we've got a slight weakening but nothing sort of really in the labor recovery. >> jim, i don't know why you don't like that 3.5 trillion what do you think? any weakening in the job >> i think the numbers to me, the claim numbers, tell me we'll probably get another pretty decent jobs number. >> okay. great. thank you, both. thank you, both. >> melissa >> it's been a pleasure, and i mean it. "squawk on the street" is next good friday morning, welcome to "squawk on the street." i'm carl quintanilla with david faber and mike santoli cramer has the morning off fed chair powell speaks in an hour, plenty of corporate results, dell, gap, pell peloto. we will keep our eye out of

afghanistan after yesterday's tragic attack. obviously it's been about the fed for most of the morning so far, and the data, mike, as joe c was just talking about points to a slowdown in spending. >> and the markets obviously have been hesitating in the face of what seems like the ingredients of a slowdown. economic data have been missing a little more than they've been beating in the last couple of weeks. that's a change in tone, and just the way the market has traded you have this bounce in some of the economically cyclical stuff earlier this week. it seemed like maybe the pendulum was swinging and yesterday unwound a little of that i don't think it's very decisive in terms of where the market really thinks the july, august numbers are. it's a lot about, you know, how we get through this. what the beginning of september looks like, and you know, bond market pretty calm credit markets not sending up any flares really. so it is a lot about just trying to get through, honestly, the

jackson hole and powell and see if that changes the equation much at all. >> are you surprised by the level of sort of unanimity and commentary from bostick and parker and all the ones we heard yesterday, it's like let's get going. >> obviously we're hearing -- we've mostly been hearing from people who kind of were there already. but yes, i think it is a little bit surprising that given the fact it's been a bit of a split committee or at least people, but they're differing on, i think, some of the shadings of timing why is that? i think there's a window i mean, like things have been good enough. employment has held up well enough that if you project ahead and this takes you six or eight months once you start tapering to get down to where you want to go in terms of sun setting the bond buying program. you want to make sure the economy is not already hitting a lot of headwind. so i think that probably explains part of it. honestly, i think there's another piece of it. i don't think fed officials love

having to articulate what the $120 billion a month is supposed to be doing, right >> right. >> we're no longer stoking demand we're no longer trying to calm the market function, you know, kind of stresses that were out there, and so you'd rather just not have it if it's not doing anything tangible right now. >> there is another element as well, called the delta variant, and that continues to be the key in some ways in their view perhaps in timing. none of us can fully anticipate what's coming. while cases are at highs at least since the height of the pandemic, they are starting to level off a bit in terms of at least theincrease. >> that's been a key number. caseload in the u.s. now up 11 week on week, two weeks ago it was growing 30 week on week, so you do want to see that second derivative decline companies getting more forcieful about requiring. gm saying yesterday, we want to know you're required to give us at least your status.

delta airlines that is earlier in the week and then this israel real world study where they find that natural immunity, meaning if you were sick is much more powerful than if you were vaccinated with pfizer or moderna, like multiples of immunity. >> a lot of different data points coming out of israel, some of which are harder to interpret in some ways obviously they did have a second wave, even though they had been so heavily vaccinated in terms of an overall percentage of the population, but hospitalizations thankfully there were far lower given how many people had been vaccinated that said, i don't know how to interpret all that data. i'll leave it to gottlieb to tell us what it all means. >> the one way it does come together in terms of the market's view of it is companies are trying to figure out a way to navigate through this without really restricting a lot of activity, without really creating the conditions that would lead to further outright shutdowns. if you look at the way the market has traded, it doesn't

really think things are coming to a halt again. it's a matter of cadence. >> we'll get to how this all flows into gap and dell and hp and peloton and workday, but first, steve liesman has cleveland fed president liqoreta mester thanks very much loretta, thanks for joining us this morning. >> thanks, steve great to be with you >> yeah, let's talk where those guys kind of left off, which is this idea of the next steps for fed policy, and i guess the test that you guys have put out is a test of substantial further progress on both sides of the mandate, inflation and employment tell me, are we there yet? >> yeah, well, steve, thanks for pointing not forward guidance we get because that's the way i look at policy and where we are. so i'm comfortable that we are basically there. i think on inflation, you can

make a very good argument that we have made substantial further progress in fact, we're well over 2% at this point some of that won't last, but some of it might, and we've also made a lot of very good progress on the employment side we still see the number of jobs lower than it was in february of 2020 before the crisis hit, but we've certainly made substantial further progress since december when we put that forward guidance out so i'm comfortable that we're basically there, and now it's a question of communicating what the policy stance is regarding our asset purchases. and making sure that we do it in a way that is well, you know, forecasted and well -- telegraphed so that powell has been doing and the whole committee has been doing is making sure that we communicate our policy stance where we see policy going, and our outlook.

>> so you're on national television with a free rein to communicate where that policy is going. tell me about your thoughts about when this taper process ought to begin and how long it ought to go? >> right so thanks, steve, so you know, i'm kcomfortable if we begin to talk about, you know, what our plans are in september, and then we start tapering sometime this year i'd like to see those asset purchases taper down so that they're completed by the middle of next year i think there's no you are gen -- urgency that we do it. i think we're in a good spot with regards to where the economy is right now i think the asset purchases, we just don't need the same kind of accommodation that we needed at the height of the crisis, and i'm comfortable that we met our conditions as we articulated the forward guidance so tapering just starts sometime

this year. tapering, you know, asset purchases to end, middle of next year >> loretta, would you mind talking about the evolution of your thinking about inflation? when we spoke in june, you weren't all that concerned you seemed to suggest that you weren't sure if this was permanent. it looked more transitory to you then a couple of months later, has your view on that changed? >> well, i think the permanent transitory probably isn't a good way to explain my views on inflation. what i'm looking at is whether some of those covid-related increases in prices and we've seen that in a number of places. some of the supply constraints, whether they're going to linger enough and stay on long enough that they actually get embedded into inflation expectations and then become an inflation high or inflation on the underlying trend inflation. those core inflation measures,

if you will, that we like to look at to sort of give a sense of where the inflation, underlying inflation rate is going. right now all the people i talk to and businesses are saying that, you know, we thought that those supply con ststraints wer going to ease off by now, and now it's all changed that they see those kind of higher prices lingering until next year or later in some cases. so i think those higher prices in some of those components will stay a bit longer than we originally expected, and that could feed into inflation expectations in a way that is not consistent with our 2% mandate. so that's what i'm watching is whether that -- those kind of price increases become embedded in people's expectations about prices continuing to rise. that's where i think we'll have to really take a hard look to see if that's happening. so far we've seen some increases

in measures of underlooying inflation, but we haven't seen that be sustained, so again, i'm very watchful on the inflation side your original question, has my view changed, yes, the evidence suggests that some of those higher prices could linger for longer than expected. >> do you feel like when you say you will take a hard look, do you anticipate now that inflation may need to be addradd addressed by raising rates sooner than you expected >> well, not yet i mean, my baseline outlook is still that inflation will move back down as some of those supply constraints ease, but i think it's up in the air now about when that timing will be i'm concentrating now first on sort of the asset part, asset purchase part of our policy. if we complete that by the middle of next year, then we'll be able to sort of take a look at what the incoming data suggests about the strength of the economy both on the

employment side and on the inflation side, and then we'll have time to assess when that first rate increase would be appropriate. but right now, the focus in my policy is on what to do with the asset purchase program then we can consider raising interest rates at the appropriate time, and again, i'll point out that i'm going to be guided by the guidance that we continue to give in our statement about what those conditions for that first rise in the interest rate will be, which is inflation at 2% and moving above and employment at or maximum employment mandates so again, the forward guidance really is guiding where my policy views are >> back in june you gave a speech about the need to or your suggestion that we need to incorporate financial stability into thinking about the setting of monetary policy

