good morning stocks pointing to a slight rebound the day after the s&p dipped below to bear market territory. the fed begins policy meeting today. markets are expecting a rate hike of 75 basis points. that's a little more than a month after fed chair jay powell said that wasn't being considered it's tuesday, june 14th, 2022. "squawk box" begins right now.

good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen andrew is off today. look at equity futures at this hour >> surging >> whoop-di-doo! i guess the best you can say this morning is they are green arrows maybe the beating has stopped for now. s&p futures up 21. nasdaq up by 96. just yesterday, there were steep declines dow down 800 points yesterday. a decline of 2.8%. that made the close the lowest since february of 2021

the s&p was down 3.9% yesterday and the nasdaq was down a jaw dropping 4.7%. all of these declines come after the steep declines on friday and on thursday before that. with all of this, you got declines pushing the s&p into bear market territory. it is down 22% from the january high dow off by 17% the nasdaq is down by 33%. treasury market is something to behold yields picked up yesterday, the 2-year treasury closed at the highest level since 2007 10-year treasury since 2011. the 10-year treasury is above 3.3% the 5-year is 3.1% joe, talk of mortgages set at this point at 6% is where some of the mortgage rates are coming in crude oil was down yesterday

along with everything else in the market this morning is up a little bit. 81 cents to the $1 the energy markets were the biggest decliners. down by 5% that is a steep reversal >> sticker shock for maortgage rates. is that average historically >> probably. 5% or 6% >> it doesn't matter >> it's where you've gone and how quickly you got thaere. >> i'm looking at the vix. got as high as 35. it did not stay there. closed at 33 and change. i don't know what people need or whether we need to recalibrate or what qualifies as a bottom for the vix number you think somewhere above 40 we're nowhere near there the high for the careeryear on

vix. you can't see it it must have been an intraday. obviously the averages weren't this low it's what happens when it is this water torture that we see where this is taken a long time to sell off. >> this is an orderly retreat and the fed has not been concerned. you don't have a situation where you can't find buyers on the other side it sayis a selloff, but happeni in an orderly fashion. the fed says that is okay. that's a big question. it is what they will talk about today and tomorrow >> crypto is a big part of the it is behaving like a risk asset like the nasdaq stock. fell below $21,000 for bitcoin celsius shares were suspended.

binance was unavailable for three hours. they said half an hour and they got it fixed they said they were working to repair a stuck transaction then they said a few people were having problems. mostly fixed the price of bitcoin is now down more than 25% in a week. that's down 66% total which is the fourth biggest percentage drop from the high in the history of bitcoin ethereum also plunged down 33% in a week. this is what is interesting. the market cap for the space for cryptocurrencies slipped below $1 trillion. $975 billion for the first time since february of 2021 according to coin market cap the total market cap was $3 trillion that is the amount of carnage.

$3 trillion to 9$975 billion we were talking and i pointed out that good old tom lee who is a big crypto bull when it was impossible to be a crypto bull it was 20,000. what did it drop 2 or 1 he kept p coming on saying my price target is 20,000 wit we laughed at him. tom, you have this great reputation in equities and bonds. why are you sticking your neck out and risking your reputation saying chris i bitcoin is going back to 20,000 fast forward here we are down to $22,000. i don't know what it means it is all relative i'm seeing now in terms of market sentiment and twitter is not a scientific poll. i'm getting a lot of ponzi

scheme and told you so it's absolutely worthless. no value all the things you come out of the woodwork that may be a bottom maybe not. maybe warren will buy all of it at $25 a coin. >> warren buffett? >> yeah. blockfi is cutting 25% of the staff. the ceo said there was a dramatic shift in the economic conditions with the negative impact on growth backed by peter thiel that lets clients accrue interest on the holdings the latest crypto company to cut jobs cr crypto.com and gemini as well. we will talk about all of this

stuff with mike novogratz. his voice my be a couple octaves higher when he comes on. >> did you see the list of the crypto billionaires who lost money? they're still billionaires. >> you see how many millionaires hundreds of thousands. >> look, this is part of the liquidity that we saw. the fed will take that liquidity out. >> it is just like a risk asset. if you need it, whatever you have that you might need >> sell for a margin call. that is the case all roads lead back to the fed the fed may get more aggressive with interest rates. steve liesman joins us with more steve, the conventional wisdom is they will hike by 75 basis points, not 50 tomorrow. >> becky, the fed is likely

going to 75 on wednesday my reporting finds the fed will accelerate from the previous expected 50 hikes which is expected due the inflation the cpi accelerated to the 40-year high and the one-year reported yesterday surged to 6.6% a new high for the series. the university of michigan report with the five-year expectation. the highest inflation since 2008 the move if it happens by the fed, is another about face for jay powell he said at the last press conference that the fed was not actively considering a 75 basis point hike he said it was conditional with the expectations the 75 point is a clear signal

that is not happening. markets will look at this with more rate hikes overall and forced the rate out. look at the fed funds future and how it is priced at 90 basis points currently you see each key month we pointed out. terminal rate is 75 basis points higher the market is not just going 75, but adding more and including in the end with 3.61. you see the decline is now priced in to the market here faster rate hikes creating economic pain that echos on main street and wall street there is not universal support among fed watchers krishna guha reporting that this is not what we anticipated not good for the markets and one from the wage hikes from the russian invasion and now

believes inflation is much less likely to take care of itself with the supply chain easing becky. >> jay powell wants to communicate with the markets so they are not surprised and caught off guard or a huge selloff. a knee jerk reaction that is fed policy for a while, to guide the markets as to what is coming. i get it if the numbers are stronger than anticipated and inflation is now not taking care of itself. they are admitting inflation hasn't peaked at this point. why continue to spoon feed the markets? why not do a shock and awe why tell anybody anything because the selloff is already here we have seen a huge drop in stocks the last three trading sessions why not shock and awe tomorrow >> i think to give markets some preparation for it, becky.

remember, it is important that treasury markets work. i've not heard great stories i got a chance to report in treasury markets what you have seen in the rise of the 2-year treasury, that creates tremendous economic dislocation. i think, becky, why not do 50 tomorrow and meet market expectation and essentially telegraph the 75 at the next meeting? i'm not sure how much it matters to surprise markets. markets are on board that rates have to go up and go up quickly. i think the real question here is, guys, put up the two-line chart we just had up, the terminal rate. how much the fed wants to bring forward in terms of hiking that's now 3.97. you remember for the last several weeks, i talked about the 4% or 5% fund rate for a time whether or not they have to get there or not

i talked to several fed officials about this i don't know i think the game is on the outlining months and how much you bring forward. >> steve, the thing is he can get away with 75 without the rest of us saying what is he doing? i'm wondering whether you still take the rap for causing all this with the crappy question about 75 basis points? i see i don't necessarily feel that way i would never hurt the mes messenger. this is all your fault, liesman. do you take the rap for this it would mean you are very influei influ influential. you are causing all this pain? >> i don't care, joe

when i go back over the question i asked -- >> it may not have been answered perfectly. >> 1,000 opportunities to ask that question. i would ask the same question again 1,000 times. >> can we see it again do you have it ready to go i have it ready to go. >> they might have used it in the 5:00 a.m i did not want to self grandize. >> let's look at it. let's see it >> you talked about using 50 basis point rate hikes or the possibility in coming meetings might there be something larger than 50? is 75 possible >> 75 increase is not something the committee is actively considering. >> great, steve. beautiful. thanks awesome. that was the question that was needed you know what? i've been using this more and

more because you have to that is the question you are flip flopping? no, sir. facts and circumstances change what do you do when things change that is more and more appropriate. it is the fed which is data dependent. >> joe, let's be serious for a second not that you weren't before. >> i was trying to do it in a softer way while i pointed fingers at you >> i get it. the question becomes does powell give the impression of the fed panicking? you don't want the fed panicking. why was this not part of the whole walk-up to the meeting here at 75 i get we had information in the last several days. we had the cpi on friday we had the consumer fed from the new york yesterday

there was new information. you would think there is a longer considered campaign here. i'm not sure this is the best look for the fed here on this 75 point hike or the turn we are taking here in the last couple days >> steve, you pointed out when the treasury market moves this quickly, the 2-year treasury moving as high as possible, that is leading to dislocation. that is bringing in the selloff in the equities market which is painful. it has been orderly. if you start to see dislocations, that is what changes the fed's opinion. what else is happening in the treasury market? >> becky, i'll tell you i was really making a bad forecast i was on vacation yesterday and last friday. i have heard some things about

some -- >> did we just lose him? >> yeah. i thought it was just me >> he was going to tell us what he heard in the treasury market. >> someone didn't want that getting out there. >> steve will be back at 7:00 unless we get him back more quickly. that's a heck of a tease. >> hold that thought coming up, a big lineup ahead to cover the turmoil in the market including former nyse tom farley and michael novogratz and joe moglia and leon cooperman. futures now, as you can see are up they are green, but not triple digits at this point you never want an 800-point

rebound. the next thing we're down 800. you are watching "squawk box" on cnbc >> announcer: today's big number $841 billion that was the total outstanding credit card debt in the u.s. in the first quarter of the year cointo the federal reserve bank of new york the highest amount ever recorded >> announcer: today's big number is sponsored by mercedes-benz. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve... or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world.

