inside even if you are vaccinated. meet the teen going to space next week. blue origin was planning to make history with the oldest person in space now the youngest it's friday, july 16th, 2021 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen andrew is out today. it's friday. we are watching the equity futures. we are getting ready for the weekend. futures are indicated higher this morning with the dow futures up 51 points s&p futures up 7 nasdaq up 27 it has been a pretty good week for the dow. up over .30% for the week to

date so far. s&p right now is down 0.2% for the week nasdaq is down by 1% it had four days in a row of declines it down 1% only 1.75% off the all-time high the dow and s&p are fractionally back to within the all-time highs. dow and s&p, down yesterday. we are at incredibly high levels jeff called it nose bleed levels for the markets. he thinks the market can continue at these level if the federal sdtimulus package continues. you will see the spending at these levels. >> it is tiresome to search the market and point out how many times the market cannot go any higher i'll not do that he's a bond guy. predict the stock market no one was worse than him. >> you don't think he's right

when he said the market could continue at these levels >> that's not what i glean from what he said he said these are the most overvalued levels in the history. what i read was not it could continue to go higher. that is a safety valve for him to be wrong. >> he said if the federal stimulus like this continues, it's all on. >> the conclusion i came to and we'll talk about inflation and janet yellen and things like that the thing i say the 10-year could go to 1.3% if the fed is going to buy and not taper, they are buying everything that is out there maybe there really isn't price discovery for the bond market. it is fed induced. why not the same for the stock market no price discovery in the stock market it is just like the bubble in the bond market.

>> you youare right. >> then earnings are good. earnings are only -- the price is only the multiple you put on it earnings are good. the multiples are still going up that could all be fed. >> do we come back to these are nose bleed levels and we don't know if there is price discovery? >> we will have paulson on he's pretty good jim will say, look, we get to 4,500 on the s&p we go and retest the 4,000 >> what did yardeni say yesterday? >> he said keep dancing. >> great >> don't fight the fed basi basically. >> if the fed is doing that and federal stimulus spending coming in those are incredible streams >> that was another. there really is nothing on tv. these are the things i'm thinking about on my own when i came to on that is is it

the fiscal or monetary stimulus? if we spend another $4 trillion, why is that not inflationary it is not that the fed has extraordinary measures and pumping so much in the system we can't spend $4 trillion if the fed doesn't allow them to buy every bonds to finance that debt it is the same thing fiscal monetary stimulus. >> it is two rivers colliding. you are looking at pittsburgh where -- i guess it is three rivers there the river is coming in and forming a giant. >> that's the source pittsburgh sends all trash down to cincinnati. they have been doing it for -- as i was growing up. that's what they did i love the pirates it is like a sister city, cincinnati we are down river from there >> you have second city.

>> we go to cincinnati call it the chocolate river. that's what it looks like. >> it's pittsburgh's fault >> not all pittsburgh's fault. they send it down. just like manhattan sends trash and sewage to new jersey >> which we don't appreciate >> we don't. andrew loves that every time he flushes the toilet he says ha-ha, there you go. >> and all of the needles along the shore? just crossing the wires. biden administration issuing a warning about the risks of doing business in hong kong. you have to watch it as china tightens its hold on the territory. companies in hong kong should be aware they are subject to laws there, including the national security law under which foreign nationals have been arrested businesses face risks associated with electronic surveillance without warrants and the surrender of corporate and

customer data to authorities people and companies should be aware of consequences of engaging with sanctioned individuals and entities and warns they could face chinese retaliation for complying with u.s. and international sanctions. here is the inflation story. the inflation rolls on janet yellen weighed in on "closing bell" yesterday >> i think we will have several more months of rapid inflation i'm not saying this is a one-month phenomenon i think over the medium term, we will see inflation decline back to normal levels of course, we have to keep a careful eye on it. >> secretary yellen said she worries about the problems inflation poses for low-income families when prices are surging. if you throw in asset surging for price inflation, we could be in it.

it depends what we do from here with congress. i'm not at all convinced the $600 billion ever gets done with republicans. >> the progressives are threatening. they want more >> i think manchin and jen psaki said if we had it, we would do it already >> tester and a couple of others raised concerns about it with janet yellen, back to the conversation about what the fed does and had fed has to provide cover for the spending from the administration >> the money for it. >> to print it out big decision is what happens is powell going to be nominated for another term that question is coming up yellen said yesterday on req "closing bell" that she hasn't decided. if you think of powell not there, you think there would be

more questions from the market >> you think biden would ask secretary yellen >> oh, yeah. oh, yeah you don't? >> no. >> i think steve mnuchin had a big role in who was chosen with powell >> i don't know. >> as a former fed chair you don't think he would seek advice >> we are opening up the can of worms of who gets in the president's ear on a lot of things i don't know i know -- >> i would be shocked if he doesn't. >> you think schumer and pelosi? >> i would be shocked if you didn't ask yellen, who is a former fed shchair herself. >> there are a lot more. powell is dovish >> and people are wondering if he is more dovish because of the coming nomination. i think he speaks his mind most

times. i think he is open about where he sees things i think it is inscrutible. >> we spent a lot already. i understand that. i still think if we stop right now. it is just bottlenecks >> transitory in nature. >> yeah. if we do a certain wing of the democratic party wants, if we do that, we are off to the races. i really do. something caused it back in the '70s it was oil and everything else that's frightening we see it in other countries this is what is causing it, but everyone else around the world is do it let's get back to the other big story. the markets have been watching the mask mandate which is back in los angeles county officials require masks to be worn indoors even by vaccinated people amid the sharp increase in covid cases. the delta variant in particular.

l.a. county recorded 1,000 new cases each day for a week. the health department says there is community transmissions hospitalizations are at the highest level since april. all students, faculty and staff must be vaccinated to return to campuses we will talk more about the spread of the delta variant at 7:30 a.m. with dr. scott gottlieb. >> i read a cnn piece yesterday. i don't know if it was hyperbolic, but it scared me a lot how many young people in miami. all unvaccinated are getting it now. 99% have not been vaccinated that is a lot of people. a lot of young people. according to this, they are getting pretty serious covid cases even in their 20s, 30s and 40s. according to the article, and

i'll ask gottli, eb about it some 20 and 30-year-olds were dying. i'm citing the cnn report. that is really concerning. >> very concerning >> so many are not >> we are going back to the place we thought we escaped. is this going back to lockdowns or mask mandates to be fin a position where case come back and hospitalizations come back. >> i have been out and about at the sporting events the one i happen to see. the ufc fight. it was packed. nobody had masks on. we're pretending like we're beyond this. >> right >> with what you have? 40% of the population not

vaccinated >> anybody under 12 is not vaccinated >> overall, 40%. >> the older you are, the more likely you are to be vaccinated. the high risk factors take it more seriously you are pointing to the right question the 20-year-olds and 30-year-olds don't think they are at risk and don't worry. >> the worry is they give it to some old person or vulnerable with pre-existing conditions or older. now according to this, they need to worry about themselves. it is not just a bad cold. coming up, the big take away from the first week of eaerngs s seasons. this 100 points down doesn't mean anything. it was up for a while yesterday before it settled. >> if it closes down, you are talking about the major advantages right now, 1.75% is the nasdaq from the all-time high .75% for the s&p and the dow

is .30% from the all-time high >> the nasdaq with the problem yesterday. it recovered economic data on the way we get the june read on retail sales at 8:30 a.m. eastern "squawk box" is coming right back >> announcer: this cnbc program is sponsored by truist securities 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. we now find that 85% of individual investors are interested in sustainable investing. among millennials, the interest is even stronger. ♪♪

