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 are checking treasury

yields, 10-year yield pushing above 3% 3.02%. 2-year at 2.7% the 30-year bond is 3.16%. another day and another record high for gas prices in the united states. you know this if you filled up the car lately aaa says the national average climbed 5 cents since yesterday. now at $4.92 a gallon. there are 14 states that are now averaging above $5 a gallon. you paid this morning? >> yesterday i didn't drive this morning. yesterday and cash and credit were the same suddenly at this place. i use a credit card. so crazy that iuse cash. i got the regular which was $5.08. i got premium -- i'm an idiot. is it really 93o octane?

>> once you push past $5, peopl go from regular to premium >> this is a lease maybe i'll buy this one. >> 87. that's my move i've never gone above 87 >> if you could get lower, you would. >> just saying >> 70 is fine. there may few knocks it does knock. >> watch out for the knocks. if you check out oil prices, this has come down slightly118.1 we were at $120 a barrel this time yesterday morning you start to get nervous about what is coming down the pike andrew.

let's talk apple this morning. they kicked off the worldwide developers conference by debuting the mobile software and lock screen and buy now and pay later and ability to deleteor edit texts apple announced it will have two new laptops on the new chip. it will be 18% faster than the m1 chip. the first devices to get it is apple's mac book air and mac book pro the best thing is you can finally use your phone which has an awesome camera, as you know, as your web cam. the lap taps which have terrible web cams and now you can take your phone and automatically know your phone wants to be the camera and boom -- not only that, guys, it looks at you and

also look down at the table. if you wanted to sketch something or show a piece of paper or do a card trick, frankly, it would look at both at the same time having said that, where was the ar no mixed reality no vr or ar. i don't know if people were disappointed >> i'm caught up on the edit function i have never seen anybody successfully recall a message without people having read it. the idea to edit your text is interesting. i wonder how accurate it will be and if it actually lets you change. >> you have 15 minutes to do it. on the text, you have 15 minutes to do it i believe it would show behind the text if you wanted to go and actually look. you see the edited version

>> that was my question. can you erase history of what stupid thing you sent? >> that i don't know they also have an undo sent on the email function that they added yesterday. that is really actually closer to a 15-second delay of the send it is not actually undoing the send it is giving you apause so whe you rethink it -- >> did you really want to send that >> the stuff that gets messed up is what is misinterpreted by if you dictate. i try to dictate all the time. fix that i send stuff it is nonsensical. the words that come out. in what universe would you send that >> i have something for you. you use siri for that. if you use google which you can do on your apple phone >> it's better

>> miles my adoration for tim cook and apple, but google has figured it out. >> nothing you said has got me that excited about the big apple. you won't wear a turtleneck to introduce this stuff >> i thought it was cool when you saw this camera and you could put on top of the laptop and it was a thing that apple would do >> what would i ever do that for? when would i have a laptop and phone next to me >> how often are you on a zoom call you are on tv right now. you have lights and cameras and stuff. >> tv and cable and business news not tv. >> zoom. everybody at home on zoom is trying to make it look as good

as they can and, by the way, this camera can adjust the lighting it almost looks as if you have lighting >> that's an improvement i would sign up for that the other thing that is interesting is the services they rollout including the buy now pay later service. firm shares were down 5% when they rolled this out because of the competition. it has been tim cook's genius. the edition of more and more services that make this part of your life that get into every aspect of your life and the ecosystem of apple and you are never getting out of and crushing competition everything they roll into, they bring all of their people along for it that is the genius of tim cook with services. >> that helps. nothing really blew you away okay >> the camera thing. i could see the future of it better i thought what they did was spectacular. i said to myself, two years from

now and everybody has a ring light in their home, you would never need that again. the camera will do a lot of the work for you. >> that would be nice. >> any new content that's different second season? >> that was not yesterday. >> i need some content i've been watching stuff i would not have watched this five years ago if it was the last thing on earth. some of the documentaries are poorly done on netflix i'm mad at netflix they have thrown so much against the wall what have you got for me, sorkin >> "the staircase. >> i saw that. i don't like that guy. he's guilty as sin i cannot believe we're watching that guy that guy is the worst. do you have any doubt? she fell one step.

it looked like a slaughterhouse. how does that? he's free? he's free. >> i know what happens >> counselor, approach the bench. >> he's free >> so well done. >> oh, my god. that guy let's move on. elon musk says the deal to buy twitter is on hold she got attacked by a freaking owl on her steps that's the explanation now, sorkin some type -- >> i know. >> a bird of prey? >> yeah, a bird of prey. swooping in. >> hitchcockian. >> while he is out at the pool. >> don't ruin it for the folks at home. >> it's been on for five years the owl did not do it. he is accused of breaching the merger agreement now texas attorney general ken

paxton is getting involved announcing his office opened an investigation over the number of bots on twitter's platform the ag's office is investigating whether twitter's reporting on real versus fake users is false or misleading or deceptive under texas law. texas is saying come on in, elon we love you. >> that is crazy we are in the strange world where states that were out of everybody's business are now in people's business. it is like the world is upside down >> all politics are local. they are >> that's true >> business does make the world go around in your state. >> i know. a billionaire overbid for something and got in a bad position and you will use the state's office of the attorney general to back out of something? >> do we know? half of twitter. i know the stuff i get is

useless. >> doesn't matter. he signed the deal and agreed to due diligdiligence. >> part of it is -- are they providing info or slow walking it. >> they don't have to. they agreed to buy a house without inspection >> he gets out of it and it's $1 billion? >> no. the worst is he pays $44 billion for the house he doesn't want. >> yeah. yeah >> just the latest in that saga continues every day. a new drip for us to follow. when we come back, we will talk about a new proposal in washington that is the most comprehensive cryptocurrency regulation to date we will go live to washington, d.c. you can see bitcoin is down 5.6% all of the cryptocurrencies were up yesterday we will bring you a first on cnbc interview with the senators

behind the plan on cryptocurrencies this is "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by ibm. ibm. l let's create satisfy cravings from tokyo to toledo? so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision. let's create supply chains that have an appetite for performance. ibm. let's create.

♪ two senators, one from each side of the aisle, coming

together to push cryptocurrency regulations. we have ylan mui with more what can you tell us >> reporter: a bipartisan pair of lawmakers is revealing sweeping cryptocurrency regulation to foster innovation and provide clarity. the proposals from senator lummis and senator gillibrand have two cryptocurrencies as commodities and regulated by the ftc. securities are overseen by the s.e.c. there is a gray area of so-called ancillary assets not decentralized and don't meet the security cardano and solana this must file disclosures twice a year with the s.e.c. the fed and white house asked congress to weigh in on.

the bill requires stablecoins to have reserves in high quality liquid assets and provide disclosures. it provides a process for banks to issue stablecoins and charter for other institutions to do so as well. lummis and gillibrand talked to lawmakers about the proposal conservatives and progressives and party leadership becky, they say the bill is not bipartisan, but non-partisan because support does not fall immediately to any party line. back to you. >> it may not fall neatly among party lines, but what will get consensus and get this passed? >> reporter: it is uphill b battle they say this is the start of the conversation they reached out to other lawmakers. think of pat toomey and josh

gottheimer others weighed in on this. they are reaching out to those offices and incorporating the ideas into the overarching framework because there needs to be a clear picture part of the problem is the regulation of crypto is done piec piecemeal. not clear definitions that work across the regulatory lines. that is what they are trying on achieve. >> ylan, thank you this is what the markets have been waiting a long time on, too. we will talk to lummis and gillibrand in the 8:00 hour. that is a first on cnbc. and a hopeful sign for the economic recovery from the pandemic the majority of those who left the work force would consider coming back. we have steve liesman with a

survey with interesting results. >> yes, andrew the survey we went after the big question for the markets and fed. in addition to surveys online, we interviewed 400 people who would come back. they said yes, if. 94% said they would consider coming back. 68% of those retired during the pandemic would consider coming back the two groups are looking for different conditions for the right job. for the unemployed, it is pay first. 54%. you comcould mention more than . flexible hours and work/life balance. a job you are qualified for is interesting to people. retirement and care benefits were down to 22% i was surprised that is low. one writing in, i worked for 21

years at the same company and laid off due to covid. i was contacted for jobs, but did not have the experience. i interviewed two weeks ago. i'm scared of losing my home we wish that woman luck. the newly retired is different that is the orange bar flexibility in hours and followed by salary and work/life balance and job they are qualified for. and then care and retirement benefits isat 13% for them one-third retired for health reasons and almost another third for covid reasons. they said they didn't want to work 12% needed to care for a family member when retired or employed or unem unemployed health issues and covid is a theme. the effects of the pandemic have not been put behind the economy and the nation, andrew, is

saying we are coming back in different ways for a long period of time. >> you looked at the distinction with the newly retired and those who retired -- is your sense those people have any ambition to go back the ones in the retired camp >> you have 68% of those retired in the past two years said we would come back. consider coming back they would many said they would come back part-time. there is one group what said i'm retired for good others would consider coming back it is interesting, andrew. it suggests to employers if you want to tack this work pool, you have to change what you are offering pay is not the first important thing. flexible hours is. >> steve liesman, thank you. it's fascinating stuff talk to you soon when we come back, we will talk about the s.e.c. because it is considering changes to the stock market and it could threaten the busiss of free trading

platforms like robinhood look at that stock right now $9 we'll talk about that straight ahead. later, we talk to georgia governor brian kemp about the production of electric vehicles in his state all that and more after this in two seconds, eric will realize (laughs)

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welcome back to "squawk box. the s.e.c. is preparing major changes to the way the stock market changes floating plans with market participants in recent weeks some of these ideas are big.

requ requiring brokerages to routed to auctions. gary gensler wants brokers to execute orders at the best plan. this has been a controversial payment model to allow who wholesalers to make more money trading against small investors. that is how some describe it defenders of the practice say the system has eliminated fees it is interesting to see a one step forward and one step back situation joe, you could see maybe marginally better execution. a penny here and a penny there at the same time, if i told you the kids would have to pay $4.95 or $9.95 before they make the trade, would they make the trade at all that's the question.

