. we will get you ready for the data points ahead. the cdc recommending the vaccine for pregnant woman and suggesting a booster for immunocompromised people today it's thursday, august 12th, 2021 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm melissa lee with andrew ross

sorkin we are looking at a higher open building on the record lclose. dow up 44. nasdaq with the weakness looking at treasury yields we saw a snap of a winning streak today, the 10-year is 1.352% andrew. we have a look at a letter you have to hear about the letter carson block's first investor letter sent yesterday on wednesday morning. according to a source familiar with the fund, block launched the domino fund after the game stop saga. since february 16th, that fund returned 10.9% since august 6th. what is fascinatingabout the letter, more than anything, is

his acceptance of how wrong he has been and how wrong shorts have been about tesla over time. he writes in his letter about his views on tesla and elon musk and frustrated he was with elon musk and how he missed the larger issue or scale, if you will, when it came to tesla and whether they get to that scale relative to volkswagen or gm that was the big missing piece for him. it is fascinating read i don't know if we will post it online we should. block writing a revelation of interest rates interest rates must stay ridiculously low levels in order to decarbon decarbonize the eco. i believe interest rates will be at the levels to spur investment

in technology to de-carbonize. back to the tesla issue. he says what i think is newfound wisdom the world needs, i'm less hostile. the tesla shorts have been right all along. tesla is here not because of scale in manufacturing base or unit sales, but scale because of the capital base sort of an acceptance of what happened here. jedi mastery is being able to set your acceptance level for the amount of bs walle'll call t for now. nobody embodies this better than elon fun investor letter to start the morning, guys. we will hear from carson block at 8:00 a.m. thank you. covid vaccine news the cdc recommending pregnant

and breast feeding women be vaccinated officials said 23% of pregnant women have received one dose of the vaccine in the u.s doctors have reported seeing more pregnant patients infected. a third vaccine dose for people with compromised immune systems as soon as today alaska airlines is considering making vaccines mandatory for employees. united, frontier and hawaii have mandated vaccines. delta, southwest and american encouraged, but not mandated them the new york stock exchange will require traders to be vaccinated by september 13th to access the trading floor medical and religious exceptions will be given. new york will expand the program to include vaccinated people effective immediately.

speaking of vaccine mandates the ceo of norwegian cruise line speaking out on "mad money" with jim cramer >> i'm so disappointed in government local level, state level, federal level. we don't have mandates whatever happened to good old leadership in this country there's a pandemic going on. imagine if 600,000 people have died of anything else in this country other than covid there would be an uproar over 35 million confirmed cases. ask dr. gottlieb, he will tell you it is over 100 million cases. it has to stop if we don't take leadership here, this will go on forever and ever. >> we will talk more about this at 7:30 a.m. with dr. scott gottlieb a new bipartisan bill seeks to bring more competition to the app store dominated by apple and

google the bill would prevent apple and google to demand their app payment system apple takes a 30% cut of payments customers make in the app. it is at the heart of the legal battle with epic games there is one thing that can unite us in politics that is the animosity toward big tech >> does it i'm curious where both of you stand on this. i have very mixed -- very mixed views about this there is part of me that truly believes the phone, that i'm holding here, developed by apple. it is their device their store. i bought the device. i knew i would use their app store going in part of the opportunity set with

the privacy and other settings they maintain for me that is the sales proposition. so, the idea that you can turn -- the government can turn the phone, i don't want to say into the wild west, but into something else, is troubling on the other side, i recognize google and apple have a duopoly over this industry and so much success in life and you say it actually does harm competition i'm not sure >> i think i would tend to side with the former of your ar arguments rather than the latter i can see where are you coming from i suppose epic games is coming from another view as well. apple developed the phone. >> what is the alternative le what other app store would there

have been? would epic games be as successful if it were not on the app store? doesn't apple deserve to collect what it wants? if government steps in and says 15% to 30% isn't kosher, what are we saying? the private business cannot build and then have government step >> you asked the other question. is it a utility? there was a point where we decided telephone network unto itself was a utility at&t had become the gatekeeper that had to be effectively broken up because if one company owned all of it and the gatekeeper, it could stifle competition. >> we had baby bells what happened? does sba communications exist?

>> no. the one distinction is the break up of at&t spurred a remarkable growth period in america with telecommunications it wasn't just the telephone network. you couldn't use a third-party telephone. you had to buy the physical phone or fax machine to hook into the network there were lots of debates back then about whether a third-party and at&t would say and the other telephone operators would say, we're trying to keep our network safe and it all has to be contiguous you can't use a third-party device that hooks into our phone. there is a little bit of that here to play both sides of the story, those are the things to think about, maybe >> well, if you are an app

developer, then you clearly have a different opinion. if you are a customer of any of the companies. if you are buying the phone and access to all of what the app store provides, you don't spend 30 seconds of your day thinking about this issue if you are an app developer, it is front and center. it pertains to everything in trying to get your app out to the people you are trying to reach. >> the truth is, i think, if you opened up the app store on apple, the end result would be the device would be more expensive. it wouldn't be cheaper if you were apple, you have to say i can't collect service revenue. i have to charge more for the de device it would open a new world. i don't know if you owned your own store, you can stock your shelves with whatever you want. you decide the rates >> until there is only one

store. >> here we are now we made the circle coming up, we are going to get you ready for today's economic data. including jobless claims and producer prices. speaking of prices, as we head to break, here is president biden's comments on inflation and the fed. >> we will keep a careful eye on inflation and trust the fed to take appropriate action if and when it's needed that's great, carl. but we need something better. that's easily adjustable has no penalties or advisory fee. and we can monitor to see that we're on track. like schwab intelligent income. schwab! introducing schwab intelligent income. a simple, modern way to pay yourself from your portfolio. oh, that's cool... i mean, we don't have that. schwab. a modern approach to wealth management. ♪all by yourself.♪

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welcome back time for the planner jobs and inflation in focus. the latest data on producer prices and jobless claims at 8:30 a.m on the earnings front, disney, airbnb and doordash after the closing bell joining us is sylvia jablonski sylvia, good morning welcome. >> thanks for having me. >> you bet sorry we're at record levels for stocks are we going to keep that up >> yeah, you know, the market has real positive momentum going forward. you have loads of liquidity in the market savings levels at all-time highs. companies issuing buy backs. free cash flows are high 7% to 9% increase looks better

than 1.35 on the 10-year the market hasn't rewarded it. with the volatility we're seeing here and there, we see that throughout the year. we also see continued growth we finish the year high. >> how you arethinking about the fed? it seems to be priming the wheel here for a taper maybe sooner rather than later does in that matter to you in your forecast? >> it doesn't for this year or next year. i suspect the fed might announce when they will taper in september. that would be step one before we get to rates i think we have time on this you know, don't forget they are monitoring inflation and monitoring what happens with the variant. we're in the situation now where businesses are suffering a little bit, particularly in the service sector because of that

we may or may not get kids back to school. that will impact the jobs number i can't imagine they would throw their hands up and give up i think we have time on that i do think once we see a taper and rate hikes, that would be slow and steady in support of the economy going forward. >> what about growth or cyclical stocks are you manyileaning one way ore other? we had tom lee who suggested it is an everything rally the environment is set up perfectly for a lot of things to go up >> i agree with that i think diversified portfolios are the way to go now. you have to think about it in two ways short-term names which have been beat up the most reopen trade casinos, hotels and airlines off the 52-week highs. the variant has put another wrench in that longer term outlook is 5g.

the fourth industrial revolution and hydrogen we had the bill that we're talking about passing which is supposed to research and fund green hydrogen it is supposed to be $11 trillion investment by 2050. growth in big tech i don't think those trades are over they are cash laden. they are moving into the future and cloud and machine learning and ai there is so much opportunity there. what is the new tech of the future and pipe down and have that be the next year on trade. >> you like crypto, sylvia why now? we have seen rocky trading this year one reason you cited to producers is tesla's investment in crypto which is not an i inve investment it is on their balance sheet

they don't par misticipate on t upside i'm curious the justification of putting it into a portfolio? >> i have been bullish on crypto for some time. i think it will eventually pick up usage to the tesla point, it is the initial use case to purchase tesla. we know that is on hold until we figure out how to make it more green which is in the works. i think once elon musk gets to the point where he is comfortable to that, he will look to accept it again. micro strategy has it on the balance sheet. amc will accept crypto the rumors around amazon was not true i also think there is a slew of etfs filed for an open discussion about the futures based products to be listed.

that means market makers will use the cryptocurrency to hedge positions and it will tick up the volume there i think regulations. if they are reasonable and look like stock regulations, it will open up the marketplace and retirement plans there is so much interest and it is not going away. i'm very bullish on the price. >> even messi is getting part of his salary paid in crypto. you don't just like crypto you love crypto. you have never been more bullish. you see reasonable. look at the recent price surge look what happens with a little bit of news with the new usage of crypto with the mutual funds and regulation is looked at and not as bad as we thought i think the world wants to use

crypto there is something like 20% of accounts now hold crypto look at the coinbase earnings. they beat the 60 million user number mainly off crypto i think demand is there. it will be a usable asset class. not all crypto bitcoin and ethereum nfts will surge with the digital art. i think there is a huge, huge use case for this going forward. >> we will see sylvia, thank you for your time. sylvia jablonski. coming up, new numbers from electric carmakers and lordstown. disney set to report after the closing bell we will tell you what to expect. "squawk box" will be right back. >> announcer: squawk planner is

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we are watching shares of chinese electric car make other nio with a second quarter loss that was slightly more than analysts expected. nio delivered 22,000 vehicles in the second quarter and expects to deliver 25,000 vehicles this quarter. shares of lordstown motors are higher the company is still planning to start production on the electric truck in september with the del deliveries in the first quarter of the year. the loss of 61 cents a share was worse than the 49 cents analysts

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good morning let's take a look at the futures this morning coming off record highs. dow jones industrial average opens higher by 28 s&p 500 with a modest rise off the open up a point the nasdaq is a fractional mover in the pre-market. andrew. thanks the crypto industry taking a step on capitol hill st establish aning itself as a for to be reckoned with.

ylan mui has more. >> reporter: good morning, andrew this infrastructure bill fight and they were the ones who started it $2.4 million in the first half of the year. that's almost the same amount the industry spent in 2020 if this keeps up, the lobbying dollars are looking to double. ripple was first and second was stellar at $330,000. c coinbase with $160,000 the senior adviser to hillary clinton and john kerry now he told me the engagement with lawmakers is long overdue