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you know, kicked off the june read with auto inflation came in hot. fed chair powell tried to calm fears. joining us is jj hanihan we get a holistic from you, jj you give us a great list with fundamentals at this point, we reduced it to the fed again. we did that at the top of the show don't fight the fed. it's going to continue does anything else pay to talk about other things when they're in the driver's seat powell is still. >> absolutely. the fed is in the driver's seat. joe, you have to talk about earnings in the long run, earnings drive markets from now until the end of the year. at least

i'm sure beyond the beginning of next year. the fed will be the game in town so to speak to lead the tug-of-war do we love stocks? do we hate stocks? transitory versus lasting debate on inflation i think is probably the biggest question we have right now you have been covering very well the last few days his testimony on capitol hill. saying with transitory the biggest issue is this should last a few months. that wording i don't know we heard that much before a few months last until back to school or until the beginning of the year or beyond that? that is the question that everybody is trying to figure out. what does that mean to him and what does that mean to fed policy you have been in the markets a long time, joe

it is the old expression inflation starts slowly and happens all of a sudden. that is the biggest fear it picks up momentum as we head into the end of the year and next year and back to the original part of the question with earnings. earnings always matter i think this earnings week, the banks held up their end of the bargain. >> a couple of things. people pointed out this will be peak earnings growth, probably not peak earnings, but growth. the second derivative. the second thing is earnings are great, but the only thing that determines the stock price is what you are willing to pay for the earnings now we're back to the fed. if interest rates go up, you will not get a multiple of 22. what do you calculate the next year s&p multiple is at this point, jj? what is your number? it's over 20, i'm sure. >> yeah, i think based on everything we know right now, it has to be between 20 and 24,

joe, don't you think again, that's all of the things equal. if the fed raises rates. >> if multiples contract hold on. i want to bring in ganjan. did you sleep in this morning? is your alarm clock broken >> sorry about that. >> good to see you >> good to see you >> you had interesting thoughts that i saw in your notes about your view on things. i mean, a lot of it is similar you have your own opinions if inflation is going to stay or the fed stays easy for maybe less now after we saw powell's testimony. he seemed to notice the predictions have not been perfect. >> sure. to me, a huge disconnect

when i get out the door or pick up a restaurant tab, i see higher prices. lawmakers were concerned about higher inflation it is something all investors are talking about. then, you take a look at the market and look at the bond market and stock market and 10-year up 1.3%. stocks hit dozens of records this year. it shows investors are more sanguin about the long-term. >> you point out that people are ready, perhaps, for powell to be wrong. they are not positioned like they believe powell is going to be wrong >> it doesn't seem like it yet >> they are accepting at this point the thesis it is transitory you can see that in valuation. >> i think so. i mean, this is anchoring the market over the past year.

confidence in the fed. propelled us in the depth from the march downturn last year and spurred this year. people are taking the fed at its word >> jj, is earnings enough? we will see peak earnings growth number two, the multiples are more dependent on interest rates. you know earnings are good, you still have to assign a multiple to where the valuations are already. >> exactly we saw you companies this week at the crux of the economy big banks drthriving they have been doing incredibly well the last year the bar is high for earnings and companies with analysts expecting the highest growth rate in a decade that could pose a test for the stock market >> jj, we also have for canaries in the coal mine we saw the vix long has been

quiet. one day last week, we did see a big move and settled back into its omniescence. is that a word does that indicate a lot of fear in the markets >> no, it doesn't indicate a lot of fear, joe it is like if you were a doctor and had a patient and gave you the different signs and you are pretty sure the diagnosis, but other things are going on and that is what the market is doing right now. what i mean by that is you get the bond market as you mentioned, telling us one thing over the last few weeks in continuing to rally and making rates lower. you know, maybe that does support the chairman's -- not the bond market itself, but the prices supporting the chairman with lumber and crude oil. corn, beans, coming off a bit

over last few weeks. that being said, the bond market with the low rates is also telling us maybe there isn't the expectation of inflation a few weeks ago. as mentioned, if i fill up my car right now this morning, it will cost me more than it did. groceries are costing me more than it did. there is a strange thing going back a couple of ways. a couple of things, joe. rates going higher and vix getting above 20 below 20 is signaling. we had to rally last week and we got near 20 and sold back off. you need to see a few things together i always like to look for bonds combined with vix and gold. when people get nervous, we see people buy that more it cannot be one thing a combination of things. when earnings are going well, that's really a difficult -- they started well. big tech has to carry their

freight coming up. if they do, it is really tough to say, oh, my gosh, the market's doomed. >> gunjan, a couple of other things in your notes i said the vix is low. you think the underlying pockets of the market where you see volatility there is more than meets the eye. when it is all said and done, probably tech is still the place to be for the second half of the year >> i think it is important not to under estimate tech a lot of people did that this year everyone positioned for the energy and cyclicals to rally. take a look at what is driving we could see these back and forth with the different markets in the stock market. >> thanks, gunjan. i understand 6:00 is early

you like coming on that's pretty early. >> big ask >> big ask kinahan. you go on with sully you are always ready >> born ready. >> i'm up early, joe >> money never sleeps. that's all you need to say thank you. we'll see you both again have a great weekend >> have a great weekend, joe when we return, it was the first treatment approved for alzheimer's since 2003, after the controversial approval, the fda has had several setbacks. let's look at the s&p gainers today. oneok up 1.7%. livenation is up 1.25% into thip

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another setback for biogen's alzheimer's drug three hospitals will not administer it. cleveland clinic and mt. sinai and providence will not carry the drug the cleveland clinic says doctors can describe it, but administered from the outside facility this follows the review of the safety and efficacy. some health insurers are restricting access to the therapy. a spokesperson for blue cross

blue shield of north carolina cited the same in the decision not to cover the drug. that is the bigger question. expensive drug if you have hospitals saying they won't administer it, you will have insurance companies saying it is safety and ef efficacy >> depressing. hope springs eternal with something with the aging population it is so urgent we find something that works >> it has been almost 20 years since there has been another drug or treatment approved >> i think this is one of those from the name of it that ends with a monocolonial antibody we don't know if it is plaque which is the result. it is not proved definitively. >> you would want it if you have a family member. >> you would you wouldn't want to have false hope that they rushed through the approval process because

there is an urgent need. it hasn't been proven it is that efficacious. >> i like to see somebody like the cleveland clinic not do it that raises concerns about the safety you wouldn't think they do that because of the efficacy. >> both the cleveland clinic >> one of the three. >> mt. sinai. >> these are well known hospitals. >> right everything is risk/reward. >> right >> that's a first. hippocratic oath do no harm >> the fda moved ahead with it and somebody looking for other cures for other people i know. i'm glad to see a chance taken >> right. >> i hope it doesn't push back too hard on the fda. >> the fda constantly criticized you might as well try it some people are in need. then again, if one person dies from gene therapy or something like that. they are in a tough spot

scott knows. we will talk to him. coming up, unemployment benefits essential lifeline to millions during the pandemic. sometimes the payments did not make it to the people who needed it up next, the cnbc investigation into how out dated technology may have fueled actual fraud. as we head to break, here is a look at the s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business our people and network will help keep you connected let's take care of business. dif. 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!

