insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. it is 5:00 a.m. at cnbc. here is your top five at 5:00. investors remain laser focused the chief economist is here. call it a sign of things to come one major central bank with the biggest interest rate hike in 22 years. bruised but still standing prime minister boris johnson survives a no confidence vote. a live report from london ahead. elon musk with help from texas about the fake account

problem with twitter later, talk to me goose. take me to a lawyer. the legal trouble for the movie as it continues it soar at the box office it is tuesday, june 7th. this is "worldwide exchange. well good morning, good afternoon or good evening. welcome from where you are watching i'm brian sullivan good to be back with you on tuesday. let's get a check on the markets. stock futures are down across the board. this after gains from the major averages on monday dow futures down 94. we could give back what we gained yesterday we have seen a lot of that in 2022 on monday, stocks bounced as bonds moved in the session the 10-year yield is above 3%.

the fed meets next week. we're in a quiet period. there are no fed speakers this week enjoy, by the way. it means we could see added volatility in the oil market, crude and nat gas are big stories. crude is up above $119 a barrel. natural gas is the larger inflation problem. it continues to rise now at $9.36 per unit. there are predictions for a hotter summer in the south meaning more electricity nat gas is used in probably 75% of the products you buy or use on a daily basis not the least of which is lights and heat and air conditioning. in the crypto world, bitcoin and ethereum lower bitcoin stuck at under $30,000 let's go around the world. mixed session in asia.

south korea fell 1%. we have big news on the central bank more on that in a minute it is early and they are trading and most major averages are opening up in the red. the british market is higher by ever so fractionally more on the markets and your money in moments let's get to the top headlines and including another lawsuit against the london metals exchange and more from apple's big event yesterday. silvana henao is here with that and more >> good morning, brian good to you have back. australia central bank raising interest rates at the fastest pace in 22 years as it continued to battle surging inflation. the australian central bank boosted the key cash rate by 50 basis points to 0.85%.

that was above the points economists expected. the rba lifted rates by a quarter point in may the first increase since 2010. one of the biggest market makers is suing the london metal exchange for $15 million in damages over the decision to cancel nickel trades back in march. the move by jane street follows the $456 million claim by elliott management and adds to the headaches for lme owner hong kong exchange wihich will vow to fight the charges. and then apple's wwdc has a faster m2 chip announcement and hardware systems across the board and new buy now pay later service. this was the first in-person

developer conference since the pandemic began brian. >> like that, it is good to be back good to see you. see you in a few minutes thank you. let's get back to your money and these volatile markets 10-year treasury yield is above 3% that is as you await the key inflation report in the week and clues it may provide on the steps on raising rates and quantitative tightening. for more, let's bring in matt maley. the chief stratist we got a nice respite this week. it has been every day or every daly, fed pun intended how much is this fed playing in

the market >> i felt it was playing in a big way. they were a little less hawkish. everything i heard was they would stick with fighting inflation and signal not just two more 50 basis point hikes, but maybe a third in september i guess my biggest concern is some of the people saying a reason to be bullish is the fed is going to stop -- not tighten as long as people thought or aggressively as people thought they are telling us they are the therefore, the reason they wouldn't is if we had a freezing up in the markets like in 2018 and 2020 or if the economy slows down so much that they need to come in and stop tightening so much both of those take the stock market lower before they do it

if you are looking for the fed to not be as aggressive later this year, you should be bearish, not bullish >> why does it take the stock market down? has the stock market priced in an economic slowdown >> no, not at all. all they have really done is priced in the fact we no longer have the stock -- i'm sorry, the fed with massive amounts of liquidity in the marketplace we started 22 times earnings that is on the expensive side o things with the economy -- with gdp estimates in the last 6 to 8 months cut in half it is only a matter of time before earnings estimates come down if the "e" of the pe comes down, we are trading at 20 times the earnings we are getting the one-two b