>> these are the next generation of digital infrastructure. the alternative to the broken digital status quo for all of the reasons, we need to have a conversation with policymakers about how they will be part of the solution. >> reporter: so the industry is looking at the backlash against the big tech companies in washington and deciding they want to stake out ground in d.c. early in hopes of avoiding problems later andrew >> ylan, it is funny you look at what happened this week as the crypto industry lost i wonder if this is part of the larger journey and demonstrates they have a seat at the table that they did not have before. >> reporter: i really think it is the latter. what was in the original bill while it was about cryptocurrency and what they had to report to the irs, it was not intended as a crackdown on the industry it was really the industry turning this into an issue that

was able to garner bipartisan support that made it a thing at the last minute. certainly this is not over yet the bill has to go to the house and the industry is actively looking for champions over in the chamber as well. i think what you saw was that leaders at the top of the industry jack dorsey or elon musk weighing in on this over the early days of the engagement with washington. >> ylan, it is interesting we say elon musk is a leader in the industry and he is not in bitcoin. he has almost become that. we will -- go ahead. it is like a conference call that's gone amiss. >> reporter: the delay

>> we'll continue this conversation right now the other facet that took place is coinbase. changed language on its side about usdc coins backed from one u.s. dollar held in the bank account to $1 or asset with a equal value which is held in accounts with institutions i asked the cfo about the change yesterday. >> clarified language to be more precise over the topic the last few weeks. >> joining us right now is jeremy lehr. maybe he can clear up this jeremy, good to see you. there was a shift in the language that we saw on coinbase site i asked her if this was a

mistake on coinbase side in how they described it because they didn't know, meaning they got the wrong information from you or whether you think you misdescribed it. what happened here >> sure. thanks first, i'll say i can't comment specifically on coinbase.com practices. i would leave that there what i can tell you is circle and coinbase have a close partnership around usdc. we forged the protocol together several years ago and worked closely on the technical standards and compliance standards and approach that has been evolving considerably as it grew last year growing 10x and accelerating into this year circle, to understand, circle is the sole issuer of usdc. the regulated financial

institution that issues usdc we are, in fact, are the firm that is managing the assets that back usdc. we are getting stations from major accounting firms all of that process is also gone through center which is the partnership vehicle we have with coinbase >> jeremy, here is the issue people look at stable coins and told it has a cash value of a dollar it is like a money market account. it will give you the dollar. the truth is the resun on the bank, you could get 98 cents or what have you. it is not backed by other assets, there could be other treasuries in there.

the question i think the public wants to understand and this is the regulatory issue, what is the backstop for a stable coin and was it described properly from the get-go? 12k3 >> it is a great question. stablecoins in the united states issued by regulated financial institutions like circle and others operate under the supervisory and regulatory framework of states and state banking supervision. that's where they sit today across the board within those, there are different rule sets. under money transmission law, we operate similar to paypal or stripe or square or a payment operator where they hold a lot of balances with people who hold value with the payment system. paypal has $35 billion.

they don't go out and disclose what's the make or share income they get with the users. with stablecoin, it is different. when we launched usdc, people were concerned about early st stablecoins unregulated. we wanted to provide a third party auditor and accounting firm what happened is these have grown so fast is the market wants more information some of that is driven by concerns with offshore actors. some of it is merited. people want to better understand that the really critical thing for the market to understand is that, you know, these operate under a consumer protection mandate and regulatory mandate today for one for one

redeemability. that is really key the second is we are going above and beyond what we're required to do from the regulatory perspective. we want to go further. we want to talk about liquidity profiles i think the bigger thing and this gets to the regulatory conversation and dc conversation this is getting so big and very core parts of the future of the economic banking and payment structure that we need new federal framework. that is why earlier this week we announced we intend to file to become a national commercial bank focused on the full reserve digital currency payment model. >> what happens if investors in this particular coin redeem their coin for u.s. dollars en

masse? >> specifically designed to accommodate that liquidity profile is designed to accommodate the stress scenarios. >> out of the corporate debt as liquidly as u.s. dollars as liquid as u.s. dollars and treasury >> that's right. a framework exists for liquidity. we are following that framework we always followed that framework. additionally, at the end of the day, the backstop is circle's balance sheet. above and beyond what happens with the market itself >> jeremy, was there a change in what actually backed each usdc the center consortium on the web site as late as march said that coin reserves held at fdic

institutions in april, appears to be a change where it said usdc was held in approved investments this happened an befbefore the d market listing which is still upscoming. t up coming the interest you receive from the business is $3.2 million in reserves in the first quarter. was this all in an effort to make the balance sheet look better ahead of the listing? >> we are trying to build a significant scale business here. what is interesting about stablecoins and block chains as payment systems is inheritly what they do is drive costs toward zero. that is disruptive that is meaningful for

businesses and markets, et ce cetera take paypal or fintech they charge 3% or 4% fees for the money that flows on the system in the block chain system, the operator of that in this case circle, we are not charging any transaction fees if you go through our investor materials, it is clear operating the structure which supported $1 trillion of payment transactions has grown quite considerably in the last year. we see becoming a backbone for many other types of applications that is growing. we do generate a modest amount of income from that. all tightly bound by those permissible roles of the regulations and liquidity covenants. it is a modest amount of income if you look at the broader

picture of revenue youfor the company. it is many other facets which are larger that is accurate as we have grown from something that was $400 million in circulations as early as 2020 to $28 billion in circulation. that effects the change and how you manage the assets and liquidity behind the payment system >> jeremy, i think the question that sort of under lies all this is whether the user, end user, understands the risks still involved in this and it is not just a stable dollar or coin it may be stable 99.9% of the time, but the time it isn't. >> this is the essence of payment money and payment systems and electronic money in the world today. when you interact with a square

or apple or paypal, i'll use that as example, you are not usually asking if i have a bunch of balances, what happens to those? if you read the customer agreement, you say, they can invest and do what they want it is defining that in the high level way. generally, because we have a regulated system that is specifically designed with consumer protection mandates and companies are bound to those, it is generally people say okay, if this is a regulated product, that is probably okay. st stablecoins are different. i think the crypto market in general demands more transparency that is relevant we had to follow and lead in that it is also very similar to the existing commercial banking system if you are making a $1 deposit at the bank.

you think of it as a dollar. you are giving that dollar and that dollar is lent out and it is reapothacated i think what we are seeing is stablecoins are so big, that they are part of the regulated federal banking system that is necessary as this becomes larger scale. >> there was never a promise from the other payment systems that the ununiit, which the dolr coin which is redeemable any point in time for one u.s. $1. when did the shift happen? was this accurately conveyed to consumers with coinbase which is the crypto for retail investors which said until recently one usdc was equal to one $1 u.s.? i understand you cannot comment

on coinbase. coinbase knew about the reserves you do give part of the try to coinbase that is an agreement it is not like they didn't know. >> we have a great partnership there. like i said, every single one of these changes along the way and what we disclose, we have been very clear across the board for any one facing circle. we are the sole issuer that is institutional participants that is broad base that is all. we have a perfect track record on that. again, i don't comment on web mark marketing. coinbase is a tremendous partner. very pleased to continue to build with them. >> jeremy, thank you for coming on this morning and try to help explain some of this to us i think we are all getting educated about this space every day. we look forward to talking to

you again soon. >> thank you so much scott. >> thanks. stocks to watch. we will go through sonos and e-bay next and joining us next is dr. scott gottleib talking about the timeline for the immunocompmid.rose >> announcer: currency check is sponsored by interactive brokers. professionals gateway to the world's markets.

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you have the best pizza in town and the worst wait times. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire e-bay shares sinking in pre-market down 1.5% right now. the second quarter revenue falling. gross merchandise volume down 7%

year over year active buyers to 150 million the outlook was light for earnings and revenue by the way, the ceo of e-bay will be on "squawk on the street" in the 10:00 hour on cnbc sonos shares posted a profit for the recent quarter earnings of 12 cents per share beat the estimate of 17 cent lost revenue beat ceo said more people are watching video content in their homes and demanding a theater-like experience. and disney is set to report today. we will talk about the delta variant and the impact on the company from streaming to theme park attendance. we will do that next

disney is set to report earnings later today the company has had a rough couple of months with the rise of the delta variant affecting theme park attendance.

for more on what we should expect is sara fisher, axios media reporter sara, great to have you with us. >> good morning. >> yesterday we got news from southwest airlines that the delta variant was impacting their businesses they were seeing an uptick in cancellations. i think that will be a big focus on the disney call, but most of its valuation of late has been because of streaming so what are we expecting given this last quarter? >> your comps are from last year, which were really, really bad. two, there have been openings for the past quarter these parks, the two biggest ones in florida and california have been open capacities, have been lifted and for now people are not required to wear masks in the theme parks outside so that's a big deal for them the problem for them is going to be they're going to definitely have to report third quarter expectations a little lower. whatever analysts see for parks and resorts, a warning sign that

things are going to slow down, that could be bad for the stock. in terms of disney plus, the problem there is going to be that everyone else has showed slowdowns. roku said they streamed a million less than the previous quarter. some of the movies were put on disney plus like cruella and black widow. >> so it sounds like analysts will have to ratchet down their expectations whether because of delta or what we've seen we've seen a slowdown in the pandemic stay-at-home businesses that benefited and video games as well. it's really across the board in terms of that grab for attention. >> there is definitely an attention problem here i thought when roku said people streamed a billion dollars less than quarter, that was a huge

warning signal to anyone in this business so for disney that's reliant on adding subscriber ads for their stock to go up, that should be a huge problem now, there is one bright spot with disney. any time the pandemic gets worse and theater revenues are going down because of mask mandates or people are scared, they tend to put more of their stuff on streaming so that could help to bolster the streaming company's ads going into the third quarter. i'm a little bearish myself. i think they'll have a hard time netflix had a hard time but they have some big hits coming up they have a new marvel movie coming out, "west side story" later in the year. we'll see. >> i want to get your thoughts on amc, sara we heard from adam aron yesterday on cnbc. he also did a live stream with trey's trade, a youtube channel which is basically held by one of the, quote unquote, apes out there so he knows where his bread is buttered in terms of

the retail investor. what's your take on adam aron and the viability of amc. >> i am so bearish on amc. i think this company is in a worse position now than it was at the beginning of the year when its stock was trading at $2 or $3. but i think adam aron is smart making lemonade out of lemons. if he can keep the stock high, raise some money, then maybe he can pay down some debt and get this company in a better fundamental position with its financials but in terms of how amc is going to fare for the year, it is not going to look good we're looking at theater revenues for the total year that i don't personally think will cap more than $5 billion adam aron said he needs it to hit $5 billion for it to be profitable i don't think that will happen some of the things that he's doing, they're gimmicky. what do you mean you'll have people buy popcorn with cryptocurrency the average age of someone buying a theater particular is not the person behind the retail investment trade on reddit

they are not going to whip out their phones and try to buy raisinettes with cryptocurrency. it's a good buzz word but i don't see how it works out. >> as adam aron said in the past there's a disconnect between the stock price and the fundamentals and that is working in amc's favor. sara, thanks for joining us. >> thank you okay coming up when we return, banks are booming. the financial sector up almost 5% in a week some fed officials seem in favor of tapering. we'll talk a lot more about the fed's next moves. later, don't miss our interview with carson block to dig through his first-ever investor letter. stay tuned, you're watching "squawk box" right here on cnbc. a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor

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investors await a series of earnings, fresh data on the labor market and inflation what you need to know ahead of the open is coming up. bank stocks rallying over the past week. we go inside the move and talk about the fed's taper timeline with bob diamond. and the fda ready to clear the way for vaccine booster shots for some americans as federal and local leaders fight a rise in infections the northeast starting to become the latest hot spot. dr. scott gottlieb will join us as the second hour of"squawk box" begins right now.

good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin and scott wapner and melissa lee in for joe and becky this week. u.s. equity futures this hour looking to open higher. the dow up about 35 points, s&p 500 looking to open about 2.5 points higher and the nasdaq looking to open about 8 points higher, scott. >> andrew, here's what's making headlines at this hour the international energy agency has cut its 2021 forecast and pointing to the covid delta variant as the key reason. the iea cut its forecast by 100,000 barrels a day but did upgrade its 2022 forecast as what it sees as a delayed return

to pre-pandemic levels. the fda is on the verge of authorizing a third vaccine dose for immunocompromised people, according to sources who spoke to nbc news. doctors say those people are still vulnerable to infection even after vaccination because of their weakened immune responses. that approval is expected as soon as today. we'll have much more on the covid front in the next half hour from dr. scott gottlieb. the new york stock exchange will require anyone accessing its trading floor to be fully vaccinated that rule will take effect september 13th the exchange will also expand its on-site random testing program. that effective immediately. >> palan tir technologies matched wall street's forecast at 4 cents per share revenue grew nearly 50% from a year ago the stock is up 4% in the premarket. andrew. meantime the end of the extended unemployment benefits and people will be coming

flocking back to work, right that is the question not so fast. senior economics reporter steve liesman joins us with new data telling, yep, a different story, steve. >> good morning, andrew. data from two hr software companies followed closely by wall street, by the way, they checked the jobs market. it shows that ending the $300 extended unemployment has had no measurable effect on job growth. in fact the states that kept the benefit showed better job growth in july. both ukg and home base wall street investors turn to them for realtime data on the jobs market. they show job growth in the 26 states that ended the benefits trailed those states that kept the benefit in july. home base reported a strong 2.5% increase in hours worked and a 2.3% gain in employees for july for those that kept the benefit. states that eliminated it, they saw declines in both categories. over at ukg dave gilbertson

writes states continuing the additional benefit grew workforce activity in july two times faster than states that stopped the benefit. hold on, there's an explanation. states that kept the benefit already have stronger job growth b blue states generally had more job loss and so saw stronger job gain with the end of lockdowns they put more people to work even while keeping the benefit in place the positive impact of ending the benefit, it could have shown up in other ways here's what the mcdonald's ceo said in the company's earnings call >> we're seeing applications have increased pretty significantly. applications in states that have ended early the federal stimulus, those have tended to do even better, so i do think that there's evidence that as the federal stimulus rolls off that you'll see an improvement in the application rate. >> but when it comes to actual

jobs, there are several academic studies from the previous recessions showing little or just marginal impact from ending or keeping those extended benefits the current data backed up the idea the decision to take a job amid a pandemic that just won't quit, well, it's more complicated than whether or not actually disprov. we'll get the state level bls data in a week or so we'll wanting to see the data from august to see if that continues. you have this other aspect that they already have strong job growth in these states that ended the benefit. here's i think what the lesson is i think it's one of humility wealthier people, andrew, be they journalists, politicians or economists shouldn't presume to know what motivates poor or

lower income people to take a job or not it's a very complicated situation with health care concerns, with school and child care concerns, and there's the check that i think plays a role in it. and when it comes to the labor shortage, we know we have fewer immigrants coming in, especially for summer work. that was a big issue geographic dislocation, all sorts of things going on economists think of labor as commodity but people ain't soybeans is all i can tell you there's a lot that goes on in people's brains. checks make a difference but they're not the whole story. >> steve, it's scott i also feel like to some respect that this is a structural issue and that you can't compare coming out of this recession, if t that, to other periods where there was stimulus put into the system we had a survey yesterday, a gentleman on this program, who suggested the results showed only 26% or so of people want to

go back to work full time. people are rethinking where and how they want to go to work regardless of whether they got a check in the mail from the government or not. that may have longer lasting and more structural effects than perhaps we're realizing. >> yeah. you know, we had that robert kaplan on yesterday, scott, on "the exchange. he said the dallas fed sees some 3 million people took this opportunity of -- opportunity, maybe that's the wrong word, but the incidence of the pandemic to retire so of those folks have dropped out of the workforce not everybody wants to go back full time. i think a lot of people realizing commuting 50 miles to work is not an optimal use of their time or lifestyle. so there's a lot of changes going on in the workforce. all of that has contributed to the labor shortage plus the idea, how many people moved out to suburban areas. what's going on with home prices there? we know there's an influx of population to those areas, right? so wealthier people, middle to

upper to high incomepeople, they can do that the folks who are working, lower income people, they don't either have the ability to move or even the housing in those places where the wealthier people have moved so there's geographic dislocation as well. >> yeah, for sure. >> steve liesman, thank you for br breaking that down for us. appreciate it. coming up, bank stocks are up more than 7% ina week wells fargo leading the way, up 10%. we'll talk about the financial sector, the fed and interest rates with atlas merchant capital ceo bob diamonds. later, mask mandates and the opening of america's schools dr. scott gottlieb will join us to talk about the need to protect schools and much more. before we head to break, let's get a check on the markets. s&p append dow looking to buildn yesterday. "squawk box" will be right back.

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ebay shares sinking in the premarket down by 1.75%. the company's second quarter revenue fell short of estimates. gross merchandise volume was down 7% and active buyers declined 2%. the outlook for the current quarter light for both revenue and earnings the ceo will be on "squawk on the street" in the 10:00 hour first on cnbc.

andrew. meantime rates are on the rise again financials at record highs and some fed officials appear supportive of tapering joining us to talk fed and financials is bob diamond, ceo of atlas merchant capital. it's great to the see you, bob i also want to talk to you about your own spac and circle, which we just had the ceo of circle on in the last hour, bob. let's talk about the fed and what you think is about to happen or not >> as we talked the last time i was on, i think the discussions are already going on in the fed about the potential for tapering we would expect to see some kind of an announcement in september for probably action around december, andrew, in tapering. but just to put that into context, as of today the fed's purchasing about $120 billion in securities a month $80 billion in u.s. treasuries

and 40 in mortgages. we do expect that tapering to begin. >> and what do you think the impact will be >> you know, i think we've talked about this as well. i see kind of that 1.5% to 3% as the range for the 10-year that's been there it seems like forever with a few exceptions. today is one of those exceptions but if you step back and look at the impact of the delta variant in terms of an interruption of the recovery, if you will, if you look at the surge in spending, it's probably past its peak if you look at the impact of fiscal spending, $5 trillion during the covid, now much, much less is an effective tightening. if you add into that a tapering, then i truly do expect a steeper curve and higher yields. i would expect the 10-year over the next six months or so to be operating more in the higher end of that 1.5% to 3% range than

just below it. so i do think there will be a big impact on rates. >> you've made a career running financial institutions, and now investing in them. does that mean you want to be in or out >> we love the financial space the question is do you want to be investing in the legacy national banks or do you want to be investing in some of the specialist and technology companies. you know, when the financial crisis hit in 2008, if you looked at the market cap of financial services in the u.s., it was dominated over 90% by kind of the large legacy national banks today that's closer to 70% i think the impact of specialists and i think the impact of technology in kind of the core earnings of money transmission, treasury and transaction services, some of the stand-alone lending

operations, many of the stand-alone broker dealers has had an impact, yeah. >> let me ask you about fintech. one of the comments that it appears jeremy diamond has made immediately is the big banks are regulated in a meaningful way and the fintech industry is not. he believes that puts the legacy banks at a disadvantage. do you believe longer term we'll see increasing regulation around the fintechs and does that create a better environment for the legacy players longer term >> i think you're absolutely correct. you know, as the ceo of circle who was on just a little while ago talked about, you know, they intend to apply to the occ to become a commercial bank i think circle is a good example of being in the stablecoin space. they not only embrace, but they encourage and they have been a pioneer of being the most regulated, the most

conservative, and really look forward to more regulation in that space so i think directionally you're correct, which is that there will be more regulation in the digital space and the crypto space and the technology space and i think -- i actually think that will give an advantage to many of the fintech companies relative to the legacy banks >> bob, were you troubled personally, and do you believe that the public should be troubled at all by this issue around the disclosure of what back to stablecoin on coinbase it's a bit unclear we've interviewed people at circle and coinbase about who was responsible for marketing it in a way that makes the user believe that it is backed dollar for dollar, when clearly it isn't. >> so, i know there was an issue around a statement on a website of coinbase changing, and i'm not that familiar, andrew, with

what happened on the website but i am very encouraged by the debate in this space i think it's great this needs to be open, it needs to be transparent. and i think jeremy allaire as the founder and ceo of circle said from the very beginning when they did their first white paper that they both embraced and encouraged regulation in this space because stablecoins are very, very different than, say, a bitcoin, which is more, i don't know, more like gold it's speculative, the price will change significantly, where firms like circle are really operating in the payment space, treasury and transaction services space >> bob, though, i'm wondering if you think stablecoins and specifically usdc, is it as liquid is it as trustworthy is it as stable as, say, say money market account