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welcome back during the pandemic, a wave of unemployment made the world of benefits a prime target for fraud according to the labor department improper payments amounted to $39 billion nationwide the bulk of the fraud involved identity theft with more

reporting transaction fraud. criminals steal the unemployment insurance from accounts. the cnbc investigation re vealed a cost saving out dated technology fueled the theft. leslie picker has the report >> reporter: when schools and venues shutdown during the pandemic performer and part-time music teacher azari moon found himself out of work. >> i had to go on unemployment insurance. >> reporter: those benefits were a lifeline until october when he discovered all but a few dollars were stolen. >> my entire account was cleared out. it kind of put me in a difficult situation. >> reporter: without those funds moon became temporarily homeless living in his car for weeks. >> i'd usually lay against that side of the car and lay my legs over the center console. >> reporter: moon and millions of unemployed americans received their state benefits through debit cards like these but they lack chips, a common security barrier against fraud. still 45 states plus d.c. use

debit cards mostly without chips although many also give recipients a direct deposit option our investigation found states like california and nevada found an outsized share of stolen benefits during the pandemic because they had a greater reliance on chipless debit cards. >> a card without a chip, that's really easy to copy. >> reporter: criminals can then take the duplicate card to an atm for cash according to cybersecurity experts like ibm's charles henderson. >> it's just a matter of picking up a reader,writer and duplicating it just like a photo copy >> and i would presume it would be impossible to replicate a card with an chip on it. >> it is extremely expensive and cost prohibitive to manufacture a card with a chip in it >> reporter: a big reason why these cards had a lower level of security in it in the first place comes down to cost california hired bank of america years ago to distribute unemployment insurance on its behalf their contract show the state only requested cards with

magnetic stripes, not chips. california recently extended its contract with b of a only the bank tells cnbc it would like to exit this business as soon as possible that's because the bank says it's lost hundreds of billions in 2020 alone due to transactions fraud in state benefits >> i was shocked i couldn't believe it was happening to me. >> reporter: this single mom vanessa experienced it first-hand and blames the bank and the lack of security >> i had to break my son's piggy bank it was sad to have my son tell me he knows i'm stressing, he knows i'm struggling, that was the heart breaking moment. >> reporter: they're part of a class action lawsuit against bank of america alleging the firm failed to fully investigate their fraud claims and quickly credit their accounts when the funds were stolen. together they say they've lost more than $10,000. >> i developed depression, anxiety. >> reporter: she was at the grocery store trying to buy food for herself and her toddler when she discovered the missing funds. >> i was sobbing and i didn't

know what to do because that was our life at that moment, and it was a really scary moment. >> reporter: they said in court documents between october 2020 and march of 2021 about 255,000 fraud claims were filed of which they approved payments to about half in a statement to cnbc, b of a said its number one goal has always been to ensure legitimate recipients could access their benefits >> what was going on with bank of america at the time was really exhausting. >> reporter: after months of back and forth bank of america gave them credit for their missing funds but they say their lives have already been up ended. >> this is peoples lives you're messing with, this is my life you're messing with, his life, her life i feel very like punched in the gut. >> reporter: amid our questionings over the last few months bank of america and the state of california told cnbc they are in the process of transitioning to chip based cards pending california legislation would also add a direct deposit option for these benefits

bank of america sees this in certain states we called the three other banks that do provide these benefits including u.s. bank, key bank. only key bank responded providing any further commentary due to ongoing investigations. guys >> the good thing. we like hearing about the report because it is interesting. it is definitely shaming people. this is fixable? this should not happen again >> no, it is fixable it is one of the things where people look at unemployment benefits they say it is a card that needs to be transitory they don't expect anyone to be on unemployment for longer than a few months the pandemic changed that for so many people. you had cards in the possession of people for longer and criminals saw that as an opportunity to target them because they were this cheaper

and cost effective technology and ease eveier to penetrate anl by people for longer is the norm >> well, as we speak, i hate that expression. as we speak, maybe we'll make progress and next time we learned we helearned a lot. doesn't qualify for a silver lining i don't know if there is any silver lining of what we have been through the past 16 months. there are a few. thank you, leslie. we look on the bright side. >> more time with family i don't want a covid 2.0 we reassessed our lieves. get vaccinated. when we come back, we have stocks to watch. including a change-up in the s&p 500. we'll talk about that next. later, senator bill haggerty joins us with reaction to

chairman jay powell's testimony to congress and much more. and you can watch or listen to us live anytime on the cnbc app. ♪ ♪ ♪ hey google, turn up the heat. ♪ ♪ ♪

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with real cocoa. well, that's the way the sandcastle crumbles. you can't beat turkey hill memories. welcome back u.s. equity futures in the green. dow indicated up 36 points nasdaq up 28 the s&p down just about 6 points as you can see yesterday, we were sharply lower

in the morning, but the dow eeked out lower. eeking out a gain. the nasdaq down 100. everything's close to all-time highs. stocks to watch. jack dorsey announcing the company will create an open source developer platform focus o ed on bitcoin. he said a lot about the cryptocurrency he said the goal is to make it easy to create the decentralized financial services. check out moderna shares that company is replacing alexion fpharmaceuticals. check it out moderna shares are up 7.6% on this news. also, keep an eye on the cruise stocks today. and can allow cruise ships to

move canada had originally banned cruising there through february of 2022. you can see the cruise lines higher today the question is complying with the rules in the united states and canada with other nations. it is not easy everybody has different demands. florida is not wanting you to ask about a vaccine. other countries not letting you in if you don't get a vaccine. it doesn't make it easy. all of the cruise lines are up 1% today >> moderna market cap. $104 billion >> wow >> ca-ching. closing at 260 i guess the new york times is not working on that expose of the stock trade. he hit his stock trade with they were ahead because i entered

into the program for state purposes they show that was all a big scam to be able to sell. where was that >> a long time ago he lost money. i have to go back and look at the timing on it >> was it in the hundreds? >> i don't think so. >> it was in the 80s. >> i think it was under 100. >> we jumped on that look what he's doing look what he's doing timing and conspiracy on twitter. all of the conspiracy people you let him do that. you let him. we're talking to the guy who is the head of the company to develop the unbelievable vaccines and all we're hearing about is we're helping pump and dump it's friday. never mind >> it's friday you can say it shut-up. when we come back, meet the teenager who was just named the fourth passenger on the blue origin space flight. we will look more closely at

tuesday's launch after this break. and look at crude oil for wti. it is a down week for oil and a sharp upswing the last few months "squawk box" will be right back. only 6% of us retail businesses have a black owner. that needs to change. so, i did something. i created a black business accelerator at amazon. and now we have a program that's dedicated

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welcome back there's a new passenger on the roster for tuesday's launch of blue origin. oliver daemen is starting his education in physics and business he'll be joining

balancing out the age range. he'll be the youngest person to ever go to space and funk is the oldest this seat supposed to go to the winner of $28 million which raises questions because that person was double booked how do you pay and double book for a flight like that >> that sounds a little like -- you go first >> i will stay here. anyway >> number one, there's imax. you can always go there. pretty damn close but you may

not be weightless. >> i can live with that. joining us now, derrick pitts, chief astronomer we are trying to put it in comparison from what we saw with richard branson. what are the differences >> good morning. the first thing, the branson flight was piloted two pilots and mission specialists along with richard branson. this flight will be completely automated. the branson flight was essentially like a space plane that takes off and lands on a runway bezos is merely a rocket that has a capsule. when it returns to earth, it will land separately and the capsule lands some place else on its own. the other thing, i really like

this, it has really big beautiful picture windows. so the view will be excellent. >> what about the karmen line. the branson ship did not cross that >> yes, there has been questions if the branson flight really went to space because it didn't cross the von karman line this new sheppard flight will reach the von karman line or

higher whether it is 52, 67 or 72 miles. if there is a mishap in any of this, you are dead no matter the altitude i see that in leveling the playing field. in this sense, if you have the nerve do it, okay, go for it >> wallie funk who is 82 qualified for space flight at that point, she never got to fly because women weren't qualified to go to space so this is pretty historic from that perspective >> i think it is really wonderful she will have the opportunity realized of going to space she had so long ago. a wonderful way to get the story out and a great celebration that women have made in space flight. sally rogers in the 1980s was

the first to fly aboard a nasa program. peggy wilson who is a retired nasa astronaut holds a lot of records having been the first commander of a space mission with 10 avas her body seems to be more easily adapted to space than more ever. i think she holds the record for having spent the longest time in space so it is great to see wallie on this >> thank you >> thanks for having me. los angeles county bringing back masks mandates in doors the latest when we return.

