year. >> the million dollar plus you asked him about, he said that's off the table? >> no, no, that's staying i think. >> that's already in. >> that's not going anywhere he's already raised taxes. i don't think he needs to raise it there we were talking about that number north of 57% for high end earners if the ways and means committee plan goes through as it is, which it won't. we'll see what happens, what kind of stuff gets through the mix. something to think about. >> from your lips. >> thanks, beck, make sure you join us tomorrow, "squawk on the street" is next. good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with mike santoli at the new york stock exchange. morgan brennan is at the kennedy space center where she witnessed that historic spacex flight. it's all about the ecodata today as retail sales come in with that surprisingly strong rebound

from the july slump, and the street looks for other signs oaf a consumer bounce. our road map begins with retail sales, surprise to the upside. is it a sign of waning covid headwinds. canadian pacific clinching its kansas city southern deal. ceos join us this hour. a new era for space travel, spacex successfully launching the first rocket into earth's orbit crewed entirely by tourists so the story of the plmorning is not just retail sales, philly fed, empire fed yesterday putting together a pas teesh of information that says maybe this delta a lull is behind us. >> a little bit of firming of the data, i think that's right we went through several weeks where data was missing, the surprise index was negative. the market's got its guard up. really evident in the weekly aaai weekly investor poll.

real swing towards bearishness we understand why. we're in this zone where we know the economy decelerated. we know the market wilbuilt up a big head of steam into september. it's been very orderly and kind of pricing sector to sector that kind of slowdown risk. you look at things like energy, that's kind of a good or bad or both type thing. those stocks are kind of running right now and consumer type stocks consumer leveraged stocks have just been sideways in wait and see mode for months. i think it's waiting for this kind of data to come out a 2.5% pullback in the s&p over the course of several days, six days in a row down and you barely kind of put a big dent in the market bounced yesterday because everyone says, this is kind of where they bounce now, down 3 or 4% to me tactically that's where we are in the market. we're still in september last half of september typically not great either. >> there's been a lot of discussion about the repeated bounces on options expiration past, what, six or seven months.

i know bay crest earlier in the week said is this getting to be too obvious of a buy signal. >> when i notice it and basically say 18th and 19th of the month. what you have had is a selloff into those moments, that third week of the month, right around the 19th of the month. it's kind of almost silly and seems scripted i do think in the absence of surprising overwhelming macro swings in the numbers that's kind of what governs things on a short-term basis so we're still in that week, still in this window when maybe you could see some of those mechanical influences take over, but yeah, it's a question of once everybody knows it. i mean, look, flows into stocks very aggressive in the last few months it's not as if people feel as if they need to rush. there's definitely an appetite to grab the pullbacks and that's what we saw yesterday. >> a lot of the macro strategists are looking for b of a today. we find evidence that consumers have picked up their spending

outside of their home, metropolitan statistical area. we need to see further evidence of that in the coming weeks. it could be an early sign that the delta lull is passing. yesterday jpmorgan talked about delta cases at a downward inflection point setting up what they said would be a fpowerful season >> it's really tracking with what a lot of the realtime covid case numbers and hospitalization numbers were saying. you know, the past couple of weeks people have been looking for that inflection and tracking it, and you haven't had at this point a negative surprise with school openings in the northeast. all of that stuff is feeding into this idea, we know there's a lot of pent up savings and spending power and personal income has been high the ammunition is there for a spending boom going ahead. i think that makes a lot of sense that you have the ingredients for it we'll see if the appetite's still there.

it's interesting because we are focused on the inflation side of things, cost pressure, supply chain stuff, but it's mostly because of demand for stuff that's exceeding the ability to deliver it. >> we've now got 60 ships awaiting birth between the port of l.a. and long beach port of l.a. was on squawk earlier today. a three-week wait time just to unload your goods. we're going to talk about rails and how that also affects the chain of getting imports from overseas it's this funny moment where the inflation is related to potential slowdown risk as opposed to overheating risk, right? those supply constraints are pulling back on the potential near-term growth at the same time, you got some categories of pricing going up that's why i think people are a little caught in between in terms of what to worry about look, the bond market is firm where it's been in terms of yield, up a little bit on the data today across the board, across, you know, maturities and that makes a lot of sense. it's not at all in panic mode on

either inflation or growth slowdown at this moment. >> speaking of all that spending, b of a today upgrades american express to neutral from underperform we view risk reward as balanced, a few negative catalysts on the horizon. it has underperformed by almost 700 basis points since the beginning of august. >> it's been a good time to be on the sidelines for it, and it makes a lot of sense that's also down in indussympat some degree. the card processors have been down there's been this fear in there, amex has a minor payments network in it. it's most aly a travel story in terms of getting that next push higher for spending on the cards. it makes a lot of sense, i think, in terms of just field position wise where people -- what are people most worried about? fintech threats, consumer slowdowns and the stock is giving you a little bit of a chance you look at that chart, it

doesn't seem like it's been punished too badly. >> still up almost 40% over two years. obviously the spacex launch last night was a thing of beauty. morgan brennan was lucky enough to see it in person, and it looks like it's just been a beautiful ride so far, morgan. good morning >> reporter: a beautiful night, a beautiful ride, just before 8:03 eastern time last night. >> five, four, three, two, one. >> ignition, liftoff >> wow, i don't think that can get old. so that's spacex's falcon 9 lifting off from here kennedy space center last night, 1.3 million pounds of thrust propelling the all civilian inspiration four crew to space now, a few minutes later the rocket's booster did stick another drone ship landing it marks the third trip to space for that booster, and actually, it's the first time that humans were launched on one that has

flown so many times to space prior. so elon musk, who teamed up with inspiration 4 benefactor jared isaacman for this mission was here he visited with the crew before the teslas transported them to the launch pad those newly minted astronauts, isaacman, hayley arceneaux, are currently orbiting earth at an altitude of 363 miles right now. that is higher than the international space station and the hubble telescope here's isaacman shortly after liftoff speaking from space. unexplored frontier, few have come before and many are about to follow. the door's open now and it's pretty incredible fwl spacex president also issuing a statement saying this mission is paving a way for a future where space is more accessible for all who wish to go

this is historic this marked a number of milestones first entirely non-professional civilian crew, first black female pilot of a space flight youngest american in space, and first person with a prosthesis so as for the experience, no live video feed unfortunately, but dragon capsule does have a coup la. over the next three days before splashdown landing, the crew will conduct health experiments. they're going to do a call with kids from st. jude's children's research hospital, for which inspiration 4 is raising $200 million guys, i think what makes this mission so extraordinary is how ordinary this crew actually is >> yeah, morgan, i mean, to that point, when the ceo of spacex says it paves the way toward, you know, this opening of space to anybody who might want to go,

what i guess practically speaking is this building toward in terms of spacex's business or in general what we'll be able to access >> reporter: yeah, so this is one piece, this idea of crude missions whether they're for n nasa, which by the way they have another one of those at the end of next month. spacex has a growing manifest. they've got missions planned as soon as early next year with axiom space, another startup as well it is just one piece of the bigger, broader spacex strategy that also involves returning humans to the moon, something else they're working on with n nasa it involves that broadband mega constellation starlink for connectivity back here on earth and longer term colonization of mars guys, i'd also just throw up a stock chart right now, and i'll talk about this a little bit later in the hour, but that is shift 4. isaacman is the founder and ceo of that company and those shares are moving higher in the premarket right now as he adds

astronaut to his list of street creds. >> unbelievable. we'll obviously keep track of it with your help over the next 48 hours or so. morgan brennan down at kennedy space. >> when we come back, the end of a long railroad bidding war, the ceos of kc southern join us. futures a little bit mixed this morning, but the ecodata as we said is the headliner. claims did tick up to 332 k but it's really only the second uptick for jobless claims since about mid-july more "squawk on the street" straight ahead. >> announcer: this cnbc program is sponsored by baird. is sponsored by baird. visit bairddifference.com. (humming) well, at first you'd be like, "that has gotta be some scrumptious jam!" (humming) and then you'd think, "he looks fantastic!