punch. the fed removing liquidity and the second part is the slowing of the economy that will bring us lower lows before we bottom >> listen, matt, we talk about inflation. we have been talking about inflation for a year and a half on the how how confident are you that the u.s. economy will slowdown could it surprise you to the upside >> of course, anything can happen you know, right now, this is inflation which is supply driven we have stagflation. people say stocks are a positive or a hedge against inflation i don't know what planet they're living on. it is a hedge against inflation when it is demand driven infl inflation. the '70s wasn't good for the stock market some reasons people are thinking the market will rally from here just don't add up with gdp

estimates coming down. everybody is looking for the economy to slow. whether we get to recession or not i don't think is all that important. >> you wonder from 80 miles an hour to 40 or 80 miles an hour to 10. a big difference for that. matt maley, always a blunt view. thank you very much. on deck, uk prime minister boris johnson surviving yet another test as he stays in office. plus, cut down to size and what could be the chart of the week it's only tuesday. maybe the stock to watch coming up. and later on, elon musk getting help from texas as he questions twitter's honesty about the potential big bot problem. a very busy hour still to go futures are down we're back after this.

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welcome back to "worldwide exchange." british prime minister boris johnson narrowly surviving a no-confidence vote yesterday driven by his party. he meis not unscathed from this vote we have steve sedgwick with more >> reporter: good morning, brian. this is extraordinary for a man who is the harry houdini of british politics

can he do what neither theresa may or one of his heroes margaret thatcher do can he survive the no-confidence v vote both of those faced no-confidence vote both won by a factor by a greater margin than boris johnson yesterday. they both lost their jobs within six months afterwards. thatcher in 1990 and theresa may because she could not get her party behind all of the issues especially brexit. boris johnson is associated with brexit he wants to move on. let's listen to what the prime minister had to say post the vote >> i know people want to talk about stuff that goes on at westminster. what i want to talk about is what we as a government are doing to help people

no, what we're going to do now is take the opportunity to unite and deliver. >> reporter: sully, to put it in context, 148 of his mps voted against him. people out of the government who voted for him, you are talking about those who voted from the back benches the scale of the result was bigger than anyone expected in the uk. >> i'm looking at the cover of "sky news. it says "this is the end." how bad politically could it be there for you guys and many parts of the world cannot afford to not have clear policy focus with regard to energy and inflation and russia, et cetera? >> reporter: absolutely. the end is near.

the man carried the victory with 86% of majority. the best victory in four years we are not due another general election here in the united kingdom until the end of 2024 and start of 2025. the speed of the demise is impressive boris johnson has the parliament committee investigation where he lied about the parties at downing street that will not have results until autumn plus, coming up this month, in a couple weeks time, a couple of smaller elections which the t on orry's held. if they lose, he could be under more pressure. >> i know, steve, the weather looks beautiful in june in england, but it was a rough winter with many oil and energy prices up. you have talked about it for years. how big is the energy problem and energy cost inflation story?

is that part of the narrative against johnson that uk's energy policy and i'll say this from across the pond so somebody can throw song mething at me. it was bungled bungled. >> reporter: i know. a gas station in california for 9$9.75 for gasoline it is the same on this side of the pond we have gas prices and food prices and heating bill prices the weather here is stunning, but on every single level, we have figures matching inflation in the united states and exacerbating if the producers will indulge me, the pay issue with the garbage collectors they are being offered 17% pay raise and they want, the unions

want 30% we are in some measures back to where we were 45 years ago that is worrying for the likes of any government let alone one struggling with lying over parties during covid >> i know. you have the cost of heating probably in october going up again which will make it double. steve sedgwick, picking out the most expensive gas station in america. steve sedgwick, thank you very much take care. still to come on tuesday, a winning bid for kohl's shares of that retailers popping ahead of the open. that story when "worldwide exchange" returns. think he's posting about all that ancient roman coinage? after a new york times report reveals interviews offered. in real time and that's... how you collect coins. your money never stops working for you with merrill,

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welcome back time for the big money movers on tuesday morning. stock one is peloton the company hiring liz cottington to be the next cfo. she worked for amazon and netflix. the current cfo is leaving after four years stock two is buzzfeed. recovering today after collapsing 41% yesterday ouch that is an issue for executives.