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the fed kicks off the two-day policy meeting today ahead of that, treasuries with a bit of movement in the last couple sessions. not a lot going on today we're going to talk about that the futures are in the green trying to bounce a little after the dow lost 2,000 plus points the previous three sessions. the s&p 500 officially in bear market territory down 20% joining us now is the head of the investment grade ssindycate. i want to talk to megan for a while at the top what was in the pi report that

was unsettling or different than expectations, meghan there has been a reaction to that number. >> you know, i've been a bit surprised how caught off guard the market was to the release on friday particularly with the precursor to the number with inflation i think inflation is surpriced the upside in every major economy. the disturbing point is it is evntrenched and broadening going into the meetings tomorrow, the more hawkish members of the central bank have the upper hand to address that >> do you think that we're getting or making progress in terms of tightening just overall? the stock market is tightening up we know we may go 75 basis points in the fed. i wonder what inning we're in

with tightening. you say the biggest risk is liquidity. something could go wrong, i guess. should we assume we're way behind the curve with rates and they need to be much higher or in the sixth or seventh inning of tightening? >> this is the first time we have seen the curve inversion since april. the 2-year move is pegged to policy the long flattening we are seeing is suggested with a market that is occupied with growth risk. i think the market feeling and telling us that they expect growth to accelerate from here that is new information for the market tightening is fairly broad based as we look at asset classes. the market dialogue is turning to the conversation around inversion as a leading signal as it relates to recessionary dynamics

there is a 12-to-18 month lag when that will take hold if you look at historic norms in credit markets, the implications are where on the curve do you move and where does cash migrate to be responsive to the reactions. the 10/30 flattening is talking to the credit area yesterday was as flat as 2006. what they wanted to see is net buying and net selling off the curve. it is more recalculation suggesting tightening across markets. >> sam, you would never ignore bond markets. what does it tell you about the stock market >> joe, meghan said it they are worried about growth expectations in the environment with the 6.5% or higher, that has happened

five times we ended up slipping into the bear market and recession and typically bear markets an associated with recessions are longer and fallen further than recessions the question is what will happen in the second quarter in terms of growth? 70% of the s&p is expected to post declines in earnings or reductions relative to the march 31 estimate. we have some groups with downward revisions and that could accelerate in the second quarter as that gets under way. >> do you think this is a cyclical bear and secular bull or a secular bear? >> i think cyclical bear within a secular bull my personal forecast is we end

up coming off 27%. that would be a sub-average bear market typically we find the pe ratios trimmed by a third that would bring us to a 15 multiple the issue is what integer. my feeling is 3500 on the s&p would be a good target right now. >> okay. this last word, meghan you would buy investment grade or junk? is there anything? you need to figure out where to go in duration or quality. what would you do? >> i think what barclays is advising and what we see in the market is that two camps are merging. if your total return focus, they are attractive front end given the recent moves and the underlying yields. i think you can buy five-year

risk with 4 or 4.5 coupons and high quality names if you are a yield player, there are coupons at the other end of the spectrum at levels we have not seen in over a decade. there are compelling opportunities at a time of underpinnings. dealer value is light as opposed to the one-year average. the new issue calendar is underwhelming. this is not a credit crisis. there is liquidity in the system a scarcity of supply the functional market staying selective in the wings of the curve is where it existing >> meghan, you are great it is a different language

equity and fixed income people are different people different animals. i got most of it, meghan wow. awfully smart. duke duke grad. hard school. >> not m.i.t >> thanks, meghan. sam, i think about your dad. we can't talk to him anymore, can we have you tried >> not recently, joe >> you don't expect an answer? you do talk to him i know what you mean i do that with my dad, too thank you. thank you both >> thanks, joe okay >> when we come back, twitter employees will hear directly from elon musk at the all-hands meeting. we have the latest next. as we head to break, look at the pre-market winners and

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good morning welcome back to "squawk box" live from the nasdaq market tisite in times square. let's look at the futures this morning. dow futures up 120 if you add up the losses from the last three days, you are talking a decline of more than 2,200 points you are not seeing red arrows. this is stopping the pain for the moment s&p 500 up 21. nasdaq up 101. >> what do we want rebound in the s&p back to 4,000? >> that would make me nervous. >> you want to get it out of the way now? >> yeah. >> is it possible it is out of

the way? maybe this talk means it's out of the way >> i will say i did put money into the s&p 500 index yesterday. when you see declines like that, it's okay, if you don't need the money right now. the problem is the people who have stuff on margin and levered up margin calls are a problem if you have cash on the sidelines that you don't need for a while, it is a bad time to put money in >> i have things i could do. i don't remember my password >> that's actually the sign of a solid investor you are not trading on a daily basis. >> we got to go. we got to go i just heard it. we have to go. we're going to go. two massive tech bills gaining traction on capitol hill ylan mui is joining us with more i had to go to get to you, ylan. you take your time >> reporter: joe, i'm here to tell you those bills promise to

reshape the way big tech does business both getting a vetting in congress the industry is taking a different position on them the american data privacy and protection act is getting an early thumb's up it is preventing data collectio beyond reasonable for a specific product or service that rule is applied across the country and consumers would still be able to sue companies, but not until four years after the bill passes. this compromise is the result of years of negotiations with the companies and congress it has bipartisan support and a hearing today in the house committee hopes to build on that momentum it. however, the other tech bill has bipartisan support, too, and that is making the industry nervous. american innovation online act, the anti-trust bill could break up big tech. two of the sponsors of the bill,

cicilline and buck, will hold a briefing on the bill today they were promised the bill would start moving through the congress this summer, but big tech is trying hard to keep that from happening in washington, sometimes you win and sometimes you lose and sometimes both of those things can happen at the same time and same day back to you. >> thank you very much ylan mui. when we come back, we will talk more about the countdown to the tomorrow's big fed decision. it is on we'll ask former dallas fed president richard fisher what the fed needs to do to get inflation under control. we have a line up of investors mike nogtzovra and leon cooperman and many more. we'll be right back. so tap ibm to un your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster.

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the fed's two-day policy meeting kicks off today. steve liesman is reporting they will hike to 75 basis points tomorrow we have the latest with us which is our cnbc contributor. richard, some indications that the fed will hike by 75 basis points tomorrow. is that the right move

>> good morning, becky i'm not sure this is what they will do. i thought i would august at the table and i was viewed as a hawk i think it is an even spread 50 or 75 you don't want to make it look like the market is pushing you around you have already laid yourself out on a 50 basis point basis. all of the chairmans have done the same thing you want to show you are reacting to the data now, they knew inflation was running higher than even the number that was reported we know because of several indicators one is the rents and cost of living in terms of space is under reported it lags. contemporary data shows it is running at a bigger rate and health care costs are in the

numbers on the pce so i don't think there is a surprise here for the fed in terms of the cpi numbers reported the other thing, becky, if you look at the report that came out this morning, the national federation of independent businesses, you know i like to look at that data. it was released 40 minutes ago small and medium businesses, private companies employing americans and run by women and men who create things from scratch that are not publicly traded the highest number in 48 years in terms of their willingness to take aggressive pricing to continue doing so. also the highest rated since surveys began in terms of not finding workers they need. the employment situation is relatively strong. there is a wage price spiral the fed knew this before the meeting. the memo that went out last

week, they sent a decision memo out to be debated by the governors which would have gone out before the friday cpi report came out i think there is some ineinerti here, becky. they have to signal they will be tougher going forward if they don't move 75 at this meeting. >> my question is why did jay powell put himself in the box to begin with if the fed knew inflation was running hotter >> he started this practice in a press conference before the meeting takes place with the testimony saying what they're going to do. that's a trap to fall into as you know, i think highly of jay powell he has done something different than any fed chairman. he is saying well before

meetings start what they are likely to do his recent public utterances and the vice chair brainard is set 50 basis points. by saying what you are going to do, i go back to the volcker days where you indicate through the journal what you think about doing, but you did not say it outright that is what powell has done and he may be trapped by it right now. >> i saw something, richard, yesterday that i thought was interesting. and there must be some voracity to it. volcker did break inflation. walmart and the internet did >> was there an internet in 1978 >> i'm talking about the 30-year secular disinflation there is a lot to that

volcker -- that's a blunt tool he used. i was there. no one likes to just pull the rug out from under the economy and just clamp down just to deal with inflation volcker at the time, as you remember, richard, americans have to accept a lower quality of life for a few years because of what he did then, we give him a lot of credit, but things did happen. exporting workers around the globe and lower labor costs also helped with disinflation >> you're right. >> the fed can't do everything for us, richard. you know that. you said that a lot. >> i believe that, joe let's keep things in perspective here what started then was the greatest bull market of all time fixed income interest rates got so low that two and a half years ago, the bank of england issued a report

that it was the lowest -- they he go back to the first trading paper. they are still historically low. we have the massive bull market in fixed income. now we're reversing it the question is how far do we go and who leads? the market or the fed. the market is leading. look at the 5-year it is a quick move the question is is it going to be contained or roll in this direction? i think it will continue to roll in this direction. >> richard, thank you. we will talk to you soon great to see you >> thanks. thanks to both you guys. coming up, the s&p falling in bear market territory tech stocks have been there for a while. the tech stocks down a third 33%. you're the one

