worry galore we have a deal opec and allies. crude production sliding on that news. pulling the plug bill ackman backing out of the spac of the 10% of music andrew was even having a hard time explaining it let's just not we have details and interview with mr. ackman. it is monday, july 19th, 2021. "squawk box" begins right now. good morning welcome to "squawk box." i'm andrew ross sorkin along with joe kernen.

becky is off this morning. just the boys. >> maybe this is it? the beginning of something down week last week. >> the beginning of the end? this is the beginning of the beginning. >> maybe this is the beginning of the pullback which we haven't had because of the fed we he talked about it every day. the default trade is green it's up. not surging. never goes down. never goes down. why? the fed. maybe the summer is it summer it's summer. >> is it the summer or delta variant? we will talk over the next three hours trying to decipher. >> you are seeing the olympics >> yup >> covid it's hard to say we put it behind us completely i think it is mostly unvaccinated people. we don't know. we'll have gottlieb on he may know more than us >> we will spend the next three hours trying to decide what is going on with the markets.

let's show you right about now joe mentioned at the top of the show it is down dow off 302 points s&p 500 is opening down 26 points the nasdaq looking to open down about 37 points off. as joe mentioned, treasury yields we have been watching every single morning for years now off -- i shouldn't say off down couple of headlines to bring you bill ackman's spac dropping the deal to buy 10% of vivendi music group. pershing square team looking to buy that for $4 billion last month. the spac announcing the board unanimously decided not to proceed with the purchase. in a letter to shareholders,

ackman said it was due to the issues with the s.e.c. particularly with the structure would qualify under new york stock exchange rules they will have a new deal over the next 18 months to go buy something. the spac price fell 18% since the announcement on june 4th the shareholder reaction to the compleplexity of all of it we were all struggling to make sense of how it would all work ackman said pershing is a long-term shareholder in the amsterdam in september we will continue to talk about this with bill ackman. he will join us at 8:00 a.m. eastern time, joe. sometimes complexity can be too

complex. here we are. >> i thought at the time and i will tell you that when you were talking about it, i started looking into it. i just decided i'll delegate this andrew will -- this will be his role didn't you mention that at the time that there were certain things that weren't quite the same as the others that would qualify for being able to do it? and someone might see that and point that out and it would not be able -- i remember you questioning this >> most spacs, the way they are stuc structured, you buy one asset. this is not that you were buying stock. if you read the rules and i'm sure bill will make the case what he was doing was within the rules. clearly the s.e.c. was raising questions about the transaction. the timing of the questions and answers meaning when this could get sorted out if it gets sorted out, appeared to have presented

a problem as this deal had to close according to the contract, the agreement with vivendi, by september. because so many questions were being asked, it is hard to believe and i believe this is why, effectively, this decision was made it would have been able to have the questions answered to fulfillment or ssatisfaction of s.e.c. vivendi back stopped this transaction and he will buy the shares he will be eating his own cookie we will talk to him about this and what is happening with this particular transaction i want to talk to him a bit about what is going on in the marketplace this morning he did have some very strong views, as you remember, joe, about covid. the first time around.

here we are with the delta variant and we will talk about inflation. >> with the s&p doubled since then not to say -- he is buying he's a genius. i didn't say evil genius he's a genius. he bends things. he doesn't break them. the classic, who would think you could amass a fortune of a company and say we will buy you. it wasn't illegal. andrew, remember >> yes, now i know what you are referring to >> that is great that is like bending things. not breaking law. >> that's a long time ago. >> i know. who thinks of things like that who can think of things like that and think, i think i can get away with that buy a lot of it.

build a huge stake and go to the other company and we'll buy that one out. >> bill is a very clever guy sometimes too clever we will talk to him about that >> okay. you can do that. awesome. opec and allies agreeing to phase out. brian sullivan is joining us with the developing story. brian, i'll hear it again. i watched you earlier talking about it >> yeah. we'll try to get new angles, joe. i saved some stuff for you you have to do that. you can't say the same stuff over and over. i'll say this, this is probably a lot less complicated than the ackman-spac-man thing you talked about. they called the surprise meeting on sunday morning. everybody in the world of oil is on the webex or zoom talking about the deal the deal for the oil markets is

to add 400,000 barrels per day from opec and opec plus nations. they each take a share of the gain starting next month this, guys, all as they begin to get back to, in some point, the end of next year is the goal that is a moveable target. they could add 5.8 million barrels a day back to the markets because that is what they took off at the height of the covid lockdowns and pandemic scare last year. all of this and now monthly meetings, joe, have been the effort to just slowly nudge more oil on the market. that delicate dance where you are able to please some of the opec and opec plus nations that would like to take advantage of higher prices and bring in more revenue or not scare or crash the market they have the deal part of the sticking point the meeting, by the way, began on july 1st is the 19th.

the baseline number was a big sticking point that was the fight they agreed to it. they will add barrels. we are also going to let the uae and four other countries add to the baseline numbers yesterday on the call, joe, it was a love fest. these calls are run by salman. his royal highness of saudi arabia they had the uae representative on the call as well. a lot of we're committed to opec we are together. we are strong. joe, i think this meeting was the most important in the year not bought ecause they added a e hundred thousand a day they were moving fast because the u.s. production is not rising in any way yet. >> no one knows, brian now trying to anticipate the supply/demand dynamics and where

it ends up what is your view? 70 is where we stay? is 55 coming it's summer. it's reopening, maybe. depending on what happens. no one can tell the future what is your best guess? because if it stays here, we might start producing more in this country, right? >> we might. okay, best guess on demand aggregating, demand will soar. i am only jokingly calling 2021 the year of the traffic jam. it doesn't matter. east coast, midwest, west coast, florida, texas traffic is terrible. there may be more mask mandates in l.a. county, but reality is people are showing a willingness to go out. domestic air travel right now you is higher than it has ever been in many cases everybody is in a car. try to go to brice canyon

national park or yosemite. you will see the traffic jams. there will be a spike. dare i say, return to the office everybody has been working returning to the office. wall street has said in the fall and other cities as well if u.s. producers don't add a lot of barrels, the bias seems to go up joe, the u.s. producers, not all, but many are hedged in the mid to low $50 that means if the cost to production is $45 and they sell at $55 they capture $10 upside. a financial transaction. if you are unhedged, you capture all that the hedging may limit the free cash flow the companies have which means they will not have the money to put in a new

drilling if you heard my rbi at the end of "worldwide exchange." only one would give new capital to oil and gas projects. i'm not smart, but my math says that is 1% >> we have the used car sellers. guys who bought a pickup truck last year can get an extra $3,000 biggest profits ever he keeps saying the same thing personal driving personal transportation. you are not on a bus you're not on a subway it is a surprise when is your birthday? is it your birthday? i saw something. >> we'll party like it's my birthday today is the actual -- i know your friend and cohost had one recently as well today is my 50th thank you, opec, for the sunday

morning. big 5-0 today. >> are you a fishies >> you don't look a day over 30! >> i use that all the time >> andrew, thank you joe, a lot of makeup >> pisces. not fishies. >> i'm a cancer. the crab >> happy birthday. and a big happy birthday, joe, we should say it, to becky quick as well. she celebrated her birthday yesterday. >> yeah. on the other side of the break, futures point to a drop to start the week. there are plenty of market moving events on the calendar. a busy week ahead. everything you need to know about jeff bezos' trip to space. rnt to blast off tomorro moing. we'll talk all about it after this

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steph, what do you make of the market this morning? >> we have been in this rotational market valued to growth and growth to value i think that we are in the pattern until we can hear from companies. you mentioned it we have a bunch of companies that will report this week that are actually going to give us great visibility going forward not so much the earnings, per se that is backbackward i am looking at ibm and cloud progress chipotle with price increases. coke, do they have pricing power and what is going on internationally? american express travel back to 2019 levels leisurely. business travel. where are we there and union pacific. that is the broad how is the

economy doing. >> valerie, what are you looking at perhaps the biggest question is what kind of guide aance can we expect with what we heard over the delta variant in the past week and what it may do with impact you hear from chipotle and how reliable is guidance given it seems to be the goal posts are moving all over again. >> i think that the goal posts are moving again because with the delta variant, it adds a level of uncertainty to any forward guidance i think we are in a situation wherefore most companies, their perspective on future profits and reopening, including back to the office plans, was predicated on lower infection rates, first and foremost, and also the fact that schools would remain open

those are two variables that could be undermined by the delta variant given how contagious it is the other implication of the delta variant, we know there are supply chain bottlenecks and constraints in the global value chain that are leading to some unusual levels of inflation. if we have the virus raging in parts of the world that people are depending on in terms of the suppliers or customers or just operations, that could also be a level of uncertainty many indications >> valerie, to follow-up on that, i know we will hear a lot of data this week. do you look at the market and see what is going on in terms of the action dow off 360 points do you say you want to be in the market because this is a dip and great opportunity or are you saying i'm holding steady because i'm worried? >> i'm not worried meaning i tend to stick to

investment discipline and focus on the opportunities we see for stock selection. as the previous guest mentioned, a lot of volatility in terms of value yup one day and growth up the next i try not to invest with that as a driver we look for multiple styles of investing, but really try to focus on the idiosyncratic issue yous we lean into. >> steph, in terms of the idiosyncratic, how much can you rely on the guidance this week some may hold back or be tentative than a week ago. >> of course they want to under promise and overdeliver. i think the visibility is better

this quarter than last quarter of course, the quarter before that we know a little bit more. we are making progress in terms of vaccines. sure, delta variant is a big deal we have to watch it. the economy, andrew, is humming along. we talk about this all the time. manufacturing, we look at ism and pmi and new orders new orders are leading ind indicators for cap x over 60 for 12 months straight 50 is expansion. let's talk about the consumer. we talk about how strong the consumer is. ample jobs out there 9.2 million to be exact. home prices up 18% confidence is strong retail sales number on friday was three times expectations the savings rate, not at 27% any longer, but still 12.5% which is above the 5% on average. i still think you want to have a

combination of reopen and cyclicals and also of tech i would point to a couple of names quickly. expedia. i like tjx which has done nothing in the last year i'm not a big airline fan. i like spirit air. i think the fourth quarter seasonally is when you look at the airlines those are the names on my radar screen >> steph, valerie, we appreciate it and we will watch thanks >> you're welcome. thank you. coming up, the compromise part of the infrastructure deal that is the bipartisan part which got complicated. senators dropping a key revenue raising provision. now need to look elsewhere we will go live to d.c. to explain that next. as we head to break, check out the biggest pre-market decliners we are seeing in the s&p 500.

