don't collapse he's saying the mets collapse. final check on the markets maybe not. can we just go into the weekend. >> no. we're down 461 after 600 yesterday. that's a thousand in two days. nothing looks real good on the screen join us next week. we'll see you back here, sorkin. "squawk on the street" is next >> cue the desk. good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. headline hits 1%, above estimates, year on year, a new cycle high even course steady from last month's 6/10 futures adding to thursday's late day swoon, and we are watching the curve today we will begin with a maze hotter than expected data jim, you talked about it with becky. every major component, nothing fell, not apparel, month on

month, not used cars, nothing. >> well, i think that what's a shame about that number is that apparel has fallen big since then, used cars have fallen very big since then we obviously are now stalled in the housing market because rates have gone so high. and the walk in two months ago this number's rear view mirror, at the same time, i think that the number is scaring people and if the fed acted right now with the big jolt. people are saying, you know what, it's going to peak and the fed is in charge, and i'm less concerned and we can move on right now is a critical moment you can knock inflation out except for gasoline, and that's up to the president. the president can negotiate a lower price. but the president has to do what the oil companies one. i'm bearish right now, obviously. people don't realize there are a lot of components, it will be better food will not be much better that's obviously transient to

some, not me, and gasoline will be worse you have to start going back to when there's big gasoline step functions up you know gasoline is hard to get down, unless we get a couple more barrels per day, and nobody sees that coming >> yeah, well and getting a million barrels more a day is going to take a while regardless but to your point, you believe it would help bring down the price near term in terms of at least changing the curve of it refining capacity is another issue. we have talked about it, jim that's not going anywhere either >> no, and those companies are making fortunes, and they should be careful they should be careful because they're going to be vulnerable to the congressional investigation that we know is going to happen, david, when we see the quarters it should not extend to the companies like the company you're looking at, which is eon, b -- exxon. the refinery markets are high, and will draw a lot of scrutiny. >> no doubt, and you have been

saying it over and over again, there needs to be a conversation it's not completely clear to ne that there's no contact between these companies and the administration, jim, but certainly -- well, listen, i would encourage them to watch our documentary on june 22nd you're going to hear from darren woods who leads the most important oil company in the country and arguably in the world, other than saudi aramco no dialogue, listen to what he has to say it will give you insight into how they view their current place in the market as well, jim, and maybe that's all it's going to come to perhaps at some point, more of a back and forth conversation between the leaders of these organizations will occur, but again, it's not as though you can just hit a switch. you know that. you can't. >> and carl, i point out, you have to go back to looking at the big jumps in oil the jumps in oil in the 70s, in the early 80s, and what happens is people only get used to it. people buy items, they go

electric we can't meet the demand for electric they'll start working more at home there are ways to be able to get around this. it's going to take time. in the interim, jay powell should be having a 9:00 press conference, and saying look, we have had enough. we're moving right now he will not want to do that. it's a little incrementalist i'm not sure he wants to do shock and awe. right now, the american people want to know that the fed has got this under control, and they'll feel better. there will be less right now, worried about recession than the idea that the fed is not doing enough >> well, we'll have at least the national economic council director brian deese in a few moments talk about what policy moves can be made. fed fund futures pricing in a half point in june one in july. one in september, and we should obviously remind viewers it's a global picture we're obviously watching italian

debt today greek debt moves of this sort in rates does open the possibility, jim, of, i don't know, ghosts of former sovereign debt crises. >> well, look, i think fortunately central bankers know what happened in 2008. and i don't think they're going to repeat it i really think they can do a good job there they're just shocked but you have to get rid of the mentality. out here, it's incredible, and i'm not going to mince words about it the person that you hear the most about out here is jamie diamond and his hurricane comment. there were a lot of people after they heard it said, you know what, we've got to reconsider our hiring maybe we have to say, someone that knowledgeable, sees something coming, we have to fire that was a very important comment. david, i know it sounds hard to believe. i'm not picking on jamie diamond, his reversal rever reverberates everywhere.

>> i'm not quite sure what to do with that. oo i've heard some things that point to potentially the reason for his reversal but i haven't confirmed that they are the case. if they were true t wouldn't be based on what people thought >> is it too late for him to clarify which week was right >> that is the question. why not taking some opportunity to clarify to a certain extent what it was or why there was that change in that five-day period it's very interesting that people took it so seriously because we do know jamie, you know, can tend to talk off the cuff from the heart, so to speak. it's what makes him a good interview. so, you know, you could imagine that it wasn't necessarily something that had been thought through in great detail. but i just know, and i don't know if you've got an insight. i haven't spoken to him directly

in any way, shape or form. i heard a couple of things, and probably should make calls i have been busy working on this other thing. it's interesting that that has been sort of driving the dialogue is interesting to me. >> david, i was at dinner last night, and all we wanted to talk about was which jamie is right if it's jamie the hurricane, we have to fire they weren't talking about jay powell they were talking about jamie. i think you didn't understand the power of his words, what he should do is say let me clarify, if he doesn't, what happens is he did something bad for his bank and for the economy and maybe that's what he wanted to do, but it sure seems like a strange thing for bankers. >> jim, how are you characterizing the market response this morning? what levels are important to hold mark newton, a well known technician says that even after yesterday's selloff, as long as we hold, say, the high 3,800s,

that that may low is still viable >> i think there's a bifurcation in the market that's extraordinary. you're seeing stocks like that i like to pick on ones that are doing well airbnb, door dash, these stocks go down, 9, 10%. docusign goes down 20% we have two markets, the markets created by 2019 going forward, and we're just taking those apart every single day, and then we have other parts, led by oil, banks go down, draft down, health care is okay. david, i think what people are saying is do you remember in 2000 when they decided to take apart everything nasdaq with cisco and intel. bristol myers held up. we're just doing a 2000 playbook i think that dusted it off >> i do hear those comparisons to 2000 often as well. we've looked at different parts of our market as well, in terms

of the speculative access, related to crypto. the damage being done to some of these companies is not dissimilar you're right that said, jim, many of the companies from the dot com boom of course never saw a dime of profit, and we're down 99.9% many of certainly the business models that have been funded by that huge amount of capital went bust that's not going to happen here. but i keep waiting, and i know you do for when the bottom is put in in terms of all right, this is a multiple that makes sense based on the future prospects of this company, and we have discounted the growth rate we have taken the multiple way down i hear more often now from the hedge fund, people i speak to in that world, it's not an investmenting environment that they can figure figure out at this point a few weeks ago, i mentioned that the very large hedge fund

has a great track record of success was 80% cash 80%, but maybe that was the right move in a market like this, jim. simply saying i can't figure it out. i'm too confused and i'm going to step aside for a bit. >> we were talking earlier about the credit risk. i'll tell you where it is. it's venture capital a lot of these companies need a much better market the tale of this may be -- you're the only one taking it seriously in terms of the damage it's done. their line of venture capitalists has spoken if you want to market where these companies are, you would find that tiger global and its ilk jacked up the prices, went to the bankers, said here's what the prices are, and the prices now of the companies that are left are a fraction of what people thought they were so you get this situation, carl, where people just say, look, the ipo market is shot already a lot of companies like

docusign again, the it was a great quarter. management said, hey, listen, it's never been better they always have something new they add, and when you listen to the call, you say, hey, guys, your stock is down 25% address it address what's happened, please, dan springer, address what's happening, and dan springer will say, our business has never been better we have a new feature that coordinates with banks, and someone has to say at that moment, what the heck are you smoking, partner you have just cost people a fortune. why don't you just say, listen, we know the stock is bad, and we got to figure out what the hell to do, and you know who did that dara dara he had one of these moments, i have to come to grips with the fact that we're not doing well, and he talked about it the people on these calls like

doc dock y docusign, it's not like that there are people who own the stock and they're getting crushed, and dan springer is going to tell a story as if it's not happening, as i think stitch fix would, rent the runway, what a story. carl, it's got to end. it's got to end. they have to say you know what, we came public at a great moment and it's really amazing, but we are not doing what you thought we would do. >> ton of bearish calls today. web bush, ever corp. cuts to inline, b of a from 120 to down to 72. as for uber, jim, dara did talk to you about not only how early he was in getting cost discipline baked into the model but the idea that somehow uber is recession prooch. t -- proof take a listen. >> we're growing top line and bottom line, and i think what makes uber different is we're truly a durable company.