beyond the theoretical your reside in that paper, i want to ask you about the situation right now. are you concerned that we have issues of financial stability that are made worse by what's going on with a wide open fed policy and the amount of liquidity it's put out there >> well, we had added a lot of liquidity, but some of my concerns about financial stability are longer on issues in terms of do we have the kind of insights we'd like in the non-bank financial sector? we saw those disruptions in the treasury markets that really necessitated the fed to move in very aggressively at the start of the pandemic because of some of the issues in the treasury market and some longer -- you know, underlying issues in sort of how the treasury market functions. i think those are the concerns i have now i do think that we have frothy real estate crisis, that's an area where i'm looking at. i don't think there's a bubble necessarily, but i do think that

the liquidity that our asset purchases are adding are not ho helping necessarily that situation and they could be adding to further frothiness in that market. that's what i'm looking at and leverage in some of the markets, the junk bond markets is high. again, not really at a point where monetary policy has to react to it, but something i'm going to be watching >> does that -- i was just going to ask, does that motivate your desire to begin this tapering or remove some of the accommodation the fed is providing, the idea that you have concerns about the frothiness in some of these markets? >> not really. it really is being driven by the -- looking at the macro economy and how far we've come since we said the forward guidance in terms of substantial progress we've made very good progress in the labor market some of the problems in the labor market now are supply

related, not demand related. i can tell you that many, many across all sectors in the fourth district, which is where i'm from, all the firms are saying it's very hard to get labor. so that's a supply side. there's some mismatching in the labor market and on the inflation side, you know, we're well above 2%. if you look at a back ward looking five-year average, inflation, and core inflation, are above 2% so again, we've met the criteria just on the macro side for wanting to start that taper. >> we only have a few seconds left i want to ask you very quickly t seems like it's implicit in what you're saying that you do not have concerns that the delta variant and the way it's spreading around the country are going to dramatically undermine either the economic progress we've seen so far or your forecast for growth in the months ahead. >> yeah, delta is certainly a concern. it's a public health concern, and as we've seen in this whole

pandemic, you know, what happens with the economy depends on what happens with the virus i think things are a little bit different now because, you know, we have the vaccination, and so, you know, i'm hoping that everyone gets vaccinated because that's our best defense against delta. my district, i've talked to them, we do a lot of outreach. there's a lot of concern about delta. there's some tapering maybe, pushing out some of the plans they had to bring their staff fully back into their offices, but it really hasn't changed their outlook. they're still, you know, seeing strong demand out there. at this point that's my forecast as well. nothing is smooth. everything is up and down, but we've learned to kind of navigate the virus, and i think that's really been true across businesses and households. i think we've learned, but again, the vaccination is the

key here to making sure that we can maintain the progress we've made over the past several months >> loretta mester that you think so much for joining us this morning. next time i hope we do it in jackson hole, but this was just great. thanks very uch. >> thanks, steve. >> carl, back to you. steve, thanks for all your hard work leading into this weekend, bringing us so much important commentary it was interesting to listen to mester talk about the notion that these supply constraints could linger for a while just this week toyota's chip supplier saying this could last through 2022, cisco last week, taiwan semi were hiking prices 10%. it all feeds into the micro as well as the macro. >> absolutely. it's not something that's very susceptible on either side to fed policy it definitely would keep the inflation readings elevated beyond what they're comfortable with here. if you did look at the inp under

thes in-- inputs, it still does look like a lot of reopening effects. it's still restaurants and hotels largely still the auto issue is kind of creating that overshoot versus longer term trends there's still the ability for jay powell and everybody else to say, look, this stuff is going to work its way through to some degree that's why i do think, she said, look, we're basically there. that was her quote, so how powell kind of reacts to that will be interesting. >> right, we'll get through some of the corporate results this morning. maybe we'll take a look at some of the ecodata and of course powell speaks just after 10:00 a.m. eteasrn time. futures green on this friday don't go away.

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. go aflac! !mm-hm! get to know us at aflac.com.

introducing xfinity rewards. our very own way of thanking you just for being with us. enjoy rewards like movie night specials. xfinity mobile benefits. ...and exclusive experiences, like the chance to win tickets to see watch what happens live. hey! it's me. the longer you've been with us... the more rewards you can get. like sharpening your cooking skills with a top chef. join for free on the xfinity app and watch all the rewards float in. our thanks. your rewards.

the nyc and the nasdaq each about to observe a moment of silence, paying respect to the u.s. servicemen in afghanistan who were killed in the kabul airport attack

our clients come to us with complicated situations that occur in their lives. for them it's the biggest milestone, the biggest accomplishment, the sale of a business, or an important event for their family. for them, it's the first and only time. we have seen this literally thousands of times, in thousands of iterations. ♪ ♪ i am vince lumia, head of field management at morgan stanley. whether that's retirement, paying for their children's college education, or their son or daughter getting married, our financial advisors need to make sure that they are making objective decisions, every step along the way.

every time you hit a milestone, an anniversary, a life event, the emotions will run high. making sure that you have somebody, a team of individuals that have seen it before, have seen every circumstance and seen every challenge, and have your back when you need it most, is one of the most valuable things a financial advisor could provide to a family. i am vince lumia and we are morgan stanley. i've spent centuries evolving with the world. that's the nature of being the economy. observing investors choose assets to balance risk and reward. with one element securing portfolios, time after time. gold. agile and liquid. a proven protector. an ever-evolving enabler of bold decisions. an asset more relevant than ever before. gold. your strategic advantage. (vo) this is a place for ambition. a forge of progress. a unicorn in training.

a corner to build a legacy. a vision for tomorrow. a fresh start. a blank canvas. a second act. a renewed company culture. a temple for ideas. and a place to make your mark. loopnet. the most popular place to find a space. looking at this morning's leaders before the market. brown-forman and gap topping that list along with some energy names. the opening bell is just minutes away

♪ music playing. ♪ there's an america we build ♪ ♪ and one we explore one that's been paved and one that's forever wild but freedom means you don't have to choose just one adventure ♪ ♪ you get both. introducing the all-new 3-row jeep grand cherokee l jeep. there's only one. the personal loan from sofi helped me consolidate my credit card debt into one simple monthly payment. debt free! thanks to sofi. ♪♪

(upbeat music) - [announcer] introducing the grubhub guarantee, our promise to deliver your order on time within the delivery window and for the lowest price compared to other apps, or you'll get back at least $5 in perks.

shares of peloton are going to be down in the premarket. they were down a lot more after market yesterday when the company did report a larger than expected loss. peloton also announcing it will cut the price of its flagship bike by 400 bucks and in a filing this morning, peloton now tells us it's been subpoenaed by the government, and it's actually the doj and also includes the department of homeland security for documents related to reporting of injuries associated with its products also says the s.e.c. is looking into related public disclosures. all we got, guys, yesterday was an internal controls update at the end of the press release talking -- referring to their upcoming annual report there it was immaterial discrepancy they were talking about, year end physical inventory counts it remains to be seen how people are going to respond to this

additional disclosure we got with the filing this morning. >> you know, it was actually a narrower loss right now than it was at the immediate reaction to the lower guidance and things like that after the close. we'll see, the stock's already -- it's lost a third of its value from the highs it's been kind of trying to go sideways, like a lot of these classic pandemic pull forward type plays super expensive stocks the bulls are out there defending it based on 2023 revenue multiples. >> b of a does upgrade we think price cuts will open new layers of demand for several years given their strong conviction on the tread and still low churn interesting the average number of workouts per sub, 19.9 per month, versus 26 in q1 so people who have it already are using it less. >> of course it has been the key, one of the key plays for the stay-at-home economy and the question continues to be what kind of rates will it see

as we do some sort of return, which again remains to be seen as well because we talk about it so often how many people are actually going back to the office. >> the street wants to evaluate on the content on the subs, right? so that's why the lower price is not necessarily seen as, you know, kind of a negative. >> the hardware not necessarily the problem. >> where is the multiple, mike what are we talking about here >> they're not really on a bottom line basis going to make too much money i looked at one report that says, well, 15 times, you know, kind of blended for some of the parts. it's mostly on like kind of gross profit or revenue from 2023 you have to be creative in terms of how you value it. honestly, it's just kind of like this brand it's a bet on the staying power of the brand and the fact they're going to own this area for a while. it's interesting, a firm often linked to it, not necessarily looking like it's going to be