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welcome back to "squawk on the street." after months of back and forth, railroad kansas city southern has officially terminated its merger agreement with canadian national and opted for a new and improved deal with canadian pacific that could create the first single line rail network linking the u.s., mexico and canada here to discuss the news, kansas city southern's ceo alongside canadian pacific's ceo thank you both for joining us this morning welcome to you a lot to cover here. keith, i actually want to start with you from an investor standpoint, the voting trust is so crucial to this deal and certainly in focus

now as you ink this fresh deal together, the fact that canadian pacific has already got the green light to implement one of these voting trusts, your rival canadian national was not able to secure that, which is how we find ourselves talking today what are the next steps from here how quickly can this merger now come together? >> thank you, thank you for the question let me start by saying, you know, reunited again i can't tell you how happy the cp family is to be partnering with kansas city southern. obviously when we think about that voting trust, perhaps maybe pat said this in a previous conversation, that is the ticket it's the ticket to realizing deal certainty and value for the shareholder. so that voting trust for the cpkc combination based on our unique facts was approved back in may yesterday we moved quickly, we filed an admitted notice of intent with the stb. that's part of the regulatory process, which provides the stb all the details of our merger

agreement. we're very intentional not to change any material facts. in fact, the only thing that changed with any materiality at all is the consideration which we provided in shares. it's a very simple approach, the trustee stays the same we expect that our merger application will be submitted by the middle of next month that's what we're targeting, and we've asked for a ten-month review process time path to approval and with that we'd expect to be able to bring these two companies together with full regulatory approval, likely the first part or maybe the middle of fourth quarter of 2022. >> okay. how are you assessing those regulatory risks i mean, i realize the securing of a waiver under old rules presumably goes a long way in that process but on the flip side you do have a biden administration that is taking a tougher stance on consolidation in industries including rail right now. >> we actually see the biden

administration's action as favorable for our facts. the facts have always mattered i've said that from the beginning. this unique combination truly is pro-competition, pro-growth. there's no overlap with these networks we've co-located, co-owned and operated for over 80 years this is the only place our tw networks touch there's not a single customer that gets left out it's not about winners and losers it's about winners we've got customers with more options. we've got competition that gets injected that doesn't exist today because effectively it gives us a level playing field to compete better with up, bnsf, cn, csx, and ns for customers' traffic. again, if you have those positive facts that bode well supporting competition, i don't believe that you need to be concerned. in fact, i think it complements the biden administration's agenda to protect and enhance

competition, which we fully intend to do >> okay. it's been a really dramatic six months pat, we haven't spoken to you through the process. but given the fact that you did initially strike a deal with canadian pacific back in march at a lower price, then canadian national swooped in with higher bid, you went with that offer instead until the regulators put up the roadblocks and now we find this combination moving forward from here as well. i'm just wondering how you would recap the last six months and whether you were surprised by all the goings on of it? >> it's been a fast and furious six months it's actually been longer than that, but just this last phase of it. all i will say is that, you know, the canadian pacific, kansas city southern combination made tremendous sense in march it makes tremendous sense now. as keith mentioned, we don't

overlap by a single mile we don't even overlap by a single yard. we come together here in kansas city their network north and across canada ours is south and across mexico. obviously when the canadian national came in with a higher bid, our board had an obligation to consider that bid and i think our board really did a great -- put a tremendous amount of effort with great advice to pursue that, but our board has also been very focused all along with this tradeoff between value and certainty and risk, and of course as things develop with the surface transportation board's decision that led our board to a different decision. so here we are with a merger that we feel very good about that creates a historic transformative one of a kind north american network that we are very excited about.

>> so pat, given the fact that this is going to create such a unique network, what's the potential from a cost perspective and a revenue standpoint >> well, i'll answer that quickly and then ask keith the merger's always about growth there will be some cost efficiencies, obviously. that's usually the case with merger if you look at where the synergies are going to come from, the synergies that we've described, it's all about revenue growth and again, we think it's because of the power that this network is going to have, the coverage that this network is going to have in very large and very competitive fright markets that's going to drive that growth. >> to add a bit of color to that, it's about a billion dollars of ebitda synergies. the lion's share of that, over 820 million we're targeting that are all growth-based revenue, taking our origin rich network and partnering with kcs's destination rich network and creating that seamless service

to create some supply chain solutions and shipment options that shippers can't enjoy today that are not possible without this combination that's what's going to drive -- and it's across all buckets. it's not any one business unit it's taking trucks off the highway, putting them on the rail, which is not only going to help the railway overall, it's going to help the trucks it's going to help the highways. it's going to be positive for the environment. it's going to drive job growth it's ag product. it's chemicals it's energy. it's automotive. it's all four of those areas that make up that in a very diverse opportunity for this company. >> and certainly this all comes amid a backdrop of not only an ongoing trend of near shoring updated trade pact across north america as well, but pat, not a day goes by right now that we don't have a ceo on our air who is talking about transportation bottlenecks, supply chain constraints and the impacts it's having on networks and having on their own companies.

how is that affecting kansas city southern right now and the rail industry at large >> it's putting stress on all of us, but i think we're all focused on making the capital investment, improving the service to respond to that and a lot of this, as you know, has been driven by just a massive and very rapid shift in how consumers are spending their money. they're buying things instead of spending on experiences. so it's challenged all of the, you know, supply chains, all modes of transportation, and i think the -- again, the -- we talk a lot about the advantage of single line service, maybea lot of people don't understand that, but when we can run a network across the entire continent that has a common operating philosophy, common long-term capital investment policy, the utilization of equipment and resources, that just eliminates a lot of opportunities for cost and time to be added to these supply

chains so this north american footprint is going to be very attractive, i think, to address those supply chain issues in the long run once we get to the point where we can integrate and actually attract investment to north america. >> all right we have to leave the conversation there, but gentlemen, thank you so much for joining us today patrick and keith creel. >> thanks for having us. take another look at the futures here as we kick off this thursday sessionmen upgrades of doordash and cisco, a new street high on chipotle, down dprgrade ofeyd at bonme and downgrade of some macao names facing pressure once again facing pressure once again don't go anywhere. and bonds are made between us. where we create things together. open each other's minds.

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the opening bell just a few moments away, the index futures are mixed. the dow looking to follow yesterday's gain with some slight upside. be right back.