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the selloff sintensified on monday the nasdaq tumbled to its lowest level since september 2020 apple and the other tech stocks are all feeling the heat to discuss what's happening in tech is gene munster founder and manager at loup. you've got a good fed-watching department there, gene does anything specific to tech really matter on trying to make a decision on what to do right

now. >> as a tech investor, i've never been technically focussed on the fed in the decades i've been doing this, i've become a student over the fed. don't fight the fed would be the sight title of any book. there are two ways to building, to reducing volatility and building stability in the market there is the hard way for tech investors investors the easy way the easy way is the fed does its job. the fed is being dynamic in its approach the second, the hard way to build stability is to ensue panic. i think we would see that if we get a 50 basis point move. i think the market would do that as a no-confidence vote for the fed. and in that case, and your programming has articulated

tht that we would focus on the vix. that would be when it breaks through 40 we are at 33 this morning. i'm optimistic with some of cnbc's reporting that there's going to be a 75 basis point move still doesn't answer the bigger question, what's going to happen with tech over the next three to six months >> a lot are 50, 60, 70. that's the average, 33 however, the combination of the stimulation from the fed and from all of the covid-related programs that we had, you add that with the notion that we're pulling forward all this demand because of the pandemic and all those, those pandemic stocks ran to incredible levels 33 might not be that much, given the move that we saw in a lot of

the, based on all the easing money and just sort of that story that everyone fell in love with >> agree with that, and i think that, you know, when you have this breakup that we're having, especially with tech, i think that there is some, maybe some insight around how to navigate that breakup a couple pieces to it. first is 2022 is the year where we stabilized the numbers. we've seen the growth over the past couple years, especially with these big tech companies. that's going to set up for easier comps in 2023 i suspect when we hit the june quarter and they start talking about the september guidance, that's going to be the pain point. and specifically, whether you h when you hit that pain point, the fear is driving that emotion. and usually we discuss fair value. we have target prices of when we'd be buying companies based

on fair value. those are out the window right now. we are focussed on bargains, and bargains have an emotional value. >> we're below what you think are at fair value. >> not at bargains yet i think we're s10% to 30% from bargains >> we, it's a three-hour show. we never have anytime. thank you. >> thank you, joe. >> okay. we'll see you. when we come back, some republican senators looking to crackdown on voting power of large institutions use' hpl wllear about the crypto carnage "squawk box" will be right back.

good morning wall wall street looking to stop the slide after yesterday's selloff. and trading near its lowest level since march of 2021. the crypto carnage continuing. we'll get you up to speed on what to watch. the fed in focus, as they kick off a two-day meeting. markets are now expecting a rate hike o on ths

with a preview of what he would like to change the second hour of "squawk box" begins right now >> good morning, and welcome pac back to "squawk box. i'm joe kernen along with beck pbecky quick. andrew is off today. on a percentage basis, not get ago whole hot back but some stabilization let's get to dom chu looking at this morning's premarket movers. he's been up since before dawn

their. >> this morning >> when i get to hang out with the early morning crew, doing worldwide exchange is a little bit more of a tougher task but to your point, the morning movers today are going to center around on what happened yesterday and the aftermath and whether there's any kind of a bounce back or recovery trade or a turn around tuesday as some folks like to call it. we'll start off with a bigger picture look at how yesterday's trading action has affected three key parts of the stock market specifically communication services, consumer discretionary and technology and the reason why we want to focus on those three is those three make up the bulk of the s&p. because it's apples and amazon and tesla. if you look at the way trading action has shifted now on a year-to-date basis yeste yesterday's losses have shaved nearly a third of the

discretionary sector off and technology is key, because it is the biggest sector by a wide margin. that's big ger picture look we're talking about 4% halosses for alphabet we're going to get back fractionally some of those losses microsoft's up a percent, alphabet's up nearly a percent same thing with amazon and tesla. it's trying to find some stability and recover some of the hardest-hit parts of the market if you take a look at other parts that we are focussing on right now. believe it or not in yesterday's trading, there were five stocks in the s&p 500, five out of 500-some issues that were actually positive on the day

they were cme group, truist financial, duke reality, mcdonald's and dominoes. those five names were actually up in a massive selloff yesterday. we're seeing a little bit up keep an eye on those bitcoin prices certainly a lot of talk. whether there's a new trading range being established at a lower level than what it had previously been. the 30,000 level was one that a lot of people were watching. price hovering elsewhere in some of the smaller alt coins, are you seeing a little bit of a bounce back. some of those doing relatively well for sure. keep an eye on those particular moves, joe

the crypto currency side of thing, especially bitcoin's getting a lot of conversation whether this support at this 20, 22 area can hold or what's the down side to that. >> dogecoin isn't going down something selling for a nickel up a third of a percent, i'm not impressed. but thanks for, you were kind of positive, you're soothing. do dolcet tones >> fair and balanced >> that's a great slogan that's taken all right, dom you'll be back in >> back >> i'll he ssee you next hour. >> a 75-point basis point is

likely the move. we expect the fed to accelerate rate hikes and they may consider out of control inflation cpi index accelerated in may to a 40-ier high. and university of michigan, five-year expectations are the highest since 2008 the move, if it happens would be an about face for fed chair jay powell he said at the last fed conference the fed was not actively considering 756 a 75 move would be a clear signal the fed is not satisfied with how progress is happening markets think this will amount to repricing yields can you see, a 184

expectations a couple weeks ago. for august, now 225. january's gone from 282 to 361 up near 4% for july 2023 and then that slight decline is now expected for december 2022 that was always sort of built in now it's a full quarter point rate cut is built in for the end of the year. but faster rate hikes have consequences for the economic pain that echoes on main street and wall street. tan td securities with a call, saying we believe this shows the fed is more determined to do what it takes to end the inflation overshoot as fast as possible certainly going to be a question for powell on wednesday. whether he has abandoned the hope for a soft handing or the intent of it with a complete focus on fighting inflation. >> we were talking, you know,

pa because we lost you last time. let's stick with theiris just f second because i was getting from you that because they had settled on 50 that maybe that might not be a bad idea. and richard fisher echoed your sentiment a little bit by saying how does it look like the market's pushing him around with something that he had decided that he's going to do and then he's like, okay. that makes him hooklook kind of wouldn't say weak, but like he's being pushed around. but if he stays at 50, he looks like he's not strong enough to go 75. i think it might be better to tell the markets we're serious here and we understand the inflation didn't moderate like we thought it might, and we need to go 75 that seems like the better choice of like what was it,

"sophie's choice." >> hobson's choice or whatever they call it i agree with you, joe. i understand, and i listened to what richard said earlier. i think powell at this point is beyond caring. i think he knows that i'm going to sit up here and say this would be a reversal if he did 75, you know, but i think that he has to be beyond that at this point, where he says we need to do what's needed being pushed around by the market i don't know i don't think it's the right call for a different reeason they should give the market time to adjust. i'm not so much concerned with the stock market as i am with the bond market. we don't want to be in a situation where we have dislocation. that's a concern you have to have when you have these kind of moves in treasury markets that are not used to these 20, 30

basis point moves. >> talk very quickly to that, that's where you got cut off in the last hour. it's been pretty orderly until now with the markets but the quick moves in treasuries might and different story. what are you seeing? what are you hearing >> i don't have much on this yet, becky i took a bad choice of being on vacation yesterday that was bad planning on my part, bad forecasting, i guess is the way you'd say it. i've heard some talk about it. still seems like markets are pricing at this point, but what you don't want to do is go back to a march of 2020 situation or 2008 situation where the most important security on the planet which is, you know, the u.s. treasury cannot find a bid you want to be very careful about that and what's going to be incumbent on powell here is to provide some sense of where this is

going. now we're up 4% for the terminal rate now we're at 3%. you don't want to come in there, becky, in the morning and say okay, i'm going to buy a security that will by the end of the day lose me money. and so they won't put a bid in >> not to mention that the fed is stepping out while they're trying to shrink their balance sheet. we will see you again a little later this morning joining us right now to talk more about it is lofty carewy, head of credit research group at goldman sachs. and this idea of the treasury market having liquidity issue, that's one of the biggest risks facing the markets right now, right? >> that's right. i mean, so far, we've seen a big decline in bond prices that is entirely reflective of the yields i say it's somewhat modest, and