buzzfeed went public through a spac deal in december. the company has low float. number of shares outstanding and few owners of the stock making it sensitive to moves. that stock is $2.34. and kohl's the department store in talks to be sold to franchise group that is the owner of retailers of the vitamin shop and buddy's home furnishing. it could be worth $8 billion or $60 a share. we are also watching wells fargo. pausing a hiring policy that requires recruiters to interview a diverse group of candidates. some were often fake and a job promised to somebody else. according to the memo, the cfo told wells fargo that the bank

plans to conduct a review of the diversity slate guidelines% fab j fake job interviews at wells fargo. let's check the other top headlines outside of wall street phillip mena is in new york with those. >> good morning, brian new york is not wasting time to prevent gun violence governor hochul signing ten gun-related bills into law on monday to raise the age requirement for semiautomatic rifles to 21 and strengthen red flag laws. now the golf world controversy. mik phil mick elson will join the saudi tour it kicks off in london with 48 golfers including dustin johnson

and martin kaymer. and prince harry and meghan released the first photo of lilibet. that's it from here, brian back to you. >> there you go. philip, thank you very much. coming up, morgan stanley chief economist ellen zentner is here with her take on inflation and interest rates and the fed and where the american economy is going throughout the month of june, we are celebrating pride month. here is the cnbc producer. >> change requires persistence after i came out to friends, i knew my family had to be next. at first, my mother was confused struggling with her religious

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stocks facing a pull back as nervous investors keep one eye on inflation and the other eye on fed

potential bot backlash twitter facing new usissues ove accounts and how the prices hold a key and where the economy is heading. we will introduce you to the rule of ten. it is all on june 7th here on "worldwide exchange" here on cnbc welcome or welcome back. good tuesday morning just about 5:30 on the east coast. thank you for joining us let's check the markets and your money. we may just give back everything we gained yesterday. markets did rise across the board. not a lot. dow up 111 points. right now, dow futures are down about exactly that much. nasdaq futures off a long way to go that is the way the market has

gone the last couple months. up one day and down two days the next a game of chutes and ladders you gain a couple and then slide. it did gain yesterday with the 10-year treasury note above 3% 10-year yield at 3.02% federal reserve meets next week. the interest rate hike is not guaranteed, but we'll call it 99%. there are no fed speakers this week we could see added volatility in the oil market it has been straight up. crude oil under $120 a barrel. natural gas, of course, which goes into so many things power, resins and chemicals and plastics it is up at $9.36 per unit there are predictions for a

hotter summer in the south that means more air conditioning and energy demanded and likely natural gas demand to the top stories texas's attorney general announcing his office is opening an investigation into twitter over its bot accounts on the plat p f platform ken paxton is looking into the number of fake accounts is false, misleading or deceptive the paxton announcement is coming the same day that elon musk threatened to back out of the deal to buy twitter over the fake accounts and bots. and the s.e.c. is revealing changes to the stock market and parts of thousand operating. according to the "wall street journal" gary gensler is outlining those tomorrow morning. the journal says one idea that

has gained momentum is requiring brokerages to send orders routed to auctions where trading firms compete and execute them at the best possible price. there is also this, paramount pictures sued over the "top gun" movie. the family of the man whose article which led to the film is saying they failed to acquire the rights the lawsuit seeks unspecified damages and including profits from "top gun: maverick" which pulled in $540 million globally since its release. from that to let's talk about crypto bitcoin. details crossing this hour on a long awaited bipartisan bill marking some of the first concrete steps by congress toward regulating crypto and digital assets

ylan mui is joining us with more ylan, good morning >> reporter: good morning, brian. the first comprehensive crypto bill in congress is introduced today. the goal is to establish standards and clear regulatory lanes for the rapidly evolving industry the responsible financial innovation act is sponsored by republican senator lummis of wyoming and senator gillibrand of new york. it should consider which are commodities and which are securities under the proposal, bitcoin and ethereum are commodities and regulated by the ftc digital assets would be overseen by the s.e.c in addition, the bill requires stablecoins to have 100% reserves in high quality liquid assets and provide regular disclosures. it has a process for banks to issue stablecoins and special