good morning stocks nearing trade records market risks are lurking including the rise in the delta variant. dr. scott gottlieb will join us. is the nft craze still alive a new project with budweiser the second hour of "squawk box" starts right now

>> welcome to the second hour of cnbc futures are in thegreen. it is friday, mid-july there's people and things are going on there's a few duldrum. not too far away treasury yields are about where they've been in recent sessions. surprising where we are thinking now 1.25 to 1.35 we shall see >> a lot of the people >> which way, up or down >> it does depend on things beyond anyone's control. you would think it is beyond the

fed but it has something to do with the future and this pandemic and everything else people were asking me in management, how do i feel on this i said i'm beyond, it is over for me i'm out and about now. reading about this if it rears its ugly head in any significant way. >> if you talk to anybody who follows this and tracks it closely. doctors, scientists will tell you it won't be through for a while. it feels like we've been in our own bubble here. giving that back >> this country is better off than the rest of the world it is really which state you are in >> but we travel we've been talking about everybody traveling internationally and across the country. it brings back how small the

world is and how inner connected the world is >> the biden administration is warning businesses about the risks of activities in hong kong this comes from advisories of state, commerce and homeland security telling u.s. companies that businesses in hong kong are subject to territory laws including a new national security law put in place. foreign nationals including one us citizen have been arrested under that law under didi shares are dropping after chinese regulators visited offices to conduct a cyber security review. stock now down by 5.75%. getting to other big movers in the markets. dom is here with the stocks we should be watching >> good friday morning shares of apple. those down fractionally in the pre-market trade roughly 60,000 shares in volume.

fallen to the world's biggest smartphone company according to estimates. it was number two earlier this year, china maker took the number two spot with 17% versus apple's 14% trailing samsung with a 19% market. now shares of moderna best known for its covid vaccines up nearly 8% it will be added to the s&p 500 effective july 21 before the opening bell and will replace alexion which is being bought by astrazeneca. we'll check with shares of square and paypal. square ceo says it will create a new cryptocurrency focused business paypal says it will increase the

amount of cryptocurrency users can buy per weekto $100,000. below that 32,000 mark >> dom, join our conversation on this feels quiet and. maybe died down, there hasn't been an immense reproductivity gamestop is working on a six-day

losing streak but the moves haven't been that dramatic yes, this is just the summer but this is also one of those scenarios where folks that have to be trading it, you can actually move markets more with not enough ammunition. >> air pockets >> yes i was speaking to some trying to figure out the general the theme they got, not necessarily a limbo but looking at what the next direction will be and it hasn't really presented itself yet >> dom, have you checked the weather for southeastern england? is it going to kick up do we need to move this to a different month to get the feel this is really a horrible place to play golf like we usually get from scotland?

>> did you see the forecast for sunday and monday? >> tell me >> they are going to have like a heat wave. >> so no scarey wind like side ways rain in june and july >> collin, we didn't mention him. i could watch that swing of his on repeat cycle all day long >> i'm really pulling for collin a lot of americans looking good. it's been like 11 years. every major that has been

contended since then >> usa usa. >> i'm pulling for an american >> this could mean 25 big ones >> that's a big bet. >> taco bell >> i'll get change i'll get a box and change. >> the grande nacho box you can get five of those. >> i'm too fat i just can't >> we are going to do it one day for breakfast. i'm going to head down to nasdaq and bring a party box. >> no. we have banned food from here. >> that is not a silver lining >> of the pandemic >> it has been a big week for economic data. here is what treasury secretary

janet yellen said yesterday on the state of the recovery. >> my expectation has been that next year, the economy would get back to full employment or something very close to it that still remains my expectation, so we are seeing people go back to work i expect that to continue. there's plenty of ability to spend that remains in the pipeline to drive continued growth >> there is still really a lot of people that need to be put back to work i expect the recovery certainly to continue with a good strong pace into next year. >> today, retail sales due at 8:30 earn. chief economist steve liesman

now. >> thank you senior economics reporter. >> does that come with a check >> maybe it comes with you winning your bet this weekend. you have supply shortages and supply sales we never thought we'd have a problem with auto supply maybe some return and maybe a shift to internet sales with a shift to 4% decline coming out and writes high frequency and

appear to show a solid performance with an economy of services spending to pick up towards some services not captured in the retail support unclear of this weakness or if it is something that chairman fed powell said. i asked who was buying these and he said, who is not buying unclear if there is any unclear policy in this yield. >> do you think there comes a day we look back and say, oh, that's what it was >> you are saying it is the most unexpected trade

it is there for it is. that doesn't help either but it is true. >> no. i thought the chinese were buying. >> the one thing, two things picking up from the conversation yesterday and again the tips spread and not a lot of inflation. they are kind of flat at 2.5 getting back to something becky said that one trader i talked to said if anything, it is this delta variant spooking the market right now >> then you have to ask yourself do they have a crystal ball. whoever they are, not just one group of people but the thinkers

there on that side of caution or the health no one really thinks that. i hope and pray that's not going to be the case >> joe throw on top of that which is getting to the question will we ever know. that made a gun slinger comment. one way or another, we'll beat the inflation comment or the fed will come in through the region kind of like a dead or alive reason the bond market has the inflation story that has to

undermine and the unexpected trade. the delta variant and strong comments by powell about what would happen and maybe that would have a factor. >> one more thing. even people saying they'd like to see the fed do something sooner he's watching closely and knows the markets. there's a question of making the term janua janet yellen didn't say much about it if he's not there, do you think people would get more nervous about what would happen and whether they could do anything about it >> for sure. the market and relative to

powell where the republicans were coming at him in easy fed policy combining from the dems and creating the policy. that is the area of attack and if you listen to brown, they are lax and i think it is an overstatement. that financial regulation of the democrats who see that loosening of the standards a little from the left and a little from the right. maybe he's in a good place i don't know. >> as this nomination is getting

decided. haven't really thought about the possibilities. he has done what bernanke would do and not having a tantrum. a couple months ago where he said the fed would gradually reduce the quantitative easing out there. i don't know how much more you could reverse. so far, the markets have been well behaved >> i think it is something a lot of people will start thinking about. >> i'll see you at 8:30. >> when we come back, a new nft involving budweiser.

stay tuned, u yoare watching "squawk box. this is nbc. onger. ♪♪ one of the big trends in sustainable investing is data, and the ability to understand how sustainable your investments are. by taking that information into account, investors can make better decisions for the long term. sustainability is not about one number. it's about variables like water usage, data privacy, consumer trust, diversity, land use and conservation. all types of investors are now considering this in their investment decisions. this is not niche. one in four dollars globally is following some form of sustainable investing. with sustainable investing at this scale, there's power to change the markets and have an impact on the issues investors care about most. i am courtney thompson and we are morgan stanley.

. check out these pictures we saw overnight. dan tweeting them out. saying late night sketching

challenge. my good to morning news crew dan is a digital comic creator i went back and forth with him on twitter at the beginning of the pandemic he did a lot of legos art and he saw some legos i was doing with my son >> i don't think he starts from scratch there especially with that horrific expression. >> same with mirrors for me. they are broken. >> i don't look like that.

then they say, it is a camera, it records but thank you, dan for liking us. you look like you did the best of the three of us. >> that craze continues. the next guest, the nft project. made more than $50 million in sales. now announcing a new collaboration. joining us now gary vaynerchuk trying to keep it all straight >> that was nba top shot which passed $600 million.

