jim, thank you i knew you were going to start singing that >> final check of the market dow futures down by about 230 points s&p futures down by 40 nasdaq off by 181. this comes after a strong day yesterday. the last day of the week, so this matters brian, thank you for being here all week it's been a pleasure folks, that does it for us today. make sure to join us next week right now, time for "squawk on the street." >> good friday morning, everybody. welcome to "squawk on the street." i'm david faber. he's jim cramer. carl has the morning off let's give you a look at futures as we wrap up the trading week here in the united states of america. not looking so good. >> oh, stop. >> all right, i'll stop. i'll start with the road map, which starts with job growth beating forecasts. a sign the labor market still going strong but as you just saw, futures are kind of near the lows of the morning. plus, quote, super bad feeling elon musk reportedly ordering an

immediate hiring freeze and a 10% reduction in staff tesla shares are down ahead of the open >> in deal news, bristol myers buying the oncology company turning point therapeutics the total price, $4.1 billion. the premium, that will excite you. certainly if you own shares. let's start with that may employment report. it shows the economy added 390,000 non-farm jobs. the unemployment rate remaining steady, 3.6% wage growth up almost 5.25% year over year. we're adding roughly 400,000 jobs a month for a long time now. doesn't seem to help biden's approval rating on the economy at all, but jobs are not a problem. >> no, look, this gives jay powell leeway. look, we have a lot more jobs wanted than people so what we don't want is a

layoff procession. what we want is a slowdown recession that cools prices. i keep thinking, everyone is much more worried than they should be, because we have a lot of jobs. and i think that that's what you should be worried about. i think inflation is a big problem, but if you can cool inflation, that's great. i think jay powell is do that. i have faith in him. just like i did in april of 2020 when he saved us from the abyss. people keep underestimating this guy. what is it, hiss demeanor? is he not a self-promoter? >> because it's a very tough needle to thread >> maybe he can do it. >> he may be able to do it >> does he seem incompetent? >> of course not, but there are so many different cross currents it's very difficult to determine whether they're going to be successful at the fed in that soft landing you talk about. what even it looks like. is a soft landing a soft recession, no recession at all

>> it could be frankly what it could be is people not buying as much a bit of a trade down, but when you go out to eat, which i know you do >> yes, i do >> if first thing anyone asks you is is there going to be a recession. when people ask that question, they're not spending the way they were. now, $900,000 for toll brothers house. people have to keep spending people should know, there's just too many people moving people moving. you can't get a grasp on what's really going on. and i think that's right, david. i think the moving problem, i thought gary brought his a-game. >> so funny because of course, as is often the case, we're in the same place on this i was going to start quoting from friedman from the call, although i think we may have it to play for people in terms of -- i don't know that he agrees with you completely on powell, but take a listen.

>> a big warriors fan so he's going to have a bad day today. you know that. >> what he had to say on that conference call. >> we know that the fed has to raise interest rates we know when interest rates rise, it usually leads to a recession. it surely is not good for the housing market anybody thinks that rising interest rates is a good thing for the housing market hasn't been alive long enough >> well, you have been alive plenty of time >> he refers to me because he said if you had a 40-year timeframe you would know, and i said yeah, look, gary in his previous conference call was a little rattled this is just a very good description of what could happen to the economy where rich people actually pull back, which is what you need, because rich people have been spending like crazy. rich people, there's a lot of rich people in the country

>> there are quite a few >> much more than there used to be, and they're spending and buying second houses come on, because the stock market look, i could be - >> saving rates, people have jobs, they have -- people spend money from savings they accrued during the pandemic, although that's quickly being burned through. >> it's still covid related. we do not have a handle on the economy because covid is still everywhere >> but it's not -- it's not impacting things other than mike breen and jeff van gundy not being able to do the game. >> that's true okay, let me put it this way >> you may have it right now >> i test every day. >> i tested that day also and i had it that night. >> there's a five-pack walmart has them walmart.com. you can order a can of coke, or

a ship >> it's become an inconvenience now. it's not two years ago anywhere where you're worried about how bad your health was going to get. >> i think a million people out of work because of covid, 3 million because we don't have immigration anymore. that's the issue, we don't have enough people to fill jobs but what will happen is he'll make everybody scared. it's going to be a jawboned slowdown jay is doing a jawboned slowdown, and yellen is not happening with i made a mistake. what was that whole yellen mea culpa thing? >> interesting >> by the way, we decided to go to, never mind, you're going to say i jump around. >> it's funny you're even thinking about that so you're not jumping around >> i don't want to do that anymore. i'm done with the stream of consciousness thing. the virginia wolf thing i do >> what about it >> she's stream of consciousness. you know sound of fury, very

stream of consciousness. let's keep going >> we can. we're going to move to tesla in a minute you want to go to that now >> yes >> we're done with the jobs report, done talking about powell and inflation >> elon is going to get us to jobs >> there is elon fatigue we're all fatigued >> it's every day. ever day he's got to do something >> i'm going to send him some not ambien because that's not going to do it, klonopin the guy needs klonopin bad he's got to get eight hours. >> what would it do for him? >> give him a solid eight hours. >> what about ambien >> it doesn't work and you get a hangover >> what do you mean it doesn't work >> trust me on this. i'm the chief spokesperson for the american mind brain foundation let's say i know where of i speak. the guy is tweeting everything second i have elon fatigue. you have it. >> i do.

>> let me ask you something, dave he wants to do layoffs >> hold on, let me tell people what he said just in case. we'll bring them along our newm mantra here he's the ceo of tesla, also spacex, may become the interim ceo of twitter if he buys it the reason, musk reportedly calling for an immediate hiring freeze and a 10% reduction in staff. that message came in an email to tesla executives apparently seen by reuters again, that's not our reporting. it did quote musk as saying he has a super bad feeling about the economy. of course, that reference to super bad, interesting today it is mcloven, the license, june 3rd was his birthday >> let's just go let's just go. what did he say earlier this week >> he said come back to work or you're fired >> maybe 10% of the people are

going to be fired. that's what this is. >> a good point. >> come on, that's what this is. but i am fatigued by him i'm tired of him it's time for him to just put up or shut up he doesn't get to tweet every 30 seconds. he loves it, though. he and adam, there are these people who just live by it >> no offense to adam aron, he's no elon musk elon musk is the most consequential businessman on the planet there's always something to talk about. >> yeah, when you're not talking about meta >> jim, he has a super bad feeling about the economy. >> is it super bad with a capital "b." david, soda is our age, soda is jamie hurricane diamond, all

right. >> add those all together. that's not making people feel particularly good. >> maybe it's moe, larry, curly. i'm just saying -- >> going to play the dylan song for him. >> you can talk down the economy. and jay must love this stuff >> it actually works in his favor. >> it works. look, when hurricane diamond said his thing, the stock market goes down. tesla, he'll drive the stock market down. how about katie huberty shading numbers down apple that's important >> what were the reasons >> oh, my gad, app store app store numbers are bad. >> really? >> yeah, the only place it's good is america. see, china impacts app store but that apple note is what's driving this market down today >> apple, as you can see, may open down more than 2% i'm looking here at your morning call list, and obviously seeing the reasons in terms of app store monetization decline year over year. first time in two years.

