together thank you, andrew too. it's great i hope this continues to open up delta, no delta, been great working with you guys. really >> a lot of fun. >> tonight i'm very proud of this show. we've all worked together with the cnbc crew and everybody else we're looking to building this franchise. >> we are excited. make sure to join us tomorrow. "squawk on the street" is next good wednesday morning welcome to street. i'm carl quintanilla with david farber futures are steady bond yields slip as july cpi is in line. a bit light as we get some signs of moderation in prices of used cars and trucks. our road map begins with a profit warning from southwest as the delva variant sweeping

through the nation >> the senate approved an infrastructure plan. >> shares of coinbase are on the move profits surging following a volatile stretch of crypto trading. we'll start out with the cpi used cars and trucks last month were up 10-5 this month almost flat >> the index showed you, very predictive i'm thinking about what you tweeted this morning about maybe consumer slow down more available cars are the less index decline. more availability as major company went back. i don't know it had caught fire in japan and went back online so i know ford had more cars gm still troubled because of covid. david, i think we may have hit some sort of wall here how much

people want to pay for this. >> you think so? that's because you see the wall? >> used car, you're paying in some cases above new car pries and i think in the end people are saying look, let me just wait wilt come down. >> if i can wait i will wait >> the if i can wait >> yeah. the kind of insight you come to expect here. i froze here >> see something say something >> i have a keen sense of the obvious. >> we may have hit some level where people are saying it cost too much to travel i don't want to get sick when i travel you know what? i don't want to pay up for a used car maybe i can get a new one. maybe a little bit of a wake up call the cpi did demonstrate that maybe we got to some -- some people saying i can wait a little >> there's some discussion the transitory prices are normalizing but that more structural pricing is gaining

steam. shelter is something to watch. restaurants up .8. >> restaurants, there's a discretionary components people want to go out. what we keep hearing, we're sick of being coopedup. but we're also now worried about delta. and there's such a big group of people who are saying the hell with delta, that i think i would be worried about delta here. >> yes >> you did >> because of delta, i'm worried about delta. >> because of southwest you may be worried about delta as well >> southwest broke with the, i say, i don't want to call logic, but it broke with the story line don't worry about delta. don't worry about it because you don't die. that had been the story line now you're starting to get

another story line which is you know what? i don't want to get sick >> important story line. >> we didn't get that last year. >> no. we didn't. but delta -- >> southwest saying the company has recently experienced deceleration in bookings and increase in trip cancelations in august which are believed to be driven by that recent rise in covid cases associated with the delta variant so they are out looking at inquired quarter revenue is worsens i will tell you, though, i talked to a couple of hedge funds who like to do real-time the tracking and economic data and they are not seeing as much of a slow down of right in the moment stuff northeastward people going out and doing things right now but they are seeing a slow down in future bookings. by that i'm talking weeks out and months out, people are pulling back right now, it would

seem and say i'll wait >> norwegian too. they saw a slip in the last month. but, if it is true as scott wapner is saying that gotlieb will be right it will burn out then you want to book for future months just this current -- >> then there's this inflation there is a question as to whether frank del rio will be a guest with you tonight does it take does this pulling back a little bit take an edge off inflation >> i think it does but there are some structural issues we do have information when people come back after the employment benefits, they are not going back down. but there is a little bit more availability think about uber remember what he said. that there are more drivers in cities where the benefits expired and so that could be another way.

i'm a jay wright camp. jay has been pretty good now what the left ones are throwing him under the bus >> a lot of headlines yesterday about progressives who would prefer to see brainard in the chair. at this point, he's clearly not going to take any kind of victory lap. >> he doesn't do that. he's the least showman oriented fed chief. even janet yellen said this morning what a benchmark, what a gold standard there. i think jay has done a remarkable job and yet there's people that keep criticizing him. i think he's going to turn out very right once we get everybody vaccinated or everybody gets sick gotlieb says there's no way out. you'll either get vaccinated or get sick what are you, you laughing at? >> you either get vaccinated or

you get sick >> he says that every time >> it's funny to hear it the >> he says it every day. >> he does your point about his twist last night he posted a bunch of charts arkansas, louisiana, nevada. clear evidence he saysthat the surge is slowing now the problem is hospitalizations just don't disappear when infections start to decline >> no. but look, we're so much obviously better than handling it, the medical community learned a great deal, obviously and the medical community should be congratulated on being able to handle this he at the he same time there is this, you don't -- if you can delay a trip because you're afraid of getting sick, then delay it that's all that's happening. >> yes, people altering their expectations what they are doing a few months out they are waiting that's reflected potentially in what's up. southwest is talking about

things that are even closer term than a few months out. >> southwest is the most heavily traveled area of people who are anti-vaccination >> because of the route system in the south >> yes >> is that what you mean >> yes over and over we're hearing that people have to read this decision in favor of norwegian where a federal judge said look you got to understand there is no protested class called the unvaccinated and florida wants to protect that class it's not a class >> right that said, though, garrett kelly of southwest and a number of other airlines are not following united's lead in mandating vaccines for its employees >> pa pathetic it's the tough banks are tough. >> citi came out with a mandate for those that want to return to the office you need to be vaccinated the >> but they are worried about

this cohort that could take them down right? cohort that corks i don't know, jam up their phones, whatever they can do. >> do you think it's about -- i mean united is based in a northern part of the country whereas the other three are based in the south >> i think it's very true, carl. i really think, again, this notion of trying to get everybody vaccinated is one that because the president didn't do it, and the fda didn't do it has given a lot of people the out not having to do it. but -- >> got the military coming >> general eisenhower who then became president eisenhower said listen, we want to end polio so beginning next week you're going to go to a high school and you'll get a shot because he was eisenhower and it was a different time we had an outbreak of smallpox in this city, 7 million people, vaccinated in a couple of weeks.