i think unlike march of 2020, credit has been following the equity market. but you're absolutely right. we haven't seen yet evidence that the market structure is becoming challenged, that the profitriocess is challenged. if it happens i think that brings us to where we were >> lotfi, i hadn't thought about it it has to be more complicated for the fed to be raising rates, yields to be moving up so quickly and knowing that the fed is going to be stepping out, and it's been the biggest buyer for a long time. >> absolutely. keep this mind that the exit is also synchronized this time around you have the fed starting to run up the balance sheet but at the same time you have the ecb in europe ending the app

and so yes, the back of the exit is a lot more front roaded in the u.s. but also a lot more synchronized in europe and these are challenges from a market plumbing standpoint in addition tobroader risk sentiment. >> the third would be a faster than expected erosion of corporate margins. and everybody is kind of watching and wondering how margins will hang in when earnings season begins again in just a few weeks what's your guess? are they going to be able to full off, corporate leaders? or will there be more pressures, estimates have to come down? >> i kind of file like we had two seasons in one a much more negative signal. that's something that i would keep an eye on but at the very high level, lst almost have a double whammy of slowing down consumer demand and

all sorts of pressures on the cost side. the net impact of that is pressure on margins, and that's one of the reasons why we would be aggressively positioned up in quality-owning companies and earnings in the face of a variety of challenges here, both in the demand and the sly side the erosion and margins happens a lot faster than expected i would say, so far, we're going into this in the position of strength from a balance sheet standpoint if you change that, then investor also have to reprice. j t >> those are the risk factors, but it's not all doom and gloom. there are hopeful signs. walk us through that and then tell us which side you come down on after looking at the risk and the potential positive sides >> the biggest positive in my view in the psych sl cycle is t

going that you slowdown in a relative position of strength. i siee levels of excessive liquidity that are unreasonably high there's certainly the ability to withstand six or nine months of high volatility in the market. you know, if i look at how yield companies have done a pretty good job so we are going there in a position of strength in my view from a fundamental standpoint, even if you have a recession i do think that, you know, high yield, are unlikely to peak at some of the levels that we saw certain certainly in 2008 or 2009. fundamentally, i think we're in much bet ter shape today. >> we will hang our hat on that.

lotfi carewy, appreciate your time today lots to come in washington on the voting power of wall street's biggest asset managers. pat toomey joins us. and then tom farley. plus mike november grats and then joe moglia. and we head to break, take a look at the s&p winners and losers in the premarket. the s&p as you know now is bear market territory "squawk box" coming right back

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later this morning, the senate banking committee will hold a meeting it focuses on corporations' voting power, specifically the big three money managers, blackrock, vanguard.

and we've talked about it endlessly on "squawk box," senator. i remember when we initially started talking about it, just, it was so patently glaringly odd that the owner of etfs would take the initiative to vote the shareholders on issues that were really sort of dear to the person running brlackrock the whole notion seemed outlandish i thought the market could fix things if you really like the job that the country's doing, other people say hey, these people don't really follow these issues very well, and they don't vote their proxy material so we, as really smart people who dot r the right thing, we should be able to vote do they need a law they can't continue this >> they've been doing it for a

long time, joe and i agree, it's kind of jarring when you step back and think about it, especially in the context of the overall tremendous options you look at the collapse of commissions and tfree trading ad friendly apps. and hey, if you invest in an actively managed fund i think the manager should make those calls, because you're hiring that person to maximize your return, but for the millions of americans who are simply trying to get a return that replicates an index, it's a completely passiv passive exercise on the part of the manager. they shouldn't be voting those shares, and i think maybe the market is moving in that direction anyway and we have seen recent examples where these votes are being cast in ways that can't possibly reflect the wishes of certainly

not all investors, maybe not even a majority. >> i hate to be cynical, but you're not going to get any democratic support, because th these three firms, the way they're voting is near and dear the democrats. take any of those issues that we f know blackrock votes on. think about the outrage you would see outside these guys' houses if they voted the other way. >> what i'm hoping is that people will look at this as a matter of principle. who should have the final say. >> good luck >> and how to cast these votes i'm willing to live with the outcome, however it is but i think the actual owner should be able to make that call >> do you think it will pass with just republican backing they love the way -- it's like you think they're going to regulate twitter when they love what twitter blocks?

>> there are some democrats who are concerned about the consolidation of power, about the fact this means there are three individuals who have enormous power over all the corporate america because of all the votes they control i fknow that that does cause concern among some of my democratic colleagues. how can it be wrong for the investors to be able to vote based on their own money how can that be wrong? we'll see, joe we're going to take a very aggressive run at this senator dan sullivan >> another republican. you're going to get nowhere. >> i think there is probably very broad support among republicans, but i think it goes beyond that. >> senator, what have the heads of any of these companies had to say to you because it doesn't seem like it's a tough concept in fact, at time when is we've

sp spoken to larry fink about it, he said yeah, we are working on ways for people to have a vote >> so far in our conversation i've gotten the sense that they accept that we have a strong point here i think larry has said publicly that this makes sense. operationally there's some challenges, we don't expect the average retail haveinvestor is n to be making a decision about every conceivable proxy vote that he could cast but there are mechanisms by which a person could inveselecta default. i think the leadership of these firms are going to work constructively they'll certainly work constructively >> esg, do you think that, okay,

it a it's going up. do you think it's a tree that grows all the way to the heavens? or people feel good, i guess but are there, do they outperform other indeces and are there negative unintended consequences, like what we've seen with defunding fossil fuel production >> take your pick, there are huge unintended consequences but sure, i think there will be a correction at some point, joe. most investors don't want to use their investment, don't want to have corporate america be the moral police of the country, and i think we've gone overboard, and i think there will be a correction >> it's weird, senator, because if you told the left that you're giving the moral authority to

kror kro corporations, what does the left usually think of corporations? they're causing all the inflation, they're creating trillio trillionaires, they're not paying taxes >> they castigate on a daily basis. >> have they thought that through? >> well, you know -- >> we're going to miss you we're going to miss you. >> we're going to try to make some progress on this. >> what do you think is going to happen do you think that oz is in >> i think dr. oz is a very strong candidate i think he wins the election >> do you, in pennsylvania >> i do. yeah yeah >> all right, thanks, senator. >> thanks for having me, guys. still to come, we will talk volatility, the ipo market and spax with tom farley right now, though, as we head to a break, let's check out shares

of oracle, trading higher after the company tonight pped earnin estimates. it competes directly with amazon and microsoft azure. "squawk box" will be right back.

still to come, mike novogratz. bitcoin now creating its lowest level since late 2020. here are the futures ahead of the open they'rupe they're green. they're not quite surging, but they're green. "squawk box" will be right back.

all right,it's been a toug year for stocks. a tough year for bitcoin, and a tough year for spax. tom farley is the former nyse president. and let's talk about what you know in this area. it's good to see you, tom, it's been a long time >> good to see you tough intro. >> now a bitcoin spack >> a real-life meme. in our presence. >> you got into spaks a few years ago, back when things were very early days, and it looked like it was a great place to be. you had some success with it

now things are turning on spacks and on bitcoin and regulators are cracking down on both these areas. what happened, where do things stand? >> it's not just spacks and crypto, but i've spent my recent years in markets when i go back to when i raised my first spack in 2018, that w there were a couple dozen spacks there were some doing real re good deals spacks don't really make sense for most businesses. and you had some really smart people finding those cases where spacks made sense. then we had this euphoria, and it made no sense so when there were a couple dozen when i did my first spack in 2018 there were 500 when i did my last spack. and the industry wasn't all good business people. you know, there were scammers and schemers and blow hards and people putting out absurd

projections that there was absolutely no hope of ever meeting. it was a real problem. so it's no surprise that regulators have stepped in and made raising and operating spack more difficult i think what we're seeing with regard to spacks is a little bit of a slow death. but i suspect just like in 2017, in 2023, you're neff ver going o talk about spacks again >> spacks now have kind of a dirty name from the bad guys who got into it. >> they're gone. there's 2,000 total. through the beginning of the first quarter next year. two years roughly, 18 months to two years. so they're going to disappear. and then on this show, you won't utter the word spack i suspect in 2024, you know, more than once or twice. i think capital market's also completely dead.