>> this is going to drive the market down. now, there's a worldwide developer conference next week, but this is going to be -- i'm glad she did it today and not the worldwide. because frankly, this can -- apple is the weak link in faang right now. >> you believe that? >> yes because this was a big note. and they sell into china just like micron does. david, do you hear that the lockdown is not really over? that's another story that's been going around >> listen, the best i can do is listen to what eunice yoon is reporting because she's there on the ground no, my understanding is it lockdown has ended but there's a lot of hoops to still jump through, so to speak, in order to actually fully participate in society. >> tesla, micron is china, apple is china, nvidia was china i said last night maybe they asterisk it and say there was a

s shutdown, but apple cannot handle a decel in the app store. as a stock as a company, it's great >> of course it can. >> people have to sell remember yesterday, microsoft when you came out with the story, people took the stock down nine and then it ended up two. you have to go through this. it's cathartic >> i'm going to make the point, katie huberty is an analyst you follow closely >> she's the best. >> you called her the ax, an old term, an influential analyst she sees downside risk to the quarter and revenue growth decelerating >> apple is still a big stock. >> still the biggest i think saudi aramco is one of the largest suppliers in the world. >> tesla, microsoft, apple a positive note about netflix but it's not a big company and meta, sheryl is kind of rocking the world there. >> a little bit. >> i find it all just gossip,

fr frankly. >> do you? >> there was a journal story today about her departure saying she's burned out and also talking about investigation into a couple different things. >> that's a danger you really have to have that down >> whether she's somehow involved company funds in helping to pay for her upcoming wedding. >> you put it out there without any knowledge of what happened >> who put what out there? >> about the possibility of malfeasance. i thought it was outrageous. >> a "wall street journal" story. i would assume there's reporting behind it. >> do we have the committee report >> i did not report that story >> i didn't either let's make that point. >> they did. they are usually fairly reliable >> that shirt is great >> you like my shirt >> oh, god >> thank you >> coming up, we're going to talk deals bristol myers. we have seen a lot of these deals. $4 billion huge premium, the name here turning point. >> which i thought was a wine.

>> you're going to want to see just how much that stock is going to be up let's give you another look at futures. we're doing that we are set up for a far lower open this morning after that strong employment number jim will tell you why. more "squawk on the street" rahthead

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that's a nice day for you if you happen to own that >> a great day for you >> and the reason why, of course, is bristol myers is buying the company about $3.8 billion in total equity value $76 a share in cash. by the way, if we go back and look, this stock traded above that, not even that long ago like so many others in the biotech industry, it has been shellacked to the point where big pharma is looking at these companies and saying, i see opportunity. you have a phase one two trial that went well this drug is going to work it's targeted oncology for lung cancer remember the sierra deal, the biohaven deal, the arena deal. they have all taken place recently >> biohaven was important because it could fill part of the pfizer exclusivity, and that's what these are about. >> by the way, i'm talking - >> you could have loss of celgenes drug that bristol bought >> the point is the same, where

you have beaten down stocks that do have drugs that have gone through phase one, two shown real promise, if not almost a guarantee that they're going to work. and you have big pharma stepping in and saying, okay, and in this case, listen, insight pharma has a drug out there already that competes here. you're going to be competing with roche and pfizer, but for bristol myers that's fine. >> you're trying to figure out how to upset keytruda. >> that's the key drug at merck. >> they paid a million to s sinoefy to have the whole drug where they think they have a keytruda competitor, that's being one of the best drugs of all time >> in terms of oncology. used in so many frontline therapies now. >> it's an amazing drug. j&j has a great oncology franchise.

>> the question continues to be, will deals like this help to fire up overall the biotech? we can bring up the biotech index. >> there haven't been any biotech ipos >> not a lot of new capital coming in. by the way, a lot of private biotech companies that thought they would come public that didn't >> they can run out of money quickly with the tests i'm involved in a test it costs a fortune to do >> very expensive to do these tests. >> need proof of concept >> a bump in june, but you can see what we're talking about >> look at that, david >> down 24% year to daeth. >> that's wealth destruction right there. people forget, the stock market became a repository of more wealth than we thought during the pandemic and a lot of that wealth has been taken away by what i call the allbirds effect. >> the allbirds effects being what >> like all ipos people who bought these things like oatly i like oat milk, i'll buy oatly. the younger people did blow up

because they were, ooh, buying aircraft, cars they bought everything that they -- there wasn't anything they didn't buy if it was something they liked hey, are those warby parker glasses? i'm going to buy that stock. i mean, that's what people were doing. >> all right, but sometimes you have encouraged themo do that, haven't you? did i miss that? >> that's a pack of lies >> that is not true? >> that's a pack of lies >> i retract that criticism. >> thank you >> you never told them to go the peter lynch route? >> no. need a tub of goo. who is that from >> i don't know? >> marlon brando one of the greatest actors of all time tub of good. >> i always just go with drunk, fat, and stupid is no wayto go through life, son. >> super bad do we have super bad can we get that. >> we can get that we'll play with musk as well but first, get ready for a mad dash we're going to count you down to an opening bell less than ten

minutes from now, as we have seen, we're looking for a lower open

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. okay, time for a mad dash. again, less than seven minutes before we get started with trading at the new york stock exchange micron is a name you love to do in the mad dash. a downgrade from piper today >> to a sell they say d-ram prices are rolling over that's a good jay powell fact because it's building block. we also have chemicals that are rolling over and they say that nand, just

flash, is beginning to roll over micron getting hit very hard by china where there's no business being done this piece, david, and the apple piece are what's driving the nasdaq down. >> is that okay so kata huberty at morgan stanley talking about the app store and then this. >> remember, semi-conductors, a lot of this, by the way, is consumer the enterprise is still strong i was going to do okta >> mobile pcs and other consumer end markets, macro economically exposure - >> jay powell, these people keep talking about unemployment that's not where it's going to be it's going to be in things like engineers in silicon valley. don't need them. don't need as many that's what's going -- and those people spend and spend they're making $300. >> or more i talked about it. >> they're going to kohl's >> a guy who made $300 last year

is not going to make it this year >> they went to bergdorf and now they're going to kohl's. don't laugh. >> i won't >> you ever been to a kohl's >> yes, i have i have been to a kohl's. >> that's the kind of slowdown we're going to have, which is you're not going to buy the $900,000 house eventually. you're not going to buy the expensive whirlpool, you'll by the cheaper whirlpool. >> any concern about this stock? >> it's go lower it has to go lower because china is shut down china is not buying d-ram. >> china is no longer as shut down as it was >> oh, yeah? yeah >> yeah. >> yeah? where is shanghai disney >> i don't know. we can't go to china they won't let us in, that's for sure >> they won't, will they >> they won't. not that you would ever go >> my stepson was there, had a great time >> we have an opening bell just

a few minutes away for you by the way, you can catch us anytime and anywhere because you can also listen to and follow the "squawk on the street" ba ainbe pca ckfter this.