>> i just wonder if gotlieb is right and things are starting to turn as he said they might because of what you said, everybody gets it or everybody is vaccinated. you have people pulling back a bit so you take the edge off inflation that would seem to be not a bad scenario for stocks. >> stocks go up a lot. discretionary. now let's throw some more money on the fire with the infrastructure package then $3 trillion whatever package. >> 3.5 trillion is a long way -- >> the house said the senate would need to pass something which i guess they have. >> what the senate did yesterday does that count?

>> given the current state of recovery, simply irresponsible to continue spending at levels more suited to a great depression or great recession. >> that's true that's the problem jay, i have to imagine, is trying to -- he really is trying to walk a tight rope between what congress wants to give and inflation. because interest rates are incredibly low >> i know you've been all over this, the corporate bond issuance this week we'll do 40 billion this week. >> people are thirsting for yield. >> i had a guy asking me for money. then he said oh, you're from c the nbc do you think the fed will take it >> what did you say to him >> then he had more questions. >> you should have given him an

answer >> he said he can't find a job then he talked about earnings reports. >> no crypto >> though thing about crypto >> he asked about taper, whether china was the economic power now. asked about inflation. asked about -- said covid. >> did he do everything in the form of a question it was not "jeopardy"? >> on 42nd street. didn't have a mask on. i'm like okay. >> now you're going to be talking about flying cars. >> he didn't ask me about flying cars he did want to know about the taper. >> back with jay jay has been consistently right. what do you want >> what do i want?

>> i think that the subway was ane anecdotal. >> later he came back through the car and yelled at me and talked about the earnings report take a look at futures this morning. pretty steady on the heels of the cpi. we'll talk about wendy's quarter. nice guidance. coinbase downgrade, virgin gact quk t street" continues in a moment. ♪ ♪ ♪ ♪

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. overnight the senate narrowly passed a $3.5 budget blueprint which contains many of the president's spending priorities the approval is 50-49 along party lines after votes on 50 amendments that took 14 hours. that followed yesterday's bipartisan passage of the $1 trillion infrastructure bill this is what the ceo of new corp had to say >> in 25 years in this industry we're as close to having meaningful infrastructure bill in this nation as new corp sees it it's through a lens of three things it's about america's safety, america's competitiveness and lastly the resurgence of american manufacturing if we learned anything through this pandemic is this nation must be a nation that makes and builds things here in america. >> we did get a lot of ata boys

at u.s. chamber of industry yesterday. >> he's a no nonsense ceo. just like the ones before him. they had been adamant that our country needed this. there's trillions of dollars in bad roads and trillions of dollars in bridges and tunnels and they got it. right now this industry is doing incredibly well. but a lot of people feel it's going plummet next year. i think this infrastructure bill means it won't new corp has been building factory after factory. remember they used to be cycled scrap. they don't burn coal the way china does i thought it just very impressive makes sense. cleveland-cliffs is the one that's most need cleveland-cliffs has old plants and new plants this is very real. i was afraid he might say this is a drop in the bucket. just the opposite. he said this is a very real

infrastructure attempt >> i liked it the. you've been talking about this for a little bit of time now obviously, we talked new corp yesterday. the stock has had a great move frankly less than some of the others >> the stock will change you got auto with tremendous demand you got nonresidential coming back very hard you got these big kinds of what i would describe as steel that you use for construction for governance that is just right in their wheelhouse i mean this is a company that's very impressed cleveland-cliffs is where people thought plants would the go down and they saved them.

so terrific company. u.s. steel is now very small a lot bigger than u.s. steel nucor -- >> a hundred spacs >> do you think the crypto community was right to be so outraged about the definition of a broker the >> crypto community has gotten a free ride, so to speak i heard the cfo of coinbase come on there was a moment there, obviously, truncated where they have to school gary. i wouldn't say them if i were them that they had to teach gary -- >> did she say that on air >> yes the sec, that's the government, under fire power, they are a private enterprise you could be regular late by

him, i want to regulate. i would not be -- i would not be -- let's say that i wanted something from gary ginzler. i would not start out by saying let me teach you how it works. >> probably not the best way to go about it. >> she was a professor of crypto and knows more than any of these people he's not self-interested because he works the for the government and he's a regulator maybe he needs some teaching >> there's plenty he could be taught >> the commission historically has not tiliked to be taught >> the commission has an awful lot on its plate today, i again >> wits well beyond that long story "journal" and on

climate. sec will try typical pose some standard >> i'll call gary and tell him i got to come down there and teach him these things you know i like gary i got to get caught up on the facts. i couldn't believe it. right on air i got to go down and teach a regulator. the regulators own you that person knew this. you do not tell a regulator let me tell you how to do your job, see. because that's what they do to you and they have fire power they have the divisions. you don't have the divisions >> well get more to coinbase and quarter itself trading volume was up double digits we'll countdown topping bell and take a look at futures and get the opening pelle here in about

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let's get to mad dash now with jim as we count down opening bell two and a half minutes before we get started with trading on hump day at the economic knicks ge, don't be confused had triple

digits >> that was my starter you may think it's going up a lot. >> yeah, but it hasn't >> okay. all right. how many stocks in the s&p 500 snus >> used to be 500. >> steve has waited to talk about ge and now has spoken. he said the cash flow was the highlight of ge's second quarter. we believe the construct remains detached from reality. yeah >> construct >> basically saying listen don't buy into any of that that people like it's backward looking. 50% or less cash flow industrial construct will be history when they close the capital let me put this -- he's gainesville saying you think they are making a lot of money and they are not >> okay. incredibly critical piece. basically says while business trends are not all bad cash

converse kay decent move in cash, earnings per share alone is not as material as the big noncash users. don't be fooled by the fact it looks like they are doing really well because they are not. >> i want to see his price target online. our viewers may not fully remember it's been a while since we mentioned. he's by far the most influential analyst. for quite a number of years he was negative on the company when it was reporting numbers that were not as bad as many had feared and then, of course, it got really bad quickly and proved correct he has a $40 price target. >> we've all been using free cash flow. one of the things that changed in 2021, you didn't worry about cash flow. it's such a true number. what he's saying is he's cutting his pre-cash flow senates. that's very, very negative be aware

that while it's moved up substantially he says now is a good time perhaps to be careful, ge >> we pay a lot of attention to what he says there's the opening bell on the big board >> big move for k through 12 education. what do we think of joby they bring the aircraft to the outside of the exchange. >> i'm a phil lebeau fan he's saying 2024 now i think there's a lot of people listening and i think they will hail joby outside of a good meal and go hey joby, like an uber.