would you put your cash into stablecoins itself because you believe it is as liquid almost as cash? >> look at the growth in it, michelle the answer to that is yes, i would, and yes, i have jeremy has been very open on exactly what the makeup of the portfolio of securities. every single asset that backs usdc is with a u.s. regulated banking institution. every single asset is within the regulatory perimeter of the u.s. for usdc >> the cds of foreign banks? because that's one asset that also backs usdc. >> jeremy has been very transparent in that portfolio. i'm not going to rediscuss that, but i think he put the whole thing out in the open. so yes, we're very comfortable with that. >> hey, bob, scott wapner, nice

to see you again. >> hey, scott. >> back to the conversation about the markets and the economy and sort of where you think we are right now, did i hear you basically describing a scenario of this is as good as it gets for both the economy and the stock market because rates are going to move higher towards your 3% range and that's going to change the game for both? >> listen, i don't -- i'm not saying that the markets can't continue to operate well and potentially be higher. i'm just saying that for any of us to expect, they're not going to be choppier going forward when you have kind of the delta variant is interrupting, when you have, you know, spending past its peak, i think with fiscal spending as well there was $5 trillion, scott, in fiscal spending during the covid period, the 16 months there. we have just announced a trillion infrastructure bill but that pales in comparison and only about half of that is

new money. and i don't think any of it is going to be spent for the next year or so i think all those are fine but we have to recognize that just the lack of continued stimulus on the fiscal side is in essence a tightening of fiscal stimulus. so yeah, i think the markets will be choppier i think they'll be less one way. i think bets on the economy are kind of a little bit less one way. let's see how some of these recovery sectors continue to perform. >> what do you think about the prospects of the fed chair, jay powell, getting another term does it matter to you? do you think it matters to markets if you're sitting back in the corner office running a large financial institution? how are you thinking about that question this morning? >> so i think -- first of all, i think he's done a terrific job under two different presidents and two different administrations. my sense is i would prefer to see jay powell continue.

i don't see another kind of alternative being presented that's realistic and i believe that the financial markets would be pleased if there's a continuation here. so i think that's the direction that we're going in anyway but i think that the financial markets would be supportive of that. >> bob, going back to circle, it looks like in the center which is a consortium that governs circle, the consortiums materials make it look like there was a change in what backed usdc fairly recently and this coincided or came just before the announcement that it would merge with your spac i'm wondering in your view, because one of the fundamental t tenets of the business model is the interest received on those reserves if that went away, does that change how you view this business how crucial is that? it was described as fundamental. just trying to understand how important it is to actually move

away from u.s. dollars in the assets that back usdc. >> so i think -- i think there was something on the website that seems to be triggering this, michelle, and i don't want to second guess that -- >> melissa. >> but it's been a while since the whole portfolio has been transparent and we're extremely comfortable with the operations of center. >> i'm asking about the business model and how important the interest on the reserves collected is to the business model since you are effectively acquiring circle as a business and one of the fundamental aspects of the business is the interest collected on those reserves. >> as jeremy said, one of the parts of our income is the interest of the reserve portfolio and we would expect it to go up and down in different circumstances. it will also go up and down depending on the level of interest rates, so that's one of the many factors of the income in circle. >> bob, great to speak with you. thanks for your time.

>> thanks, michelle. >> bob diamond melissa. coming up, melissa, shipping delays and higher costs impacting many businesses across america. a look at the latest freight data and what it means for companies. that's coming up next. later, dr. scott gottlieb is our guest. we'll be right back. >> announcer: time for today's aflac trivia question. warren buffett's berkshire hathaway is the most expensive stock of all time. what company is in second in terms of nominal share price the answer when cnbc's "squawk box" continues go aflac!!! what the heck, troy - that's not your kid! the aflac duck is just covering for sophie. same way he got me money to help cover her hospital bill when my health insurance didn't pay for all of it. but this isn't fair! that's exactly what i said! but then i learned health insurance isn't even supposed to cover everything. wait...for real? for real real. luckily i had aflac. aflac!!! get help with expenses health insurance doesn't cover.

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look at the july cast freight index with numbers and volumes and costs for the freight market many companies have flagged shipping costs as a headwind frank holland joins us now what are the latest numbers showing, frank >> well, freight buy-ins returned to pre-pandemic levels. this year covid cases were on the rise because of the delta variant so kind of an interesting parallel there over the last three months freight volumes have declined subseq subsequentially. but bottlenecks getting containers off ocean ships is artificially lowering those volumes and a big rebound leading up to the holidays is very likely. the cost of shipping declining but still near historic levels a 23% increase from 2019 numbers. david vernon says retail and grocery companies are expected to see the sharpest cost

increases. >> companies in the food industry, companies in the retail industry that use a lot of trucks in their supplychain it's just going to mean there's going to be pressure. >> so the shortage of truck drivers another factor pushing rates higher the report says that despite the delta variant and cases rising, it still appears that hiring momentum is increasing you can finding a link to the full report on cnbc.com. >> are there certain industries, frank, where we're seeing the shortage impact more profoundly than others? >> well, i mean food and retail is where you're going to see it more, at least initially, because they need to ship things in more often. imagine a walmart. the example that dave vernon gave me is corn flakes you don't make a lot of money on a box of corn flakes, they're not very heavy but take up a lot of room. you still have to pay the same amount to ship them as you would a box of sneakers. so food companies, retail that don't sell high margin products will feel it first.

>> frank, i'm looking at a tweet and they say we move 100,000 containers a year. normal time shanghai to chicago 23 to 25 days, now 50 to 60. pricing was $3500, now $17,500 forecast is for continuation through march of 2022. >> yeah. that's what analysts are really saying and echoing i just got the latest information on container volume that's available demand is up about 30% over the same period in june of last year still waiting to get the july numbers for containers it's definitely a big issue. we see the delays at ports, the increased volumes at ports there's a lot of demand literally sitting in the ocean waiting to come into the united states there still is a truck driver shortage and the factor of intermodal which is getting those off the ship and onto a truck or train so just log jams and pressure points at pretty much every step

of the u.s. supplychain. >> no doubt. higher prices too. frank holland, thanks so much. >> thank you. still to come on "squawk box" dr. scott gottlieb on the return to school, masks and more. three major airlines are requiring covid vaccinations for their employees. are more on the way? we'll hear from the president of the association of flight attendants. here are the futures ahead of the open, coming off record highs looking to add albeit sligly aoshtcrs the board. we're back on "squawk" right after this turkey hill chocolate chip cookie dough creamy premium ice cream and chasing fireflies. don't worry about me. i'm fine. you can't beat turkey hill memories.

the u.s. food and drug administration is expected to announce in the next few days that it is authorizing covid-19 vaccine booster shots for some people who are immunocompromised. this would be a third shot of the current two-dose pfizer and moderna vaccines meanwhile, more companies are mandating vaccines here's the ceo of norwegian cruise lines speaking out last night on "mad money" with jim cramer i'm so disappointed in government at the local level, state level, federal, that we don't have mandates. whatever happened to good ole leadership in this country there is a pandemic going on imagine if 600,000, 700,000

people have died of anything else in this country other than covid there would be an uproar over 35 million u.s. cases dr. gottlieb will tell you it's over 100 million cases it's got to stop if we don't take leadership here, this is going to go on forever and ever and ever. >> we're going to ask dr. gottlieb joining us to discuss this all is dr. scott gottlieb, a cnbc contributor. he also serves on the boards of pfizer and ill umina. his new book is out in september. dr. gottlieb, great to have you with us. is a vaccine mandate -- i mean i think the ship has sailed on that there are pros and cons obviously to this debate it's a very hot debate but is a mandate in your view, would that have been any sort of silver bullet to all of this >> well, look, i think the bottom line is we're going to see more and more businesses start to mandate vaccination i think people are a little bit fed up with the situation that

we find ourselves in with this continued spread you're going to see more businesses implement vaccine mandates, particularly for people who want to return to the office the fact that the federal government is going to mandate vaccination for the armed forces and for federal workers require them to either get vaccinated or submit to some kind of supervision, some kindof testing. i think it's going to provide cover for a lot of private industry to do the same. once these vaccines hopefully become fully authorized, fully approved by the fda, i think that's going to give additional impetus to businesses to give them the confidence that they have the legal ground to stand on in terms of requiring vaccination. >> i want to go to the booster shots and this news that the fda will soon approve a booster shot for immunocompromised individuals. what do you think the timeline is from this point to when it is approved for all individuals and along the spectrum are also those with underlying conditions which were preferred in terms of being in line for the vaccine in the first place.

>> yeah, it remains to be seen what the authorization from the fda will look like, how broad it's going to be i would suspect that it's going to be broad language and they'll leave it up to cdc's advisory committee to issue more granular regulations. it's a question of whether the fda will authorize this third dose for people who are on active immunosuppressive drugs people who have undergone an organ transplant or are under chemotherapy or whether they're at increased risk because of an immunosuppressive element. people with chronic diseases or people or previous therapy that might leave them more immunocompromised on the whole i suspect it's going to be the latter, that the fda will issue broader language and leave it up to cdc to interpret that language and potentially if they want to go down the path of issuing more granular recommendations. but ultimately i think we're heading in the direction of

making boosters available to the entire population. israel has boosted their entire population over the age of 60. they'll probably be done this week so we'll have pretty good data coming out of israel on what the impact of the third dose is and what the side effect profile looks like i think people who were vaccinated and i've said this for a while, people who were vaccinated last december, january, february, which includes a lot of people who are in vulnerable situations, nursing home patients, long-term care facilities, also health care workers who are exposed to a lot of covid, i think we're seeing evidence of declining vaccine efficacy over time it's been a while. those people should be eligible to receive boosters. i think we ultimately get there, it's just a question of how much time it takes the cdc to arrive at that point. anyone who's been vaccinated recently over the summer, certainly anyone who's vaccinated now, i think people who have a fresh vaccination, that's going to provide pretty strong efficacy against delta. we're talking really about

