bouncing right about the flat line we've been watching treasuries too. >> jordan spieth, go jordan, jordan 5 under leading the tournament, leading the open right now, one of the early favorites and an american. >> an american that does it for us today, we will see you right back here tomorrow, right now it's time for "squawk on the street. bye bye. good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber markets will get another chance to react to fed chair powell when he appears before senate banking in about a half an hour. jobless claims at a new post-covid low cathie wood agreeing with fed chair powell that the surge in prices will be temporary why she says we are in a, quote,

risk-off period. plus, why gm is issuing an important warning for some chevy bolt owners. don't charge it unattended don't park it inside, it could cash fire. and mark wahlberg's backed fitness chain set to debut at the nyc, don't miss the interview with adam gilchrist and mark wahlberg himself. inflation, why purchasing mbs isn't affecting housing pricing or demand, what'd you think? >> well, i go with what charlie scharf said, which is the ceo of wells fargo, red hot housing market he said listen, we're at the peak in used cars. that's because the last month was down 1.3 that jives very well with this early morning conference call are from taiwan semi, which is now committing a great deal of money to make the auto shortage no longer a shortage i think they're going to solve

that problem so a major area of inflation i think is going to be under control. >> you were saying we need to start seeing that reflected in data, and we got fiphilly fed today, prior 87. >> it's happening. and look, the supply chain had to catch up. now, against that, david. >> yes, sir. >> we're getting just too much negative input on delta variant around the globe, and absenteeism again, it's not set settled. there are many countries where there's simply not enough vaccines the taiwan semi conference call directly talks about the lack of vaccines in taiwan to be able to vaccinate everybody. geopolitical, by the way, the chinese are charging them and the united states is giving them, but you can see -- >> is the delta variant a market spoiler? is that a fair point somebody was trying to make ththat point to me saying it's scaring investors. >> yes. >> you believe that? >> yes, because there's too many breakthrough incidences.

>> even though the death rate, thankfully is staying low, and that's what we should ultimately be playing for there still will be the reaction to the caseload that will slow things >> there is evidence that the death rate is spiking. >> is there? >> yeah. and among younger people, too. >> it's no more -- it's apparently i hate to get into the science, but it's obviously much more contagious, but it's not clear that it's more deadly. >> not clear evidence starting to come in that it might be and carl obviously around the globe there's been a much -- you know, we've done very well in this country vaccinating. there are many other countries key to our supply chain that frankly have not gotten vaccinated, and the word is from people at the cdc if you have not been vaccinated, you will get it there's no people who will not get it. >> the problem there is that the vaccination rate in this country is down 54% in a week. we're back to rates that we had

in january >> in terms of the number of people getting -- >> and we have excess vaccines, a lot of excess moderna. we should send it to southeast asia where they're desperate or to india where they're desperate. >> we're not going to send it to china, but there they had a vaccine of their own that's not proving particularly effective either >> they've done an informal deal with biontech. >> is this partially behind what has been a stealth rotation lately and not talking about some of the big tech names which you know have done quite well, apple amongst them i'd take a look at snowflake over the last five days. >> have you? >> and i'm looking at it right now, jim this thing was 274 on the 13th of july. >> the word is is that this is a blowout quarter. the previous quarter was not a blowout quarter. this is the quarter where you're seeing the power of the model. remember, the model is a usage model. you don't pay a flat license, and you don't pay a contract for

software as a service. it's a usage model there's a lot of companies that just don't use the cloud that given moment, and frank saluteman's model i think is vastly superior. >> don't you think this also is a reflection of quick rotations in terms of the high multiple software stocks that have sold because of what you're talking about? >> frank's outfit is not really affected, carl, at all by anything involving covid formation of even lambda, which we're now worried about. just getting the whole greek alphabet in, because frank is totally -- he's got his people all over the country, and he's adopted a very -- what would you say, david, a diffuse. >> pro-remote work. >> ultrah hybrid. we know what he did with service now, he's going to pull this off. that i think company's model is a very winning model why should we always have to pay

every minute for a cloud if we're not using cloud. >> we want to get to that, also katie hue berty on apple morgan stanley, 185 beats 165 revenue ahead. thick i guess was a slight miss. >> everyone missed fick my hat is off to the work that sarah and you heard quite frankly that to me when i listen to the cfo of wells fargo, they've done the best on this frankly because they were so bad, but morgan stanley, it was a good quarter the fact that the stock has run so much is against it, my travel trust of those three -- >> by the way, you've said the same thing after every single earnings report this week. >> i've been right. >> i'm not saying you're wrong. >> i want to take that back, that made me sound like a total jerk >> the stocks have been down all week the earnings reports have been

generally strong, but the market has not certainly risen to the occasion >> yesterday bank of america was down. >> that was one of those -- if they could ever get a fed rate increase, they would do well wells fargo, i think it's really important to point out versus 2019, travels up 11. entertainment up 38, restaurant up 28 versus credit card use up 13 by the way, stable there, reduction in expenses and how about this, they took out 2 million square feet of various branches and this is charlie scharf now ready play offense. he did say that a tremendous number of his people he's hiring now are going to play offense. almost everybody earlier was defense. >> now we've got evercore adding visa mastercard on some proprietary data that shows that cross border spending is going

to grow. >> is going to come back both companies are really well run. i think the one everyone is buzzing about saying that square could be the equivalent investment of jp morgan in 1871. >> they went back to 1871. >> literally the first line of the report. >> the first line. >> that was a big year >> that was right before the panic of 18 whatever they do say square users, it could go to 150 to $200. when you make that kind of call some clown on cnbc mentions it, i am the clown, i'm crusty, and i did it i just took that. >> we're monitoring that morgan stanley call as well certainly we'll bring you anything of interest if we hear it from mr. gorman. >> i'm waiting >> don't wait too much. >> when we come back, though, a fitness chain backed by mark wahlberg going public today. he's going to join us exclusively at the big board talk about f 45 training along with the founder adam gilgilcre.

a lot more "squawk on the street" is straight ahead. ok, at at&t everyone gets our best deals on all smartphones. let me break it down. you got your new customers — they get our best deals. you got your existing customers — they also get our best deals. everyone. gets. the deals. questions? got it. but, why did you use a permanent marker? because i want to make sure you remember. i am going to get a new whiteboard. it's not complicated. only at&t gives everyone our best deals on every smartphone. like the samsung galaxy s21 5g for free. before we talk about tax-smart investing, what's new? -well, audrey's expecting... -twins! grandparents! we want to put money aside for them, so...change in plans. alright, let's see what we can adjust. ♪♪ we'd be closer to the twins. change in plans. okay. mom, are you painting again? you could sell these.

lemme guess, change in plans? at fidelity, a change in plans is always part of the plan.

team usa is ready for the olympic games... lemm ...and so is sharon!ans? she got xfinity internet and mobile together... so she has the fastest wifi you can get at home... wow! ...and nationwide 5g on the most reliable wireless network... oh my gosh! ...plus up to 400 dollars off her wireless bill! wow! cheer on team usa with xfinity internet. and ask how to save up to $400 a year on your wireless bill when you add xfinity mobile. get started today. fitness chain f45 training will begin trading right here at the new york stock exchange this morning, looking to price around $15 a share. joining us in an exclusive, celebrity investor mark wahlberg

and the company's ceo adam gilchrist. >> congratulations. >> very excited to be here >> thank you very much there's a lot of interest in this name and face we know that fitness in the past year has just been around the block. lots of questions about whether we would ever go to the gym at all again. what's the future of that given this interest today? >> i think it's the exact opposite people are excited to be, you know, rejoining their communities and being part of something special again. not many folks that i know, you know, want to do zoom dinner parties, and the same applies for the gym. so we've seen our second month cohorts actually visiting f45 more frequently than pre-covid-19. >> mark, what attracted you to the model? you obviously could have had your choice of any kind of fitness business plan to get involved in. >> i've been approached by a number of fitness concepts, but the results that the memberships are getting, the members, the franchisees, the success they're

having and the model people at any level of fitness can come in and do the workout somebody who's clearly in the beginning of their fitness journey working out with an elite athlete, never the same exercise twice it's absolutely fantastic. >> mark, there are people that think that peloton changed the world. a lot of people would rather do it individually. i myself am much more a group enthusiast it makes me work harder. how do you feel about getting people off the peloton and back to where they can compete, of course, you know, fun with the group? >> you know, look, die hard fitness enthusiasts who don't have the schedule, got to do it in the middle of the night, or early in the morning, eventually that becomes stagnant, boring. you want to be in there with the energy of people working out with you alongside you, inspiring you, pushing you and supporting you for me i was always the guy who would work out by myself at 4:00 in the morning by the time i went into the studio, i didn't want to do anything else.