>> we'll get to the suburbs very quickly. ceo said with phil that even by as soon as 2030 he expects the home be fully automated. you'll get into the joby without a pilot. >> not me. you'll get in one. >> and then have drop offs you can drop-off with a parachute. >> how about blaze do you take blaze? >> i have not. >> i tried it once >> i'm just saying blaze is here and now. >> it here now it uses fuel this is electric and will be autonomous and for urban use we call them flying cars they are urban mobility, flying taxi kind of things.

acic the sponsor of that of crest by is merging the archer. also 2024. it takes a while for the ffa to approve them if they hit those targets you'll start seeing them. >> certification of a novel aircraft is a big deal that's what the skeptics say be careful. >> what we care about is certificate at the the if i occasion of the max in china i don't know exactly what it takes. one went up and came back down successfully in china. >> the number of jobs here on the line if that things get certified -- remember there's a shortage as opposed to joby there's a big shortage of planes in china, they need planes airbus is doing better bogey cannot get off here even though china approves it, it's a big deal in the meantime previous cpi

number was very bad for the stock market this one is being interpreted as very good particularly for growth names which have been hammered as of late. >> i like this >> details up too? >> yep the combination of that and the infrastructure -- i mean i guess if we do get a rollover in case growth in the next week as some models predict then maybe you're looking at, tom calls it an everything rally going into the end of the year. >> i like that >> do i buy it >> i need oil to come down oil is coming down need cases to peak cases are peaking. that money needs to be continued to be spent that's a child credit and i need jay powell to not waiver and then, yeah, it's an everything market. >> everything. >> okay. >> okay.

>> yeah. i'm fine with that i want it to be an everything market that would be exciting >> we do have names like home depot, jim three month high on hd >> yeah. >> have you looked at walmart. walmart just jumped nine points. nine points. walmart is the biggest -- >> so, you were noting it yesterday as well. >> now we got a preview, walmart, omni channel, deep dive everyone is take target has been consistently great, walmart plus has gone from 11 million to 13 million. a lot of people thought walmart plus was a bit of a bust that's very much their amazon prime. would be pretty amaze field goal that came back david? >> yesterday we missed it. catapult it was a spac. it's been cut in half or more. they reported results before the market opened i guess yesterday

but i was taking a look at it. joby is a spac acic is going to tune with archer >> you know what, david -- >> changes in retail and new policies from covid policies varyants predicting consumer purchase behavior that's just been really ugly can add up to a growing list of spacs. >> glowing up. spelled wrong. now listen, david, let me tell you something incredibly odd albertson's yesterday, the cfo, new cfo out of best buy. how much is this new cfo worth to albertson's >> wow, look at that >> going back and forth with the ceo, it was not neat that was actually, i think,

barclays which had a sell on the stock telling torch avoid it, went to a hold and that's what happens. we still have considerable number of shorts here and the train was go along kroger and go short albertson's. that didn't turn out, did it, david? >> no, jim, it didn't. >> thank you i want you to demonstrate the same level of enthusiasm for me that you did for matt. >> matt was right a lot. >> ooh >> that's it >> i like the edge >> that was it >> you just betrayed me. >> i would never betray you. >> i'm by your side. >> hey, it's a big ocean

>> very good >> albertsons. this is the barclays title win some, lose some. you just lost a ton of money for the shorts which the -- >> i know. on twitter this morning talk about payment of bitcoin >> we should just go to the bronx zoo and do the show from there. >> bronx zoo is awesome. i haven't been there for a while. i used to go there often i miss those days. >> okay. >> you're talking about the stocks amp mc, it was funny up substantially in the pre-market yesterday. couldn't hold. down again at almost 3%. >> you don't think convertible bond he didn't give you that vibe >> he mentioned his own personal holdings and mentioned 67 and at

some point would look for diversification later this year or this year >> what's interesting nucor is up 3 now up only 1. there's some skepticism developing in some areas but i'm watching some of the traditional growth stocks making their way back >> we haven't touched on either wendy's. and the former weight watchers, jim, on some subgrowth that was a clear miss in an earning, 48 cents misses by 17 cents >> the ceo of wendy, that stock should be up more. very rare on the weight watchers call they literally said listen we didn't do well dhe not try to spin it and i give them credit for saying they didn't do it >> you're going to have wendy's

ceo on tonight >> yeah. tom penegor. >> i thought you would bring weight watchers on >> no because they are contra indicators like albertsons where the analyst gaffed everybody >> you weren't happy with him or the ceo from coinbase. >> like i said, the chief, the head of the sec is a person of great stature. so you don't like say i got to go down there and teach him. >> and teach him >> it's resulting. how about that it's resulting >> quick follow on our story yesterday. canada pacific make an alternative offer to acquire kansas city southern remember so much of this right now is up to kansas city southern shareholders. we'll have a vote to approve the current deal with canada national that vote is scheduled for the 19th of this came month of august yesterday we got an unexpected

release from the scb saying basically they will make a decision on the proposed voting trust no later than august 31st. the board has received many inquiries as to the timing and particularly in light of that they say that shareholder vote therefore they are going to give you and answer by the 31st that could be soon what i'm hearing as you expect, no surprise here from people close to canadian -- excuse me from kansas city southern, if it's not we'll adjourn the meeting until we get the ruling on the vote. that's the key here for canadian national doesn't mean they will get a yes or no but give them some sort of a path if they have, to you know, what they need to do and give everybody a much better idea as to whether or not -- >> the whole way