we are recession resistant in that we don't have big fixed costs and our cost of supply essentially adjusts up and down. >> today, jim, we're going to talk about the goldman downgrade of netflix, e ebay, ro box. >> there's a circular wagons among who's going to get advertising. the advertising is going far more to the bigger guys, and cut off the oxygen of the little ones if people want to know if the dan springers, i don't mean to to pick on him too much, which is exactly what i'm doing. if you read the letter it said, okay, listen, everything is different. everything, and we've got to change it, and we don't want our stock lower, we want our shareholders to be happier to do that, we've got to do a lot of things. there are going to be more drivers because there will be a slow down, but david, the letter

is what? that was a letter to address what's happened. >> agreed. fine >> oh, okay. >> but when it comes to these stocks, and you're talking about 2000, we're showing one side of it got to show the other side it's just a big round trip they're all big round trips. we sat there talking about how times were great how growth was great multiples went skyrocketing, the fed balance sheet went to $9 trillion. show the whole thing docusign zoom, uber >> give me the chart of docusign, please i'm calling it out, david. now, you're absolutely right it's a giant bump. the question is not the multiple is docusign worth 17 billion or 7 billion, and there are no takeovers like, you know, you don't hear jamie diamond saying this is docusign you hear him talking about reuben hurricane carter or

whatever do you think he knows who reuben hurricane carter was. >> of course he does of course he does. he's an old guy like us. he knows who he is plays the dillon song. >> all right >> guys, coming up -- >> who monroe was? >> i don't know. >> we'll talk about netflix and is goldman celebrating on the stock. in a moment, shares down 5% premarket, we'll get more to stitch fix, disney, tesla, and all the comments in the past 24 hours from drunken miller, yellen and more. wow, we're crunching tons of polygons here! don't go away. what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

netflix is extending losses, goodman cuts to sell today, from neutral. they say we have concerns around the impact of a consumer recession, as well as heightened levels of competition. we view netflix as a show me story with a light catalyst path we modestly lower our paid streaming as you said across every region jim, they go from 265 to 186. >> yeah, i mean, look, it's just one of those notes, i think it's a little selfish, which is basically, we were paying too much for netflix there's a lot of competition you got to get more realistic about what netflix is worth. i think david's comments about the big u-turn and the comeback, go back and look what netflix was like a few years ago and david, that's where the

stock goes it goes where it's just indistinguishable. >> we'll show it again there it is. a long move up, and then the move down. i didn't find this note particularly instructive at all. i think you kind of said the same thing, jim. >> i looked at his price target. it's based on, you know, 12 times ev over gap, ebita, fine, whatever, 20 times, ev over cash flow my favorite part, what could make us more positive, subscriber growth. >> that's funny. >> very helpful. >> you think it was just some director coming in saying, would you please pull up what everybody else is saying i felt bad for the guy he obviously had a lot of work to do in this thing. i think that there could be plenty here. >> his group is getting crushed. i love wall street's ability to come up with new words instead of saying losses were down a

lot. this is since october of '21 our coverage universe has derated at 49% it's d rated that's the word. okay that's great it's d rated it's that word that hedge funds came up with draw down. we had nothing to do with the fact that we lost that money it was a draw down it was drawn down. it wasn't us i love the language. d rated. >> the language is great i was disappointed with the whole package, carl. it's a gigantic package, it's just a recognition of what's happening. except for they threw it in the front door i just, i read it, and i said okay, i'm going to have to come, but could you just be a little more original in what could turn things around. the one thing david said that i keep returning to is these companies are not going to go away it is not 2000 in the sense that we won't be using netflix. in retrospect, we paid too much

for them that's what we did and we got to figure out, pay too little. >> meanwhile, on the cost side, jim, we got disney, ousting their content sheet. peter rice amazon has apparently decided that rights to cricket are too sp expensive. you know they are expensive. >> i thought that was funny. look, there's pieces out which say, if disney gets cricket, it's great, if it doesn't get it, it's great all i can tell you is disney doesn't stop firing people in piecemeal, then every time they fire someone, this doc is going to go lower. this is fire per share talk about losing the narrative. you think the feds lost the narrative. david, when you keep seeing these. >> they keep signing people to long-term deals and firing them, and paying them out. i mean, count me in. i'm ready to go. sign me up. >> where's fox, that

acquisition? >> fire me >> where's that acquisition of fox rated in your -- >> peter writes, oh, it's not even in the top ten. >> it's not? >> no, it's not suboptimal >> how do you crack into the top ten, then? >> i got to go over my top ten >> how about exxon, xto, how did that work? >> that was a terrible acquisition. >> they get very mad, david. >> did you bring it up june 22nd. did you mention it. >> i think i've got you in there criticizing that deal. >> we have to go to the mad dash, but i think you should address it on my show after you promote all the other shows because you're on every show. >> i will be on every show promoting, yes >> in the meantime, jim, we'll get your mad dash in a minute as we count down to the opening bell keep your eye on futures we're back in a moment

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equity markets not happy with cpi 1% above the 7/10 we were looking for. corp. at 6/10. estimate was 5/10. food at home, five straight months of 1% plus for food at home and air fares up 38 year on year we'll talk to iadebrn ese in a few moments after the opening bell

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a little less than two minutes before we get started with trading on the final day of what's been a difficult week let's get a mad dash in, jim. >> we have people who feel vindicated by some of these declines barclays analyst really comes,

lowers the boom, talks about shanghai, shackle, second quarter production, some very big cuts in the number of cars made, and he's got to sell, but he does raise his price target from 3.25 to 3.70. what happens is you have analysts justifying their negativities, missed the whole move, and they're now saying, you know what, i told you so the only problem is he told you so and would have made three times your money, but this is another stock that when the fed got tough, it peaked you can see on the far left, the peak from the fed, and you have a couple of fits and starts. this piece, david, basically says that there is going to be a reason for musk to lay off people, and he may have to the one thing i don't like about this piece, david, is the higher oil goes up. the more cars are going to sell. and so there's no demand from here, and i think we should be worried about the demand much more than the supply