>> it seems it is pennies. >> it seems like -- >> you can lose money in much better ways than getting screwed out of a penny or two. >> the question is the big guys. citadel with the payment order the big guys can leverage. >> we don't buy stocks i'm kidding. when i bought netflix, i would have got it at $700.02. i paid $700.04. >> or do they say wait >> make it fair and level. >> i think -- >> i have cnbc to thank for that they didn't allow me to buy these things thank god. >> there is a question about this if there are fees for every transaction, which is what there used to be in the market and they still exist in places, but

how that changes the dynamic if people trade at all? >> when i was a stockbroker in 1985, we had fees. you do 1,000 shares, it is a $1,400 commission. >> that came down not just because of payment for order flow >> it came -- >> it came down from competition. >> it is all good. now you are free to lose money your own way not based on transactions. >> yeah. >> and a market flash. check out the shares of amc and gamestop data shows overall short interests in those two stocks is now at the highest level in years at 22% and 24% shares of both companies are down sharply since the meme craze in early 2021.

ron burgundy >> yeah. coming up, katie stockton is going to join us we get an update based on the con vversations we had yesterda. and throughout the month of june, we are celebrating pride month. here is axios correspondent ina freed. >> to me, pride month is all about celebrating the work that has been done to get us to the moment all of the people who fought with their lives so we have a chance at equality it is also a reminder there is so much work still to be done. i am so proud of the next generation of trans and non binary youth they are thriving. theyave ha chance to have a childhood. it is amazing.

it has really changed the game >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure nt. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee and get the best deals on every smart phone.

good morning welcome back to "squawk box" live from the nasdaq market site in times square. checking the futures disappointing yesterday as interest rates moved up and we gave back the gains.

now we are in the red. we have a long way to go until 4:00 142 pre-market a lot can happen between now and then weakness this morning here and in cryptocurrency. joining us is katie stockton founding and managing partner at fair strategies. katie, i was in denial again not seriously in denial, but wishing we did not have to go through the pain you are indicating we have to go through. you are emphasizing we're in a cyclical bear market and a long and secular bull with perhaps more work in the averages to be done to make a real low and now the important level on the s&p is back at 3,800 >> that's right. i think we're all in store for a rough summer based on the down side momentum

long term and we all want to relax. the market might not let us do that we wdo have the negative and lon term the importance for the s&p is 3,500. we are looking for this to end quickly. there is resistance as we discussed at 4,200 not far from current levels. that's based on the latest breakdown for the s&p 500. importantly, the s&p 500, although it might feel it, it is not yet oversold that is looking at monthly indicators we we still have room for the down side it can take a few months to manifest at a breakout >> we go through 3,815 which

does not hold. does 3,500 hold? >> you know, i think worst-case scenario is 3,200 is the second support. that support would be targeted by breakdown below 3,815. 3,500 is an interim level. somewhere below that is where the market will establish the long-term low. in terms of time frame, we are looking at september or october as to timeframe with improvement with the long-term indicator looking at the market this morning, there is a tight intraday trading range below intraday support for the sa s&p 500. it is 40/90. that is where the relief rally

may hold we are trying to help people get hedged at the right time >> andrew. >> katie, one question that you are looking at the data and charts what happens if later this week and we get pce and it shows year over year inflation is down and you think the market would rally on that news how do you think about different data points that may come and effect the charts? >> we think about it in terms of the reaction if the market breaks out from the intraday trading range and response to the news, that is a bullish short-term development we are more reactive and how we digest the data and the market right now is reflecting all known information. you know, with that in mind, we want to respect the trends and respect the momentum over different timeframes the multiple timeframe is key with everything highly c

correlated it is important to keep that in mind mind if we get a nice positive reaction, it might be short lived. >> you could substitute that word for averages. just different levels of support and resistance and come to the same conclusion. bitcoin now has bottomed or near term or rallies to 35,000 it may eventually break 29,000 or stays between 29 and 35 >> it was interesting. last week, we saw the signal which was short-term for bitcoin. that supsports a relief rally it is not unfolding this morning. we saw signs of life yesterday in the cryptocurrency market we have a bullish short-term buy. we are not buying in on bitcoin,

but for people who still hold positions, we are waiting to take down exposure it is given the long-term loss of momentum that is shared by the nature indices the correlations are high there. close to the highest levels ever for bitcoin and the nasdaq 100 so it goes to show that people are treating bitcoin and other cryptocurrencies, of course, as risk assets. near term, no. we are looking for out performance from the alt-coins whether or not that makes sense, i can't be sure. that is what the rotational wor suggests followed by a potential breakdown and support is roughly 27,000 that is based on the levels where you see we are replacing lot of weight on the miss environment. >> we have one really good bull market that will be great. that's oil going to 150

four people are happy about that either ceos of oil companies or long futures or shareholders. that could spell trouble for everything else. 150 oil. >> that's true it is giving some up trend to work with. in terms of wti crude oil, we have seen a confirmed breakout we have a couple of good closes above resistance level which was roughly 115 per barrel that targets next and final resistance on the chart which is 147 per barrel very significant long-term breakout we are still not seeing the sell signals there that we would expect in the steep up trend we are respecting the momentum with crude oil and energy s sector that sector has relative good strength >> katie, i know you are a technician do you look at the charts and think this makes sense the reason we are testing some of the things and equities markets is because the chart i'm

looking at for oil goes up. it meets with what we are talking to other analysts who look at this broadly >> that is when it aligns on the technical and also the macro front. you mixed that to the f fundaf fundamental front for the individual stocks. it is not unusual for things to line up in that way. for example, we are talking about september or october as a potential bottom to me, that makes sense. the indicators support it. perhaps there is a macro case as well it makes it that much more powerful when things align and we are price base in how we look at things and supplylook at supd demand that is often macro in nature and it makes sense at this time. >> we have a bull market in rates, not in bonds. we don't talk about that at this

point. katie, the 10-year >> i think stalled the 10-year yield and dollar is stalled for now. within steep up trends they will resume higher ultimately. >> thanks, katie >> you're welcome. >> okay. don't shoot the messenger. when we come back, the great wealth migration we have data on where the wealthy people have been moving the last two years we have good guesses he will reveal the biggest winners and loser next. and latser, we are talking t senators lummis and gillibrand about the latest cryptocurrency in washington. see how much support they have for this "squawk box" will be right back.

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welcome back to "squawk box. new data showing the wealthy moving at a faster rate than 2020 we have robert frank are the wealthy migration. >> andrew, the northeast and california lost over $40 billion in income in 2020. new york losing $20 billion in income from migration that year. more than twice the losses of 2019 california also nearly doubling

losses to $18 billion. connecticut, new york and illinois losing a combined $11 billion in income. most of the winners as we expect were low-tech states florida. florida adding $24 billion in personal income in 2020. texas adding $12 billion with arizona and nevada seeing strong gains. if you drilled down and looked at specific state to state migration. taxes become less important. new yorkers did go to florida. that was the top pick. their second common destination for new yorkers was new jersey which gained $5.3 billion from new yorkers who moved there. california also gained $3 billion from new yorkers they, of course, have a higher tax rate california ended up losing twice that to texas and arizona. the average income of those leaving high tax states continuing to push higher. new york lost 1.6% of the

population and 3% of the income. that shows the people who left were the biggest earners and some of the biggest taxpayers. andrew >> so if this was happening before -- it sounds like -- it is happening in the midst of this i know this is backwards looking. can you project forward? you think this is the trend is your friend and it is continuing at this pace has it shifted in your mind? >> i mean, the sad thing is it is impossible to know what happened in 2021 the states are not providing updated data the tax collections don't reflect it california has a $100 billion tax surplus from the payment in 2021 new york with a $20 billion sur surplus. it is not showing up in the tax roles. that is probably masked by the strong markets and strong income last year. it will be next year or the year after that we see what was

happening in 2021 with regard to the population and incomes that left >> i guess this goes to the political point which is in states like california and new york and in cities like new york which we often talk about anecdotally. all of the money fleeing those cities are not feeling it with the strength of the markets. you can think inflation is part of it. how much of that is a masking story? the tide will go out a year or two from now and say it is worse than we thought. do you think there is any chance it is better than we thought >> unlikely it is better andrew, the point about the tide going out is really important. we already have seen markets this year that are down. not as strong as next year we will see what happens the rest of the year it is unlaikely we get the strength of the markets and the economy. this could be reflect in the tax

roles in the back half of the year as the states have passed and spending at record amounts the budget in california is $300 million. the budget in new york city is the budget of the entire state of florida this year we could see the spending out slowing and we could see that show up in the back half of the year. >> okay. robert frank looking sharp in the summer suit, i should add nice to see you. thank you. >> sure. they never learn legislation spending this money as if this is the new normal and they he keep the money and it wl never go back down we have seen this movie before. when we come back, how to navigate a tricky travel landscape.% the points guy will join us for advice for handling legislations and your rewards points. good luck with that. we're back after this.