>> the company -- my expectations were similar. i worked for the shareholders. no scorched shirt. let's make money for people. i enjoy them i hope they get somewhere else or not fired because they are very big breath of fresh air really terrific. >> one thing we've not touched on is this white house statement from jay sullivan, national security adviser, basically prodding opec to boost production, asking the ftc to consider monitoring what they consider illegal activity. they have their eye on gas prices >> what's incredible is that they along with devon, which is incredibly shareholder friendly, these guys are drilling their fool heads off they are actually trying to

return free cash flow to shareholders you're not going to the to see a dramatic expansion in the amount of oil that's being pumped we're not bringing the price down and that's important. we're asking them to bring the price down but our guys are being so judicious. pioneer does its complete dividend plant, they would be the highest dividend in doing a variable dividend. these are great companies. they have listened to the shareholders incredibly conscious of what happened at exxon. trying so hard to cut much less. these are model citizens at one point i said can't invest in these guys. these guys listened. i got to tell you. they are trying to do everything they can to cutback on emissions and to get right and i have to salute them. they are doing terrific things >> they have been disciplined. very disciplined that continues to be the case

why production is not rising to meet what has been a rising price. >> they are being judicious. if you're a shareholder they are saying we make a lot of cash we're going now to return it devon's dividend yield and pioneer's dividend yield are two of the highest >> when people look they are going to see they are not the highest. you need to make that clear to people the yield as currently stated is not one of the highest >> the judges said i could call, that it's going to count >> understood. >> you get -- i just want people to under that if everything works out, they are going to give a space dividend and a variable dividend and if people want income i'm recommending pioneer right here right now if they want income >> all right i'm glad we touched on that. we do have the dow up almost 170. record highs for the s&p and blue chips let's get to bob pisani.

>> what is somewhat taming inflation fears. worth about 10 points the. cpi that wasn't really much tamer. tamer than it's been recently. in line with expectations. good enough for the market it's not clear how much this really does lower the chance of suddenly coming out at the jackson hole meeting with the tapering announcement, dramatically lowers those chance but what market thinks its positive those lower car prices, that's definitely a victory for the inflation is transitory camp for sure so at least so far powell has been right in terms of sectors here a mixed open tech was up. banks have been lagging. energy is a lowers throughout the whole month. we had a large crowd out here for our electric vehicle or evt

wealth this morning here but i want to point out the etf set new highs, electric vehicles doing well all the biggest stocks in the s&p, hitting new highs low volatility stuff is doing well we're talking about costco, proctor and gamble, pepsi, johnson & johnson all doing well joby, you saw phil agencies interview with jfrp oby. they were oogling the take off and landing vehicle. tesla meets uber in the air. reid hoffman involved in that spac business. joby opened about 10%, opened at $11.20 a lot of talk about an ipo land. a lot of push back on prices we're in a quiet period in

august always happens in august we didn't end well in the last couple of weeks. it fell apart. seven ipos were postponed. why? because the buyers didn't want to pay the price, they wanted lower price and guys offering it just walked way from the deals essentially. we saw price cuts, companies went public. but dole, weber cut their prices aftermarket is the day after it goes public. you usually get a first day pop in most poiz the question is what happens after that they have been terrible in the last few months losing 8%. the average cnbc buyer that buys an ipo on the first day of trading loses money. that's getting push back we have a whole bunch of companies out there. you see the renaissance ipo, main basket of ipos that's been underperforming the s&p 500, and it's flat this year with the s&p

500 up 18% that's a real warning sign big names coming in the second half of the year why does this matter they are trying to figure out what the prices will be in the second half of the year. already there's push back from people saying wait a minute we're lotion money you got to change the price. here's some names. rivian globalfoundryes. instacart. that's a 40 billion valuation. authentic brands forever 21 still out there nautica. nerdwallet and turo we have fresh market stripe the online payment firm is sitting out there my point is big companies but there's a lot of discussion about what the right price will be street is pushing back and that's good for people who are buyers of ipos >> still to come this morning former fed governor randy

kroszner on what's next for the fed. we did get a top, a little bit below 1.35 on the ten year we'll be right back.

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become an agent of innovation with invesco qqq american express joining the list of companies revising their return-to-work plans they've post poned a full return of employees to the offices until at least october 11th. joining the likes of microsoft, black rock, jim. >> you know david did the anecdotal story about whether the fed's going to taper for the last 30 years, i've gone in from new jersey

it usually takes an hour it took me 20 minutes. it must be wednesday's, they don't -- >> it is august. it is a particularly quiet time of year. office buildings are 15 to 20% and that's where they've been quite some time. moany had anticipated the return to work and not long after labor day. and many are delaying that a month. and people are waiting and seeing and delaying a bit so they have a better data to make decisions about bringing people back, doing all sorts of things that are going to take place a couple of months from now as we see the delta variant. >> we're not hearing it from schools though schools are coming >> that's what most people are predicting they play rummy cube >> maybe that's why jaime wants

them all back in the office. >> at least monday, friday >> good for the math skills. >> we will get to stock trading with jim as the dow is up more than 200 points. your family is on the move, so keep up with t-mobile - america's largest 5g network. with our new magenta max plan, you get unlimited premium data that can't slow you down based on how much smartphone data you use. and keep up with the hottest shows on the go because with magenta max, netflix is on us. plus, new and existing customers can add lines to their family plan for 50% off! so get out there and with unlimited premium data, netflix on us and 50% off additional family lines. only at t-mobile. the leader in 5g

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let's get to jim and stop trading. >> he compared me to a ph.d. student in new haven you didn't bring up norton lifelock >> and that's an omission on my part >> i have poshmark, wendy's. >> and the stock is up and i forgot to mention it >> you're right. no it's just a very good deal poshmark has a great business model. we mentioned a terrific quarter. we're going to talk about courage and the lack of constitutional protection for

those that don't want to be vaccinated he has no right to see if people are vaccinated and the federal district judge -- >> issued an injunction. >> very rare is you overturn a temporary injunction good people coin base that gary's happy to see you and learn all sorts of things about bitcoin. >> got a lot of mileage out of that one >> ooh, they didn't mean to say that >> i got to go to cramer's school i got to learn >> professor cramer. we'll see you tonight. "mattemoy.d ne 6:00 p.m. eastern time don't go anywhere.