>> you should have given me a ji jingle, i'm up at 4:00 in the morning. >> when we opened the studio, people were in tears to be back in the studio and back in the community. they have such a support system. whatever they think their fitness goals are, they're always surpassing them. >> if you're not ripped, people go to planet fitness, they have pizza day. how do you make sure people who go to f45 they don't feel excluded you're kind of jacked. i'm not jacked, why would i want go go to a club where people -- >> i think the most important element is the fact that we actually have a judgment free zone, and we call our studios sanctuaries. so we actually create an environment where we don't have any mirrors in our studios, which is really important. b, we don't have any scales, and c, we applaud people for just turning up for us the goal is to get people in three times a week, and

that's really the paradigm shift between planet it's an incredible business, and us, where we actually want people to turn up and get great ra ra results because we are a premium product where they pay anywhere up to $3,000. >> being a public company ceo is different than running a private company. obviously you'll have a board and a bunch of shareholders. what are you going to do with the additional capital you're going to be raising? >> well, we're going to be opportunistic with our capital we wanted an extremely strong balance shaet. we've been fiscally conservative since 2013, having never had an unprofitable quarter, and there's not many startups growing at this sort of breakneck speed that can boast that we recently purchased fly wheel because they had invested $65 million in technology and we acquired that business for 25 million, but the reason it was such a great investment for us was not that we saved 40 million on tech costs, was the fact it would have taken three years to

build out that leader board technology. >> mark, what about your approach did you always feel like you want to be in the gym? or i would think certainly you've got to as well have something at home that you can do or goes back to sort of the online experience that so many people are now having. >> it always depends on what i'm doing work wise, if i'm preparing for a role where i have to get in shape or out of shape. i just put on 30 pounds for a movie. it was fun eating whatever i want for a couple of days, and then it became a task. if i had my choice, i'd be going to f45, you get in and out, 45 minutes, you warm up, cool down, every day is completely different. it's 40,000 exercises in the data bank. >> yeah. >> so it's incredible. >> we've seen a few fitness models where the business model tolerates a high degree of churn, right or at least customers who sign up and then don't come in. what's your churn target >> we're looking at net sales

growth our churn is low single-digits per month. an average studio of ours has 175 members, and our break even's only 75 members if you actually look at the style of community we're trying to create, a, it's very small, but b, the by-product of that is it's very sticky everybody turns up at 6:00 a.m., they know each other's name. i think that's very important, they're trying to create community. community for us is more important than the actual workout. we want people to have a third place to go. they have home, work, and f45 is that spot, it's a sanctuary for people to turn up and have a fun 45 minutes of the day. >> fly wheel was very well attended by women. it was not necessarily -- don't want a gym that is all dominated by guys. can you keep that up i always thought that was extraordinary, a lot of women great in structures and then they got laid off. can you bring them back? >> of course we can.

our business, what's interesting is if you go back ten years in group training, excluding cross fit, 99% of attendees were female at the moment f45 has 75% female, 25% male, and our age demographic is 25 to 42. what's really interesting about our company is we're the first company, first gym ever to go on to a military base and train soldiers to be ready for combat. that is absolutely remarkable. secondly, there's 4,000 colleges here, and we are the only third-party gym ever to go into a recreation center in a college, and people would argue whether stanford's a great school or not, but the fact is they got rid of all their group training and appointed f45 and then usc signed up, ut, we're looking at our tam being obviously stretched out through colleges and recently we signed our third high school. so again, another accolade for us because we're the only third-party gym on the planet to

be in high schools, and there's 25,000 high schools here like let's help these kids get fit. and you know, we think -- it's not just getting fit, but the mental health benefits of feeling stronger and, you know, being active is really important and we're ultra excited about the high schools, and you know, we've got great -- that's going to assist us with our over 50s workout. >> you've got it all covered. >> and mental health has become very important before we wrap up, mark, we talk so often here about direct to consumer and the changes in your main business. how are you approaching things you know, we're just curious this terms of how you think about the platform, direct to consumer i think you've got a movie coming out soon, and the compensation structure i assume would change as well for you given you're not seeing the back end that you're accustomed to. >> and look, people decide when and where they want to view their content, right we want to make stuff that's entertaining that people want to

watch. i've always been a big supporter of the theater system, people going out to experience theater, but i also love what netflix is doing as well. it's just changing it's constantly evolving, and we want to continue to make great content, and they're making fantastic content. >> you're not buying amc stock here like a meme ster. >> not necessarily you've got to be able to continue to evolve, so i love to go to the theater. my next film is coming out in the theater. i always support that experience >> has it changed the way you do a deal, though is there a lot more money now? >> yes, it depends i just financed my first film. i've never done that before. everybody told me i was absolutely crazy i own the film now, and i think it's going to be something really special i'm taking risks on myself all the time, things that i believe on that's why i bet on f45 the way that i did i see the results people are getting, and i hadn't seen that anywhere else. somebody working out who has never been in the gym before working out with somebody who can absolutely kill it, and they're working out together.

>> i think people are beginning to think of you as an entrepreneur as much as an actor. >> absolutely. >> congratulations on that >> hey, i've got a family. >> this guy's invincible >> mark wahlberg, adam gilchrist, we will watch xflv later today. thank you, guys. >> industrial production out a couple of moments ago. let's get to santelli. >> yes, carl, our june industrial production came in light, about 2/10 light. it was up 4/10 of 1% it's the lightest since april. but do remember in february we had a minus number even though it is a bit light, we know there's constraints on supply chains. one of the bright spots is utilization rates. it's 75.4. capacity utilization is also a couple of tenths light however, it's still a post-covid high, and do remember if you look at february pre-covid in 2020, which this is the highest number since, at that point it

was 76.3 so we are slowly chugging back to that level. a bit of a disappointment, but at least moves in the proper direction. "squawk on the street" will return after these messages. t'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!

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. take a look at futures here, a few minutes before the opening bell and jay powell in front of senate banking which begins at 9:30 a.m. eastern time we'll try and take a little q & a down the road this morning claims, ten-year, bank earnings and a lot more all in focus. we're back in a moment

welcome back

we've got about 2 1/2 minutes before we get started with trading here at the new york stock exchange mad dash time, my friend what do you got? >> david, there's always a question whether sometimes it's better to be never than late, and there's a piece out by citi today, chris stanley, terrific guy, saying that maybe it's time to go long amd and short intel people have been doing this trade for ages, but that doesn't stop him from suggesting it. my problem with it, it is true, indicating that there's enough capacity for advanced micro to get the advanced chips, but the idea of coming in -- and my travel trust is long amd so i'm talking against my position, the idea of going underweight intel, the gross margins are going to be worse than we think, in the 40s, but i like advanced micro because they're going to close the deal with psi links.

>> spreads have widened because of perceived antitrust risk and continued questions about china. we showed a five-year amd. you were early i would point out of course as i like to. >> almost all of 1600% of that you'd been saying buy the stock. >> lisa su took me to school when the stock was at 5. i admitted that i was an intel hawk, and she suggested a 12-step program against me being, and it was radical. it was not a -- by the way, i love her company, but that particular dinner i was caught quite unawares, and i never went back i was convinced that at the end she's right. i was wrong. back her now, daily is finally backing her. >> it's a little late. >> yes. >> and that's being kind >> let's get a look at the opening bell here on this thursday at the big board. you just saw them with us, f45's

ceo adam gilchrist, mark wahlberg celebrating the studio's ipoat the nasdaq. hardware company hillman solutions celebrating a listing via spac did talking to those guys make you interested >> yes, i did not realize how little they -- i think that the fly wheel business was a terrific business. they spent a lot of money on it. i think they're a little pricey versus planet fitness, but i also know that a higher end gym can be quite exciting for people who are looking for engagement against each other competition does raise your ability and your strength versus beating peloton at home, just kind of doing it all by yourself >> my wife was new york state champion, was a fly wheel

enthusiast and is ready to go back you didn't know that about her. >> i'm always learning something new about lisa. >> she hates to talk about herself doing anything positive. she's very self-effacing like me. >> i like her. >> it helps the marriage. >> it was great hearing wahlberg's comments about streaming a few moments ago. netflix, by the way, highest since april 20 as they are going to make this -- >> people were talking about faang. >> pushing the gaming hiring a facebook veteran and on that gym, gme shares were down 3% premarket at least. >> gme obviously the meme sters are struggling for more money. we do hope they're not going to use the child credit to try to keep these stocks up. >> that's a different story. >> general mowtors is a suboptimal story in terms of charging -- >> indoors, outdoors, you got to keep an eye on it at all times, don't bring it inside.