people who were vaccinated in that initial cohort. >> dr. gottlieb, it's scott. it's nice to see you this morning. on that note, i'm hoping that you can provide some more clarity on this news report that was going around yesterday that i know you've since seen this so-called pre-print study which is said to raise concern about the effectiveness of mrna vaccines against the delta variant. now, this is allegedly from july when delta was most dominant and they say that the pfizer vaccine was only 42% effective in preventing infection and moderna was 76% effective against infection. do you have any more clarity about what i'm talking about now that i think you've had an opportunity to look into this? >> yeah. i've read the study. i've also had the opportunity to talk to some of my colleagues at pfizer i'm on the board of pfizer, about that study i think there's some things about that study that weren't

fully corrected for. i've long said i think these two mrna vaccines are comparable in terms of their efficacy. i've said that when there are studies that coming out that suggest pfizer might be better i've said that when studies have come out suggesting moderna have been better. so i've been consistent on that point. the reality is the pfizer vaccine was approved first and initially distributed to health care workers, to nursing homes, and also the distribution of the pfizer vaccine was biased toward hospital-based distribution where you were likely distributing it to a more sick population the reason why they did that initially is because remember it needed to be stored at minus 80 degrees so hospitals were better equipped to handle a vaccine that had those storage requirements the moderna vaccine was approved later so it wasn't distributed to the nursing homes initially and health care workers in the same quantities as pfizer and it was also initially distributed through community sites where there might have been healthier patients so to the extent we're seeing declining efficacy over time from both of these vaccines, and

i believe it's a class effect, the pfizer vaccine was distributed earlier and was also distributed to people who might be at more risk of either contracting covid or coming into contact with covid the authors of this study didn't correct for that they didn't fully correct for that so i think that the finding of this disparity between the two vaccines is an artifact of how these vaccines were distributed. i think these vaccines are largely comparable in terms of their efficacy and i think we should be providing boosters for both the pfizer and the moderna vaccine for people who were vaccinated six, seven, eight, nine months ago, which is what israel is doing, what germany is going to be doing, what the uk is doing as well. >> doctor, two questions to follow up on that. one is clearly, though, what this suggests is that there are going to be lots and lots and lots of breakthrough cases it may not turn into hospitalized cases and may not turn into cases of death hopefully. but lots of breakthrough cases, and that raises the question about spread

so my question to you is for the business leaders who are watching this program who are requiring vaccinations, do they need to layer on top of that masking people indoors or some kind of, you know, surveillance testing program that's meaningful in a way that we haven't been thinking about? >> yeah, look, it's a good question how contagious people who are vaccinated are when they develop a mild infection first of all, i think people who are vaccinated still need to be vigilant if you have a viral illness, don't assume that it can't be covid because you've been vaccinated you should get yourself tested, especially if you're around vulnerable people and in circumstances where you have the propensity to spread the virus based on what we know right now and it's early evidence because we're not doing a good job collecting outpatient evidence the belief is that people who are vaccinated who develop the infection might be contagious early on in the course of the infection but they clear the infection more quickly and their

viral load is dropped more quickly so they are less likelyd period of time that's what we're seeing in israel most of the spread among vaccinated people is in the household. people who get vaccinated and get infected are spreading within their household but not outside the household. so i think businesses right now probably don't need to be implementing additional measures >> doctor, real quick, between the pfizer and moderna issue, one other thing we didn't discuss is moderna required an extra week between the first shot and second shot you've talked about the longer the distance is between those shots, the greater the efficacy. also in the moderna shot there appears to be more vaccine you don't think that they are any different? >> certainly the interval could play a role. you know, you're right, moderna is a higher dose vaccine, but you get a comparable immune response from both vaccines. pfizer uses a lower dose because it's formulated differently.

but i think that what we will learn over time, one possibility, is that if we had extended the interval between these two doses longer, you might have gotten a more durable response now, remember, we were trying to get as much immunity into the population as quickly as possible and get these development programs done as soon as possible because we were in the setting of a raging epidemic but there is some evidence to suggest from other vaccines as well that when you extend the interval, you get a more durable response so it could be that after a third dose of these vaccines you get a much more durable response as well. it could be that these vaccines become an annual inoculation but the interval could be playing a role there aren't other vaccines that i know of where the interval between the initial vaccine and the booster is less than two months shingrix is two months so typically you would wait at least two months as an interval between two vaccines and that could be playing a role in why we're seeing declining efficacy over time in the people vaccinated seven, eight months

ago. >> lastly, dr. gottlieb, it's scott again. i'm also reading about tens of thousands of doses that are set to expire in the coming weeks and that states are reporting, quote unquote, wasted doses. if that's the case, and we presume that it's true, why shouldn't we just open up boosters to anybody who wants one at this point if we have so many vaccines and summer and a good portion are set to expire >> look, i mean these are good questions for cdc. i think that ultimately cdc is going to come around to the position of providing boosters to -- certainly to the 60 and over population and people who are at high risk of a bad outcome from covid, might be immunosuppressed and further out from the vaccine there should be a time element here people who have been recently vaccinated probably are pretty -- have a pretty durable vaccination even against the delta variant, which is a lot more virulent obviously.

i think we'll come around to this but just later than we should i'm worried about infection getting into nursing homes and long-term care facilities and you'll see bad outcomes. you're certainly seeing infection rates go up among the vaccinated population. people who were vaccinated a while ago and more susceptible to covid eventually some of those infections will result in bad outcomes. >> scott, thanks so much dr. scott gottlieb. >> thanks a lot. >> "squawk box" will be right back based upon the examples that i had growing up. and that was important for me because you can't be what you can't see. the ey entrepreneurs access network has a tremendous impact on my business and other african american and latino entrepreneurs across this country because they give access to networks, business opportunities and capital.

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apple the target of complaints about its approach to user privacy critics say the iphone maker has gone too far with its new effort to scan devices for known images of child sexual abuse. is apple being a good corporate citizen or overstepping its bounds jon fortt is here to weigh in. >> apple is absolutely overstepping here. apple which built a reputation on protecting user privacy apple which coined the phrase what happens on your iphone, stays on your iphone apple is now going to snoop through our photos this isn't about child pornography, which is horrible and should be stopped. it's about our phones being an extension of our modern selves, carrying data about where we've been and when, who we saw and

why, what we said, what we searched, what we downloaded now apple has given itself permission to conduct an unannounced automatic search of the images on that device. it's not what appear le is doin, it's what they're getting us used this. this is the version of slowly boiling frog sure, i'll let them search my phone because i don't have anything but i'm giving permission to search my phone. we live in an era where a few technology companies have emerged as global power players in communication and commerce but it's really hard to hold them accountable, so we don't want them in charge of our civil liberties. that's what's at stake here. >> jon, apple says they're not actually looking at the photos on your phone. that's a big difference. >> yeah. on the other hand let's not make this more cerebral than it needs to be. apple is doing the right thing here the right way facts, child sexual abuse is horrific there's a whole cycle to it and

aim knowledges are part of it. if you have icloud turned on apple has a way to determine whether bad images exist on your device without looking at the images yourselves. it's like they leave a finger printing and apple can dust for prints some critics are worked up because apple is doing this search on the device that's irrelevant. searching on devices is more protective of privacy than doing it in the cloud. also, this is not some new frontier of surveillance or apple expecting a new level of trust. if you have find my turned on, apple knows where your devices are and where you are at all times. the same goes for google with android and google maps. if you turn those cloud services on, you are essentially using apple and google's computers for your convenience the minute you turn on a cloud service, you're trusting the cloud provider to keep its promises to you. up to this point apple has been a lot more protective of user data than the government has, melissa. >> jon, thanks so much coming up, more airlines

ordering vaccine mandates for employees. the president of the association of flight attendants will be our guest. at the top of the hour, muddy waters research founder, carson block, joins us he has a letter out isth morning that you need to hear more about. we're back after this. ♪ ♪ ♪ ♪

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gig-speed broadband network. and just doubled the capacity here. how do things look on your end? -perfect! because we're building a better network every single day. three major airlines are now requiring covid vaccinations for their employees. for more on this, let's welcome in sarah nelson, international president of the association of flight attending ants.

her union represents nearly 50,000 flight attendants at 20 airlines, including united, frontier and hawaiian. good morning welcome. >> thank you, scott. >> is the union for or against mandated vaccines for employees? >> well, let me be unequivocal that we are fully supportive of everyone getting vaccinated. it is more nuanced than that and we should go into the nuances. we've been running a campaign you can see my sticker that says i'm vaccinated, get vacxxed, coe fly with us. we've been creating phone banks to members homes we worked with the airlines and airports to create clinics so people can have access to the vaccine right there in their workplace. we have been working to remove the wto block on distribution around the world for the vaccine because we've got to end this pandemic and we've worked really hard on education around this.

so we've been very supportive of the vaccine. but i want to be really clear that it's important that these companies take these steps with unions we negotiated an incentive so people have an ability to do that we negotiated time off with sick leave and supportive sick leave so that sick leave can be paid if you are experiencing a reaction to the vaccine. and also werecognize that in mid-september we are expecting a full fda approval on the vaccine, which is going to be very helpful the vaccine mandates that have been announced by the airlines so far are not effective until the end of october i believe actually that all airlines are going to get there, but they want to see some additional things in place here from the government so that they can reassure workers that this is safe. i'll tell you, though, we have to get everyone vaccinated i want to be very clear about that and very clear about how much we are working on this because as long as the virus is

allowed to exist and mutate, we are all in danger. the continued harm to people and economic harm is just going to go on and on >> i'm listening to you intently i don't hear, frankly, you going as far as saying that you think that the vaccine should be mandated >> here is the reason -- >> advocating is one thing, mandating is another i hear you trying to make a nuance between those two am i right >> here's what i want to say, though, scott. the nuances exist because i want to make sure that companies have the things in place that i was talking about. if you are doing all of those things, if you are supporting your workers in those ways, then we can support a vaccine mandate. but to just say that we support it without making sure that the companies are taking these other steps is really dishonest and not fair to the workers. and so we really need to support that i'll give you an example restaurant workers are being told by restaurants that they're

required to get the vaccine and they're not even being given health care. we have other spaces and workplaces where they have not mandated masks but now they're going to mandate vaccines. those things don't make sense. and so we have to make sure that you're working with unions where they exist, being thoughtful and listening to the companies where they have taken these steps. the steps that united airlines took, for example, with us in order to put this in place were very deliberate, were escalating as they went along and put them in a place where there hasn't really been a lot of backlash because people understood it, they understood it was coming, and we've done everything we can to help to support people getting this and feel comfortable about it. >> so united, just to be clear, they previously negotiated this out with you you're making it sound like they did that i honestly don't know to the extent that they did or did they just make the decision on what they thought was best for their employees as a private company which

obviously they're entitled to do >> the company made the decision about the vaccine mandate but, scott, they took the steps along the way to work with us on incentive programs, on how they're going to treat sick leave, on the clinics that they provided so that people had access all of those steps were critically important to lead them to a place where they could make the decision to mandate i want to be really clear, it's not until the end of october other airlines still have time to meet that same timeline. >> appreciate your time, sara, as always. thank you for being with us this morning. coming up, carson block is going to be with us. in his first-ever investor letter this morning, we'll have an exclusive interview you've got to hear his tughohts on elon musk, meme stocks and so much more. big hour ahead on "squawk. sofi is a one-stop shop for your finances designed to work better together. spend with sofi and get cash back rewards that automatically go toward your goals. like investing in stocks, etfs, and crypto.