>> obviously juxtaposed, lowered with the upgrade yesterday from ups and tesla, which did have the positive impact on the shares opening bell, realtime exchange. celebrating its 100th anniversary at the nasdaq. phoenix motor, which develops and manufactures electric vehicles jim, we'll watch the open here our thanks to helene misler who points out, there were five down days, in the prior ten months, only two >> i have been rely ongoing her work since 1989. and it's excellent i would point out that at a certain point, you have to default to what the late mark haynes would say

we're not oversold yet it's ludicrous to look for things to buy, but you can still buy the oils i know that they're heinous to a lot of people, but they're working. david, you know what's happened here kicking, screaming, everybody hates the oils they don't want to own them, but when you look at what real price targets go higher, if you care about that stuff, over and over you're going to see it's pioneer, you're going to see it's your company, exxon which you have a documentary on june 22nd at 8:00, and not to kid around, but that's the kind of stock that you buy. >> still, you think. itst is not as though energy has had an incredible move you think there's room to go broadly thinking. >> look at it as a percentage of the s&p, it's just too small, and given what they can do, and if they start producing even more, but still give you the dividends, they should be 8 to 10% of the s&p

need to double, and you need to think like that because institutions don't vary for oil, sometimes because they hate fossil fuels like our president, and sometimes because they don't believe the move, and the move is for real. this is a step function up they're not bringing it back down carl, we are in a worldwide shortage, and if someone can tell me that ukraine is about to have a peace talk with russia, i'm not seeing anything other than siege out of ukraine. which means longer and longer and higher and higher oil. >> certainly the comments from putin earlier in the week about taking back references to peter the great, jim, we're a long way from establishing any timetable for ongoing negotiations interesting piece in the journal today, though, a thousand companies have either cut back or left losses topping 56 billion. the sanctions making business there untenable. >> and i talked to people on technology they're shocked that the

russians think that they can have a first world economy without the technologies being taken away they were always bad at much of technology to begin with just in terms of consumer technology, but also enterprise. and this should set them back. putin doesn't seem to realize that ultimately if you do not have the modern day technology, you will not have the weapons. but we're not at a point, we're telling the ukrainians to declare war against russia in the sense of going into russia i cannot believe, carl, that the russians can handle what would be just basically a return to pre-'86. i don't mean the year. i mean the semiconductor, it's a remarkable time they're willing to forego the technology that's what they're doing. >> speaking of technology, i know you have lisa sue tonight on the heels of the investor day. they did say they're looking for a down year in pcs

some of their margin targets pretty robust. >> this was a tour deforce meeting. they're pulling away from intel. i know that people at intel think i'm a broken record but lisa su did a remarkable job the presentation was incredible. the number of new chips they have, the higyper scalers, who they're working with are of course the faang stocks. if you sell amd today it's because you're really tired and sad. >> tired and sad. >> yeah, tired and sad >> there are a lot of people who are tired and sad. >> they're tired of the hurricane diamond, they're tired of the fed not moving fast enough, they're tired of the talk about layoffs they're tired of the fact that they have too many engineers i don't know, carl, it has a very bad feel here >> your mood is darkened since you went out west. i don't know >> you know, that's because i did reporting. you know, the concept of

reporting you pioneered it chuck robbins from cisco, everyone said the same thing, how long, how deep, and they're talking about the recession. they like our program. they watch it. i think that's good, they get up and watch it. >> they do they do. >> we have the texts to prove it from many of them during the course of the show, which is always nice. >> they're all hoping, everyone is hoping that we'll get more positive, and i keep telling them, we're tv people, we're not the fed. carl, there's not much we can do i don't want to contribute to the fact that there are too many engineers. let that be the take away. there are not enough engineers for ten years. now if you want to get a degree, i think you should go for fashion and business. >> i wonder if that will change the leverage i want to come back briefly to a conversation we have been having for two years, which is back to the office a year and a half since we have all been back in various places.

we got to go to deese, carl, we can't have that conversation we'll do it later. >> by the way, i'm hypnotized by the s&p, for a moment there, mot -- not a single component on the s&p. inflation rising to 8/6 over a year ago joining us for the first response from the white house and the administration national economic counsel director brian deese. good morning, good to have you. >> it's good to be here. >> watching headline, but also watching core, 6/10 is the same as five in the last eight months, year to date, average gain is 5/10 is the view from the white house that core may actually be reaccelerating >> i think the news today underscores the importance of what the president is doing, identifying and fighting inflation as the top economic priority for the country right

now. it's heartening to see moderation on annual core and so we will keep a close eye on that, and obviously there's a distinction between pci and cpe. at the end of the day, we didn't need the report to underscore. what we know in may is energy prices have driven up the price at the pump for families and consumers and the can price of fuel oil, and natural gas is working its way through the economy and affecting elements of the core as well. we see that, for example, in airline prices so that is our challenge that is our focus, and the issue now is how can we actually make progress on concrete steps that would improve that we're very hopeful and calling on congress to move on shipping legislation that would bring down the cost of moving goods overseas we talked to a number of ceos over the course of the week that say that would be a game changer in terms of not having to pass on prices to consumers, and we're focusing on how we can lower the deficit. fiscal policy can be

complementary to what the fed is trying to do. >> i don't know if you have been able to catch our programming this week. it seems like at the top of every show, we talk about what outreach from the white house to the oil industry would mean in lowering energy prices we've talked about this before why haven't you had more direct conversations with oil executives about production or have you and we just don't know about it. >> i heard jim's commentary as well we have had conversations including this week with ceos of oil companies, and we'll continue to do that. we operate in a market, a global oil market and that market for refined product as well, and there's a very strong market incentive right now. but we should start with some facts. highest natural gas production until the united states ever happening right now under president biden. we're about to hit the highest oil production levels ever under president biden. we have real challenges, and part of it is that the oil

industry, the refinery industry, took 800 million barrels a day of refinery capacity offline before this president took office during the pandemic, and so right now, we are short refinery capacity because of those decisions. those decisions were decisions made by those companies as fiduc fiduciaries, and now we need to work on what we can do to actually get more capacity and more product into the market, but i want to be very clear, any constructive step that would help in the very immediate term to bring more refinery online, more output out of refineries, we have put that request directly to companies. we'll continue to do so. if there's any practical step from the government's perspective, we stand ready to do that. >> well, brian, you're a realist, and i appreciate that we have to go brown to green first. the great larry fink, i really love, has outlined a path. and you know what, you haven't done it. you haven't just said, okay, listen, guys in the permian, oil

is at 120, we know you're returning money to your shareholders, we need you to do what's right in return, you need pipe, natural gas would come down if you had pipe your number is about the amount of pipe. if we can keep the price of oil down by exporting it and get oil down into the future, you know, it's a win for you, but what are you afraid of? are you afraid of being seen with guys who are involved with fossil fuel? are you afraid of the president going to permian rather than saudi arabia come on, man, come on, you know the real you know the real. you know what has to be done you're a realist. >> let me tell you what the president has done the president traveled to europe, and he said, i am going to increase natural gas exports to europe over the course of a couple of months what has happened, natural gas imports out of the united states are up 20%. the share of u.s. natural gas going to europe has doubled. that's happened over just the

last couple of months. the president went out, said that to the world, and in fact, right now, the reason natural gas prices are going up is because we have dramatically increased exports of natural gas. that's what's happening right now. the price of natural gas is going up because those exports are increasing we are acting, and we are communicating that we're prepared to do things in the immediate term, and at the same time, to your point, there is a transition the market is driving it, and we are going to take steps to encourage that but we're practical and pragmatic about this, but it's also important that we look at what's actually happening, natural gas is a great example of that. >> it's david. as part of the transition, people may need to get accustomed to higher prices overall. isn't that just the simple fact? >> look, before putin began amassing troops at the border, the price of gas in the united states, the average price of gas in the united states was about