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. all right. we're looking at what's going to be a very weak opening it's going to be nasdaq and many people are going to interpret it as being the employment number that's wrong it's actual i would say worries, and real worries, about apple and that has to do almost entirely with the app store, but that matters very much because that's been the growth service has been the growth. david, i'm looking at the situation and thinking, everyone is thinking it's employment. it's the market was up very big yesterday, led by tech you're going to get a repeal of a lot of it. because of the micron comments, the apple comments >> something else you noted and we're going to get an opening bell in a moment in a tweet is a lot of the beaten down names showed life yesterday. >> yes, i think that may have

been entirely because the hedge funds you talked about are margined out the amount of exposure i confirmed, the amount of exposure to these high growth stocks was extraordinary but also, take a stock like okta, so beaten down, and they don't miss enough, because they didn't miss, a short rally this morning. you have companies with stocks that have come down tremendously versus new information that really is about personal, not enterprise confirmed earlier this week, so just be awarn that the consumer, we all thing is hanging in there, not when it comes to tech whether it be cell phone or pc or whether it be printer the consumer seems to have bought everything they need to work from home >> i want to get back to that quickly let me mention the opening bell >> that was radical. >> that was big, but i have to

read this. you saw the real time exchange we got a lot more red on the board. the s&p does open down, over 1%. here at the big board, that was the society for corporate governance who knew, 75 years, the society for corporate governance and then it's national doughnut day. i didn't need to read either one of those things. i'm sorry to have interrupted your important thoughts. >> no, don't worry about it. i'm just saying that the enterprise remains very strong unless it's involved with china. the personal looks like we're pretty far along with work from home you and i both agree that work from home has been completely underrated as a theme, but that is so important. and when we're finished with the office at home, and we're finished with the computer at home, then we're done. that's why best buy, as much as i like it, yields almost 5%. >> right i want to come back to a name i haven't mentioned this week. of course, it also involves a

gentleman we do mention every 10, 15 minutes >> elon musk >> yes, twitter. take look at shares of twitter it's an outlier today. stocks up. didn't get a second request. in other words, it's done. >> what? >> he's going to do it >> no, no. sorry. inantitrust review not an issue >> okay. who would have thought it was? >> nobody except you never know with the administration, with concern, perhaps, about what it would mean if he had that ownership. never say never with lena khan, you just don't know. done no second request. what does that mean and why is that important it means we're probably going to get to court a lot sooner if musk continues on the track that he seems to have been on you're going to have the proxy out, perhaps, i don't know, could be really quick, but unless it gets reviewed. >> why is the stock at $40 and not $45? >> if reviewed, probably

mid-july, still an august vote let me finish my thought >> sure. all right, partner >> the point is that you have just moved up the calendar for the board having to sue him for specific performance if in fact he keeps dawdling around and not doing anything we'll see. we're going to know a lot sooner >> i think this specific performance is so cut and dried it's not going to take long. >> might not delaware may look very unkindly on what he's done in terms of his sort of vague allegations of fraud at the company >> how did you get that? >> what do you mean? it's a filing. i didn't break any news here >> but you also didn't falsify news like some of our competitors. >> i desperately try not to do so, which is why i report so little of what i hear. but i can tell you you simply that has truncated what might have been a much longer process. if they had gotten a second request, it would have been back and forth. no longer the case

>> i wish i could have - >> not indicative of his approach and whether he's going to change it and whether he's no longer on hold with the transaction. $54.20 is still a mighty spread from where we are. >> at the same time, very hard to encourage people to buy the stock given the fact i have no conviction on it none and i do think that they have got some new things in the works but they're gnot paying offyet. elon, who i admit i have fatigue of, is not going to keep it the twitter we think >> no, he would make quite significant changes, as potentially it's interim ceo, if he does close on the purchase, which again, he could own this thing as soon as september maybe even a vote by mid-august. i want to move on, though. what else has your attention this morning obviously, you mentioned apple and micron as two of the keys

given the negative comments. >> i want to talk about okta for a second okta was hacked, and they are a cybersecurity company. so there's been a huge, huge, huge short squeeze going on because todd mckinnon, who refuses to play the profit game, still doing the growth thing where they lose money, but they had a fantastic quarter. they didn't lose any customers they were hacked their cybersecurity company was hacked but it shows you how important identity theft this is identity here. it's where, say, somebody leaves a company, bad guys find out about it they burrow in they pretend to be that person and destroy your business. and todd's got good software now, look, palo alto has good software too rowdstrike i thought had a good quarter, but not enough. the beat wasn't big enough so that's the world right now. >> so okta got hacked.

there was concern about that fact and whether they would lose customers, and they didn'tric look at crowdstrike, what's going on there >> they didn't beat by enough. i'm going to speak to george next week when i'm out in san francisco, but this doesn't beat by enough these stocks, it's a horse race for these companies. palo alto beat the biggest okta stock was down a lot, and he was going to lose business, he didn't. crowdstrike, we're all used to george blowing it away, and he didn't >> can we talk a little lululemon? >> absolutely. it was maybe the most perfect quarter of the earnings period >> it was, and the stock is not reacting in a positive way to that >> listen, i don't want to call him a clown, who said lulu did not have the best gross margins. can i just say lulu's conference call, their quarter was a thing of beauty.

but the city's carping about lower margin because of freight. what i wrote is i hesitate to call that stupid because i'm in a pretty good mood because of my club call yesterday, but that's just such a misjudgment because they have shoes doing well, all new -- a whole new line. they have the best growth of anyone in apparel. and i just think that if you -- cal mcdonald is a wonder they have china problems >> they have a different take and one i think you would agree with certainly more, they say remarkably robust consumer demand has continued into the next quarter, as can be seen by solid above consensus revenue, eps guidance, sales growth, and against this backdrop of consistent and broadbased demand, lulu to its benefit is leaning into investments >> i thought it was a great quarter on every single line item i didn't care about the air freight. >> do you own any of those pants?

the ones people wear to work all the time they're very sharp looking pants. >> i have a lot of lululemon >> you do? >> for workout stuff >> you wear something other than a suit >> i was in my garden in breonly. >> they seem to have the product people want to buy >> people are selling this because of the air freight issue. most of the companies that had air freight was destroyed by air freight. not these guys i mean, what is it >> aeropostale >> i try to forget the names american eagle outfitters, gap, those are the guys who blew it, not lulu lemon it was one of the most perfect quarters i have seen this year >> but it did hurt the gross margins by about 340 basis points using freight to bypass lengthy delays on the water. transit. what's wrong >> a great quarter >> it was a great quarter, i know that. it's just the stock is down.