i'll give ah stat. there have been four ipos in june there were 91 in june of 2021. >> but this is a lazarus situation. it will come back. s >> absolutely, without question, but it will be 2022 at the earliest and then crypto, i think, looks more like capital markets than it does like spaks it's a painful moment. i think retail has been smoked i don't think retail's coming back anytime soon. it's going to really impact some of the big business models oriented and retail and generating massive fees on retail that's not coming back any tomb soon it's going to take years to build back the base of retail. >> institutional's getting a little bit of a footing, too, that the retail left, but that didn't counter act what

happened you saw the crypto space was 3 trillion it's now 975 billion >> yeah. >> that sppain is spread around retail >> terra luna. mostly outside the united states >> you rememberst sterra luna >> beautiful bath. >> it's just a means to bring a company public one of the advantages was that you could do it quicker. is there a way of doing what you need to do to protect people and still do it quickly as a spak? >> with a spak t, it was a merg as opposed to an ipo you could do things like -- >> a problem >> could you do things according to the sec they put out a proposed rule that would put an end to that. they would treat it pretty much the same as an ipo the b

the benefits of a spak are going to be very, very rare. you might see a handful of new spaks. there are some special cases, but honestly, it's not even worth it, because it's going to be such a tiny little corner >> h >> you had to be like a really serious individual to run the new york stock exchange. could you be fooled by a ponzi scheme, if that's what bitcoin and crypto is? i mean, you have to be really, really stable and you'd need to look at all these things are you being fooled or is it something that will be long-lasting and just acting like an asset where the, you go into a bear market and this happens. this is not even the worst decline in bitcoin you see what i'm saying. warren buffett said he'd buy every bitcoin for $25. it's still at 22,000 is it overvalued by 100%

>> yeah, you're conflating bitcoin and digital assets generally. >> a coin drop from 65,000 to 20,000 >> it's volatile there's no argument. is bit kpoincoin a store of val. >> there's beloved stocks down a lot more on a percentage basis than bitcoin i understand that. it's a speculative asset so you don't see it going away you don't think five years from now, boy, that is gone it's here to stay. >> no. bitcoin. >> the other crypto stuff, the stablecoins, different story >> the majority are going to go away at any point in time. they're technology stock there's some really great innovations. we've seen some e-toys and cosmo.com and digital assets we've seen a few implode in the

last month, a few implode in the last 48 hours, and that's going to be the case >> how much was leveraged in so many of these things, how many people were kind of borrowing to make some of these trades, too >> it was hidden in plain sight. that is defy so defy was hey, i'm going to have this coin, i'm going to stake it i'm going to get a yield i'm going to get a liquidity token. now aim i'm going to take that liquidity coin and stake it. it was borrowing on borrowing on borrowing. underneath that are really great preaccept. you're going to see business models come in i'm not a cheerleader in terms of the timing. it's going to take a long time >> account sec, other regulators are looking very closely at crypto, at spaks

your latest eldeal, it has to be approved >> we announced the transaction, july 7, 2021 we launched the exchange, bullish in december. >> a crypto exchange >> a crypto exchange it's gone from zero to the last it 4 24 hours it's done $2.4 million. the sec's being very deliberate about crypto deals in front of it because it's a precedential matter so we're going that you process, and it's long, and it's difficult. but i understand why we're doing it >> you're looking forward to regulators kind of finally deciding, there are a couple

senators we had on last week talking about their efforts to try to figure out regulation whether it comes to the crypto world. is that a good thing to finally figure out who's in charge, who' who's running the show >> yeah, look at this celsius, 1.7 mostly american customers. >> 1.7. >> 1.7 million what amount of transparency should they be providing to retail ethereum, if you're involved with digital assets, you're involved with ethereum is it a security or not a security >> it doesn't fall by the wayside either >> no. no >> i agree >> i was just being, i believe

in the long-term value of it, i, you know, 100,000 in an year or two? i don't know 22's still a hlot of money for a bitcoin. >> this thing's been around for 20 year, it's volatile if you don't want volatility in your life, don't get involved in bit k bitcoin. >> do you like the gold bugs that are laughing about this gold and bitcoin both at 1800. >> right >> they say gold's definitely going to be better so bitcoin goes to 65,000 and

they're still taking the victory lap that they stuck with gold at 1800 >> i was thinking on the way here i wasn't going to say it, because it sounds ridiculous i still think bitcoin is a decent inflation -- >> wait. >> i know, i know it sounds, i know it sounds ridiculous. right now everyone is selling everything that they can especially things that -- >> it's not a hedge when that happens. >> i agree that's why i hesitate. as it matures. >> maybe as you get the leverage wrung out of it. if it's not levered, you don't have to sell it at those things. leveraged is the same story every time and again and again >> we won't be around when we get to 21 million. there's not that many left >> it's 21 million i think when people finally understand that, i think it will be a good inflation hedge. i know that sounds ridiculous.

>> lots more to talk about with tom. he's going to be hanging around for the rest of the show when we come back, the crypto selloff continuing let's take a look at where t things stand mike novogtzra joins us, jacques b "squawk box" will be right back. "squawk box" will be right back. "squawk box" will be right back. "squawk box" will be right back. "squawk box" will be right back. "squawk box" will be right back. "squawk box" will be right back. "squawk box" will be right back.

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novogratz. thanks for joining us. do you ever wake up in a cold sweat in the middle of the night and just ask yourself, "oh, my god, what have i done" >> sometimes it's a hot sweat. >> tmi >> listen, i, you know, bitcoin, we're seeing the down side of it we've got to keep it in context. the s&p's down 10% since thursday at 2:00 i hoped this year was 30,000 in bitcoin, the 30,000, 50,000 range was my hope. inflation's been a little more stubborn the fed's going to have to be more hawkish and we're going through what feels like a long-term capital management moment in crypto. a lot of people are two young to remember that, but it was the big hedge fund that had all the leverage, and whethen it started unwinding, there were

repercussions everywhere we're seeing that with celsius we will it first with the terra luna ecosystem you've been floating that's cause add de-leveraging we've gone to levels i think should be close to the bottom. 20,000 bitcoin, a thousand ethereum i think the macro environment's still pretty challenging out here but there's been a lot of damage done >> we've had you on for a long time and really not that long but i can remember bitcoin got back to 10,000 or 11,000 and ran up to 14,000 and you admitted that you actually lightened up a little at 14,000 and thin it went back down so we've been talking about ththis at levels that, you know,

10,000, 65,000, it's pretty staggering, what we've seen. at this point, it's drop from peak to where it is now, it's the fourth largest percentage, so it's dropped a lot more than that previously and still was able to get all the way back to new highs. you think we're seeing the same thing here but then again you said you thought 40 might be low. you thought 30 might be a low. now you're saying 20 might be a low. i. >> this is certainly more painful because the numbers were bigger, more money lost. more infrastructure in place so it's a big industry all of a sudden i think we'll see job cuts i think the industry will resize itself quick limly bitcoin will lead out, the moment the fed flinches, because the economy's really starting to roll over. they're going to see bitcoin

explode north. it was interesting lots of guys i talk to are seeing, you know, the next time they're going to get engaged is wheth when they start sensing fed's going to pause you look at 1970s, gold led the market back, not stocks. we've established bitcoin as a liquid asset the fed was easy money and powell decided he was going to look more like volcker this year and as long as the fed is hawkish, it's hard for know risk asset to do really well. >> hey, mike when the smoke clears here, what, what percentage of retail, which has been powering the whole digital asset space. bitcoin and others, what percentage of retail is just gone for the time being? >> you know, it's a great

question, and i wish i knew the answer what i've been surprised with throughout this entire cycle, starting in 2013, is the resiliency of retail they just keep coming back, right? young kids especially see crypto as their generational way to participate in markets so listen, there's been a lot of t damage to retail this celsius thing is a bad thing. there's no way to put lipstick on that pig. when you think about regulation, you're supposed to protect retail there were clear signs in lots of ways that were you allowing, and this is where we didn't have direct ownership, you know, allowing kind of non-banked banks to get set up, to have asset liability mismatch and take in lots of deposits, consumer deposits.

so i'm sure there will be a lot of head scratching trying to figure out what went wrong so i think confidence is going to get low for a while but i'm pretty confident it will come back. it's been an industry that has lived through many cycles. like this is the most painful, paus because it's coming from the largest market cap by no means was it technology's fault. >> over the last couple days, the bear narrative has really emerged on twitter, it's where i get a lot of my new us there aren't a lot of real-world cases for digital assets how optimistic are you that we'll see more real-world. >> like candy's doing with

baseball, those are new ways that fans can participate in appreciation of their heroes nba made $125,000 in just selling digital collectibles that is not going away af b af. >> mike, thanks. we'll check back with you in the near future, and who knows where we'll be thanks when we come back. billnaioire investor leon cooperman. "squawk box" will be right back.