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time now for the executive edge potential setback for the infrastructure deal in congress. a lot of fat fats breathing easier this morning. ylan mui joins us now. just kidding, ylan good morning how are you, ylan mui? >> reporter: good morning, joe infrastructure is bipartisan, but the irs is not gop senator rob portman said over the weekend, enhanced irs enforcement is dropped from the

infrastructure package under negotiations with the 11 democrats and republicans. this was supposed to net 10% of the cost of the $578 billion deal fin finding a way to plug the hole is a hold up beefing up the irs is toxic. representative jason smith, the republican on the house budge bun budget wrote, arming agents with a mandate from the president to go after taxpayers would mean more audits and paper work for more americans trying to make ends meet more audits make it harder to hide income. the treasury department estimates together they raise $7

$760 billion over the next decade if that money is not used to pay for the infrastructure plan, joe, it will likely end up in the other bill that democrats can pass all by themselves back to you. >> a lot of -- if that happens and if this happens. wednesday is not looking too good portman saying that is not possible looking for other ways to pay for. arcane medicaid reimbursement switch to leave more money in the government they have all kinds of tricks. sometimes i wonder if there is real money when you figure the accounting differently they will have to replace it, obviously. ylan >> reporter: yeah, that is one of the challenging some of the pay fors in the plan are a little fuzzy things like spectrum auctions or selling oil from the strategic petroleum reserve. in addition to reaching the

deal, they have to see what the final pay for comes to and whether or not it adds to the deficit. that could make it tough for republicans to swallow democrats moving ahead with potentially deficit increasing plan on the infrastructure as well there could be a lot of red ink in our future, joe >> pressure on speaker pelosi to agree to pass, if it were to come to her, to pass the bipartisan one and stop insisting the other one gets done first are you hearing anything that might work on her? would she change her mind? >> reporter: you know, i think we need to see them come to her first, joe right now, the first hurdle is seeing what happens in the senate if schumer pushes for the vote on the bipartisan struck plan the procedural vote on wednesday. are both going to come up?

right now that is up in the air. make the tough choice before they arrive in the house. >> thanks, ylan, for the update. andrew. coming up, we're going to get you ready for the trading day head you are looking at the market down dow is off 360 points right now. squawk mplanner is next. we talk bitcoin with mhaicel sanshin. all after this >> announcer: executive edge is sponsored by at&t business our people and network will help keep you connected let's take care of business. 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...

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good morning welcome back to "squawk box. it's 6:30 a.m. eastern time. the dow is off 350 points. lots of questions about what is moving the markets this morning. perhaps the delta variant being one of them. we will get a lot of data this week on the week's squawk planner. earnings rolling in. we will hear from auto nation

and ibm. tomorrow is netflix and travelers and chipotle and united airlines. on wednesday, j&j and coca-cola and verizon. thursday, at&t and intel and twitter. and friday is american express and honeywell. light week on data we have june housing starts tomorrow weekly jobless on thursday ecb releasing the latest policy on thursday morning. other items of note. don't miss the special coverage tomorrow as jeff bezos prepares to blast off to space. that will happen around 9:00 a.m. eastern time. on wednesday, bitcoin. jack dorsey and cathie wood and, yes, elon musk a lot going on this week joe. andrew, speaking of which, grayscale investment the world's largest dignital

currency asset manager announcing a partnership today with the launch of defi fund index. joining us is michael sonshin. you are tempting to create an institutional grade digital currency index what's in it who would buy it how you does it work who is the partnership what does it involve, michael? update us. >> sure. this is grayscale's investment product. for us, we are trying to access the digital market for consumers. there is a broad base of grayscale investors in defi. defi is traditional financial services meeting decentralization working with the coin desk team

is working with the index and given the investors to invest in defi protocols through the investment vehicle with broad based exposure >> sushi swap. you have to have sushi swap in there. all of these assets are showing positive returns i don't know for bitcoin itself, it depends where you entered if you have positive return. we noticed lately, it is less volatile than the dow. i guess you can see it on the chart. some people say that's a good thi thing. maybe it loses the risk involved with it being a true currency or used for transactions. others say i don't know. it represents what china has done and maybe there's

increasing regulatory fears that are putting a cap on it. >> well, i think what we have certainly seen over the years is the ecosystem continue to get challenged the recent ban on mining in china is positive. we see the mining distribution fan out to other parts of the world. including here in the u.s. investors in the asset class are not focus ed on the short-term o short-term movement in price they are looking at allocations of the medium to longer term any dampening of volatility is not something to focus on. >> it may pull back or have a correction we have seen in years. it may get more focus. there are people that are just stacked. >> indeed. >> keep stacking what about an etf? an article today about some of

gensler's comments we are as far away from an etf as we were five years ago. because of the fears regulators have that they are not protecting investors adequately yet in digital assets. >> bitcoin etf in the u.s., joe, is a matter of when, not if. i don't know if you saw this last week. we announced our partnership with bny mellon. we are 100% committed to converting our flagship products gdtc into the etf when regulatory approvals are ready for that type of product in our view of the world, they are looking for a couple of different points of maturation in the market. that is what they need to approve the products and give the protections the consumers are looking for.

>> michael, two questions. one is on the fees of the funds and the other is the discount that sometimes appears that the fund effectively trades out relative to the assets themselves how investors are supposed to think about that the fees are 2% or more. in a world where you can actually buy the underlying assets relatively easily, arguably, how should they think about that >> i think many investors are interested in adding to digital exposure with the 401(k) or more of the traditional means through investing with stocks or bonds or etf the ability to do so through grayscale product that has fees that are certainly competitive with the market really does give them that opportunity to have that exposure alongside the other investment assets. over time, we believe fees will come down.

we have seen it inother asset classes. no question about that >> what about the discount to the underlying value of the asset itself if i was to buy ethereum or bought ethereum trust, the trust, effectively, trades at a lower valuation than the actual assets themselves. >> yeah. both grayscale bitcoin and grayscale ethereum trust have been trading at a discount at asset value. for a lot of investors, they have stepped in and buy shares at discounts as money allows them to have exposure or control a greater amount of bitcoin or ethereum if they were buying in the stock market ultimately, we believe that discounts will begin to narrow and in the etf scenario, we will see back and have etf trade closer we see institutional buyers trade as well.

>> all right michael, we'll end it there. good luck. thank you. i don't know sushi swap can you give me -- what is the highlight there? why is that attractive to you? it's healthy what is the deal with that >> there are a variety of digital asset protocols within the broadly defined defi states. sushi, abe we are seeing the development of protocols for decentralized exchanges. >> i got it. i had sushi yesterday, actually. i don't know just asking. >> i don't take credit for it, joe. >> thank you we'll see you. sushi swap is it just useable to buy sushi? >> i would like sushi right about now.

handroll morning sushi. it's good for you. no carbs if you don't do the rice >> i know that coming up on the other side of the break zoom announcing the deal to give it a bigger foot hold in conference call software we will bring you that story after the break. don't miss it. interview with bill ackman is his spac backing out of the deal of 10% of music you can watch us live anytime on the cnbc app we're back aft ts.erhi it's a wishlist on wheels. a choice that requires no explanation. it's where safe and daring seamlessly intersect. it's understated, yet over-delivers. it is truly the mercedes-benz of sports sedans. visit your local mercedes-benz dealer today for exceptional lease and financing offers.