>> it doesn't even matter what we are talking about so it is happening. once again, kudos. you make sense about what is happening on the show and still being met with a lot of skepticism the latest thing and you point out -- $2 billion spent on nfts spent this quarter you understand it whether you like it or not in this budweiser news that kind of explains what is going on can you explain. >> the same way internet happened it wasn't hitting the radar yet because it was early

you see dips making the commitment to be our first client with budweiser which will help brands launch their nft projects you are starting every little piece for social >> specifically, what will budweiser and vayner, what will we call it the intersection >> it is a stand alone consulting company vayner consulting and beverages. that company's job is to consult, strategize and launch

nft projects they had a remarkable collaboration in the uk and they saw the inclinings over selling digital horse skins. i know everybody is going what we've been partners with them for eight years. they go, if gary sold $51 million worth of v friends and we are sitting on one of the biggest brands in the world and we know exactly who he and the organization is, this is probably a good bet for us this is similar to what we did me and my brother when we started vayner, we started the social media platform. they've got the courage and curiosity to say, this limited amount of dollars, in the scheme

of their company is worth us tasting. let me make this point, the great part about nfts from doing commercials or brands, there is no hiding behind metrics, reports or headlines you are going to see the economics of your project. for me, that accountability is an exciting part we'll be finally able at vayner to show how much stronger we are than everybody else. >> in the meda verse i need a boomer course this is beyond the internet. >> vr, right >> this is a term you use frequency. i'm going to start using it. the futuritier operation of the internet, that whole meta verse will be a big part in your view?

>> yes, i don't come on this show and talk about things four, six seven years from now i don't think it is a good idea. >> do you know what's going to happen because we wouldn't believe it >> it is less that i do have a good idea and that i do spend enough time in occulous. 98% of my time is listening, tasting and find the right thing. i bought eejtheriun in 2016. we are now doing $2 billion in revenue in this period this is now real the metaverse is incredibly exciting but it is going to be a while before i come on the show

and say, okay, you have to now do this. >> there will be more budweiser and a lot more clients for vayner nft it's a learning process. i feel like i'm in first grade we need you to come on and explain. it will take time. >> it will take time thank you. >> we'll see you you got it, beck horse skins. >> i don't >> we are going to keep working on it. it is real >> glen hutchens knows a lot about this too he's offered to explain more we should have him at some point. still to come, dr. gottlieb about the rise of the delta variants some reinstate offing the mask mandate even for those vaccinated >> announcer: time for the afla

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approximately how many popsicles are sold each year the answer 2 billion with the most popular flavor being cherry

>> the mask mandate is back in los angeles. county officials will choir masks to be worn in doors even by vaccinated people joining us now is dr. gottlieb, former fda commissioner and

serves on its board of pfizer and illumina i don't know if your ears have been burning all morning we've been waiting to get your thoughts on this do you think this measure was the right move >> i don't think it is the right move i don't think you can tell people who have been vaccinated they have to wear a mask i think it will be the exception. there is not going to be a lot of support at this point people worried about covid have largely been vaccinated. most people who are worried about this people who remain unvaccinated aren't worried about this and aren't going to wear masks either some models being looked at. cdc has one, i'm told that shows a wave of epidemic over the next two months those models is no mitigation. no mandates of masks, no

closures of businesses that's likely to be the norm when you get vaccinated, you are less likely to spread. >> telling them you have to wear masks in doors it creates a disincentive to wear masks in the first place. >> we've been talking about the article and pointed out it might be hyperbolic. you can't trust everything you are reading on this. thank god the biden administration is going to make sure we get it all straight here on facebook. this was from cnn that seemed to imply 20, 30 and 40-year-olds not vaccinated not only were getting sick and getting sicker more than had been seen in the pandemic itself and that there

were, they didn't say how many deaths there were but 20, 30 and 40-year-olds were getting sick they are getting sick quickly to intubation and more are dying. are you seeing that? >> this is striking younger people because younger people remain unvaccinated. when people who remain unvax natd get infection it is clear this is causing more infections far more contagious. a good analysis i tweeted yesterday in a study out of china showing you get 1,000 fold increase in viral tiders early in the infection people are getting very high tiders early in the infection.

if they have declining neutralizing antibodies those can get overwhelmed. that's why you are seeing people getting sickwhether previously infected or vaccinated but their b cells kick in. when you have a strain more contagious, it will start to infect people who might have escaped and might be more vulnerable >> doctor, if you don't have preexisting conditions, what are the percentages of 20, 30, 40-year-olds have died it is low. why in this article am i getting the idea young people are su coming to this disease

>> people who are vaccinated and might develop mild symptoms. if you've been vaccinated and you develop a mild cold, you don't think you have covid we are not doing a lot of routine screening unless you play for the new york yankees. i think we are not picking up a lot of infection not because we are not doing testing but because people likely to get infected are unlikely to get tested they are either young and healthy or people who have been vaccinated i suspect a lot of young people right now getting infected you are seeing the tip of the iceberg. >> is that an argument for changing our behaviors if you have somebody who is vulnerable. making sure you get your kids tested before we bring them

around your parents? >> i thinks that what we should be doing how do we protect the vulnerable if you were vaccinated or vaccinated last december wearing a mask right now is not imprudent. if you are in mississippi, or arkansas >> los angeles county as well. it is not as dense in other parts of the country right now they do have a surge of infection. >> you keep coming back to the idea that we couldn't know how long the immunity will last or

protection there are other levels it occurs to me people we vaccinated first are all the health care workers and they are not on the front line. is the clue going to be when health care workers are the first ones sick? >> i think we'll end up boosting the population the include will be the nursing homes. i think the vulnerable and elderly in nursing homes, the infections are going to get into these settings just like you see the infection shoot around a baseball team in close quarters, it will shoot around facilities like that. the declining effect of the vaccine. health care workers are an interesting question

if you are a 55-year-old health care worker going back to the hospital in the fall or winter, do you feel comfortable? what could end up pushing the cdc to make a recommendation may be the health care workers wanting to get boosters. the government needs to speak to this you don't want to lose your relevancy but give guidance people want to follow. i think you'll see health care workers start to contemplate boosters for themselves. >> is there going to be a big fall spike of covid 2.0 or are we catching herd immunity? >> barring vaccines that pierces the prior infection. after we get through this wave, we'll have enough of a

population with the wall of immunity, the level of spread will drop. i don't think this will become herd immunity. i think this is the last surge of infection we would have to deal with. we thought b 117 was that surge. delta is more contagious that it will require so much more of the population to have immunity. >> some say the h hesitence is because it does not have full approval there is a conspiracy theory that says they haven't approved this because they know something. >> the full application is in right now. pfizer submitted on may 21st

i think it will take the fda three months to approve. i thinks that reasonable it might slip a couple of weeks. i think the time line from three months is what fda is working on in my view given my experience i think this is coming up. in terms of what it will drive, it probably will drive more confidence there are people for whom it will detour. it will give health care institutions and other employers more drive once it is no longer just emergency, it will give more going to the fall. >> the yankees canceling their game with the red sox at the last minute, why does it keep happening with the yankees is it just the testing

>> why does it keep happening with baseball. i think it will continue to happen with baseball because it is a close quarters. you get a single introduction into that setting like delta, it is going to spread someone introduced it and it spread through the clubhouse i don't understand why these clubs don't require everyone to be vaccinated. whoever brought that in cost that team a tremendous amount. why these teams are allowing them to go in unvaccinated and put other players at risk is hard to understand >> the other players at risk are unvaccinated maybe they deserve each other. if you are vaccinated, you can't catch it who are the unvaccinated people giving it to the other vaccinated people. >> there are some supposedly vaccinated

>> do you believe that they did get vaccinated or maybe they got one? i don't know. >> i don't know. what do you think? how is it happening? you don't want to guess. >> we are probably never going to know. i don't think they'll disclose that my hunch is that someone introduced that. some people even vaccinated are going to catch it. >> thank you, scott. coming up. call it the summer of excess everything from private jets to exclusive islands are in high demand "squawk box" is coming right back at the lexus golden opportunity sales event. get 1.9% apr financing

on the 2021 rx 350. experience amazing. (judith) in this market, you'll find fisher investments is different than other money managers. 2021 rx 350. (other money manager) different how? don't you just ride the wave? (judith) no - we actively manage client portfolios based on our forward-looking views of the market. (other money manager) but you still sell investments that generate high commissions, right? (judith) no, we don't sell commission products. we're a fiduciary, obligated to act in our client's best interest. (other money manager) so when do you make more money? only when your clients make more money? (judith) yep, we do better when our clients do better. at fisher investments we're clearly different.