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. a rise in airline flight cancellations is causing big headaches for ravelers during memorial day, there were over 2600 flights canceled more than the three previous years combined let's bring in brian kelly, the founder of the points guy website. looking at the last three years, two of those year there weren't that many flights, but this takes all of those plus the normal memorial day weekend from the year before. how much worse is this than what we've seen, let's say, over the last 10 or 20 years in.

>> i wish i had good news. they're forecasting a pretty bad storm season and staffing shortages are the real root cause to all of this when an airline has to cancel flights, that flight can no longer get to where it needs to go in the good old days, there were reserved flight attendants, people are calling out with covid, the airlines are canceling flights preemptively >> did they just screw up? did they oversell? and they don't have the staffing, and they know it >> a lot of these airline, delta has recorded near-record

revenues, so clearly the airlines are looking to recoup the losses they've had over the last two years if your flight is delayed or canceled, go to your credit card so many of them have trip delay and cancellation coverage. in the u.s., the airlines owe you nothing but a refund if your flight's delayed but your credit card company will often cover hotel costs, et cetera >> i think most of these cancellations come because people miss their connecting flights when they're late with something, too how big of an issue is that? and should you avoid doing that connection >> absolutely avoid connections at all costs if you do have a connection, do to the do anything lower than two hours, even three hours can be dicey if you miss that connection, chances are flights are sold out. i also recommend get global

entry. that will give you pre-check as well we've seen insane security line due to tsa shortages make sure you get global entry, especially when coming back to the u.s. those immigration lines can be really, really long. >> brian, i've had now a bunch of flights canceled. had to communicate with the airlines very quickly. how do you get the replacement ticket the app always sends you to some flight that is either five days later or doesn't make any sense. you're on the phone for two hours. tell me that there is some side door somewhere that you don't know about >> i recommend calling an international phone line you can often get through in much quicker time. the other is to go to the airport lounge they can get you rebooked. do not wait in that hours-long line in the airport.

social media just don't do it publicly and give out your pnr. but you've got to be savvy if you're waiting in line to be rebooked, all those available seats are going to be snatched >> can you go to the airport lounge if you're not a member? >> sometimes they're overcrowded, but can you buy for 50 bucks depending on the lounge or get one of those airline credit cards that gives you lounge access and a ton of other perks. at least that is valuable, because they'll save seats for elite members versus non-elite members of the airline >> congress is looking into this do you think there's anything they can do? >> the u.s. has no skbrapasseng bill of rights i doubt if we're going to see anything from congress the airlines have a big lobby, and unfortunately, i don't see any reprieve for the every day

traveler protect yourself by using the right credit cards and try to book non-stop flights. >> i have a lot of questions you'll have to come back next week we can talk more about this. coming up, georgia governor brian kemp is going to joanin u to talk about rising gas prices and the electric vehicle production the national average climbed 5 cents since yesterday, rising to $4.92 a gallon $4.92 a gallon we'll be right back.om your loc. or same day if you need it sooner. but aren't you glad you can also just swing by to pick it up, and get your answered? because peace of mind is something you just can't get in a cardboard box.

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good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm live with andrew ross sorkin and joe kernen

s&p futures are down by 128. we do have breaking news from target target just coming out and announcing big steps to try to dole deal with the big inventory issues wall start took that stock down 25% on that day. target heard the message and is now responding it's planning several actions in the second quarter, including additional mark downs and canceling orders they say they're looking for the addition of incremental holding capacity near u.s. ports to allow flexibility and speed in the portions of the supply chain that have been affected. they're going to address markups. so can you anticipate costs going up for consumers and they're going to work to shorten lead time. they're doing a lot of other things the company is planning for

continued strength in food and beverage, household essentials and beauty they're planning more conservatively when it comes do discretionary categories like home that's where the trends change so rapidly a lot of the things they had ordered 12 months out, some of those deliveries were late and got here after the consumer had moved on they say they're going to take aggressive actions, working with vendors, that means beating up on vendors to make sure they're taking some of the hit on this, too. and they're building capacity in the supply chain they're going to add five distribution centers i guess if the supply chain isn't working for you, you figure it out and build it yourself they are lowering their guidance in terms of the operating margins. it's going to be in the range of 2% they told us three weeks tag

wou ago i would be closer, and probably about 5% target now expects an operating margin rate in the range around 6% that would be better than they've seen in the fall in the years leading up to the pandemic they continue to look for four-year revenue in the low to mid-single digit range and are looking to make market hair ga share gains. they do have a board meeting that start this is afternoon and a sheareholder meeting. they are trying to catch up with what they admitted was a big mistake in inventory they come in around 30% to 40% if you listen to npd group, they will tell you these are historically high levels of

inventory. brian cornell telling us they are doing this, working aggressively with this they want to make sure they're prioritizing their deem. t team. they're not going to take cuts, but just about everybody else is going to be paying more. >> back down to revisiting where it went after the initial break in the stock >> right >> even at 151 but i guess, traders will probably be saying, okay you're copping to what's going to happen near term between now and september, yeah, and then you know the second half of the year we're going to have to take your word for it but we've got a couple more months of serious pain in the meantime and that's front and center. that's right here. >> i don't know why it comes as a surprise to anybody. they've been offering 40%

discounts. i bought a patio set from them because it was 40% off >> you got to believe they're going to be able to do that in the second half. the pain is still here for the next month and a half, two months, whatever >> brian's a great operator. do you think we've seen this play out enough in other companies? i mean, we've seen it in some companies, clearly, but the amount of added cost that's going to come up in the next couple months and how many mornings are we going to wake up with announcements like this and is that already baked into the cake in the market or not i would give you not but maybe when the market opens? i don't know >> you know, i think if you really look at this, this is going to be another case where you'd see a big differentiation in the retailers the big box retailers are going to be able to take more aggressive steps especially when it comes to the vendors who they w are going to pressure.

i think you're seeing that play out in a big way, and that could be a differentiator as well. i would probably want to know, as an owner of the business that the steps were being taken and taken aggressively but joe's right. you have to take this on faith that the second half is going to make up for this >> but if you don't think someone like brian cornell earns his pay, think about what walmart or target has to think about inventories and what they staff. and so we go into the pandemic totally different stuff than everybody wanted oh, heck, okay, got to get all this stuff then you get all that stuff. then we read in the journal yesterday, then another really quick change from what people are buying and interested in when we come out of it and i guess if you were a true genius and great retailer, maybe could you anticipate exactly what to put on the shelves >> not with the snarls in the

supply chains. >> that complicated things, too. but also self-inflicted. misgag misgaugeing what the consumer's going to buy >> no one has seen the consumer shift like it has here you can see it in the airlines and all the way through. people are trying to keep up with these trends. >> i used to think that about hot topic. think if i was the buyer for hot topic. this is what i'm putting in for the summer for the fall, i like this kind i think knicker things are coming >> that's an excellent point we have all become teenagers we're all teenagers at this point. we have the same attention span. >> jam >> you would have -- >> i remember jams i used to wear those jams, joe

>> three quarter pants orring? or something? i used to wear them. >> i'm going all in. >> second grade for me, but i remember >> the little hats? >> that, i don't remember. >> i will say these are really aggressive steps, and they are laying them out. at the end of this, pretty interesting note, i think they talk a little bit about how, look, this is their best guess for where things stand right now. there are risks to this that things could change. anything, these risks and uncertainties include the possibility of further shifts of consumer demand away from the margin, discretionary categories this is what we're telling you right now. the company does not take any obligation, it says to update any forward-looking statement. but they giving us an update three weeks later and as they're preparing to talk to wall street and i think this is a pretty good thing to lay out.