hurt too bad, at least this morning. >> he's part of the firm's revenue base for sure, is peloton. let's get to the opening bell on this friday morning. the cnbc realtime exchange, the big board, it's uk-based used car sale celebrating its listing on the nyse. other big movers this morning has been gap, $0.70, revenue ahead, comps up 3, up 12 on a two-year stack athleta up 13, and banana up 41, which got some people's attention. they do raise the guide, see full-year revenue in the low 30s, prior 21 to 25. retail all week long, guys >> it's been mixed, of course. we know what happened with nordstrom. that stock down sharply. william sonoma, best buy quite positive, dick's sporting goods quite positive and gap moving higher having done the "closing bell" yesterday, i know how all these

stocks were moving after hours gap was up more than it actually has opened up and peloton is down less than it looked like at least after market they're comparing to 2019 numbers as well, and clearly athleta and old navy are the star performers, but the declines at gap have lessened as well still declining. i think it was about 10% versus 19, if i recall, but a lesser decline overall, and i think 33% of overall revenues came from online which was down from 40%. >> there's i guess just a sense that the ongoing store closures for various concepts have gotten to a point and the online sales reached the threshold where it's definitely still relevant, and ath athleta, you know, for years people were like, wow. it was just too small necessarily to be reflected in the valuation. tremendous separation in retail, right? i mean, the dollar store's getting pounded. anybody that can't pass along any prices if you're in apparel

at home goods or sporting goods it seems like things are okay. >> a lot of the discounters had been getting a wave of discounted from the snap benefits then the shipping and the lojtistic and the raw material costs in a business that's historically low margin completely overwhelmed that narrative. >> the whole brand is value. it's very difficult to maneuver. target obviously not reporting this week, but what an amazing stock, just vast outperformance against walmart, but it has rolled a fair bit if you looked at the one-year. so since mid-july, just a lot of these kind of cross currents in the cyclical parts of the market you know, levered to the consumer it has been a little bit off the boil, and a lot of the bounces in the bank and some of the industrials just brought you up to where we were trading, you know, a few weeks ago. it hasn't necessarily been that clear a message of the markets just hesitant we had to wait for what powell's

going to say and exactly how strong we can expect this kind of echo reopening or whatever we're going to call it to be at this point. >> keeping an eye on shares of dell and hp inc. or hpq the symbol as well both reported after the bell yesterday. both are down, though hp getting the brunt of it, in part, perhaps, because of morgan stanley's decision to say they prefer dell over hpq, and they downgrade hpq to an equal weight this morning no longer seeing a path to near-term multiple expansion for that company's stock given lower earnings qualityi and execution headwinds. growth of the home office, the upgrade of technology that comes along with that whether it be printers or laptops and computers of all type. vm ware going to be, 83% ownership going to be spun that's the key here. we did get a look at vm ware, which was a bit disappointing

from the dell report, and that stock is down more than both of the others, down almost 6%, mike, at this point is vm ware they're going to have an analyst meeting, i think it's september 23rd at dell, going through the details about spend we've been waiting some time for, that will create two solely public companies. >> obviously a very kind of noisy, you know, interrelated securities probably has kept the multiples. if morgan stanley, if you don't think that hewlett-packard can have multiple expansion above eight times forward earnings that's seven, eight times. it's like 12% free cash flow yield. it shows you that markets are saying this is kind of, you know, a no growth runoff business type of thing right or wrong, that's the way the market sort of treats it for the moment. >> yeah, they're looking at inventories as well. inventory data shows a 530% increase at hp over the last ten weeks. precovid, which stands out from other vendors and further confirms it will take hb several

quarters to get back into a position to dwroe in line with the broader pc market. >> i thought that was weird since all we do is talk about shortages of hardware. >> strange >> you have a 500% jump in channel inventory, three times covid by the way so hp is going to -- we're pennies away from a six-month low or so in an era where corporate i.t. budgets with feeling their oats >> you would think that the moment was there for them to actually capitalize a little bit better still a $34 billion company, good size, but it's definitely kind of set aside, even beyond some of the old tech that has rallied well, if you look at things like oracle, they've done fine. >> a lot of attention on oil this weekend as we go into a period in which tropical storm ida is scheduled to hit southern louisiana around sunday afternoon, around 2:00 depending on the track is still a bit early. maximum sustained winds right now about 60 miles an hour of course sunday's also the 16th

anniversary of the landfall of hurricane katrina. you do have a lot of the leadership centered around oil >> the energy stocks got super, super oversold from june into this month's low, you know, essentially people saying the reflation trade is over, and they were big beneficiaries of it it's rebuilding a little bit you know, high 60s for crude oil, still seems like the recent highs at 75 are pretty safe, but it is helping a little bit here in terms of, you know, leadership today i still think it's noisy we're dealing with a lot of stuff. 20% year-to-date gains in the s&p 500. >> obviously we've doubled since the march 2020 low it just feels -- you know, 4,500 on the s&p is triple that ceiling of the market that we had in place for, you know, ten years after 2000, and so there's a perception outthere we've come a along way pe multiple of the s&p has actually come down this year

earnings have just been surging so much that it's created this pretty fat cushion under the market for now and financial conditions are so easy, we'll see if, you know, that changes after powell, but that it's sort of been hard to say we need some tough love on the multiple because it hasn't happened >> i do go back to earnings season, the heart of it, of course, the mega caps. when you look at whetherit was apple, facebook, amazon, outlook, microsoft, those numbers were incredible in terms of top-line growth, and frankly the earnings as well, but the reaction, not much >> no, the market kind of got there ahead of the reports, you would think in a lot of these, and it seems like for the third and fourth quarter, arguably, the numbers are still a little bit modest, so you'll probably see a similar beat rate. i think it just tells you about the psychology of the market we've seen the best in terms of acceleration rate. now it's about who's got the sustai sustainability, and we're going to have to transition from stronger to longer in terms of the bull case. that we know, you know, kind of

a more durable expansion. >> alphabet is worth mentioning. it had maybe the strongest of all those numbers. it is up 62, almost 63% this year did lag a bit in 2020, but made up for it. guys, we got to look at china as well you know, the latest sort of story coming you have there. eunice yoon was reporting on it earlier. the journal reporting as well. new rules would prohibit internet firms holding a swath of user related data from listing abroad, and, you know, that would affect certainly, i mean, you think about bytedance, that's a private company by the way. who knows where the market value is these days. they haven't necessarily done anything that would assail it of stock from one party to another to sort of establish that. it had been as high as i heard over 400 billion at one point. bytedance wouldn't seem to be in a position to go public here with these latest rules. you can see it is having an

impact on alibaba. both fear from our s.e.c. but also as well the chinese don't seem to be particularly appreciative of it any longer or allowing for it either in terms of the way so many companies in china have been able to go public here by essentially putting it -- the cayman and contracts for the right to manage the assets without actually owning the assets. >> yeah, you own some kind of abstract claim on the underlying business, although, it's some irony, isn't it, in china saying if you deal with personal consumer data, we're not going to let you go public in the u.s. u.s. investors have almost zero window on anything going on in terms of operations let alone the consumer data. it's obviously a device to curtail -- >> some of the commentary out of china is remarkable. they have this cyberspace administration in which they say companies must abide by ethics that should not set up algo that entice users to spend money this a way that might disrupt public

order. i have no idea what that means, but can you imagine us ever saying anything like that? >> ib say that to my daughter, maybe you do too at 11:00 when i go in there, actually, i've got to quote the chinese now >> it's really amazing the chinese government has said there's all this value in commerce going on and what they consider frivolous activity, and just non-strategic, and it doesn't really build the product productive of the company. facebook didn't have to exist. it certainly didn't have to be a trillion dollar plus company, but here it is. >> might be better off if it didn't sorry. guys, a story i've been following all week is the redemption levels of spacs this is deals that close they actually get the approval of the holders, but the right to redeem at 10 or $10.10 is taken