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we've been talking about the spacex launch, but the news is not all good for elon musk today. published reports say two of cathie wood's arc funds sold more than 81,000 shares in tesla yesterday, representing a value of about $62 million so far this month, arc funds have sold about $266 million worth of tesla shares, which is already an outsized proportion of the overall fund. >> yeah, exactly in a flagship fund i think it's still over 10% in the past arc has come up against position limits where they trim back on tesla. also, it's an actively managed etf without a lot of cash position you have to sell something usually to buy something unless you have big inflows that seems to be the reshuffling. tesla's stock started off pretty well off those lows.

it's worth noting. about a year ago it was around 400 as we can remember back to those times before it was admitted to the s&p 500. >> yeah, actually auto did pretty nicely yesterday as well. >> a strong week, yeah. >> volkswagen today does say that the chip shortage they see lasting into the second half of 2022 there's the opening bell, and the cnbc realtime exchange, it's identity security platform forage rock celebrating an ipo today at the nasdaq. procept, biorobotics, a surgical robotics company got to take a moment to mention the ipos yesterday, all but one had gains of at least 40% as the market's absorbing some of these new issues. >> yeah, a couple of buzzy consumer oriented names with a little bit of brand resonance, dutch bros coffee and on running, i think, it was service running shoe company. >> on holdings, yes. >> on holdings

we have seen a handful of these. on balance ipos have actually motte been great performers. it's kind of been half and half in terms of 2021 vintage ipos, especially some of those consumery names, whether it's like a krispy kreme. i think it's one reason long short hedge funds have a little bit of something to work with this year between spacs and some of the ipos that come out looking a little bit over ripe they've actually made some hay, but yesterday a very good performance. a very caffeinated group at the "closing bell," i can tell you that. >> i can tell you that >> at the opening, you're going to be led by some financials as we keep our eye on yields, but the banks are going to have a very nice morning along with some travel names as we work our way through some of the internals of the retail sales. the bottom line suggests delta fears aren't stopping people from spending some of their abundant cash on goods, even as they retreat from services it will trigger a wave of

upgrades for forecasts for q3 consumption and gdp growth, which has been trimmed. >> it absolutely has most of the atlanta fed, realtime gdp numbers down below 4%, 3.7 for this quarter a lot of folks basically saying take down third quarter, maybe bump up fourth quarter for next year that gets to the point where we're talking about mostly spending deferred, not spending eliminated from are the future and again, it's because of the high savings across the economy and the personal income growth that seems like it's able to bolster things you know it's going to change the pace it's about the pacing of the economy more than anything else and whether things like energy costs as we get further toward the winter are going to be at least a psychological impediment a lot of people are pointing to this sort of, well, remember in 2011 we had a fragile recovery red we didn't know what the fed was going to do. we had debt ceilings shenanigans in 2011 and oil was going to 700.

that all together gave you a recession aftershock scare the policy situation right now is so much more generous you have household balance sheets in great shape, there's no solvency issues it's a very different environment. i think there's still that echo of what we were dealing with, and even if it's a pale version of it. $100 oil ten yearsago is a lot higher than $70 oil today. >> yeah, people will point out we've never had a recession really where you didn't see $100 crude, but to your general point, greg has a great piece in the journal today basically looking at the success, maybe not of health policy in this country, but fiscal policy and economic policy says it's -- we're in a much healthier place than we could have imagined in spring of 2020, and that's worth celebrating. you saw some of the dow leaders there, amexis in the lead. number two, cisco updated at

credit suisse and added to the focus list of jpmorgan on the heels of that investor day they say the sentiment's been cautious but that's going to change as they kpe caexecute on their long-term guidance >> our supply chain team is rated number one in the world by gby gartner, not in the industry but the world. we're doing everything we can to meet our customers' needs, which is the most important thing we see. we're definitely revenue constrained right now because of the supply issues that we're seeing and the component shortages. >> that's going to tailor almost every bear case in some element of tech. >> without a doubt cisco, i mean, as a company the way the stock is valued, it doesn't need some kind of dazzling growth story. 5 to 7% top line guidance over a number of years. similar earnings growth, heavy free cash flow generation. it's a 16 times earnings company. all it really needs is some confidence that those things can

be met and that you're not going to have some kind of gdp shock along the way because cisco is more sensitive to global demand than we thought back in the day. it seems to be working pretty well it's kind of this shareholder yield story, both dividend and buyback is pretty much at the core. >> i know you were looking at the cmg call. >> yeah. >> as piper puts a street high what's their target? is it 2,600 now, they were at 2235. >> it's sort of fascinating. the stock has worked remarkably well it's gotten this embrace by investors who basically say it's one of the elite consumer growth stories along with whatever it is, nike and starbucks and things like that, but you have to strain to get further aggressive upside price targets from here. i mean, i think the consensus price target is right at where the stock was trading around 1880 to get to those levels of 2,600, you're talking about a target multiple of 47 times next year's

enterprise value to ebitda, to cash flow. the stock has never really traded it did very briefly last year in the comeback for the lows. you go back 18 years since amazon traded there. nasdaq traded that kind of zone for a few years in the late 2010 my point is it's like the elite kind of valuation, but the core case is that they have so much runway to add stores and it's so rare to have one of these companies as great returns on capital, all that growth potential, and all that consumer loyalty, and everything working at once. final point is, it's 52 or $53 billion market cap there aren't huge cap restaurant stocks like, if you -- mcdonald's is 180. there's not a lot of them. it's got this almost scarcity value of large cap or mega cap, you know, kind of restaurant concepts that are working. so that's why i think you can -- you have to get aggressive to say buy them here. >> yeah. speaking of restaurants,

doordash is up almost 4.5%, the highest since february as we get an upgrade over at b of a, they go to buy target 255, talking about the non-restaurant tam, mike they believe that over time you're going to get things that are non-restaurant, non-food applicable retail, they see going from 2% to 10% in the next say five years, but you know, the headline risk is there, whether it's amazon or lawsuits with new york city or what have you. >> it feels like it's sort of chasing the stock, which it really has come back from the depths, you know, early this year i don't think it's changed the overall story of do we really know exactly how great a business this is, longer term? you're doing the hard part, you know, you're trying to pay people to do the last few hundred yards of delivery. fair enough that the total adjustable market is very large and growing and people are in

the habit of doing the post mates thing. i just -- you know, you have to wonder about what the economics look like, you know, down the road but again, not that many claims on the pure convenience delivery economy and doordash, you know, is one of them. >> the other headline making some news today is mars k, shipping giant raising their guidance on the tail of longer delays in shipping and higher at least spot rates, which some have argued are peaking. we're going to get fedex next week as well, going to give us another touch point on where we are with supply. >> shipping stocks have done very well. that's kind of percolating through. there's absolutely a kind of global reflation theme under the surface between what's happening with energy. again, it's the supply story in large part, plus the shipping piece of it. so what's friction and margin squeezing for a lot of companies is obviously working to some benefit to those other.