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welcome back to "squawk box" this morning lots going on in the markets to tell you about the dow opening down 382 points. nasdaq off 61 points the s&p 500 as well down about 35 points as we are all trying to digest the news from the weekend around the delta variant and other issues slew of earnings reports we will probably hear good news, but interesting to see the guidance we get. we are hearing about a number of deals this morning some deals are not happening as well we'll talk about bill ackman's transaction. we will talk to him in the 8:00 hour another big deal that is happening. zoom announcing it is buying

five9. provider of cloud content. the price is big $14.7 billion. the second biggest tech deal of the year behind icrosoft's planned $16 billion of nuance communication. the deal represents 13% premium to five9's close call center technology that allows representatives to work from home. something that may unfortunately come in handy the next couple months depending which way this breaks coming up in just a moment over 24 hours from now, jeff bezos is blasting off in space on blue origin's blue shepherd we have mike massimino with more on that deal. and the ice prof wti crude

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welcome back the futures are down 300 points, almost 400 point after a near 300 point drop on friday in the dow. just round it up to the highs, 35,000 on the dow. what are we down, a couple of percentage points? not far of any of the indices from all-time highs. we'll see. it's been a while since we've had a pull back of 5%.

you want to go on this tomorrow. >> tomorrow we should mention is the highly anticipated blue origin launch of jeff bezos. mike massimino is a professor with columbia university thank you for joining us

tell us what's going on over the past couple of days. what jeff bezos is experiencing, how you prepare for something like this, how much preparation is even required >> thanks for having me, andrew. good to see you as well, joe thanks for having me i think as far as preparation at this point, i think what they're doing is mainly mentally thinking about what they're going to do with the flight. vehicle is highly automated. they've got 15 successful flights of this vehicle, including three successful abort tests so anything that happens, whether it's an emergency or normal operations can be handled autonomously more it's going to be concentrating on what they're going to do during the flight. what does he want to accomplish as far as taking the views in, experiencing zero gravity. trying to get the memories in context in his head for all four

of the crew members they can tell us about it they're the first ones to do this in my mind part of the responsibility is to let us know what it's like i think that's what they're concentrating on at this point. >> how different is the blue origin from virgin galactic that we saw a week and a half ago can you hear me? i think we lost him. we had a technical issue hopefully -- >> either that or you really stumped him. >> hopefully there are no more technical issues we will talk to him tomorrow morning. >> see if we can get him back. either he's really thinking about a considered answer or not but, yeah, it appears we did lose him when you asked me, i felt comfortable with that last week, a couple of weeks ago. now we're back on top of -- now

we're lighting that candle on top of a -- and god forbid they tested the flight, andrew. does that mean you end it and you're still on the ground or does the abort sequence mean like you're already up there does it involve leaving the capsule and floating to the ground with the parachute? i mean, is that what we might -- >> i don't know. i believe there's lots of different -- one of the things that the reports suggest is that there are more backup plans or at least advertised there's more backup plans with the blue origin effort than the virgin galactic. >> if one of the backup plans is you're at 20,000 feet and -- i don't know, that just is one that you would hate to -- you or me, if we were there, it would be -- we'd probably rather stay on the ship.

i don't know it's for very intrepid people. >> i assume, joe, you were the original bidder but you had plans tomorrow. >> no, i don't have the money or the -- or the guts, let's call it, andrew. coming up, autonation set to report we'll talk to ceo mike jackson about the back log and supply of new and used cars. i assume these numbers might shall interesting to see when they do hit because there's so many people looking for cars. plus, an exclusive interview with pershing square's bill ackman u' wchg quk yoreatin"sawbox" on u' wchg quk yoreatin"sawbox" on cnbc we need more ways of connith customers, fast. i know some consultants with great ideas. can they help us improve our digital experience? herbing square, personing scare, personing square share.

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. a rough start to the week for stocks. the rebound of covid partially to blame dr. scott gottleib will join us to talk about the resurgence in cases. we go under the hood of autonation to talk about the auto sales, chip shortage and demand for vehicles as the second hour of "squawk box"

begins right now. good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with andrew ross sorkin. becky is off today after friday's 299 point loss, we have about a 375 point loss indicated this morning in the dow. the s&p is down 34 nasdaq off 61. it was a down week in the major averages last week those have been rare haven't seen many recently but we did have one last week. we're watching the 10-year if you were scratching your head recently, keep scratching. 1.24 and change today. whether it's the -- a perceived

slowdown in global growth or delta variant fears, whatever you want to attribute it to, surprising that the fed's still there and our bonds are att attractive to foreigners 1.24 was not predicted by a lot of people. >> it was not predicted at all and i don't know if this news that we're about to bring you is predicted either we have breaking news this morning from robinhood and leslie picker joins us this morning. leslie. >> andrew, we knew it was coming this is the price range offering size and valuation for robinhood in terms of its marketing that it's seeking as it begins its road show. today the company filed an amended s1 showing it is looking to sell shares between 38 and $42 each 55 million shares total for an offering size at the high end of that range of $2.3 billion now in terms of its market cap, in terms of its market cap at

that $42 per share high end of the range the company is seeking $35 billion market cap in this ipo. now it was reported they had been expecting a valuation of about $40 billion here their last private market valuation was $11.7 billion raised last september. we are expecting a listing next week if you recall those road shows have been compressed now that they can be virtual at this point in time and also in today's amended filing you're seeing updated financials from the first half of the year the company reporting estimates for revenue as low as 546, as high as 574 million for the quarter ended june 30th. and then they're also showing an update for their next cumulative funded accounts at 22.5 million at this point in time. so a lot to parse through with this amended filing. we will bring you anymore details as we get them

guys >> hey, leslie, last private market ground as you said, $11 billion. i'm curious what the valuation though was pegged at in the middle of the gamestop moment, if you will, when they had to go out and raise about $2 billion of capital very, very quickly. i know some of that was considered convertible if you will do you know what valuation that was set at >> yeah, the nice thing about convert, the nice thing for investors is that it's actually val urd at a 30% discount to the ipo price. in other words, they're getting a 30% up side no matter what that ipo price is when they go public assuming all goes, you know -- all works out for them to go public next week so whatever a 30% discountto that price is. >> leslie picker, we will be watching it. perhaps the most -- a lot of people are going to focus on the

big ipo in many, many ways. >> i think it is yeah, i think it is. >> meantime, we've got other breaking news just out the u.s. and its allies pointing the finger now at china as the major threat to cybersecurity. they say chinese engaging in state-sponsored malicious cyber activity they're urging government agencies and private sector companies to apply some newly issued recommendations to reduce the threat of cyber infiltration eu, uk, new zealand, canada, nato are all joining the u.s. in condemning china's cyber activities we will see what impact that may have. and then the other big headline of the morning, bill ackman's spac, the largest in history dropping a deal to buy the 10% stake in the flash of universal music group. they agreed to buy that stake as

much as $4 billion the spac announcing they have unanimously decided not to proceed with issues raised by the sec with several elements of the transaction, in particular whether the structure qualifies under the nyse rules ackman said they will pursue a conventional spac merger spac prices falling 18% since the umg purchase was announced back on june 4th ackman said he had underestimated the shareholders reactions. pershing plans to become a long-term holder of umg after its public holding in amsterdam. the stock up marginally on this news this morning given the complexity of the previous transaction and now the fact that it will be a simpler deal going forward and also that

pershing square, itself, the hedge fund will be stepping into the shoes of tontine and eating its own cookie owning that larger stake we're going to talk to bill ackman about all of this directly in an exclusive interview at 8 a.m we'll talk about the spac transaction, what he's looking at next and also talk about what is driving markets this morning. the delta variant, inflation and so much more, joe. >> andrew, thanks. stronger than expected june retail sales report giving markets better picture of growth expectations for the second quarter. add them all up and you get to 1.24% on the 10 year figure that out. steve liesman joins us with the details of his latest rapid update and this addition of liesmania with the liesmaniacs. >> that's great, joe you sound like a 1950s announcer.

to infinity and beyond cnbc expecting strong growth and higher inflation part of the landscape for at least the next four quarters with both peaking in the second quarter. here's the cnbc rapid update we have a dozen forecasts that we've averaged here. shows growth peaking this quarter at 9%. that's down. we had double digit forecasts at the beginning. inflation looks to beat some of the growth outflow gdp gradually seemed declining but remaining above trends into next year. for the year economists forecast 6.7% growth followed by 3.9 in 2022 or double economic potential. lowest comes from the trend of 1.9% for the first time the cnbc rapid update includes update and they prove inflation measure and here we go inflation to have it 5.7% in the

second quarter that would be the highest level since 1990 gradually comes down this year into next ending up at 2.2 which is .7 higher than the 10-year average of 7.9%. i asked some of the forecasters why they haven't reduced growth more because of the higher inflation forecasts. this is what ian shepherd son told me i haven't pulled down by real gdp forecasts in response to higher inflation because i'm expecting unprecedented 2.5 trillion in extra savings. this huge pile of savings should act as a shock absorber against the inflation hit. with both growth and inflation declining towards trend, i think this forecast is on the edge of what's acceptable to the powell fed plans for gradual withdrawal of stimulus. if the inflation starts to trend up the other way, that could

bring a policy change. i think this is on the edge of what would be okay for powell. >> probably welcome some of the opec news. that's not the only thing that causes inflation but that might help the transitory wishes coming true? >> that's an awesome point, joe. one of the things that we've been pointing out for a while which is that they cut back during the pandemic, never brought it back. the demands surge. you didn't have all of the airline capacity back as well, so now that that's happened that's one potential thing lumber coming down is another thing. what does powell have to do to get renominated? he has to be right about transitory inflation. >> do you think? really that's interesting shoe in, isn't he? don't you think? not going to change horses here. >> i don't know, joe

i think there are some progressive parts of the democratic party that might want a yet more progressive chair, but i could be wrong about that. i could be wrong about that. i hear noises, i hear whispers, i hear people screaming at testimony like sherod brown and elizabeth warren and i wonder are there others who they would want to see in office. i could be wrong on that >> that word, i don't know for me, it's just not a good word it's like -- i don't know -- >> which one, warren >> no, progressive like calling a really tall person short >> oh, okay. >> it's very -- or, you know, a folicically challenged person calling him curley, not speaking of anyone close by but you know what i mean, steve. >> pleasure. >> good to see you sorry, andrew.

you know -- i don't know why i'm sorry. you know how we are. >> you know what, friends never have to say sorry, joe how about that >> i remember in my day it was love means you don't have to say -- love story. >> i was trying to say -- >> this is more than friendship. it's been a long time. >> been a long time. >> longer than some marriages. >> we're family. >> longer than some marriages. >> when we return, auto sales remain healthy they're showing times of slowing down and autonation's ceo mike jackson will be discussing the state of the agency and the latest quarterly results before we head to break, let's get a check on the markets they are looking down, off about 370 points since moving around s&p 500 off 37 points. nasdaq looking topo en down 86 points right now we're back after this.