advantage of by a large vast majority of those holders as well, and no letup here, the latest one got approval, lgl systems deal with iron net was approved guess what the redemption rate was. 93%. 93% of the shares were redeemed, so you had 1.17 million shares left you can see the stock is up. i've pointed out that in a couple of names here we've seen investors who were shorting prior to the close of the deal only to find that there were so few shares left because of huge redemption rates that have put some in a very difficult position to either secure a borrow or short more or cover their short, and that has resulted in big squeezes for a couple of names. that's a trend we've been following. in this case you see not that much in part, you know, perhaps the stock had been happenging in there. what am i talking about as to why investors are shorting some of these names prior to close? take a look at xos

this was next gen 1, last mile trucker. we had next gen 2. we had richard branson join us on monday. this is the first spac all right, can we go back at least a week, guys that's not really particularly helpful chart there. there you can see coming right down over the last week from kind of ten. we got initial numbers in terms of a very large redemption there as well, but we didn't get a lot more until an ak this morning. the number that jumped out at me and i've talked about this as well, these companies expect to take in a lot of cash from the spac holders in addition to the pike in this case you had a $220 million pipe, you had transaction costs as well of 55 million, and the total they took in was 216 million, so they took in less than the entire -- the pipe, because the redemptions were so high and after

transaction costs there was nothing else from the actual spac holders you can see what's happened to the stock. mike, i'm just keeping an eye on this obviously we've talked a lot about this i did spac out that was in february, we saw spacs decline dramatically in terms of issuance. things picked up a bit this is the latest iteration there's so many trading below and/or at 10 at the same time, the deals get approved, sponsors i guess are somewhat happy the key is the sponsor's still probably making money on that deal >> that's mousetrap. up the optionality in there. i recently looked at how many spacs are still looking for deems. i think it might be 300. >> yes, it's a lot and that gets back to the competition between them these spac-offs as they call them, and is the sponsor really inclined to actually walk away from a deal even though it may be at a valuation that they don't necessarily think is a great one for their underlying

holders because they can benefit way down, not from -- down to 4 on the stock price oftentimes, and so does that -- you know, is it the best way to go about finding a deal when your sponsor can benefit, even though you're buying it at ten, which is why we may be getting all these redemptions. >> guys, in faang news, apple is obviously the lead announcing it has resolved a class action lawsuit from u.s. developers over its app store policies. josh lipton has the latest over at the nasdaq. good morning, josh. >> so carl, one big fight for apple now looks to be over apple is announcing that pending official court approval here it has resolved a class action lawsuit from u.s. developers over its app store policies. the part of the settlement that's attracting the most attention here, developers can now share purchase options with their users outside of their ios app. so for example, a developer can email a customer with that customer's permission that they can make a purchase with

alternative payment medicines, potentially important if they can convince a lot of their customers to pay them directly that means they can keep more money obviously. how many customers are actually going to choose that option, though that remains to be seen. apple will also create a new $100 million fund to assist small developers and it's going to maintain that lower 15% commission for developers earning under $1 million for at least three years. bottom line, apple is facing criticism, senator richard blumenthal saying in response to this news, today's news only adds to the momentum and further exposes rampant anti-competitive abuses in the app markets. however, apple can now say it has reached a deal with its community of smaller developers. in other words, it reached a deal here with 99% of developers that actually pay apple a commission it's only the big companies now.

so apple's going to argue the epics and spotifys of the world that still aren't happy. back to you all. >> fascinating development we'll watch it not moving the stock a lot, but interesting policy change over at apple. thanks. still to come, the fed chair and his remarks to the jackson hole virtual symposium set to begin in just about 15 minutes we're going to watch that as we go to break, obviously, a lot of attention on treasuries today as we got the personal income and spending data. intending 3/10 prior 11, which means the delta variant really did slow down the consumer even as pce deflator is at a 30-year high back in a moment

- i didn't realize you have to have a prescription drug plan with medicare. i didn't know to shop around. i just picked one. every time i went to my pharmacy, copay was different. and i'd ask them, "why is it different? you know, you didn't charge me this much last time."

no one could ever answer me. but now with goodrx you can look on your phone and it'll tell you exactly how much it's going to be. and when i get to the pharmacy they charge me exactly what it says on that app. and it's so much cheaper than that prescription drug plan. it's all about saving money with me. i like watching my dollars. it's a challenge many of the nation's restaurants are facing in the midst of this historic labor crunch should they require their employees to take the covid vaccine. kate rogers joins us with more on the mandate dilemma good morning, kate >> good morning, carl. in new york city restaurants did not have a choice. mayor bill de blasio key to new

york city program mandates restaurant workers and patrons be vaccinated for indoor settings the company is short 20 workers as it is and lost several over the policy >> it's exacerbating the situation, you know, and then, you know, in addition to all that, you're dealing so, we're getting hit from everywhere >> others have concerns with the uncertainty around mandates and fear losing more workers over such a requirement david bar said between his kfc franchises in alabama and georgia, he's already short workers from being fully staffed. >> we've decided to encourage, verses mandate vaccinations. both because of the labor force, tight labor force today, and we don't desire to lose potentially another 20 to 30% of our employees, as well as a policy

standpoint from looking to d.c. or the state house as to what the policy should be as regards to mandates. >> larger restaurant chains have largely been silent so far on mandating vaccines mcdonald's did delay return to office until october and would require office employees to be fully vaccinated the company wanted to seek input from its workers both have encouraged the shot. >> fascinating very tough decision by some of the business leaders when we come back, the countdown to fed chair powell's speech with the dow up. require a trade? right now, at t-mobile we're getting rid of the trade-in headache. switch and get the epic iphone 12 with 5g on us. get it on magenta max with unlimited premium data. no trade in required. no worrying about having a phone that qualifies.

you can keep it or pass it down. it's that easy. unlimited premium data, iphone 12 on us and no trade in required. you won't get that from anyone else. t-mobile, the leader in 5g. 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. ♪

it's taken a lot to get to this moment. ♪ grew up at midnight - fothe maccabees ♪rld. dreams are on the line. you got this. refresh... it all, comes down, to this. ♪♪

just a few minutes away from fed chair powell's speech. that is the purchases, in his view, don't have much value. markets have largely priced it in morgan stanley says w the details around taper in hand, there's no need to use this as a signaling opportunity. the fed has delivered on

communication, markets are prepped and all that's left is for the fed to give the greenlight >> i don't think anything being said right now means at the september meeting they give you the templet and say it's on. could be november. maybe that's the zone of uncertainty in there, in terms of timing. then it becomes about trying to emphasize, constantly that this does not mean higher rates right away after this process works through the taper process. because it would put the market on edge more than the buy in program. 2018 was perceived as a problem and perceived the fed got tight and stayed that way on autopilot because the economy was plateauing and weakening it's about the underlying conditions as well >> given all the commentary we've had, i'm surprised we're

not ending it today. >> which is why he'll probably sound dubbish on the net basis >> and wasn't that long ago the phrase not thinking about thinking about was pretty common it's a long way they've had to help us travel >> which speaks to how things got better through the spring and into the summer, because we didn't anticipate that level of improvement problem. >> we will see what the fed chair says in a few moments, as his jackson hole symposium speech gets underway in the meantime, mark lets hangn in there ou t turl look for activity arndheene. dow's up a hundred the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision.

with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity. (vo) this is a place for ambition. for smarter trading decisions, a forge of progress. a unicorn in training. a corner to build a legacy. a vision for tomorrow. a fresh start. a blank canvas. a second act. a renewed company culture. a temple for ideas. and a place to make your mark. loopnet. the most popular place to find a space.

all the things, all around you... where you learn, work, and fly... we help make them healthier. we are the people of abm. for more than 100 years, we've been a leader in making spaces cleaner, from the things you touch to the air you breathe.