>> he could have one. >> there's game stop shares. here's gm. >> yeah, down almost 1.5% on that news. >> amc, which we asked wahlberg about, the battleground there is the july 30 puts there are people who want to break amc. a friend of mine, i'd hate to see the stock broken, but the market is what the market does >> it's up 17x for the year. i mean, people talk about it collapsing it started at year at $2. >> still got a $17 billion market value. >> adam is playing offense >> we've skdiscussed that, yes. >> may be on the 5 yard line going the 95 yards. >> well, i just watched a guy ring the bell who's invincible, vince pa poll lee. >> you did mention. >> he's an eagle >> here's the issue. the stock has been down ever since adam aaron said he's not

going to swing any more shares if you were a short seller, that was the moment to pounce the difficulty was what happens if he does 100 million shares. but he took that off the table, david. there's a lot of money betting these memesters really got to keep it up now, i have now decided at david's guiding not to mention any of the small caps that people have been allegedly pumping and thumping i don't think it's worth it to bring their attention. these are stocks that are on the red hot griddle. let's put it that way. >> we do have ray jay this morning upgrading delta to strong buy, 58 target. jim, their point is that we're seeing some delta variant worries kind of creep through, travel names, but they still are poised for a rebound in business travel, and they say it's too strong to ignore too hard to ignore. >> i heard them speak with phil yesterday. really terrific. the one thing i would say is

could you imagine when they do get back into the international business, you know, delta has a very big traffic to europe in general, and they're obviously doing nothing. so they're not getting anything from there so i like that call very much. i really like that call. i think that american big traffic, delta big traffic in america. i don't know, when i fly delta, i mean they're full i recently flew delta and they were just full that's anecdotal obviously. >> yes, it is. >> but ed bastian pretty much confirmed that my anecdotal is empirical. ceo great interview. >> yes, i actually -- >> we do some great interviews. >> we do the network does a lot of excellent work. >> closing bell does janet ye yellen. >> that's later today. >> but we do mark wahlberg >> who's got more followers? i mean, let's just face it, when

it comes to followers, we're crashing closing bell. >> wahlberg, i'm look at his arm right now. >> he's so jacked. when people confuse me with him, i always suspect they have 90, 1,000 vision >> that's a good arm nice watch too. >> what do you got some sort of man crush? >> wow >> guys, i wanted to do a faber report what do you think about that >> spac faber report. >> i don't want to lose you. >> no, it's not spacs, it's black stone and aig. it's one of the more important corporate news stories of the morning. >> how much more money can black stone make >> they have continued to transform themselves from what we still sometimes describe as a private equity firm into really what is a broad based alternative assets manager with a great deal of permanent capital. this deal with aig, let's go through some of the particulars and give you a sense as to what's going on. aig remember is going to spend

their life casualty business, 9.9% stake in that retirement cash flow business is going to be taken by black stone. they're also going to be managing 50 billion, so they're transferring essentially saying, here, you manage this money for us obviously the premium money we bring in and that will go up to almost 100 billion over six years. and again, they're paying 2.2 billion for that 9.9% equity stake, and they're also requiring their affordable housing assets, and they're doing that in their core plus nontraded reit, i believe. that's individual investors in there. it shows you the breadth of blackstone the company has $118 billion market value to put that in perspective, it's only 20 billion shy of citi group. so it is an enormous financial services company >> but they're the largest homeowner in the country >> they were with invitation homes, yes but remember, it became its own company. >> it's a great business of owning homes.

>> in this case, obviously we all know insurance companies in the need to try to create some sort of return, it's very hard to do in the corporate bond market or in any bond market, and you do have more of that ability here perhaps with blackstone working those assets. you just can't buy enough liquid bonds. it opens up some yield opportunities and some thought there. it frees up capital, obviously, for the insurers themselves, and it is sort of an evolution that continues for blackstone >> i got a question. >> and it moves them closer to credit the liability here is 40 years you don't need liquidity if you're an insurer. you want to generate some sort of return. what's the question? >> who is the most humble billionaire in america >> fthere's a lot of humble billionaires. >> how about somebody that works at -- >> john gray >> humble billionaire. >> kind of annoying. >> you think he's annoying >> no, it's annoying that nobody ever says they don't like that

guy. everybody likes that guy. >> he does a tremendous amount of charity work. when he does it, he actually does it. it's not like he has a staff. >> obviously as president, ceo, steve schwartzman. >> you introduced me to him. >> i know. >> anyway, it was an interesting deal, and it does show sort of the changing nature of these firms. they don't own an insurer, though, remember, so they're not taking on insurance liabilities unlike apollo, which actually do have insurance subsidiaries, but they continue expanding. remember last week when i mentioned the financing of that -- it was all credit funds, there were no banks. this goes back to that idea of where are you going to be able to find some sort of additional yield? that's leverage loans. and that's the kind of stuff now that they're going to be able to invest in on part of these 50 billion. >> i'm worried about the -- this whole closet finance because we had it in 2008 >> the risk is being taken on. >> but maybe the fed is on top

of it. jay powell seems to have -- >> the fed said the banks at a certain level aren't allowed to do it. >> everyone keeps asking, what would jamie -- jamie dimon feels like per mete yus bound. >> because of the weight of the world? >> he's kind of -- the bird keeps pecking at him, which is financial service square, the best opportunity since -- and if you were unbound, he would do a much better start. like upstart which is unbound. he's bound. >> they are heavily regulated for obvious reasons. we did have a financial crisis that almost brought us to the end, and it was a result of risk taking in many of our large financial institutions by the way, on that note, morgan stanley, just always remind people, press releases are great. we rely on them, but it's also worth taking a look at the 10q merrill lynch's 10q's you never

even saw the initials cdo, not once. >> what are you saying >> not at all. >> just the opposite >> reminding people -- and it's a very different time, i'm just reminding people that it is important to remember that these are still difficult companies to understand the risks they're undertaking sometimes. and i mean, you know, did you know credit suisse was doing what it was doing? of course not. >> james gorman has worked harder than -- did have an archegos. >> they had a $900 million loss. >> that's fine, that's a good point. >> gorman now saying that he expects 80% of staff to return to the office. mostly full-time by september. 80% would be a number. >> that's high >> that's a big number >> i still continue to think that the world has changed. >> it has. >> that kind of company -- actually, 80%. >> financial services is a bit different. blackstone also has many of its employees already back

>> many. >> a vast majority financial services, though, i think is an outlier when it comes to the new world of work >> i do too. personally, you know -- >> blackstone, may but its portfolio companies, they're all going to be like 2, 3, in terms of days in, days out that's the world that is going to be the world for corporate america it seems. >> don't you think morgan stanley the flows are amazing. they have huge flows wealth management is absolutely perfect business i think the e-trade business is crushing it. i like what they're doing with e-trade very much. >> wealth management up 30, right? probably the most important part. >> yes, yes, that's big. you know, robinhood versus -- robinhood is nothing versus e-trade frankly. return on equity of 14%? how about that >> yeah. and rotce of 18.6% during the quarter. yeah >> i mean, look at what's the amount versus the last 50 years.