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baaam. internet that keeps you ahead of the game. that's cute, but my internet streams to my ride.d. yeah, well mine's always got my back. okay chill, 'cuz mine's so fast, no one can catch me. speed? we'll show you speed. wow! -that's nothing... ...because my internet gives me a flex 4k streaming box for free. impressive! that's 'cuz you all have the same internet. xfinity xfi so powerful, it keeps one-upping itself. can your internet do that? autonation reporting and, crazy. yeah, up over $100 well above the $2.81 revenue above wall street forecast joining us in a first on cnbc interview, mike jackson,

autonation ceo trying to remember where autonation shares were in the lows of the lows, mike, but that would have been a good time. was it 3 or 4 at the pandemic lows >> i think we were in the 20s someplace, joe, '08, '09 we were in the 4s. over 22 years i've seen it all. >> you've seen it all. >> i like being over 100 it's a great feeling. >> you made it so this is not the first record in terms of results. you've had how many of the last reports that you've done in the last four or five quarters have been record results? >> joe, this is our fifth all-time consecutive record meaning we're comparing against an all-time record, what was an all-time record in the second quarter of 2020. so it's a commitment

as you and i talked a year ago, joe, i felt a seismic shift in the demand for personal transportation as one of the consequences of the pandemic i called it out then people want bigger ones homes, they want more electronics in their homes and the american spirit of independence and controlling who's with them and when they go where after shelter in place was at least and i think the pandemic was a sparring event, as it should be. so i see demand for personal individual vehicles continuing into the years ahead so the environment is good within that autonation's performance is absolutely outstanding. we have this powerful combination of brand, a great customer experience, a digital platform, operating capability and that all led to achieving an all-time revenue of $7 billion

in the second quarter of this year that was driven by a 50% increase in revenue for new vehicles and a 65% increase in revenue for pre-owned vehicles because i was very bullish a year ago on the marketplace and we purchased a gretgrgressivelyh pre-owned side and have never stopped. pricing is good when you have this level of demand compared to supply manufacturers have made an heroic attempt to restart production as i look at shipments to autonation, they're double what they were a year ago they're only 6% behind what they were in 2019 but demand is far higher with the disruption from microchips, they're doing everything they can. i will also tip my hat to the fact that they've really

prioritized which type of vehicles get the chips very smart very shrewd. build what people want to buy and don't worry about the rest so there could be some profound lessons for the industry coming out of this horrific, awful, mind-blowing pandemic period. >> i guess, yes. that must have been 13 years ago when you're down in the single digits i'm getting my crises mixed up you only got down to -- >> yeah. in the 20s this time at least that's my recollection, joe. the beauty is -- let me just finish one more point. >> yeah. >> whenever i'm bullish on a dislocation, something like this, over my entire career of autonation we've repurchased shares aggressively when we see an opportunity, and during the

second quarter we repurchased 9% combine that with the first quarter, we've repurchased 15% of the outstanding shares of autonation thus far this year. so that's a clear statement of confidence in the future of the automotive retail. >> have you seen used cars going for more than they cost? or more than they were sold for when they were new that's the piece in the journal today. some guy brought in a car, a year old pickup truck he got $3,000 than the list price from the previous year. that's weird, isn't it that's not going to stay like that >> well, there's no question that preowned values have increased significantly with the shortage of new vehicles now i think we're a year or more away from sorting out all the production issues around the

microchip. this is going to go on for some time this is very positive for business because the trade-in values, the customers pay the difference between the trade and the price of the new vehicles, it's a good time good time for customers. >> we never have enough time i was going to ask you, you know, you tried to pass the baton a couple of times. i guess there's nobody that can do it. you'll probably be like buffett running this place until you're 100. >> listen. stop it, joe a couple things -- >> evs evs -- right now people are buying gas guzzlers, they're still internal combustion, small amount of evs. in ten years when you're still ceo, will you be at 10% evs at autonation >> quick i am, indeed, in some extra innings here at autonation, which is fine because i love the company and i love the business, but i will not be here at 100

years old in 2030, that i can assure you evs as a percent of vehicles sold by 2030 will probably be around 20, 25% as far as units in operation on the roads of america, they'll be 7 or 8% all electric this is not like falling from the flip phone to the smartphone, it will be a gradual transition but the inflection point, joe, of the arrival of all electric vehicles is definitely here for the industry, for america and there's no turning back. and so there it is but i will not be here talking to you in 2030 but i will miss you. i will miss you, i promise that. i will miss you and i will think of you. >> we'll think of you too. i know you'll be out on the range. thanks, mike not home on the range -- >> allig. rht >> thanks, mike. "squawk box" will be right back.

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the futures are under pressure down 361 points. the s&p indicated down about 36 and the nasdaq indicated off

just under 90 points news this morning, it appears the irs will not be getting additional funding, at least not from a proposed $1 trillion bipartisan part of the deal we're talking about, the infrastructure packages, boosting the agency's tax collection part of the plan had been part of the plan to pay for infrastructure rob portman said republicans are concerned about giving the irs more power help for facebook is pushing back saying it is killing people with vaccine misinformation. after issuing a rebuttal facebook defended itself over the weekend saying 85% of users have been vaccinated or intended to be vaccinated against covid-19 facebook was not the reason that the white house's vaccination goals were not reached. and zoom has struck its largest ever acquisition deal.

it's buying cloud-based call center operator five9. they say they will increase their presence with enterprise customers. pretty good currency use if you were thinking about diversifying, you can buy a lot more with what you've got. >> 100%, and if you think work from home is going to last in any which way, hybrid or not, it looks like something that will fit in nicely with that business we'll see what investors think about that later on when the stock opens. still to come, dr. scott gottleib will be talking to us about the surge in covid cases we're seeing that in the markets and the impacts on the olympics and so much more plus, bill ackman is going to join us exclusively in the next hour for a conversation you don't want to miss bo rur rhtftnsig aer this you got to move the phone in front of you like..like it's a mirror, dad. you know?

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dom chu is thinking of individual names moving in the premarket, which looks to be a tough session for the bulls, dom. >> it's going to be a tough session for the bulls.

we're just about 2% away from record highs in the overall market if you take a look where the action has been as the markets have somewhat rolled over a little bit, it has been with regards to the weakest parts being energy it's down 10% in just a week and meanwhile utilities and consumer staples are the two best performing staples, two of the only positive ones over the last one-week span. it's fairly evident where you're seeing the market increase on a daily basis, we're seeing quite a bit of action. wti crude falling on the plan from opec and the partner companies to scale back the production cuts fully by september of next year you can see crude oil prices down 3%. meanwhile, occidental, apa and exxon mobil had been moving to the premarket. the data may be off but all of these stocks, major energy producers are all off lower in the pre-market trade cruise line operators, federal

appeals court said cdc restrict shuns can remain in place. restrictions can be there. florida court said they could be there. norwegian, carnival and royal caribbean all off 4 or 5%. financials have been a notable part of the week 10-year yield ticking slightly lower while goldman sachs, jpmorgan, bank of america all there off 2.3% 1.24% with the 10-year note. >> collin with two ls. did you happen to notice, we're talking ice man. we're talking ice cubes in his veins. did you -- were you noticing that the guy who engraves the trophy was engraving it before collin had even finished because it was so obvious that this -- have you ever seen that before

where they're engraving the trophy and he's on 18 because there's -- >> you remember when tiger had like a 7 or 8 shot lead back in 2000 -- >> this was a two-shot lead. >> it was a crazy thing i heard from our colleagues. we talked about this on what was it, thursday or friday, this idea that collin, i could watch that spring on repeat. i was listening to some of our colleagues on golf channel justin leonard, he made a comment that collin doesn't bomb it, he's not 6'4", 6'5", 250, it was a great stat his dispersion, how much he sprays it on the 6 iron is the same as the elite players pitching wedges. so he is literally hitting 6 irons, mid irons to the same accuracy as people are hitting pitching wedges on the tour. >> we're watching something

here he's 24. >> two majors at 24. >> not just 2. that was his first masters win first british open win no one's ever done that, ever. >> pga and a british open is not a bad way to start a career. >> i won my money. i bet on an american to win. i feel bast foroosthuisen. you know when spieth lost it, he lost it on saturday on 18 when he missed the putt that was this long. >> jordan spieth, he loves the british open he's back. >> thanks, dom >> you've got it >> we digress. coming up, dr. scott gottleib on the delta variant and rising covid cases. and at the top of the hour, bill ackman's specific announces it is dropping the bid for the label home to music, like taylor swift, lady gaga