1.75 less than it is today, and in real terms, it was lower than the average for the past decade. so if you really isolate what's going on here, it's because vladimir putin decided to take on this irresponsible war, and we have created all of this in the global energy markets. yes, we have to deal with that, and yes we have to stand with ukraine, and we need to fight his aggression, and yes, that creates serious global challenges in our energy market. i don't think we should confuse that with the transition that the market is driving and that we can accelerate while lowering costs for consumers. the thing that people miss out is that if we provided technology neutral long-term insen incentives to produce lower cost, cleaner energy in the united states, american utility companies would lower people's utility bills. if congress passed the legislation, american utility companies would lower utility bills. there's a pathway here to reduce

the cost of energy for american families while also helping accelerate the transition that the market is driving. >> yeah, well, another way would be to put a real price on carbon that's higher than where it currently is an argument for another day. brian, let me come back to you i have a button collection from when i was a kid, including a whip inflation button from 1975 i think was under ford what makes you think it can work now. until volker started to raise rates dramatically how much can the white house do to act against inflation are you relying more on mr. powell >> i think this president has been very clear that, number one, he is going to give the fed the independence to operate, and that is not something we should take for granted you're talking about history that is not something that has been the norm in the past. presidents have sought to politicize fed decision making this president did something unique sat in the oval office, with the chairman of the federal reserve,

i will not do that that's number one. we also know that making things more affordable for families right now, and reducing the federal deficit, both of those things would be complementary to what the fed is trying to accomplish so fiscal policy does have a role to play here, and it's actually pretty straightforward. if we did tax reform right now that reduced the deficit, that would be complimentary to what fed is doing on both economics and also, turns out what's good economic policy often ends up being good politics, there's no reason we can't reform the tax code, bring in more revenue, reduce the deficit, and help the fed in what it's trying to do. >> finally ending on a separate topic, wires have a piece now, quoting a u.s. official that biden will lift covid-19 testing requirements for international travel, to the u.s. effective sunday any kmcomment? >> this is an issue we have been taking for some time, a public

health decision. we believe we have made the progress that we need to make in having protocols in place around covid that we can lift this requirement and ei think that will be good news for business travel, good news for american commerce and companies as well >> brian, as always, we appreciate it, especially on the heels of such an important metric cpi today, see you next time. >> good to be with you guys. >> brian deese >> interesting discussion. got to a bunch there, david. >> we did. i'm not sure we reached any conclusions at all, and i know jim is still frustrate in part, i would assume, by the response on energy. there's so many different elements as well refining or pipelines, whether it's obviously the production itself which as we keep saying, will take nine months to a year if you put it on, continuing to increase the production in certain parts of the world

of course they are, it's a lot of moving parts. >> they hate fossil fuels. a lot of the numbers he talked about are not true i mean, we're not producing as much as president trump. the idea that it's europeans causing natural gas to go up a lot isn't true we just were unprepared for this particular moment, and don't have enough pipelines. look, they hate fossil fuels they don't want to go to the permian, be seen with scott sheffield from fiepioneer. they don't want to do it they think it's a bad thing for the election but it would help the -- they're a little backward if they made a deal with the devil to be able to move the forward curve to say guys you got to start producing much much more, oil would drop, they would work with the refineries to get more production. david, these are dirty companies. it's better to not be seen with them. >> they are making efforts to obviously reduce their carbon

footprints all have the ambition of reducing their carbon footprint. >> they're doing things, and i want to break bread with them. have you heard them say that >> no. >> it's like they're doing nothing, companies from the '70s >> there should be a more robust dialogue and i don't know to what extent there is deese referred to it i don't know but certainly could imagine a more robust dialogue around all of these issues. >> maybe it was more unionized. >> they don't consider them a partner to a certain extent or trust the partner in the energy transition >> the saudis are better is it better to go to saudi arabia >> no, it isn't. at the same time, we have this climate change issue, which is not an insignificant one make a deal with the devil >> every year. >> saudi arabia, not permian. >> so the saudis are better friends of the united states than western texas

all right. fine >> well, it is notable that the few names that are green today are very energy reliant, southwest, united, american, norwegian, carnival, or maybe that's just a signal that demand is going to look past some of these fare increases. >> people want to travel we should figure out, there's two things they should figure out, one is how to get airline flights down, more competition, a preemptive strike, let's stop with the spirit nonsensuous we're not going to allow that, and an antitrust investigation into the alleged price fixing by the three companies that do most of the shipping. they're not american companies i think you would find that there's the possibility that there's an alleged collusion they won't go to justice and say look into it they're just so uncreative they don't understand how

business works, carl, they are -- they kind of are like people who think, you know what, i don't know about these business people. i think we should stay away from them when we're pictured with them, we're going to lose the state of pennsylvania i don't know. >> you want more theater you want a big table with executives around it and pictures and cameras. >> i want the president to be savvy enough to say, okay, guys, i know you're starting, i know you made these policies to return investments to the shareholders and i get that. during that period oil is going to 122 what are your needs, what are your needs, and i'll give you -- there's no give without a get. you guys need x, i'll give you this i will make it so pipelines are easier to have i'll make it so we will be able to get some tax credits for carving capture, but what do you need it's pretty simple equation, what do you need, refiners, what do you need. >> they're just not necessarily

high enough to fully move that business where they want to invest an enormous amount of capital in it will come technology will help that as well. >> they're not creative. >> near are shareholders, jim. i mean, you know, that's another part of this equation, you keep talking like like they're all going to be so happy if the administration were successful in getting the oil companies to say we're going to spend more. they don't want that, either why not drill more >> why not just keep sending me money? why not keep sending me bigger dividends? why? why? i know at some point they're not going to use gasoline anymore. i know at some point you're going to have to make the transition. >> i'm just saying these are real americans, they're not bad guys, they're all trying, and we're going to said, you know what they have all gotten religion, the president should sit down with them. carl, that's bad optics.

brian deese is a substantive guy, he knows what to do, and he has to have the message -- we're in favor of solar in your tank i would rather have tony the tiger in my tank [ laughter ] >> david was about to get to, really quick, work from home, b of a survey. >> yes. >> they asked would you prefer to work from home. 92%. it's down 24 points. >> i've been hearing anecdotally, certainly young people are questioning, do i have to work from home if i take this job, can i come to the office? there is a part that wants to be in, yet yesterday howard shultz saying he's lost the war i can't get it done. >> they keep raising the price of at-home dining, like we saw with the cpi, you want to go

back and get the free lunch at the office the cafeterias are heavily subsidized >> let's listen to shultz talking about it >> i have been unsuccessful, despite everything i have tried to do to get our people back to work. >> you want them back. >> i've pleaded. i get on nigh knees, do whatever you want, no they won't come back at the level i want them to we're a collaborative group, i realize i'm an old-school person, this is a different generation i've been schooled by our people, don't say too much so, you know, we have to establish a new way of working you know, i've embraced it >> i thought that was -- that's everything i hear, jim, from every ceo.

>> i found it crazy, carl, humor me if you pay them more, they'll do what you want. maybe that is really old school. if you pay people more, they tend to want to do what you say. so, maybe instead of the college benefits, whatever, you have to raise the price of this and pay them at a price that says, okay, listen, i don't want to do it, but i'll do it, because i want the money. that's what it comes down to that is the american way maybe labor should be winning. >> he said, that's what the money is for we'll find out whether the labor -- >> what? >> oil oil. >> what about it. >> unijune 22nd.