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♪ nothing's gonna ever keep you down ♪ [triumphantly yells] ♪ you're the best! around! ♪ [ding] don't get mad. get e*trade and take charge of your finances today. ♪♪ good morning investors are on inflation watch again today. we are due to get new producer price numbers in just 30 minutes. futures ahead of that data are calm this morning. meanwhile published reports say the fda is close to green lighting booster shots of the covid-19 vaccine for people with weakened immune systems. this as the delta variant hammers communities around the country. and we're hearing from

outspoken investor carson block in a way we never have the noted short seller out with his first-ever investor letter she'l he'll join us to share his thoughts and his dreams. wait until we tell you what we mean by that the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with melissa lee and scott wapner in for joe and becky this week we've got another big hour ahead on the program and an hour and a half from the market open. let's show you where things stand. the dow would open 30 points higher, s&p up about 2 points and the nasdaq about 8 points higher let's flip the board around and show you where treasury yields stand right now given the conversations we've been having

over the past couple of weeks about maybe tapering, maybe inflation, where are we. right now the 10-year note at 1.357. melissa. here are some of the stories investors will be talking about today. at-risk americans could be close to receiving a third covid vaccine booster shot the fda is nearing a decision to authorize the jabs for people with weakened immune systems dr. scott gottlieb joinlds us last hour and mentioned other categories of people who were vaccinated late last year and early this year like nursing home residents and health care workers. >> i think that we're seeing evidence of declining vaccine efficacy over time it's been a while. and that those people should be eligible to receive boosters i think we ultimately get there, it's just going to be a question of how much time it takes the cdc to ultimately arrive at that point. >> yesterday the cdc also came out with guidance recommending pregnant women be vaccinated against covid-19 some earnings news, software

platform company palantir companies matching analysts forks at 4 cents a share sales rose 49% from a year ago the stock is up more than 8% and doordash held talks to buy grocery delivery company instacart for between $40 billion and $50 billion. that is according to sources cited by the information however, the talks have reportedly fallen apart over potential regulatory concerns. the information also says instacart instigated stocks with uber about a sales partnership instacart is planning to list publicly in the next few months. now new this morning, long-time activist short seller carson block is out with his first-ever investor letter it is a doozy according to sources familiar with block's domino fundi, which launched in february block describes how the gamestop short squeeze spooked some of his investors and ended up

starting the domino fund with significantly less than $70 million he had planned currently he's got about $30 million of commitments through august 6th, domino had returned just shy of 11%. joining us to talk about the fund and so many of the other interesting revelations from that letter on interest rates, elon musk is muddy waters capital founder carson block good morning to you. >> good morning. >> let's go through the letter, because it is, as i said, it's a doozy and you are honest i should say this letter is not necessarily family friendly. there's some language in this letter but let's start with elon musk because he's somebody i know that has frustrated the short sellers for quite some time but it appears that you may have come around on him >> well, actually i know you want to start with elon, andrew, but i just want to talk about the rates because that's what got me to elon. >> okay. >> i woke up last week 3:00 a.m.

one morning kind inform a panic because i had this realization that i think in order to decarbonize the economy, i think central banks within several years are going to make it their express policy to keep rates basically at -- real rates at 0 or negative levels you know, but i thought is this actually effective and that took me to tesla. and here's the thing i have been extremely critical over the years of elon musk because he has lied a lot. he's broken a lot of laws. i don't like the way that tesla rushes or encourages people to use full self-driving technology that is not full self-driving and i think that makes the rest of us somewhat less safe on the roads. but, the reality is tesla has dragged the world's major auto

manufacturers into taking electric vehicle design and production seriously so it would have happened eventually, but for tesla it would not be happening to the extent it is now and so that presents this moral quandary when you look at somebody like elon musk. i don't think he's a particularly great human being, but he, you know, is really what drove so much of this. and where shorts have been wrong was thinking, okay, well, tesla can never be economic because it doesn't have scale well, they have been right and wrong. so tesla is not economic i mean if you take out the accounting maneuvers, if you take out the way that it's conned investors into buying vaporware well in advance and the subsidies and the carbon

credits, it's not an economic business but what shorts were thinking was it can't be economic because it doesn't have the scale. you know, we were thinking scale in terms of unit sales and manufacturing base but reallythe only scale that matters is capital base. how big is the market cap, because as long as it's a mega market cap, tesla can continue to raise money, to subsidize these noneconomic vehicles, and that really, like i said, has driven the large auto manufacturers to significantly shift their resources and their thinking so this is a creature also of these very low rates so absent these low rates and absent elon musk, we're not at this point in the evolution of the electric vehicle it's an interesting moral conundrum. >> there's so many things to

unpack here. let me first go at the interest rate issue because this realization in the middle of the night you say that you woke up believing that central banks are going to keep interest rates low to help decarbonize the world. explain that >> well, so, when i woke up -- it's kind of a panic because when you're a short seller, rates at these levels are not your friends and i've seen a lot of really, really smart investors go out of business over the years really because, you know, they were right in their thesis but it didn't matter because rates are low. so my first thought was, oh, my god, i think this is going to happen but why? and i -- so i unpacked it initially by thinking about elon musk and how this has -- this low rate environment has enabled this, the development of evs

effectively at the major auto manufacturers. that's what is necessary because these are not economic decarbonizing -- >> do you think that -- but, carson, you think that jay powell or christine lagarde are thinking about decarbonization when they think about where to put interest rates >> not at this point, but i think in a few years, yes. look, coming out of the global financial crisis and we have this emergency monetary policy for over ten years, you know, even though we weren't still in that emergency and then we had another emergency, covid, so that's obviously going to keep rates low for some period of time but i think the next -- i think the next wave of thinking will be, you know what, we do need to decarbonize. governments allocating money from their budgets is not going to do it this is the way it has to be done it's a quasi-market solution

really >> carson, related to elon musk, and i know you don't like him as a person or his character, but at some level if you believe in decarbonizing the economy and the world, don't you have to give him perhaps, i don't know the ultimate, but a lot of credit for pushing us and moving us in that direction >> i mean that's what i'm saying look, i'm not an environmentalist, i'm a car guy. i don't have an electric vehicle. i don't like them nearly as much as i like internal combustion engines. i use the air conditioning like all the time so i don't like to admit this, but the reality is this is not a sustainable lifestyle. elon musk combined with low rates -- elon has done what he's had to do in order to build the market cap, build the capital base of tesla, to give tesla the scale that tells the major auto manufacturers, you need to start

doing this too so yeah, i have to give him credit but this is not without costs also i do think that, look, obviously keeping rates, real rates at zero or close to zero or negative is going to increase inequality in society. so if i'm correct about this future, think about this financial assets are going to continue to rise there's going to continue to be a bifurcation between have and have nots. a decarbonized economy is significantly more expensive, so there will be real inflation that comes about as a result of decarbonization. and then the other thing that -- something i've been really lamenting for a few years is how the united states, the rule of law in the u.s. and say a lot of other liberal democracies is eroding. and i think that the financial markets are an important part of that when ordinary people who are falling behind look and see how the elite in society have

basically, you know, gamed the system for themselves and are doing so well while everybody else is struggling, that creates discontent that creates vitriol directed towards institutions and -- >> carson -- >> when elon musk can get away with flouting the law and the rules, that is corrosive to the rule of law in the markets and, therefore, society so it has costs, letting him get away with helping push us to this transition. it's not cost free >> two things. one of course is elon musk would say that he hasn't flouted the law. more important, let me ask about this relates to meme stocks because one of the things that's fascinating to me about tesla is in some ways tesla was able to manifest its own destiny because shareholders were willing to continue to provide it with capital. and one of the things we're now

seeing in the context of an amc potentially or gamestop or other companies like this, there are shareholders that believe that they can manifest their own destiny, which means to some degree that the share price is disconnected from the fundamentals at least in the context that we've historically known them because they believe that they hold the shares long enough and if they potentially provide more capital to these companies that they can create success. how you think that changes the market or do you think that this is a sort of aberration of history? >> well, in a low rate environment where i guess the big picture point is in a low rate environment the conventional metrics that we think of as economic returns don't matter so elon can get away with it because he built cars. and he continues to build cars and he built rockets so whatever visions the

shareholders have for gamestop, for amc, for them to transform, i think eventually the managements, they don't necessarily have to generate economic returns, at least again the way we think of historically thought of economic returns, but they have to manifest -- they have to be able to achieve their investors' ambitions at some level or i think they get washed out. you know, the corollary to all of this is, oh, gee, i'm an activist short seller can i still make money, and i think the answer is yes because the vast majority of management who sell these dreams to investors will be unable to execute. they will be unable to do the things that elon musk has done and i think the trick for us isn't to try to sort out the noneconomic business models, i think it's just to look at the people running these businesses and say, okay, who is going to be unable to meet the investor expectations in terms of xyz

goals that they want to achieve. but really stop talking about profit and cash flow and look at what the investors are expecting and who can pull that off. >> so, carson, i'll throw a name out there, adam aron, amc. can he pull it off >> to be honest i haven't -- that is such an area of pain for me and i'm still smarting about the lower long sides because of these meme stocks. i don't pay any attention to amc. i just want to make sure the things that i am looking at shorting or i am short are not turning into meme stocks >> can i throw out the name gamestop are you still smarting there >> i mean, you know, look, we -- you know, i have to be careful here legally because i'm not -- we're not registered to sell securities and these funds to the general public but we obviously have a smaller launch than we wanted and it was

directly related to the pain that gamestop inflicted on melvin capital and other shorts. actually i think the last time i was on your show, it was basically trying to answer the question of is there any future in short selling, is there any point to what we do. a lot of people were asking that question and because people were asking that question, we got, you know, less -- fewer people actually writing checks at the launch than we had anticipated. am i still smarting over it? no i'm just trying to survive and n net-net it made us smarter as investors. our lessons over the last year have made us smarter as investors too. so what doesn't kill you does make you stronger. >> carson, we appreciate you joining us it was a fascinating letter. i hope investors get an opportunity to read it and i hope you come on back and we can continue this conversation. >> thanks, andrew. >> thanks.

all right, guys, thanks. coming up, breaking inflation data yesterday we got a new read on consumer prices. today it's producer prices but first as we head to break, check out shares of ebay the company posting a decline in active buyers in its latest quarterly report it's also forecasting lower than expected revenue for the current quarter. do not miss a first on cnbc interview with ebay's ceo later this morning on "squawk on the street." we'll beig bk. rhtac

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welcome back to "squawk box. taking a check on futures, it could be another record-setting day for the s&p 500. the dow looking to add a couple of analyst calls for you. morgan stanley downgrading micron saying the memory chip maker is due for a slowdown. credit suisse is downgrading virgin galactic. for more on both calls, head on over to cnbc pro. coming up, big companies have gotten hit by ransomware attacks but local governments are also being targeted. they're in line to get help in the new bipartisan infrastructu bl.reil we'll tell you how much. "squawk box" will be right back.