charter for others to do so as well also, a government study of the use of crypto. that is a huge political v vulnerability for the agency there is an exclusion up to $200 so consumers buy with digital currency and not worry about the taxes. gillibrand has been working with lummis on the bill for months. both of these senators know they have a long way to go before the bill becomes law brian, they have been working behind the scenes to shore up support and at least start the conversation back to you. >> yeah. a lot of questions here. number one, you talk about the bill being bipartisan. does crypto fall squarely between party lines? >> reporter: it doesn't.

the lawmakers have been talking to spfolks across the spectrum. they spoken to mitch mcconnell to rowe. they also are looking at pr protecting consumers you are seeing the interest from unlikely sources even lummis and gillibrand are unusual partners on a bill like this this is good news for the crypto industry and they have lots of different advocates and in different corners of capitol hill there is skepticism over the crypto industry. >> let's highlight the positives. maybe good news for america. maybe, potentially, we found a topic that both sides can, sort

of, get around kind of, ylan? >> reporter: kind of, sort of. i'm not holding my breath. >> it's a kind of, sort of kind of day better than no ylan mui, thank you. apparle making surprises at conference, but it is nothing with software. venturing into the buy now pay later space. apple also announcing changes to the operating system for ipads and iphones and the maccomputer. for more on the event, let's bring in alex kantrowitz alex, let's start with the negative and what we thought we might get, but didn't. that was some kind of, you know, augmented reality head set

what happened? >> apple is waiting for the perfect release on that device it wants to get it right the first time however, we're seeing other companies. companies like meta get a large head start on the type of technology when apple comes in, we will see if it catches up it was able to do that when it came in late on the smartphone market kudos to them. we have not seen apple create a category changing device since that time. i don't think they will be able to surmount meta's lead any time soon >> even if it is the perfect product? >> there are lots of limitations you have to get around first, the category is largely overestimated. people are saying this is the next big consumer device i see it as an enterprise device it is nice to sit in meetings with colleagues in virtual

reality or something that you are working on for disaster preparedness and make decisions in real time most people live close to their friends and family i don't see them needing to spend time unless they are gaming on virtual reality. i think meta will make mistakes and learn quicker and apple is pushing toward the consumer device and will raealize the mistake too late >> we have widgets on the lock screen they are nice tweaks, but it feels like frosting on the frosting overall, alex, the event was nice and in-person hybrid in-person event for the first time in two years. do you expect bigger things at the next one >> i like to see hebigger thing. we are looking at the market the event was everything from the market from apple.

like you mentioned, gloss on the current operating system cool tfeatures pay later event. and you don't want your person you were with access your files. everything that apple introduced is not changing the market right now. in the age of $3 trillion apple, fed zero interest rate, this would be great we expect more from them it is not going to change reality on the ground. >> maybe messages text editing so you don't get into the bad breakup in the first place alex kantrowitz, thank you good to have you on. appreciate it. all right. coming up here on "worldwide exchange" the answer to a question you hear some politicians complaining about a lot these days why aren't american oil producers pumping more oil we'll find out and see if oil

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welcome back let's get a quick check of amc and gamestop why are we looking at trader favorites? because there is new data out showing interest will fall in the two names and now at highest level in a year. 22% and 24%. shares are down since the meme kickoff in 2020. people are betting it will fall or the stocks are rally if the shorts get squeezed. amc and gamestop two names to watch. i'm back and so is the rbi the random but interesting thing you will hear cnbc style this is one of the more interesting charts we have seen in a long time it goes straight to the economic question is the american economy going to fall into recession? we can never answer that with