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good wednesday morning welcome to another hour of "squawk on the street. got some record highs for the dow jones and s&p this morning

as we get some signs inflation might be moderating a bit. >> we're 30 minutes into the trading session. so, here are the three big movers we're watching. we're going to start with coin base beating estimates as a public company and saw better than expected revenue of $2 billion. up from 178 million a year ago plus wendy's on the top and bottom line with same-store sales beating forecast as more people return to in-person dining and finally watch ww international. that's plunging. company's formally known as weight watcher's saw the quarterly revenue fall short of analysts forecast. fewer numbers in the quarter than the same quarter last year. shares are down 25% right now. david. >> let's get to our steve leaseman right now

now, you have the number steve will fill in the rest for us steve. >> you know, it's a weird thing to see moderation. even going so far as to say the core rate shows the inflation surge is temporary it seems early days to declare victory after so many months of sharp increases and an economy in the throws of supply boddal necks and labor shortages. new vehicles were up strong also but they could be coming down. that's what we want to watch but that was showing double digit gains. apparel moderated as well. housing's the new one to watch

that seems something we have to be concerned about in the years ahead. that's in the eye of the beholder from oxford economics wrietsz, and i quote here. we believed june marked the peek in the annual rate of inflation. and jim wriettes he's a little more skeptical today's data doesn't reverse much on this front it's just that expectations have adjusted much higher the fed is going to welcome the news for sure but will clearly want to see substantial further progress on the inflation front. together, with moderation, if we get tin august, could help ease back some of the concerns. and we're going to get a first-hand look for what one of the new hawks at 1:00 on the

exchange carl >> steve, thanks for setting that up for us joining us this morning, former governor, now deputy dean and economics professor at the university of chicago, school of business good to see you this morning >> great to see you. steve did set us up there. there's a number of reports saying core inflation may have peeked has it >> it's early to say there could be one offs coming down i broadly agree it's likely to be transitory. and in particular, there's risk to inflations. >> so, the risks come from where? if we're going to agree the transitory nature of pricing is coming back to normal, like with used cars and trucks, is it time to start worrying about things like shelter

>> that's something you're going to hear a lot more from the fed about, not only that rental prices may be going up but market's getting frothy in some areas. be concerned about the asset price issue as well as the inflation issue. the key thing will be wages. are people starting to ask for higher wages and quitting their job. there are a lot of open jobs >> it's morgan what's perhaps a really basic question you mentioned frothy certainly the housing mark has looked frothy. looking at price increases in recent months. as we hear more talk around taper and debate around that, how does treasury and mortgage-backed security create or support jobs? >> well, it certainly keeps interest rates low and the lower they are, the more likely it is that people have

more incentive to spend, rather than save. and firms to invest and create jobs but it's only if those are sustainable. you can get a big boost in the short run that may not work out as well in the long run. so, it's a trade off >> randy do, you think -- we've gotten anecdotal evidence very recently a pullback in terms of their planning as a result of the spread of the delta variant. do you think that will have an impact in terms of inflation or future demand or is it too early to say >> i think it has potential impact and something that the fed is struggling with people are ready to give the all clear and we've defeated the virus and can move ahead i would be a bit more cautious about that because we don't know whether there could be a new variant coming up.

the fed will be somewhat cautious no big move but they melee the foundation for starting to announce a taper later in the year if things go well and we don't have some sort of problem related to the variant or the virus. >> i know this may be a tough one to answer and we're not looking to you to read charts that granularly. we did have had the double bottom at 112. now people talk about the resistance and high 130s the shorter of asking is do you think we hit 2% before 1:00 or vice versa >> i think there will be volatility i don't think it's likely we'll be hitting one inflation expectations are moving up a little bit but they're still in a reasonable range. unless there's a big hit to the economy, due to the variant or policy

my guess is we're going to move higher gradualy. i don't think this is happening overnight. >> randy, does jerome powell get another term >> i think he is done a very good job in an extraordinarily difficult time i think he has been pretty good on communication no one's going to be perfect there's a little upset in the markets when they first started talking about maybe moving ahead a little bit more slowly but so far i think he's handled things well. obviously there, are other excellent candidates but i would stick with jay i think he's a good guy. >> what's been written about him lately is his ability to forge relationships on thohill he made a lot of trips and it's paid off others argue we're starting to

get so much fed speak looking to accelerate the timing of taper do you think he's done a good job at, at least building consensus within the committee >> i think so. you see relatively few descents. and it's been a tough time to get everyone on board. it's positives people can speak their minds. it's much better for the markets to know these different ideas areen the table and being debated. but one idea is being given. this is a chance the chairman may be wrong or may have to pivot and this makes it easier for him to do that i think he's managed the communications issue quite well. sgl >> it's going to be an exciting couple of weeks ahead. thank you. >> great to see you. southwest, the second airline in a week to warn about the delta variant on bookings. phil >> what southwest is saying that yes, there is an impact in terms

of covid-19, the delta variant and what they've seen in terms of near term or close in bookings of cancellations. as you look at shares in southwest, dropping an ak. they're operating revenue guidance for august and september. down 3% compared to what they previously expected. the company says it has recently experienced a deceleration in close-in bookings and an increase in close-in trip cancellations in august 2021 kelly was on our air and said he didn't notice an impact. that has changed they said for now, they're not mandating employees be vaccinated all of the airlines have