>> they doubled the dividend when they were allowed to by the capital return they obviously also committed to buying as much as 12 billion in stock back over the next 12 months, all of which doesn't mean the stock's going up. it's not none of the stocks have moved up this week. >> at this moment, david, at this moment? >> but their reaction to earnings has not been a positive one for the stocks. >> i bet you gorman, this is a sailing term, i don't know if you know it. he's going to buy back stock hand over fist he's got the most capital to buy back stock wells has a lot of capital to buy back stock i don't know how aggressive wells can be, but i think these guys can they're back to number one in equities post archegos >> that's good to know that's good to know. >> and don't forget going 2x meantime, we mentioned the banks are related to the ten-year, which is related to inflation, which is related to what cathie wood said about inflation and growth on "closing bell" yesterday. here's what she said. >> risk-off period, i know we

got hit today. a lot of growth strategies got hit. there was a shift towards defensives, and i think there's a lot of confusion but if growth is going to be squares because inflation's going to come down, our kind of strategies, which generate revenue growth rates in the 25% plus range are going to shine longer term. >> there she is, talking about someone who believes this is all transitory. >> it's been a bad month that said, i agree with her deflation just because i think we're at the peak. i think everybody's worried about what's happening now they should look at the future they should look at the taiwan semi when it comes to used cars which is a very big component. they should read the warehouse piece by goldman this morning, talking about how lumber is coming down. they should be focused, david, on the fact that oil has peaked, i believe, because the permian's been sneaking up now 400,000 more barrels a day it's been going up every single week the deal that apparently some

with opec plus is going to produce more oil and peak gas may be at peak as they switch to coal >> we are in a moment. >> you talked about this earlier in the week, wti is on pace for the worst week in a month on the week where you said maybe there's some voices who are arguing this is at the top >> well, you know, the balance sheet as rusty brazil went over yesterday, the balance sheets for the major oil producers in the permian have been so abundant that you -- they can turn on the jets now without hurting -- they have these ducks, you know, these ones that are drilled but not complete, they can open them up. we're going to see a million barrels back in the permian. there will be a tipping point supply, i'm quoting the top right here >> wow, all right. >> you can happenng me on it. >> with that, dow's down 140,

and we're back to 43 55 let's get back to bob pisani on a busy day back on the floor. >> i'm just so happy, guys, because we're back to normal, not just that mark wahlberg and adam gilchrist are here, but people are on the floor. hundreds of people walking around it's like the old days, watching everybody become wealthy, frankly, and let's hope it continues for them we've got three ipos, the fitness center, we've got a club a and a shopping center. obviously we're waiting for f45. here's our people that are going to be handling this. it's probably not going to happen my estimation price right in the middle of the range, 15 to 17 was the price talk here. you heard adam gilchrist talking about the company, and there's our man, of course we have an indication peter. >> 17 to 18, you saw it here first, first indication 17 to 18

for f45. any idea when this might happen? >> i think we have some time it's going to play out over the next hour or so. >> this is the man in charge, pete gee awe chi we'll talk more about that i want to talk about membership collective this is soho house, a private series of clubs out there. 30 million shares at 14. that was the low end of the price target, 14 to 16 these aren't software companies. not necessarily membership clubs like this. still doing very good. this backed byron berkle finally i want to give the nasdaq some due. phillips edison coming this is a neighborhood shopping centers. this is a reit i know that doesn't sound very exciting they price right at $28, the low end 28 to 31 they're very big on large grossers grossers are the anchors and they think that's going to distinguish them we'll keep an eye on that. groceries have done very, very

well throughout the pandemic 15 ipos this week. 15 that continues the crazy numbers we had back in june, so that's very important here, year-to-date up 18%. i said this before i'm happy there's a lot of them. i'm happy that they're doing well, but after the first day they trade down. most of them do. this is a problem that's a little unusual and the average ipo price, the percentage above is 53.7% or trading above their ipo price. usually you want above 60% so bottom line is good numbers, we're getting a lot of ipos out here but after market activity not so great. finally, i just want to say something about morgan stanley they doubled their dividend and had a very large buyback, so we're getting really big capital returns. the dividend yield is 3% now that is very unusual for a bank because most of these banks, they're in the 1 to 2% range most of the time when you start seeing 3% yields, you're talking about reits. y

you're talking about food companies, utilities, oil companies. right now you're in a very rarefied, probably 60 companies in the s&p 500 have yields over 3% morgan stanley is now one of them duke, campbell, merck have dividend yields in the 3% range. finally, last thing, keep an eye on the reopening stocks because so far we're seeing some lag in some of the big names. we're seeing carnival, for example, royal caribbean, occi occidental, most of the oil names have been lagging in the last couple of days here gap and some of the retailers as well big day here, guys, and i'll be over here looking at some of these other ipos in the next hour back to you. meantime, the fed chair testifying for a second straight day. this time over at senate banking. we're going to bring you live coverage once q & a begins take a look at treasuries and how they're faring this morning. jobless claims did come in 360k at the lows not seen since march of last year, and the ten-year is back to 132, we're back in a moment

these days, we want sophisticated but simple. cutting edge made user friendly. in other words, we want a hybrid. and so do retailers. which is why they're going hybrid, with ibm. a hybrid cloud approach with watson ai helps manage supply chains while predicting demands with ease. from retail to healthcare, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm. esg is responsible investing. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance.

as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes. join the pursuit of outperformance at pgim. the investment management business of prudential. this is dr. arnold t. petsworth, he's the owner of petsworth vetworld. business was steady, but then an influx of new four-legged friends changed everything. dr. petsworth welcomed these new patients. the only problem? more appointments meant he needed more space. that's when dr. petsworth turned to his american express business card, which offers spending potential that's built for his changing business needs. he used his card to furnish a new exam room and everyone was happy. get the card built for business. by american express. 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.

families for decades, they can join democrats in the fight to raise wages - >> banking, why jay powell's q&a is about to begin. >> of course, most of them won't say aloud what this inflation alarmism is really all about they don't want workers to have more power in reality the biggest risks to our economy, mr. chairman, is not doing enough to empower workers and not doing enough to curb wall street greed in excess so we, chair powell, my question is you supported vice-chair quar quarles, his efforts to weaken largest banks and you oversaw weakened ccar stress tests which only decide how the biggest banks are. governor brainerd pushed back to the efforts to weaken financial regulations. president rosen gran of the

boston fed made the case that strong financial regulation enables the fed to are more aggressive in the employment mandate. cleveland fed, minneapolis fed are outspoken in the need for the board to keep its eye on financial stability, weakening financial safeguards doesn't help working families, increases the risk of a financial crisis, wiping out everything they worked so hard for we are making progress, as i said earlier, and workers are getting a better seat at the table. we can make the economy safer and fairer with higher capital requirements of the big esg banks. my question is, why have you been against stronger capital requirements and using the counter cyclical capital buffer in curbing runaway executive bonuses and stock buybacks >> so, i guess i would say with the stress test severity of the stress test has very much been maintained the effect of the stress capital buffer was to raise capital

requirements for the largest firms and they did manage to get through the recent pandemic and acute phase of it and the recovery and did their jobs during the -- so i think that our by and large our financial institutions are well capitalized we limited their dilgsbutions during the pandemic and their capital ran materially during the course of the pandemic the financial system is strong and the banks are strong i have felt and i have said on a number of occasions that the level of loss absorbing capital in the system is about right i think the experience of the pandemic bears that out. i would be prepared to deploy the counter cyclical capital buffer if i thought that the conditions we laid out were triggered but i haven't so far felt that way. >> every time the fed is -- thank you for that answer. every time the fed has taken action to lower capital

standards they claim doing so would increase lending in the economy and otherwise promote economic growth. that hasn't been what's happened instead buybacks, dividends, executive compensation have gone up even during the pandemic. we empower workers by maintaining tight labor markets and strong financial regulations. i believe that enables the fed to be more aggressive and helping workers and that should be your mission. it's time, mr. chair, respectfully, you change the way you think about regulating the biggest banks. one other question, mr. chair. in addition to adopting pro worker financial stability policies the fed can further help communities of color by leading the push for a strong update to the community reinvestment act we have seen good developments there with a different controller of the currency last year the fed unanimously released a framework for modernizing cra that was really received by representatives of the civil rights community and by banks my question, mr. chair, is the

federal reserve still committed to full, not piecemeal, full cra modernization with an inner agency approach and what is the timing >> we are very much committed to that outcome and i actually feel good about where we are on this. we are resuming our interagency discussions on it. i am optimistic welcome will ct with something with broad support and among the financial institutions and it will be a good, solid updating after many years into the more technologically enabled era that will help the intended beneficiaries quite bait. >> and the timing? >> working on it now you will see we are reacting to very large analyzing, very large quantity of comments and discussing that particularly with the occ and also the fdic is not clear what their role will be at this time but they hope they will join in i think we will be making visible progress in come months. i can't give you a finish date

yet but we are moving now. >> thank you we will be watching. >> thank you, mr. chairman chairman powell, in your testimony you said that substantial further progress is still a ways off for the economic recovery and i think you cite that as a justification for the extremely accommodative policy that you have i don't think you are referring to the need for substantial further progress in gdp growth i think it's employment you are thinking of. the unemployment rate has declined dramatically but hasn't reached the pre-pandemic lows. and i think that you have also made references to the work force participation rate i guess my question is, isn't it entirely possible that for a variety of factors, not the least of which is legislation that we've passed, the labor force participation rate may not get back to the record highs that we recently saw and we've made it more difficult for the unemployment rate to get back to the record lows that we were at

before, and do you take that into account when you determine how much progress we have made towards full employment? >> so what was happening towards the end of the very long expansion, longest expansion, was that people were staying in the labor force later into their careers. labor force participation consistently remained above all estimates of where it was going to be. what happened in the pandemic was a lot of those people retired. so there have been significant amounts of retirement. so the truth is we don't know where that's going to settle out and it will take a period of years for us to really understand what the new trend is i don't see that as a problem for the standard we have set forth for tapering asset purchases, which is substantial further progress we are not going to need to know the answers to those questions to make a decision that we have made substantial further progress it will be more of a consideration for raising rates where we have set a higher bar. >> okay.