100% certainty until after the fact it is interesting. it comes via research. the team call it the rule of 10 they found out mortgage rates and gas prices equal 10 or more, it tends to lead to a big consumer slowdown and/or recession. in other words, you have a 6% mortgage and $4 gas, that equals 10 that's a bad sign. 20 years ago, gas prices were lower. mortgage rates were higher maybe the makeup of the 10 may have been different. factor that in you get the idea here is when we popped over 10 before if you are on radio and can't see the charts, i get it in 1995, we were over 10 co combined no recession 2001, it happened. recession. 2008 when oil had the spike and housing collapsed. recession or worse

now we are basically there again in some areas with gas over $5 and mortgage rates above 5 as well this would be the fifth time in 30 years we have gone above 10 in mortgage and gas prices combined does this mean a recession no nothing is perfect it is another way to look at consumers that are getting pinched with expenses and it could be the harbinger of the down turn to come. the rule of 10 something to watch ra random, but interesting. also up in price, of course, is oil it goes behind gasoline. now more than 80 trade groups, including the american petroleum institute and chamber of commerce are calling on the biden administration to increase the domestic production of natural gas. let's talk about it with jay

king jay, good to have you on the program. we know oil production is going up the federal government says we'll get to 12.9 million barrel per day on average next year that would be a record we are hearing politicians saying why aren't we doing more? why aren't we doing more, jay? >> it is about esg it is about people wanting to drill more efficiently we are going to natural gas a little bit more. we are not drilling in the united states because of several reasons. the government shutting us down. exxon and people like that are making huge profits. they are buying back stock instead of putting that money back to work in the oilfield like before. private institutions you hear blackstone coming back and saying okay. we're done we're going to start investing in oil and gas againbecause th numbers don't lie. the numbers are good

if you have that, you will have people starting to come back and they are coming back it is slowly slowly if they will, they will get there and when you do, brian, you will see prices come down a little bit this is like an extraordinary time because you are not seeing people coming back and drilling like you did in the years past a little bit different this time >> jay, that's the question. what's changed now from previous cycles >> i think it is the people who don't want to drill for oil and gas. we don't want oil and gas. we much rather drive electric cars they are not admitting, i dgues, we do need oil not only for gasoline asphalt and lipstick and plastics so many other products they are not willing to come

back and put it back only 60% of the account before the pandemic we are not drilling for oil and gas in the united states until we really make that decision -- i did hear president biden say something about tax breaks and tax credits let's go more to get people back in the oilfield in the united states and drilling for oil again. i have heard that, but it is not like you turn a switch and oil starts popping out of the ground it takes billions of dollars it takes a lot to get things started and drilled and pipelines in and things like that it takes time. >> i've been to midland, texas in summer, jay it was about 108 degrees when i woke up and the sun hadn't come up yet i thought working out in fields can pay well, but it is a hard job. you see all of the trucks with steel and frack sand and water

and diesel generators. it's a hard business it can pay a lot, but if you can make similar money and work at an air conditioned office now, i guess many people will take that option do you think the labor shortage across america and in a variety of industries, but including oil and gas or will higher prices mean enough pay to bring people back to the fields >> it will it is coming back. it is like the other day where somebody said the new ford pickup truck was delivered to the rig. oh, we're coming pack. when the workers make more money than at the local walmarts and things of that nature, they will start coming back. it is tough. when you are making really, really good money and prices go down and you get laid off, it doesn't make mama too happy when

you lose your job. when heit comes back, it will cm back i'm a fourth generation guy. i have seen the ups and downs of midland. it comes up and it comes down. i believe this time that we're not -- we're not -- john said it in his newsletter. thousands of people talking about it it is just not like it was before i believe this time we're going to see a down side in oil for a long period of time. it is like investments protect the down side. let the upside take care of itself we feel that's where we are today. we're going to see the prices. we still have inflation and rising costs we're up 10% to 30% to 40% on costs on drilling wells. it's costing more, but that's okay we have the risproduct rise to

offset that. >> the production is likely to go up and prices may come down refreshing view. jay young, king operating. thank you. take care. different. speaking of oil prices, we have inflation data due out this week morgan stanley's ellen zentner is here and why she says in the near term not much can be done with prices. dow tuarfures e down 124 we're back right after this.