the wealthy are hearing phrases they don't know. phrases like no. we are booked. take a number.

that's terrible, i feel horrible for these people >> this is a huge supply the top 1% have added a huge percent to their wealth. they have a new luxury problem, that is a lack of supply now with an added of excess of excess in the hamptons, a plate of lobster pasta is now $85 but only if you are lucky enough to get in waiting lists now stretching for weeks. the favorite watering hole of the wealthy cash cash now booked all summer through early fall. turning down ong-term clients. her new pitch, offering winter

weddings it is impossible to find boats over 80 feet long to charter dock space from nantucket to maine to new jersey are all full prices up 20 to 30%. real estate in aspen priced over $11 million. in the hamptons, we saw rent prices over $2 million for the summer >> i feel so bad thank you for providing us a little bit of justice on this > en way >>whe come back, shares of apple on a hot streak. we've got the inside line. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute.

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despite losses, apple shares have been hovering at nie highs adding more than $300 million. representing a further upside for the stock. managing director at wedbush and managing director at da davidson i'll do my little rant so there are no flying autonomous apple cars. i don't see anyone wearing those

ugly watches anymore what happened? is it the services and the whole apple eco system i don't have the new apple tv. none of these things happened and the stock has at least doubled from where they are saying what will they do next? >> it is the new infoerch. looking at getting consumers essentially free devices the most important product generates the largest portion of sales and profits. in my opinion, the recent improvement in apple shares is demonstrated in the reputation

of the iphone. i got an iphone. what is this, an 11? before that, i had a 7 that i had to charge every 15 minutes this thing is so near and dear to me and almost brings tears to my eyes. it is the iphone a very large part of my life if i ever leave it somewhere, i would have to swim across the hudson to get it and i would >> listen. this is the strongest cycle apple has had in a decade. services has been the key too. we think services is worth

$1.3 trillion. that's been a big part the 1-2 punch here shown in china. look what they've done in terms of apple units and what is coming up. >> it is perfect now what would upgrades mean here on out? we good to iphone 13 it is part of the 5g upgrade cycle. 20% yet. next year, apple glass the arvr will be the next product launch. we talk 2024 when we see the apple car hitting the road >> so it is still coming we are buying time

that's coming? >> yes the good news is that slow down inspired apple to essentially look at a lot more opportunities either on a timeless car with apple handling that or full apple car makes a lot of sense to me. these have resulted in a very strong performance there is a chance of that coming late >> showing a willingness of things in the past that could drive the upside with an

overreliance on the iphone >> any questions about tim cook have been laid to rest years ago? >> he's the poster child for the transition and hopefully jassy will do as well for amazon. >> what tim cook has done is really the golden touch in terms of what he's done at apple >> great 'lberight. wel right back. we'll be right back. it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. get ready for it all with an advanced network and managed services from comcast business. and get cybersecurity solutions that let you see everything on your network. plus an expert team looking ahead 24/7 to help prevent threats. every day in business is a big day. we'll keep you ready for what's next.

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>> fourth straight positive streak the nasdaq looking like it will snap the streak. the treasury secretary yellen predicting a few more months of rapid inflation. she also thinks it will remain under control when all said and done breaking this morning, biden administration warning u.s. businesses about the risks they may face if they do business in hong kong. the live report from china is coming up. the final hour of "squawk box" begins right now.

good morning welcome to "squawk box" on cnbc. andrew is off today. we've been watching u.s. equity futures still in the green down by over 100 points. indicated by 27. treasury yields now in the same rough raframe of where we've be at 2.2%. >> other top business stories we've referenced treasury secretary yellen said she worries about problems

inflation could pose for lower income families looking to buy homes but ultimately it will remain well under control. >> i think we will have several more months of rapid inflation i think over the medium term, we'll see inflation climb back to normal levels we'll keep a careful eye on it >> climbing back to those rates. seeing that as a sign the market believes inflation is under control. biden administration is warning u.s. businesses about the potential risk of doing business in hong kong the advisories coming from departments of state, treasury

and u.s. business. hong kong laws including strict new national security law. we'll get a live report and update from eunice yoon in beijing this hour. oliver daemen, an 18-year-old aspiring pilot will get to ride on the space flight. he takes the fourth seat on the new sheppard rocket that was supposed to go to a mysterious person that bought a $28 million ticket but that person had to delay due to scheduling conflicts. what, you got to wash your hair. at 18, he'll be the youngest person ever to travel to space scheduling conflict? >> not that you blame the person for having a last minute case of

cold feet. that looks scarey. you go first which one? >> that's the first one. they look to the pit down below. very dangerous you go first we are a little less than 90 minutes from the opening bell this morning dom chu is here. >> snakes. why did it have to be snakes >> if i paid $28 million for a ride, i would schedule everything else aroundthat best performing sectors are consumer

a pretty big gap between those sectors and that's the way the market is rolling out this week ahead of the slower volumes. also checking out what is happening with part of the reopening rates. looking at the cruise lines like carnival and norwegian positive headlines out of canada where they could allow cruise ships to operate where they had been expected. canada has been in lockdown in many ways not letting tourists into the country or certain areas. those stocks not big on the big market showing you a look at the most popular ticker searches. yesterday's trade, the four most popular searches were the 10-year yield.

amc entertainment up about 4%. number two most searched ticker. apple and square on some of their ambitions of crypto cur currency those are the top four and i'll send those back over to you. >> the second day of capitol hill testimony pressing fed chair jay powell on the big spike as they've seen the inflation reopen as he's done before, he clamped down on expectations that quickly rising prices would be a long term phenomenon >> we are experiencing a big up tick in inflation. bigger than many expected and i expected we are trying to understand whether that is something that will pass through quickly or whether we need to act

one way or the other, we are not going to a period of high inflation for a long period of time we have tools to address that. >> joining nus now to talk about battling higher inflation, tennessee republican senator b someone said, what are those tool a tighter monetary policy. they don't even talk about that. there's a plan to have a plan to talk about it down the road. what tools is he talking about >> i think they'll meet at the end of this month. they are going to talk a further balance sheet and also rates

i think he's got a longer view on rates and i think he has to look hard of what is happening in the real economy. look at whats happening in my state of tennessee try to buy a house in nashville right now. prices are through the roof. they talk like this is some sort of pig in the pipeline moment. you see inherent policy. they came in and canceled keystone and forbid drilling everything people in tennessee have to buy is transported when you have massive stimulus spending under way at a time when our economy is improving. you've got to take a long look at the long-term impact. we are seeing increase of government dependancy and increase of return of

unemployment we need to focus on inflation, that's an insidious tax. i am very concerned about that i think chairman powell talked about it too >> you've got some great experience in the financial market we've already done a lot in terms of monetary policy in terms of fiscal policy, we've done quit a bit of stimulus in the middle of the pandemic now we are talking about expo nentally more. could inflation go up based on the prospects for this happening? are you convinced we are going to get another $3 trillion or any of that will ever become law at this point, senator >> as you know, inflation can be

a self-fulfilling prophecy i think people in my home state and across america are feeling this the things they buy ever day are going to be more expensive today than they are tomorrow as families make their own decisions. i am concerned about inflation do the 10 republicans that did this bipartisan that comes up to 4.1 trillion. >> what would in a mean a year from now if we did that? >> we saw what would happen in