>> we are getting some breaking news out of the fed, eamon javers has it. i'm going to guess it involves somewhat ylan mui, i'm going to guess it involves some of the ethics rules behind holding what fed officials can have. >> the federal reserve is announcing that it is examining its ethics rules for financial holdings after two fed presidents came under fire for some of their financial transactions in a statement the central bank said that chairman jay powell has directed staff to take a fresh and comprehensive look at the rules to identify ways to tighten those standards and that it will make changes as appropriate to the fed's code of conduct. the fed also said the trust of the american people is essential for the federal reserve to effectively carry out our important mission. now, of course dallas fed president robert kaplan has faced intense blowback over millions of dollars of stock trades last year and boston fed president facing criticism from his state and several reits.

both have pledged to divest those assets just today democratic senator elizabeth warren called on the fed to prohibit officials and staff from trading individual stocks we will see how far this ethic review goes. the central bank announcing today it will be examining its code of conduct and looking for ways to tighten standards. back to you. >> interesting on the heels of that controversy in the last couple of weeks, ylan, thank you. that's our ylan mui. what else strikes you today. >> >> going to watch the energy sector a lot of the technical work is saying, okay, this actual rebound might have some lags, not so much on crude itself, but on the stocks, and it's an area where i do think that, you know, you want to see if, in fact, we're going to rekindle and swing back towards some of that cyclical mode. it is the consumer stocks that are taking their cue out of the -- you know, at the jumpof the retail sales number.

synchrony financial is a good one to watch, which of course is credit cards that's one of the leaders in the s&p right now as well as gap and bath and body works and discover so the consumer credit names got the amex upgrade the market reveals itself in terms of what it was worried about two hours ago which was that maybe the consumer was a little soft. >> one last thing i would add we didn't touch on is macao jpmorgan today they do cut wynn and las vegas sands to neutral this idea could have impl implications for patron spend as well, mike, they say as reduced ability to repatriate free cash flow back into the u.s. if and when that looks like it's doable. >> exactly a lot of stuff that people figured wasn't going to have to be an issue for a while, although they also do say that they don't believe sort of a relian

relianciiiiiing story, if you're coming in and saying we're going to downgrade, it's fine. you basically have to say it's too hard to figure out what comes next they're going back towards march 2020 to existential threat level. we'll see if there's some final purchase often been this thing with china, you know, crackdown type stories where they're sort of like first the stick and then the carrot or the bad cop first. >> there's not. >> it hasn't let up. it hasn't been like we got our point across, now we're going to actually let you go back to business hasn't happened. >> just one reason why tencent is now out of the top ten globa companies, meaning no chinese company is in the top ten global list. >> which is stunning given how a few years ago china fought so hard to make sure the shares went into the index and it was considered to be the signature moment they were going to be recognized in the global equity complex. >> dow hanging on to 35 points this morning let's get to bob pisani.

>> flattish open despite the fact that august retail sales and notably philly fed much better than anticipated. let's take a look at the sectors. it's not that bad so far in september. we're down about 1%, banks up today as yields are up a little bit. but banks have been really sideways since february, not a big momentum player at all we see apparel doing better, auto doing better as well. industrials kind of disappointing, a little flattish, big names, your honeywells, 3m not doing much at all today. tech is down because there's some weakness in semiconductors and china is just a mess forget act the casinos they've got some other big problems i'll get to in a minute here the thing i'm most concerned about is we've been seeing a very slow deterioration in the advance decline line that is very closely watched by technicians as a sign of when you have either near-term or long-term market tops. about 15% of the s&p 500 is 20% below their 52-week highs.

that's kind of a significant number more so if you get deeper down into the lower market caps, about 30% of the s&p mid cap and almost half of the s&p small caps are 20% or more off of their 52-week highs, and this is largely, as you would expect, sectors that are exposed to the reopening story where in some cases they're reconsidering the extent of the reopening around the covid varniant obviously travel stocks like airline stocks have been weak, but fedex is 20% off its high. some of the big material names like dupont, also ppg is 20%, caterpillar, stanley black and decker, lockheed martin, 3m about 12% off the highs. with the s&p 1% off its high, these are fairly significant same with the retailers, they topped out many, many months ago in the earlier part of the year and some of these like nordstrom

significantly off the high, kohl's, ross stores, discounters always do a little better, but still this is a not a great performance considering how well they were looking in february and march of this year the china slowdown, particularly the decline in retail sales around the covid concerns, it's really affecting the ruksluxury retillers, kerring, tapestry, richemont. lvmh is one of the biggest companies in europe. it would be a top 15 if it was in the s&p 500 that is weighing on many of the european indices homebuilders also weak we've seen supply chain and labor problems affecting the ability of some of the homebuilders to fully deliver on their orders so pulte had that issue. we see them all off about 11, 12, 14%. there's been concerns about drug control prices from the biden administration this is a completely separate issue to covid that's been weighing on big pharma and these have big market caps that's another sector of the market that's been weak

recently so there are pockets of problems here even though technology and communication services continue to hold up finally, around china, i know we're a bit concerned about the casino stocks. i just want to point out what's going on with ever grand this is one of the probably two largest property developers in china. huge, huge company, and we're talking about $300 billion in debt out there, and there's a lot of concerns here that's weighing on the chinese market there this is an issue for the high yield market globally. a lot of people have gone around the world trying to get high yields, even higher yields than they're getting in high yield market in the united states, which is below 3% right now. so you want to keep an eye on this it's not easy to get exposure to china, high yield, there's not many that do hyem, some of the emerging market high yield funds. i don't think there's a big contagion around this. just be aware carl that a lot of people in the united states have been going overseas trying to find high yield and this could be a potential issue back to you. >> all right, bob, thank you

bob pisani when we come back, how some space stocks are moving after last night's historic spacex launch get a look at bond reports, see how treasuries are faring on the heels of jobless claims. got the ten-year back up almost to 135, dow has gone red, though we're down 50, and we'll be right back

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the street." on the heelts of last night's historic spacex launch, a broader look at the movers in the space sector we will start with virgin galactic which is the other, i guess the publicly traded space tourism private space travel name that is trading higher right now in sympathy to very different types of flights virgin galactic is suborbital and lasts minutes. what we saw last night from spacex is multiday and orbital spaceflight. nonetheless, it all speaks to this major milestone in this

long anticipated process of the democratization and normalization of space travel for everyday people. some of the other names, many of them newly public in the rocket space right now, astra space, rocket lab, moving as well boeing is trading about flat obviously, the commercial piece of boeing's business tends to get investors' attention a little bit more, but they have the space portfolio. they are a direct competitor to spacex where these types of orbital missions for nasa and ultimately potentially private spaceflight are concerned as well lastly, i want to point out shift for payments this is the payment processing platform created and run by jared isaacman, the inspiration and commander, the man who basically created the mission that we are now covering today as you can see there, those shares are actually trading higher as well guys, and perhaps it's because he is now adding astronauts to

his list of street credentials and this mission is going successfully coming into it, we saw the shares under a little bit of pressure lastly, in the 10:00 a.m. hour, the next hour, we will be speaking to another man who has astronaut as a credential, and that is the nasa administrator, bill nelson. who probably more than anybody else can speak to some the sensations and feelings that these civilian astronauts are feeling right now in space. >> it's nice to have an administrator who knows what it's like. no question. we look forward to that. dow's down about 33 points here. we continue to process some eke t eco data and analyst calls today. more "squawk on the street" more "squawk on the street" continues in a moment. [aflac!] you know, aflac can help keep unexpected healthcare costs from ruining someone's finances. check out this coverage... you still got it coach, you still got it! i never lost it! yeah! [aflac!]