>> there wasn't a one quarter problem. now we know that >> we kind of knew that, but yes, the operating margins are going to be more compressed than they told us three weeks ago they said they expected operating margins to be more closely aligned to what they'd seen in the first quarter. this is a bigger hit, but they are taking significant steps to try to address all of this i think they're getting their arms around this and really seeing a change. >> look at the dow >> the dow, 220 points. >> how much you extrapolate from this, and i think the answer is you've got to. >> want to get over to dom chu who's got some of the other top movers some of them may have changed. >> so target's one of them earnings coming out rolling right now. let's check out on the retail theme. maybe not a surprise that kohl's is one of those things on the move this maybe muddles things a

little bit still, though, you have all the deal chatter surrounding the department store chain those shares were about 13%, now they're only about 9%, 10% kohl's has entered into negotiations with franchise group, which is proposing a takeover deal that marks their shares at $60 a share franchise is the parent company of sylvan learning and others. maybe that target news having a bit of an impact also watching peloton, the high-end fitness equipment retailer, digital content maker, 5,000 shares of volume peloton has hired liz cottington to be their next chief executive officer. she was previously at amazon web services she had roles at netflix

previously joel woodworth is stepping down. peloton shares up about 1.25%. then we're going to end on shares of robinhood. they are down just fractionally roughly, 13,000 to 15,000 shares in volume, due to the securities and exchange commission looking to revamp market rules that's according to people familiar with the journal. robin hood offers that commission-free product where customer orders are sold to high-frequency trading firms rather than route it to venues where they are matched with the best-available fitter or price in the market. robinhood shares may be getting a little bit of the headwind there from those tech stories. i'll send things back over to you. futures are pointing lower as dom indicated there the health of the consumer in

focus. the struggle of the nation's retailers front and center target taking major steps to dole with the inventories. joining us is ceo and and how much do you extrapolate and say the market has not baked in yet the tough margins and comps that are going to be coming >> hi, good morning, andrucew the news from target isn't so surprising you have to look at the trends that have shifted. we know that spending has gone from goods to services in terms of the housing goods we know april sales were below march sales. it does seem like there is easing up in one of the major

categories they have troubles with but some of these big box retailers are going to have to fully digitalize and their logistics for inventory and shipping and whatnot this is probably way too far ahead of the game in the future. if you think about blockchain technology and smart contracts you can envision that some of these problems will be avoided when the exact timing of the ship hitting the port to the inventory amounts and things like that can be baked in. there might be a shift of interest to investing in that space. >> i hear you. i guess the question we're all trying to grapple with is where we are in the market place you sound like you are bullish long term, not even long term, for this calendar year at this point? >> yeah, i'm more bullish for long term. i was pretty bullish for this calendar year. i think we're going to have a

market recovery or see some yes, ma'am prompt on all three indeces by the end of the year, but i don't think it's going to be as much of a recovery as i expected just because some of the issues are going on longer than i anticipated a lot of things have to fall in place, right i think inflation's going to be a key thing. when we see the numbers on tri, if friday, if we see a lightening there. china and the lockdowns and supply chain we still need fed, whether there will be a soft landing we need to see how earnings shake out, and that will determine the near-term performance, but long term, i'm absolutely interested in being a buyer. when we have some of the top, you know, names of the market place trading 15% to 30% below

52-week highs. a lot of the froth has been taken off. long-term investors tend to do well when they seize these opportunities. >> nice to he sao ysee you. thank you. >> politicians around the country are now dealing with rising gas prices and other inflationary pressures we're going to talk to georgia's governor about what can or should be done and then among our other big guests today, kristin gillibrand on regulating crypto and tony sack noggy. but first as we head to brake, chbrarks break check out the leaders and lagger

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to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network, with the carrier rated #1 in customer satisfaction. that's a whole lot of happy campers out there. and it's never too late to join them. get $250 off an eligible 5g phone with xfinity mobile. take the savings challenge at xfinitymobile.com/mysavings or visit your xfinity store and talk to our switch squad today. . as gas price continue to surge to record-high levels, our next guest touts his state as having one of the lowest prices for gas per gallon let's bring in georgia governor brian kemp and you're welcome that we used a shed shot ofhead shot of you

'80s were you a really handsome young man and continue to be sf >> thanks a lot, joe, good to be with you >> a good intro, isn't it? we just talked about oil what would that mean for gas prices in your view, not just in georgia but around the nation. that would start cutting into i think discretionary spending and people's plans >> >> well, it wouldn't just be starting to cut in people are seeing it every day because of bad domestic energy policy what we're trying to do in georgia by suspending the gas tax is giving the hardworking people the ability to work through the hard time. we trying to give georgiaens a

way to fight through that. we have a very supportive legislature. and thankfully because our state was open and revenues strong, we can do this. but it can only last for so long, that's why we need changes in washington, d.c. to try to drove drive down the prices we're seeing this squeezing the consumer and hard-working georgians >> some of the president's advisors, they talk about they've made progress in supply chain issues you know i've flown down, i'm a sea island guy i've seen the congestion in savannah they're not there anymore. there are things that can be done near term, i think the administration has tried to do that any of the long-term fossil fuel production issues, it takes more than, it's not a switch you can turn on and off.

what do they need to do? what are you suggesting they need to do >> i don't know that i've seen any progress if you look at the gas price charts since joe biden took office, they're still going up i mean, we're thankful we've got the lowest, i believe, gas prices in the country because actions that we've taken here in this state but if you look at it over all, every state in the country was over $4 a gallon for the first time ever. and it's gone up since then. that's a week, ten days old. weave he a taken great action on the supply chain here at the port of savannah we're seeing increased volume right now with wait times because we're having so many ships and the problems out there, the supply chain backlog from china and some other places, but we're managing through that our port has grown over 20% in the last couple years. it's because we're open. you know, vi have a state of

emergency right now help with the logistic supply chain on moving goods and services through our state and other things we're doing i think the administration needs to be doing more of those type of things and getting people going. we paid people way too long to sit at home when the market was saying hey, we need more people in the workforce >> the biden administration's been in office, whatever, x amount of time, governor, a lot of these are honglong-term issus for a lot of different reasons >> joe, with all -- >> what did they do? as of day one, what did the biden administration do that you say caused the gas prices to be where they are today >> with all due respect, early in the administration, they were paying people more to stay home to get in the workforce. they wanted to continue to spend more money anded in flood the s. they went out to the west coast

and long beach and said they saved christmas and the holiday season and the same problems they had then around thanksgiving of last year, they still have out there. where, if you look at georgia, we had a lot of those issue, too. by january 1st, we had clogged the backlog. we're seeing that because of things out of our control. we took action literally months before they ever started talking about it, expanding, you know, land around the port where we can store more containers, because there wasn't enough distribution in the system, dealing with the truck issue, which was really 5% to 10% of the problem. there's actions that you can take you look at this administration. literally, in a year and a half, they've turned the country's economy upside down. driven inflation to 40-year highs and obviously what they're doing is not working we're sending a billion dollars of excess revenue back to the taxpayers right now. $250 for an individual up to $500 for a family.

and look, that's a substantial amount of money that's helping people buy that extra gas they need to absorb a little bit of the high grocery prices, but not every state is able to do that, which is why the administration's got to pivot and try something different. just like at the border, you know they got the same border policies nowthat they had when they came into office. and look what's happening. it's not gotten better it's continuing to get worse, and the american people and hard-working georgians are tired of that. they want to take action to fix these problems now we're for promoting the evening market place we're letting the market drive that sector, but like you said, that's going to be years in the making we're not going to see that change, the supply on fossil fuels and other things in the next two or three months >> governor, what do you think happened in the recent primary in terms of your 50-point margin

of victory over former senator perdue who was backed by former president trump. did republicans sort of, they like the job you've been doing, i think, in georgia. but i also think there was a -- was there an effort to put up the best candidate, the least divisive candidate to take on stacey abrams? is that what you, how do you read what happened were you surprised by the margin of victory that hunyou had? you weren't, i guess because of the success that you've had. >> you have to work hard every day. which is what i've been doing. i've always been a grinder as a small-business construction guy that started a business with a pickup truck and shovel. and on those projects you got to grind away every day and that's what i've been doing ever since i got in office when i ran in '18, i promised i

wouldput them first ahead of the status quo and politically correct. the other thing is i promised them when i got in office i would do what i told them i would do while i was campaigning, and that's whaet i've done, whether it's largest teacher pay rate in history. that we're strengthening rural georgia, standing up with our men and women in law enforcement while the other side's wanting to dee -fund the police i think the longer the race went on people started realizing, especially when we got a little past the 2020 election and covid and civil unrest and a lot of tough things that our citizens and the country's been through, people started focussing on, hey, you know, this guy has done what he said we would do he's put us first.