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tpc is where harding won his first major. he is now the championship golfer of the year after winning the british open hard to keep all the majors straight sometimes futures down 452 they worsened, andrew. stocks under pressure this morning. nasdaq down 133 and the s&p down 47 airline issues, don't need to think that hard to figure this out. it's covid worries, delta variant worries. we keep hearing about the olympics and i don't know how that finally plays out, but more than a few athletes and well-known athletes out because of that. check out some of the casino names. that's the same story obviously. talk about this, the delta variant is spreading once again, spreading mostly

among the unvaccinated we're going to get to dr. scott right now? dr. scott gottleib joins us, former fda commissioner and cnbc contributor. he serves on the board of pfizer and lumina do we need to recalibrate how many cases we're seeing from fully vaccinated people, scott or is it still an unvaccinated problem? seems like that israeli news may have pressed some of this. we know it's only 90% or whatever the number is so you can have this happen are there more happening because of the delta variant >> potentially there's more breakthrough infections, that's what we're seeing in israel. over time you get decline in the vaccine effectiveness. they are very effective against hospitalizations and severe outcomes we're seeing that in the israeli

data and uk data the case fatality rate is down because more of the vulnerable population is vaccinated there are breakthrough infections occurring in vaccinated people. i don't think it's an overwhelming number but we're not tracking it here in the united states. that's the bottom line we should be tracking it cdc is only tracking breakthrough infections among people who are hospitalized. we should also have a better sense of whether or not this is a more transmissible strain even among the vaccinated it reduces your likelihood of transmitting the infection where viral levels are higher in the course of the infection, they can make you more contagious are people who are vaccinated and developing mild symptoms more contagious in those settings we should be tracking it so we know the answer to that question. >> scott, do you think that when

we're deciding about colleges and who can come back or when we're deciding about traveling to europe and countries, et cetera, is it going to be that you need the vaccine or nothing? or if you had covid and you had a case and you've got antibodies, do you think that that should be the third option about what would allow you to go back to college or allow you to go somewhere is it possible to have proof of that, that i've had covid and there's no reason for me necessarily to get the vaccine you've pointed out the third booster, the side effects seem to be a little bit higher. if you've had covid and you get the vaccine, are your side effects worse than if you haven't had -- previously had covid? >> well, i don't think the side effect profile of a booster of a third dose is going to be different than a second dose based on data so far there are small studies, but i've seen some of that data and

that data has been talked about publicly, at least by pfizer, the company i'm on the board of. in terms of whether or not previous infection should be a good correlate with future infection, we've seen that people who have been previously infected with covid don't seem to be susceptible with reinfection. we've seen some reinfections and it's not tracked very well it does seem to be the case that even against delta prior infection does seem to be protected. again, we don't know how long that protection is going to last either it's likely to decline over time it's a harder thing to demonstrate and verify that someone has been previously infected so i think it's going to be hard to use as a proxy in the marketplace. places that want to restrict access based on demonstration of immunity. >> scott, is it legitimate for someone to say i have antibodies and i don't even -- i was asymptomatic so i'm young and i

handled the first exposure to covid pretty well and i have antibodies so it's my view i'd rather not get -- rather not introduce the vaccine into my system, i'd rather just go along -- i'm 22 years old, 23, 24 years old and the first time i was exposed to it it wasn't a big deal and now i already have antibodies is that a legitimate point to say i don't want to get a vaccine or should they be forced to get a vaccine. >> it's different between is it legitimate or is it prudent? someone who is previously infected will have a very robust and durable immunity and be at very low risk of getting vaccinated in that setting i think the prudent thing to do would be get vaccinated in that setting. there is immunity in that prior infection. we shouldn't discount that if you are young and healthy, previously infected, you are at low risk of a previous infection to get you in trouble.

you will secure a much more durable immunity we've seen that in the data. i would still encourage that individual to get vaccinated you're right, people are making those judgments and some proportion of the unvaccinated are people that have been previously infected and they have prior immunity. >> scott, want to talk about the olympics we've heard now about a number of cases and some real questions about what the impact is going to be on the games themselves. how concerned are you about a big spread at the olympics and then what ultimately happens when they come home? >> well, look, i think they can control that environment i think they can create a bubble around that environment. this might be the system working. they turned over a handful of infections, using other precautions to prevent spread in the settings in the congregant

settings whether or not they can pull off a lot of events that go on around the olympics is another question keeping the athletes safe and the games on, that's something they should be able to do. >> scott, i wanted you to weigh in on what we've heard in the white house and the back and forth between the white house and facebook about information and misinformation perhaps about the vaccines, the vaccine effort and what's happening do you point the finger at social media >> yeah, i do. look, i think the bottom line is that these social media -- you can't police everything that's on social media, right there are a lot of people getting on social media and distributing information but when you give someone a big platform, when you have a facebook page with tens of millions of followers or twitter page where someone is a verified user, the social media platform has handed them a franchise. they've given them a very big megaphone. they've supported that by making

them a verified user, promoting that page. they have an obligation for what appears on those pages at that point if they're giving someone a very big platform to distribute the information they have an obligation. i think they have an affirmative responsibility it's not just facebook, it's twitter as well. a lot of this is getting exchanged on twitter in addition to facebook. the administration has in their focus groups what's going on from what i'm told, is thatwhe they talk to people about why they are avenue not getting vaccinated, a lot of people have pointed to things they saw on facebook that's why the administration is focusing on facebook. >> scott, where is the line? the reason i ask you about where is the line? because here we are having a conversation it's a fair conversation there are people who have had covid who are raising their own questions about whether they should take the vaccine or not and if that conversation was happening on social media, should that be a conversation that twitter or facebook should

effectively down rank or not >> this is a reasonable conversation, you're right nbc hasn' an affirmative duty t make sure what we're talking about is right when you are putting out fake scientific data and fake information that's highly misleading is clearly aligned. that's going on. that's easy to police. >> it's impossible because some of the stuff you see, it might be myocarditis that has nothing to do with the vaccine and you don't point out that the true myocarditis comes more from viruses but you'll see all of those anecdotal things -- i just saw something come up on social media about some young child that developed some -- developed, i don't know whether they were vaccinated, but you see things that are obviously not true or other things that may or may not be related to the

vaccine. >> look, there's a -- >> go ahead. >> there's a gray area look, there's a zone where it's hard to make a determination about the voracity of the information. there's things that are clearly appropriate like having a debate about what we're talking about here, should you get vaccinated if you've been previously infected then there are things that are clearly false that everyone recognizes as fake information when that fake information continues to propagate, that's easy to recognize. >> full fda approval would be helpful as well. that's the other thing that you keep seeing. what is the time line now in your view if you've had -- i know it's impossible to forecast you did run the fda so when do you think it will be >> yeah, i'm still in the same place that i've been since the outset when these applications got filed. i think pfizer filed the application on may 7th and moderna on june 1st. i might be off on those dates. i always felt the fda would approve the applications within

three months of the filing these have been rolling filings. the companies continue to submit information to the agency so that's going to slow the agency down also, a lot of the review right now isn't on the clinical portion of the review because the agency's been doing that, on the cmc, manufacturing controls. end of august, september is a reasonable time frame. that puts you about three months, maybe a little bit more. >> doctor, two things. does that require -- if there's a new version or booster that deals with the delta variant, does that have to be approved separately, if you will? the other question relates to kids and whether that vac steen, -- vaccine, if it's different, has to be approved as well not just for emergency use but on a regular basis. >> a booster this fall, if we receive boosters it would be a third dose of the existing vaccine. there's no reason to contemplate a booster with a new vaccine designed against the delta variant. the existing vaccine is very

protective against the delta variant. i hear the music so i know i'm running out of time. thanks a lot. >> thank you, dr. scott gottleib check back with u yohopefully later this week. "squawk box" coming right back as i observe investors balance risk and reward, i see one element securing portfolios, time after time. gold. your strategic advantage. all the things, all around you... where you learn, work, and fly...