good morning major averages in the green their this morning with about 90 minutes to go before the opening bell but at the moment, that wouldn't come close to making up the losses tomorrow. the dow's been down over 2200 points we'll have more on what to

expect from new inflation data coming up later this hour. and the feds are considering the biggest rate hike in nearly 30 year. we have expert insight you won't find anywhere else the final hour of "squawk box" begins right now good morning, and welcome to "squawk box. here on cnbc live from the nasdaq market site there are four people on the set at the same time tears in my eyes, i guess. >> be still my heart >> tears in my eyes, along with becky quick. andrew's off today we'll be talking to everybody who's here today it's great, spending time in the studio one of those individuals this

morning is tom farley. good to have him on. former nyse big boss and now a jack-of-all-trades, you're all over the place >> spacs, crypto. >> crypto. >> everything that's good in the world. >> you have a big future there's a shot we don't have moglia in yet. our special guest, omega family office chair cooperman. joe moglia, he's actually here >> he's here >> i don't floknow if we can d e shot i'm not directing. he is here >> i'm almost crying >> it's not a green screen behind him from coastal carolina >> i'm here. >> he's here u.s. equity futures. we're still up 135 or so. and we've been up 70 or 80

hasn't advanced, hasn't gone down treasury yields, that has been a little volatile. we down at 330 on the ten-year, her already moved back up. let's get over to dom incchu. he's not in studio, but he's in some studio. >> what's happening right now a little loss of momentum. you can sig you see the dow industrials. one that's going to help out a lot is oracle. the software giant comes out with earnings after the bell that were better than expected

for profits and revenues more businesses want cloud computing units. more hybrid work from home, that sort of thing. that positivity has oracle shares up 12%. that nasdaq has hammered oracle. we're down roughly 40% from the highs we saw for oracle over the last several months. getting back 11% of it now, but down 40% through yesterday's close. also watching what's happening with many of the travel and leisure names. they were hit exorbitantly hard. what does it do to travel demand than so-called reopening trade from the pandemic lows caesars is up fractionally united united airlines up fractionally. those were among the worst performers in the s&p 500 in

yesterday's session. we'll see if there can be some stability there. and then maybe an interesting downgrade on the analyst side of things this morning comes bit folks at j.p. morgan and applies to coinbase, the biggest u.s. exchange operators, down 5% in trading, carrying over some losses from yesterday, this is due in part to crypto prices on the decline, but analysts at j.p. morgan down grading this stock. they've taken the target price, which is $171 before, and then cut it down to 68 bucks. if you're looking for a reason why, they're saying the decline in crypto prices are going to make profitability not likely. we'll keep an eye on those trades i'll send things back over to you. >> they were at 171. >> of 8.

kind68 >> kind of a mea culpa >> for more on the market selloff and the impact on retail investors, we're going to bring in joe moglia, the former ceo of td ameritrade. and joe, you have been doing their this a long time what is different this time around or does this rhyme >> you go back to the dotcom bubble burst march 2000 to 2003. i don't think anything was as painful as 2007 and 2008 but this is a tough one. i don't think the situation today is what the financial crisis was but it's serious and we've talked before about recession. i recognize that there are economic definitions for that. but the typical family m in thi

country has been in recession for a long time now. they feel it in the price of gas, in the price of food, housing and rent and if you've been an investor, you've gotten whacked over the span of the last several months. i think, when i think of the plight of the individual investor has right now, they probably have never been more concerned in the sense that we don't just have a tough market we also have a war going on. we have sanctions with regard to russia you got somebody like kim jong un who's got a crazy ego, and he's firing off missiles because he wants to make a poichblt and we haven't even talked about pr terrorism yet. so the tenicalypical family and investor has had more stress than they have in a while. >> how much more they're paying

at the grocery store and to fill up their gas tanks that's part of the uncertainty >> i agree the typical family is not looking to those numbers they know what it costs them at the end of the month, they don't have as much discretionary income if any, left over compared to what they would have had a year ago. >> how big was the overall bubble in terms of monetary, fiscal and everything else that we may have, may be dealing with right now, and what does that mean about how much reckoning that we need to do and how much worse this could actually get. there are some really bullish guys they've been wrong some times anyway fwhu wabut this was the combination of the financial crisis and all that. the pandemic stayed emergency. we haven't had real price discovery in the bond market in how long in this could be really

a big bubble >> if it is a really, really big bubble, a lot of air's been taken out of that bubble and you referenced when the dot com bubble burst ameritrade was in trouble. that's why i went to merrill 80 it took like ten years to get back to normal, but i think that was specifically a dot com bubble we had so much stimulus in the market place, and some blame the fed for that the government needed to do something to step up we needed greater liquidity.

we needed estimate husband there were good reasons for that but we're paying for that now. the fed has a pretty good understanding. what we've got to do, we've had serious inflation, more than we've had in 20 years, and they know what we've got to do about it >> after that dot com bubble burst thouhow long it took for e markets to come back there's no guarantee that this pops back like we've seen in recent history >> i agree, becky. there's no guarantee that it's going to pop back. i think we may very well have a decent rally in a bear market. something like that may happen but the worst is not over yet. we don't have inflation taken care of yet. we have things we didn't have before sanctions on russia, a dollar going through the moon energy prices throughout moon. but we have a war going on

and, you know, the concern that i've got is that we thought, many people hoped that would and 30-day event now it's like 125 days, and it's not over yet pray to ghod this doesn't p ha, but it could get past the ukraine and is something far more bigger than that. the confluence of events are difficult to be able to cope with >> how much of the inflation that we're seeing right now do you attribute to the war >> i don't think i would attribute that much to the war specifically >> we're hearing that. but i'm wondering if the average american hears that and just goes -- >> that exacerbates. >> on the other side of the

world, in one country, that that's causing >> i agree >> we're hearing it every day. we just heard yesterday with bernstein. >> we've had this retail bid fintech. tech generally, crypto does that bid move to areas like oil and gas or consumer goods? not consumer discretionary, but consumer staples, or does that disappear for a while? >> ifyou've been involved with too many of the speculative trades, you've been involved with bitcoin one thing that the individual investor, i know novogratz was talking about it a little earlier. i don't think the entire individual investor recalled

woworld, this has been a tough day for day traders. most of the day traders are younger. they're learning what to place in bitcoin we told for two years that bitcoin is a hedge bitcoin's not a hedge. we've learned that already >> the other retail, look at netflix, netflix makes bitcoin look fabulous. netflix is down .75. >> the netflix and the pelotons of the world, they did as well as they did because what happened with the virus. right? and that was the stay at home economy. and things went through the moon now if i'm running one of those companies i can't believe that we're going to have that type of demand for the rest of our lives. so the mistake they made, they

created enormous inventory, but i do think they come back. i think there's a real reason for that, whereas the bitcoin thing is something the world aeltsworld's still trying to figure out >> what about the bitcoin, they're relatively new, younger investors. you get burned that badly, that's what happened after the dot com. you know the retail world so well >> but as time went on, investors came back. the individual investors probably don't have big positions in something like bitcoin, but they're involved with the market. now if i'm an individual investor, we all flowknow this. you can't panic. one thing we should talk more about on your show, averaging is by far the best way to be able to deploy capital. and if they've been doing that all along they're putting money in the market now when it'slow and putting in money while it

was going up but that's the best way to be able to do that. they shouldn't be calling ups and downs. >> boeings's down 75%. it's not just the pandemic let's get to kate reasoooney, breaking news. >> boeing's had their own problems >> how about ge? >> they have problems too. >> they have their own problems. >> okay, we are not, we are going to kate rooney when she's ready. >> okay. >> you are, mr. pulse of the retail investor. lou b how are boatth of sfthem

y go >> i >> i think both are in pain are. >> ail kll i know is there's breaking news. >> this morning kcoinbase sayin they're going to lay off roughly 900 employees, saying we appear to be enter ago recession after a ten-plus-year economic boom. to employees, they grew too quickly and need to manage burn

rate it comes to almost an 80% drop sat down with emily choi she said it was difficult baut a nis necessary decision >> we will power through any macro environment. the reality is that we have to adjust when we feel that there is a very dynamic economic environment in play. so we're going to make those decisions based on those factors. >> coinbase had put a pause on hiring and two weeks later extended that. the layoffs come as jp morgan cuts the price target by more than half.

analysts there see the potential for more downside and talked about a need for management to lower costs. back to you. >> we're all a little jumpy, i think. if i see breaking news on coinbase, this is not, on the spectrum of what the breaking news could have been, it's probably not surprising. and as for the company itself, i feel bad for the employees, but we talking on break about expenses at coinbase and what they were, and that was kind of funny that he said this before you didn't know this was coming. >> i had no idea their was coming, but at the last commercial break i turned to both of you and said coinbase is going to have to do a massive layoff and this comes two minutes later. i've thr i've known brian for a long, long time. and we invested -- >> you and your wife >> no. but we got to see, and they grew

too quickly. and a preponderance of their revenue comes from the retail business where they were earning close to a percent and a half per trade. as we were talking about with joe, retail has been hurt. the more attractive sector is institutions and i think this is a down payment. i applaud them for getting started. i know it's difficult. and there's probably more to come >> wow we should point out for those who weren't watching a half hour ago when we first brought you in, bullish is the crypto exchange that you're running right now. it's not, it's institutional >> it's not been approved.