>> judging from twitter, it will be neverending on this debate. >> a big pivot let's get to bonds, ten-year, 3.11, vix month to date might, near 28. we're back in a moment ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world.

it's making complicated financial concepts seem simple. opportunity is making the dream of home ownership a reality... ♪ ♪ ...writing new rules and redefining the game... ...and driving the world forward to a greener energy future. (applause) ♪ ♪ opportunity is setting a goal... ...and charting a course to get there. sometimes the only thing standing between you and opportunity... ...is someone who can make the connection. at ice, we connect people to opportunity.

come back. -i always come back. ♪ ♪ jim, what's on "mad" tonight? >> week the cybersecurities, and those two can turn, then the market can turn. >> yeah. we'll see you tonight. "mad money" tonight. >> oil can come down, but it

requires a face-to-face. not much, down by a nickel the dow is down 600, session low. l of lemons. when you become an expedia member, you can instantly start saving on your travels. so you can go and see all those lemons, for less. how do we show strength and stability? (eagle call) a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people.

welcome back to "squawk on

the street." i'm rick santelli here, with very significant breaking news our june preliminary read on university of michigan sentiment is historic. this series gog back to 1978 the lowest read is 51.7 until right now. 50.2 is now the lowest read going back to recordkeeping. it can be changed, we know that, because it is a preliminary read, but its significant nonetheless. current conditions, huge drop from 63.3 to 55.4. expectations, 46.8 versus 55.2 the news isn't any better on the inflation side one-year inflation at 5.4 equals the cycle high for march that was the highest sins 1982 on the ten-year inflation outlook, 3.3 is a new high we have to go back into the

way-back machine that's the highest since 2008. these are very significant numbers, and definitely much worse than expectations. we see ten-year note yields, after having a lot of volatility on the cpi number actually trading briefly under 3% is now zoom zoom zooming up eight basis points 320 is the intraday high, 3.13 is the high yield close. we're getting close. back to you. >> rick, appreciate that good morning, everybody. welcome to the second hour of "squawk on the street. morgan brennan is on maternity leave. rick told you about the cpi on u-mich, above the intraday low for the year we are 30 minutes into the

trading session. starting with netflix, under pressure, and cut its pride targets from 265 down to 186 we'll have more on that later this hour. plus stitchfix getting crushed the company also announced it would lay off 15% of the salaried workers, amounting to about 330 jobs the stock is down 70%. docusign shares are falling. don't miss the ceo, dan springer, next hour on "techcheck." as we said, looking at the brought are markets, falling deeper into the red. consumer prices did rise 1% from the previous month, up 0.6%, on pace for the ninth weekly loss in ten the dow poised for the tenth weekly decline in 11, something we've not done since the depression. >> it's a persistent slow grind

lower. you got the lows in the s&p, may 20th, was the day three weeks ago today, a 9% rally off of that and here you have a bit of a slow motion retest of that cushion that arguably was built up when there was a genuine big rush everyone has known and been operating on the premise that the path to a potential soft landing is narrow and bumpy. the inflation numb respect and relentless rise in oil, and the fact that yields keep surging higher reinforce the idea that it's getting narrower. we're probably in search, to some degree that it's so bad it's good, whether it's the markets, whether it's consumer sentiment, frankly a year later the market is higher, because usually that means everyone has been recognizing the tough stuff.

>> for a brief meantime, it looked like a bottom -- is that the moment, or, you know, multiples, we are 22, we're at 17 now in the market obviously we talked a lot about the pattern that for so many of these great growth stocks, that big mountain, so to speak, what should people be looking for >> i don't think there's a magic level for the valuation. if you say right now we're bottoming, you're effectively saying -- or we have bottomed, you're effectively saying probably no recession, we're stopping at fair value, not cheap, right >> so a lot of the work has been done i do think people are defensive enough, you know, hedge funds

are completely back on their heels so you have the tactical conditions says, why not you could rally again, but if you're back in 2000, that was a very prolonged process of just wringing out, you know, value. >> remember when we bottomed out in terms of the market multiple. >> it wasn't that cheap but that's because the earnings kept sliding. no saying we're going to have that happened here, but i think a lot bad had to happen to go two years into a bear market well, that's the problem of it let's continue the conversation today. bring in darrell kronk, and na nathan sheets. happy friday, gentlemen. your thoughts on cpi, and not to

be goldilocks, but your reaction to some who say pce is unlikely to be as bad, is that going to offer any kind of relief in the days to come >> i think the bottom line from today's cpi report is inflation is hot it's not going anywhere maybe sideways, but it's certainly not going down in any convincing way we are seeing a bit of a refiling of the inflation process fro goods, more into services, so there's some compositional change, but this is an inflationary environment how you calculate that inflation, quite frankly, i think i have to come to the same conclusion, and i think it's the conclusion that the fed will come to next week, and that is we have an inflation problem

it's cutting into consumer confidence it's cutting into spending power, and the fed's got to tackle it. >> darrell, yew thoughts on what that means >> the biggest repricing is 50 basis points in september. we already had priced in 50 for june, 50 for july, and there was a growing probability of 50 in september. that looks like, if you look at fed funds future, it becomes the consensus. you can look at cpi backward-looking, if you look at the bond market and yield curve, it is telling you it doesn't believe peak inflation or peak yields yet whether it's the 530s, and that the central bank is behind the curve and needs to do a lot more, even if you want to go to neutral or suggest tight,

short-term rates have to be above whatever the rate of inflation is >> that would certainly be the case that the market does not see a peak, but if you go down that chain, and you get to the point the fed has to become restrictive, the market is maybe something might break before we get there, or perhaps the economy would slow enough along the way, that would be the thing to help restrain inflation that to me explains why the market-based inflation measures are not really raised higher, in fact, are off their highs. does that make sense >> that makes a lot of sense i think that is this dynamic of how much hiking can the economy absorb, is what the markets are wrestling with at the moment, as they seem to factor in some soft earnings reports that we're

seeing some some of the retailers. how strong is the consumer going to be in this environment of rising rates, high energy prices, and i do think that there is a legitimate rest, which at the moment, it looks to have a fair amount of scheme, but these headwinds are mounting, and they are significant. the consumer may lose momentum, you know, before the fed gets the fed funds rate above the rate of inflation. i think that's what the markets are wrestling with, seeking to price in at the moment. >> darrell, what do you tell investors, hey, i thought i would get some bang out of apparel inventories, out of import demand, shipping container rates coming down, out of housing traffic coming down

when is that reflected >> there is some evidence -- i emphasize the word "some" -- that some of the supply chain dynamics are starting to clear mildly it's going to take a long time we know the china shutdown and the russia/ukraine situation affected that. looking no further that is shelter costs and the cpi reading that tells you that's just whitehot. from an investor standpoint, look, we're about ready to put the second quarter in a row where we have negative equity returns, as measured by the s&p, and negative bond returns. that has only happened four times in the last 50 years, and when it has, three out of the four times, the economy has experienced a recession. from an investor standpoint, we have been saying for some time

and continue to say defense is the order of the day, right? you have to play defense with your equity portfolio, you have to play defense with your fixed-income portfolio don't reach down the credit spectrum right now it's the worst time to do that, as we head into probably a recession problem. >> great that's a fascinating stat. darrell, nathan, appreciate it good to see you until the next time. the u.s. will be ending covid-19 testing requirements for air travelers coming into the country. we talked about it with the nec director brian deese, who confirmed it within the last hour. >> this is an issue we have been looking at for some time it's a public health, but we believe we have made the progress we need to make in having protocols in place around covid, that we can lift this