today, more than 100,000 of us are innovating to ensure spaces are more efficient, healthier and safer. abm. making spaces healthier for you. baaam. internet that doesn't miss a beat. that's cute, but my internet streams to my ride.. pshh, mine's so fast, no one can catch me. that's because you both have the same internet. xfinity xfi. so powerful, it keeps one-upping itself. can your internet do that? good friday morning. welcome to another hour of "squawk on the street. dow hanging on to a gain of about a hundred points, trying to makeup lost ground from yesterday. basically three big buckets. one is corporate results, a gap in work day, for example, both raising their guidance

echo data, personal spending did slow down in july from june as the delta variant made its way to household psychology, even as it's the longest in several decades. and chine issuing new rules on corporate algorithms and the way they may list outside of china but the lead is jackson hole, with powell set to speak any moment fed chair jay powell says in his jackson hole speech that substantial progress has been met for inflation. on the employment mandate, he says there's clear progress towards maximum employment but importantly does not say the substantial further progress the test has been met. he does say the fed has made progress on the goals for reducing asset this year but doesn't say those goals have been met he points out the delta variant presents a near term miss.

that's atenuating his sense on where it has been. and the labor market has brightened considerably but is turbialent he seems optimist took meet the goal relatively soon and inflation is, quote, a cause for concern. high inflation readings, however, he says, will likely prove to be temporary, it results in a narrow group of goods and services and does not see wage-push inflation. powell points out you already see moderation in prices he would be concerned if inflationary measures spread more broadly to the economy. on the issue of rate hikes, he's very clear in saying the timing of asset reductions or a taper is not a direct signal to the timing of rate hikes again, he's trying to separate those two actions by the federal

reserve. he says it's a different, more stringent test for rate hikes. tightening could be harmful and the bank cannot count on being transitory >> let's get to the fed chair. >> this led to animate and unprecedented decline, as large parltsz of the economy were shuttered to contain the spread of the disease the path of recovery has been a difficult one. and a good place to begin is by thanking those on the frontline fighting the pandemic. the essential workers who kept the economy going. those who have cared for others in need, and those in medical research, business and government, who came together to discover, produce, and widely distribute effective vaccines in record time. we should also keep in our thoughts those who have lost their lives from covid, as well as their loved ones.

strong policy support has fuelled a vigorous, but uneven recovery one that is, in many respects, historically anomilous in a reversal of typical patterns in a downturn, aggregate personal income rose, rather than fell and households massively shifts spending from services to manufactured goods booming demand for goods and the strength and speed of the reopening have led to shortages and bottlenecks, leaving the covid-constrained supply side unable to keep up. the result has been elevated inflation in durable goods a sector that has experienced an annual inflation rate well below zero over the past quarter century. labor market conditions are improving but turbulent and the pandemic continues to threaten, not only health and life but economic activity. many other advanced economies

are experiencing similarly unusual conditions in my comments today, i will focus on the fed's efforts to promote maximum employment and price stability goals, amid the upheaval and suggest how lessons from history and the evolving risks offer useful guidance for today's unique monetary challenges the pandemic recession, the briefest, yet deepest on record, displaced roughly 30 million workers in a space of two months the decline in output in the second quarter of 2020 was twice the full decline during the great recession. but the pace of the recovery has exceeded expectations with output surpassing the previous peek after only four quarters. less than half the time required following the great recession. as is typically the case, the recovery in employment has

lagged that in output. nonetheless, employment gains have also come faster than expected the economic downturn has not fallen equally on all americans. and those least able to shoulder the burden have been hardest hit. in particular, despite progress, joblessness continues to fall disproportionately on lower wage workers and on african-americans and hispanics. the unevenness of the recovery can further be seen through the lens of the secteral shift of spending into goods. particularly durable goods, such as appliances, furniture and cars and away from services, particularly in-person services in areas such as travel and leisure. as the pandemic struck, restaurant meals fell 45%, air travel, 95%, and dentist visits 65%. even today, with overall gdp and

consumption spending more than fully recovered, services spending remains about 7% below trend. total employment is 6 million below its february 2020 level and 5 million of the shortfall is in the still depressed service sector in contrast, spending on durable goods has boomed since the start of the recovery. and is now running about 20% above the prepandemic level. with demand outstripping pandemic afflicted supply, rising durable prices are a principal factor lifting inflation well above our 2% objective. given the ongoing upheaval in the economy, some strains and surprises are inevitable the job of monetary policy is to promote maximum employment as the economy works through this challenging period i'll turn to a discussion of progress towards those goals

the outlook for the labor market has brightened considerably in recent months. after faltering last winter, job gains have risen steadily over the course of the year and now average 832,000 over the past three months of which almost 800,000 have been in services. the pace of total hiring is faster than at any time in the recorded data before the pandemic the levels of job opening and quits are at record highs. and employers report they cannot fill jobs fast enough to meet return dg mand these favorable conditions for job seekers should help the economy cover the considerable remaining ground to reach maximum employment the unemployment rate has declined to 5.4% a post pandemic low but is still much too high and the reported rate understates the amount of market slack.

long-term unemployment remains elevated and participation has lagged behind much of the market, as it has in past recoveries with vaccinations rising, schools reopening and enhanced unemployment benefits ending, some factors that may be holding back job seekers are likely fading while the delta variant presents a near-term risk, look gz for maximum employment the rapid reopening of the economy has brought a sharp run up in inflation. over the 12 months through july, headline and core pce a have been well above our 2% longer run objective. businesses and consumers widely report upward pressure on prices and wages. inflation at these levels is, of course, a cause for concern.

but that concern is tempered by a number of factors that suggest that these elevated readings are likely to prove temporary. this assessment is a critical and ongoing one. and we are carefully monitoring incoming data. the dynamics of inflation are complex. and we assess the inflation outlook number from a number of different perspectives, as i will discuss the spike is so far largely the product of a narrow group of goods and services that have been effected by the pandemic and the reopening of the economy. durable goods alone contributed about 1% to the latest 12-month measures in inflation. energy prices add another eight-tenths of a percent to headline inflation and from long experience, we expect the inflation effects to

be transitory. in addition, some prices, for example for hotel rooms and airplane tickets, decline sharply during the recession and have moved close to prepandemic levels the 12-month window we use in computing inflation now captures the rebound in prices but not initial decline. temporarily elevating reported inflation. these effects, which are adding a few 10ths to measured inflation, should wash out over time we consult a range of measures meant to capture whether particular price increases are spilling over into broad-based inflation. these include trimmed meme measures and excluding durables and concluded just before the pandemic they generally show inflation at or close to our 2% longer-run objective. we would be concerned at signs

that inflationary pressures were spreading more broadly through the economy. we are also directly monitoring the prices of particular goods and services most effected by the pandemic and reopening and are beginning to see a moderation in some cases, as shortages ease used kar prices, for example, appear to have stabilized. indeed, some price indicators are beginning to fall. if that continues, as many analysts predict, then yulsed car prices will soon be pulling measured inflation down, as they did for much of the past decade. this same dynamic of dissipating and in some cases reversing, seems likely to play out in durables more generally. over the 25 years preceding the pandemic, durables prices actually declines. with inflation averaging negative 1.9% per year

as supply problems have begun to resolve, inflation in durable goods, other than autos has slowed and may be starting to fall it seems unlikely that durables inflation will continue to contribute to overall inflation. we will be looking for evidence that supports or undercuts that expectation. we also assess whether wage increases are consistent with the 2% inflation goal over time. wage increases are essential to support a rising standard of living and are generally, of course, a welcome development. but if wage increases were to move materially and persistently above the level of proddicativety gains, businesses would likely pass those increases on to customers. a process that could become the sort of wage price spiral seen at times in the past today we see little evidence of wage increases that might threaten excessive inflation

broad-based measures of wages that adjust for compositional changes in the labor force, such as the cost index and atlantic wage- wage-growth tracker show it consistent with the long-term objective. we'll continue to monitor this carefully. policy makers and analysts generally believe that, as long as longer-term inflation expectations remain anchored policy can and should look through temporary swings in inflation. our monetary policy framework emphasizes that anchoring longer-term inflation is necessary for price stability. we carefully monitor a wide-range of indicators of longer term inflation expectations these measures today are at levels broadly consistent with our 2% objective

because they're individually noisy, we focus on common patterns across the measures one approach to summarizing the patterns is the board staff's index of common inflation expectations which combines information from a broad-range of service and market-based measures. this index capture as general move down in expectations starting around 2014, a time when inflation was running persistently below 2%. more recently, it shows a welcome reversal of the decline and at levels more consistent with the 2% objective. longer term inflation expectations have moved much less than actual inflation or near term expectations suggesting that households, businesses and market participants also agree that current high inflation readings are likely to prove transitory and that, in any case, the fed will keep inflation close to the