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welcome or welcome back. let's talk about the american economy and if inflation has peaked or it will fall soon or the odds of falling into a recession this year or next. we have morgan stanley's economist ellen zentner. we heard oil prices may match or come down in the near term

that would be good news for inflation. do you think inflation has peaked >> so, i think when we get the report this week, we are going on to test highs or make a new high in headline inflation i think the underlining details with some areas to show relief overall, headline inflation is high that's what matters for the economy. that's what matters for households increasingly, that is what is mattering for the fed. it is important to strip out food and energy prices to show inflation is not as high it is high and painful and the fed is acknowledging that. >> yeah. i was out in iowa recently talking about inflation. farmers said everything we grew with the fertilizer costs hasn't come to market yet itmay not have peaked. >> i think the fertilizer story

and agriculture story in the u.s. and food prices is something we have been following closely with the report out just yesterday. pointing out that food prices disproportionately impact lower-income households. it is a problem. it is not just supply chain from fertilizer and food. it is about weather. we are weather mattered most for crops. it still matters most. we were already having a bad season leading into this for weather before all of these issues hit there are things the administration is trying to do to alleviate that. none affect the near-term costs for families for food. >> yeah. a bad hurricane, buty the way, that shuts down the gulf of mexico facility -- a lot of things are left to hope.

next week is all but guaranteed, ell ellen, that the fed raises rates a half point kwquantitative tightening is not getting enough attention what is your take on the non-rate things that the fed is doing and what they mean >> i think the quantitative tightening and the fed shrinking its balance sheet not getting much attention so low leittle is running off a started at a trickle we hit the maximum runoff in september. maybe we only see the effect of the flows in september i think the uneasiness i have with the balance sheet is that it seems well priced into rates markets. it is not well anticipated the effects on equities and on corporate credit that is coming from our strategist of asset classes. those classes seem to not be

impacted until the flows occur we only just started to see that balance sheet runoff that will provide additional tightening i don't know how much it will factor into what the fed does beyond the july meeting. it will provide additional tightening >> yeah. all of these things layer oni w at cnbc yesterday in the office. she was like, yeah i was moaning and groaning of airlines she said we went to florida a couple months ago and we're done we broke the bank on that trip you wonder how much of that is actually going through and how much of the spending spree we have seen, ellen we know 21% of it is on credit cards. how long i know we feel good, but how long can that continue until people back off? >> i think we went through the period, a long period of pent-up

demand of the spending being satisfied. now we opened the season for pent-up demand for services to be satisfied you are right. we will still take that trip, but pay three times as much for it there is a lot of price tolerance for households it starts at the lowest income levels we see the destruction in the lowest income levels dealing with food, energy and rent and the fed raise in interest rates. you mentioned credit card. in the near term, they carry the variable debt which is impacted by higher interest rates they pulled back on the spending for a time, the upper income groups spend this represents 40% of consumer spending unless the wealthy stops spending, acknoconsumer spendins okay.

>> i liken ending the show on okay ellen zentner, thank you always appreciate your views take care. maybe a little good news all right. that's it for us on "worldwide exchange." see you tomorrow stock futures are down you never know what can happen "squawk box" is up next. see you tomorrow have a great day nope. how do we show that we'll stand tall through the storms? nah. (thunder) how do we make our clients feel secure and- ugh... not lions. (lion rumbles) we do it with our people. people who've been looking after people for over 170 years. dad! a dinosaur! it's just a movie. no dad, a real dinosaur!

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good morning the average price of gasoline creeping closer to $5 with no sign of relief in sight. which states are paying most. elon musk threatening to scuttle his twitter deal over fake accounts and bots the attorney general is now looking into the matter. travel nightmares.

the points guy is here with tips for your airline reward points and the best way to rebook a flight if your's gets canceled it's tuesday, june 7th, 2022 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live in the nasdaq market site in times square i'm rebecca quick along with joe kernen and andrew ross sorkin. yesterday, we did see gains for the market, but the dow was up 16 points at the close it is indicated down 140 points this morning s&p down 19. nasdaq off 70. if you