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that's real life ready. i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ state and local governments have been hit hard by ransomware attacks over the last few years but will be getting a billion dollar boost thanks to washington's new infrastructure package. eamon javers joins us now with more

good morning. >> good morning, scott that's right cities and towns across the country have brn absolutely crippled by this wave of cyberattacks, but if you take the new bedford, massachusetts, it was the victim of ransomware attacks in july of 2019. mayor john mitchell tells us that the city is still rebuilding a critical database two years later and continues to fend off attacks >> ransomware attackers don't give you a break after they have landed upon you, so, no, we are subject to attacks all the time. they're often wolves in sheep's clothing. >> new bedford has gone from spending $50,000 a year on cybersecurity to a half million dollars a year while mitchell says his city can afford it through state grants and taxes, many other cities cannot and that's where a new cyber grant program comes in that's included in the just-passed infrastructure package. it would authorize $1 billion

over four years to aid states with cybersecurity defenses. states would need to distribute 80% of funds to local governments. attacks on state and local governments have been steady the last couple of years despite all the cybersecurity measures in place. 113 ransomware attacks in 2019 and 112 in 2020. that's according to data those are numbers that keep mayor mitchell on high alert >> we understand that we could be under attack at any point we've experienced it so, you know, we're sensitive to it the reality is that other city governments, other town governments need to be just as vigilant >> scott, if you think about that $50,000 cybersecurity spend that they did have, now the half million dollar cybersecurity spend that they do have today, multiply that by all the towns, states, counties, municipalities

and school systems across the country and you get an idea of the scale of the spending that we're talking about here all of that is money that could be going into american communities. instead it's going to cybersecurity defenses, scott. >> it's a brave new world. that's what this is all about. all of these administrators and all these towns and cities across america, school districts, et cetera, as you cite need to start thinking of this in different ways >> yeah, absolutely. look, you have to defend your people the first role of government is to defend the citizens you've got to defend the town first so you can see why they're doing this if you look at the scale of the spending, they are getting some help from the new infrastructure bill so that is good news, but this is just a massive tax on america, whether it's america's small towns or america's federal government the tax money is going to cybersecurity companies and hackers. >> eamon javers, thank you very much andrew coming up next, brand new inflation data july's ppi number is out in just

minutes. we'll bring you that report. then we'll talk about what it might mean for the fed's evolving tapering discussion stay tuned you're watching "squawk box" right here on cnbc

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welcome back to "squawk box" on cnbc. we are just seconds away now from new jobless claims and producer price data. take a look at where futures are right now. we are obviously paying close attention, not moving too much in the premarket we've got fractional moves across the board rick santelli standing by at the cme where it's literally seconds away now. >> yes, we're looking for initial continuing claims of course maybe more importantly producer price index for the month of july the year over year numbers yesterday were sticky on consumer prices and the data is trickling out. let's start with ppi, shall we headline number up 1%. definitely 0.4 higher than the 0.6 we were looking at it equals the 1% last month. for this series the high water mark was january, up 1.2 and if we strip out the all-important food and energy, we're also up 1%, twice the expectations also equaling last month

the difference here, up 1% last month was the highest ever now let's look at some of the other data points on ppi if you look at the month-over-month ex food, energy and trade, that's up 0.9 that's 0.4 hotter than our last look here are the year over year numbers, 7.8, a new all-time high for headline year over year usurping 7.3 last month. these go back to 2010 because they reconfigured ppi. and 6.2% when you strip out food and energy also all-time high and 6.1 when you strip out food, energy and trade that's also, all the year over year numbers are extremes. on jobless claims, finally we move down a bit but didn't move quite far enough 375,000 doesn't usurp the post

covid initial claims low at 268,000. if we look at continuing claims, not only, not only did we stay below 3 million but 2,866,000. that's a new post covid low. and there are revisions to last month claims at 385 last month now stand at 387, so they're down an even dozen last month's continuing claims slightly revised at 2.908 million. the ex-energy aspects of this are raising eyebrows because the current administration would like the saudis to pump more oil but they don't see the same luxury for domestic production back to you. >> rick santelli, thanks so much steve liesman joins us now with more so we see the stock market is not really reacting very much at all, steve, to a hotter than expected ppi if we could throw up rates as we have this conversation too, i'm

curious to what the 10-year is doing after we got the cpi rick used a good word, sticky, but it wasn't as bad as feared what do you make of the ppi before we get to jobless claims, steve? >> yeah, so i wonder if the market immediately processed what i'm about to say, which is that there's this anomalous thing in there about transportation which really pushed up the ppi. and i don't -- i can't say where that's coming from if you look at the numbers in here, scott, and i was just poring over it, transportation of passengers for final demand these are essentially airfare costs are up 9%. this is the month of july. what's interesting about that is on the consumer side, the cpi showed moderation in increase of airline fares. in any event, it looks like there's this one thing inthere that has pushed up the wholesale prices for services. when i look on the good side, i see a little bit more moderation in there

for example, finished consumer foods down 1.8%. i think i saw goods also be down up to 0.6. i think there's moderation in this number. that said, it's still a high number relative to where it normally is or normally should be but i think there's an anomaly in here that's pushed it up and so it's not really that concerning that it's above expectations it's concerning that it's high in and of itself, scott. >> steve, i've got a question because the cpi number yesterday, we got all excited because month on month it was the biggest drop in 15 months. here we are with ppi i get what you're saying about this one-time, this bucket that's pushing the overall number higher. but how do we process these two data sets that are taken in concurrent periods isn't there a lag? wouldn't we see any rise in ppi trickle into cpi later on and so we could see this translate into cpi? >> that's an awesome question,

melissa. as you know, between ppi and cpi is a whole bunch of stuff. what's in the middle there profit margin, productivity and at the end of that chain is the ability of companies to pass along those prices so they may eat those higher prices, they may find ways to be more efficient or pass them along. so not all of the ppi ends up in the cpi. we've been talking to fed officials the last couple of days they're worried about this these numbers are hotter and higher than they expected. that's important this is motivating at least some of them. we had kaplan on yesterday kaplan told us he wants to announce september and go in october. what i think is fascinating about this, and, scott, you guys have been talking about this on "halftime," is that the market seems to be processing at least the debate about a faster taper, you know, without really skipping a beat. it's not surge, but it's not fallen off on the idea that the fed may move faster than the market originally expected. >> right because there's still a fair

amount of liquidity that's going to be put into the system even if there is a modest taper. >> right. >> it's not going to truly change the game. that's obviously what the market is thinking about. just give me your quickie on the jobless claims as well we know, as you've said over and over again, it's the employment and the labor side of the mandate that at this point probably matters more than anything to the fed. >> i think that's right. but real quickly on the other topic here, remember, kaplan is a hawk because he's talking about a taper that takes eight months, not ten months so you're absolutely right, the liquidity will be out there for quite a while to come. on claims, we're making steady progress, putting people back to work the next job for me is looking at the high frequency data to see where the delta variant is or is not showing up this is the next most important thing we have to figure out as to whether or not it causes a scaling back of the recovery of the u.s. economy >> all right, steve, we appreciate that. thank you, steve liesman for more on the new inflation

data, let's bring in the aforementioned kathy, from oxford economics good morning to you. what's your read here? steve characterized this as hotter and higher perhaps than the fed would like >> yeah, you know, the ppi data here is certainly stronger than expected, stronger than the fed would like but as you mentioned yesterday, the consumer price data while still firm and still a bit sticky and elevated was -- did show some moderation and i think that is really the key. it gets back to the past as steve mentioned, companies may be paying higher input prices but can they pass it on to consumers and to what degree and for how long we'll have to wait and see that was a great question earlier about the pass through from ppi to cpi. but i looked at the data actually it's been moving in tandem month to mont and sticky.