my wife and our girls were on the campaign trail every single day, because they believe like i do we live in the greatest state in the country to live, work and raise our family, and we don't want to lose that. >> hey, governor, we have a lot of ceos who watch this program every morning. a lot of companies pushed by employees or customers are speaking out on issues that historically they did not. in the state of georgia on voting rights. delta almost lost its tax benefit as a result of speaking out. you are seeing this play out in florida where governor desantis has effectively tried to step in against disney, against a baseball team over their comments around gun safety, just yesterday we now have the texas a.g. working on behalf of elon musk against twitter in

california something is happening here. there is a view among the critics that hear's almost an au authoritarian approach, for a very long time, the gop wanted corporations to be able to speak, and i'm thinking of citizens united. >> i would just say we don't have a problem in georgia of anybody speaking their mind. that's a first amendment right we've always embraced that if you look back to civil unrest, it was the state of georgia and myself and our people making sure the protesters were protected and they had a right to be upset we'd all seen injustice with our own eyes but on the corporate side, nobody's worried about somebody speaking out what we're worried about is when they speak out and they're wrong, just like they were on the election integrity act

senate bill 202. over a year ago they talked about it was going to suppress the vote and stacy abrams and the mayor and president biden were saying it was jim crow 2.0. we just had record turnout in both our primaries in the democratic primary and the republican primary and you know, even though major league baseball pulled the all-star game, we stood up and told the whole country, look, this bill is a good bill that makes it easy to vote and hard to cheat and they screwed small business owners, and stacey abrams was pressing the players union to boycott the game before she said she wasn't we stood up and pushed back against that because we had the truth on our side. as you know, the braves won the world series, and we got poetic justice when it comes to that. but that's what we're going to continue to do i've done that, whether it's hollywood, big corporations or

other things that's what georgians want somebody who can be clear cut and truthful and they can decide on the policy or not >> thanks. you are not predicting a re-pete, are- repeat with the braves? >> i'm predicting a repeat of kemp for governor in 2022. the braves are doing a little better >> you want to send us a new picture, or you like that one we used >> they're out there you've got to use some due diligence. >> i'm doing the same thing, going with a 20-year-old head shot when i'm looking out, that's how i see myself thank you, governor. we'll see you later. >> have a great day. when we come back, target out with big news this morning, warning that its profits for the second quarter will be squeezed as it rolls out a plan to deal with unwanted inventory. it is looking for higher

operating margins in the second half as a result market's telling them that, too. st we're going to talk to industry insider, jan miffen, about all of these moves next. first, though, as we head to break. take a look at the dow futures, down 210 points, not just target fielding this. expectation is this is industrywide, target and amazon under pressure too the nasdaq off by ouabt 121. are you watching "squawk box." this is cnbc, and we'll be right this is cnbc, and we'll be right back ♪ ♪ it's raising capital that helps companies change the world. it's mcated financial concepts seem simple.

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come back. -i always come back. rely on prudential's retirement and workp ♪ ♪ benefits. still to come this morning, target taking major steps to w even out its inventory the stock down nearly 10%. a little over 9% we'll talk to jan kniffen next about it and so much more after about it and so much more after this turns out your beach people. i think we're beach people. whoa whoa, slow down boys. we know you love it.

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some break news from target this morning the retailer saying it is going to be taking some pretty aggressive steps to deal with the excess inventory that it told us about three weeks ago when it reported its earnings. it says as a result of all this excess inventory and change in consumer tastes, change in consumer sentiment, what people were willing to boy auy, it's gg to be taking steep discounts to get rid of some of those additional mark downs, canceling orders, a slough of other things that they're doing to keep up

with rising costs, maybe taking price hikes where they can on essential items. all of this coming at the cost of the retailer. it's going to be operating profit margins of 2% for the quarter. three weeks ago it thought it would be closer to 5%. it does say the second half it hopes to make up for that. the street not waiting to see what happens in the second half. target shares down by 9.4% and other retailers down in sympathy joining us right now to talk about all of this and more is jan kniffen. jan, what do you think of this does this come as a surprise to you, knowing that they have this excess inventory >> you saw my notes yesterday. i told you, retail inflation is peaking in the second quarter. target just said that's what's happening. they're already taking the mark

downs. they're cling they're clearing this out in the second quarter they didn't raise prices enough in the first quarter on all the items that were really selling, so they got hurt now they're also having to mark down on the items that aren't selling in the second quarter. i'm surprised they had to do it twice. they told us the story once before so i'm a little surprised they had to do this twice i told you yesterday, holiday sales are going to be good brian cornell's clearly saying holiday sales are going to be good, profits are going to be solid. i believe both of those things are going to be true we're going to go through this pig in the python. we're not going to have an excess inventory problem going forward. and we're going to have good, solid profitability because the consumer right now is still pretty darn healthy. the problem is we've got 30% more stuff in the system than we

need right at this moment. >> it's also trying to anticipate what the consumer's going to be feeling like six months from now. they have already put in their orders for a lot of the stuff they're anticipating for the holidays the consumer has changed taste so quickly that it's been really hard for these retailers to keep up especially when you have supply chain issues it looks like target is taking a lot of steps to deal with that, making sure they build up areas receipt right outside the ports, but d you think they are going to be stocked sufficiently but not too much for whatever the consumer might be feeling come the holiday season >> well, i'd rather be a luxury retailer i'd rather be selling apparel, shoes, accessories, cosmetics and jewelry exclusively. the consumer is moving to experiences. and the stuff she wants to have with her when she goes on those

experiences. and that sntuff is what i just said all the branded product players, from lbmh, gucci, they're all selling well, because that's what she wants to do she wants to go out, go places and wear the stuff and she's spending there we didn't know when that was going to happen, but we knew it was going to happen as soon as we came through the pandemic we were talking about her approach to the roaring 20s for a year now it's just the timing and all that stuff that came in for walmart and target a lot of it was ordered a heck of a long time ago because the supply chain has been such a problem. they'll be sorted out here in q3 and q4 i don't think we're going to have a problem in the back half. i think holiday sales will be good profits will be good we'll get through the inventory issue. yes, people have been up 30%, 40%.

but like you said, you just bought something 40% off 40% off was the no. >> in 2019, remember >> the stock is down by 9% right now. you liked this stock, higher than this. what do you think now with the selloff? it's 1:45 right now. >> now i like that 9% better, wh whatever it is now they're a great retailer they're going to get this right. they're going to have a good back half, a got 2023. the consumer is still healthy. i don't think they can muck it up that fast we're going to have a good back half here in 2022. we've got record employment, record low unemployment. we've got rising wages and total wages for keeping up with inflation. individual wages aren't. but we've got enough people working and rising

participation. we're doing fine as far as the consumer broadly ability to spend. and they're going to keep spending, and they're still pretty price insensitive on the stuff they want. the problem we have in the second quarter is a lot of that stuff is not the same stuff they wanted when we ordered it. that's all going to be sorted out bit endy the end of the yea. we all knew that it's just getting the supply chain to work. all those boats that we used to be sitting off there aren't sitting off there. there's 30% of what there was. it's working now, and it will work much better as we go through the back end so the consumer, unless something happens, the consumer's very happy right now. >> you are a brave man muck it up fast. say that three times fast. good luck with it. >> muck you. >> okay. talking about shortages.

is an inventory shortage a different story, a pilot shortage and wait for what it means for airline passengers and in investors. we'll talk about that right we'll talk about that right after the break. ♪♪ age before beauty? why not both? visibly diminish wrinkled skin in just two days. new crepe corrector lotion only from gold bond. champion your skin. dave doesn't need a posh virtual receptionist, because he cloned himself. while his clone watches the phones, dave can work on his code. and lead his team. dave trusts his clone like he trusts himself. so, in summary, we're going to sell the company. who's in favor?... perfect. but if cloning isn't an option for you, just get posh.

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now, to a controversy in the travel industry. airlines want tofly more routes, route 66 but they lack the pilots needed and the traveling public is starting to notice a lot of things can cause a canceled flight. but certainly, you need a good buy, two good people guys or gals flying the plane. by definition. >> you do. you do it doesn't matter the size of the aircraft you can't fly alone. you need two and right now there is tight staffing when it comes to who's in the cockpit pilots right now in terms of how the whole entire industry is looking at it, there is a shortage but the airline pilots

associat association says they might be overstating the shortage are the airlines and these executives we interviewed, are they making this up? or is there a shortage of pilots? we did see as you take a look at shares of the four major airlines, they lost just under 10,000 pilots during the pandemic and i've talked to each of the ceos of these companies, they are short the niflights they wod fly if they had the full compliment of pilots are the pilots in the pilot union, are they overstating this or the airlines? are they overstating this the fact of the matter is, the regional airlines is where you feel the impact the most because the major airlines have moved to fill up these jobs from pilots who took early buyouts during the pandemic and retire, they brought these pilots in from the regional airlines

that as created a gap in the number of pilots specifically at some of the regional airlines. you're talking about mesa, skywest, the publicly traded ones they do not fly the full compliment of the schedule that they flew before the pandemic. and that has also impacted the service for the major airlines so yes, there is a pilot shortage the question becomes how quickly can that supply of pilot be re-established it's going to take some time, guys there's a training backlog right now. and you have a number of airlines rushing to hire pilots, and they're hiring quickly, but it's going to take some time to fill this up >> i want maintenance guys up to fully-staffed. we need everything fully staffed. i'm i'm sure it's all affected >> they sold too many night the

f flights for the number of pilots they have >> you need a staffed airplane more pandemic hangover coming up, target's profit margin warning isn't just hitting retailers this morning the auto industry also could be slammed by some inventory issues we're going to talk to former ford ceo mark fields about what investors should know when investors should know when "squawk box" comes right back. visit indeed.com/hire