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about 126 points s&p 500 down about 48 points as well meantime, just over a week after richard branson flew to the edge of space, jeff bezos attempting to also make history tomorrow, blue origin will launch its first crew flight his brother mark bezos, and 82-year-old aviator, and an 18-year-old as well. we are joined by walter isaacson at tulane university, and advisory partner, and a cnbc contributor. it's great to see you. put this in context and history for what he's trying to do, but also relative to what perhaps richard branson was trying to

do. >> you have two different stories emergemerging, one is se tourism, where people pay because they want to do it and it's exciting. it helps restore the luster and beauty of knowing our planet and knowing outer space. the other is commercialization of space aviation, which is also good since our shuttle missionsened we haven't easily brought people to the space station or launch satellites that well that's when you see companies like elon musk's spacex competing much more strongly i think there's probably been about $2.8 billion worth of spacex satellite launches and only about $500 million for blue origin these are two new industries, both of which are good >> that's what i was going to

asking in terms of space tourism, is it part of a larger effort and are there lessons to be learned in the space tourism business which effectively will be transferred to commercialization, if you will, or some of these other even bigger efforts? >> yeah, sure, there will be someless sons, but you don't need space tourism in order to create orbital flights, which you need toad to put satellites into orbit, or for that matter, mars and the moon. so i think what you've done with this space tourism is you have sped up the process. some you have created boosters and engines faster, and you've also spurred the public imagination against in a time when we've been in a deep funk to say, well, we can explore new places all of that is good and probably spillover effect, but probably still separate industries. >> what do you think of the cry

tee these ego mania by billionaires, and something effectively built only for the rich space tufrism will be very expensive, but even 10, 20 years from now it will be expensive. space tourism will be expensive. in fact, all forms of tourism can be expensive to me that's not the important thing that's happening by having the space tourism, we're seeing a bigger interest in space, but what is happening is things like starlink, which has put up satellites to give internet access to remote places around the world i just saw a wonderful will marshal's company, planet.com, which every day surveys every spot on this planet to see what's changing. those types of things are the things that will be important. >> finally, walter, amazon shareholder, who are you supposed to think?

>> i think it's final. amazon, he's made the transition well he's earned his billions and earned the right to do this. >> walter isaacson, great to see you. we look forward to tomorrow's space launch. coming up, bill ackman's spac dropping its bid for universal music. take a look at the futures, they de closing in, perhaps on down 500,own by 450, 470 in the premarket sessions "squawk box" will be right back. with a hybrid, you don't have to choose. that's why insurers are going hybrid with ibm. with watson on a hybrid cloud they can use ai to help predict client needs and get the data they need to quickly design coverage for each one. businesses that want personalization and speed are going with a smarter hybrid cloud using the technology and expertise of ibm.

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good morning 300 points down on friday, the dow came down another 450 day, so it doesn't take a calculator to add that up 750 dow points in a couple sessions after a lower week last week for the major averages. earnings season is ramping up, and obviously one of the major concerns for investors, the increasing spread of the more infectious delta, breaking this morning, the u.s. and other countries accusing china of masterminding ransomware attacks

and cyberespionage on a worldwide square and bill ackman's spac dropping a deal in part because of s.e.c. concerns aboutthe transaction. we'll speak with bill ackman exclusively in just moments, as the final hour of "squawk box" begins right now good morning welcome to "squawk box" right here on cnbc i'm andrew sorkin. futures are lower in a big way, right now the dow off about 450 points s. the s&p off about 45 points, as new questions emerge about the delta variant and so much else. we have a bunch of big earnings

report this week hopefully we get some guidance, but the ten-year note trading at 1.230, this after opec and allies over the weekend agreed to increase production, brigging more oil back to the markets as economies heal from the coronavirus damage form the delta variant of the disease is spreading quickly, hitting stocks of companies that have been tied to the economy reopening. you're looking at cruise lines right now. you're also looking at hotel chains airlines are also down this morning, and check out shares of boeing, for example, as well, just to give you a sense of how the market seems to be thinking right now, you're looking at boeing off about 5%. meantime, big headline this morning, we learned that bill ackman's was dropping about a

home as to stars like taylor swift and lady gaga, ackman said the spacs unanimously decided to move forward of the proposed deal that could have potentially blocked it, include whether its structure met nyse rules ackman says he still intends to become a long-term investing company. and joining us to talk about it is bill ackman, ceo of pershing square capital management. great to see you this morning to talk with you this morning on when a headline emerged and this deal has effectively been called off. i do know that your hedge fund will now step into the place effectively of the spac, but tell us what happened.

>> sure. so just to rewind, if we go back just a few weeks, we announced the transaction, and a couple weeks later before we signed the deal, the s.e.c. came to us and said we have some concern about whether remain code would become an investment company. in order to address the concern, we changed the structure of the deal that we would put it into a trust. we signed the deal, and pushed forward the transaction. then this week, the last few days, the s.e.c. would raise, i would say, a deal killer they said, in their view, the transaction did not mean the new york stock exchange spac rules i would call that a dagger in the heart of the transaction, put the team in an awkward spot. we love universal, and not being

ability to do the transaction, we offered to take it off the hands of a public company that was actually built into the transaction, the right to assign to an affiliate, and we've also assumed indemnity obligations and expenses, and put tauntine back into the deal, and we have 18 months for find another transaction. we structured this the way we did to accommodate the ability to acquire universal, and the s.e.c. didn't like it. therefore, we're going to do more conventional merger, but our intent was to do a merger all along. it was really some issues on their side that cause us to structure the deal this way. >> bill, was this just too complicated? i think a lot of us, including myself, struggled to articulate and explain to the public what exactly this was it was very different in many

ways than a traditional spac clearly the investors also felt perhaps this was too complex, because they started selling effectively the shares, and they fell in price. >> sure. what happened was, i think, really two kinds of investors. we went public, we got to select the investors, picked investors with a long-term, partners with us for the next multiple years, and then i would say the reddit community got excited and short-term investors came in, i want debt on a deal being announced, a lot of those investors were levered, bought options, we announced a deal that unfortunately is very bat if you're levered or doing options. a requirement to put the stock in a trust account is very detrimental if you're a margin

holder it's also detrimental if you're an options holder. by the time of the announcement, about a third of the symptom was head by people, there were a lot of investors investing in spacs that way we didn't design the transaction to effect -- but we were focus odd creating long-term value what's interesting, is all of these problem go away by the end of the year. we didn't like that, but it was something we had to do for regulatory reasons sells, universal would be a dutch-listed company, people didn't love that, but we believed by the time we distributed the stock to shareholders, it would hopefully be a new york stock exchange listed company if you could hold the stock for six months, i think people would do very, very well, but

unfortunately 'percentage of our investors needed a shorter period of time, and it had a negative effect on them. >> what was the mistake, though? clearly the s.e.c. was preparing to make it very difficult for you to close on time did you get bad advice from your lawyers? did you try to press ahead despited bad advice? how do you think about that? >> we have great lawyers joe and scott miller, steve frayeden, you know, steve bigler, one of the best delaware lawyers, great lawyers, but we don't just rewhite on lawyers. we read the law ourselves. there's a ruled called 102-06, which are the spac requirements. what's interesting, i called the new york stock exchange and told them about the transaction i didn't tell them the company,

but talked about the structure, described it it's their rules, not s.e.c. rules, and the new york stock exchange i would say, up until thursday was extremely supportive of this transaction they understood the structure, liked our spark structure, which was a warrant issued to our shareholders the only discusses appointment is it wouldn't initially be listed on the exchange from the first week when we realized we had to this is a stock perform transaction, they reviewed the rules, and rules give -- spacs don't have to do merger they can do asset purchases, stock purchases, and we're not the first spac to buy a minority interest in a private company and distribute it to shareholders there are other examples that gave us confidence. it's a very large spac

i would say the s.e.c. is carefully scrutinizing every spac transaction, and i think they should, though i would argue the reason why they should -- many spacs have crazy valuations, sponsors putting up numbers, and a lot of retail investors pile in, the stock price pops, and it hurts a lot of people form this is enormously profitable, with a great long-term trajectory, no founder stock, no compensation, even the warrants we bought when we paid $65 million were tearing up in this transaction our shareholders are investing -- we're all getting the same common stock and there's no dilution to our shareholders so all the reasons the s.e.c. should be focused on spacs don't

apply here i think it's -- when i view, again, it's not great, the negative aspects are the trust, which goes away in four months it's a long time for many investors, but that was actually driven by something the s.e.c. was focused on t. >> bill, now that the transaction isn't happening as a spac, just to put a fine point on it, pershing square, the hedge fund, is effectively stepping into those shoes. you will not become an even larger owner of universal music group. how are tauntine shareholders, who are happy about this deal, supposed to think about that >> well, if you're a shareholders and you wanted this deal, you should call the s.e.c. and complain, i guess. i would say that would be my first call i guess the good news is

universal will become a public company at the end of september. the venue is going to called a spin joch or different or distribution, distribute 60% of the stock from the public, you'll have the chance to buy shares there we did have a lot of supporter shareholders who liked that we were picking no warrants, liked there was a second bite of the apple, and again, for our investors' trouble, we gave them a gift, if you will, this spark warrant, which again i hear you on complexity, but complexity is okay is if you're getting something for free spark is a quite interesting equity i do believe once we get the entity improved -- what we tried to do is go from spac 1.0 to spac 2.0 it was great alignment, purchase of a warrant, but it had two problems, one is opportunity across the capital you have to wait, the other is

pressure on the sponsor to do a deal spark is a spac where you don't put up your money until one of found a deal, signed a deal and actually had the s.e.c. approve the registration statement we are trying to move the bar on spac technology. it's unfortunate the s.e.c. chose to shut down this transaction. you'll have to ask them, but i do think -- i think everyone can win here i think avendi approached us and said, bill, would you just buy the directly, but i'm a fiduciary for psdh we had been working on the deal for them and until literally the government sort of put their foot down and said no, at which

point i wanted to put tauntine back to where it started, but we had plenty of time to do something forward, our shareholders will get the benefit of the warrants that were issued here, which i think is a nice positive we'll get the benefits of what we paid for, and we'll do something interesting. i would say there's a number of companies that weren't ready to go public. nowi a year later. there's family-owned businesses where the family was not ready you know, a year is a long time, and founders, family owners get older, they make different decisions, we have a big capital gains tax potentially change here, some changes in estate planning, all of these would a benefit the largest spac in the world. i can guarantee we're going to work hard and only do something that makes a lot of sense for our shareholders.