strongly encouraged their employees to be vaccinated and they have a high vaccination rate but so far united and hawaiian and frontier are the only ones saying you've got to be vaccinated or be tested on a regular basis. but american, delta and southwest are not going down the road as of right now all moving higher, despite that warning from southwest regarding cancellations and a drop in bookings due to covid-19 back to you. the fact the different airlines are taking different approaches to vaccines and whether they're going to mandate or not, what does it speak to the labor market where the industry is concerned? for years we've been talking about pilot shortages. is that coming into play >> they say it's not a factor. but keep in mind, as they have added more flights, morgan, they have hatd to have more pilots make sure they have their certification up to schedule

in terms of they're reidy to go on a particular aircraft whenever that might be and these airlines lost a number of pilots who took early buyouts last year. and the airline said we think we're going to be okay in terms of staffing. you have to wonder if that might play a role not toot mandate and united said we believe we're going to get to 100% >> and going ahead with the merger and seeing shares spike spoke to the ceo and founder this morning speak about the emergency, which i believe is years away, from the market as well >> there's major players, 12 to 15, all saying they plan to be in service by 2024

technologically, i think they're going to be there. the question is whether regulators will be comfortable with these urban air taxis zipping around metropolitan areas. it's one thing when you have a helicopter service like blade that is going from point a to b. those are well-known corridors they're traveling around a lot of complexity and will regulators be comfortable by 2024 that's the big question. >> as we head to a quick break, here's a look at the road map for the next hour, including a look at the big banks, hoyitting new highs. and one of the real estate companies in the world we'll get his word on return to the office and kathy wood says she's keeping, quote, an open mind on the sector

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it's taken a lot to get to this moment. ♪ grew up at midnight - the maccabees ♪ dreams are on the line. you got this. refresh... it all, comes down, to this. ♪♪ office space seeing a surge in inquiries, that's according to real estate company although the exact dates for many not quite certain joining us to discuss the company's quarter and the future of work is ceo brett white

we've had that conversation for some time in terms of future work you said we believe a full recovery of the office market is in the relative near term. not three years from now, not four years it's something much quicker than that what are you seeing? and why did you say that >> first of all, congratulations on a fabulous week at "jeopardy. that was a ton of fun to watch so, we lost .2.9 billion office jobs we've recovered 2.2 million of the jobs and we expect full recovery of office employment in the middle of next year. that would be two years and it took six years so, we expect to see a full recovery and expect to see the same rents will drop out, begin to improve. vacancies will begin to improve. there's a lot of return to

employment, which has a good outlook to the short and midterm year >> so, what changed here just four mungs ago you were looking at this year and next year differently what's lapened that has encouraged you so much. >> >> vaccines i think the single largest determinant is people's ability to feel safe going back to work and that inflection point we hit march, april when so many vaccines became very available, widely distributed, changed the mindset, i believe, of most office workers and certainly the folks who run these companies at the office environment is going to be a very safe environment. i would say with the really rapid change around mandating vaccines at the workplace, we're seeing, as you know, every hour another large company saying they're going to mandate vaccines or regular testing. that's a huge supporter to making people feel safe going

back to work and in the office >> we still know and you and i have talked about this that they're going to have hybrid models what changes are taking place in the actual space itself in terms of work? because the way companies approach it is different now >> you're absolutely right and by the way, that's one of the key fundamental drivers of our relationship and strategic partnership. companies are thinking of space very differently i think they realize the office needs to be a place that attracts people to the office. a place that's fun to work, a place that, also, by the way, is rich in technology to help the tenant experience within the buildings. prrls and as you know and we all know, we work has always been a leader in office space technology and tenant experience, mereoing our capabilities and managing four billion square feet around the

world and create a very interesting and fun office to work in and great technology to help you use that office these are the sort of things that large companies are talking to us about every day. which is it's going to need to be different, configured different, technology in the auflgs is going to be different. all of this about helping tenants feel better about the workplace environment and we're excited to go back to work >> what markets are recovering the fastest? or i dare say, recovering the fastest? >> we're seeing rapid return to the office in places like dallas we're seeing slow return in places like san francisco. i do think the more important point is there's an overall fundament trend eof movement bak to normalcy. as we look over the midterms, say a year from now, my guess is

things are going to feel very, very normal a year from now. as david mentions the office space itself may be different. hopefully it's more fun to work in and the technology 's going to be better but i think a year from now, we're going to feel, for the most part, that all of this is behind us. >> when i look at manhattan, midtown or downtown, the largest office market in the country by far. i can't imagine being completely full again, given at any one time 25, 30, 40% of the work force may not be there how do you view it in terms of office space long term >> and i'm going to answer the question on the data the data tells us we should see office occupancy back tine 89% in the next couple of years.

remember we're creating a massive amount of knowledge-based working jobs and the creation of jobs offsets hybrid work and offsets folks that may be permanently at home. when we look back two years from now, a pretty stable office market with fairly regular occupancies. and prepandemic, the average office floor plate was 65% occupied on any given day. people are traveling when we talk about getting back to full occupancy, we'll never see, never have seen, walking on a floor in every office building so, we think the data tells us we're office, job, employment numbers and forecasts that we're going to be back to a fairly stable office environment in the next couple of years >> and finally, near term, because you have a good line of

sight on this stuff. are we seeing company's delay return to work soon? many expect to be back near labor day. is the delta variant having an impact >> first is office building tours, tenants looking for new space. up 80% right now average lease term right now, david, is 75% of leases are getting done right now are over four years so, what does that tell you? that's normal. delta, what it's done is delay back to work, back to the office, certainly. i think for most companies, it's wait and see but my guess is people expect you back to work late october. >> thanks for your time. >> great talking to you. thank you. meanwhile, competition to buy homes is high school and the

stak stakes are rising for rentals as well >> demand for rentals is off the charts and that has landlords seeing bidding wars and dollar signs normally reserved for home buyers >> been leasing property are for almost 30 years and we haven't seen an applicant pool this competitive since we started >> he put this maryland town house on the market two weeks ago and potential tenants are offering several hundred dollars a month over asking price. in july, rentsz nationally rose 7% year over year for one-bedroom apartments and 8.7% for two-bedroom apartments that's up from the month before. for single family rentals, rents up 6.6% year over year that's nearly four times the increase we saw in may last year

not only is rent rising but so is the profile of the renter >> you're seeing higher credit scores you're seeing applicants willing to put down more in terms of security deposit you're seeing strong rental history as well. that wasn't necessarily the case precovid >> now, he says he's seeing a lot of renters, who were trying to buy homes but decided to rent instead and with the eviction moratorium still in place, being extended that takes more supply out of the market. morgan >> thank you key thing to watch meantime, spaces, we're watching that space as well and expecting shares to return towards a long-term value of $25. as enhancements on the mother ship begin in the fall, after