2% objective over time finally, it is worth noting that, since the 1990s, inflation in many advanced economies has run below 2%, even in good times. it likely reflects sustained disinflationary forces, such as technology, as well as a commitment by central banks to maintain price stability in the united states, unemployment ran below 4% for about two years below the pandemic while unemployment ran at or below 2% but not by enough to lift price inflation consistently to 2% while the underlying global disinflationary factors are likely to evolve over time, there's little reason to think they've suddenly reverse sd or

abated seems they focus on inflation as it continueinize to history. we'll continue to monitor against each of these assessments. to sum up, the baseline outlook is for continued progress towards maximum employment with inflation continuing to levels consistent with our goal of averaging 2% over time let me return to how the baseline outlook and uncertainties figure in our monetary policy making the period from 1950 through the early 1980s provides two important lessons for managing the risks and uncertainties we face today the early days of stabilization policy in the 1950s taught monetary policy makers not to offset what are temporary fluctuations in inflation. indeed, they do more harm than

good, particularly in an era where policy rates are much closer to the effected lower bound, even in good times. the main influence of monetary policy on inflation can come after a lag of a year or more. if a central bank tightens policy in response to factors that turn out to be temporary, they're likely to arrive after the need has passed. it unnecessary slows hiring and other economic activity and pushes inflation lower than desired. today, with substantial slack remaining in the labor market and the pandemic continuing, such a mistake could be particularly harmful we know that extended periods of unemployment can mean lasting harm to workers and to the productive capacity of the economy. history also teaches, however, that central banks cannot take for granted that inflation, due to transitory factors, will fade the 1970s saw two periods chin there were large increases in

energy and food prices raising headline inflation for a time but when the direct effects on headline inflation eased, core inflation continued to run consistently higher than before. they came to generally expect higher inflation one reason why we now monitor inflation expectations so carefully. central banks have always faced the problem of distinguishing transitory inflation hikes there is no substitute for a more careful focus on data and incoming risks if sustained higher inflation were to become a serious concern, the affluency would certainly respond and use tools to assure inflation runs at levels consistent with our goal. incoming data should provide

more evidence that some of its supply and demand imbalances are improving and more evidence of a continued moderation and inflation, particularly in goods and service prices that have been most efekted by the pandemic we expect to see continued strong job creation. and we'll be learning more about the delta variant's effects. for now, i believe that policy is well positioned as always, we are prepared to adjust policy, as appropriate, to achieve our goals that brings me to a concluding word on the path ahead for monetary policy. the committee remains steadfast in our offed expressed commitment to support the economy for as long as is needed to achieve a full recovery the changes we made last year to our monetary policy framework are well suited to address today's challenges we've said that we'd continue our asset purchases at the current pace until we see

substantial progress towards maximum employment and price stability goals measured since last december, when we first articulated the guidance my view is the substantial further progress test has been met for inflation. there has also been clear progress towards maximum employment at the affluency's recent july meeting, i was of the view, as were most participants, that if the economy moved broadly as anticipated, it may be move asset purchases this year. the intervening month has brought more progress in terms of a strong employment report for july and the further spread of the delta variant f we will be carefully assessing incoming data and evolving risks. even after our asset purchases end, longer term securities will continue to support accommodative financial conditions

the timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal in terms of the timing lift off, for which we have a substantially more stringent test we've said we'll continue to hold a target range until the economy reaches conditions consistent with maximum employment and inflation has reached 2% and is on track to moderately exceed 2% for some time we have much ground to cover to reach maximum employment and time will tell whether we've reached 2% inflation on a sustainable basis. these are challenging times for the public we serve. as the pandemic and its unprecedented toll on health and economic activity linger but i will end on a positive note before the pandemic, we all saw the extraordinary benefits that a strong labor market can deliver to our society

despite today's challenges, the economy is on a path to just such a labor market, with high levels of employment and participation, broadly-shared wage gains and inflation running close to our price stability goal thank you very much. >> that is fed chair powell speaking at the jackson hole virtual symposium. during his remarks, record high on the s&p and the nasdaq. steve leaseman, lot of discussion in the early going about how much of the text circulated around the idea that inflationary forces may be temporary, which you brought us at the top of the hour >> he is all in on the transitory play here, carl he says he doesn't see it in wage inflaigz. he already sees some moderation in pricing he's not concerned to see the wage price spiral. he sets out he's certainly

concerned about inflation and says if it's too high, we're going to take action on it but he's out of step with at least some members of his committee, who are much more concerned about inflation, who have come on air and said point blank we see the inflation issue as less transitory but if there were a motion to describe what powell did it's this with his chips when it comes to going all in on the transitory story, when it comes to inflation >> yeah. steve, obviously the market has basically absorbed the notion that what he sought to do, which is essentially disconnect the eventual first rate hike from the tapering process so, the sting has been reduced out of the fact that they're going to start the bond hikes. you look at the two to five-year

treasury yields. they're down quite a bit i guess that might have been one of the objectives of this talk >> not just this talk, mike, but you're absolutely right to point that out this has been a concerted effort of jay powell and the federal reserve, before there was even talk of a taper. powell has made a concerted effort to avoid a tantrum and that, prince pale, involves communicating in advance there would be a change in policy and making clear what you pointed out, that there was separate criteria for raising interest rates than tapering and they were on separate tracks if you look at the way the markets performed, not just that you mentioned. but look at fed probabilities, which have been unchanged whiles there has been talk of an earlier taper. they continue to point to the end of 2022, beginning of 2023

to begin the rate hike >> when we look at the transitory nature nofflation between powell and some other members of the fed, is there anything we can look at specifically, in terms of the data they're interpreting differently or what goes into the differ ngence in perspectiv? >> what we heard this morning and yesterday from the fed presidents is a lot of what they're hearing from their business contacts in their different regions. and they say hey, they told us initially they thought the stuff was going to be temporary and that's perhaps where the temporary idea came from but we're going to solve the bottlenecks. and then the outcome looks to be longer than have been communicated to the federal reserve. before we move on, i want to be clear. i think there's a certain hawkish element to this, which is powell is now out there saying we're pretty much going to taper this year

that's a new development that we don't want to lose in the other sort of near-term dubbish aspect, which is he's not committing to announcing the taper in september he could yet do it he has the flexibility from the speech to announce the taper in september but could be september or november. it's a pick 'em whether they do this in november, depending a lot on the data. >> that's why goldman brought its november odds up to 45 that's going to be the discussion now what particular meeting -- >> go either way. >> -- yeah, gets the particulaty. steve helping us understand what powell said. as we said a moment ago. record highs on the s&p and nasdaq all sectors green. the vix back bel 1 ow7. jerry is here! j! mate, how are ya!? it's so good to see you. good to see all of you, yeah! why is jerry so... popular?

it's been like this ever since we started using workday. what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry. they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world.

do you have a life insurance policy you no longer need? now you can sell your policy, even a term policy, for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized that we needed a way to supplement our income. if you have one hundred thousand dollars or more of life insurance you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit conventrydirect.com to find out if you policy qualifies. or call the number on your screen. coventry direct, redefining insurance. ♪ you probably think visa is a credit card company, huh? ♪ but it's actually a network.