the proxy has not been made effective by the sec, so i'm very involved in the exchange space generally as you know, and the crypto space >> you are young old dog but i'll call you an old dog can we treat you new tricks? crypto or are you just a nonbeliever? >> i would consider myself a crypto expert. >> long term, here to stay >> i believe so. >> bitcoin eventually rebounds >> i believe so. >> we have a wide range, depending on how long you've within in the business did you have to be convinced >> in the beginning i did. one person i have a world of respect for is cathiey wood.

and i think the world of her and known her for a long time. part of the reason why i became very open to getting involved is because of the argument she could paint for that she could still paint a good argument novogratz talked about how difficult that is. i wouldn't be the kind of person to give advice, but i believe in enough people who are really smart who have their money on the line that i thought it was worth getting involved with. >> day traders getting burned so badly and getting washed out do you think it takes a while for retail investors to get back involved >> we're talking about the investor, individual investor. they probably have reasonable asset allocation mix and if they have a position of bitcoin, it hasn't, the typical

investor on the individual side doesn't have major positions at bitcoin. they're small positions. maybe a percent of the portfolio. if you have 1% of your portfolio blow up, that's not the end of the world. and they'll probably stay with that over time the day trader is a different world. >> how big of the retail investor, the individual investor, the people who are day trading, are long-term investors? the real noise comes from people who are actively trading in and out throughout the day but that's probably a small percentage of the people investing in the market. >> that's 100% accurate. the noise throughout the day are the people doing the trades. there's not that much money associated with it and the trillions and trillions of the dollars lies in the hands of the individual investor the numbers we see, with regards

to the actual trading, and amount of dollars that are actually really involved, from a retail perspective, globally, it's not that significant. >> joe moglia. i want to thanks you for being here in studio with us >> pleasure to be here, becky. >> we're trying to get back to normal on some level and this is a big part of it >> thank you joe, goo joe,g joe, good to siee you investor lee cooperman's going to join us as we head to break, these are the five s&p 500 stocks that bucked the trend yesterday and closed in the green. cme group, truist financial. mcdonald's, domino's pizza >> i understand that >> and duke realty

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welcome back to "squawk box" here on cnbc we are seconds away from the may consumer price inflation data. we've been watching the futures aed had

ahead of this. s&p futures are up by 17 right now. the nasdaq is indicated up by close to 80 points we've been watching all of this with the ten-year yield. yields have been significantly higher this week 3.326% rick santelli is standing by take it away >> yes, our may read on producer price headline expected up .6, is up .5 high watermark is march when it was up 1.6 if we strip out food and energy, that was up .8 on headline 1.6 high watermark, up .5 food and energy high watermark there is up 1.2 if we look ex-food, energy and trade, it stays at 1.5

jan of '21, up 1%. year over year headline, 10.8. and that's sequentially sfis following 11%. the high watermark there was march at 11.5. finally, ex-food, energy and trade, up 6.8. high watermark there up 7.1 march of '22 so we can see that whether it was sequentially from last month, other than ex-food and energy month over month, everything basically has moderated to some extent, and that is a good thing we see interest rates around 3.32%. that's a ten-year high we see that the dollar index is hovering at a 20-year high and maybe the most important issue of all, if we look toward

europe and many of the other economies we continue to see the same notion as energy inflation seems to be playing havoc with many economies becky, back to you >> steve liesman is here you've been digging through it what jumps out at you? >> that we're not getting any help on the goods sector up 1.4%. you would have this switch from goods inflation moderating over into the service sector, and that is not happening. that's a big story right there i was looking up the pipeline. it was additional inflation, but i haven't had a chance to hlook at that. i like that rick used the term moderating i'm not all that sanguine. we still have a big problem up

the pipeline that's going to filter down, and the question becomes how much of that can be passed along to consumers and whether we're at some point of a breaking point becky? >> right now, folks, we've got breaking news on fedex david faber joins us with that good morning >> we've been tracking the possibility of activism at fedex for some time, pointing out that revenues are roughly the same size as u.p.s. but market cap half this morning fedex announcing it will be adding three new directors to its board in an agreement it has reached with the hedge fund d.e. shaw they're adding amy lane immediately. and it is an agreement obviously, we can expect there has been some conversation going on over the last few weeks, if not longer, with shaw.

some other important announcements. the company increasing its dividend by 53%. i'm told that's the second largest dividend increase in history. it's now $1.15 a share and there remains confidence in the company and operation. fred smith did only a couple weeks ago step down as the company's ceo, one of the longest-serving ceos of all time was he, and this might be a reflection of a kinder, gentler fed ex they have yet to announce. but changing to a certain extent their executive compensation program to what they say is more closely tied to total

shareholder return a couple of different things there that they're changing. one metric, total shareholder return, relative to the broad market indix wex will be includn that it will align we've seen the shares are moving up roughly 7% in the premarket and, again, perhaps not that big a surprise to those who follow the company closely. the nominating window had opened we're going to get more from the company when it reports earnings i believe later this week as well as late in the month, analyst day. first investor day they've had in some time as well the big news, three fnew directors added to that board. beginning the ceo reign of the ceo. back to you. >> looking at this stock, it was

trading at close 200 bucks yesterday, which was down from its all-time high of $304. it's up more than 7% on this news but, you know, that's a decline, a pretty significant decline over time, but not very different from what you would see from the dow transports. i think the dow transports yesterday closed down something like 29% from their all-time highs. how much of what's been happening lee happening here is a function of the high energy costs and management, tying your compensation to a different metric system sounds like a good idea how do you kind of outrun some of the global forces that all of these are facing >> i don't think you do. but i think on the part of the activist there has been frustration amongst other shareholders as well with just how much money the company spends, what its margins look like and its overall spending

versus its revenue number. and simply put that it could operate a lot more efficiently and so i to think, joe, that's a point they've been trying to make among shareholders for some time >> i'll take tit any ok any stock up 8%, i'm happy. especially a name brand company h like fedex to feel a little better, i don't even need to know what the rea reasons are. people are like, that's because of this, this, and this. >> i want to know who gets credit >> david gets rcredit for this. >> thanks, joe i always appreciate when you give me credit >> you do a lot of appreciating, faber. if you knew that fedex was going

to be in a sustained up trend that would make me feel better about everything it's such a bellwether and a gauge of costs and commerce and it has been for a while. >> although to becky's point, as you though,know, it's not reflef any operating environment. in v >> i have a similar question for becky. it seems like page one of the investor pitch for next fund do you think fedex had some of this in the hopper >> i think some of it was here i don't think they were potentially surprised to be met with a shareholder that wanted change and willing to mount a proxy fight to get that change fred smith is a combative guy, has one of the greatest track records in the history of american business, but none the

husb less, i think they were fearful they would lose a proxy fight. whether y you have to say that's a win exxonmobil, prior to the engine one proxy fight, succeeded in seating two new dreirectors thee again in a settlement at that point. and lohse, prior to that were able to do some things so they do have a significant track record they can point to when it comes to activism of late, not with the proxy fights but the threats there of and being able to get some change. >> interesting, thanks, david. >> david, thanks, joining us to talk more about this, lee cooperman, can i start by asking you, lee, just put a little sav

salve on this. >> we've had recession -- >> ten-year bull market or a one-year or two-year bear market >> last time i was in your show, even throwough i'm not an overly religious person i felt like pharaoh and his dream interpreted by joseph. i'm not making a seven-year forecast, but i believe we've gone through one of the most speculative periods i'm aware of spacs and all that crap that was going on, crypto and nonfungible tokens i would think we're in store for an extended period of time, returns in the equity market to

be very modest so, you know, i had that experience personal limit i got my mba on january 31st of 1967. my son is now about 55 was six months old couldn't afford a vacation the very next day i started my man. in 1982, i made my money picking stocks so i think we're in that kind of environment. overall, i'm very concerned that we've had a very, very toxic combination of fiscal monetary policies we've borrowed from the future and we're nain a give-back peri. >> we've had people argue that we're still in a secular bull.