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box. we have been talking about target all morning and its plans to fix its inventory troubles. the auto industry also at risk across the economy people are looking at this. joining us, mark fields, former ford motor company president and ceo. we are looking at target stock and the entire market take a tumble on the back of this news and really trying to understand how to extrapolate that piece. target, autos, related, unrelated. how do you see this? >> well, you know, andrew, it's an interesting time in the auto industry right now because if you think about it, auto production has halready declined by the amount typical in a recession, about 20% from its peak in the last two years, that was because of supply chain issues the auto industry down about what you would expect in a bad economy. now you have a situation where the economy is starting to

weaken consumer financials are starting to weaken. interest rates going up causing more expensive for financing vehicles, so you might see a double hit to the auto industry, but the good news for the auto industry is because of this decline over the last two years, they have to rebuild their inventory. so the key question as they rebuild that inventory, or the wildcard is whether the demand side will still be as strong with more vehicles as they finally arrive in the showrooms. >> in terms of inventory, obviously, there's been a big push to get cars back on the floors, if you will. we've seen the impact on used cars what do you expect over the next six months, 12 months in that regard >> in the next six to 12 months you'll see the auto industry improve. you'll see inventory start to come back up versus the very

depressed levels that they are right now. but at the same time, you're going to start seeing some oems look at their inventory levels and demand levels and say gee, how much more should we bring back, because they're definitely lower, the amount of stock that they had in the showrooms than they it pre-covid. that's fundamental they've changed their operating model post covid but they're going to look at the production schedules, the demand, the backlog. and then they're going to determine, okay, what does this mean for pricing, and right now, andrew, in the industry, you see incentive levels as a percent of the price of the vehicle the lowest they've ever been i think they'll start to creep up as consumers start to pull back >> and a related question, because i know evs are the things that you're thinking about. how does the price of oil at this point change the dynamic or

not, mixed with the headwinds of what you think is going to be happening in the economy, and the additional cost that comes with buying evs. how do you think the auto makers in terms of manufacturing and sales are going to be impacted >> right now, the oems or the auto makers approach is how do we scale the market with the new evs. it's pretty compelling with gas, i think this morning aaa said the price of gas in the u.s. is about $4.92 on average across the patch when you look at that, and you rook look at the savings you can get from an electric vehicle, it's about $1800 to $2,000 in savings over five years. it's a very compelling offer for consumers that in basically five years you can pay back the incremental cost of an ev. but getting more traction with evs is going to require consumers to accept these higher

up-front costs for vehicles in exchange for the total cost of ownership benefits down the road and thiat's a risk. they're going to look at how far they price the evs it's tough when this familiar hip fifamily financials are stretched tesla's stock is down, what do you think >> that's going to be the market to determine but the bottom line is electric vehicles as a part of the industry are going to continue to grow over time. and i think tesla is well-positioned, but they have great new competition from the established oems, but the market's going to grow over time >> always great to see you >> thanks, andrew. when we come back, kristin gillibrand on the plan to create

the most bipartisan legislation on crypto. we're going to get into it after this

good morning, and welcome back to "squawk box" right here. i'm andrew ross sorkin take a look at equity futures. we're down about 198, 200 points on the dow s&p down about 32 points the nasdaq looking to open down about 135 points let's also show you treasury yields we'll show you where the ten-year note sits finally, let's talk a little energy and gas in particular because gas prices are going to get another all-time high and closing in on $5 a gallon nationwide aaa says we're at $4.92 a gallon you're looking at those prices moving higher. i've got a question for both of you.

let's show you cryptocurrencies at this hour because bitcoin, which had moved up yesterday, along with most of the cryptos has now moved down begin. we're under 30,000 we've got big news this morning. senator cynthia lummis of wyoming and kristen gillibrand in just a few minutes. i was thinking back, 2008, when gas prices, could you have bought a barrel over $150, and i don't think that at the pump the prices were this high. >> we don't have enough row fi refining capacity. anything being trucked or transported, higher cost associated with that even at the pump, higher prices

to pay inflation has hit just about every area >> why don't i ask you the question that's a very good answer. >> these two words we haven't said in a long time. crack spread >> the crack spread has gotten better >> crack spread. and diesel and everything else refiners will switch to diesel if they can get a lot more for it and then everything. >> and we're shipping some of that diesel overseas, too. because there's demand for it in other places the other crazy thing is wti is catching up to sprint. part of that is because the dollar's so much stronger that, you know, it's changed some of it in that capacity, too it's the strength of the dollar as our central bank is raising faster than just about everywhere, except for australia, i was thinking about that, since blake was a baby that's the thing that went

through my head. 22 year, bre blake was a baby. >> whatever's happening, it's bo biden's fault. >> we've seemed to have a lot of guests who think that. >> there are a lot of thing wrong. probably 90%, 95% maybe, of the things 96 >> why don't we talk about what target warned this morning >> looks like it was trump's fault. >> target warningi its investors that its profits are going to take short-term hit. they are marking down unwanted items. they're canceling orders, trying to get rid of excess inventory t as it shifts from a covid-19 inventory. the margin would be around what

we saw in the first quarter, which is around 5% or what it achieved in the first quarter. however, in the become half of the year, because of the steps they're taking right now, target thinks its margins will end up better than the pre-pandemic average. it's looking for operating margins closer to 6% in the second half if everything works the way they're anticipating it expects revenue growth to be in the low to mid single digits for the whole year and it expects to maintain its market share gains i spoke with brian cornell, the ceo. they're taking these steps now, trying to make very decisive moves to make sure they are prepared for the very important seasons that come in the second half of the year back to school, back to college, and they want to be set for the holidays, all the way from halloween to thanksgiving to the holiday p shshopping period. that's a really important time for the retailers. they'll be doing things like

pressuring vendors to make sure vendors are taking some of thi pain you may see them raising prices in other areas household essentials they're still seeing a lot of traffic. traffic is up in the stores, and they're seeing sales that are higher, too. but the operating margins are where they're really focussed on working through the pain right now so they can prosper through the second half of the year. right now that stock is down 8.7% this is a big decline after the huge decline that stock took when it reported earnings three weeks ago. on that day the stock was down by about 25% the biggest decline target had seen since the blackmon monda crash in 1987. walmart had a similar plunge it saw its stock drop the biggest it's seen all the way back to 1987 walmart shares are down by 3.1%.

home depot off by 1.5% it's coming now because target has a board meeting today and talking to wall trstreet tomorr. you should also check out department stores on this. department stores also down to some extent. nordstrom is off by 1.75%. >> we're going to go through this pig in the python in the second quarter they'll get rid of the ve inventories, and good, solid profitability because the consumer right now is pretty darn healthy the problem is we've got 30% more stuff in the system than we needed right at this moment. >> targen cornell decided to roll out the

company's new inventory plan after hearing retail competitors were having similar problems, also so they could get ahead of this before the holiday seasons. they are not going to be making cuts when it comes to the team or salaries. so the staff was their most important asset through the pandemic and they plan on continuing to invest in that staff right now the stock is off by about 7.7% andrew meantime, we have a news alert for everybody. apple will have to change the connector on its iphones sold in europe by 2024 this comes after eu lawmakers agreed on a single mobile charging port. regulations are going to require a usb-type c charger by fall of 2024 it will save consumers around $267 million apple has avoided that

there's been calls forever as you know, for standardization of these plugs on your phone. i'm looking at mine right now. they have the, what do they call this, the lightning connector port, joe, but i don't know. maybe it would be helpful. it just makes it harder in terms of making the phone as tiny thin as humanly possible. >> this is one of those priorities, really we need the government to get involved with this >> everything in a perfect world. a little over 90 minutes until the opening bell let's get over to dom chu to look at some of the premarket top movers >> the opening bell is not until 9:30 there are a lot of earnings out this morning tied to the overarching market narratives of inflation and the health of the american consumer these days

we'll start with jm smuckers those shares are down. the packaged food company behind jam the and jellies, milk bone dog biscuits but did say that full-year profits would take a hit due to the recall of its jif peanut butter products earlier in the year other factors are continuing to impact result amid an increasing uncertainty for that particular move so jm smuckers is down a percent. then g-iii apparel the clothing make are behind donna karan. also topping expectations for profits and revenues they said consumers are refreshing their wardrobes as they return to work and social

activities and then we're going to end on a check of novavax the vaccine maker is up by almost 4% with a trading halt with roughly 24,000 shares changing hands before that halt. a fda panel will convene to consider recommending the shots for the adults this is where the more traditional type of vaccine technology interesting move there we'll see how novavax trades once trading starts again. >> thanks for the update, we'll he see you a little later we have senator cynthia lummis and kristen gillibrand. they've been working on this for months we will speak with them first on "squawk box. stay tuned we'll be right bk.ac

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group of senators on cryptocurrency two senators join us right now. ladies, welcome, it is so good to see both of you how did it come about that are you working together and how much support you've found from your colleagues on this. >> well, we've put out early dr drafts of this bill from december so it's been a long time coming. so when senator jgillibrand joined in, her contributions have been important. we've had multiple meetings with regulators, with the regulated industry and a lot of stakeholders.