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so-called mega roth i.r.a. retirement account robert frank to explain what it is, what might come of it. robert. >> good morning. this is a retirement tool designed to help the middle class with a secure retirement instead, it's also become a popular tax shelter for the wealthy. now the house democrats, well, they are taking action a number of iras with more than $5 million in assets has tripled over the past decade to 28,000

those with accounts over 25 million now have 53 billion in assets the latest house plan includes a series of measures that would bree vent the wealthy from using these for their own benefit. first of all, it would effectively limit i.r.a. accounts to $10 million. once the balance reaches $10 million, taxpayers can no longer make contributions. at the balance of your i.r.a., roth i.r.a. and defined benefit plans total more than $10 million, you have to distribute half of that over 10 million until you get the balance down finally, the rules close the so-called back door roth i.r.a to get around the income limits right now on roth iras, wealthy safe ers were contributed to iras and converting them into roth iras. the new rules prevent those who make more than $400,000 a year from those conversions the house also seeking to limit

the kinds of investments you can put in.r.a "propublica" revealed peter thiel placed private shares of paypal in his roth i.r.a. which grew in the largest tax-free i.r.a. ever at $5 billion. carl. >> wow between the iras and et cetera, tax discussion on this bill is getting interesting. thank you. watching the markets here. a little bit of a drawdown since the open dow's now down 71 points back to 4465

♪ good thursday morning. another hour of "squawk on the street." i'm carl quintanilla with mike santoli live at post 9 of the new york stock exchange. morgan brennan is at the kennedy space center following spacex's historic flight. david faber has the morning often. retail sales above expectations but the markets having a tough time repeating the best day of the month yesterday. dow's down 95. business inventories are out rick santelli's got that hey, rick. >> yes, inventories are a very important aspect of trading

these days we are all monitoring some of the low inventories, especially in front of holiday season so the july business inventories coming in as expected, up half of 1% is a solid number. if we look at the entire year, it really has been all positive numbers, the smallest was in april up 0.10 of 1% as we try to replenish various parts of the pipeline of inventories. last month up 0.8 to 0.9 another thing up today, interest rates and energy prices. we want to pay close attention 1.34% on a ten-year, the area to monitor around 1.37 to 1.39% that zone is considered the best resistance, which means should we get above that area, maybe look for hotter interest rates mike. >> jthank you. we are 30 minutes into the trading session. here are three big movers we are

watching starting with cisco shares, they are rising a day after the company's investor day credit suisse saying cisco poised to execute on the long-term guidance while ramping the recurring revenue streams. jpm as well. it opened up a quarter of a percent. bank of america updating doordash to a buy based on upside to 2021 estimates as well as a robust five-year growth opportunity add ad to go the recent gains up. 6.5% beyond meat getting down greed to underweight the stock now down 15% year to date close to 5% this morning carl. >> let's get back out to morgan brennan in florida good morning again. >> good morning, carl. it was a perfect launch for spacex all-civilian mission last night. the twice-flown falcon 9 rocket lifted off just before 8:03 p.m.

eastern. jared isaacman, hayley arceneaux, sian proctor and chris sembroski are currently orbiting earth at an altitude about 363 miles. >> this is higher than the space station, higher than hubble. for spacex this is the fourth crewed mission in less than a year and a half since it began transporting people in the midst of a pandemic no less. three distancing capsules are currently in orbit spacex dominates the launch market half the u.s. licensed launches so far this year inspiration 4 is orbiting the globe every 90 minutes, travel at more than 17,000 miles per hour it will last three days with an expected splashdown off the florida coast sometime on sunday so in a year of billionaires and private citizens going to space this is really historic, it is ambitious. rbi's richard bran's virgin galactic

traveled 50 miles. jeff bezos similar with blue origins, 11 minutes to 62, both three times the speed of sound another key difference, price. so galak lick $450,000 now for space tourism tickets. blue origins hasn't disclosed but some say the high six figures or low sevens. we don't know, guys, how much issacman paid for this spacex mission in addition to the $200 million, including $100 million he personally contributed for st. jude children's research hospital but what we know is that another private spaceflight startup axiom, which is contracted with spacex is $55 million per seat for those early customers with that first launch, first mission, i should say, expected to happen early next year. lastly, look at shares of shift four this is the only payments processing platform run by issacman those shares are trading higher

today, too. >> to be clear on that, do we have a kind of chain of logic as to why the payments processing company stock should be up based on, you know, the founder going into space >> i will say -- >> in other words, theres no space travel connection. >> there is no space travel connection per se. what i will say is that we have seen reactions in this stock based on news aroundi issacman since this was announced seven months ago i have been speaking to him through that process on our air as well. i have been keeping a close eye on it. from some of my previous conversations with jared isaacman who got barely any sleep the last six months given the training for spacex and this mission and of course his day job running shift four, he has said even though it was never the intention and not part of the plan, that it has, this process has raised awareness for shift four and meant more prospective customers as well.

>> got you all right. well, we are in that kind of a market morgan, thanks very much talk you to again soon. plets e let's stocks moving lower as the s&p on pace for th first positive week in the last four it could correct up to 15% in the fourth quarter barry banister and citi national rockdale chief investment officer tom galvin good morning to you both barry, we have seen some indigestion in the markets the last couple of weeks, below the surface for longer than that if you look at the value and cyclical stocks. what do you think would be the trigger or storyline that might create the kind of potential downside that you are anticipating >> yeah, we've been negative on the value cyclical and small caps since the summer and like the defensive sectors and industries and that call has been right but our market correction call has been wrong we to see the pmi indices

falling off sharply in the fourth quarter third quarter should be okay we also think that the broad dollar, which is overweight, the chinese currency, that's going to strengthen, and the chinese will cut rates by the end of the year that has a disinflationary effect it would cause oil to pull back. if your ten-year yield is sticky here in the 1-3s and your inflation s fall yield goes up and that will squeeze the market so all these factors should coalesce along with covid in the northern cold states coming back after this lull in the south as negative event as we get into october 31st we will find out halloween if we have a trick or a treat. >> yeah, i was going say that seems to be pretty core to this idea that in fact, you know, if investors are now saying, oh, we might actually be in a little bit of an all-clear moment when it comes to the latest surge, you think we are actually in for

another one? >> yeah. if you look at what happened in 2020, we are still a little bit aways from herd immunity, even if you include totally vaccinated population or a percentage basis, which we analyzed at the state level as well as asymptomatic infections that weren't reported and then, of course, symptomatic infections, if you add it together, the northern quarter of the united states, the top right quarter of the united states is next just like it was in 2020. the summer popped up in july if you recall, in 2020, in the south, mid-south and southwest, then it tailed off into the late summer and then the north came back so no reason not expect that we will see how people react >> yeah. tom, how would you be playing this period right here where the overall s&p 500 has had really just a little bit of a 2% wobble, but about half of all stocks really have corrected much more seriously and would you be getting more or less

aggressive >> yes we are viewing any pull-backs in the broader market as a buying opportunity. why we think that is based on several factors. firstly, the s&p 500 has been on a historic tear. it's doubled in about a year when normally one sector of the market takes several years for that it occur. there has been in rolling correction, mid small caps, tech stocks earlier in the year cyclical stocks as barry just pointed out. and there are some real potential grinchs that may want to steal christmas this year covid, a winter surge i think has to be expected taxes are going to go up china uncertainty continues to be there hedge funds may look to, you know, the end of september, let's lock in the gains this year and put some selling pressure in the market can't rule that out. people have been talking about it though. so i think that could help