i asked someone earlier on the show about the side oze of the bubble >> the bubble was a fixed income and the would-be faangs which have been destroyed. i don't own any of these things, but i look at symbols. i do fknow robinhood down 86%. we saw just extraordinary speculation, and i'm quite confident that this stuff doesn't go away very quickly it heaves some scars i think we've had aggregate drag down to what happened in 2008. it's going to affect their thinking and i think cathie wood's a very

bright lady, very confident, but my guess is she'll have outflows at the bottom. not inflows as she's experiencing now >> the last time you were on the show, the s&p was at 22, and i remember you did a very basic analysis and said the s&p's fairly priced because the risk-free rate is effectively zero 22 times feels about right if the rates change or t, the earnings change. are we fathirly priced here or do you think the 15 times i going down >> i think the 15 times is going up because i think we're going to have a recession a typical recession, profits drop 20% so earnings are running 220, 225, but i suspect we'd probably

head toward 180. i think the price of oil or the fed will push us into recession sometime next year i think there's too much liquidity in the system to experience a recession this year, but i think we'll have a recession sometime in 2023 and the market will on average go lower. now let me just be very clear. equities are the best house in the financial asset neighborhood in my opinion, but i don't like the neighborhood for various reasons. we borrowed from the future. very inappropriate fiscal monetary policies. i think inflation is likely to be worse than generally expected powell has been very wrong on inflation and while he has some cover from the ukraine war, the reality is he was wrong before the are what the word transitory was inappropriate. labor has got the upper hand now. and that can be bad for profit margins. and interest rates are still too

low relative to inflation. when i grew up, the kenya government used to have a real return you have gdp running at 10%. and you have kenyagovernment's at 330 or 335, wherever they are. you know, i think the stocks are probably bottoming now and we can't pick the bottom we can't buy at the bottom we can't sell at the top the top would be the bottom, the bottom would be the top. so you have to go in slowly. i've been a seller on strength and not a buyer on weakness. and i think we could have a significant rally at any time. but my basic viewpoint is the 4800 of the s&p is likely to be a high for quite some time that's why i would probably separate myself from the crowd when the crowd is talking more cyclical, short-term stuff, i

think we're going to go through a long period of low returns as we try to right the ship unless we head to feeiat curreny but i'm going with the pharaoh. >> we understand what you're saying about the fed they're in a tough spot. >> they put themselves in a tough spot. >> they did. but what about policymakers? i wonder what the right formula would be for whether, would you urge that they don't do anything they might raise taxes they might, they might cut taxes. who knows, depending on who's in office is there anything policymakers should be -- probably shouldn't do build back better i imagine you would think they shouldn't spend a lot more money on throwing money at a problem so what should they, they shouldn't do anything? or they should do something? >> they should basically understand whether it's a

capitalistic system or not rather than criticize them for excess profits to me, what i would be doing is telling the oil companies, we'll guarantee you $100 per barrel as we fill the strategic reserve and you'll get more production but we're following the wrong policies by criticizing them we should be criticizing ourselves for very bad policies that led to the problems we're having present lly i'm capitalist with a heart, and i have common sense i think. and i don't think you get more output from the oil companies by criticizing them in a bear market, you never know how low is by the time this is over, if we fall into a recession, the market could fall 40% from its

peak i only want to buy stocks that pay me to be patient, meaning they pay a dividend or they have a balance sheet to buyback cheap stock when they believe it's cheap. >> the nasdaq's down 33. you're talking about the s&p only down 20 and change. so you think the s&p goes down 40%? >> if i'm right that we end up with a recession, yes. it won't happen this year. i think the low this year is probably not terribly below where we are, if i had to guess. i think if the fed raises 75 basis points tomorrow, people will feel a little bit better, but i think being conservative, being cautious is the right approach you know, like i said, i'm not a buyer of weakness, and i think the bottom is not in yet, and i'm basically taking it very conservatively, which is not to say there are not cheap stocks around there are plenty of cheap stocks

around i own a bunch of them. and i p just am being patient. >> can i go back to something you said that was pretty scary to me. there are some analysts who have s&p of 2 550 and i think you said 1806 >> i'm assuming sometime in the next 12, 18 months you have a recession. every recovery sows the seeds for the next recovession we're overdue. we've had policies that have pulled forward demand. we see a shift in the power between labor and business so, you know, i would say a conservative approach is

appropriate. you know, and yeah, and i think 180 is more probable than 250 in terms of earnings many then you have the multiple. i'm assuming as earnings go down the multiple goes up so i'm close to 3,000 again, that's assuming recession. if we didn't have a recession, that's too conservative. >> you have a bunch of stocks you think are cheap. our viewers are always looking for opportunities. you want to tell us about a couple quickly >> my biggest position happened to be a bond it's too complicated to discuss on the phone, but i think it's a 100% return in 15 months in the first lien paper, which is very attractive i own a lot of google at 15.4 times next year's earnings a lot of motorola solutions, which is a 15% or 20% grower

lithium motors selling at six times earnings and transfer eight times earnings i had a restock that went from 2 to 38. i was wondering whether i should take some profits. after i got finished talking with him, i said the thing is cheap. paramount resources, canadian run gas company. they have 142 million shares they're generating $1 billion of free cash flow after spending $600 million on cap-x and paying a dividend of about 3% they also have about $5 per share of their stock in other people's energy stocks that don't add to earnings. so it's selling between three and four times cash flow their production costs produce a barrel of oil is about $31 they're making a fortune, and i don't know anybody that's credible that sees the price of oil much below $85 a barrel. i think there's a $25 premium in

it for the ukraine war, but at $85 a barrel, they make a lot of money. i think frankly we would be better off if the price of oil dropped a bit because it would delay demand destruction i like apollo. there's plenty of thingss you could be doing overall, a conservative approach is warranted in the market i think inflation is likely to be worse than we expected. labor has the upper hand i think over the next 12, 18 months, we're going to be in a rising interest rate environment. inflation is going to remain relatively high. and i think somewhere we have to address our fiscal policy. so you know, taxes may have to go up. unless we're going into fiat currency in 2020, our national debt was $20 trillion i'm sorry, 2017, it was $20 trillion in 2022, it's $30 trillion we had an increase of 50% in our

national debt in a matter of five or six years. it's concerning to me. and you have joe manchin trying to keep us on the reservation. and you have an administration that seems to want to put out debt left and right. there's a price to pay for that, i think. >> great to have you on today. thank you. >> you stay well keep fighting the good fight, joe. >> you have like an ice bucket full of corona right there >> it's your backdrop, lee >> i can't get rid of that backdrop i'm sitting in my house in my basement in new jersey >> no way. honestly, i thought you were like snoop dogg on those commercials. >> reminds me of the video that went viral i'm not a cat, judge lee, thank you we appreciate. anyway, let's get down to the

new york stock exchange. jim cramer joins us now. we have to talk about the fed, the fomc meeting, what you think they're going to do? >> look, i think it would be great if they do 75. i want them to double the amount of bonds and runoff. $95 billion, they should go to $200 billion i think the idea with the curve being better is we want to cool the economy. i'm listening to everybody, and i spoke to my friend david tepper and i'll talk about that in our show, but it's not yet time to make money it's a time to not lose money, and i listen to what lee said. these are my teachers. lee was my teacher, david tepper was my teacher they're all suitably negative, but i don't think that necessarily applies for today. i like what lee said, if the market comes up a little, you can sell some. google is one of the largest positions of my travel trust, alphabet, and i agree with that. i like microsoft, too. those are interesting stocks because google is very inexpensive.

microsoft is expensive historically, but i thought the paramount story was most co compelling because i think oil is great here. i think even if the russia/ukraine war ends, we're not going to let up on russia. there will still be great sanctions against them, so i think that oil is the best place to be. it's very much like '69 to '71 oil has just been periodically very great when there's inflation. it's a small part of the s&p, and people still resist oil. when i mention people should be buying oil, people say, are you kidding? i missed oil i thought it might bea compromise between the president and the oil companies, but when he said exxon made more money than god, that's exactly what the oil companies told me to think about buyiden, that he hae them, so there will be no deal with the oil companies >> really quickly, your thoughts on fedex this morning. >> about as good as it gets for

fedex. the business is not that great >> jim, we had a depressing morning. guest after guest. it's bad out there what is the bull case? can you help us out with hopefulness? >> i think the bull case is that china realizes it's been doing this wrong and it's got to open up. that europe starts getting its natural gas from other places which will make it so the russians would not have the money to win the war but you have to get that war over because that's the famine and that's the oil and that's the natural gas. and that's a little country, russia, and they're basically bullying the whole world it's time to put a stop to it. some of these other countries. india, china, they should be ashamed of themselves, backing the russians it shows you their true colors >> jim, thank you. we'll see you in a few minutes, hear more about your nvsaonitdad tepper "squawk box" will be back in a moment

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final check on the markets now. 176. those are some of the best levels that we have seen i don't know, the nasdaq up 122. that would be a good day normally, so we're just going to - >> best day than the day before. >> we will take it crypto, kind of holding its own. bitcoin was below $22,000. it's back above. tom farley, good luck. >> great seeing you guys it's been too long

>> i think you're back in a big way. >> yeah. >> you have another scheduled -- >> another scheduled appearance here next week >> got your wardrobe mapped out? >> i'm going to wear a tie as a sign of respect. >> excellent good having you. >> great to be here. >> like it when we'ren a two-shot together, but i have to deal with that anyway. because you're too good looking. make sure to join us tomorrow. "squawk on the street" is next >> good tuesday morning. welcome to "squawk on the street." i'm carl with jim and david. trying to stabilize after monday's 4% bear market drop got some support from oracle's quarter and core ppi, the lowest annual gain of the year. oil is near $123 our road map begins with wall street's woes. investors closely monitoring headwinds, recession risk, and watching the tea leaves from the fed. >> plus, shares of