we want the ed to take our timeo put the best draft onto the table. we think we're there today's the day. >> senator gillibrand, let's break it down. the most important part is that it declares that things like bitcoin and ether are commodities, and they would be regulated by the cftc. a lot of other things would be e regulated by the ftc how much squabbling is there because there have been interregulatory dispute about who should be able to regulate this >> most important goal of this legislation was to create consumer protects. when we met with industry leaders, they basically said we just need to know what the rules of the road are. we've been seeking regulation.

and the delays and response have been unconscionable. what we did has been common sense. if you're a security, you're going to passthe howie's test and we look at each digital asset's purpose. and based on the purpose we align the regulatory framework around that purpose. >> all right there's squabbling that's continued, that's going back and forth people saying look, how can you regulate a decentralized effort to begin with, and aren't there conditions where these would be equity and should be regulated by the ftc i guess it gets me back to the original question, senat senator gillibrand how much support do you have is this something you think the

senate will get behind >> i do. our goal is to make sure it goes through the levels, the banking committee, the agriculture committee, intelligence and financial services you need basic rules of the road we think there will be momentum, and we're just going to work with them over time to continue to improve the bill. >> who have you talked to, senator lummis in terms of the leadership are they on board with this? i know you've reached out to the left and the right where do you think your biggest support is coming from >> we have found very receptive

people on both sides of the aisle. we've met with the leaders of the finance committee as senator gillibrand mentioned there will be four committees involved this this bill. so we'll want to go through and sort out how the bill can be divide among the committees and then ten to meet with all of their members, not just the chairs but all of their members. the fact that we're on several of these committees helps. we've met with the chairs and ranking members of all of the committees of jurisdiction they know we're working on t they know our approach, they know that we're trying to fit the digital asset world into our current regulatory framework and have a general overview of how we're going about it so we've had dinners w we've had breakfasts, meetings, br our staffs have met with their

staffs this has been a lengthy effort on our part to not only brief our colleagues but collect information from the stakeholder the. >> hey, senators, two questions for you. one is, and i'm sure you saw this a little over a month ago, fidelity, the largest 401(k) manager in the country announced that they were going to offer bitcoin to users or to consumers, companies have to choose to allow their employees to put bitcoin in their 401(k)s. labor department came out and said this is a terrible idea what do you think? >> i think the labor department's wrong i think it's a wonderful idea. it should be part of a diversified allocation and a store of value obviously, if you have a fully diversified asset allocation you have some assets that you want to produce income in the short

run. you also want some assets that are just a store ofvi value and i think that's where bitcoin really shines. i think it's some of the hardest money that's ever been created in the world and for that reason, it belongs as a slice of diversified alle allocation for retirement. >> and senator gillibrand, do you agree? disagree >> no, i agree that's why this piece of legislation is so important around timely. once you place things around these, where there's full transparency, that is going to create the safety and soundness in the market that hwill give people comfort that this is one that's here to stay, properly regulated and has oversight accountability and that's what this legislation is going to do while many people are

uncomfortable with where these digital assets are offered today, once a regulatory framework is put around it there will be more comfort there >> considering you're dealing with the ftc, there has long been chatter about whether these two agencies should be one that there's too much competition between them, too much infighting about who's going to take this and who's going to regulate that some people think the competition is good. some people think the competition is terrible. what do you think? >> i think it's our job as congress members to create the laws, and they implement the laws and they should not be fighting over jurisdiction. that is why cynthia and i work so hard to make thoughtful decisions about what part of these digital assets go to each regulator. each regulators has expertise that is unique they're going to need more

resources when this industry goes to them, which is why we have a revenue stream going into the cftc specific ally so they can hire more experts, more cyber security personnel and more lawyers it's important that they have the resources to do the work we are giving them to do. but the distinct responsibilities of the ft c and and cftc, they have to nourish. >> we hooked at every single circuit court decision it that has ever referenced the howie test to make sure that our current definition is sufficiently modern and updated so it's going to be fairly clear between the cftc and the ftc about which assets fall into the regulatory regime.

>> the sec chairman has been very clear that he'd like to regulate this. has he hmade any comment about losing out on bitcoin? >> i am meeting with him today, and we're going to continue to work with both the ftc and cftc to make sure we are using the right howie test we think that because we are using the howie test, it's going to come out just fine. >> it just sounds like there's still some massaging taking place. >> this is day one and i think this is not the day of the vote on the bill. that will be day 100 day one is you introduce ideas so that the people who have responsibility to write these laws have a chance to look at

it, learn about it we can are hcan have a lot of round tables each will be taking part of their jurisdiction and create their own oversight. that will happen over the weeks and months to come ta they don't decide what they get to keep and what they don't. we have to write that rule for them, which we going to do over teime, this market will become more and more transparent. >> my guess is you're going to face pretty significant lobbying from a lot of different parties over the next hundred days or so while you do this. >> lawmakers in your state last week passed a law that will halt permits for new cryptocurrency mining because of the environment. what do you think about that >> so i think that is an

oversimplification and i think there was an urgency to protect sufficiently our pristine resources like the finger lakes, because clean water is essential for many industries in new york such as farming, our drinking water and tourism. that was one thing i think long term there are places that are appropriate for bitcoin mining each state can figure that out my view is i'm trying to figure out the regulatory framework and let states do what they want we also have a new york regulator who's been issuing bit licenses for a while but that regulator is kind of doing all the work receiight nod would love to have federal oversight as well. >> thank you for your work on

this we will continue to watch and see where things shake out from here thank you. >> coming up, a tech investor, joe lonsdale will join us. plus toni sacconaghi lots more squawk is ahead. lots more squawk is ahead. stay with us mmmm, delicious. shhhh, shhhh. you know at cdw, we can design a productivity solution with lenovo devices that offer fast, reliable connectivityyoure manage their workloads, with or without cyborgs. perfect, 'cause this guy needs a little work. for technology that moves you forward, trust lenovo and it orchestration by cdw.

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coming up, threat or negotiating tactic would elon musk really abandon his bid for twitter? we'll get some color from one investor to another. investor to another. joe lonsdale joins us next i'm hard of hearing. ♪♪ oh hey, don't forget about the tense music too. would you say tense? y suspenseful. oh hey, don't forget about the tense music too. aren't they the same thing? can we move on guys, please? alexa, turn on the subtitles. and dim the lights. ok, dimming the lights.

welcome back to sq"squawk box. ken paxton says his office is opening an investigation into getter over twitter over the number of bots on the service he wants to know if twitter's reporting on fake accounts is false or deceptive, this at the same time that elon musk is threatening to back out of his deal to buy twitter over concerns about the number of inauthentic accounts on that

platform moon eantime, i want to tal more about musk's deal with twitter. joe, it's great to see you this morning. we're trying to make sense of what's going on in texas, what's going on with this deal. from anybody putting two and two together, it looks like the texas a.g. is doing this in part because of elon musk it just sort of boggles the mind what's happening but what do you think is happening? >> you know, i think a lot of people here are fans in texas of elon i doubt they're coordinating but people are pretty shocked. they underestimate how incompetent it really is it's something that, you know, it's probably not in their

interest financially to know it, but if they were more competent, it would i think elon was shocked to see these numbers. it's scary to buy something when you don't know the numbers >> which goes to the question of homework one of the things that was so unique about this particular transaction, he effectively said i'm not doing homework there will be no homework done, and i'm waiving all homework abilities. i'm buying this for what it is what i'm seeing and what i'm getting. >> the way that work, their disclosures have to be correct i'm buying it based on what you've told me, but if there are disclosures that are incorrect, then twitter's still liable. let's be honest here you know, the markets have gone down a lot i'm sure with the markets down

th this much you want to be extra careful. they may need to fix that. >> the complicated part, look, i am not one to defend at all twitter, and if their disclosures were improper, they were improper, and they should be slapped or more so than that bit s by the sec andr twitter, he sai to get rid of all the bots i think this thing is overrun with bots. he had a view that bots are a problem, i think there are too many now we're debating, how many is too many >> the bots will often do things that are unhealthy for our dialog and force us in bad directions you know, when you dig deeper,

it turns out there may be more than twitter realizes. the disclosure, if it's wrong means ca m means he can back out. i think it's smart of him to push on that one >> you know, we've had people on our air who say this thing isn't worth of ha half of what he's pg p for it is this just i want a lower price? does he think i can't really get out, so i'm going to lock you up in litigation for the next 18, 24 months, so therefore you should take a lower price? or do you think there's something else going on here >> obviously, this has been the biggest move in 20 year. it's obviously just not worth, you know, what they had originally agreed. now that said, again, the point

is just underestimated it is such a badly-run company you could make this thing with someone like elon running it worth five or ten times as much. i think he could still buy it and make it. there are so many things could you do to fix this company and make it worth a lot more >> do you think that the way that this is all played out will make it harder to the extent that elon musk ever wants to make another proposal. this board at the time really couldn't say no. the price was remarkably high, even if they didn't want to do this view, there was a view that their fiduciary duty was such that they couldn't do anything else they couldn't say look, this is a bad guy. but now if you're a board and elon were to go to you and make proposal, i actually think a

board could go to court and say look, we're not taking this proposal, because look at this cl clown show over here we can't put our company at risk the way those folks did. >> everyone knows that twit ser is a uniquely dysfunctional company. elon obviously has to do the deal if the disclosures are correct. it's the right thing to do to push on a disclosure that may be far off. that's what a lot of people would be doing in his shoes. i don't think it's that irresponsible. >> i'm also curious if could you weigh in on this beef between elon or president biden or maybe really president biden and elon. my view is that biden started this fight, very inexplicably, either ignoring or poking at elon musk over unions, which, by the way. fair if he has a view on unions,

it's just taking it out specifically on elon musk, to the detriment of everything else, given that he was an ally of his and voted for him, says he voted for him >> i think it's obviously a mistake. elon is against censorship he pays better without a union you know, what's unique about elon is that he has the ability to be a greater ceo. most of the fortune 500 ceos are not the, you have to be very risk averse. because elon founded his company, guys like alex carp, these guys are able to be courageous, because they're the founders that's very rare in america. most people in america are just kowtowing to people like biden e-ron elon really stands out as someone who's courageous and not afraid to speak out.