requirement. i think that will be good news for business travel, good news for american commerce, merge companies as well. phil lebeau joins us with what it means. we did get a brief pop in the stock prices, but they have fallen back since then jet fuel will ultimately drive the airline stocks right now this testing requirement is huge for people flying to europe. i'm going to europe this summer. i know a number of people going to europe. i wasn't looking forward to having to be tested before i come back. now people can breathe a bit easier it's less of a hassle coming back into the states does it mean we're going to see more traffic i'm not sure i think at the end of the day what really drives transatlantic traffic right now, two things -- one, you had the pechbtup demand, and two, it's the economy. especially as airfares have gone

up, carl i'm not see this as news that will immediately lift the shares of the airline stocks. the cost component for the airlines, that remains a huge issue, especially with jet fuel. >> well, phil, so, you know, no near-te near-term bumps? >> i think that they're still going to do it, david. i think they were going to do it anyhow i'm not sure anybody gets in news and says, all right, let's get this in august if they were planning this trip, whether going to europe or europeans coming over here, this doesn't change the equation. it just makes it less of a hassle >> phil, appreciate that one more chapter done in the covid story, at least for now. after the break, wee talk some

netflix sinks lower as goldman goes to sell later on, don't miss former fed vice chair alan blinder. we'll talk about today's hotter han expected cpi print

the nasdaq near letter every

month since the year with significant losses well, no change today, as you see with the index down over 3%, roughly 27% for the year here to discuss what to do, raymond james senior analyst aaron kessler, and barton crockett aaron, i'll start with you i'm sure a lot of your clients as well, when is this going to end? what is an appropriate multiple. what do you tell them on a day in particular like today >> yeah, it is a tough environment right now, with rising inflation concerns, concerns around earnings coming down possible. we think they're sticking with names that are free cash flow. >> so for us, that's kind of google or alphabet meta or facebook around 16 times

earnings something like go daddy with 13 times cash flow, so we think of this as names that are read cash flow yeah, we think investors are best to stick with reasonable valuations, and solid balance sheets as well. >> aaron, stock-based comp, you said increasing conversation around it. what are the conversations like? obviously i can imagine, given the value of that stock is a lot less >> yeah, i think that is a concern. in a bull market investors will kind of discounts, focus on revenue growth companies may have to reup some of their employees on cash or offering stock so that is becoming a concern right now for some of our fees

>> barton, in terms of the macro and how it filters into your -- there's some talk that some consumers sensitivity, all of a sudden could become an issue, is that reflected in your stocks? do you think that will be an ongoing concern? >> look, i think this potential recession is, you know, something that we're trying to digest the environment historically entertainment was a safe harbor. people would hang on to their pay tv subscription. what will happen with streaming if we go into a recession? >> my bet would be it will be somewhat similar, that this will be a safe harbor, but we have so many streaming services, some might be winnowing down. i think that environment, netflix is probably better

positioned, because they've been the first service you signed up for, and they're probably the one you're using the most based on the usage data, so, you know, that is a setup that i think will be new, but that would be my guess on how it would break >> aaron, i've got overweights on alphabet and meta what sets them apart from your pretty broad series of olds? >> yeah, actually i think we have solid earnings, particularly gap earnings. obviously pretty entrench the franchises, we think google or alphabet holds up pretty well. google is much more flattish, but still growing slight will you. and we still think it rose

modestly, and closer to ten times earnings on meta or facebook at these levels at well we see limited down side at this point. >> barton, you mentioned you thought that netflix could be a little more resilient, because basically it's what people consider the core of their streaming array. the stock obviously down to close to three quarters of its highs, if you believe necessary earnings are sustainable, starting to look okay, but what about the strategic pivot or transformation that they may have to do, whether it's the ad tier, or people talking about even acquisitions at this point, and the rethink of how much they spent on content, perhaps. >> look, i am a neutral on netflix. i have been since i launched coverage here at rosin blatt on april 19th i was cautious around the consumer interest in the service. it looked like it had been inflecting downward.

we saw that in spades, but the stock has amazed me with how much it's come down. there is a point where you have to start thinking about it i'm still neutral today. that's basically reflecting kind of mixed thoughts. i do think that these guys that pivot to advertising will make the service more popular i think the crackdown will help. that said, the broad kind of indicators of consumer interests, if anything, don't look encouraging the the people who have the service are watching it, but the people who indicate more people are signing up are not what i would like to see. i think it's on probably one of these stocks you watch, and when you feel like the subscriber numbers are at the low ebb, and you can think about it, make a value argument for it, we're not there today, but that is the

kind of ark we are looking for. >> specific to netflix or others, though, it would seem their able to raise price from here would be more difficult agreed >> it's not helpful, the recession, the inflation back drop probably is, pivoting to advertising gives them an ability to lower the price if the economy is slowing down. that's going to be important to have that. we should have had it a long time ago, but better late than never, i would guess. >> the nasdaq is down about 3.3% thank you for the conversation. >> thank you. meantime crude oil with a three-month high dominic chu is tracking some energy prices. >> if there's a consensus, those oil prices as investors dinext

the latest inflation data, but both benchmarks, international and u.s. are trading near the $120 a barrel mark that's a far cry from where prices were a year ago and the moves in oil prices are among the reasons for the energy sectors, of course, outperformance here. one of the etfs that tracks it, xle, is basically flat on the week so far. that is outperforming. meanwhile, the broader s&p is poised for a decline now, over the past four weeks, the same xle etf is much 15%, other sectors are all near the flat line or worse through the course of the past month now, what we do see is a similar trend when we look at some of the more narrowly focused -- oil services etf, o.i.h. right here, is you want.

the spdr exploration etf, xop, up the last month. in terms of individual names, look at occidental petroleum, also marathon oil, valero, each up almost 90% as well. even in a down market, there are still some areas showing some upside momentum. this is one of those situation that seems to be kind of uneed to what's been happening this year, given the inflationary narrative. >> yeah, i mean, dom, essentially anything you would define as momentum in this market is energy there's almost no other names that qualify on the other hand. pretty much all the charts you showed had a slight curl down. today energy is easing back a bit. it's one of those situations,

you know, where we're wondering, you have to defer to the trend, but switch backs when things get this stretched should not be unexpected to. >> to your point, it maybe coincide also in the last few weeks or so, maybe a month or so with the increased chatter, right? that sentiment around that world recession. it certainty wasn't a base case talked about 6, 9, 12 months ago. a lot of folks are bringing in this possibility of, or it's not our base case, but could be a possibility discussions. with that you brings in the whole topic of the cure for higher price says higher prices, right? s. >> dom, thanks for that. by the way, always a nice time to remind you, do have an upcoming documentary on

exxonmobile. it's premieres june 22nd it's even more than that, this is company that has conceivably been one of the most relevant companies for the longest period of time, i think 100 years it's been relevant to the globe, you could make the argument, but never one that opened itself up, never let adjourn it'ses in to understand it better. at this particular juncture, because of this energy transition that is coming up and does face them with some significant decisions in terms of capital allocation, of course, amongst them, we really do try to answer that question there's a look at guyana that was a heck of a trip. june 22nd. we hope you join us then. >> less than two weeks. >> yes, sir. a check on the market, s&p down about 2.7%.