i just hope there is a focus on the distinct possibility we are not going to get to those levels anytime soon let me turn to housing prices. the home price index showed housing prices across the u.s. as a whole increased in maybe more than 15% from the previous year and that wasn't a base effect there was no big decline in may of plast year. 15% clearly is making housing less affordable, more out of reach for more people. so the number of voices within the fed seem to be increasingly concerned about this the st. louis fed president james bullard said this week he has, quote, a little bit concerned we are feeding intoane incipient housing bubble dallas fed president said that the fed should begin tapering to begin offsetting, quote, some of these excesses and imbalances, end quote. the boston fed president eric rosengren raised alarms that the fed's mortgage backed security purchases may be contributing to the boom in real estate prices

citing the potential financial stability implications i guess you know i have been clear for a long time, i have been very skeptical about the ongoing mortgage backed purchases. are you concerned about the unintended consequences associated with $40 billion worth of mortgage backed security purchases that continue month after month? >> housing prices are going up around 15% this a very high rate of increase a number of factors are contributing monetary policy certainly one of those factors. other fact e, people have long balance sheets, so they are able to make down payments and supply factors are constraining the supply temporariarily. the best thing is that the difference between treasury purchases and mbs purposes is not large. probably mbs purchases are somewhat more supportive of housing. it's not the intent but that may be the effect.

monetary policy is supporting this that is a discussion we will be having as an ongoing basis we will talk about these things in our last meeting and we will talk in the next meeting in a couple of weeks. >> i think that's important. let me close with a question on a central bank digital currency. during your testimony yesterday i sensed what i wasn't sure but thought might be a change in your tone about the virtues of a central bank digital currency being issued by the fed. one of the things you said yesterday is that one of the stronger arguments in favor of a cbdc is you wouldn't need stablecoins, wouldn't neat cryptocurrencies if you had a digital u.s. currency. isn't the reverse also true? if you have stablecoins, corrupt owe currencies in use, there is no need for a digital bank currency two points one is it's my view that the

development of a central bank digital currency by the fed would require congressional authorization. i am wondering if you share that view secondly, it's not clear to me what problem a central bank digital currency would solve and i wonder if you think there are problems that only a central bank digital currency can solve. >> i am undecided on whether the benefits outweigh the costs. yesterday i was answering a direct question about a particular argument, i said in favor that would be one of the stronger arguments i would agree that the more direct route would be to appropriately regulate stablecoins which were not -- we don't do right now that's going on a very important thing we do do are so in terms of congressional authorization, there are different views on that. i have said publicly and i think this is right that we would want broad support in society and in congress and ideally that would take the form of authorizing

legislation as opposed to a very careful reading of ambiguous law to support this. it's a very, very important initiative and i do think we should ideally get authorization. in terms of what the problem is to solve, i think that is exactly the right question, and i think our obligation is to explore both the technology and the policy issues over the next couple of years. that's what we are going to do so we are in a position to make an informed recommendation but my, again, my mind is open on this and i honestly don't have a preconceived answer to these questions. >> thank you, mr. chairman. >> senator menendez of new jersey is recognized. >> chairman powell, as the federal reserve seeks to fulfill its mandate of maximum employment, i want to discuss with you the tremendous impact that immigration has on the labor force. isn't it true that over the past ten years the immigrant labor force participation rate has been consistently higher than that of native-born workers?

>> i believe that's right. >> yeah. and let me help you verify that. the st. louis fed noted in their study that as of june 2021 the foreign-born labor force participation rate is 3% higher than the native-important rate and that gap hasn't been lower than 2% for the past ten years an important but often overlooked characteristicsistic of these immigrants tis their beyond meat. 78% of workers are between 25 and 54 years of age scared to 62.2% of the native labor force. so as the american labor force ages, will immigrants and, therefore, immigration policy, play an increasingly important role in maintaining a healthy u.s. labor force, therefore, a healthy economy? >> senator, i am going to stay away from making any recommendations on immigration

policy it's not in our wheelhouse labor forest growth is one of the two things that can drive the top line the other being productivity growth and, you know, in recent years immigration has been a significant part of accounted for a significant part of growth in the work force. >> i appreciate that i am not asking about immigration policy i am saying that one of the newest studies shows that nearly one in four americans is projected to be 65 years of age or older by 2060 so while america gets older, the overall population is growing at a slower rate than it has in almost a century leaving unfilled job openings in a future american economy. i think we should be looking at our immigration policy, whatever that might ultimately be i have my own idea, the u.s. citizenship act, as a source of dealing with the labor market. let me continue on the question of the labor market. one part of the fed's dual

mandate is to maximize employment, and understanding what factors inhilkted people's ability to work in -- as a key to helping achieve that goal on page 7 of your monetary policy report, and i'll quote directly from it, the effect of the pandemic on employment was largest for workers with lower wages, for workers with lower educational attainment, and for african americans and hispanics. and these hard hit groups still have the most ground left to regain and the pandemic seems to have taken a particularly large toll on the labor force participation of mothers, especially hispanic mothers. that's very much true. so have disruptions in childcare due to the pandemic had a negative effect on employment? >> yes, they have. and also schools being closed. caretakers generally are having a hard time getting back into

the labor force for that reason. >> the federal reserve's data shows that the pandemic's effect on childcare caused 9% of all parents unable to work late last year and an additional 14% of parents had to decrease their hours and this effect was pronounced among black, hispanic and low-income households. so is the effect on childcare unemployment isolated only to the covid pandemic >> sorry >> is the effect of the availability of childcare that is affordable on employment isolated only to the covid-19 pandemic >> i'm going to guess really that the answer to that will be no. >> yeah. and it is no studies have hone that working families pay for childcare and 35% of their income on average five times more than what the department of health considers affordable it seems to me that increasing

the availability of high-quality affordable childcare like what president biden proposed in the american families plan has a positive effect on employment, enables businesses to easily find qualified workers and ultimately helps address supply bottlenecks. the same fed study i cited notes that recdeucing or offsetting th cost of childcare has a strong employment effect on black, hispanic and low-income families the pandemic showed all of the inequalities in our nation highlighted in a way so dramatically and particularly communities of color now the employment challenges we all talk about wanting to get people to work, the employment challenges that people have in being able to work and they, as i have shown in the fed's st. louis fed statistics, more, more gainfully employed than native-born, it seems we should

shall working on making the pathway easier so business can have qualified workers thank you, mr. chairman. >> senator rounds of south dakota is recognized for five minutes. >> thank you, mr. chairman chairman powell, good to see you, sir i appreciated the time that you have spent trying to not only educate us, but also to work with us. i understand that clearly you have made it your mission to adhere to the guidance for the fed in which you work to maintaining 2% inflation over a period of time, as well as full unemployment or full employment. and when we talk about it, it's always a combination of which one you are more focused on and how you main that while responding appropriately in that non-political way to the actions of congress and the administration i am curious with regard to today's position,

we are coming out of a pandemic. we've put a lot of fuel into the economy with direct payments and so forth, and people are trying to get back to work right now, and yet we have got inflation, which right now in this current state seems to be above a 2% rate can you talk a little bit about the measurement time period that you believe is appropriate for shooting for a 2% goal and if there is a concern that you would express or that you follow up with when we talk about overinflating or perhaps putting fuel in, what concerns you would have and how you would respond to congressional activity. >> so, the inflation that we have today, what we said is that if inflation runs below 2% for an extended period we want inflation to run moderately above 2% for some time this is not moderately above 2%

by any stretch this is well above 2% and we understand that. i it's also not tied to the things that inflation is usually tied to, which is a tight labor market, a tight economy, that kind of thing. this is a shock going through the system associated with reopening of the economy and it's driven inflation well above 2% of course, we are not comfortable with that. in terms of the tests that we articulated, we didn't tie ourselves to a formula we just -- what we want is inflation expectations to be anchored at 2% because if they are not there is not much reason to think that inflation will average 2% so that's really how we are thinking about it. what's -- the thing -- the challenge we are confronting is how to react to this inflation, which is larger than we had expected or anybody had expected and to the extent it is temporary, then -- >> mr. powell testifying before senate banking, a host of questions about digital

currencies, labor force participation, the levels of loss absorbing capital in the financial system, housing prices and more mike santoli is here with me, david faber, to talk about how adept he has come at not saying a lot and markets have been range bound as a result. >> the goal is to try to preserve maximum flexibility and freedom to act and time. deferring that moment where you seem to have an urgent need to respond to a tightening labor market or something else these questions about why are you buying 40 billion a month in mortgage-backed securities when housing is getting expensive, it's frustrating i don't think there is a good direct link. everyone assumes there is a link so it's tricky and actually if you have to articulate the specifics of how qe is helping, it's very hard because it is mostly signaling. >> meanwhile, as our friend ivan said this morning on twitter, the number of back seat drivers is increasing.