moderate what the pace of the k decline is we think 5% to 10% pull back panneback ac. >> what's the answer for the kind of environment that you are looking for right here in other words, we have seen the overall indexes be supported by the mega-cap growth stocks that sure they are expensive but they act as defensive plays when things get a little stressed >> they do but there is a cyclical aspect how long do you delay the iphone upgrade? that affects hardware. software is a capital decision particularly in the cloud and it's been strong, of course, but corporate cfos and capex, the confidence of ceos and capex typically go together. and so i.t. is still a bit cyclical it's been lulled into being portrayed as noncyclical because of covid

one thing i want to say about earnings, second half revisions are probably going to be down t took one year to go from below to above the 25-year trend for operating earnings in the past after the '01 and '08 recessions t took three years. everything is v-shaped including this time elapse today 100% gain we are already mid-cycle and it will be interesting to see how the second half pans out >> for sure. tom, just before we go, what are the select areas you mentioned if we get a little bit more of a pronounced pull back thaw prefer to buy >> i have a more optimistic view than barry about earnings in the second half of the year. i don't think we will see the explosion in earnings that we saw in q2. i think there will still be slowing in the face of growth, but growing. so the areas that i'm looking in -- to put cash to work f we get that buying opportunity, is continue to stay in the u.s.,

which we remain overweight mid small caps, which have been lagging are setting up nicely for a nice out performance in 2022 we are getting through this period where they have been surprising to the downside forecasts have been recalibrated and i think mid small cap stocks will do great next year. thematically, i am continuing to like the normalization of consumer activity, starbucks, hca, for example, the digital revolution i think it's going to continue as a strong secular trend. adobe, semiconductor, i think they will continue to be great stocks in particular, taking advantage of some of the laggards that have been occurring in the market during this corrective rolling, corrective process, particularly in the travel area. we like mastercard, expedia, disney, and i think as we look out a year from now interest rates will be higher, banks will be higher and jpmorgan and ally

financial. >> all right plenty of laggards to look among, tom thank you very much, tom and barry. >> thank you as we go to break, a look at the roadmap the rest of the hour including retail sales posting that surprise gain as consumers show strength despite the delta fears. >> and the country's largest real estate financing firm we will talk the return to work trade with the ceo of marcus. and a lot more on yesterday's launch in florida with the administrator of nasa, bill nelson, as "squawk on the street" continues. street" continues. dow's down 111 we can explore uncharted waters, and not only make new discoveries, but get there faster, with better outcomes. with app, cloud and anywhere workspace solu vmware helps companies navigate change-- meeting them where they are, and getting them where they want to be. faster.

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comcast business powering possibilities. cnbc out with a new survey asking americans about feelings on covid vaccine booster shots meg tirrell has the results. good morning, meg. >> good morning, mike. all off this comes before the fda's outside committee of vaccine advisors meets tomorrow to discuss pfizer's booster application. before then we wanted to get a sense of how people are feeling about these, how many plan to get them we did a survey with die nate a and we found that a a lot of americans have already gotten booster shots. cdc data says 1.86 million americans since they were authorized for just people who are immunocompromised, but polling data suggests it's more than that, between 4 and 16% 16% being the dine eight a findings we asked people if they plan to

get the booster, 82% said they will, 14% unsure 4% said definitely or probably will not were people thinking about changing up brands even though it is probably not going to be the recommendation until we get more study data on that? 79% said it's important to them to stick with the same brands they got the first time, whereas 21% said it's not important. in terms brands, pfizer is the most popular. however, that may have something to do with the fact that the most people got pfizer the first time around and plan to stick with that. moderna is the in ex and then johnson & johnson. in terms of switching away from the brand, even though that's probably not going to be recommended at first, the most people who got johnson & johnson are the ones who want to switch to another brand 25% of people who got j&j the first time compared with 4% for pfizer and moderna it's going to be a week of talk about whether we even need boosters and then seeing for whom they are recommended starting with tomorrow, this fda

meeting on pfizer and continuing to next week guys. >> meg, we can't wait to get some of that information in the coming days. meg tirrell talking about boosters there it leads us to a discussion about office occupancy still well below pre-covid levels this week new york city requiring the more than 300,000 municipal employees to return to the office full time as a growing list of companies push back their ipo return date marcus and million chap says the disruption could last for an extended period of time. the ceo joins us this morning. welcome. good to talk to you. appreciate the guidance. certainly we have seen a lot of pushes to january and in the case of others like microsoft not even putting a date on a full return. how much momentum do you think that's taking away >> quite a bit, actually there is a lot of enthusiasm for the return to office that is now delayed, as you said, carl more important than that, people are trying to figure out what happens even beyond the next six

months or so when the delta variant, hopefully, works its way through the system and we come out of it with some kind of a solution which is expected to happen anyway we are going to have speed bumps after a global pandemic. and around that topic or discussion, we are for sure hearing from our clients, major office owners all over the country that they are expecting less office demand in the short term, but as the economy comes back and you have new business formations, which as you know last year was at record levels, we will see new companies form we will see new expansion of space demands and, therefore, there should be an offset behind the current delay. >> i am looking at this list here of cities with the strongest office demand and those with the weakest so on the strongest, it's boston, it's austin, nashville, names that make sense. weakest, new york city, sadly, number one d.c., chicago

what do you think makes the difference between what list you end up on? the difference between boston and new york, you would think, the differences might be negligible. >> you're right. it has to do with the size of the central business district. it has to do with the amount of public transportation that really drives the amount of workers that come into a central business location. of course, the nature of the office using jobs. the differences aren't that much it's not like those markets are on fire and new york is completely lagging we have seen a lot of improvement in new york. we have seen a lot of improvement in other lagging markets like d.c. or chicago it's just that they have a bigger problem to solve, if you will, because the pandemic had a larger impact on a bigger market >> the idea that down the road this is creating more demand because of new business formation and people anticipating a return to normal, how does big companies rethinking their overall space

footprint play into that the idea perhaps that they will have fewer people in the office in some cases longer term, maybe playing against the fact that they want more space per person? >> you know, what we are hearing mostly from our clients is that there is going to be a need for plenty of time in office for collaboration and team interaction. everybody wants that, whether it's the employees or the employers. and there is no doubt that there is going to be a high degree of pent-up demand for that in person collaboration the space configuration to accommodate that, team space, meeting space, collaboration space is overshadowing the need for typical offices, individual offices and cubicles, so that the use of space is starting to get reshaped as well as the fact that if you have this hybrid notion as a lasting strategy where people are in the office, let's say, three days a week, but can work virtually, remotely a couple days a week, that

spells a return closer in to central cities where during the pandemic we saw people flee and go to the suburban markets orator sherry locations. you are having to come in the office two, three days a week, you need to be fairly close. from a housing perspective, that also plays into the fact that urban market housing had become very expensive now those rents have adjusted and especially the younger workers are now getting more attracted to coming back closer into the urban markets so you have a lot of fighting dynamics meanwhile, as an investment, commercial real estate is one of the most attractive investments this year. so much capital flowing in with the exception of office space. buyers are reluctant until they see more evidence of all of these dynamics play out. >> although the journal in week did a piece on pimco, for example, ramping up its commercial real estate holdings trying to make up for low rourns on corporate bonds and so forth.