>> how -- when the s&p does so well, we all know general growth, you've had some of the greatest trades in history, but i remember, you know, penny or -- take your pick if you do 51% and you're right, you're like a genius in this business, i think. but something is writing in, why universal music? why a legacy dinosaur? why not some crypto, defi, cannabis, cloud company, something like that? >> sure. >> why a complicated deal for this old music company have you been beating the s&p for the fast three, four years >> we've been crushing the s&p i'm pleased to see, we have over a long period of time, you know, we've doane well but, you know, your perception will change one you understand

the business, you're describing mom and dad's universal music. >> the boomer view, i know >> what's changed about universal, okay, is streaming, is spotify,i apple music, google music. the content being distributed on the modern, sexy technologies is content, a third of those owned by universal 40% of the u.s. market it's not just the beat also or u2 or sting. it's drake, taylor swift are universal artists. you have a company with incredible historic content, a company where every great artist wants to -- aspiring artist wants to partner and have universal help them, you know, break out as a professional artist own, i can't think of a business

as a content space netflix is amazing b. they have to spend billions to create content, where was music content is really forever. >> you always talk me into these things the hong kong/dollar was supposed to drop off, it's so compelling when you explain everything, but it's difficult, obviously. >> i would say look at our batting average. we've had some very high-profile failures, but you can count them on one, maybe one and a half hands. i would say our batting average has been probably 90-plus percent. it's been very, very high. so as a result we try to pick things very carefully, but i would say the probability that university will be a very successful investment is really, really high. that's my view

>> i wanted to ask you about covid. we're trying to make sense of the business action from friday and this morning as well, especially as there's increased concerns about the delta variant and what that may mean for the, quote, return to work and everything else that comes after. we've had conversations with you, and what it meant close to 18 months ago. i'm curious how you're thinking about the markets today. >> sure, again, i think it's a short term to intermediate term thing. i would say the delta variant is certainly a negative if you're unvaccinated today if you're unvaccinated today, i would say the thing the delta variant is an injection of the virus, or a bit like a vaccine that's not getting a vaccine, and it's going to crowd out all the other variant, and that's actually a good thing.

if you look at the uk, 99 percent of the cases are delta cases. today it's something like 55% or whatever it is in the u.s. it's going to go to something approaches 100, because it has an r-naught close to measles it's incredibly infectious so the result of that set, you know, unfortunately if you're older, if you've got diabetes, obesity and some of these co-morbidities it's very dangerous. as long as you survive, i think it increases the chance to get to herd immunity faster. i think you'll see a large number of people get infected, particularly in states where the vaccinate rates are low. it will crowd the hospitals,

though the good news is you have a very infectious variant that appears to be not as deadly as some of the others like the south african variant. if this had been a deadly variant, a more deadly variant and more infectious one, i think we would be in a different place. but the hope is it gets people the antibodies they didn't get from being vaccinated. >> how does this change behavior over the next several months and therefore change the economic outlook to the degree that it may or may not we're looking obviously at airlines, anything related with travel i don't know if you think it will have an impact on the restaurant business. i know you own several of those. what's your take in terms of how that directs it? >> i hope it motivates anyone who doesn't have a vaccine to get a vaccine. i don't think it's going to

change behavior to a great extent i think people are done -- i am -- hiding from the rest of the world. they're going to go out and have fun, go to restaurants you'll see a massive, in my view, economic boom. some people already afraid, some are afraid of getting a vaccine, therefore afraid of going out, but i don't think -- i think we're going to have an extremely strong economy come the fall i think people will return to work come september. i think companies will insist on vaccines i think it's a good thing. even people in my own company, i would say there's probably three people who haven't gotten a vaccine. you know, one case, sort of a philosophical objection or maybe a religious one, and, you know, my question is you take antibiotics, other drugs, if you take an antibiotic for some other infection, why not a vaccine? if you're concerned about the

risk, and the risk is, in my view, a lot greater that you get covid, and people can decide -- >> so what's going to be the bill ackman policy at the office >> so i'm hoping they get their -- i'm doing my best to convince everyone who hasn't gotten the vaccine by being convincing, and by the time everyone comes back to work, we'll decide what we're going to do about our vaccine policy. >> also i want to ask you about inflation. both the inflation we ar seeing, maybe some supply-chain issues that are creating some of this is the big question, is this the new normal or is it transitory? >> i'm in more of closer to the new normal perspective one, i think inflation is

understated. there's very, very significant kind of -- you talk about ownership equivalent rents, those are really understated if you look at the housing market, we have a housing boom talk to a homebuilder, everything is on allocation, you have to have a friend who nose a ceo in order to buy a home so you've seen prices go way up. i think the way the data is collected for the kind of cpi or inflakes numbers really understate what's going on in housing. that's approaching a third of inflation. there's housing inflation, real wage inflation this is not a transitory thing at all, which is recruiting -- trying to get people to come work in a hotel, work in a restaurant i think it's harder now because of some of the stimulus. but a lot of people made life choses and various things.

i think you're going to have to pay people to come to work i think that's a big positive, probably a long-term positive for the economy, so you've got your $5 trillion in stimulus, an increase in wages, a lot of savings, you have the stimulus of a lot of people being vaccinated around the same time, all of these things lead to massive, massive economic growth and die mand well still have an extremely accommodative federal reserve. i think rates are going up, short rates i think will have to go up a lot faster than people think, and i think today's move is -- i would borrow as much as you can on a long-term fixed rate, but come the turn of the year, i would be surprised if we're anything close, with meaningfully higher yields, as people realize there will be a big recovery and hopefully the delta variant in a way vaccinated, if you will, exposed a lot of people, hopefully they survive exposure, and we get

closer to herd immunity and we get more people inspired to get a vaccine. >> bill, to the extent there's a pullback today and there has been on friday, does that mean you're a buyer in this market? especially -- you've been making the big play that the world is going to come back >>. >> we're going to spend $4 billion on universal music we're not a buyer of the market in general markets in general are i'm not as good at assessing i have to look at each company one at a time. we're excited about the companies we own we're excited about our view of where the economy is headed. we try to buy businesses that are insulated from the economy but people will be listening to more music six months, a year

from now, and owning a royalty on people listening to music is a great place to be, and i have one of the best management team in the industry. i'm sad for tauntin, i think the company will become public people will have an opportunity to buy the stock, and we're going to focus and deliver for our shareholders very, very attractive, so we have -- i'm not being in any way cry indicate of the s.e.c. i want to be clear we have the best capital markets in the world we are the envy of the world for markets. we have the best investor protections of the world to keep that in perspective. at the end of the day, perhaps everyone ends up happier hopefully the longer-term

investors we can deliver for, and if they want to buy universal, they can buy it in a couple months. >> you've got 18 months now to buy another company. one of the argumentses made about the second bite of the apple is a smaller company would be able to digest and there would be a bigger pool two of the big companies, airbnb has gone public. a lot of people talked about stripe, michael bloomberg's company. how hard do you think it will be to find the right company? >> a lot of those people we can reengage those conversations, i would say, quickly look, i think the other thing that's important to us is i told

bilari we would close, and even if something -- we're going to close. i think having a reputation for getting deals done, having the ability to address sometimes complicated situations is something we can bring to the table. we do have the ability to shrink it, if you will, if we came to a view at that time entity was too large for a particular deal. there are things we can do to address the size issue i think size will be an asset for us we need one transaction, we're super focused, it's our highest priority i can't guarantee it, i can't promise it, but we have all our incentives, and we're very long term from a reputation viewpoint. we have a lot of people excited about our holdings, and i want to deliver >> bill ackman, we appreciate

you joining us on this day when the news broke we hope to see you soon and follow the progress of universal music and pershing square. >> thank you very much i appreciate it. coming up, much more on the markets. the futures are now down over 500 points on the dow. the s&p likely better down about 50 points, nasdaq down 140 lp ung up, mohamed el-erian will hes to attempt to make sense of it all. you're watching "squawk box" on cnbc i know some consultants with great ideas. can they help us improve our digital experience? absolutely. they've invested over $2 billion in tech. that could really help us manage inventory. and save us a ton of dough. then let's take back our market share. checkmate, chess heads. girls, i said “bedtime”!

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story today. you've got united, american, carnival, cruise lines, hitting down also check on the the financials, which are down across the board, but we are talking about a -- more than a -- more than a 1.5% drop in the average or so. top industrial names, you can see there, down between 1% and 2%, the futures lower this morning include chevron, american express, boeing, goldman sachs, and microsoft, which isn't even down a percentage point after being worth $2.5 trillion at one point. anyway, it was up there. what a performance -- a lot of windows, that's a pretty good business, i think, still >> totally. >> in the meantime we have a lot more to come this morning.