the dow down about 800, the closing low for the s&p two days in a row, that was about three weeks ago. bob pisani has more on the action >> that was may 19th, mike we're sitting at very important closing lows, with big names as well let's look it he sectors not surprisingly, growth is getting clobbered, over value travel and leisure names are in that sector. they're getting hit, global growth, of course, an issue, some materials are down. energy is holding up comparative well energy has sort of become the new tech some of the defensive names like health care and some of the consumer staples names like kroger,sh megacap tech, that's some important levels here, apple's closing low is 137.35,

and we are essentially sitting right at the closing low nvidia leading semiconductors to the down side right now. travel and leisure, these have been ping-pong balls essentially for consumer sentiment those numbers at 10:00, they did not help at all. visa is weighing on the dow jones industrial average as well interestingly, asset managerser notably weak when you great concerns of an economic slowdown, you not only have concerns of people maybe traveling less later on in the year, but maybe even trading less, for example. so all the asset manager, t. rowe price, frankly, blackrock, all to the weak side today oil, as i said my trieder friends say it's the nub tech, holding up relatively well

exxon was actually or sup early on remember the three important market narratives at this point. the fed and inflation, china lockdown easing, and the russia will ukraine conflict. goldman now already thinking 50 basis points in september. that just came out how about the soft landing narrative? well, maybe, but that's certainly less likely at this point. the key stories, peak inflation, fed pausing, soft landing, not trending in the right direction. the china lockdown, very fluid still. we have seen things go in and out there. that's not been completely resolved russia summer ukraine, no change there. the three main narratives that move the stock market are not really either moving in the

right direction in the case of china lockdown and the fed inflation, or not changing at all in the case of russia/ukraine mike, of course, is right, 3900, that was the old low, may 19th we got as high as 4176, so do the math there, up almost 10%, and now we're all the way back down so we are sitting just above the old may 19th lows at this point. i don't think anybody is going to argue strongly now. we're just going to have to slog through this, see some kind of data eventually that inflation is slowing down. so far we're just not getting that number. guys, back to you. >> hey, bob, it's me so many of the items you mentioned go toward this theme i've been hearing, just very confusing market, one in which

it is extremely difficult to imagine investing, so to speak, at least for any amount of time. you know, i don't know what you're hearing from the asset managers even though they had brutal years, and investors -- are going a lot more to cash just saying i can't just figure this out >> yeah. >> it's an earnings problem right now. as we keep pointing out week after week, earnings are expected to be up 10% in 2022, 10% in 2023. they haven't changed at all. we have seen a multiple compression from 21 to the 16% to 17% range so everybody is waiting for the other shoe to drop i think the 2023 numbers are clearly in trouble, but we're

not move on that a lot of people say, suppose we forget about earnings growth and we're back to 2022 you shave 10%, we're at 3900, take 10% off of that, you're at 3400 this is why macro guys are hovering around the 3400 levels, 3500 levels for the s&p 500. they're assumings some kind of decline in the earnings picture on top of a multiple this is certainly not unreasonable the problem is analysts have been reluctant to move, and it's going to be the battleground unfortunately the bears are saying the analysts at inflection points are always behind, and they're going to have more ammunition on that i'm looking forward to your special, david, other than i love seeing you in a hard lat. it looks like we'll get interesting behind the scenes

information. there's david in a hard hat. >> a lot more than that. all the those exciting outfits all different colored coveralls. i do look somewhat ridiculous much of the time, but bob, have at it. it will be a peacock, and youtube. we are living here in the current age. we're not telling you to watch just at a particular time and place. >> you can see it on multiple platforms. looking forward to it. >> thanks, bob. meantime, let's bring in vice chair and princeton university professor of economics, alan blinder. good to have you back. good morning. >> good morning. the annual rate 6.3, above the year on year is this getting out of the control, and does the fed have tools to get it back in control? >> well, it depends on what you mean by out-of-control

the fed wants it to be lower right now, but they don't have tools to do that right now one of the is easing on monetary policies, but there are others i was hoping we would get it down today in the cpi. we didn't. we did get a down tick of the pce. so maybe there was some hope, but obviously today we did not we made a new peaks by a tiny fraction what is notable is the tremendous gap this has happened before, but not for a long time. the headline, cpi, 8.6, core 6.0. that's a big difference, quite a big difference >> you mentioned pcu, and we've been talking about the difference in the construction

there, maybe medical costs have a bit -- can act as a bit of a salve. would that mean much to the committee? >> i think it would mean a lot to the public, you know, it's the cpi, but the committee believes the pce is a better measure of inflation they have staked their inflation targets on the pci, not the cpi. so to the committee it will mean a lot, and as i said, in the last month, there was one down tick, but the committee is not going to be hyper-excited about that it wants to see it go down several months in a row. >> al, what are the implications, in terms of policy of the widespread that you point out between headline and core inflation meshes you are right

now? on the one hand one would think in the past, the fed looks to the core, and perhaps the food inflating the headline is more of a restraint on growth than beating future inflation, but it seems right now the fed wants all these numbers lower and will not give much in the way of a concession that it's better at the core level 689. >> there's a political feed-through, but also an economic feed-through from the headline aspects if it keeps up. if it's one month, that's one thing, but if it keeps up, and it is keeping up, energy is embodied in almost anything we're buying agricultural prices get into a

number of other prices outside the agricultural sector, so we have understood this for a long time it's a muted bleed-through of the food and energy components into core, and the longer those keep going up, the worse that bleed-through gets >> you know, there's one line of thinking, at least coming into today's report, that a lot of tightening of financial conditions has occurred in the last six or so months. mortgage rates up to 5.5%. housing is in a real retrench march mode right now obviously corporate debt costs, they're resetting higher, so what's supposed to happen is happening in the way of dampening demand does the fed need to just say, this will get traction, and we're on the right path? or is there a newer sense of urgency?

>> no, i think the fed understands, unfortunately a lot of people don't understand that there are quite long lags between what the fed does, which flows through the interest rates quickly, and the reaction of the economy. this is true in automobile purchases, housing, business activity, you know, so people are always impact. you raised interest rates, how come the economy is not slowing down up to now, the economy was virtually showing no sign of slowing down the economy has not really slowed down that's typical that's what the fed expects. it will be a while before -- they're a long way from that

the last point on that is that to justify in the market side, the kind of asset pricing, especially fixed-income pricing that's already in the market, the fed has to follow through with more interest rate cuts nobody thinking the fed is finished raising interest rates. the fed nose that, has to continue down this path to justify the higher interest rates. >> is there anything in terms of -- >> yeah, well, unfortunately

what is happening, especially with food and energy, as we've been talking about is satly red olent of what happened in the ' 0s and '80s, that by the supply shocks hit had been bulge for years, year, not months. >> so the current situation is much better in that respect, but, you know, the last time we saw gaps between core and headline, which is where you and i started this conversation of this magnitude was back then the cause was the same, food and energy prices soaring. >> which is why it's curious, alan, going into this period, people were gaming out, okay,

what happens if we get huge increases in energy prices, the 5r89 last year was it had become less intensive in terms of gdp yellen brought this up ideas she seemed to be a bit confused why sentiment is so bad, we saw it in u-mi counter h today, still inemployed is at a low, and there's a savings buffer, even if it's getting eaten away. >> inflation it's in one word people in america have not seen inflation rates like this, for some of them, young people, in their lifetimes. even for someone like me it's been a very, very long time it's a shocker it's well documented people don't line aniflation only for rational reasons, but also partly for irrational

reasons. it just gives them a feeling that there's too many loose ends, nobody is in charge, things are going wrong, so on. all of that is happening now you know, i agree with secretary yellen, the real side of the economy -- suppose we forget about inflation for five minutes, which people aren't, but suppose we could the real sides of the economy, growth, production, jobs, wages, it's all doing very well quite well >> it's amazing we went from talking about the prospect of deflation and how pernicious and dangerous that is, to the situation we're in right now look forward to talking soon thank you so much. >> you're very welcome ceos are gathering on the sidelines of the summit of americas where president biden is meeting with western hemisphere leaders kayla tausche hats a special