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cathy woods says she's keeping, a quote, open mind on chinese stocks hey, don >> so, a lot of these chinese stocks have taken a beating and it has caused cathy wood to trim those positions substantially in some ways, across many of the funds that art funds manages three of the biggest ones, where you've seen notable position decline have been in j.d..com, alibaba. you can see on a year-to-date basis, alibaba out performing, if that's what you want to call it and from the highs, it's even more dramatic, especially for names like j.d..com. they're somewhat emblematic because they're traded in the u.s. as well if you look at the overall theme

for how this is developling, they have taken the disproportionate beating compared to the overall names there. these are two etfs that track various parts of the market. the ticker xsi track as lot of the latest stocks. the internet etf tracks many of the big tech names we talk about. you can see we're down roughly half in terms of 50% of the value from the highs we've seen. if you contrast from the white line from the highs we saw bac here, we are down roughly 25%. almost a doubling in terms of the amount of losses we've seen from relative highs, showing you how disproportion that chinese tech stocks have been hit. as for the funds themselves, three of the bigger ones that have exposures, have been in

focus on a year-to-date basis. the thin tech innovation holds many of the internet names and the self-generation internet itself does well a it gives you an idea of how the sentiment has shifted but the reason why, perhaps, kathy wood is keeping that quote/unquote open mind on the chinese internet stocks. if things drop any further, could represent a value trade. >> worth mentioning soft bank, who has been hit hard on its investments. so many are chinese-related companies, such as alibaba time for a news update leslie i'm leslie picker and here's your cnbc update at this hour. as afghanistan's defense ministry is showing air strikes, the military is losing ground as u.s. forces withdraw

and reuters reports they think the taliban could isolate kabul in 30 days and could take control in 90 days a majority of parents, age 12 to 17, are against a vaccine mandate for school students. it also found 63% want schools to require masks for teachers and students who aren't vaccinated youtube is shutting down senator rand paul's event for a week for posting something saying claulgt masks don't work. he said he calls it a badge of honor. messi is telling reporters he hopes to lead the team to a champion's league victory. i know my husband will be watching >> thats would make two husbands for two ladies on air right now. thank you. after the break, we'll get our take on the record rally

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the dow and s&p brought in overnight highs. art here to talk about the trading today. good to see you. >> good morning. good to see you too, sir sfrrls. >> you wrote this morning that traders remain frustrated by the remaining tip toe effect as we're looking for breakout patterns did they do anything to deliver to something like that >> it didn't bring a breakout but was supportive for the bills. yoib been spot on all morning. the used car prices had been jumping and jumping have pulled back and that makes powell's

transitory son more plausible. and dianna spot on with the rent equibblents. the owner equivalent rent, which is a component of those inflation numbers, is very heavily walgted. it's about 30%. if that continues to move up, that's going to keep up with pressure woo haven't had that breakout call one of the reasons i'm concerned with that is seasonality after the election, it's down the most frequent. september is the weakest month so, we're going to a two-month period where, seizeinally, the market has tough sledding. great you're having record new highs but i'd like to see it

punch through once in a while. show me you're forcing the shorts to come things like that >> we have been watching narrowing for several weeks. and do you think infrastructure, although this is going to be a long process, is going to help out growth names and maybe broaden that out >> it would certain wlae be helping the materials. we saw that yesterday. cater pillar was a standout once again. and stocks like boeing they moved away from the financials for a little bit here so, i think infrastructure can help out reasonably well if they're putting it out with an eye dropper, we can all remember the infamous shovel ready projects we don't know what they were

shoveling but it wasn't anything into the economy >> fair point. and we haven't seen a meaningful pullback since last fall how sustainable is it? i guess i should ask that we clime toob higher and higher records here >> we've been moving up in wonderment and as carl eluded to, i'm a little concerned we've been doing it in these baby steps. the fact the market has a compressed amp luitude every day. up a little bit more, without any sign of differ ngss, about you believing it should be weak, strong because what happens quite frequently, when you get a long period of minor change and narrow amp luitude, that hints a complacency in which people are saying yeah, the economy's good.

but no excitement, no vuvr in there and that's bothersome to me we often see that as we move towards tops >> because it does feel like we're climbing this wall of worry. when you look around, whether it's the ekauchbomy, the market, the world at large, what do you see as the biggest potential risk there >> you know, the fact that, for example, inflation began to kick in much more heavily, i think that's unlikely but that would bea factor don't forget you've had the fed shoveling money into this economy. the liquidity is phenomenal. and once again we've had no real inflation. that's because you've got to look at the velocity of money. not whether there's more money or not it's whether you lend it or spend it you can only get inflation if

you lend or spend the money. if i put it in my garage, that's not inflationary start to see if inflations go up but for now, the fed has satisfied a previously unforeseen amount of liquidity in the market right now. >> i wonder how you're thinking of the delta variant and if any of the charts prove -- if cases do roll over with very little mitt gagsz efforts, especially in the south, if the market is going to think of new ways of variants as things we can tolerate and then move on. >> well, i think the critical thing and i wrote a couple of weeks ago, about the variant, which has gone through south america and hopefully not here or other key places. what i'm looking for is you

remember the phrase, heard immunity i would like for isto get to that spot where the antibodies, either from vaccination or from previous exposure are enough that if you get that roll over call, if you don't begin to get the new cases, you only get the variants as they start to reach into more and more new kieszs. that gives the virus a chance to mutate if we can tame the number of new exposures and breakouts, we'll get close the heard immunity and then i think you can see a big sigh of relief in the market >> good to box that in, either tloouz infections or vaccinations we'll see. >> thank you as we head to a quick break,

shares of canada goose plunging, after a 45 send per share loss as the company sees rising expenses those shares are down 14%. and poshmark rising. the company saying it expects an impact from apple's flew privacy controls