are you being aggressive, would you say? and is the industry overall looking to be aggressive given opportunities that may come up >> we are as an industry, and the reason for that, carl, is because you have a lasting economic recovery with some speed bumps, granted, you know, the delta variant and all that but there is almost $5 trillion of excess capital that has been created as pentup demand that will eventually get released into the economy incredibly low interest rates. buyers are in the market taking advantage of low interest rates way ahead of the recovery. whether it's apartments that's really viewed as a safety investment because it performance so well or shopping centers that are viewed as a turnaround and reuse strategy, which is very popular right now with so many of our clients, are seeing record amount of trading. so the investment market is looking beyond this current cloud, if you will >> right that's generally what they are

paid to do we'll see how that works out really good insight. we're truly grateful good to see you. thanks. >> thanks for having me on the program. a quicklook at the markets not too far above the lows for the morning. down about 0.6% on the s&p 500 the low for the week a couple days ago the s&p # 4436. the nasdaq is the deerrm far this morning. we'll be right back. if you're 55 and up obile t 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. isn't it a paradox? that the love for this world that gets us out in it

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let's get to the "etf spotlight. a look at the continued weakness in chinese tech. dom. >> carl, traders and investors continue to struggle with whether or not things have gotten bad enough for the big tech stocks in china so if you check out the action so far today, alibaba, pin duo duo, jd, amongst others. the u.s. listed shares of those companies under pressure all morning long as the chinese government's continued pressure to do more to promote societal well being pushes equities in the world tech to the downside one of the biggest et cetera, t

etfs, ticker kweb is down today, half a percent since the peak earlier this year. it lost half its value currently a six-day losing streak and the regulatory woes aren't localized to the technology sector the casino stocks, bigger operations in china, some of these have those analysts at jpmorgan, shares of wynn, las vegas sands, neutral to overweciting lack of charity how possible new regulations on gaming companies could affect their ability to bring home cash to the u.s. from macao wynn has lost two billion in market cap in the last few days. las vegas sands lost around 4 billion in value in that same time keep an eye on the casino stocks now back out to the kennedy space center to morgan brennan she is enjoying the great outdoors back over to you. >> that i am, dom. thank you. after the break, do not miss an

interview with nasa administrator and astronaut bill nelson we're back in two. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

♪ welcome back i'm rahel solomon. at least three people have been killed and dozens injured after a 6.0 magnitude earthquake rocked china this morning in the southwest province search and rescue effort are still underway. a pair of wildfires burning in the sierra nevada mountains threatening to destroy some of the world's largest trees. the national parks service closed sequoia national park and evacuated staff due to the first. 6,000 acres within the park have already been burned. the capitol police taking extra precautions ahead of this weekend's rally. fencing has already been reinstalled around the u.s. capitol grounds.

far-right extremists are expected to gather and protest the ongoing criminal charges against those involved in the january 6th capitol riot. and russian president vladimir putin will remain in isolation a few days after dozens of people close to him tested positive for covid-19 he is fully vaccinated with russia's sputnik v back to you. thank you. well, it marks a new era for space travel spacex launching the inspiration mission into earth's orbit crewed entirely by private citizens space traveler and space company creator richard branson tweeting, congratulations to elon musk and the spacex crew. another great moment for space exploration. well, for more on this historic launch joining us is nasa administrator bill nelson, himself an astronaut administrator nelson, great to have you back on t the fact that fewer than 600

people can call themselves astronauts and have been to space. we can add the four crewmates of inspiration 4 to that list you are on it as well. so i guess just thinking back to 1986 and your own columbia mission as a lawmaker, i hate to use the term, an amateur or civilian astronaut, what do you think that experience was like for the citizens as they made their journey last night >> well, it was incredible now, i had the opportunity to go and train with the crew at the johnson space center and to do 12 medical experiments that were a part of nasa but what they experienced last night and will for the next few days is an incredible experience as they look back at earth they see how beautiful it is and yet how fragile it looks, and i

hope that they come away with one of the conclusions that i had, is that i became more of an environmentalist going into space and wanted to be a better steward of what we have when i returned to earth. >> you know, i heard similar comments like that from both jeff bezos and richard branson in recent months on the heels of their suborbital spaceflights as well i realize this was a fully private, fully commercial mission to orbit, but it involves the dragon capsule, which nasa partnered with spacex on, and actually funded to the tune of $3.1 billion for the commercial crew program for nasa so how does this speak to, i guess, the evolving and growing relationship between the government and these commercial space companies as we continue to see this new era open up?

>> we are encouraging commercial activity in space. as a matter of fact, it's the law that senator kay bailey hutchison of texas and i passed 11 years ago settingnasa on this course of a commercial track as well as a government track. and you're exactly right, morgan the development of this spacex capsule, the dragon, was a joint venture because when it comes into flying human beings, nasa is all over it because ofthe safety and, therefore, that was a joint partnership to get spacex to where it is that now it can fly our nasa astronauts to and from the space station, which, by the way, with the competition there, has become cheaper as well as the

inventitiveness of spacex in reusing the first stages, it's become cheaper, it's more efficient, it's more economical, and nasa makes sure it's safe. so this venture, which is unrelated to the international space station, they are just in orbit for three days it is, as a result of this public/private partnership >> certainly, we are seeing more of those public/private partnerships being struck, including some of the contracts for some of the future hardware around the artemis program as well i am curious though, administrator, how you think the regulatory environment continues to evolve alongside this i realize the faa is the regulator for some aspects of spaceflight, but overall, whether it is international treaty making or whether it's rules and regulations and new

guidelines from an american perspective and a policy perspective as we continue to see the space economy open up with private sector, i guess, spearheading so much of this, what do you think that turns into >> well, spaceflight is risky business so the government of necessity has to be involved in a regulation first, for humans. secondly, on launches, for example, that the public is protected and public assets are protected. but what the whole idea of getting commercial companies in space is let them loose. threat them be creative. let them be inventive. come up with new things to do in manufacturing in space i think eventually we will see mining on asteroids, come coming up with new kind of rare, exotic

materials that we can use on earth. so it's what you have to use is common sense in the process of the public/private partnership >> it will be interesting to see how all of this plays out. i always like the idea of rare earth materials coming from off of earth administrator bill nelson, thanks for joining us today. >> thanks, morgan. as we go to break, some of the biggest laggards for the week a lot of stay at home there. zoom video, peloton, ea, watching jd.com as wl. w's down 136 w's down 136 stay with us you can act quickly. that's decision tech, only from fidelity. hey look. we're twinsies.