>> we were talking about the governor of georgia earlier. a lot of companies speaking out are starting to get slapped down, especially in states like florida and elsewhere by the governor there and i'm curious what you think of that. some people say, look, you know, those moves, htit for tat. this is stifling free speech >> the disney ceo was not speaking out his values. a bunch of crazy activists in the company pushed really, really hard to misinterpret things and forced the ceo to speak out. i think smart people can disagree on what desantis did. the way it works right now in america, the far left may punish you from government, but the right has never really punished people so saying everyone in the

corporate world is forced to virtue signal to the left. show them that there's two sides. right now before this happened with desantis, the boards would say go ahead what he's trying to do is change that calculation and say others like to be dangerous maybe the board shouldn't always give in to the extremists on one side >> does that change the calculus more broadly between what had been a friendlier relationship between business and the gop than the democrats, which is to say, does florida seem as attractive a place for business? everybody was talking about miami being the hottest place in the universe or frankly austin in texas the hottest place where people are moving. but there are going to be companies that may have more west ward views or whatnot >> i think there are some

companies that may change the relationship what had already changed over the last ten years are the companies have given in to what elon calls the book mind virus and moved away from the gop. the calculation was always that it is worth virtue signaling this way because we're going to be attacked by the left if we don't and the right's always our friend anyway. the calculation is changing it back so that you shouldn't give in to one side of the business as someone who cares a lot about liberty, this means a lot to me. >> i imagine from your perspective you don't like it on either side. it bothers me greatly that biden had set up this incentive program that was good for companies that had unions and bad for companies that didn't, like tesla on one side

i don't like that. desantis trying to punish companies based on what they're saying either. but here we are. >> i mean, i think what's happen something desantis is saying the left's doing this, i'm going to do it, too i 100% agree with you, andrew. we don't want the government rewarding people politically i think it's a very scary future we have to have our leaders stop row w rewarding companies for being on their side >> joe lonsdale, thank you what should investors expect from shares of apple coming out of the company's latest hardware and software and to kramer's first take on the trading day ahead. coming up on "squawk box" when we return.

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let's get out to the cnbc bureau in san francisco where we find our jim cramer who has set up camp for the week to do a complete tech tour we're going to hear from a lot more names from jim. before we get to that, though, let's talk about the news of the morning. we were looking at futures in the red before we heard any bad news from target, but that did take when we heard from target

and the concerns they have to clear up their inventory took their losses, maybe doubled them, maybe more than that target shares down 7%. what do you think about everything you've heard? >> like you, i spoke to brian cornell last night, the ceo. it's very clear to me that they chased inventory there was nothing they could do. they felt there was a certain way the consumer was going to buy things, still stuck at home with the appliances, the tv. these things are going to be dumped it's not just going to be obviously price cuts they've got to get rid of the stuff because they need the space in the stores. so it's going to be brutal but it's also the medicine taken the stocks never really rallied. so the question is where is this going to bottom. after the number cuts and the price target cuts, it's going to be the stock to buy. >> in terms of watching the pain that they've already taken

it's going to help their marcgis in the second half they're talking 6% but it counts on the consumer hanging in there and maybe being right for what they stock up for in terms of the holidays brian cornell is a great operator this is a struggle that clearly target is dealing w walmart is dealing with similar issues. there's a lot of inventory out there. this is historically, these crazy high levels of inventory because consumers moving so quickly and the supply chain moving so slowly >> this morning, look, you've got to understand that some people are going to handle this thing better than others, and walmart's in much better shape than everybody else. there was an analyst on this morning for you guys who was saying if there was only blockchain, if there was only this, only that. brian is the best there is it wouldn't matter if there was

blockchain, anything this is about merchandising and having the wrong merchandise because you're late and people didn't realize the change in the consumer it happened quite rapidly. the best part of target was luggage. one of the reasons macy's did so well is they had more luggag this is one of the most denation fair events in a long time everyone who keeps saying everything is inflationary when you get target dumping everything into your new home and you bought a new home, this is a good time the negative story is the only one making it right now on the tape. >> when target first announced in may it was 145 was the low that day, tried to bounce back, now it's a double bottom, why is that when it bounces off there twice, gets down to 145 twice, and it's such a great company, obviously we're talking about one or two quarters of problems. why isn't this a buy at 145

where it is now or 148 why not say wow, if i liked it much higher i'm going to buy half a position right now. >> the analysts didn't have the news what i think -- unless there were some analysts they shared with it. i believe there has to be down beat news, target was the worst, the other guys figure it out so that's the second leg it's only bad from the point of view that this quarter is destroyed, gutted. what are you going to do with back to school if you only have all the hard goods that can't be sold cornell is not a person that's going to sit there and let the inventory destroy q3, q4 you would think that tj maxx would be up because they're usually a beneficiary, but that's not it.

it's hard goods, appliances being done hard to see it. >> they're telling us to wrap, jim. quickly, give us a tease about what you have coming up, what you're going to be talking out there today, why you're out in san francisco. >> thank you we have lyft, doing quite well we have elf beauty, and broad com. and then john zimmer has to prove to us that model works in an environment you can't find drivers. >> excellent thank you, jim we'll see you in a few minutes "squawk box" will be right back.

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apple unveiling software and hardware updates at its latest worldwide developer conference these include a buy now, pay later product, more texting features like the ability to recall messages sent by mistakes and new macbooks joining us what the updates mean for investors, tony burnstein, senior research analyst we'll get his take on the eu's push to make all cell

phone charging connecters the same like so many apple announcements in the past, the company seemed to have gotten the street to be okay with no major watershed events that sort of incremental progress with services and the ecosystem and everything else. did that happen again because -- i mean, the first thing you point out is there major updates we did not get yesterday is that the tract from the sizzle of what apple is trying to do when you talk about virtual reality updates did what apple did say overcome that in your view? >> good morning, joe i think the event was almost a nonevent, basically what was expected in terms of new max was delivered. i think there was some hope that

maybe they could give some clues on arvr headsets in terms of capabilities that they were developing in arvr perhaps even a sneak preview of the headset, that did not happen. we believe the headset is likely to come out next year. there may have been some hope that apple may have said more about apple tv plus in light of netflix issues recently their show platform was doing well and we didn't hear anything there. i think it was more wishful thing, the event itself was largely in line with expectations and it's geared towards developers and that's what we had yesterday. >> so the -- what we did hear, what was most significant in your view? the top three. >> i think most importantly apple continues to push its own silicon and its max.

so it came out with its second generation m-2 processer chip. has really strong power versus performance meaning the thing can run really cool without a fan and that allows for it to be lighter. and so i think apple continuing to push its silicon having a new version 19 months after its first version was impressive, and that sets the stage for industry going forward i think in terms of the broader competitive environment, in terms of impacting other players, the buy now pay later, which was expected, has ramifications for the broader payment industry i think it underscores that apple will always move into aj aj adjacents. and the fact that apple is

pushing its apple car play, saying we have to differentiate the car. but consumers like car play and if apple is going to make that more and more functional going forward that may interfere with auto makers going forward. >> foreshadowing the eu, what does that do, significant? >> no. again. standards try and evolve over time and we'll see how that goes again, as an apple watcher, it's not a significant move >> and the watch, too many features at this point >> i don't know what you think, joe. >> i won't -- i think they're ugly >> okay. and they can be overly featured and need to be charged every night. look, i think the apple watch does a lot of things, maybe too many things. and ultimately it would be best

if it could be segmented and made simpler for different audiences. >> why do people buy really nice watches not to look like a cascio i used to have one of those. but i moved on. >> you've evolved. >> with my members only jacket thanks, tony, we'll see you later. and thank you, sorkin and becky quick. join us tomorrow, squawk on the street is next 3 . good tuesday morning welcome to "squawk on the street" i'm carl quintanilla trying to clear out some excess inventory, you have the 10 year holding. a road map this morning begins with profit warnings, the retailer at target set to slash pr