bullard today timed these emergency measures and once tapering begins, he argues, keep flexibility, don't put it on automatic pilot. >> yeah. it's going to be noisy i think the regional fed presidents are a source of this back and forth this is eye of the beholder. 5% inflation can lead people to interpret things in multiple different ways for now the market is a little bit on the defense here. we have treasury yields down, but it's not really changing the overall set of international space stationss around the federal. >> we are keeping our eye on morgan stanley today they topped estimates. digging into some. numbers on investment banking. wilfred frost has more. >> good morning. results were solid nice beat across all departments. investment banking up 16% to 2.4 billion, equity trading up 8% to 2.8 billion. nice beats for both of those

like the other banks, they picked up some of the slack from fixed income trading, which was down 45% year over year to 2 billion. all together banks enjoyed significantly elevated activity compared to pre-pandemic likely with some lasting gains whether it comes to the big u.s. players. interesting to see for the jacobsen banks wealth management 6.1 billion, up 30% year over year due to e*trade acquisition and investment management up 1.7 billion, up 92% year over year and that was thanks to the eaton vance acquisition. firm words recently of wanting to see staff back in the office. >> the comment i made about the workplace, you know, i fundamentally believe that the way you and i and others sitting this room, sher own and john, have developed our careers is being men stored by and watching and experiencing the

professional skills of those who came before us it's certainly dramatically affected my career i don't think you can do that sitting at home by yourself. i think there is a limit to how far as good as the zoom technology is, how far that can take you so what i said was that i wanted people to start coming back in the office and certainly by labor day, but i also said, which wasn't picked up in the media, we would flexible where flexibility was called for. >> he said he expect today have 8 #% back by september morgan stanley is up now 0.3%. it's also up about 2% or so for the week as a whole, which makes it the best performer of the big six banks now that they've all reported erasing some of those earlier losses. >> all right a lot to cover on m.s. today. don't miss goldman's chief david coston his year-end targets as the nasdaq is trying avoid its first three-day losing streak since

'r omaddlef y. wee back in a moment memorable as eatingn i'm s turkey hill chocolate peanut butter cup ice cream with real cocoa. well, that's the way the sandcastle crumbles. you can't beat turkey hill memories. jerry is here! j! mate, how are ya!? it's so good to see you. good to see all of you, yeah! why is jerry so... popular? it's been like this ever since we started using workday. what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry. they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world. - dearest gastro pubs, bistros, and restaurants... thanks for treating every small plate like a big deal. three-day losing streak since we promise to serve as seriously as you do.

let's hit the "etf spotlight. a quick break, taking a look at the health care sector, ticker llxld under pressure this morning, still up double candidates this year the biggest holdings, j&j, pfizer and abbott labs united health stock moving lower this morning despite better than

expected quarterly results falling by a third from a year ago. we a bk t mutreacinwoines snhu let's you transfer up to 90 credits toward your bachelor's degree. - [woman] it doesn't matter how old you are, you can do it. you can finish. - [announcer] finish your degree at snhu.edu.

the street." want to get to our latest spac deal announcement. long view acquisition corp. 2 a publicly traded company. it is a publicly traded company but now doing its deal the company in question is heart flow it's a leader in revolutionizing precision heart care dr. john stephens runs the company and larry robbins who runs lend strew and a lot of other views as well. doctor, let me begin with you in terms of the transaction the company has been around some time you have great words associated whether it's a.i. and cloud-based and software as a service. what is that you have done that you claim is revolffizing the w that those who look at blood flow when susomebody has a hear issue enables them to do. >> it's way more than words. it's about what we do to help

pres patient care there are about one out of three deaths in america are due to cardiovascular disease today the solutions that we have had to date are fundamentally flawed they are just inaccurate half the time people get a test their doctor sends them and it's falsely positive and a quarter of the time it's falsely negative patients have significant heart disease that don't get the right answer, the right treatment and the best outcome they could have we solve that problem. >> how do you solve that problem? >> now the words come in so it's bringing together artificial intelligence, data from a cardiac ct scan, which is a simple test performed in a few minutes that's completely non-invasive it goes to the cloud where the computing happens. we get back to the physician a three die mensional interactive report that says what the problem is, does my patient have hard disease and what do i do? medical therapy, lifestyle changes, a stint or bypass

surgery. we deliver that answer with preit six, personalization and the diagnosis and the optimization of therapy. >> and, larry, from your perspective, as somebody who invests in large publicly traded health care companies and has a long history in that, what about that technology in particular has attracted you to make this a deal for your spac >> it's brilliant, unique, proprietary, differentiated and much more effective. i am a numbers guy so not only are 55% of people traditionally sent to angiograms sent there on unnecessarily, but there is an 83% reduction in unnecessary procedures even bigger is the impact on undetected disease where heart flow customers are reporting that they literally have a 50 times reduction in the amount of undetected disease versus the current standards of care today. we saw a tremendous unmet me

need in cardiac care, the number one killer, and with a very, very unique product with unique fund and a company culture both from an innovation and people culture that we think that heart flow is destined to become an extremely large and important company in medical technology. >> let's talk about that large and important company, doctor, because i always like to look at the projections. i probably won't find them here h in the deck. you expect revenues to double in a short amount of time why? >> because it's the pieces have come together. there are no shortcuts in health care you really have to do the groundwork the last 11 years we have been doing the groundwork largely, the clinical investigation, the clinical data, over 425 peer-reviewed publications we have gone through the necessary regulatory steps then the payors, medicare and the commercial insurance companies. most importantly, though, we

have the data to confirm we have a better patient outcome, a better patient experience and we reduce the total cost of care for the patient and for society. >> who is the most important audience is it the care provider? is it the insurance company? i mean, it's interesting to listen to you talk about how you have to prepare the market ultimately at the point of care where is the real decision made and who do you have to pitch >> you said who is the pitch it's, yes, it is the patient first of all then the physician who cares for the patient. but ultimately it's the provider, the hospital systems, care providers and insurance companies. we have to have every stakeholder aligned to make this work there are no shortcuts, that's why it took 11 years and $500 million to date to get us here. >> right. >> one of the things that we loved about heart flow, they do more for less. if we think about the last 20 years of medical innovation, there has been great

breakthroughs, but they are very expensive. so it's more care for more dollars. the promise of heart flow is that not only is it a breakthrough in terms of efficacy, but it lowers the total cost of care because it eliminates unnecessary invasive procedures and for the patients limits catastrophic events one thing that attracted us to the company is aligning with the payors who can save system costs for themselves because everybody wins the payors win, the doctor wins, the provider and naturally investors can win alongside of them. >> right well, this is seconds back butterfly was your first we had you on with jonathan rothberg in this one interestingly you are returning some capital i just wanted to mention that briefly. it's something we have not seen too often. why not give them as much capital as was available in your spac >> the company and its board were committed to have the

company be fully capitalized, which includes $200 million to invest in the company for the growth plan to the time in late '24 they become cash flow positive and have a $200 million cushion as well for internal investments or bolt-on investments. they believe their equity is extremely valuable they didn't want to sell a dollar more. it would have been to our best advantage as a spac sponsor to convince to take as much capital as possible. but we respect the culture of the company which is to minimize dilution, the most bullish people about the company's future are actually the long-term investors who have been with the company as well as the long-term employees. the executive team has been together on average seven years. so this is a well seasoned group coming public even though they are this a new public, a very mature organization. >> for spacs overall, larry, your sec, but your main job is

to run a long/short equity portfolio. >> it is. >> how do you view spacs as somebody who has a couple of them in the marketplace, one, obviously, has de-spac'd. >> is it an adjunct or more significant focus for you given the potential profitability and the level of control that you may have that, obviously, is usually not available at large public companies >> for you it's an adjunct activity from the perspective. we are always looking for the 20 special investments that can carry forward our investors' returns and tax efficiently over the long term. we have held over 75 companies for five years or longer we are not traders we are investors the spac business has allowed us a unique opportunity to be able to create those high-quality investments, to be able to partner with executives like john and charlie taylor and the team at heart flow and the board to create the culture right the first time, attack the problem, to be able to aggressively

invest in growing the company for the long term. for us our spac activities accelerate what we are trying to do at gren view. i am a valuation sensitive investor we have always struggled how to deal with high valuations versus our desire to back the most emerging technologies. the spac allows our investors to be able to prenegotiate a price for high-growth companies we find highly attractive heart flow is brought at a 27% discount to the high-growth comparables on 23 revenues and they grow faster there is a lot of execution to earn the multiples and we will turn our attention to help the company execute. >> we look forward to bring you back to talk about the broader market, prospects for butterfly, as well, obviously, that you are involved in. larry robbins, doctor, good luck congratulations. >> thank you. >> carl, over to you. thanks dow's down 28. a news update with rahel solomon. >> good morning, everyone.