march. roughly 10% of our gdp we want to dump into our economy we haven't seen the rise to inflation since jimmy carter's days we've way overshot that. we need to be aware of that before we consider this stimulus right now. >> when you pass senator manchin in the halls, do you say hi? none of the prospects will go on the reconciliation >> you are right about that? >> what number is possible we know they are never going to get six. so bernie was like a stalking horse to say six and we are supposed to feel good about four

or three who can get to him to set him up >> the senator is saying the right things saying whatever we do needs to be paid for. he doesn't want to see more inflation. you talk 3.5, 4.2, both of those will lead to rapid inflation and not a way to prayay for it. >> that makes it okay to spend another $4 trillion. take your pick raise capital gains taxes. not free at all, you are exactly right. >> something is definitely in

the works. this is your view of where we are sitting two years from now >> what they want to put through, whatever they want to call is essentially the green new deal what they'll do with the debt policy, they'll do away with fossil fuels they've got capital gains there. it pushes america's jobs off shore. capital investment bee gets jobs and growth this policy is imbedded in this stimulus package, green new deal will have exactly the opposite effect >> do you think things change with the next midterm or that it will be too late for some of

this stuff >> you already see things moving back they are back to the original topic. people are feeling this at home ever day e every good or service when they go to the pump or try to buy a home, this is a massive tax on every american they'll feel this and i think they'll vote in 2022 with that in mind and there is a ability for the republicans to retake. >> he's so nice, senator >> so calm >> good to be on with you. >> nashville is awesome. a reason prices are going up there. >> greatest state in the nation. >> is it i hear that a lot. depends where the senators are

from great state of tennessee >> you've got an open invitation to come visit. >> four or five cities i love down there i used to go through the smokies as a kid thank you, appreciate it >> thank you >> so what do you think goes away first, inflation or coronavirus? which is more transient? >> i'm hoping covid is gone. i already thought it was gone. >> hope so too >> there's a guy out there selling boosters i'll take another one right now. lay it on me >> when we come back, breaking retail sales stay tuned for that number and the market reaction. first up, considering buying microcrypt production from global foundries for $30

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coming up, the biden administration sounding the alarm for u.s. businesses doing business in hong kong. >> who is at fault when a cyber attack reaches your business we have the story you don't want to miss. we'll update you on that broken down news truck outside the studio anyone know how to work a distributor? we'll be right back.

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two months ago, we learned the pipeline was hit by a rare ransom attack. >> i'm losing customers and business >> that's what eddie told his

supplier after his gas pump went dry. he manages an ez mart where he sells gas and runs a convenience store. for eight days, he had nothing to sell at the pump. >> ez mart is the lead plaintiff in a class action filed last month. they saw sales dip nearly $8,000 in may the same month the gang dark side attacked the company. >> the gain we seek is one of negligence allowing remote access without multilayer security.

allegi alleging colonial failed to properly secure the pipeline they said they can't comment on pending litigation but that company worked around the clock to restart the pipeline. the issue came up in a hearing with the ceo. >> did you have a plan for cyber security response that included guidance about ransom wear >> senator, specifically, no discussion about ransom and action >> the colonial case involves physical damage. >> the hackers create the bad guys and criminals what liabilities and responsibilities does the pipeline have. other people are impacted by it.

that's a question many are asking virtual every industry from meat packing to software faces the threat of the ransom wear attack. eddie says it took about a month for business to return but business is now back to normal >> this proposed class action filed on june 21st and colonial has until late august. the judge will determine if it reaches the determination. if it moves forward as a class, this could be a year's long fight. >> this raises questions the idea that you can't provide a service up would be open to it leading to the question of what

level is acceptable. the technology runs day by day trying to catch up with technology and hackers >> this is going to be interesting. i'll be back with more >> coming up, breaking retail sales. "squawk box" will be right back. these days you have to keep everything moving and reinvent the wheel. with a hybrid, you can do both. that's why manufacturers are going hybrid with ibm.

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welcome back to "squawk box" on cnbc. we are a long way away from this number now that you got out from the new retail sales data. rick, the numbers, please. >> survey says our june read on retail sales maybe the most important number will be x autos. the we are starting to see a trigger come out we are expecting actually a downed number. this is kind of surprising right now, i see we are up .06 expecting a number down.

x autos up 1.3 three times what we were expecting if you strip out ooze and gas, they are up 1.1 really strong numbers. x autos up 1.3 it really is significant on the sales control group this number is plugged in to other important numbers on the food chain up also about three times more than expectations. i think the inflation story isn't up higher. the growth story on the other hand can't possibly do that. this number could start to firm up yields a little bit you could see yields are down. kind of held at 129. we got down as far as 1.25

there is a bias of yields. have you been watching the corporate bond high-yield story? >> it has concern too. money is finding its way there's a lot around >> there is something really enlightening we should show our viewers. the tightest spread was around 2007 do you know where the interest rate was with the record low take a guess >> where were we >> between 4.5%. >> i grew up with 7 and 8. we were already down to 4 at that point >> i know that think about this the spread now is about the same as it was then but yields on

tenure was higher. this is important. the meat here is the 10-year is so low we put those corporate yields so low and on an absolute basis, they are way lower than they were the problem is jay powell and company just have these flood gates open a lot of these with good securities and companies if you get any kind of temper tantrum, the spread will go hey

wire >> if retail sales are stronger isn't this inflationary worry or is it good growth? >> first of all vehicles down 2.5% not lack of demand they can't make them because of chip shortage. probably some place in this report looking at gas sales up 2.5% were they buying more hostess cupcakes probably not buying gas at a higher price there. following the 2.3% decline so some of the shift back. this is a good report overall.

it will help flatten the second quarter gdp. in a decline down in may overall spending is continuing the inflation and the supply shortage finally, you have some shifts going on into the sector service. food and drink places up 2.3%. another good number up 40% on the year as we return to restaurants, joe >> still, in the old days, we love retail. we are not worrying about a cool economy. we are worried about it being too hot at this point. i don't know if the market knows what to do with these numbers. >> at least it is not stagflation. we saw the huge empire state numbers yesterday. we are seeing the prices go

along. >> that's right. i did hear yesterday, empire that was yesterday it rhymed with higher and a couple of other things thank you, steve >> have a great weekend. >> that's a good question. looking for the silver lining. joining us now to talk more about retail sales data is william sprigs, howard university professor of economics. with cree tail, we want to know about the strength of the consumer and what that strength is doing in terms of inflation what do you take away on those two points >> on this data, we always have to worry about these month-to-month changes and what do we think about may? it is good we didn't continue to

trend the sales. not a nice rebound back to applicant's level. it is not a good indication to star worrying about inflation. it looks like sales are levelin off. it still looks like we are running into these problems with supply chains this is a good indication we have to worry all of these where we move and

take a billion out of our economy. where we are rising in terms of disease and we've seen retail sales grow good that we saw either flat performance on e commerce quite high on the trend. the brick and mortar stories, the good news we were able to make on their own. >> you make a good point strips would fade away at about $1 million. we did see child tax credits hitting bank accounts this week. more put back into the economy the rest of this year. >> a very good sign we are still

down when you look at employment for day care centers we'll have a clear path this is really vital >> do you think we'll be able to reach the full numbers we did before pre covid right now, it is tough to figure it out when you have day cares not open and schools not open. i know a lot of people have reassessed their lives if you have the option of maybe staying home, more people do >> there is continued reticence.