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retail sales posting a surprising gain this morning courtney has more. >> it was a positive surprise. the commerce department says total august retail sales grew 0.7% from july or 15% year over year stripping out autos, auto parts, core retail sales grew 0.8% economists forecast 0.9. compared to august 2020, year over year, core retail sales gained total july retail sales are now down 1.8% from month prior, which was june non-store retail or online sales up 5py 3% in august from july. furniture, home good sales stores, those gained 3.#% over last month more than 15.5% over last year

general merchandise sales up 3.5% from july 15.5% year over year department stores up 2.4% in august from july but up almost 29% over last year electronics and appliances fell more than 3%, but still up nicely when you compare to 2020. capital economics read the details as a cautious signal saying the breakdown shows that it was driven largely by a big 5.3% month over month increase in nonstore speeding perhaps delta driven fears pushing consumers back to shopping from and eating at home still though the retail etf, the xrt, up 0.8% today now 1% that is outperforming the broader market fall. back to you, carl. >> wow, thank you, courtney. watching retail sales today. for more on that, joined by

rebecca. great to have you back thank you for the time. >> thank you for having me, carl. >> going into this particular economic data point, the thinking was that delta would have kept consumers from buying goods because there was simply fewer occasions to go out. directionally, does this make sense to you >> not at all. i think we are seeing increases that are getting us closer to the numbers we were at in 2019 and we're seeing retail stores like sacks, bloomingdale's, nordstroms saying they are increasing door dounts because the customers she wants to shop and she is going out, even if she is a bit more cautious when she does. >> do you worry at all about, for example, theics peration of some of these enhanced jobless benef benefits or anything that might curtail consumer cash flow and make them more cautious in buying goods. >> i think the consumer today actually cares more about brands than stand for something and are not something that's gonna, you know, wear out in a couple of

months so i think while they are maybe more cautious about what could happen, they know that if they are supporting independent young designers or people that stand for something that they are willing to spend a little bit more, know they will have to longer i have customers have had my bags for ten years she knows it's going to last that i think is more important than something that falls apart very shortly. >> then how are you thinking about -- i assume you have been planning for the holiday season for a while now. but how are you thinking about inventory overall? and as you're thinking about it, what are you able to get we talk about supply chain congestion all the time. >> yes, we are experiencing a little bit of congestion at the port so there are some delays but i think for us we know from last year in coming back -- cutting back our inventory that we are comfortable with not having enough. we are comfortable with selling out. as uncomfortable as that can be, we think that's a better

position than to be risky and have an extra over inventory we have seen that last year again by controlling that, by cutting back, you actually let t whet the customer's appetite >> is uncertainty about return to office a drag at all? are you betting that in 2022 you are going to have people coming back into work and are, obviously, going to need a handbag of some sort >> for sure. i think that with our brand in particular, you need a handbag whether you are going to the office, out with friends, going to a wedding we are all occasions so i think the more that brands can make sure that they have enough of an offering, it's not just about go to work because that is so uncertain we saw even last year handbag sales were up 10% over the year prior. where was she going? nowhere. it was the promise and hope she

would be going somewhere soon. >> rebecca, the customer profile that you described somebody that's interested in the sustainable the or the kind of background story of how a product is made, maybe also would be attract today sort of secondary market that's become so popular in terms of pre-owned accessories, clothes, things like that. how does that play in at all into your business >> we have a huge secondary markets. it's on poshmark or "the real. we haven't engaged to partner in the way some others brands have. but we see a future where you can plug into our site, you can rent already on our site or borrow it. and so that's our sort of angle with it. but we do see, you know, an additional leg further down the line where you can actually potentially have a marketplace within our site to be able to do that directly and not with these other third-party providers. >> holiday is going to be interesting and beyond we really love getting your intelligence on where we're all headed, especially on fashion

and retail thanks. >> thank you so much coming up on "tech check" today we will talk to thomas peterffy at the top of the hour. meantime, dow continues to be weighed down a bit down 170 don't go away.

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this is pro competition, pro growth, no overlapith these networks it's happened in glove in kansas city we've colocated, co-owned and operated over 80 years this is the only two places where the networks touch not a single customer that gets left out 'not about winners and losers. it's about winners >> reporter: that was keith creel who joined us as the ink dries on the new and improved merger deal with kansas city southern, also patrick ottensmeyer. he's spoken with the media at least from a broadcast perspective since all of the deal-making drama erupted earlier this year. this combination creates the first ever and only fully

connected single rail line between the u.s., canada and mexico that is of course pending regulatory approval. we did ask about what that timetable is going to look like as well and creel expects the application submitted by the middle of next month and asked for a ten-month review process to get to approval, to implement this voting trust which is crucial to the deal but there is regulatory risk, we ask creel and ottenmeyer they say it will enhance competition and create the smallest of the class one r railroads combined and as you heard the idea of propelling more growth as it looks to take market share not just from other railroads but also from the truck market guys >> morgan, it was notable that the ceos over the course of the interview name checked literally every one of the competitors,

other railroads that are larger. >> reporter: that's right. >> they want to underscore the idea that it's essentially creating a counterweight toment so of the other companies but at the same time they want to pitch this unique network in terms of geography. >> yes, that's absolutely right and of course all of this comes amid the fundamental backdrop of what has become a very slow but steady near shoring and onshoring trend of manufacturing. you have updated trade rules here on the north american continent as well which will benefit railroads and then of course right now in the midst of congestion and supply chain and transportation bottlenecks, what being able to have one continuous network could mean for that process in the future >> interesting test of the biden administration's anti trust approach as well morgan. talk to you soon as we head to a break a look at the biggest laggards on the s&p 500 for the week, some of the casino names leading the way

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the dow down 0.75% retail stocks are higher on the august retail sales. small business supply chain issues continue to worsen ahead of the holiday shopping season kate rogers is here with more on that hi, kate >> good morning. the national federation of business is out with the latest covid-19 survey and the supply chain is disrupting operations on main street half of small business owners reported supply chain disruptions had a significant impact on business two months ago the number was at 32%. more than half of owners impacted reported the disruption is worse than three months ago and 86% anticipate these issues will continue for at least the next five months or more a quarter also reported that tariffs on chinese products have had a somewhat negative impact on business with 10% saying that they had a significant negative

impact on operations beyond supply chain issues the other major hurdle for operators are continued staffing challenges, 27% said they are experiencing a significant shortage and about half of small business owners say they're receiving fewer job applications than they were just a month ago. unfilled job openings per the nfib are at a 48-year record high the challenges are weighing on main street's economic outlook, the survey shows a quarter say they anticipate things will return to pre-crisis levels sometime in the first half of 2022 the supply chain issues stand to weigh on small businesses of course heading into the holiday season as they attempt to recoup sales loss over the last year. back over to you >> kate, thank you very much it's going to be around with us for months that issue. back down to morgan one more time before we close out the hour wra. it up from the cape. >> reporter: spacex is a $74 billion company, one of its most

valuable privately held companies in the world, nonetheless, when it comes to new space and commercial space, it is still essentialley as we saw in evidence with this historic launch last night, spacex and everyone else perhaps not surprising to see morgan stanley issuing a note about the milestone that spacex's inspiration 4 mission accomplished, analysts saying virgin galactic, blue orin and spacex are proving out the feasible technical ability and noting that this mission is meaningful notonly for human space flight but path toward commercialization and other countries as well, space restaurants, the broader space economy so it speaks to how quickly this sector is growing and how amazing this moment is just in terms of the mission itself, we've got three days

with four civilian astronauts orbiting at an altitude higher than the space station and expected to splash down off the florida coaston sunday we'll continue to follow it and i'll be back on set tomorrow with you guys. >> all right, we look forward to it great stuff from down there, we appreciate it. the dow is down 235 as we head over over to "tech check. >> i'm jon ford with carl quintanilla. when it comes to your portfolio, should be buying now, paying later? the top picks in e-commerce and how to trade fintech and an