♪ connecting just about everyone to just about everyone else. ♪ it can open eyes with a cup of coffee and change minds on what makes a business, a business. and it is working to connect everyone, everywhere. so, meet visa. a network working for everyone. ♪ it is one of the bigger earnings movers this morning this after reported a wider than

expected loss and saying it's been subpoenaed by the doj, as well as homeland security for documents associated with its products they did cut the price of their bike, now 1495 -- now 1495 from 1895, previously should start to deliver returns, says j & p by fiscal year, second quarter of 22 as peloton invests in better best product strategy they're at least positive on the stock.

i'm dad's greatest sandcastle - and greatest memory! but even i'm not as memorable as eating turkey hill chocolate peanut butter cup ice cream with real cocoa. well, that's the way the sandcastle crumbles. you can't beat turkey hill memories. if you're 55 and up, t- mobile has plans built just for you. whether you need a single line or lines for family members, you'll get great value on america's most reliable 5g network. like 2 lines of unlimited for just $27.50 a line. only at t-mobile.

welcome back your update at this hour evacuations have resumed after

itacks killed 113 and injured 180. the deadliest day since august 2011 with 13 service members killed about 12,500 were evacuated sunday, now raising the told number since the taliban took over august 14th to about 105,000. california's fire continues to burn and creep closer to lake tahoe. it's scorched nearly 100,000 acres. 3,000 firefighters have been called tine help contain the spread and team u.s.a. has won its first gold medal from the tokyo paralimpics. anastasia set a new world record in the women's 300-meter free style. and gia set a new world record in the 100-meter back stroke they're each making their first paralimpic appearance. you're up to date. i'll send it back to you >> congratulations to them

fed chair powell indicated this hour the central bank is likely to begin tapering by the end of the year and said rate hikes are not imminent >> inflation at these levels is, of course, a cause for concern but that concern is tempered by a number of factors that suggest that these elevated readings are likely to prove temporary. >> for more, let's bring in chief market strategist at northwestern mutual wealth management and morgan stanley mutual wealth management are you surprised how much of the speech was devoted to pushing back on inflationary concerns >> so, yes and no. we've often had a little bit of a skeptical view here about the extent to come chair powell speaks out of both sides of his mouth. and what i mean by that is i

think deep down the chair knows that the u.s. economy actually needs inflation to ultimately give the fed room to raise rates to a level that gets us to policy normalization at the same time, you know, he's wanted to not fan the flames of inflation, such that inflation expectations get unanchored and so, he's been the -- at the front of the line and the champion of this speech about everything being transitory when it comes to price dynamics and what has shocked us is that a good part of the market on certainly the bond market seems to be buying his rhetoric, even though they may know that deep down he doesn't mean it. he wants inflation >> it is fascinating brent, what were your takeaways from the last half hour.

>> you know too, me, i think we keep focusing on inflation because the old fed taught us to focus on inflation this is not the old fed. we need stop focusing on inflation and focus on employment groelgt because this fed believes it probably kaugs broader climate growth they advanced the ball but want to see what delta impact is having on the economy. and so, i'm not surprised at all. i guess bottom line to me is people need to stop focusing on the day to day and focus on what this new fed is. they're dedicated to beingedesy. this is a fed listening to the market so, i remind you all, in 2018, the fed was expecting to tighten going to 2019 and they actually eased, not because their forecast changed but because the market told them to. and so, the fed wants to focus on employment, they want the

market to move higher and this fed is still your friend >> what might the market come to as a way of disagreement on the inflation side the point lisa is making is the bond market may be able to kind of internalize this idea that they're not going to be proactive in response to inflation readings, therefore, rates might be slow to go up eventually but ultimately, how will real rates stay in the face of inflation data? >> that a big question i don't know what the bond market is going to do. but people need to put money in bonds for a safer side of their portfolio. there's quite a bit of money looking for a home right now i think longer term, we're in for a rise in inflation. i do believe, with the fed chair, this is transitory, for all the reasons he outlined. i don't know you can have permanent inflation with 9.3 to 11.3 million people less employed and not participating

if they would be, if we'd not had covid. i think the fed is going to use the room to keep policy easy >> between what he said on durables inflation, verses say wages, do you think he's less certain about the latter >> absolutely. and again, here i just wish he would be much more plain spoken. he talk ss about this idea and making a very fine line between full employment and maximum employment and the reality is you know, translate that into code if you want to go from full to maximum employment, you're driving wage inflation that's the point and so, you know, i think this is an opportunity to contrast what the fed is trying to do and i agree with brett in terms of their driving markets. but let's listen to what

corporate ceos are saying. whether it's the national data for small businesses, talking about price increases. whether it's the quarterly earnings reports that we're getting and the view we're getting from corporate ceos. they're talking about price pressures and they're talking about price pressures, not just from the labor side but from restructuring supply chains. from input costs etc. and they know. they're on the ground and i'm not exactly sure why the market's choosing to believe one but not the other. >> finally, brent, it sounds like you don't think this is going going to move your model on equities but lisa, does this do anything on how you view stocks right now? >> no, not particularly. the fact the market is moving pretty aggressively into the green to get more new all-time

highs on the s&p 500 gives us pause. i think most folks know morgan stanley, at this juncture has been somewhat more cautious than some of our peers that makeup consensus. we believe there could be a 10 to 15% pullback over the next three to six months. this market is not pricing in risk premium we're not pricing in the risk premium either for higher inflation or rates nor are we pricing in the risk premium that earnings revisions, which have continued to grind up higher, are going to have to take a pause and incorporate the fact that there are going to be margin pressures right? margin pressures from rising costs, rising wages, rising taxes. no one's talking about rising taxes. in washington. rising regulation and so our view is that this is a market that increasingly is getting over its skis and you know, the

fed might want to talk about financial stability and asset bubbles at some point because they're driving them >> that definitely didn't happen today but you guys have been quite clear. thank you, guys. appreciate it very much. good to see you. >> thank you >> have a good weekend as we head to break, take a look at the biggest gainers in the s and, prksz for the week. casinos and energy leading the way. we did it again. verizon has been named america's most reliable network by rootmetrics. and our customers rated us #1 for network quality in america according to j.d. power. number one in reliability, 16 times in a row. most awarded for network quality, 27 times in a row. proving once again that nobody builds networks like verizon. that's why we're building 5g right, that's why there's only one best network.

you founded your kayak company because you love the ocean- not spreadsheets. 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 (upbeat music) mat- [announcer] introducingn. the grubhub guarantee, our promise to deliver your order on time within the delivery window and for the lowest price compared to other apps, or you'll get back at least $5 in perks.