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morgan stanley, wells fargo are hitting week highs gerard, great to have you on this morning i want your thoughts as we've seen the 10-year yield move higher this week, is that what is powering the stocks right now? or are there other forces as well >> i think you put your finger on it. i think we're saying the curve being there real catalyst. you may remember when the 10-year was down well below 1% and steadily rose into may to over 170 basis points and the bank stocks did extremely well the trade was very strong and the banks benefitted from that then peeks went down and the banks started to struggle. now the 10 year is moving up, the banks are moving with them >> given the fact we're getting more fed speak and talk of it,

is that a good thing for banks and if so, is it a situation where they tend to rally around that talk or do you wait and watch and see as an investor >> i think it's a good thing for bank stocks. the steepening curve enhances their margin and that will lead to greater revenue. if we see a 10 year approach 2%, rather than 1%, the bank stocks will do well the underlying fundamentals, is this economy is growing, as well as inflation data that came out today. this is all ben filgsz to the underlying fundamentals which will drive the stocks higher as well we could have two forces here over the next 12 months, which is higher rates and coming from increased loan demand. >> i know you wrote on this not long ago but the loan loss

reserve releases and what that did for the biggest u.s. banks in this earning season i mean, these are institutions sitting on a lot of excess cash right now. how does that get deployed and if it does, whether it's loans or securities, what does that to do to continue to power the eps numbers? >> you're right. the level of liquidity and securities ownership for the banking industry are at record levels one of the measures we use is a loan to deposit ratio, which measures how loaned up the industry is. normally it should be closer to 90%. what you're likely to see. you don't need to see the fed raise short-term interest rates. and the need for loan growth to support economic growth.

all the banks need to do is transfer their earning assets from securities yielding less than 2%. to loans yielding 3 to 4%. and that's a pick up just from transferring the assets. then, in 2022, that's just added fuel to the revenue growth for this industry. >> hey, gerard, i wonder, as we're looking for areas where there's more gas in the tank on some of these names, maybe it's loan growth but i wonder how much is in continuing loss provisions, perhaps discussion about capitol returns? >> i would say that the loan-loss reserve releasing, as you might recall last year, at the height of the pandemic, the banks had to set aside hundreds of billions in loan loss reserves this is the first time in our

careers we didn't see a credit cycle and that's because of what the federal reserve did. and the outcome is they didn't have any material credit loss said we're probably seeing the peek of those numbers we expect it to continue to the second half of next year but it won't be the size of what we just saw you brought up another good point. theplans the banks will be very strong. seen all big banks announce dividend increases following stress tests they went through in june, and also sizable buyback announcements. not only underlying fundamentals, potential for rising rates, you have capital action plans also going in favor of shareholders to own stocks today. >> man all right. you sound excited. it's david, gerard looking at this group, underperformance of citi prized up 20% for the year, versus an

underperformer of the group. $40 billion below that or less than morgan stanley. what do you make of citi and what do you tell clients about that name right now? >> david, you're really asking a good question, because citi has been the laggard and has been a laggard for a while. as you know, it's truly hard one global bank that we have in this country look at bank of america. 90% of revenue comes from the united states. in citi's case, approximately 65%, 70% of their revenue comes from outside the united states a more complex and more costly operation, running the operation they have. they've had a change in leadership, you're aware of. jane frazier now the new ceo i think you'll see, make real important changes. she's going to exit businesses that they do not have economies to scale in. >> yeah. >> however, tushing around a battleship and not a speedboat got to take time. >> thanks for joining us. >> you're very welcome

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a check on moderna under pressure has been since hitting that high for the week stock still up dramatically for rchayear, but not bigger tn mek anymore. we'll be right back.

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welcome back the supply chain slowdown hurting retailers still leading to empty shelves and higher prices our courtney reagan has that story for us >> reporter: hi, morgan. retail ceos tell me the supply chain never worse with every link in the chain delayed, at a short of and a higher cost taking at least twice as long to get goods from asia here to the united states. big retailers in better shape than vendors that sell to them vendors say empty shelves and prices 3% to 10% higher inevitable for shoppers. now back-to-school, holidays and well into 2022 ll bean is larger, still paying more for normal containers

percentage increase is less than smaller brands are paying. so far absorbing the cost. still, ceo steve smith tells me, "we are worried about our fall inventory. 70% receipts finished somewhere in the supply chain. the other 30% we're worried about. either not produced yet or in the raw materials stage. the ceo of cng accessories sells to t.j. maxx and others, store prices have to go up in 2019, average container from china cost $1,200. beginning of the pandemic, fell to $1,100 for all-time low since prices going up. average container costing betweens $15,000 and $19,000 that's what the ceo of maker of baby gear paying up from $2,500 saying he's worried about the third and fourth quarter and holiday sales disruptions noting there's not a lot of stability

and predictability to know what will ship when 10% of his orders currently are hung up in china back to you. does it for us look at the big five apple, facebook, amazon and micr microsoft. only microsoft and apple better on the session that does it for us. "techcheck" starts right now. good wednesday morning welcome to atlan"techcheck." i'm carl quintanilla with jon fortt and deirdre bosa coinbase's first outside investor cfo on a big cloud deal. plus earnings exclusives with ceos of fubotv and docks imty. an