here is your cnbc news update at this hour. 33 people are dead and dozens missing in germany and neighboring belgium. heavy flooding caused by storms across western europe, rivers there overrunning their banks and sweeping away cars and collapsing buildings the beckwourth fire continues to grow. it has burned more than 95,000 acres, but is now 71% contain. the fire destroyed at least 20 homes and worsening conditions can have prompted new mandatory evacuations. johnson & johnson recalling sunscreens after the company detected a potentially cancer-causing chemical in some champs j&j telling consumers to sytop using five of its six neutrogena and aconvenient 'sunscreens. and six cast ways have been reunited in chile after being missing for a week their boat crashed against rocks last tuesday and two fishermen

are still missing. back to you. >> thank you very much. as we go to break we are continuing to monitor fed chair powell on the hill plus, another big interview you don't want to miss later on "closing bell," the secretary of treasury, janet yellen at 4:00 p.m. eastern time we are back in a couple of minutes. you packed a record 1.1 trillion transistors into this chip i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you become an agent of innovation with invesco qqq like you 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. here are the two battling to the line and allyson felix...

simone manuel's above her trying to fight on, and above simone... getting an opportunity to show her stuff. nonstop, displayed at the highest performance level... finding something and the us takes gold! ♪ dream on ♪ ♪ dream on ♪ ♪ dream on ♪ ♪ dream on ♪ - yes! ♪ ahhhhhhh ♪ ♪ dream until your dreams come true ♪ goldman sachs today reiterating their year end target for the s&p with all of that lets bring in goldman's chief u.s. equity strategist david kostin. david, good morning, good to have you. >> thanks, carl, nice to be there. i was helping to be there in person i am in the office i don't know what's wrong with the technology here. maybe next time. >> it's an argument for ipo work, david, when you don't have

to work about the zoom issues. i want to ask about 4,300 year end, which i know is contingent on a ten-year that ends the year around, what, one-nine you have talked about that this week you also talked about the key questions for earnings season and a lot involves how corporates are going to manage inflation. >> correct so i think the target of 4,300 which is roughly where we are now is predicated on a couple of assumptions. the first over the next 90 days probably going to get most of the news flow and focus will be on tax and fiscal negotiations in washington, d.c and the assumption that we are making for profits for 2022 are 5% below consensus i would expect after the legislation is passed there will be increases in taxes and you will get a wave of negative earnings revisions across the market as analysts and individual companies lower their forecasts to take into account

the higher tax rates that's one risk factor we are focused on on. the second is not on the corporate tax side, rather, carl, on the capital gains tax rate in history we know when capital gains goes up, capital gains rate goes higher, equity prices tend to be flat to down and in particular the high momentum stocks where there is the embedded long-term capital gains, they tend to do less well you started the conversation with the idea of higher interest rates and the ten-year rising slightly from here, closer to 190 at the end ary. basically higher rates, higher taxes, higher corporate and higher capital gains taxes those are three big richks that are not fully factored into the market fourth out into next year, the end of 2022 around 4,600 for a level. market so broadly speaking, we are flattish in second half of the year with a gradual rise in 2022. >> right

now, i know, i wonder if you were surprise pd by that trip down to 125. you said that if we end the year at one-six instead of one-nine, maybe fair value closer to 7,700? >> yes the sensitivity of the equity valuation is significant on an absolute basis as we talked about before, p.e. multiples, price to book mu multiples -- >> david, i hope you forgive me. one interruption back to senate banking here is senator warren. >> i want to talk about a couple of changes in particular to prevent taxpayer bailout, banks are required to have living wills banks must be able to show every year how they could be shut down without wrecking the entire economy. in 2019 you changed the rules, said that the 13 banks with

$250 billion to $700 billion in assets could submit full livin wills only once every six years instead of every year. so that test is now weaker chair powell, has the fed done anything over the past four years to make living will requirements stronger? >> to make living will requirement -- we have done a lot of things to strengthen regulation and capital. >> but on living wills. >> no. >> okay. will let's move to another regulation, the vul ka rule. the rule that works like glass light to separate commercial banking from wall street risk taking in 2019, you exempted more short-term trading holdings from the rules. so banks could take on a little more risk. now, that weakened the rule. then in 2020 you eased up the rules to let banks invest more assets in high-risk private

equity and hedge funds so the rule got weaker again let me ask, mr. chairman, during the past four years has the fed done anything to make the rule stronger and limit risky trading for the largest banks? >> i think by clarifying it, we made it more effective at what it's supposed to do, which is just what you said. >> well, i have to say it's whether or not you did anything to make it stronger, not just whether or not you made it clearer. it's whether or not you made it stronger or maharder for banks engage in speculative trading. i'm taking it that the answer here is no i've highlighted two examples of weakening regulations. but there are a whole lot more reducing capital requirements, easing liquidity requirements, shrinking margin requirements, scaling back on supervision, weakening the stress test. it's a long list and i realize that you think

that these are good changes, but i'm trying to look at this from a regulatory perspective is the chairman of the federal reserve making banking rules stronger or weaker so tell me, mr. chairman, is there a big rule change that i missed can you name a change that strengthened the rules and made the actual rules tougher >> well, let me say we did not weaken capital requirements for the largest banks and i actively resisted any move in that direction. in fact, the stress capital buffer, which we implemented quite recently after years of consideration, raises capital standards for the largest banks, stress tests, they are bound by the stress test. we maintained the very high strin genesee of the stress test through this period. >> what i was asking about anything tougher look, what i'm looking for is that the fed's record over the past four years, i see one move

after another to weaken regulation over wall street banks, and that worries me there is no doubt that the banks are stronger today than they were when they crashed the economy in 2008, but that's the wrong standard the question is whether or not they are strong enough to withstand the next crisis. and whether the fed is tough enough to protect the american economy and the american taxpayer in 2020, the giant banks that are the beneficiary of these weakened rules made it through the crisis, but the researchers from the minneapolis fed found that the banks would have faced up to $300 billion in losses if not for fiscal stimulus from the government in other words, the current fed rules were not strong enough for the banks to withstand the pandemic without, one again, calling on american taxpayers to back them up

and that's the heart of my concern. i understand that the next crisis may feel far away, but, like the pandemic, it may come at us fast and from an unexpected direction it is the job of the federal reserve and specifically the job of the chair of the federal reserve to use the regulatory tools that congress has created in order to make sure that banks remain strong and that taxpayers will never be called on again for a bailout. thank you, mr. chairman. >> thank you, senator warren senator tillis is recognized. >> thank you for being here. i wanted to go back and give you an opportunity to respond to a question. >> all right senator warren questioning fed chair powell as q&a continues. we continue our conversation with david kostin of goldman-goal sorry for that interruption. we were talking about the game of inches regarding your year-end targets and the way it

relates to the ten-year. i want to ask whether or not you have heard enough so far to get a sense of how companies are going to be deal with higher input costs. >> well, first of all, carl, the expectations for this quarter and the commentary looking forward, we have only had a relatively few number of companies reporting. the bar is very, very high in terms of growth. the consensus expectations are now 61%, year-over-year growth of 61% in earnings driven by 22% in revenue growth and around 250 basis points of margin expansion. so those are the hurdles we they in the first quarter that companies well exceeded the expectations and the market is sort of expecting another positive surprise season, if you will, sort of a whisper number everyone is expecting there will be a comparison with a year ago with the pandemic low in the second quarter of last year, the worst part of the economy crunch therefore, the bar is set, you