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welcome back from the highs, crude oil is now down over 10% at this stage. you can see that's the white line going lower here. energy stocks are even worse so keep an eon energy stocks on the crude oil price declines also keeping an eye on what's happening with other parts of the market right now, specifically in the chip sector. qualcomm is down with the rest of the market. inindividually shares down about 2%, that semiconduct or trade and free per mcmoran, down lovely 4% industrialsen selling

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robinhood out with some updated financials this morning, as it kicks off its road show, and nears -- leslie picker joins us with the latest hi, leslie. >> hi, joe robinhood with certain shareholders club the ceo plans to sell shares, according to an amended filing from this morning. these terms imply an offer sight of $2.3 billion at the high end.

it also revealed updated financials robinhood said it generate estimated revenue as high as $574 million during the second quarter. that would be a nearly 2.5 times the level they saw during the same time last year, but it estimates it lost about half a billion during q2. the double more to 22.5 million. it plans to list under the symbol h.o.o.d >> keep us updated thank you, leslie picker meantime all morning we've been watching ties talked -- as it promptses investor concerns

>> this is did i i think stocks have been going down forever these roll over maybe two, three weeks ago. they're somewhat related to reddit from bottom to top, and the airlines, you know, they're more than just ge and amc, so we have to let the reddit people get their clocks cleaned -- i only

say that it back i like to be heckled on twitter when you have this kind of yield, andrew, 1.22, give me 3%. do you look through the delta variant at this point? >> yes, absolutely you look through it. >> yeah, you look through it, all these athletes testing, they're obviously asymptomatic or else they wouldn't be crushing it right now. look, i think also, by the way, the j&j, dr. propyl says that's the one to be careful of -- not to disparage it, but i think the asymptomatic is not as dangerous. the deaths are not going up that much i'm not buying that this is the

end of the bull market i'm saying that most of the companies that are involved with technology have been rolling over for days, maybe even weeks, and suddenly everyone has discovered that. >> what about a facebook the reason i ask is, you know, they appeared to beat back the antitrust case, at least temporarily, but now they have the white house on them all over again on covid >> look, that stock, facebook, amazon, netflix, they've all held up a long time. i think once you see those roll over, then everything has rolled over that's when you buy. i am being cynical these are all going to -- where have they been the only thing that hasn't rolled over is faang, and then

you have to go back. unless you're into the reddit that's become public they keep pumping it out we've got to stop with the underwritings. yeah, one -- >> but what does that mean >> does this mean that jim cramer is basically saying i want to hang out a while yeah, meanwhile, the people who don't want to get vaxed will not get vaxed. you're either vaccinated or you get covid. there really isn't -- you can't stop, but the delta people seem

to be more concerned about the actual impact of the shot than of the delta variant so they're all going to get it >> final question for you the question, by the way -- you say let it come down there a 5% correction? >> i think 3 to 5. three to five we already had a lot of ten i want to see faang go down, even though i love it. did people just notice -- norwegian cruise was at 28, and then florida said you can't enforce it there's a lot of people doing a lot of stupid things when you listen to got sleeb saying it could be pleased, yeah, you have to believe that facebook's stock is going to come down here

how dumb -- how come gottlieb was smiling? >> it's his way of deliver bad news and being kind at the same time. >> he's on the board of illuma and pfizer, did you know that? >> of course bill ackman, obviously this is going to restarred do you want to own this now? whatever happens, it's good for bill you know that. i think it is. he's now going to have to own universal music in a much bigger way.

>> you just heard what universal music is it's what your kids listen to. aren't your kids like 2? better, joe is a great grandfather. >> we will see what happens to universal music when it starts -- starts trading. >> did you ever hear of lady gaga >> i have. but i think that's like -- that makes me old at this point >> you're a boomer at heart. >> i am. >> my kids have some explaining to do if i'm a grandfather >> i love the -- bill ackman, everything is good that he does. >> that's what i said.

>> i remember j.c. penney. valiant, there's a lot of them target my favorite was of the 85-slide presentation at the dlifrlg of alpha of the hong kong dollar pig coming off in 15 days. but he's had some great ones he's had some great ones as he's explaining it, they all sound just as good >> exactly my point. that'ssh by the way, just, it's 156, now to 146. if that stock gets to 140, i don't know, why not buy it

they had a great quarter. >> let's see what mohammed thinking about all of this joining us to talk about it. mohamed el-erian also the president of queens college, cambridge in terms of a pullback, does that sound reasonable to you >> i always respect jim, but he's technicals. he spoke about stats he spoke about retail investors maybe being shaken out you have two con sense coming together this morning, about market technicals and consensus about growth that's what all the asset class are telling you this morning. >> is that similar with the ten-year have you -- have you decided why it's below 1 1/4 or was earlier? i haven't checked it recently. >> yeah, it's around 122 as we

came on air. yeah, there's first and foremost concerns about growth, have we reached peak growth, and is it coming down? two, does concerns that the fed is going to continue buying, you want to get in the way of 120 billion of monthly purchases, and three, importantly, if you are a pension fund and you are now in a much more comfortable position because you're stuck, component that has gone up so much, you are going to liability manage you're going to sell stocks and buy bonds and immunize your liabilities regardless of the level of the ten-year. so that's the technical. so you've got all these things together, policy, fundamentals and technicals coming together and resulting in a 122 ten-year, what's really interesting, joe, it's no longer good news for the stock market that is what has changed over the last few weeks >> the stimulus idea, we got to

a point where the -- i think the consensus was it's no longer needed and it could be counterproductive, but you just talked about a lot of growth concerns do you think infrastructure and stimulus now would be welcomed as unfortunately something that maybe we still could use or it would still be a positive for the economy? >> so joe, our biggest worry, which hasn't yet materialized -- and i don't want it to materialize, no one invested in this market would want it to materialize is stagflation, that you get lower growth and higher inflation at the same time that is our biggest worry out there, and we don't want that worry to start being a big concern let alone materialize because then we have nowhere to hide the reason why i'm saying that is you've got to distinguish between two types of stimulus. one is monetary stimulus if we continue with this monetary stimulus, we will have high inflation persist, already

chair powell has said inflation has been higher than he expected and for longer than he expect. well, you know what? that's going to be even worse if monetary stimulus persists on the fiscal side, if you can produce really good infrastructure opportunities, not just physical but human, what you do is you promote growth so you do want the stimulus to persist, but you want a different type of stimulus more infrastructure, less monetary stimulus. >> it has been positive that you can't do more fiscal spending without co-opting the fed to, you know, any debt that they're there to become you up and to keep interest rates low. so it's hand in hand you think you get -- if they started tapering and raised rates, how do you do more -- another $4 trillion. it doesn't work, the math doesn't work that way, mohamed >> so first of all, you want -- the window is closing.

so i agree with you that that risk is out there and the longer we wait, the higher the risk is. so that window is closing where you can have that smooth transition going on on stimulus. i agree with you that that window is closing. that's why we've got to hurry up now on both sides, on the monetary side and the fiscal side you've heard me say that for months having said that, the bond market is at 122 how many people expected us to be at 122 right here so the bond market ironically has given debt holders a much bigger buffer than anybody expected but i agree on your general point. that window's going to close if we're not careful. >> and which -- when you say human infrastructure, so you're buying into that what would you of all the entitlement programs, whatever you want to call them, all the things that democrats have wanted for a long, long time whether it's free college or

universal health care or child care, all those things do you buy sinto that, all those things you would call those infrastructure you put that under that umbrella >> what i buy into is we've got to increase our labor force participation. we've got to make it more productive, and we've got to invest in human capital. now, what does that mean better education, better training, better labor retooling, better child care so you can increase female labor participation. it's about bringing more people into the labor force and having a more productive labor force. that's what i buy into, joe. and joe, before we go off air, can you please acknowledge the mets in first place. they're going to fall out of first place, and i need an acknowledgment from you that has happened. >> i had the mets yesterday. they were down 6-0 in the first inning, and i said why did i do this, and then you saw what happened the rest is history.

>> please have them more going forward because we're slip sliding away >> i had the reds, too they didn't show up. 8-0. all right, mohamed, thank you. >> thank you. >> we will see you soon. coming up, what you need to keep an eye on as we approach the opening bell on wall street, down but not 500 anymore, "squawk box" will be right back. at the lexus golden opportunity sales event. get 1.9% apr financing on the 2021 rx 350. experience amazing.

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check the markets one last time, the dow is now down just under 500 points, had been more than that. it's down 483 points the s&p down just under 50 the nasdaq down about 130, 0 pointed out that the dow lost almost 300 points on friday, and it was a down week, which we haven't seen in recent weeks the ten-year note, just talking about that with mohamed, 1.22% this morning and you're seeing as we've talked about the reopening trade being reversed to some extent with the airlines all down at more than 3 or 4%, and of course cruise lines, casinos, hotels, just about across the board you're seeing some persistent

new worries about the delta variant and every data point we hear coming out of the olympics, too, hard to get excited about the olympics when we're sort of anxious. there's anxiety. >> could be hard >> still trying to look forward to it because it's such a great thing to see and we miss it from last time. >> yep we do. >> i will see you tomorrow, so sorkin. >> i'll see you tomorrow. >> becky should be back. "squawk on the street" is coming up right now good morning, and welcome to "squawk on the street. i'm david faber along with jim cross-cl cramer, and we're live from the new york stock exchange. carl has the morning off let's give you a look at futures as we get ready to start trading here at the nyc 30 minutes from now. we're set up for what will be a sharply lower open that of course is where you'd expect our road map would start. riskoff this morning stocks are going to open lower this of course is the spread and the rapid spread of the delta variant rattle