>> therefore it's bad? that's the kind of logic that so many people, microsoft, oh, the talk is down maybe it matters then by the end of the day, it's up this was a great quarter and you have someone -- it's like exxon versus chevron. >> understood, but maybe they're not -- maybe investors simply don't believe the raise in revenue and earnings guidance -- >> go sell it. see what happens when china goes back online. go sell it you don't like it, get out of lululemon, you clowns. >> got to stop insulting our viewers. >> i'm just insulting the sellers. >> just those sellers. how's rh doing >> gary -- >> rh is not doing anything. >> interesting is gary has amazing british property opening up, the san francisco guest house. he's managed to transform the old bethlehem steel project building in san francisco into a luxury it was an amazing series of

great things, all within the context of him saying we're going to be down 1% to 3%. talk about underpromising. i bet you he overdelivers. i don't like the selling in the last ten minutes >> i turned it off >> he loves the warriors goes to a lot of games and gets really good seats. we haven't even gotten to coinbase >> let's talk coinbase >> they have resunded, i don't know how they got this they rescinded job offers. >> yes >> what do you make of that? >> that's not good but it's specific to coinbase is it really reflective of a broader slowdown >> they're going against bitcoin whining because it uses a lot of carbon the fangs are out. the long knives are out for crypto, yut the young people cling to crypto. they cling good luck. >> well, another company that

may be potentially laying people off, we mentioned it, is tesla >> keep coming back to tesla >> being reported by reuters here, a memo in which he says he feels super bad about the economy, and tesla is down down almost 6% >> all right >> sort of revisiting, again - >> negative market people. twitter, because you did some reporting. >> i did some repeating, not necessarily reporting. >> there are some ones we haven't gotten to yet. >> tell me >> i have been spending more time on the standard & poor's. we all talk about the lack of stock issues david bondish, that's when jay powell should be selling the bonds like mad because there's no corporate bonds to speak of. so can you imagine those desks the only people getting laid off when that goes down. >> except for the fed, they're not really selling anything because they never really bought anything it's just an electronic entry

that they erase. >> you're with me that the korme corporate issuing is way down. >> yes >> disney, needham is adding $1.66 billion in operating income for the parks segment only for the next 90 days because they say the next quarter is going to be bad after that, weaker i thought that was an important call david, exxon, the love for exxon is incredible. it brings me to june 22nd. >> yes, very important day here at 8:00 p.m. when we will debut our documentary, exxonmobil at the crossroads >> a name for it >> yeah, got a name. >> who is the guy on the right is that john garfield? >> it's john garfield, who subbed in for me >> he was great. >> he was great. >> yes, body and soul. fantastic. died too young >> very young. >> all right, we'll move from garfield to the bond report. why not? let's look at how treasuries are

faring this morning. of course, off the jobs number, 390,000 jobs added for the month of may you can see the ten-year creeping up in yield back to almost 3%. we're back after this.

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. welcome back to "squawk on the street." rick santelli here with more breaking news. our may final reads on s&p global services pmi at 53.4, replacing the mid-month read at 53.5 second lightest read of the year outside of january and if we look at the composite pmi, 53.6. that's also a bit lighter than the 53.8 mid-month read. and that, too, is the lightest read since january when it was at 51.1. now, if we consider that all the pmis have been coming in mostly on the light side, this shouldn't be a surprise, but it goes a long way in describing that at least services is above 50 even though it has

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welcome back shares of starbucks not doing much, but news, jim, that you

have from the company does start to answer that question you have been asking all morning about whether that unlockdown in shanghai is real >> i'm looking at a video sent from starbucks, cc'd also to howard schultz that shows his tremendous enthusiasm for the openingopenings, talking about -- we reopened nearly 640 stores, and 10,000 partnerships we'll be serving customers daily. you're looking right at this was reading how shanghai was not open. >> 940 stores had been closed, now opening over 600 of thousands with the reopening of shanghai >> i want to show you this video cc'd to howard i think he should come on. this is a big change. >> it's a good video

a lot of people. >> that's what i'm saying. >> when the facts change, you change your mind, that's right all right. let's get over to bob pisani with a quick look alternate what's going on in the market this morning bob? >> good morning, david growth is getting clobbered. value is doing a bit better, so energy, some of the consumer staples stuff. when i say growth, it's technology, communication services, and you can see what's going on there, communications service, a tough morning alphabet is down two, meta is down two tessa is in consumer discretionary, believe it or not, but the travel stocks are notably weaker today energy is generally holding up well, oil around 117

the consumer staples, all of them just fractionally positive this morning the big issue, it's pretty simple does the job data increase or decrease the chances the federal reserve will keep raising rates in september by 50 basis points or not unfortunately the market is saying, well, yes, it's slowing, we want that goldilocks slow, but it's still strong. ism was still too high, so the market is maybe saying we're trending down, but it's not going to change the fed narrative too much there's two. the first is the peak inflation, we are getting some evidence of that, but not enough to clearly convince the fed to change their find at all. the other narrative is the

growth scare narrative that's out there. whether or not we're going to see earnings revisions coming. that's what happened this morning. i think that was a major issue on top of the jobs report, which against shows some slowing, but still pretty strong. that's why you had, for example, and the guys are right to focus on this apple with the morgan stanley note doesn't seem like a lot, but those are overall growth worries for the market. the amazing thing is the analyst community doesn't seem to be getting the memo about this, because number are still remarkably high for earnings estimates. the entire community is continues to expect a very strong second half of the year overall earnings are expected to be up 10% for the s&p 500 this year, and 10% for 2023

these numbers have not changed much there's a few minor adjustments, but overall, and you can hear, of course, mr. musk obviously disagreeing with in a. we've had a multiple expression now from 21 to 17, what we haven't had a dramatic drop in the estimates. it there's a fear we're going to get the earnings decline so far the analysts have a deer in the headlights look in their face somebody is going to be right or wrong here it's either the market telling people to change or the analysts will be right in the second half of the year. you can see the markets are very skeptical about that earnings groust forecast. guys, back to you. >> bob, thank you. jim was agreeing with you here

as well. >> the numbers are too high. one of the reasons is the consumers have slowed. when it comes to building out any sort of equipment, cell phones, anything china is a disaster. i know there's a report that starbucks is open, but the amount of purchasing of technology in china. >> conceivably it will come back >> but you still have to have numbers come down. look, some of the semiconductor numbers have come down already nvidia will have a great second half, but it's targeted chips, special chips. all right. you have a show tonight. i hope the voice holds up. >> it will

arcbeck, this is a trucking story. >> you're back for the first time in a couple years, back to the west coast next week. >> and i can't wait. i like to do it four times a year, and it is going can be we'll be together, but zooming >> that's the way most people do it these days. but the people i have lined up, i myself am hocked >> these are all interviews for mom, not -- "mad money." >> i will miss you >> don't get covid. >> i just had it you have at least a few months.