guest for us. >> reporter: good morning, we are here with suzanne clark, the ceo of the u.s. chaism better of commerce, who just wrapped up your own summit here >> thank you for having me. >> you met twice with president biden after his remarks. what did he tell you about where the white house is and what tools he has to fix the problems >> thank you for that question i think what is important is that he showed up. it was important to see him emphasize the role of -- and pursuing some of the opportunities. i think the ceos in attendance and online were pleased to see that emphasize. >> the white house has painted it as a global problem the price of gas in canada, europe, but the u.s.'s print this morning did not give us much to write home about when you look inside the report,

did you see any good news for corporate america there? >> no, and i think what we've beend to is turn this into action we know there are things we could do right away. we have to lower tariffs, we've got to increase oil and gas production supply in the medium and long-term way, a strategy to allow people to invest we need to allow more legal immigrants into this country to fill the open jobs. >> these are all things the white house is considering the tariff reduction is on the table. there's a policy deliberation process going on right now the president, the treasury secretary, and the fed chair all med last week. conceivably they discussed that policy, the impact on inflation, do you get any sense that they will really pursue that? >> our hope is they won't let this crisis -- this is a moment where they could step in and do things that are hard to do it's time for the leaders of the

country to step up. >>. >> reporter: what does it tell you we saul -- saw 8.6% inflation. does in a tell you and your member companies that the fed can't fix this without a recession? >> what we're talking more about the other side, the supply side. what do we do to fix the inputs, the cost of labor, cost of energy those are the places we can take action that will be the fastest? >> how fast will that be those sound like longer-term solutions. who can be done to fix this? >> except they're not lowering tariffs could have an immediate impact the worker shortage could have an immediate impact. if you talk to any ceo, that's what they bring up they cannot find qualified workers. they cannot find truck drivers >> reporter: the biden

administration has been trying to do things by executive order, yet there are still 12 million jeep openings. that's what businesses are facing, millions they cannot fill were there any conversations here in l.a. that those can get filled any time soon >> i think it had more to do with the mem sphere challenges that's something we talk about at home a great deal here there's a lot of conversation about what do we do to lift of economies in the northern triangle to stop the great migration at home. what do we do with the digital divide to include more countries. what do we do about health resilience for the next pandemic what do we do about trade? to participate in the global economy. the focus here was really about the hemisphere >> reporter: biden administration also spearheaded

discussions for a new migration framework, what we saw announced was essentially a promise, a loose pledge by many countries, not all of whom will sign on, just to be better cops on the beat for migration in the region do you see this as being enfor enforceable? it's going to be another problem for the private sector to cause. until we get to root cause, economic growth in those regions, if you were a mom or dad, you would try to get to a better place. >> it was announced 3.2 billion going to the northern triangle yesterday i was told it would be an enduring solution, which tells me it's many years away from a return on investment. for companies putting money into a region, what do they get out of it? >> it's so interesting, secretary blinken was here and i had the honor of walking him

around and talking to some of the most innovative companies, and talking about what they're doing in the region. it was really remarkable to me to hear the innovation, againme, to hear the innovation coming from the company >> finally, bryan, nec director at the white house made a little news on this program this morning where he said he been in discussion with some loyal companies at the white house earlier this week. you talked to the energy industry quite rememberly. do you get any sense that production will increase in this country. if you think about the oim and gas strategy, the company, trag hasn't changed the last 12 or 18 months but our government strategy did capital goes where it's wanted and where it's secure. to understand the u.s. is willing to have long term strategy to take advantage of our best natural resources would go a long way to getting companies to step up and invest.

>> this is a conversation we will continue. we appreciate your time today. susan clark is the ceo of the u.s. chamber of commerce back to you. >> kayla, such an appropriate interview. appreciate that. we want to turn back to netflix. we talk about the goldman downgrades today they go to sell. we have some concerns around the impact of a consumer veglevel as well as heightened competition we modestly lower our paid streaming subs across every region a couple times today morgan stanley on chips and goldman on some of these names are macro driven it's not a call about even some of their buy rated names they cut the target 10 bucks the macro desk is having influence on the single stock analyst. sd >> it's the market action itself obviously leaving an analyst

with that kind of position of saying, we may not be hearing it from the company but clearly the market is registering some consumer when it comes to netflix it's interesting because the big take away from the last down side surprising was this company is now quote ex-growth. you no longer can pencil in sub growth as a driver and sentiment has swung very negative. now you have a quarter of all analysts recommending it where you had three quarters in december of last year recommending it. you're kind of looking almost for the rational behind why it's trading cheap the way it is. a light catalyst path is an interesting way the put it too it used to be a light catalyst path was find because it was an automatic growth machine and you didn't need the catalyst you just needed the same thing going on today to keep going on. >> yeah, you did i know a lot of different things they use in that phrases that i like i said earlier on the last hour with jim that it wasn't a

particularly instructive note, fundamentally on netflix didn't offer anything we didn't know to carl's point coming back to other names, mike, that are more based on the fundamentals docusign losing quarter of its market value that's been a significant decline and reflective of overall what we have seen in so many, in part, certainly the names benefitted in part of the pandemic. go back, let's show the sort of the full arc of docusign up and dow down there it is. keep going back. keep going back. you don't give me enough here. thank you. there it is. just a lot to look like that >> a ton >> it's basically anything that was software, big tote it will addressable market and it was this virtuous cycle of venture

capital back companies spending heavily on the software of companies. that was an age of abundance it's still looking like 40 times, 35 times forward earnings the market is way cheaper than that now that's kind of the purgatory a lot of them find themselves. >> we'll watch docusign. a bunch of downgrades today. stock down almost 60% for the year to date check out some of the biggest laggards on the s&p for the week we are looking to put together another losing week. we did have a little activity in the cruise lines anl aid airlins

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that's why the world's largest companies and over 30 million people rely on prudential's retirement and workplace benefits. who's your rock? . shanghai locking down parts of the city once again she is live from china and has

the latest for us. eunice >> reporter: thanks, david 23 million residents, nearly the entire population of shanghai is going back into lockdown or partial lockdown for mass covid testing this weekend meanwhile, the capital has shut most entertainment venues, including bars and internet cac cafes. the authorities are taking measure over a small number of cases. a total of 148 reported infections out of a combined 47 million people since the reopening of shanghai on june 1st. now, the measures are stoking concerns that despite what the leadership has said that it's worried about the impact of the slowing economy, that the commitment to zero covid is so strong by the country that cities will continuously be locked down.

the president reiterated calling on his government to have unwaving iver waiving commitmen his zero appropriate what people are hearing on the ground is that zero covid is the national priority. just to give you a sense of some of the uncertainty that companies are facing, shanghai disney land keeps its parks and hotels closed but today disney started to open some of the stores outside of the park but only to realize that the city or at least most of it, is going to be shut this weekend these are some of the shifting circumstances that management have to deal with as they try to p pursue some sort of business prospect that's leading to a lot of large decline in business confidence david. >> thank you

can only imagine the different cross currents of trying to keep your business open and operating, bring your people back not to mention chinese stocks that had a good week going a will the of confusion there as well in terms of regulators and financial and ipo. we got a lot of inflation having an impact. looking at the market. that's going to do it for squawk on the street. tech check starts now. good friday morning. welcome to "tech check." hot cpi data taking stock. the worst stretch since 2002 we'll talk to cramer about how we play this then it's the earnings mover of the morning. docusign down 20%. the ceo is right here on