actually that most retail investors actually don't vote. maybe you want a professional voting and i would argue to you that larry fink singularly has changed the conversation and boardrooms in america more than perhaps anybody else, and i want to think for the better. >> yeah. >> i talk about it all the time, engine number 1. we're at $12 million, and they get larry fink

we are finding right now a revolution if you're in the board, what's fink thinking. i want to keep my job. fink is the most important person in the investment firm. i think he's a great guy he's a great interview, isn't he how about the fact that he tells the truth on every question. isn't he a joy >> i like he bris tled a little at andrew's question. >> but he answers it he answers every question we ever throw at him. >> he bristles, that's a great verb he's a bristler. you gave him 22 straight minutes. that was fantastic i got to thank max for that, executive producer that's the most important interview of the quarter. >> thanks, jim >> i'm not kidding >> we'll see you in a couple minutes. thank you. >> all right for more on the markets let's bring in barry knapp at ironside's macroeconomics.

and chief investment officer and barry, i'm going to start with you. what we've seen with these inflation numbers, what larry fink said today, what steven mnuchin said today, all of them saying they think the fed's going to have to raise rates sooner rather than later how about you? i think you agree with that too. >> well. >> let's say start shrinking the assets that they're buying same thing. >> that was what i was actually, how i was going to respond yes, unequivocally, and you could include your friend rick reiter, my friend as well, in there he tweeted about that last night and talked about how the mortgage purchases in particular are creating a dynamic we've got house prices rising faster than they were in '05, '06. the correlation of all the various cities is super high implying this is really being influenced by macro factors like the fed purchases. they should not be supplying

this level of accommodation in the market at this point in time for sure, and you know, i never expected powell to make that announcement at the humphrey hawkins testimony today, so s&p's fell 15 yesterday, they're up 16 today, sort of offsetting that risk. but two weeks from today is the next fed meeting and there's going to be an even more heated discussion about parring back those asset purchases. i think they really need to do that for the broader health of the market because they are just suppressing volatility in such a way that as rick santelli implied, means that you're going to have a bigger reaction when they end this. and the biggest reactions last cycle when they ended their various qe programs came when they were buying mortgages hand over fist. so this is an increasing risk that they need to start walking back from. >> and brenda, your biggest concern is that right now there are a lot of people who are investing today who have never lived through a cycle where rates are rising and you see

inflation picking up at the same time how should people prepare for that >> yes, i mean, it is something that, you know, most investors today really have never invested through an environment like that, and so that's what certainly keeps me up at night thinking about how we're going to muddle through this, and i think we could expect to see certainly a pickup in volatility in the market in the second half of this year as we go through these environments where the fed likely signals that they're going to start tapering perhaps faster than what the market expects. and when we really learn what true inflation numbers are after we get to this period where there are these transitory factors that have increased and those start to come down, but what are you left with are we left with a higher inflationary environment i think we probably are. i think the market is likely to be quite volatile ainvestors really try to figure out how they should be positioned. but i think what we're doing is, you know, sticking with companies that really have

pricing power. we have it overweight in commodities as well. we think that's -- there's great supply demand story there across many parts of that complex in addition to that it has been a good inflation mary hedge and we're staying cautious when it comes to bonds that is the biggest head scratcher for us is the reaction in bonds with the ten-year being as low as it is. we just don't think it's sustainable over the longer term here. >> and barry i'd ask you the same question. what do you do with that you don't want to be in bonds, you don't want to be in cash if inflation is on the rise there's a lot of money still on the sidelines, money that has to be invested somewhere. >> to brenda's point, i wrote a long essay, which is actually outside of my client pay wall. people can go to ironsides macro to see it. what i did is i kpiecompared the early '60s when we had very similar monetary policy, lost

interest in being the dollar gold standard and what it meant for equities and initially, it was fairly favorable. earnings growth accelerated because top line revenue growth accelerated, so it does bode well for the commodity or reflation sectors materials, energy, financials, industrials, but bonds underperformed through that whole period. now people are jumping to this 70s an lol yo analog. you've got to go through the 60s first, i would be long on that >> barry, brenda, wai nt to thank you both for being with us we'll see you both soon. "squawk box" will be right back.

this is cynthia suarez, cfo of go-go foodco., an online food delivery service. business was steady, until... gogo-foodco. go check it out. whaatt?! overnight, users tripled. which meant hiring 20 new employees and buying 20 new laptops. so she used her american express business card, which gives her more membership rewards points on her business purchases. somebody ordered some laptops? cynthia suarez. cfo. mvp. get the card built for business. by american express.

final check now on the markets. the futures have started moving even higher than through most of the premarket session. we now have the dow up triple digits and the nasdaq maybe more importantly up triple digits >> got to be powell. >> we're going to be listening and see two-day testimony, it comes fast and furious, not enough ever for me i wish it was like every day we got to hear fed speak. we do from someone, just not necessarily jay powell and the ten-year this morning

was back above 1.4 i saw that it briefly was back below, but still seems really, really low we'll do it again tomorrow, which we decided would be thursday >> yes >> half the show to figure that out. >> it did. make sure you join us, "squawk on the street" is next good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures do extend some gains as fed chair powell on the hill today says substantial further progress is still a ways off lots of earnings from the banks, apple is poised for a record high our road map begins with inflation nation powell preparing to testify before congress says inflation has increased notably. we'll tell you what you can expect to hear. plus, the big banks report earnings we're going gto giv