>> four months immunization, is all it is. >> i'm early >> three more months >> i have a booster tomorrow. >> that was a great show, but i didn't like the -- gary? that was sad, but lulu was not it should be bought. >> gary was sad, lulu was not. coming up. more about elon musk's warning keep it here your record label is taking off. but so is your sound engineer. 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

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[ dramatic music ] [ engine revs ] so you can have more success [ roars ]. [ roars ] welcome back to "squawk on the street." rick santelli here, still live at cme hq, with the last breaking news. the services index for the month, expected 56.5, a miss, 55.9 sequentially, following 57.1, and it is the lightest read -- well, 55.9 takes us back a ways. it equals february of last year to find a smaller number, you have to go all the way back to may of 2020 when it was at 45.2.

so very rare to see this soft a number it goes a long way to show us, even though services is all the rage, after we've all been kind of in lockdown, it certainly isn't living up, considering some of the constraints in the economy. leslie, back to you. >> i'll take it to, rick leslie is here, though, too. welcome to you'll hour of "squawk on the street. we're live at post 9 carl has the morning off morgan brennan is on maternity leave. overall we are in the proceeded solidly. >> we're 30 minutes into the trading session. here are three big movers we are watching, starting with tesla shares sliding, on reports that elon musk ordered an immediate hiring freeze appeared 10% in

reduction, and reportedly saying he feels super bad about the economy. lululemon reporting better ann expected earnings. that stock currently trading, pretty much changed. and another retailer to watch is hr, the company topping earnings estimates, but issuing a weaker than expected full-year revenue, also announcing a $2 billion expansion of the buyback program. >> a little bounce turns to the jobs report the u.s. economy added 390,000 new jobs in may. steve liesman has more >> the economy adding more jobs than economists were expecting in may, but the important read from the report, what it says about inflation, being judged mostly neutral we came in at 390, we were

looking for 328. unemployment rate 3.6, we were looking for down, so a bit of a miss there average hourly earnings are 3%, so that's 5.25 year over year. still pretty high year over year on the wage number capital economics says better than expected jobs number address signs that the economy is still strong, but, quote, with wage growth still growing well above rates that are consist president with the fed's 2% inflation target, however, that won't stop the fed continues to raise rates in the next meeting or two, i would add, or perhaps three. that tick higher in the labor force participation comes out after it edged lower, but it remains below where also before the pandemic that's where the jobs were well, still a reboundingeconom coming back 84,000, construction

doing well, also factory orders did well retail standing out with a big decline of 61,000, so hot on the headline, not so hot, though, because the jobs gains were covered. wage gains off their peak, but not nearly enough to remove the single-minded concern at the fed. >> that's the inference, right lael brainard said yesterday we're working from a moment of strength just general that leaves that general premise in place >> there's a guy in some room some place that thought up the pause story and then ran with it i was never on board with that story. to me september was always about 50 or a quarter.

look at the funds rate outlook what you see is a bit higher the july number is the peak number that i watch and is running about 3.25 it's been down as low as 290, but that tells you how far the fed has to go here that we're going to have an aggressive run here, aggressive run probably through the summer a year from now, and then the market bakes in something of a cool off after that. >> steve, thank you. >> sure, david. let's bring in diane swanton, and david kelly, a duo we always like to have on these days david, i'm going to start with you, just your reaction of the numbers, whether it's changed any of your views? >> i feel pretty good about the number it shows there's policemen of

job momentum, but i like to see this labor force growth. i like to see this growth in xwroimt in the sectors that most need the work, we're seeing more truck drivers and more leisure and entertainment. it's the third month in a row with 3.6 unemployment. we are coming in for a soft landing. this economy is going to slow, inflation is going to roll over. i know it's taking too long from a lot of people's perspectives, but we have to be patient. >> diane, do you think it's a soft landing >> i think we'll have a more hard landing though, yes, we did see the slowdown, what was interesting in the breakdown of the details. what we saw was non-supervisory

workers accelerated, close to the 6.6% we saw last month, so that cooling is not happening as much as we would like to see it in the broader economy, certainly for the fed. also for the people out sick, could not work, moved up again we're moving about 40% above the levels we saw pre-pandemic that's adding to staffing shortages. the omicron wave is going through the second wave right now but that's adding to staffing shortages even though we saw a bit of cooling, there actually is growth picking up again in non-supervisory workers. that is something that is good news, except it's not enough for those workers to keep up with inflation. we saw the supply of multiple

job holders. i'd like to believe that's because one job is enough now all of a sudden. my suspicion, though, and we're starting to see it in the beige book, is that higher prices at the gas pump have increased commute costs, making it harder for workers to take on the extra job to make ends meet, because you can't afford the commute costs of that extra job. we've seen it in things like uber and lyft, and the pullback and supply of those workers. >> that's an interesting point about the impact of inflation on getting that second job. >> david, i'm curious, can inflation come down when you have an unemployment rate of 3.6% is that even a possibility >> yes i think it is, it will be an interesting thing to watch over the next few years. we are going to see eventually a rollover of thinks supply

issues i think it's also really interesting watching the dropping in retail employment. that tells me we're seeing a backing off of spending of basic goods in this economy. so i think inflation will gradually come down. in fact eventually we'll overbuild in a lot of inventories. eventually by the middle of this decade that will put on downward pressure i think it will come down slowly for a long time, and we just have to be patient. >> diane we've been focusing on what you would call anecdotal instances, whether it's fast-growing startups or some of the bigger companies and wondering if that's a bit of a replay of what we saw where

there was over-investment of one sector seemed to spill into another general weakness in the job market what should we be looking for from the labor market that should justifiably get us worried, as opposed to just being generally aware of the facts we're in the latter part of the cycle >> what i've been looking at is the pace of job gains. we did have a big increase, when public schools hired up, so we did get a public sector boost in this month what i'm looking at is the pace of job gains are still running more than double than what we saw in the 2010s, and close to double of the hottest part of the last part of the expansion, so you need to see a real cooling of job gains down in the 150,000, 100,000 i do think that the fed has now come to the conclusion that they think full employment -- it's interesting how they're framing

what a softish landing is, they now think it's somewhere between 4% and 5%. that is, by definition, a move into recession territory, in terms of the size of increase in unemployment, or if they grind it down with a stalling growth rate, and then sort of allow unemployment to gradually rise it's still painful for those who are employed yes, there will be layoffs, but the unemployment claims that's come oil, still rock-bottom lows, continues claims at the lowest levels on record for this employment report, that doesn't suggest that these layoffs are anywhere near enough to cool off the economy in the way we saw it in 2001. >> david, wrap up the conversation for me, take me back to the markets themselves, whether, in fact -- you did start with a relatively

optimistic outlook, whether it translates into optimism >> yeah, i think it should i do think there's a better chance of a soft landing everybody's scared about rece recession, inflation, but the fed has a long record. i think we will eventually get there. that's good news for both stocks and bonds. as for this pause in the fed, i think their tone will turn more dovish, things like the services ism number, as we get more indications that the economy is actually slowing down. i think that's when the fed will cool its rhetoric here. >> diane and david, always appreciate it. thank you both. >> anytime. >> thank you. as we head to a quick break, we have a road map for the rest of the howard, including a biopharma deal at a very big

premium. bristol-myers is the buyer we'll tell you who the seller is. tesla potential joins the growing list of tech companies laying off employees. boeing shares under pressure again, as ceo dave calhoun tries to ease insts'veor concerns, don't go anywhere.