this is andy, my schwab financial consultant. here's andy listening to my goals and making plans. this is us talking tax-smart investing, managing risk, and all the ways schwab can help me invest. this is andy reminding me

how i can keep my investing costs low and that there's no fee to work with him. here's me learning about schwab's satisfaction guarantee. accountability, i like it. so, yeah. andy and i made a good plan. find your own andy at schwab. a modern approach to wealth management. new customers get our best deals on all smartphones. find your own andy at schwab. that's right. but what if i'm already a customer? oh, no problem. hey, cam...? ah, same deal! yeah, it's kind of our thing. huh, that's a great deal... what if i'm new to at&t? cam, can you...? hey... but what about for existing customers? same deal. it's the same deal. is he ok? it's not complicated. with at&t, everyone can ace back to school with our best deals on every smartphone - like the samsung galaxy z fold3 5g. the timing and pace of the coming reduction in asset perches will not be intended to

carry a direct signal regarding interest rate lift off, for which we've articulated a different and more stringent test >> that was the fed chair, earlier this hour, signaling the central bank will remain patient as the economy continues to recover. what will that mean for inreal estate sector? and what about inflation always good to have you. what are you seeing in terms of what's called inflation, so to speak or rebounds, certainly in new york, both in ownership in terms of prices paid, and rents? >> as we've seen the rental market has had an incredible comeback recently. during the pandemic, it was in collapse vacancy rates were incredibly high and now we're seeing people come back to the city, dip their toe in the water, so to speak. so, that has been excellent. but the pandemic was an incredible disrupter

we saw urban centers get hit by new york city and those markets benefitted and now the demand has made prices unattainable for people in the seuburbs we're seeing new york city as a very fluid market, which has been excellent and the rental market has done incredibly well. so, we're glad to be in rebound mode but i know that yesterday the supreme court blocked the eviction moratorium and i think that's going to have an incredible impact on tenants and landlords alike. and i think the rental relief program is what i hope states will be focussed on. i hope landlords will get the relief they need and tenants will be able to stay in place. we don't want to throw people out on the street. >> of course not where are we in terms of the rebound, both in prices paid and for rents? i mean, i've seen recent stories that say new york is once again the highest rental prices in the

country because san francisco fell and hasn't come back as much >> i mean prices have picked up in the rental market we see san francisco, the median rental price, which is fantastic. but new york has historically been a expensive market to begin with and the rental market is less permanent. so, people can rent an apartment, live here, come back to work, or come back to school and so that has been superb. for us in new york city, and the housing market also remains. prices have corrected a bit and we saw a little correction during the pandemic. and so, we're seeing a lot more movement in the marked overall which has been really positive people are feeling really good about the return to work but remember, david, but for the vaccination, we wouldn't see where we are today, the economic recovery we would see none of that. and the pfizer getting fda

approve is going to get us -- more people vaccinated in the united states, right don't you think? >> not that many people are coming back to work in the major pats of new york city, where we have office buildings that remain well more than half empty. i wonder, just given the continued issues of the overall economy for years to come, high tax rate said, questions about quality of life, who are these people buying apartments all i keep hearing about is people who are leaving but clearly they're selling to somebody >> no, i mean there are people that have moved around in new york city. people moving from uptown to downtown, etc., millennial purchasers and there were people that left during the pandemic. that is a fact covid rates were really high but now new york leads the charge in vaccinations we're number one so, i think that people are feeling a sense of liberation. they are coming back to go to

work, yes. companies are not -- not everybody is going full time but there's a sort of hybrid and mandates about getting vaccinated and wearing masks so, people are feeling safer overall. it's going to take time. yes, we have legislation in albany, all those things, david. you're correct frrmgs we're not out of the woods but we're in a much better place than we were fear was running rampant and now we're in a much better spot in new york city. >> you mentioned we're probably headed to a hybrid work. but we've seen less return to the office -- the timeline's got pushed back, right in the last couple of months around the city, that's the biggest conspicuous difference how has it impacted, either the commercial and the residential market in terms of people wanting to be close to where they work or commuting or any of the other economic vitality

measures in the area >> it does have an impact. it's going to be slow and steady the offices, as you said, are not where they were. and it's going to take two years, probably, at least until we see people come back full time so, you see it's lithe. even trc it's not what it was, but slow and steady as we get people back to work, vaccinated, and people want to be in the office if you talk to people, they don't want to work from home they don't want to do zooms. you know, they miss seeing each other. and there's this sort of desire to be together and be social and build culture together so i do think that little by little we will come into a better place, but it's going to take time. like everything, it will take time before we get back to a better spot. when it comes to commercial, and like the retail space, we see so many empty retail spaces all over the city. you know, it's going to be a rebuild. we're in rebuild mode, but we're headed in the right direction. >> all right, bess we'll keep checking in with you

to see if that continues to be the case appreciate it. thank you. >> thank you, david. take care. meerantime, look at the biggest laggards on the s&p this morning. penn national, a lot of reopening plays. the losers are centered somewhat around the retail space. auto zone, advanced auto parts moderna it biggest laggard, down four wee ckn mont'rba ia me over the years, mercedes-benz has patented thousands of safety innovations. crash-tested so many cars we've stopped counting. and built our most punishing test facility yet, in our effort to build the world's safest cars. we've created crumple zones and autonomous braking. active lane keeping assist and blind spot assist. we've introduced airbags, side curtain airbags,

and now the first-ever rear-mounted front-impact airbags. all in the hope that you never need any of it. ♪ ♪

let's het our etf spotlight as we head to a break. taking a look at the retail sector ticker xrt, that etf up around 50% year to date, boosted by macy's and dick's sporting goods. both of those up more than 100% since january. the gap also joining the retail surge today, after reporting an earnings beat. and also raising its full-year guidance, largely on the strength of its old navy and athleta brands thstk ae ocupbout 2% right now. "squawk on the street" will be right back folks the world's first fully autonomous vehicle is almost at the finish line today we're going to fine tune the dynamic braking system

whoo, what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you you don't have to be a deep learning engineer to help make the world a smarter place does this come in blue? become an agent of innovation with invesco qqq experience our advance standards safety technology on a full line of vehicles. at the lexus golden opportunity sales event. get 1.9% apr financing on the 2021 rx 350. experience amazing at your lexus dealer. i'm evie's best camper badge. but even i'm not as memorable as eating turkey hill chocolate chip cookie dough creamy premium ice cream and chasing fireflies. don't worry about me. i'm fine. you can't beat turkey hill memories.

what happens if you ever need to miss work for a long time? why would i miss work? you could sprain your ankle... get hit by a school bus. get kicked by a horse. scurvy. plan today. feel comfortable about tomorrow. massmutual. all the things, all around you... where you learn, work, and fly... we help make them healthier. we are the people of abm. for more than 100 years, we've been a leader in making spaces cleaner, from the things you touch to the air you breathe. today, more than 100,000 of us are innovating to ensure spaces are more efficient, healthier and safer. abm. making spaces healthier for you. your shipping manager left to “find themself.” leaving you lost. 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 cnbc is out with a new digital documentary that gives you a behind the scenes look at some of the big pharma companies as they race to develop a covid vaccine. meg tirrell has more for us. >> hey, david. this is really a deep dive into the companies that decided to make a huge bet on an as yet

unproven technology, messenger rna. we talked with the leadership and researchers from moderna, pfizer, and biontech about how they made those decisions. other companies like johnson & johnson were early in the fight as well last year. ee talked with the companies in mrna also about how they plan to stay ahead of the virus and what's next for this now completely proven technology take a look. >> we are having a surveillance system that is checking every single variant that is emerging and we try to see if any of them escapes the protection of our vaccine. in the beginning or over time. so right now, we have very high comfort level that within 90 days from the day that we will identify a variant of concern, we will be able to have massive production of one. so i feel optimistic >> i really think it's the beginning of the decade of information-based medicine this is what we're most excited about here, is that we didn't build the company to solve a

pandemic we built the company to change the way medicines are made we're using mrna to send instructions to your body. the instructions can be anything you want it can be how do you protect yourself against covid, it can be how you protect yourself against flu, and it can also be, as you said, how does your immune system attack cancer in a personalized cancer treatment. we're doing all those things and people literally right now, and that's a much longer journey that's the journey that we're on for the next ten years as a company, and the place we're excited to invest our innovation and our time, our blood, sweat, and tears together >> so guys, a lot here in this documentary about how these companies made these decisions, feeling like they were really alone in this at the beginning all of that available on cnbc.com and youtube, produced by the incredible sam rega it's a wonderful watch in my humble opinion, and unbiased opinion. >> that's all right, meg your coverage of that for us was quite amazing as well.

look forward to seeing the documentary. truly breakthrough thank you, meg tirrell mike, i'll turn to you in the last few seconds here. quick thoughts on where we stand right now? >> market fully embracing this idea that taper is not going to hurt this bull market. it's not connected to where rates are going higher, and powell kind of walked the line pretty well. >> s&p almost touching up 20% for the year tech check starts now. >> developers, developers, developers, dwemers. developers, developers, developers, developers yes. >> good friday morning welcome to