know, pretty -- still high growth, but the expectations are there will be -- you know, likely beat that and looking forward, you have had some companies announce price increases across the board that have come forward in terms of their recent announcements, general mills most recently. other companies announced this summer they will be taking price increases. we are looking at margins that are pretty much at these levels and one of the big areas of focus that we have is which companies are likely to show expanding march, carl, in 2022 semiconductor companies, communication services, some consumer health care companies, et cetera, across the market are expecting higher margins that's a big area of focus in this environment where there is a lot of concerns about which companies can maintain high and stable growth margins. >> david, i wonder what your read on the recent leadership shift in the market. obviously, with very large growth stocks again supporting things, small caps, banks weak,

cyclicals have taken a back seat the last couple of months. is that an important signal about the pace of growth, the ebb and flow of these, you know, styles and fackers or what >> mike, my perspective is it's about duration it's the same way a fixed income investor would manage through a bond yield that went from 91 basis points at the start of the year to 175 and then all the way back to around, you know, 130. and so that is -- that mirrors exactly the short versus long-duration rotation in the market and the idea of these large cap, particularly tech companies, where they have strong growth, they tend to have longer duration that means their average time in the future if they are getting the cash flows and generating them will be further out than, say, companies where they are more near term and you can think about that as exactly what the equity market has straytraded with rates. shorter duration stocks did particularly well as rates were rising and that rotated back more recently.

when i look at and see what is the trajectory of rates in the second half of the year to 2022 expecting rates to move to a higher direction therefore, it becomes critical to focus within technology on the profitable tech companies. by definition, an unprofitable tech company where they have negative net income, they are losing money this year, that means all of the valuation tends to get pushed further into the future that's the poster child for a long-duration equity the shorter-duration equities, if you will, some of the faster growing tech companies where the, by definition, some of the value is actually happening near term if you look in particular at the big cap tech companies, you know, the five leading stocks in the market, the expectation for these companies is basically 15 to 25% kind of revenue growth in 2021, '22 and into 2023.

very strong revenue growth two to three times faster than the rest of the market that's some of the near-term profit blts as well as the growth they are buying back a tlot of stock. that's an area of focus with are the to investors a lot of questions coming on the back of biden's proposals on antitrust posture in regulatory regime but that's another aspect in risk factor for those stocks. >> yeah, a great note on that earlier in the week. i want to close by asking you about so-called mean stocks, david. data track has a nice look this morning at google search for the words invest and buy stocks and they are back to pre-pandemic levels, which they say is a bad omen for mean stocks that need a constant flurry of activity and interest are you seeing that? >> well, we have less line of sight in the retail business generally speaking, but of source of demand for equities broadly is households. when you think about the idea,

carl, right now there is $1 trillion more money in money market mutual funds today than before the pandemic. $1 trillion more rates are at zero. mean pretty low. therefore, our expectation slow or fast, but basically direction of travel is pretty clear. it's likely to go from cash into equities and that will benefit lots of different aspects and that's the household allocation, household owner, one third of the equity market directly we think that would be demand. some of that no doubt in the meme stocks. some with companies with higher profiles co com corporate buybacks are surging as well as foreign policy investors and a weaker dollar regime, they tend to have an increase those are the three big responses. retail, that's consistent with the flows from households. >> interesting, david. i am glad, even though we were

interrupted bit hearing, alet of good time with you today we will talk next time thanks. >> thanks. all right. maybe the big interview coming up on "the halftime report." don't miss an exclusive with double line's jeffrey gundlach at 12: p. eaer00.mstn. we'll be right back. stay with us ♪♪ ♪♪ rush hour will never feel the same. experience, thrilling performance from our 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.

lumber's quick fall may not be the only downswing for the commodity space this summer. we have more on cnbc.com more "squawk on the street" coming up.

let's bring in steve liesman for more reaction to powell speaking in the senate today, steve. >> yeah, mike. i think the one bit of news that maybe you missed when you were talking to mr. costin earlier was that powell made a little bit more about where the fed is in thinking about tapering he said we're in active consideration of figuring out if

we made further substantial progress >> we said we would begin to reduce our asset purchases when we feel the economy achieved substantial further progress measured from last december. so we're in active consideration of that now. we had a full meeting last june, last month, to discuss that. we have another meeting coming up in two weeks. so we'll be making that assessment and as we assess the progress of the economy toward that goal, we will begin to reduce our asset purchases >> so that's where they're at. just a broad overview idea, mike, which is that the democrats are not happy with powell when it comes to financial regulations. both senator warren and senator brown have hit powell hard on the issue of easing regulations on the bank, which is arguable whether he did that or not they're concerned about inflation along with their concern about democratic spending all of this raises the question about, you know, does -- will

powell have the support to be renominated in several months when president biden has to make that decision. and so we're seeing the early rollout of maybe some taking some sides on that issue right now. >> steve, appreciate that very much and you're right, one of the key questions that is being threaded through some of the hearings this week. coming up this morning on "techcheck," self-driving technology company aurora announcing this morning it will go public via spac we have an exclusive with the ceo coming up on "techcheck" at 11:30 a.m. eastern dow goes green as the s&p is at 4360 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. i'm evie's best camper badge. but even i'm not as memorable as eating turkey hill chocolate chip cookie dough creamy premium ice cream and chasing fireflies. don't worry about me. i'm fine. you can't beat turkey hill memories.

ready to shine from the inside out? try nature's bounty hair, skin and nails gummies. the number one brand to support beautiful hair, glowing skin, and healthy nails. and introducing jelly beans with two times more biotin. - [narrator] at southern new hampshire university, we're committed to making college more accessible by making it more affordable. that's why we're keeping our tuition the same for all online and campus programs through the year 2022. - i knew snhu was the place for me when i saw how affordable it was, i ran to my husband with my computer and i said, "look, we can do this." - [narrator] take advantage of some of the lowest online tuition rates in the nation.

find your degree at snhu.edu. they want to view their content, right? we want to make stuff that is entertaining that people want to watch, how they decide to do that, i've always been a big supporter of the theater system, but people going out to experience theater, but i also love what netflix is doing as well it is just changing. it is constantly evolving and we want to continue to make great content and they're making fantastic content. >> that was mark wahlberg joining us earlier on "squawk on the street." he's one of the significant owners of f45, which went public today. but talking to him about streaming, of course you know as an actor, it is

probably not a bad time. he's got direct to consumer, paramount plus, he also is making movies for sony, which is all about going to the movie theater still as they're sort of the arm supplier in many ways. but it is interesting, i tried to get him involved in a bit of a conversation about compensation because i find that interesting too. the platforms are expensive for the providers. and they're not getting the back end from the movie theater showing. and so they got to do deals with guys like wahlberg, big stars that pay them a lot up front, more than they otherwise would, based on the revenue they would get from the movie theaters. >> you wonder if this is a little bit of a bulge of just, you know, indiscriminate spending by the streamers, they feel they need to build their library, have credibility about topline -- >> have stuff keep coming. >> over time, do the economics work for a netflix or amazon >> yeah. >> paying up front that way. >> the money is enormous. >> the volume ofm amazing too.

there are 280 series this think they're worthy of an emmy. >> $16 billion from netflix, hard to wrap your head around spending that much on content. we have been focused on the banks, morgan stanley the latest to report. they had not been responding particularly positively to what otherwise seemed to be generally decent earnings. this morning is an exception it seems key to off the yield. >> treasury yields at ten-year, a few basis points off the lows, 134, something like that that's enough to create one of these mini rotations and banks are still down a couple percent as a group it is not necessarily a huge leadership move, but it shows you the market wants to move money from one pocket to the other on day to day basis, tech, banks, small caps, large, as opposed to exiting all at once when they get a little nervous about it. >> anything else you're keeping an eye on? >> it is the small caps, to see -- it has gotten really stretched. the nasdaq 100 versus small

caps see if we get any kind of snapback. >> better rotation than the last few days, away from the high multiple software names should point out the likes of apple and facebook and google and amazon all down that's a bit of a change as well that will do it for us for "squawk on the street. "techcheck" starts right now good thursday morning welcome to "techcheck. i'm carl quintanilla with jon fortt, deirdre bosa and julia boorstin the fragility of the tech rally. is a reset coming ahead of earnings apple is eating everyone's lunch, legendary venture capitalist vinod