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welcome back tesla shares following a reuters

record that elon musk told executives to cut 10% of his workforce, saying he has a, quote, super-bad feeling about the economy. craig joins us to discuss. the shares are down 7% right now. where do you see this super-bad feeling about the economy is coming from? obviously there's a speed bump they really monitor foot traffic carefully. they have people either going object not going to purchase, it's not a surprise that we do see change there this is a very well-run company. for them to focus on taking on

the costs, is not a surprise long-term demand, i don't think it's you know, i think evs are a great option for a lot of people i was kind of shocked when i bought one myself. yeah, the market will have some turbulence. >> you would think the stock would be reacting more favorably to this news, any idea what they might be talking about here, the back officer jobs. >> i don't have any particular insights on which jobs i feel for those employees while it may be taken as bad news for tesla did, it is really is fantastic news for the industry

they are almost always top quality employees at tesla people appreciate the expertise they bring when they come from the different companies, to have, you know, 10,000 tesla employees out there looking for new jobs would be a blessen for the industry so all of the small companies acrock the ecosystem, this is a blessing in disguise, and, yeah, it's a short-term issue for tesla, but i don't think it's going to impact their ability to hire in the future >> craig, it's interesting, given the fact that tesla, the entire basis for how the company has performed and how it's valued is that it's on a path to, what, 20 million units sold in 20230 it's multiples of what they're producing now, so is this the time to cut back by 10%, or does it show some employers in a

tight labor market over-hired. elon musk doesn't like people working from home, so maybe that's a way to cull the flock so if you have to talk about the growth trajectory, the one negative for me that was the most material in the last few months is when the transport minister of india said, hey, we're not dropping our tariffs then elon said a couple weeks later, all plans for india are on hold. they had selected a facility back in 2019 india can and will be just as big as china for tesla, so that's less economic than strategic at this point. economics, they have done a good job of passing from price to

support margins. my instinct is yes, we need a growth rate for the near to immediate temple won't be as exciting as what they had been hiring for, planning for but it doesn't change the outlook for evs. >> right craig, though, as an analyst who following this company very closely, how do you deal with a sentence like that "i feel super-bad about the economy. are you getting any filling in the blanks there or like us, trying to figure it out the best we can? >> i talk to people across the industry i talk to a lot of people their former employees that all still talk to their former colleagues. a lot of people that are free from fiduciary so the quality information is usually pretty good.

i don't think this is as something out there yesterday, but we have seen other companies make fall steps than have those rolled back. i think the demand is becoming more price sensitive now, and the high-end -- is sort of the mid tier driver. commodities, battery costs are a big deal

china, their iron phosphate sales have doubled in the last six months there's real issues in the supply chain tesla is managing them beckably, but this is nothing different than the broader industrial context. they feel the same impacts everybody else does. >> it's interesting, especially since the backdrop of rising oil prices as well craig, thank you very much. >> thank you as we head to a break, take a look alternate a couple different stocks bristol-myers is buying the biopharma company turning point therapeutics the premium is $76 in cash for a took trading well below that is what is capturing people's imagination, and most certainly those lucky enough to have owned this prior the stock had been higher not even that long ago, but having a

trip reminiscent of many, we have seen a number of significant deals in terms of total value. by pharma stepping up, hey, this drug is likely to work in this case we're talking about a drug for lung cancer it is essentially what we call a targeted oncology. bristol is happy to step up, pay the bryce for something that it's very confident will work. the deal is expected to be accretive, but not until the beginning of 2025. we'll hear more about it later today. we'll have an exclusive with the ceo of bristol-myers on "power lunch," 2:00 p.m. eastern.

we'll be right back. from fidelity keep you tuned in all day long. so when something happens that could affect your portfolio, you can act quickly. that's decision tech, only from fidelity.

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the ark innovation, arkk, on pace for the eighth negative week in nine shares have now been cut in half since january, as tech names continue to see pressure it's a similar torrie, they're all underperforming by a wide margin guy walt -- walmart has its big shareholders and associates week our courtney reagan joins us she's enjoying -- yeah, it's rocking there, courtney. hi, david. you're right, it has been three years. there's 14,000 of them here at the bud walton arena

while all of the events are called shareholders, it is more of a celebration for the associates and the work they have done over the year. this week the retailer did announce its expansion to the academy training programs, for four more automated fulfillment center with more than 1.6 million associates, walmart has added a number of benefits from free college tuition programs, to job training, as well as expanded healthware benefits, but really it's the pay that's the most critical to start they make $12 an hour, on average the company says it takes about seven months to move up in role and pay and average hourly wage is more than $17 an hour while both have moved up over

the years, other retailers does have higher starting wages these workers are considered essential, but when it comes to whether or not walmart is at risk for unionization, there's a whole business of an antiunion/antilabor movement that's fairly strong the laws are not that strong when it comes to the favor of yunds, and most importantly global corporations sincely hold, less likely, mike? >> and with walmart, that dates back decades this is not a new phenomenon t i do wonder, you know, in the jobs number today, reat a time was a

soft point is there a sense where they're they still work about competing, therefore broadband slower to shed workers if things turn down? >> i think that walmart does feel good about where their lame numbers are. that's part of why they're trying to make sure they offer employees an attractive place to work with all of these job training skills. as they may frankly thank over the years even a store worker's jobs has definitely changed. so i think it's top of mind to understand that labor markets are tight, and walmart needs to bring its a-game

>> i was at a walmart in kansas, and they had signs all over saying minimum wage $15 an hour, different wages, all these benefits listed, so definitely looking to recruit those coming into the stores in kansas. that definitely caught my eye. courtney, thank you. staying with retail, shares of kohl's trading higher today there is been a bit of back and forth going on with regard to this deal. we want to set the report straight based on what we're hearing from sources yesterday afternoon there was a report, actually early evening that the auction was delayed for this company it's been receiving bids for quite a while. this report said it was basically -- it implied it was kind of over, it was a done deal you know, we have reporting that suggested that actually there is no such thing as necessarily an

auction being delayed indefinitely it's really that the deadline gets extended or the process ends so the deadline has been extended and the process hag not end. it's an insight into the world of -- the offers coming in are much lower than those initially proposed, because the market has changed since then the shares are still trading still with a $20 spread. >> obviously a lot of skepticism that in fact a deal will get done private equity, loading it up with debt, heading into a potential recession. if you're on the board, you're