>> the same states that see the surge are the ones with low vaccination rates are the ones who will get unemployment insurance we have to differentiate between low force driven by the issue of the employee these are two different problems a lot of the low wage workers that were in restaurants and leisure and hospital are women not necessarily getting unemployment checks but in the labor force going into the fall, we have that same surge and

disease these are two forces that are really dark clouds. professor, thanks for your time today. >> thanks for having me. the biden administration is warning about the risks of doing business in hong kong. >> hey, joe. just the threat of the biden advisory is setting off officials. accusing the u.s. of attempting to bolden anti-china trouble makers or agents in the city and found that china would retaliate against any further sanctions as they would reportedly sanction

seven officials and would issue an advisory likely today which would say to american companies that they would face electronic surveillance and sanction law. all of this amounts to what president biden described as the deteriorating business climate also meant to remind companies to understand that they have consequences for engagement for chinese officials just a couple of days sending to asia? visiting a variety of countries. there had been some rumbling she might be meeting her chinese

counter part in the port city but now there have been several reports, joe, that the chinese have snubbed that idea based on what users put up there. was it more of a tlelt and scare tactic >> there have been reports people have had their writings taken down there have been several reports of that.

that's what the u.s. government is sort of hammering home and changing and need to understand that changes there are going to be much more -- will not have as much daylight between mainland china as well as hong kong. >> it is hard to answer the question what does the future look like? i wonder how far this really goes >> it is a difficult question. difficult to really know when you talk to the chinese government, which is managing the entire place, they are going to say especially for foreign investors, there isn't going to be any change at all the city will be economically prosperous it depends which sector you are

in a lot of firms will be hiring like crazy they see the potential for this to be nited and be more economically vibrant there are people who do believe that even though there are just as many or several loud voices who are activists of the risks of being in hong kong because there is so much grayness when it comes to the national security law. >> you know where to reach me. >> i will call you i will get a red phone >> just email me and say, what is wrong with you. let me know. >> don't i already do that

>> you do. we don't have time for anything else >> thank you when we come back, we'll get mike santoli's take on the markets as we get ready for the friday morning opening bell. nasdaq 100 is tracking for a negative week. it could snag an eight-day winning streak for the nasdaq. i've had about a enough. stay tuned you are watching "squawk box" on cnbc ♪ but entrepreneurs never stopped. ♪ and found solutions that kept them going. ♪ at u.s. bank, we can help you adapt and evolve your business, no matter what you're facing. because when you close the gap, a world of possibility opens. ♪ u.s. bank. we'll get there together. ♪

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welcome back futures maybe improved a little bit. we never know, mike. too hot. not hot enough been looking at the recent return of risk on the markets. like wear? risk everywhere. we'll get to some of that. look at the s&p 500, really strong close minimizing losses. seemed like he got people ready for friday past three fridays have been very strong. longer term, maybe you get to a pause developing wouldn't be surprising around earnings season. this is a correction back there in the third quarter

similarly january, february, starting mid-april this isn't that unusual to get a lot of back and forth action that doesn't let the index do anything but consolidate look at the average stock equal weighted russell 1,000 it has been the big guys carrying things more recently. the s&p 500 overtaken the measur it's actually been down trending since early june this has been underneath the market but not yet necessarily gotten to the index level. so it shows you just people looking for the big guys here's the speculative pockets i was talking about, and really what you'll see is peak around february or march of this year so this is junior biotech companies. ibbj is a small cap bio tech look at the shape of these charts, they're all similar. spacs obviously have way come off the -- and then interactive

broker is just a proxy for retail trading activity, which is still very high but well below where it was a few months ago. what's interesting is that the overall markets have been able to absorb these things rolling over a lot of the excitement and aggression coming out of some pockets of the market, including crypto, and yet the overall index has remained relatively on solid footing so far almost seven months into the year >> we have a whole new view of what risk is, i think, mike. i mean, we know about real risk now. it used to be a rich tech stock that was -- had a high multiple, we used to think that's where you'd find it. now we've got things like nfts and crypto and meme stocks and i mean, it seems like we've e expanded, you know, we've even pushed the edge out even further on what risky actually is. and some of the most risky areas may have pulled in a little, but

you've got the tech stocks that are $2.5 trillion market caps on some of these. >> in gross numbers, yeah, very big. also never been companies with greater gross profits than the ones we're seeing right now, and the stuff you talk about, clearly money is going to find its way to where the action is, but it's been okay to ignore those things going on parallel to the core of the equity market if you just -- when we're buying vanguard 500 all this time as a lot of people are, that stuff kind of happens around the edges and sofa r has not necessarily undercut what's going on i view it as almost a wing of gambling and collectibles happening around the edges whereas you have people trying to discount future earnings at the core of the market maybe that's a little too square way to look at it. that's been okay. >> i like the way you said that, money's going to find the way to where the action is. i don't know if you saw the cover of "the post"or not.

let's talk more about the markets, bring in jim pallulson. i was a little surprised you're buying into at least somewhat that maybe this is transitory, that inflation is not a problem. remember a couple of years ago you thought commodity inflation was going to be a big deal did that finally come to pass, and why do you seem more, i don't know, less concerned at this point >> well, i'm not totally confident, joe i mean, i don't know if anyone can be for sure. but i really think that what we're dealing with here, we went through what i would argue the biggest -- the pandemic's put us on the biggest roller coaster ride of the post-war era we went to basically a depr depressioniary bust and firms reacted to that by cutting everything to the bone to try to survive a pandemic, and then within a matter of months we went to a wartime boom, and there's just no way that supply

side can react that fast after initially preparing to survive a health pandemic and then all of a sudden finding out we got the strongest growth of the post war era. i think that a lot of this looks to me like, you know, a temporary supply shock and given time it will catch up. i really think that's probably most of what this is but with policy running such amuck and outsized fiscal and monetary p monetary policies that just will not stop even though the economy is doing well, it does give one some pause i still lean towards the view that probably not until next year i think inflation will come down it will probably stay a little elevated in this recovery, but so will economic growth overall. i do think, though, it could get, you know, it still stays bad enough for long enough that maybe later this year we get a correction

but i kind of think it might come from higher levels. >> okay. so back to the four 4,100, 4,200 on the s&p after getting up another 5% from where we are now, is that basically what you're feeling >> that's what i kind of think you know, i just think -- you know, i think tapering is already happening, joe the money supply has really slowed dramatically. fiscal stimulus has gone from 18% of gdp to 12% of gdp i think that's having an impact, as mike suggested, the market has moved more sideways than up really since march, and i think ultimately we're in that period of revaluation, probably will have a correction before it ends, but i also think underneath this, the bigger story for me is we're just having a fundamental explosion here earnings are just going straight north. they're so good we don't even talk about them, and at the end of the day, if the market's

roughly 4,100 or something at the end of the year, i think earnings are going to be $220 a share in the s&p and we go into next year with an undervalued market relative to its average since 1990 and this is a year we'll look back on that maybe the market was up, but what really happened was earnings caught up and revalued this market to give it better footing for this bull to continue >> is there anything on the horizon policy wise, do you think we could stimulate too much you know, we throw the trillions around a lot these are your people that want to do all these things you're just lucky that the other people don't let it happen they allow you to still do well. but if we took the -- wouldn't you like to get negative if we just went wild and turned into a socialist state, jim >> yeah, i have some concerns that way myself, joe i mean, i think we're going a

little too far we're spending money like -- >> a little? that's big of you to finally come up with that. >> not only -- yeah, yeah. i just think not only, you know, it's not just fiscal policy, but it's like monetary policy. they're like joined at the hip doing the exactly same thing meanwhile, the economy is growing at one of its fastest rate of the entire era i think we ought to give some concern to disincentivizing, you know, economic behaviors those are concerns, and we may have some problems with that down the road of unintended consequences from overuse and abuse of policies. but i also think, joe, there is a remarkable revival of fundamentals here. balance sheets have really improved, and i think that's going to be more pronounced than maybe some of the problems we're going to have down the road. >> we've got to go thanks, have a great weekend bank of america approves bitcoins futures trading, so

we'll see what happens make sure you join us next week. "squawk on the street" is next m? 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.

♪ good morning, and welcome to "squawk on the street. i'm david faber along with leslie picker and mike santoli we are live from the new york stock exchange jim and carl both have the morning off. let's give you a look at futures as we get ready to wrap up the trading week you can see we are set up for a higher open. and