>> all right so transitory then is still in the cards because that's what the fed needs it to be for its credibility certainly to be intact but also for its policy mechanism to really be what it expects it to be >> yeah, that's right. and that is the operative word, transitory and how long is transitory but there are, you know, evidence that the fed is correct in that a lot of this is being generated by the reopening and broader reopening of the economy and also we have these supply chain disruptions. if they gradually get worked out, that should take some pressure off of inflation. but again it's still going to remain high. higher than we're used to. the last decade we struggled to get inflation at 2%. now it's going to remain above the 2% pace for the next couple of years at least. >> when do you think the taper

is going to happen is october almost a formality at this point and the timeline being you get the speech in jackson hole, you have the n meeting in september and you actually start the taper in october? >> i think many of us thought at the jackson hole symposium they would announce the tapering but maybe not commence until early next year. but then when they wrote in the statement or powell talked about it would take several meetings for them to really decide the qe logistics, then it pushed out the time frame a little bit. so it may be that we get an announcement, a formal announcement at the september fomc meeting remember, we'll have one more payroll report if we get another strong report, it will be three strong reports and that should give them enough confidence to announce the qe tapering with inflation remaining elevated, it does keep pressure on them to take another step. >> how are you thinking about the idea of what steve liesman has characterized as a more

fractious fed. you can hear the more hawkish tone that some have said, including kaplan who steve interviewed yesterday but there have been other fed speakers too that maybe you have some fracture within the room that maybe powell, though, he hasn't -- he's led you to believe certainly that he's more dovish, nothing to make you believe otherwise, but otherwise have been speaking out to the contrary. >> we're definitely seeing a fracturing of the fomc and moving along the spectrum, the doves on one end and the hawks on the other i agree with you, i would put powell more on the dovish side i think that he and the core leaders more towards the central of the spectrum. i think what they're going to do is gradually pivot towards less accomm accommodation. i do think it's quite -- we'll get the announcement for qe tapering sometime in fall. i think you get all of them to

agree with that. some of them want to go quicker. kaplan would like to go quicker, but i think announcing it in the fall, maybe even starting a little bit, you know, earlier, towards the end of the year, but remember rate increases are further off. there we think that doesn't occur until 2023, even though you have the splintering on the fomc. >> so i'm looking at the 10-year as we speak and it's at 1.369 so we call it 1.37. let's not forget that just ten days ago it was at 1.12. so rick santelli is making the point this morning as well that the treasury market was anticipating higher cpi and ppi, thus the move. so now do we need to be thinking of an even higher complex for interest rates >> well, i think what you're seeing in the bond market, it's really been a difficult year frankly to call the long-term interest rates but i think what you're seeing is the market overdid it on the downside in terms of yields.

it was too pessimistic on growth and not it's looking for growth, looking for earnings, but the bond market got pretty pessimistic there. some of it was also technical driving it down to as you said 1.12%. our view is that we get towards 1.7% by year ending. >> we appreciate your instant reaction to this number. >> my pleasure. market and investing insights coming out of the new inflation data we just got dynamic funds noah blackstein will join us check out the major precious metals followingthe inflation printing and the dollar index we've been watching all week hovering at four-week highs against most peers on the dixie you can always watch or listen

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welcome back to "squawk box" this morning the futures right now, the dow in the green about 26 points higher right about now but the s&p 500, we'll call it marginally in the red. nasdaq off about 20 points i want to get straight down to the new york stock exchange where jim cramer joins us now.

i don't know, jim, there's about a hundred different things we could talk about i follow you on twitter religiously, as you know let's just talk about delta and the variant and what you think it means or doesn't. we're talking to dr. scott gottlieb a little bit earlier about what really does seem like the possibility that pfizer and moderna, you know, after some period of time are really going to have these breakthrough infections do you think that's going to change people's behavior the next couple of months? >> i think it will i just got my antibodies tested. i'm anxious to get the fda to approve this obviously no doctor wants to go until they do because it's a shame. it's pretty clear you need the booster. i have moderna i also think there's a lot more breakthroughs than people are talking about. we don't get good data you have to be ready with monoclonal antibodies. regeneron said the stock was really hot i think monoclonal antibodies

are -- the sales are good. and that's actually bad, of course i think the people who are not going for the mandate are foolish. i think frank del rio expressed a pretty important position which is we don't have any leadership i don't understand what president biden is doing at all, ron klain. what are they doing? i think we have to be prepared the only guy that seems to be prepared is fed chief powell who seems to recognize this is going to impact pretty hard and the breakthroughs are coming. >> when you say it's going to impact hard, what do you think that means for the economy in the short and longer term? is this a couple of months in terms of how you think about what's going to happen and then there will be enough boosters for everybody? is this something that gets pulled out even farther? does it even change people's behavior >> i saw seven people died in a nursing home yesterday in paris, in france. they were all vaccinated i think that the i'm not trying to scare people.

the variant we're not ready. for the idea this whole thing is optional if i hear one more person urging them to get vaccines but not saying you have to, that's just nonsense i think the airlines other than united have been complete cowards. and i think that the people who refuse to even check and have a passport, i think they're cowards too. you have to bite the bullet here we've got to stop this thing frank del rio is dead right. the sooner we do it, the better. but we're also going to get more variants if we don't do anything the president is showing no leadership whatsoever. sorry to be political but this is business now. >> jim, you and i agree on this in very many ways but i'll throw a curveball at you, which is that if you're running a company like, and i'll give you some examples a walmart, an amazon, a u.p.s., a federal express where some of them have actually mandated vaccines in their corporate office but haven't out in their

what might be described as among their blue collar workers, they are demonstrably worried that if they were to do so that they would create an even bigger supply chain problem because people would walk off the job. what do you do >> well, i mean i think that if you look at the companies that have had just gigantic rash of these infections, that's a short-sighted view they should be offering -- at their places, they should be offering the vaccines. same thing with jpmorgan, same thing with goldman sachs they should have right there a station and offer the vaccine. hopefully after the fda, whatever the hell they're doing, decide to give it regular approval we really just -- as a nation we completely botched this. the fact that there's no proof from the fda gives a lot of people an opportunity to say we're not taking it. i've changed my behavior entirely back to masks everywhere, back

to not wanting to be inside. why? if you read, it tells you to do it andrew, you and i both know, okay, that delta is out of control. we act as if everything is fine because a lot of people are vaccinated that's clearly not working why would frank del rio try to get everybody vaccinated, be willing to turn away a lot of people i don't know if you heard this morning on an xm show, if you're not vaccinated, you can't come, period, end of story, because he wants to have a safe place that's going to be the way of the future >> jim, always good to see you and to get your candid views on all of it. we'll get more of your candid views in just a little bit with the gang on "squawk on the street" in just a couple minutes. we are just a little more than half an hour from the opening bell on wall street. joining us now is noah blackstein noah, great to see you. >> nice to see you too. >> you see the recent rotation

to cyclical and nongrowth can't last what's the backdrop for that call >> really i think a couple of things i think over the last six months or really since november when the pfizer vaccine was proved to be effective, there's been a massive rally in some distraught cyclicals and a whole bunch of others that were hit very, very hard many of those stocks were up ten fold from the lows those businesses while up year over year compared to 2020 are really still down versus 2019. troubled businesses pre-pandemic are not suddenly fixed post-pandemic. so you know there's a number of retailers or malls or other areas like that which were having difficulties before the pandemic, obviously have benefited by stimulus checks, have benefited by interest rates and other things have been allowed to refinance i think now we're moving into a period where we've passed peak in terms of stimulus and in terms of year over year growth

rates. we're coming up to obviously some difficult comparisons with stimulus an other things like that i think the sustainability of those companies i would call them some of the trashier companies, is going to be much more of a challenge from here. and so, you know, there's a number of things on the horizon that whether it's the beginning of tapering, even if we're just talking about tapering, whether it's the endemic nature of covid-19, that we're into a little bit more tricky period of time where i think that high quality growth will win out for sure, secular not cyclical probably works from here over the next certainly 18 months >> are you talking big cap tech? because big cap tech and tech at large had difficulty when interest rates rose. if we're starting to think about a fed taper, do you think that it's going to invoke the same sort of rise in interest rates that we've seen in the past that

will ultimately bite the sectors that you like right now? >> i think that this inflation theme, you know, growth stocks historically have had a positive correlation to interest rates. the only time they have had negative correlation to interest rates was over the last 12 months and that seemed to be more due to the relative growth of cyclicals and distressed areas than it had to do with the absolute growth rates. and so i think that those relative growth rates for the more distressed areas will begin to flatten out as we move into 2022 for sure. and so i think growth is going to become quite scarce or certainly more scarce. but these inflation themes that we're talking about clearly we're seeing it in the ppi and seeing it begin to roll over driven by some unique factors in terms of used cars lumber is down and i suspect used car prices will do the same in about a year so you're seeing

some rollover in consumer prices for sure interest rates today, there's a lot of positioning in the equity market, the bond market not so much and we're not even back to where we were in 2019. 2019 we bounced between 1.49 to 1.95 on the 10-year. we can't even get there now in 2021 so i think the economy has more work to do for sure and there's more headwinds right now than there are tailwinds. >> so in terms of information confirmation signals, you put more stock -- you put more weight into the bond market and what it's telling you with rates being at up 1.36% versus what wv heard from conference calls. we've heard a number of companies cite inflationary pressures that they see lasting through the end of this year and potentially into the next year >> sure. well, i think that the inflationary pressures usually in a typical recession, there's a demand hit and the supply side

is slow to catch up. in this case we have a demand and supply chain hit at the same time supply chains were cut dramatically and demand, ex-hotels and airlines did not fall off and was accelerated by repeated stimulus checks so you have this lag between the supply chain needing to catch up it's trying to ramp back up. it will catch up, though, i'm fairly confident so i am in the transitory camp certainly you're beginning to see early signs of cpi rolling over most of the push in producer prices in this report was through services and so we'll see where things go and we'll see if the labor market loosens up in the fall. but yeah, i am still suggesting that there's -- if inflation was such a problem, why is the 10-year still below where it was even in 2019 of that 1.50 to

1.90 range so something doesn't seem to be clicking right here. you could argue it was central bank purchases, but central banks have been purchasing bonds for a long period of time. i think the bond market is a pretty good indicator of what's happening. either way, we're running into a period of slower growth with less stimulus checks obviously, and now the labor market, people have to start coming back into the labor market we'll see how this transition goes i think the supply chain worries will ease. you saw a big downgrade of dram today and lumber prices come down i think supply will begin to catch up to demand that doesn't mean we're going into a recession that doesn't mean growth won't be solid but it's certainly not going to be the year over year growth rates of 7% to 9% that have been easy year-over-yore comparisons and price driven because of supply chain issues. >> noah, great to speak to you thank you. coming up, what you need to watch on the way to the opening ayll on wall street.

st tuned, "squawk box" is coming right back.

quick final check on the markets before we hand it over to the folks on "squawk on the street." the dow jones industrial average looks like would open 18 points

higher, the s&p 500 off marginally about 2 points, the nasdaq looking to open down, though, about 29 points this morning. we'll show you the 10-year note as well. we'll flip the board around and you're right now looking at that 10-year note at, voila, there it is, 1.364. i want to thank melissa and the judge, mr. wapner. we'll see you all tomorrow make sure you join us then "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street." the dow, s&p have a decent shot at record highs at the open, despite producer prices running a bit hot, signs of cooling in e-commerce and travel spend. jobless claims is a new low at 375,000. we begin with that hotter than expected ppi data and what it's signaling to the fed. plus t