obviously getting valuation metrics from your adviser, and you're going to make a decision as to whether fully engage, and whether that number makes sense, but of course, we all don't know >> right right. >> this one has felt like it's not lead to go a deal, but we'll have to wait and see. >> i don't know if this is on the part of the board that is just being pickier about the offer itself, obviously rejecting offers, so maybe they're waiting for a better bidder or better offer. >> anything question about the financing markets as well? >> absolutely. that's a big part of it. though when you look at what happened with earnings, a lot of its peers did a lot better that could suggest this is an idiosyncratic story in terms of what happens with that earnings,

and there could be a case to be made that you could turn things around, fix it, you know >> there are so many chain retailers that trade at what look like six, seven times earnings if they can or cannot get a price based on those expectations, i think it has implications for the whole group. gap looked at it until it compliedly wiped out the guidance, so it's dicey. >> yeah. time now for a news update frank holland has that for us. good morning. good morning, an escape t texas prison er was shot. the sunshine state is brace fog a potential tropical storm, brewing in the gulf of mexico is

expected to bring heavy rain the system has sustained winds of 40 miles per hour and expected to develop a well-defined center and become a pro tropical storm named alex. the winner was decided in a spell-off. irina logan attempted 26 words in 90 seconds. she got 21 right this time she got to go home with a $50,000 check that's the latest. mike back over to you. >> after the break, don't miss our exclusive with jan hatzus. we are back in two

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the u.s. economy did add 390,000 jobs in may, that was above estimates. joining us is jan hotzius. give us your take. >> the payroll number was clearly stronger than expected, but i think is shows, household survey a little softer and i think the wage numbers it will a bit softer, so i think it's consistent with what the fed is trying to achieve for now, which is a deceleration and growth that's moderate

i think it will result in deceleration on a year-on-year basis we're already somewhat off the highs i think that will continue the key thing to watch is what happening in the labor market, what happens with wages, what happens with open possessions. the news we have seen, especially from the technology sector, is open positions are being brought down labor force participation is rising somewhat, but it's a significant adjustment that needs to occur so we'll have to see >> do you think this gives the fed comfort that these hikes are being absorbed well, and any sort of pause, that steve liesman attributed to some guy, in september, this is the case that it's really off the table >> we'll almost certainly get

two 50 base point hikes. i think a pause is very unlikely vice chair brainard spoke yesterday, i think it was, saying it was unlikely, so i think the decision is between 25 and 50 basis points. our forecast is 25, but certainly it could be 50, engineer depending on what we see in the numbers so there's plenty of information that they will have before making that decision my interpretation is 25 in september is a quasi-pause it's so semantics at this point. you mentioned open jobs. as job listings, as this target of the fed, you know, this excess stated demand for labor that they would like to basically compress a bit, get that wiped away, normalize it, and without raising the

unemployment race too much, can take it off the boil i know the math kind of works, but have we seen anything like this before? >> history would say it's challenging. once the market has softened, typically the economy has turned down that said, this is a very different cycle. if you look at overall labor demand, and plus employment, it's much more tilted toward open positions, the level of employment is not excessive, so i think that's different there's more labor supply that can come into the workforce, more people on the sidelines than you would normally see with an unemployment rate this low. i think there's a limit on how much weight you should put on history, but it's definitely a challenging situation.

>> what does that mean with consumers dealing with the high costs of necessities >> i think it's a weak environment for real income growth for two reasons one, large price increases that have run ahead of wage increases. two, reduce transfer income. you had all these one-off payments last year, unemployment benefits child care tax credits, all of that has run off, so i think that will weigh on consumer spending growth. how that shakes out in different sectors is going to vary a lot, because good spending is at very high levels, so it's going to be pretty soft. service is spending so some

signs. >> i don't know if you heard, jan, elon musk is feeling super-bad about the economy. i don't know if you can put that in your model, how that works for you. but in all seriousness, he sells a lot of cars, and they cost a lot of money we have no idea what is behind that statement reported by reuters, but does that fit in what we're saying with waning demand >> overall the economy is definitely more negative there's always a distribution of cross-sectors, so i do think that the if the overall economy is slowing, you would expect some sectors to show more. i think in the tech sector, we've more negative commentary, and we've seen more companies say things like elon musk about employment levels. i think that will have to

happen, at least in some sectors of the economy so i don't think it's necessarily totally inconsistent with the jurisdiction we're seeing a moderate deceleration the fact there are some sectors see more of a deceleration versus other sectors, that obviously weighing on the dyn dynamic, right >> yes, then if you have less employment growth, some declines in some sectors, that will be another reason for why consumer spending will not grow at anything like what we had last year. >> jan, a lot of attention, whether it merits it or not, this week on the start of quantitative tightening or the fed allowing its balance sheet toshrink to some degree. give us a sense of what this ought to mean. the way it's occurring should not necessarily be that disruptive it's not as if the fed is out

there selling bonds. the treasury, maybe they have to sell more t-bills. i mean it's a lot of mechanics here do you think it's a selling issue for the economy as a whole? >> i think it's a modest addition relative to the funds rate increases, but the funds rate increases i think will be a lot more important there is more uncertainty obviously around the impact of qt we haven't gone through this in the past, only once at a reseduced pace >> the deficit is down

>> it is a factor that will push the premium up by more we've had said maybe 30 basis points or so, if you take the total adjustment over the next couple of years, that's not insignificant, but not nearly as important as the impact of the rate hikes. >> jan, thank you. have a great weekend. >> you too. >> good to see you. >> great to be back. boeing's ceo dave calhoun speaking at a conference earlier today trying to ease concerns of the investors who think the dow components have lost their way phil >> hey, mike not a lot of reaction from the comments today the stock is a bit down fractionally, but i wouldn't say it's because of his comments a lot of focus in the market about whether or not boeing will have to do a capital raise. he said they intend to be cash

flow positive this year. they said that earlier this year he said that is the forecast at this point and they are working through their issues when it comes to the dreamliner they have suspended deliveries while we are working with the faa to work out a protocol that is approved of, in terms of inspection of the 787. here's what calhoun had to say about the current relationship with the faa. >> we're not battling. that's not what this is. i think there's pretty good recognition over the last two years, we'll be transparent, straight, every step of the way. they said to see american industry succeed it's not -- it's pretty constructive >> last year has rough for boeing they have increased their deliveries for the 737-max they are working their way up to 31 per month by the end of this year they'll be there in the second half of this year.

they do not have the deliveries of the dreamliner to help with their cash flow at this point. in terms of increasing production, dave calhoun said a lot will be what's happening with the supply chain and the comfort level. again, for reaction to the stock today to his comments, but the bed headline here is calhoun says they intend to be cash flow positive this year, and that they do not see the need for a capital raise at this point. guys, back to you. >> yeah, phil, certainly -- i guess that would be reassures, though it seems to some investors there might have been merit to raising equity. it seems we keep pushing out the data, but in temples of when the earnings power starts to show back up, maybe 2024 i guess is a lot of these issues they can get through them. >> the green democrat liner theoretically -- sorry to cut you off there,

phil we wanted to get president biden delivers remarks on the jobs report. >> i want to speak briefly about our economy and what we're doing to lower of costs for american families even with today's good news, a lot of americans remain anxious. i understand the feeling i grew up in a family about 100 miles from here, when the price of gas went up, you felt it. it was a discussion at the kitchen table. no denying that high prices, particularly around gasoline and food, are a real problem but there's every reason for the american people to feel confident we will meet the challenges because of the enormous progress we've had made, from a position of strength. still a problem, but we can tackle from a position of strength the progress we have made i think is critical. at the time i took over about 16 months ago, the economy had

stalled. covid was out of the control today thanks for the economic plan and the vaccination plan my administration put in action, americans have achieved the most robust recovery in history the job market is the it has been since just after world war ii we've got more evidence of that today. we learned in may the economy -- bringing the total since i took over to 8.7 million new jobs an all-time record we learned more americans entered the labor force in may in fact working age people have come back into the workforce at a faster rate in this recovery than at any point in the last 40 years. that means that the unemployment rate is near historic lows and the number of americans on unemployment benefits has gone from record highs to record lows with millions moving up to better jobs with better pay, and

american manufacturing booming, 600,000 new manufacturing jobs created seince i took office, bu it isn't only about jobs families are carrying less debt. their average savings are up recent survey from the federal reserve found that more americans feel financially comfortable than anytime since the survey began in 2013 that confident and comfort ability is part of the reason why americans are starting new small businesses last year than ever before. and because of our strong growth, we have strength in medicare and social security programs that millions of families rely on yesterday i learned that social security and medicare trust funds will be able to pay benefits for longer than previously projected before we passed the american rescue plan. the recent a faster than expected recovery in jobs, earnings, whiearnings,c

growth in fact america's stronger economic position today than just about any other country in the world. the which i economy could grow than china's this year the point is this, we've laid an economic foundation that is historically strong and now we're moving forward to a new moment we can build on that foundation, build a future of stable steady growth so we can bring down inflation without sacrificing all the historic gains we've made and that is what we're beginning to see will today's jobs report. with today's numbers, the be i don'ts over the last three months have averaged about 400,000 jobs per month, a sign we're beginning to shift to steady growth after rapidly recovering 600,000 jobs per month over the prior six months.

as we move to a period of new stable steady growth, we should expect to see more moderation. we aren't likely to see the kind of blockbuster reports like we've had, but that a good thing. that is a sign of a healthy economy with steady growth rising wages for working families, everyday costs easing up and shrinking the deficit that stability puts us in a strong position to tackle what is clearly a problem inflation i've been very clear, fighting inflation is my top economic priority on tuesday i spoke about one element of my inflation plan giving the federal reserve the space they need to operate today i'd like to address two additional elements. one, bringing down the cost of everyday goods for families. and, two, bringing down the federal reserve deficit at the same time. bringing down the costs, here is

where we stand the two challenges on the minds of most working families are prices at the pump and prices at the grocery store. both of these challenges have been directly exacerbated by putin's war in ukraine the price of gas is up $1.40 since the beginning of the year when putin began amassing troops at the ukrainian border. this is the putin price hike putin's war has raised the price of food because ukraine and russia are two of the world's major bread baskets for wheat and corn basic product for so many foods around the world ukraine has 20 million tons of grain in storage right now and it has been in storage since the last harvest normally that would have already been exported in to the world market but because of putin's invasion and blockade of a port around which they could take that grain out for the rest of the world, it is not. it is not. look, i understand that families

who are struggling probably don't care why the prices are un they just want them to go down joe, what are you going to do to bring them down? but it is important that we understand the root of the problem so we can take steps to solve it i've been up front with the american people from the outset that there would be a cost here at home of putin's decision to brutally and savagely invade a sovereign nation but as your president, i remain committed to doing everything in my power to blunt the impact on american families. that is exactly what i'm doing i led the world to coordinate the largest release of global oil reserves in history. 240 million barrels to boost global supply and keep prices from rising even more. i directed the sale of gasoline using homegrown biofuels this summer and i'm working closely with our european partners to get more of the grain locked in ukraine right now out of the world

market which could help bring down prices, there is ways to do that over land which we can talk about at another time. but actions have already helped to blunt what would have been an even larger putin price hike as i said, i'm going to continue to use every tool available to me to further blunt those price hikes as we move forward but the fact is this, there is more than one way to solve this problem. if food and gas prices are going to be elevated by putin's price hike, one way we can make things a little better for families and by helping them save on other basic items that family needs on a monthly basis, like their utility bills, internet bills, prescription drug bills and other costs like housing my goal is to make sure that the end of the month families have a little more breathing room than they have now. for example, here is something that we can do right now congress could help ease the costs for families right away by

passing my clean energy investment proposal that i proposed that has been sitting there. things like tax credits for businesses to produce clean energy tax cuts for families to make their homes more energy efficient. that it results in i met with nearly a dozen xis of the largest utility companies such as southern, american electric power, they told me that if we pass the investments, they will make immediately lower -- they will immediately lower the average family's energy costs by about $500 a year that would help a lot. that would make up for a lot and in the long run, it would help make families truly energy independence so in the future american families are no longer subject to the winds of a dictator half a whoorld away. but it is also lower prescription drug costs by giving medicare the power to negotiate with the pharmaceutical companies how much that they can charge just

like they do at the veterans administration right now it is x amount of dollars for your insulin and they can decide not to sell it at all or they can sell it at the price that the government says that they will pay for it bringing down the average cost of prescription drugs. by capping that cost of insulin by the way at no more than $35 a month, it costs them less than ten bucks to make it and some families, it means hundreds of dollars a month and sometimes hundreds of dollars a year depending on what ailment they are trying to deal with someone with diabetes or arthritis could be thousands of dollars per year i've laid out a plan to lower rent and mortgage costs, largest cost most families face because we have a shortage of housing. building more than 1 million more housing units and closing the shortfall will do that i've late out a plan to lower

the cost of high speed internet by working with the 20 leading internet service froirs cut th providers to cut their prices. this could lower what they have to pay for high speed internet by $50 a month or more nearly 40% of households in america qualify for these savings. and by the way, you can find out if you would be heligible by visiting get internet.gov. get internet.gov say it again get internet.gov see if you qualify i've laid out a plan to lower the cost of everyday goods i called on congress to crack down on foreign-owned shipping companies that have raised their prices to transport goods by as much as 1,000% 1,000% and that obviously raises the cost of the goods on those ships

to consumers the senate has passed legislation and i'm hopeful the house can do the same to crack down on these companies and help lower overall costs. my plan does all this without raising a penny on taxes of people making less than $400,000 a year and by not raising the deficit at all like the 55 major corporations that don't pay a single penny in taxes even though they had a $40 billion profit the point is this, i'm doing everything i can on my own to help working families during this stretch of higher prices. and i'm going to continue to do that but congress needs to act as well we can do so much more if we come together to lower the cost for american families. but my congressional friends led by rick scott have a different approach he has introduced a plan he wants to raise taxes on wo